Currently, investors are approaching any new projects in Warsaw very cautiously and are redirecting their attention to other cities. Apart from the cities offering opportunities for development: Poznań, Kraków, the Tricity (Gdańsk, Gdynia, Sopot), the Katowice Agglomeration, Łódź or Szczecin, investors are also interested in cities of 100 to 400,000 inhabitants. The latter locations have a development potential especially for operators in food markets. The planned legal changes relating to restricting construction of large-space stores will force the operators to include smaller shops in their portfolios.
Rental rates in Warsaw shopping centres for shops with an area of up to 100m2 fall within EUR 35-50/m2. An exception is, for example, the Złote Tarasy facility, where the rent for some shops may exceed EUR 85/m2. Such expectations of the landlord result from the fact that the centre is similar to a location along a main city street. Rental rates for small areas in Galeria Mokotów or Arkadia exceed the market averages, reaching up to EUR 65/m2. Average rental rates along main shopping streets usually exceed those paid in shopping centres. In the best streets in Warsaw and Kraków, they may even reach EUR 100/m2. In Poznań and Wrocław, the average rates approximate to EUR 45/m2. A different situation can be observed in Katowice, Łódź, Szczecin or the Tricity markets, where the rental rates along the main shopping streets are lower than those paid in shopping centres.
Market trends
The development of the retail market which has continued for several years allows us
to anticipate certain trends for its further change:
- Investors’ interest in the adaptation and modernization of historic facilities (e.g. old factories). Frequently, such investments are carried out in cooperation with city authorities and they function as multi-purposes and not merely for trading (i.e. cultural, exhibition, office and entertainment). More and more importance is attached to a centre’s “packaging”, which becomes one of the factors deciding its attractiveness;
- Drawing developers' attention to locations outside large cities and plans to open shopping centres there with an area of 40-60,000m2;
- Extending the existing suburban centres where large-space stores are located and transforming them into retail parks. Retail parks frequently include shopping centres with similar themes (eg. clothing, DIY, sports) forming independent shopping facilities with regional reach. Currently, Inter Ikea is the major player in the DIY and home decoration segment;
- As part of suburban retail development, factory outlets are gaining popularity;
they are being opened in the vicinity of the largest cities;
- Diversification of the portfolio of large hypermarket operators in order to counteract the negative effects of the large-space retail law.
