103,000 sqm gla in six months

Although the Polish retail market is still trying to shake off the effects of the Covid-19 pandemic, the forecasts for the sector are more optimistic than for the rest of Europe. According to Oxford Economics, retail sales in Poland are expected to grow by 4.9 pct per annum until 2023, which would put Poland in a leading position in Europe. This year is expected to see app. 209,000 sqm gla solely in retail parks come onto the market, making 2021 a record-breaking year for retail parks in terms of space delivered to the market.

JLL and Trei Real Estate Poland, the authors of the second edition of the ʻRetail Parks and Convenience Centres in Poland’ report, give us their summary of the market for such projects at the end of H1 2021, and outline the development prospects for the sector in Poland.

Supply – 3 mln sqm of retail parks & convenience centres

In the first six months of 2021, developers completed 242,000 sqm gla of new retail space, 43 pct of which was delivered in retail parks and convenience centres dedicated to every-day, quick shopping (app. 103,000 sqm). A further 237,000 sqm gla remains under construction across the two formats, of which 188,000 sqm is to be delivered to the market by the end of this year.

“The current supply of retail parks, both regional and traditional, and convenience centres in a retail park layout, total 2.87 mln sqm gla. Regional retail parks make up half of this space, however, their share is decreasing year-by-year in favour of smaller assets,” reveals Joanna Tomczyk, a senior research analyst at JLL in Warsaw.

Retail park and convenience centre stock is distributed unevenly as far as city size is concerned. They are concentrated in the major metropolitan areas (46 pct of existing stock) and towns of below 50,000 inhabitants (29 pct). An astonishing 67 pct of stock under construction (237,500 sqm) is located in the smallest cities (those of fewer than 50,000 inhabitants). A mere 8 pct is located in the largest conurbations, proving that smaller markets are currently very much the focus of developer activity.

“When choosing new locations for our Vendo Parks, we are still focusing on small towns of around 15,000 inhabitants that are poorly served in terms of retail. The whole of Poland is taken into consideration during this process and our projects always include the presence of a food operator. Each investment’s sphere of influence has around 30,000 potential visitors living in the city and surrounding area. At present, we have three new retail parks at an advanced stage of construction, namely Inowrocław, Chorzów and Radzymin, which we plan to open by the end of this year. We are also in the process of expanding the Vendo Park in Pułtusk. The land bank we have secured means we can confidently plan our projects for 2022 and next year will see no slowdown in the current pace of Trei’s development in Poland,” says Jacek Wesołowski, the managing director of Trei Real Estate Poland.

Demand – foreign brands interested in Poland

So far this year, seven foreign brands have made their debut in Poland’s brick and mortar retail sector. Two furniture chains, Swedish brand Duxiana and German brand Rolf Benz opened their first stores in furniture centres, respectively in Kraków and Warsaw. Italian dental clinic DentalPro opened in the Manufaktura shopping centre in Łódź, illustrating the growing importance of the health concept in the offer of shopping malls. In Warsaw two brands opened their first stores in Westfield Arkadia – a Lego shop, and Dutch cosmetics brand Rituals, while Italian menswear firm Camissima and Turkish fashion brand Yargici opened stores in Galeria Mokotów.

“The headwinds on the retail market in Poland, including the drop in both footfall and turnover in the majority of shopping centres during the pandemic, as well as the negotiations between tenants and landlords, have caused a slowdown, along with the temporary halt to some retailers’ expansion plans. Budget retailers, off-price brands, those offering lower- priced products, and grocery and drugstore chains were the least affected by Covid-19 and their expansion plans have hardly changed. Action, Dealz, KiK, Pepco, Tedi and new market entrant HalfPrice, have successfully attracted consumers to their stores by offering attractive prices for a wide range of products,” says Anna Wysocka, the head of the retail agency at JLL in Warsaw.

Who’s looking for space in retail parks?

JLL and Trei have analysed the merchandise mixes of selected traditional retail parks and convenience centres in terms of their gla. Centres with a combined 133,000 sqm gla were surveyed in the report, which reveals that value retailers, occupying 33 pct of the gla (i.e. every third unit), is the category most commonly found in traditional parks and convenience centres. Unlike many other retail chains, value retailers have hardly changed their expansion plans during the pandemic. Other popular retail categories include specialised stores (16 pct of gla), grocery operators (14 pct), fashion and shoes (13 pct), electronic (10 pct), and health & beauty stores (9 pct). The number of stores in each category is usually limited to one or two, due to the rather small size of these projects. Retailers from various retail categories take up different sizes of units.

“In H1 2021, we opened four Vendo Parks in Zielonka, Myślibórz, Koszalin and Piekary Śląskie with a combined area of almost 20,000 sqm. In the same period, we concluded 35 lease agreements for a total of 22,500 sqm. As the pandemic has not affected Trei’s commercialisation process for new facilities, the company has been able to successfully implement its investment plans. Today, an increasing number of tenants are considering locating their stores in retail parks. The last fifteen months have proved that we are more resistant to restrictions than large-format shopping centres. We also offer lower leasing costs than malls. As a result, we are currently holding talks with companies that have not previously had a presence in retail parks, including the entire LPP group and the Smyk brand. In addition, there is a relatively large number of players making their market entries into Poland that are also interested in retail parks,” adds Jacek Wesołowski.

Attractive rents

The rents and service charges offered in retail parks and convenience centres are significantly lower compared to those in shopping centres and remained stable in H1 2021. This is due to the characteristics of this type of retail scheme, e.g. less common space, a simple one-storey layout, outside surface parking and usually a location on the outskirts of town. Prime rents for units of app. 2,000 sqm in the best performing retail parks currently stand at EUR 8–12 per sqm monthly, with service charges at a low EUR 1.5–2 per sqm monthly. Moreover, retail parks and convenience centres benefit from lower fit-out costs because of the stores’ standard and easy access.

Alternative formats on the radar of investors

Since the beginning of 2021, retail properties with a total value of app. EUR 420 mln have changed hands. Continuing last year’s trend, the number of transactions has remained high, with the low volume being a direct result of the type of assets that are currently most popular with investors.

“Investors’ attention is still focused mainly on retail parks, convenience centres, DIY stores and grocery shops, which is reflected in the number of transactions being concluded this year. So far prime yields for the best retail parks remain stable at around 6.8 pct. However, the high level of interest and limited availability of good product could result in short-term compression,” adds Agnieszka Kołat, the head of retail investment at JLL.

The largest retail deal finalised in 2021 was EPP’s acquisition of four retail parks for EUR 106 mln. This is the final tranche of a larger deal signed in 2018 covering 12 assets, including eight M1 shopping centres. The largest transaction to be closed in the third quarter of this year was the sale of a portfolio of six Auchan hypermarkets located in Szczecin, Rybnik, Słupsk, Gdańsk, Nowy Sącz and Lublin. The portfolio, previously owned by Pruim (a company managed by Griffin Real Estate), was sold for EUR 87 mln to an undisclosed buyer.



Regional retail parks (≥ 10,000 sqm gla): retail parks which are components of the largest shopping destinations, mostly adjacent to shopping centres and retail warehouses. The vast majority are located on the outskirts of cities, or along major roads. Their regional impact power is increased by the synergy with neighbouring retail schemes. Suitable for customers travelling by car, customised for occasional, purpose shopping.

Traditional retail parks (5,000–9,999 sqm gla): typical retail parks with large parking lots and entrances to units directly from the outside. Varied and wide offers dedicated to purpose shopping. Located along main roads and convenient for customers travelling by car. In small towns, they are often the only large-scale modern location that offers chain store brands.

Convenience centres (2,000–4,999 sqm gla): the smallest retail format, which mainly serves the immediate neighbourhood. Due to their gla, the offer is limited but fulfils basic, everyday needs. Located along major arterial routes or in densely populated residential areas. For the purposes of this report, only convenience centres operating in the retail park layout (direct external entrances to premises and a lack of common spaces) have been considered.