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Poland Retail continues to recover

Retail & leisure
Cushman & Wakefield has summarized the situation on the Polish retail market in 2023, which saw heightened development activity, with about 450,000 sqm of new retail space delivered. The Polish retail sector continued to recover, as confirmed by the number of debuts. Meanwhile, the slower price growth bolstered consumer sentiment, leading to higher retail turnover levels.

New retail supply hits its highest in Q4

According to data from Cushman & Wakefield, new retail supply in 2023 comprising new openings and extensions of schemes sized over 5,000 sqm hits 447,000 sqm of GLA. However, the closures of four shopping centres and an outlet centre in Bydgoszcz brought last year’s total down to 343,000 sqm. Retail parks accounted for 80 pct of the new supply, while shopping centres made up only 15 pct.

The highest supply of modern retail space was recorded in Q4, which saw 217,000 sqm of GLA come on stream through 20 new openings, 3 redevelopments and one extension, alongside four refurbishments. This brought Poland’s total retail stock to app. 16.3 mln sqm. It is worth noting that the outlook for 2024 is promising as the development pipeline suggests that new supply is likely to match or even surpass volumes posted in the prior year.
Ewelina Staruch, Retail Market analyst, Cushman & Wakefield

The largest retail completions of Q4 were Ozimska Park in Opole with 17,000 sqm of GLA (the redevelopment of Galeria Ozimska, which used to be anchored by Tesco), N-Park Olkusz (16,000 sqm) Pasaż Kępiński in Baranów (12,000 sqm) and Targowa Retail Park in Przasnysz (12,000 sqm).

At the end of 2023 there was app. 370,000 sqm of retail space under construction in 38 projects scheduled for completion in 2024-25, of which 27 were retail parks. The development pipeline also includes nine extensions, including Sukcesja in Łódź, and two schemes vacated by Tesco in Bytom and Przemyśl which will be repurposed as retail parks.
Ewelina Staruch

The best statistics for new brand debuts in six years

Cushman & Wakefield estimates that 11 new brands entered Poland in Q4 2023. These were Lichi, Moschino Jeans, Herse, Milk Bar, PLNY LALA, Guerlain, OD Store, WMF, Moomin shop, JUST IN CASE, and Mokida. This brought last year’s total number of debuts to 29 – the best result since 2017. In addition, only two retailers withdrew from the Polish market.

October was the only positive growth month in 2023

Statistics for retail sales in constant prices for January-November 2023 published by Statistics Poland (GUS) show that spend across the sector was up by 2.8 pct year-on-year in October - the only positive growth month of last year. The other months of 2023 saw falls, with the largest drop of 7.3 pct recorded in March and April. Retail sales in November were down by 0.3 pct year-on-year, while data for January-November 2023 shows a fall of 2.4 pct year-on-year.

November is a special month for retail on account of Black Friday, which marks the beginning of the several-week long run-up to Christmas. However, analysis of retail sales for November 2023 has revealed that only two retail categories grew year-on-year: motor vehicles, motorbikes and spare parts, with sales up by 11.8 pct year-on-year, and pharmaceuticals, cosmetics and orthopaedic equipment (up by 4.1 pct year-on-year). The biggest slump in business was recorded for furniture, radio, tv and home appliances (-10.1 pct year-on-year), and newspapers and books (-9.1 pct year-on-year).

Meanwhile, in November 2023 the share of e-commerce in overall retail sales hit 11.7 pct, marking the highest level last year.

Strong footfall with turnover after taking account of inflation marginally up compared to 2022

Although the footfall index for shopping centres and retail parks was up in Q4 2023 compared to 2022, it remained below the level recorded in the pre-pandemic year of 2019. The average footfall was 452,000 customers per retail scheme in October 2023, 424,000 in November 2023 and over 520,000 in December 2023, up by 3.7 pct, 1.8 pct and 0.5 pct year-on-year respectively.
Ewa Derlatka-Chilewicz, head of Research, Cushman & Wakefield

Shopping centre tenants tend to post the strongest financial inflows in Q4. Average net turnover exceeded PLN 1,070 per sqm in October, followed by PLN 1,110 per sqm in November.

Nominal turnover rose in October and November by 5 pct and 8 pct year-on-year respectively, but real turnover – taking account of inflation – was down by 1.6 pct year-on-year in October but marginally up by 1 pct in November. This is attributable to the slower price growth and improving consumer sentiment. It is worth emphasizing that real retail sales growth in shopping centres in 2023 for such categories as fashion, footwear, press, books, health and beauty was higher than that for overall retail sales reported by Statistics Poland, which is evidence of a stronger performance of shopping centres compared to the retail market as a whole.
Ewa Derlatka-Chilewicz

Retail parks report the strongest rental growth

All three retail sectors – shopping centres, retail parks and high streets – posted positive average rental growth in 2023.

The strongest year-on-year rise of 12.5 pct was recorded in Q4 2023 for retail parks compared to around 7 pct for shopping centres and high streets. Unfortunately, tenants should brace themselves for further rent increases in early 2024 due to rent indexation and rising service charges.
Paulina Bauer, head of Retail Asset Services, Cushman & Wakefield

The highest vacancy rate of 4.4 pct is in Poznań

As of Q3 2023, the average retail vacancy rate for Poland’s 16 largest cities with a population of over 180,000 was 3.4 pct, with the lowest availability of retail space recorded in Toruń (1.1 pct), Kielce (1.4 pct), Kraków (1.7 pct) and Łódź (1.8 pct).

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