Mixing it up at Potsdamer Platz
Berlin’s Potsdamer Platz is indicative of the way retail developments around the world have had to adapt by incorporating a much greater mix of retail, food & beverage and entertainments in order to stay relevant and survive.
Since acquiring the estate in 2016, Brookfield Properties has invested over €200 million to transform Potsdamer Platz into a flagship destination in Germany, attracting world-class retail, food and beverage, and leisure providers.
The focal point of the renovation is the Potsdamer Platz Arkaden, now rebranded as The Playce, a major shopping and entertainment space. Construction began in January 2020 and concluded in September 2022, resulting in over 460,000 sq ft of retail space spread over three floors.
Jonathan Doughty, project director at ECE Marketplaces and international food & beverage specialist who has been working on Potsdamer Platz for some years, says: “Retail has changed and will never go back. You need to give people what they want…it’s not just functional food anymore.”
This can also mean a shift away from those ubiquitous global brands. “Starbucks went out and vegan doughnuts came in and it’s doing 50% more sales. It was a recognised Berlin brand and there’s Burgermeister, which is legendary in Berlin and when it opened sales were off the scale,” he says.
Roger Goyk, director of retail at Brookfield Properties Germany, agrees that people are now looking for “local heroes”. When the 47,000 sq ft Manifesto Food Hall was introduced into the development it featured diverse international food vendors but also included four local brands.
Other brands brought in include some from the UK such as experimental mixology concept The Alchemist that originally opened its doors in 2010 at Spinningfields in Manchester, which delivers drinks accompanied by theatrics.
Simon Potts, MD of The Alchemist, says: “What we’ve done is not re-invent the wheel. A margarita is a margarita. We’ve been encouraged to retain our UK character. There is a sentiment against big brands but people do want consistency. It’s the NPD that then attracts people in.”
Another UK brand at Potsdamer Platz is Lane7, which has set the standard for boutique bowling, creating a modern, vibrant atmosphere at its locations in its home market. Tim Wilks, director at Lane7, says the move to Germany is based on the comfort he has with the location of the development and its future prospects.
“We are buying into the future. It has a wider generational pull. It’s got ambition and we’ll evolve our unit. We want to be bespoke to the local environment so although we’re cashless in the UK we won’t be in Germany,” he explains.
What both these operators are undoubtedly also buying into is the work done at Potsdamer Platz to shift German food away from its price sensitivity. Doughty says: “It has been very low price with the expectation that a good meal would cost less than Euros 10. After Covid-19 the experience [of eating out] became more important. The perception of cheap has therefore had to change as you can’t make money any more. It’s now less about the transaction. The Alchemist is like a theatre show around a drink.”
Typically German retail is very fragmented and having the 17 buildings on the Potsdamer Platz development all under single ownership has provided the opportunity to “play the long game”. Part of this was initiated in 2022 when Brookfield Properties undertook broader public realm improvements to create a green neighbourhood with interconnected pedestrian roads and squares. Completed in February 2024, these upgrades have made it a more accessible and enjoyable space for office tenants, tourists, and residents.
This reflects the broad change in the retail landscape and how it fits into a wider eco-system, according to Doughty: “You can’t keep building retail in the old way. There is no demand for it. You have to put in other stuff [beyond retail]] as it’s what people desire. The retail industry 10 years ago got fat, lazy and forgot that guests need stimulating.”
Glynn Davis, editor, Retail Insider