Warsaw market of retail space in housing developments (PL)
Monday 24 October 2011
Intense growth of the Warsaw market of retail space in housing developments results from developers’ efforts to improve attractiveness of their projects and make them more comfortable for new inhabitants. There is also an economic factor which fuels this market extension – instead of housing units which are harder to sell when situated on the ground floor developers arrange more attractive and more profitable retail-service units.
According to market survey conducted by Emmerson Market Research Department at the end of Q3 2011 Warsaw market of retail-service space in housing developments comprised 232 units. 75% of them where to be sold while for following 17% developers were considering both option: sale and lease. Only 7% of retail-service units were strictly destined to be leased only.
Majority of the analyzed market is constituted by average-standard units of an area between 100 and 250 m² sold or leased in a developer’s state. This is a consequence of the fact that typical middle-class housing estate clearly dominate among currently implemented projects on the Warsaw primary housing market.
The average initial selling price for retail-service space in housing developments in Warsaw reaches PLN/ m² 12,650 and is 23% higher when compared to the analogous price for dwellings in the projects which include both retail and housing units. The highest prices are quoted in Srodmiescie (PLN/ m² 16,350). In case of the entire Warsaw, price range is very wide. The cheapest retail-service units destined to be sold are offered for less than PLN/ m² 7,000 while the maximum prices exceed the level of PLN/ m² 22,000.
Similarly to the city’s residential market, price negotiations are accepted and therefore highly recommended. Final prices may significantly differ when compared to initial ones. When lease market is taken into account, rent rates are also subject to negotiations. In that case developers prefer long-term agreements. A typical lease contract period is 3 to 5 years with an option to extend. Contracts for unspecified time are very rarely signed.
In case of lease market, rents paid in PLN much more common. The average rent rate in the analyzed period reached PLN/ m² 95.3. There were only four housing projects in the city where rents were denominated in EUR. These were:
– Trio Apartamenty located in the district of Srodmiescie
– Platinum Towers located in the district of Wola,
– Woronicza Qbik located in the district of Mokotow
– Scandinavian House located in the district of Wilanow.
The average rent for retail space in those projects reached EUR/m² 31.6 and when converted to PLN (on the basis of 30.09.2011 NPB average rate) was 46% higher comparing to the analogous rate for developments with rents in PLN.
In case of the entire market, the central city’s part (especially district of Wola) accumulates the highest part of supply. Only each fifth retail unit in the current offer is situated in the right-bank Warsaw – most of them in districts of Praga Poludnie as in Rembertow, Wesola and Praga Polnoc there were no retail units in housing developments available on the market.
Commercialization level in case of retail units reaches 48% which means that still 52% available in currently commercialized projects are still not sold or leased.