03 October, Il Sole 24 Ore
The debate over opening shopping centres on Sundays has led to a series of negative predictions of retail in Italy. The official reports don’t talk about it, but the doubt lingers among the operators of the sector: the uncertainty, the competition by online shopping, the changing consumption trends. All these factors have contributed to changing the scenario. Nevertheless, the international players seem to disagree with this vision.
One of these is Falcon Malls, present in 170 countries, 20 directly owned shopping centres, over 2,100 shops and 17 projects currently in progress. What’s their opinion? “Despite Lombardy, and especially Milan, is a wealthy region, the offer for shopping centres is still limited compared to the market’s potential”, commented Luc Lescault, marketing and communication director of the group.
Far from saturation
“Milan provides 22% of the national GDP – explains Lescault during an interview to Across Magazine. “It’s the most attractive area concerning investments and new businesses. In 2016 the average per capita income was by 45% higher than the national average and the consumption levels exceeded by 37% the average Italian ones. 12% of the Milan people earn more than 55 thousand euro, against the 4% in the rest of the country. The city will keep this advantaged position also in the next few years. However, the situation of shopping centres doesn’t reflect the high potential of this market”.
According to Falcon Malls, the two factors to consider to assess the situation of shopping centres in Italy are age and dimensions. 73% of the malls is dated before 2007, and only 17% exceeds 40 thousand Sq m GLA (gross surface). This situation is common to Lombardy too, where 78% of the shopping centres were built before 2007, and only 17% of the malls have a GLA over 40 thousand Sq m. In the province of Milan, the malls’ gross surface every one thousand people is equal to 448 Sq m, but this value dramatically decreases when considering malls with GLA over 40 thousand Sq m. Despite the opening of Arese and the upcoming Westfield (Europe’s biggest shopping centres), the offer for shopping centres in Milan and its province is still very limited, especially for what concerns newest generation malls, able to meet people’s changed consumption habits.
Lescault concludes: “In order to fill the gap, it’s necessary to develop new and bigger shopping centres, while investors holding dated properties will have to requalify them and change their business model”.
Therefore, there is still plenty of opportunities for the retail property market in Lombardy, while the rest of the country will have to provide some certainties to investors.
Source: Il Sole 24 Ore
Translator: Cristina Ambrosi