New shopping centres in large cities

2010-08-23

Because of the weaker economic climate both investors and tenants of retail space are approaching new projects with caution. In a desire to limit risk investors are opting to build new centres mainly in large cities, according to Puls Biznesu.
Approximately 440,000 m² of space in new shopping centres will be completed this year, close to 170,000 m² of which have already been finished. These projects include Port Lodz, Zgorzelec Plaza, Suwalki Plaza, Galeria Mazovia in Plock, Galeria Jastrzebie in Jastrzebie-Zdroj, Family Point in Wroclaw and Tesco in Warsaw. Recently work was also completed on the Metropol Dom and Wnetrze shopping centres in Warsaw, representing a total floor area of 13,500 m². Also scheduled for completion by the end of 2010 are the Galeria Wiatraczna mall in Warsaw, Gemini Jasna Park in Tarnow, Galeria Victoria in Walbrzych, Galeria Sanowa in Przemysl and Agora in Bytom.
Analysts from Cushman & Wakefield believe that a decline in activity among property developers over the next two years will be reflected in fewer new units being completed and in more modest expansion tendencies among retail chains. Slackening interest in retail space is forcing owners to reduce rents, which is working to the advantage of tenants. Market specialists believe that the coming years will be positive both for those interested in leasing retail space and for the owners of such space. New malls will also open during this period, including Galeria Kaskada in Szczecin, Centrum Sloneczne in Radom, Bulwary Poznanskie in Poznan, and Galeria Katowicka in Katowice, while Galeria Echo in Kielce will be expanded. Construction work will also probably commence on a number of retail investments that had been suspended due to the crisis, including Millenium Hall in Rzeszow and Felicity in Lublin.
At the present time, developers are returning to major urban centres where they are launching new projects, hoping in this way to minimise risk. Fresh investments are in the pipeline in Poznan, Katowice, Wroclaw and Lodz.

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