Reflection on the past ready for the future? Report CRIDO and CBRE

POLISH COMMERCIAL REAL ESTATE, 20 YEARS LATER... RE FLECTION ON THE PAST. RE ADY FOR THE FUTURE?

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The only constant is change. There are two words that can simply describe the last 20 years in Poland: dynamism and change. As Unibail-Rodamco-Westfield (URW), we had the privilege of being a part of this journey. At the beginning, as Rodamco in Poland, together with the GTC Group we owned Galeria Mokotów, the first third-generation shopping mall in the country. It paved the way for the shopping centre market in Poland. The idea of a large shopping mall with a cinema, a bowling alley, and a vast dining offer, located in a post-industrial area, seemed a risky concept. Luckily for us, Galeria Mokotów was the exact opposite, and proved an instant hit. Stories still circulate of retailers waiting in a line for any free unit. In 2007, Rodamco together with ING REIM & ING RED invited customers to a brand new iconic mall - Złote Tarasy, located right next to the Central Railway Station in Warsaw. After the merger of Unibail with Rodamco in 2009, we gained sufficient market share and financial standing to take over two other destinations in Warsaw, namely Arkadia and Galeria Wileńska. In 2017, we developed the Wroclavia shopping mall, with modern office space and a long-distance bus terminal fully integrated within. We are proud to see this place visited by over 17m people a year in an city of less than 1m inhabitants. This is a brief version of our story over last two decades, since Poland joined EU. The bigger the company, the bigger were our operations both globally as well as on our local Polish market. What started as partial ownership of one successful mall visited by 11m people in 2004 has become a business of 6 malls with 78m visits a year. On the one hand, our appetite for a “better” life has driven consumption habits. On the other, stability of EU membership, allowed financing to flow more freely, fuelling new investments and developments. However, there is still one thing that we have not managed to accomplish on the Polish market, namely more local capital, invested in real estate. A comparison of Polish and Czech investment markets shows some striking differences. I believe that introducing REITs, adjusted to local needs, could be a critical factor helping local investors to profit from real estate projects, while at the same time increasing liquidity of Polish real estate assets. Another factor could be joining the eurozone. It would eliminate currency risk for both real estate investors, and for retailers. In conclusion, during the last 20 years the death of malls was predicted on several occasions, but we now see that the modern consumer enjoys stability and flexibility in making choices, and we as URW will keep trying to offer customers a seamless, unforgettable shopping experience.

GRZEGORZ GRAJKOWSKI

Director of Operations Poland Unibail-Rodamco-Westfield