Transformative real estate is not just about changing buildings, it is about changing how we think about the purpose of real estate in society, says Veronica Gallo-Alvarez.

The retail landscape across Western Europe has undergone seismic shifts in recent years. The rise of e-commerce, accelerated by the covid pandemic, has fundamentally altered consumer behaviours and challenged traditional retail models. At Redevco, we view these disruptions not merely as challenges, but also catalysts for reimagining the future of urban spaces.

As one of Western Europe’s largest privately-owned real estate managers with about €10 billion in assets under management across more than 300 buildings, on the Continent as well as in the UK, we are uniquely positioned to lead this transformation. As owners of both best-in-class retail on high streets and out-of-town retail parks, we have evolved our mission to focus on creating vibrant, mixed-use environments that serve the needs of communities while delivering sustainable returns for investors.

The €1bn urban transformation initiative

At the heart of our strategy is an ambitious €1 billion, pan-European investment programme extending to 2030, with half the capital expected to be deployed in the next few years. This initiative targets the transformation of our prime retail assets in urban centres into dynamic, 24/7 destinations that respond to the changing demands of the communities they serve.

We are currently evaluating up to 40 potential redevelopment projects, making this one of Europe’s most ambitious urban transformation programmes undertaken by a single asset manager. This goes beyond modernising retail spaces – it is about fundamentally rethinking how these assets can better serve their communities through mixed-use concepts that integrate retail with residential, hospitality, wellness, work and community spaces.

The move away from conventional single-use investment models to experiential, mixed-use formats is reshaping our urban landscapes. At Redevco, we are not only responding to this evolution but actively participating in its development.

From retail-centric to community-focused

A defining characteristic of our transformation approach is the significant reduction in retail gross lettable area (GLA) in favour of diverse usage types. This shift reflects our understanding that today’s urban centres need to offer more than just shopping opportunities – they need to provide experiences, services and spaces that foster community engagement.

Our Elisen Palais project in Hamburg exemplifies this approach. We are redeveloping a former C&A retail store into a highly sustainable mixed-use property, reducing the retail GLA by approximately 70%. The space will instead accommodate two distinct hotel concepts, creating a vibrant destination that serves multiple community needs.

Similarly, our Rue De Rivoli project in central Paris will see retail GLA reduced by more than half as we transform an eight-story building into a true mixed-use environment. The redeveloped space will feature three floors of offices, a lifestyle hotel, a restaurant, an extensive rooftop garden offering panoramic views of Paris and urban logistics functionality.

The transformative power of these projects stems from our approach to integration. We are creating environments where different uses connect horizontally and vertically, forming self-contained ecosystems that also integrate seamlessly with the surrounding urban fabric.

Sustainability at the core

At Redevco, we aim to balance our fiduciary duty to produce financial returns with our ethical responsibility to combat climate change and generate positive social impact. Our transformation programme offers particularly compelling opportunities to reduce the carbon footprints of our assets.

Our current, most prominent high-street redevelopment schemes are targeting BREEAM Excellent sustainability certifications, with significant reductions in carbon intensity from pre-project levels. These range from over 90% reduction in Hamburg, to an estimated 35% at the Rue de Rivoli in Paris.

‘Reimagining our assets as integrated parts of vibrant communities helps to shape more resilient, sustainable and engaging urban environments.’

Veronica Gallo-Alvarez, Redevco

Environmental considerations form the foundation of our transformation strategy, rather than serving as a supplementary consideration. Repurposing existing structures inherently delivers significant environmental benefits compared with demolition and new construction.

The enhanced energy-efficiency measures we implement further amplify these positive environmental outcomes.

Retail warehouse parks: the next frontier

We are also focusing on the evolution of retail warehouse parks. As urban areas expand and absorb periphery locations, retail warehouse parks are emerging as neighbourhood hubs in increasingly affluent and diverse areas. Their excellent transport connections, large site footprints and redevelopment potential make them ideal candidates for transformation into mixed-use destinations that include everything from residential developments to last-mile logistics.

We anticipate considerable value appreciation in retail warehouse locations as they evolve towards the mixed-use character that increasingly defines city centres. These locations represent the next wave of our transformation strategy.

Pioneering positive change

Redevco aims to deliver financial returns and pioneer positive change in the built environment, demonstrating how thoughtful transformation can create spaces that serve communities, respect the environment and deliver sustainable returns.

Transformative real estate is not just about changing buildings, it is about changing how we think about the purpose of real estate in society. By reimagining our assets as integrated parts of vibrant communities rather than standalone retail destinations, we are helping to shape more resilient, sustainable and engaging urban environments for the future.

As we continue to implement our €1 billion transformation programme, we remain committed to our dual mission: delivering value for investors while creating positive impact for communities and the planet.

Through this integrated approach, we believe we can help lead the real estate industry towards a more sustainable and community-focused future.

Veronica Gallo-Alvarez is head of investment management at Redevco