In 2010 there is likely to be only seven million square meters of new space open while 2011 could see as little as five million open across Europe, the lowest figures since 2003, the Cushman & Wakefield European Shopping Centre Development report shows.
‘By 2011 new shopping centre completion levels are likely to have dropped by around 45% from their peak in 2007,’ said Alexander Colpaert, consultant in Cushman & Wakefield’s European research group.
With 2009 expecting to have around 8.7 million square meters of new shopping centre space open, a decline of 5% on 2008, the trend is definitely downwards.
The research also predicts that completion levels will not pick up significantly for two to three years.
The largest amount of new shopping centre space opened in Russia, where approximately 580,000 square meters was added in the first six months of 2009, of which around 45% was built in Moscow.
In Western Europe Italy recorded the highest amount of new space, with 18 new centres adding just over 370,000 square meters to the market.
Germany and the Netherlands also recorded relatively strong activity in the first half of 2009.
Bulgaria recorded the largest percentage increase in shopping centre provision at 33% but the largest centre to open in 2009 in Europe was the 122,000 square meter Dolce Vita Tejo shopping centre in Amadora, Portugal.
The UK has performed poorly. ‘The UK shopping centre development market remains very difficult due to issues of viability and financing.
This is illustrated by the scheme in Wakefield where the developer went into administration and construction work ceased,’ said Justin Taylor, head of UK shopping centre leasing at Cushman & Wakefield.
Although investment activity in Eastern Europe has come to a virtual standstill there is some activity in more established markets such as the UK, Germany, France and Spain, the report continues.
There is also evidence that, after two years of increases, prime shopping centre investment yields are stabilising across Europe.
