More than 75 million sq ft of planned shopping centre development space in Europe has been axed or put on hold as a result of the global downturn.
According to a report from property agency Cushman & Wakefield, about 107.6 million sq ft of new shopping centre space will open across Europe in 2009, 40 per cent less than forecast in July 2008. An even lower amount, 75.3 million sq ft, is expected to open in 2010 – representing the slowest rate of expansion since 2005.
The report, European Shopping Centre Development, suggests that emerging markets such as Russia, Ukraine and – to a lesser extent – Turkey will all be notably affected. These three countries accounted for 58 per cent of the total development pipeline a year ago, but that figure now stands at 22 per cent.
Cushman & Wakefield European retail partner Boris van Haare Heijmeijer said: “The downturn in the development market is mainly due to the difficulty in securing finance for schemes. This is exacerbated by many retailers being cautious in their expansion and being reluctant to commit to new shopping centres.”
However, Alexander Colpaert, a consultant in Cushman & Wakefield’s European research group, said there are still opportunities in some markets. “The slowdown in development activity is not necessarily a negative trend for many of the emerging countries in Europe,” he said.
“Some areas, in particular the capital cities, have seen an enormous amount of shopping centre space added in a very short space of time.”
Last year was a record year for shopping centre openings in Europe, with 310 schemes launching, covering 96.8 million sq ft. Russia led the way with 17.7 million sq ft of new space – a 23 per cent increase in shopping centre space – followed by Turkey, the UK, Spain and Romania.
The UK was the most active Western market, with about 9 million sq ft of space coming onto the market last year, primarily through the opening of three schemes – Liverpool One, Westfield London and Cabot Circus in Bristol.
UK developers have since put many of their schemes on hold as the downturn has taken hold. Developments such as Hammerson’s Sevenstone in Sheffield, CSC’s Westgate in Oxford, Westfield’s Broadmarsh in Nottingham and Hammerson’s Eastgate in Leeds are all on ice.