Central and Eastern Europe (CEE) continued to dominate shopping centre development activity last year and accounted for nearly 70% (2.4 million sq m) of all space added to the market in H2 2013, according to the latest European Shopping Centre Development report by global property consultancy Cushman & Wakefield.
Overall, development across Europe picked up considerably in the second half of 2013 with 3.6 million sq m of new shopping centre gross leasable area (GLA) delivered onto the market. This is twice the amount of space completed in H1 2013, albeit the total figure was lower than previous forecasts, with the opening date of a number of projects delayed into 2014.
James Chapman, Head of Cushman & Wakefield’s Central European capital markets team, said: “Appetite for shopping centre investment is returning to pre-crisis levels and recent development activity has created new opportunities. Many of the larger cities across Central Europe are now reaching saturation point with the exception of Warsaw where potential exists for new large-scale retail. In most other top-tier cities the focus is on repositioning existing centres to drive performance, whilst the completion of numerous new centres in smaller cities – with a 100,000+ population – has helped to intensify competition and attract investor attention.”
„Mirroring the more stable development situation and the increasing consumer and business confidence in Slovakia, we can also confirm that there will be some further shopping centre transactions completed during this year in Slovakia – a sign that confidence is returning to this investment sector,“ said Andrew Thompson, Managing Partner and Head of CMG in Slovakia.
Total European shopping centre floorspace now stands at approximately 154 million sq m of GLA as at 1 January 2014. France remains the largest market by shopping centre space, with 17.3 million sq m of GLA, followed by the UK in second place with 16.93 million sq m and Russia in third with floorspace now exceeding 16.86 million sq m. However, Russia is expected to replace the UK as the second largest market by the end of this year.
“Landlords of shopping centres will have to invest in existing shopping schemes and improve them. This represents an important trend since shopping centres will need to differentiate from each other in order to compete. In Slovakia, the saturation of retail space per person is 219,5 sq m GLA per 1000 inhabitants which is similar to other locations in Central Europe where the average saturation in CE is 209 sq m and in the EU27 is 262 sq m,” said Matúš Furman, Head of Retail team in Slovakia.
Looking forward to 2014, there are 203 new shopping centres due for completion across Europe; and 127 of these will be delivered in Central and Eastern Europe. Of the 86 extensions to be opened, 65 will be located in Western Europe. There will be 103 schemes and 32 extensions opening in 2015. The Ukraine, Turkey and Russia will continue to fuel development across the continent, all three recording double-digit rises in total floorspace.
“There will be only one shopping centre opened in Slovakia this year – Bory Mall with a size of 53 000 sq m GLA. The expected opening date is the beginning of November. There are two more shopping centres in the preparation phase: Forum Poprad and City Arena Trnava, with both expected to complete in Q4 2015,” Furman added.