Prospects in the provinces
'Poland's Emerging Cities,' a report on the retail sector in selected emerging markets in Poland, was published by Jones Lang LaSalle recently. The report reveals that the most lucrative markets are to be found outside the major Polish cities.
"There was a need to present emerging cities which are registering strong retail development activity and increasing retailers' interest," said Beatrice Mouton, a retail specialist with Jones Lang LaSalle. "We wanted to highlight that, boosted by the strong economic performance of the country, the retail market in Poland is developing further and deeper into the regions, as both the retailers and developers recognize that the population of these smaller cities has a growing disposable income and needs which are waiting to be fulfilled. Therefore, approximately 60 percent of retail development activity is located in these selected eight emerging Polish cities."
Group of eight
The eight cities that were included in the analysis were Bielsko-Biała, Białystok, Bydgoszcz, Gorzów Wielkopolski, Kielce, Lublin, Rzeszów and Rybnik. The selection was dependent on the level of current construction stock - a key indicator of significant construction activity. The selected cities have populations of between 100,000 and 400,000.
LaSalle's report highlights that the retail market in major Polish cities is maturing and, in some case-studies, approaching temporary saturation. It is for this reason that retail developers and investors are refocusing their attention on Poland's second and third-tier towns.
Białystok, with a population of 292,000 people, is the biggest city in the north-eastern part of Poland. It has modern retail stock of 58,000 sqm, leading JLLS to conclude that the town is "clearly undersupplied in retail terms." However, Białystok seems to be fairly well equipped in furniture and home-furnishing stores.
Regional opportunities
With 177,000 people, Bielsko-Biała is the informal capital of the Podbeskidzie region. Modern retail space is roughly 143,000 sqm, with 90,000 sqm in four shopping centers. Modern shopping-center stock in Bielsko is set to grow by 50,000 over the next two years, which will significantly increase the town's shopping-center density.
Bydgoszcz, with 366,000 inhabitants, has modern retail stock of 164,000 sqm, according to JLLS. The densely-populated Fordon district features clear under-supply of modern retail provision, says the report, and the town is enjoying increasing interest from retail developers and chains, with three shopping centers totaling 63,000 sqm under construction.
Gorzów Wielkopolski has a population of 125,000 and is just 45km from the German border. Modern retail supply in the city is estimated at 45,000 sqm. It enjoys healthy retail demand. JLLS says a number of retail developers and DIY operators are looking at Gorzów.
The town and the city
Kielce, 180 km south of Warsaw with a population of 212,000 inhabitants, has experienced dynamic economic growth. Modern retail provision of 108,000 sqm includes only a few shopping schemes. JLLS says several retail developers are pro-actively monitoring the Kielce market, with demand for retail space proving strong.
Lublin has 355,000 inhabitants and retail space of 151,000 sqm. A number of large-scale projects are planned for the city. Demand for modern retail floorspace is strong and Lublin Plaza, currently under construction, is almost 100 percent leased.
Rybnik has a population of 143,000, but modern retail supply is still limited although three major schemes are nearing completion. Rzeszów, with a population of 159,000, is dynamically developing and has a modern retail provision of 104,000 sqm. A number of large-scale retail projects are in the pipeline and demand for modern retail space is strong, demonstrated by the shortage of available units on the city's high streets.
