High streets may become alternative to shopping centres in pandemic

The revival of trade on Poland’s high streets is a perennial theme, which is now being discussed because of the pandemic. Paradoxically, the uncertainty that tenants are now facing may direct their attention towards alternative locations. These include streets that have not been prohibited from trading, and which therefore ensure continuity of operations. However, to make them more attractive it would be necessary to simplify tender procedures, create a coherent strategy, and establish close cooperation between the city and private owners. 

Covid-19 revealed the financial condition of many brands and service outlets, with some, unfortunately, unable to survive. This set of circumstances can also be applied to tenants operating on high streets. However, there is one "but".

“There is still a large number of companies on the market which were in more than good shape before the appearance of Covid-19 and had considerable cash reserves. These companies are now looking for an opportunity to take over premises that offer more attractive rental rates than before March last year. Therefore, we can expect over time that some of the vacated premises will be occupied by new tenants. However, this is a drawn-out process, as the process of leasing premises on high streets is much more challenging compared to other commercial facilities, such as shopping centers or office buildings,” Anna Wdowiak, Senior Consultant at Retail Agency, JLL, explained.

Complicated tender procedures and bidding contests, or complex ownership structures are factors that have discouraged many tenants from considering locations, for example, on one of Warsaw’s main thoroughfares.

“Tenants, especially companies with large networks, expect that the process of obtaining high street locations to be easier and the property owners themselves to be flexible in negotiations. Having overcome such challenges, retail chains will look to apply the same high street policy in Warsaw that they have already adopted in other foreign markets. One ought to remember that large, well-known brands will be followed by customers, and this, in turn, will attract more companies to a particular location,” Anna Wdowiak added.

(WBJ)