Asia Driving Spike in Global Shopping Center Development
CBRE reports this week that global shopping center development continues to grow with a total of 11.4 million square meters (122.7 million square feet) of new shopping center space opened in 2014, compared with 10.6 million sq. m. (114.1 million sq. ft.) in 2013.
Emerging markets, particularly in Asia, have continued to dominate the shopping center development pipeline with over 39 million sq. m. (419.8 million sq. ft.) under construction at the end of last year. China accounted for over 60 percent of the pipeline, with Russia, Turkey and India also possessing significant space under construction, says CBRE's report.
Shanghai tops the ranking for most new space under construction with 4.1 million sq. m. (44.1 million sq. ft.), followed by Shenzhen with 3.4 million sq. m. (36.6 million sq. ft.) and Chengdu in third place with 3 million sq. m. (32.3 million sq. ft.), Chongqing and Guangzhou make up the top five most active markets with more than 20 projects in the pipeline. However, supply of new development in China and India is at risk of slowing down due to the economy and mounting financial pressures on landlords. Construction of some shopping malls is on hold due to lack of funding or in some cases landlords are considering changing the schemes to other uses.
Europe accounted for 20 percent of total completions in 2014 with Russia and Turkey continuing to dominate the new development pipeline. Moscow was the most active European country in 2014 and the only city outside of China in the top five. Notable schemes completed include the Avia Park which is currently Europe's largest shopping mall totalling 231,000 sq. m. (2.5 million sq. ft.) of gross leasable area (GLA). Istanbul saw the addition of eight new shopping centers totalling 440,253 sq. m. (4.7 million sq. ft.) and also has one of the largest development pipelines in Europe. This has been led by the easy availability of credit in the Turkish market which has fuelled consumer spending.
In the Middle East, Abu Dhabi continues to strengthen its position as a leading retail destination with the completion of four new centers including the Yas Mall located on Yas Island with space for 400 shops, a 20 screen cinema and 10,000 car parking spaces. Paris was once again the most active market in Western Europe, with only one center opening in 2014.
Natasha Patel, head of CBRE EMEA Retail Research said, "The factors driving the development pipeline of new space remains largely unchanged compared to last year in terms of location with new construction dominated by Asia and in particular China. Other influences include a growing middle class population in emerging markets, the urbanisation of large cities and a lack of high quality retail space required by cross border retailers.
Western Europe and the U.S. continue to suffer from a lack of new development and extensions and refurbishments of existing centers will be a key focus in a bid to continue to attract key retailers and consumers."