New mixes in retail real estate
The Dutch retail real estate market is in a phase of recovery and reorientation. Although the coronavirus pandemic left deep scars on high streets and the investment market, recent figures show that the tide is slowly turning. Nevertheless, the playing field remains uneven. In cities like Amsterdam, Utrecht, and Maastricht, flagship stores and high-traffic locations are once again attracting visitors, while secondary shopping areas in medium-sized cities and suburbs are struggling with structural vacancy. In the first quarter of 2025, the investment volume in retail real estate rose to €287 million, a 9 percent increase compared to the same period a year earlier. An investment volume of approximately €1.4 billion is expected for 2025 as a whole. However, on the occupier side, the market remains cautious: retail space take-up is stabilizing or declining slightly, particularly for larger units. This picture points to recovery, but with significant differences between locations and property types.
What's striking is the changing role of the physical store. Experience, convenience, and integration with online channels are now crucial. Customers no longer come just for the product, but for the experience. Furthermore, sustainability and multifunctionality are no longer luxuries, but strict requirements. In many cases, stores are no longer just shops, but part of a broader functional mix: retail on the ground floor, hospitality or personal care facilities adjacent, co-working or short-stay accommodation above. Municipalities are responding to this by expanding zoning plans and more actively allowing mixed-use developments.
A second strategy is adding to the existing buildings. Especially in inner-city areas with good accessibility and a tight housing market, adding one or more floors can be advantageous. Legal preparation plays a key role in this: research into the maximum building height, revising the zoning plan, permitting procedures, and amending the deed of division. In several municipalities, such as Rotterdam and Eindhoven, building-up projects are now actively facilitated, subject to the conditions of sustainability and mixed-use development. Adding to the existing buildings not only increases rental income but also reduces the risk of vacancy on lower floors, as it creates a broader operating mix.
Changes in function are also becoming increasingly relevant. Many former shops are now being successfully repurposed into restaurants, day clinics, gyms, or even cultural facilities. However, without a legal change to the designated use, such a transformation is difficult to achieve. It requires coordination with the municipality, clear lease agreements that allow for mixed-use, and sometimes also tax and legal advice on the consequences of a change in use. Moreover, lease agreements are increasingly incorporating sustainability clauses, such as energy-saving measures, shared facilities, and agreements on ESG obligations. Such "green leases" increase the property's attractiveness to institutional investors, who are increasingly scrutinizing sustainability in their real estate portfolios.
Take the example of The Orchard in Rijswijk, an area development that perfectly illustrates how retail integrates into a broader urban vision. Where a dilapidated shopping center once stood, 3W real estate, together with partners, is now developing a vibrant urban district with over 500 homes, amenities, restaurants, and modern retail. By cleverly managing mixed-use developments and legal structuring, a new urban ecosystem has emerged. There is space for supermarkets, gyms, and restaurants, as well as social functions and flexible workspaces. Crucial to this project is the revision of the zoning plan, which is replacing one-sided retail with a diverse mix of functions. The retail functions are no longer standalone but are anchored in a neighborhood where living and socializing are central. This example demonstrates that retail real estate also has a future outside prime locations, provided it is part of a comprehensive plan, is legally sound, and responds to what people truly need in their living environment.
The rules of the retail real estate market have changed. Those who adapt in time can create significant value by reinventing real estate: flexible, multifunctional, and sustainable.
This article previously appeared on Vastgoed Journaal: https://vastgoedjournaal.nl/news/70587/nieuwe-mixen-in-retailvastgoed
What's striking is the changing role of the physical store. Experience, convenience, and integration with online channels are now crucial. Customers no longer come just for the product, but for the experience. Furthermore, sustainability and multifunctionality are no longer luxuries, but strict requirements. In many cases, stores are no longer just shops, but part of a broader functional mix: retail on the ground floor, hospitality or personal care facilities adjacent, co-working or short-stay accommodation above. Municipalities are responding to this by expanding zoning plans and more actively allowing mixed-use developments.
From retail space to multifunctional real estate
This presents a concrete opportunity for real estate investors and owners to create value, provided they operate strategically and legally astutely. One of the most direct options is to divide properties into separate units. A large 1,200 m² retail unit in a secondary city whose tenant is leaving doesn't need to be entirely re-let as a retail space. Instead, the ground floor can remain available for a service provider or food retail concept, while the upper floors are redeveloped into apartments or workspaces. This does require legal restructuring: a division into apartment rights, a zoning plan amendment, and often structural changes that must comply with fire safety and occupancy standards.A second strategy is adding to the existing buildings. Especially in inner-city areas with good accessibility and a tight housing market, adding one or more floors can be advantageous. Legal preparation plays a key role in this: research into the maximum building height, revising the zoning plan, permitting procedures, and amending the deed of division. In several municipalities, such as Rotterdam and Eindhoven, building-up projects are now actively facilitated, subject to the conditions of sustainability and mixed-use development. Adding to the existing buildings not only increases rental income but also reduces the risk of vacancy on lower floors, as it creates a broader operating mix.
Changes in function are also becoming increasingly relevant. Many former shops are now being successfully repurposed into restaurants, day clinics, gyms, or even cultural facilities. However, without a legal change to the designated use, such a transformation is difficult to achieve. It requires coordination with the municipality, clear lease agreements that allow for mixed-use, and sometimes also tax and legal advice on the consequences of a change in use. Moreover, lease agreements are increasingly incorporating sustainability clauses, such as energy-saving measures, shared facilities, and agreements on ESG obligations. Such "green leases" increase the property's attractiveness to institutional investors, who are increasingly scrutinizing sustainability in their real estate portfolios.
Profitable mixing
Retail real estate therefore remains a complex, yet potentially promising, segment. For those willing to look beyond traditional leasing to a single retailer, there are many possibilities. A retail property that's vacant today could offer a profitable mix of living, working, and shopping tomorrow. Those who are well-prepared from a legal and urban planning perspective have a head start.Take the example of The Orchard in Rijswijk, an area development that perfectly illustrates how retail integrates into a broader urban vision. Where a dilapidated shopping center once stood, 3W real estate, together with partners, is now developing a vibrant urban district with over 500 homes, amenities, restaurants, and modern retail. By cleverly managing mixed-use developments and legal structuring, a new urban ecosystem has emerged. There is space for supermarkets, gyms, and restaurants, as well as social functions and flexible workspaces. Crucial to this project is the revision of the zoning plan, which is replacing one-sided retail with a diverse mix of functions. The retail functions are no longer standalone but are anchored in a neighborhood where living and socializing are central. This example demonstrates that retail real estate also has a future outside prime locations, provided it is part of a comprehensive plan, is legally sound, and responds to what people truly need in their living environment.
The rules of the retail real estate market have changed. Those who adapt in time can create significant value by reinventing real estate: flexible, multifunctional, and sustainable.
This article previously appeared on Vastgoed Journaal: https://vastgoedjournaal.nl/news/70587/nieuwe-mixen-in-retailvastgoed
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