Sharpest decline in new shopping centre development in Europe for 27 years
31 Mar, 2011, Moscow
• Russia and Turkey continue to dominate the 2011/12 development pipeline
London, 31 March: New shopping centre development in Europe fell sharply in 2010, with the largest decline since 1983, according to a report from Cushman & Wakefield. Around 5.2 million sq m of shopping centre space was completed last year, a fall of 30% from 2009. It was the second consecutive year of falling completion levels and represented the lowest annual completion total since 2004.
However, development is expected to pick up in 2011 with over half of the markets predicted to see an upturn in activity. 6.9 million sq m of new space is scheduled for completion by the year end. Market conditions remain uncertain across many parts of Europe, and the pipeline may increase or decline with projects restarting or being delayed depending on economic growth, retail sales and occupier demand. If all of the schemes are finished on time, this year’s development total will exceed that of last year by 33%.
In total, 165 new shopping centres opened in 2010 with total GLA (Gross Lettable Area) standing at just over 131.9 million sq m in Europe. As with previous years, Central and Eastern Europe accounted for the majority (63%) of new space opened. The largest scheme completed was the 144,300sq.m City-Park Grad shopping centre in Voronezh, which is now the biggest shopping centre in Russia outside of Moscow. Russia recorded the highest development total of all the markets covered, accounting for a quarter of new space opened last year.
Many Central and Eastern European markets recorded notable increases in floor space, in particular Bulgaria which saw seven new schemes resulting in a 139% increase in shopping centre space year-on-year. In Western Europe, Italy and Spain recorded the largest amounts of new space added. In Italy, 15 new shopping centres and four extensions opened in 2010. Spain saw seven new schemes and three extensions completed. Germany, Portugal and France all experienced declines in development activity.
Russia and Turkey continue to dominate the European development pipeline with their combined 2011/12 pipeline accounting for over 40% of the European total. Both markets are expected to see large increases in development activity in 2011. In Russia, more than 3 million sq m GLA is due to open in 2011/12. In Turkey, nearly 1.8 million sq m of new space is scheduled for completion before the end of 2012.
Charles Slater, partner and head of retail services,
Mike Rodda, head of cross border retail investment,
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