At the end of Q1, approximately 550,000 sqm of shopping centre space with completion dates by 2018 remained under construction. In the market, we still observe the processes of repositioning the older retail schemes by their modernization, extension and renovation. Stores are also modernized by their tenants.

In the period from January to March this year, beyond the pre-lease agreements in projects which are currently under construction, the transactions in existing shopping centres were noted especially in such sectors as groceries, fashion, also sport and recreation.

"High activity in the first quarter was observed in the food sector. The closing of Alma supermarket chain has resulted in the expansion of other competing brands which have occupied the space previously reserved by the operator. Examples of such transactions include: Carrefour in Galeria Olimp and in Aura centre in Olsztyn, Intermarche in Galeria Młociny and Piotr i Paweł in Klif,” said Katarzyna Michnikowska, Associate Director, Research and Consultancy, Colliers International.

The average vacancy rate for the 18 largest Polish cities remains at a low level of about 3.5%. The lowest vacancies are recorded in Warsaw, while the highest are in Radom.

Supply

In Q1 2017, new parts of two extended shopping centres were completed – Auchan Hetmańska in Białystok and Outlet Park Szczecin. Since January of 2017, Galeria Graffica (currently Outlet Graffica) has changed its retail offer: as a result of conducted recommercialization the project will turn into the first outlet centre in the region.

Demand

In Q1 2017, several retail chains debuted in Poland, including Trespass (the first regular store in Blue City in Warsaw) and Freya (in Poznań‘s Stary Browar). However, brands such as Kipling and Stenders decided to withdraw their stores from the Polish market.

Transactions which are worth mentioning among lease agreements announced at the beginning of the year: P&C (4,000 sqm) in Wroclavia shopping centre, Van Graaf (3,250 sqm) in Forum Gdańsk, Zara (3,500 sqm) in Kraków’s Serenada, Intermarche (2,610 sqm) in Galeria Młociny in Warsaw, TK Maxx (2,400 sqm) in Atrium Biała in Białystok and Carrefour (2,200 sqm) in Galeria Olimp in Lublin.

Polish retail chains are still an attractive investment product. The sales agreement of Żabka Polska between Mid Europa Partners and CVC Capital Partners was signed in Q1 of this year (approximately 4,500 grocery stores in Poland).

Vacancy rate

The closing of Alma supermarkets and Praktiker DIY stores caused a temporary vacancy increase in several shopping centres in Q4 2016/Q1 2017. However, that space is quickly absorbed by other supermarket (Carrefour, Intermarche, Piotr i Paweł) and DIY chains (Leroy Merlin).

Prognosis

At the end of Q1 2017, over 550,000 sqm of new retail space were under construction, 55% of which is planned to be delivered to the market between April and December this year.

The largest retail projects that are currently under construction are: Galeria Młociny (70,000 sqm), Wroclavia (64,000 sqm), Galeria Północna in Warsaw (64,000 sqm) and Forum Gdańsk (62,000 sqm).

 

The most interesting projects planned to be delivered to the market by 2018-2019 include IKEA Zabrze (65,000 sqm), Nowa Stacja Pruszków (27,000 sqm), Silesia Outlet (20,000 sqm) and extensions of Janki Shopping Centre (20,000 sqm) and Fort Wola (IKEA store).

 

A few retail chain debuts in the Polish market are announced for 2017, of which Iconix Brand Group is worth mentioning.