A total of 39 million square meters of shopping center space is currently under construction across the world’s major cities, representing a three million m² increase from 2013, according to the latest research from global property advisor CBRE.
The development activity of shopping center space around the world is focused in China. Indeed, more than half of the shopping center space under construction in the 180 countries surveyed is taking place within China’s borders. Shanghai takes first position with 3.3 million m² of space under construction – more than the combined total of all 86 European cities excluding those in Russia and Turkey. Just behind Shanghai is Chengdu with 3.2 million m² followed by Shenzhen and Tianjin with 2.7 million m² and 2.5 million m² under construction respectively.
Other markets in the top ten include Istanbul, Wuhan, Moscow, Beijing, Nanjing, and Guangzhou.
In Southeast Asia, nearly 40% of the 3.3 million m² under construction is located in Kuala Lumpur, making it the 12th most active market globally. In Vietnam, Ho Chi Minh City and Hanoi have also seen a large number of new developments in suburban areas and are seeing strong leasing demand from retailers attracted by lower rents and the lower-to-mid income residences nearby.
Buoyant occupier demand is pushing a strong development pipeline in New Delhi with 500,000 m² of new retail space currently under construction.
In the Middle East, Abu Dhabi continues to strengthen its position as a leading retail destination with three centers (168,000 m²) completed in 2013 and another eight centers (778,000 m²) currently under construction.
In Europe, Russian and Turkish cities continue to dominate the development pipeline. The most active market in Europe is Istanbul with 27 centers (1.9 million m²) currently under construction. As in other markets, much of this new space is away from the city center in peripheral locations.
Moscow leads the development for Russia with 1.5 million m² of space due to open over the next three years. However, development activity is also at an all-time high in regional cities, such as St Petersburg, Yekateringburg, Samara, and Novosibirsk, with some 2.6 million m² due for completion in 2014 alone.
Natasha Patel, EMEA Retail Research, CBRE, commented:
“Global development activity is similar to last year in terms of location with new construction dominated by Asia and in particular China. The scale of new development there is due not only to economic growth in the region, but also due to the demands of cross-border retailers, many of whom have found that the existing retail space in the region is not of the standard they require.”
Of the 35 new center openings in Europe in 2013, 26 were in Eastern Europe, with only four in Central Europe and just five in Western Europe. Although new shopping center development remains at historically low levels in much of Western Europe, many larger centers have extensions planned to accommodate the strong occupier demand for the best retail destinations around Europe.