By INÊS LOPES – [email protected]
No shopping centres will be inaugurated in Portugal this year, concluded a study by commercial real estate brokers and consultants Cushman & Wakefield (C&W).
After a particularly bleak 2011 with retail investment volume totalling €72 million, the lowest annual figure in almost a decade according to C&W, and only two new large-scale shopping centres opening in Portugal – Aqua Portimão and Forum Sintra – 2012 is expected to see no inaugurations, an all-time historical low.
Market specialist Marta Esteves Costa, director of the research and consultancy department for C&W, told Público newspaper: “This evolution in the market is hardly surprising if we take a look at the current economic situation of the country and in particular the real estate market.
“The reduction of credit to the real estate sector, associated with a lack of interest for shopping centre projects by foreign investors, is limiting the activity of property developers, who encounter difficulties realising their new projects.”
The news may give traditional store owners one less thing to worry about, but innovative marketing strategies to lure shoppers to the high street are needed as convenience is a major factor for the consumer. This they can find at large complexes which offer all necessities and luxuries under one roof with longer, more accommodating opening hours.
Portugal’s austerity programme introduced to combat unsustainable debt levels has diminished consumer spending drastically, with investors wary of large-scale commercial risks and lenders unwilling to grant loans.
The short-term outlook for the retail and consumer sector is also not positive with retailers holding back from implementing expansion strategies when faced with an effective loss of sales volume and awareness that domestic consumption will remain low until at least 2013.
Marta Esteves Costa continued: “This scenario is not encouraging for new investment in the retail sector.”
In their retail sector report for the last quarter of 2011, C&W revealed that retail sales have been in continuous decline since the beginning of that year, with volume decreasing 8.8% year-on-year in November, 9.2% in October and 6.3% in September.
According to the European Shopping Centre Development report by C&W, “the expected upturn in European shopping centre development in 2011 was knocked off course by delays in a number of markets.”
The report said: “If all the shopping centre projects scheduled for the year had been completed on time, provision across Europe would have increased by nearly 6.8 million square metres, representing an increase of 15% on the (revised) 2010 total. However, delays in several markets – notably Russia, Turkey and Italy – resulted in the amount of new shopping centre space in Europe in 2011 nearly identical to that of 2010, totalling 5.9 million square metres.”
In October last year, the Algarve Resident reported that a new shopping centre, representing a €100 million investment, could open in Guia by the end of 2013.
The Summerville Shopping Parque project, announced by investment fund Imo Pan Iberian Retail, will be managed by Portuguese investment and asset management company, Imorendimento.
Its commercial director, Luís Mesquita, said: “We expect to open Summerville Shopping Parque between November 2013 and March 2014”.
Alongside AlgarveShopping, Albufeira Retail Center, Makro and Leroy Merlin in Guia, the project has been approved to be located between the EN125 and Via do Infante (A22).
Only time and the current economic outlook will tell the future of this project.
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