The rate of shopping centre construction activity has fallen to levels not seen since the early 1990s recession, according to a new report from property firm CB Richard Ellis.
Shopping centre development has fallen to less than 25% of levels recorded in 2007, prior to the onset of the credit crunch.
There is no development planned for 2012, and CBRE does not expect new schemes to be delivered until 2015/2016.
New centres will provide less than three million square foot of space in 2011, limiting opportunities for retailers to expand.
More than half of the total new shopping centre space will come from the 1.9 million sq ft Westfield Stratford scheme, due to open in East London next month.
However, the report found that unlike the early 1990s recession, when new scheme proposals and consent levels declined sharply, the overall development pipeline has remained “relatively stable”.
The report found that the decline “continues to be more to do with nominal delays than schemes being scrapped altogether”.
CBRE shopping centre development and leasing director Mark Disney said: “Retailer demand is increasingly focused on larger shopping centres, but the lack of new development is limiting opportunities.
“We are seeing strong demand for new space in schemes such as Westfield Stratford, but demand is also strong for space in established major shopping centres like Bluewater, Meadowhall, and the Trafford Centre.
“The market is now gradually adapting to developers’ requirements to see committed income before starting on-site.
“We are also seeing greater evidence of retailers being prepared to agree pre-lettings as they play their part in unblocking the pipeline to deliver the space that they need. After the current hiatus in the pipeline, we expect that a flow of new schemes will begin to be delivered to the market from 2015/2016 onwards.”
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