Is the Dutch shopping street making a comeback?

Current issues related to economics, (responsible) investment, pensions and income: every week an APG expert gives a clear answer to the question of the week. This time: Head of European real estate Robert-Jan Foortse, about the future of the Dutch shopping street. “In the past, people mainly went there to buy things. Today, consumers want more.”

In the first year after opening, the Mall of the Netherlands, a shopping center in Leidschendam-Voorburg, attracted 13 million visitors, despite two lockdowns. That was more than expected. This tells us that big shopping malls seem to be faring well, but the Dutch shopping street, on the other hand, is struggling, and has been for some time, Foortse says. “Although it does make a difference whether you are talking about the Kalverstraat in Amsterdam or a shopping street in the somewhat smaller provincial town. The trend from physical to digital sales has been going on for a number of years, and Covid has accelerated that trend.” Still, Foortse sees opportunities for the shopping street, although it will require a transformation.

Fragmented

Investing in shopping streets to help them get back on their feet is not so easy. “The problem with shopping streets is that ownership is extremely fragmented. It is therefore very difficult to create a proposition for a shopping street because there are so many stakeholders and owners. For example, one owner may want to invest in his own property but not in the infrastructure, while another may not want to invest at all. Because of this fragmentation, APG, about fifteen years ago, chose to invest primarily in shopping malls and outlets, such as, for example, Batavia Stad Fashion Outlet. This is actually a replica of a Dutch shopping street. Because we have full ownership, this shopping street can be managed and controlled in the same way as a shopping mall. We have influence on the range of stores, the parking facilities and whether it is safe and well maintained. We don’t have that influence in an ordinary shopping street. Visitors in Batavia Stad notice that it is a pleasant environment for shopping, although the outlet discounts also play a role, of course.” 

Because the traditional shopping street has so many stakeholders with different interests, it takes a long time to find a new use for it, says Foortse. “This is primarily a problem that, in my opinion, lends itself to a public-private partnership. The various stakeholders must come together and design a joint vision of the shopping street of the future.” Because the function is changing. “In the past, people used to go there mainly to buy things. Today, consumers want more. I think people still want to go to the shopping street, but it’s more to buy something tasty from the deli or to visit a pop-up store. You have to create something that appeals to people, and that is no longer just offering items to buy. Experience may be a word that is being overused, but it really is about that. Post-Covid, we are once again noticing that people are social beings after all and like to go somewhere where there are other people.”

Transformation

Of all purchases, about 75 percent are still made in physical stores. The remaining 25 percent is done digitally; a percentage that will only get higher. The average shopping street of the near future will therefore need fewer square meters of retail space. “The shopping street still has quite a few qualities to offer, but we may have to reinvent it and find a new approach. One of those qualities is that they are often centrally located in a town. Also, there is often parking nearby. If flexible working becomes a permanent part of our lives, retail space can be converted into workplaces. People who don’t have a suitable workspace at home will then be able to go there, but they will still not want to have to deal with traffic jams to the office outside the city.” The location in the city center and the parking facilities also argue in favor of converting stores into homes, Foortse believes. “But it can easily take several years to get the zoning changed. That does take away the incentive to create something new in a shopping street. That’s where I see a role for politicians. They should ensure that this process can be accelerated.”  

It appears that the Dutch shopping street will be able to make a new start, but it will look very different in ten or twenty years than it does today, Foortse believes. “I think you’ll see much more of a mix of today’s traditional stores, places to eat and drink, offices where you can rent workplaces and residential spaces. That will be true for all cities, although there will be differences in emphasis. For example, Amsterdam’s Kalverstraat will remain primarily a shopping street while the shopping street in a smaller town will include more housing. A transformation of the shopping street is afoot, but it is happening slowly.”