Shopping mad: Over 107,000 square metres of retail space awaits green light

High street shopping in Valletta, Sliema and Hamrun used to dominate the Maltese retail sector till the early 1990s, but over the past two decades shopping malls and department stores have sprouted in various localities. Despite the advent of internet shopping, demand for new retail space continues unabated.

There are at least eight projects whose planning applications are pending, three of which seek land outside building zones (ODZ), and in total adding up a floor area of over 107,000 square metres, an area equivalent to 15 football grounds.

And that excludes some 21,000 sq.m yet to be realised at Smart City.

All this comes on the back of expansive developments of retail space in Malta: the Pama shopping village in Mosta extends over 6,340 sq.m; the Kiabi outlet on the former Burmarrad winery is spread over 1,035 sq.m; and then there is 2,198 sq.m of space on Qormi’s Landmark building, near Lidl. Significantly, places like the Kiabi megastore were approved in ODZ areas, although located in existing building, further eroding the distinction between urban and rural Malta. It could be the case with the Ghaxaq mega shopping complex, proposed instead of a construction plant in a rural area.

At a total of 17,000 sq.m, Tigné Point in Sliema is Malta’s largest shopping mall but could soon be overtaken by the Hudson Group development in Ghaxaq and a luxury shopping mall on the site of the Institute of Tourism Studies in St George’s Bay. When Smart City’s impact assessment was presented in 2008, they listed Sliema and Valletta with a total area of 20,000 and 17,000 sq.m of high street shopping, respectively.

This expansionist commercial strategy seems to have overtaken Malta’s high street experience, and surely it’s a far cry from the street shops that dominated the 1990s, before the opening of Malta’s shopping malls, such as the Sliema’s Plaza, Valletta’s Embassy, Gallerija in Fgura and Mainstreet in Paola, and Bay Street in Paceville, Daniels in Hamrun, and Gozo’s Tigrija Palazz.

How sustainable is all this retail?

It remains unclear whether sufficient demand exists for the further growth of this sector, although the appetite for land seems insatiable.

“While demand is growing strongly, there is little by way of indication of whether supply is keeping apace in a sustainable manner,” economist Gordon Cordina told MaltaToday, who said that what should really matter is that development and operating permits take a “holistic view” of the economic and social impacts of these projects, also within the context of other developments in the country. “This is therefore a question of ensuring that the right processes and expertise are in place to ensure that projects are complementary and sustainable.”

Operators in the sector like Chris Grech of Bay Street, had already recommended a more coordinated approach to development. In 2016 the real estate entrepreneur  told MaltaToday that mega-developments would double retail space already existing in Valletta and Sliema combined, questioning whether there was even enough growth to justify such an increase in retail space.

But Grech’s recommendation was not that of stalling development but to get the right mix between office, residential and retail in new development projects, particularly in high-rises.

One retail project that failed to take off had been earmarked for Smart City in Kalkara, once set to become Malta’s biggest shopping centre, with over 21,000 sq.m of retail space approved in 2008. But even its own environmental impact assessment had cast doubts on whether sufficient demand existed for the project’s retail component.

“The scale of the oversupply suggests that significant displacement in retail spend from other areas would be required to sustain the level of retail planned,” the EIA stated, suggesting that shopping malls will only be developed if other retail developments fail to materialise or if there is “a national increase in spending power.”

And a fear of a retail bubble due to this new oversupply can only be countered by tapping into particular niches in the market, like the demand for luxury goods by high spenders propped up by high value-added industries like financial services and gaming.

Mega-developments could double retail space already existing in Valletta and Sliema combined, questioning whether there was even enough growth to justify such an increase in retail space

Shopping and parking

Undoubtedly a concern about the opening of shopping malls is that it drives small shops in residential centres out of a shrinking market. But Paul Abela, the president of the small business chamber (GRTU) says the opening of new shopping malls like Pama are a “great success”, only noting that the demand for these new attractions is marked by whichever outlet is well-served by parking facilities.

“It is high time that accumulated funds from the Planning Authority’s commuted parking scheme are put to use to create car parks in localities like Mosta and Hamrun,” Abela told MaltaToday of these important high streets.

Abela attributed the success of self-contained malls to the transformation of shopping into “an experience”, where people park their cars and alternate between shopping and other recreational activities like eating out and having a coffee, while children can have fun in recreational areas.

“The future of high street shopping in various towns depends on improving the infrastructure to offer shoppers a more wholesome experience,” Abela said, insisting that urban regeneration projects such as those in Paola and Mosta must include new car parks.

But building more car parks and shopping attractions in city centres also attracts more traffic in already congested areas, a point made by Green Party secretary-general Ralph Cassar in reference to plans for a new car park in Mosta. Even building retail centres right outside established urban areas, could increase traffic and extend urban sprawl as demand grows for other facilities like petrol stations in their vicinity.

“A real vision would have been to pedestrianise the centre of Mosta, creating a park and ride system from the periphery into the centre, and through real and targeted investment in infrastructure and incentive encourage people to take up bicycles and pedelecs and boosting public transport provision to and from Mosta,” Cassar, a local councillor for neighbouring Attard, said.

These far-reaching plans however appear not have captured the imagination of planners and policy-makers.

What's in store?

Ghaxaq: The largest shopping mall ever

Ghaxaq

A huge retail centre is set to take up 30,646 sq.m of retail space constructed over three levels in a 37,880 sq.m site presently occupied by the Barbros construction plant next to the Lidl supermarket in Zejtun, in an ‘area of containment’ where limited development can be allowed outside development zones. 

The application was presented by Hudson International Ltd, which already operates 27 outlets in Malta representing international brands, such as Kiabi, River Island, Timberland, Nike, UJ Hos and Urban Jungle.

The application incorporates the existing 2,500 sq.m Lidl supermarket on the ground floor, a gigantic 12,964 sq.m department store constructed over three levels and an additional 17,682 sq.m of other retail shops. Underground parking will cater for 752 cars while 408 parking spaces are allocated at ground floor level.

Hudson International already operates the Kiabi department stores in the Landmark in Qormi and in the ex-farmer’s winery in Burmarrad. The Burmarrad site could only be used for agricultural activities until 2063, as it was public land given to the Farmer’s Wine Co-operative in 1965 on emphyteusis to be used for wine production. 

The cooperative sold the emphytheusis for €815,000 in 2008 to BCBT Properties, a company in which Burmarrad Commercials is a main shareholder. The condition on its use was lifted after the change in government in 2013. 

Marsaskala: Shops to fill a quarry

A long disused 9,750 sq.m quarry opposite the Marsaskala Family Park is being proposed for massive commercial development including retail outlets, a drive-thru take away, offices and restaurants. 

The development includes a basement carpark, a 3,080 sq.m commercial outlet and 748 sq.m restaurant and a 330 sq.m drive thru at ground floor level, 2,080 sq.m of offices at the first floor level and a landscaped roof. 

The development, located outside development zones opposite the family park and the sewage recycling plant, is being proposed by Ephriam Schembri who owns the site.

Qormi: DIY

Plans have been submitted by a group of developers proposing a Do it Yourself retail complex opposite the park and ride in Qormi instead of fields. 

The application presented by Centre Park Holdings Limited proposes two levels of underground parking, a DIY centre with ancillary facilities and a receded first floor for retail space and offices occupying a floor space of 10,000 sq.m.

Archaeological remains including tombs and cart ruts will be integrated in the commercial development, all with the blessing of the Superintendence of Cultural Heritage. 

The company is owned by Anthony Fenech, Paul and Philip Caruana of Quality Holdings Limited, and Vincent and Charles Borg of V&C Developments Ltd. According to present planning rules, all the soil in the area was cleared for an archaeological investigation of the site. The area is zoned for parking, sports facilities and the development of an old people’s home according to changes to the local plan made in July 2013, three months after the election.

Townsquare: Shopping under the tower’s gaze

Townsquare

The 38-storey high-rise in Sliema approved by the PA in 2016 is currently pending an appeal. It includes 9,600 sq.m of retail space which would equate to about 40 medium-sized shops similar to those in the area and three larger shopping outlets.

The shopping centre is being proposed on an open plaza around the high rise. 

“We did not want to create a new shopping mall. We will be creating a pedestrianised space where people can continue their shopping experience while walking along Sliema’s streets,” project architect Martin Xuereb told MaltaToday in 2015.

ITS: A shopping mall in the golden mile

St George’s Bay

The shopping mall included in St George’s Bay high-rise development over the site of the Institute for Tourism Studies will cover almost 24,000 sq.m on three levels and will be “solely dedicated to the most luxurious designer brands, in line with the recurrent upmarket theme of the project”, according to a proposal presented to the government last year. 

The Big Bon Group, owned by Bernard and Mario Gauci, is lead operator for the mall, which is seeking brands not yet with a Malta presence. Big Bon has already taken over 2,400 sq.m in The Point shopping mall in Tigné. 

The remaining outlet space will be allocated to high-street fashion outlets, other branded retail stores offering cosmetics, home furnishings and tech gadgets, cafés and other refreshment and entertainment establishments.

Skyparks: Shopping next to airport

Skyparks

A master plan proposing the expansion of the existing Malta International Airport complex and the addition of office and retail blocks, a hotel and recreational areas is still being considered by Planning Authority. The project includes 16,800 sq.m of commercial space. The new development would include commercial centres, which would incorporate both commercial and office space and showrooms.

Wied incita: Some shopping next to warehouses

Wied incita

Construction group Bilom has also included 7,460 sq.m of retail in a proposed industrial park for SMEs over 158,000 sq.m on a site currently taken up by quarries in Wied Incita, Attard. A 2,550 sq.m family recreation park is proposed next to the shopping area.

GZIRA Shopping on Manoel Island

Manoel Island

In 2012 the PA approved 6,320 sq.m of retail in the Lazzaretto development by MIDI in Manoel Island, alongside 54 apartments, a 2,868 sq.m casino and a 1,950 sq.m hostel. New plans presented recently by MIDI foresee a waterfront mix of catering, retail and recreational facilities.