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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,
POLAND
RETAIL DESTINATIONS
2010 EditionRetail in Poland
4
6
8
10
12
14
Krakow
16
Lodz
18
Szczecin
20
Retail Investment
22
Market Practice and Definitions
23
Warsaw
Upper Silesia
Wroclaw
Poznan
TriCity
2010 EDITIONRETAIL IN POLAND
GENERAL OVERVIEW
RETAIL STOCK
Poland has proven to be resilient to the current economic
downturn.
he 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 export. Therefore further performance of the neighbouring economies, especially
German , remains crucial to the long term economic prosperity.
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 (13 retail parks and 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.
Polish retail market continued to expand dynamically but was the
last in the row of record-breaking years in terms of the shopping centre stock
completion. New shopping centre additions reached nearly 8 0,000 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 eight
largest urban centres in comparison to 28% added 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 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 registered inhabitants, it translates into some 600 sq
m of retail space per 1,000 people in Poland's prime urban centres.
urrent economic downturn became the catalyst for the real estate market and for its retail sector in particular. Drying pipeline, expected to
750 ,000 sq m of GLA in 2010 and 2011 , indicates
that Polish retail market has reached developmental threshold when
qualitative change is to replace quantitative growth. Market diversification will reinforce 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 considerably and is t , y’s formats 6 In 2009 the it the 3 the to their markets , million The c add up approximately - 850 the , be d ,
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).
Poland outperforms several Euro zone countries in terms of international ratings
volume
in total
RETAIL IN POLAND
Shopping Centre Stock New Completions 0 3 6 9 2005 2006 2007 2008 2009 2010* SHOPPING CENTRE
POLAND (million sq m)STOCK
IN 0 200 400 600 800 1000 Poznan
Wroclaw Warsaw Tri
-City
Szczecin
Lodz
Krakow
Upper Silesia
SHOPPING CENTRE DENSITY IN MAJOR CITIES (sq m per 1,000 inhabitants) 0 400 800 1200 1600 Warsaw Silesia Wroclaw Poznan TriCity Lodz Krakow Szczecin
Existing Under Construction Planned till 2012 SHOPPING CENTRE STOCK
IN MAJOR CITIES ( 000 sq m)‘
RETAIL IN POLAND
RETAIL STOCK
RETAIL RENTS
cont.
Decreasing pipeline 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 and tenants'
market makes retailers much more and opportunistic.
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 good basis for the market's further
development.
is coupled
tightens selective
a
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 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 /sq m/ month, but are considerably more benign in other key locations. the
-55 - 80
QUICK STATS POLAND PROGNOSIS FOR 2010 SUPPLY DEMAND VACANCY RENTS YIELDS
PRIME SHOPPING CENTRE RENTS IN Q1 2010 (EUR/SQ M/MONTH) 0 20 40 60 80 SHOPPING CENTRE OMPLETIONS % C ( ) Upper Silesia Warsaw Wroclaw Krakow Tri City -Poznan Lodz Szczecin
8 Major Cities Medium - Sized Cities Small - Sized Cities
0 20 40 60 80 100 2007 2008 2009 2010*
WARSAW
WARSAW
GENERAL OVERVIEW
RETAIL STOCK
RETAIL RENTS
As the the riates n is The d However, r the the a operates ithe The 2010 pipeline will be equally limited with only
two retail projects, apart from a few retail warehouses, being currently under
construction 16 being ed M geography , Wilanow a some substantial R ’ stay at 55 80
prime business hub of Central and Eastern Europe, Warsaw continues to
develop despite 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 expat , 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 i total when
its functional region included.
With 1.3 million sq m of GLA, Warsaw remains the country's prime retail hub. ensity 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).
ecalculated for the whole Warsaw agglomeration, 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 KEN
Centre - E.Leclerc anchored shopping centre, and another 7,800 sq m added in
Domoteka – top end of the market, home and furniture centre that n
Targowek Retail Park.
: 12,000 sq m of GLA Wolf Bracka department store and ,000 sq m Tesco's project at Fieldorfa Street.
Warsaw's retail market is far from saturat . arket niches persist in
terms of the , 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 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
south-east and north-west of the city. Also, with only slow increase in the number of
quality high street units, there are 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.
etailers 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
EUR – / 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.
DOMOTEKA IN
TARGOWEK RETAIL PARK
KEN CENTER
WARSAW
WARSAW’S
RETAIL MARKET
IS WELL
DEVELOPED
BUT IT IS
AS MARKET
NICHES
PERSIST
FAR FROM
SATURATION
QUICK STATS WARSAW PROGNOSIS FOR 2010 SUPPLY DEMAND VACANCY RENTS YIELDSSELECTED RETAIL SCHEMES IN WARSAW
EXISTING
No Project
1 Arkadia
2 Wola Park
3 Centrum Janki 4 Targowek Retail Park 5 Zlote Tarasy 6 Centrum Krakowska 7 Galeria Mokotow
8 Blue City
9 Janki Retail Park 10 Targowek Centre No Project 20 11 12 13 14 15 16 17 18 19 Reduta Promenada CH Wilenska Sadyba Best Mall
King Cross Klif
Fashion House Piaseczno Factory Outlet Center Galeria Rembielinska Centrum Skorosze
UNDER CONSTRUCTION
1 Wolf Bracka 2 Tesco Fieldorfa
Q GÓRA KALWARIA DĘBLIN BIAŁYSTOK NIEPORENT OSTROŁĘKA GDAŃSK TERESPOL WĘGRÓW LUBLIN LESZNO POZNAŃ ŻYRARD ÓW KATOWICE KRAKÓW PIASECZNO PUŁAWSKA PRZYCZÓŁKOWA E.DREWNY PUŁAWSKA PUŁAWSKA SOBIE SKIEG O WAŁ MIEDZYS ZYŃS KI POWSIŃSKA WOŁOSKA ŻWIRKI I WIGURY GRÓJECKA AL.WILANOWSKA AL.NIEPODLEGŁOŚCI CZERNIA KOW SKA HYNKA ŁOPUSZAŃSKA ALEJA KRAKOWSKA AL. JEROZOLIMSKIE WAWELSKA KASPRZAKA AL. SOLIDARNOŚCI WISŁOSTRADA GROCHOWSKA OSTROBRAMSKA B.CZECHA CYRULIKÓW RADZYMIŃSKA TORUŃSKA PŁOCHOCIŃSKA MODLIŃSKA ODROWĄŻA PATRIOTÓW TRAKT WAŁ MIEDZYSZYŃSKI LUB EL SKI MODLIŃSKA PUŁKOWA ARMII KRAJOWEJ SŁOMIŃSKIEGO ARKUSZOWA POWSTAŃCÓW ŚLĄSKICH OKOPOWA JAGIELOŃSKA MARSA PŁOWIECKA WOLSKA POŁCZYŃSKA GÓRCZEWSKA PRY MAS A ARMII LUDOWEJ MARSZAŁKOWSKA TYSI ĄCLECIA E34 2 1 8 7 9 10 12 13 14 1 2 3 4 5 6 7 8 15 16 17 18 19 20 11 1 2
UPPER SILESIA
UPPER SILESIA
GENERAL OVERVIEW
RETAIL STOCK
RETAIL RENTS
The U , As the problem The retail destination only W being built which will prime Together with, albeit at a slower pace
which
and the potential
a
4
pper 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. industrial
centre of Poland, Upper Silesia region is among the best developed in terms of
transport infrastructure, but also faces some serious structural s.
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 of the
region. With modern retail density currently at 370 sq m of GLA per capita
(when shopping centres and specialised schemes included) Upper Silesia still boasts some prime retail development opportunities.
ith 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
include Helical's Europa Centralna in Sosnica and Parkridge's Focus Mall in
Gliwice, 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 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.
the growing shopping centre network, high street retailing in
Katowice is improving . 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, 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
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.
The rental rates for prime units are currently at 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 – 5 /sq m/month. EUROPA CENTRALNA GLIWICE STAWOWA STREET KATOWICE AGORA BYTOM
UPPER SILESIA
SELECTED RETAIL SCHEMES IN UPPER SILESIA
SILESIA
PRIME
OPPORTUNITIES
BOASTS
SOME
RETAIL
DEVELOPMENT
EXISTINGNo Project GLA (sq m) Opening Date
1 Silesia City Center Katowice 65,000 2005
2 M1 Czeladz 58,500 1997 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
UNDER CONSTRUCTION
1 Focus Mall Gliwice 65,000 2010
2 Agora Bytom 27,000 2010 QUICK STATS UPPER SILESIA PROGNOSIS FOR 2010 SUPPLY DEMAND VACANCY RENTS
YIELDS 3 Europa Centralna Retail Park 67,000 2011
Piekary Bytom Zabrze Gliwice Świętochłowice Siemianowice Śląskie Chorzów Katowice Czeladź
Będzin Dąbrowa Górnicza Wojkowice Ruda Śląska Radzionków Tarnowskie Góry Sosnowiec Mysłowice Jaworzno Mikołów Tychy 10 1 2 1 3 2 4 5 6 7 8 9 3
WROCLAW
WROCLAW
GENERAL OVERVIEW
RETAIL STOCK
RETAIL RENTS
With 640,000 residents Wroclaw is the key business and cultural hub of
Dolnoslaskie Voivodship. Over the last decade Wroclaw came at the of
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 president Rafal
Dutkiewicz. The diversity of economy, with strong manufacturing
sector as well as high quality academic offer, create good fundamentals for Wroclaw's long term economic viability.
Wroclaw's retail offer consists of 1 modern providing
approximately 5 ,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 leading
Polish markets.
hopping centre offer is complemented with other formats as well as 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 offer with many restaurants and cafes, art galleries and bank branches. Bielany Hub Bielany Retail Park is another established Wroclaw's retail destination.
hopping centre stock in Wroclaw has nearly doubled between 2007 and
2008, when some 202,000 LA 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.
development has slowed down 2009 saw only addition
of renovated and extended Renoma department store
Family Point, Praktiker -anchored shopping centre at Krakowska
street .
Despite recent stock Wroclaw's retail potential is still perceived as
high by many developers who are either constructing or planning new
developments Mayland RE and Apsys. Th has
been partially boosted by 2012 Euro Cup preparations nfrastructural
projects are being accompanied with retail, the example of which is Maslice.
The construction of 60,000 sq m shopping centre in direct vicinity of Stadion
Slask initiated by of the leading Polish entrepreneurs - Zygmunt Solorz, is
to start soon, as is to be completed prior to the championships.
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 – /sq m/month.
, top the the city Wroclaw’s a 8 retail schemes 20 the The s a . s with The s sq m G Retail
in and the last year the
. The most recent addition to the stock is
, which operates from Q1 2010
the increase,
, such as eir appetite for Wroclaw
, where i a i, one the project 62 RENOMA SWIDNICKA STREET
WROCLAW
WROCLAW’S
NEW RETAIL
PROVISION
IS BEING
PREPARED FOR
EURO 2012
QUICK STATS WROCLAW PROGNOSIS FOR 2010 SUPPLY DEMAND VACANCY RENTS YIELDSSELECTED RETAIL SCHEMES IN WROCLAW
EXISTING
No Project GLA (sq m) Opening Date
1 2 3 4 5 6 7 8 9 10 Magnolia Park 74,000 2007 Auchan Bielany 56,000 2003 Pasaz Grunwaldzki 50,000 2007 Korona 46,100 1999
Bielany Retail Park 44,200 1996
Arkady Wroclawskie 32,000 2007 Renoma 31,000 2009 Borek 27,000 1999 Galeria Dominikanska 24,000 2001 Marino 19,000 2008 Q AL. KA RKONOSK A ARMII KRAJOWEJ HUBSKA BARDZKA BUFOROWA OPOLSKA KRAKOWSKA
TRAUGUTTAPL.GRUNWALDZKI
WYSZYNSKIEGO KRZYWOUSTEGO KROMERA SWOJCZYCKA CHOCIŃSKA STRA MOKRONOSKA JERZMANOWSKA ŻERNICKA KOSMONAUTÓW LOTNICZA LEGNICKA OBORNICKA AL.JANA III SOBIESKIEGO SUŁ OWSKA BAŁTYCKA ZAJĄCZKOWSKA SREDZKA GEN. HALLERA GRABISZYŃSKA OPOLE OŁAW A STRZELIN OPOLE KŁOD ZKO JELENIA GÓRA LEGNICA LUBIN OBORNIKI ŚLĄSKIE POZNAŃ WARSZAWA A4 A8 A8 94 5 5 35 8 E40 E261 455 395 E342 E67 KĄTY WROCŁAWSKIE 2 3 4 1 5 8 7 6 9 10
POZNAN
POZNAN
GENERAL OVERVIEW
RETAIL STOCK
RETAIL RENTS
Home to some 560,000 residents, 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 and outsourcers. Poznan's
economy is the third functional regions of Poland (after Warsaw and
Silesia Agglomerations) in terms of economic performance.
With opening of 54,000 sq m of GLA Galeria Malta, Poznan's retail market
has seen 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,
s
Stary Browar – 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.
D
of small, convenience-type of formats could potentially be more adequate in some local neighbourhoods.
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.
Poznan producers strongest
the a
is among the best retail schemes in Poland and, in terms of overall retail offer and standard, it tands alongside
with so far the best in the city and
espite high retail development activity market niches persist, as the construction
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.
MALTA
POLWIEJSKA STEET
POZNAN
SELECTED RETAIL SCHEMES IN POZNAN
EXISTING
No Project GLA (sq m) Opening Date
1 2 3 4 5 6 7 8 9 10 54,000 2009 47,500 2003 45,500 2005 44,500 2001 42,500 2008 42,000 2000 41,500 1998 30,500 2005 30,000 1995 23,500 1997 Galeria Malta Stary Browar King Cross Marcelin
Auchan Komorniki Galeria Pestka Auchan Swadzim M1 Poznan Poznan Plaza Centrum Franowo Panorama
IN TERMS OF
STOCK DENSITY
POZNAN IS
NOW
AMONG POLISH
CITIES
THE BEST
RETAIL
PROVISIONED
QUICK STATS POZNAN PROGNOSIS FOR 2010 SUPPLY DEMAND VACANCY RENTS YIELDS Q GRUNWALDZKA DĄBROW DĄBROWSKIEGO BUKOWSKA POZNA ŃSKA GŁOGOWSKA HETMAŃSKA KRÓLOWEJ JA DWIGI TOWAROWA ZAMENHOFA GŁOGOWSKA DOLNA WILDA BOLESŁAWA KRZYWOUSTEGO ZŁOTOWSKA MALWOWA LESZCZYŃSKA OPOLSKA STAROPOLSKA GŁUSZYNA LEŚNA SERBSKA KOSZA LIŃSKA SŁUPSKA GROJNICKA OWICKA NARAM OJEWO RAD SZELĄGO WSKA PIA TKOWSKA SOLNA GARBARY ABPA A.BARANIAKA WARSZAWSKA POZNAŃSKA GNIEŹNIEŃSKA BAŁTYCKA GDYŃSKA LECHICKA OBORNICKA SKIEGO A2 A2 A2 5 11 430 307 184 11 92 92 92 11 5 196 2 3 4 1 5 8 7 6 9 10TRI -CITY
TRI-CITY
GENERAL OVERVIEW
RETAIL STOCK
RETAIL RENTS
The Tri-City agglomeration composed of Gdansk, Gdynia and Sopot
host population close to 745,000 residents. Tri-City remains the most
important industrial, educational and cultural hub of the northern Poland. The
region now go through a transition period, with historically strong
marine industry now in recess, being replaced by
urban tourism and Baltic seaside leisure industry. Hotter than ever summers of the last decade play an important role in that structural shift.
esidential sector in the city is booming, with second home developments being increasingly popular among Poles and other north Europeans alike.
Tri-City retail market in 2009 has seen several completion added nearly
50,000 sq m to the modern retail stock, currently nearly ,000 sq
m of GLA . Current stock translates into the
density of 650 sq m for every 1,000 inhabitants Tri-City among
better provisioned urban centres of Poland.
The high street retailing is along Dluga Street in Gdansk's Old
Town, but the area is dominated by banks and service units or tourist
o . Gdansk host the largest , internationally known seasonal market
Jar ark Dominikanski (St. Dominique 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.
Centrum Haffnera in
Sopot, would greatly improve shopping and leisure experience in that
popular seaside resort. The major project currently under construction is
Morski Park Handlowy, 50,000 sq m Liebrecht& oo 's retail park, which
completion is scheduled for H2 2011. Other projects, such as Mlode Miasto planned on the brownfield site of Gdansk Shipyard
, remain on the planning stage.
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.
is that
jointly a
is ing the
increasingly the service sector
as well as
The r
s that
totalling to 490
in 18 retail schemes volume of
and positions
concentrated
focussed
ffer in Poland
m ’s . ,
2009 has seen only some minor additions to the stock, such as Fashion House Gdansk’s extension and the completion of
which
a w D
and Fronciere Euris’ Wgorze redevelopment and extension
GALERIA PRZYMORZE
DLUGA STREET
11
TRI-CITYTRI - CITY
TRI-CITY
MARKET
ITS
RETAIL OFFER
CONTINUES TO
DEVELOP
QUICK STATS TRI-CITY PROGNOSIS FOR 2010 SUPPLY DEMAND VACANCY RENTS YIELDSSELECTED RETAIL SCHEMES IN TRI-CITY
EXISTING
No Project GLA (sq m) Opening Date
1 2 3 4 5 6 7 8 9 10 UNDER CONSTRUCTION 1
Matarnia Retail Park Gdansk Auchan Gdansk
Osowa Gdansk Galeria Baltycka Gdansk
Morena Gdansk Klif Gdynia
Wzgorze Gdynia
Morski Retail Park
78,000 1998 43,100 1998 39,100 1998 39,000 2007 31,000 2002 30,700 1996 20,700 2001 50,000 2011
Galeria Przymorze Gdansk Manhattan Gdansk Alfa Centrum Gdansk
23,500 2009
22,200 2004
21,000 2002
Fashion House Gdansk 16,400 2005
2 3 4 1 5 6 9 8 10 1 7 11
KRAKOW
KRAKOW
GENERAL OVERVIEW
RETAIL STOCK
RETAIL RENTS
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.
istorical capital of Poland escaped destructions otherwise disturbing the
development of other major Polish cities, Krakow is the key sight-seeing
destination of Poland, with estimated 8 million visitors each year, creating
some outstanding opportunities for retail operators and developers alike.
Modern retail stock currently stays at 438,000 sq m of GLA t 580 sq m per
every 1,000 inhabitants 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 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 within the first 40
days after 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 (5 , 00 sq m), M1 Krakow (42,500 sq m), Galeria Kazimierz (36,000 sq m) and Krakow Plaza (3 ,000 sq m).
Krakow's old town, the historical city walls, remains the city major
retail zone. Florianska and Grodzka Streets, the main connectors between
Barbakan and Wawel Castle sightseeing attractions, Krakow's prime,
pedestrianized and landscaped high street . 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.
urrent retail pipeline in Krakow remains limited, with only one project –
King Square, a 13,400 sq m shopping centre under construction everal others
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 little retail provision available in its western part.
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.
The h that an . A , stock scheme recorded its 8 0 1 within ’s are s The c . S , including , while BONARKA FLORIANSKA STREET KING SQUARE
KRAKOW
KRAKOW
CONTINUES
TO OFFER
RETAIL
DEVELOPEMENT
GOOD
POTENTIAL
QUICK STATS KRAKOW PROGNOSIS FOR 2010 SUPPLY DEMAND VACANCY RENTS YIELDSSELECTED RETAIL SCHEMES IN KRAKOW
EXISTING
No Project GLA (sq m) Opening Date
1 2 3 4 5 6 7 8 9 10 UNDER CONSTRUCTION 11 1 Bonarka 91,000 2009 King Square 13,400 2010 Galeria Krakowska 58,000 1998 Zakopianka 57,000 2006 M1 Krakow 42,500 2001 Galeria Kazimierz 36,000 2005 Krakow Plaza 31,000 2001 CH Czyzyny 30,500 2002 Krokus 27,100 1997 Tesco 25,500 1997 Tesco 25,300 2000 Solvay Park 14,500 2007 Q KAMIEŃSKIEGO AL.POWST.ŚL. AL. P OKO JU MOGILSKA PRAZMOWSKIEGO AL.POWST.WIELKOP MICKIEWICZA KONOPNICKIEJ KSIĘCIA JÓZEFA KASZTANOWA BALICKA OLSZAN ICKA TYNIECKA NAWOJKI OPOLSKA GLOGERA JAS NOGÓ RSKA PASTERNAK AL. 29 LISTOPADA AL. 29 LISTOPADA LU BLAŃSKA B. KOMOROWSKIEGO NOWOH UCKA UJASTEK WIELICKA BOTEWA KRAKOWSKA ŁOWIŃSKIEGO IGOŁOMSKA IGOŁOMSKA KOCMY RZOW SKA ZAKOPIAŃSKA TUROWICZA ZAWIŁA BABIŃSKIEGO SKOTNICKA ARM IIK RAJOWEJ KATOWICE KATOWICE OLKUSZ SKA LA WARSZAWA PROSZOWICE SANDOMIERZ RZESZÓW TARNÓW ZAKOPANE OŚWIĘCIM TYCHY 2 4 5 3 6 9 8 7 10 11 1 1 SŁOWA CKIEG O
LODZ
LODZ
GENERAL OVERVIEW
RETAIL STOCK
RETAIL RENTS
Located centrally in Poland and within two hour drive from Warsaw, Lodz
develop 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 overheating in residential and office sectors. However,
even after the completion of Manufaktura, the largest shopping centre in
Poland, retail market provision remains below the
average for large Polish cities.
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.
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
considerable leisure component, Manufaktura establishe 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.
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.
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.
has ed
, the current
in terms of the stock density
a
has d
MANUFAKTURA
PIOTRKOWSKA STREET
LODZ
SELECTED RETAIL SCHEMES IN LODZ
EXISTING
No Project GLA (sq m) Opening Date
1 2 3 4 109,500 2006 Galeria Lodzka 45,000 2002 M1 Lodz 37,800 1999 Tulipan 33,000 1999 Manufaktura
IN RECENT
YEARS LODZ
HAS SEEN A
IN
DEVELOPMENT
ACTIVITY
MAJOR SURGE
QUICK STATS LODZ PROGNOSIS FOR 2010 SUPPLY DEMAND VACANCY RENTS YIELDS 5 6 7 8 9 10 UNDER CONSTRUCTION 1 Pasaz Lodzki 32,000 2000 Tesco 26,000 2000 Tesco 24,000 1999 Carrefour 20,000 1997 Carrefour 17,000 1999 Carrefour 13,000 2000 Port Lodz 67,000 2010 11
IKEA Port Lodz 33,000 2009
Q KONIN BLASZKI SIERADZ KATOWICE GDAŃSK WARSZAWAŁOWICZ RAWA MAZ. TO MA SZÓW M AZ. KONSTANTYNOWSKA AL.WŁÓKNIARZY ŻEROMSKIEGO AL. POLITECHNIKI PIOTRKOWSKA PIOTRKOWSKA KILIŃSKIEGO NARUTOWICZA POMORSKA POMORSKA WOJSKA POLSKIEGO KOPCIŃSKIEGO AL. RYDZA-ŚMIG ŁEGO MARATOŃSKA ŁASKOWICE SANITARIUSZEK PABIANICKA CHOCIANOWICKA RZGOWSKA KOLUMNY DĄBROWSKIEGO PRZYBYSZEWSKIEGO AL. PIŁSUDSKIEGO BRZEZIŃSKA STRYKOWSKA STRYKOWSKA WARSZAWSKA ŁAGI EWNIC KA WYCIECZKOWA OKÓLNA BRZEZIŃSKA BYSZEWSKA WIACZYŃSKA ROKICIŃSKA ROK ICIŃSK A KOLUMNY POMORSKA LEGIONÓW ZGIERSKA AL. WŁÓKNIARZY LIMANOWSKIEGO ALEKSANDROWSKASZCZECIŃSKA ZŁOTNO TRAKTOROWA SZCZECIŃSKA 2 3 4 1 6 9 8 7 10 11 1 5
SZCZEC IN
SZCZECIN
GALERIA TURZYN 3 MAJA STREETGENERAL OVERVIEW
RETAIL STOCK
RETAIL RENTS
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
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 market is taking off. The city
features as a real estate hotspot and creates some retail development
opportunities.
Szczecin continues to boast one of the best retail development potential 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 '
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.
With 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
in Turzyn shopping centre (a project different from Macquarie's Turzyn Gallery but bearing similar name and sharing similar location) while further
,000 sq m of modern retail space stays on the planning boards. Raiffeisen
Evolution's 31,500 sq m Ferio shopping centre construction in Pogodno
district of Szczecin is expected to start in the spring .
Szczecin's prime high street is crystallizing along 3 Maja Street
Niepodleglosci and Wyzwolenia Avenues. It stretch between Szczecin
Glowny PKP railway station and a brown field site after 'Dana' factory, where current owner JW Construction plans to develop a mix-use complex Nova Dana with retail and service component
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 5 – /sq m/month in the
best locations. population , retail good s GE Real Estate s a 15,000 sq m 98 ’s
, followed by the works commencement on Echo Investment’s Astra and Mayland’s Aleja Slonca, all to be completed by 2012 and es its . 2 40 AUCHAN KOLBASKOWO
SZCZECIN
SZCZECIN’S
IS TO SEE A
CONSIDERABLE
RETAIL MARKET
DEVELOPMENT
SURGE
QUICK STATS SZCZECIN PROGNOSIS FOR 2010 SUPPLY DEMAND VACANCY RENTS YIELDS 1 2 3 4 5 6 7SELECTED RETAIL SCHEMES IN SZCZECIN
EXISTING
No Project GLA (sq m) Opening Date
42,000 2003 32,000 1999 Galaxy Ster 27,500 2001 Turzyn 24,000 2007 Galeria Gryf 21,000 2000 Piast 21,000 2008 Auchan Kolbaskowo 14,500 1997 Real UNDER CONSTRUCTION 1 2 42,000 2011 Galeria Kaskada 15,000 2010 CH Turzyn E28 E65 142 E65 10 13 13 31 119 A5 A6 3 6 10 10 115 AL. WOJSKA POLSKIEGO ZEGADŁOWICZA KU SŁOŃCU MIESZKA I POŁUDNIOWA CUKROWA AL. PIASTÓW AL. PIŁSUDSKIEGO WILCZA OBOTRYCKA POKOJU MICKIEWICZA GDAŃSKA PRZESTRZENNA HANGAROWA ANDRZEJA STRUGA GRYFIŃSKA METALOWA GRANITOWA RYMARSKA BATALIONÓW CHŁOPSKICH POMORSKA SZOSA STARGARDZKA GOLENIOWSKA SZOSA STARG ARDZKA PRZY SZŁOŚCI SZOSA POLSKA PRZESOCIŃSKA 2 4 1 7 6 1 2 3 5
RETAIL INVESTMENT
RETAIL INVESTMENT
0 500 1000 1500 2000 2500 3000 2008 2003 2004 2005 2006 2007 2009PRIME RETAIL YIELDS IN POLAND (%) 2008 2003 2004 2005 2006 2007 2009 0 2 4 6 8 10 12 RETAIL INVESTMENT VOLUME IN POLAND (EUR million)
INVESTMENT TRANSACTIONS
The retail market in 2009 attracted around 51% out of the total investment
volume in Poland 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 wo shopping centres purchased
by MGPA Europe Fund III from Mayland (DTC Finance BV) – Karolinka and
Pogoria, located in Opole and Dabrowa Gornicza respectively he
transaction price also include 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.
Despite healthy fundamentals and overall good performance of the of
Polish shopping centres, with consumer spending proving resilient to the mildly worsening economic situation, many international and opportunistic
investors that were scrutinizing the market were closing transaction . They
were waiting for the market to bottom out and, based on the traditional
comparison with 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%
. Estimated risk premium from investing
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 cities have flattened.
and it
. T were for EUR 236 million
, and t d majority s not s the
has established price
levels for the begining of 2010 outside
of the
Polish
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.
KAROLINKA IN OPOLE INVESTMENT ACTIVITY IN POLAND BY SECTOR Retail Office Industrial Mix-use & Hotel
51% 28% 6% 15% 23% 63% 9% 5% 2008 2009
MARKET PRACTICE
DEFINITIONS OF KEY TERMS
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,
MARKET TRANSPARENCY
LEASE LENGTH AND TERMS
RENT PAYMENT
TENANTS' COVENANT
INCENTIVES
SERVICE CHARGE
– Property market has strong and transparent fundamentals regarding property titles but a degree of opacity persist 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.
– Typical lease contract period is 5 to 10 years with an
option to extend. Most rents are Euro and paid in zlotys, but service charges
and other payments (e.g. marketing fees) are often denominated in . 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 inde .
– Rent is payable monthly in advance, and is quoted without VAT. – Within shopping centres service charge payments are common and will include repairs, cleaning and security.
– 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 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.
s
denominated in
the local currency ces
RETAIL SPACE GLA
SHOPPING GALLERY
HYPERMARKET
SHOPPING CENTRE
FACTORY OUTLET
RETAIL PARK
- gross lettable area in sq m refers to the area leased to tenants and includes any other construction elements.
- part of a shopping centre encompassing a number of adjacent shop units that are all accessible from a mall.
- 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.
- 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
where hypermarket occupies 40-50% of the total GLA
dominated by other than retail commercial functions.
is a shopping centre where manufacturers and retailers sell their merchandise at discount or gross prices.
- is a consistently designed, planned and managed scheme that comprises of
medium- and large-scale specialist retailers (“big box ” or “ ”) as well as a
shopping centre.
,
from the centres a to the schemes
es retail warehouses
-CB Richard Ellis Polska Rondo ONZ 1 00-124 Warsaw Poland T +48 22 544 8000 F +48 22 544 8001 Magda Frątczak Retail Agency T +48 22 544 8017 F +48 22 544 8001 [email protected] Charle Wardropers Managing Director T +48 22 544 8007 F +48 22 544 8001 [email protected] Joanna Mroczek Research & Consultancy T +48 22 544 8061 F +48 22 544 8001 [email protected]
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