poland retail destinations - Centrum Business in Małopolska

POLAND
RETAIL DESTINATIONS
2010 EDITION
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DISCLAIMER 2010 CB RICHARD ELLIS
Information herein has been obtained from sources believed reliable. While we do not
doubt its accuracy, we have not verified it and make no guarantee, warranty or
representation about it. It is your responsibility to independently confirm its accuracy
and completeness. Any projections, opinions, assumptions or estimates used are for
example only and do not represent the current or future performence of the market. This
information is designed exclusively for use by CB Richard Ellis clients, and cannot be
reproduced without prior written permission of CB Richard Ellis.
© 2010 CB Richard Ellis Polska
POLAND
RETAIL DESTINATIONS
2010 Edition
Retail in Poland
Warsaw
Upper Silesia
Wroclaw
Poznan
TriCity
Krakow
Lodz
Szczecin
Retail Investment
Market Practice and Definitions
DISCLAIMER 2010 CB Richard Ellis
Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no
guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections,
opinions, assumptions or estimates used are for example only and do not represent the current or future performence of the market. This information
is designed exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of CB Richard Ellis.
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2010 EDITION
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RETAIL IN POLAND
RETAIL IN POLAND
GENERAL OVERVIEW
Poland has proven to be considerably resilient to the current economic
downturn. Poland outperforms several Euro zone countries in terms of
international ratings and is the only European Union country that avoided GDP
decline in any of 2009 quarters. Domestic market remains poised for further
growth, but Polish economy as a 'host country' relies heavily on the Western
European sources of investment and financing as well as their markets for
SHOPPING CENTRE STOCK
IN POLAND (million sq m)
export. Therefore, further performance of the neighbouring economies, especially
Germany’s, remains crucial to the long term economic prosperity.
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RETAIL STOCK
6
At the end of 2009 shopping centre stock in Poland amounted to 7.7 million sq
m located in 325 schemes, of which 21 (8% in terms of GLA) were specialized
shopping formats (13 retail parks and 6 factory outlets). With little over 200 sq m
of GLA per 1,000 residents and weak high streets, modern retail network in
Poland remains underdeveloped.
2009
2007
2008
2005
2006
0
2010*
3
Shopping Centre Stock
New Completions
* Forecast
SHOPPING CENTRE STOCK
IN MAJOR CITIES (‘000 sq m)
Szczecin
Lodz
Krakow
TriCity
Poznan
Wroclaw
Silesia
Warsaw
400
0
Existing
800
Under Construction
1200
1600
Planned till 2012
SHOPPING CENTRE DENSITY
IN MAJOR CITIES
(sq m per 1,000 inhabitants)
1000
800
600
400
200
Upper Silesia
Lodz
Szczecin
Krakow
Tri - City
Warsaw
Poznan
Wroclaw
0
In 2009 the Polish retail market continued to expand dynamically but it was the
last in the row of the record-breaking years in terms of the shopping centre stock
completion. New shopping centre additions reached nearly 830,000 sq m of
GLA, after the completion of approximately 700,000, and 630,000 sq m in 2007
and 2008 respectively. The market has seen the completion of several large-scale
developments, including Galeria Jurajska in Czestochowa, Galeria Malta in
Poznan, and Bonarka in Krakow. 36% of new space was delivered in the eight
largest urban centres in comparison to 28% added to their markets in 2008,
marking the gradual return of developers to the medium and large Polish cities.
Large cities and urban regions continue to lead the way in terms of the retail
stock volume as well as the diversity of retail schemes. Out of the total 7.7
million sq m of existing shopping centre space in Poland, around 60% is located
in Poland's eight key cities and regions. Given that the key urban hubs jointly
encompass some 7.8 million registered inhabitants, it translates into some 600 sq
m of retail space per 1,000 people in Poland's prime urban centres.
The current economic downturn became the catalyst for the real estate market
and for its retail sector in particular. Drying pipeline, expected to add up
approximately 750 - 850,000 sq m of GLA in 2010 and 2011 in total, indicates
that the Polish retail market has reached developmental threshold, when
qualitative change is to replace quantitative growth. Market diversification will
be reinforced and retail formats are to diversify further, with both small
convenience / neighborhood centres being constructed alongside with regional
parks such as Helical's Europa Centralna in Gliwice. City centre
(re)developments, as for example Avestus RE’s Hala Koszyki in Warsaw, will go
in pair with green field projects such as Liebrecht&wooD's Morski Park
Handlowy in Gdansk (Tri-City).
© 2010 CB Richard Ellis Polska
SHOPPING CENTRE
COMPLETIONS (%)
RETAIL STOCK cont.
Decreasing pipeline is coupled with reduced tenant demand for the retail space
in shopping centres. While the best schemes in various locations still enjoy
great popularity and become fully commercialized prior to their opening or
exercise waiting lists of tenants, other projects face difficulties with
(re)commercialization, as many retail operators are far more cautious with their
expansion plans. Also, for the first time there are some winners and losers
among shopping centres as competition in many locations tightens and tenants'
market makes retailers much more selective and opportunistic.
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80
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40
20
0
2007
2008
8 Major Cities
2009
2010*
Medium - Sized Cities
Small - Sized Cities
QUICK STATS POLAND
PROGNOSIS FOR 2010
Investment risks and profitability are now under much closer scrutiny than they
were in the boom times, but there is still a number of firms interested in
shopping centre retailing. Some of them have limited their expansion plans, but
others have decided to take advantage of the growing vacancy rate and
decreasing rents and are opting for prime pitch space in order to secure better
locations for their businesses. Robust consumer demand, backed with the solid
economic fundamentals, create a good basis for the market's further
development.
SUPPLY
RETAIL RENTS
DEMAND
VACANCY
RENTS
YIELDS
PRIME SHOPPING CENTRE
RENTS IN Q1 2010
(EUR/SQ M/MONTH)
Lodz
Szczecin
Poznan
Wroclaw
Krakow
Upper
Silesia
Tri-City
Warsaw
0
20
40
© 2010 CB Richard Ellis Polska
60
80
Shopping center rents have seen some noticeable decline over the last 24
months. Prime asking rents in Warsaw reduced by a third from their peak at
EUR 120 /sq m/ month in the end of 2007 to EUR 80/ sq m/ month in the
second half of 2009. This translates into 25% decline when expressed in zlotys,
as the Polish currency has lost to Euro over that same period, and the market
practice of denominating shopping centre rents in Euro but executing payments
in the local currency prevails. Warsaw, where demand remains healthy and
there is no evidence of further downwards pressure on rents, remains the most
expensive retail location in Poland with prime rents at about EUR 60 - 80/ sq m/
month (for the best unit of approximately 100 sq m and located in a prime
shopping centre). Prime shopping centre rents across Polish major cities stay in
the range between EUR 40 - 55 /sq m/ month.
Service charges in shopping centres stay at EUR 5 - 7/ sq m/ month. In the retail
parks rental rates and service charges for units of approx. 1,000 sq m remain in
the range of EUR 10 – 12 and EUR 3 – 4 / sq m/ month respectively. However,
despite rental levels stabilizing, tenant's market translates into increased
expectations in terms of other incentives, such as capital contributions towards
shop fitting and rent-free periods. High street rents in Warsaw reach up to EUR
55 - 80 /sq m/ month, but are considerably more benign in other key locations.
RETAIL IN POLAND
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WARSAW
GENERAL OVERVIEW
WARSAW
As the prime business hub of Central and Eastern Europe, Warsaw continues to
develop despite the economic downturn. With increasingly service-oriented
economy and prime work (both in terms of employment and earnings)
opportunities, Warsaw continues to be the destination of choice for migrants
and expatriates, leading to the further centralisation of wealth and power.
Political, business, and cultural centre of Poland, Warsaw encompasses some
1.7 million (registered) inhabitants living in the city and 3 million in total when
its functional region is included.
DOMOTEKA IN
TARGOWEK RETAIL PARK
KEN CENTER
RETAIL STOCK
With 1.3 million sq m of GLA, Warsaw remains the country's prime retail hub.
The density ratio of modern retail provision seems to be relatively high when
the population of the city itself considered (some 760 sq m per 1,000 people).
However, recalculated for the whole Warsaw agglomeration, the density ratio
falls to about 430 sq m of GLA per every 1,000 inhabitants.
2009 saw only two completions: 7,500 sq m of GLA extension of the KEN
Centre - E.Leclerc anchored shopping centre, and another 7,800 sq m added in
Domoteka – a top end of the market, home and furniture centre that operates in
the Targowek Retail Park. The 2010 pipeline will be equally limited with only
two retail projects, apart from a few retail warehouses, being currently under
construction: 12,000 sq m of GLA Wolf Bracka department store and 16,000 sq
m Tesco's project at Fieldorfa Street.
Warsaw's retail market is far from being saturated. Market niches persist in
terms of the geography, type of formats, and store concepts. For example, there
is a considerable opportunity for convenience centres (supermarket anchored
developments with small retail and service gallery) in several dynamically
developing residential districts, including Bialoleka, Wilanow and Wawer,
where retail provision remains scarce. On the other end of the market spectrum
there is a room for some larger formats with regional catchment in the southeast and north-west of the city. Also, with only a slow increase in the number of
quality high street units, there are some substantial opportunities for luxury and
ancillary retail facilities in the city centre. Arkadia and Zlote Tarasy both
continuously feature as the most popular retail destinations of Warsaw.
WOLF BRACKA
RETAIL RENTS
Retailers’ demand remains robust and there is no evidence of further
downwards pressure on rents. Warsaw remains the most expensive retail
location in Poland with prime rents at about EUR 60 - 80/ sq m/ month (for the
best unit of approximately 100 sq m and located in a prime shopping centre).
Average rents stay at EUR 30 – 35 /sq m/ month. Service charges in shopping
centres are at the level of EUR 5 - 7/ sq m/ month. High street rents stay at
EUR 55 – 80 / sq m/ month. In the retail parks rental rates and service charges
for units of approx. 1,000 sq m remain in the range of EUR 10 – 12 and
EUR 3 – 4 / sq m/ month respectively.
© 2010 CB Richard Ellis Polska
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QUICK STATS
WARSAW
PROGNOSIS FOR 2010
SELECTED RETAIL SCHEMES IN WARSAW
EXISTING
WARSAW
WARSAW’S
RETAIL MARKET
IS WELL
DEVELOPED
BUT IT IS
FAR FROM
SATURATION
AS MARKET
NICHES
PERSIST
No
Project
No
Project
1
Arkadia
11
Reduta
2
Wola Park
12
Promenada
3
Centrum Janki
13
CH Wilenska
4
Targowek Retail Park
14
Sadyba Best Mall
5
Zlote Tarasy
15
King Cross
6
Centrum Krakowska
16
Klif
7
Galeria Mokotow
17
Fashion House Piaseczno
8
Blue City
18
Factory Outlet Center
9
Janki Retail Park
19
Galeria Rembielinska
10
Targowek Centre
20
Centrum Skorosze
2
Tesco Fieldorfa
UNDER CONSTRUCTION
1
Wolf Bracka
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© 2010 CB Richard Ellis Polska
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SŁOMIŃ
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UPPER SILESIA
UPPER SILESIA
GENERAL OVERVIEW
The Upper Silesia Agglomeration encompasses some 2.2 million people living
in Katowice, Gliwice, Zabrze, Bytom, Chorzow, Sosnowiec, Ruda Slaska,
Dabrowa Gornicza, Myslowice, Czeladz, Bedzin, Swietochlowice,
Siemianowice, Piekary Slaskie, Jaworzno, Knurow, Tychy and Mikolow. Silesia
is the second largest urban hub of Poland, after Warsaw. As the industrial
centre of Poland, Upper Silesia region is among the best developed in terms of
transport infrastructure, but also faces some serious structural problems.
EUROPA CENTRALNA
GLIWICE
RETAIL STOCK
STAWOWA STREET
KATOWICE
AGORA
BYTOM
The Silesia Agglomeration offers currently 815,000 sq m of modern retail stock.
Apart from 5,900 sq m of GLA opened in the latest Fashion House Sosnowiec
extension, there were no new additions to the stock in 2009. Silesia City Center
continues to hold the reputation of the most popular retail destination of the
region. With modern retail density currently at only 370 sq m of GLA per capita
(when shopping centres and specialised schemes included) Upper Silesia still
boasts some prime retail development opportunities.
With nearly 170,000 sq m of GLA currently under construction, the region will
see a substantial stock increase in the near future. The key projects being built
include Helical's Europa Centralna in Sosnica and Parkridge's Focus Mall in
Gliwice, which will add 67,000 and 65,000 sq m of GLA to the stock
respectively. Even with these new additions Silesia Agglomeration continues to
create some prime development opportunities. For example in Katowice's draft
version of Studium published in December 2009 there were some new
locations, mainly south of the city centre, singled out as potential sites for new
large scale retail facilities.
Together with the growing shopping centre network, high street retailing in
Katowice is improving, albeit at a slower pace. Stretching along 3 Maja and
Stawowa streets, Silesia's main high street is gradually experiencing the
positive impact of revitalisation plans implemented by the city. Neinver's
project, which is located on the plot adjacent to the Katowice main railway
station and is to see the construction start this spring, will provide the gravity
point, reinforcing the retail function of that central area. Still, given the size and
the potential of its catchment, Katowice's high street stays considerably
underdeveloped both in terms of its size, quality of units, as well as the retail
offer.
RETAIL RENTS
The rental rates for prime units are currently at a level of EUR 45 – 52 /sq
m/month. Service charges are between EUR 5 – 8 /sq m/month. Rents for units
in retail parks range from EUR 9 – 11 /sq m/month. The high street retail rents
have seen some considerable declines to the current EUR 18 – 45 /sq m/month.
© 2010 CB Richard Ellis Polska
SELECTED RETAIL SCHEMES IN UPPER SILESIA
SILESIA BOASTS
SOME PRIME
RETAIL
DEVELOPMENT
OPPORTUNITIES
EXISTING
No
Project
1
Opening Date
65,000
2005
58,500
1997
Silesia City Center Katowice
2
QUICK STATS
UPPER SILESIA
PROGNOSIS FOR 2010
GLA (sq m)
M1 Czeladz
3
3 Stawy Katowice
48,200
1999
4
Forum Gliwice
46,000
2007
5
M1 Zabrze
42,000
1999
6
Arena Gliwice
37,000
2006
7
Auchan Sosnowiec
36,500
1999
8
Plejada Sosonowiec
33,000
2001
9
Rawa Retail Park Katowice
33,000
2000
10
Pogoria Dabrowa Gornicza
30,000
2008
65,000
2010
27,000
2010
67,000
2011
SUPPLY
UNDER CONSTRUCTION
DEMAND
1
VACANCY
Focus Mall Gliwice
2
RENTS
Agora Bytom
3
YIELDS
Europa Centralna Retail Park
Tarnowskie
Góry
Radzionków
Piekary
Wojkowice
2
5
6
Gliwice
1
4
Bytom
Chorzów
Siemianowice
Śląskie
Świętochłowice
1
3
10
Będzin
Zabrze
2
Czeladź
9
Dąbrowa Górnicza
7
8
Sosnowiec
Katowice
Ruda
Śląska
3
Mysłowice
Jaworzno
Mikołów
Tychy
© 2010 CB Richard Ellis Polska
UPPER SILESIA
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WROCLAW
GENERAL OVERVIEW
WROCLAW
With 640,000 residents, Wroclaw is the key business and cultural hub of
Dolnoslaskie Voivodship. Over the last decade Wroclaw came at the top of the
Polish cities in terms of the quality of business environment and became a
destination of choice for many domestic and foreign investors, largely due to
the proactive and open policies of the city hall led by the city president Rafal
Dutkiewicz. The diversity of Wroclaw’s economy, with a strong manufacturing
sector as well as high quality academic offer, create good fundamentals for
Wroclaw's long term economic viability.
RENOMA
SWIDNICKA STREET
BIELANY RETAIL PARK
RETAIL STOCK
Wroclaw's retail offer consists of 18 modern retail schemes providing
approximately 520,000 sq m of GLA in total. With nearly 800 sq m of shopping
centre space per every thousand of inhabitants, in terms of density Wroclaw's
retail offer is the second most developed, after Poznan, among the leading
Polish markets.
The shopping centre offer is complemented with other formats as well as a
relatively well developed high street retailing. The traditional high street in
Wroclaw is Swidnicka Street, the location for two well-known department
stores Renoma and Solpol, as well as many up-market brands. The Old Town,
Wroclaw's main tourist attraction, boasts service, leisure and tourist offers with
many restaurants and cafes, art galleries and bank branches. Bielany Hub with
Bielany Retail Park is another established Wroclaw's retail destination.
The shopping centre stock in Wroclaw has nearly doubled between 2007 and
2008, when some 202,000 sq m GLA were added to the market in six shopping
centres: Pasaz Grunwaldzki, Arkady Wroclawskie and Magnolia Park in 2007
and Marino Shopping Centre, Mlyn Retail Park and Futura Park in 2008. Retail
development has slowed down in 2009 and the last year saw only the addition
of renovated and extended Renoma department store. The most recent addition
to the stock is Family Point, Praktiker -anchored shopping centre at Krakowska
street, which operates from Q1 2010.
Despite the recent stock increase, Wroclaw's retail potential is still perceived as
high by many developers who are either constructing or planning new
developments, such as Mayland RE and Apsys. Their appetite for Wroclaw has
been partially boosted by 2012 Euro Cup preparations, where infrastructural
projects are being accompanied with retail, the example of which is Maslice.
The construction of a 60,000 sq m shopping centre in direct vicinity of Stadion
Slaski, initiated by one of the leading Polish entrepreneurs - Zygmunt Solorz, is
to start soon, as the project is to be completed prior to the championships.
RETAIL RENTS
Prime shopping centre rents for units of approximately 100 sq m are at the level
of EUR 45 – 50 /sq m/month. Rents for units of 1,000 sq m in retail parks,
remain at EUR 8 - 10 /sq m/month. The rental levels for high street units range
between EUR 45 – 62 /sq m/month.
© 2010 CB Richard Ellis Polska
11
SELECTED RETAIL SCHEMES IN WROCLAW
WROCLAW’S
NEW RETAIL
PROVISION
IS BEING
PREPARED FOR
EURO 2012
Project
GLA (sq m)
Opening Date
1
Magnolia Park
74,000
2007
2
Auchan Bielany
56,000
2003
3
Pasaz Grunwaldzki
50,000
2007
4
Korona
46,100
1999
5
Bielany Retail Park
44,200
1996
6
Arkady Wroclawskie
32,000
2007
7
Renoma
31,000
2009
8
Borek
27,000
1999
9
Galeria Dominikanska
24,000
2001
10
Marino
19,000
2008
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© 2010 CB Richard Ellis Polska
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QUICK STATS
WROCLAW
PROGNOSIS FOR 2010
RENTS
O
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JERZMANOWSKA
KRZY
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WROCLAW
EXISTING
12
POZNAN
GENERAL OVERVIEW
POZNAN
Home to some 560,000 residents, Poznan is a well established trade, exhibition
and business centre of the country's western regions and the entry-point of
choice for many German-speaking producers and outsourcers. Poznan's
economy is the third strongest functional regions of Poland (after Warsaw and
Silesia Agglomerations) in terms of economic performance.
RETAIL STOCK
MALTA
POLWIEJSKA STEET
BULWARY POZNANSKIE
With the opening of 54,000 sq m of GLA Galeria Malta, Poznan's retail market
has seen a major addition to the stock in 2009. The overall retail provision has
reached about 510,000 sq m, of which nearly 60,000 sq m are located in two
specialized schemes – Neinver's Factory Outlet and Inter IKEA's Centrum
Franowo, including its recent 14,000 sq m extension. Neinver's Galeria Malta,
located in the vicinity of Malta Lake in Poznan, is among the best retail schemes
in Poland and, in terms of overall retail offer and standard, it stands alongside
with Stary Browar – so far the best in the city and often awarded retail concept.
Poznan boasts retail density of about 900 sq m of retail space per every 1,000
inhabitants and in terms of volume is by far the best provisioned city of Poland.
Retail stock in the city will grow further upon the completion of Inter IKEA's
Bulwary Poznanskie - a 70,000 sq m of GLA retail park, scheduled for 2012.
Other planned large retail projects include 85,000 sq m Apsys' Lacina and
50,000 sq m Echo Investment's Metropolis. However, even in this highly
provisioned market some niches persist.
Despite high retail development activity market niches persist, as the
construction of small, convenience-type of formats could potentially be more
adequate in some local neighbourhoods. Also, the provision of quality high
street units in Poznan remains very limited , as the market is dominated by
large-scale retail developments. The city’s Old Town is the main traditional
retail zone.
RETAIL RENTS
Prime retail rents for units of approximately 100 sq m in shopping centres are
currently at the level of EUR 40 – 48/sq m/month. Rents for the best high street
retail units are currently at EUR 36 – 46 /sq m/month.
© 2010 CB Richard Ellis Polska
13
QUICK STATS
POZNAN
PROGNOSIS FOR 2010
SELECTED RETAIL SCHEMES IN POZNAN
EXISTING
No
Project
GLA (sq m)
1
Galeria Malta
54,000
2009
2
Stary Browar
47,500
2003
3
King Cross Marcelin
45,500
2005
4
Auchan Komorniki
44,500
2001
5
Galeria Pestka
42,500
2008
6
Auchan Swadzim
42,000
2000
7
M1 Poznan
41,500
1998
8
Poznan Plaza
30,500
2005
9
Centrum Franowo
30,000
1995
10
Panorama
23,500
1997
POZNAN
IN TERMS OF
STOCK DENSITY
POZNAN IS
NOW THE BEST
RETAIL
PROVISIONED
AMONG POLISH
CITIES
Opening Date
SUPPLY
GR
OJN
AŃSKA
POZN184
ICK
A
11
RENTS
LECHICKA
92
IEŃSKA
SOLN
GO
A
TOWAR
ZKA
OWA
LD
NWA
2
KRÓLO
WEJ JA
GŁ
A A.B
POZNAŃSKA
92
ARA
NIAK
A
7
9
SKA
A2
STEGO
ZYWOU
AWA KR
DOLN
AW
430 ILDA
LEŚNA
OG
OW
S
ABP
BOLESŁ
GŁ
SKA
I
11
LSK
A
5
HETMAŃ
1
DWIG
OPO
4
A2
SKA
LESZCZYŃ
KA
10
WARSZAWSKA
OPOL
A
OG
OW
S
OW
LW
MA
GRU
SKIE
GARBARY
3
A
KA
ZŁ
O
OT
K
WS
SZ
EL
Ą
GO
GNIEŹN
ZAMEN
HOFA
ROW
KA
DĄB
TYC
307
BUKOWSKA
GŁU
© 2010 CB Richard Ellis Polska
5
BAŁ
Q
SERBSKA
WSKA
DĄBROWSKIEGO
8
5
PIA TKOWSKA
6
196
A
GDYŃSKA
KA
SK
NARAM OWICKA
IŃ
NIC
92
AL
OR
SZ
OB
KO
SŁUPSKA
YIELDS
STAR
VACANCY
RADOJE
W
O
DEMAND
SZY
NA
11
A2
14
TRI-CITY
GENERAL OVERVIEW
TRI - CITY
The Tri-City agglomeration is composed of Gdansk, Gdynia and Sopot that
jointly host a population close to 745,000 residents. Tri-City remains the most
important industrial, educational and cultural hub of the northern Poland. The
region is now going through a transition period, with the historically strong
marine industry now in recess, being increasingly replaced by the service sector
as well as urban tourism and Baltic seaside leisure industry. Hotter than ever
summers of the last decade play an important role in that structural shift. The
residential sector in the city is booming, with second home developments being
increasingly popular among Poles and other north Europeans alike.
GALERIA PRZYMORZE
RETAIL STOCK
Tri-City retail market in 2009 has seen several completions that added nearly
50,000 sq m to the modern retail stock, currently totalling to nearly 490,000 sq
m of GLA in 18 retail schemes. Current volume of stock translates into the
density of 650 sq m for every 1,000 inhabitants and positions Tri-City among
better provisioned urban centres of Poland.
DLUGA STREET
MORSKI PARK HANDLOWY
The high street retailing is concentrated along Dluga Street in Gdansk's Old
Town, but the area is dominated by banks and service units or tourist focussed
offer. Gdansk host the largest in Poland, internationally known seasonal market
Jarmark Dominikanski (St. Dominique’s Market). In Gdynia, Swietojanska Street
is the home to many luxury stores with national and international fashion
retailers such as Escada, Laurel, Vero Moda, Carry, St.Emile.
Given the relative weakness of other forms of retailing, the demand for retail
space in Tri-City's shopping centres remains robust and the market continues to
develop further. 2009 has seen only some minor additions to the stock, such as
Fashion House Gdansk’s extension and the completion of Centrum Haffnera in
Sopot, which would greatly improve shopping and leisure experience in that
popular seaside resort. The major project currently under construction is
Morski Park Handlowy, a 50,000 sq m Liebrecht&wooD's retail park, which
completion is scheduled for H2 2011. Other projects, such as Mlode Miasto
planned on the brownfield site of Gdansk Shipyard and Fronciere Euris’
Wgorze redevelopment and extension, remain on the planning stage.
RETAIL RENTS
The rental levels for prime units in Tri-City in modern shopping centres are at
the level of EUR 40 – 50 /sq m/month. High street rents reach between EUR
50 – 65 /sq m/month. Rents for units in retail parks stay at EUR 10 – 12 /sq
m/month.
© 2010 CB Richard Ellis Polska
15
SELECTED RETAIL SCHEMES IN TRI-CITY
EXISTING
No
Project
1
Matarnia Retail Park Gdansk
78,000
1998
Auchan Gdansk
43,100
1998
3
Osowa Gdansk
39,100
1998
39,000
2007
31,000
2002
5
6
Galeria Baltycka Gdansk
Morena Gdansk
Klif Gdynia
30,700
1996
7
Galeria Przymorze Gdansk
23,500
2009
8
Manhattan Gdansk
22,200
2004
9
Alfa Centrum Gdansk
21,000
2002
Wzgorze Gdynia
20,700
2001
16,400
2005
50,000
2011
10
11
Fashion House Gdansk
UNDER CONSTRUCTION
1
Morski Retail Park
SUPPLY
DEMAND
VACANCY
RENTS
YIELDS
10
6
3
9
7
8
1
5
2
1
© 2010 CB Richard Ellis Polska
Opening Date
2
4
QUICK STATS
TRI-CITY
PROGNOSIS FOR 2010
GLA (sq m)
11
4
TRI-CITY
TRI - CITY
TRI-CITY
MARKET
CONTINUES TO
DEVELOP ITS
RETAIL OFFER
16
KRAKOW
GENERAL OVERVIEW
KRAKOW
As a major academic, cultural, and business hub of Poland with over 750,000
inhabitants, Krakow is among the largest urban centres of the country. The
historical capital of Poland that escaped destructions otherwise disturbing the
development of other major Polish cities, Krakow is the key sight-seeing
destination of Poland, with an estimated 8 million visitors each year, creating
some outstanding opportunities for retail operators and developers alike.
BONARKA
FLORIANSKA STREET
RETAIL STOCK
Modern retail stock currently stays at 438,000 sq m of GLA. At 580 sq m per
every 1,000 inhabitants, stock density remains lower than in many other
leading retail locations. Shopping centre stock in Krakow has seen a
considerable increase in 2009 with the opening of 91,000 sq m of GLA Bonarka
shopping centre. Trigranit's scheme is the largest project delivered the last
year. Located at the south-eastern fringe of the city centre and in the vicinity of
Krakow's main thoroughfares, Bonarka enjoys a record-breaking initial
customers' interest, with some 2 million footfall recorded within the first 40
days after its opening. Bonarka's completion created a strong competition to
other major retail developments in the city, such as Galeria Krakowska (offering
57,000 sq m of retail space), Zakopianka (58,000 sq m), M1 Krakow (42,500 sq
m), Galeria Kazimierz (36,000 sq m) and Krakow Plaza (31,000 sq m).
Krakow's old town, within the historical city walls, remains the city’s major
retail zone. Florianska and Grodzka Streets, the main connectors between
Barbakan and Wawel Castle sightseeing attractions, are Krakow's prime,
pedestrianized and landscaped high streets. The city centre is a location of
choice for international retailers such as Max Mara, Hexeline, United Colors of
Benetton, Krakowski Kredens, and Orsay among others.
KING SQUARE
The current retail pipeline in Krakow remains limited, with only one project –
King Square, a 13,400 sq m shopping centre under construction. Several others,
including Neinver's Futura Park (31,000 sq m), remain on the planning stage.
Krakow continues to offer a very good retail development potential, with
current retail network being almost exclusively located in the east and south of
the city while little retail provision available in its western part.
RETAIL RENTS
Prime retail rents for units of approximately 100 sq m within shopping centres
amount to EUR 40 – 49 /sq m/month. Prime rents for units on the main high
streets range from EUR 65– 70 /sq m/month.
© 2010 CB Richard Ellis Polska
17
SELECTED RETAIL SCHEMES IN KRAKOW
EXISTING
QUICK STATS
KRAKOW PROGNOSIS
FOR 2010
SUPPLY
No
Project
GLA (sq m)
1
Bonarka
91,000
2009
2
Zakopianka
58,000
1998
3
Galeria Krakowska
57,000
2006
4
M1 Krakow
42,500
2001
5
Galeria Kazimierz
36,000
2005
6
Krakow Plaza
31,000
2001
7
CH Czyzyny
30,500
2002
Opening Date
8
Krokus
27,100
1997
9
Tesco
25,500
1997
10
Tesco
25,300
2000
14,500
2007
11
Solvay Park
KRAKOW
KRAKOW
CONTINUES
TO OFFER GOOD
RETAIL
DEVELOPEMENT
POTENTIAL
UNDER CONSTRUCTION
1
DEMAND
13,400
King Square
2010
3
KON
IECK
WIŁA
ZA
BABIŃSKIEGO
W
ZO
OS
IEL
KO
P
1
ST
2
ŃSKIE
GO
RZESZÓW
9
WIE
LIC
KA
T
SKO
TUROWICZA
NIC
KA
ZAKO
PIAŃ
11
ST.W
.PO
W
1
A
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BOTEWA
KAMIE
SKA
TYN
H
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NO
AL
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10
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PADA
RENTS
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VACANCY
KRAKOWSKA
ZAK
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O
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TARNÓW
CIM
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© 2010 CB Richard Ellis Polska
SAND
OMIE
RZ
18
LODZ
GENERAL OVERVIEW
LODZ
Located centrally in Poland and within two hour drive from Warsaw, Lodz has
developed dynamically as the major logistics hub and a popular BPO location.
With some 750,000 inhabitants Lodz is one of the largest urban centres of
Poland and continues to create some significant retail opportunities. In the
second half of the last decade, Lodz has seen a surge in development activity,
leading to the current overheating in residential and office sectors. However,
even after the completion of Manufaktura, the largest shopping centre in
Poland, in terms of the stock density retail market provision remains below the
average for large Polish cities.
MANUFAKTURA
RETAIL STOCK
Lodz retail offer consists of 11 shopping centres and two specialised projects,
including the only 2009 market addition of Inter IKEA's first phase – IKEA store
in Port Lodz retail park, the whole project to be completed by the first half of
2010. With about 409,000 sq m of modern retail space (and density reaching
nearly 550 sq m per 1,000 inhabitants) Lodz retail provision remains relatively
limited in comparison to other leading Polish cities.
PIOTRKOWSKA STREET
Lodz retail offer is dominated either by traditional, hypermarket - anchored
formats or large retail facilities with regional catchment, such as Manufaktura
shopping centre and (soon) Port Lodz retail park. Manufaktura, with over
110,000 sq m of GLA, is the largest shopping centre in Poland as well as among
the best and the most advanced retail developments in Europe. Offering a
considerable leisure component, Manufaktura has established itself as a
shopping and leisure hotspot of Lodz.
Piotrkowska Street is among the most recognisable high streets of Poland.
Manufaktura, Galeria Lodzka, and linking them Piotrkowska Street jointly
create one of the largest shopping zones in Poland. Unfortunately, offering little
competition to the modern units in terms of the standard and size, Piotrkowska
Street suffers from the domination of financial and other services tenants, with
little fashion and leisure / restaurant offer.
PORT LODZ
Pipeline in Lodz remains limited. Apart from the completion of Port Lodz, that
in total will add some 100,000 sq m of GLA to the stock, there are two other
major retail projects planned, but both Sukcesja (developed by Fabryka
Biznesu) and Auchan shopping centres for the time being remain on the
planning boards.
RETAIL RENTS
Prime retail rents for units of approximately 100 sq m within shopping centres
range between EUR 35 - 40 /sq m/month. Prime rents at Piotrkowska Street are
in range of EUR 20 - 43 /sq m/month.
© 2010 CB Richard Ellis Polska
19
SELECTED RETAIL SCHEMES IN LODZ
EXISTING
QUICK STATS LODZ
PROGNOSIS FOR 2010
SUPPLY
No
Project
GLA (sq m)
Opening Date
1
Manufaktura
109,500
2006
2
Galeria Lodzka
45,000
2002
3
M1 Lodz
37,800
1999
4
Tulipan
33,000
1999
5
IKEA Port Lodz
33,000
2009
6
Pasaz Lodzki
32,000
2000
7
Tesco
26,000
2000
8
Tesco
24,000
1999
9
Carrefour
20,000
1997
10
Carrefour
17,000
1999
11
Carrefour
13,000
2000
67,000
2010
LODZ
IN RECENT
YEARS LODZ
HAS SEEN A
MAJOR SURGE
IN
DEVELOPMENT
ACTIVITY
UNDER CONSTRUCTION
1
DEMAND
Port Lodz
SK
AŃ
GD
RENTS
WAR
SZ
ŁOW AWA
ICZ
VACANCY
YIELDS
OKÓLNA
ŁAGIEW
NIC
KA
SKA
ROWS
KA
IŃS
NOW
SKIEG
SZC
ZEC
7
LIMA
O
3
BYS
WA
RA
Z.
MA
A
SK
ZYŃ
AC
KOPCIŃSKIEGO
POMORSK
A
POMORSKA
4
O
AL. PIŁSUDSKIEG
AL. RYDZA-ŚMIGŁEGO
M
AL. POLITECHNIKI
A
ŃSK
TO
ARA
2
PIOTRKOWSKA
6
POMORSKA
KIEGO
Y
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BRZEZIŃSKA
NARUTOWICZA
KILIŃS
ŻEROMSKIEGO
IARZ
ŁÓKN
AL.W
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NTY
STA
KON
KA
PIOTRKOWSKA
1
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LEG
POLS
SKA
ZEW
BRZEZIŃSKA
O
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WI
SKA
WOJ
ZŁOTNO
S
OW
SKA
AW
RSZ
WA
STRYKOWS
11
KA
IARZY
SAND
AL. WŁÓKN
ALEK
TRAKTOROWA
SZC
ZEC
IŃS
KA
KA
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A
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WYCIE
ZGIER
KON
KA
WS
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STR
8
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PR
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KA
DĄBROWSKIEGO
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TO
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SZE
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Q
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© 2010 CB Richard Ellis Polska
KATOWICE
PA
BIA
NIC
KA
SIER
ADZ
5
1
9
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KOLUMN
KOLU
MNY
Z.
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SKA
RZGOW
ŁASKOWICE
20
SZCZECIN
GENERAL OVERVIEW
SZCZECIN
The smallest among large Polish cities but hosting the largest seaport of Poland,
Szczecin is situated in the utmost north-west part of the country on the border
with Germany, only some 140 km from Berlin. After the outflow of population
at the beginning of the last decade, the negative trend has been recently
reversed through more active city policies, attracting more investment. There
are numerous signs that at last Szczecin's retail market is taking off. The city
features as a real estate hotspot and creates some good retail development
opportunities.
GALERIA TURZYN
RETAIL STOCK
Szczecin continues to boast one of the best retail development potentials among
large Polish cities. Current shopping centre provision in Szczecin amounts to
about 200,000 sq m of GLA , which translates into about 500 sq m per 1,000
people, one of the lowest retail density ratios among large Polish cities. There
were no new additions to the stock in 2009 and the major schemes remain
42,000 sq m of GLA Echo Investment's Galaxy, 32,000 sq m GE Real Estate's
Ster and 27,500 sq m Macquarie's Turzyn Gallery. The most recent market
addition was 21,000 sq m Auchan in Kolbaskowo, completed in November
2008.
3 MAJA STREET
With a limited existing retail offer, Szczecin's market is expected to see a major
surge in stock within the next few years. Currently there is 57,000 sq m under
construction in two projects: 42,000 sq m in ECE's Galeria Kaskada and 15,000
sq m in Turzyn shopping centre (a project different from Macquarie's Turzyn
Gallery but bearing similar name and sharing similar location) while further
98,000 sq m of modern retail space stays on the planning boards. Raiffeisen
Evolution's 31,500 sq m Ferio shopping centre’s construction in Pogodno
district of Szczecin is expected to start in the spring, followed by the works
commencement on Echo Investment’s Astra and Mayland’s Aleja Slonca, all to
be completed by 2012.
AUCHAN KOLBASKOWO
Szczecin's prime high street is crystallizing along 3 Maja Street and
Niepodleglosci and Wyzwolenia Avenues. It stretches between Szczecin
Glowny PKP railway station and a brown field site after 'Dana' factory, where its
current owner JW Construction plans to develop a mix-use complex Nova Dana
with retail and service component.
RETAIL RENTS
Prime rents for a 100 sq m fashion unit in a high quality shopping centre, such
as Galaxy Centrum, stay at EUR 40 – 45 /sq m/month. The rental levels for
single retail units of approximately 100 sq m, located along the main shopping
streets, has seen some decline to the current EUR 25 – 40 /sq m/month in the
best locations.
© 2010 CB Richard Ellis Polska
21
SELECTED RETAIL SCHEMES IN SZCZECIN
EXISTING
No
Project
1
GLA (sq m)
Galaxy
42,000
2003
2
Ster
32,000
1999
Opening Date
3
Turzyn
27,500
2001
4
Galeria Gryf
24,000
2007
5
Piast
21,000
2000
21,000
2008
14,500
1997
6
Auchan Kolbaskowo
7
Real
SZCZECIN
SZCZECIN’S
RETAIL MARKET
IS TO SEE A
CONSIDERABLE
DEVELOPMENT
SURGE
UNDER CONSTRUCTION
1
Galeria Kaskada
42,000
2011
2
CH Turzyn
15,000
2010
PRZ
ESO
CIŃ
SKA
QUICK STATS
SZCZECIN
PROGNOSIS FOR 2010
SUPPLY
DEMAND
115
VACANCY
SZOSA POLSKA
ZA
POKOJU
ZEG AD ŁO WIC
RENTS
YIELDS
IEG
SK
OL
WIL
CZ
A
AP
SK
OJ
.W
AL
A
CK
RY
OT
OB
O
A
CZ
MICKIE WI
1
KU SŁO ŃCU
MIE
SZK
5
IEGO
6
W
1
SUDSK
142
AL. P
2
3
AL. PIŁ
IASTÓ
2
10
AI
GD
AŃ
SKA
6
A
SKA
FIŃ
GRY
ANDRZE
4
JA STRU
GA
7
W
ITO
N
RA
SZO
ME
TA
LO
WA
G
31
13
119
© 2010 CB Richard Ellis Polska
SA S
T
3 ARGAR
D
10
E65 ZKA
SZOSA
I
A5
A6
E28
C
ŁOŚ
Y SZ
PRZ E65
MA
RY
A
K
RS
SKA
KA
A
NÓW
ALIO KICH
BAT ŁOPS
CH
IOW
ORS
H A NGA RO W
LEN
POM
1
CUK 3
ROW
A
POŁUDNIOWA
GO
PRZESTRZENNA
STARG
ARDZK
A
10
RETAIL INVESTMENT
INVESTMENT ACTIVITY
IN POLAND BY SECTOR
2008
5%
9%
23%
15%
2009
6%
51%
28%
63%
Retail
Industrial
Office
Mix-use & Hotel
PRIME RETAIL YIELDS
IN POLAND (%)
12
10
8
6
4
2008
2009
2007
2005
2006
2003
2004
2
0
RETAIL INVESTMENT
VOLUME IN POLAND
(EUR million)
3000
2500
2000
1500
1000
2009
2008
2007
2005
2006
2003
500
0
INVESTMENT TRANSACTIONS
The retail market in 2009 attracted around 51% out of the total investment
volume in Poland and it amounted to EUR 327 million in ten transactions. This
represents a 30% fall in terms of transactions' volume in comparison to 2008.
Unfolding stages of the economic downturn, difficulties in securing external
financing (with bank loans drying) but above all the changing investors' profile
and risk re-assessment across the number of international markets, have all
translated into dramatically decreasing investment activity. With severely
limited transactional evidence yields assessment became to some extend
academic exercise, making investors even more reluctant to go ahead with the
deals.
Over 70% of the total retail investment volume recorded the last year was made
in one transaction. Two shopping centres were purchased for EUR 236 million
by MGPA Europe Fund III from Mayland (DTC Finance BV) – Karolinka and
Pogoria, located in Opole and Dabrowa Gornicza respectively, and the
transaction price also included an option to purchase Jantar Shopping Centre in
Slupsk. A few smaller deals completed in 2009 included shopping galleries in
Sieradz, Gorzow, Lomza and Katowice as well as two Biedronka supermarkets
in Jelenia Gora and Gdynia.
KAROLINKA IN OPOLE
2004
RETAIL INVESTMENT
22
Despite healthy fundamentals and overall good performance of the majority of
Polish shopping centres, with consumer spendings proving resilient to the
mildly worsening economic situation, many international and opportunistic
investors that were scrutinizing the market were not closing transactions. They
were waiting for the market to bottom out and, based on the traditional
comparison with the Western markets, they expected some further yields
decompression in Poland. However, there is evidence that the northwards shift
of prime yields is now over. The sale of Mayland's portfolio for about EUR 236
million and initial yield estimated at little above 8% has established price
levels for the begining of 2010. Estimated risk premium from investing outside
of the core markets continues to be at least 100 bps higher than that attached to
the prime retail investment in Warsaw, while yields differences between
Warsaw and other major Polish cities have flattened.
Looking forward, there is a number of signs that the retail investment market
will see some revival in 2010. Owing to the favourable economic fundamentals,
Poland is back again a hotspot on international investors' radar screens. Having
current price level confirmed through transactional evidence, and with growing
downwards pressure on yields, investors may finally feel encouraged buying.
Moreover, rental decline is bottoming out or, depending on location, already
reversed. At that same time development's pipeline is considerably drying,
creating good investment conditions. Still, to see 2006 – 2007 levels of activity
one has to wait until fundamental indicators, such as consumers' demand and
rental increase, will be back on the stable growth path.
© 2010 CB Richard Ellis Polska
23
MARKET TRANSPARENCY – Property market has strong and transparent
fundamentals regarding property titles but a degree of opacity persists with regards to the
availability of market information. The information on historical freehold and perpetual
usufruct transactions registered as Notaries Deeds is freely accessible to the listed property
valuers, but there is no public record of lease transactions.
LEASE LENGTH AND TERMS – Typical lease contract period is 5 to 10 years with an
option to extend. Most rents are denominated in Euro and paid in zlotys, but service charges
and other payments (e.g. marketing fees) are often denominated in the local currency. Only
older leases can be still denominated in US$. Rents are typically the subject of annual
indexation by the European (Eurostat) or U.S. consumer price indeces.
RENT PAYMENT – Rent is payable monthly in advance, and is quoted without VAT.
SERVICE CHARGE – Within shopping centres service charge payments are common and
will include repairs, cleaning and security.
TENANTS' COVENANT – Covenant strength is very important within the Polish market.
Rental deposit, bank or parent company's guarantee equivalent to 3-6 months' rent, service
charge, marketing costs and VAT is expected from all tenants.
INCENTIVES – Incentives include capital contributions toward shop fitting and rent-free
periods, individually negotiated between the parties. Anchor tenants can expect a minimum of
3 months' rent-free or a fit-out contribution.
DEFINITIONS OF KEY TERMS
RETAIL SPACE GLA - gross lettable area in sq m refers to the area leased to tenants and
includes any other construction elements.
SHOPPING GALLERY - part of a shopping centre encompassing a number of adjacent
shop units that are all accessible from a mall.
HYPERMARKET - either stand alone or part of a shopping centre, large-scale store (with a
minimum GLA size of 2,000 sq m) offering a wide variety of convenience and household
products.
SHOPPING CENTRE - a scheme that is planned, built and managed as a single entity,
comprising units and 'communal' areas, with a minimum GLA of 5,000 sq m, usually a group of
at least 10 shops and service units. Shopping centre schemes can vary in terms of the concept,
from the centres where a hypermarket occupies 40-50% of the total GLA to the schemes
dominated by other than retail commercial functions.
FACTORY OUTLET- is a shopping centre where manufacturers and retailers sell their
merchandise at discount or gross prices.
RETAIL PARK - is a consistently designed, planned and managed scheme that comprises of
medium- and large-scale specialist retailers (“big boxes” or “retail warehouses”) as well as a
shopping centre.
DISCLAIMER 2010 CB Richard Ellis
Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee,
warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions,
assumptions or estimates used are for example only and do not represent the current or future performance of the market. This information is designed
exclusively for use by CB Richard Ellis clients, and cannot be reproduced without prior written permission of CB Richard Ellis.
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Charles Wardroper
Managing Director
[email protected]
T +48 22 544 8007
F +48 22 544 8001
Magda Frątczak
Retail Agency
[email protected]
T +48 22 544 8017
F +48 22 544 8001
Joanna Mroczek
Research & Consultancy
[email protected]
T +48 22 544 8061
F +48 22 544 8001
Karina Kreja
Retail Consultancy
[email protected]
T +48 22 544 8064
F +48 22 544 8001
www.cbre.pl
CB Richard Ellis Polska
Rondo ONZ 1
00-124 Warsaw
Poland
T +48 22 544 8000
F +48 22 544 8001