Small cities and retail parks dominate the market

Transcription

1 (f) DTZ Research PROPERTY TIMES Small cities and retail parks dominate the market Poland Retail, H2 214 Total modern retail stock (definition available on page 6) in Poland exceeded 12.7 million sq m at the end of January 215 Contents Macroeconomic background 2 Supply 3 Demand 5 Vacancy and rents 5 Definitions 6 New supply in 214 exceeded 466, sq m of GLA and was delivered in 28 new schemes and 8 extensions of existing schemes. In terms of size of the new assets the share of small retail schemes has been steadily rising, as 22 of new schemes do not exceed 2, sq m of GLA. Although shopping centres are still dominating retail format of newly delivered schemes, retail parks are gaining on importance. Over 24% of new supply, translating into 11, sq m was delivered as retail parks and total supply of this format exceeded 1 million sq m at the end of 214. Cities below 1, inhabitants have the highest share in new supply, which amounted to 45% of the total. 211, sq m covers 16 new schemes and three extensions. Investors more cautious approach to new projects, which are now carefully designed and tailored to the local market requirements, results in healthy occupancy rate upon opening exceeding 9% in most of recently completed shopping centres and retail parks. Large cities and agglomerations will again return on developers radar screens in two coming years. Over 7% of 78, sq m being under construction is located in cities with populations above 2 thousand inhabitants. A growing number of extensions, redevelopments and remodelling activities results from the need to adapt to changing environment including intensifying competition and changes of consumer habits. Author Ewa Derlatka-Chilewicz Associate, Consulting & Research ewa.derlatka-chilewicz@dtz.com Figure 1 New supply by size of the city ( sq m) 1,2 1, Contacts Kamila Wykrota, Consulting & Research kamila.wykrota@dtz.com Magali Marton Head of EMEA Research magali.marton@dtz.com Hans Vrensen Global Head of Research +44 () hans.vrensen@dtz.com , (f) - forecast Property Times 1

2 Q1 211 Q2 211 Q3 211 Q4 211 Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Q2 213 Q3 213 Q4 213 Q1 214 Q2 214 Q (f) 215(f) 216(f) Poland Retail, H2 214 Macroeconomic background Figure 2 GDP growth and inflation rate in Poland Economic growth and inflation In 214, Polish economy has noticeably accelerated after two years of moderate growth. According to the National Bank of Poland s (NBP) estimates, the GDP growth in 214 amounted to 3.2% y-o-y compared to 1.6% registered in 213. In the first half of the year, Poland has remained resilient to the political and economic unrest in Europe. However, in H2 214, the continued decline in the economic activity in the European Union has slightly curbed national economy through the deterioration in the trade balance and the general sentiment in the enterprise sector. 8% 7% 6% 5% 4% 3% 2% 1% % Consumption was the main component that boosted GDP dynamics. Due to improving labour market conditions and gradually increasing households purchasing power, the trend is expected to continue in the coming years. GDP growth forecasts for 215 and 216 oscillate around 3% (3.% in 215 and 3.3% in 216, according to NBP). In the period from January to November 214, the consumer price index amounted to.1%, which is in line with the NBP s forecast of the average rate for the whole year. The low inflation rate results from the general economic situation, as well as supply factors, including a decrease in food and oil prices. As a result of the deflation observed since July 214, the Monetary Policy Council reduced in October the reference rate by.5 pp to the level of 2.%. Low interest rates buoy demand for credit and hence spur consumption. Currency exchange Although over the first eight months of 214 the Polish zloty appreciated against euro and dollar, the trend was reversed in the months that followed. The exchange rates, both in terms of euro and dollar, have slightly increased to the level of 4.22 EUR/PLN and 3.43 USD/PLN in December 214. The weakening of the national currency is correlated with poor economic performance, especially in the Eurozone, and political tensions in the Polish economic environment. The exchange rate against dollar is additionally influenced by the improving situation in the US economy. Retail sales Between January and November 214, the retail sales in constant prices amounted to 4.2% y-o-y, with the most dynamic growth observed in the first two quarters when the average indicators fluctuated between 5 5.5%. The main drivers of this dynamics include the nominal growth of salaries, increasing employment and also deflation, which translates into higher purchasing power. Labour market The situation in the Polish labour market has markedly improved over the year 214. As of the end of December 214, the unemployment rate amounted to 11.5%, compared to 13.4% observed in December 213. In 214 the average monthly salary in the enterprise sector increased to the level of PLN 3,98 up by 3.7% compared to 213. Source: National Bank of Poland, (f) - forecast Figure 3 Retail sales growth in Poland 1% 8% 6% 4% 2% % -2% -4% Source: Central Statistical Office Figure 4 GDP growth Average monthly salary in the enterprise sector (PLN) and unemployment rate in Poland 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 Salary Source: Central Statistical Office Inflation rate Unemployment rate 2% 18% 16% 14% 12% 1% 8% 6% 4% 2% % Property Times 2

3 (f) Poland Retail, H2 214 Supply 214 ended with the total modern retail supply exceeding 12.7 million sq m of GLA. 73% of the total stock comprises of shopping centres/ shopping & leisure centres (9.3 million sq m) followed by stand-alone retail warehouses (18% and 2.3 million sq m) and retail parks (8% of the total stock, 1 million sq m). Factory outlets have a 1.5% share in the market, covering over 194, sq m. New supply in 214 amounted to over 466, sq m of GLA of which 44% was completed in the second half of the year. 28 new schemes were delivered to the market and additionally 8 existing schemes were extended. Shopping centres still make up the majority of recently completed stock, taking up 67% of newly delivered space. However, a tangible shift towards retail parks has been observed in the last two years. Only two shopping centres completed in 214 are larger than 4, sq m: Atrium Felicity in Lublin (73, sq m) and Galeria Warmińska in Olsztyn (41, sq m). Over 24% of new supply was delivered as retail parks, in comparison to almost 2% in 213 and an average of 7 8% in previous years. Due to the high annual supply of over 11, sq m, total supply of retail parks exceeded 1 million sq m at the end of 214. In 214 supply of factory outlets increased by over 2, sq m. For the first time this type of retail format was completed in cities with population lower than 4 thousand inhabitants. City Outlet of 1,5 sq m was delivered in Lublin, while Outlet Białystok (approx. 1, sq m) was opened as a result of redevelopment and change of format and function of former Galeria Podlaska in Białystok. Only 1.5% of new supply delivered in 214 was located in eight major agglomerations: Warsaw, Silesia, Łódź, Kraków, Poznań, Tricity and Szczecin. 48, sq m was distributed among six new projects (three stand-alone retail warehouses: Decathlon in Bytom, Bricoman in Jaworzno and E.Leclerc in Szczecin; two small retail parks: Vis a Vis in Łódź and marcredo Center in Piekary Śląskie and one convenience shopping centre: Galeria Dębiec in Poznań), as well as two extensions of existing schemes (Magnolia in Wrocław and Krokus in Kraków). Cities with a population between 2 4 thousand inhabitants have a 22% share in new supply. The largest supply increase was in Lublin, where over 98, sq m was completed including three new projects: Atrium Felicity the largest regional shopping centre in the city, City Outlet and Selgros a stand-alone retail warehouse. Cities with a population between 1-2 thousand inhabitants saw an increase of 1, sq m, amounting to 23% of new supply located in three new projects: Galeria Warmińska in Olsztyn, Galeria Amber in Kalisz and Retail Park Bielsko in Bielsko-Biała. Table 1 Major completions in 214 Scheme City GLA (sq m) Developer Atrium Felicity Lublin 73, Galeria Warmińska Olsztyn 41, Atrium European Real Estate Libra Project Galeria Siedlce Siedlce 34, K. Strus Galeria Amber Kalisz 33,5 Echo Investment Galeria Bursztynowa Ostrołęka 27, Narev Inwestycje / Tagor / Omis Vivo! Piła Piła 23,8 Rank Progress Figure 5 Retail stock by format Figure 6 Annual supply of retail parks ( sq m) %, (f)-forecast 8% 1% Shopping centre 73% Stand-alone retail warehouse Retail park Factory outlet Property Times 3

4 Silesia Szczecin Łódź Warsaw Kraków Average for 8 aggl. Tricity Wrocław Poznań Poland Retail, H2 214 The highest share in new supply was noted in cities below 1, inhabitants and amounted to 211, sq m, which translates into 45% of the total and covers 16 new schemes and three extensions. The largest shopping centres include Galeria Siedlce, Galeria Bursztynowa in Ostrołęka, Vivo! Piła,Centrum Galardia in Starachowice and Brama Mazur in Ełk. Over 32% of new supply located in smaller cities was delivered as retail parks. Ten retail parks of an average size of around 5, sq m of GLA were completed in such cities as Chełm, Knurów, Nowa Sól, Kutno, Radomsko, Płońsk or Turek. The retail format of small schemes, tailored to the shopping needs of local communities, fills the niche in the market perfectly. The highest retail market density among eight major agglomerations was recorded in Poznań and amounted to 965 sq m per thousand inhabitants, while average in this group of cities reach 731 sq m. Over 78, sq m of new supply is currently under construction with opening dates planned for 215 and 216. In spite of the high level of density rates the developers interest in large cities and agglomerations is evident. Over 44% of supply under construction is located in eight major cities and a further 26% is located in cities with populations between 2 and 4 thousand inhabitants. The largest projects in pipeline include Posnania shopping centre in Poznań, Zielone Arkady in Bydgoszcz, Sukcesja in Łódź and Tarasy Zamkowe in Lublin. Along with growing maturity of the retail market in Poland, shopping centre owners face new challenges and threats. Intensifying competition and changes of consumer habits force older schemes to catch-up in this changing environment, which results in a growing number of extensions, redevelopments and remodelling processes taking place. Some of the schemes being recently redeveloped (and/or extended) are: Atrium Copernicus in Toruń, Galeria Sudecka (formerly the Echo centre) in Jelenia Góra, Magnolia Park in Wrocław, Centrum Bielany in Wrocław, Factory Ursus in Warsaw, Supersam in Katowice, Ogrody in Elbląg and Galeria Pomorska in Bydgoszcz. Figure 7 Retail stock split by format and market size ( inhabitants) 1% 8% 6% 4% 2% % Figure 8 Retail market density in major agglomerations (sq m per 1, inhabitants) 1,2 1, Table 2 over below 1 Stand-alone retail warehouse Retail parks Major schemes under construction Shopping centers Outlets Scheme City GLA (sq m) Developer Date of opening Posnania Poznań 95, Apsys 216 Zielone Arkady Bydgoszcz 51, ECE 215 Sukcesja Łódź 46,3 Tarasy Zamkowe PH Bielany rozbudowa VIVO! Fabryka Biznesu 215 Lublin 38, Immofinanz 215 Wrocław 35, Inter Ikea 215 Stalowa Wola 32,5 Immofinanz /Acteeum Property Times 4

5 Szczecin Poznań Tricity Kraków Wrocław Silesia Łódź Warsaw Poland Retail, H2 214 Demand Interest from new brands in the Polish market has been fuelled by solid economic figures (growing GDP and retail sales) and a concrete customer base. However, the pace of new entries was slower than in 213, partly because of the lack of high quality vacant space in prime properties in Warsaw, which is traditionally preferred location for the first store in Poland. Approximately 35 new retailers started their operations in 214, in comparison to over 5 recorded in 213. Among new brands are NEO (a new brand by Adidas), Desigual (with regular stores), CityFiT (a British chain of fitness clubs), Leopark (a Ukrainian operator of kids play centres), Undiz ( a new concept of the Etam lingerie chain), Devred 192 (French men s fashion brand), Imaginarium ( a Spanish chain selling toys and accessories for children), English Home (a British chain with home accessories) and Lidia Kalita (a new Polish fashion brand). The retailers expansion in 214 was strongly dependant on the type of retail schemes completed. Due to the intensive retail park format development focused mainly on smaller cities chains such as CCC, Jysk, Media Expert, Deichmann, Pepco, Rossmann, RTV Euro AGD, Neonet, KiK and Martes Sport expanded their operations in 214. Many retail chains (especially well known fashion anchors) indicate that a lack of available space in the best shopping centres in Poland is a major obstacle to their expansion in the country. Figure 9 Prime rents in shopping centres (EUR/sq m/ month) Vacancy and rents Vacancy The average vacancy rate in shopping centres in eight major agglomerations remains at a healthy level below 4%, with the lowest percentages of vacant space recorded in Warsaw and Wrocław. The majority of large cities with a population between 2 and 4 thousand inhabitants also benefit from healthy average occupancy levels, excepting Kielce, Bydgoszcz and Toruń, where average vacancy levels exceed 4%. Most of recently completed shopping centres and retail parks were leased at 9% and higher upon opening, which confirms investors more cautious approach to new projects being carefully planned and tailored to the local market requirements. Rents Prime shopping centre rents remain stable in 214 and range between EUR 9 to EUR 1 per sq m per month for top retail assets in Warsaw and range between EUR 43 and EUR 55 per sq m per month in other major agglomerations. Pressure on rents is visible in secondary and tertiary retail schemes both in larger and smaller cities. Property Times 5

6 Definitions Modern retail stock Prime rent Shopping centre Stand alone retail warehouse Retail park Factory Outlet retail schemes exceeding 5, sq m of GLA delivered or refurbished after 199 the highest rent paid monthly for the most attractive, approx. 1 sq m unit leased by the fashion operator in the best shopping centres modern retail schemes with over 5, sq m of GLA and more than 1 shops in the shopping mall, with central management a large-scale stand-alone retail scheme typical for DIY, furniture, electronic appliances, cash & carry and sport operators a retail scheme with a few dominating, stand alone, large-space anchor tenants, accompanied by smaller tenants; min. two big-box operators a shopping centre with brand shops offering merchandise at discount price Property Times 6

7 EMEA John Forrester Chief Executive +44 () Head of Central & Eastern Europe Alan Colquhoun Senior alan.colquhoun@dtz.com Consulting and Research Kamila Wykrota kamila.wykrota@dtz.com Capital Markets... Craig Maguire Senior craig.maguire@dtz.com Office Agency... Barbara Przesmycka barbara.przesmycka@dtz.com Retail Agency... Renata Kusznierska Senior renata.kusznierska@dtz.com Industrial and Logistics Agency Marc Le Bozec marc.lebozec@dtz.com Corporate Real Estate Services (CREM) Ian Scattergood Senior ian.scattergood@dtz.com Property Management... Christopher Rasiewicz christopher.rasiewicz@dtz.com Project and Building Consultancy Andrew Frizell andrew.frizell@dtz.com Valuation Urszula Sobczyk urszula.sobczyk@dtz.com Disclaimer This report should not be relied upon as a basis for entering into transactions without seeking specific, qualified, professional advice. Whilst facts have been rigorously checked, DTZ can take no responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy within this report. Information contained herein should not, in whole or part, be published, reproduced or referred to without prior approval. Any such reproduction should be credited to DTZ. DTZ January 215 To see a full list of all our publications please go to Global Headquarters 77 West Wacker Drive 18th Floor Chicago, IL 661 USA phone fax info@dtz.com DTZ Poland Ul. Złota 59 8th Floor Warsaw, -12 phone fax info@dtz.pl