Trei Real Estate GmbH (“Trei”), an international developer and asset manager, and Jones Lang LaSalle Poland (“JLL”) jointly published the fifth edition of their market report on retail parks and convenience centres in Poland. The report indicates that retail parks have become one of the most important retail real estate development formats in Poland. The total stock of retail parks completed between 2018 and mid-year 2024 equals more than five times the sum total of the period between 2000 and 2005. During the first six months of 2024, the supply in newly completed retail parks reached another high-water mark, topping 400,000 square metres of gross floor area. In the shopping centre segment, by contrast, only about 50,000 square metres of gross floor area were realised. Year on year, the transaction volume in the retail segment increased by 149 percent during the first half of 2024, and thus exceeded the five-year average by 16 percent.
Pepijn Morshuis, the CEO of Trei Real Estate, commented: “Retail parks and convenience centres are the answer to the growing demand for conveniently accessible retail venues close to residential neighbourhoods. As a result, they have now become the preferred type of development, and dominate the supply of new-build properties. In addition, retail parks offer a speedier investment process and flexibility in floor space planning, which makes future expansions a viable option. Even expanding retailers in search of new sites favour retail parks over conventional shopping centres now.”
Low Rent Level Attracts New Brands
The average rent level for most retail parks ranges from €8 to €20/sqm/month, marking a slight increase year on year. The rent level obviously depends on the location of a given property, on its size and on the services provided by a given tenant. Compared to shopping centres, retail parks and convenience centres remain the most affordable solution for expanding retail chains because even their premium rates are less than half as much as shopping centre rents in cities of 100,000 to 200,000 residents. Moreover, retail parks are attracting more and more lifestyle brands that used to be located primarily in shopping centres. Chains like Sphinx, Starbucks, Apart, Yes and Verona opened their first retail park outlets in 2024.
Great Potential in Small Towns and Mid-Sized Cities
During the first half of 2024, a total of 22 new retail parks opened for business in Poland, while 44 percent of these new venues were built in cities of less than 100,000 residents. Due to the country’s large number of smaller and mid-sized cities, Poland has considerable development potential. More than 3 million people in 350 cities of 5,000 to 15,000 residents lack access to modern retail amenities. These needs could be nicely covered by bringing in retail parks or convenience centres. This would be made easier by the fact that development land is more readily available in cities with populations of less than 100,000.
Jacek Wesołowski, Managing Director of Trei Real Estate Poland, said: “For the time being, the segment of retail parks or convenience centres in Poland shows no sign of saturation yet. Investors have become well aware of it and are shifting their focus increasingly to small towns. Against the background of a firming economy and attractive terms of financing, we expect the willingness to invest to keep growing over the next few quarters.”
Focus on Sustainability
Sustainability remains a key factor in the development of new retail parks. At present, about 200 retail venues or the equivalent of 59 percent of the entire stock of modern retail space are certified to the LEED or BREEAM sustainability standards. The trend is driven not least by today’s consumers, who attach more and more importance to high-end products that are regionally sourced.
Jacek Wesołowski added: “Without a doubt, sustainability is the future of retail parks but already defines the present as well. As developers, we implement ESG solutions as early as the planning stage, and, in a parallel move, adapt the operational facilities to environmental requirements toward this end. Our retail parks of the Vendo Park brand are equipped with photovoltaic systems and offer charging stations for electric vehicles. We also strive to have all projects certified to the BREEAM standard.” Trei, which develops retail parks under its Vendo Park brand, counts among the most active retail park developers in Poland. Trei’s portfolio currently comprises a total of 38 Vendo Parks. The company plans to open another four before the end of this year.
The full-length survey is available for download under the following link: https://www.treirealestate.com/medien/downloads/Retail_Park_Report/EN_Retail_Park_Report_2024.pdf