Netherlands: If supermarket function disappears, 25% of value remains
- DRC Discount Retail Consulting GmbH
- 2 days ago
- 2 min read
Supermarket real estate has been a stable investment for years, but there are also risks involved. Especially in a period in which economies of scale are becoming increasingly important. 'A quarter of the real estate value will remain if the supermarket function disappears.'
In forty years, the number of supermarket stores fell from about 8,500 to just under 5,000. This means that in the same period, about 3,500 properties lost their supermarket function, and that is precisely a major risk for investors.
Changes in the supermarket landscape
The number of supermarket branches has decreased in recent decades, but their average retail floor area has increased. 'It has increased from about 800 m2 in 2005 to just over 1,100 m2 in 2025,' says Wouter Kromkamp, co-owner of supermarket real estate consultant Macellum.
Supermarkets have traditionally had to deal with smaller margins, but rising costs are forcing them to scale up. As a result, this is increasingly becoming a game of the big ones, something that actually started with the consolidation in the eighties and nineties. Today, stores need more consumers in a catchment area to be successful. Currently, the average is 5,500 consumers, but this figure is highly brand-dependent.
Destination of the property
"If a supermarket decides to close the building and no worthy alternative is built in its place, then roughly only a quarter of the real estate value remains," says Robert Jan Koopman, co-owner of Macellum. The value is falling so sharply because this type of building is difficult to transform into a new function. For example, there is often little light, which makes a transformation into an office or homes difficult.
'The moment there is a supermarket in the building, the value is about fifteen to sixteen times the annual rent, assuming a future-proof supermarket location. For example, the supermarket pays a rent of 150 - 200 euros per square meter. If that supermarket function disappears, as an investor you will have to deal with obsolete real estate that can only be filled by parties such as a gym or other retail format,' says Koopman.
Property value
The risk of losing the supermarket function is often underestimated, according to Macellum's advisors. 'You may only be at seven to eight times the new annual rent, and you will still have a quarter of the value of your real estate left,' Koopman completes the calculation.
When the supermarket disappears from an area, it also has an effect on local facilities such as specialty stores. 'The supermarket is really a magnet for a shopping area. Functions such as a bakery, a butcher and a pharmacy are all related to it. If that trigger disappears, these kinds of parties often don't survive either,' says Kromkamp.
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