In the first half of the year, developers delivered 215,000 sq m of new retail space, with six international brands making their debuts in Poland.
The first half of the year saw the market grow by 215,000 sq m of modern retail space. The biggest highlight during this time was the eagerly anticipated opening of Galeria Młociny in Warsaw. The 78,500 sq m project is the largest completion of 2019 and the biggest shopping centre delivered to the market since Posnania in 2016. We expect that approximately 278,000 sq m across all retail formats will be delivered to the market in the second half of the year, although the completion of some developments may be put back until 2020.
Joanna Tomczyk, Senior Research Analyst, JLL
The shopping centre environment is becoming increasingly saturated. Coupled with the changing habits of increasingly demanding consumers, this means there is a greater need to properly analyse the economic viability of each new scheme, and to take an innovative approach towards design, functional concept and tenant mix. It is also worth noting that maturing consumers have increasingly higher expectations for the shopping experience and selection of brands on offer. Fulfilling these needs will be supported by the debuts of international brands on the Polish market, which will diversify the existing stock of retail real estate.
Edyta Potera, Head of Retail Landlord Representation Services, JLL
Demand – new brands enter Poland, more debuts on the horizon
Rents and vacancy rates
The retail market in Poland is becoming increasingly saturated and tenant favourable. Owners of shopping centres note the rapidly changing environment. They often compete for valued brands by going to great lengths, and retailers have a large choice of locations and facilities. At the moment, rent-free periods and design contributions are the most popular incentives offered by shopping centres to key brands.
Edyta Potera, Head of Retail Landlord Representation Services, JLL
Investment market
At the beginning of July 2019, the overall retail investment volume transacted in Poland was around 730 million EUR. This result is lower than that of the corresponding period of 2018, but we should note that the Polish economy is growing strongly, the unemployment rate is at a historical low, and retail sales are increasing in well performing retail schemes. Therefore, in the long-term, we expect investor demand will rebound for well performing retail properties.
Agnieszka Kołat, Director, Retail Investment CEE, JLL
