European shopping centre growth slows

Growth in new shopping centre space across Europe has declined by 10% to 10.8m sq ft in H1 2018, compared with the same period last year. The amount of space under construction in the six-month period also dropped by 11% year-on-year, according to data from Cushman & Wakefield, with a 25% fall in Western European regions. The findings show that over the past two decades, Europe has seen an average of 58m sq ft of new shopping centre space built every year, but an annual average of just 38m sq ft of new space is scheduled to be completed in 2018 and 2019. The slowing pace indicates mature European markets are beginning to reach the peak of space required for shopping centres. Established retail markets and a shift towards online shopping have reduced demand. Shopping centre floorspace across Europe totalled 1.7bn sq ft in the first half of the year. The UK The UK opened the majority of new shopping centre space in Western Europe in H1 2018, as growth in new space slows across the continent. In the UK there was nearly 970,000 sq ft (90,000 sq m) of new shopping centre space added during the six months, buoyed by Westfield London’s 740,000 sq ft extension. However, the report noted that weaker demand for space, the growth of online retail, high levels of supply and higher operating costs have curtailed development activity. Following the UK was France, which added 890,000 sq ft of new shopping centre space and recorded the second highest amount of new shopping centre development in Western Europe during H1. Redevelopment opportunities The findings also show one third of shopping centre space across Europe was originally built more than 20 years ago, presenting a “significant opportunity” for redevelopment. Silvia Jodlowski, senior research analyst at Cushman & Wakefield, said: “Most of Europe has now had over 20 years of continuous shopping centre development – much more in the case of established markets such as the UK, France and Germany. “Arguably, most European shopping centre markets are at or near maturity, with net new additions to space likely to slow considerably. “As a result, development will focus increasingly on the revitalisation and renewal of existing space, as a growing number of older schemes become obsolete. In fact, over one-third of Europe’s shopping centre space is now over 20 years old and, while much of this space has been refurbished and remodelled over time, equally much of it is ripe for redevelopment.”   To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette