30. März 2010 
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Development of shopping centres still declining to a low point in 2011
During 2009, France also moved into the top five of the new shopping centre completions table, with around 530,000 sq m delivered. The Netherlands also experienced a high level of completions during the year with more than double the 10 year average completed over the year.
Alexander Colpaert, retail researcher at Cushman & Wakefield said: “Whilst forecasting completion levels beyond 2011 is difficult given the uncertain market conditions, it is clear that much will depend on the pace of the economic recovery across Europe as well as the appetite for risk taking among investors and funders. Emerging markets such as Russia, Turkey and Poland will most likely lead the way in terms of a recovery in shopping centre development activity, with favourable demographics and healthy demand from (international) retailers for the best space in prime locations. In many mature, western European markets the focus will be on the regeneration of existing retail destinations as the polarisation between prime and secondary locations continues to increase.
“There are a large number of shelved projects throughout Europe which could be reinitiated in the short term. For example, in the UK alone around 1.2 million sq m shopping centre space is currently on hold. When the economic environment improves and finance eases, such projects could boost the medium term pipeline significantly. Whilst there will be a delay before new schemes come on-stream, suggesting supply shortages in some markets over the next 2-3 years, investor interest in development is steadily re-awakening and the best schemes are unlikely to remain stalled for long.”
Charles Slater, partner and head of retail services Cushman & Wakefield Russia, said: “Despite the dramatic slowdown in development activity in Russia the pipeline continues to be robust and tops the table in terms of announced projects. Going forward there are positive forecasts for Russia’s economy this year and 2011. Market fundamentals point to a returning of the retailer occupational markets which will help fuel developer’s appetite to again push into the many untapped cities across the regions of Russia.”
Razvan Gheorghe, partner and managing director, Cushman & Wakefield Romania, said: “Job insecurity during 2009 in the private sector coupled with the 2010 Government layoff program did not help consumer confidence or boost spending or borrowing. This has therefore affected the development of new shopping centres. We believe that the upturn in development will take place only after improvement in the jobs market and after banks regain confidence in the real estate sector. In our opinion, 2010 will be a year of preparatory work for future developments, with completion timed in the years ahead when the Romanian economy should be in recovery mode.”
Alexander Colpaert, retail researcher at Cushman & Wakefield said: “Whilst forecasting completion levels beyond 2011 is difficult given the uncertain market conditions, it is clear that much will depend on the pace of the economic recovery across Europe as well as the appetite for risk taking among investors and funders. Emerging markets such as Russia, Turkey and Poland will most likely lead the way in terms of a recovery in shopping centre development activity, with favourable demographics and healthy demand from (international) retailers for the best space in prime locations. In many mature, western European markets the focus will be on the regeneration of existing retail destinations as the polarisation between prime and secondary locations continues to increase.
“There are a large number of shelved projects throughout Europe which could be reinitiated in the short term. For example, in the UK alone around 1.2 million sq m shopping centre space is currently on hold. When the economic environment improves and finance eases, such projects could boost the medium term pipeline significantly. Whilst there will be a delay before new schemes come on-stream, suggesting supply shortages in some markets over the next 2-3 years, investor interest in development is steadily re-awakening and the best schemes are unlikely to remain stalled for long.”
Charles Slater, partner and head of retail services Cushman & Wakefield Russia, said: “Despite the dramatic slowdown in development activity in Russia the pipeline continues to be robust and tops the table in terms of announced projects. Going forward there are positive forecasts for Russia’s economy this year and 2011. Market fundamentals point to a returning of the retailer occupational markets which will help fuel developer’s appetite to again push into the many untapped cities across the regions of Russia.”
Razvan Gheorghe, partner and managing director, Cushman & Wakefield Romania, said: “Job insecurity during 2009 in the private sector coupled with the 2010 Government layoff program did not help consumer confidence or boost spending or borrowing. This has therefore affected the development of new shopping centres. We believe that the upturn in development will take place only after improvement in the jobs market and after banks regain confidence in the real estate sector. In our opinion, 2010 will be a year of preparatory work for future developments, with completion timed in the years ahead when the Romanian economy should be in recovery mode.”
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