Global real estate services firm Cushman & Wakefield has summarised the situation on the Polish retail market for the third quarter of 2024, which saw a continuation of strong development activity, with new openings dominated by retail parks. The three months leading up to September marked the first quarter in the history of the Polish market in which one retail format accounted for the entire new supply. Retail market sentiment remained robust amid a growing number of brand debuts and strong retail sales, shopping centre footfall and turnover growth.
SUPPLY: 102,000 sqm of new retail space comes onto the market in Q3
The Polish retail sector witnessed strong development activity in the third quarter of 2024, with 102,000 sqm coming on stream. Retail parks accounted for all the new openings - these were developed both in large agglomerations and in towns with populations below 50,000. This brought Poland’s total retail stock to around 16.6 million sqm, with the total new supply for this year expected to reach around 460,000 sqm,
comments Ewa Derlatka-Chilewicz, Head of Research, Cushman & Wakefield.
There is currently 350,000 sqm under construction. The retail development pipeline comprises 44 projects, including 26 new buildings, 14 extensions and four redevelopments. The highest concentration of construction activity is in Silesia and Mazovia – 55,000 sqm and 54,000 sqm respectively. In addition, 37% of retail stock under development is in towns with populations below 50,000, and 43% in the largest agglomerations with over 400,000 inhabitants,
says Ewelina Staruch, Senior Analyst, Cushman & Wakefield.
DEMAND: 10 new brands enter Poland
RETAIL SALES: A strong third quarter
Retail sales remained in positive territory in the third quarter of 2024, rising year-on-year by 4.4% in July and 2.6% in August, according to the latest data from Statistics Poland. In comparison, retail sales readings for the third quarter of last year were negative, with a 4.0% year-on-year drop in July and a 2.7% decline in August. In terms of the best-performing retail categories in constant prices in August 2024, motor vehicles, motorbikes and spare parts stood out, with sales up by 15.7% year-on-year, followed by other (+13.9%). Pharmaceuticals, cosmetics and orthopaedic equipment saw retail sales rise by 11.2% year-on-year,
adds Ewa Derlatka-Chilewicz.
Consumer sentiment has improved over the year, leading to an increase in spending. The latest July reading of the Current Consumer Confidence Index (CCCI) was 10.9 pp higher than in July 2023,
adds Ewelina Staruch.
FOOTFALL AND TURNOVER: Consumer footfall and spend in shopping centres remain stable
The footfall index edged down by 1% year-on-year but was up by 4% compared to 2022. The best performers in terms of customer traffic year-on-year were the largest shopping centres, those with over 60,000 sqm of leasable area. Preliminary figures for September indicate a several percentage decline in footfall year-on-year, possibly due to exceptionally fine weather, which reduced the propensity to visit shopping centres and purchase autumn collections,
explains Ewa Derlatka-Chilewicz.
RENTS: Rental rates rise year-on-year across all three retail market segments
Prime rents have shown a consistent upward trend. In the third quarter of 2024, monthly shopping centre rental rates averaged EUR 155 per sqm, representing a year-on-year increase of 19%. Annual rental growth for high streets and retail parks was recorded at 19% and 23% respectively,
comments Michał Masztakowski, Head of Retail Agency Poland, Cushman & Wakefield.