Despite increased demand in 2009, development activity in 2010 is set to expand, but primarily on a built-to-suit basis.
Although limited new supply was delivered in 2009, take-up was higher than expected, reaching approximately 90-95,000 m2. Developersa€™ activity remains constrained by the difficulties in obtaining finance, securing longer lease terms and larger occupiers.
Whilst the full impact of the economic downturn has not yet been fully
felt, European shopping centre development has already slowed
considerably. Indeed, 2009 experienced the sharpest decrease in new
shopping centre space in almost 15 years. In total, around 7.4 million sq.m
of GLA was completed in 2009, approximately 19% less than in 2008. In
total, 256 new shopping centres opened, representing around 89% of total
new space, with refurbishments and extensions accounting for the
remainder. Total shopping centre GLA now stands at just under 128.3
million sq.m for the whole of Europe.
The slowdown in development activity is expected to continue in the short
term. Around 6.1 and 5.0 million sq.m GLA is anticipated to be delivered
in 2010 and 2011 respectively, with the latter being the lowest annual level
in seven years.
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