EPP sees return of pre-Covid levels
EPP, Poland’s largest retail landlord, says retail spend across its portfolio is returning gradually to preCovid levels with the lifting in May of most lockdown restrictions in the central European country, giving Polish customers greater freedom to shop around at brick-and-mortar stores.
Poland’s largest retail landlord EPP says retail spend across its portfolio was gradually returning to pre-Covid-19 levels after most lockdown restrictions in the central European country were lifted in May, giving Polish customers greater freedom to shop around at brick-and-mortar stores.
The return of customers to shopping centres is reflected in higher than prepandemic turnover levels. In the months without trading limitations (February and May to July), tenants’ sales exceeded those in the corresponding months of 2019 by 4% on average. At the same time, footfalls at EPP’s shopping centres were steadily growing. In August, shopper numbers in 2021 reached 84% of 2019 levels, confirming the optimistic consumer sentiment.
“This bodes well for potential rental growth impetus for the future and gives us a good reason to be optimistic for the longer term. The pandemic proved to us that Poles really enjoy shopping at shopping centres. This tells us that customers are looking for an experience that can be achieved only in brick-and-mortar,” CEO Tomasz Trzóslo said in an interview.
“E-commerce, while helpful during hard lockdowns when some stores had to close, isn’t the first choice for Polish people when they can shop in a mall. That said, we respect the fact that our customers expect to be able to shop how and when they want and, to meet these expectations, we are placing greater focus on an omni-channel approach of our shopping centres.”
Once restrictions were lifted and shopping centres reopened, the e-commerce penetration level in Poland dropped from 9.8% during the lockdown in January to 7.4% by July. EPP has meanwhile signed 204 leases for nearly 70,000m² of space during the pandemic, keeping its retail occupancy stable at 95.4%.
Like other landlords, EPP is recovering from the pandemicinduced devastation that had effectively cut off tenants from their customers at physical stores in particular, save for tenants that provided an essential service such as food.
More than half the Polish population is fully vaccinated, lessening the chances of future growth-sapping lockdowns. Listed on the JSE and Luxembourg, EPP’s €2.2bn portfolio is also supported by brighter prospects in Poland, which is seen as one of the fastest growing economies in Europe.
Poland’s GDP is expected grow 4.9% in 2021 and rising to 5.6% in 2022, while low unemployment and increasing wages is likely to stimulate consumer spending.
“EPP is fortunate to operate in one of the strongest retail markets in Europe, which supports both the retail sector and EPP’s relatively rapid recovery,” Trzóslo said.
“As we emerge from the Covid-19 pandemic, the company intends to leverage its scale to continue to introduce new concepts, tenants and experiences at its shopping centres.”