The share of internet sales returned to a level similar to the pre-pandemic period. At the same time, Polish customers are more willing than before to buy conveniently in smaller retail formats - this is the summary of the situation on the retail real estate market in Poland at the end of the third quarter of 2020 made by JLL.
– The so-called lockdown period is behind us and we are still getting used to the new normality in the commercial real estate market. After large retail facilities opened up again to customers, the share of e-commerce in sales started to decrease, confirming the positive attitude of Poles to shopping in stationary stores. Currently, it is close to the pre-pandemic level. However, the recently observed increase in the incidence of the disease may again affect our everyday life and shopping habits. This is a challenging time, which is why the sector's representatives postulate to suspend the trade ban on Sunday, which would help at least partly the industry go through this difficult period - explains Anna Wysocka, Director of the Department of Commercial Space Rental, JLL.
Price for the local community
From the beginning of the year to the end of September the supply of space increased by 248,000 sq.m, 30% of which was accounted for by convenience centres. As a result of the pandemic, construction activity in the retail sector slowed down and the habits and needs of Polish consumers have changed.
- The trend of locality and convenience shopping, which was already present before COVID-19, intensified with the spread of the pandemic, and this is reflected in the new supply. Of the 54,000 sq.m of retail space delivered to the market in the third quarter, 53% was delivered to seven convenience centres and another 27% in retail parks. Moreover, these formats are also increasingly interesting for investors - explains Joanna Tomczyk, Senior Market Analyst, JLL.
Multifunctional projects continue to strengthen their market position. In the third quarter, The Warsaw HUB was opened, offering a total of over 110,000 sq.m, of which 4,800 sq.m is for retail purposes.
On the other hand, five shopping centres, based mainly on the hypermarket offer (four Auchan and one Tesco), have been closed. The supply of commercial centres has also decreased as a result of withdrawal of a few objects (e.g. Galeria Kamienna in Starachowice and Galeria Plaza in Kraków), which no longer meet the criteria of commercial centres or transformation of a part of commercial area into another function (e.g. Renoma in Wrocław and Plac Unii City Shopping in Warsaw).
Debuts and diversification
Four international brands debuted in Poland in the third quarter: Primark in Galeria Młociny, Courir in Galeria Krakowska (return after a short absence), Falconeri in Galeria Mokotów and Russian "hard discounter" MERE in Częstochowa. The combination of the discount with wholesale cash & carry is also developed by the Supeco brand of the Carrefour group.
- Some networks also diversify their business portfolio. An example is the 24-hour self-service kiosk opened recently in Warsaw with a catering offer. The Polish sports brand 4F has just opened, also in the capital city, its first cafe with healthy food, fitness area, 4F collection salon and online order pick-up point," points out Joanna Tomczyk.
Outlook for the coming months
- Undoubtedly, the near future, as in the case of other segments of the commercial real estate sector, will be marked by broadly understood flexibility. On the one hand, we can expect pressure on the decline in prime rents, and on the other hand, tenants' expectations towards agreements, which in their opinion should better respond to changing needs and business condition and offer a number of incentives, such as flexible lease agreements or longer rent-free periods. It should be stressed, however, that in this difficult period for all participants of the industry it is necessary to cooperate and jointly develop models acceptable to all parties - summarizes Anna Wysocka.