Strength of regions

Fewer large centres have recently been built in Poland, which is certainly related to the saturation with retail space. However, we observe a great deal of redevelopments and modernisations. This applies to the largest conurbations and smaller towns. In 2018 several novelties emerged on the map of Poland in regional cities and smaller towns, including those that could be considered large retail projects in relation to the local market: Gemini Park Tychy, which opened in spring 2018, Nowa Stacja in Pruszków, which started in November, and Libero in Katowice, which also opened in November. The listed shopping centres are significant projects as regards the conditions of the local market. Gemini Park Tychy has 36,600 sqm, Nowa Stacja – 27,000 sqm and Libero – 45,000 sqm. Furthermore, the market in regional cities and smaller towns is enriched by other formats – popular retail parks (e.g. Saller’s retail parks in Brzeg, Olecko, Oława and Tarnowskie Góry, Vendo Park in Chodzież) and outlet centres (e.g. Silesia Outlet which is under construction in Gliwice and Smart Outlet Center in Bydgoszcz, which is already in operation). A great deal of projects are under construction: Tkalnia in Pabianice (developer: A&A), Galeria Chełm (developers: Acteeum Central Europe and Equilis), Dekada Nysa (developer: Dekada). Investors' plans also envisage the development of Prochownia in Łomianki (developer: Ghelamco Poland) and a retail hub in Siedlce (developer: Immofinanz), three hotels under the Karuzela brand are also under construction in Biała Podlaska, Lubliniec and Tarnobrzeg. Due to the life cycle of retail buildings in smaller towns, there is a continuing trend of modernisation and redevelopment of retail buildings (the portfolio of shopping centres owned by Carrefour Polska and centres from the portfolio of Ceetrus Polska, including Auchan Hetmańska in Białystok as well as Sfera in Bielsko-Biała (CBRE Global Investors), Galeria Jurajska in Częstochowa (GTC) and Plaza Rzeszów. “On regional markets 2017 was a period of expansion, modernisation and releasing as well as investment purchases, including Galeria Słoneczna in Radom, Alfa in Białystok and Toruń Plaza. It reflects the attractiveness and development potential of these markets,” reads the ‘Shopping centres in regional cities, Q1 2018’ report prepared by Colliers International. According to the consulting agency rent rates in regional cities remain in a slight downward trend. The highest ones, for 100-150-sqm units designated for fashion, located in the best shopping centre on the market, are around EUR 28-30 per sqm per month in Bydgoszcz and at EUR 24-26 per sqm per month in Radom or Częstochowa. “More flexible terms of lease are becoming a market practice, regional cities included. Strategic tenants for the centre are offered incentive packages, including: participation in the fit out costs, lease with an exclusively turnover-based rent, shorter rental periods, temporary discounts and the freezing of operating costs,” reads Colliers International’s report.

Potential in regions

Some of the most interesting shopping regions in Poland are Upper Silesia and Małopolska. A chain of shopping centres under the common name of Gemini Park operates in southern Poland – its developer is Gemini Holding, founded by Rafał Sonik, one of the most recognisable faces of the Polish real estate market, and a great motorsport driver at the same time. The portfolio consists of three buildings: Gemini Park Bielsko-Biała (Silesian province), Gemini Park Tarnów (Małopolskie province) and Gemini Park Tychy (Silesian province). The first shopping centre was created in 2009, the second one – a year later and the last one – in 2018. The Silesian province has 12,300 sqm and it is inhabited by 4.5 mln people. According to the data of the Polish Chamber of Commerce (KIG), the urbanisation rate amounted to 76.8 pct there at the end of October. The macroeconomic data that characterise the region in terms of affluence are important for economic activity, in particular in the field of retail business. The GDP for 2017 for the Silesian province amounted to almost PLN 244 mln, PLN 53,700 of which was attributable to one resident this region. The unemployment rate is 4.4 pct whereas this indicator for Poland amounts to 5.7 pct (KIG data as at the end of October 2018). Since the beginning of this year more than 8,600 new apartments have been delivered in the Silesian province. Małopolska has 15,200 sqm and it is inhabited by 3.4 mln people. Its urbanisation rate is 48.3 pct. The GDP for the Małopolska province is PLN 158.4 mln, PLN 46,600 of which is attributable to one resident . The unemployment rate at the end of October 2018 fluctuated around 4.7 pct (data of the Polish Chamber of Commerce).

Gemini Park, Tychy

Top score location

Tarnów is the central town of the Tarnów conurbation and it was the capital of the former Tarnów province. The city has a population of almost 110,000 people, 65 pct of whom are of working age. The main industries in the town are the chemical sector (Grupa Azoty is based here) and the machinery sector. As a sub-zone of the Kraków Special Economic Zone, Tarnów has around 30 ha of land available for industrial operations. There are around 10 retail buildings of more than 5,000 sqm in Tarnów. Their total leasable area is 127,000 sqm. The largest buildings are: Gemini Park Tarnów: 43,000 sqm, Galeria Tarnovia: 17,000 sqm, Echo Tarnów: 20,200 sqm and Bazar: 13,000 sqm. 10 areas designated for large-format service buildings were indicated in a study of land development conditions and directions of Tarnów municipality. Most of them are covered by the provisions of local zoning plans. Only two plots are not built-up, which provides a possibility of developing two more such buildings,” says Daniela Motak, a spokesperson for Tarnów. The largest shopping centre is Gemini Park Tarnów located at ul. Nowodąbrowska 127. “There are three most important things in the retail business: location, location, location. And we have it. Our shopping centre is located near the A4 motorway and an exit which helped us to link the building with suburban areas comprising the Dąbrowski, Dębicki and Brzeski proviats. The centre is located on the outskirts of large housing estates with around 50,000 residents,” explains Zbigniew Nowak, the director of Gemini Park in Tarnów. “The purchasing power of the town is lower than in Kraków and it can be compared to the national average. On the other hand, customers’ disposable surplus has been growing,” adds Zbigniew Nowak. Tarnów is located in a rhombus which is marked by: Kraków (from the west), Nowy Sącz (from the south), Rzeszów (from the east) and Kielce (from the north). “Therefore our centre has a catchment area of app. 1.3 mln customers. At weekends more than 60 pct customers come from outside the town. We are located in a town that should be the capital of the region,” concludes Zbigniew Nowak. The owner of the building planned to expand it, which was, however, given a negative opinion of the town council in Tarnów. “The proposal was supported by some residents while others expressed opposition – and their position was supported by the town council of Tarnów, which did not agree to the expansion. As you can see, the residents themselves are divided as regards this matter,” comments Daniela Motak.

Silesian Manchester

Bielsko-Biała, which is located at the foot of the Little Beskids and the Silesian Beskids, acts as the main urban centre of the Podbeskidzie region. The town has a population of 175,000 people. 60 pct of them are people of working age. The unemployment rate is 2.4 pct here. Bielsko-Biała is the main town of the Bielsko-Biała Industrial Region, with flourishing machine, automotive, textile, metallurgical and food sectors. The 5.17-ha Bielsko Biała Industrial and Service Park was established in the vicinity of the Special Economic Zone and the S1 expressway in 2005. “Bielsko-Biała is a dynamically developing area and the unemployment rate is only 2 pct here. The town has one of the largest coefficients of enterprises in the Silesian province, right after Katowice. The average shopping basket of our customers has a higher value than in other towns of the region,” remarks Krzysztof Brączek, the director of Gemini Park Bielsko-Biała. Bielsko-Biała is called the Silesian Manchester not without reason. The potential of the town has been spotted by retail developers, which resulted in the retail space saturation of 1,100 sqm per 1,000 people. The main competitors of Gemini Park Bielsko-Biała (42,500 sqm) are Galeria Sfera (132,000 sqm of useable space) and Sarni Stok (33,000 sqm). Gemini Park Bielsko-Biała is the southernmost building. Its catchment area comprises 900,000 people. “The builidng is located at the junction of two important arteries: east-west and north-south. We use tourist traffic generated by Szczyrk, Wisła and Ustroń. Summer or winter holiday periods are a special time for us when we always have a great number of customers – contrary to the statistics that say there is drop in footfall in retail buildings in Poland. We use this advantage, directing a great deal of marketing campaigns to these areas,” emphasizes Krzysztof Brączek.

Gemini Park, Bielsko-Biała

No competition

Tychy is one of the most dynamically developing towns in Silesia and one of the six wealthiest towns in the country. “In terms of the national purchasing power index – which is 126.6 here – Tychy occupies the 10th position today, just after Warsaw. This makes the shopping centre an extremely absorbent market with strong purchasing power and well off customers,” says Tomasz Misztalewski, the director of Gemini Park in Tychy. The surroundings are also conducive to the development of the building. The town has been supporting investors for many years and it is open to new investment, as reflected not only by Gemini Park but also several dozen production plants in the area, with Fiat Auto Poland and Isuzu Motor Polska in the lead. Local competition, or the lack of it, is not without significance. “Gemini Park is the first such large shopping centre in the town, where saturation with retail space is only around 375 sqm per 1,000 residents. Thus we could not only quickly build recognisability but also gain loyal customers,” adds Tomasz Misztalewski. The location of the town is also favourable. Tychy is located in the very centre of the developing Silesia Metropolis and it includes important transport hubs. Consequently the town has good transport links to several dozen cities and towns of the region – Katowice, Mikołów and Mysłowice but also Pszczyna, Oświęcim and Żory. In the case of Gemini Park it is also important where the centre itself is located. The project is developing 3.5 km from the inner centre of Tychy, in a place which has been associated with trade for years. In the vicinity there are such popular stores as: Obi, Tesco and Media Markt, creating the so-called power centre together with Gemini Park, which is attractive for the customer who has different shopping needs. Gemini Park Tychy is planned to be extended by 6,600 sqm. The new areas will feature restaurants with waiter service, mainly from the casual dining segment, as well as a multi-screen cinema – the first of its kind in the town. The expansion is to end in 2020.