The growing trend towards demolishing shopping centres is opening up opportunities for new residential and office projects, says BNP Paribas Real Estate Poland in its latest report “Modern Retail Market in Poland”.
Approximately 135,000 sqm of modern retail space was added to Poland’s total stock in the second quarter of 2024, with new supply comprising both new openings and extensions. At the end of June 2024 there was approximately 335,000 sqm of retail space under construction and 110,000 sqm underway in extension and reformatting projects.
The highest retail space saturation rates continue to be seen in Wrocław and Poznań, where they stand at 1,024 sqm and 973 sqm per 1,000 inhabitants respectively, with the lowest in Katowice and Łódź - 723 sqm and 699 sqm per 1,000 inhabitants respectively.
The second quarter of 2024 saw three brands enter the Polish retail market and all the debuts took place in Warsaw. The newcomers were Romanian-owned bakery Luca, which chose Polna Corner as its first location, the Veselka craft bar from Ukraine in the Warsaw Brewery complex and Answear.com, which opened its first brick-and-mortar store in the Norblin Factory.
Retail parks are still in demand
The period from April to June 2024 saw nine new completions, three extensions and three redevelopments. Only one new shopping centre opened in the second quarter of 2024: Galeria Starówka in Leszno. Extensions included Dekada in Grójec and the Nowa Górna retail park in Łódź, which saw 5,000 sqm and 3,000 sqm added respectively. In addition, three buildings vacated by Tesco were redeveloped and replaced by two retail parks in Bytom and one in Piła.
New retail openings were once again dominated by retail parks which were delivered in Jastrzębie-Zdrój, Olsztyn, Świebodzin, Tychy, Zawiercie and Zgorzelec. The second quarter of 2024 also saw three transactions with four retail parks changing hands: two in the Warsaw region (in Łubna and Grodzisk Mazowiecki) and the other two in Kłodzko and Kępno. This asset class continues to be seen as a relatively stable and safe haven.
The mature shopping centre market is evolving
BNP Paribas Real Estate Poland notes that the mature and saturated retail market in Poland continues to evolve. As a result, some shopping centres have already been knocked down in Polish cities, some are scheduled for demolition while the fate of others is hanging in the balance.
“The increase in demolitions has been largely driven by falling turnover and footfall levels or new investment plans of landlords,” says Fabrice Paumelle, Head of Retail, BNP Paribas Real Estate Poland. “Demolition work is underway at the Galeria Malta shopping centre in Poznań - it is likely to be replaced by a housing development. In Wrocław, the demolition of Arkady Wrocławskie is expected to begin this year to make way for a modern office building with living space. Shopping centres will not vanish, but will experience an intensification of a range of processes, from recommercializations, refurbishments and upgrades through to extensions, redevelopments and repurposing or demolition to reclaim land for new projects.”
Shopping centres that already been torn down include Jupiter in Warsaw, Kraków Plaza in Krakow, S.C. Belg in Katowice, and Sosnowiec in Sosnowiec. They will be replaced by new housing developments, offices, hotels or logistics parks.
Discounters benefit financially from non-trading Sundays
The Polish retail market is expected to be significantly influenced by the announced liberalization of Sunday shopping regulations. The bill providing for two shopping Sundays each month, with staff receiving double pay on those days and an extra day off work in return within six days before or after the working Sunday has passed its first reading in the Polish Sejm. It was referred to committees for MPs to work on it and introduce amendments.
Contrary to lawmakers’ intentions in 2018, the Sunday trading ban failed to support small, local stores in their competition with large-scale retailers, say analysts of BNP Paribas Real Estate Poland. According to data from Statistics Poland (GUS), the number of stores fell from nearly 340,000 at the end of 2018 to just under 326,000 at the end of 2022, a loss of 14,000 stores in the space of four years. Following the era of supermarkets and hypermarkets, discount and smaller format stores have become first choice for Polish shoppers.
“Recent years have seen a huge expansion of discounters which have built up a loyal customer base thanks to aggressive marketing and pricing strategies and long opening hours. The existing Sunday trading ban legislation contains many arbitrary exemptions which may open the door to misuse,” say experts of BNP Paribas Real Estate Poland.
Social selling – a new engaging trend in online sales
Poland’s e-commerce penetration rate stood at 8.6% in May 2024 and remained above 8% throughout the first half of the year. The best performing online retail categories are invariably newspapers, books, textiles, clothing and footwear. BNP Paribas Real Estate Poland also notes the continued rise of social commerce, or selling through social platforms.
“Leveraging social commerce is likely to empower retailers to gain a competitive advantage in the world of e-commerce. In contrast to popular marketing strategies, it is based on being active, a compelling display of products and enhancing customer reach to boost sales and build connections with customers,” comments Klaudia Okoń, Senior Consultant, Business Intelligence Hub & Consultancy, BNP Paribas Real Estate Poland. “Social commerce also allows users to enjoy a quick and convenient shopping experience. And with the user’s payment or address data stored by a social platform, shopping is usually a few clicks away, with no need to enter the same data again and again.”
