The downward trend in modern retail real estate market can be seen. The third quarter of 2019 saw Polish modern retail market grew by approx. 51 000 sqm of leasable space and, as a result, at the end of September it stood at 14.85 million sqm - according to a report prepared by experts from BNP Paribas Real Estate Poland. The limited volume of new supply is expected and thus the need to expand and remodel existing schemes increases. The differences in rents are much greater between leading shopping centres and lower class schemes.
Limited new supply
The result for 2019 will be the lowest in the last 20 years and will confirm the downward trend that has been going on for a long time. The volume of new supply expected next year may be even lower, which is the result of a lack of large schemes under construction. We do not expect a large shopping and entertainment center like Galeria Młociny to be delivered in the country within the next two or three years. The limited volume of new supply, as well as the format and size of implemented projects, are clearly convincing about the phase of market maturity
Patrycja Dzikowska, Head of Research & Consultancy, BNP Paribas Real Estate Poland
Growing importance of small markets
Unfaltering tenant demand
Rents pressure on lower class assets
One of the methods to improve the market position is the extension or remodeling of assets. This phenomenon has been observed on the market for several years. Refreshing the offer or expanding the number of tenants with new brands, services and entertainment allows to increase the prestige of an asset, and thus strengthen the position in negotiations with tenants. The new functions may also to extend the time of the visit and the experience in the shopping centre and attract more visitors
Fabrice Paumelle, Head of Retail, BNP Paribas Real Estate Poland