Shopping in the regions
Jones Lang LaSalle's latest report, Leading Cities, examines the retail market in seven key locations in the country, including Kraków, Poznań, Wrocław, Szczecin, and Łód, as well as two agglomerations, Silesia and Tri-City.
Kraków consistently attracts investors' attention, thanks to its popularity among tourists and unofficial position as Poland's second capital city. According to the report, total modern retail space in the city is now at 330,000 sqm, with many major chains opening flagship stores in the prime retail areas, such as Rynek and ul. Grodzka, Floriańska and Szewska. Demand is strong, meaning low vacancy rates, with prime shopping center rents clocking in at between EUR 38-40 (zł.148-156) per sqm per month. Prime rents are peaking at EUR 50-75 (zł.195-292).
In the future, Galeria Krakowska will add 60,000 sqm of retail space to the market and Ikea and Auchan are joining forces to develop a combination of hypermarket centers and retail parks.
Łód and Poznań
Łódż, with 774,000 inhabitants, is still the second-largest city in the country. Despite high unemployment and poor wages, the region is giving some indications of an economic recovery. The city has one of the lowest rents of the major Polish cities, with rent on its main high street, ul. Piotrkowska, at EUR 25 (zł.97) per sqm per month. On average, prime retail rent is higher at EUR 36-37 (zł.140-144).
A major new center, Manufaktura, is set to add 109,000 sqm of retail space to the city next year, with an extensive shopping and entertainment offer.
Poznań has a very dynamic retail market, with prime rents reaching EUR 35-38 (zł.136-148) and rents for the top high-street units making as much as EUR 50 (zł.195). Retail space in the city is set to double in the next three to four years, and construction on the second phase of the very popular Stary Browar development has already begun. Ikea is set to expand in the area and a new factory outlet is also planned.
Wrocław and Szczecin
Wrocław also has a strong retail market, with more than 300,000 sqm of retail space already on the market. Prime shopping-center rent is at EUR 35-40 (zl.136-156) per sqm per month, with high-street units making EUR 30-45 (zł.117-175) for the top locations.
Three main retail developments are due on the Wrocław market. In the downtown area Renoma will add 30,000 sqm, and two fringe developments are also nearing completion: Pasaż Grunwaldzki (50,000 sqm) and Arkady (30,000 sqm). Galeria Legnicka is also under development in the Fabryczna district. The first Factory outlet in Lower Silesia is due to open in spring 2006 and will add 10,000 sqm and the third phase of Bielany Park Handlowy is also being developed, which will add a further 10,000 sqm.
With its location close to the German border, there is still a lot of untapped potential in Szczecin. Prime rents are around EUR 37-38 (zł.144-148) per sqm per month with high streets asking just EUR 25 (zł.97). The relative small amount of existing space (total shopping center space is around 120,000 sqm) means many investors have their eye on the western town, and two major developments are in the pipeline.
Agglomerations
The Tri-City agglomeration is one of the wealthier areas in Poland, and its coastal location makes for strong tourist revenues. Total modern retail stock is around 400,000 sqm, with high streets dominated by small tourist-oriented stores, rather than major fashion brands. Shopping-center rents range between EUR 35-37 (zł.136-144) per sqm per month, with prime high-street space available for a surprisingly low EUR 20-30 (zł.78-115) per sqm.
Some 295,000 sqm is currently in the planning stages including three shopping centers in Gdańsk and two major projects in Gdynia.
The Upper Silesia agglomeration has become a popular retail destination in recent years, with Silesia City Center in Katowice the most important development in the region. Katowice is planning to revitalize the city center and create a pedestrian retail zone, which should create major opportunities for retailers. The best units are asking EUR 35-40 (zł.136-156) per sqm per month, with prime retail rents at EUR 32-35 (zł.125-136) and high-street units lower again. Gliwice is currently attracting a lot of attention, who two major developments due there, in the shape of Forum Gliwice and Focus Park.
Laurence Mackin
