Retail parks are increasing their potential in the sector and consolidating their position in the market. The group of investors implementing projects in this format is growing.
“The greatest activity of investors in the retail sector can be observed above all in the segment of retail parks and everyday shopping centres, which results from market demand for small, local convenience store facilities. Retail parks will continue to be the main player in this sector in the coming years, as many areas of the country still lack modern retail. There will be an influx of new tenants and global brands will be keen to enter. Dealz, for example, is planning an expansion calculated to double the number of outlets in Poland. In spring, the German discount chain Woolworth made its debut on our market. New concepts from the Baltic states and Ukraine are also beginning to develop on the Polish market,” says Agata Karolina Lasota, managing director of LBC Invest.
According to the company’s data, approximately 150,000 sq m of retail space was delivered in Poland in the first half of 2023, mainly within retail parks. This is 40 per cent more than in the same period last year. Almost 70 per cent of the new space was provided by debut retail parks, mostly delivered in towns with less than 100,000 inhabitants. In addition, three larger schemes also opened after revitalisation, i.e. Fort Wola (22,000 sq m) and the Atrium Promenada gallery (extension by 12,600 sq m, totaling 63,000 sq m) in Warsaw and Bawełnianka in Bełchatów (33,000 sq m), which had stood empty for years.
Almost half a million metres under construction.
At the middle of this year, almost 470 thousand sq m of retail space remained under construction. More than 30 new retail parks are under construction and several sites are being extended. Work is also underway on the revitalisation of Bonarka City Center and Galeria Wołomin, as well as Sukcesja in Łódź. Further halls are also being redeveloped after Tesco hypermarkets, in Opole, Bytom and Bielsko-Biała.
“Retail parks are one of the most intensively developing segments of the commercial property market in Poland. Investments in this type of project are not as demanding and time-consuming as the construction of large shopping complexes. Their maintenance is also much easier. In addition, contracts concluded with tenants are usually longer than in large centres and are usually already expressed in euros. Sometimes contracts are signed for up to 10 years. Retail parks offer significantly lower rents and service charges than traditional shopping centres, which is why there is no shortage of people willing to locate their business there. Consumers, on the other hand, find them attractive due to the fact that everyday purchases can be done quickly by entering the shops directly from the car park. The popularity of the format is being boosted by catering establishments of well-known chain brands and the increasing number of discount industrial and grocery shops and off-price shops, which allows buyers to save money,” informs Agata Karolina Lasota.
“The scale of realisations in this segment has remained high for several years. There is still room for new facilities, as the saturation of retail space in shopping centres in Poland is still much lower than in Western European countries, currently averaging 330 sq m per 1,000 inhabitants. Investors are still intensively looking for plots for new projects, most often in smaller towns attractively located in terms of transport and land on the outskirts of the largest cities, where new housing estates are being built. The key issue for new developments is to match the format to the location and to select the optimal tenant group, he adds.
There are plans to deliver 300,000 sq m more this year.
The stock of modern retail space in Poland amounts to 16 million sq m. Around 20 per cent of this space is located in retail parks, which are becoming more and more densely scattered throughout Poland. Parks are forming an increasingly extensive network and are opening close to customers. New facilities are growing, both in large and medium-sized cities and in small towns with a population of 10,000, to which they provide an offer previously available only in large cities, where rental rates are incomparably higher.
In the best shopping centres in Warsaw, one has to reckon with rents of EUR 100-130 per sq m per month, while in other, largest cities in Poland rents cost EUR 40-60 per sq m per month. In retail parks, on the other hand, rents are in the range of EUR 9-12/sq m/month.
According to investors’ announcements, by the end of 2023, the country’s retail space market stock is likely to increase by another 300,000 sq m of leasable space. Among the largest schemes remaining under construction are the Koszalin Power Center (38 thousand sq m), Karuzela in Biała Podlaska (28 thousand sq m) and Gorzów Power Center (25 thousand sq m), Nowa Sukcesja in Łódź (22 thousand sq m) and Galeria Goplana in Leszno (15 thousand sq m).
