Room to grow

While the average gross leasable area (GLA) in the European Union is 171 sqm per 1000 people, Poland's GLA comes to just 110 sqm per 1000 people. Considering the amount of new schemes in the pipeline for 2006 and 2007, it will likely not take long for the country to catch up with the EU levels.

According to Cushman & Wakefield, more than 1.1 million sqm of new shopping-center space will be delivered to the Polish retail market in the next two years, which marks a 26-percent increase from January 2006 to December 2007. This ranks Poland sixth on the European list, which is topped by Russia. That country is due to see the largest amount of new shopping-center space introduced to market, with 1.9 million sqm of new prime-quality retail space to be delivered by the end of 2007. "Retail is one of the most dynamic sectors of the Russian economy. [It is] stimulated by the country's strong economic growth - set to reach more than six percent this year - and the development of consumer lending," says Charles Slater, deputy head of retail for Cushman & Wakefield Stiles & Riabokobylko (C&W/S&R), C&W's Russian office.

According to DTZ, a positive economic situation is also stimulating the retail boom in Poland. Growing salaries, household expenditures and retail sales all reflect the increasing spending power of Polish customers, which enables the further expansion of retail chains. "Most new shopping-center developments in Poland are located outside Warsaw, in Poland's seven largest cities, all with populations of more than 400,000. Current schemes due to open this year and next include Forum in Gliwice, Manufaktura in Łódź, Galeria Krakowska in Kraków, Arkady Wrocławskie in Wrocław and Galeria Malta in Poznań. Development activity is also growing in the group of smaller cities with populations of 100,000-400,000 inhabitants," comments Piotr Kaszyński, head of the retail department at C&W in Poland.

According to Kaszyński, the amount and quality of the new schemes create additional investment opportunities in Poland. "The Polish retail investment market proved to be the strongest commercial property sector in 2005. Around 40 retail assets changed ownership in 20 transactions worth a total EUR 1.92 [zł.7.65] billion, a record for the Polish retail market. Looking ahead to 2006 and 2007, we expect similar levels of activity."