We use cookies to make sure our website better meets your expectations.
You can adjust your web browser's settings to stop accepting cookies. For further information, read our cookie policy.
SEARCH
IN Warsaw
Exchange Rates
Warsaw Stock Exchange - Indices
The Warsaw Voice » Real Estate » February 25, 2011
RETAIL MARKET
You have to be logged in to use the ReadSpeaker utility and listen to a text. It's free-of-charge. Just log in to the site or register if you are not registered user yet.
Mood Improves
February 25, 2011   
Article's tools:
Print

Poland’s retail market will see an increased supply of space and new investment projects this year, analysts say.

According to the Property Times 2010 report by real estate services company DTZ, in 2010 developers delivered 550,000 square meters of retail space to the market. This marked a 57-percent decrease from 2009. DTZ predicts that this year the situation will improve and anywhere from 770,000 to 790,000 sq m of new retail space will be completed. According to analysts, business sentiment has improved markedly among retailers and financial institutions providing funds for projects in the retail space sector.

Analysts from real estate services company Colliers International say developers are increasingly active. According to Małgorzata Trzaskowska, retail space department director at Colliers International, a much larger number of new projects than a year ago is now entering the construction phase. Colliers International data shows that at the end of September last year, Poland had a total of 7.86 million square meters of modern retail space. In the third quarter of last year, several projects with a combined area of 56,300 sq m were completed. The total supply of modern retail space in Poland’s eight largest cities is 5.13 million square meters; no new shopping center was completed in these cities in the third quarter of 2010.

Medium-sized and small cities have a total of 2.73 million square meters of retail space today, with several new large projects completed recently. In October, the two-level Victoria mall opened in the southwestern city of Wałbrzych. The shopping complex is home to about 100 clothing stores, an Intermarché Super supermarket, and an electronics store, in addition to service outlets, restaurants and a modern Cinema City multiplex with seven screens. The developer of the complex is Keen Property Partners Retail. The Victoria mall is the first modern retail, service and entertainment center in Wałbrzych and the region. It was built on a 10-hectare lot in the center of Wałbrzych. In the future, a hotel and a residential section will be built there. The entertainment section of the mall (with an area of 2,300 sq m) includes the seven-screen Cinema City multiplex (with three screens adapted for watching movies in 3D), the Kinderplaneta play area for children, and 13 restaurants, eateries and cafes. There are 1,390 parking spaces for customers above and under the ground. An additional attraction is an open-air amphitheater accessible to the general public. In the summer, it will host outdoor concerts, and in winter an ice skating rink will be organized there. The project will cost more than 95 million euros together with the planned residential and hotel sections.

In November, the Agora Bytom mall opened in the southern city of Bytom. The over 90-million-euro facility is the largest investment project of this kind in Bytom. Agora Bytom was built by Danish developer Braaten+Pedersen plus Partners and Norwegian company Borgestad. The investors’ aim was to build a multifunctional facility in Bytom, referring to the history of the city and harmoniously melding into its architecture. The facility was also seen as an important part of the economic development of the region. The region’s property market has markedly revived recently. The city of Bytom sold many residential buildings around Agora over two years, and many private properties are being renovated.

Agora Bytom was built over two years on a plot of almost 11,000 sq m. This five-level mall with an area of 57,000 sq m combines shopping with entertainment and cultural functions. In addition to cultural venues, around 65 stores are currently available to customers representing sectors such as clothing, shoes, sportswear, cosmetics and electronics. There is also a modern entertainment center called Fantasy Park, cafes and restaurants, parking for 820 cars, as well as Cinema City, the most modern movie theater in Bytom. The general contractor was Erbud SA, while EMCM Poland manages the property.

Projects on hold due to crisis
According to Colliers International, the low supply of new retail space is due to the economic crisis, which has led to a significant decrease in the number of retail projects under construction. At the same time, the situation is clearly improving, Colliers International says. In 2009, work to build around 365,000 sq m of retail space got under way, while in 2010 almost 650,000 sq m of such space was under construction. Among the largest investment projects scheduled to be completed by the end of this year is Millenium Hall in Rzeszów and the Galeria Kaskada mall in Szczecin.

The retail investment market has already seen an upturn. According to real estate services company Jones Lang LaSalle, European retail real estate investment volumes reached 20.6 billion euros last year, an increase of 68 percent over 2009. In 2010, Poland ranked 5th in Europe in terms of the value of market transactions—677 million euros worth of transactions were made in the last quarter of the year. One of the largest deals in 2010 in Poland was the sale of the Promenada shopping center in Warsaw by Carpathian PLC to Atrium European Real Estate for nearly 170 million euros.

“In 2010, we observed considerable interest among investors in commercial products and many transactions were finalized,” says Agata Sekuła, Head of Retail Investment Central Europe at Jones Lang LaSalle. “Poland was the favorite market in Central Europe. In addition to many purely investment transactions such as the sale of the Promenada, Arkadia and Warszawa Wileńska shopping malls in Warsaw, the Ferio center in Konin, the Jantar center in Słupsk, and the Galeria Malta mall in Poznań, investors were also interested in more complex transaction structures such as forward funding and joint ventures involving projects by developers, for which there was completely no demand in 2009.”

Tenants are still cautious about leasing commercial space, but they are far less likely to decide against expanding on the market. One example is the opening of new premises by the Tchibo company in Wrocław and Warsaw, the Starbucks company in the capital and Cracow and the first store of the TK Maxx chain in Warsaw. Rents in the most attractively located shopping centers in major urban centers have remained stable over the past few months. In Warsaw, rents for retail space range from 65 to 80 euros per sq m per month for premises with an area of around 100 square meters. In the best shopping centers, rents reach 90 euros per sq m per month. In other cities, rents are up to half lower. Tenants can expect developers to be more flexible in the case of retail premises that opened during the crisis and do not have enough customers.

According to analysts at Colliers International, developers are increasingly active on the market. Far more new projects are now entering the construction phase than in the same period of 2009. This is expected to translate into an increased supply of retail space in 2012 and 2013. Since most tenants have the greatest difficulties behind them, it can be expected that demand for such space will remain at a stable level. Premises in the best shopping centers are expected to remain the most popular among tenants, and rents should not change much in the coming months, experts say.

Planned openings
According to the Retailnet.pl website, several dozen new shopping centers will be built from scratch in Poland in 2011. The first of the planned centers will become operational in the second quarter of the year. Facilities in four major Polish cities will be completed. In the second quarter of this year, the CH Revia Park mall is scheduled to open in Zamo¶ć. The investor and general contractor is the Uniwers sp. z o.o. company, while ARS Retail Solutions is responsible for leases. The mall is being built on a lot of around 25,000 sq m. The construction project is combined with the development of retail facilities on the plot. Tenants will be provided with 8,000 sq m of space, which will be home to 75 stores and service outlets, including restaurants.

In the third quarter, Focus Park is scheduled to open in Jelenia Góra. The investor in this facility is the British-owned Parkridge Retail Poland company. The total area of Focus Park will exceed 40,000 sq m. Of this, more than 16,000 sq m is earmarked for rental. The Blue Ocean Investment Group agency is in charge of finding tenants. At the end of the year, Galeria Veneda in Łomża and Galeria Olimpia in Bełchatów are scheduled to open. The investor behind both projects is Echo Investment SA. Łomża’s Galeria Veneda will be home to 80 stores with a combined retail area of 16,000 sq m, in addition to a food court and 650 parking spaces. Bełchatów’s Galeria Olimpia will be 33,000 sq m in area, including 31,000 sq m set aside for retail outlets. The mall will have two floors, a cinema, supermarket and 900 car parking spaces.

One of the largest shopping centers to be completed this year is Galeria Słoneczna in Radom. The facility is part of the Centrum Słoneczne project, which also comprises a housing estate, a water park, an ice skating rink and a skate park, an open-air amphitheater, and a play area for children. The project will provide 42,000 sq m of space for tenants and house around 170 stores, boutiques, restaurants and service outlets. The investor and developer is AIG/Lincoln Polska. The opening is planned for this spring.

In the middle of the year, the Stara Tkalnia project is scheduled to be completed in Piotrków Trybunalski. The shopping center will be housed in a renovated factory. It will provide 10,500 sq m of space and be home to 80 stores. Customers will be provided with 300 parking spaces. The investor behind the project is the TMR company, while the GPC company is responsible for finding tenants for the mall. Another center that will open in 2011 is Galeria Kaskada in Szczecin. It will provide 43,000 sq m of retail space and house around 140 stores, restaurants and service outlets. The total area is 110,000 sq m. The developer for the Szczecin center is ECE Projektmanagement Polska, and the general contractor is Strabag Polska. The total value of the investment project will exceed 180 million euros.

In October, Galeria Ostrovia in Ostrów Wielkopolski will open. This will be a one-story building with a total area of 42,000 sq m. Two parallel shopping and services passages will be created in the center, in addition to a hypermarket, a DIY market, a store stocking household appliances and consumer electronics, and a food court with restaurants and cafes. The investor behind Galeria Ostrovia is the West Investment company, part of the Saller group.

Shopping center with aquapark
Entertainment and recreation complexes are often built to accompany large shopping centers. Some of these comprise water parks, which are increasingly popular in Poland. At present there are 130 water parks nationwide, and a further 20 are under construction. The example of the Wrocław Water Park shows that water parks can be good business. The Wrocław Water Park managed to increase its revenues by 40 percent over a year and a half. In 2008, when the facility opened, its revenue amounted to zl.15 million, followed by zl.21 million a year later. Through the end of October last year, the park attracted more than 2.8 million visitors. Every month, the Wrocław pool complex is visited by around 86,000 customers, a record figure among Polish facilities of this kind.

Water parks in other cities have no reason to complain either. The number of visitors is growing at a rate of 20 to 30 percent a year, which attracts new investors. Over the next two to three years the number of water parks in Poland is expected to increase by about 20. In the near future water parks in Kalisz and Słupsk will be completed. The country’s largest water park is under construction in Poznań. It will cost zl.300 million to build.

Some of the water parks work with hotels, which is already the norm in the West. Under 5 percent of Poland’s more than 1,800 hotels have a water park; the rest have either no room or money for such a project, so a deal with an existing water park is an ideal arrangement for hotels. The Water Park in Cracow, for example, has decided to enlist new customers in such a way. Today, the park works with more than 50 hotels and hostels. Meanwhile, water parks are increasingly deciding to build hotels in the vicinity—so that guests can come to the pool in a bathrobe. The Wrocław Water Park plans to build a hotel with 200 beds that will have at least three stars.
© The Warsaw Voice 2010-2018
E-mail Marketing Powered by SARE