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Continued tenant and developer interest, low vacancy rate, one of the lowest shopping density ratios among Poland agglomerations further illustrate development potential of Warsaw retail market
Warsaw, 7 November 2013 – Jones Lang LaSalle has released its Warsaw City Report Q3 2013. The research spans the office, retail, industrial, hotel and residential market and is supplemented with analyses of investment market and infrastructure. Below are the report's major research findings concerning the retail market in Warsaw.
Anna Wysocka, Head of Retail Agency, Jones Lang LaSalle, commented: “The dynamic development of new residential clusters, coupled with a great improvement of Warsaw's road infrastructure, has helped to create new retail locations. This in turn has generated demand for further retail developments such as Galeria Wilanów and Galeria Białołęka by GTC, which are aimed at enriching a retail offer in a district and improving the inhabitants' quality of life. One of the lowest shopping densities among Polish agglomeration, coupled with Poland's highest purchasing power, are key aspects that are encouraging new projects. Warsaw's retail market attractiveness is also proved by the continued interest of tenants. According to Jones Lang LaSalle's report Retail Destination Europe, Warsaw ranks higher than Stockholm, Lyon or Copenhagen in terms of attractiveness for international retailers. In addition, high street locations, with scheduled revitalization of Three Crosses Square 10/14 and the CEDET building in Aleje Jerozolimskie, are aimed not only at tourists, but also at clients seeking a different shopping experience to the one found in shopping centres are becoming increasingly important. Convenience centres are also gaining traction”.
Stock and supply – Plac Unii City Shopping opensAt the end of October 2013, the modern retail stock in the Warsaw agglomeration reached 1.61 million sq m of GLA. Shopping centre formats total 1.10 million sq m GLA in 36 assets. With a density of 445 sq m / 1,000 inhabitants, Warsaw still ranks low among major agglomerations. According to Jones Lang LaSalle analyses, Wilanów, Białołęka, Tarchomin, Ursynów and Bielany have special potential for shopping centre development. The retail market in the Warsaw agglomeration is also driven by Poland's highest purchasing power in Poland – €9,294 per person per annum. This exceeds the national average by approximately 60%.
The most notable event in Q3 was the opening of Plac Unii City Shopping (15,500 sq m), the first downtown shopping mall since the launch of Złote Tarasy in 2007. This gallery is a component of a large office complex, prominently located in one the most affluent catchment areas in the city. The retail mix, besides a Supersam supermarket that historically operated in this destination, includes leading brands such as Zara, H&M, Massimo Dutti, Smyk and a strong pool of premium fascias, i.e. Marella, Furla, Deni Cler, Manila Grace, LiuJo, Armani Jeans, Chiara and E-go’ – an Italian brand entering Poland. Tendency to extend and remodel existing projects and to refresh their offer still shapes the Warsaw retail landscape. In the analysed period, Galeria Mokotów was extended by 5,000 sq m with Zara and Peek & Cloppenburg now operating larger stores. The food court was enlarged, re-arranged and enriched with new restaurants e.g. VaPiano, Sphinx and Tokyo Sushi. Also, to adapt to the evolving market, some of the existing assets, e.g. Auchan Piaseczno, Centrum Janki, Atrium Promenada, Tesco Kabaty or Wola Park, are planned to be refurbished and extended.
Vacancy rate – tenants’ interest continuesThe available stock is well absorbed by the market. Strong demand for modern retail space in prime centres in Warsaw is keeping the vacancy rate stable at a low level of around 2%. Interestingly, strong interest from tenants has fuelled not only top properties such as Złote Tarasy, Arkadia and the aforementioned Galeria Mokotów, but also other retail schemes. The tenant mix of the Klif centre has been markedly refreshed by the introduction of renowned brands such as COS, Tommy Hilfiger, Napapijri, Tous, Hera, Yes Prestige. There are ongoing works on stores of a Super-Pharm drugstore and H&M, with the latter to house a new concept of H&M Home. Also, Sadyba Best Mall strongly reinforced its position by introducing H&M, Gino Rossi, Celio (first store of this chain in Poland) and a Pure Jatomi fitness club. In Warszawa Wileńska, next to which a station of the second metro line will open in Autumn next year, works continue on improving the offer by introducing new popular operators such as Bershka, Stradivarius, Mohito, Cropp, Parfois and Starbucks. The food court section is also being remodeled. Good quality assets from the retail park sector are capturing tenant demand as well. Targówek Park Handlowy by Inter Ikea enriched the retail offer with TK Maxx and CCC.
Rents slightly upOwing to the re-commercialisation of key retail assets during last year, prime shopping centre rents for a 100 sq m boutique from the fashion category, located prominently in a leading shopping centre, increased slightly by 5% and currently stand at €85 to €100/ sq m/ month. On high streets (including Nowy Świat, Marszałkowska, Chmielna, Mokotowska or Plac Trzech Krzyży -Three Crosses Square), prime rents oscillate between €80 and €95 sq m/ month, subject to location.
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