Primary schemes are the answer to slow-down in shopping centre development, says Jones Lang LaSalle
Published: 18 March, 2010
A 28 per cent decline on new shopping centre space across Europe in 2009 brought an end to three consecutive years of development growth, according to Jones Lang LaSalle.
Jeremy Eddy, head of pan-European Retail Capital Markets at JLL, said that this slow-down of shopping centre development was “inevitable” given the financial climate. He warned that schemes in the planning stages are still in danger of falling through, particularly those in secondary locations.
“A significant number of planned schemes could be written off entirely - previously agreed land prices are unsustainably high in too many cases for the development to stack up given the climate of lower rents, uncertain consumer markets, lower exit price and worse or no finance terms.
“However, the growing demand from retailers for the very best schemes should stimulate development for prime shopping centres,” said Eddy.
Head of pan-European Retail Agency, James Dolphin, agreed that primary sites are key to pulling back growth. “Retailer demand is strong for prime shopping centres in the best locations, with many international brands looking to expand their presence across the region and tap into the large high-spending catchments. The expansion programmes of brands such as Apple, New Yorker and Hollister demonstrates confidence in economic recovery across much of Europe,” he said.