Retail parks – current opportunities

Growing bigger

Over the last few years, retail parks in Poland were mostly developed in smaller formats, around 5,000 square meters, either adding to the existing retail landscape or introducing modern retail amenities to smaller towns as their first such facilities. Now, there's a noticeable shift towards larger developments, with 32 bigger retail parks (GLA > 5,000 sq. m.) either being built or expanded, including 6 that exceed 20,000 sq. m. The biggest retail park on the construction stage is Sun Park Mysiadło, which will offer 55,000 sq. m. These larger schemes make up more than half of the new construction space in this category.

Retail parks developed in bigger formats have become alternatives to traditional regional shopping centres by offering tenants lower operating costs and making it feasible for them to grow in markets that were previously out of reach. Their effectiveness and appeal to consumers have prompted operators traditionally focused on conventional malls to venture into retail parks. This trend includes a variety of tenants, particularly those in the economy fashion sector, gastronomy and service providers like gyms or play areas, and even childcare facilities.

Slowdown, but retail parks still sought-after

Despite a general slowdown in real estate investments, retail parks continue to remain one of top choices for investors in Poland. They are perceived as a relatively stable and secure investment, offering affordability with individual transactions typically ranging from 5 to 15 million euros.

In 2023, retail parks and convenience facilities made up 56% of the sector's total investment volume, also representing about half of all transactions. Already in 2024, a few deals with this type of assets have been completed, with Avison Young's team advising on the sale of 2 of them. Looking ahead, several more transactions involving substantial retail parks are anticipated in the near future.

Due to our country's size, dynamic economic growth, and the numerous locations where retail offer can be still developed, we stand out among competitive countries where retail parks are valued significantly higher. This advantage continually draws new investors in search of appealing opportunities. Last year, the market welcomed first acquisition of the French investor FREY – the purchase of Matarnia Retail Park in Gdansk marked one of the top three investment deals of 2023. Additionally, an Austrian family office made its entrance into the Polish market by acquiring 2 convenience retail parks in Silesia, with Avison Young advising on the purchase.

The retail park sector remains ripe for further development, given its still unsaturated market and the availability of suitable land for investment. Currently, approximately 50 retail parks, including small convenience schemes, are under construction. The growth dynamics of the investment market is relatively slow, primarily because the majority of investors are long-term holders. Therefore, the investment volume mainly depends on developers and the delivery of new assets. In 2023, 40% of retail parks involved in transactions were new investments (less than 2 years on the market).

Lack of portfolios, more individual buyers

The current state of the Polish retail park market is characterized by a lack of consolidation, as seen in the relatively few portfolio transactions. In 2023, only 3 small retail park portfolios were sold in the retail sector, with Avison Young investment advisory in 2 of them.

The Polish local market is notably different from its Western countries, primarily due to the scarcity of portfolios of retail parks or grocery stores. Significant local investors acquiring retail parks typically do so with the intention of holding onto these assets long-term to generate rental income, rather than reselling them. This approach results in a relatively quiet portfolios market.

Who is buying?

The interest in Polish retail parks remains high, with over 20 investors actively seeking opportunities in this segment. Most active seem to be investors from Central and Eastern Europe, the Baltics, and Poland itself. These are often individual investors and small family offices. Individual investors are also successfully acquiring a considerable number of single grocery stores, offering often higher purchase price than investment funds.

The primary challenge lies now in finding properties that meet the criteria of both affordability and quality. The most sought-after retail parks are those that are newly built, situated in major cities, and feature a grocery store tenant secured by a long-term lease. Despite these specific preferences, the market does not lack either available properties or potential buyers.

Author: Artur Czuba, Associate Director, Investment