EYE ON RETAIL IN POLAND - Amazon Web Services€¦ · Rei ors o GLA Tpoo o soppin enres rei prs s perene o GLA P / 2 Population 1 E m etail / E centr GLA 3 S inde 2017 m / 4 R construction

R E S E A R C H

Real Estatefor a changing

world

EYE ON RETAIL IN POLANDNOVEMBER 2018

The retail industry benefits massively from solid economic fundamentals. The significant increase in purchasing power (+20% over the last 5 years), steadily

growing private consumption, unemployment rate at its historically low and rising salaries, as well as the positive attitude of consumers, means that the favourable situation in the retail sector will continue to prevail. The past years’ stellar growth in consumption and retails sales have compensated for stationary retailing share losses to ecommerce. Despite steady growth of the retail stock, turnover in shopping centres has been increasing and achieved +5% over the last five years1. The e-commerce volume has recorded a double-digit growth year-on-year, but it creates only ca. 4% of the total retail sales.

After the dynamic pace of growth of the market over the past decade, with the average of approx. 660,000 sq m of new space per

annum, the distinctly lower volume of new supply achieved in 2017 and the volume forecast for the years 2018–2020 indicated that the market is entering a mature stage now.

Remodelling and refurbishment of older schemes, often connected with extensions, will become one of the major triggers of the market development.

In the short-term perspective it is expected that the trend to modernize and expand existing schemes will continue to grow, thus generating as much as approx. 20% of new supply. There is modernization and expansion work currently underway at large renowned retail complexes such as Centrum Janki, Atrium Targówek, Atrium Reduta and Atrium Promenada in the Warsaw Agglomeration, among others. Better and wider leisure offers, recreation

areas for entire families, extensive selection of catering amenities from food court stands to seated restaurants, roof gardens and other leisure facilities have been aimed at luring clientele.

The issue that currently concerns the entire modern retail industry in Poland is the potential impact of the ban on Sunday trading on footfall and turnover, as well as the possible implications in respect of rents. First results do not reflect major inflictions, however, the next two years will be a stress test for landlords of the retail properties.

The prospects for the modern retail sector in Poland remain bright, however, the growing consumption aspirations of Polish consumers and their appetite for new brands seem to be insatiable.

The Polish modern retail sector with over 14.4 million sq m of GLA across all formats offers a wide range of opportunities for brands of various selection, profile and positioning. Shopping centres, with 10.6 million sq m in nearly 430 schemes, vary from most modern leisure-driven shopping centres in large agglomerations to small strip malls with discount offering located in towns of approx. 15–20 thousand of residents.

04P O L A N D

06WA R S AW

08U P P E R S I L E S I A

10T R I C I T Y

12P O Z N A Ń

14W R O C Ł AW

16K R A KÓ W

20S Z C Z E C I N

22G E N E R A L M A R K E T

P R A C T I C E

18ŁÓ D Ź

23C O N TA C TS

22G LO S S A R Y

CONTENT OPPORTUNITIES JUST AROUND THE CORNER

1. PRCH Shopping Centre Turnover Index

3 BNP Paribas Real Estate

SZCZECIN393,500 m2 BYDGOSZCZ

347,900 m2 TORUŃ179,400 m2

POZNAŃ888,500 m2

ŁÓDŹ697,000 m2

WROCŁAW862,000 m2

WARSAW1,939,000 m2

UPPER SILESIA1,509,000 m2

BIAŁYSTOK256,100 m2

OLSZTYN140,500 m2

TRICITY960,500 m2

RADOM151,600 m2 LUBLIN

507,500 m2

KIELCE177,300 m2

RZESZÓW294,100 m2

TARNÓW94,400 m2

KRAKÓW776,500 m2

BIELSKO-BIAŁA240,700 m2

RYBNIK170,900 m2

CZĘSTOCHOWA182,900 m2

Elbląg

Koszalin

Gorzów Wielkopolski

Zielona Góra

Legnica

Wałbrzych

Kalisz

Opole

Jastrzębie-Zdrój

WłocławekPłock

14.46m m2

10.6m m2

€2,458

440,000 m2

376 / 273

€6,838

38m

3.2%

177 LOCATIONS WITH MODERN RETAIL SPACE

Outlet Centre1.5%

Retail Park8.5%

Retail Warehousing

17.5%

Shopping Centre72.5%

FOCUS ON RETAIL IN POLAND

Purchasing power (per capita / year)2

Population1

Existing modern retail stock / Existing shopping centre stock (GLA)3

Shopping centre turnover index in 2017 (sq m / year)4

Retail stock under construction3

Density of modern retail stock / Density of shopping centre stock (sq m of GLA per 1,000 inhabitants)3

Vacancy rate5

1. Central Statistical Office; 2. MB Research, as of 2017; 3. BNP Paribas Real Estate Poland, at the end of Oct. 2018; 4. PRCH; 5. PRCH, average for cities with population above 150,000 inhabitants

Retail formats (% of GLA)

LOCATIONS WITH AT LEAST ONE MODERN RETAIL SCHEME (BY POPULATION):

over 200,000 (agglomeration)

100,001 – 200,000

50,001 – 100,000

less than 50,001

modern retail stock182,900 m2

4 5 Eye on Retail in Poland | 2018 BNP Paribas Real Estate

Retail formats (% of GLA) Typology of shopping centres & retail parks (as a percentage of GLA)


Population1





1. Central Statistical Office2. MB Research, as of 20173. BNP Paribas Real Estate Poland, at the end of Oct. 20184. PRCH

SC – shopping centre, RP – retail park, OC – outlet centre

Vacancy rate4

S E L E C T E D M O D E R N R E TA I L P R O V I S I O N

Outlet Centre3%

Retail Park14%

Retail Warehousing

14%

Shopping Centre69%

Leaders in the region

Leaders in the city

District centres

Old generation,hypermarket-driven schemes

Neighbourhood /convenience

15%

5%

27%

20%

32%

WARSAW AGGLOMERATIONTHE MARKET IN THE WARSAW AGGLOMERATION OFFERS A DIVERSIFIED SELECTION OF FORMATS AND RETAILER POOL. At the end of Q3 2018, a volume of 1.9 million sq m of GLA was recorded across all retail formats. Large shopping and leisure complexes, such as Arkadia, Złote Tarasy and Galeria Mokotów dominate the market. Owners of secondary but well established shopping centres react strongly to toughening competition and undertake extensions and refurbishments in order to bolster their market position and increase the value of their assets.

LEADING SHOPPING CENTRES are the most sought-after destination for newcomers, however, the availability of space is limited and operators have to wait for reasonable opportunities. Last year Hamleys, Newbie, Love Republic and Zarina entered the newly opened Galeria Północna. A new medium-sized concept store by IKEA opened in Blue City, while Primark will come on stage next summer in a new shopping and leisure complex, Galeria Młociny.

In the southern, western and north-eastern outskirts of Warsaw operate three outlet centres. Two IKEA-driven retail parks of paramount importance serve the north and the south of the agglomeration respectively. Small, convenience retail schemes have emerged in new residential clusters in the suburbs as well as in the satellite towns of Warsaw.

PRIME SHOPPING CENTRE RENTS PEAK AT €120 – 130 / SQ M / MONTH. Rental conditions in lower class schemes, have been tightening since customers’ have shifted towards more convenience retailing.

For the past several years the vacancy rate has been oscillating around a healthy 2%. There are, however, clear disparities between locations, with a number of distressed assets suffering from limited tenant demand.

High street retailing is dominated by F&B facilities thus premium and luxury brands are clustered in leading shopping centres such as Galeria Mokotów, Atrium Promenada, vitkAc and Klif.

NAME GLA CITY FORMAT OWNER1 Arkadia 105,000 Warsaw SC Unibail-Rodamco-Westfield2 HOMEPARK Targówek + IKEA 100,000 Warsaw RP Pradera / IKEA3 Wola Park 79,500 Warsaw SC Inter IKEA4 Centrum Janki 75,500 Janki SC Cromwell Property Group5 Galeria Mokotów 67,500 Warsaw SC Unibail-Rodamco-Westfield6 Galeria Północna 64,000 Warsaw SC GTC7 Złote Tarasy 64,000 Warsaw SC Unibail-Rodamco-Westfield8 HOMEPARK Janki + IKEA 61,000 Janki RP Pradera / IKEA9 Blue City 60,000 Warsaw SC Singspiel Investeringen B.V.

10 Atrium Targówek 51,000 Warsaw SC Atrium European Real Estate11 Atrium Promenada 47,500 Warsaw SC Atrium European Real Estate

SELECTED MAJOR RETAIL SCHEMES

1,939,000 m2

1,338,000 m2

€3,253

160,000 m2

749 / 517

€10,534

2.6m

2.0%

Warsaw agglomeration

1 Arkadia2 ArtN (UC)3 Atrium Promenada (+ extension)4 Atrium Reduta5 Atrium Targówek (+ extension)6 Auchan Piaseczno7 Blue City8 Cedet9 Centrum Gocław

10 Centrum Janki (+ extension)11 Centrum Skorosze

12 Centrum Ursynów13 Designer Outlet Piaseczno14 Dom Mody Klif15 Dom Mody vitkAc16 Factory Annopol17 Factory Ursus18 Ferio Wawer19 Galeria Bemowo 20 Galeria Brwinów21 Galeria Gondola22 Galeria Grodova

23 Galeria Łomianki 24 Galeria Młociny (UC)25 Galeria Mokotów26 Galeria Podkowa27 Galeria Północna28 Galeria Renova29 Galeria Wileńska30 Galeria Wołomin31 HOMEPARK Janki32 HOMEPARK Targówek33 KEN Center

34 King Cross35 M1 Marki36 N Park37 Nowa Stacja38 Plac Unii City Shopping39 Plac Vogla40 Sadyba Best Mall41 Wars, Sawa, Junior42 Wola Park43 Zielony Targówek44 Złote Tarasy

Błonie

Grodzisk Maz.Nadarzyn

Lesznowola

PruszkówMilanówek

Brwinów

Podkowa Leśna

PiastówMichałowice

Raszyn

Sulejówek

Józefów

Otwock

Karczew

Zalesie Górne

PiasecznoKonstancin-Jeziorna

Ząbki

Zielonka

KobyłkaWołomin

Legionowo

Czosnów Jabłonna

MarkiŁomianki

Stare Babice

Izabelin

Ożarów Maz.

WARSAW

1

214

84115 944

1031

37

1125

40

3817

19

23

24

27

21

2026

22

18

12

33

39

47

42

543

32 3516

28

29

30

334

1336

6

UC – under construction


S E L E C T E D M O D E R N R E TA I L P R O V I S I O N



Population1


Shopping centre turnover index in Katowice in 2017 (sq m / year)4





Vacancy rate4

1 Agora Bytom2 Arena3 Atrium Plejada4 Atrium Siemianowice5 Atrium Świętochłowice6 Auchan Mikołów7 Auchan Sosnowiec8 Belg9 Centrum 3 Stawy

10 Centrum AKS

11 Centrum Plejada12 Centrum Skałka13 Centrum Tarnowskie Góry14 City Point15 Cydr Park16 Dąbrówka17 Designer Outlet Sosnowiec18 Europa Centralna 19 Forum Gliwice20 Galeria Galena

21 Galeria Katowicka 22 Galeria Libero23 Galeria Zabrze24 Gemini Park25 HOMEPARK Rawa26 M1 Bytom27 M1 Czeladź28 M1 Zabrze29 marcredo Center 30 Park Handlowy Szombierki

31 Platan (+ extension)32 Pogoria33 Quick Park34 Ruda Śląska Plaza35 Silesia City Centre36 Silesia Outlet (UC)37 Sosnowiec Plaza38 Supersam39 Vendo Park

UPPER SILESIA CONURBATION Upper Si lesia conurbation

1,509,000 m2

1,140,500 m2

€1,930

37,200 m2

702 / 531

€7,998

2.15m

3.6%

WITH A POPULATION OF OVER 2.1 MILLION OF RESIDENTS AND THE PURCHASING POWER VOLUME REPRESENTING 6.5% of the country’s total, the region is a large and relatively opulent consumer market. Between 2015 and 2017, the shopping centre turnover index improved by approx. 20%.

THE MODERN RETAIL MARKET WITH 1.45 MILLION SQ M OF GLA IS THE SECOND LARGEST IN POLAND, AFTER WARSAW. The retail offer in the region is well diversified across all formats, from dominant regional shopping & leisure centres to small convenience strip malls, outlet centres and retail parks.

Katowice is the core market in the region and accumulates a vast portion of modern retail amenities, including top shopping centres of regional capture power such as Silesia City Centre and Galeria Katowicka. Still in 2018, another large shopping and leisure complex – Galeria Libero – will open in the southern part of the city, hence competition will intensify.

Other cities in the region are also relatively well provided with modern

assets of local importance such as Forum Gliwice and Europa Centralna in Gliwice, M1 and Platan in Zabrze, M1 in Czeladź, Agora and Plejada in Bytom, Pogoria in Dąbrowa Górnicza, Gemini Park in Tychy and Galeria Galena in Jaworzno, to name but a few. Platan, the shopping centre conveniently located in the centre of Zabrze, will bolster its market position this year following the extension by 11,000 sq m with a cinema, new fashion anchors and additional dining options.

An established retail destination for the entire region is Sosnowiec Designer Outlet which has gained its solid market position due to convenient location and well-balanced selection of renowned mass market brands. Next year the scheme will face a new competitor as works on Silesia Outlet Gliwice are ongoing.

PRIME RENTS IN KATOWICE PEAK AT €60 / SQ M / MONTH and are expected to remain stable. Rental levels in established retail schemes in other cities in the region should stay unchanged, while secondary schemes may face downward pressure.

NAME GLA CITY FORMAT OWNER1 Silesia City Centre 84,000 Katowice SC ECE / Allianz2 Europa Centralna 67,000 Gliwice SC Helical Poland / Standard Life Investments3 M1 Czeladź 51,000 Czeladź SC EPP4 M1 Zabrze 49,000 Zabrze SC Chariot Top Group5 Galeria Katowicka 48,000 Katowice SC EPF6 Galeria Libero 45,000 Katowice SC Echo Investment7 Forum Gliwice 43,000 Gliwice SC DEKA Immobilien


Outlet Centre1%

Retail Park7%

Retail Warehousing

17%

Shopping Centre75%


Leaders in the city

District centres



18%

6%

29%

28%

19%

Tarnowskie Góry

Knurów

Gierałtowice

Czerwionka-Leszczyny

OrzeszeŁaziska Górne

Mikołów

LędzinyTychy

Jaworzno

Bieruń

Radzionków

Piekary Śl.

Wojkowice

Ruda ŚląskaŚwiętochłowice Chorzów

Będzin DąbrowaGórnicza

Siemianowice Śl.

Mysłowice

Czeladź

GLIWICE

KATOWICE

SOSNOWIECZABRZE

BYTOM

13

15

2926

1

303

3123

34

6

1412

24

22

510

3538

21 8

9

2732

39

7

11

37

33

17

20

2516

4

28

19

18

2

36


9 BNP Paribas Real Estate8 Eye on Retail in Poland | 2018



Population1







Vacancy rate4

S E L E C T E D M O D E R N R E TA I L P R O V I S I O NTRICITY CONURBATION Tricity conurbation

960,500 m2

662,000 m2

€2,332

16,500 m2

916 / 632

€7,874

1m

3.6%

THE TRICITY REGION IS POLYCENTRIC WITH GDAŃSK AND GDYNIA RETAIL SUB-MARKETS OF EQUAL IMPORTANCE. At the end of Q3 2018 the modern retail stock in the conurbation reached 960,000 sq m of GLA across all formats, with nearly 70% comprised in 25 shopping centres.

In the area there is a clear distribution of retail provision between the central locations along a major arterial road which goes through Gdańsk and Gdynia and hot spots established along the Tricity ring road such as Matarnia retail park developed around the IKEA furniture store, Designer Outlet Gdańsk together with Morski retail park and Auchan complex.

Galeria Bałtycka in Gdańsk Wrzeszcz and Riviera in Gdynia, both located next to stops of SKM (a metropolitan fast railway) and well accessible from the central and outer residential areas, dominate in the region. In May 2018 in the downtown of Gdańsk opened a new shopping centre – Forum Gdańsk – which is an example of most contemporary retail venues blending unique design and architecture with shopping experience following the most

recent trends in retailing. The shopping centre is expected to attain top position in the region and to facilitate reinforcement of retailing in the downtown which until now was a destination for tourists rather than for residents. Moreover, regeneration of the derelict Granary Island into a modern buzzing quarter of Gdańsk would create opportunities for new retail and leisure concepts.

Sopot, which is a fashionable summer destination, maintains a very limited volume of modern retail stock but has relatively strong high street presence.

PRIME RENTS IN TOP CLASS SHOPPING CENTRES ARE BETWEEN €45 AND €55 / SQ M / MONTH, but the delivery of Forum Gdańsk will result in a strong downward pressure on rents in the shopping centres located in Gdańsk.

NAME GLA CITY FORMAT OWNER1 Matarnia Park Handlowy 81,500 Gdańsk RP Inter IKEA2 Centrum Riviera 70,500 Gdynia SC Union Investment3 Forum Gdańsk 62,000 Gdańsk SC Blackstone4 Galeria Bałtycka 46,500 Gdańsk SC ECE5 Galeria Klif 32,000 Gdynia SC AEW


1 Alfa Centrum2 Auchan3 Auchan Port Rumia4 Batory5 Centrum Osowa6 Centrum Riviera

7 Designer Outlet Gdańsk8 Forum Gdańsk9 Galeria Bałtycka

10 Galeria Klif11 Galeria Madison 12 Galeria Metropolia

13 Galeria Przymorze14 Galeria Rumia15 Galeria Szperk 16 Galeria Zaspa17 Manhattan18 Matarnia Park Handlowy

19 Morena20 Morski Park Handlowy

(+ extension)21 Tesco ChełmOutlet Centre

2%

Retail Park14%

Retail Warehousing

15%

Shopping Centre69%


Leaders in the city

District centres



10%

6%

47%

4%

33%

Reda Kosakowo

Rumia

Hel

Wejherowo

Chwaszczyno

Żukowo

Rębiechowo

GDYNIA

SOPOT

GDAŃSK

3

1415

4

6

10

5

131

18

2

7

19

21

811

20

9171216





Population1







Vacancy rate4

S E L E C T E D M O D E R N R E TA I L P R O V I S I O NPOZNAŃ AGGLOMERATION Poznań agglomeration

888,500 m2

662,500 m2

€2,938

0 m2

1,082 / 807

€8,870

0.82m

5.1%

ALTHOUGH THE SHOPPING CENTRE STOCK IN POZNAŃ HAS ENLARGED BY HALF SINCE 2013 and today the city is among most saturated large markets, improving economy coupled with bolstering consumer confidence and growing purchasing power increased the shopping centre turnover index by 11% over that time.

WITH 888,500 SQ M OF GLA, THE MODERN RETAIL MARKET IN POZNAŃ AGGLOMERATION is very well provided with all retail formats of various types, profiles and positioning. The central area of Poznań is tightly packed with shopping centres totalling nearly 280,000 sq m. The position of regional leaders is shared between Posnania, a shopping & leisure complex comprising as much as 300 most popular tenants, and Stary Browar, an urban shopping centre offering wide selection of retail, leisure and F&B options, including up-market designer brands.

OVER THE LAST TWO YEARS THE SHOPPING CENTRES SECTOR IN POZNAŃ CHANGED FUNDAMENTALLY, most importantly in the aftermath of opening of Posnania shopping and leisure complex that brought another 99,000 sq m of

a new GLA in the city centre. The delivery of such a big retail scheme to already competitive environment has made the local market turbulent pushing the vacancy rate over 5% and lowering rental levels by a significant 10 – 15%.

Outer areas of the city are developed with older, albeit established, assets which still benefit from well identified catchment areas and loyal customer base. A number of retail locations have substantial extension, remodelling and repositioning potential.

PRIME RENTS IN TOP CLASS SHOPPING CENTRES ARE STABLE BETWEEN €45 AND €55 / SQ M / MONTH. Fierce competition, however, has resulted in noticeably high vacancies in lower class schemes and has exerted downward pressure on rents, most visibly in secondary / tertiary class assets. The local market needs another 2 – 3 years to absorb the available space and stabilize.

NAME GLA CITY FORMAT OWNER1 Posnania 99,000 Poznań SC Apsys / Fonciere Euris2 HOMEPARK Franowo + IKEA 59,500 Poznań RP Pradera / IKEA3 Avenida 58,000 Poznań SC ECE / Resolution Property4 Stary Browar 47,500 Poznań SC DAWM5 King Cross Marcelin 45,500 Poznań SC EPP6 M1 Poznań 43,500 Poznań SC Chariot Top Group


1 Auchan Komorniki2 Auchan Swadzim3 Avenida4 Centrum Franowo5 ETC Swarzędz

6 Factory Poznań7 Galeria A28 Galeria Dębiec9 Galeria Mallwowa

10 Galeria Malta

11 Galeria MM12 Galeria Pestka13 HOMEPARK Franowo14 King Cross Marcelin15 Kupiec Poznański

16 M1 Poznań17 Panorama18 Posnania19 Poznań Plaza20 Stary Browar

Outlet Centre2%

Shopping Centre74%

Retail Park7%

Retail Warehousing

17%


Leaders in the city

District centres



5%

16%

42%

8%

29%

Swarzędź

Koziegłowy

Czerwonak

Suchy Las

Złotniki

Komorniki

Plewiska

Skórzewo

Przeźmierowo

Swadzim

Rokietnica

PuszczykowoGłuszyna

Kamionki

Garaszewo

Gądki

Szczepankowo

Luboń

POZNAŃ

1 7

2

3

1613

145

6

8

9

10

12 19

18

17

20

4

1115





Population1







Vacancy rate4

S E L E C T E D M O D E R N R E TA I L P R O V I S I O NWROCŁAW AGGLOMERATION Wrocław agglomeration

862,000 m2

532,000 m2

€1,923

0 m2

1,077 / 664

€8,540

0.8m

3.3%

WROCŁAW AGGLOMERATION IS INHABITED BY APPROX. 800,000 OF RESIDENTS WITH PURCHASING POWER EXCEEDING THE NATIONAL AVERAGE BY 25%. Although the modern retail sector in the region enlarged by 20% over the last three years, shopping centre turnover index remains stable.

THE MODERN RETAIL MARKET IN THE WROCŁAW AGGLOMERATION IS WELL ESTABLISHED AND DEVELOPED WITH A WIDE DIVERSITY OF FORMATS. At the end of Q3 2018, the modern retail stock in the region reached 862,500 sq m of GLA. The spectrum of shopping centres ranges from small, convenience type schemes to large shopping & leisure complexes which offer very wide selection of retail facilities, leisure amenities and F&B options.

A STRONG CLUSTER OF MODERN RETAILING FORMED IN THE CENTRAL PART OF WROCŁAW which consequently results in fierce competition. The most recent completion, Wroclavia, a large shopping & leisure complex by Unibail-Rodamco-Westfield, is about to gain the leading position and reshape fundamentally the picture of retailing in the downtown.

Within a range of approx. 2 km operate other established retail & leisure destinations, e.g. Pasaż Grunwaldzki, Renoma, Galeria Dominikańska.

Magnolia Park, the complex with a wide selection of retail, service, leisure and dining options, conveniently located in the western quadrant of the city, is expected to retain its solid positon of regional leader owing to critical mass and strong capture power.

In the southernmost fringe of Wrocław, close to A4 highway, around IKEA blue box clustered a strong complex – Aleja Bielany – composed of a shopping & leisure complex and a retail park.

PRIME SHOPPING CENTRE RENTS PEAK AT €55 – 60 / SQ M / MONTH. In turn, high competition has been compressing rents in secondary assets with some schemes suffering from vacancies.

NAME GLA CITY FORMAT OWNER1 Aleja Bielany 143,000 Bielany Wrocławskie SC + RP Inter IKEA2 Magnolia Park 99,000 Wrocław SC Union Investment3 Wroclavia 64,000 Wrocław SC Unibail-Rodamco-Westfield4 Pasaż Grunwaldzki 52,000 Wrocław SC Echo Investment5 Renoma 30,000 Wrocław SC Griffin Group6 Galeria Dominikańska 24,000 Wrocław SC Atrium European Real Estate


1 Aleja Bielany2 Arkady Wrocławskie3 Auchan4 Centrum Borek5 Family Point

6 Ferio Gaj7 Futura Park8 Galeria Dominikańska9 Korona

10 Magnolia Park

11 Marino12 Młyn Park Handlowy13 Pasaż Grunwaldzki 14 Renoma15 Sky Tower

16 Tarasy Grabiszyńskie17 Wroclavia18 Wrocław Fashion Outlet

Outlet Centre1%

Retail Park21%

Retail Warehousing

16%

Shopping Centre62%


Leaders in the city

District centres



7%

9%

26%

27%

31%

SiechniceBielany Wrocławskie

Tyniec Mały

Żerniki Wrocławskie

PartyniceOporów

KlecinaCesarzowice

Krzyki

Grabiszyn

Ołtaszyn

Jagodno

Księże

Bartoszowice

Psie Pole

Pawłowice

Domaszczyn

Mirków

Krzyżanowice

Sołtysowice

Lipa Piotrowska

Gądów

Maślice

Zgorzelisko

Radwanice

Bieńkowice

Smolec

WROCŁAW

13

4

8

5

6

718

15 1716

9

2

12

13

10

11

14





Population1







Vacancy rate4

S E L E C T E D M O D E R N R E TA I L P R O V I S I O NKRAKÓW AGGLOMERATION Kraków agglomeration

776 500 m2

565 500 m2

€2,458

20,900 m2

751 / 547

€8,290

1m

3.5%

AT THE END OF Q3 2018, THE MODERN RETAIL STOCK IN KRAKÓW STOOD AT 776,500 SQ M OF GLA, with 72% of the space accumulated in 14 traditional shopping centres. A dominant position in the region is held by Galeria Krakowska, a downtown shopping centre prominently located next to the main train station in the close vicinity to the Old Town area, and Bonarka, a large shopping and leisure complex located on the southern edge of the city centre. Serenada shopping centre opened in Autumn last year, together with the already existing retail and leisure amenities next door, which is expected to create a strong complex of critical mass capturing consumers from further afield. Well established older schemes such as M1, Czyżyny and Zakopianka, located in dense residential clusters, benefit from a loyal customer base and have significant potential for further reinforcement.

The only outlet centre in the region, Factory Kraków, operates in the north-western suburbs of the city

– in Modlniczka. The scheme is part of a bigger retail cluster also composed of a Futura retail park. Reflecting current market trends, the range of F&B facilities

in the scheme was improved recently. In the near future, another outlet centre may commence operation in the city as Kraków Plaza is intended to be remodelled into the outlet destination with an up-market positioning.

A LOW UNEMPLOYMENT RATE and steadily increasing wages have been reflected in growing retail sales and a large increase in the shopping centre turnover index which improved by over 30% between 2014 and 2017.

PRIME RENTS IN THE LEADING SHOPPING CENTRES PEAK AT €60 / SQ M / MONTH and are expected to remain stable in the mid-term, while the gap between rental levels in top and secondary schemes, unless augmented, will gradually widen.

KRAKÓW FEATURES THE MOST ESTABLISHED HIGH STREET retailing among the Polish major agglomerations. The most sought-after high street location is the historical Old Town area which is greatly fuelled by tourist traffic.

NAME GLA CITY FORMAT OWNER1 Bonarka City Center 91,500 Kraków SC NEPI / Rockcastle2 Galeria Bronowice 60,000 Kraków SC Immochan3 Galeria Krakowska 58,000 Kraków SC ECE Projektmanagement4 M1 Kraków 49,000 Kraków SC EPP5 Serenada 41,500 Kraków SC NEPI / Rockcastle


1 Atut Ruczaj (UC)2 Bonarka City Center3 Czyżyny4 Factory Kraków5 Futura Park

6 Galeria Bronowice7 Galeria Kazimierz8 Galeria Krakowska9 Kraków Plaza

10 Krokus

11 M112 Serenada13 Solvay Park14 ZakopiankaOutlet Centre

3%

Retail Park5%

Retail Warehousing

19%

Shopping Centre73%


Leaders in the city

District centres



10%

11%

26%

28%

25%

Wieliczka

Biskupice

Zabierzów

Zielonki

Wielka Wieś Michałowice

Kocmyrzów-Luborzyca

Skawina

Mogilany

KRAKÓW

1

3

4 5

6

7

89 11

10 12

13 14

2





Population1







Vacancy rate4

S E L E C T E D M O D E R N R E TA I L P R O V I S I O NŁódź agglomerationŁÓDŹ AGGLOMERATION

697,000 m2

542,000 m2

€2,383

11,600 m2

744 / 579

€7,635

0.94m

3.7%

THE SELECTION OF MODERN RETAIL OFFER IN ŁÓDŹ IS VARIED IN TERMS OF FORMATS AND LOCATIONS, with two of the country’s largest shopping schemes operating in the city. Although the retail space saturation index for Łódź urban area is 744 sq m / 1,000 inhabitants, clearly below the largest agglomerations’ average of 800 sq m, the vacancy rate of around 5 – 7% coupled with moderate purchasing power of the region have resulted in no new deliveries for a couple of years.

COMPETITION IN THE SHOPPING SECTOR IS CUT-THROAT. A large portion of shopping centre space (44%) is situated in the city centre. Manufaktura, a large shopping and leisure complex which is a great case of revitalisation of post-industrial sites, comprises 300 tenants, a wide selection of entertainment amenities, numerous dining options, Museum of Art and other attractions. The scheme has become not only a shopping and leisure destination but even more importantly a major town square and meeting venue for residents. The complex has definitely cornered the market and its dominant position is incontestable. The southern edge of the

city centre is a battle field of three retail schemes, Galeria Łódzka, Sukcesja and Pasaż Łódzki, which are situated within a short distance.

Port Łódź, a large retail complex anchored by IKEA furniture big box and Leroy Merlin “do-it-yourself” store, is situated in the south-western outskirts of Łódź, which is an extremely challenging location for an attached shopping centre of 200 units.

Apart from a small Tkalnia shopping centre in a small, satellite town of Pabianice, there are no significant pipeline projects in the region. Selected secondary schemes in Łódź, however, have considerable upside potential.

PRIME RENTS IN THE LEADING MANUFAKTURA COMPLEX ARE STABLE AROUND €55 / SQ M / MONTH. The remaining schemes have been facing strong tenants’ pressure on lowering rental levels and increasing tenants’ incentives.

NAME GLA CITY FORMAT OWNER1 Manufaktura 110,000 Łódź SC Union Investment2 Port Łódź 103,000 Łódź SC Inter IKEA3 Galeria Łódzka 45,000 Łódź SC ECE Projektmanagement4 Pasaż Łódzki 37,000 Łódź SC Pradera


1 Centrum Echo2 Centrum Guliwer 3 Galeria Łódzka4 M1 Łódź

5 Manufaktura6 Pasaż Łódzki7 Port Łódź8 Ptak Outlet

9 Sukcesja10 Tkalnia (UC)11 Tulipan12 Vis a Vis Outlet Centre

2%

Shopping Centre78%

Retail Park1%

Retail Warehousing

19%


Leaders in the city

District centres



34%

23%

19%

20%

3%

Brójce

Andrespol

Bedoń Przykościelny

NowosolnaAleksandrów Łódzki

Konstantynów Łódzki

Rąbień

PabianiceRzgów

Ksawerów

Sereczyn

ŁÓDŹ

110

2

3

4

5

6 9

11

12

7

8





Population1







Vacancy rate4

S E L E C T E D M O D E R N R E TA I L P R O V I S I O NSZCZECIN AGGLOMERATION Szczecin agglomeration

393,500 m2

258,500 m2

€2,125

0 m2

707 / 464

€7,662

0.56m

1.5%

WITH 393,000 SQ M OF GLA, THE MODERN RETAIL SECTOR IN SZCZECIN and its agglomeration is the smallest one among major Polish markets. The region is yet reasonably well provided with a wide pool of formats and schemes.

TRADITIONAL SHOPPING CENTRES DOMINATE IN THE CENTRAL AREA. Galaxy and Galeria Kaskada, both downtown located, have been striving for region’s number one. Last year Galaxy, the large shopping and leisure centre which comprises a large food operator, a leisure component and a diverse selection of 190 most popular mass market brands, secured its leading market position through extension and inclusion of new fashion anchors and F&B amenities. Galeria Kaskada whereas, with its selection of premium brands, is positioned to a bit more affluent clientele.

A decent cluster of retail facilities emerged in the south-eastern, dense residential Dąbie district. Along the major arterial road in the area operate Outlet Park (a complex of an outlet centre with a leisure element), Galeria Gryf with Carrefour and an attached MMG retail park, Auchan hypermarket and retail warehousing retailers.

Ster shopping complex caters residents of outer city clusters in the west of the city. This location is planned to be empowered through major extension by nearly 25,000 sq m of new GLA.

For a couple of years the vacancy rate in Szczecin has been oscillating around 2% – 3% which demonstrates a healthy balance in the regional market. Between 2013 and 2017 the shopping centre turnover index increased by 10% despite a 12% growth of retail space. Due to the location of Szczecin close to Germany and Scandinavia, cross-border traffic strongly supports the retail and service segments in the entire region.

PRIME RENTS IN THE LEADING SHOPPING CENTRES OSCILLATE AROUND €50 / SQ M / MONTH and are expected to remain stable in the mid-term perspective.

NAME GLA CITY FORMAT OWNER1 Centrum Galaxy 59,500 Szczecin SC EPP2 Galeria Kaskada 43,000 Szczecin SC ECE Projektmanagement3 Outlet Park Szczecin 28,000 Szczecin OC Echo Investment


1 Atrium Molo2 Auchan3 Auchan4 Centrum Galaxy5 Centrum Ster

6 Galeria Gryf7 Galeria Kaskada8 Galeria Turzyn9 marcredo Center

10 Outlet Park

Outlet Centre7%

Shopping Centre66%

Retail Park3%

Retail Warehousing

24%


Leaders in the city

District centres



19%

3%

31%

10%

38%

Jez. Dąbie

Kołbaskowo

Mierzyn

Głębokie-Pilchowo

Osów

Pilchowo

Warszewo

BukowoStołczyn

Gumieńce

Warzymice

Przecław

Smętowice

Podjuchy

Klucz

ZdrojeSłoneczne

Kijewo

Dąbie

SZCZECIN

1

3

4

785

2 10

6 9



GLOSSARY

GENERAL MARKET PRACTICE

MODERN RETAIL MARKET – all retail formats – shopping centres, outlet centres retail parks and standalone retail warehouses – which were developed or fully redeveloped / refurbished after 1990.

SHOPPING CENTRE1 – a retail property that is planned, built and managed as a single entity, comprising units and common areas, with a minimum GLA of 5,000 sq m and more than 10 units in the shopping centre.

OUTLET CENTRE1 – a consistently designed, planned and managed scheme with separate store units, where manufacturers and retailers sell merchandise at discounted prices that may be surplus stock, prior-season or slow selling.

RETAIL PARK – a retail complex that is planned, developed and managed as a single entity, composed of at least 2 units with a minimum total GLA of 5,000.

STAND-ALONE RETAIL WAREHOUSE – – a single level retail store with a minimum GLA of 2,500 sq m, occupied by DIY operators, electricals, household appliances, sport equipment, furniture and furnishings, food hypermarkets and cash & carry retailers.

PRIME SHOPPING CENTRE RENTS – – market rents (net) that could be achievable within a given period for approx. 100 sq m units, located in the most prestigious areas of leading shopping centres and leased to tenants from the fashion sector.

O C C U P A N C Y C O S TS

RENT CURRENCY – quoted predominantly in Euro and paid in Polish Zloty, monthly in advance.

SERVICE CHARGE – generally quoted in Polish Zloty per month per square metre, reconciled at the end of the year.

MARKETING CHARGE – generally quoted in Polish Zloty per month per square metre.

1. ISCS

T Y P I C A L L E A S E T E R M S

LEASE LENGTH – typically 3 to 5 years for small and medium-sized units, 10 years for large units such as food store, a DIY store and a cinema. The maximum lease length is 10 years, with an option for renewal.

RENT REVIEW – rents are usually indexed annually based on the European Union Consumer Price Index, if the rent is stated in Euro or the inflation index published by Central Statistical Office of Poland (GUS) if the rent is in Polish Zloty.

GUARANTEE AND SECURITY DEPOSIT – cash deposit or a bank guarantee of 3 months of the gross rent of the lease, service charge and marketing fee. Additionally the notary deed according to Art. 777 of the Code of Civil Procedure.

BREAK OPTIONS AND TERMINATIONS – – applied in the case of lease length longer than 5 years. Options are negotiable but a period of at least 3 years length is generally asked for.

CONTACTS

AUTHORS

BNP Paribas Real Estate One of the leading international real estate providers, offers its clients a comprehensive range of services that cover the entire real estate lifecycle: property development, transaction, consulting, valuation, property management and investment management. Our 5,100 team members, active in 36 countries, provide you with specialist knowledge of their markets and implement global real estate strategies using local solutions.

BNP Paribas Real Estate in CEE region provides the following services: Capital Markets, Property Management, Letting Advisory and Valuation for all commercial asset class whether logistic, office or retail. All departments are furthermore complemented by a Research Department providing clients with ad hoc reports and data, enabling suitable long-term business decisions.

More information: www.realestate.bnpparibas.com, www.realestate.bnpparibas.pl.

BNP Paribas Real Estate is part of the BNP Paribas GroupKRS 0000123245 Sąd Rejonowy dla M. St. Warszawy, XII Wydział Gospodarczy KRS Regon 011890235, NIP 527-11-37-593 Capital: 14 200 000 PLN

BNP Paribas Real Estate Poland Sp. z o.o.Atrium Tower, al. Jana Pawła II 2500-854 Warsaw Tel.: +48 22 653 44 00www.realestate.bnpparibas.pl

Picture credentials:Cover, pages 2, 23 – Fotolia.

Anna PływaczSenior ConsultantRetail Leasing [email protected]

Patrycja DzikowskaHead of Research & [email protected]

Szymon DołęgaConsultantResearch & [email protected]

Marta BłaszczakConsultantRetail Active [email protected]

Natasa MikaHead of Retail Leasing [email protected]

Fabrice PaumelleHead of Retail [email protected]

Erik DrukkerManaging DirectorAgency & Valuation [email protected]

Marcin KlammerChief Executive [email protected]


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