Retail stock to grow by 5.5%

There is more than 793,000 sqm of retail space under construction, of which nearly 50 percent are located in cities with more than 300,000 citizens, according to the "Poland Retail Market" report compiled by Savills World Research. This year will see 5.5 percent growth in retail stock. As much as 92 percent of retail space under construction is located in shopping centers. "Development of retail space in Poland will outpace retail sales growth of 3.5% which may lead to an increase in vacancy rates and some decreases in turnover across the country," Tomasz Buras, Head of the Polish branch of Savills, was quoted in the report. Additionally, due to the fact that hypermarket operators are reducing their units in existing schemes and are leasing smaller units in under construction and planned projects, additional retail space needs to be commercialized. The report indicates that retail space provision in Poland stands now at 263 sqm per 1,000 inhabitants, while vacancy rate is relatively stable at 3-4 percent. Rental rates in the best shopping centers in Poland are rather stable with the highest rates available in Warsaw (€80 - 95 per sqm/month) with those in other cities being at half the price level. According to Savills, mixed-use projects (urban projects with significant retail element) will gain momentum in the next few years.