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News Release


Warsaw locations with potential for new retail developments

Wawer, Ursynów and Wola join Białołęka and Wilanów as the most promising locations for new retail projects. Demand for new investments is being driven by growth in purchasing power and dynamic development of the residential market

JLL, GfK Polonia and REAS present their joint research initiative “Warsaw Retail: Mind the Gap!”, which is aimed at identifying those Warsaw sub-regions with the greatest potential for new retail projects. The conclusions are based on the broad analyses of the key factors impacting retail market development - retail space density; the purchasing power of residents in their respective areas; and short to mid- and long- term geographic development perspectives for the residential market in Warsaw.

Anna Bartoszewicz-Wnuk, Head of Research and Consultancy, JLL, said: “This is the second edition of this unique report, first published in 2009. Once again we wanted to look at the Warsaw retail map and define the direction of its future development. During the five years since the release of the first analysis, fundamental changes to Warsaw’s transport and communication system have occurred, including the completion of the Marii Curie-Skłodowskiej bridge, the A2 highway, a large part of the S8 and the western part of S2 ring roads, and the soon-to-be completed central stretch of the second metro line. Whilst all of them were factored into the 2009 report, they are now a reality and new plans are being made for further improvements to the road and transport infrastructure, which will influence the residential and retail markets in Warsaw”.

Retail supply and density in Warsaw- there is room for projects
Stock-wise, the market situation has been fairly stable over the last seven years. Average annual retail completion stood at almost 20,000 sq m. The most recent large (40,000-80,000 sq m GLA) shopping centre (Złote Tarasy) hit the market in 2007, with the last very large centre (greater than 80,000 sq m) opening 10 years ago (Arkadia). This does not imply that the market is stagnating. On the contrary, smaller formats, convenience centres, downtown shopping malls and high streets have registered development. New retail units commenced trading on ground floors of residential and office buildings.

Agnieszka Tarajko-Bąk, Senior Research Analyst, JLL, said: “In order to best estimate the true retail density in Warsaw, we have carefully looked into all modern retail assets with a GLA exceeding 500 sq m, including shopping centres, retail parks, outlets, as well as standalone supermarkets, discount stores, retail space within residential and office buildings, furniture stores, DIY units, and high streets. The analysis showed that when all the formats above 500 sq m are considered, the average retail density for Warsaw stands at 1,151 sq m / 1,000 inhabitants. Włochy, Targówek and Śródmieście are by far the best served areas with regards to retail density, mainly due to the heavy concentration of large retail properties, while Bielany, Rembertów and Żoliborz, come in with the lowest rate”.

Purchasing power – Wawer, Wesoła, Włochy lead the pack
Inhabitants of Warsaw have nearly 80% more financial resources than the average Poland resident (purchasing power of Warsaw household is 40% higher than of average Polish household). At the same time, the differences in the value of the GfK Purchasing Power Index  for households between individual districts of Warsaw can be as high as 40%.

Agnieszka Kowalewska, Project Manager, GfK Polonia, explained: “Between 2005 and 2013, the annual purchasing power of average household in Warsaw doubled to almost 100,000 PLN. There are, however, differences between districts. The most affluent households in Warsaw are situated in Wawer, Wesoła, Włochy, Białołęka and Wilanów, while less affluent districts include Bielany, Targówek and Żoliborz”.

Mokotów has the largest total amount of purchasing power (which is noticeably connected with Mokotów having the largest population of more than 200,000 inhabitants).

Another factor analysed when identifying potential locations for new retail development is the labour market. Wilanów, Ursynów and Białołęka are characterized by the lowest unemployment rate – under 4%.

Residential market in Warsaw – 60 000 new residential units by 2017
Warsaw continues to be Poland’s major residential market. The average annual production of new residential units in the past ten years was around 14,000; the majority of those being flats in multi-family developments.

A key part of the retail analysis is the site catchment area. It is critical to monitor the development of the residential market, both existing and new housing stock. Gradual changes in household structures are also analysed.

Katarzyna Kuniewicz, Director, Market Research, REAS, said: “According to our market forecast, more than 60,000 units shall be completed from 2014 to 2017. The second part of the forecast relates to the period between 2018 and 2025. This forecast is based on the absorption potential of varying areas designated for residential construction in the municipal urban planning strategy, as well as future demographic and economic trends and the projection of the market development. We estimate the number of new residential units to be completed in 2018-2025 at approximately 110,000. The areas of the largest concentration of future residential developments include Białołęka, Wilanów and Wola”.

According to REAS, the areas to have the largest concentrations of future residential developments are, apart from aforementioned Białołęka (in the MSI neighborhood units of Grodzisk around Głębocka Street, Nowodwory and Tarchomin), Wilanów – Błonia Wilanowskie (i.e. Miasteczko Wilanów) and Wola (Odolany), also Bemowo (Chrzanów), Żoliborz (Żoliborz Przemysłowy), Mokotów (Stegny, Służewiec, in the longer term – Siekierki neighbourhood), and in the more distant future Ursus (Szamoty).

Development opportunities in Białołęka, Wilanów, Wawer, Ursynów and Wola
When aspects such as the unemployment rate, purchasing power, residential market development and retail density, are taken into account, the two Warsaw districts of Białołęka and Wilanów clearly look undersupplied in retail terms.

Białołęka is one of the fastest growing districts of Warsaw, with one of the lowest unemployment rates in the capital city (3.7% as of Q4 2013), and relatively strong purchasing power. The young population supports the development of a large-scale hypermarket-anchored shopping centre.

Wilanów is where retail market development is clearly lagging behind the volume of new residential units. The lack of a proper shopping centre is illustrated by the fact that a number of retail units have been opened on the ground floor of residential properties. A combination of low retail space density, strong residential growth and high purchasing power support the development of a large-scale shopping centre that would have the wider catchment area of Konstancin-Jeziorna and Powsin. Wawer could also be included in this catchment area following completion of the southern ring road and provided that no competing centre is developed across the river.

Wawer is the largest of Warsaw’s districts, with a very low retail space density and reasonably strong purchasing power. The area has retail development potential, but, on a scale that is adjusted to the size of the market both in terms of geography and population figures. Also, it must be kept in mind that upon completion of the southern ring road, Wawer itself will be in the catchment area of the planned Galeria Wilanów.

Ursynów can absorb new shopping centre space perhaps as an extension to one of the existing centres. The combination of overall purchasing power, low unemployment and retail density rate indicates further retail potential in this Warsaw district.
Wola is also worth mentioning as it is one of the fastest growing residential districts in Warsaw. Despite Wola being relatively well - equipped with modern retail space, there is potential for new retail projects in Odolany and Czyste due to the development of the residential market there.

Another two districts that have some retail potential are: Bemowo (in new residential clusters), and Bielany. This northern district has the lowest density level but it does not show great potential in terms in terms of new residential investments and purchasing power is limited in comparison to other districts. Nevertheless, the existing retail offer is insufficient for the large pool of people living in the area, and therefore there is space for retail centre in this district.

“Despite the market maturing, we are of the view that Warsaw offers multiple opportunities in terms of further retail development. Dynamic residential growth, an increasing number of inhabitants combined with the country's highest purchasing power will generate demand for new retail projects of various scales and formats. Those investors who will correctly assess potential of a given location, competitive environment, and customers needs, will be successful”, Agnieszka Tarajko – Bąk, summarised.