European

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

Retail provision in shopping centres is becoming

formulaic, driven by an increase in cross-border retail

The East-West gap between shopping centre design

and location is narrowing and developers are offering
more than a simple retail experience, although
formats vary considerably

Sustainability is moving up the agenda for many

shopping centre developers and investors.
European Shopping Centres: One Size fits All? August 2008

Shopping centre development is booming in Europe like

never before, particularly in the emerging markets to the
east. With cross-border retailers actively expanding into
these markets and Eastern Europe increasingly adopting
development trends from the west, does this mean we are
moving inexorably towards a cloned European shopping
centre?

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European Shopping Centres: One Size fits All? August 2008
Summary
• Europe is heading towards a clone shopping centre from
an occupier perspective. In the last 12 months Carrefour
opened in Turkey and Romania, Albert unveiled new
stores in Belgium, Czech Republic and Poland, and Tesco
also opened in Poland, as well as Hungary and the UK.
And, unsurprisingly, hypermarkets anchored 75 % of all
major new schemes in 2007-2008.
• Fashion anchors are becoming more popular as shopping
centre owners look to maximise their rental income and
footfall. And the same fashion anchors are increasingly
found across Europe, with H&M, for example, taking major
shopping centre units in Italy, Czech Republic, Hungary,
Poland and the UK last year.
• Overall retail provision is also becoming formulaic,
reflecting the growing internationalisation of the retail
sector and a desire to replicate a ‘winning’ formula.
Fashion retailers for instance, took about half of the units
in each of the shopping centres opened, and of these,
cross border retailers dominated - accounting for 84% of
fashion units in Palladium (Prague) and 80% in St
Stephens (Hull). Zara, Pull & Bear and Bershka were
found in over 50% of all new schemes, whilst H&M,
Promod, Levis and Esprit were present at 40% of new
schemes.
• The Leisure and entertainment mix is also looking
increasingly familiar across Europe. In spite of a few new
attractions such as an aquarium in Forum Istanbul, Turkey
and plans to mix a Grand Prix motor racing circuit with
retail in Pescara, Italy, there are no clear new trends
emerging.
• Cinemas remain by far the most popular leisure anchor,
present in 85% of the new schemes, more even than
hypermarkets (75%). But it is increasingly clear that there
is no ‘next big thing’ to replace the cinema, although
cinema operators are looking at how best to re-invent
themselves, including the use of 3D digital screens and
VIP suites.
• However, other aspects of new shopping centre
development are not quite so formulaic. There is a big
locational difference between east and west, driven by the
difficulty in accessing town centre sites in eastern Europe
and a move towards town centre regeneration projects and
‘town centre first’ planning policies in western Europe.
Over 60% of major new schemes in Western Europe were
located in town centres, compared with just 28% in the
East.
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• The creation of a Third Place is a key trend in shopping
centre development in Western Europe – a place where
people no longer go purely to shop but rather to shop
when they are out. Retail as an element of mixed-use
schemes is part of this trend and has become a common
feature of Western development, often linked to urban
regeneration. Princesshay in Exeter being a good example
of this. This trend is also gaining momentum in CEE, with
many of the largest mixed-use projects found in this
region.
• Catering is also central to the concept of a Third Place.
The provision of restaurants and cafes is slightly less in the
east compared with the west, but their importance in
enhancing a centre’s environment and increasing dwell
time are universally recognised. The key theme here is a
drive towards quality with more restaurants located
throughout the centre. Turkey is leading this trend in the
east, with for example, Wagamama and Kitchenette
located in the Kanyon shopping centre, Istanbul.
• On the same theme, luxury brands are entering shopping
centres at higher rates, notably in Turkey, Russia and
Poland. And in London, Louis Vuitton, Tiffany and Mulberry
have signed for the soon to open Westfield London.
• Shopping centre design is becoming more sophisticated.
In the west, sympathetic integration into existing town
centres and improving the public realm is key, whereas in
the east, innovative design is helping to create a
competitive advantage in the face of an ever increasing
supply of new schemes.
• Sustainability is now high on the agenda for a number of
shopping centre developers and owners, but there is little
market evidence to show that green issues are influencing
market pricing or the ability of a scheme to attract retailers.
This will surely change.
• Ultimately, the consumer has choices. They can choose
where to shop, where to relax, where to interact. With
these choices comes the need for developers to offer an
environment that encourages consumers to shop and
more importantly a place which is more appealing than
competing shopping experiences, including the internet.
Creating and evolving a unique identity is central to this
strategy and will ensure that one size will never fit all, even
if the tenant line-ups look increasingly similar.
European Shopping Centres: One Size fits All? August 2008

Introduction

This highlights two things: firstly that market maturity varies

Jones Lang LaSalle has examined the enormously around the region, and secondly that new
evidence from recently opened large development is heavily focused on Eastern Europe, but it also
scale developments around Europe and shows a significant level of new development taking place in the
more mature markets – The Netherlands, for example, is due to
looked at emerging trends in new see an 8% increase in stock between 2007 and 2009.
projects to see if one size really does fit
all. The first part of the report provides an objective overview of
current occupier trends in the shopping centre market, based
The context of the report is depicted in the graph below. It on an extensive assessment of a pan-European cross-section
shows the provision of shopping centres in Europe and the of large schemes (GLA >30,000sqm) that have opened over the
relationship between market maturity and current growth rates. last 12 months, plus analysis of some of the most high-profile
For example, Romania is shown to have a relatively low retail and innovative shopping centres planned for 2008 & 2009.
market size and prime shopping centre stock, but that the
market is growing rapidly. Spain has a relatively large market The second part is more qualitative and covers key trends in
size and is still seeing some growth to its largely developed shopping centre location, mixed use schemes, the importance
prime shopping centre market. of leisure and catering, sustainability, the shopping environment
including the drive towards quality and developing a ‘sense of
place’.
Fast Growing Markets

Relative retail market size

RO BE = Belgium
RU CZ = Czech Republic
% increase in stock Dec 2007-Dec 2009

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

importance that developers still place upon the convenience

Occupier Trends: offer as a driver of scheme success in most of Europe is clear,
and for out of town or peripheral developments it remains a
A Single European must.

Format? Presence of Anchor / Key Tenants in New Schemes by type

of Retailer

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

same time Leisure and Entertainment has

Homewares
become an integral component in
creating a ‘retail’ destination. 0% 10% 20% 30% 40% 50% 60% 70% 80%
% Schemes where present

This section examines recent shopping Source: Jones Lang LaSalle

centre completions across Europe and

establishes what the key occupier trends
actually are. Fashion & Clothing

Fashion/Clothing retailers were the second most common

choice as anchor or key tenant and were present in over 70% of
new schemes assessed. There is growing evidence of the
Anchors and Key Tenants ‘fashion focused’ shopping centre, with many featuring multiple
fashion anchors or key tenants, albeit supported by a
hypermarket or electrical superstore, or both.
Hypermarkets remain the key Anchors
H&M was the most popular flagship retailer (see table below),
The presence of Hypermarkets as a key attractor remains
with presence at 6 out of the 21 new schemes assessed and
commonplace, with over three quarters of new schemes
consistently commanding large spaces at new schemes across
assessed featuring this type of store as a primary anchor. The
Europe. This is not an isolated case with fresh International
dominance of hypermarkets in Central and Eastern areas is still
brands becoming increasingly sought-after to anchor new
evident, though there are signs of the concept spreading further
shopping centre developments in most markets, especially in
North and West with, for example, ING Real Estate’s St.
Central & Eastern regions, where only a few years ago the
Stephens scheme in Kingston-upon-Hull which opened in
attitude was that the consumer would not be receptive to
September 2007 with a 13,500 sqm Tesco Superstore as key
anything but Local and National retailers.
anchor.
Increasing cross-border activity of Western based fashion
The importance of hypermarkets looks set to continue with over
retailers as they expand out of their saturated home markets,
70% of the new projects assessed confirming their presence at
and a growing awareness by consumers of international brands
the scheme. In some markets, however, supermarkets are
are the main reasons for this. Thus traditionally strong brands
becoming more popular. In the more upmarket Polish schemes,
in home markets such as Inditex Group, H&M, Peek &
smaller format supermarkets together with delicatessens are
Cloppenburg and Next now command similar gravitas abroad.
preferred. Not only do they provide a more attractive
But it is not just brands from the West that are expanding
environment for consumers, with less shopping trolleys around,
internationally. Polish fashion retailer Reserved already trade in
they also free up space for fashion and they pay higher rents
ten countries, including Czech Republic and Ukraine, and has
than hypermarkets (a supermarket/deli in Poland for example
recently taken a major unit at the new Baneasa Mall in
would be expected to pay over double the rent/sqm compared
Bucharest.
to a hypermarket). In Spain, supermarkets have become more
popular to overcome licensing issues. In any event, the

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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

Electrical superstores are regarded as the third most important

key tenant by shopping centre developers, with almost 50% of
schemes assessed featuring this type of retailer as an anchor.

Electrical stores feature as an anchor primarily in Eastern

regions, largely due to a lack of quality retail warehousing - the
traditional location for this type of retailer. This can again be
related to cross-border expansion and with brands like Saturn
and Electro World taking large units at schemes such as Złote
Tarasy in Warsaw and Arena Plaza in Budapest.

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European Shopping Centres: One Size fits All? August 2008

Retail Category Leisure & Entertainment

Provision The ‘next big thing’ for Leisure and Entertainment at shopping
centres is still to emerge - Cinemas are still regarded as the
essential lesiure component to any significant new retail
scheme. Almost 85% of new builds assessed featured a
multiplex, more common even than hypermarkets. Cinema City
were the most active operator in terms of taking up new space,
Retail Category Provision of New Schemes by unit whilst Multikino also continued their expansion plans across
numbers Poland and now operate 130 screens across 14 cities, the
3% 2%
5% majority of which are located within shopping centres.
6%
There are many similarities in the type of leisure facility being
8% adopted across Europe (see provision graph below). However,
the peripheral locations of large-scale Central and Eastern
48%
European developments allow for a greater use of leisure
8% space. The Ice Rink at Teraspark, Denizli, (amongst presence
at other schemes) is a good example of this, as is the Casino
at Akropolis in Kaunas, Lithuania.
8%

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

Echo Investments’ triple-level Pasaz Grunwaldzki in Wroclaw

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.

Restaurants and cafés took a significant 12% of available retail

Children’s Entertainment Areas were popular across both
units whilst Health & Beauty, Services & Telecommunications
regions with presence in 26% of all schemes assessed, as were
and Jewellery & Watch stores were also well represented,
arenas for hosting cultural events such as music gigs or
taking an average of 8% of available units each. On the whole
exhibitions. These had a presence in a third of new schemes
their was little difference between splits in Eastern and Western
studied, although the figure is heavily weighted towards Eastern
Europe, with Restaurants and cafés the most notable, recording
Europe, testament to a lack of existing venues to support the
a 10% vs 16% split respectively.
growing trends of popular culture and an attempt to recreate the
down-town feel that inner-city areas in Western Europe tend to
There are some significant exceptions to this formulaic mix, with
have automatically.
household goods centres an obvious example. Following
schemes such as the Bowfounds MAB’s ‘Domus’ furniture
The analysis of recently opened schemes has shown that
theme centre on the outskirts of Paris, ING Real Estate’s
leisure is now an integral part of most large centres but it has
Inspira Deco ‘furniture boulevard’ is a themed habitat outlet
also shown that there has been little real innovation in terms of
centre scheduled to open in Madrid in 2009 which could ignite
leisure mix or new concepts. Increasing dwell times in a
further development of this type, particularly around the
shopping centres, the traditional role of leisure, is now being
principal Spanish cities. The project could however face delay
overtaken by the need to create a sense of place. This is
as furniture and household retailers begin to limit expansion
explored in more detail in the next section.
plans in response to more difficult trading conditions.

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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.

In Western Europe there is a drive for quality and

In, Edge or Out of Town distinctiveness, characterised by strong links to leisure and
lifestyle which aim to create a place for social interaction. Inner-
The division between the more city developments and extensions to existing schemes are at
functional shopping centres in Eastern the fore of this trend, strongly related to the extensive urban
regeneration currently being experienced across the region as a
Europe and the more sophisticated retail result of Government ‘town-centre first’ policies.
destinations of Western Europe are
narrowing as Central and Eastern
Feest & Cultuurpaleis, Oostend
markets mature and Western retail
evolves existing concepts

A matter of East vs West?

Over 65% of the new developments assessed in Western

Europe were located in-town, with a further third being built at
edge-of-town locations. In the East, the dominant positioning
was peripheral with 58% of the sample. In-town locations
accounted for 42% of the new schemes assessed.

Location of new Shopping Centre developments -

East vs. West

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
driving development to edge or out of town locations. This is
evident in major and secondary towns/cities such as Istanbul,
Bucharest and Cluj (although there are still a number of inner
city projects planned, such as Sema Park in Bucharest).
Within our broad definition of Western Europe, Spain and Italy
are exceptions to the general East/West trend, with the majority
of retail development taking place in out of town or peripheral
locations. In the under supplied Italian market this is due
primarily to the lack of suitable town centre sites for large scale
development, but new schemes such as Gruppo PAM’s
87,000sqm Roma Est in Rome are also catering for the
growing trend towards suburban living in Italy.
Conversely, the ICSC credited ZloteTarasy scheme in Warsaw
and Palladium shopping centre in Prague, both inner-city
mixed use projects, are recent examples of regeneration
extending its geographic reach as some of the primary markets
in Central and Eastern areas begin to mature and follow trends
set by the West.
Planes, Trains and Football Stadiums…
It is not just about in town/out of town though. Other retail
destinations, while not necessarily new, are evolving. Multi
Development opened their I Petali di Reggio shopping centre
in May 2007, combining retail as part of a football stadium
complex, a concept being further developed elsewhere with
planning now advanced for the site of Club Brugge’s new
football stadium in Belgium to incorporate a 40,000sqm
shopping centre. The retail element essentially funds the
stadium development and in doing so creates a unique
destination.
I Petali di Reggio, Reggio Emilia
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Transcending both Eastern and Western regions is the growth
of low-cost travel. This has acted as a catalyst for the
development of retail around transport terminals. St Pancras
International in London is a prime example of the high street
entering the rail station (M&S, Monsoon, La Senza et al. all
have units) whilst schemes such as Arena Plaza in Budapest
have been developed with the proximity to a transport
interchange a major consideration. In Poland, there are a
number of tenders being carried out by PKP, the Polish railway,
to provide retail and the Czech Republic is also following a
similar trend.
Away from rail, DEOL Partners Kiev Airport City will combine
186,000 sqm of retail and office space with hotels and other
mixed use facilities on the site of Boryspil Airports new
International Terminal D, due for completion within the next
three years. London Heathrow’s Terminal 5 opened in March
2008 with some 20,000 sqm plus of retail floorspace featuring
high-end brands such as Paul Smith and Gucci, and
introducing retailers like Prada to the European airport scene
Blurring of retail formats
The agglomeration of several retail formats to create unique
retail critical mass is a familiar scenario in Spain in schemes
such as the La Nueva Condomina and Thader in Murcia, but it
is gathering pace elsewhere, particularly in Eastern Europe. In
Romania, for example, Modus/Nova Imobilaire’s Colloseum
Center in Chitilia, Bucharest, will combine a shopping mall
(60,000sqm) with a retail park (54,000sqm), whilst the existing
Baneseasa shopping city to the north of Bucharest combines a
retail park (IKEA, Mobexpert, Bricostore, Flanco ), Carrefour
with retail gallery and shopping centre anchored by Peek &
Cloppenburg, Zara and Reserved.
The ‘hybrid scheme’ concept, where retail boxes are actually
attached to malls is quite commonplace in Poland and is being
widely adopted in Russia with MEGA schemes such as the
newly opened MEGA Samara in Samara comprising a
shopping mall flanked by IKEA and a hypermarket (in this case
Auchan). With GLA’s typically in excess of 100,000sqm, the
focus here again falls on creating critical mass.
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

Mixed-use facilitates easy movement between home, work and

leisure, and they are becoming an almost standard
consideration in the development industry. Strongly linked to
Government policy of ‘town-centres first’, but also evident in
out-of-town or peripheral locations, they are central to the trend
of urban regenerations we are seeing across Europe, with retail
acting as a key component in creating a rounded lifestyle
concept.

Many examples of mixed-use developments with successful Leisure & Entertainment

retail elements can be found across Europe with mature
markets such as the Netherlands and the UK amongst the most
active. Land Securities’ pedestrianized and open-air
Princesshay scheme in Exeter is a good example, integrating
residential, retail and public space within the Roman urban
fabric of the town, and receiving an ICSC award in the process.
Analysis seen earlier in this report highlights the importance
that developers place on leisure to drive footfall, increase dwell
times and create a unique destination. Leisure & entertainment
at a scheme also facilitates creative social interaction and thus
is one of the main contributors if the shopping centre is to be a
Third Place in which people want to spend time.

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
Cinemas
Multiplex cinemas have been anchoring shopping centres for
over 15 years and are still as important to the leisure offer of a
scheme as hypermarkets are to the retail aspect. This is in spite
of the fact that cinemas are not always popular with shopping
centre owners, as rents are low, they take up a lot of space and
they can provide unwanted competition with retailers for car
parking space. ECE, for example, do not include cinemas in
their schemes.
Although there are no signs of the Cinema trend slowing, there
are indications of saturation in some markets. Spain has seen
over 230 closures between 2004 and 2007, although the
majority of these were older, traditional screens on the high
street. Around 15 however were located at shopping centres
including those at schemes in Gijon (2005) and Castellon
(2007). Two cinemas have closed in shopping centres so far in
2008, both located in Burgos. Converting a failed cinema, with
its sloping floor, has always been a financial issue, but not an
insurmountable one. At Garbera o El Mirador de Santa Justa
in Seville the old cinema was re-let as a Media Markt, and at
Abaco Parque, Burgos, a conversion will house part of a large
El Corte Ingles department store.
The growing risk of saturation is leading to more cases whereby
multiplex operators are adapting their offer to reflect an
increasingly competitive market. For example, Movieplex have
recently upgraded all of their cinema screens at Plaza
Romania in Bucharest to Dolby 3D Digital. Other operators
have introduced ‘VIP’ suites offering luxury viewing, a concept
recently trialled by Vue at Lakeside in Thurrock, UK. ‘Sense
Screens’ which compliment the viewing with appeal to the
wider senses such as smell, or allow you to feel sound effects
through seats are also emerging on the continent.
IMAX is proving an increasingly popular concept for shopping
centre developers and this screen format has been introduced
in some screens across Turkey and Hungary, with plans to
extend Russian coverage from the existing locations of
Moscow, St Petersburg and Kazan over the next three years.
Contraceni Park in Bucharest, due early 2009, is set to be
anchored by a 20 screen multiplex plus IMAX, highlighting the
growth of the concept in Romania. IMAX is a relatively
established concept in many Western Europe markets , though
presence in shopping centres remains uncommon.
New Leisure
No new definitive leisure trend has emerged, but there are a
number of new attractions. Multi Turkmall’s Forum Istanbul is
due to open later this year with an 8,000sqm aquarium as its
main leisure anchor, in addition to large expanses of public
open space for sports & cultural activities, whilst Grand Prix
One in Pescara, Italy, promoted by Merlino Progetti, plans to
merge motor racing and retail, featuring a full-size Formula 1
test track and showrooms. Elsewhere, Sonae Sierra & Fonciere
Euris’s much credited Alexa scheme in Berlin features one of
11 COPYRIGHT © JONES LANG LASALLE IP, INC. 2008. All rights reserved.
the worlds largest model railway exhibitions. And Merlin
Entertainment have ambitious European expansion plans for
their Madame Tussaud’s, Lego Land, Dungeon and Sea Life
attractions, of which shopping centre locations are an active
consideration.
Model Railway at Alexa, Berlin
This range of new concepts is good news for the consumer, but
perhaps less favourable for the investor. A relatively new
scheme with modern design and standard formula of tenant mix
is likely to generate strong interest, but add to that a big box
leisure facility and the risk arguably increases. It is difficult
therefore to see any of the facilities mentioned sparking a key
future trend – the trend is towards leisure as an entity, not a
specific. Snowdomes are a good example of this, at one stage
touted as the next big thing but stalling in their development, the
reality being that the concept does not transcend all markets
and there is often limited interest for what can be regarded as a
specialist hobby. Their environmental credentials are also
increasingly difficult to justify.
Restaurants & Cafes
Food & drink is central to the concept of a Third Place. The
catering aspects of shopping centres are now going beyond the
traditional food courts and rather creating culinary destinations
that encourage increased social interaction. There is certainly a
trend of increased quality in shopping centre catering provision
(which is further explored later), but increases in the volume of
places to dine is not a uniform trend - there were higher
proportions of Restaurants & Cafés in the new Western
European schemes (16%) compared with the East (10%). In
Poland for example, the biggest food court areas are limited to
about 10 - 12 units with some additional cafes and restaurants
spread across the centre. But the divide is narrowing. The in-
town Palladium Shopping Centre in Prague for example has an
above average catering provision, and it is also clear that
catering facilities in shopping centres are popular with CEE
shoppers, and help to drive footfall.
Romania and Bulgaria are also perhaps exceptions with food
courts often acting as an anchor and serving as more of a
lifestyle element akin to the Latin culture of Southern Europe.
This then alludes to an additional North/South axis to consider,
with the climates and culture dictating greater popularity of
catering within the Southern markets.
European Shopping Centres: One Size fits All? August 2008
A Drive towards Quality
The challenge of creating a place people
want to be has led to a drive towards
quality, in both an occupier and physical
design sense.
Occupiers
The increasing affluence of consumers is evident across the
majority of CEE markets, with retail expenditure showing solid
year-on-year growth, particularly in the Eastern European
markets of Russia, Turkey and Romania. With this has followed
an increase in the brand quality of tenants and levels of cross
border retail activity, leading to local brands being increasingly
replaced by stronger National or Western retailers. A similar
cycle was seen in Western Europe during the mid to late 1990’s
when brands such as Zara began entering foreign markets.
Luxury brands are beginning to expand their operations in order
to service rising demand, and shopping centres are becoming
an increasingly popular choice of location for this type of
retailer, especially in the East where traditional high streets are
often regarded the weaker pitch areas.
The Capital Partners/Unibail-Rodamco Metropolis Shopping
Centre in Moscow is scheduled to open later this year with a
strong line-up of more upmarket retailers whilst Istinye Park,
which opened in September 2007 in Istanbul houses Dolce &
Gabbana, Fendi, Gucci and Jimmy Choo amongst other
luxury brands within its open air ‘lifestyle centre’ section of the
scheme. Other shopping centres have begun to reposition
themselves as more upmarket to reflect the change in
consumer demand, with centres such as Klif in Warsaw
successfully attracting brands such as Marella, Fred Perry &
Bugatti, and other schemes such as Palac Flora in Prague
starting to implement a similar strategy.
The trend is not exclusive to Eastern Europe, with Westfield’s
London White City, set to open in September 2008, hoping the
much publicised ‘Village’ area will challenge the established
luxury districts of London by attracting additional high-end
retailers to complement the already signed Louis Vuitton,
Tiffany and Mulberry. Conversely, Spain is actually seeing a
decline in luxury retailer demand as market conditions become
tougher.
Catering is also seeing a drive towards quality, with Turkey
leading the way in converting fast food chains into quality
restaurants (e.g. Wagamama and Kitchenette at Kanyon
Shopping Centre, Istanbul) and the emergence of aesthetic
traditional markets selling local produce are proving a popular
concept here and also in Russia.
COPYRIGHT © JONES LANG LASALLE IP, INC. 2008. All rights reserved.
Luxury retailers at Istinye Park, Istanbul
Design
An improvement to overall shopping centre design and
aesthetics is evident across Europe, with developers focusing
on the quality of materials, layout, the ‘space between the
shops’ the use of natural light, and ceiling heights (if there is
one) to increase the ambience of the shopping centre
environment and experience.
In Western regions, design has long since evolved from
functional to a more sophisticated approach, with integration of
the structure into the existing town centre and improving the
public realm central to the overall concept.
In Central and Eastern areas, the improvement to design
comes less as a case of remaining sympathetic to the existing
urban fabric, but rather an attempt to create a competitive
advantage in what are primarily edge of town developments.
The influence of Western architects and developers has
ensured that new shopping centres in Central and Eastern
regions are at the fore of contemporary design and give the
perception of openness through use of natural light and
thoughtfully designed space, despite being typically closed or
under cover. The transparent undulating roof at Zlote Tarasy,
Warsaw shows how elements of design can become iconic,
creating a sense of identity, whilst the contemporary
architecture and use of public space of Baneasa Shopping
Centre, Bucharest, highlights the trend towards developers
engineering a European ‘piazza’ feel in peripheral locations.
The trend in Western areas is towards a more open design,
largely a function of town centre regenerations which aim to
complement the existing urban fabric. The focus here is on
creating an inviting environment in which people want to spend
time, of course strongly linked to the concept of the Third Place.
Grosvenors £900 million Liverpool One project in Liverpool,
UK, is a retail led mixed-used development which concentrates
on optimising pedestrian flows and maximising the use of public
open space. As part of the scheme, the Chevasse Park which is
planned for October 2008 epitomises the vision and hopes to
recreate a New York Central Park feel, complemented by
surrounding dining and leisure.
12
European Shopping Centres: One Size fits All? August 2008

Sustainability

Sustainability concerns appear to be Meydan Shopping Centre, Umraniye

moving up the agenda for retail
developers across Europe.
Upstream, the strategic sustainability consultancy arm of Jones
Lang LaSalle, note that whilst companies such as Sonae Sierra
and British Land have been applying their own sustainability
standards to new projects for several years now, more recently
companies such as Unibail-Rodamco, Klépierre, Corio and
Redevco have also begun to make public commitments to
sustainability, and pilot projects for “green” retail developments
are starting to appear in various countries within both Eastern
and Western Europe. Internally, the number of commercial
property companies setting ambitious corporate responsibility
programmes is rising, calling for a greater need of advice from
sustainability specialists such as Upstream. This trend is set to In the medium term, rising energy prices and legislative
continue with the ICSC initiative to develop a Pan European pressures are likely to increase the need to find sustainable
green building rating system for retail based on the UK’s solutions at the development stage, particularly through building
BREEAM (Building Research Establishment Environmental design. These solutions will need to allow reasonable pay back
Assessment Method), which aims to launch the BREEAM periods and be proven to increase operational efficiency.
Retail Europe in Autumn 2009. Standards such as the BREEAM Retail Europe, assuming that
it does take effect next year, may well be adopted by property
Reasons for the push are largely commitment orientated, with developers as a means of providing a framework for
EU legislation requiring any building over 1000m2 that is sold or sustainability implementation and boasting publicly recognised
leased from October 2008 to have an energy-performance sustainability credentials. The longevity of the standard will
certificate. Rising energy prices are also driving the search for depend on the extent to which it is successfully adapted to
alternative solutions, coupled with the pressures on companies national and/or local contexts and the added value that can or
to demonstrate visible commitment to attain or maintain a cannot be derived from it. In other words, whether or not it
leadership position in the industry. Developers are also proves to make buildings more attractive to investors and
becoming aware of the increased marketability of a project in occupiers.
the eyes of investors, and the effect it has on market value in
the short to medium term. The Meydan Shopping Centre in
Umraniye Istanbul for example, which opened in August 2007,
employs geothermic energy for temperature control in addition
to natural ‘meadow’ rooftops. A strong tenant line-up which
includes Nike, Mango and Turkey’s first Media Markt soon
followed with the green focus of the scheme most likely a
contributing factor.

13 COPYRIGHT © JONES LANG LASALLE IP, INC. 2008. All rights reserved.
European Shopping Centres: One Size fits All? August 2008

A Single European Format?

In summary, and returning to the main
theme of the report, it is clear that one
design doesn’t fit all, although certain
aspects of shopping centre development
do transcend all European markets
As we have seen, achieving distinctiveness from an occupier
sense is challenging. The fundamentals of retail anchor and
tenant mix follow a similar formula across Europe, based on the
developers’ experience of what works and what doesn’t. The
influence of Western developers and tenants moving East has
acted as catalyst for this convergence, but it has also led to a
more condensed development cycle in Central and Eastern
Europe.
Functional retail in this region is arguably being delivered as
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.
Differentiation means different things in different markets and
the difficulties in securing a unique retail offer has led to the
non-retail aspects of shopping centres becoming the main
differentiators. Previously, developers would look to
‘destination’ facilities, such as the Multiplex to perform this
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
used to create an ambience and vibrancy.
Ultimately, the consumer has choices. They can choose where
to shop, where to relax, where to interact. With these choices
comes the need for developers to offer an environment that
encourages consumers to shop and more importantly a place
which is more appealing than competing shopping experiences,
including the internet. Creating and evolving a unique identity is
central to this strategy and will ensure that one size will never fit
all, even if the tenant line-ups look increasingly similar.

Glossary of Terms

New scheme openings are defined by a cumulative assessment undertaken of 21 new
European shopping centres with a GLA of 30,000sqm or greater that Jones Lang LaSalle
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
30,000sqm, were also assessed though quantitative data from this exercise was excluded
from any grouped figures and used as reference only. No shopping centres to open in
Russia were included in this part of the quantitative analysis.
Anchor / Key tenants have been defined either by direct reference from the shopping centre
owner/developer/leasing agent or through analysis of physical floor plans.
Eastern Europe in the context of this report refers to the contemporary geographic
definition of Central and Eastern Europe, including Greece and Turkey. Western Europe is
defined as all countries to the West of Germany, Austria and Italy inclusive.

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.

COPYRIGHT © JONES LANG LASALLE IP, INC. 2008. All rights reserved. 14
Contacts

James Dolphin Chris Powell MRICS Neville Moss

Head of European Retail Agency Chairman National Director
Retail Agency Retail EMEA European Retail Research
Jones Lang LaSalle Jones Lang LaSalle Jones Lang LaSalle
London London London
+44 20 7852 4623 +44 20 7409 2199 +44 20 3147 1187
james.dolphin@eu.jll.com cpowell@churstonheard.co.uk neville.moss@eu.jll.com

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.