The best days are in front of us

no signs of shortening. It disappoints because many projects are due to be finished The estate agents we talked to about the shopping space market in the first half of the year are complaining loudly that they have lots of work to do even during the holidays. Admittedly, less new space was commissioned in the first six months than in the same period in 2005, but many projects are in various stages of implementation. According to agents DTZ, 180,700 sqm of retail space was delivered in the first half year, 64,500 sqm less than in 2005. According to Ewa Derlatka, one of DTZ’s market analysts: “Developers have started investing in smaller cities, where both the local authorities and business lobbies are more active and determined to defend their interests. Apart from that, to purchase a plot figuring in a local development plan allowing shopping centres greater than 2,000 sqm is getting more difficult, as is waiting for an appropriate plan to be approved.”

Making a hit

Several spectacular trade debuts took place in the first half of last year. In Kraków, the first customers entered the Galeria Kazimierz Mall, while in Poznań – Plaza opened its fourth shopping centre. Poznań’s shoppers could also make their first purchases at the Marcelin centre. In the last half-year, though, there were not many such ‘grand openings’. Galeria Venus opened for business in Świdnik as did Tesco with a mall in Stalowa Wola, a Castorama each in Lubin and Kielce and a Domoteka in Ikea in Warsaw’s Targówek district. According to Piotr Kaszyński, head of the Retail Department at Cushman & Wakefield: “The retail hit of the past six months was surely the long-awaited opening of Manufaktura, a fine shopping centre, but one that needs an expansion in the range of products it offers. The second half year, however, appears to be interesting. Galeria Krakowska developed by ECE Projektmanagement will get under way in Kraków, while in Warsaw, Złote Tarasy, from Dutch developer ING Real Estate, will finally start operating. The latter investment continues to be a big unknown. Ewa Derlatka is mone of those that are uneasy: “It is difficult even to imagine how complicated access to the building is going to be, and also whether customers will be happy with having to pay for parking, and how the painful problem of what to do with the homeless who will want to leave the nearby Warszawa Centralna railway station will be tackled.” And no clear opinion exists as to the impact Złote Tarasy will have on the retail businesses along ul. Marszałkowska. Many tenants have outlets both on the city’s major shopping thoroughfare and inside Złote Tarasy. Piotr Kaszyński thinks that: “The new shopping centre and ul. Marszałkowska are not going to compete, but will rather mutually supplement what is on offer.” The highly profitable pre-Xmas period will also be at the forefront of ECE’s attention. In the view of Ewa Derlatka: “Though much work remains to be done, Galeria Krakowska’s developer wants to open the centre before Christmas. The presence of this new mall will surely be felt by the nearby Galeria Kazimierz, but I think both centres will operate well, since a large number of office and housing investments have appeared in the vicinity.”

 – 63,500 sqm, Galeria Krakowska – around 60,000 sqm), other centres to open for business will be the Pasaż Świetokrzyski in Kielce (13,200 sqm, Echo Investment), the first stage of the Galeria Hetmańska in Białystok (DA Invest), Auchan in Krasno near Rzeszów and the Factory Outlet in Wrocław (1st stage – 10,000 sqm, Neinver). Cushman & Wakefield estimates that the new retail space to appear on the market throughout the whole of this year will total 480,000 sqm. Last year the amount was 530,000 sqm. Earlier estimates suggested that this and last year would be record breakers. C&W’s forecasts suggested there would be 1.6 mln sqm modern space.  These optimistic forecasts collided with the hard facts namely, the headaches experienced by developers, primarily in obtaining the licences required. The final stages of many projects were postponed until 2007, including that for Pasaż Grunwaldzki in Wrocław (Echo Investment), the Focus Parks in Zielona Góra and Rybnik (Parkridge CE Retail), Galeria Legnicka (Redis Legnicka Devco), Plaza in Lublin, Rybnik and Sosnowiec (Plaza Centres) and Forum Gliwice (Braaten+Pedersen).

to pronounce

Things are also looking up for locations in Poland’s eastern region and also smaller towns of populations around 100,000-150,000. It is not only developers who have noticed their potential, but so have such large shopping chains as C&A and H&M. The German C&A chain is to appear in the Galeria Askana in Gorzów Wielkopolski (population 125,000, Caelum) while Swedish clothes bearing the H&M trademark will be available this autumn in Galeria Graffica in Rzeszów (population around 160,000). With tongue in cheek, Maciej Mazur, president of Lambert Smith Hampton reminisces that: “A year ago the development director In his view, the impulse to accelerate the expansion of the number of shopping centres in smaller cities is provided by the excellent results registered by properties in such locations. Maciej Mazur comments: “Recently opened shopping centres like Alfa in Olsztyn and Copernicus in Toruń are examples of such ‘promoters’ in smaller cities. A large number of tenants admit the results they are registering are much better than those of many outlets in large conurbations.”

The final touches were given to several substantial investment transactions which were announced in the past months. The number of buyers for Polish properties is not subsiding: the OBI portfolio was taken over by WP Carey for EUR 150 mln, Promenada in Warsaw was snapped up for EUR 127 mln by Dawnay Day Carpathian from the ECC, Ahold’s portfolio was bought by ING Property Fund for EUR 80 mln and the Arka BZ WBK fund paid Invest-JWK-Management PLN 191.5 mln for Alfa in Olsztyn.

– 340,000 sqm) to GE Real Estate for EUR 555 mln. Real of Germany bought the Geant shopping chain and Tesco of the UK took over the Leader Price supermarkets.

 But a real gold rush can be expected next year. If all the developmental projects are fulfilled, Poznań will take first place among cities with the greatest saturation of retail space (more than 1200 sqm per 1,000 residents). Rzeszów will rank second on the list, with Warsaw lagging behind in third place.