New European mall openings slow to 2005 level: C&W

The number of new shopping centre openings in Europe has slowed to the lowest rate since 2005, according to new research from Cushman & Wakefield. Just 2.1 million m² of shopping centre gross lettable area (GLA) was added to the market in the first half of 2010. A total of 64 centres opened - a decrease of around 50% year-on-year compared to the same period in 2009, which saw 120 centre openings.

In its new European Shopping Centre Development report, the global real estate adviser states that a further 3.8 million m² GLA is expected to open before the end of this year, a decrease of 17% on 2009. It forecasts that completion levels will fall even further in 2011 to around 5.2 million m². This would equate to a 3.9% increase in total provision on 2010 - the smallest annual increase in almost 30 years.

With a combined 2010-11 shopping centre pipeline accounting for just over half of the European total, Russia and Turkey still top the pipeline 'league table' of shopping centres. Russia recorded the highest amount of new centre space in the first half of 2010 with just under 430,000 m² GLA completed, of which 41% was located in Moscow. The 130,000 m² scheme Vegas shopping centre in Moscow, which opened in June, was by far the largest scheme completed in the first six months of 2010.

France and Italy have the largest pipeline of new space in Western Europe. In France, which has seen a strong increase in retail development in recent years, the focus is on smaller centres in secondary cities. There has been a relatively steady level of development in Italy where the pipeline figures for 2010 and 2011 indicate a slowdown of 25-30% on the 10-year average for annual completions.

Virtually all European countries have seen shrinking pipelines in recent years. In total, 10 countries saw no new shopping centre openings in the first half of 2010, including the Czech Republic, Hungary and Ireland. Completion levels are not expected to pick up in the short term, although the number of new development projects may increase in some countries next year, depending on the pace of economic recovery and, in particular, domestic demand/retail sales.