European shopping centre market reaches maturity, says C&W

The growth in new European shopping centre space has started to slow, as mature European markets begin to reach the peak of space required, according to the latest research from Cushman & Wakefield.

Over the last two decades, Europe has seen an average of 5.4 million m2 of new shopping centre space built every year, but an annual average of just 3.5 million m2 of new space is scheduled to be completed in 2018 and 2019. Established retail markets and a shift towards online shopping have reduced the need for new space across Europe.
Although the need for new shopping centres is falling, ageing stock in the most mature markets presents a significant opportunity for redevelopment. One third of Europe’s shopping centre space was originally built more than 20 years ago.
In the first six months of 2018 Western Europe saw 373,000 m2 of new space created, an 8.2% year-on-year (y-o-y) rise, taking the total space available to 108.8 million m2. However, in H2 2018 and 2019 the region is expected to see just 2.1 million m2 of new space created, a fall of 25% y-o-y.

Meanwhile, in the less mature Central and Eastern European (CEE) market, 676,000 m2 of space was created, an 18% fall y-o-y, taking the total to 57.4 million m2 of space. In H2 2018 and 2019 the region is expected to see the creation of 4.0 million m2 of space – a 2.4% y-on-y fall.
Silvia Jodlowski, senior research analyst at Cushman & Wakefield, said: 'Changing consumer behaviour and the rise of online shopping is set to have an increasing impact in more mature markets, particularly in Western Europe. In developing shopping centre markets in Central and Eastern Europe the requirement for space is increasingly impacted by macroeconomic trends – particularly in Turkey and Russia, where activity has been lower in H1 2018, which contrasts with Poland where a strong economy is driving growth.'
Western Europe
The UK was the most active Western European country in terms of new openings, adding nearly 90,000 m2 of new space in H1 2018, driven mainly by the 69,000 m2 extension of Westfield shopping centre in White City, London. However, weaker demand for space, the growth of online retail, high levels of supply, and higher operating costs have curtailed development activity.
France added 83,000 m2 of new shopping centre space and recorded the second highest amount of new shopping centre development in Western Europe in H1 2018.
Finland had the third highest amount of new shopping centre space in H1 2018, with 69,000 m2 completed. Despite the expected strong growth in new space – with 312,000 m2 in the pipeline for H2 2018/2019 – Finland is still expected to require further space into the early 2020s due to strong population growth and improving purchasing power in Helsinki and other main cities.


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