33.5 million square meters of shopping centre space currently under construction across the world’s major cities: CBRE
A total of 33.5 million square meters (sq m) of shopping centre space is currently under construction across the world’s major cities, according to a new research report from leading global real estate advisor CBRE.
CBRE’s annual study of global shopping centre development found that development activity of shopping centre space around the world remains heavily concentrated in the Asia Pacific region (APAC), which accounts for 26.6 million sq m of space, with construction activity focussed in more than 90% of the Asian cities surveyed compared to 56 cities in the Americas and 14% in Europe, Middle East and Africa (EMEA).
China remains the most active shopping centre market accounting for 19.7 million sq m of the development pipeline under construction and includes 15 cities in the top 20 most active development markets globally. Shenzhen takes the top spot for the most shopping space under construction with 4.5 million sq m, followed by Shanghai with 3 million sq m, together they account for 40% of China’s construction pipeline as of the end of 2016.
In Europe, Middle East and Africa (EMEA) the development pipeline has started to slow down with the level of shopping centres under construction totalling 4.49 million sq m. Russia, Turkey and the UAE account for the majority of activity in EMEA with Turkish cities dominating the development pipeline with 1.3 million sq m of space under construction across 17 shopping centres. In the Middle East, Dubai is expected to strengthen its position as a leading retail destination as the market is set to see an increase in supply with 900,000 sq m of new retail space expected to be delivered over the next three years. Notable retail schemes include the Nakheel Mall on the Palm Jumeirah, the Circle Mall in Jumeirah Village Circle and ongoing expansion projects in existing shopping centres such as the Dubai Mall.
Despite a slowdown in shopping centre completions over the past few years, 2016 saw an increase of 11.4% globally compared to 2015.
The Americas registered the strongest growth with shopping centre completion levels up 43.6% due mostly to a surge in construction in Mexico which saw 1.3 million sq m of space added across three major Mexican cities. EMEA shopping centre completions make up 16% of the global total and saw an increase of 18% year-on-year. Moscow and Istanbul are the only markets outside of Asia to feature in the top 10 cities of global shopping centre completions.
“Although on the whole we are seeing a slowdown in shopping centre development activity, 2016 witnessed an increase in the amount of space coming on stream globally as centres in the pipeline finally came to market.”
“However, leasing activity has proved challenging in many locations, as retailers navigate the retail landscape to find the perfect operational model which combines online and bricks and mortar. Some shopping centres have delayed opening or have opened with some vacant space. Going forward many investors and landlords are taking a more cautious approach as a number of markets are experiencing some level of saturation. The focus will be on repositioning and renovating existing assets and creating an experience for consumers in order to differentiate centres and drive footfall, “said Natasha Patel, Director, EMEA Retail Research.