The largest projects in Poland underway include the mixed-use complex Fabryka Norblina in Warsaw. Credit: JTI
Feature | Studies & Reports

Poland: A review of historic months

Almost 90,000 sq m of new retail space was delivered to Polish market in the second quarter of 2020. Footfall amounted to approximately 80% of last year’s due to the pandemic.

Cushman & Wakefield has summarized the months from April to June on the Polish retail market. Nearly 90,000 sq m of retail space came on stream across all formats in in this period in the country. In the first half of 2020, new supply amounted to 65,000 sq m, of which nearly 40% was delivered through openings in cities with less than 100,000 residents. Newly built schemes were sized under 20,000 sq m as the retail market has reached maturity and saturation. 

More than 420,000 sq m of retail space is currently under construction and scheduled for delivery in 2020 and 2021. The largest projects underway include the mixed-use complex Fabryka Norblina in Warsaw, the Karuzela shopping center in Kołobrzeg, and the Color Park shopping center in Nowy Targ. Half of the development pipeline will be delivered in smaller cities with a population below 100,000.

“We will continue to see smaller convenience centers and small retail parks being added to the existing retail stock. The average size of all projects under construction is 12,000 sq m. The pandemic is also likely to accelerate decisions to remodel, upgrade, or repurpose shopping centers that were underperforming before the outbreak,”commented Katarzyna Lipka, Head of Consulting & Research, Cushman & Wakefield.

And what about prime shopping center rents? They held firm before the pandemic, with a slight upward trend. Warsaw retained the top spot with prime rents for a 100 sq m unit in its best-in-class malls at EUR 120-130/sq m/month. Rents stood at EUR 40-52/sq m/month for similar units in other major cities. “Due to the outbreak of the pandemic, many shopping center tenants renegotiated lease conditions, showing more caution in execution of long-term leases. Signs have started to emerge that tenants expect temporary rent discounts (until the end of 2020) of around 20% for units in malls, which will require a lease renewal for another 12 to 18 months on average,” said Małgorzata Dziubińska, Associate Director, Cushman & Wakefield.

Share of online sales down from 9.1% in May to 7.7% in June

The data from the Polish Council of Shopping Centres (PRCH) shows that footfall in shopping centers which were reopened on May 4, 2020 has been rising steadily ever since, accounting for 80% to 87% of last year’s footfall in the week from July 13 to 19. According to the PRCH Turnover Index, retail sales were down in May 2020 by 33% year-on-year in large malls (sized 40,000-plus sq m) and by 26% in smaller retail schemes. The steepest year-on-year falls in turnover were reported in entertainment (-97%) and services (-86%).

Ever since shopping centers were reopened in May, the share of online sales in total retail sales has been falling steadily. It stood at 7.7% in June compared with 9.1% a month earlier and 5% to 6% before the pandemic. Falls were reported, among others, by retailers in the following categories: “textiles, fashion and footwear” (down to 19.5% from 26.8% a month earlier), “press, books and other sales in specialized stores” (down to 21.8% from 25.2%), and “furniture, electronics and household goods” (down to 14.1% from 15.6%). Meanwhile, total retail sales were down in June 2020 by 1.3% year-on-year, but up by 8.4% compared to May 2020.

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