Retailers look to emerging markets for growth: CBRE

An increase in the amount of shopping centre space available in emerging European markets is expected to put retailer growth back on track next year after a shortage of space curtailed expansion in 2010, according to new research by property adviser CB Richard Ellis.

CBRE's Shopping Centre Stock in Europe research found that 1.9 million m² of shopping centre space was completed in 2010 - a fall of 36% from the previous year. However, if all of the new shopping centres due in 2011 are completed on time, there will be an increase of 53% in new space available to retailers next year, totalling 2.9 million m².

In particular, renewed confidence in markets such as Turkey, Russia, and Poland has resulted in an upturn in construction starts and completions are forecast to rise again in 2011. There are currently 146 shopping centres (over 20,000 m2) under construction in Europe, with the highest levels of activity in the emerging markets of Turkey (1.3 million m² over 26 schemes), Russia (856,000 m² over 19 schemes), and Poland (712,000 m² over 21 schemes).

In Western Europe, Italy (394,000 m2), Germany (369,000 m2), and Spain (356,000 m2) recorded the largest amount of new space currently under construction. The UK currently has three shopping centres under development, with Westfield Stratford City being the largest at 177,000 m² and due to open in September 2011.

John Welham, Head of European Retail Investment at CBRE, commented: 'Since the global economic downturn the majority of investors have focused on core assets and locations, and this still remains the case today; however, the retail sector in particular is now starting to see more capital looking for ‘value-add’ opportunities. Lack of shopping centre development in Western Europe, combined with a growing interest in riskier markets, should show through in 2011 investment activity, with an upside potential often greater than the current fundamentals may be suggesting.'