Market analysis
11-27-2009
Demand for rental of stores and retail real estate increased in the second quarter of 2009.
It should be noted when analysing the retail real estate market that 2009 began with a dramatic drop in demand for rental or purchase of retail real estate. While there were few difficulties in arranging rental of premises in 2008 - the lessees did not particularly strive to negotiate rents much lower than originally quoted by the owners, and banks and financial institutions were opening new branch offices en masse and driving up rent prices - currently we are witnessing stabilisation in the retail real estate market.
If we compare the first and second quarters of 2009 we should clearly see the growth of demand for retail real estate rental in the second quarter. This was matched by new lease offers.
The retail real estate market has also seen an increase in yet another type of transaction: a large number of lessees, especially catering enterprises, has given up their previous activity and is offering their businesses, along with lease rights for their respective premises, for sale. One should also note the closing of the offices of bank branches and financial consultancy companies, which is naturally influenced by the current economic recession.
With regard to customers in the market for retail real estate, it is becoming clear, that the so-called niche businesses are gaining popularity; this means a demand for premises suitable for wine bars, chocolate drinkeries or sushi bars: premises ranging from 80 to 120 sq. m. Premises with areas of 150 to 500 sq. m are sought by large companies intending to open furniture stores, grocery markets, pharmacies, dance studios, etc. Traditionally, the shortest time in the market is reserved for stores located in the fashionable areas in the centre of Warsaw, on streets such as ul. Chmielna, Marszałkowska, Jana Pawła, or Nowy Świat. On the other hand, newly-built housing estates often offer to many retail premises, with too steep rents, obscure location, and poor rental prospects.
Commentary by Anna Pawelec, Real Estate Broker License no. 4285; e-mail: a.pawelec@maxon.p