EUROPEAN SHOPPING CENTRE DEVELOPMENT GROWS 50% IN 2013
- Turkey, Russia, Ukraine and Poland most active development markets -
- Warsaw and Kraków still short of prime retail space -
Total retail stock in Poland consists of 420 projects with over 9.3 million sq m of leasable space. Over half is located in leading Polish agglomerations: Warsaw (1.4 million sq m in 42 projects), Katowice (1.03 million sq m), Tri-City (almost 620,000 sq m), Wrocław (540,000 sq m), Łódź and Poznań (510,000 sq m each) and Kraków (495,000 sq m). Modern retail space consists primarily of regular shopping centres but also of retail parks and outlet centres. Tri-City boasts the highest saturation of retail space with over 500 sq m of retail per 1,000 inhabitants. Among large cities, the lowest ratio is in the Kraków agglomeration – 250 sq m/1,000 inhabitants. The average density for all eight agglomerations is 413 sq m/1,000 inhabitants, and taking into account premises currently under construction, it is 444 sq m/1,000 inhabitants.
Beata Kokeli, Senior Director, Head of Retail at CBRE in Poland:
“On average, a market is believed to be saturated if the density rate is 750 sq m per 1,000 inhabitants. It is worth bearing in mind however that each city needs to be treated individually and, apart from traditional retail space, there are also market niches for other projects such as retail parks, outlet centres and specialized shopping centres. The vacancy rate in seven largest Polish agglomerations remains relatively low and currently ranges from around 1.6% in the Katowice conurbation to 4.5% in Kraków. Vacant space is usually located in less attractive projects, while in prime shopping centres there is a dearth of available units.”
In Poland in 2012 there was a rapid increase of the number of small shopping centre formats and strip malls with leasable area under 5,000 sq m such as those developed by Czerwona Torebka, Dekada or Budrem. Furthermore, the number of outlet centres is increasing – in March 2012, Factory Outlet Annopol was opened, while last year saw the completion of Szczecin Outlet Park and Ptak Outlet in Rzgów near Łódź.
Beata Kokeli added:
“The Warsaw retail market remains one of the least saturated amongst Polish agglomerations with 443 sq m per 1,000 inhabitants. In the first half of 2013, thanks to three new deliveries, the retail supply grew by almost 40,000 sq m and a further 15,300 sq m will be added in October when the Plac Unii development is completed. Even though there are several retail projects such as GTC Wilanów and Białołęka, Galeria Nova in Piaseczno or Galeria Kabaty at planning stages, no new construction has been started in Warsaw recently, therefore new supply in 2014 will be very limited. To some extent the Warsaw high street sector is clearly benefiting from the shortage of retail space in shopping centres. The area between Świętokrzyska St. and Zbawiciela Pl. is being gradually established as Warsaw’s prime retail zone, which is now expanding not only along the Royal Route and Marszałkowska St., but also along Bracka and Mokotowska Streets.”
Shopping centre development activity is largely concentrated in emerging markets, with a large proportion (74%) taking place in Eastern Europe. Turkey is forecast to remain the most active development market. In Istanbul there are 37 centres currently under construction, of which the largest will have a GLA of 150,000 sq m.
Eastern Europe’s other highly active shopping centre development market are Russia (2.88 million sq m) and Ukraine (789,888 sq m). The majority of Russian development is concentrated in Moscow, with 1.4 million sq m of space due to open over the next two to three years. For Ukraine, the space currently under construction represents 38% of its total shopping centre space, thus adding significant space to its retail market upon completion.
2013, with 1.5 million sq m of space already completed in all of Europe, is on track to equaling last year in terms of finalized shopping center construction. In 2012 a total of 100 shopping centres totaling 3.44 million sq m of space opened.
Neville Moss, Head of EMEA Retail Research, CBRE, commented:
“The rapid growth of new shopping centre development in emerging markets is attributed to a growing middle class, the urbanization of large cities and consumer demand for better quality retail. Retailers are competing to take advantage of these new opportunities. There has also been a strong trend towards refurbishments and repositioning of existing assets among landlords that want to upgrade the retail mix in order to make their centre more attractive for retailers, in particular in Italy and Poland.”