By Andrew Batt:
Global shopping centre development continues apace with growing middle class populations and retailer expansion leading to unprecedented levels of construction, particularly in Asia, and new openings, largely in emerging markets, according to global property advisor CBRE.
CBRE measured the level of shopping centre development in 180 of the world’s major cities to identify the most active markets, both in terms of 2011 completions and space currently under construction. The research found that development activity has reached significant levels, with 29.6 million sqm under construction globally – equivalent to all the combined existing space in France, United Kingdom (UK) and Germany – while 7.8 million sqm of new space opened in 2011.
Emerging markets such as China, Turkey, and India are far more active than the more mature markets of Western Europe and North America. In 2011, new shopping centres opened in 63 (35 percent) of the cities covered in the survey, of which 50 were in emerging markets. In contrast, only five cites in Western Europe saw the opening of a new centre last year.
James Pitchon, Executive Director, Head of CBRE Research in Thailand, said: “In Bangkok retail market saw a full recovery from the floods of 2011. All retail stores closed during the floods were reopened and retail sales improved. The two key trends are community malls in Bangkok and expansion of major retail developers to upcountry; CPN, the country’s leading retail property developer with a 22 percent market share of leasable area of Bangkok’s shopping malls plans to open 5 new malls upcountry within this year.”
According to CBRE Research, the total retail supply in Bangkok as of Q1 2012 rose to 5.75 million sqm, an increase of 1.0 percent quarter-on-quarter and 5.0 percent year-on-year, with the majority of new additions in the community mall format. Bangkok’s retail supply increased in all areas – downtown, midtown and the suburbs – during Q1 2012. More than half of the retail centres are in the shopping mall formats. Approximately 500,000 sqm of retail space is expected to be completed in 2012 based on developers’ announcements, bringing the total retail supply in Bangkok to 6.26 million sqm by the end of 2012.
Chinese cities currently dominate shopping centre construction activity. In the 180 cities analysed, exactly half of all the shopping centre space under construction is in China, with Asia accounting for 70 percent of all schemes currently being built. Outside of China, the most active markets are Abu Dhabi, Hanoi, Kuala Lumpur (Klang Valley), New Delhi and Sao Paolo – five cities in three regions.
Joel Stephen, CBRE Director of Retail Representation in China, said: “Many of these Chinese cities with populations often exceeding 10 million people are usually starting from a relatively low base. Often only a handful of existing department stores and shopping centres serve these vast populations. The speed of retailer expansion, especially those in the mass market sector who tend to open more stores in each city, has been restricted by the availability of suitable real estate. This considerable pipeline of development over the coming few years will help retailers accelerate the rate of portfolio growth across China. “
Sebastian Skiff, Executive Director of CBRE Retail in Asia, commented: ”Due to the rapid increase of middle class populations around the world, shopping centre developments are on the rise to satisfy growing consumer demand. The shopping centre concept has morphed into an integral element of retail development, especially in the East. With development now expanding rapidly, not only in Beijing and Shanghai but also deeper into the highly populated provincial capitals, China is topping the charts for development growth and seeing great opportunities for expansion in these large cities. With this momentum, China will undoubtedly continue the push for more and better shopping centres, replicating the best retail venues now found around the world.”
In Europe, new shopping centres 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 centre. London, with the completion of Westfield Stratford City, was the only city in Europe where more than 100,000 sqm was completed. Likewise there was virtually no new development in the mature shopping centre markets of North America and the Pacific region.
Skiff added: “Overall, retailers have shifted their focus to exploring new markets and new opportunities in which they are able to grow their businesses and carry out cross-border expansion initiatives. This strategic growth is contributing to the escalation of high quality retail space in emerging markets, such as China, Malaysia and Vietnam. These markets are seeing an influx of retailers and outside interest which consequently fuels the demand for new developments. Mature markets such as Western Europe and North America have substantial retail development offerings and as a result, we will not likely see such expansive growth in new malls, but rather a constant elevation of what already exists as owners respond to new store formats required by retailers, and more modern facilities preferred by most consumers.”
For the latest property news from Thailand and around Southeast Asia in English, visit our Property News section. If you’re looking for Thailand property to buy, sell or rent you may like to visit www.ddproperty.com.