Cushman & Wakefield has released a summary of retail market conditions in Poland. At the end of Q2 2023, there was close to 500,000 sqm of retail space under construction, seven international brands debuted on the Polish market in the three months to June while the expansion of retail parks continued apace. On the other hand, both retail tenants and landlords continued to face high inflation which impacted their real turnover levels.
Supply: new retail space supply hits 136,000 sqm in H1 2023
According to the latest data from Cushman & Wakefield, Poland’s total retail stock stands at just over 16.1 million sqm. Another 300,000 sqm is expected to be delivered by the end of this year.
“Approximately 70,000 sqm was added to the Polish retail market in the second quarter of 2023 through schemes over 5,000 sqm, marking the second lowest quarterly result since 2015. This brought total new supply in the year to date to 136,000 sqm”, comments Ewelina Staruch, Analyst, Consulting & Research, Cushman & Wakefield.
The second quarter saw six new openings, two extensions of existing retail parks and one redevelopment. New retail developments included the Bawełnianka shopping centre and five retail parks: in Bytów, Dzierżoniów, Lublin, Ostrzeszów and Piotrków Trybunalski. In addition, the extensions of two retail parks: Aura Park in Nakło nad Notecią and Nowe Bielawy in Toruń were completed in the three months to June, while the revamped Atrium Promenada shopping centre was reopened in April.
“At the end of June 2023, there was approximately 465,000 sqm of retail space under construction and scheduled for opening in 2023-24. 365,000 sqm will be delivered through 37 new projects, including 30 retail parks. The remaining 100,000 sqm will be added through extensions and redevelopments”, adds Ewelina Staruch.
Extensions underway include six retail parks and two shopping centres (Bonarka City Center and Galeria Wołomin) while redevelopments comprise three schemes vacated by Tesco and Sukcesja in Łódź. In terms of GLA in the pipeline, the largest projects under construction are Koszalin Power Center (38,000 sqm), Nowa Sukcesja in Łódź (35,000 sqm), Karuzela in Biała Podlaska (28,000 sqm) and Gorzów Power Center (26,000 sqm).
Demand: seven new brands enter Poland
The second quarter of 2023 saw more debuts than the first three months of the year, with seven new retailers opening their stores in Poland - these included Woolworth, Hugo, Helly Hansen, Nuumo and Bob Snail. In addition, two pure online retailers (Centrumrowerowe.pl and Engwe E-Bikes) opened their first physical stores.
Footfall and turnover: many customers, nominal turnover up but real turnover down
“The average footfall for shopping centres and retail parks in the second quarter of 2023 was 428,000 per retail scheme, up by 8.6% from the first quarter and 3.0% year-on-year. The average for shopping centres only in the three months to June was up by around 12% year-on-year”, says Ewa Derlatka-Chilewicz, Head of Research, Cushman & Wakefield.
In May 2023, net nominal retail sales in prime retail schemes averaged PLN 1,037 per square metre of floorspace, showing an improvement over previous months and May 2022 (up by 3.8% year-on-year). However, real turnover (taking account of inflation) was down by 9.2% year-on-year. However, preliminary data for June 2023 shows an almost 8% increase in real terms year-on-year.
“Rising prices continue to weigh heavy on shopping centre turnover levels. Retail sales contracted in the second quarter of 2023. The biggest annual slump in business in constant prices in June was recorded for newspapers and books, as well as furniture, radio, tv and household appliances (-14.4%). By contrast, fashion and health & beauty - the two categories which are particularly important for shopping centres - saw retail sales remain unchanged year-on-year versus 2022 but improve by 5.5% and 1.6%, respectively, over the month”, adds Ewa Derlatka-Chilewicz.
Rents: retail parks see positive rental growth
All retail sectors posted positive year-on-year rental growth in the second quarter of 2023.
“There was a marginal uplift in rents over the first quarter for prime units in the best-in-class retail parks. The downturn in the consumer market and lower real turnover levels experienced by tenants are the main drivers behind the downward pressure on non-prime rents”, concludes Paulina Bauer, Head of Asset Services Retail, Cushman & Wakefield.
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