CEE Marketbeat Retail 2023 Q2
Despite all the challenges, retail schemes across various formats performed well in CEE
- Despite the challenges posed by surging inflation in 2022 and H1 2023, the highest in the EU, impacting purchasing power and costs for retailers and developers, a positive trend toward decreasing inflation and enhanced domestic spending emerged in Q2 2023 across CEE. Inflation is expected to recede to single digits by 2024, providing further relief.
- Retail schemes have performed well, with retail sales meeting or surpassing pre-pandemic levels. While shopping centre footfall is generally lower, visitors now tend to visit retail schemes with specific intentions to buy and spend more.
- A slowdown in development activity is evident in the CEE retail property sector, particularly within shopping centres. As of Q2 2023, around 1.3 million sq m is under construction in CEE-6, with 63% in retail parks. Developers are prioritising the refurbishment and extension of existing shopping centres, along with the construction of new retail parks.
- CEE countries consistently attract new brands, with at least 47 new market entries recorded in 2023 and more planned by year-end. Dynamic expansion is notable in discount non-food retailers, affordable clothing, sports stores, and F&B. Czechia and Poland remain the most attractive CEE markets for entry.
- In Q2 2023, prime rents for high street retail space across CEE remained steady compared to the previous quarter, while they increased for retail parks and shopping centres in certain countries in the region.