Shopping centre development rises in Russia and Turkey

Russian money is something that I have been very well aware of for some years now, having followed my father’s football team, Chelsea FC. Roman Abramovich has believe it or not been involved with Chelsea FC for ten years, as the British press widely reported earlier this year. Russian money and the increased spending power of the country is something that real estate investors, property developers and retailers are increasingly looking to harness.

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Roman Abramovich pictured with club legend Didier Drogba (Photo: PA)

As an example, take the shopping centre pipeline; of the 11.9 million sq m of new retail property space across Europe to be completed during H2 2013 and 2014, nearly 30% will open in Russia. The result is that Russia will have the largest share of shopping centre space in Europe by the end of 2014, surpassing both the very mature retail markets of UK and France.

15 new shopping centres opened during the first half of this year in Russia, totalling 522,000 sq m, a further 900,000 sq m is scheduled to open in H2 2013 and an additional 2.5 million sq m is in the pipeline for 2014 (including the very impressive, Jones Lang LaSalle leased, Avia Park which exceeds 230,000 sq m GLA).

Turkey is Europe’s other active powerhouse market; during H1 2013, a total of 581,000 sq m of new shopping centre space opened in the Turkish market. For H2 2013 and 2014 total completions are expected to reach 1.1 million sq m and 1.3 million sq m respectively. Zorlu Center, a $2.5bn high-end multi-use development in Istanbul, is the most anticipated opening later this year.

Jonathan Bayfield is an Analyst in JLL’s European Retail Research. He works with his investment and agency colleagues advising international investors and occupiers on their retail real estate strategy across Europe.

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