Retail parks and convenience centres in Poland 2022
Retail market is maintaining its momentum and retail parks are stock expansion leaders.
Retail parks and convenience centres emerged as the most resilient retail sector during the COVID-19 pandemic, with customers putting importance on quick and efficient shopping. In today’s challenging economic conditions this trend is continuing, since essential goods and value shopping are needed, which are the key product categories for retail parks. Thanks to their local character, retail parks perfectly fit the new reality, addressing the issue of limited mobility, with consumers spending more time at home and in their neighbourhood.
The number of investors which would like to have retail parks in their portfolio is growing steadily, companies specializing in this type of project are intensifying their operations and announcing additional projects in smaller towns, and retailers are following. The mix of tenants operating in retail parks depends on the size and character of the particular scheme. Traditional retail parks and convenience centres meet the every-day needs of the customers living in the immediate vicinity of the development. Therefore they are home to retailers with basic offerings, very often from the off-price segment.
Research from a number of different sources has shown that in terms of key metrics, such as rents, yields, vacancy rates, capital values and footfall, retail parks have proven to be resilient and have performed better than other retail formats. The retail industry is facing many challenges, such as the outbreak of war in Ukraine, interrupted supply chains, fluctuations in the availability of employees, rising inflation and operational costs, and changing consumer habits. The pandemic had also a significant impact on the functioning of economic entities. Fluctuating construction costs, as well as increases in minimum wages and electricity costs, are pushing many developers to search for cheaper construction options. Smaller retail formats, such as retail parks and convenience centres, are a perfect solution. This is followed by demand from retailers that are ready to expand in this type of schemes in smaller markets.
The Polish retail market remains attractive to retailers, a fact which is confirmed by the number of new international chains entering the market, as well as those already present looking for expansion opportunities. 66% of the retail space provided by developers in H1 2022 was delivered in retail parks and convenience centres. With some 38 million potential customers, Poland remains the leader in the CEE region and still attracts attention of numerous international investors, developers and retailers.