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Shopping Centre development pipeline remains strong in Central Europe

Some 190,000 sq m of new shopping centre stock was delivered in Central European countries (Poland, Czech Republic, Hungary and Slovakia) in H1 2013 with Poland accounting for 126,000 sq m of the total.
A total of 1.8 million sq m of new shopping centre space was added to the European market in the same period, according to the latest European Shopping Centre Development report published by global property consultants Cushman & Wakefield (C&W).

C&W expects the new supply in CE to reach additional 540,000 sq m of GLA in the second half of the year 2013, which is due to the Christmas season generally more popular for opening shopping schemes. For the whole of 2013 C&W expects the supply to reach 730,000 sq m of GLA.

“We believe there is still new development potential in Central Europe. The focus today is on natural gaps within certain cities, but more importantly on the optimisation of existing centres. We see the markets as developing naturally and converging to Western numbers at a reasonable pace,” says Jonathan Hallett, Managing Partner CE at C&W.

The largest schemes delivered in the second half of 2013 are as follows: Galeria Bronowice, Kraków (60,000 sqm), Poznań City Center, Poznan (58,000 sqm) and Galeria Katowicka, Katowice (53,000 sqm) in Poland. In the Czech Republic Galerie Santovka (46,000 sqm) opened in Olomouc, in Hungary Árkád Center - 2nd phase (20,000 sqm) and CET (12,000 sqm) opened in Budapest.
The largest new schemes opened in the first half of 2013 are Galeria Solna (30,000 sq m) and Europa Centralna (27,000) in Poland.

Market saturation
The EU-27 average of shopping centre stock is 262 sq m per 1,000 inhabitants while the CE average is 209 sq m per 1,000 inhabitants. The most saturated market is Poland with 225 sq m of shopping centre stock per 1,000 inhabitants, overtaking Slovakia, thanks to high activity in 2013. Hungary is significantly under-saturated with only 136 sq m of shopping centre stock per 1,000 inhabitants while the Czech Republic stands at 210 sq m/1000 population.

The Czech Republic has seen two major projects opening in 2013 – the major extension of the successful shopping centre Centrum Černý Most (current size 90,000 sq m) in Prague by Unibail-Rodamco in March. A large regional scheme Galerie Šantovka (46,000 sq m) opened by Dandreet in Olomouc in October.

There was no new supply in Slovakia in H1 2013, in the rest of the year; the sole opening was the first Slovak outlet in Voderady near Trnava, the 15,000 sq m One Fashion Outlet.

Piotr Kaszyński, Partner, Head of Retail Agency in Poland, said, “Shopping centres market in Poland in 2013 has continued to enjoy dynamic development. Approx. 500,000 sq m of GLA has been delivered to the market in newly built or extended schemes, mainly in large conurbations. Key openings included: Galeria Bronowice Kraków, Poznań City Center, Galeria Katowicka, Riviera Gdynia, Trzy Korony Nowy Sącz and Galeria Solna Inowrocław.

The 20.000 GLA extension of ECE project Árkád Budapest opened in two phases in 2013.

Development outlook
Looking forward to 2014, there are already 171 new schemes and 65 extensions due to be delivered across Europe, with the pipeline volume estimated at 6.2 million sq.m of GLA. Developers revealed plans for opening of 30 new schemes in Central Europe in 2014. Together with extensions of existing schemes there are approx. 760,000 sqm in the pipeline for 2014 in the region.

“The Czech Republic has a healthy pipeline of shopping centre projects, with centres like Quadrio, an 8,000 sq m scheme in Prague by CPI, and OC Kladno, a 26,000 sq m regional scheme in Kladno by Crestyl, scheduled to open in 2014,” says Michal Sotak, head of research at Cushman & Wakefield Czech Republic and Slovakia.

“The largest expected 2014 opening in Slovakia is the 55,000 sq m Bory Mall shopping centre, which aims to dominate the western part of Bratislava. Projects under construction include City Arena Trnava and Forum Poprad, both regional schemes aspiring to dominate their respective cities,” says Matus Furman, head of retail at Cushman & Wakefield.

For year 2014 there is no pipeline project to open in Hungary. There are three pipeline projects currently all of them with uncertain timing but not earlier than 2015-16 (Mundo Shopping centre by Echo Investment 39.000 GLA; Etele square by Futureal 40.000 GLA and ECE project 50.000 GLA).

Provision of shopping centres in 2014 is expected to remain at a similar level, with the strongest development activity to be noted in big cities such as Łódź (Sukcesja), Lublin (Atrium Felicity, Zamkowe Tarasy), Białystok (Galeria Jurowiecka) and medium-size cities: Olsztyn (Galeria Warmińska), Kalisz (Galeria Amber), Siedlce (Galeria S), Galeria Sudecka (Jelenia Góra), Galeria Bursztynowa (Ostrołęka), Galeria Neptun (Starogard Gdański).

According to preliminary forecasts 2014 will see the opening of 25 shopping centres in Poland totalling 520,000 sq m GLA, including six extensions (110,000 sq m GLA).



Source: Cushman & Wakefield, December 2013