Aldi to Offer Berlin Students Flats on Top of Discount Food

(Bloomberg) -- German discount grocer Aldi has become the latest player in the industry to realize that putting apartments on top of its supermarkets can help smooth the process of building bigger new stores in crowded cities.

Aldi Nord is working with the Berlin authorities to build more than 2,000 apartments above its stores in the booming German capital, where a housing shortage has sent prices surging. Some of the apartments could be set aside for students or social housing, which can help persuade city officials to give the green light to building projects.

“We want to build large stores and you don’t always get the space needed for those,” Aldi Nord spokeswoman Serra Schlesinger said. “In areas of high population density, the city has an interest in affordable accommodation.”

In Britain, supermarket chains have long built stores with apartments above them, while Aldi’s German rival Lidl has at least two similar projects in Berlin. Schlesinger declined to disclose the budget for Aldi’s project but the spending comes on top of a 5.2 billion euro ($6.5 billion) modernization drive involving the refurbishment of 4,800 stores across Europe.

Aldi has plans for a similar apartment project in Hamburg with 14 flats, but that is dwarfed by the size of the Berlin blocks, the first two of which will together have as many as 200 dwellings. The company plans to retain ownership of the apartments and rent them out, with the focus on securing store space rather than making significant rental returns.

Some 30 percent of the apartments will be rented out at 6.50 euros per square meter, equivalent to the current tariff for social housing excluding heating costs, Aldi said. The rest will be priced at 10 euros per square meter.

To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net.

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Iain Rogers

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