Report: Poland's Retail Market
With the minor exception of hypermarket take-overs, there will be no major changes on the retail market according to analysts, and the entertainment and leisure sector will continue to move forward slowly.
By the end of this year's 1st quarter, there was over 3.9 mln sqm of modern retail space in Poland's eight biggest cities and over 800,000 sqm in 65 towns.
High Streets
Demand for space in the high streets of big cities remains higher than supply
and despite growing competition from shopping centres, their prestige and appeal
are not diminishing. The vague legal status of the real estate, (in for example,
ul. Chmielna in Warsaw), and the lack of modern space are frequent obstacles to
their development. Developers have responded by using the lowest floors of
office buildings as retail units.
Rents: EUR 35-80 sqm (Cushman & Wakefield H&B) in ul. Chmielna in Warsaw
and USD 85 per sqm, (Jones Lang LaSalle), in ul. Nowy Świat.
Shopping centres
There are approximately 100 centres operating on the Polish market, in which the
biggest tenants are invariably supermarkets and hypermarkets. Though large
shopping centres, in big cities are successful, smaller ones in small
cities have trouble finding tenants.
Market trends show that older shopping centres may suffer from the emergence of
newer rivals, forcing owners to adapt and find new market nichés. Alternatively,
they can upgrade already-existing centres, as in the case of Galeria Mokotów
and the Targówek centre.
TK Development, Echo Investment, Domy Towarowe Casino, Plaza Centres and Cefic
are the main shopping centre developers.
Rents: EUR 10-50 per sqm; average Warsaw rate - approximately 35 EURO per sqm
(Cushman & Wakefield H&B), USD 47 per sqm in prestigious shopping
centres (Jones Lang LaSalle)
Retail & leisure space
When planning the construction of a shopping centre, developers introduce
leisure elements and multiplexes above all. Contracts with multiplex operators
are usually signed before investments are launched, but some projects, such as
Wola Park and Targówek II in Warsaw, function without a multi-screen cinema,
though they have space for one.
Last year's important event was the take-over of four Ster Century multiplexes:
in Promenada Janki, Galeria Mokotów in Warsaw and Korona in Wrocław by the
Cinema City chain which already owned multiplexes in Sadyba Best Mall and Bemowo
in Warsaw, Kraków Plaza and Zakopianka in Kraków, Ruda Śląska Plaza in Ruda
Śląska and Punkt in Katowice.
Fitness centres, bowling-alley operators, computer games' centres and bars are
other examples of leisure space tenants. There is some scope for
development in the sport, health and fitness market.
Rents: depending on the quality of location are EUR 7-13 sqm. for multiplexes
and EUR 5-10 sqm. for other leisure space.
Hypermarkets
There are an estimated 120 foreign hypermarkets in Poland which, at the end of
the 1st quarter of 2002, occupied a total of 690,700 sqm of space in the
eight biggest cities. Thirty per cent of these hypermarkets were
free-standing.
'Concentration' is the trend which has been gathering momentum this year. In the
middle of this year, Tesco took over the HIT hypermarket chain. Soon after,
Ahold gained control of the Jumbo supermarkets. Another major event was the
purchase of 11 centres, part of Domy Towarowe Casino (the Kings Cross centres),
2 buildings owned by Apsys and its partner as well as Fronciere Euris in Wrocław
and Warsaw (the Janki centre) by GE Capital Real Estate and Heitman Central
Europe Property Partners.
Rents: EUR 7-8.5 per sq. for hypermarkets in shopping centres.
Article based on the following reports:
"Polish retail space market, 2002", Cushman & Wakefield Healey
& Baker
"Warsaw City Profile September 2002", Jones Lang LaSalle
