2023 on the Polish retail market: High supply, many debuts and improving turnover

The highest supply of modern retail space was recorded in the fourth quarter, which saw 217,000 sq m of GLA come on stream through 20 new openings, 3 redevelopments and one extension, alongside four refurbishments. This brought Poland’s total retail stock to approximately 16.3 million sq m. It is worth noting that the outlook for 2024 is promising as the development pipeline suggests that new supply is likely to match or even surpass volumes posted in the prior year,

comments Ewelina Staruch, Retail Market Analyst, Cushman & Wakefield.

At the end of 2023 there was approximately 370,000 sq m of retail space under construction in 38 projects scheduled for completion in 2024-25, of which 27 were retail parks. The development pipeline also includes nine extensions, including Sukcesja in Łódź, and two schemes vacated by Tesco in Bytom and Przemyśl which will be repurposed as retail parks,

adds Ewelina Staruch.

Although the footfall index for shopping centres and retail parks was up in Q4 2023 compared to 2022, it remained below the level recorded in the pre-pandemic year of 2019. The average footfall was 452,000 customers per retail scheme in October 2023, 424,000 in November 2023 and over 520,000 in December 2023, up by 3.7%, 1.8% and 0.5% year-on-year respectively,

comments Ewa Derlatka-Chilewicz, Head of Research, Cushman & Wakefield. 

Nominal turnover rose in October and November by 5% and 8% year-on-year respectively, but real turnover - taking account of inflation - was down by 1.6% year-on-year in October but marginally up by 1% in November. This is attributable to the slower price growth and improving consumer sentiment. It is worth emphasizing that real retail sales growth in shopping centres in 2023 for such categories as fashion, footwear, press, books, health and beauty was higher than that for overall retail sales reported by Statistics Poland, which is evidence of a stronger performance of shopping centres compared to the retail market as a whole,

adds Ewa Derlatka-Chilewicz.

The strongest year-on-year rise of 12.5% was recorded in the fourth quarter of 2023 for retail parks compared to around 7% for shopping centres and high streets. Unfortunately, tenants should brace themselves for further rent increases in early 2024 due to rent indexation and rising service charges,

says Paulina Bauer, Head of Retail Asset Services, Cushman & Wakefield.