In the majority of city centres, the range of retail options looks the same. For the heart of Tilburg, Wereldhave and Bulsink are striving for more variety. The property owner provides the finished building, while the retailers bring in the display materials, cash registers and their collections.
From 2016 up to last year, Wereldhave was working on a redevelopment project in Tilburg’s city centre. Part of the renovation work was aimed at connecting two shopping areas: the Pieter Vreedeplein and the Emmapassage. Whereas you could only walk up and down the shopping street in the past, now visitors could do a shopping loop.
To boost the range of shopping options in the refurbished Emmapassage, Wereldhave wanted to attract a few new players. In other words, retailers that could add value to the shopping area, but who lacked the resources to establish themselves in a city centre.
“Retail leases have a fairly conventional set-up,” explains Rik Janssen, Manager of Marketing and Communications at Wereldhave. “Due to the long minimum lease period and high completion costs of the premises, the investment risk is too high for many retailers. We have been observing this trend especially since the covid pandemic.” Wereldhave came up with a different lease concept for Tilburg: the whitebox. Here, the newly constructed space is delivered completely finished, including floors, lighting, a climate control system, a storeroom and finished walls in a chosen colour. Janssen: “Actually, entrepreneurs only need to bring in the display materials, the cash register and their collection. If they want to customise the space beyond that, then we coordinate it in consultation.”
The minimum rental period of five years also does not apply here. Tenants enter into a contract that can be terminated either after two years or after five years. For the first two years, retailers only pay a percentage of their sales. So if no one comes into the shop, the retailer doesn’t pay any rent. A calculated risk, Janssen acknowledges. “We have discussions beforehand, of course. Tenants need to demonstrate that they’re going to deliver something good.”
NIX & NIX
General contractor Bulsink constructed five retail units in the Emmapassage according to the whitebox concept. The properties were completed in succession, which saved time and money. “That was great for us, because delivering turnkey properties is an investment risk. In the end, they still have to be rented out. Since Bulsink has a lot of experience in retail construction projects, they took the pressure off and helped us accelerate the process.” The whitebox shops are scattered throughout the shopping centre and are indistinguishable from the other retail options from the outside. Janssen: “They are no different from their neighbours.”
In the end, finding tenants turned out not to be such a huge undertaking. When the Emmapassage reopened in 2022, every retail space was filled, including the whitebox properties. The first Whitebox entrepreneurs include America Today, MSCH Copenhagen, Nix & Nix – alcohol-free liquor store and Retail Rookie of 2022 – Voetbalshop.nl and Ecco. “For the Nix & Nix concept, for example, where there was only a physical shop in Haarlem, this was an opportunity for them to set up a flagship store at an A location. Without any major investment, this allowed them to validate their range with shoppers in the heart of Tilburg.”
We are tapping into a new market of start-ups and brands who otherwise would not be able to open in an A location
The lease concept is mainly aimed at new brands or retailers. Larger chains like HEMA or Rituals are not likely to sign up so quickly. “The turnkey model part of the concept is an immediate limitation for larger tenants, as there is less room for customisation. We finished the walls for Nix & Nix in their brand colours, and also at the other shops we were flexible in the finishing touches here and there. But, as an entrepreneur, if you have a very clear idea of what your shop should look like, a white box may not be the best solution. We are focusing on start-ups, web shops or retail brands that may not yet have enough capital to take a formula approach to finishing their shops.”
NO POP-UP STORES
Incidentally, a whitebox location should not be confused with a pop-up store. “Whereas the hallmark of a pop-up store is its temporary nature, here we are looking to work together for the long-term. New players start under flexible conditions but with the notion that it will ultimately grow into a permanent lease based on their having demonstrated a successful business.”
Wereldhave is considering other locations for introducing the whitebox concept. “For us, the investment has been worth it. I’m convinced that we would not have fully leased out the Emmapassage if we had not invested in these retail units at our own risk.” Janssen also describes the importance for city centres when it comes to attracting new players to A locations. “Sometimes you have to invest more as an owner to make a shopping area more attractive. Ultimately, this is how we are adding more colour to the city centre.”