Vacancy rate is one of the key parameters determining the condition of a retail scheme. It is also one of the first measures to react to any changes of the market conditions.
At the end of H1 2015, there were 230,000 sq m of vacant space in 236 modern retail schemes in Poland’s 15 largest cities. This figure translates into 3.3% of the leasing area in the studied schemes.
In the largest agglomerations’ well-developed markets an increase in stock has not triggered a rise in vacancy rates; they have instead been falling systematically. A solid customer base with a rapidly growing purchasing power and a steady interest from tenants are key factors that encourage positive market statistics.
Over the last 5 years the situation in cities with between 200 and 400 thousand inhabitants has changed, with the rate reaching 4%.
Rapid market growth in recent times has sometimes not been met with sufficiently strong demand from tenants, which is largely an effect of the global economic crisis, intense competition, the ever-changing consumer behaviours and an optimisation of portfolios by those retail chains which were less immune to the economic turmoil.
2012-2013 were difficult years for the retail park sector, when an increased supply was coupled with a significant growth in vacancy volume. However, in the last year and a half the vacancy rate levels have gradually grown more stable, settling in the region of 5-6%.
As the shopping behaviours of the Polish consumers change, the so-called older generation retail formats are becoming obsolete. Hypermarket-driven shopping centres, preferred by customers a decade ago, have systematically seen their position weaken, with smaller schemes gaining favour with customers.
There has been a tangible polarisation in small retail schemes (with a leasing area of under 20,000 sq m). Well-planned retail assets with a solid market base are able to attract both tenants and customers. Unfortunately, due to a fast, haphazard growth of this sector, a number of poorly-prepared schemes have been constructed, and are now suffering from a lack of interest from tenants.
A clear trend has been observed on the part of tenants to choose the most popular schemes in a given market, as market leaders are the ones who immediately address new challenges.
Vacancy rate is influenced by several different factors, which are not easily quantified without analysing each case separately. Although competition, quality of service range and consumer profile in a given market seem to be crucial parameters for the condition of a retail scheme, current market challenges require a more complex approach to the question of vacancies. Finding a workable solution to this problem presents a challenge for many owners of shopping schemes.
The study of vacancy rates is conducted on a regular basis in modern shopping centres, retail parks and outlet centres (236 in total) located in cities with population exceeding 200 thousand inhabitants (8 main agglomerations and 7 cities counting from 200 to 400 thousand inhabitants). The report is based on data from the years 2011-2015.
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*Methodology: The study of vacancy rate is conducted on a regular basis in modern shopping centres, retail parks and outlet centres (236 in total) located in cities with population exceeding 200 thousand inhabitants (8 main agglomerations and 7 cities counting from 200 to 400 thousand inhabitants). The study has been conducted in the years 2011-2015.