PARIS — Russia is booming — at least when it comes to shopping center development.
The country has surpassed the United Kingdom as Europe’s second largest shopping center market, boasting 17.5 million square meters of space, according to a new study published today by real estate advisory Cushman & Wakefield.
The U.K. has moved to third position with 17 million square meters, while France remains number one, sporting 17.6 million square meters of shopping center space as of the first half of 2014.
“Economic growth and urbanization has been the main driver of development this year, as developers see potential in densely populated regions with a lack of high-quality schemes,” the study explained, noting that with 4.6 million square meters of space waiting in the pipeline for the second half of this year and 2015, Russia was on its way to overtaking France as well.
By year-end, the country will also host Europe’s largest mall: Avia Park in Moscow, spanning 230,000 square meters, or 2.5 million square feet.
“However, political uncertainty, steady depreciation of the ruble and stagnating consumer demand is pressuring retailers,” observed Maxim Karbasnikoff, Cushman & Wakefield’s head of retail services in Russia. But he added that “fundamentals are still positive in the mid-term and we expect vacancy to stabilize and rents to reach a healthier level in the coming six months.”
In the first half of 2014, there were 53 new malls in Europe – 12 of them in Russia — and a further 49 are slated to open by the end of 2015, the study said.
Cushman & Wakefield also singled out Turkey as the second fastest growing shopping center market.
More than two million square meters of space is to be added there in the second half of 2014 and in 2015, followed by France with approximately 1 million square meters.