Jones Lang LaSalle reports that 14.1 million m² of new shopping center space across Europe will be completed during 2014 and 2015 – highlighting continued activity in shopping center development in the region. Russia will have the largest share of shopping center space in Europe by 2015 with 3.8 million m² scheduled for completion over the next two years.
During 2013, 5.6 million m² of new shopping center space was completed in Europe, an increase of 11.2% on 2012. The pipeline for 2014 is expected to reach 7.2 million m², the highest level since 2008 and up 32% on the average level completions of 5.5 million m² between 2009 and 2013. An additional 6.9 million m² of shopping center space is expected to go online in 2015, up 26% on the 5 year average.
Driven by improving economies and rising levels of disposable incomes, the majority of the new schemes continue to be developed in Russia and Turkey. In 2013 almost 50% of newly developed shopping center space in Europe was located in these two countries. Increased development activity across the wider European region will however see the overall European share of new space completed in Turkey and Russia reduce to 34% by 2015.
Russia is anticipated to have the largest shopping center stock in Europe by 2015. In 2013 more than 1.6 million m² of new shopping center space was completed in Russia, up 11% on 2012. Avia Park in Moscow is one of the most exciting developments due to open in 2014 with a total of 225,000 m² of leasable space available - making it the largest shopping center development in the country. For 2014 and 2015, total completion in Russia is expected to reach 2.0 million m² and 1.8 million m² respectively.
Turkey was Europe’s second most active market in 2013 with a total of 1.2 million m² of new shopping center space opening. For 2014 and 2015, total completions are expected to reach 1.9 million m² and 535,000 m² respectively. Zorlu Center was the most notable opening in 2013; the high-end luxury scheme in Istanbul includes over 66,000 m² of retail space. At 150,000 m² Boulevardi Mall in Istanbul is currently the largest scheme under construction in Turkey and is expected to open later this year.
In Western Europe, Germany has the largest shopping center development pipeline over the next two years. In 2014 some 613,000 m² is expected to open. This is expected to increase to 919,000 m² in 2015. This is significantly up on 2013, which saw 295,000 m² of new shopping center space coming onto the market and highlights the increased confidence among developers and investors in this core market.
James Brown Head of EMEA Retail Research and Consulting at Jones Lang LaSalle says; “Growth markets of Russia and Turkey are playing catch up. Favourable market conditions will not necessarily translate into a wave of new retail development across Western Europe in the same way experienced in previous periods of economic recovery. Structural change is still playing out, retail is being redefined, developers will be cautious, as will lenders on new developments.”
Robert Bonwell CEO EMEA retail at Jones Lang LaSalle says;
“Redevelopment is the new development for most established markets, as tired stock loses appeal and deferred capital expenditure comes home to roost. Redevelopment of existing large scale retail assets will become a key part of Asset Management in a retail market that is being redefined through multi-speed economic growth, increasing urbanization and rapid technological change.”