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11.1 million sq m of new shopping centre space under construction across the EMEA region

Company: Amcham

According to leading global real estate advisor CBRE, 11.1 million sq m of new shopping centre space is currently under construction across Europe, the Middle East and Africa (EMEA).

Turkey, United Arab Emirates (UAE) and Russia are the most active countries in terms of shopping centre development and accounted for more than 50% of total development under construction in 2017.

Turkey saw 300,000 sq m of new space completed in the first half of the 2017. The UAE follows closely behind with just under 2 million sq m of space currently under construction with Dubai accounting for more than three quarters of developments in the country. New schemes coming onto the market are trying to differentiate by providing amenities and experiences that are difficult to replicate online.  One notable new scheme doing this is Meydan One Mall, which will include more than 100 food and beverage outlets, the world’s largest indoor ski slope and a luxury brand quarter. 

Across Europe, the Eastern European countries are the most active shopping centre development markets, with Russia, Poland and Ukraine all showing strong development pipelines. Russia’s development pipeline currently stands at 1.9 million sq m and this is largely due to improving macroeconomics fundamentals coupled with strong forecasted retail sales which is starting to improve developer sentiment.

Katarína Brydone, Head of Retail at CBRE:

“New developments in Europe are slowing as the market has already reached optimum saturation rates in terms of the purchasing power of the population. If we consider CZ, there is not enough room for new big development, except for in Prague. As a result, contemporary developers and owners of shopping centers are focused primarily on the possibility of expanding existing well-functioning shopping centers. However, due to the old stock and the limited new construction, redeveloping existing shopping centers has remained the leading trend.”

The UK has the largest shopping centre development pipeline in Western Europe with a total of 460,000 sq m of new space under construction and due be delivered over the next five years.

France has the second largest shopping centre pipeline with 409,000 sq m and Spain is slightly behind with 345,000 sq m. Spain’s economic recovery is improving asset performance and investor and developer sentiment.

Extensions to existing shopping centres continue to be a popular route to achieving additional floor space, especially in Western European markets.  Extensions made up 20% of shopping centre stock in EMEA with the UK, Ireland and Austria all showing sizable extension pipelines. The UK has one of the largest shopping centre extension pipelines in Europe with Westfield London making up 69,000 sq m.  

Katarína Brydone adds:

“Eastern markets are less saturated, and Ukraine, for example, is not in the CEE, which is why the percentage of new construction is so high. But let’s not underestimate their purchasing power. Generally, the retail spending of Eastern European countries is more dynamic than the rest of Europe, which corresponds to the economy – we mustn’t forget that these countries are fundamentally very different from the countries in Western Europe in terms of Retail spend per capital.”

Tags: Real Estate | Business Development |

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