Many homes still to be created above retail floors

Downtown is a place where people like to come, to meet other, to shop, to relax. Many inner-city areas are also historic, and simply pleasant places to spend time. But above the shops, it is often strikingly quiet and empty. It seems that across the Netherlands, there are thousands of empty floors above our retail spaces, which all in all could provide the space for 40,000 homes. ‘Time for change!’ says Hilko Hartog.

Many homes still to be created above retail floors

Downtown is a place where people like to come, to meet other, to shop, to relax. Many inner-city areas are also historic, and simply pleasant places to spend time. But above the shops, it is often strikingly quiet and empty. It seems that across the Netherlands, there are thousands of empty floors above our retail spaces, which all in all could provide the space for 40,000 homes. ‘Time for change!’ says Hilko Hartog.

‘The idea of creating apartments above shops is nothing new,’ Hilko says. ‘But it is becoming more and more of a topical issue as the nationwide housing shortage increases. We also know that inner-city areas are improved when people start living above the shops. The social control increases. And there are even government funds available to promote this development. The scale of Vastned’s operation is exactly right for pursuing this kind of initiative, and that is what we are doing. But however simple the idea may sound, putting housing above a shop is more complicated than you might think’

Total approach is key

‘There are a number of little issues you have to think about when it comes to residential space above retail space,’ says Hilko. ‘There are many parties involved. The retailer, for starters, is interested is keeping his shopfront as broad as possible and creating the most attractive possible display window across the maximum breadth of the shopfront. There may be no separate entrance to the apartment upstairs and little to no space available to make one. One solution can be an entryway shared between two broader retail spaces, a combination with a location belonging to another owner, or a side entrance, which can be a possibility with a corner location. Other impediments can be fire safety requirements, municipal parking requirements and issues with historic buildings. It is not just about preserving historic façades; in these buildings, it is generally not possible to break down the original supports or walls. All parties see things through their own eyes and think about their own obligations. What we need is an approach that takes all of these into account. One city, Utrecht, has recently created a coordination point for these types of issues, and it proves to be helping enormously.’

“Fostering the residential function above shops in the city is the best way to revitalise the urban environment.”

Hilko Hartog
Retail Portfolio Manager at Vastned

Perseverance

‘Return on investment also plays a role,’ says Hartog. ‘Once we decide to invest in above-shop apartments, sustainability comes into play: double glazing, or secondary glazing on historic buildings, high-yield boilers, insulation and so on. These are investments that must pay for themselves over time. Because the locations are generally good ones, and the valuations are quite substantial, this is not an insurmountable issue. Along with a view to the big picture and long-term returns, it is mainly about perseverance, creativity and drive. And that is where our big strength lies. We are not a large player, but we are not a small player, either. We have a unique profile, and we know our market and the Dutch urban environment better than anyone. I have been doing this since 1999, so you can bet I know the locations and what goes on in them. That allows me to adapt when something comes up. I can tell you all about the transformation of creating the apartments above the shops on the Oude Gracht and in Vredenburg in Utrecht. In Amsterdam, there are also the spectacular historic buildings on Leidsestraat and the upgrading of many of our nearly 60 apartments in beautiful Ferdinand Bolstraat. In all these locations, we were able to achieve compromises with all the stakeholders and make the apartments above the shops a reality. That is good for the city, good for the residents and good for us. So, it is a win-win-win situation!’

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