The history of shopping centers in Poland is over a quarter of a century long. According to the data of the Polish Council of Shopping Centers (PRCH), there are currently approx. 560 shopping centers and retail parks with an area of more than 5,000 sq. m in Poland. Half of them have been in the market for more than a decade, over 30 percent are more than 15 years old, and some have even already celebrated their 20th anniversary. PRCH, partnered with Reesco Retail analyzed the age of commercial facilities in Poland and prepared the study “Reconstruction, extension and modernization for commercial properties”.
– Trade in Poland has changed rapidly over the last decades, which is why we looked at the history of Polish shopping centers and invited experts who conduct or support the modernization processes of facilities in various areas on a daily basis to collaborate on their future – says Krzysztof Poznański, Managing Director of PRCH.
– Reconstruction of commercial buildings is part of the life cycle of each investment. The dynamically changing lifestyle and consumer needs, technological progress, as well as the growing popularity of e-commerce mean that the concept of the attractiveness of a shopping center is constantly redefined – emphasizes Lucyna Śliż, Head of Development, Reesco Retail.
25 years of places of commerce in Poland
Shopping centers are a symbol of the free market economy that started a new era in Polish trade after 1989, as they were a form of orderly and modern trade. When in 1993 the first modern commercial facilities appeared in Poland (e.g. the Promenada in Warsaw), street and bazaar trade flourished, including places similar to the 10th Anniversary Stadium or Defilad Square at the Palace of Culture and Science in Warsaw.
The years 1997-2002 marked the first period when large-scale modern shopping centers emerged – usually located in city centers or around large superstores on the outskirts of a metropolis. Superstores were the first shopping destinations – convenient and accessible to customers. They became a favorite destination for people to shop at, and shops and service points were subsequently built around them. Today, these facilities are often over twenty years old, characterized by an excellent location, high recognition and a group of loyal customers. Seeing their great potential, owners invest in their modernization or reconstruction.
A decade of dynamic development
Between 2005 and 2015, the industry went through a period of dynamic development, which was in turn a time of the highest increase in the number and size of commercial facilities in Poland. It was then that shopping centers with a very wide range of shopping, dining and entertainment choices began to emerge. During this decade, 298 facilities were opened in Poland.The centers built at that time are currently between 6 and 16 years old. The owners regularly invest in them by introducing modern solutions to be ahead of the expectations and needs of customers, changing trends, fashion, aesthetic and functional requirements. Food courts are expanded, and cinemas and entertainment venues are enlarged. The area around the facilities is often redeveloped in accordance with the needs of the modern world: green areas are enlarged, lawns are sometimes turned into flower meadows, houses for insects and birds are built, and food truck zones are opened for customers. Even the roofs are sometimes redeveloped with beehives or herb gardens.
Recent years – market maturity and saturation
The Polish shopping center market can now be considered as mature. The report of the PRCH Retail Research Forum for the first half of 2021 states that the saturation level with retail space is 328 sq. m. GLA per 1,000 inhabitants, and after completion of ongoing investments, it will reach 341 sq. m. per 100 inhabitants. This result is comparable with the average indicators for the EU.
– The decade of the dynamic creation of new facilities in the constantly insatiable market is behind us. Today, retail parks are usually built around new housing estates or in smaller towns, as well as outlet centers, often on the outskirts of cities. If a decision is made to launch a larger investment – it is usually a premium class center, that is multi-functional and very modern, attracting a unique combination of tenants. This is a response to market saturation and maturity and an attempt to find its own niche – comments Krzysztof Poznański from PRCH.
Trends and the future of the market
In response to the visible saturation of the commercial real estate market, owners decide to expand or even change the functions of existing facilities, reposition them and undertake marketing activities to in turn attract new, often non-obvious tenants, and with them – customers.
There is also a visible trend of modernizing the existing renowned shopping centers, which are trusted by customers and have a high footfall. These facilities are prepared for change, care for loyal customers and strive for new groups of consumers. They will be modernized, adapting to new expectations and needs not only of people, but also of the environment, because not only are customers changing, but their expectations as well.
According to ICSC (International Council of Shopping Centers), over 50% of shopping center visitors expect a diversified restaurant offer, and 40% of them would like to combine shopping with entertainment. Gastronomy and entertainment historically accounted for 5% to 7% of the area of the centers, and now accounts for 10% to 15%. It is expected to grow to approx. 20% in the future. There are co-working zones, because of the new popularization of remote work. In addition, buildings are aging, and the fashion and style of architecture is changing. Neighborhoods are changing as well, and centers should be unique and tailored to local needs. In addition, tenants in the buildings change, and each one has its own concept and the space needs to be adapted to them. Parking lots over the years have had to develop with the increasing number of cars, and recently, by including space for bicycles and scooters. There are places for charging not only phones or tablets, but also cars. The facilities keep up with new technology, recently changing to LED lighting to help take care of the environment and resources. Today, modernity is about sustainable development. Multi-channel sales are also developing (the so-called omnichannel), which results in the need to provide parcel machines, as well as showrooms, digital mirrors or tablets to learn about their offer. The centers keep changing, keeping up with the clients’ needs and the changing reality.
– According to PRCH data, owners of retail facilities and managers are already investing about PLN 1 billion in fit-out investments, including finishing and preparing shops for tenants as well as renovations, modernizations and extensions carried out in common areas. This amount will certainly increase in the post-pandemic period. That is why, together with the Polish Council of Shopping Centers, we have prepared a publication on reconstruction and modernization, which, as many indications are, is the future, an opportunity for a “new beginning” for existing facilities – says Lucyna Śliż, Head of Development, Reesco Retail.