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2023 | Book

Investments in Pop-up Stores

Alternative Rental Models and Vacancy Risk Reduction


About this book

This book focuses on two key challenges: the negative impact on property value and higher vacancy risk for pop-up shops. It suggests alternative rental models based on footfall and customer conversion rates and provides a strategic framework for real estate investors to develop and manage pop-up stores. The empirical study emphasizes the importance of data availability, market fundamentals, and the potential of the operator model for managing pop-up retail spaces.

The retail real estate market in Switzerland comprises about 13.0% of total commercial areas. The growth of e-commerce, accelerated by the COVID-19 pandemic, is causing significant changes in brick-and-mortar retail. Real estate owners are facing higher vacancy rates, shorter rental terms, and lower rental prices. However, e-commerce has limitations that prevent it from fully replacing physical stores. Retailers are now seeking flexible and innovative spaces like pop-up stores.

In Switzerland, pop-up stores are mostly used as marketing tools or to fill vacancies, rather than as a sustainable business model, due to their negative impact on property market value.

This textbook has been recommended and developed for universitary courses in Germany, Austria and Switzerland.

Table of Contents

1. Introduction
According to an estimate by Wüest Partner, the retail market accounts for approximately 35 Mn sqm GFA, corresponding to ca. 13.0% of the total commercial areas in Switzerland (Schläpfer et al., 2020). With the increasing importance of e-commerce sales, the brick-and-mortar retail market is however going through a structural change, whereby the novel Coronavirus has acted as a catalyst of this already ongoing trend. According to the GfK Market Monitor Switzerland, while total retail trade sales volume (B2C) in Switzerland somewhat stagnated between 2010 and 2019, the online retail trade sales volume (including both domestic purchases and imported goods from foreign companies) increased from CHF 5.1 Bn in 2010 to CHF 14.0 Bn in 2022, at the expense of traditional brick-and-mortar stores.
Alessia Breda, Michael Trübestein, Matthias Daniel Aepli
2. Literature Review
Despite the popularity of the concept and the increasing amount of academic research on the topic, there still is no single definition for the term “pop-up store” to be found in the literature. The following table summarizes a selection of the academic definitions attributed to the term.
Alessia Breda, Michael Trübestein, Matthias Daniel Aepli
3. Methodology
This chapter provides a description of the methodology adopted in the design and development of the research as well as the methods selected for the collection and analysis of the data used to obtain an answer to the proposed research questions.
Alessia Breda, Michael Trübestein, Matthias Daniel Aepli
4. Results Alternative Rental Models
In this chapter the analysis and the results of the data obtained from the literature review is presented. From this data, suggestions on the suitable KPIs to measure the performance of pop-up stores are provided along with the derivation of a framework for alternative rental models suitable for pop- up stores.
Alessia Breda, Michael Trübestein, Matthias Daniel Aepli
5. Results Minimization of Vacancy Risk
In this chapter the analysis and the results of the data obtained in the interviews as well as the most relevant findings are presented and compared to the findings from the literature review.
Alessia Breda, Michael Trübestein, Matthias Daniel Aepli
6. Conclusion & Discussion
The goal of this study is to determine a framework for the development and management of pop-up stores for real estate investors, which maximizes rental income and minimizes risk. The ultimate goal is therefore to develop a framework that could allow investors to consider pop-up stores in their retail real estate portfolio beyond a temporary strategy to counteract periods of vacancy. A critical reflection of the study findings as well as an analysis of its limitations and quality is provided in this chapter.
Alessia Breda, Michael Trübestein, Matthias Daniel Aepli
Investments in Pop-up Stores
Alessia Breda
Michael Trübestein
Matthias Daniel Aepli
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