Polarisation widens in European shopping centre market
As shopping centre markets reach maturity in most European countries, there will be growing polarisation between successful prime schemes and struggling secondary sites which are having to diversify to survive, according to new research from Cushman & Wakefield.
The firm’s annual ‘European Shopping Centre: The Development Story’ report shows that approximately 2.6 million square metres of new shopping centre space was completed in 2018, 28% below the amount added in 2017. The 2018 figure represents the lowest level of completions for 24 years and is comparable with the volumes delivered in the early 1990s when the first traditional shopping centres in Central and Eastern Europe were opening.
However, while the pace of new development has been slowing over the past five years, the total size of the European market is still growing – and now stands at 168.1 million sq m – increasing shopping centre competition. As developers try to retain their market positions, they are focusing efforts on redevelopment and refurbishment projects, aimed at creating sophisticated, modern and aesthetically pleasing shopping and leisure centres.
Report author Silvia Jodlowski, Senior Research Analyst at Cushman & Wakefield, says: “Opportunities for new shopping centre development are seen mainly in two types of schemes. Dominant innovative schemes with a strong leisure element, in place of aging unattractive schemes, or smaller convenience/community retail schemes, where distance to the store, the presence of a food operator and appropriate tenant mix are crucial factors for a scheme’s success.”