The study "Ground Floors 4.0 - Current Approaches for Project Developers and Urban Planners" by the independent analysis company bulwiengesa examines the difficulties and challenges of using first floors in urban neighborhoods. For example, the leasing of first floors has not only become more difficult due to the effects of the Corona pandemic and developments in online retail. Even before the crisis, there were signs of a decline in demand for first floor locations. Some of the reasons for the so-called "store death" are, in addition to the changes to stationary retail, rising construction costs and land prices as well as the growing importance of gastronomy.
As the gap between steadily rising construction costs and store rental income grows, it is difficult to lease first floors in neighborhoods. To illustrate the problem, the study points out that construction costs in A-list cities increased by about 20 percent between the years 2009 and 2019. However, store rental income over the same period increased by only 12 percent. Rising land prices also mean that owners can no longer afford storefronts. Here, the developments between 2015 and 2019 in land prices in A-cities should be taken into account: Land has become about 115 percent more expensive during this period. Added to this are the costs of the elaborate finishing work required on first floors for their use.
In cooperation with three project development companies and the Bundesstiftung Baukultur (German Federal Foundation for Building Culture), recommendations for action were drawn up for the joint study "Ground Floors 4.0" to serve as a basis for urban developers and project planners to revitalize first floors. The focus is on establishing first floors in new development neighborhoods and urban districts rather than in city centers. According to study participants, first floors are the flagship for urban neighborhoods and a vibrant, diverse and socially mixed neighborhood. To prevent vacancy, financial feasibility must be ensured in addition to innovative ideas. The analysis includes ideas for solutions, such as cross-subsidization, as well as elaborated recommendations for action and some best practice examples in the field of first floor planning and use.
Source: bulwiengesa
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