London -- A report issued by C.B. Richard Ellis on Friday said that global shopping center development has reached unprecedented levels of construction and new openings, fueled by growing middle classes and retailer expansion.
According to the most recent research by CBRE, which measured shopping center development activity in 180 of the world’s major cities – including 2011 completions and space currently under construction – 318.6 million sq. ft. is currently under construction and about 84 million sq. ft. opened in 2011.
The report found that emerging markets such as China, Turkey, and India are far more active than the more mature markets of Western Europe and North America. Growing middle class populations have led to an upsurge in new development to meet demand, while the maturity of the retail sector in Western Europe and North America has forced retailers from these markets to cross borders in order to grow their businesses.
In 2011, new shopping centers opened in 63 (35%) of the cities covered in the survey, of which 50 were in emerging markets. In contrast, only five cities in Western Europe saw the opening of a new center last year.
Chinese cities currently dominate shopping center construction activity. In the 180 cities analysed, half of the space under construction is in China. Outside of China, the most active markets are Abu Dhabi, Hanoi, Kuala Lumpur (Klang Valley), New Delhi and Sao Paolo.
“It is our view that shopping center development activity is currently at an all-time high,” said Neville Moss, head of retail research, CBRE. “China has led the way in recent years and with huge opportunities still existing in its secondary cities, it is likely to remain the most active development market over coming years. However, the upsurge in development is also evident in Turkey, Mexico, Malaysia and Vietnam among others.”
Moss added that the maturity of the retail sector in western Europe and North America has resulted in much lower levels of development, but it has also forced retailers from these markets to seek new opportunities in fresh markets in order to grow their businesses. “This trend is expected to continue,” said Moss, “and is helping to underpin the development of high quality, new retail space in emerging markets.”
In Europe, new shopping centers were completed in just 15 out of the 96 cities covered in the survey. Outside of Russia and Turkey only the Ukraine (Kiev and Kharkov) and Italy (Milan and Turin) saw the completion of more than one new center. There was virtually no new development in the mature shopping center markets of North America and the Pacific region.