The record breaking era for the domestic retail sector is over now. The market is shaped by e.g. limited supply, increased competition, growth of e-commerce and the aftereffects of the ban on Sunday trading. As pointed out by experts at BNP Paribas Real Estate Poland, in H1 2018 developers operating on the Polish market completed and delivered approx. 191 000 sqm of modern retail space, out of which 110 000 sqm appeared on the market between April and June. As expected, further 300 000 sqm of new supply will be delivered by the end of the year.
New supply – decreasing growth pace
The pace of growth in the retail sector has clearly dropped down a gear. After the few past years when we got used to record breaking increases (the average for the past decade was more than 660 000 sqm of new supply per annum) the market has now reached a new stage in its maturity. Its cooling off in the coming years will lead to e.g. reduced supply and absorption capacity. Importantly, the change dynamics as regards consumer habits and expectations will have a significant impact on the retail market’s evolution process
Patrycja Dzikowska, Head of Research and Consultancy, Central and Eastern Europe, BNP Paribas Real Estate Poland
Demand – increasing market dynamics and new challenges
The combination of positive economic indicators means that the conditions for retail trade are favourable. Increasing employment and wages translate into continuously improving retail sales results, which in June increased by 10.3% y-o-y. The turnover analysis in respect of shopping centres as carried out by the Polish Council of Shopping Centres for the past few years now confirms that the modern retail sector is in good form. Naturally, we should remember that we are dealing with an average result here, one that takes into account both the sector’s leaders and those market players that are not performing as well
Natasa Mika, Retail Department, BNP Paribas Real Estate Poland