UK is priciest place in Europe to build shopping centres

The cost of building shopping centres in the UK is the highest in Europe, research has found. Switzerland and the Netherlands are close behind the UK, with Ireland and Sweden in the second tier of costs

The findings from EC Harris showed that in Eastern Europe construction costs in countries including Bulgaria and Romania are a fraction of costs in the UK. However, even these countries are seeing localised overheating in the construction industry, which is pushing up costs.

Mike Pearce, senior European partner, EC Harris, said shopping centre development had changed over the past decade. “In the UK the challenge is to integrate mixed use development skills and the needs of city centre regeneration, while across much of mainland Europe the trend has been towards large edge of town shopping centres that have grown in size significantly over the period.”

He said “mega centres” were being developed in Russia, Turkey and Central Europe which could be measured in hundreds of thousands of square metres. Several of these are linked to offices and hotel schemes whilst others are centred upon specific urban focuses such as railway stations.

He added: “In Central Europe and the emerging regions further east there has been a rush to fill the retail ‘gap’ in the market. This rush has lead to significant returns for the initial pioneers into Central Europe who moved at a fast pace and these same developers are now reaching further east where the potential is viewed as considerable. However, the pressure to develop such schemes quickly in new markets brings with it a number of risks.”

The European Focus provides figures showing a range of benchmark costs, in Euros per m2, for a typical shopping centre development with comfort cooling. The figures are based on EC Harris’ own data and are indicative of pricing levels across Europe. To view the European Focus, visit www.echarris.com/research