New openings dominated by shopping parks and a decrease in vacancy rates – the commercial real estate market in Poland is performing well.
The commercial real estate market in Poland increased by another 116,000 sq. meters in the third quarter of 2024. The decrease in the average level of vacancies in retail facilities in the largest Polish cities, as well as an increase in the turnover of tenants, allow the conclusion that the forecasts for the rapid end of shopping malls in Poland were premature. This is the conclusion drawn from the “At A Glance: Modern Trade Market in Poland. Q3 2024” report developed by analysts from BNP Paribas Real Estate Poland.
A Quarter of Large Premises and Greater Turnover
The period from July to September was again a busy time for the Polish commercial real estate sector. In this period, the market was enriched by 116,000 sq. meters of new area in the form of as many as seven new shopping parks, expansion of three shopping parks and one reconstruction of a facility after Tesco. This is the first such quarter in the development of the Polish market, when one format completely dominated the new supply. The market has so far mainly developed based on facilities, the area of which hovered around 10,000 sq. meters, while in this quarter, as many as three large shopping parks were commissioned: BIG Gorzów Wielkopolski (25,000 sq. meters, BIG Shopping Centers), BIG Ostróda (24,000 sq. meters, BIG Shopping Centers/Acteeum Group), and San Park Piaseczno in Mysiadle (18,000 sq. meters, ED SAN III Sancak).
The data collected for the first half of 2024 confirms that the commercial sector in Poland is growing steadily. The 0.3 pp year-on-year decrease in the average level of vacancies in commercial facilities also indicates the good condition of this sector. The decrease in the vacancy rate concerns as many as six of the eight largest Polish cities.
Additionally, it was observed that the turnovers of tenants operating in shopping malls in the first half of 2024 were 4.2% higher compared to the same period last year.
“Increased turnover of tenants indicates that they were clearly higher than the increase in consumer goods and service prices for the entire retail trade, which in the same period was 2.7%. This speaks of the good condition of shopping centers as a sales channel. It means that expert forecasts predicting the rapid end of shopping malls in Poland did not come true,” says Fabrice Paumelle, Director of the Retail Space Department, BNP Paribas Real Estate Poland.
The footfall of shopping malls also witnessed a rise (PRCH Footfall Density Index). In the first half of this year, it was 0.9% higher than in the first half of 2023.
Total Sales Value in Small Shops Increases
In the context of the commercial real estate market in Poland, the situation of small-scale shops (up to 300 sq. meters) is interesting. According to the Polish Chamber of Commerce, in August 2024, the total sales value in such stores was 4.9% higher than the previous year, although the number of transactions decreased by more than 2%. During this period, customers of small stores paid an average of PLN 24.89 for purchases, an increase of 7% compared to last year. The average number of packages in the basket is four pieces, indicating an increase of 2% year-on-year.
“The higher value of baskets is a result of rising prices – almost all product categories have significantly increased year-on-year, but we can see that the increases from month to month are no longer as large as in 2022. Although Poles declare their willingness to shop in small stores, research shows that we usually make small purchases in such outlets, and for those over PLN 100, we choose to go to large stores – most often to discount stores. The reason here are lower product prices and promotions, which are crucial for Polish consumers,” points out Klaudia Okoń, Senior Consultant, Business Intelligence Hub & Consultancy, BNP Paribas Real Estate Poland.
Traditional Shopping vs Digital Shopping
The “Scale of Omnichannel Behaviours in Retail Facilities” study conducted jointly by GFK research agency and the Polish Shopping Centre Council shows that shopping centres and parks remain one of the main shopping channels for customers. The main reason individuals visit Polish shopping centres are for traditional purchases, as indicated by as many as 88.5% of respondents. Another 10% represent visits combining traditional shopping with omnichannel behaviours, and only 1.5% of visits are exclusively related to omnichannel behaviours.
The Generation Z stands out against this backdrop – a generation which treats the digital world as an integral part of daily life. Traditional marketing strategies seem to be ineffective in this target group. Young consumers expect fast, intuitive shopping experiences integrated into their lives. Generation Z increasingly uses TikTok instead of Google for information and products. This change requires rethinking SEO strategies to include brand visibility on social media platforms. Generation Z also prefers mobile shopping and the use of modern technologies such as shopping apps and NFC payments, with word-of-mouth being the most important for them. Moreover, the social impact of Generation Z, which is entering with strong beliefs about environmental protection and sustainable development, will put stronger pressure on retailers and FMCG companies, forcing them to better understand the environmental consequences for consumers.
New Features in the Polish Retail Market
The development of the commercial sector in Poland is also indicated by various new technological solutions and expansions of both major and new entities. An example is the expansion of the InPost Group, a leader in logistic solutions for the e-commerce industry in Europe, which opened the largest logistics centre in Poland in Wola Bykowska – near Warsaw and Łódź. At the target 36,000 sq. meters, as many as 85,000 packages per hour will be handled. Also, Żabka presented strong development plans for the next five years, planning to open 4,500 new stores, with the aim to have as many as 19,500 stores throughout Poland.
On the other hand, Zalando is introducing an AI-based assistant in Poland, and is also adding Warsaw, along with three new cities, to Trend Spotter, a fashion inspiration tool available on other markets. In addition, UNIQLO is opening its permanent store in Poland. It will be located on Marszałkowska Street in Warsaw, in the Wars Sawa Junior complex. The pop-up store opened there two years ago will be converted into a permanent high street format, with a sales area of 1,700 sq. meters.
Source: https://ceo.com.pl/rynek-nieruchomosci-handlowych-w-polsce-ma-sie-dobrze-96685
