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The Warsaw Voice » Real Estate » October 1, 2010
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Time of Stability
October 1, 2010   
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Modern retail space is plentiful in Poland’s largest cities, and no high-profile shopping malls are expected to open in the near future.

Several large shopping centers were completed in the country last year. These included the 91,000-square-meter Bonarka in the southern city of Cracow, 52,000-sq-m Malta in the western city of Poznań, and 48,000-sq-m Galeria Jurajska in the southern city of Częstochowa. These projects were started before the international financial crisis began. In recent years, Poland’s largest cities have become relatively saturated with modern retail space.

Ikea and Victoria
Poland has 7.8 million sq m of modern retail space, according to data by real estate services company Colliers International. Around 221,000 sq m of new space was put on the market in the first half of this year, compared with 340,000 sq m a year earlier.

The second part of the Ikea Port ŁódĽ center in the central city of ŁódĽ was the largest project completed in the first half of the year. It opened in the spring and covers 67,000 sq m. The Ikea store in the center opened in the fall of 2009. Ikea Port ŁódĽ has a total rentable space of 100,000 sq m. It is located on Pabianicka Street on the outskirts of the city. There are around 200 shopping outlets in the center, a parking lot and an underground garage for 4,500 cars.

Around 250,000 sq m of retail space is scheduled for completion in the second half of the year—almost 90 percent of it in smaller cities. The largest project is Galeria Victoria, which is due to open in the southern city of Wałbrzych in October. With 43,000 sq m of space, it will be the first modern shopping, service and entertainment center in the city and the region as a whole. It will be supplemented with hotel and residential functions. Galeria Victoria will also be the city’s first shopping center with a multi-screen cinema—Cinema City. The center is located on a 10-hectare site at the intersection of 1 Maja and Skarżyska streets in the center of Wałbrzych along national road no. 367 leading to the Polish-Czech border crossing at Golińsk. Among the tenants in the two-level retail complex will be a 4,800-sq-m Carrefour hypermarket. A unique feature of the complex is an amphitheater where open-air concerts are planned in summer and a skating rink in winter. The developer is Keen Property Partners Retail.

Shortage of Retail Space in Warsaw
There is room for new shopping malls in Warsaw. Since the launch of the Złote Tarasy center at the beginning of 2007 Warsaw has not seen any large openings of retail space. But there are districts in the city where large housing estates have been built in recent years, with thousands of people moving in. Residents of Białołęka, Wilanów, Ursynów, Rembertów and Wawer need new stores.

The GTC and Polnord companies have formed a joint venture to build a modern shopping center on a 7.5-hectare site in the Wilanów district. The center will have 60,000 sq m of rentable space and its opening is scheduled for 2013. The total cost of the project, including the site, is estimated at 170 million euros. Its value after completion is estimated at 250 million euros.

The center will cater for the shopping needs of customers in the Wilanów and Sadyba districts and the nearby town of Konstancin-Jeziorna.

Few Openings in 2011
There will be even fewer shopping center openings next year. The Neinver company plans to open a factory outlet combined with a conventional shopping mall near the southern city of Cracow. The project, called Futura Park Kraków, will be located in the village of Modlniczka along the A4 freeway. The complex will cover 42,000 sq m. The Factory Kraków center, which will be built as part of Futura Park Kraków, will be the first factory outlet in the Małopolska province and Neinver’s largest facility of this kind in Poland. With a retail space of 22,000 sq m, there will be around 120 stores in the factory outlet. The outlet will be on the upper floor of the two-level complex. The 20,000-sq-m shopping mall will be on the ground floor. The center will include a parking garage for 1,400 vehicles.

Magdalena Fabijańczuk


ommentary: Vying for a Slice of the Retail Pie
Grzegorz Mroczek, director for space lease at Caelum Development:

Just five years ago there were few places in Poland, even in the largest cities, where competition on the retail market was strong. In the last few years the market has expanded rapidly. A shopping mall developer has to choose at the planning stage what features are supposed to make the mall more attractive to customers compared with the competition.

To beat the competition, developers usually try to build a larger mall, with more and better tenants, with a strong entertainment function and added value, for example a large playground for children or a skating rink. They also try to give their retail premises distinctive architectural features (...).

Competing projects should avoid offering the same services. Instead, they should go for something new and unique for the consumer. If a rival shopping mall has a cinema and bowling alley, there is no point in offering the same as this would only generate operating problems for both competitors. A much better idea in such a case is to arrange a fitness club.

Cross-marketing, with which we have very good experience, is another instrument used to encourage consumers to use services offered by a shopping mall. For example, if a customer spends, say, zl.20 in a restaurant in the mall, he or she is offered free admission to the mall’s cinema or bowling alley.

To sum up, the shopping mall market in a specific location is a single pie. In many cases, local markets need a longer time to be able to absorb new retail projects when these are put on the market. Shopping centers are learning how to fight for every zloty spent by the consumer in order to gain a larger market share. We may expect increased activity in this area in the coming years.


Commentary: Warsaw Waiting for New Shopping Malls

Małgorzata Trzaskowska, retail space department director at Colliers International:

Developers believe that Warsaw still has potential for the development of new retail premises. The fast expansion of the city means that demand for retail space is growing in some districts, including Wilanów, Ursynów, Tarchomin, Białołęka and Wawer. Consumers in these districts have to travel a long distance to a large shopping center if, for example, they want to buy food for the whole week and additionally visit other stores in the center.

Developers’ recent activity in these districts—for example preparations for the Miasteczko Wilanów project and the expansion of the Tesco store in the Kabaty neighborhood—prove that there really is demand in these districts for more retail space. The opening of Miasteczko Wilanów will certainly be good news for residents of Wilanów, Powsin and Konstancin-Jeziorna. So far these consumers have usually done their shopping at Sadyba Best Mall, but when the new center opens they will no longer need to travel that far. The new mall, with a wider range of retail and service outlets, is also certain to better meet their expectations. Residents of Ursynów are also waiting for a new large and modern facility bringing together well-known and liked brands. Several new retail premises have been built in the district recently, but they are relatively small and cater for the needs of people living in their immediate neighborhood.

As the amount of retail space per capita is relatively low in Warsaw, at around 830 sq m per 1,000 population, it may be expected that new modern retail facilities will be developed in the city in the near future. These will certainly be premises of various kinds—both modern shopping malls of the latest generation, such as Miasteczko Wilanów, and factory outlets like Factory Outlet Annopol planned by Neinver.

The new premises will also be varied in character, size and positioning, depending on the size of the site, infrastructure and transportation in the area.
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