Shopping centre developments in the UK have fallen by 40 percent in the past year – the fastest rate of decline since the 1990s, according to research by Richard Ellis.
According to CBRE in its Shopping Centres in the Pipeline report, the volume of shopping centre development has dropped from 13.02 million square foot in 2007 to just 7.91 million square foot in 2008. The real estate services firm added that the amount of space scheduled to open in 2009 would also fall short of scheduled figures.
CBRE, however, ruled out the possibility that shopping centre completions would fall to the rate seen during the UK recession of the 1990s, saying “far less space is currently over-hanging in the market”.
The warning came as the UK Royal Institute of Chartered Surveyors (RICS) also predicted that the value of commercial property in Britain would drop by 16 percent in 2009 and a further 10 percent in 2010.
RICS said in its Commercial Property Forecast for December 2008 that rising credit defaults, restricted debt availability and subdued tenant demand would prevent a near term recovery in the commercial investment market. For retail property, such as shopping centres, RICS said values would drop by up to 30 percent over the next two years.