Europe's retail park market - Cushman & Wakefield report
today Jun 14, 2019
The retail parks sector in Europe continues to grow as consumers increasingly focus on these shopping destinations rather than traditional malls and high streets.
Floor space for retail parks rose 2.2% last year, reaching 50.1 million sq m. And much of that development in Western Europe was focused on larger cities with strong catchment areas and high pedestrian flows, while in Central and Eastern Europe, smaller cities and suburban areas saw the fastest growth.
That's according to research from Cushman & Wakefield (C&W), which said that 995,000 sq m of new retail park space was completed in Europe last year. And while that was down 15% on 2017 “a stable development trend is expected going forward, with 1.4 million sq m of new retail park space scheduled for opening in 2019/20.”
It also said that “quick and easy construction and a growing number of schemes below 5,000 sq m are expected to boost the number of openings.”
Retail Parks have proved to be one of the strongest segments in physical retail in recent years and as they’ve attracted more and more consumers, the brand and product-type mix have evolved. Locations that used to be all about supermarkets, DIY stores and other ‘big-box’ retailers, are much more likely these days to attract fashion and general merchandise retailers, as well as the food and beverage (and other leisure) options that make a visit to a retail park more than just a shopping trip. But plenty of retail parks are sticking to more traditional tenant mixes and C&W thinks they need to wake up to the opportunities out there.
Silvia Jodlowski, C&W Senior Research Analyst, said: “Weaker consumer demand and rising costs are forcing retailers to explore new formats and concepts and retail parks represent a viable option for many operators. Cheaper rents, lower service charges and more flexible floorspace are the main factors attracting retailer interest.
“Across Europe, we are now seeing developers and landlords experimenting with different formats to keep pace with changing consumer demand. In times of economic uncertainty, retail parks have proved to be an efficient alternative to shopping centres, but if landlords want to succeed, they must offer customers more reasons to visit. This could be achieved by broadening the tenant mix to include more food and beverage operators, as well as leisure and fashion retailers.”
The company said that France has seen the most retail park development, with a burst of new sites opening, as well as a small amount of upgrade activity. Spain has also been strong, as has the UK. Behind the top three, the most development has been seen in Italy, Romania, Poland, Germany, Sweden, the Czech republic and Slovakia.
But although in top spot, retail park development in France has been decelerating, down 22% from 2017, yet the volume of annual completions surpassed that of shopping centres which has been declining at an increasing rate (-28%).
Despite Spain being in the top three in terms of new development and Germany much further behind, the top three markets as far as total retail park space is concerned, are Germany, the UK and France. They account for more than 74% of total retail park space across the continent.
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