The Euros 2016: Retail Demand
France has the largest shopping centre market in Europe with just over 17.7 million sq m of floor space. With the UEFA Euro 2016 starting this Friday (10th June 2016) France shopping centres are expected to benefit from high footfall due to the volume of visitors the country will receive – this is sure to drive retail sales to new heights! Schemes need to be prepared for the volume of new consumers they will receive and the different demographics that may visit, so they can really capitalise on this opportunity!
Retail was the fastest growing sector of the commercial property market in 2015. German trading volumes doubled and this growth is expected to continue through 2016 – it’s not only the Euro 2016 power ranking Germany are leading, Germany (along with the UK) remain the most sought after markets accounting for over 45% of total trading volumes in Europe.
According to GFK in 2015, for most countries; economy grew, unemployment fell and purchasing power increased – the perfect combination for Shopping Centres! Overseas investment into UK shopping centres massively increased last year with Asian investment contributing £190m towards UK shopping centres alone!
The substantial investment received lead to developments across Europe which dramatically increased the size of centres. Russia, Turkey, Poland, France and Sweden may not be the top 5 teams for the Euro’s, but they are leading for shopping centre space. They are the top 5 countries respectively for shopping centre space added in the second half of 2015, totalling 2,396,900 sq m of development work!
There are constantly new projects being planned and developments underway demonstrating the strength of the shopping centre industry. Cushman and Wakefield reported the total shopping centre floorspace in Europe increased by 1.4 million sq m, reaching 152.6 million sq m at the end of 2015 – Central and Eastern Europe contributing 78% of this growth. CEE’s increasingly wealthy middle class is creating demand for bigger schemes with more advanced offerings. Poland has the second largest shopping centre market in the CEE (after Russia) and received 51% of the total investment volume in Central Europe region in 2015!
Poland is seeing increasingly more interest in their outlet centres. Across magazine reported, for an outlet scheme to be profitable it needs 2 million people within a 90 minute drive catchment area, this report has proven the potential opportunity for more successful outlets to be built in Poland. Outlet centres offer a range of products and great offers which keeps consumers coming back – generally consumers dwell time is a lot longer at outlets than shopping centres and consumers are much more inclined to buy due to the limited number and exclusivity of products and the low prices. Outlets are also becoming popular tourist destinations, attracting new consumers and lifting revenue for retailers. With the increasing spending power in smaller towns in Poland, there is definitely scope for more outlet centres to be developed… watch this space.
The speed and scale of urbanisation is driving growth and demand for shopping centres across Europe – 54% of the population live in urban areas and this is expected to grow year on year which is accelerating the demand for retail. The number of trends and opportunities are increasing massively!
The trend of experiential shopping has spread internationally, a lot of investment and developments into old schemes will be scene throughout 2016 driven from the competition between different retail formats and the growing expectations from consumers. The demand for leisure, entertainment, a strong volume and range of retailers, car parking facilities, innovative interior design & layout, and F&B offerings is forcing centres across Europe to extend and refurbish old schemes to ensure they keep driving footfall and make their centre first choice.
With urbanisation and spending power escalating, consumers are becoming increasingly more demanding and willing to spend. Consumers don’t visit schemes for the sole purpose of shopping, they go for the experience – with events such as the Euros 2016 driving the public to visit different cities, shopping centres need to have strong USP’s to ensure they are the centre of choice for tourists! There are so many opportunities for further growth across Europe; landlords need to be innovative with their developments to strive in the increasingly competitive retail market.
Katrina Whitehead, Marketing & Operations, Foundation Recruitment
Related Posts
