Shopping spree
This year, Jones Lang Lasalle and Cushman & Wakefield both ranked Poland in the top tier in their rankings of European retail pipeline stock. With approximately 1.9 million sqm planned for delivery in 2007 and 2008, Poland is building on the strength of the retail market.
Poland's retail tradition is based solidly on a heritage of large-scale market sites, evidenced by the strong historical presence of the "Hala" and the "Bazar." Today, developers are coming up with projects that are bigger, more diverse, more convenient and a great deal more attractive than the run-of-the-mill mall in order to meet evolving consumer demand.
The biggest opening so far this year has been Złote Tarasy in Warsaw, followed by the expansion of the Stary Browar complex in Poznań, Galeria Krakowska in Kraków and Wrocław's 30,000 sqm Arkady center. Wrocław is currently gearing up for the opening of the gargantuan Galeria Legnicka this autumn, an investment worth close to zł.400 million.
The future of the metropolis
Warsaw will see retail parks in Targówek and Łomianki, in addition to a newly refurbished Hala Koszyki multi-use complex. However, as the market in the capital approaches saturation and rents rise, other cities will surpass Warsaw's level of space per capita, currently at about 650 sqm per 1,000 residents, according to Colliers.
By the end of next year, Poznań will see the opening of the 153,000 sqm Galeria Malta by Neinver and two smaller-scale projects from Echo and Mobel Walther, respectively. The multi-functional Łacina project from retail giant Apsys, will span 120,000 sqm on the banks of Poznań's Lake Malta in 2010.
Kraków's most-anticipated project is Trigranit's Bonarka City Center. The project, located on the site of a former chemical factory, is expected to resemble Trigranit's very successful 65,000-sqm Silesia City Center in Katowice.
Looking for love in all the small places
While the largest projects will continue to crop up in metropolitan areas, the greatest number of retail developments will take place in smaller cities and towns, which have relatively poor or almost nonexistent retail offers. "Currently the biggest increase in shopping-center space can be observed in cities with between 200,000 and 400,000 residents, and developers are also looking at cities and towns with populations as low as 100,000," observes Dorota Flak, an analyst with King Sturge.
Mayland was among the first major investors so shift its big-city know-how to smaller cities. In addition to its more typical, single-storey shopping-center projects, the company is building a 10-ha Pogoria project in Dàbrów Górniczy.
Parkridge is launching four of its own large-scale (up to 140,000 sqm) Focus Park projects on the sites of refurbished landmarks or industrial sites in the cities of Bydgoszcz, Rybnik, Zielona Góra and Jelenia Góra. Lublin will see the opening of Lublin Plaza and Felicity this year.
Alfa, Galeria Biała and the Galeria Podlaska project from Spirit and Quinlan Private Golub (QPG) are upcoming projects for Białystock. QPG is also collaborating on the Forum Center in Gliwice. Płock, Słupsk, Koszalin, Kielce, Nowy Targ, Opole and Częstochowa are among those cities to see major new shopping centers in the next few years.
The southeast is also seeing some major development. Once it is completed in 2009, Conres' zł.400-million Millenium Hall in Rzeszów will be the biggest retail-entertainment complex in the Podkarpacie region. The investor anticipates a catchment area of 500,000 potential visitors within a 30-minute drive of the center, which will offers a range of shops, restaurants, services, spas, gardens and an auditorium for 4,500 spectators.
Scaling services
As shopping centers grow in size, the products and services they offer are expanding proportionally, creating mini-metropolises of sorts. Patrycja Dzikowska, a senior consultant at Jones Lang LaSalle (JLL), says, "The competition for tenants is much tougher than it was four or five years ago, therefore, shopping centers have to firmly position or even reposition their offers and marketing strategy."
This entails looking to the West for cues. "Shopping centers are following the European trend of the full leisure concept and people are coming to consider these sites as integrated all-day leisure destinations," claims Michael Atwell, head of capital markets at Cushman & Wakefield.
Stephen Pragnell, President of the Polish Council of Shopping Centers, believes "a major trend is the development of urban regeneration through retail. Local authorities are realizing the positive effects of city-center commercial projects to bring new attractions and dynamic growth to their city." He also claims that, "Today, developers are working closely with the community to ensure that their projects become an essential part of the urban infrastructure, a real life-style experience and destination."
Other trends
The Outlet Company and Neinever - developers that offer large-scale discount retail schemes for high-end brands - are among the few firms that are invested in providing a high standard for architecture and upmarket retail. The Outlet Company is currently expanding its Warsaw location - a fully-functional indoor and outdoor replica of the city's Old Town. Other major cities will see more outlet villages on their outskirts.
Another growing retail trend is home improvement centers developed to meet the demand for DIY and home decoration as the number of homeoweners in the country increases. SGI Komfort is planning such projects in Łódź and Szczecin this year and other investors are following suit.
As for the big cities, according to JLL's Dzikowska, "Developers are building smaller convenience-type centers in areas of denser population clusters." Such schemes will provide a variety of services to neighborhood residents.
Pragnell, Dzikowska and Flak all anticipate the arrival of "niche" projects in city centers - attracting a more sophisticated breed of consumer and bringing luxury retailers to Poland's big cities.
