ICSC: Russian and Turkish cities dominate mall development

Istanbul is the most active market in Europe in terms of shopping centre development as Turkish and Russian cities continue to dominate the continent’s pipeline, new research from CBRE shows.

Twenty-seven shopping centres, equivalent to 1.9 million m2, are currently under construction in Istanbul, the survey found. As in other markets, much of this new space is away from the city centre in peripheral locations.

Moscow leads the development pipeline for Russia with 1.5 million m2 of space due to open over the next three years. However, development activity is also at an all-time high in regional cities such as St Petersburg, Yekateringburg, Samara, and Novosibirsk, with some 2.6 million m2 due for completion in 2014 alone.

Globally, a total of 39 million m2 of shopping centre space is currently under construction in the 180 countries surveyed, representing a three million m2 increase from 2013. More than half of this is taking place in China.

Shanghai takes first position with 3.3 million m2 of space under construction – more than the combined total of all 86 European cities excluding those in Russia and Turkey.

Istanbul and Moscow feature in the top ten most active markets, together with Wuhan, Beijing, Nanjing, and Guangzhou.

Natasha Patel, EMEA Retail Research, CBRE, commented: ‘Global development activity is similar to last year in terms of location with new construction dominated by Asia and in particular China. The scale of new development there is due not only to economic growth in the region, but also due to the demands of cross-border retailers, many of whom have found that the existing retail space in the region is not of the standard they require.’

Of the 35 new centre openings in Europe in 2013, 26 were in Eastern Europe, with only four in Central Europe and just five in Western Europe.

Although new shopping centre development remains at historically low levels in much of Western Europe, many larger centres have extensions planned to accommodate the strong occupier demand, CBRE said.