Retail market became mature and saturated

One of key trends characterizing the Polish retail property market includes retail space saturation in large cities, according to Cushman & Wakefield. The growth of the retail sector in Poland, which will make a strong presence at the MAPIC trade show in Cannes in November, is notable, but challenges remain for both developers and tenants.

„In the past 25 years Poland witnessed a rapid growth of the retail property market and implementation of good solutions that had proved successful in Western countries. Many projects completed across the country provide access to products and services that were previously unavailable on the Polish market. As a result of activities of developers, tenants and city authorities Poland now has a mature and saturated retail market. Retail space saturation is particularly high in most regional cities and a large number of small and medium-sized cities” – commented Marek Noetzel, partner and head of retail department at Cushman & Wakefield.

As a result of growing retail space saturation, particularly in large-scale retail schemes, tenants are gaining an increasingly strong position, the C&W expert says. Customers are moving away from older shopping centers to modern centers with attractive offers. Owners of older retail schemes may find it very difficult to keep rents stable unless they change the format of, extend or thoroughly refurbish their properties. Many owners are already making such changes. In Katowice, the example includes Silesia City Center, which was extended in 2011, and now revamps approximately 100 retail units.

„In addition to the growing number of shopping centers, there are also new formats coming onto the market, targeting customers of large-scale retail schemes. On the one hand, with the revitalization of city centers there is renewed interest in high streets which offer both a unique atmosphere and an excellent location. Following major investments, Nowy Świat St. in Warsaw, 3 Maja St. in Katowice and Floriańska St. in Kraków have claimed back their former splendour and attract inhabitants with services and branded stores. On the other hand, convenience centers which are located close to housing estates serve a complementary function, offering mainly basic services and staple products” – Marek Noetzel added.

The Polish retail market has undergone many changes in recent years. Customers now enjoy a more interesting choice of locations in which to do shopping comfortably, in line with their lifestyles and pace of life, and the multitude of retail formats is just the market’s response to consumer needs, according to Cushman & Wakefield.

According to Colliers International’s data, there are six major shopping centers in Katowice: 3 Stawy, Auchan Reńców, Belg, Dąbrówka, Galeria Katowicka, Silesia City Center and Supersam. In the longer term only one spectacular retail project (Echo Investment’s shopping center) is expected to be launched in Katowice.

Echo Investment and BNP Paribas Real Estate Poland will host a discussion panel dedicated to the current condition of the Polish retail sector entitled Polish Your Retail. The meeting will be held at MAPIC (18th to 20th of November), the largest and most important commercial real estate sector event in the world. Apart from a presentation of the Echo’s retail scheme, an analysis of the retail market in Poland’s 8 largest agglomerations – including Katowice – will be unveiled to participants.