Why apartment blocks are adding coffee bars to the mix

 —  Article by JLL Staff Reporter
Young man drinking coffee in cafe and using tablet computer
Image credit: Shutterstock

For many people living in Europe’s cities, coffee isn’t just about a quick caffeine fix on their daily commute, it’s also about relaxing and socializing in cafes whether it’s Monday lunchtime or Friday night.

While there’s no shortage of artisan or chain outlets, residential developers are increasingly choosing to add their own offerings to the mix with coffee bars on the ground floors of new build apartments.

In doing so, they’re building a sense of community and providing an amenity that adds value for residents while improving the attractiveness of their schemes – not to mention adding a valuable additional income stream as coffee sales soar.

It’s a sign of the residential sector’s growing appreciation of the needs and requirements of residents, says Nick Whitten, UK residential research director at JLL.

“Residents increasingly expect high quality services and amenities on their doorstep,” he says. “Desirable coffee bars in developments provide an area where residents can work, meet friends or relax in what they see as a home from home.”

Creating a coffee-fuelled buzz

The use of ground-floor units for cafés is, according to a 2017 joint study by the London School of Economics and policy network, Future of London, a huge opportunity to regenerate and improve areas.

And placemaking is an essential part of the country’s nascent private rented sector. Schemes owned by build-to-rent funds, including that of Dutch pension fund PGGM and Legal & General, are including cafes as part of the drive to create more than just homes.

“Coffee bars have been a feature of office buildings for many years,” says Whitten. “Residential developments are now following suit. The traditional model was that ground floor units were leased to separate business – but that boundary is blurring now.”

Several London residential schemes, including The Madison in Canary Wharf and Berkeley Homes’ Goodman’s Fields in east London, have incorporated coffee bars, with the latter home to a Notes independent coffee roaster.

Independent coffee chains are leading the way, with residential developers and investors aware of the draw such bars have. In Dublin, the Press Up group’s Union Café is taking space in a major residential scheme, the Camberley Mews development, in the Irish capital’s Churchtown district.

Getting the right blend

In Germany, it’s early days yet residential developers are thinking more about how they can best incorporate cafes into their schemes. the internationalization of Berlin and its reputation as a hip, creative city with plenty of entrepreneurs is bringing in new residents with their own set of lifestyle preferences. These are shifting the focus of amenities within the city’s apartment schemes, which were previously limited to kindergartens and supermarkets.

“International buyers are looking for a sense of place rather than simply a flat,” says Thomas Zabel, JLL head of German Residential Development. “But what’s really changed things is scale. Projects are increasing in size and becoming quarters.

“When you have upwards of 500 residents in a new development, coffee is an obvious requirement. German residential developers are learning.”

Heading north out of Berlin’s Mitte district, Instone Real Estate’s The Mile apartment scheme on former industrial land ran the risk of being somewhat isolated. Completed in 2016, the 271-unit scheme has incorporated a street-level coffee bar, 19Grams, in a former gallery, where baristas meticulously pour milk against a backdrop of exposed brick and wooden shelving.

While catering mainly to residents, the café is also enjoying the attention of lunchtime footfall from workers in the vicinity. The completion last year of the new headquarters of the German Federal Intelligence Service directly opposite brought around 4,000 staff to the street.

“What we are seeing residential developers aim for is more access to the wider public, with entrances often positioned on both sides of a café,” says Zabel. “The customer base spreads beyond the resident.”

Back in the UK, very few coffee bars are exclusively for residents-only use.

“It is difficult to ensure a profitable operation when many of the residents are away from the building through the course of the day,” says Whitten. “This has meant developers have had to find suitable ways of allowing public access to drive footfall through the day while also ensuring resident security is maintained.”

Whitten says the UK’s embracing of flexible working policies and remote working has meant that community-focused, co-living schemes, such as “The Collective” scheme in northwest London, are particularly ripe for the addition of coffee bars.

“Where you live is increasingly where you work and where you play,” he says. “Coffee bars aren’t the only option for developers looking to create high-quality social spaces within their buildings. But for many developments, they can be a good fit.”

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