Shopping Centers Today International

APR 2016

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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Page 53 of 63

O N T H E G R O U N D : M i l a N The world's fashion capital is finally getting more malls Shopping opportunities ought never to be in short supply in Milan. After all, Italy is Europe's fourth-largest economy, and Milan is that country's business capital and a fashion mecca that is home to a good number of the world's top fashion brands. And yet Greater Milan has only 264 square meters (about 2,840 square feet) of shopping space per 1,000 inhabitants, according to Colliers International, versus 405 square meters in the Paris metro area and 670 in Warsaw. This is about to change, how- ever. Three major projects set to open in Milan over the next two years will add roughly 300,000 square meters to the Milan metro area's shopping center stock of 1 million square meters. The first of these, the 92,000-square meter Arese, is set to open this month, with backing from hypermarket entrepreneur Marco Brunelli. This 200-shop mall is built on the site of an old Alfa Romeo factory and keeps some connections to that automotive past, includ- ing a functioning test track. One of the architects, Davide Padoa, CEO of Design International, is a Milan native now based in London. Padoa cites two elements he says inspired the design: The first is an idea borrowed from London's Covent Garden Market, in which a building within a building houses a series of indoor plazas, and the second is the use of exterior storefronts to make the mall more invit- ing, a feature he has noted in some U.S. malls. But what could excite shoppers most is the entry of Italy's first Primark. The Anglo-Irish brand-name discounter will be as successful in Milan as it has been elsewhere in Europe, accord- ing to Gaetano Lamacchia, CBRE's director of Milan retail capital markets. "Italians will embrace this new concept because we are very fashion-conscious, but, like everyone, we love the bargains," Lamacchia said. Arese will reign as Milan's biggest mall — for about a year. Then, in 2017, the €1.4 billion (about $1.5 billion) Westfield Milan will begin opening its doors. It's a 170,000-square- meter project near the Linate Airport, that will be one of the biggest malls in Italy. Also on track to open next year is the 45,000-square-meter Cascina Merlata mall, part of EuroMilano's 540,000-square-meter mixed-use project going up near the site of Expo 2015. Several brownfield projects are in the pipeline too, according to Padoa. There are several reasons it has taken this long for Milan's retail to catch up to that of other major cities. Padoa points to a byzantine zoning-approvals process, while Lamacchia blames the financial crisis and its aftermath. "Basically, banks did not fi- nance new development, so the developers had the land and the permissions but no financing to develop," Lamacchia said. This began changing, however, about three years ago, he notes, with banks first financing purchases of prime assets, then of second- tier properties, and now of new development. But even with all this development going on, Padoa does not worry that the Milan market will be overbuilt. The market has some physical constraints, he points out, because most of these projects are being built on a diminishing supply of formerly industrial land. Lamac- chia concurs. "I don't see any risk of oversupply," Lamacchia said. Some smaller shopping centers may need to focus on quality improvement here and there, but otherwise the impact of these new malls is likely to be minimal, he says. And certainly, Lamacchia adds, welcome as all the new retail offerings are, they will not be luring tourists away from the Quadrilatero d'Oro — the downtown luxury shopping district that includes the recently renovated, 19th-century Galleria Vittorio Emanuele II. — Bennett Voyles 54 S C T / A P R I L 2 0 1 6

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