“Last year, investors mostly focused on the development and modernisation of existing shopping centres, having identified a need to adapt them to the changing reality and expectations of potential clients. Trends already present in the main agglomerations of the country, have reached regional cities: sport and recreational areas, a well-developed gastronomy offer, as well as solutions to raise the level of customers’ comfort when shopping,” said Katarzyna Michnikowska, Associate Director, Research and Consultancy, Colliers International.

Lublin – the most retail city

Currently, one shopping centre in the regional cities supports on average 33,000 potential customers (the most in Częstochowa and Toruń, the least in Rzeszów and Lublin). Lublin boasts the largest number of facilities – with its IKEA Skende Shopping (57,500 sqm) and 14 shopping centres. It has the highest retail space density, and the vacancy rate is at a medium level of 4.6 %. The city in second place in terms of number of shopping centres is Bydgoszcz with 10 retail sites. Third place is taken by two cities – Białystok and Rzeszów – both with 9 facilities. The smallest retail market is Olsztyn with 121,000 sqm across 5 projects.

Flexible lease contracts

Market practice, also in regional cities, is becoming more flexible in terms of leases. Strategic tenants for a centre are being offered incentive packages, including: participation in fitout costs, leases based only on turnover, shorter rental periods and temporary reductions and freezing of service charge costs. When it comes to contracts, landlords are increasingly taking into consideration the position of a tenant in the market. New legal regulations introduced in Poland last year, including the gradually implemented Sunday trading ban, may bring changes in lease conditions in the near future.

The lowest rates are in Radom and Częstochowa, which fluctuate around EUR 24-26 sqm/month. The most expensive city among all those surveyed is Bydgoszcz, where for 100-150 sqm for the fashion sector in a prime shopping centre the cost is around EUR 28-30 sqm/month.

Domination of modernisation and extensions

In 2017, approximately 65,600 sqm of shopping centre space was delivered to the market. Still, one of the most visible trends were expansions and modernisations of existing centres. Auchan Hetmańska in Białystok was modernised, where along with an increase in area of 6,000 sqm, a chillout zone, a co-working space, a multimedia corner and a playground were opened. Sfera in Bielsko-Biała, Galeria Jurajska in Częstochowa and Plaza Rzeszów were also extended and modernised.

“The medium-term forecast for development activity in regional cities is that it will remain moderate and mainly include modernisations, extensions and small convenience shopping centres. At  the  beginning of 2018, approximately 33,000 sqm of retail space was under construction in these locations,” adds Katarzyna Michnikowska, Director in the Consulting and Market Research Department of Colliers International.

Not only shopping

Following the model of the largest agglomerations, entertainment and leisure concepts are beginning to appear temporarily or permanently in shopping centres in regional cities to add variety to their offer. In the past year, for example, a karting track (1,400 sqm) was opened in Białystok Outlet Center, and a temporary LEGO exhibition (1,500 sqm) was organised in Outlet Center Lublin. The  offer of shopping centres in regional cities is also being enriched with nontypical functions – the Bydgoszcz Art Center (320 sqm) opened in Focus Mall in Bydgoszcz, which will run exhibitions  and educational activities in historical interiors.

Changes are also visible in the gastronomy sector.

“Fast-changing consumer habits mean that the trend to eat out has also reached regional cities. First and foremost, it is an opportunity for the faster development of café chains in these locations – for example Starbucks in Bydgoszcz and Costa Coffee in Olsztyn,” adds Katarzyna Michnikowska.

[1] Białystok, Bielsko-Biała, Bydgoszcz, Częstochowa, Kielce, Lublin, Olsztyn, Radom, Rzeszów, Toruń