Polish malls in good shape

It also examined the almost 7,000 lease contracts for space in the malls. According to the ‘Shopping Centre Index Poland 2015’ report, average-sized retail properties of 20,000 to 40,000 sqm (43 pct) dominate the Polish shopping centre landscape. Large centres make up 32 pct of the facilities examined and small properties account for 25 pct of the total.

A fashion mecca

The malls’ key tenants are fashion retailers (32 pct), which usually occupy the largest units. As CBRE also points out, shopping centre rent levels vary not just according to the size of the units but also the size of the cities and towns they are located in. For example, the average rent for tenants leasing the smallest units of less than 100 sqm in towns with no more than 50,000 residents ranges from EUR 18 to 25 per sqm per month. In towns of 50,000–100,000 residents the average rent rate ranges from EUR 21–34 per sqm per month. In cities where the number of residents ranges between 100,000 and 400,000, tenants have to pay from EUR 25 to 38 per sqm per month, and in the largest conurbations (from 400,000 to 800,000 residents) the rentals reach EUR 34 to 50 per sqm per month. The most attractive shopping centres in Poland charge for the tenants of the smallest units EUR 80–110 per sqm per month on average. At the same time, tenants operating the largest store formats (with areas of over 1,000 sqm) in cities with less than 50,000 inhabitants currently need to pay app. EUR 8 per month. In mid-sized towns of 50,000 to 100,000 inhabitants the rates reach EUR 6 to 9 per sqm per month, while in the cities with 400,000 to 800,000 residents they amount to EUR 10 to 16 per sqm per month. In prime shopping centre schemes large format rentals range from EUR 16 to 18 per sqm a month. The highest rates are being paid by jewellery and accessories retailers as they tend to lease the smallest units of the most attractive properties. The lowest rates are being paid by children’s fashion and toys retailer as well as interior design and electronics merchants.

Money, money, money

CBRE’s analysts also examined the financial burdens of shopping mall tenants, which include rent rates and operating costs, and compared them to the turnover they generate. It turns out that the greatest burden is falls on accessory retailers – their expenditure accounts for 22 pct of the turnover on average. They were followed by children’s clothing and toys retailers, whose financial burden accounts for app. 21 pct of their turnover and fashion retailers (20 pct). Multimedia, interior design and electronics retailers as well as health and beauty stores, bear the lowest financial burden (app. 10 pct of their turnover). “According to the data, the average Polish shopping centre is doing well. The average annual turnover amounts to app. EUR 2,000 per sqm, which translates into an app. 16 pct financial burden for tenants. These are, of course, medians; however, one could conclude that the market is healthy and tenants do not have to face business-killing costs,” says Magdalena Frątczak, the director of the retail agency at CBRE. According to the consultancy, in the Czech Republic the average annual turnover of a shopping centre amounts to app. EUR 1,900 per sqm, in Slovakia to nearly EUR 2,000 per sqm, while in Italy shopping centre properties generate over EUR 3,100 per sqm per year. Average shopping centre rentals for the Czech Republic and Slovakia properties are around EUR 17–18 per sqm per month, in Poland they are EUR 17.5, whereas in Romania they are as low as EUR 13 per sqm per month.