Turkey led in development of new malls in 2017, slowdown ahead: Report
Shopping center supply rose significantly, with 1.1 million square meters of new space, making Turkey the most active country in terms of development in 2017 across Europe despite a loss in the currency value, followed by Poland and France, a fresh report has shown.
According to the “European Shopping Centers: The Development Story” report by Cushman and Wakefield, which was released on Aug. 6, a further 1.4 million square meters of new mall space is expected to be added in Turkey in the 2018 and 2019 period, while a slowdown is also expected.
The report showed that Western Europe recorded a 23 percent decrease in new shopping center completions last year, as 1.5 million square meters of new shopping center space was delivered.
Shopping center development also slowed in Central and Eastern Europe, where annual completions declined by 23 percent to 2.3 million square meters, according to the report.
“Despite exchange rate volatility, weaker occupier demand and falling rents, Turkey was the most active country and accounted for 47 percent of total completions in the CEE region,” read the report.
Shopping center landlords are attracting new occupiers by offering pure turnover rents for a limited time of up to one year, said Cushman and Wakefield Managing Partner Toğrul Gönden.
“However, development is set to slow given the relatively weak trading environment and near saturation levels in parts of the market,” he added, while noting that this was not unexpected.
“Turkey’s mall sector has rapidly grown for the last 10-15 years. With 147 square-meter gross leasable areas [GLA] in square meter per 1,000 population, Turkey has even surpassed Russia. Despite this, a fairly high stock addition is planned to Turkey’s mall market,” Gönden added.
Russia was the second most active country in terms of development, although annual completions declined from 1.6 million square meters in 2016 to just 0.6 million square meters in 2017.
The shopping center density in terms of GLA in square meter per 1,000 population is the highest in Norway with 857 across Europe, followed by Estonia and Luxembourg with 725 and 594, respectively. Turkey is in the middle of the list with 147, according to the report.