The History of Shopping Center Development

INDEX

Index II

List of Figures III

List of Tables III

1.  Introduction  1

2.  Definitions and Classifications  1

2.1  Definition Shopping Center  1

2.2  Types of Shopping Centers  2

3.  The History of Shopping Center Development  3

3.1  USA The Country of Origin  3

3.2  Europe  6

3.3  Germany  7

4.  Current Situation  9

4.1  USA  9

4.2  Europe  10

4.3  Germany  12

5.  New Trends and Future Developments  13

5.1  USA  13

5.2  Europe and Germany  14

6.  Examples of Shopping Center Developments  16

6.1  Istanbul Cevahir Shopping and Entertainment Center Turkey  16

6.2  Ruhrpark Bochum Germany  17

7.  Conclusion  17

8.  References  19

  II  

List of Figures

  Figure 1: Country Club Plaza Missouri  4

  Figure 2: Europe s Shopping Center Growth  7

  Figure 3: Ruhrpark Bochum  8

  Figure 4: Shopping Center Development in Germany  9

  Figure 5: Germany s Shopping Center Stock  12

  Figure 6: European Shopping Center Markets  14

  Figure 7: Europe s Shopping Center Pipeline 2008-2009  15

  Figure 8: Istanbul Cevahir  16

  Figure 9: Ruhrpark Bochum  17

List of Tables

Table 1:  Shopping Center Types in the U S  2

Table 2:  The International Standard of European Shopping Center Types  3

Table 3:  The Total Stock of Shopping Centers  11

  III  

1. Introduction

Shopping centers continue to be a very successful land use, real estate and retail concept, but there has been a significant change since the development of the first shopping centers in the USA. Today, shopping centers are not only shopping des- tinations anymore. A modern shopping center offers a wide range of possibilities. Shopping, dining, entertainment, sports and recreation is consolidated and so it becomes more and more an amusement function.

The purpose of this paper is to show the history of shopping center development. But it won’t be focused on the history only. As shopping center activity continues worldwide, also the current situation, new trends and future developments will be illustrated as well as an insight into the new shopping center market of Asia, which is one of the most growing markets at the moment, will be given.

2. Definitions and Classifications

2.1 Definition ‘Shopping Center’

The International Council of Shopping Center (ICSC) distinguishes between shop- ping centers in the USA and shopping centers in Europe. However, a shopping center in the USA is “A group of retail and other commercial establishments that is planned, developed, owned and managed as a single property, with on-site park- ing provided. The center’s size and orientation are generally determined by the market characteristics of the trade area served by the center. The three main physical configurations of shopping centers are malls, open-air centers, and hybrid centers.” 1 In contrast, a shopping center throughout Europe is understood as “A retail prop- erty that is planned, built and managed as a single entity, comprising units and ‘communal’ areas, with a minimum gross leasable area (GLA) of 5,000 square me- ters.” 2 A diversity of town planning regulations and development restrictions account for the definition difference.

1 http://www.icsc.org/srch/lib/USDefinitions.pdf 2 Lambert, J., One Step closer to a Pan-European Shopping Center Standard, 2006, p. 35

The term ‘shopping center’ came along in the early 1950’s and is now used in most parts of the world. However, the terms ‘shopping mall’, ‘shopping arcade’ as well as ‘shopping precinct’ are well known too. The author of this paper would like to point out that the term ‘shopping center’ will be used synonymously in this paper for all above mentioned terms.

2.2 Types of Shopping Centers

Shopping centers in the USA can be grouped into three main parts – mall, open- air center and hybrid center. A mall is typically enclosed, climate-controlled, lighted, flanked on one or both side by storefronts and entrances and has on-site parking. An open-air center typically has an attached row of stores or service out- lets managed as one unit with on-site parking. The open-air center used to be called ‘strip center’ because of its linear form and its shops side-by-side in a long and narrow row. Hybrid center combine elements from two or more of the main shopping center types. Value-oriented mega-malls (combine mall, power center and outlet elements), power-lifestyle centers (combine power center and lifestyle center elements) and entertainment-retail centers (retail uses with multiplex movie theaters, theme restaurants and other entertainment) are general hybrid centers. 3

* 1 sq ft = 0.09 sq m Table 1: Shopping Center Types in the U.S.

Source: Author’s demonstration according to ICSC

European shopping centers can be divided into two main groups – traditional cen- ter and specialized center. A traditional center can be enclosed or open-air, is an 3 Cp. http://www.icsc.org/srch/lib/USDefinitions.pdf

all-purpose scheme and is also classified by its size. A specialized center is typi- cally open-air, has a specific purpose and can also be classified by its size. 4

Table 2: The International Standard of European Shopping Center Types Source: Author’s demonstration according to Lambert, J., One Step closer to a Pan-European Shopping Center Standard, p. 35

As some centers are hybrid centers or combinations of two or even more types, not every center can be precisely defined, but nevertheless each center is a part of the shopping center market.

3. The History of Shopping Center Development

In form of markets and bazaars have shopping centers for more than 1,000 years existed. With the rise of the automobile culture in the USA in the beginning of the

20 th century, a new type of shopping was developed and the first modern shopping

center was born in the 1920’s.

3.1 USA – The Country of Origin

The first shopping center was called Country Club Plaza and opened its doors in 1922 in Kansas City, Missouri. The center was planned and constructed by Jesse Clyde Nichols and was located in a suburban residential district. 5 The Country Club Plaza was constructed in connection with a new built residential area and 4 Cp. Lambert, J., One Step Closer to a Pan-European Shopping Center Standard, 2006, p.35 5 Cp. http://www.icsc.org/srch/about/impactofshoppingcenters/01_briefhistory.pdf