C&W: Europe's shopping centre space to rise 20% in 2008-09

The current shopping centre development boom across Europe is set to continue, with more than 22 million m² of new shopping centre schemes expected to open this year and next, according to the latest European Shopping Centres Report by real estate consultant Cushman & Wakefield (C&W).

Russia tops a 34-strong country ranking of pipelines for 2008 and 2009 with 3.2 million m2, followed by Ukraine, Spain, Romania and Poland. Just over 11 million m² of space is expected to open this year and next, compared to about 8.2 million m² in 2007. This will bring the total amount of shopping centre space in Europe to 134 million m² by the end of 2009.

'The current boom in shopping centre development is set to continue into 2009, with an additional 20% of new space due to come onto the market this year and next. Much of this development is in Central & Eastern Europe, where supplies of modern retail space are starting from a very low base, while in the more mature markets shopping centres are continuing to play a key part in city-centre regeneration,' the report notes.

As well as having the largest pipeline, Russia also topped the rankings in terms of the amount of new space coming on stream in 2007, with more than 1.84 million m² of new space opened. 'In the coming years we expect to see the further fine-tuning of the retail sector in Moscow, and the more rapid development of shopping centres in Russia’s cities with a population of less than 300,000,' said Konstantin Sakharov, head of retail of C&W's Russian office. 'Ukraine is a few years behind Russia, but is now on the brink of change. Old formats still heavily dominate the market but we will soon see new landmark projects that will significantly change consumption patterns. Many retail operators are set to enter the market from Russia, although a high percentage of local formats will continue to have a strong presence in the local market at least in the short to medium term.'

The development of the Polish retail estate market may slow down after 2009 due to the restrictive regulations of the Act on Large-Surface Retail Schemes, which came into force in September 2007, noted Katarzyna Michnikowska from Advisory Department, C&W Poland.