UBS Group AG analysts are sticking by a prediction that a fifth of shops in French shopping centers will be empty by 2023.

Vacancies in French malls have reached 11.2 percent and are on a pace to meet UBS’s prediction from January 2018 for 20.6 percent by the end of 2023, analysts led by Charles Boissier and Osmaan Malik wrote in a report.

“This is well on track to reach what was labelled as a bearish forecast in a supposedly strong market,” they said. “This is the start of a downward spiral that can lead to ‘dead malls,’ a concept that was so far used mostly for the U.S., generally foreign to France.”

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Vacancy rates are rising across the board, with local high streets hit the hardest and the recent Yellow Vest protestsalso causing more store closures, the analysts said. More store openings and the growth of online sales will compound the problem. Listed shopping mall owners — including Unibail-Rodamco-Westfield and Klepierre SA — may take a hit from higher vacancies as the bargaining power is put in the hands of tenants and if sentiment weakens, harming their ability to offload assets.

Carrefour SA and Maisons du Monde SA are among the French retailers with a strong presence in suburban shopping centers that were hit by Yellow Vest protests in recent months.

The social unrest is likely to accelerate the decline of the hypermarket model, according to Invest Securities, and this format’s “structural challenges” are among reasons Standard & Poor’s gave for its downgrade of Carrefour’s long-term debt rating on Friday. Meanwhile, Oddo BHF has cut its recommendation on Mercialys SA, a French real-estate company specialized in the shopping centers, citing a “scarcity” of development projects.(Updates with analyst comment on hypermarkets in last paragraph.)

Extracted from Bloomberg