Intelligence

Polish retail market approaches saturation point

The Polish retail market has reached saturation point according to real estate giants CBRE and JLL.

According to a report published by CBRE Poland, the Polish commercial market is already saturated, which points out that there are only two cities in Poland with over 200,000 inhabitants that have space for further development: Toruń and Częstochowa.

In 2018 Poland constructed 435,000 square metres of new retail space, with shopping centres accounting for over 50 per cent of that space. As a result, Poland’s total retail stock now exceeds 14 million square metres, with over 10 million square metres in shopping centres.

“Currently, there is approximately 196,000 square metres of leasable space in the shopping centre format under construction, with delivery dates scheduled for 2019 – this is 40 per cent less than the corresponding period last year,” said Anna Wysocka, head of retail agency at JLL. “This shows that the market for traditional formats is becoming increasingly saturated, while the needs of Polish customers are undergoing major changes. As a consequence, developers and tenants are increasingly drawn to multi-functional projects, such as the Monopolis complex being developed in Łódź or Elektrownia Powiśle in Warsaw. In addition, along with the market’s maturity, shopping centres are expanding their offers so as to include catering and entertainment amenities as well. At the same time, the proportion of food retailers and DIY stores continues to decline.”

According to JLL, retailers were open to stable, but selective expansion throughout the country. Twenty nine new international brands entered the Polish market last year, “a slight increase on 2017, which confirms that Poland is still among the most attractive destinations for retailers.”

“Last year was characterized by the further development of omni-channel retailing,” adds Joanna Tomczyk, research analyst at JLL. “A number of new retail concepts entered the market, most often combining different distribution channels and advanced digital solutions, such as that of the Ikea store in the Blue City shopping centre in Warsaw, whose new concept made its global debut. Mergers and acquisitions proved to be a long-term trend too, such as OBI DIY who took over a number of locations previously occupied by Praktiker stores.”

Despite Poland’s controversial ban on Sunday trading, there was record investment in the retail market in 2018.

“According to our estimates, the value of retail investment transactions concluded in 2018 totalled 2.47 billion euros. This is an all-time record for the Polish retail investment market,” said Marzena Surmacz, financial analyst, capital markets, JLL.

For investors and shopping centres to continue earning despite the Sunday trading ban, experts from the National Board of Gastronomy and Catering (KRGiC) stated in 2018 that, there needs to be a complete change in the way gastronomy is handled in shopping centres, reports InnPoland. According KRGiC experts, shopping centres would need to redesign their layout, so that customers do not have to walk through a desolate retail terrain, in order to get to the services exempt from the ban, such as restaurants and cafes, cinemas, and post offices.

“For us, 2018 was a very interesting year in the retail sector. In the last 12 months, the market saw record-breaking interest amongst investors. On the other hand, the industry faced a considerable challenge due to the act on non-trading Sundays, which negatively affected the footfall in shopping centres, but to a lesser extent than predicted. Interestingly, despite drops in footfall, in general, turnover grew. This year will surely be no less interesting. On the one hand, in 2019 the trading ban will expand – trading will be permitted only on the last Sunday of each month. However, the market will become even more diversified with the introduction of new formats and an expansion of existing offers,” concludes Ms Wysocka.

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