Chinese carmaker Nio recently opened a showroom in a seven-storey historic building on one of Amsterdam’s canals. The Metz building on the Keizersgracht, which had previously housed an Abercrombie & Fitch store, received a complete makeover from architect firm MVRDV before Nio moved in.
“The exciting challenge of this project was in unifying the history of this building with the identity of Nio, a company which in many senses is interested in offering a vision of the future”, said MVRDV founding partner Jacob van Rijs.
Seeing cars in prime retail space is nothing new. There have been luxury car dealers at Berkeley Square in Mayfair, London, for decades, for hedge fund managers to gawp at during the few breaks they have. US carmaker Tesla opened showrooms in Europe as not many people had heard of the brand when it came to Europe 15 years ago. Other EV brands, from Genesis to Polestar, have followed suit.
“Car brands are more and more a statement of self, what you are you doing or not doing for the planet,” said Jonathan Doughty, global head of foodservice, leisure and place making at developer and shopping centre operater ECE. “What’s on your drive is a statement about you.”
Nio, however, wants to offer more than just a space where you can admire its cars. It opened the first Nio House in Europe in Oslo, Norway in the autumn of 2021. It was no coincidence that the Chinese carmaker had chosen the country for its European debut. Last year, 93% of cars sold in Norway were either electric or a plug-in hybrid, according to the International Energy Agency. The second-highest take-up is in Sweden, with 60%, followed by China (38%) and the UK (24%).
Nio House in Oslo has a 2,100-square-metre user centre for products and services on the upper floor but on the lower floor it has a café, library, forum, lab, living room and joy camp. It has even hosted kids’ parties.
“When Nio House opened in Oslo, it had more traffic than H&M and Zara’s flagships,” said Remi Olsen, head of retail at Norwegian property consultant Akershus Eiendom. “Even in smaller cities, it creates a positive vibe as it’s something more than a showroom of cars – it’s a lifestyle.”
Ben Binns, head of cross border retail agency at Cushman & Wakefield, believes electric vehicle carmakers popping up in prime retail space is not only driven by marketing, but also by fewer consumers heading out of town. He points to Ikea, which is moving with a smaller offering into prime retail space in town centres. In March, the property arm of the Swedish retailer bought Brighton’s main shopping centre, Churchill Square, for a new Ikea city store. It will offer a wide array of the brand’s products, with many available for immediate purchase or delivery via zero-emission vehicles.
“[Ikea] has realised that people aren't going out of town as much as they used to,” said Binns. “Not everybody has a car or is travelling out more.”
When Genesis set up shop in Battersea Power Station after it was converted to a shopping centre in 2022, the Chinese EV brand said that the power station, powered by sustainable energy and offering “unparalleled levelling up opportunities for the local community”, was the perfect place to showcase the brand to the London market. Its Genesis Studio was “more like stepping into a modern gallery than visiting a car dealership,” it said.
Many landlords view carmakers as great tenants. For some locations, where competition is strong, automotive brands are willing to pay higher rents, said Akershus Eiendom’s Olsen. The spend on rent is not tied to actual sales from that space but comes out of the marketing budget.
Landlords, however, need to be aware of a few practicalities. The property needs to be accessible to deliver the cars, the doors need to be wide enough to bring the cars into the property, the floors need to be strong enough to carry them and there needs to be a sprinkler installation. They could be faced with a higher insurance bill because of perceived fire risks.
Not all landlords are targeting carmakers as their next tenant. Roger Goyk, director of retail at Brookfield Properties Germany, said he has been approached by a number of carmakers to lease space in The Playce, its shopping centre owned by Potsdamer Platz in Berlin. The area has historic ties to the car industry as Daimler Mercedez Benz had its headquarters at Potsdamer Platz. However, Brookfield Properties’ leasing strategy for The Playce focuses on curating a unique retail and entertainment destination to the widest audience. Goyk believes that carmakers have an appeal that doesn't match the wider vision for the newly pedestrianised area.
If you wanted to buy a car, where would you take it for a spin?
Josefine Ulrich, director EMEA retail leasing strategy & operations at JLL, does not agree that car brands are not inclusive enough for prime retail locations.
“It depends on the brand and the pricing point,” said Ulrich, adding that you can walk casually in without feeling pressured to buy a car.
EV brands may temporarily put the brakes on further expansions due to falling consumer demand, amid range anxiety and high costs, and a looming trade war between the EU and China.
“There’s a question mark over tariffs at the moment,” said Cushman’s Binns. “The technology is still developing and evolving, and the customer is still determining what they want and don’t want.”
Carmakers are racing to increase charging speed and range and make EVs cheaper. Meanwhile, cities around Europe are increasingly charging polluting cars to enter the city centre or banning them altogether. The future points to EVs and you’re likely to see more of them when you’re out shopping.