Upwards of 441 million square feet of shopping center space was under construction around the world at the end of 2015, up from 419 million in 2014, according to CBRE. China is by far the most active market as a pipeline and for delivery of new space, the firm says. Almost 60 percent of global retail construction is taking place in four Chinese cities.
Meanwhile, a lack of quality space continues to be an issue in the U.S., with developers focusing on expansions, renovations and redevelopments, according to Melina Cordero, the firm’s director of research for the Americas. In the Americas, development activity is focused largely in Latin America and particularly in Mexico, which accounts for 46 percent of that region’s shopping center pipeline.
Within the U.S. there are 15 major projects under construction, up from nine in 2014. Most of the activity remains concentrated in the New York City metropolitan area, fueled by the American Dream at Meadowlands project; the World Trade Center and Hudson Yards redevelopments, in Manhattan; and the CityPoint redevelopment in downtown Brooklyn.
Houston is the second busiest U.S. retail market, with four significant projects under construction, totaling 1.5 million square feet. Los Angeles ranks third, with 766,142 square feet of retail space scheduled for completion this year. The 15 shopping centers under construction are broadly diversified among new lifestyle centers, super-regional and regional malls, and power centers, Cordero says. “Generally, centers in the U.S. are opening with upwards of 90 percent occupancy rates,” she writes in the firm’s second-quarter retail market report.
In Canada the shopping center development pipeline dropped sharply between 2014 and 2015. In 2014 some 3.9 million square feet of projects were under construction, compared with only 1.4 million square feet in 2015. The largest source of activity continues to be in Calgary, Alberta, Cordero notes, though the city also experienced the largest decline in construction over the past year, seemingly owing to depressed energy prices.