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EMEA

New retail space equivalent to ‘ninety Westfield London’s’ forecast in the next 24 months in Europe*

Shopping centre development activity picking up as 14.1 million sq. m of new retail space set to open by 2015


EMEA, 11 March 2014 – JLL reports that 14.1 million sq. m of new shopping centre space across Europe will be completed during 2014 and 2015 – highlighting continued activity in shopping centre development in the region. Russia will have the largest share of shopping centre space in Europe by 2015 with 3.8 million sq. m scheduled for completion over the next two years.

During 2013, 5.6 million sq. m of new shopping centre space was completed in Europe, an increase of 11.2% on 2012. The pipeline for 2014 is expected to reach 7.2 million sq. m, the highest level since 2008 and up 32% on the average level completions of 5.5 million sq. m between 2009 and 2013. An additional 6.9 million sq. m of shopping centre space is expected to go online in 2015, up 26% on the 5 year average.

Driven by improving economies and rising levels of disposable incomes, the majority of the new schemes continue to be developed in Russia and Turkey. In 2013 almost 50% of newly developed shopping centre space in Europe was located in these two countries. Increased development activity across the wider European region will however see the overall European share of new space completed in Turkey and Russia reduce to 34% by 2015.

Russia is anticipated to have the largest shopping centre stock in Europe by 2015. In 2013 more than 1.6 million sq. m of new shopping centre space was completed in Russia, up 11% on 2012. Avia Park in Moscow is one of the most exciting developments due to open in 2014 with a total of 225,000 sq. m of leasable space available - making it the largest shopping centre development in the country. For 2014 and 2015, total completion in Russia is expected to reach 2.0 million sq. m. and 1.8 million sq. m respectively.

Tatyana Kluchinskaya, National Director, Head of Retail Department at JLL, Russia & CIS, said: “2014-2015 to be the most active years in terms of retail development in Russia. Today total shopping centre stock in Russia amounts to circa 16 m sq m. With this result the country ranked #3 in Europe after Great Britain (18.1 m sq m) and France (16.3 m sq m). If all announced schemes are completed, Russia will be the European leader in terms of shopping centre stock (19.8 m sq m). These figures can be changed due to economy and the rate of construction”.

Ukraine ranked #4 by 2014-2015 retail pipeline in Europe (1.4 m sq m). If all announced projects are completed, total shopping centre stock in Ukraine will amount to 3.7 m sq m.

Turkey was Europe’s second most active market in 2013 with a total of 1.2 million sq. m of new shopping centre space opening. For 2014 and 2015, total completions are expected to reach 1.9 million sq. m and 535,000 sq. m respectively. Zorlu Center was the most notable opening in 2013; the high-end luxury scheme in Istanbul includes over 66,000 sq. m of retail space. At 150,000 sq. m Boulevardi Mall in Istanbul is currently the largest scheme under construction in Turkey and is expected to open later this year.

In Western Europe, Germany has the largest shopping centre development pipeline over the next two years. In 2014 some 613,000 sq. m is expected to open. This is expected to increase to 919,000 sq. m in 2015. This is significantly up on 2013, which saw 295,000 sq. m of new shopping centre space coming onto the market and highlights the increased confidence among developers and investors in this core market.

James Brown Head of EMEA Retail Research and Consulting at JLL says: “Growth markets of Russia and Turkey are playing catch up. Favourable market conditions will not necessarily translate into a wave of new retail development across Western Europe in the same way experienced in previous periods of economic recovery. Structural change is still playing out, retail is being redefined, developers will be cautious, as will lenders on new developments.”

Robert Bonwell CEO EMEA retail at JLL says: “Redevelopment is the new development for most established markets, as tired stock loses appeal and deferred capital expenditure comes home to roost. Redevelopment of existing large scale retail assets will become a key part of Asset Management in a retail market that is being redefined through multi-speed economic growth, increasing urbanisation and rapid technological change.”

European Shopping Centre Completions & Pipeline


Source: JLL; Oxford Economics

Notes to Editors:
*14.1 million sq. m of shopping centre development activity is equal to approximately 90 times the lettable area of Westfield London (162,539 sq. m) at http://corporate.westfield.com (February 2014).
This research considers existing shopping centres and those under construction in Europe of 5,000 sq. meters (sq. m) and above. It excludes retail warehouses and factory outlet centres. Pipeline figures should be treated with caution.

About JLL
JLL (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $4.0 billion, JLL operates in 75 countries worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 279 million square meters and completed $99 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $47.6 billion of real estate assets under management.
In Russia and CIS JLL has offices in Moscow, St. Petersburg and Kiev. JLL, Russia & CIS was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011, 2012 and 2013 at the Commercial Real Estate Awards, Moscow; Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg and The Best Real Estate Consultancy in Ukraine at the Ukrainian Property Awards in 2013. For further information, visit www.jll.ru