Warsaw retail market – towards services and entertainment
According to JLL, retail stock in Warsaw totals 1.76 million sqm. Important trend is increasing investor interest in mixed-use objects. More in the report.
By the end of 2017, total retail stock in the Warsaw Agglomeration amounted to 1.76 million sq m, of which shopping centres accounted for 1.2 million sq m. Other formats include retail parks (276,000 sq m), standalone retail objects (212,000 sq m) and outlet centers (57,000 sq m). Approximately 85,000 sq m of space was delivered to the Warsaw retail market last year with the largest completed object being Galeria Północna (64,000 sq m). Furthermore, the saturation level in the shopping centre format totaled 472 sq m / 1,000 inhabitants and was the third lowest rate among the eight major metropolitan areas nationwide.
"Over 198,000 sq m of retail space currently under construction should be delivered to market in 2018-2019. 151,000 sq m of this volume consists of shopping centres. A noticeable trend is increasing investor interest in mixed-use objects. Example of projects developed in this format include EC Powiśle, Browary Warszawskie or Centrum Praskie Koneser", explains Joanna Tomczyk, Research Analyst, JLL.
The largest retail investments under development in the Warsaw Agglomeration:
|Project||Developer / Investor||GLA (sq m)|
|Galeria Młociny||Echo Investment/ Echo Polska Properties||76,000|
|Nowa Stacja in Pruszków||ECC||26,800|
|Centrum Janki (extension)||Cromwell Property Group||21,000|
|Centrum Praskie Koneser||BBI Development/ Liebrecht & wooD||21,000|
|EC Powiśle||White Star Real Estate/ Tristan Capital Partners||15,500|
Source: JLL, Q4 2017
"Last year Warsaw saw the Polish market debuts of 11 foreign brands. Among them was the American brand, Victoria's Secret, with its full range available in Arkadia. Hamley's, the British toy store, opened in Galeria Północna along with Russian fashion brands from the Melon Group - Zarina and Love Republic. Furthermore, Carpisa, the Italian handbag and accessory manufacturer, made its debut in Galeria Wileńska while the American pizzeria, Papa John's, opened on Kijowska Street", adds Joanna Tomczyk.
Expanding the portfolio is just one of the measures that retail landlords undertake in order to diversify their proposition, which in turn increases customer satisfaction.
"Warsaw retail centers are seeing a steady increase in their gastronomic range which provides great opportunities for further development. This goes in line with the changing functionality of retail projects, which have broadened their appeal beyond the basic shopping experience. We can say that we are witnessing the transformation of shopping centers into meeting centers. Therefore, owners of such objects often focus on expanding the entertainment offer by providing customers with amenities such as cinemas, educational zones for children, mini golf courses, climbing walls, riddle rooms and even libraries. This is the case with Blue City which will open a cinema later this year", explains Anna Wysocka, Head of Retail Agency at JLL.
Prime shopping centre rents, which are based on units of 100 sq m earmarked for fashion and accessories and located in the best performing assets, average out at between €110 and €130 / sq m / month.