Shopping centres continue to boom in Europe's emerging markets
16 Oct, 2008, Europe
New shopping centres in Europe with a record 15 million square metres of retail floorspace will have opened by the end of 2008 according to the latest European Shopping Centre Development Report from real estate adviser Cushman & Wakefield.
The annual figure is the highest since 1965 when Cushman & Wakefield began monitoring the introduction and growth of shopping centres in Europe. 15,000,000 sq m is more than 16 times the size of the world’s largest planned shopping centre, the Mall of Arabia, Dubai.
Looking further ahead, the development pipeline figure for the 18 months from July 2008 to the end of 2009 is even larger and stands currently at 26 million sq m with the emerging European markets of Russia, Ukraine and Turkey accounting for 58 per cent of the total. Over the next 18 months shopping centre floorspace is set to double in both Russia and Ukraine.
Russia tops the overall ranking with 10 million sq m of space under construction and expected to complete between July 2008 and the end of 2009. This figure includes 14 ’super-regional’ schemes of more than 100,000 sq m. The largest scheme due to open by the end of 2009 is the Forum Istanbul, Turkey which will be over 172,000 sq m. By contrast, development in Bulgaria has been slower than in its neighbours with just under 350,000 sq m of new space under contruction. Proportionately, however, it will see a huge 400% increase over 18 months.
Darren Yates, associate in Cushman & Wakefield’s European research group, said: "So far, the liquidity crisis has had only a limited impact on shopping centre development. A handful of schemes have been postponed in the UK, for example. However, if the current crisis is prolonged, a greater impact may be seen on developers' ability to access funds in the coming months. Moreover, the impact on consumer spending may also become more apparent, potentially filtering through to retailer demand for new shopping centre space".
Figures for shopping centre floorspace that has already opened during the first half of 2008 show that Spain and Italy recorded the largest figure in Western Europe although the UK recorded the largest centre openings with three completions accounting for around 280,000 sq m. These included the 151,000 sq m Liverpool One scheme which was the largest centre to open in Europe. Completion levels in Spain were boosted by the opening of large regional schemes such as the 90,000 sq m Islazul scheme in Madrid and the 53,000 sq m Ballonti shopping centre in Portugalete. In total, the opening of 16 new shopping centres added around 400,000 sq m to existing provision.
Italy, which occupies fourth place in terms of new space completed, experienced record development levels last year due to the opening of a number of super-regional schemes. In 2008 the trend has been more focused on medium-sized schemes in secondary cities, with new schemes averaging around 20,000 sq m.
Boris van Haare Heijmeijer, head of European retail services at Cushman & Wakefield, said: “New shopping centre development will continue throughout 2009 although some schemes scheduled for delivery beyond that may yet be postponed due to concerns over the strength of local economies. Central & Eastern Europe has historically been poorly served and there is considerable pent up demand from retailers and consumers in these markets. Even in Western Europe, the vast majority of new schemes and extensions which have begun construction will all complete with only a small number postponed because of funding issues. Most international retailers are keeping to their expansion plans and the best schemes are likely to let well.”
Gulsin Hakman, head of retail Turkey, Cushman & Wakefield said: "Three of the ten largest schemes in Europe are due to open in Turkey by the end of 2009 making it by far the biggest year of openings so far. Turkey has a large population of almost 75 million which, measured by square metres per 1,000 population, is currently woefully under served and well below the EU-27 average. This means that new space is being easily absorbed into the market with both domestic and international retailers clamouring to get access to the this sizeable market.”
Konstantin Sakharov, head of retail at Cushman & Wakefield Stiles & Riabokobylko, the Russian operation of Cushman & Wakefield, said: “Up until the crisis we had been seeing a trend for new development in cities of less than 300,000 people. These so-called secondary and even tertiary cities are providing attractive opportunities for Russia’s most forward thinking developers. In the biggest cities, consumers have become increasingly discerning and developers have been responding by building more sophisticated schemes with a greater variety of supporting leisure facilities.”
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Chris Bond, UK Media Relations Manager
Cushman & Wakefield
Tel: + 44 (0)20 7152 5006 / +44 (0)7793 808 006
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Notes to Editors:
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