The prediction is that, between the second quarter of 2018 and all 2019, there will be a promotion of 3.5 million square metres of retail surface in the continent, a 35% less than the annual average registered during the last years.
Shopping malls are maturing in Europe. After years of an intense activity, the sector has reached the top in European markets, but with a prediction of decrease in the promotion of this channel. In Spain, however, the sector is going through a sweet period, granted with new projects and players.
According to the study Europe’s Shopping Centre Market Is Reaching Maturity, carried out by the real estate consultant Cushman&Wakefield, between the second quarter of 2018 and the whole of 2019, there is a promotion predicted of 3.5 million square metres of surface destined to these sorts of actives in Europe, a 35% less than the annual average registered during the last years.
In a context characterised by the stride of online channels and the stagnation of great part of European markets due to the existent offer, Cushman&Wakefield foresees a hiatus of new shopping mall constructions for the next course.
In the last years, the sector has added an average of 5.4 million square metres in Europe
Promotors of countries such as the United Kingdom or France have left behind a period marked by an annual development of 5.4 new million square metres dedicated to shopping malls. Now, according to the consultancy firm, they would be getting ready to focus their investment efforts into renewing and modernising their facilities, as they are starting to become obsolete. In fact, a third of the current shopping malls in Europe are more than two decades old.
In Spain, retail parks are also being renovated: last year alone complexes such as Diagonal Mar, Dolce Vita Odeón, Glòres and Madrid Xanadú have also changed their looks. At the same time, new projects like Torre Sevilla, Open Sky, Palmas Altas, Centro Canalejas y Finistrelles Shopping Centre have been promoted.
Less finished projects for next year
In 2017, development activity reached minimums in western Europe after thirty years of growth. During first quarter of 2018 the sector experienced a light shift, when 373,000 square metres of surface where commercialised, an 8.2% more than during the same period in 2017, with the United Kingdom, France and Finland as the three most active markets.
Despite this upturn, openings of new shopping malls are also estimated to reduce in the next few months. From the 6.1 million square metres predicted to host shopping malls, only 2.1 million are currently in development in order to finish the works between this fiscal year’s second quarter and 2019, an interannual rate of 25% less.
The United Kingdom and France reduce their activity
The lesser demand of space by retailers, the boom of e-commerce and the increase of exploitation costs have caused a decrease in the rate of promotor activities in the UK’s shopping malls.
Nevertheless, the Anglo-Saxon country was the most active in western Europe in terms of new openings between January and June 2018, adding almost 90,000 square metres more. Amidst the most highlighted operations from the first quarter is the expansion of 69,000 square metres in Westfield’s shopping mall, located in the White City district, in London.
France, on the other hand, aggregated 83,000 new square metres of surface in shopping malls during the first quarter of 2018, occupying the second position in the ranking of the most active markets in the development of these kinds of activities from western Europe.
Germany is one of the few European countries where this sector will continue to expand
For what is left of the year, however, it is predicted that the volume of finished projects will reduce to an interannual rate of 24% in the French territory. The consultant points out that this decrease will be balanced by an interannual upturn of 27% in the openings of shopping centres. Furthermore, France is starting to adapt a new model of retail sales which combines the use of commercial spaces with offices and other leisure and public domain attractions.
Germany is the only country in Europe figured in the study where shopping mall business keeps on broadening. The ancientness of the actives (almost 60% of them were built more than twenty years ago) has caused an increase in the demand of modern spaces adapted to the new needs of consumers. According to Cushman&Wakefiled, it is estimated that Germany will dedicate 200,000 square metres for shopping malls between the second quarter of 2018 and all 2019. A 24% of this surface will be destined to the extension of already existent facilities.