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Extensions to existing European shopping centres to drive development in 2017-18

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  • 4.5 million sqm of new space expected in 2017; a further 2.3m sqm due in 2018
  • Paris, Marseilles, Helsinki, Madrid, London have strongest pipelines in Western Europe while Istanbul, Moscow, Ankara, Warsaw and Tallinn lead way in CEE
  • Developers chase the right footfall and spend with emphasis on leisure offer

April 2017, Extensions to established shopping centres will be a significant driver of new floorspace across Europe in the next two years, according to Cushman & Wakefield’s latest European Shopping Centre Development Report.

Landlords are increasingly focused on pursuing the ‘right’ footfall by focusing on a combination of technology, data, events and entertainment, tenant mix and an improved leisure and food and beverage offer. By using data, owners can better target consumers who fit the tenant mix within centres and therefore are likely to have a higher propensity to spend.

Justin Taylor, Cushman & Wakefield’s Head of EMEA Retail, said: “Shopping centre owners are responding to shoppers’ wishes to augment their physical shopping experience with a social or leisure experience. Development activity is increasingly focusing on new formats with a strong food and beverage presence as well as leisure and entertainment operators to increase footfall, dwell time and spend. Many occupiers are likely to use and fit-out space in the future in a different way. Customers will be attracted to brands where the internal physical environment offers the opportunity to meet, shop, work, rest and play.

“Extensions to established centres will account for around a quarter of new space and there is good logic behind that. The planning process is shorter, they have existing public transport solutions and a ready-made customer base to tap into – all of which reduces risk. As schemes get larger they can also attract more visitors and become regional destinations in their own right, which can bring additional benefits to the host city or town as well as the wider region.”

Western Europe

France, the most active shopping centre development market in Western Europe in 2016, also has the strongest development pipeline in Western Europe. More than 931,000 sqm of new space is scheduled to be delivered to the market in 2017-2018, of which approximately 56% is in the key regional cities of Paris, Marseille, Lille and Lyon.

Arnaud de Bergeyck, International Partner, Head of Capital Markets Brussels, said "Historically, there are only few shopping center transactions in Belgium due to limited amount of (new) products available. 2017 should be a milestone year thanks to the expected sale of 2 qualitative shopping centres in Brussels - Docks Bruxsel and Woluwe Shopping."

Report author Silvia Jodlowski, a Research Analyst in Cushman & Wakefield’s EMEA Research & Insight team, said: “Across Europe, future development activity is expected to be focused on locations with a good balance of low shopping centre density, high consumer spending, a low risk environment and where the existing stock is in need of refurbishment or redevelopment.

“In Western Europe, London and Edinburgh have strong potential for future growth, driven mainly by extensions and redevelopments of existing centres. Cologne, Hamburg and Lyon are other locations offering good development potential.

“In CEE, strong development activity in the last ten years has led to significant growth in shopping centre density in many of the region’s capital cities. Prague, Bucharest and Budapest are the exceptions, as shopping centre density is below the CEE city average. However, developers are also increasingly targeting opportunities in fast-growing second-tier cities such as Krakow and Wroclaw in Poland. The main Turkish cities of Ankara and Istanbul should be the potential future hotspots for development, however the economic and geopolitical risks remain.”