Despite the pandemic triumph of e-commerce, customers are not giving up on shopping in brick-and-mortar shops. Brands wanting to benefit from the synergy of these channels implement innovative formats and compete for customers' attention with technology and environmentally friendly products. However, retail parks and convenience centres[1] continue to enjoy popularity among investors and developers.
- Retail is well on the road to recovery with customers returning to brick-and-mortar shops. 2021 saw a marked rebound in the clothing and footwear sector.
- The popularity of online shopping, whose share in total sales volume exceeded 11% in November, is not showing any signs of waning.
- Retail chains are looking for ways to attract customers with new retail formats and strategies incorporating ESG.
- Fewer and fewer shopping centres are being developed - as much as 51% of the space currently under construction will be in retail parks.
The retail market in 2021 was mainly characterised by the shift of retail formats towards an omnichannel solution. Major companies’ new strategies focused on developing online and offline channels to work in tandem with each other. There has also been an increase in the flexibility of both landlords and retailers seeking to adapt their offerings as quickly as possible to new shopping habits and evolving customer expectations,
comments Anna Wysocka Head of Retail Agency, JLL.
Another important phenomenon that has irreversibly changed retailing is the rise in customers’ environmental awareness. Today, the plans of most brands assume the inclusion of ESG-compliant activities. This manifests itself in a variety of ways, such as: introducing eco-friendly fashion collections, promoting activities and behaviours related to the closed-circle economy, promoting the re-use of products and creating special shopping platforms, such as the increasingly popular Vinted application. We can see campaigns that reflect ESG values from such well-known brands as IKEA, Zalando, H&M and 4F. It is also worth mentioning that ESG strategies are also increasingly important for real estate owners of retail space,
adds Anna Wysocka, expert at JLL.
The popularity of smaller retail formats is increasing
The largest projects completed last year included IKEA in Szczecin (29,000 sqm of GLA), Mozaika in Kraków (25,400 sqm of GLA) and Galeria Andrychów (24,000 sqm of GLA). Poland’s total stock of modern retail space (formats above 2,000 sqm) now totals 16.4 million sqm of GLA,
explains Joanna Tomczyk, Senior Research Analyst, JLL.
Retail parks and convenience centres on investors' radar
In 2021, the retail segment saw a transaction volume of nearly EUR 1 billion, up more than 40% on 2020’s EUR 704 million. Apart from the smaller formats, which are consistently popular with investors, there were also the first sales of large shopping centres since the outbreak of the pandemic. These primarily involved properties that allow higher returns to be generated by adding value or were opportunistic transactions in centres with high residual value. The largest transaction in 2021 was the sale of M1 Marki in Warsaw by Chariot Top Group to Redefine. Portfolio transactions in 2021 included the sale of Pradera Central European Fund’s three shopping centres (Pasaż Łódzki, Galeria nad Jeziorem and CH Osowa) and WP Carey’s purchase of a seven OBI DIY store portfolio,
comments Agnieszka Kołat, Executive Director, Retail Investment, JLL.
[1] A facility dedicated to everyday, quick shopping on the way to/from home, located mainly on roads with high traffic volumes or in residential areas. It is the smallest retail format (GLA between 2,000 sqm and 4,999 sqm).
[2] A coherently designed, planned, and managed scheme comprising mainly medium to large-sized specialized shops, mostly without common areas, with an entrance directly from the car park, a minimum GLA of 5,000 sqm and a minimum number of two shops.
[3] Purpose-built, stand-alone retail warehouse offering household goods, electronics or DIY products, or a hypermarket store. The GLA of such a scheme is ≥ 5,000 sqm.
