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Retail Boom in Poland: 1.2 Million Square Meters Planned by 2025

REAL ESTATERetail Boom in Poland: 1.2 Million Square Meters Planned by 2025

Between 2023 and 2025, the retail space is expected to grow by over 1.2 million square meters, according to estimates by the Polish Council of Shopping Centres. Interest from investors is growing, with retail parks no longer being exclusive to large cities. Smaller towns are also seeing these investments, with potential in residential estate locations also being noticed. New investors are also entering this segment, highlights Radosław Jodko, an investment expert.

In 2023, the total retail area grew by nearly 440,000 square meters. As per the BNP Paribas report “At a Glance – the modern retail market in Poland”, the fourth quarter of last year turned out to be the best, providing 230,000 square meters of modern retail space.

The Polish Council of Shopping Centres estimates that 110 new retail facilities will be built by 2025, including 98 retail parks, providing a total of over 1.2 million square meters of space.

“The popularity of this type of facility is reflected in the interest of investors. As data from last year shows, in the retail parks sector, the total volume of transactions exceeded 440 million euros. We see a revival in this market segment, as signified by as many as 29 brands debuting, the most since 2017,” enumerates Radosław Jodko, investment expert from RRJ Group.

As he emphasizes, we now see retail parks being established in towns with 10 thousand inhabitants. Jodko believes their successful integration into local communities comes from providing a comfortable shopping model, saving time as multiple tasks can be completed during a shopping trip, alongside offering convenient and comfortable parking.

New Investors in Poland

This year, much like the last, retail parks and convenience-type facilities are attracting investors; in 2023 they generated over 60% of the transaction volume in this sector. “Investors perceive these types of investments as safe, providing a prospect for long-term and steady income,” summarizes Jodko. He continues, “The growth of this segment is also evidenced by new investors interested in the retail segment appearing on our market – from Lithuania, Germany, France, the Czech Republic, and even funds whose capital comes from Ukraine. Also noteworthy is that retail parks are more frequently attracting private investors.”

Expectation of Interest Rate Cuts

What factors build investor confidence in retail park investments? Jodko cites factors such as consumer loyalty to these types of establishments, the emergence of new tenants including services that can be used while shopping, such as medical services. In Jodko’s summation, the pandemic demonstrated consumer ties to retail parks which thrived even in such circumstances. He states that investors are currently seeking safe investment products, while anticipation remains high for expected interest rate cuts in Europe.

In the first quarter of 2024, around 430 thousand square meters of retail space is under construction in various parts of Poland, nearly 80% of which is comprised of investments involving retail parks and small, local shopping centers.

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