As mentioned in my previous blog, the seminar on retail development in Europe’s big five this afternoon promised news of an “enormous development pipeline”, something I would imagine translating into plenty of opportunities for the construction industry.
Well, an enormous pipeline there might be but unfortunately the delegates from the UK, Germany, Italy, Spain and France were unanimous in their announcements that a massive chunk of that wouldn’t see the light of day in 2010, or 2011 for that matter. And some projects in the pipeline may simply never materialize at all.
I wish I could be the bearer of brighter news. Despite there being a “purposeful” mood here at MAPIC, as Mark Disney from CBRE put it early today, the retail development pipeline is still not looking healthy.
Martyn Chase from DTZ kicked off the proceedings with an overview of the market in the UK saying that most projects have been delayed and that “day by day there is no start date”. He added that projects to be built or opened in 2010 were limited with a similar story in 2011. His projections for beyond the next two years were no more positive: “And after that? It looks pretty thin to be honest. It’s a tale of decline in the UK.”
Jan Eijkemans, managing director of MAB Development Group said that it was a similar state of affairs in Germany with lots of projects on hold.
Pietro Malaspina, director of Sierra Developments gave an overview of Spain and Italy. In Italy he pointed to some more positive news with the opening of a 41,000 sq m mall last October which is faring well and the construction of another centre in La Spezia next month.
But he said that Spain was not in such a strong position, being a more mature market. In nine months only 11 new shopping centres have opened in the country equaling just 231,000 sq m, down 35% on the average 371,000 sq m over the last decade. “There are 54 projects in the pipeline,” he said. “It is around 1.4m sq m but it is likely that 50% of this will not see the light. In 2010 we are meant to deliver 38 new projects plus 8 to carry over from 2009. We predict only between 20 and 24 will actually go ahead.”
Finally to France and Albert Malaquin could do nothing but follow in the footsteps of the other big four which his predications: “For 2010/11 the retail development pipeline is 1.9 sq m but we won’t reach that. It will be nearer 1.2m sq m.
The reaction to the talks was one of what Chase joked as being “stunned silence” as no questions came from the deadly quiet audience after the facts and figures were delivered in quick succession.
Desperate to end on a more positive note, the panelists all said that, despite such tough economic times it was not all bad news and the positive, forward looking attitude at the conference was not naïve.
Chase said that stores including Apple, Abercrombie, Claire’s Accessories and Primark were all after retail space in the UK proving that retailer demand is out there.
Malaspina added: “My father always said ‘I got through the 1929 crisis.’ So this time round I think I will do the same as him. Let’s all do the same. Let’s be positive because there are signs of a recovery. Things can only improve.”
I will report again after tomorrow’s early start as CBRE releases new research on Europe’s most active retailers over breakfast.