Nivy Mall sits in the New Nivy zone, a redeveloped area in Bratislava, Slovakia, located on the border of the city’s historic old town. The mall has been combined with a modern bus terminal by its developer, HB Reavis, giving it a gleaming, futuristic look. But the standout feature of the asset is Nivy Mall’s publicly accessible roof terrace. Spread over 129,000 square feet, the area has been specifically created for recreation and relaxation.
Local residents, shoppers, travelers and workers can enjoy an area that has more than 130 trees, extensive lawns, flower beds and plants. As well as the community gardens and botanical trail, the rooftop also houses bat shelters, children’s playgrounds, an 1,800-foot running track and many other recreational zones. Visitors can play table tennis or chess, or sit down to enjoy some freshly cooked food in a designated barbecue space.
The green roof at the Nivy Mall became an immediate hit when it was completed in 2021. On the 24th day after opening, the mall had welcomed its millionth visitor to the terrace.
“We design our rooftops from a user-centric approach,” says Marcel Sedák, CEO of HB Reavis Germany. “We want to bring people together. In order to achieve this, we look at our tenants and adapt our plans to their needs. This can mean installing the needed natural elements with greenery, relaxing zones, urban gardening, sports tracks, etc. HB Reavis will be open to use the rooftops of future projects in a way that will fit the location and purpose of a building, as it is an integral part of project planning. We imagine that examples like Nivy Mall rooftop — or at least parts of it — will be [widely] adopted.”
As the Nivy Mall concept shows, rooftops in Europe have come a long way since their days as lifeless spaces, allowing only restricted access to services and building maintenance staff. Kier Bothwell, an associate partner at Quadrant, a real estate asset management and development company, has observed how developers have started to recognize the roof as prime real estate. They treat it as “additional occupiable floor area that creates value, benefiting the well-being and happiness of the building’s users and ultimately making a building more desirable,” he says.
“All sectors are now looking to find better ways to use roof space that has previously been occupied by plant and equipment,” adds Tom Smithers, property director at AshbyCapital. “In office and residential, roof space is most commonly being repurposed for well-being; in industrial, it’s often used for renewable energy generation; while in the leisure industry the prime usage is now rooftop entertainment space.”
Barry Jessup, managing director at U.K. developer Socius, believes there has been an “absolute sea change” in rooftop use in the United Kingdom during the past five years, strongly influenced by post-pandemic views on urban living. “Initially, the perception was that the post-COVID reaction would see people move out to the country and live in houses with gardens,” he says. “But we’ve now seen a return to the city, a lot of people now not wanting to commute. And what they really want when they move into the cities are external spaces, and in most cities that’s usually made up of a balcony or a terrace.”
Rooftop spaces offering flexible use are becoming increasingly sought after in the office sector.
“In a new world where a ‘work-from-anywhere-you-like’ job is attainable, businesses across sectors are being challenged like never before to attract talent,” explains Bothwell.
At the same time, says Andrew Hudson, head of cost management at JLL, there is the added challenge of enticing current employees to return to the office. Within this context, an attractive rooftop space can be an “enormous value differentiator.” This is pushing tenants toward offering properties that provide attractive biodiverse rooftop spaces, bringing food and beverage offerings and fitness amenities, among other quality-of-life features.
“It’s space where people can have yoga classes, or a quiet moment to reflect during the day, to read a book, or have a little peace and quiet,” says Hudson. “They can lunch with their friends, have an informal team meeting, or show off the roof terrace to prospective employees and clients. The roof terrace almost becomes an extension of the company brand and its values.”
Another key driver for Jessup is a change in mindset of what an office work environment should look like in a post-COVID world. “The need for human interaction to generate creativity and ideas and invoke a brand presence for the business and to maintain staff loyalty is well documented,” he says. “So, there’s been a fundamental mindset change by occupiers toward providing high-quality informal workspaces. That certainly could be cafes on the ground floor, but it could also be roof terraces.”
Socius has reacted to this need itself, having created rooftops with weather cover in schemes based in Milton Keynes and Bristol in the United Kingdom. One way the developer has done this is by building solar panels on stilts — something Jessup first saw in New York seven years ago — which creates multifunctional use. “If you’re going to use roof terraces, a lot of the time, you need weather cover. If you’re working on your laptop on a sunny day, you need shade, or when it’s raining you need protection from the rain. If you can provide weather cover, then the space can be used up to 250 days a year in the northern hemisphere.”
For Rob Madden, head of London office brokerage at CBRE, creative rooftops are not only a huge selling point, but are now becoming a prerequisite for many. Not only do they encourage workers to return to the office, they also boost businesses’ sustainability strategies by creating well-being spaces and increasing biodiversity. This can then lead to stronger rental levels. A communal rooftop creates premium pricing across all floors, as well as creating a sense of community by giving all tenants access to space they might not usually be able to access. “On an exclusive basis to top-floor tenants only, it will attract super premium rents,” adds Madden.
Smithers highlights how an AshbyCapital office scheme in Slough, in the United Kingdom, called “At the Future Works,” has proved that communal roof terraces have great appeal. The space offers opportunities for socializing and wellness activities, in addition to being a place to work. “We’ve found it’s been extremely well received following the pandemic, as employers look to offer a more complete package to their staff,” says Smithers. “A more footloose approach to working life means people are more likely to take their laptops outside or use the space to work collaboratively.”
The need for green outdoor space in offices is now being taken even further. Quadrant’s Bothwell reveals the manager and developer’s latest refurbishment office project in Canary Wharf, “YY London,” will not only have a rooftop designed to host both indoor and outdoor events, but also outdoor galleries at all levels. “Recognizing the significant benefits that weaving the innate need we all have for biophilia into our day-to-day work environment, at YY London we have gone a step further, sacrificing lettable floor area — once a sacrilegious concept in the world of property — to provide green balconies at all levels. YY London gives over 5,500 square feet to the future tenant of one floor level for a wraparound, covered terrace that will be usable year-round.”
Despite the rise in office roof–terrace repurposing, it is hotels and the general hospitality sector that account for the bulk of rooftop activity, says Madden’s colleague, Mark Calder, director, U.K. retail, at CBRE. Rooftops that operate as hospitality offerings trade with significant turnovers, providing a compelling benefit to the landlord by often exceeding market rents.
“They add another dimension to the overall experience by creating an atmosphere, allowing brands to offer the consumer good food, great service and intriguing views,” says Calder. “This makes rooftops a suitable location for multiple different scenarios and as such, we see high levels of competition for space, with numerous occupiers willing to be competitive in order to secure sites.”
The future of the rooftop restaurant will be more than just a restaurant, predicts Calder. “We have seen an increasing number of onsite events, and as such, technology will start to be used in order to create events that can be streamed globally.”
Calder adds, “We think there will be more rooftops in five years’ time in terms of volume. This poses the question of how they then out-compete, and it’s likely that the occupier will play more of a role on a day-to-day basis once in situ. And whilst rents are more in line with the revenue produced by an F&B provider, it’ll be interesting to see rooftops expand outside of this scope and move into the wider experiential space.”
In contrast, industrial properties, often located outside of the city with larger roof surfaces, remain prime spaces for solar panel installation. Nevertheless, some new logistics assets are also being built with appealing rooftops in mind.
Industrial real estate developer CTP acquired the Amsterdam Logistic Cityhub (ALC) scheme in 2021, a multitenant last-mile complex that includes some 2.35 million square feet of multi-story logistics space, with approximately 1,700 parking spaces, 200 loading docks and a private 590-foot quay, as well as 120,000 square feet of office space. The complex’s energy management system, generated by solar panels and 10 wind turbines, is set to provide 6 DC 240KW fast-charging stations for electric trucks and vans. The “leftover” electricity will be used directly in the building, instead of delivering it back to the grid.
“We will also get a rooftop [that is] 1,300 feet long and 37 feet wide,” says Adam Targowski, head of ESG at CTP. “Where rooftops in warm city centers cool down the environment, this rooftop is part of the CTP ecosystem, providing a nice place for people to work in, places for meeting with other tenants and even a couple of places where people can work out.”
Overall, the most popular use of rooftop space is still to install solar photovoltaic (PV) systems. This is the case with both commercial and residential properties, says Rajul Sood, senior director and head of lending services at Acuity Knowledge Partners. In addition to the significant benefits they provide — from lower energy bills to clean and affordable energy — PV systems on rooftops do not compete with land use, and their integration into the electricity system is relatively easy due to their proximity to the point of consumption.
According to BNP Paribas REIM’s head of research, Thomas Kotyrba, positioning PV panels on top of a building can, on average, increase the value of a building by 15 percent and save some 25 percent on CO2 emissions, as well.
A cheaper option, and one that can work with both simple and elaborate rooftop configurations, is to make more use of solar reflective lime wash paint. “This can reduce the temperature on the rooftop by 30 degrees Celsius. And that could help to reduce the temperature within the building by up to 5 degrees Celsius,” says Kotyrba.
“There are also recent discussions and studies about combining PV and cool roof painting,” he adds. “This will help to increase the effectiveness of the photovoltaic installers. Combining both approaches is something that we will see more and more often in the market.”
One issue with such an approach, in particular for older buildings, is whether a property’s structure can actually hold up the pressure of installing an additional PV structure on its roof.
Hopes exist, however, that this will not be a problem for too much longer. “As the cost of solar PV comes down, we are seeing exciting advances in lightweight thin film solar technology,” says Francisca Wiggins, investment adviser to Atrato Onsite Energy. “Once this becomes commercialized, you will be able to greatly increase the amount of solar you can fit on a roof or even on the side of a building. In short, we think a rooftop without any solar will become an anomaly.”
She adds that in the United Kingdom there are an estimated 8.2 billion square feet of south-facing rooftops on commercial buildings. Rooftop solar is a way to tap into this significant source of unused space, rather than competing for the use of acreage on the ground which can divide public opinion. “Under existing permitted development rights, rooftop projects of less than 1MW can usually be installed without requiring special approval in England, enabling installation to be completed in as little as eight weeks,” says Wiggins.
“There is very little disruption to the tenant, and business should be able to continue as usual. You can see proof of this in the supermarket operators — they are notoriously concerned about trading disruption, and yet they are major proponents for onsite solar.”
Aside from the use of solar panels, Kotyrba adds that further examples of efforts to make rooftops more sustainable can be found in Europe already. These include “green roofs” that collect rainwater and distribute it efficiently, rather than allowing water to just run down the walls of a property. Rainwater captured from green roofs can be used to flush toilets inside the building or for plant irrigation.
On top of having the potential to increase overall value and rent, rooftops can create alternative revenue streams for landlords.
Kotyrba says that the owners of PV systems can be charged rent, while Sood points out some other areas where this may be possible, such as drone delivery set-ups, advertising, farming (a popular use for the residential and hospitality sectors) and even beehives.
John Arbuckle, a partner at advisory firm Gerald Eve, believes there is huge potential to increase revenue and asset value through the use of drones. “Vertiports for passenger and cargo services using eVTOL [electric vertical take-off and landing] aircraft, and cargo delivery using drones offer future opportunities to grow revenue and increase demand for commercial space in the building or area,” he argues. “This might be a particularly attractive idea for buildings with poor public transport links.
“This type of rooftop use offers the opportunity to create value through new revenue streams as well as increasing rental revenues and asset value,” adds Arbuckle. “For new buildings, or those undergoing substantial refurbishment, such opportunities might be relatively easy to exploit. However, retrofitting is often less straightforward, with planning consents, logistics and the cost of works requiring careful analysis and business case development. With a deteriorating economic outlook, maximizing values by making rooftops work harder is certainly something investors and landlords should be exploring.”
Cautious assessment is even more crucial when regulation is taken into consideration. Jumping into decisions to turn rooftops into drone-friendly landing spots could be an expensive mistake if authorities restrict drone use.
“If municipalities and cities face an increasing use of drones in the airspace in cities, then that will become more regulated,” warns Kotyrba.
Marek Handzel is the editor of Institutional Real Estate Europe.