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Shopping Centres:
One Size fits All?
August 2008
Hypermarkets remain the key shopping centre anchor
with a presence in 75% of all major new schemes in
2007-2008. Large-scale fashion stores are also
increasing in popularity
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European Shopping Centres: One Size fits All? August 2008
Summary
• Europe is heading towards a clone shopping centre from • The creation of a Third Place is a key trend in shopping
an occupier perspective. In the last 12 months Carrefour centre development in Western Europe – a place where
opened in Turkey and Romania, Albert unveiled new people no longer go purely to shop but rather to shop
stores in Belgium, Czech Republic and Poland, and Tesco when they are out. Retail as an element of mixed-use
also opened in Poland, as well as Hungary and the UK. schemes is part of this trend and has become a common
And, unsurprisingly, hypermarkets anchored 75 % of all feature of Western development, often linked to urban
major new schemes in 2007-2008. regeneration. Princesshay in Exeter being a good example
of this. This trend is also gaining momentum in CEE, with
• Fashion anchors are becoming more popular as shopping many of the largest mixed-use projects found in this
centre owners look to maximise their rental income and region.
footfall. And the same fashion anchors are increasingly
found across Europe, with H&M, for example, taking major • Catering is also central to the concept of a Third Place.
shopping centre units in Italy, Czech Republic, Hungary, The provision of restaurants and cafes is slightly less in the
Poland and the UK last year. east compared with the west, but their importance in
enhancing a centre’s environment and increasing dwell
• Overall retail provision is also becoming formulaic, time are universally recognised. The key theme here is a
reflecting the growing internationalisation of the retail drive towards quality with more restaurants located
sector and a desire to replicate a ‘winning’ formula. throughout the centre. Turkey is leading this trend in the
Fashion retailers for instance, took about half of the units east, with for example, Wagamama and Kitchenette
in each of the shopping centres opened, and of these, located in the Kanyon shopping centre, Istanbul.
cross border retailers dominated - accounting for 84% of
fashion units in Palladium (Prague) and 80% in St • On the same theme, luxury brands are entering shopping
Stephens (Hull). Zara, Pull & Bear and Bershka were centres at higher rates, notably in Turkey, Russia and
found in over 50% of all new schemes, whilst H&M, Poland. And in London, Louis Vuitton, Tiffany and Mulberry
Promod, Levis and Esprit were present at 40% of new have signed for the soon to open Westfield London.
schemes.
• Shopping centre design is becoming more sophisticated.
• The Leisure and entertainment mix is also looking In the west, sympathetic integration into existing town
increasingly familiar across Europe. In spite of a few new centres and improving the public realm is key, whereas in
attractions such as an aquarium in Forum Istanbul, Turkey the east, innovative design is helping to create a
and plans to mix a Grand Prix motor racing circuit with competitive advantage in the face of an ever increasing
retail in Pescara, Italy, there are no clear new trends supply of new schemes.
emerging.
• Sustainability is now high on the agenda for a number of
• Cinemas remain by far the most popular leisure anchor, shopping centre developers and owners, but there is little
present in 85% of the new schemes, more even than market evidence to show that green issues are influencing
hypermarkets (75%). But it is increasingly clear that there market pricing or the ability of a scheme to attract retailers.
is no ‘next big thing’ to replace the cinema, although This will surely change.
cinema operators are looking at how best to re-invent
themselves, including the use of 3D digital screens and • Ultimately, the consumer has choices. They can choose
VIP suites. where to shop, where to relax, where to interact. With
these choices comes the need for developers to offer an
• However, other aspects of new shopping centre environment that encourages consumers to shop and
development are not quite so formulaic. There is a big more importantly a place which is more appealing than
locational difference between east and west, driven by the competing shopping experiences, including the internet.
difficulty in accessing town centre sites in eastern Europe Creating and evolving a unique identity is central to this
and a move towards town centre regeneration projects and strategy and will ensure that one size will never fit all, even
‘town centre first’ planning policies in western Europe. if the tenant line-ups look increasingly similar.
Over 60% of major new schemes in Western Europe were
located in town centres, compared with just 28% in the
East.
3 COPYRIGHT © JONES LANG LASALLE IP, INC. 2008. All rights reserved.
European Shopping Centres: One Size fits All? August 2008
Introduction
GR DE = Germany
ES = Spain
TR
FR = France
GR = Greece
SK
HU = Hungary
Growth Markets
IE = Ireland
PL CZ PT IT = Italy
NL = Netherlands
IT IE
PL = Poland
PT = Portugal
BE ES
RO = Romania
DE UK
Stable Markets
RU = Russia
SE = Sweden
HU SE SK = Slovakia
FR NL TR = Turkey
UK = United Kingdom
Total GLA in m2 / 1,000 inhabitants
Low levels of Prime Underdeveloped Prime Developed Prime Shopping Mature Market
Shopping Centres Shopping Centre Market Centre Market Focus on extensions and
redevelopment
Market Maturity
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European Shopping Centres: One Size fits All? August 2008
Hypermarket
Fashion/Clothing
There is a perception that consumers are
constantly seeking a sense of ‘retail Electricals
uniqueness’ but in reality the shopper
Department Store
expects a core of high-street retailers to
be present at any new scheme. At the Sports
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European Shopping Centres: One Size fits All? August 2008
Most popular Anchor/Key Tenants by order Department stores – will Continental Europe follow the UK
trend?
Anchor / Key Tenant Retail Category
Department Stores acting as anchors of new shopping centres
H&M Fashion/Clothing
was limited to only a few markets, including Turkey, the UK and
Zara Fashion/Clothing
Poland. They have been – and still are - very much a Western
Saturn Electrical European and namely British trend, with key players typically
C&A Fashion/Clothing first to commit to any significant new scheme (e.g. John Lewis,
Carrefour Hypermarket M&S and House of Fraser at Westfield Stratford – due to
M&S Fashion/Clothing / Dept Store open 2010), although in Germany this once traditionally strong
Elektro Market Electrical market does appear to be in terminal decline.
Tesco Hypermarket
Peek & Cloppenburg Fashion/Clothing
The rest of continental Europe has less of an affiliation to the
department store as shopping centre anchors, with, as we have
Auchan Hypermarket
seen, the Hypermaket/Fashion/Electrical line-up the common
format. There is, quite simply, a lack of strong local department
store operators in Southern and Central Eastern Europe. But
Although the UK remains an important target for many also the growing desire among shopping centres owners to
International retailers, demand has decreased whilst in contrast drive income means that they are more likely to split floorspace
it is flourishing in markets such as the resurgent Germany and that could be taken by a department store into, for example, a
the fast growing CEE markets. Poland saw Massimo Dutti and Peek & Cloppenburg, Zara and H&M, thus achieving higher
Sprider amongst others enter in the last 12 months, with plans rents.
afoot for GAP, Cortefiel and TopShop to follow suit. In
addition, retailers are looking to consolidate their supply lines Adding to this, cross border expansion is logistically difficult for
and reduce costs by buying out domestic chains in foreign Department Stores, and there appears to be a strong emotional
markets, often with venture capitalist backing. attachment at a National scale – with consumers loyal to their
own stores brands and less receptive of new international
In a bid to distance themselves from the notion of ‘clone entrants. The preferred location is also often the high street and
Europe’, new shopping centres will be on the lookout for the so, despite some ambitious expansion plans by operators such
next retail giants to anchor their schemes. Primark are set to as Debenhams (albeit via franchise), previous attempts to
follow up their successful move into Spain with expansion into enter shopping centres have not always been successful (e.g.
the rest of continental Europe, highlighting Germany, Portugal The Field’s in Copenhagen) and as such Department Store
and Benelux region as priority markets. Trans-Atlantic brands presence in shopping centres across wider Europe is unlikely to
such as Abercrombie & Fitch or Banana Republic could see radical change. This is a shame in that a concept so
perhaps emerge as key players following recent European successful in arguably the most sophisticated market in Europe,
activity, whilst brands from Poland’s LLP Group such as the UK, has not been more widely adopted elsewhere. More
Reserved and Cropp Town are set to continue their expansion than any other retailer, a department store can provide a sense
across CEE, as are children’s wear retailer SMYK. of identity for a scheme (for example, Selfridges at The Bull
Ring) and could add variety to the limited number of major
anchors operating around Europe.
Electrical stores
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European Shopping Centres: One Size fits All? August 2008
12%
Fashion & Footwear Restaurants & Cafés Jewellery, Watches & Gifts
Services & Telecomms Health & Beauty Toys, Games & Hobbies
Provision of Leisure Anchors - East vs. West
Electricals Homewares Convenience
90%
Source: Jones Lang LaSalle 80% East West
% of Schemes where present
70%
60%
Fashion and Footwear retailers dominate 50%
40%
30%
As expected, Fashion and Footwear was the most prevalent
20%
retail category across our assessment of recent shopping 10%
centre openings, taking an average of 48% of units per scheme. 0%
The range however was broad with some schemes such as
IMAX
Gym/Fitness
Bowling
Bingo
Exhibition
Casino
Billiards/Pool
Entertainment
Theatre
Cinema
Ice Skating
Arena
Children's
Club
seeing up to 66% coverage whilst Sonae Sierra’s 8a Avenida,
an extension to the existing Modelo Shopping Centre in S. João
Source: Jones Lang LaSalle
da Madeira opened with a 40% Fashion & Footwear provision.
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European Shopping Centres: One Size fits All? August 2008
The broad trend of locating away from the city centre in the
Key Trends in Shopping East is set to continue, a function of the rapid development of
retail in primary and secondary towns in markets such as
Centre Development Russia and Ukraine. For example, Prizma Beta Group’s
64,000sqm Sky mall – bordering out of town Kiev – will look to
use the size its out-of-town location affords as a main selling
point in attracting major Western brands.
But the dominant out of town scheme is not just the preserve of
This section examines the aspects of Eastern Europe. Amorium/ING Groups 122,000sqm Dolce Vita
shopping centre development that look Tejo in Lisbon is due to open in the Autumn 2008 and will be
beyond the retail, those features that competing with the nearby Colombo Shopping Centre. A
similar scenario is set to play out in Zaragoza, Spain where the
shape the purpose, positioning and feel Plaza Imperial and Puerto Venecia retail parks will see
of a scheme. shopping centres of 83,000 sqm and 73,000sqm respectively
added to their existing retail park space, despite being located
only several km apart. Puerto Venecia will also feature
50,000sqm of leisure upon opening in 2009.
80% Edge/Out of Town in town There is often greater scope to create a sense of identity in
67%
70% town centres by complementing the existing urban fabric. A
% of new scheme assessed
58%
60% good example of this is the Feest & Cultuurpaleis in Oostend
50% 42% Belgium, a 5,555sqm joint in-town redevelopment by ING Real
40% 33% Estate, AGSO & Wilma. Opened in April 2007, the ICSC
30% nominated project saw the transformation of an old city-owned
20% museum into 17 prime retail units, providing a good example of
10%
the joining up of a town’s retail offer whilst remaining
0%
sympathetic to the existing cultural environment.
Eastern Europe Western Europe
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European Shopping Centres: One Size fits All? August 2008
The difficulty of securing inner-city land in Eastern Europe is Transcending both Eastern and Western regions is the growth
driving development to edge or out of town locations. This is of low-cost travel. This has acted as a catalyst for the
evident in major and secondary towns/cities such as Istanbul, development of retail around transport terminals. St Pancras
Bucharest and Cluj (although there are still a number of inner International in London is a prime example of the high street
city projects planned, such as Sema Park in Bucharest). entering the rail station (M&S, Monsoon, La Senza et al. all
have units) whilst schemes such as Arena Plaza in Budapest
Within our broad definition of Western Europe, Spain and Italy have been developed with the proximity to a transport
are exceptions to the general East/West trend, with the majority interchange a major consideration. In Poland, there are a
of retail development taking place in out of town or peripheral number of tenders being carried out by PKP, the Polish railway,
locations. In the under supplied Italian market this is due to provide retail and the Czech Republic is also following a
primarily to the lack of suitable town centre sites for large scale similar trend.
development, but new schemes such as Gruppo PAM’s
87,000sqm Roma Est in Rome are also catering for the Away from rail, DEOL Partners Kiev Airport City will combine
growing trend towards suburban living in Italy. 186,000 sqm of retail and office space with hotels and other
mixed use facilities on the site of Boryspil Airports new
Conversely, the ICSC credited ZloteTarasy scheme in Warsaw International Terminal D, due for completion within the next
and Palladium shopping centre in Prague, both inner-city three years. London Heathrow’s Terminal 5 opened in March
mixed use projects, are recent examples of regeneration 2008 with some 20,000 sqm plus of retail floorspace featuring
extending its geographic reach as some of the primary markets high-end brands such as Paul Smith and Gucci, and
in Central and Eastern areas begin to mature and follow trends introducing retailers like Prada to the European airport scene
set by the West.
It is not just about in town/out of town though. Other retail The agglomeration of several retail formats to create unique
destinations, while not necessarily new, are evolving. Multi retail critical mass is a familiar scenario in Spain in schemes
Development opened their I Petali di Reggio shopping centre such as the La Nueva Condomina and Thader in Murcia, but it
in May 2007, combining retail as part of a football stadium is gathering pace elsewhere, particularly in Eastern Europe. In
complex, a concept being further developed elsewhere with Romania, for example, Modus/Nova Imobilaire’s Colloseum
planning now advanced for the site of Club Brugge’s new Center in Chitilia, Bucharest, will combine a shopping mall
football stadium in Belgium to incorporate a 40,000sqm (60,000sqm) with a retail park (54,000sqm), whilst the existing
shopping centre. The retail element essentially funds the Baneseasa shopping city to the north of Bucharest combines a
stadium development and in doing so creates a unique retail park (IKEA, Mobexpert, Bricostore, Flanco ), Carrefour
destination. with retail gallery and shopping centre anchored by Peek &
Cloppenburg, Zara and Reserved.
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European Shopping Centres: One Size fits All? August 2008
A Third Place
The concept of a Third Place – We are seeing mixed-use as a growing trend in Eastern
accessible social surroundings that are regions, with notable schemes due for completion in Istanbul,
Krakow, Bucharest and Moscow over the next 18 months
separate from the home and the (see previous table). Office space will be a key component of
workplace – has led shopping centre these to not only drive daytime retail trade but also to support
leisure & entertainment facilities in the evening. And in Poland a
developers to explore ways of using housing boom is creating new residential districts (e.g. Warsaw
retail as an anchor for community life; - Miasteczko Wilanów is a new quarter for approx 30,000 -
creating a place people no longer go 40,000 inhabitants) which will be supported by retail and service
provision.
purely to shop, but rather to shop when
they’re already out. Mixed use
developments, leisure & entertainment Princesshay, Exeter
and catering are all central to the creation
of a place where people simply want to
spend time…...and shop.
Mixed-Use
Retail GLA Non-Retail Although leisure and entertainment remains a key component
Scheme Completion to shopping centre development through the remainder of 2008
(M2) Description
Residential of c.1,000 and 2009, at this stage we are seeing little innovation in the
Bonarka, Krakow 2009 90,000 types of facility appearing in the project plans. The range of
flats & Office
Sun Plaza,
2009 76,000
8,500 sqm office facilities closely follows findings from our assessment of the
Bucharest building recent shopping centre openings, with Ice rinks, bowling alleys
Cotroceni Park,
2009 75,000
c.100,000 sqm and children’s entertainment areas all recurring themes, whilst
Bucharest Offices cinemas are confirmed at over two thirds of the future projects
Forum City Park,
Residential, Hotel & assessed.
2008 175,000 Offices totalling
Istanbul
100,000sqm
Residential, Office &
Avia Park, Moscow 2009 163,400
Public Parks
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European Shopping Centres: One Size fits All? August 2008
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European Shopping Centres: One Size fits All? August 2008
The Capital Partners/Unibail-Rodamco Metropolis Shopping In Central and Eastern areas, the improvement to design
Centre in Moscow is scheduled to open later this year with a comes less as a case of remaining sympathetic to the existing
strong line-up of more upmarket retailers whilst Istinye Park, urban fabric, but rather an attempt to create a competitive
which opened in September 2007 in Istanbul houses Dolce & advantage in what are primarily edge of town developments.
Gabbana, Fendi, Gucci and Jimmy Choo amongst other
luxury brands within its open air ‘lifestyle centre’ section of the The influence of Western architects and developers has
scheme. Other shopping centres have begun to reposition ensured that new shopping centres in Central and Eastern
themselves as more upmarket to reflect the change in regions are at the fore of contemporary design and give the
consumer demand, with centres such as Klif in Warsaw perception of openness through use of natural light and
successfully attracting brands such as Marella, Fred Perry & thoughtfully designed space, despite being typically closed or
Bugatti, and other schemes such as Palac Flora in Prague under cover. The transparent undulating roof at Zlote Tarasy,
starting to implement a similar strategy. Warsaw shows how elements of design can become iconic,
creating a sense of identity, whilst the contemporary
The trend is not exclusive to Eastern Europe, with Westfield’s architecture and use of public space of Baneasa Shopping
London White City, set to open in September 2008, hoping the Centre, Bucharest, highlights the trend towards developers
much publicised ‘Village’ area will challenge the established engineering a European ‘piazza’ feel in peripheral locations.
luxury districts of London by attracting additional high-end
retailers to complement the already signed Louis Vuitton, The trend in Western areas is towards a more open design,
Tiffany and Mulberry. Conversely, Spain is actually seeing a largely a function of town centre regenerations which aim to
decline in luxury retailer demand as market conditions become complement the existing urban fabric. The focus here is on
tougher. creating an inviting environment in which people want to spend
time, of course strongly linked to the concept of the Third Place.
Catering is also seeing a drive towards quality, with Turkey Grosvenors £900 million Liverpool One project in Liverpool,
leading the way in converting fast food chains into quality UK, is a retail led mixed-used development which concentrates
restaurants (e.g. Wagamama and Kitchenette at Kanyon on optimising pedestrian flows and maximising the use of public
Shopping Centre, Istanbul) and the emergence of aesthetic open space. As part of the scheme, the Chevasse Park which is
traditional markets selling local produce are proving a popular planned for October 2008 epitomises the vision and hopes to
concept here and also in Russia. recreate a New York Central Park feel, complemented by
surrounding dining and leisure.
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European Shopping Centres: One Size fits All? August 2008
Sustainability
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European Shopping Centres: One Size fits All? August 2008
In summary, and returning to the main Differentiation means different things in different markets and
theme of the report, it is clear that one the difficulties in securing a unique retail offer has led to the
non-retail aspects of shopping centres becoming the main
design doesn’t fit all, although certain differentiators. Previously, developers would look to
aspects of shopping centre development ‘destination’ facilities, such as the Multiplex to perform this
do transcend all European markets function, but now with an almost omnipresence of this type of
attraction, the design, location, and unique leisure &
entertainment facilities – optimised for local demand – are all
As we have seen, achieving distinctiveness from an occupier used to create an ambience and vibrancy.
sense is challenging. The fundamentals of retail anchor and
tenant mix follow a similar formula across Europe, based on the Ultimately, the consumer has choices. They can choose where
developers’ experience of what works and what doesn’t. The to shop, where to relax, where to interact. With these choices
influence of Western developers and tenants moving East has comes the need for developers to offer an environment that
acted as catalyst for this convergence, but it has also led to a encourages consumers to shop and more importantly a place
more condensed development cycle in Central and Eastern which is more appealing than competing shopping experiences,
Europe. including the internet. Creating and evolving a unique identity is
central to this strategy and will ensure that one size will never fit
Functional retail in this region is arguably being delivered as all, even if the tenant line-ups look increasingly similar.
successfully as in Western markets, though as the rapid pace of
development continues, the level of competition will increase
and the next challenge will be one of differentiation, in line with
the cycle we have seen in the West. This doesn’t mean we will
see a replication of Western development, but rather an
evolution away from functional retail towards Third Place
creation that intrinsically fits its host environment.
Glossary of Terms
New scheme openings are defined by a cumulative assessment undertaken of 21 new Anchor / Key tenants have been defined either by direct reference from the shopping centre
European shopping centres with a GLA of 30,000sqm or greater that Jones Lang LaSalle owner/developer/leasing agent or through analysis of physical floor plans.
know to have opened between January 2007 and February 2008. In addition, a cross-
section of new scheme openings falling within the same time period, with a GLA of under Eastern Europe in the context of this report refers to the contemporary geographic
30,000sqm, were also assessed though quantitative data from this exercise was excluded definition of Central and Eastern Europe, including Greece and Turkey. Western Europe is
from any grouped figures and used as reference only. No shopping centres to open in defined as all countries to the West of Germany, Austria and Italy inclusive.
Russia were included in this part of the quantitative analysis.
Future scheme openings (also referred to as ‘future projects’) are defined by a cumulative
assessment undertaken of all European projects in plan or under construction that are due
for completion before the end of 2009 with a GLA of 45,000sqm or greater and whereby
information was available and known to Jones Lang LaSalle.
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Contacts
COPYRIGHT © JONES LANG LASALLE IP, INC. 2008. All rights reserved. No part of this publication may be reproduced or
transmitted in any form or by any means without prior written consent of Jones Lang LaSalle. It is based on material that we believe to
be reliable. Whilst every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors.