Global shopping space rises to 41.9 square metres

London - Global shopping centre space has increased from 39 million square metres in 2014 to 41.9 million square metres in 2015, with Asian cities dominating nine out of the top ten most active global markets, according to a new report from global real estate advisor CBRE.

The report measured shopping centre developments in 168 major cities globally and highlights that China remains the most active market in terms of delivering new space, accounting for two-thirds of construction globally. Chinese cities including Chongqing, Shenzhen, Chengdu and Shanghai all have over three million square metres of space under construction with more than 30 projects in each city.

Emerging markets such as Manila, Moscow, Mexico City and Bangalore remain highly active, however activity in the emerging Eastern European markets such as Russia have slowed due to economic and political uncertainty.

Across the board, global shopping centre completions have started to slow as parts of the global retail market experiences an imbalance between significant supply and demand. Globally 10.7 million square metres of new space opened in 2015, down from 12.1 million square metres in 2014. Development activity in Europe continues to be slow in comparison to Asia, only a quarter of cities surveyed in EMEA saw the completion of a new centre last year, and the levels of completions slowed down from 2.6 million to 1.6 million. EMEA accounted for 15 percent of total completions globally in 2015 with the vast majority of space being built in Russian cities.

Natasha Patel, director of EMEA Retail Research said: “Shopping centre development remains active across Asia, however the notable change this year is the slowing in the number of completions, in many cases in markets where there are high levels of construction already and weakening demand, landlords are becoming exposed to oversupply. Now landlord’s operational expertise will come to the fore as they attempt to enhance footfall through experiential retailing, food and beverage and leisure.

“In Western Europe and the US, a lack of quality space continues to be an issue. Extensions, refurbishments and repositions of existing assets continue to be the focus in Western Europe in a bid to continue to attract key brands and consumers alike. Access to good quality space will also remain a challenge in many markets and will prompt retailers to consider alternative retail formats with high foot traffic such as transport hubs.”