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News Release

Warsaw

Warsaw in anticipation of new retail projects


JLL has summarised 2014 on Warsaw Agglomeration's retail market[1].

Anna Bartoszewicz-Wnuk, Head of Research & Consultancy, JLL, said: "At the end of 2014, the modern retail stock in the Warsaw Agglomeration was 1.62 million sq m, including 1.11 million sq m in the shopping centres. With the highest purchasing power in Poland, exceeding the national average by 68%, Warsaw is the most sought-after location for developers, investors and retailers. High demand for modern shopping centre units in the capital city is reflected by the low vacancy rate. Moreover, the region features one of the lowest shopping centre densities amongst the largest Polish cities - 437 sq m/ 1,000 residents.

The 36 operating shopping centres (1.11 million sq m) in Greater Warsaw are complemented by a number of other projects representing different market formats: five retail parks (total floor space of 260,000 sq m), 23 stand-alone retail warehouses (186,000 sq m) and three outlet centres (50,000 sq m). In 2014, retail space supply was only affected in terms of re-arrangement in Arkadia and Atrium Promenada shopping centres.

Developers' ambitious plans

During Q4, the development process continued on projects undertaken in the suburban areas: Ferio Wawer (12,500 sq m), the first modern shopping centre in the Wawer district, Fabryka Wołomin (30,600 sq m), and Galeria Legionowo (10,500 sq m) in Legionowo. In addition, three other schemes are currently in the development/re-development stage including Hala Koszyki, a mixed-use project designed to combine a shopping gallery (7,500 sq m) and an office component (approx. 13,000 sq m), an extension to Wola Park (17,600 sq m) and an extension to the Factory Ursus outlet centre  (6,000 sq m). Construction works on one new project, MODO domy mody (formerly Centrum Łopuszańska - 16,000 sq m) commenced in Q4. If there are no delays, all these projects will be delivered in 2015.

Some other large schemes that are at a very advanced stage of preparation and development can start later in 2015 or early in 2016. These include: Galeria Północna (64,000 sq m), Auchan Piaseczno (redevelopment and extension to 64,000 sq m), Atrium Promenada (extension by up to 44,000 sq m; of which the first stage will be of 4,000 sq m, H&M, as main anchor tenant, has already been secured) and potentially Galeria Wilanów (61,000 sq m). This would be the GTC second scheme in Warsaw.

Demand

Anna Wysocka, Head of Retail Agency, JLL, said: "International retailers entering the Polish market typically target the best performing retail assets in Warsaw as primary locations for their operations. In Q4 alone, we witnessed a number of market debuts including Kipling, Kiko Milano and Imaginarium in Arkadia, Avon Studio in Złote Tarasy and Calvin Klein Watch & Jewelry concept store on Mysia 3. In previous months, the retail market in Warsaw also gained i.a. Devred 1902 in Wola Park, Undiz, Kiehl's Since 1851, NEO in Arkadia".

Prime rents

Prime rents in Warsaw, which refer to 100 sq m shopping units located in leading retail assets and earmarked for fashion and accessories stores, showed stability in Q4. As of the end of the quarter, these rents ranged between €90 and €105 sq m/ month, however we are observing upward pressure on rents in the best trading assets.

[1] Warsaw Agglomeration is inhabited by 2.54 mln residents and includes the city of Warsaw and the following surrounding municipalities: Pruszków, Piastów, Raszyn, Nadarzyn, Brwinów, Michałowice, Konstancin Jeziorna, Lesznowola, Piaseczno, Błonie, Izabelin, Łomianki, Ożarów Mazowiecki, Stare Babice, Grodzisk Mazowiecki, Milanówek, Podkowa Leśna, Jabłonna, Legionowo, Nieporęt, Halinów, Sulejówek, Kobyłka, Marki, Radzymin, Wołomin, Ząbki, Zielonka, Józefów, Otwock and Wiązowna.