UNITED KINGDOM FRANCE BELGIUM NETHERLANDS GERMANY POLAND RUSSIA LITHUANIA LATVIA CZECH REP. SLOVAKIA AUSTRIA SWITZERLAND HUNGARY CROATIA ROMANIA BULGARIA UKRAINE RUSSIA TURKEY GREECE PORTUGAL SPAIN ITALY DENMARK SWEDEN ESTONIA NORWAY FINLAND IRELAND SERBIA ALBANIA BELARUS MONTENEGRO UNITED KINGDOM FRANCE BELGIUM NETHERLANDS GERMANY POLAND RUSSIA LITHUANIA LATVIA CZECH REP. SLOVAKIA AUSTRIA SWITZERLAND HUNGARY CROATIA ROMANIA BULGARIA UKRAINE RUSSIA TURKEY GREECE PORTUGAL SPAIN ITALY DENMARK SWEDEN ESTONIA NORWAY FINLAND IRELAND SERBIA ALBANIA BELARUS MONTENEGRO
BELAR LATV LITHUANIA RUSSIA ANY POLAND CZECH REP. UKRAINE SLOVAKIA AUSTRIA HUNGARY Accelerating success. CROATIA ROMANIA
Where to invest in Poland? MaP of RETaIl GaPS Part 1 CentrAl PolAnd
Colliers International Research & Consultancy Research & Consultancy department at Colliers International undertakes research and advisory services for Clients in the area of Polish real estate market in particular; ofice, retail, industrial and hotel. Our knowledge is supported by years of experience and devised analytical methods, which support our Clients in the decision-making processes, identifying opportunities and threats and possible scenarios resulting from the changing market conditions. Services provided by the Department include economic analysis and market studies of the real estate market with respect to future market trends, feasibility study, competition analysis, investment strategies, analysis of the location, etc. Our database includes the most current information on the real estate market in Poland, and our close cooperation with Colliers agency departments allows for a better understanding of individual needs of our Customers. 2 Colliers international
Dear Sirs, It is my great pleasure to introduce the latest Research & Consultancy Department publication WHERE TO INVEST IN POLAND? MAP OF RETAIL GAPS; Our report identiies potential investment opportunities on the Polish retail market in small cities. The report will be released in six parts and will be published on the quarterly basis the irst part focuses on the Central Poland. I hope you will ind this publication interesting, informative and useful in making your business decisions. If you would like to receive more detailed information about investment opportunities on the retail market in Poland, or any other publication by our department, please contact us on: +48 22 331 78 00 or +48 22 333 91 72. We hope you will enjoy reading it. Yours sincerely, Dominika J drak Director Research & Consultancy Colliers international 3
Central Poland Voivodships Mazowieckie Łódzkie 4 Colliers international
Introduction the aim of the report WHere to InVeSt In PolAnd? MAP of retail GAPS is to identify potential investment opportunities on the Polish retail market in smaller cities. retail markets in major Polish agglomerations are already quite well recognised and developed (although this does not necessarily mean that they are saturated in terms of retail space), whereas smaller cities can carry a signiicant, yet undiscovered potential and therefore it is worth to take a closer look at them. the purpose of this report is to investigate and identify these retail gaps. the report will be released in six parts and will be published on a quarterly basis. each part of the report will be dedicated to a separate Polish region: 1. Central region (part i): > Łódzkie > Mazowieckie 2. southern region 3. south-western region 4. northern region 5. north-western region 6. eastern region the report provides an overview of retail markets in cities with populations between 30 100 thousand inhabitants. Cities are analysed in terms of both existing and planned modern retail supply, as well as economic indicators, such as unemployment rate and purchasing power. Based on the results of this analysis the map of retail gaps is created. the map deines new trade routes, which cover the cities with high potential due to the combination of limited supply of modern retail space and favourable economic parameters. Such potential gaps represent an interesting alternative to larger cities, which are already relatively well served in terms of existing retail space. Smaller cities can present an interesting option for investors who wish to gain exposure in new and prospective locations. the map of new trade routes may become the irst step in identifying locations which ofer real opportunities for successful development. Colliers international 5
WHERE To InVEST CEnTRal Poland Retail Markets in Small Cities retail markets in small cities difer signiicantly from each other, both in terms of their degree of development as well as local circumstances, and it can, therefore be quite diicult to compare them and obtain conclusive results. However, there are certain key elements that determine the success of a planned investment in a particular location, such as local authorities attitude and infrastructure development. these can be important factors that may facilitate the investment process, or, on the contrary make it almost impossible. Identifying a particular location requires detailed analysis of local conditions, both in terms of existing and future competition, as well as socio-economic situation, planned infrastructure investment etc. Compared to large agglomerations, where retail markets have been developing pretty steadily, in smaller cities the situation is slightly diferent. In the majority of cities over 30 thousand inhabitants there are already local as well as chain supermarkets; diy stores with building materials, home and garden articles; furniture stores and small department stores, mostly with local tenants. What distinguishes retail markets in particular cities is the presence in some of them of a modern retail shopping centre, which has delivered new quality and ofers new retail experience to consumers on the local market. Investors looking for new opportunities in smaller cities make their decisions based on many factors, such as socio-economic situation, existing and planned competition or the distance from a larger urban agglomeration. therefore, not all cities of similar size will be similarly assessed in terms of investment potential. the picture of any given retail market changes signiicantly with the opening of a modern retail shopping centre, which is able to attract bigger, well known retail chains. the analysis of retail space in the following part of this report consists mainly of modern schemes with min. 5,000 m 2 GlA, which represents a scale of development with the potential to attract signiicant custom and impact on a market. 6 Colliers international
WHere to InVeSt CentrAl PolAnd Mazowieckie Voivodship ostrołęka the largest and most populous voivodship in Poland. płock Ciechanów wyszków location east-central Poland, bordered by six voivodships: lubelskie to the South-east, Świętokrzyskie to the South, legionowo wołomin sochaczew warsaw pruszków Żyrardów grodzisk Maz. otwock piaseczno Mińsk Mazowiecki siedlce population Łódzkie to the South-West, Kujawsko-Pomorskie to the north-west, Warmińsko-Mazurskie to the north, Podlaskie to the north-east 5.2 mln area 35,558 sq. km. Capital warsaw radom Main Cities warsaw, radom, płock MazowieCkie selected statistical data (table 1.) Population Unemployment rate (%) Purchasing power index per inhabitant * poland 38,200,037 11.8 100 Mazowieckie Voivodship 5,236,296 9.5 127 warsaw 1,713,673 3.7 siedlce 76,365 9.4 piaseczno 71,087 7.1 pruszków 56,893 6.7 ostrołęka 53,402 14.9 legionowo 52,083 12.6 wołomin 50,912 12.9 Ciechanów 45,078 16.5 otwock 44,069 8.3 Żyrardów 40,990 13.7 grodzisk Mazowiecki 40,057 6.7 wyszków 38,627 14.8 Mińsk Mazowiecki 38,353 9.6 sochaczew 37,537 10.6 * Purchasing power in selected cities in relation to the average in voivodship based on data from Central Statistical Oice Colliers international 7
WHERE To InVEST CEnTRal Poland Modern retail space in cities with population between 30 and 100 thousand inhabitants in Mazowieckie Voivodship. > 13 cities with population between 30 and 100 thousand inhabitants. > At the end of Q3 2011 modern shopping centres with min. 5,000 m 2 GlA were present in three cities only. > the majority of modern retail space is located in Piaseczno (nearly 60,000 m 2 ), where there are two big retail schemes: Auchan (extension plans) and Fashion House, which beneit from Piaseczno s location in the immediate vicinity of Warsaw. there is also new decathlon store. > Bigger shopping centres are also located in Ciechanów (Galeria Mrówka) and Wyszków (Galeria Wyszków). > n analysed cities there are also a number of smaller retail schemes (less than 5,000 m 2 GlA), which can be considered as modern space, including Galeria Alius in ostrołęka, Galeria S in Siedlce, Galeria Partner in Mińsk Mazowiecki, Pasaż Handlowy Stara Przędzalnia and Galeria Żyrardów in Żyrardów. Modern retail space (table 2.) Modern retail space (min. 5,000 m 2 gla) piaseczno 56,000 existing retail schemes Auchan (1996), Fashion House (2005) Ciechanów 7,700 Galeria Mrówka (2008) wyszków 11,000 Galeria Wyszków (2010) Mazowieckie - existing and planned retail supply (m 2 ) Modern retail schemes under construction and planned: > By the end of 2014 in ive cities openings of nine retail schemes are planned: in Siedlce, legionowo, Ciechanów, Pruszków and Żyrardów. > developers are particularly active in Ciechanów and Siedlce. > Five retail schemes are under construction at the moment. these include two extensions of existing shopping centres: Galeria S in Siedlce and Galeria Mrówka in Ciechanów (retail park extension) and three new retail schemes: Arabella in Ciechanów and two smaller shopping centres in Żyrardów (Stara Garbarnia and dekada Żyrardów). > the biggest planned retail scheme is Galeria legionowo, with 43,000 m 2 GlA. Modern retail space under construction and planned (table 3.) siedlce legionowo Ciechanów Main planned retail schemes Galeria S (extension) Centrum Handlowe Galeria legionowo Galeria Mrówka (extension of retail park) status area planned completion UC 27,000 H2 2013 planned 50,000 2013 / 2014 planned 43,000 H2 2013 UC 11,000 Q3 2012 Arabella UC 15,500 H1 2012 Karuzela Park planned 8,000 n/a pruszków renoma planned 11,000 2012 / 2013 Żyrardów UC-under construction Stara Garbarnia dekada Żyrardów UC 5,000 Q4 2011 UC 3,800 Q2 2012 E P 8 Colliers international
WHere to InVeSt CentrAl PolAnd Łódzkie Voivodship wieluń sieradz zduńska wola kutno zgierz Łódź pabianice tomaszów Mazowiecki piotrków trybunalski Bełchatów radomsko skierniewice opoczno location population area Capital Main Cities Central Poland, bordered by six voivodships: Mazowieckie to the north-east, Świętokrzyskie to the South-east, Śląskie to the South, opolskie to the South-West, Wielkopolskie to the West Kujawsko-Pomorskie to the north 2.5 mln 18,218 sq. km. Łódź Łódź, piotrków trybunalski, pabianice Łódzkie selected statistical data (table 4.) population unemployment rate (%) purchasing power index per inhabitant * poland 38,200,037 11.8 100 Łódzkie Voivodship 2,537,813 12.1 98 Łódź 732,376 10.4 piotrków trybunalski 77,817 10.9 pabianice 68,608 15 tomaszów Mazowiecki 65,424 16.3 Bełchatów 60,864 10.6 zgierz 57,838 15.7 skierniewice 49,007 9.6 radomsko 48,286 14.2 kutno 46,257 16.9 zduńska wola 43,948 12.4 sieradz 43,552 12.3 opoczno 35,837 14.8 wieluń 32,687 10.3 * Purchasing power in selected cities in relation to the average in voivodship. based on data from Central Statistical Oice Colliers international 9
WHERE To InVEST CEnTRal Poland Modern retail space in cities with population between 30 and 100 thousand inhabitants in Łódzkie Voivodship: > 12 cities with population between 30 and 100 thousand inhabitants. > In ive cities there are modern retail schemes with min. 5,000 m 2 GlA. > the largest supply of modern retail space (52,800 m 2 ) is located in Piotrków trybunalski, in two big shopping centres: echo and Focus Mall. > the second city in terms of existing retail space is Sieradz, where three shopping centres Galeria Sieradzka, Galeria rondo and dekada provide over 25,000 m 2 GlA of modern retail space. > retail schemes in other cities: Pabianice SC echo, Bełchatów Galeria olimpia, Skierniewice tesco and, newly delivered in September 2011, dekada Skierniewice. Modern retail space (table 5.) piotrków trybunalski Modern retail space (min. 5,000 m 2 gla) 52,800 existing retail schemes SC echo (2000), Focus Mall (2009) pabianice 13,500 SC echo (2003) Bełchatów 9,300 Galeria olimpia (2000) skierniewice 5,000 tesco (2003) sieradz 25,000 Galeria Sieradzka (2008), Galeria rondo (2011), dekada Sieradz (2011) Łódzkie - existing and planned retail supply (m 2 ) Modern retail schemes under construction and planned: > At the end of Q3 2011 developers activity was recorded in two cities: Pabianice and Bełchatów. > Pabianice there is one retail scheme under construction, of around 5,000 m 2 GlA. > Bełchatów investors are currently building two shopping centres, which according to the plans will be delivered to the market in the second half of 2012. the irst is Galeria olimpia, which, together with its existing part (formerly SC echo), will comprise a retail complex with 30,500 m 2 GlA. the second scheme is Bawełnianka, with 35,000 m 2 GlA. > Investors are also planning retail schemes in radomsko and tomaszów Mazowiecki. Modern retail space under construction and planned (table 6.) pabianice tomaszów Mazowiecki Bełchatów radomsko Main planned retail schemes Centrum Fabryka Shopping Centre status area planned completion UC 5,000 Q2 2013 planned 30,000 2014 / 2015 Bawełnianka UC 35,000 H2 2012 olimpia UC 21,000 H2 2012 Galeria radomsko UC-under construction planned 20,000 n/a,,,,,, E P 10 Colliers international
WHere to InVeSt CentrAl PolAnd Summary Based on the analysis carried out, covering the analysis of modern retail space and socio-economic factors, investment potential of surveyed cities has been identiied. the data is presented in the following tables. the potential resulting from socio-economic factors (table 7. and table 8.) has been identiied on the basis of the evaluation of MazowieCkie investment potential resulting from socio-economic factors (table 7.) unemployment rate * purchasing power ** potential siedlce + - piaseczno + + pruszków + + ostrołęka - - legionowo - + wołomin - - Ciechanów - - otwock + - Żyrardów - - grodzisk Mazowiecki + + wyszków - - Mińsk Mazowiecki + - sochaczew + + * Unemployment rate: + => lower than Polish average; => higher than Polish average ** Purchasing power: + => higher than the average for voivodship; => lower than the average for voivodship unemployment rate and purchasing power ( + favourable situation; unfavourable situation) and presented with appropriate indicators: - high - neutral - low Łódzkie investment potential resulting from socio-economic factors (table 8.) unemployment rate * purchasing power ** potential piotrków trybunalski + + pabianice - + tomaszów Mazowiecki - - Bełchatów + + zgierz - + skierniewice + + radomsko - + kutno - + zduńska wola - - sieradz - + opoczno - - wieluń + + * Unemployment rate: + => lower than Polish average; => higher than Polish average ** Purchasing power: + => higher than the average for voivodship; => lower than the average for voivodship Colliers international 11
WHERE To InVEST CEnTRal Poland the analysis of retail markets (including existing and planned schemes) in the cities with population between 30 and 100 thousand inhabitants and results obtained from the analysis of socio-economic situation led to identifying the investment potential of analysed cities. the results are presented by appropriate colours (table 9. and table 10.), which correspond with cities designation on the map. - high investment potential, low investment risk - medium potential and risk - low potential, high risk MazowieCkie investment potential resulting from the development of retail market and socio-economic factors - see table 7. (table 9.) siedlce piaseczno pruszków ostrołęka legionowo wołomin Ciechanów otwock Żyrardów grodzisk Mazowiecki wyszków Mińsk Mazowiecki sochaczew investment potential Łódzkie investment potential resulting from the development of retail market and socio-economic factors - see table 8. (table 10.) piotrków trybunalski pabianice tomaszów Mazowiecki Bełchatów zgierz skierniewice radomsko kutno zduńska wola sieradz opoczno wieluń investment potential 12 Colliers international
WHere to InVeSt CentrAl PolAnd Map of retail gaps in Poland Map of retail gaps in poland The map of retail gaps in Poland identiies the investment potential of smaller cities in particular voivodships and sets new trade routes. Three trade routes were indicated: blue, red and black, which point out existing opportunities and the level of investment risk. Established colours of trade routes correspond with the degree of diiculty of tourist trails. Blue indicates low diiculty level, which in business terms translates into high potential and relatively low investment risk. The red route from the investment point of view presents slightly lower potential of a particular retail market and higher risk, while black indicates the highest diiculty level and cities assigned to this route are considered as very risky for investors at the moment (however, in longer term the situation in these cities may change). - high investment potential, low investment risk - medium potential and risk Kutno Płock Sochaczew Skierniewice ostrołęka Ciechanów Wyszków legionowo Wołomin Warsaw Pruszków otwock Grodzisk Maz. piaseczno Żyrardów Mińsk Maz. Siedlce - low potential, high risk Zgierz Łódź Wieluń Sieradz Zduńska Wola Bełchatów Pabianice Piotrków trybunalski tomaszów Mazowiecki opoczno radom The data in the report represents the situation at the end of Q3 2011. This publication does not cover every aspect of the subject it deals with. This publication is not designed to provide legal advice or investment consultancy and therefore it cannot be considered as a basis for business decisions. radomsko Colliers international 13