Shopping centers is one of the safer bets for retail and development investment across Europe for the near future. This may be a bold statement given the continued uncertainty surrounding the economy but the evidence in Verdict’s latest insight into shopping centers in Europe is compelling.

1. Case Study:
Shopping Centers In Europe
Investment And Development Trends
Shopping centers remain a bright prospect
in Europe’s retail landscape
November 2012
www.verdict.co.uk

2. Case Study: Shopping Centers In Europe
Investment And Development Trends
Shopping centers is one of the safer bets for retail and development investment across Europe
for the near future. This may be a bold statement given the continued uncertainty surrounding the
economy but the evidence in Verdict’s latest insight into shopping centers in Europe is compelling.
Vacancy rates among many of the continent’s major shopping centers are low, and larger centers
have the advantages of putting the most desired retailers in one place. Add to this the power that
major shopping center management firms have in courting fresh, upcoming brands, often from
international shores, and the convenience that the shopping center format offers to test exactly
what works for which consumers, and where.
Major management firms are also continually committed to refurbishing and extending their
current portfolios as well as, and often in preference over new builds, bringing these premises
more in tune with modern shoppers in a lower-risk fashion. But new developments are still
important – with millions of sq m in the pipeline for the next year.
All this makes for an innovative, refreshing and modern shopping experience that regularly offers
something new, particularly compared to tired town centers and small malls.
If future prospects aren’t convincing given the economic uncertainty, then the acceleration
of shopping center developments springing up over the past 50 years or so offers significant
evidence. By the end of 2013 Europe will have almost 7,000 shopping centers, a meteoric rise
considering the headcount was 81 at the start of the 1960s. This means an average rate of
development of more than 130 shopping centers a year, and there is more to come.
New shopping center development pipeline for major management firms
HAMMERSON PLAZA CENTERS EUROPE
LES TERRASSES DU PORT, MARSEILLES POLAND
(56,000 sq m), April 2014 – 3 centers totalling 94,000 sq m
ROMANIA
LE JEU DU PAUME, BEAUVAIS
– 8 centers totalling 352,000 sq m
(23,000 sq m), 2014
HUNGARY
EASTGATE QUARTERS, LEEDS – 1 center totalling 16,000 sq m
(92,900 sq m), 2016 SERBIA
– 2 centers totalling 110,000 sq m
SEVENSTONE, SHEFFIELD
GREECE
(60,500 sq m), 2016
– 1 center totalling 26,000 sq m
BULGARIA
Source: Shopping Centers in Europe 2012, – 2 centers totalling 64,000 sq m
Verdict Research
CZECH REPUBLIC
– 2 centers totalling 75,600 sq m
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3. Case Study: Shopping Centers In Europe
Investment And Development Trends
Current uncertainties mean that schemes can be put on hold or delays may occur. Had all the
scheduled developments for 2011 been completed on time, space provision would have been 15%
up on 2010, but delays in several markets – mainly Italy, Russia and Turkey – meant that the growth
rate was almost flat.
Consequently, the 2012/13 pipeline focuses on central and Eastern Europe, which accounts for
61% of scheduled development. Russia and Turkey take the biggest slice, with around a third
(32%) of the total. Verdict pinpoints these two countries as prime prospects for shopping center
development. Openings over the past year have included AFIMALL city in Moscow, and Multi
Corporation’s opening of its 10th center in Turkey, the Forum Kayseri. Multi subsidiary Multi
Development Turkey has one project under construction in the country, due to open next year, with
five more developments in planning.
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4. Case Study: Shopping Centers In Europe
Investment And Development Trends
Shopping center investment
In 2011 retail investment into shopping centers was worth almost €40 billion – 3.5% up on 2010. By
country, activity increased by more than sevenfold in Russia, while the UK retains its spot at the top
of the investment pile with €12bn of retail assets, despite this being a 15% drop on 2010.
But not all countries are inspiring confidence to invest – in fact some have experienced a significant
downturn. Spain and Portugal have seen huge drops. In Spain the value of transactions slipped
61% (worth €733m), while in Portugal the €72m of transactions last year was an 80% drop to the
lowest in over a decade.
Investment in shopping center
Movements in retail investment into shopping centers in 2011 assets was worth just under €22bn
last year, a significant jump from
€12bn in 2010 and €6.5bn in 2009.
2011 saw total transactions of €14bn
in more than 50 deals worth at least
€100m. Ten of these were worth
more than €350m.
€ € The market concentrates on two
investment strategies – focusing
BELGIUM FINLAND on prime shopping centers in core
CZECH REPUBLIC FRANCE markets or investing in assets with
DENMARK GREECE short-term redevelopment potential.
Investment is largely tipping towards
GERMANY IRELAND
the first, and concentrating on the
ITALY NETHERLANDS
largest, most productive shopping
POLAND NORWAY
centers in prime regions. Recent
RUSSIA PORTUGAL examples include Capital Shopping
SLOVAKIA SPAIN Centres securing full ownership
SWEDEN UK of Manchester’s Trafford Centre
SWITZERLAND at a cost of €1.8bn of shares, and
Unibail-Rodamco’s €237.5m buy of
Source: Shopping Centers in Europe 2012, Verdict Research the second half of Galeria Mokotow
in Warsaw.
4 www.verdict.co.uk

5. Case Study: Shopping Centers In Europe
Investment And Development Trends
Extensions and refurbishments
Refurbishing and extending existing shopping centers is predictably less expensive than building
new developments, but retailer strategies are increasingly focussing on the largest centers in prime
locations, rather than peppering lots of outlets across the widest geographical bases.
Refurbishments and extensions are not new trends for shopping center players across Europe,
but they are increasingly taking center stage in development plans. Since the mid-1990s the
rate of extension activity has sped up. Extensions accounted for 10% of annual shopping center
development since 2007, but in three of the past five years this has risen to 16% or more.
Extension plans
PLAZA CENTERS:
Extension of Arena Plaza,
Budapest due for completion in 2015.
CAPITAL
CITYCON:
SHOPPING CENTRES: Five extension and redevelopments
Plans to redevelop Harlequin Watford
worth over €80m scheduled to
to create a center spanning 93,000
complete in 2012, with eight further
sq m. Further extension plans for
projects planned over next two years
Lakeside, Nottingham, Braehead and
estimated to cost €475m.
Cribbs Causeway
HAMMERSON: EUROCOMMERCIAL:
Five potential extensions, including Plans for refurbishment and
Centrale, Croydon and SQY Quest, extension of up to 20,000 sq m for
Saint Quentin over next four years Eurostop, Halmstad.
Source: Shopping Centers in Europe 2012, Verdict Research
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6. Case Study: Shopping Centers In Europe
Investment And Development Trends
Major extension and refurbishment activity over the past year among the major players includes:
• Unibail-Rodamco completing a major renovation of Parly 2, Le Chesnay, in November 2011, and a
2011 renovation of the 126,000 sq m La Part-Dieu in Lyon
• Corio adding 12,500 sq m of gross leasable area to Kopspijker/Stadsplein, Spijkenisse, 18,000 sqm
to Cityplaza, Nieuwegein and 12,500sq m to Middenwaard, Heerhugowaard during 2011
• Altarea Cogedim adding 3,000 sq m to Cap 3000, Saint-Laurent-du-Var, providing space for 12
new stores and restaurants.
Development pipeline budgets for some of the major players have significant allocations
for refurbishment and extension. Unibail-Rodamco has earmarked €1.9bn of its total €6.9bn
development pipeline for extensions and renovations, while 44% of Corio’s €2.5bn pipeline
investment will go to redevelopments and extensions.
Capital Shopping centers has plans to enlarge and refurbish five of its fifteen of its shopping
centers, having completed its full takeover of the Trafford Centre. The firm is starting with Lakeside
(Thurrock), with plans submitted for a 30,000 sq m extension. This will be followed by the Victoria
and Broadmarsh centers (Nottingham) and the Harlequin (Watford). At least one of the projects is
aimed to be on site in 2014.
Corio plans to refurbish Palazzo del Lavoro to a 28,000 sq m Favourite Meeting Place shopping
center, and Eurocommercial’s acquisition of Europstop in Halmstad has sparked plans for
refurbishment and an extension of up to 20,000 sq m, subject to planning consent
6 www.verdict.co.uk

7. Case Study: Shopping Centers In Europe
Investment And Development Trends
This case study was taken from Shopping Centers in Europe – a Verdict Channel Strategy Report.
For more information on this report please email information@verdict.co.uk, visit http://bit.ly/
TqhZbM or call +44 (0)20 7551 9664
Shopping Centers in Europe 2012
Introduction
We expect that the majority of European shopping centers to remain viable and to provide an
outlet for capital seeking a secure and profitable home. Older and/or poorly located shopping
centers, especially those serving regions particularly badly hit by unemployment, will suffer and
some may be badly degraded by retailer flight or even have to close down.
Features and benefits
• Understand which areas of Europe are attracting the most shopping center investment
and why.
• Find out how changes to individual country populations and consumer economies have
affected the viability of shopping center investment.
• Examine the portfolios of the major shopping center operators, owners and investors.
Highlights
If all the shopping center projects scheduled for 2011 had been completed on time, provision
across Europe would have increased by 15% to 6.8 million sq m. However, delays in several
markets – notably Italy, Russia and Turkey – resulted in the amount of new shopping center
space totaling 5.9 million sq m, nearly identical to that of 2010.
The pipeline for European shopping center development pipeline for 2012/13 is 10.9 million sq
m, with 6.4 million sq m scheduled for completion in 2012. Central and Eastern Europe accounts
for most (61%) of the pipeline. Russia and Turkey top the list, accounting for 32% of new
shopping space scheduled.
Investors are increasingly focusing on maximizing the value of their assets instead of investing
in new developments. Many centers built in good locations now require investment to continue
to generate high revenues, and both the cost and investment risk of refurbishment and
redevelopment is lower than the construction of a new center.
Your key questions answered
• Who are the largest investors, owners and operators of shopping centers in Europe?
• What methods are shopping centers in Europe using to differentiate themselves from the
competition?
• What has been the impact of the European debt crisis on shopping centers? What would the
worsening of the crisis mean for shopping centers?
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8. Case Study: Shopping Centers In Europe
Investment And Development Trends
About Verdict
Verdict is a retail information specialist within the Informa Group. With almost 30 years’
experience, Verdict publishes unrivalled independent analysis. We provide a complete picture
of the UK and increasingly the international retail arena, helping retailers, manufacturers, service
suppliers, analysts and consultants to fully exploit opportunities within the industry.
www.verdict.co.uk
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