London, 17 April 2013 – An unprecedented 32 million square metres (sq m) of shopping centre space is currently under construction across the world, representing a 15% increase year-on-year (28 million sq m in 2012), according to the latest research from global property advisor CBRE.
Shopping centre development activity is heavily concentrated in emerging markets, with China home to more than half of all the space under construction (16.8 million sq m). Seven of the 10 most active development markets globally are in China. These include Chengdu (2.9 million sq m) and Tianjin (2.1 million sq m), with Shenyang, Chongqing, Wuhan, Guangzhou and Hangzhou due to deliver over one million sq m over the next three years.
Other markets experiencing substantial expansion include Istanbul, Moscow, St Petersburg, Abu Dhabi, New Delhi, Kiev, Hanoi and Kuala Lumpur.
The rapid growth of new shopping centre development in emerging, as opposed to ‘mature’, markets is attributed to a growing middle class, the urbanisation of large cities and consumer demand for better quality retail. Retailers, including many from western Europe and North America, are competing to take advantage of these new opportunities.
Across Europe, shopping centre development in 2012 increased by 10% year-on-year to 1.71 million sq m; however, a large proportion (72%) was in Eastern Europe. Istanbul was the most active European development market last year with the opening of seven new centres, including Marmara Park (94,000 sq m) and Trump Towers (41,000 sq m). Istanbul will be the most active development market in coming years with 32 centres currently under construction.
Europe’s other highly active development market is Russia which, like Turkey, is benefiting from strong economic growth and rising incomes. In St. Petersburg, new residential areas supported by enhanced road and rail links are driving shopping centre development, with 0.5 million sq m under construction. Moscow has the largest development pipeline, with 815,000 sq m due to open over the next two to three years. In neighbouring Ukraine, Kiev has 445,000 sq m under construction in eight centres, making it the fourth most active development market in Europe, and attracted a record 40 new international retailers last year.
Neville Moss, Head of EMEA Retail Research, CBRE, commented:
“The fact that a substantial majority of new shopping centre development in Europe is within its emerging markets is hugely significant. Prime space is in short supply in mature markets and retailers are increasingly turning to these emerging, but increasingly promising, alternatives.
“However, cross-border retailers continue to seek prime space and much of the new space in emerging markets is in peripheral areas of the large cities, appealing only to local retailers. In many cities, the mismatch between demand and supply has led to increasingly high rents in prime areas and high vacancies elsewhere.
“Another feature of both mature and emerging markets is that the proportion of mixed-use is increasing. Larger shopping centres of the future will incorporate major leisure attractions and other uses to create a more appealing customer experience and meet the challenge of online retailing.”
View the Global Shopping Centre Development report
Note
This is the second year that CBRE has measured the level of shopping centre development in 180 of the world’s major cities. The survey was based on new centres of over 20,000 sq m and excluded retail warehousing and factory outlet centres.
About CBRE
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2012 revenue). The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
