Russia Leads The Way In Shopping Centres
4 Nov, 2005, Moscow
Russia has 1.8 million square metres of shopping centre space due to come onto the market between June 2005 and the end of 2006, says European Shopping Centre Development, a report by Cushman & Wakefield Healey & Baker, which operates the European division of Cushman & Wakefield, the world's largest privately held real estate services firm.
More new shopping centre space is due to come on stream in Russia than any other country in Europe. This represents nearly a doubling of area devoted to shopping centres. "We are witnessing a retail revolution in Russia," says Natalia Oreshina, the Head of Retail of Cushman & Wakefield Stiles & Riabokobylko, the Russian office of C&W/H&B. "Russia is a market with 143 million consumers and one of the fastest economic growth rates in the world."
European Shopping Centre Development is an annual report based on data collated by C&W/H&B's offices across the region. According to the report, the total amount of shopping centre space across the 34 main markets of Europe is now edging towards the 100 million square metre mark, with 5.5 million sq m due to be completed in 2005 and a further 7 million sq m in 2006, bringing the total to 98.6 million sq m.
Boris van Haare Heijmeijer, C&W/H&B's Head of Shopping Centres, says: "The spotlight may be on the eastern fringes of Europe, but we are still seeing healthy levels of new shopping centre space coming onto the market in the more mature economies of Europe. These new schemes not only improve the quality of retail space but also provide a greater choice for retailers and consumers."
In Russia, the schemes that are due to open between June 2005 and December 2006 include five MEGA malls developed by Swedish retailer IKEA in Moscow, St Petersburg, Kazan, Ekaterinburg and Nizhniy Novgorod totaling around 640,000 sq m of gross leaseable area.
Behind Russia in terms of new shopping centre space coming onto the market in the second half of this year and next year comes Italy, followed by Poland. On a regional basis, the fastest growing areas of Europe in terms of new shopping centre space over the last five years have been Central Europe with annual increases of 30-60 per cent and Eastern European with 40-90 per cent.
In Poland, rents are on average around half of those in Western European markets, with yields being one per cent higher. Piotr Kaszynski, C&W/H&B's Head of Retail in Poland, says: "Poland's advantage over other countries in Central Europe is the large number of cities above 100,000 inhabitants (40 across the country) and its growing consumer purchasing power."
Piotr Kaszynski continues: "At present, the retail market is undergoing significant change, with the development of city centre schemes rather than the previous hypermarket schemes. In addition, retailers are seeking to develop critical mass with regional representation, supported by efficient logistics."
The key new scheme in Poland is Zlote Tarasy, in the centre of Warsaw. The 225,000 sq m mixed-use development includes 63,500 sq m of retail and leisure space, and is being developed by ING Real Estate at a cost of around 400mn euros, with Rodamco Europe acquiring a 50% stake on completion. Zlote Tarasy opens in autumn 2006, and almost 80 per cent of the space has already been committed to.
In terms of total floorspace of the European countries monitored, the UK, France and Germany lead the ranking. In addition, these three mature markets alone are due to see around 1.6 million square metres of new shopping centre space open between June 2005 and December 2006.