The retail park segment in Poland is developing very dynamically. While the market for shopping centres in large cities is largely saturated, there is still potential for new retail parks, especially in cities with fewer than 100,000 inhabitants. In smaller Polish cities, rents for this type of retail property range between EUR 8 and EUR 12 per square metre and month, in larger cities up to EUR 16 per square metre and month. Yields on well-rented properties range between 8% and just over 9%. In larger cities, yields can also be below 8%. These are the most important results of the first market report for retail parks in Poland presented by CBRE and Trei Real Estate.
Pepijn Morshuis, CEO of Trei Real Estate, comments: "While the market for retail parks in Germany is already largely saturated, there is still enormous potential in Poland. Medium-sized and smaller cities are still especially undersupplied with modern retail space. The new report, which examines this segment of the Polish market for the first time, affirms Trei's strategy of becoming the largest holder of retail park portfolios in Poland. When comparing yields, in particular, Poland is a much more attractive market. In Germany, the prime yields of retail parks are currently around 5%."
At the end of the first quarter of 2019, the portfolio of retail parks in Poland totalled around 1.52 million square metres of gross lettable area. The pipeline of space under construction will amount to around 170,000 square metres of total leasable space by the end of 2019. CBRE divides retail parks into three categories: properties in the "big box" category (more than 10,000 square metres of total leasable space) dominate the market. They currently account for 45% of the supply of space. Properties with a total leasable area of 3,000 to 10,000 square metres ("typical" retail parks) account for 41%. The remaining 14% is accounted for by stores with less than 3,000 square metres (local supplier markets).
Agata Czarnecka, director of Consultancy & Research at CBRE Poland, explains: "Typical retail parks are properties ranging from 3,000 to 10,000 square metres. The total space available in this segment is estimated at over 620,000 square metres as of the end of Q1 2019. In 2018 the growth in space amounted to around 110,000 square metres. This considerable increase indicates the strong interest of project developers in this segment."
Jacek Wesołowski, managing director of Trei Real Estate Poland, adds: "Retail tenants are seeking alternatives due to the growing saturation of the market with space in shopping centres in big Polish cities." Retail parks attract tenants with rents and service fees that are significantly lower than in shopping centres. A convenient location with respect to transportation and a large outdoor car park, which ensure easy access, are important as well. The term of lease for Polish retail parks is generally five years. The amount of the rent is generally stipulated in euros. The tenant pays the equivalent in Polish złoty monthly in advance and, consequently, bears the exchange rate risk.
Trei is one of the largest developers and owners of retail parks in Poland. The company currently has 11 Polish retail parks in its portfolio under the Vendo Park brand. This year, five more retail parks are planned in smaller cities, including Pułtusk (the voivodeship of Mazowieckie), Ostrołęka (the voivodeship of Mazowieckie), Łask (the voivodeship of Łódź), Jawor (the voivodeship of Lower Silesia) and Solec Kujawski (the voivodeship of Kujawie-Pomerania).
The full report can be downloaded here in German, English and Polish: https://www.treirealestate.com/#/report