The total area of the 13 outlet centers currently operating in the Polish market is now more than 213,000 sq m. Over the next few years, the market will grow with the addition of new ones in the capital and Bydgoszcz. Additionally, experts at BNP Paribas Real Estate Poland have name Rzeszów and Silesia as the new locations with a large potential for growth in this particular market.
“Shopping at outlet centers enjoys unflagging popularity. In the coming years, we are expecting to see an increase in interest in this type of format, in particular on the side of middle-income residents of large agglomerations. On the one hand, this will be the result of the gradually-growing wealth of the middle class, but it will also result from the increasingly diverse range of products offered by outlet centers. They are steadily evolving towards the traditional shopping center format, where the leisure and entertainment zones are an important element,” stressed Anna Staniszewska, Head of Research and Consultancy, BNP Paribas Real Estate Poland.
Higher vacancy rate
The authors of the report entitled “Always in. The Outlet Center Market in Poland,” draw the attention to the appropriate representation of this format in large agglomerations and emphasize the growing potential held by these schemes in medium-sized cities. In the opinion of analysts at BNP Paribas Real Estate Poland, the vacancy rate in the newly-launched outlet centers will be higher than in traditional shopping centers. Over the medium term, however, the number of unleased units will decrease. Additionally, investor appetite is set to grow.
“Outlet centers are a relatively new product on the domestic investment market, but they are one that is attracting more and more interest, in particular as regards premium-quality schemes. Investment in outlet centers presents an interesting alternative to the more demanding traditional shopping center market,” commented Mateusz Skubiszewski, Director, Capital Markets, BNP Paribas Real Estate Poland.
More entertainment services
Outlet centers, usually located on the outskirts or outside of the boundaries of large cities, offer their customers sizeable parking areas and transit using their own means of dedicated public transport. The authors of the report state that the common feature of locations for this retail format is their catchment area of a minimum of 2 million residents within a distance that can be covered within a travel time by car not longer than 1.5 hours. The range of goods offered by this type of scheme is mainly based on end-of-line products. Clothing shops have the greatest presence there, followed closely by leather accessories and boutiques offering beauty products and perfumes. The one feature that makes outlet centers different from traditional shopping centers is the limited range of entertainment services and the small number of restaurants and cafés as well as the poor representation of shops selling electronic goods and home furnishings. This should soon change.
According to the report, over the medium and long term, this particular retail format should be become more similar to traditional shopping centers. This will be the result of adjusting the offer to the needs of families in respect of entertainment, restaurant, and café zones. Additionally, the analysis shows that the average time dedicated by customers to shopping in outlet centers tends to be longer than the amount of time they spend in traditional shopping centers and amounts to approximately 1.5 hours.