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 168.1m sq m – as shopping centre competition increases. This is contributing to a deepening polarization between prime and secondary centres.
Cushman, in its annual ‘European Shopping Centre: The Development Story’ report, says developers are focusing efforts on redevelopment and refurbishment projects in an effort to retain their market positions.
Over the next two days, we take a closer look at the sector, split by Western and Central & Eastern Europe.
Growing concern around the rise of e-commerce and strong growth in high street retail dampened new shopping centre development across Western Europe. France, for the fourth year, was the most active country in terms of floorspace added, with 237,000 sq m of new space to the market.
In the UK, although the ongoing shift to online has resulted in store closures, oversupply is not holding back shopping centre development. Rather than discouraging further development, it has merely focused developers’ interest in driving footfall as they strive to create unique and interactive shopping experiences via leisure extensions and mixed-use developments. The UK was the third most active development market in Western Europe in 2018, with 147,000 sq m of new space delivered, of which 74% was contained in two developments. This represented an 8% rise on 2017.
In Finland, strong urban migration is supporting shopping centre development where 80% of total built space was located in the three largest regions: Helsinki, Tampere and Turku. While in Southern Europe, Spain retained its top position for shopping centre development.
Across 2019 and 2020, 2.1 million sq m of new shopping centre space is expected in Western Europe.
Top five Western European cities for development pipeline 2019-2020