Retail space in Poland increased by 12 facilities, occupying 107.4 thousand sqm in Q1 2023. The total already stands at 13.5 million sqm, according to a CBRE report. The new space is dominated by retail parks of up to 10,000 sqm, which account for two-thirds of all completed facilities, but there was also no shortage of larger projects such as the revamped Fort Wola and Promenada galleries in Warsaw. There is still 362.3 thousand sqm of retail space under construction, which will mainly populate smaller towns.
Among tenants, non-food discounters are the fastest growing. Multifunctional facilities are also developing, creating gathering places where shopping is one of the functionalities, it was stated.
“Prices are rising, resulting in a 1.9% year-on-year decline in retail sales in the first two months of 2023, according to the CSO. Despite this, the country’s retail market continues to grow. Developers’ attention continues to focus on retail parks in smaller cities, where two-thirds of all new space was built in the first quarter of this year. At the same time, the segment of multifunctional facilities, where shopping plays a complementary role, which fit into the concept of a 15-minute city, is growing. The trend is to combine historic, revitalized space with new urban fabric, as exemplified by the renovation of Ulrich Gardens near Wola Park. As part of sustainable development, commercial buildings are increasingly being tailored to the life of the local community and activities are taking place there for the benefit of people in need and the environment,” CBRE’s head of the retail sector Magdalena Frątczak said.
According to the CBRE report, the supply of retail space in small cities (less than 100,000 residents) already accounts for a quarter of the total and continues to grow. At the end of the first quarter of this year, 362,300 sqm of new space was under construction, most of which (71%) is retail parks. More than half of this space (55%) will populate smaller towns. The categories of tenants with the fastest growth are non-food discounters, such as Pepco, Tedi, Dealz and Action, and grocery chains.
“The expansion of the offer in retail parks to include discount grocery and non-grocery makes it even easier for consumers to fulfill their various needs in one place. It also makes it easier to shop more economically. This is a good development direction for the coming months, given that the challenges facing the retail market are mainly high inflation, rising energy prices, declining purchasing power and deteriorating consumer sentiment,” Frątczak said.
CBRE also pointed out that two new brands have appeared in Poland since the beginning of the year, they are Ukrainian Master Burger and British Lush. Changing consumer habits have meant that we can see a growing interest in shopping streets. The number of tenants opening stores on them is growing. As a result, the vacancy rate is declining, and rents have returned to pre-pandemic amounts. In the best shopping centers in Warsaw, one has to pay about €100-130 per square meter per month, and in other major cities in Poland about €40-60 per square meter per month. In retail parks, on the other hand, rents reach €9-12 per sq. m. per month.
Source: CBRE and ISBnews
