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European shopping centre development slows but pipeline remains strong

Total floorspace in Europe reaches 160.8 million sq m at midpoint of the year – driven by CEE. 34 new centres and 21 extensions added 1.2million sq m in H1 2017, with Turkey accounting for nearly half of all new space. A further 6.8 million sq m is set to be completed across H2 2017-2018. 

Shopping centre development activity in the first half of 2017 increased total floorspace across Europe to 160.8 million sq m at the midpoint of the year, according to Cushman & Wakefield.

In the first half of the year 825,000 sq m was delivered to the market in Central & Eastern Europe (CEE), compared with 344,000 sq m in Western Europe – although Western Europe still accounts for more than two-thirds (68 pct) of total built shopping centre space. In total, 34 new shopping centre projects were completed (representing 84 pct of new space added in H1), while 21 existing schemes were extended.

Turkey was by far the most active market, accounting for 48 pct (566,000 sq m) of all new European shopping centre space, followed by Russia with 186,000 sq m and Italy with 107,000 sq m of new space. 

The half-yearly total added was 11 pct lower than the same period in 2016, with development activity affected by growing competition, changing consumer behaviour, and the growth of online retailing. A further 6.8 million sq m of space is currently under construction and expected to be completed by the end of 2018. 

Total floorspace was 109.1million sq m at the half year point. Despite limited development activity in Western Europe’s three largest shopping centre markets – UK, France and Germany – activity in Southern Europe remained buoyant. Italy was the most active development market, adding more than 100,000 sq m of new space – more than 30% of Western Europe’s total in H1 2017. 

While development activity in Poland was limited in H1 2017, it has a strong pipeline with 600,000 sq m of space under construction. Nearly a third of this space is in Warsaw, where higher-than-average levels of provision have not discouraged further development.

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