After a number of large-scale malls were delivered to the European market in H2 2014, Russia has now broken France’s 43-year reign as Europe’s largest shopping center market – according to new research from global real estate adviser Cushman & Wakefield.
Accounting for more than half of all shopping center space added to the market in H2 2014, Russia’s total shopping center stock climbed to more than 17.7 million m² by the end of last year, overtaking France’s 17.66 million m²GLA. The UK follows behind as Europe’s third largest market with 17.1 million m².
According to Cushman & Wakefield’s latest European Shopping Centre Development report, total shopping center floor space across Europe totaled 152.3 million m² at 1 January 2015, recording a 3.3% year-on-year increase. While Western Europe currently accounts for 69% of total built space, development activity in Central and Eastern Europe (CEE) surged ahead in H2 2014, with 2.2 million m² of space delivered to the market compared to 981,000 in Western Europe over the same period.
Development activity throughout Europe has been motivated by the need to meet consumer demand for larger centers which offer a greater diversity of retailers, an array of leisure activities and a wider choice of food and drink offerings.
Western Europe’s biggest markets have seen an increasing number of extensions and refurbishments as developers seek to ‘future-proof’ small or outdated centers, whilst CEE is still dominated by the creation of new, dominant regional centers that serve a wide catchment area. These trends will continue into 2015 and 2016, with Russia and Turkey continuing to dominate the development pipeline as overall density remains at a low level, albeit the completion of projects of Russia will be subject to financing conditions and the wider geopolitical environment.
In Western Europe, development activity in markets with lower densities such as Italy and Spain are also gaining momentum, with Italy’s pipeline over the next two years more than doubling that of the UK.
Source: Cushman & Wakefield