End of Life: The Case of Aging Large-Scale Retail Properties

Retail is an increasingly dynamic environment, shaped by digitalization, empowered customers and broad socio-economic changes. These factors are impacting retailers' business models and, in particular, their offline stores, which are subject to physical deterioration and obsolescence.

Over time, the declining utility of built substance conflicts with increasing user expectations, ultimately leading to demolition. This includes significant urban, economic and environmental consequences. By analyzing an extended dataset based on the German demolition statistic, this study empirically examines the lifetime of demolished large-scale retail buildings. It identifies the characteristics of underperforming buildings as well as the triggers that ultimately lead to their demise.

As demolition generates significant negative externalities, it is assessed whether end of life occurs prematurely. This is measured by technical and economic benchmarks, as well as against alternative assets. The study is conducted with the aim of future-proofing large retail properties, which is essential for sustainable future urban development.

Autorentext

Dr.-Ing. Fritz Pelzl researches the future challenges of sustainable real estate and urban development with a focus on retail and residential buildings. He is also a project developer and the founder and managing director of several property companies.

Inhalt

Introduction.- Framework of Large-scale Retail Properties.- Aging Process of Large-scale Retail Properties.- Transfer of Obsolescence on Large-scale Retail Properties.- Demolition of Large-scale Retail Properties.- Lifetime of Demolished Large-scale Retail Properties.- Lifetime of Demolished Worst-performing Large-scale Retail Properties.- Conclusion.