Publish Date: December 23, 2014

With the global shopping center industry gearing up for the year ahead, SCT asked experts for their opinions on trends to track in 2015. Heres the second installment in our series:

New construction slowed sharply during the 2008 financial crisis, so landlords around the globe shifted their focus toward strategic redevelopments of well-located properties. This trend will continue apace over the next 12 months as demand rises for good real estate with high-quality amenities, experts say. Scentre Group, which owns and operates Westfield in Australia and New Zealand, is one example of a landlord with redevelopment on its radar screen. Scentres $475 million redevelopment of Westfield Miranda, slated for completion later this year in Sydney, will yield about 63,000 square feet of gross leasable area and bring in about 100 new specialty retailers. Other amenities include a fresh-food market, an outdoor restaurant precinct, some rooftop restaurants and a 10-screen multiplex. Having reinvested $400 million into the redevelopment of Westfield Garden City in Brisbane, Scentre Group reportedly aims to spend some $3 billion on improvements to various other properties across Australia and New Zealand as well. Meanwhile, Sonae Sierra is among the landlords making strategic improvements to its properties in emerging markets. As part of the Lisbon, Portugalbased landlords $38.7 million expansion and refurbishment of 20-year-old Brazilian mall Franca Shopping, in So Paulo, Sonae Sierra is bringing in 68 new shops and additional parking. The expansion will add a total of about 36,000 square feet to Franca Shoppings existing footprint.

The demand for good real estate is sparking redevelopments and other creative space reconfigurations outside the mall sector as well. On Fifth Avenue in New York City, where retail rents are the highest in the world right now, landlords are taking ground-level space that had previously been used for other things and repurposing it for retail, said broker Peter Braus, managing principal of Lee & Associates NYC. Theyre basically trying to put every square inch to work as retail as they can. Others are adding retail uses to the likes of old armory buildings and Hudson River piers in a bid to meet the robust demand, Braus says.

With the drive toward urbanization, new housing stock is coming online in central city cores or in older, closer-in suburbs a trend that is driving retail redevelopment in the Midwest and other markets, says broker Scot Courtney, president of Lee & Associates Indianapolis. A lot of the retail properties in these areas are 20 years old, he said. They have gone through their first lifecycle, so it makes sense to repurpose them and give tenants more of what they want.

Courtney cites the redevelopment of Rivers Edge, located between Castleton Square Mall and The Fashion Mall, in Indianapolis. With a redevelopment plan, Rivers Edge was able to woo Arhaus Furniture, Buy Buy Baby, The Container Store, Harry & Izzys and Nordstrom Rack. That center previously had a lot of vacancy, but the landlord took a great site and made it work, Courtney said. Over this next year owners will continue to focus on mixed-use redevelopments that offer the kind of live-work-play environments people crave, he says. Weve seen a bit of a shift in where consumers are choosing to live, Courtney said. Indianapolis, for example, has historically been a sprawl city. Wherever you can find walkability today, it is a plus, but it did not use to be that way at all.