A vibrant city needs a high street revival

Shopping centre statistics point to both the high maturity of the Polish retail market and tenants’ unwavering interest in this retail format. No wonder - Polish people enjoy visiting shopping centres, appreciate their variety and like to shop in them. A recent survey carried out by Cushman & Wakefield has found that 33% of Polish consumers go to a shopping centre at least once a week and around 60% are attracted to shopping centres by their entertainment offer. At the same time, many top brands are, however, increasingly looking for alternative ways of growing their store portfolios and are considering expansion into retail parks or housing estates and ultimately opening flagship stores in high streets. This strategy poses no risk to the position of shopping centres – on the contrary, it is testament to the strength of the Polish retail market,” 

explains Michał Masztakowski, Head of Retail Agency Poland, Cushman & Wakefield.

The first shopping centres that were developed in Poland in the early 1990s met the lion’s share of demand for retail space as the legal status of real estate remained largely undefined at that time, which translated into supply constraints on the rapidly growing retail market. By contrast, shopping centres in such countries as the UK, France and Italy constituted an addition to the rich offer of high streets. What’s more, they were not built there in city centres - or at least not on such a big scale as in Poland. Today, as some tenants, including fashion, sports and convenience brands, are facing a scarcity of growth options in shopping centres, many are increasingly shifting their focus towards high streets,” 

adds Michał Masztakowski.

Could these leases suggest that competition for prime addresses in Polish high streets is intensifying? There is no doubt that we are seeing a gradual increase in demand for such locations from a wide range of brands. More and more tenants are becoming aware of ever-changing trends and lifestyles. Urban dwellers are increasingly embracing the concept of a 15-minute city, they want to live more sustainably, value their time and would like to do shopping in their favourite stores spontaneously - when out on a walk, on their way home from work or to meet friends. It is worth taking advantage of this opportunity as there are still many compelling locations available in high streets,” 

comments Magdalena Gniazdowska Leasing Manager, Retail Agency, Cushman & Wakefield.

At the end of 2023, retail stock in Warsaw’s office buildings stood at 390,000 sq m in 1,400 units in more than 360 locations. At the end of last year, the proportion of office buildings offering such units was 64%, up from 60% in 2013. This best illustrates qualitative changes on the commercial property market in Poland and a synergy of retail and offices. Is it relevant in the context of high streets? As many as 87% of retail and service units are located on the ground floor of office buildings which are beginning to serve as a natural extension of high street retail while becoming an increasingly integral part of the urban fabric and attracting stronger footfall. This is a win-win strategy for office landlords and retailers,” 

says Magdalena Gniazdowska.

For example, market rents for retail space in prime office buildings stand at EUR 50-60 per sq m, compared to EUR 150-170 in shopping centres. There are, of course, some drawbacks to retailing in office buildings such as lower weekend turnover levels or the lack of large spaces. However, these disadvantages appear to be well compensated by a convenient location and a customer profile,” 

explains Magdalena Gniazdowska.