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BNP Paribas Real Estate: Clear differences among the high streets in the capitals of Central Europe

Location within one geopolitical region is far from having one story to tell about high streets witin that region. Capital cities vary in terms of commercial offer or rental levels. There are also clear differences when considering pace of development and potential. However, there are also some common points, which mainly focus on areas with defined tenant-mix structure. These topics have been presented in the Report: A Tale of Three Cities: High Street in the CEE capitals, prepared by BNP Paribas Real Estate.The purpose of the Report was to compare the key drivers stimulating development of highs streets in Prague, Budapest and Warsaw. Additionally, the report shows differences and similarities when analyzing supply of commercial units, tenant-mix structure as well as rental levels and vacancy rates. The research was based on site inspections and detailed review of retailers and service providers present on selected high streets. The tenant-mix analysis also included defining of target groups.The survey conducted indicates that Warsaw, despite having the largest number of commercial units at high streets (450 units) and the wealthiest population in terms of purchasing power, has the smallest market share of retail, accounting for 52% whereas in Prague it reaches over 62%, with only 250 units.The differences among the analysed cities are also connected with rental levels. Prague has been an unquestionnable

Location within one geopolitical region is far from having one story to tell about high streets witin that region. Capital cities vary in terms of commercial offer or rental levels. There are also clear differences when considering pace of development and potential. However, there are also some common points, which mainly focus on areas with defined tenant-mix structure. These topics have been presented in the Report: A Tale of Three Cities: High Street in the CEE capitals, prepared by BNP Paribas Real Estate.

The purpose of the Report was to compare the key drivers stimulating development of highs streets in Prague, Budapest and Warsaw. Additionally, the report shows differences and similarities when analyzing supply of commercial units, tenant-mix structure as well as rental levels and vacancy rates. The research was based on site inspections and detailed review of retailers and service providers present on selected high streets. The tenant-mix analysis also included defining of target groups.

The survey conducted indicates that Warsaw, despite having the largest number of commercial units at high streets (450 units) and the wealthiest population in terms of purchasing power, has the smallest market share of retail, accounting for 52% whereas in Prague it reaches over 62%, with only 250 units.

The differences among the analysed cities are also connected with rental levels. Prague has been an unquestionnable leader with prime rents at around €160-180 sqm/month. The best high street stores in Budapest and Warsaw can be leased for €80-100 sqm/month.

 „The multidimensional, strong position of Prague derives from its high tourist attractiveness, holding 5th position in Euromonitor’s Top 100 City Destinations Ranking 2013). It contributes to generating substantial footfall, which is extremely important for tenants. Additionally, high street units in Prague are of appropriate size, quality and visibility” – comments Anna Staniszewska, Head of Research & Consulting CEE at BNP Paribas Real Estate.

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 Each of the capitals has a prestige zone, dominated by luxury and upmarket brands. Prague has definitely the highest concentration of this type of retailers, followed by Budapest. In Warsaw this area is concentrated around the Three Crossess Square and Mokotowska Street. Although dynamically developing, it lags behind the peer cities.

In all of the analysed cities, there are also „catering & entertainment” clusters, with plenty of food offer, clubs and discos. Additionally, there are areas dedicated to popular brands and retail chains.

 According to the Report, Warsaw has a large development potential. As a financial hub for the region, the agglomeration of the highest population and highest purchasing power among the peer cities, the city meets almost all of the criteria to attract retailers typical for high streets and compete with the analysed capitals. Next to the renowned cities such as Nowy Świat, Chmielna, Three Crossess Square or Mokotowska, there are spots such as Świętokrzyska, becoming attractive as new high streets after opening of the second metro line.

Given the fact that urban malls in Warsaw are fully let, high streets become a natural place for expansion for new comers, which are perfect for flagship stores.

 “In Warsaw, it is no longer a question „if” but when” the proper development will happen. Apart from the obvious macroeconomic funamentals of the city, one should also consider the changing shopping habits as well as changing habits for leisure and entertainment. The offer on Warsaw high streets should adjust to the new trends and become a true heart of the city, a centre full of life, in which people like and want to be” – said Anna Staniszewska, Head of Research & Consulting CEE at BNP Paribas Real Estate.

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Source BNP Paribas Real Estate. Provided by

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