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Summary
By 2020, the global shopping mall market sees Asia as a dominant force in terms of retail space, as evidenced by the "New South China Mall" in Dongguan, which is the largest in terms of usable retail space. Worldwide, the market is booming, with consumer spending on the rise, and shopping malls being developed and renovated in parallel. In France, which has the second largest number of shopping centers in Europe after the UK, the market is facing a decline in revenues despite a significant number of projects underway (117), scheduled for completion by 2023.
The COVID-19 pandemic has severely impacted the sector, with French shopping center sales plummeting by 94%, as reported by Procos. In addition, investment in the sector has been temporarily curbed, with zero investment in shopping centers among retail-related asset classes in Q1 2020, according to Knight Frank. Despite the challenges, France remains a strong player in Europe, but must navigate a landscape of increased competition, changing consumer behavior and the aftermath of the pandemic.
The changing dynamics of the French shopping center market
The French shopping center market has undergone a substantial evolution, signaled by significant changes in consumer behavior and the impact of global trends. With a strong historical presence characterized by the opening of American-style shopping centers such as "Parly 2" and "Cap 3000" in 1969, France now boasts between 1,200 and 1,300 shopping centers, placing it in a strong position in the European context, just behind the UK. However, while the number of centers continues to rise, the sector's overall sales have fallen from around 134.6 billion euros in 2015 to around 130.2 billion euros.
A notable trend in consumer preference is the gravitation towards experiences rather than products, probably influenced by the rise of e-commerce, with physical shopping centers competing not only with each other, but also with the online retail market. Nevertheless, shopping centers remain an essential part of French consumer culture, with a significant proportion of the population - almost half - expressing a preference for these complexes over other outlets, particularly among young people and residents of the Paris region. In response to this competitive market, new retail models have emerged, such as business parks and hybrid structures, which mix traditional shopping centers with open-air retail spaces, innovating the shopping experience and services on offer.
Despite growth in numbers and diversity, the market has been put under pressure by the COVID-19 pandemic, which has led to a staggering drop in shopping center sales of up to 94% between April 2019 and April 2020. The largest shopping centers in terms of capacity, notably La Part-Dieu, Aéroport Paris CDG Terminal 2, and Les Quatre Temps, are located mainly on the outskirts of major cities, and they remain key to attracting significant consumer traffic, accounting for a considerable portion of shopping center sales, particularly in the personal goods category.
Investment in the sector remains stable, with a strong domestic presence accounting for around 65% of investment volume, complemented by foreign investment from countries such as Norway, the UK, the USA and Italy. Nevertheless, the trend seems to be towards renovation rather than new construction, with a significant percentage of commercial projects authorized over the past five years having been caught up in legal proceedings or having had difficulty obtaining bank financing.
Overall, the French shopping center market is undergoing a period of transformation, reconciling the appeal of traditional shopping with the demands of modern retail innovation and the ever-present challenge of online commerce.
Key players shaping the French shopping center landscape
The French shopping center market is not only vast, it's also highly competitive, with several key players dominating the scene, each bringing their own flavor to the retail experience. Here's a brief overview of the main entities shaping the hive in France:
- Unibail-Rodamco-Westfield Unibail-Rodamco-Westfield is one of the sector's leading figures, with a portfolio that includes some of the most iconic and visited shopping centers in France and beyond. Their properties are renowned for combining high-end shopping with leisure and dining experiences, often located in prime locations that attract both locals and tourists.
- Klépierre Another titan of the shopping center sector, Klépierre offers a wide range of retail destinations. Its strategic presence in every region ensures that it is an omnipresent presence in the lives of French consumers. With a focus on enhancing the customer experience, Klépierre's centers are designed to be more than just shopping spaces - they are social and leisure centers.
- Altarea-Cogedim Altarea-Cogedim combines its real estate prowess with its passion for retail, resulting in a conglomerate that not only owns but also manages multi-purpose shopping centers. Its properties are designed to meet the evolving demands of retailers and consumers alike, offering a harmonious blend that nurtures the ecosystem of commerce and community.
- Les Quatre Temps We can't talk about French shopping centers without mentioning Les Quatre Temps. Located in the bustling business district of La Défense, near Paris, it's a shopper's paradise that attracts large numbers of visitors every year. Its size and diversity make it a benchmark for the country's shopping centers.
- La Part Dieu In the heart of Lyon, La Part Dieu's extensive offering and strategic location make it a key shopping hub in the region. Its popularity and sales figures testify to its central role in the history of urban shopping in France.
- Rosny 2 Another famous shopping destination, Rosny 2 has secured a place for itself in the French retail pantheon. Offering a multiplicity of stores and services, it embodies the convenience and diversity that today's consumers seek.
- Créteil Soleil and Val d'Europe Créteil Soleil and Val d'Europe are both major market players, with each center fostering a vibrant retail culture in their respective localities. They combine accessibility with an eclectic mix of retail options.
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- Number of pages : 30 pages
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- Last update : 08/11/2020
Summary and extracts
1 Market summary
1.1 Definition and presentation of the shopping centre market
A shopping centre is a group of 20 shops in a surface of at least 5,000 m² of usable commercial area. It is designed and used as a single entity.
Gloablly, the shopping centre market is dominated by Asia in terms of m² of surface area. The market is in full bloom as consumer spending increases amid higher GDP globally, and new projects are built together with the renovation of exisiting structures to meet this demand.
In France, it was the opening of "Parly 2" and "Cap 3000" in 1969 that marked the real expansion of American-style shopping centres. The shopping centre is integrated into larger cities as a place for new districts to arise. Examples of this includes La Défense or Aulnay in the Paris region, but also La Part-Dieu in Lyon, Mériadeck in Bordeaux or La Bourse in Marseille. [Toute La Franchise]
Today, France has the second highest amount of shopping centres (1,250) in Europe after the United Kingdom, and the expansion of new centres is in full bloom. However, as competition has become more fierce, overall revenue in the sector is down. Amid a more fragmented market structure, new business models tied to shopping centres have arised, including retail parks and hybrid structures.
COVID-19 has had a detrimental effect on short-term sales; Procos reports that sales for shopping centres in France dropped by 94% between April 2019 and April 2020. The industry is yet to prove of a significant bounceback coming out of this crisis.
1.2 The global market dominated by Asia
Overview
AT Kearney's study on the future of shopping centres provides an initial overview of the current global market. It is noted that the market growth is positive in all regions of the world, but that it is largely driven by the Asia-Pacific region with a *% increase in the number of ...
1.3 France's position in Europe is robust
In Europe, the United Kingdom dominates the number of shopping centres; in **** the country had almost *** more than France which was in second plance.
Moreover, from the graph below we can confirm that there is a vast amount of shopping centres in France. The fact that the UK, France and Italy ...
1.4 French revenue is declining but investment remains strong
Overview
In France there were *** shopping centres in ****. Together, these made up ** million m* and €*** billion in revenue, and together they accounted for ***,*** employees and **,*** stores (***). Another *** projects are currently under way in France and are set to be ready by ****. [***]
Moreover, **% of shopping centres are branches and **% are held by ...
2 Demand analysis
2.1 Focus: the French consumer & shopping centres
Attendance
In ****, French shopping centres hosted *.* billion visits. [***]
A study by the Hammerson real estate showed the importance of shopping centres in the habits of the French people. Indeed, Almost one in two French people (***). [***]
Most popular shopping centres & stores
Below is an overview of the most visited shopping centres in ...
2.2 COVID-19's impact on the industry
Procos reports that sales for shopping centres dropped by **% between April **** and April **** (***). Between January and April ****, and the equivalent period in ****, sales declined by **%. Meanwhile, E-commerce demonstrated a **% increase.
Emmanuel Le Roch, General Delegate of Procos, states that rents will be the largest and most significant cost to consider for ...
3 Market structure
3.1 An overview of shopping centres in France
A shopping centre's lifespan is around ** years. [***]
On top of this, Le Figaro claims that in **** **% of shopping centre surfaces (***) were located in the periphery of larger cities. Projects in the city centre, on the other hand, are in continuous decline and represent a mere *% of the surface area planned.
Shopping ...
3.2 Distribution & revenue of shopping centres in France
Revenue is in a decreasing trend
Revenue of shopping centres France, ****-***** (***), in % Source: ****
Overall, revenue for shopping centres in France is down, as shown in the graph above. Compared to ****, revenue has decreased every year, and in **** the index value was **.*. This implies a decrease in revenue of *.*% (***).
In particular, ...
3.3 Nationality of investors and investment outlook
Investors account for a significant portion of the demand as they provide capital to build new shopping centers and renovate existing ones. We present below the most common investors in shopping centers in France, by nationality.
Volumes invested by buyer's nationality France, ****, in % Source: ****
Indeed, shopping centers require heavy initial investments ...
3.4 E-McDonald's dominates presence
In particular, McDonald's is the most common store in French shopping centres; in ****, there were *,*** stores located in shopping centres.
In second place we find Crédit Agricole (***). Overall, banks prevails in terms of presence measured through number of stores.
Ten most common stores in shopping centres France, ****, in units Source: ...
3.5 E-commerce: a threat to the status quo?
Revenue for e-commerce France, ****-****, in € billion Source: ****
The E-commerce sector is growing rapidly in France as we can see in the graph above; in **** e-commerce revenue was equal to €**.* billion whilst in **** this figure had increased to €**.* billion (***). This can be viewed as a threat to shopping centres which relies ...
4 Analysis of the offer
4.1 Diversification is key in today's shopping centres
This section defines a shopping centre and looks at what is required in order to ignite success.
Defintion based on size
Super-regional shopping centres: Useful commercial area greater than **,*** m* and/or at least *** stores and services. Regional shopping centres: Useful commercial area greater than **,*** m* and/or at least ** stores ...
4.2 Cost analysis
Cost distribution of a shopping centre France, in % Source: ****
It is difficult to estimate a universal cost distribution for shopping centres as costs depend on rent agreements, investor ROI requirements, fees to tertiary partners etc. However, the graph above depicts a proxy for the distribution of costs. Here, one aspect (***) are ...
4.3 The largest shopping centres in France by capacity
Largest shopping centres in France, by number of outlets France, ****, in units Source: ****
In ****, La Part-Dieu was the largest shopping centre in France measured through number of stores (***).
The conclusion we can draw from the graph above, and as we have stated before, is that the largest shopping centres in France ...
4.4 Improvements to shopping centres going forward
The graphs presented in this section provides a credible hint of where consumers place value in shopping centres, but also which aspects are subject to the most drastic changes. In ** years, what will change the most/evolve for the stores? France and Europe, ****, in % Source: L'Observatoire Cetelem From this we find ...
4.5 Location matters
Source: ****
Finally, the table above applies for shopping centre investors who want to establish (***) a complex in the most frequented streets of France's largest cities. We find that Paris is by far the most expensive, followed by Lyon and Bordeaux.
These prices play a large part in why shopping centres are ...
5 Rules and regulations
5.1 Legislative framework and urban planning
The decree of ** June **** of General de Gaulle prohibited the refusal of manufacturers to sell to distributors, which launched the expansion of mass distribution
Commercial urban planning can be seen as an instrument to regulate the expansion of shopping centres:
The law of * December **** on the orientation of trade and crafts, ...
6 Positioning of the actors
6.1 Segmentation
- Unibail-Rodamco-Westfield
- Klépierre Groupe
- Westfield Les quatre temps
- La Part Dieu (Unibail Espace expansion)
- Marques Avenue
- SCC
- Sopic
- Compagnie de Phalsbourg
- Frey
- Groupama Immobilier
- Mercialys
- Franprix (Groupe Casino)
- Scaprim
- Socri
- Icade
- Foncière Euris
- Redevco
- Kléber Retail Real Estate
- CEETRUS Auchan
List of charts
- Breakdown of spending in global shopping centres
- Nombre de centres commerciaux en Europe, par pays
- Densité des centres commerciaux en Europe, par pays
- Taille du marché des centres commerciaux
- Évolution du nombre de centres commerciaux
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Latest news
Real estate: Icade to convert part of its offices - 19/02/2024
- - In 2023, Icade booked almost 5,300 housing reservations, down 12.6% on 2022.
- - Block sales to institutional investors and social landlords accounted for over 60% of the total, or around 3,600 lots.
- - Icade was able to maintain its sales in property development at nearly 1.3 billion euros.
- - Icade signed leases for 243,000 square meters of office and business space - for a total portfolio of 1.8 million m2, up 20% on 2022.
- - Rental income amounted to 364 million euros (+2.2% on a like-for-like basis).
- - The valuation of Icade's portfolio has been revised downwards by 17.5% compared with the end of 2022, to 6.5 billion - including 5.3 billion in offices.
- - Icade plans to diversify further, targeting business premises, student residences and data centers as a priority.
- - Icade has begun to withdraw from clinics and nursing homes, and has already recouped 1.45 billion euros
Marques Avenue: Brand villages continue to weather the apparel crisis - 12/10/2023
- Sales generated in outlets by textile chains rose by 9% in 2022 compared with 2019.
- Overall sales in the apparel sector, on the other hand, fell by 4%.
- The Village generated sales of 215 million euros in 2022, compared with 135 million euros in 2019.
- Premium brand products in "brand villages" are sold at a minimum discount of 30% all year round, which can rise to 80% during sales periods.
- Brand villages" account for 4% to 5% of retail real estate space in France.
- The market leader, Marques Avenue, owns eight brand villages. There are 28 outlets in France.
Real estate: Icade to review its office portfolio - 25/07/2023
- Three-quarters of Icade's office assets are adapted to address issues of centrality, flexibility and the environment
- The sale of around two-thirds of its healthcare real estate assets to Primonial REIM raised Icade around 1.4 billion euros
Icade sells its residential portfolio - 02/06/2023
- Value of residential portfolio sold to RLF: 40 million euros
- Total value of residual residential portfolio: 50 million euros
Real estate: Primonial ready to buy a large stake in Icade Santé - 14/03/2023
- Valuation of the Icade Santé company: 2.6 billion euros
- Value of Icade Healthcare Europe's portfolio of assets: 850 million
Shopping centers: Unibail turns its back on the health crisis | Shopping centers face health crisis. - 11/02/2023
- The Group operates 78 shopping centers in 12 countries in Europe and the United States
- Rents return to 2019 levels
- The Group's convention and trade-show business, which had been lamented by the Covid crisis, has recovered and exceeded 2019 levels, at 132 million in rental income
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