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News Release

Warsaw

Wide or unique. The retail offer dilemma

JLL investigates the attractiveness and uniqueness of both the Polish retail market in general and the retail attractiveness of particular cities in terms of the range of brands on offer  


JLL, the international advisory company, has published a report "Wide or unique? The retail offer dilemma". It is the first such analysis of the commercial real estate market in Poland which, using new methodology, identifies the uniqueness of individual projects and the attractiveness of certain cities in terms of the range of brands on offer.

Poland's shopping centre market has been growing continuously since the 1990s. At the end of Q1 2015, there were 384 modern shopping centres operating across the country, with a total leasable floor space of nearly nine million sq m. In cities with a population of more than 100,000 people (analyzed in the report) there are currently 278 operational centres offering 7.3 million sq m of space.

Anna Wysocka, Head of Retail Agency at JLL, says: "Centres differ in terms of location, size, age, market positioning, and capture power, with a key differentiator for a particular asset being its tenant mix. Therefore as well as location, a combination of such attributes as the number of popular brands trading, their market positioning against the catchment area profile, and the uniqueness of what it offers on a particular market make a retail centre perform successfully. The retail profile of a city is the sum of the offers from all the centres within a particular city. Just as each retail project can be subject to analysis, so one can also analyse the attractiveness of entire cities for shoppers in terms of the range of brands on offer and positioning."

Methodology – 60 key brands determine retail offer attractiveness

In order to investigate the retail attractiveness of both cities and their respective retail projects, a base basket of 60 brands was created. The basket includes retailers from the following retail categories: fashion, shoes, kids and maternity, household goods, multimedia, and health & beauty. All of the selected brands are regarded as key tenants. Each retailer has been assigned to one of three positioning categories (20 brands in each category). An average positioning of cities and shopping centres, was checked.

Anna Bartoszewicz-Wnuk, Head of Research and Consulting at JLL, says: "The only city in which all 60 analysed brands operate is Warsaw, which also has the highest market positioning. Among the cities with populations in excess of 400,000 residents, the widest range of brands is in the Tri-City market, with the highest market positioning being a feature of Poznań. In slightly smaller cities i.e. those with populations between 200,000 and 399,000 residents, the largest number of base basket brands operate in Lublin, with the highest market positioning to be found in Białystok. The broadest spectrum of analysed brands within the cities of 100,000 to 199,000 residents is in Rzeszów, which also has the highest market positioning."

As a city's retail attractiveness is determined by the range of brands found in shopping centres trading on the local market, the survey also analyses retail assets. As opposed to cities, the attractiveness of shopping centres takes into account not only the number of popular brands, but also the uniqueness of what they offer. In order to arrive at an adequate indicator, the attractiveness coefficient was used. This indicator identifies and promotes assets with brands which are not present anywhere else in a given city or are present only in a limited number of competing centres. Similarly to cities, the retail positioning of shopping centres, operating in all cities under consideration, was also taken into account.

 "It is important to note that the analysis of attractiveness and uniqueness has only regard to the retail offer of shopping centres trading on local markets. Other parameters of performance such as footfall, alignment with the target group, and achievable turnover levels are not part of this survey", explains Jan Jakub Zombirt, Associate Director, Research and Consulting, JLL.​

Uniqueness of the retail offer in selected cities of various sizes

Warsaw

The city's three large shopping centres (Galeria Mokotów, Arkadia and Złote Tarasy) have the widest and most unique range of brands in Warsaw. They are also characterised by fairly similar market positioning, although Galeria Mokotów's positioning is markedly higher. Interestingly, three other assets (Blue City, Atrium Promenada and Klif) feature a similar attractiveness in terms of the brands on offer, although their market positioning are somewhat different. The remaining projects in Warsaw can be described as comparable, both in terms of market segmentation and uniqueness of the range of brands on offer.

Kraków

In Kraków, Galeria Krakowska possess the most unique spectrum of brands. Despite being smaller than Bonarka City Centre, the project offers the same number of base basket brands. However, thanks to the presence of retailers such as Hugo Boss and Tommy Hilfiger, which do not operate regular stores in other shopping centres in the city, the range of Galeria Krakowska is more unique. It also has the highest market positioning although high attractiveness is also a feature of Bonarka City Centre. As a result, the ranges of both these assets could be described as somewhat complementary. In terms of attractiveness, third place is taken by Galeria Kazimierz.

Lublin

Among the centres in Lublin, the most attractive and unique range of brands are to be found in Lublin Plaza and Atrium Felicity. However, due to the presence of a number of premium brands, it is the former which has the higher market positioning. Both centres account for some 65% of the base basket brands on offer in Lublin. The price proposition of Tarasy Zamkowe, which opened earlier this year, is similar to that of Atrium Felicity, although its range of available chains and their uniqueness is considerably lower.

Rzeszów

"Rzeszow stands out in our analysis – it is positioned higher, and the presence of the analyzed brands is higher than in cities of a similar size. The shopping centres in Rzeszów feature similar market positioning to those located in larger cities. When compared to those of a similar size, one can perceive it as being relatively high. The broadest, most unique and highest level of brand range can be found at Galeria Rzeszów", lists Jan Zombirt.

Conclusions

"The attractiveness and uniqueness of shopping centres is one of the key factors that influences their perception by customers, who expect that each centre will offer a slightly different brand mix. Although the pool of retailers operating on the Polish market is growing year-on-year, in numerous cases the spectrum of brands offered by retail centres located in one city is generally the same. Thus, the attractiveness of a given project is attributable to the combinations of two factors: the broad spectrum of brands and their uniqueness on a particular market, adds Anna Wysocka.

"Thanks to the methodology adopted by JLL, which takes into account not only the number of brands trading but also their unique presence, this survey has enabled us to diversify projects in analysed cities. Until now, there has been no such analytical tool to compare operating centers and cities in terms of their retail offer. The adopted methodology is an effective tool when evaluating a competitive environment and market positioning of assets, particularly useful when creating an optimal tenant mix", summarizes Anna Bartoszewicz-Wnuk.​