A lack of quality shopping centers in Europe held back the expansion plans of retailers in 2010. Now a 25 percent growth in new shopping centers is expected to put retail development back on track.
Across Europe, 51 shopping centers totaling 1.5 million square meters of space opened in the first half of 2012. Another 3 million square meters is scheduled to open before the end of the year, a new research by leading global property adviser CB Richard Ellis shows.
This sudden spurt in the development of shopping centers is to due to the demand for high-quality retail spaces. The study found that most retailers prefer to set up shops in shopping centers of 10,000 square meters and above.
Emerging markets are some of the most active markets this year. Turkey leads the race with almost 400,000 square meters of new shopping centre space. Germany follows next with 165,000 square meters, and Poland and Italy have 140,000 square meters each.
Last year Turkey was an active market with over 20 percent of new shopping center stock. This includes the 160,000 square meters Marmara Forum in Bakirkoy, Istanbul - the largest scheme in Turkey to date. Poland saw the construction of 16 shopping centers while Russia had nine new ones.
“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 centers is more modest, providing fewer opportunities for expanding retailers,” Neville Moss, head of EMEA retail research at CBRE, said in the report.
Though emerging markets dominate on the development front, construction activity continues in mature European markets to meet retailer demand. The report shows that in 2011, the big five western European markets (Spain, Italy, France, Germany and United Kingdom) accounted for just one third of all new shopping centre space in Europe.
Tough consumer environment was attributed to be the reason for low levels of construction in the UK.
“Tough consumer environment and limited demand has led to low levels of construction. The amount of space under construction in the UK is just 1.5 percent of the total space being built in Europe,” the study showed.
