Strong retailer demand for prime shopping centres in top locations, particularly in Germany and Italy, could serve as a catalyst to drive the development pipeline across Europe, according to new research released by Jones Lang LaSalle at Mipim in Cannes. The tightening of the supply pipeline during 2009 in the wake of the financial crisis meant that substantial amounts of planned space were delayed. However, the growing demand from retailers for top schemes as European economies recover could stimulate development, JLL said.
Strong retailer demand for prime shopping centres in top locations, particularly in Germany and Italy, could serve as a catalyst to drive the development pipeline across Europe, according to new research released by Jones Lang LaSalle at Mipim in Cannes. The tightening of the supply pipeline during 2009 in the wake of the financial crisis meant that substantial amounts of planned space were delayed. However, the growing demand from retailers for top schemes as European economies recover could stimulate development, JLL said.
The total EMEA pipeline for 2010 equates to 8.5 million m2 of new shopping centre space. This is 25% lower than the forecast made for the same period back in December 2008, and includes a high proportion of schemes that were originally planned to open in 2009 but were subsequently delayed due to the financial crisis. The actual level of openings in 2010 is likely to reduce further still, JLL warned.
James Dolphin, Head of pan-European Retail Agency at Jones Lang LaSalle, said: 'Retailer demand is strong for prime shopping centres in the best locations, with many international brands looking to expand their presence across the region and tap into the large high-spending catchments. In the markets where demand is strongest, such as Germany and Italy, it could be a catalyst for some recovery for pipeline product. Italy in particular lacks route to market options for new entrants given the low number of high quality shopping centres, but less nervousness around the economy and consumer spending compared to Spain for example has brought it to the fore of retailers’ thoughts which should benefit further development.'
During 2009, almost 6 million m2 of new shopping centre space was developed across Europe, a 28% decline on 2008 levels, bringing an end to three years of consecutive development growth, JLL's research shows. Russia remained the most active market, representing 21% of the total increase in European stock, but despite this being higher than the proportion from 2008 (13%) actual completions were 340,000 m2 lower than in 2008. Collectively Poland, Turkey and Italy contributed a further 33% of all completed development space in Europe.
