In Europe, the dynamics in the shopping center development have disappeared after the real estate crisis. The current growth of leasable space is the same as 20 years ago, and no substantial change is in sight.
At the end of the 1990s, the European shopping center industry was characterized by abundant annual sales growth. From about 2005, the shopping center industry was fueled by fierce economic activity in Russia, Turkey and Poland. This hype, as we know too well, ended abruptly with the 2008 real estate crisis: the pipelines dried out instantly.
The situation has not improved since: political and economic crises in Russia and Turkey, crippling economic growth and a shift from stationary sales to the Internet, made retailers cut down on expansion. Therefore, the demand for new sales areas has reasonably weakened.
The annual growth of new leasable space in Europe, including Turkey and Russia, seems to be stabilizing at a level of slightly under 4 million sqm. At the same time, the spatial focus is shifting: there are fewer projects in Russia, Turkey, Ukraine and Poland (which is already quite filled), and more in Germany, Romania (yet again) and Bulgaria.
In the past five years, about 6.2 million m² of new retail space were built in Russia, which is by far the highest figure among other European countries. Turkey, with 3.9 million m², follows at a respectable distance. In the same period the leasable area increased by 2.4 million sqm in Poland, and by 2.2 million m² in Germany.
As a general trend, new projects of both shopping centers and retail parks are becoming scarce. A clear sign is the increase in transactions with commercial real estate. Individual properties, as well as entire portfolios change owners, especially due to the lack of new projects and a relative abundance of money that should be invested.
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