U.S. Retailers Shop for Space in European Market

NNN Lease Market News

With U.S. retailers such as Abercrombie & Fitch Co. and Gap Inc. pushing into Europe, analysts are debating a key question: Has there been enough recent development to satisfy this new demand for space?
The weak U.S. economy and worries about jobs have consumers spending less and are causing some of the biggest U.S. retailers to look abroad for growth.
According to new research by property consultants CB Richard Ellis, 1.9 million square meters (20.5 million square feet) of new shopping-center space was built in Europe in 2010, down 36% from the previous year, even after development fell 30% in 2009. Some analysts believe there is still enough supply to satisfy demand.
The outlook is better in some countries than others. According to CBRE, the development pipeline is still "considerably smaller" than in 2007 and 2008 —the most recent peak in shopping-center development. But construction starts are rising in markets such as Turkey, Russia, and Poland. There are 146 shopping centers under construction in Europe today, says CBRE, and the highest level of activity is in Europe's emerging markets.
"The shopping center development market in Turkey has sprung back to life," Neville Moss, CBRE's head of retail research in Europe, the Middle East and Africa, said in a statement.

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