25% INCREASE IN NEW SHOPPING CENTRE SPACE TO BE DELIVERED IN EUROPE IN 2012
New Development Aims to Meet Demand for Modern Shopping Centre Units
New shopping centre development in Europe is expected to increase by a quarter in 2012 to meet retailer demand for modern, high quality retail space, according to the latest research by global property advisor CBRE.
CBRE’s Shopping Centre Stock in Europe research examines existing shopping centres and those under construction in Europe of 10,000 sq metres (sq m) and above. This represents the vast majority of centres in which international retailers are located or would like to be located.
Across Europe, 51 shopping centres totalling 1.5 million sq m of space opened in the first half of 2012 with another 3 million sq m scheduled to open before the end of the year. If all of this space opens on time, completions will reach 4.4 million sq m in 2012, 25% higher than in 2011.
Turkey is the most active market with almost 400,000 sq m of new shopping centre space completed in 2012, accounting for one third of new space delivered in the first half of the year. This is some way ahead of Germany (165,000 sq m), with Italy and Poland (both 140,000 sq m) just behind.
Neville Moss, Head of EMEA Retail Research, CBRE, commented: “A highly active shopping centre development market in Turkey, Poland and Russia is enabling retailers to grow store networks there, but elsewhere the number of new centres is more modest, providing fewer opportunities for expanding retailers. Crucially, very little of the new space addresses the lack of prime units in major city centres – the most sought after locations by retailers - and consequently some are finding it difficult to achieve their store expansion plans.”
Some 3.6 million sq m of shopping centre space was completed in Europe in 2011, representing a 4.6% fall on the year. Nevertheless, this still signifies a significant level of new space, with only the development boom years of 2005-2009 seeing higher annual completion levels.
Emerging markets have dominated new development in recent years, but construction activity continues apace in the more mature European markets to meet retailer demand. In 2011, the big five western European markets (Spain, Italy, France, Germany and United Kingdom) accounted for one third of all new shopping centre space in Europe.
Turkey was by far the most active market in 2011, accounting for just over 20% of new shopping centre stock built last year, including the 160,000 sq m Marmara Forum in Bakirkoy, Istanbul – the largest scheme in Turkey to date. In second position was Poland where 428,000 sq m was completed in 16 centres, accounting for 12% of new space. Development activity remained high in Russia with nine new centres completed in Moscow and St Petersburg alone.
“The only retail completion in H1 2012 in Hungary was in Siófok. Pipeline remains very limited going forward as well, until the expansion of ECE’s Árkád in Budapest we don’t expect too much activity on the Hungarian retail market”, Gábor Borbély, Head of Research and Consulting at CBRE Budapest added.