Transformation of city centres – The interplay between increased benefits for citizens and owners' capital preservation of real estate investments

The city centres in Europe and Germany are in the process of structural change, which is questioning the current real estate value-creation concepts, especially the mono-functional focus on retail. Structural change is caused by megatrends such as social, technological and ecological change. The corona pandemic has further pushed and consolidated the change in citizens' habits. The change manifests itself, among others, in lower footfall and declining turnover. Vacancies are already on the rise in small and medium-sized towns as well as on the outskirts of large city centres. For owners of inner-city properties, it is existential to adapt the inner-city properties to the new environmental situation. Failure means further increases in vacancy rates, falling rents, trading-down effects and the permanent decline of the capital tied up in city centres. The current discourse sees numerous fields of action in the inner cities. At the core is the need to enrich and balance the diversity of functions. More housing, urban production, strengthening of communication and integration Climate adaptation/climate protection, to name a few. The aim is to increase resilience through numerous functions and uses, to make the inner city more exciting and attractive for citizens and generally to reverse the threat of trading-down effects. Currently, the perspective and interests of property owners are rather secondary in the debate. Accordingly, there is hardly any evidence of concrete mixes of uses in the properties that guarantee an equal balance of interests between the benefits of the citizens and the capital preservation of the owners. A representative survey of 1,000 citizens will be used to fill this research void. The resulting database is intended to help owners of large-scale retail properties, in particular, those with a strategic and long-term approach, to find sustainable concepts for follow-up use that ensure the long-term preservation of the value of the capital tied up in the properties by providing needs-oriented real estate solutions that make a visit to the city centre an experience for citizens, while at the same time ensuring that the transformation is economically feasible and the long-term preservation of the value of the capital bound up in the properties. Since structural change is an international phenomenon, the insights gained in the survey of German citizens can also open up development perspectives for properties in other European countries. The results of the survey define the room for action for real estate owners and thus lay the foundation for the evidence-based and sustainable transformation of inner cities that brings added value for all stakeholders involved.