Retail parks in Poland is good business

Retail parks in Poland is good business

PRESS INFO

Warsaw, December 20th, 2021

A record year is ahead for the sector of the smaller commercial facilities

The growing trend of local awareness and the evolution of shopping habits increased the popularity of commercial convenience stores. Retail parks and small shopping centers have grown in importance, which in result motivates developers to undertake more intense actions. Each quarter, there are more and more investors who are planning to use this format and build commercial facilities. Apart from the flexibility of space and lower rental rates, the advantage of retail parks is their proximity to customers, a key factor in today’s world.

- The popularity of smaller retail facilities is best evidenced by the fact that some brands prepare concepts specifically tailored for retail parks and everyday shopping centers. Chain stores have returned to their expansion plans and are starting the talks about leasing space in new locations. The discount sector, by locating its new outlets in retail parks, strengthens its position. Also, fashion brands, which previously limited their activity only to stores in galleries, started to look for new sales channels and thus have been turning up in smaller facilities. New brands are also entering our market, such as the DIY store Hipper.pl, with plans to locate a chain of it’s stores in retail parks - informs Agata Karolina Lasota, Managing Director at LBC Invest.

The first three quarters of this year has already brought a greater increase in space in the retail sector than the entire previous year. During this time, the domestic resources increased by almost 330.000 m2 and according to the estimated data, throughout the 2021 the retail space market will be supplied by around 500.000 m2 of new retail space. – Currently, over 460.000 m2 of retail space is under construction nationwide, including 40 retail parks and convenience centers. In this format, over 200.000 m2 of new space will appear on the market this year, making it a historically record result. And developers are still turning up the heat. Retail parks and small shopping centers already account for over 60 percent of investments projects launched in the last quarter. They are usually built in cities with less than 100.000 residents, where there is a shortage of commercial space and cheaper land. It is a good way for the investors to strategically expand their investment portfolio or diversify their real estate portfolio - says Agata Karolina Lasota.

New investment groups, with new brands of everyday shopping facilities started to appear on our market, such as the Polish-German investment group 4FI, which debuted with it’s first center called Mozaika in Krakow. Furniture and construction stores remain active and constantly develop their potential. This year, Agata Meble has commissioned new commercial warehouses in Bydgoszcz, while IKEA commissioned it’s one in Szczecin. Castorama in Zary and Leroy Merlin in Bydgoszcz, as well as Leroy Merlin in Kutno, were opened in buildings previously used by Tesco. A former Tesco facility in Warsaw is also being adapted for Leroy Merlin. The Atut Ruczaj Center in Krakow and Galeria Bawóchanka in Belchatow are expanding and building extensions. Andrychow Gallery was opened in December this year.

New parks will be brought out to the market, including Saller Park Lipnik retail and service park, Premium Park Lubrza, Zabkowice Slaskie retail park, Sierpc Retail Park, Tuchola Park, S1 Center in Zlotoryja, Multishop Suwalki, Swinoujscie retail park and Stop Shop Zielona Gora.

DS Retail Park is planning to open a retail park in Sosnowiec and Rembelszczyzna, and this year the company wants to commission a retail park in Reda. Fortis Investments is preparing further projects, with a total area of ​​17.000 m2, to be built, i.e., in Opoczno, Ciechocinek, Leczyca and Lowicz. The new retail park from DL Invest Group is being built in Mikolow.

- Higher capitalization rates in our country, as compared to the European ones, in some cases reaching 7 %, is a strong impulse to invest in this real estate sector. - Agata Karolina Lasota informs. – Recently in the commercial sector, we have mainly seen transactions involving small real properties. Retail parks and convenience centers are attractive assets for investors. This is also confirmed by the large number of the ongoing negotiations regarding this format of the real properties. We are also talking about projects that are currently only at the stage of preparation for construction - comments the director of LBC Invest. - We have recently concluded contracts for the implementation of comprehensive investment processes, including commercialization of retail parks located in Krakow and two smaller cities in Lesser Poland and Pomerania regions. We are planning to start the implementation of the projects next year, and the design works are currently underway. Investors are both the clients from the African continent and Polish companies with whom we have been working successfully for many years - she adds.

The growing demand for convenience real properties has resulted in over a dozen transactions this year, involving smaller shopping centers, mainly located in small towns. LCN, the American fund has acquired a number retail parks, as well as leased Auchan hypermarket chains with a total area of 107.600 m2 and located in Szczecin, Rybnik, Slupsk, Gdansk, Nowy Sacz and Lublin. Other facilities, such as Galeria Malta, Galeria Rumia, and Galeria Pestka, despite requiring a modernization, have also changed their owners.

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