The value of transactions involving modern retail space to increase in 2010

2010-06-23

Between January and May 2010, transactions on the commercial property market in Poland were worth €900m, which represents a 30% increase in comparison with the whole 2009, according to the Cushman & Wakefield (C&W) agency. After the recession, foreign investors are returning to the Polish market, where modern retail space, storage space and office space for sale are worth around €2bn in all. Investment funds from Germany, Great Britain, the USA, France and Australia have invested the most substantial amounts in Poland. The largest transactions in 2010 included the sale of the Galeria Wilenska and Arkadia shopping centres in Warsaw. The latter transaction was worth around €200m.
In 2009, about 900,000 m² of modern retail space was released in Poland. In 2010, analysts expect to see a smaller amount of modern retail space added to the market as a result of the suspension of a large number of projects. Therefore, it is expected that the shopping streets will grow more popular again in Poland. In recent years, the importance of such streets declined because of the large number of new shopping galleries appearing on the Polish market.

In the first quarter of the year investors in Poland obtained building permits for 1,030 retail/service buildings with total planned area of 652,900 m². This represented a drop of 19.1% and of 41.9%, respectively, compared with the same period a year ago. In our view, the decline in investment activity observed in Q1 was due in part to this year’s exceptionally harsh winter, which delayed many projects. We expect that as conditions in the construction sector improve, figures for the following quarters will show a significant rise in the number of new investments in retail/service buildings. However, it is possible that in the year as a whole, the number of new investments will be slightly lower than in 2009, when permits for a total of 5,381 such buildings were issued with combined area of 3.85 million m².

Bartłomiej Sosna
Senior Construction Analyst
PMR Publications