CG malls europe - Commerz Real

Even though the aforementioned indicators show that the situation is returning to normal,
we need to remember that economic growth is rebounding from a low level, and
that we are still a long way from a “normal” economy: a regression cannot be ruled out!
The current situation in the so called PIIGS states and the implication for the Eurozone
open onto a potential risk for the near future. The one-million-Dollar question is just how
the current turmoil of the Euro currency will affect the real economy.
2.1 Retail Market
Negative consumer spending and weak retail sales caused shopping centre development
to slow significantly last year. Instead of nearly 10 million sqm of new space completed
as expected for 2009, only 8 million sqm were delivered. But while a lot of announced
projects have been shelved in Spain and Italy, Russia and Turkey saw plenty of activity in
2009. In the course of the year, 127 shopping centre developments were postponed. In
Western Europe, the pipeline for France remains intact, yet one third of the upcoming
projects are actually refurbishments explained by the obsolete stock of the French shopping
centre market.
The decreasing demand for shopping centre space is translating into higher vacancy
rates. Most affected are shopping centres with an insufficient tenant mixture and / or
location, while successful prime centres attract a higher footfall and more retailers.
Even when the average performance of shopping centres in Europe turned into negative
growth in 2008 and 2009, sound assets (good location, good management, etc.) remained
robust and saw positive growth.
Total Returns in Real Estate Market?
0
-5
-10
-15
-20
-25
-30
-35
FR DE IE IT NL PL ES SE UK
Source: JPMA, based in IPD, May 2010
Source: JPMA, based in IPD, May 2010
2008 2009
Manager‘s Report on the Fund
13