Asia is dominating the mall development rankings with the continent now accounting for a staggering 70 per cent of all projects currently underway globally.

A new report from global property advisor CBRE shows global shopping centre development has reached unprecedented levels of construction despite the global economic malaise.

CBRE says it is being fuelled by growing middle classes in developing countries, especially in Asia, and retailer expansion outside their traditional home markets.

CBRE measured the level of shopping centre development in 180 of the world‘s major cities to identify the most active markets, both in terms of 2011 completions and space currently under construction. The research found that 29.6 million square meters of mall retail space is currently under construction globally – equivalent to all the combined existing space in France, UK and Germany – while 7.8 million square meters of new space opened in 2011.

Emerging markets such as China, Turkey, and India are predictably far more active than the more mature markets of Western Europe and North America. In 2011, new shopping centres opened in 63 (35 per cent) of the cities covered in the survey, of which 50 were in emerging markets. In contrast, only five cites in Western Europe saw the opening of a new centre last year.

Chinese cities currently dominate shopping centre construction activity. In the 180 cities analysed, exactly half of all the shopping centre space under construction is in China, with Asia accounting for 70 per cent of all schemes currently being built.

Outside of China, the most active markets are Abu Dhabi, Hanoi, Kuala Lumpur (Klang Valley), New Delhi and Sao Paolo – five cities in three regions.

Joel Stephen, CBRE director of retailer representation in China, said many of these Chinese cities with populations often exceeding 10 million people are usually starting from a relatively low base.

“Often only a handful of existing department stores and shopping centres serve these vast populations. The speed of retailer expansion, especially those in the mass market sector who tend to open more stores in each city, has been restricted by the availability of suitable real estate.”

This considerable pipeline of development over the coming few years will help retailers accelerate the rate of portfolio growth across China, he says.

Sebastian Skiff, executive director of CBRE Retail in Asia, said due to the rapid increase of middle class populations around the world, shopping centre developments are on the rise to satisfy growing consumer demand.

“The shopping centre concept has morphed into an integral element of retail development, especially in the East. With development now expanding rapidly not only in Beijing and Shanghai but also deeper into the highly populated provincial capitals, China is topping the charts for development growth and seeing great opportunities for expansion in these large cities.”

Skiff says this momentum will see China undoubtedly continue the push for more and better shopping centres, replicating the best retail venues now found around the world.

In Europe, new shopping centres were completed in just 15 out of the 96 cities covered in the survey. Outside of Russia and Turkey, only the Ukraine (Kiev and Kharkov) and Italy (Milan and Turin) saw the completion of more than one new centre. London, with the completion of Westfield Stratford City, was the only city in Europe where more than 100,000 sqm was completed.
Likewise there was virtually no new development in the mature shopping centre markets of North America and the Pacific region.

Explained Skiff: “Overall, retailers have shifted their focus to exploring new markets and new opportunities in which they are able to grow their businesses and carry out cross border expansion initiatives. This strategic growth is contributing to the escalation of high quality retail space in emerging markets, such as China, Malaysia and Vietnam.

“These markets are seeing an influx of retailers and outside interest which consequently fuels the demand for new developments.”

He said mature markets such as Western Europe and North America already have substantial retail development offerings and as a result, it is unlikely there will be such expansive growth in new malls, but rather a constant elevation of what already exists as owners respond to new store formats required by retailers, and more modern facilities preferred by most consumers.