Cushman & Wakefield has summarised the situation on the Polish retail market. The opening of 2024 is encouraging and new retail space supply in the coming months is likely to match or even surpass last year’s total. The Polish market continues to attract interest from new brands, borne out by several debuts. More arrivals are expected to follow amid improving retail sales, rising shopping centre footfall and turnover levels as inflation is weakening.
Supply: A good first quarter
2024 got off to a good start with 82,000 sqm of GLA, delivered in the three months to March. The first quarter of 2024 saw six new retail park openings - these included OTO Park in Koszalin with an area of 38,000 sqm, the largest retail park completed since 2013. All the other retail parks were smaller than 8,000 sqm. In addition, approximately 12,000 sqm of new retail space was delivered through five extensions. New supply also included the redevelopment of Wysockiego Retail Park in Białystok and the refurbishment of Galeria Sieradzka.
"Poland’s combined retail stock stands at approximately 16.3 million sqm. The outlook for 2024 remains positive as the development pipeline suggests that new supply is likely to match or surpass 2023’s total. Shopping centres account for 18% of the stock underway, while retail parks with a 76% share in the pipeline continue to dominate the Polish development market”, comments Ewa Derlatka-Chilewicz, Head of Research, Cushman & Wakefield.
At the end of the first quarter of 2024 there was approximately 400,000 sq m of GLA under construction. Of that total, around 310,000 sqm will be delivered through new retail projects, with the remaining 90,000 sqm expected to come on stream through extensions and redevelopments. The largest projects under construction include the Nowa Sukcesja Shopping Centre in Łódź (35,000 sqm) and retail parks: Silwana in Gorzów Wielkopolski (26,000 sqm) and BIG Ostróda (25,000 sqm).
Demand: Five new brands enter Poland
In the first quarter of 2024, five brands debuted in Poland - these included Jack & Jones, House of Diamond, Kamalion, Made by Society, and Hesburger. During the first three months of the year, only one retailer withdrew from the Polish market: the Dutch brand Hunkemöller.
Retail sales: A rebound after a very weak 2023
According to data published by Statistics Poland (GUS), retail sales in constant prices improved significantly during the first quarter of 2024, growing by 3% in January and 6.1% in February.
Analysis of retail sales for February 2024 has revealed that only two out of the eight retail categories listed experienced falls year-on-year. Textiles, clothing and footwear - products that are particularly important to shopping centres - saw retail sales fall by 21.5% year-on-year, while figures for furniture, radio, TV and household appliances showed a slump in sales of 5.2%. By contrast, the strongest growth was recorded for motor vehicles, motorbikes and spare parts (+26.6%) and others (+23.0%). In February 2024, Poland’s online penetration rate stood at 8.6% and remained largely unchanged year-on-year. The best online performers were multimedia, fashion, furniture, radio, tv and household appliances,” comments Ewelina Staruch, Market Analyst, Cushman & Wakefield.
Footfall and turnover: Statistics show that shopping centres remain popular retail destinations attracting big spenders
"The average footfall for shopping centres and retail parks in Q1 2024 was approximately 420,000 customers per retail scheme, a significant improvement over previous years. The footfall index was up by 17.1% year-on-year and by 5.5% when compared with 2022. The strongest month was March 2024 with approximately 455,000 visitors on average,” adds Ewelina Staruch.
Average financial inflows of shopping centre tenants for the first quarter of 2024 are relatively close to last year’s.
"Net nominal turnover averaged PLN 972 per square metre in January 2024, a year-on-year increase of 4.3%, before falling slightly to PLN 849 per square metre in February. Importantly, with inflation slowing, real turnover was no longer in negative territory of several per cent. In addition, consumer sentiment remained resilient compared to previous months, boding well for the whole retail market,” explains Ewelina Staruch.
Rents: Retail parks are seeing the strongest rental growth
All three retail formats - shopping centres, retail parks and high streets - posted average year-on-year rental growth.
"Retail parks reported the strongest rise of 13.5%. Meanwhile, prime shopping centre and high street rents increased by approximately 11% year-on-year. The relatively strong rental growth at the beginning of 2024 was driven by annual rent indexation translating into higher rates in new leases,” comments Paulina Bauer, Head of Retail Asset Services, Cushman & Wakefield.
