European Shopping Center Development Hit by Delays or Cancellations

The sight of half-finished shopping centers and office buildings that are peppering the U.S. landscape can also be seen across the ocean in Europe. According to the latest figures from Cushman & Wakefield, up to 7 million square meters of planned shopping center development in Europe has been put on hold or cancelled as a result of the credit crunch.

In its new “European Shopping Centre Development” report, the real estate advisory firm says it expects around 10 million square meters of new shopping center space to open across Europe in 2009, 40 percent less than forecast in July 2008, with an even lower amount of 7 million square meters now expected to open in 2010. This would represent the slowest rate of expansion since 2005 and would bring an end to five consecutive years of growth in European shopping center development.

Last year was a record year for shopping centers in Europe, with over 9 million square meters of new shopping center space opening in 310 sites. The UK was the most active western European market, with around 840,000 square meters of new space coming into the market, primarily due to the opening of three large regional shopping centers.

The slowdown in activity for 2009 and 2010 “is not necessarily a negative trend for many of the merging countries in Europe as some areas, in particular, the capital cities, have seen an enormous amount of shopping center space added in a very short space of time,” said Alexander Copaert, a consultant at Cushman & Wakefield. “This environment gives developers, retailers, and local governments the time to assess the current situation and, for example, to examine how well provided certain cities are now and what the impact would be of further large-scale schemes on the current retail landscape.”