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No. 027 / 24th March 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter
MANUFACTURING & PROCESSING Industrial output accelerates in February page 3 BANKING & FINANCE mBank teams up with Orange in new mobile banking alliance page 3 PKO BP to finalize merger with Nordea by mid-2015 page 4 ENERGY & RESOURCES Tauron teams up with PIR to build PLN 1.5bn cogen unit in Silesia page 6 New mining law to speed up development of Poland's shale gas industry page 6 VW has been making commercial vehicles in Poznań for more than a decade.
Photo: VW Poznań
VW to create 2,300 jobs at new factory
Germany's top car manufacturer Volkswagen has unveiled details of its new greenfield investment in Poland, which has been the stuff of rumors since autumn last year. The company plans to build a brand new factory in Września, 50km east of Poznań, that will produce the next generation of VW's Crafter delivery van. According to Polish government officials, the project will total EUR 800m and launch in Q4 2016. page 2
PROPERTY & CONSTRUCTION Global property giant Invesco opens its 2nd CEE office in Warsaw page 8 France's Yareal announces new office project page 9 Nestle to take up 10,000 sq.m at new Mokotów scheme by Kronos Real Estate page 9
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SERVICES & BPO Dutch Express delivery giant TNT to employ 400 at new Warsaw shared services centre page 11 CONSUMER GOODS & RETAIL Spanish Neinver to add 6,000 sq.m of GLA to Ursus outlet center in Warsaw page 13 POLITICS & ECONOMY A recipe for doing business better: Poland Today talks to Xavier Devictor, The World Bank's head for Poland and the Baltic States page 12 KEY FIGURES Up-to-date macroeconomic figures, currency & stock market data and lots of other hard-to-find info pages 14-16
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MANUFACTURING & PROCESSING
VW unveils details of huge new greenfield investment in Poland Although this project has been the stuff of rumors for a couple of months now, Volkswagen has finally provided an official confirmation of its plans to build a brand new factory in Poland. The EUR 800m facility is to create 2,300 new jobs and focus on the production of the Crafter delivery van range. The latter has been made since 2005 at two German Daimler plants under a co-operation accord with VW that is due to expire at the end of 2016. Relocating production to Poland will allow the German group, which already makes the Caddy and T5 commercial vehicles near Poznań, to significantly reduce its production costs.
"By taking the decision to produce the Crafter in Poland, we are setting the course for the strategic realignment of our light commercial vehicles,” said Leif Östling, head of VW's commercial vehicles business. "The Crafter is outstandingly well-suited for all the growth markets of the world and will take Volkswagen Commercial Vehicles a stage forward on its way to becoming a globally active manufacturer." The new plant will be located in Września, some 50km to the east of Poznań and will be the second location of Volkswagen Commercial Vehicles in Poland in addition to the plant at Poznań, where Caddy urban delivery vans have already rolled off the production line for more than a decade. "Our experience with the production of the Caddy in Poland has been excellent. And the region around Września offers ideal economic, infrastructure and labor market policy conditions for us," said Eckhard Scholz, Speaker of the Management Board of Volkswagen Commercial Vehicles.
Image: VW
According to the Cologne-based IW economic institute, labor costs in Poland's manufacturing industry came to an hourly EUR 6.65 per worker in 2012, about a sixth of the EUR 36.98 in Germany. Recent large scale-improvements in road infrastructure have only strengthened the country's position as a competitively priced manufacturing hub for German companies. Last year Germany bought more than 30% of Poland's total automotive exports (EUR 5.39bn of EUR 17.91bn). A month ago GM-Opel announced plans to launch production of a new range of diesel engines in Poland at the cost of EUR 250m.
Automotive industry in decline Passenger & LCV production in Poland and automotive exports Auto motive exp orts in EUR bn, left axis
The area of the future plant will total some 220 hectares and the plant itself will consist of a body shop, paint shop and final assembly unit. Construction is scheduled to start at the end of 2014 with the start of production following in Q4 2016. Poland's Economy Ministry said the investment will total EUR 800m, which would make it one of the priciest automotive investments Europe has seen in years. The MercedesBenz factory in Hungary opened two years ago cost EUR 548m, despite its much larger floor size and production volume. Perhaps the elevated capex has something to do with VW's expectations with regard to public aid, as the Polish government has agreed to include the investment site into the Walbrzych special economic zone. The next generation of Volkswagen's Crafter van will be made at the new Polish factory in Września.
nover told Poland Today, confirming that the plant's annual production capacity is to reach 88,500 units.
"Volkswagen did not disclose any investment numbers and will not comment on this topic," Günther Scherelis from VW's commercial vehicles unit in Han-
Vehicle output in ' 00 0, right axis 20
1,00 0
19
90 0
18
80 0
17
70 0
16
60 0
15
50 0
14
40 0 20 08
20 09
201 0
2011
2012
2013
Source: Samar, AutomotiveSuppliers.pl *) exports figure projected
"Due to the current situation in Europe's automotive sector further investments of this scale are unlikely to materialize anytime soon, although a few years from now, when car sales in the EU return to pre-crisis levels, other carmarkers may follow in VW's footsteps," says Rafał Orłowski, market expert from AutomotiveSuppliers.pl. In the short-term, however, one may expect some of VW's suppliers and subcon-
weekly newsletter # 027 / 24th March 2014 / page 3
tractors to relocate to Poland, and its 70 or so partners who are located in Poland, may count on new orders. "We hope the launch of production in Września will stimulate cooperation with local suppliers of parts and components of which there are approximately 1,000 in Poland, more than a half of whom hold the ISO/TS 16949 certificate – a crucial quality badge in the automotive sector. Assuming that one new job at the VW factory creates another 2-3 with its partners, by early 2017 the project may result in creation of some 68,000 new automotive jobs in Poland," Orłowski says.
VW is Poland's No. 2 car manufacturer Car production in Poland by maker in '000 units
Fiat
2009
VW
2010 2011 2012
Opel
2013 0
100
200
300
400
500
600
Source: Samar
Despite a slight improvement in automobile sales, Poland-based car manufacturers turned out 575,117 passenger cars and light commercial vehicles last year, marking a 9.6% drop from 2012, according to market researcher Samar. Although Fiat Auto Poland retained its position as the country's number one carmaker, its share in the total vehicle output dropped by 3.4 pps, down to 51.4%. The Poznań-based Volkswagen plant came second with a 29.7% share (+4.2 pps), whereas Opel Polska's factory in Gliwice saw its share shrink by less than 1 pps, reaching 18.9%.
Poland's automotive exports totaled EUR 17.9bn in 2013, 1% up on the prior year, and in 2014 the figure is likely to reach EUR 19bn, according to estimates by AutomotiveSuppliers.pl. The largest products group were parts and components, representing more than 38.8% of the total figure (EUR 6.95bn; +5% y/y), followed by passenger cars and LCVs with 30% (EUR 5.13bn; -3.8% y/y) and Diesel engines with 12.3% (EUR 2.2bn; +4.8% y/y).
Industrial output & producer prices
MANUFACTURING & PROCESSING
Source: GUS, the central statistical office
Industrial output accelerates in February Poland's industrial output increased by 5.3% y/y in February, against a 4.1% growth in January, the Central Statistical Office (GUS) said on Wednesday. The result was slightly lower than the consensus projections for 6.5%, according to a survey by PAP Polish news agency. The seasonally adjusted figure came in at 5.6% y/y on a 0.9% monthly decrease. Construction output accelerated by 14,4% y/y on a 18.7% monthly increase. "Industrial output growth accelerated in February to 5.3% y/y, which was slightly below forecasts while construction output growth surged 14.4% y/y, clearly above expectations. Taking into account the impact of weather, which influenced both releases, in our opinion the data show a continuation of an economic revival and support expectations that these trends will be maintained in coming quarters. Producer prices contracted more than anticipated, by 1.4%y/y, confirming that an economic recovery is unfolding amid low inflation pressure," BZ WBK analysts commented on the data. The construction output reading was the best in two years.
Industry output, y/y change 8% 4% 0% -4% -8% -12% Jun Aug Oct 12 12 12
Producer Price Index, y/y change
Dec Feb 12 13
Apr 13
Jun Aug Oct 13 13 13
Dec 13
F eb14
According to Finance Ministry analysts, Poland's industrial output, both in q/q terms and the seasonallyadjusted measure, should accelerate in Q1 2014 vs. the final months of 2013. "Despite a slight decline in February, the [seasonally adjusted] output growth remained in a growth trend, which should be continued in the following months," the analysts wrote. "We expect that in Q1 2014, the output growth rate, both q/q and seasonally adjusted, will accelerate slightly vs. Q4 2013, which will be reflected in the higher y/y growth figure."
BANKING & FINANCE
mBank teams up with Orange in new mobile banking alliance The Polish unit of France's telecoms giant Orange will work with mBank, a subsidiary of Germany's Commerzbank, to provide mobile financial services, both companies said in a statement last week. The two partners seek to launch a mobile retail bank for
weekly newsletter # 027 / 24th March 2014 / page 4
smartphone and tablet users under the Orange brand in the second half of 2014. No financial details of the initiative have been disclosed. The bank's offer will be aimed at individual customers, as well as small and medium-sized enterprises. It will include mobile payments, current accounts, loans, deposits, and credit and debit cards. Customers will enjoy more benefits thanks to new, attractive packages comprising both financial and telecommunications services, Orange and mBank said.
"Bank customers expect maximum facilitation and simplification of funds management, regardless of location, and the mobile bank will make it happen. It combines the skills of Orange Polska - the operator of the largest high-speed mobile and fixed-line Internet network - and mBank, which has set the trends in modern electronic banking. The experience and potential of both companies ensure the highest quality of services. Entry into new markets, including the financial market, is one of the key elements of our strategy" said Bruno Duthoit, the CEO of Orange Polska.
Orange is Poland's No. 2 mobile network Mobile operators in Poland, market shares as of end of 2013*
The mBank group saw its assets total assets increase from PLN 102bn in 2012 to PLN 104m as of end of 2013. Its attributable net earnings increased only slightly and came to PLN 1.2bn. Following the merger of its mBank and Multibank units, the Warsaw-listed bank has more than 250 branches and over 6,073 employees. "When a truly mobile bank and the biggest Polish telecommunications company join their forces to create a new platform, it has to be considered a clear sign of changes that are taking place on the financial services market. mBank will be consistently developing its mobile banking services, both under own brand and through cooperation with Orange Polska" said Cezary Stypułkowski, CEO of mBank.
Orange 27%
BANKING & FINANCE
T-Mobile 28%
Plus 25%
The new bank will operate under the Orange brand. Image: Orange, mBank
Orange Polska will be responsible for marketing and acquisition of customers to this joint venture, while mBank is going to handle the banking side of the business. For this purpose, the bank will establish a new branch that will be part of its existing structure. The deal mirrors similar agreements between Alior Bank and the Polish arm of T-Mobile (see PT Business Review+ No. 016 page 3) as well as Invest Bank and Polkomtel (see PT Business Review+ No. 015 page 3) and marks a growing trend among mobile operators, who seek new sources of revenue amid deepening recession in the traditional telecoms business.
Other 1%
Play 19%
Source: Telepolis *) based on SIM card numbers
Orange Polska turned over PLN 12.92bn last year, marking a decline by nearly 9% against the prior year. Its EBIDTA shrank 16% and totaled PLN 4.1bn, whereas its net earnings dropped by two thirds, down to PLN 294m. Its mobile arm had more than 15.3m customers as of end of December, including 1.17m broadband subscribers, while its fixed-line unit boasted 2.3m users.
PKO BP to finalize merger with Nordea by midmid-2015 Poland's top lender PKO BP plans to complete its merger with the Polish arm of Sweden's Nordea Bank by mid-2015, the bank announced after the financial watchdog KNF finally gave its blessing for the transaction in March. The deal seals PKO's position as Poland's number one lender, boosting its share in the banking sector's total assets from 15% to 18%. "KNF's decision opens the door to implementing the agreement signed in June last year. After the deal is completed, we will focus on efficient integration process. We would like to use the potential of the acquired assets to strengthen the bank's capital group and to offer new quality on the financial services mar-
weekly newsletter # 027 / 24th March 2014 / page 5
ket," said Zbigniew Jagiełło, Chief Operating Officer at PKO Bank Polski. PKO BP announced in mid-June 2013 that it would buy 99.21% in Nordea Bank Polska for PLN 2.642bn, 100% in life insurer Nordea TUnŻ for PLN 180m and 100% in leasing and factoring firm Nordea Finance Polska for PLN 8m. PKO BP received the consent for the transaction from anti-monopoly office UOKiK in October 2013. The acquisition of Nordea Bank Polska will take place as a public share-buy tender for 100% of the bank’s shares. The deal will be closed on 1 April 2014, PKO and Nordea announced. Since then, until the legal merger is completed – which is planned for late September or early October 2014 – Nordea Bank Polska will operate as a separate entity within the PKO BP group. Both banks will maintain their full independence in terms of services provided and available network of branches. Following the legal merger – which will involve the acquisition of Nordea Bank Polska’s total assets and operations by PKO Bank Polski – PKO will become a legal successor of Nordea Bank Polska, while the two formerly independent institutions will become one single legal entity. The Nordea logo will be replaced by PKO BP brand within two weeks from the legal merger, whereas the following months will see the two banks become one at the operational level, including processes, systems and IT resources. According to PKO BP, the whole operation in to reach completion in the first half of 2015. As for the remaining two Nordea units, Nordea Finance Polska and Nordea Polska TUnŻ, their acquisitions will take place as private deals. The insurance company will remain a separate company within PKO BP Group operating under the new brand name. The change of the name will take place within three months after the deal is completed. Nordea Finance
Polska – a leasing and factoring company – will eventually be merged with PKO Leasing.
PKO BP's strategic real estate management plan," as explained by Monik Floriańczyk.
No details of potential redundancies
As of end of 2013 PKO BP had 1,186 branches and a workforce of 24,437 employees. The respective figures for Nordea Bank Polska stood at 135 and 1,985. Poland Today asked PKO BP about the expected impact of the merger on the branch network and staff numbers, but we have not been able to get any figures with regard to the potential employment downsizing. "Our branch network in the largest cities will expand by some 25%, as the attractive locations of Nordea units were of strategic importance for PKO BP as a buyer. We intend to maintain the current level of employment at Nordea's retail and corporate banking network," Monika Floriańczyk of PKO BP's corporate communications department tells Poland Today. "Since the signing of the agreement with Nordea we have been keeping all of Nordea Bank Polska employees regularly informed about the professional development opportunities available under PKO BP and conditions of their employment following the merger. We carried out a series of meetings with managerial and sales staff- overall with some 500 employees and answered all the crucial queries. We will provide more information following the official merger on 1 April." "The merger with Nordea will contribute to strengthening PKO BP as the leading universal bank in Poland and the Central and Eastern Europe, confirming its leading position in retail banking and enhancing its position in corporate banking, especially in servicing international customers," PKO said. The acquisition of Nordea Bank boosts PKO BP's assets by 16.5% and its portfolio of wealthy customers will expand by 8%. PKO BP serves more than 8m customers at the moment. The new Nordea headquarters, which is currently being built as part of SwedeCenter's Gdynia Waterfront project will be taken into consideration in
The takeover of Nordea Bank Polska significantly boosts PKO BP's position in the largest cities. Image: PKO BP
Last year Nordea Bank posted a PLN 63.5m net profit (down from PLN 144.3m in 2012) on operating revenues of PLN 743m (vs. PLN 935.8m in the prior year). Its total assets stood at PLN 32.9bn as of end of 2013. PKO BP saw its consolidated attributable net earnings drop from PLN 3.8bn in 2011 down to PLN 3.75bn in 2012 and PLN 3.2bn in 2013, as the historically low market rates seriously dented its interest income. The full-year consolidated income on continued operations exceeded PLN 10.7bn, while net interest income was at PLN 6.7bn. Despite a decline in interchange fees and slower market dynamics, net fee and commission income rose 3.1% y/y, to over PLN 3bn, mainly thanks to higher fees related to fund servicing and insurance products sale. The bank sold PLN 7.5m in consumer loans (+20% y/y) and more than PLN 10bn in home loans (+38% y/y), maintaining its position as the number one mortgage lender with a share of more than 30% in new sales. PKO BP's cost-to-income ratio stood at 43.2% as of end of last year, with ROA and ROE at
weekly newsletter # 027 / 24th March 2014 / page 6
1.6% and 13.2% respectively. Its consolidated solvency ratio increased by 0.7 pps in 2013 reaching 13.6%, with total assets at PLN 199.2bn.
ENERGY & RESOURCES
Tauron teams up with PIR to build PLN 1.5bn cogen unit in Silesia Poland's No.2 energy producer Tauron and the state investment vehicle Polskie Inwestycje Rozwojowe (PIR) have inked an agreement that paves the way for the construction of a new gas-fired 413MW power unit at Tauron's Łagisza station in Będzin. The investment will be worth PLN 1.5bn, of which PIR may contribute up to PLN 750m. "This is a yet another important energy sector project involving state-controlled enterprises that drive forward Poland's economic growth. Over the past six years our economy has expanded by an accumulated 20%, which is quite impressive against the backdrop of the European Union's 0.8% contraction during the same period. Over the coming six years the capital expenditures on new power stations in Poland will add up to PLN 30bn, translating into 5,000MW of new capacity in brand new units. The Łagisza project, which will go online in four years, will be one of them," Treasury Minister Włodzimierz Karpiński commented in an official communiqué, adding that PIR is currently involved in projects with a combined value of PLN 5bn and analyzing further undertakings that are worth roughly twice that amount. The Łagisza power plant supplies heat and power to the Będzin and Dąbrowa Górnicza parts of Silesia, Poland's most densely populated region. The new power
unit will have an installed capacity of 413MW (electric) and 260MW (thermal) and following its completion it will provide heat also to Sosnowiec, serving a total population of 0.7m people. Created last year as part of the government's "Polish Investments" program to stimulate economic recovery by investing future privatization proceeds into projects of strategic importance, PIR has recently agreed to inject up to PLN 150m into a public-private heat & power plant project in Olsztyn (see BR+ No. 022 page 4). The fund's other projects included a PLN 120m investment into a PLN 560m fiber optic joint venture with backbone network operator HAWE (see BR+ No. 018 page 12, PLN 563m investment in Lotos Petrobaltic's B8 exploration project in the Baltic Sea (see BR+ No. 007 page 5) and possible participation in a PLN 12bn petrochemical project by Polish refiner Grupa Lotos and chemical company Azoty (see BR+ No. 014 page 2). Led by Mariusz Grendowicz, the former CEO of mBank, PIR mediates in the allocation of low-cost capital for strategic projects that have a hard time raising commercial financing. As for Tauron, the company reported an 11% drop in 2013 net profit, saying it is expecting even weaker results this year. The state-controlled utility, like larger state rival PGE , is struggling with falling energy prices and weak demand in Poland because of a sluggish economy. "We hope that 2014 will see the lowest level of energy prices and that they will slowly start to rebound," Chief Executive Dariusz Lubera told reporters at a recent press conference. The company has been cutting costs to combat the difficult market conditions and aims to save PLN 900m between 2013 and 2015. Savings last year totaled PLN 320m, Tauron said, helping the company's profits fall less than expected. Net profit came in at PLN 1.308bn, above market forecasts for PLN 1.227bn.
Tauron has put on hold a PLN 3.5bn project with Polish copper miner KGHM to build a gas-fired plant at Blachownia in southern Poland because of the adverse market conditions and problems with reliable gas deliveries. But the company still hopes to begin construction of a PLN 5.4bn coal-fired Jaworzno plant also in the south of Poland, where Tauron has most of its assets. Tauron plans to sell bonds in the first half of this year to finance the project, already delayed due to some financing difficulties. The group does not rule out increasing a planned PLN 1.5bn bond issue if necessary to finance the flagship project.
ENERGY & RESOURCES
New mining law to speed up development of Poland's Poland's shale gas industry The Polish government has adopted crucial amendments to the mining law, hoping to speed up work on shale gas extraction. The new regulatory framework was one of the key objectives of Environment Minister Maciej Grabowski, who was appointed late last year with the task of kickstarting Poland's shale gas production. The issue has gained additional urgency in recent weeks due to the unfolding Russia-Ukraine crisis that may introduce additional volatility to deliveries from Russia, which supplies two thirds of Poland's gas and almost all of the oil processed by the country's refineries. "New regulation will speed up and facilitate conducting exploration and extraction works," the government press center said in a statement.
weekly newsletter # 027 / 24th March 2014 / page 7
Crucially, Poland is hoping to facilitate exploration and extraction of hydrocarbons by introducing a single E&E permit and giving up plans of creating a national energy mineables operator NOKE, according to a draft amendment to the mining law adopted by the cabinet last Tuesday. A single permit for exploration and extraction will replace three separate permits required today, which should "encourage entrepreneurs to conduct exploration works in the broadest scope possible," the statement reads. As a rule, permits will be granted for the period of 10-30 years.
shale gas fields take longer to develop than conventional fields, argued the OPWW, they would have insufficient time to make discoveries before the deadline, at which point they either have to apply for a production license or hand it back to the ministry. The lobby also criticized the officials for trying to impose disproportionate penalties on them if they fall behind in their work schedules due to circumstances beyond their control.
Assessing Poland's shale riches
tion at some 40% of income and introduction of the burden only as of 2020, with budget receipts in 20202029 estimated at PLN 10.0-16.1bn. "Taxation for central budget will become a fact only in 2020 - by that time extraction of shale gas will be free from taxes," PM Donald Tusk said during a press conference after the cabinet sitting which passed the bill. The total tax burden on shale gas production should not surpass on average 40% of income, which in the government's view "should be encouraging for entrepreneurs."
Estimated recoverable shale gas reserves in bn cb.m
That burden will consist of two elements - a royalty on extraction and a special hydrocarbons gains tax. The royalty on unconventional resources will measure 1.5% of the value of extracted volume in the case of shale gas and 3% in the case of shale oil. In conventional resources, the levy will measure 3% in the case of natural gas and 6% in the case of crude oil. The special hydrocarbons tax will be flexible and will measure from 0 to 25%, depending on the level of incurred costs and generated revenues, officials said.
EIA (2011)
EIA (2013)
Wood Mackenzie (2010)
Following the encouraging results of San Leon's hydraulic fracking in Lewino, the government is hoping for 2014 to be a turning point for the Polish shale.
6,000
5,000
4,000
3,000
2,000
1,000
0
*PIG (2012)
*) Poland's Geological Institute PIG estimates the country's recoverable shale gas reserves at 346-768bn cb.m Source: Municipalities, PT archives
Image: UOS
Last year, investors complained that the previous draft of the legislation ignored many of their demands. The Polish Exploration and Production Industry Organisation (OPPPW), the industry's main lobby group, accused the government of seeking "excessive controls and rights" in shale gas exploration. The short license periods were among the industry's key concerns. So far the ministry of environment has been handing out five-year exploration licenses to companies that could be extended only once, for two years. Many of those original licenses are now beginning to expire. Since
So far works on hydrocarbons bill have been delayed, among others, due to controversies related to creation of NOKE, a new regulatory institution. In the end, the government has decided to abandon the NOKE idea altogether and instead strengthen the oversight prerogatives of the existing mining watchdog and environment protection inspectorate.
More favorable taxation on shale The cabinet has also clarified its stance on hydrocarbons' taxation, by proposing a cap on shale gas taxa-
"In practice, if the extraction operations bring no profit or if the profit isn't significant a company won't pay that tax," the cabinet's statement read. "Shale gas could contribute to helping Poland develop a domestic, affordable and secure energy source. It can also help reduce the country's CO2 emissions. At the moment nearly 90% of Poland’s electricity is generated from coal. However, as a new industry it will need similar financial opportunities which are already being given to other energy resources, such as renewable energy. Through a supportive tax regime, the withdrawal from establishing the National Energy Minerals Operator (NOKE) and the move to a single concession for exploration and extraction of hydrocarbon deposits, the Polish Government has shown its commitment to supporting Europe’s drive to develop a thriving shale
weekly newsletter # 027 / 24th March 2014 / page 8
gas industry," commented Marcus Pepperell, spokesperson for Shale Gas Europe, a Brussels-based shale industry lobby. According to a report from the Polish Geological Institute in March 2012, the country has reserves of between 346bn and 768bn cb.m of recoverable shale gas. The new regulatory framework comes less than two months after London-listed San Leon Energy announced that it had made significant progress toward commercial production after vertical drilling in northern Poland, "the most encouraging vertical shale well test in Poland to date." Several international explorers have divested or reduced their positions in Polish shale in recent months, including ExxonMobil, Marathon Oil and Talisman Energy, which has dented investor confidence although none of the explorers attributed their decision directly to exploration results. So far an estimated 55 exploration wells have been completed in Poland, with a further 30 to be drilled this year. According to experts, at least 100 boreholes will be needed to properly assess the potential of Poland's shale plays.
ing in touch with Poland's vast and dynamic real estate market. After Palmer Capital, which opened a Warsaw office a few weeks ago, another major international player Invesco Real Estate (IRE) has set up shop in the Polish capital. Invesco appointed former Colliers and AIB PPM executive Anna Duchnowska as Director of Asset Management at the Warsaw office, Invesco's second in Central and Eastern Europe after Prague. "We believe the timing is now right in what, in our view, is a strong real estate market within Europe. This step complements our existing operations in the region, through our team of six specialists in our Prague office, which opened in 2004, said Andy Rofe, Managing Director of IRE-Europe.
PROPERTY & CONSTRUCTION
Global property giant Invesco opens its 2nd CEE office in Warsaw Although Poland has been the key investment property market in Central and Eastern Europe for years, many global funds preferred to cover the region from Prague, be it due to the latter's milder climate or its more vibrant expatriate community. Recently, however, it seems like fund managers are beginning to realize that on-the-ground presence may be essential for stay-
Galeria Kazimierz became part of Invesco's CEE portfolio last year.
Image: GTC.
"Invesco Real Estate has an allocation across the commercial sectors of office, retail and logistics in Poland. We currently have eight properties in Poland with c. USD 570m under management. Unfortunately, we cannot provide details of any potential deals that are in our pipeline. However, we are actively raising
capital for our existing and new funds, and Poland has an allocation role as part of several client mandates. In CEE, it is Poland and the Czech Republic which are our countries of focus right now. The aim is to grow our Polish operations to be our local, on-the-ground operations with specialists in their field. Anna Duchnowska is currently heading up our operations in Poland and we will add additional resources as and when appropriate," Lisa Nell, Associate Director – Marketing, Europe, at Invesco Real Estate, told Poland Today. Invesco Real Estate is a global real estate firm, which has been providing real estate investment and property asset management services since 1983, first in the US and then expanding into Europe and Asia. Globally, Invesco Real Estate has USD 55.7bn of assets under management and over 366 staff in 18 offices around the world. In Europe, the company has six offices in London, Munich, Madrid, Paris, Prague and Luxembourg, and around 112 employees. IRE manages 139 assets across 13 European countries and has USD7.3bn of assets under management, including EUR 706m in 18 CEE assets. The company transacted EUR 300m in the region last year including the EUR 180m acquisition of Kraków's Galeria Kazimierz shopping center from GTC, one of the largest retail acquisitions in Poland in 2013. Opened in 2005, Galeria Kazimierz is a 38,300 sq.m modern shopping center constructed on two levels and divided into 140 units and 10 screen multiplex as well as multi-media, sports and household anchor stores. The center benefits from the attractive location and easy access, and its tenants include. Cinema City, Alma, Empik, Zara and H&M.
Ĺšroda, 9 Kwietnia 2014, Villa Foksal, ul. Foksal 3/5, Warszawa 8.30 -11.30
Organizatorzy
Partnerzy
Partnerzy medialni
weekly newsletter # 027 / 24th March 2014 / page 9
PROPERTY & CONSTRUCTION
France's Yareal announces new office project in Warsaw Although one might think there is no more free land left in the Służewiec area of Warsaw's Mokotów district, which reportedly already houses more modern offices than all of Poland's regional cities combined, developers keep proving us wrong. France's Yareal has just announced a large new project on the corner of Cybernetyki and Wynalazek streets, a stone's throw from the Okęcie airport and close to the Galeria Mokotów mall.
Subsequently the company delivered the 9,800 sq.m Cristal Park complex in the Aleje Jerozoliskie area and carried out a a total makeover of a modernist office building on Mokotowska street (next to Deloitte House built by Ghelamco), turning it into 9,600 sq.m of class A offices. Yareal's most recent office project has been Oxygen Park, a complex of two six-story buildings with a combined lettable space of 18,300 sq.m, located near the A2 highway intersection with the Aleje Jerozolimskie artery.
Yareal is part of Yareal International, whose shareholders include YAM Invest, a group that brings together a range of European real estate development and investment companies. Yareal's best-known development to date is the Renaissance Building on Warsaw's Zbawiciela Square (4,575 sq.m of offices and 600 sq.m of retail space on the ground floor). Renaissance Building was named the best office development of 2004 and sold two years later to a Spanish investor for a reported EUR 25m.
PROPERTY & CONSTRUCTION
Nestle to take up 10,000 sq.m at new Mokotów scheme by by Kronos Real Estate Spanish developer Kronos Real Estate has secured key tenants for its new development in Warsaw's Mokotów district: Ocean Business Park. Nestlé Polska and Nestlé Waters Polska, the Polish subsidiaries of the world's leading nutrition, health and wellness giant Nestlé will lease over 10,000 sq.m of modern office space in the new development, which is reach completion in Q1 2015 with a total GLA of 17,600 sq.m across eight floors.
Yareal's Neopark project will include two buildings with a combined GLA of 24,000 sq.m, separated by a green patio with restaurants, retail outlets and a fitness center. The developer will seek BREEAM sustainable building certification for the project, hoping to obtain a building permit for Neopark this year. "As far as the launch of this project is concerned, we are not confined by pre-leases," Olga Prokopiak, head of marketing at Yareal, told Poland Today, hinting that the company may be ready to build speculative.
Londyńska 5) have a combined floor space of 13,500 sq.m.
Yareal's new project Neopark will be located in Warsaw's office cluster of Słuzewiec.
Image: Yareal
"Oxygen Park holds a valid occupancy permit and so far we have let out 50% of the available office space in the complex," says Ms. Prokopiak. "Our board is yet to decide about its future. Yareal may choose to keep Oxygen Park in its portfolio or sell the property, in case we receive an offer than would be attractive for our shareholders." Besides offices, Yareal has embarked on a number of small upscale residential projects in Warsaw, including the Hoża 55 project where only a handful of units are still available. Its ongoing residential developments (Brylowska 2, Rezydencja Kosntancińska, and
"Nestlé was searching for modern, functional and flexible office space. Besides being a prestigious office worthy of a leading global company, the location had to allow for further development of the company’s structures. Other important factors were location, access to public transport, easy access by car and close proximity to the airport. The selected complex can boast all of the above," said Julita Spychalska, National Director, Corporate Advisory, at property consultancy JLL, which represented Nestlé. Ocean Business Park is located on Domaniewska Street, in the heart of Warsaw's ever-expanding business district of Służewiec Przemysłowy. The first section of the Park was the 15,600 sq.m Ambassador building Kronos completed last year and fully leased to a number of top-class tenants including Electronic
weekly newsletter # 027 / 24th March 2014 / page 10
Arts, Aecom, Gras Savoye, DSV, Coty, Ipsos, CBRE Corporate Outsourcing, ACC Advanced Solutions and Yusen Logistics. Designed by AMC – Andrzej M. Choldzynski, the architect behind the landmark Warsaw Stock Exchange building, the Ambassador has 11 over ground floors, together with 4 underground levels accommodating 298 parking spaces. In addition to other amenities such as restaurants, coffee shops, banks, laundry and fitness club, a 1,800 sq.m green terrace was designed on the 8th floor.
experience in real estate and green energy. Kronos Kapital has been operating in Poland since 2006, focusing on expanding its land bank, small residential development in the outskirts of Warsaw (Ząbki, Chyliczki) and the Domaniewska office project. Back in 2011, when Poland Today's Lech Kaczanowski spoke to Angel Medina, general director at Kronos Real Estate, the company's medium-term development pipeline in Warsaw was worth some PLN 300m. According to earlier plans, the developments on Domaniewska in Warsaw were to include residential buildings, besides offices.
years completed over 10 transactions worth a total of approximately EUR 350m. "Our strategy focuses on class A office buildings located in the Warsaw city centre at the best addresses of Śródmieście and the Old Town. We choose properties that lie in the immediate vicinity of leisure areas, services, shops and restaurants,” says Maciej Zajdel, CEO of IVG Poland.
PROPERTY & CONSTRUCTION
IVG adds another building in downtown Warsaw to its portfolio
Nestle will take up more than a half of the total GLA in Ocean Business Park.
Image: JLL
Phase two of the Ocean Business Park is the Pacific building, which will welcome Nestlé at the beginning of 2016. With a double glass façade and BREEAM certification it will be a yet another class-A development in this popular area. The Pacific Office Building has been designed by the Spanish architecture company Estudio Lamela, which cooperated with Kronos on an office project developed in 2009 in Valladolid, Spain. Kronos Kapital is the daughter of the Spanish company Cronos Global, with a background of 20 years of
German property fund IVG has added another property to its Warsaw portfolio with the acquisition of the Chmielna 25 building, which combines high street retail space with, from LHI Ltd. Financial details of the transaction have not been disclosed. Located on some of Warsaw's key pedestrian traffic reas, Chmielna 25 is a LEED Gold-certified, class A nine-storey building offering 4,500 sq.m of modern office space located on six floors and 1,800 sq.m of retail space. The property joins seven class A buildings located in the centre of Warsaw IVG has acquired in the recent years, including among others: Royal Trakt Offices (Ujazdowskie Av.), Norway House (in the vicinity of Konstytucji Sq.), Palac Młodziejowskiego (historic part of the Old Town), Le Palais (Grzybowski Sq.) Feniks (Żelazna Street). IVG in Poland is one of the most active investors in Poland, which in the last 3
Chmielna 25's underground garage can fit 25 cars and the building's tenants include the flagship store of kids goods retailer Smyk, as well as the head offices of LHI Ltd. and Deutsche Hypothekenbank. Image: LHI Ltd.
According to IVG, Chmielna 25 perfectly complements the Fund's portfolio, which includes a varied selection range of shops and service buildings located along the popular streets or in pedestrian precincts. Nowy Świat, Chmielna, and Marszałkowska and streets are three of the most recognizable high-streets in Warsaw, despite the latter two still waiting to see their better days. Besides fashion boutiques, the area's key magnet are its numerous restaurants and cafes. The central location provides convenient connection accessible by public transport – subway, bus or tram from the other
weekly newsletter # 027 / 24th March 2014 / page 11
parts of the city. Chmielna Street is located exactly between two key subway stations (Centrum metro station and Nowy Swiat metro station, which is currently under construction). Over the past 18 months IVG Funds have invested more than EUR 1.9bn across Europe, mainly in Germany and Warsaw. IVG Institutional Funds belongs to IVG Immobilien AG and offers specialized fund products. With EUR 12.4bn assets under management, IVG Institutional Funds GmbH is one of the leading European fund providers for institutional investors. Interestingly, IVG's shopping spree in Poland come at a time when its German owner is at its historic low. Its shares, that back in 2007 traded at EUR 35 are currently trading at less than EUR 0.02 apiece. In August last year, the parent company IVG Immobilien AG, applied with the Bonn District Court to initiate a proceeding similar to US bankruptcy reorganization and at the end of February 2014 it submitted a plan to cut its debt by EUR 2.2bn and issue new shares. The deal would transfer ownership to IVG’s creditors. IVG has been in talks with its lenders to restructure EUR 3.2bn of debt for more than a year. Following the planned restructuring, the company will focus on its real estate, institutional funds and caverns-storage businesses and cut its staff to 320 from 400.
land's skilled and competitively priced white collar workers. The Dutch company has just announced the launch of its shared services centre (SSC) in Warsaw, which is to create a total of more than 400 jobs by the end of next year. "We chose Warsaw because this is where the Polish HQ is of TNT Express is located, which ensures smooth cooperation between our financial department, where some of the SSC staff originate from, and the new unit. Moreover, Warsaw gives us access to a pool of highly skilled students and graduates from the entire region," Jolanta Krupowicz, Marketing Manager at TNT Express Poland tells Poland Today. "The centre currently employs 100 staff and it is located at our main office on 19 Annopol St. As the unit expands, we will consider different scenarios regarding the necessary office space."
Global parcel delivery giant TNT Express has joined the ever-growing group of international businesses that chose to entrust their back office processes to Po-
TNT Express is one of the world’s largest express delivery companies. On a daily basis, TNT Express delivers close to one million consignments ranging from documents and parcels to palletized freight. The company operates road and air transportation networks in Europe, the Middle East and Africa, Asia-Pacific and the Americas. TNT Express made EUR 6.7bn in revenue in 2013, down from EUR 7.3bn in 2012. In Poland, the company has 1,000 staff as well as a proprietary fleet of 170 vehicles and cooperates with an estimated 900 contract drivers with delivery vans. Its Polish distribution network is comprised of 26 regional offices including three transshipment hubs: in Warsaw (air, road), as well as Gdańsk and Katowice (air). TNT has been operating in Poland for 20 years and in 2013 it carried 8.3m consignments (34,000 parcels a day). "The last year was very good for TNT Express Poland. Although we continue to focus on international deliveries, both express and economy, we are strengthening our position on the domestic market as well. Besides our qualified staff, a dense branch network, and efficient transport links, we have a unique asset in the shape of an overnight service, with a separate infrastructure and network," says Jolant Krupowicz.
SERVICES & BPO
Express delivery giant TNT to employ 400 at new Warsaw centre
ture, the Warsaw centre will provide similar services to TNT companies in the UK, Germany, and the Benelux.
TNT Express has three air hubs in Poland: Warsaw, Gdańsk, and Katowice. Image: TNT With the creation of a shared services centre, TNT seeks to reduce costs and unify processes. The unit is already operational and handles bookkeeping, financial reporting and other related administrative duties for TNT's subsidiaries in Poland and Italy. In the fu-
Poland is a European leader in business process outsourcing, with more than foreign-owned 400 BPO & SSC centers employing in excess of 110,000 skilled workers in the country, according to estimates by industry organization ABSL, which expects the figure to reach 140,000 by the end of this year.
weekly newsletter # 027 / 24th March 2014 / page 12
RETAIL PROPERTIES
Neinver to add 6,000 sq.m of GLA to Ursus outlet center in Warsaw
Factory Warszawa Annopol, which opened in 2013 with 120 retail units and 1,400 parking spaces. Last year, Neinver's Polish outlet centers in Poland were visited by 11.8m. According to the company, customer numbers at its Polish centers have been growing at the annual rate of 10%.
Spanish developer Neinver is embarking on a major extension of its Factory Warszawa Ursus property, which was opened back in 2002 as Poland's first outlet centre. By September next year, the centre's GLA is to increase from 13,700 sq.m to 19,900 sq.m, boosting the number of retail outlets from 80 to 110. Additionally, the investor is to refurbish the existing building and more than double the number of parking spaces to a total of nearly 1,000. The timing of the project is hardly a coincidence, as its completion will follow crucial improvements in the local road infrastructure. By the time the new extension is commissioned, the newly built Nowolazurowa St. will provide easy access to the centre from two of Warsaw's key arteries: Aleje Jerozolimskie and Połczyńska St. At the moment, the centre houses the factory outlet stores of a number of well-known brands, including Liu Jo, Guess, Adidas, Puma, Nike, Tommy Hilfiger, Tom Tailor, Lacoste, Triumph, Reserved, Levi’s, Diverse, Vero Moda, House, and Calvin Klein Underwear. Neinver is Europe's second largest outlet centre operator with properties in Spain, Portugal, France, Germany, and Italy, and the number one player in Poland where it has five centers: Warszawa Ursus, Warszawa Annopol, Wrocław, Poznań, Kraków with a total GLA of almost 84,000 sq.m and approximately 550 shops. The Kraków center is part of the 44,000 sq.m Futura Park complex, which encompasses also a retail park. Their most recent completion was the 19,700-sq.m
Malta – the largest shopping and entertainment center in Western Poland, 75% of which Neinver sold to US Heitman back in December 2010. "We have laid foundations for a 20,000 sq.m GLA office building across from Galeria Katowicka, on the eastern side of Szewczyka Square and we are waiting to reach a satisfactory level of pre-leases in order to launch construction of the overground section. We hope this will happen this year," Monika OlejnikOkuniewska, Marketing & PR Senior Manager at Neinver told Poland Today. "Besides the Factory Ursus extension we are also gearing up to expand Galeria Malta in the near future. Although we are always on the lookout for new opportunities, we are focusing on managing our existing portfolio which totals 230,000 sq.m at the moment."
POLITICS & ECONOMY Opened in 2002 Factory Warszawa Ursus was PoImage: Neinver land's first outlet centre.
Besides outlet centers, Neinver has developed a number of major mixed-use and retail schemes in Poland. A few months ago the company launched its most ambitious project to-date, the EUR 240m retail-anchored mixed-use development Galeria Katowicka. Located in the southern Polish city of Katowice, the project is part of a large-scale urban revitalization scheme spearheaded by Polish State Railways (PKP), which chose Neinver seven years ago to transform a rundown train station into a modern transportation hub, shopping and office complex. Following the completion of brand new rail and bus stations, Neinver has delivered the retail section of the project, which includes more than 220 shops and service points set over four levels and 53,000 sq.m of GLA. Prior to Galeria Katowicka, Neinver's flagship Polish project was Poznań's Galeria
A recipe for doing doing business better The World Bank’s head for Poland and the Baltic States Xavier Devictor tells Poland Today editor Andrew Kureth what Poland needs to change to make a leap in competitiveness • PT: In the 2014 edition of the World Bank’s Doing Business report, Poland rose three places in the ranking, to 45. Has Poland made substantial progress relative to other European Union states? Xavier Devictor: This year Poland was basically ranked in the middle of the EU pack, so there has been some relatively rapid improvement. Three years ago Poland was at the bottom of the EU pack. If you look at the period since 2005, Poland has made the most pro-
weekly newsletter # 027 / 24th March 2014 / page 13
gress of any EU country toward the best performers under each indicator. We think this does indeed reflect the reality that the business environment has improved. But that Poland is in the middle of the EU pack can be seen as a glass half full – because it has made such progress over a relatively short period of time – or as a glass half empty because 45 is only 45. We think that Poland should continue reforming with the aim of joining the first tier of the EU countries. That is, Scandinavia and the UK. • PT: What are the places that Poland could improve? XD: Poland is doing relatively poorly when it comes to the ease of getting electricity and starting a business. It could do much better when it comes to construction permits, insolvency and contract enforcement. So there is a number of areas where Poland can still make progress. We have been working with the prime minister’s office and a number of ministries to try to find practical solutions to improve not so much the performance, but the situation. This is not about trying to get a better score in the rankings, this is about trying to create a better business environment. We are hopeful that if the government maintains its commitment, it will be able to continue making progress, especially because the type of reforms that we are talking about are administrative by nature. They are not politically loaded reforms. What we are talking about here is strengthening the supervision of electricity-distribution firms so as to make sure that when you ask for a new connection you get it in, for example, 30 days instead of say, 60 days. When you talk about construction permits, the challenge lies in making sure you get a response from the various offices in a reasonable amount of time. So again, these are not politically loaded issues. • PT: If the issues are not politically sensitive, then why hasn’t more progress been made?
EC: It is a matter of progress step by step, and I also think it is a matter of administrative inertia in some areas. These are things that take time to implement. But as I said, we see a strong commitment in the prime minister’s office. Before we issued the report we had an opportunity to have a discussion with the prime minister and with his council of economic advisors. And it was very heartening to see that the prime minister took a genuine interest not only in the issue of where Poland was ranked but why it had placed where it did. We also saw interest in finding solutions and how quickly those could be implemented. So that was very positive. And once again, it was not about improving the ranking, it was about using the ranking to diagnose the areas where a specific effort should be made. • PT: You have called Poland a “regional champion” when it comes to ease of doing business. Why? XD: In these types of rankings, countries typically have ups and downs, but for Poland it has been ups and ups. However – this could still be seen as just short-term improvement. I think what is really interesting is that over several years Poland is the EU country that has made the most progress towards the top tier. That differentiates Poland from a number of other countries in Central Europe. I think that is a reflection of how continued commitment by the government and its pragmatism – a practical sense of what can be done and how to do it – is making a difference. • PT: Of the challenges that you mentioned, which ones do you think could be overcome quickly, and which ones will take longer to resolve? XD: You have to look at the question from two different aspects: You can look at how to improve in the ranking, and there we see the most room for improvement on getting electricity. That is all about how much time, how many procedures and how much money it costs for a company to obtain a new connection to the grid. So this basically requires a review of the administrative process and figuring out whether
some of the steps could be expedited or carried out more efficiently. In this case, we see huge room for improvement. We also see some room for improvement on construction permits where regulations remain, in our view, overly complicated. But Poland has to think about how to improve the business environment as a whole. And there we are very encouraged by government efforts on deregulation of professions. We have also been very encouraged by efforts to modernize the insolvency law, so that when a company goes bankrupt liquidation isn’t the only viable option. We are talking with the Ministry of Justice about how to allocate resources across the judiciary to make sure that the courts that have lots of cases have the means to handle them effectively. So some of these solutions could yield results relatively soon – such as the improvement in insolvency law. But some of them require a change of culture in some ministries, administration or the judiciary, and by their nature take more time. • PT: Poland is an EU laggard when it comes to innovation. How important is changing this when it comes to improving the business environment? XD: This is key for Poland because it is 24 out of 27 EU countries in terms of innovativeness [according to an EU ranking]. When we looked at the number of patents per million inhabitants it was actually very small. Poland had 8, whereas the EU average was 97. So it was an order of magnitude of difference. But since Poland’s GDP is at 65% of the EU average, if Poland wants to continue to grow then innovation is clearly a very important agenda. Obviously, the Vistula River Valley is not going to become Silicon Valley tomorrow, but there are still a few years during which Poland can put in place what it needs to start developing innovation so that when it reaches 75 or 80% of the average EU GDP per capita – and therefore per capita costs, more or less – it already has the resources to start innovating.
weekly newsletter # 027 / 24th March 2014 / page 14
KEY STATISTICS Consumer Prices Prices
Inflation
-0.2
0.0 +3.4 +0.8
+2.2
+1.4
+0.1 +3.7
Clothing, shoes
-4.9
-0.2
-4.9
-0.6
Housing
+1.8
+0.1
+1.8
0.0
Transport
-5.0
-3.7
-4.7
-1.7
+1.9 +0.2
+1.9
+0.1
-2.3
-1.2
-0.9
0.4
-1.2
-1.5
-1.1 +0.4
Communications -11.7
-4.9
-11.6
0.0
-7.8
-0.3
-3.2 +0.4
Gross CPI
-0.2 +0.7 +0.1 +0.5 +0.1 +0.7 +0.1
+0.6
Sep '13
Oct '13
Nov '13 Dec '13 Jan '14
m/m (%)
-0.9
+3.6
-5.8
+17.3
y/y (%)
+3.9
+3.2
+3.8
+5.8
+4.8
Year
2009
2010
2011
2012
2013
Turnover in PLNbn
582.8
593.0
646.1
676.0
n/a
+4.3
+5.5
+11.6
+5.6
+2.3
y/y (%) Feb 14
+1.6
Dec 13
+1.6
Alcohol, tobacco +3.6
+1.8
Oct 13
+1.5 +0.7
m/m
Aug 13
+0.3
Jun 13
+1.9
y/y
Apr 13
Food & bev
Month
5% 4% 3% 2% 1% 0% -1% Feb 13
y/y m/m y/y m/m y/y m/m y/y m/m
Dec 12
Sector
Retail Turnover
Oct 12
Feb '14
Aug 12
Jan '14
Jun 12
Dec '13
Apr 12
Nov '13
Feb 12
Data in (%)
Residential Construction Dwellings
2009 2010
2011
2012
2013 Jan-Feb y/y
178.8
174.9
184.1
165.1
138.7
158.1
162.2
141.8
127.4
(in '000 units)
Producer Prices Prices
Industrial Output
Permits Commenced
142.9
-0.3
+0.1
-0.7
-0.3
-0.1
0.0
-0.1
m/m (%)
-4.5
+9.6
+6.0
-6.2
-9.7
+2.9
-1.8
U. construction
670.3 692.7 723.0
713.1 694.0
-1.1
-1.4
-1.4
-1.5
-1.0
-1.0
-1.4
y/y (%)
+2.2
+6.2
+4.4
+2.9
+6.6
+4.1
+5.3
Completed
160.0 135.7
152.5
Year
2007
2008
2009
2010
2011
2012
2013
Year
2007
2008
2009
2010
2011
2012
2013
Source: Central Statistical Office (GUS)
y/y (%)
+2.0
+2.2
+3.4
+2.1
+7.6
+3.3
-1.3
y/y (%)
+10.7
+3.6
-3.5
+9.8
+7.7
+1.0
+2.2
Gross Domestic Product
-0.1
-0.1
-0.1
-0.2
-0.2
-1.9
-1.8
-1.8
-1.7
-1.7
-1.7
-1.6
2007
2008
2009
2010
2011
2012
2013
+7.4
+4.8
+0.2
-0.1
+1.0
+0.2
-1.8
Q3 2013
A
A
A
A
8,427
B
192 6,060
B
138 6,290
B
B
143 6,061 138
Manufacturing
3,522
154
3,491
152 3,560
155 3,625 158
Energy
6,535
198 6,196
188 5,828
177
152 3,693
157 3,766 160
Construction
3,829
163 3,556
Retail & repairs
3,365
143 3,432 146
3,421
6,021 183
146 3,408 145
Transportation
3,816
135 3,439
122 3,547
125 3,589 127
IT, telecoms
6,379
166 6,685
174 6,707
174 6,654 173
Financial sector 6,044
136 6,356
143 6,702
151 6,109 137
National average 3,878
154
3,741 149
Source: Central Statistical Office (GUS)
3,613
144 3,652 145
-4.9
Current account def. in % of GDP -1.5% -1.9%
Q2 2013
+0.8%
389,244
-2.3%
Q1 2013
+0.5%
370,089
-3.1%
2013
+1.6%
1,631,764
-1.5%
2012
+1.9%
1,595,225
-3.7%
Sentiment Indicators
2011
+4.5%
1,528,127
-5.0%
Economic sentiment and consumer confidence indicators
2010
+3.9%
1,416,585
-5.1%
y/y (%) Year y/y (%)
-64.0
+18.7
-11.1
-4.8
-3.2
-8.9
+5.8
-3.9
+14.4
2007
2008
2009
2010
2011
2012
2013
+15.5
+12.1
+5.1
+4.6
+11.8
-0.6
-12.0
Co nsumer conf id ence (lef t axis) Economic sentiment (right axis)
20
120
Key Economic Data & Projections
0
100
Indicator
2010
2013
*2014
-20
80
GDP change
+3.9% +4.5%
+1.9%
+1.6%
+3.5%
Consumer inflation
+2.6% +4.3%
+3.7%
+0.9%
+1.1%
Producer inflation
+2.1% +7.6%
+3.4%
-1.3%
+0.1%
-40
60 Feb 14
Q2 2013
-2.1
23.7
442,167
+21.5
Nov 13
Q1 2013
+56.4
393,725
-2.9
Aug 13
Coal mining
Q4 2012
16.5 688.2
+1.9%
+14.3
M ay 13
Sector
GDP in PLN bn current prices
+0.8
+2.7%
+9.4
F eb 13
A: avg monthly wages in PLN B: indexed avg wages, 100=2005
146.1
(%)
18.4
Q3 2013
-0.8
Source: The Central Statistical Office of Poland, GUS
Gross Wages
Growth y/y unadjusted
131.7
2014
Q4 2013
m/m (%)
Nov 12
y/y (%)
-0.1
Period
Aug '13 Sep '13 Oct '13 Nov '13 Dec '13 Jan '14 Feb '14
A ug 12
Year
-0.2
Month
M ay 12
y/y (%)
Aug'13 Sep'13 Oct'13 Nov'13 Dec'13 Jan'14 Feb'14
F eb 12
m/m (%)
Aug '13 Sep '13 Oct '13 Nov '13 Dec '13 Jan '14 Feb '14
Construction Output
Construction Prices Price s Month
Month
Nov 1 1
y/y (%)
Aug'13 Sep'13 Oct'13 Nov'13 Dec'13 Jan'14 Feb'14
Aug 11
m/m (%)
M ay 1 1
Month
-21.3
The economic sentiment (1990-2010 average = 100) is a composite made up of 5 sectoral confidence indicators, which are arithmetic means of seasonally adjusted balances of answers to a selection of questions closely related to the reference variable. Source: Eurostat
CA balance, % of GDP
2011
2012
-5.1%
-5.0%
-3.7%
-1.5%
-0.6%
Nominal gross wage
+3.9%
+5.2%
+3.7%
+3.4%
+4.7%
Unemployment**
12.4%
12.5%
13.4%
13.4%
12.6%
3.99
4.12
4.19
4.20
4.09
EUR/PLN
Sources: NBP, BZ WBK, GUS *) projections **) year-end
weekly newsletter # 027 / 24th March 2014 / page 15
100 DKK
56.22 ↓
100 SEK
47.43 ↓
10,000 JPY
USD EUR 350
300
50.09 ↓ 297.66 ↓ 15.27 ↓
100 CZK 10,000 HUF
400
5 Apr 13
100 NOK
134.48 ↓
Money Supply in PLN m Monetary base M1 - Currency outside banks M2 - Time deposits M3
WIG-20 stocks Price Change Change in alphabetical 21 Mar 14 mar end of order '14 '14 '13
WIG Total index
Aug '13 Sep '13 Oct '13 Nov '13 Dec '13 Jan '14 4.6%
4.5%
4.5%
4.5%
4.3%
4.2%
PLN (up to 5 y )
5.1%
4.9%
4.9%
4.9%
4.9%
4.9%
PLN (over 5 y)
4.9%
4.8%
4.8%
4.8%
4.7%
4.8%
PLN (total)
4.9%
4.8%
4.8%
4.8%
4.7%
4.8
↑ BZ WBK
EUR (up to 1m EUR) 1.9%
1.8%
2.0%
1.9%
1.9%
2.0%
↑ Eurocash
EUR (over 1m EUR) 3.5%
3.2%
2.5%
3.0%
2.9%
3.6%
↓ Grupa Lotos ↑GTC
Overnight
1 week
1 month
3 months
6 months
2.59%%
2.60%
2.61%
2.71%
2.74%
Oct '13
Nov '13
Dec '13
Jan '14
154,967
153,672
164,010
161,544
2.59%
536,237
538,837
113,174
555,851
113,718
114,401
546,487 113,455
935,095
934,713
960,361
947,443
414,941
412,469
421,160
418,259
955,419
953,446
978,924
962,416
- Net foreign assets 150,517 148,702 143,430 140,617 Monetary base: Polish currency emitted by the central bank and money on accounts held with it. M1= currency outside banks + demand deposits M2= M1+ time deposits (inc in foreign currencies) M3= the broad measure of money supply Source: NBP
+3%
125
-1%
403.3
+1%
+4%
39.44
+2%
-17%
36.3
-1%
+2%
WIG-20 blue chip index
7.19
+6%
-3%
105.5
+2%
0%
2,3 2,365. 65.96
↑ JSW
44.1
+5%
-17%
↑ Kernel
28.8 +20%
-24% -15%
↑ Handlowy
Central Bank (NBP) Base Rates Reference
+1% +12%
↑ Bogdanka
Warsaw Inter Bank Offered Rate (WIBOR) as of 21 Mar 2014
50, 50,555. 55.93
47.37
↑ Asseco Pol.
Change 1 week
+2% ↑
Change end of '13
-1% ↓
Change 1 week
+1% ↑
Change end of '13
-1% ↓
Lombard
NBP deposit
Rediscount
↓ KGHM
100.45
-1%
4.00%
1.00%
2.75%
↑ mBank
515.05
+6%
+3%
WIG Total closing index
10.57
-1%
+8%
last three months
184.75
0%
+3%
55,000
18.45
-1%
+13%
54,000
4.22
-2%
-18%
↓ Orange Pol.
Credit
→ Pekao
The financial sector's net lending in PLN bn,
↓ PGE
loan stock at the end of period Type of loan
↓ PGNiG
53,000 52,000
Sep '13
Nov '13
Dec '13
Jan '14
→ PKN Orlen
40.37
0%
-2%
Loans to customers
901,288
906,298
903,890
914,189
↑ PKO BP
41.05 +36%
+4%
50,000
- to private companies
260,585
262,396
259,061
263,063
↓ PZU
409.3
-1%
-9%%
49,000
- to households
559,965
563,157
562,381
567,984
↑ Synthos
5.03
+1%
-8%
1,627,119 1,601,293
1,628,197
↑ Tauron
5.25
+8%
+20%
Total assets of banks
1,612,836
Source: Central Bank NBP
51,000
21 Mar 14
344.68 ↓
as of 21 March 2014
5 Feb 14
502.24 ↓
100 CHF
21 Mar 14
100 GBP
Warsaw Stock Exchange, rates in PLN
on loans to non-financial corporations PLN (up to 1 year)
14 Jan 14
419.70 ↓
30 Oct 13
100 EUR
Key indices
Term / currency
450
23 Aug 13
304.25↓
17 Jun 13
100 USD
Stock Exchange
Average weighted annual interest rates
27 Feb 14
as of 21 March 2014
Interest rates
14 Jan 14
100 USD/EUR against PLN
Central Bank average rates
13 Dec 13
Currency
Source: Warsaw Stock Exchange
T rade Poland's ten largest trading partners, ranked according to 2013
Poland exports and imports according to commodity groups, according to SITC classification EXPORTS in PLN bn 2013
y/y (%)
share (%)
2012
EXPORTS in PLNbn
IMPORTS in PLN bn share (%)
2013
y/y (%)
share (%)
2012
share (%)
No Country
Jan 2014
share
IMPORTS in PLN bn *2013
share No
Country
Jan 2014
share
*2013
share
10,999 20.7% 139,334 21.5%
69,304
+9.7
10.9
61,694
10.5
47,906
+6.2
7.4
44,287
7.0
1 Germany
8,624
+7.3
1.4
7,967
1.3
4,150
+4.0
0.6
3,989
0.6
2 UK
3,488
6.5%
41,503
6.5%
2 Russia
7,852 14.8%
Crude materials except fuels
15,744
+10.5
2.5
14,024
2.4
21,585
-3.7
3.3
22,053
3.5
3 Czech Rep.
3,394
6.3%
39,421
6.2%
3 China
5,497 10.3% 60,914 9.4%
Fuels etc
30,013
+1.4
4.7
29,389
4.9
75,539
-11.7
11.7
85,280
13.2
4 France
3,313
6.1%
35,745
5.6%
4 Italy
2,357
4.4% 33,703 5.2%
1,864
+34.2
0.2
1,342
0.2
2,646
-9.2
0.4
2,887
0.5
5 Russia
2,140 4.0% 34,058
5.3%
5 Netherlands
1,856
3.5% 25,005 3.9%
Chemical products
59,103
+7.7
9.3
54,295
9.1
92,917
+3.1
14.3
89,140
13.9
6 Italy
2,391
4.4% 27,450
4.3%
6 France
1,971
3.7% 24,533 3.8%
Manufactured goods by material
129,915
+2.0
20.3
126,161
21.1
112,392
0.0
17.3
110,773
17.4
7 Netherlands
2,269
4.2%
25,292 4.0%
7 Czech Rep.
1,869
3.5% 23,778 3.7%
239,434
+6.1
37.5
223,646
37.4
216,608
+4.1
33.4
203,718
32.1
8 Ukraine
n/a
2.8%
18,037
2.8%
8 USA
1,209
2.3%
17,350
82,816
+8.5
13.0
75,925
12.7
58,210
-1.1
9.0
57,646
9.1
9 Sweden
1,723
3.2%
17,498
2.7%
9 UK
1,295
2.4%
16,861 2.6%
1,782
n/a
0.2
2,653
0.5
16,242
n/a
2.6
18,515
2.8
10 Slovakia
1,293
2.4%
16,795
2.6% 10 Belgium
1,309
2.5%
14,913 2.3%
100
648,195
0.0
100
638,288
100
Food and live animals Beverages and tobacco
Animal and vegetable oils
Machinery, transport equip. Other manufactured articles Not classified TOTAL
638,599
+5.8
100
597,096
14,097 26.1% 159,622 25.0%
Source: Central Statistical Office (GUS)
1 Germany
*) preliminary estimates
79,601 12.3%
2.7%
weekly newsletter # 027 / 24th March 2014 / page 16
Industrial Industrial Properties
Regional Data Industrial output Jan 2014 *
Poland's regions (main cities indicated
Indus-
in brackets)
try
Monthly wages (PLN) Jan 2014**
Unemployment Jan 2014
Constru- Indus- Constru-in '000 ction
try
%
ction
New dwellings Jan 2014
Existing stock, sq.m
by region, Q4 2013
Num- Index *
Warsaw central
ber
VaEffective Under const cancy rents EUR/ ruction, sq.m ratio sq.m/mth
563,000
17,000
Warsaw suburbs 2,063,000
22.3%
3.6–5.1
12.5%
2.1–2.8
98.4
82.9
4,076
3,967
161.2
13.8
1,176
72.3
Central Poland
1,021,000
80,000
15.2%
2.1–3.3
Kujawsko-Pomorskie (Bydgoszcz) 107.6
138.6
3,321
3,143
156.7
18.8
608
91.0
Poznań
1,023,000
215,000
4.4%
2.5–3.15 2.4–3.3
Dolnośląskie (Wrocław) Lubelskie (Lublin) Lubuskie (Zielona Góra) Łódzkie (Łódź)
104.3
84.6
3,787
2,976
140.4
15.0
346
59.2
Upper Silesia
1,431,000
37,000
9.3%
117.8
106.4
3,396
3,030
63.5
16.5
434
82.8
Wrocław
780,000
259,000
11.7%
2.6–3.1
103.9
100.4
3,735
3,094
158.2
14.5
433
71.2
Tri-city
184,000
46,000
9.2%
2.8–3.3
Kraków
141,000
0
4.0%
3.3-4.0
97.6
100.3
3,708
3,274
172.4
12.1
1,393
70.1
Mazowieckie (Warszawa)
106.5
86.6
4,380
4,776
295.3
11.4
2,491
90.7
Opolskie (Opole)
103.7
146.9
3,509
3,460
55.0
15.0
147
86.0
Podkarpackie (Rzeszów)
102.7
146.9
3,333
2,998
160.4
16.9
585
101.9
Podlaskie (Białystok)
106.4
98.6
3,209
3,613
74.0
15.7
228
69.9
110.6
93.3
3,892
3,305
119.9
13.9
774
85.4
Śląskie (Katowice)
100.1
95.7
4,270
3,493
218.4
11.7
1,030
102.6
Warsaw
Świętokrzyskie (Kielce)
109.0
55.5
3,356
3,153
94.7
17.1
211
106.0
Kraków
Warmińsko-Mazurskie (Olsztyn)
102.1
137.1
3,427
2,964
121.2
22.4
452
135.7
Katowice
5,898
Wielkopolskie (Poznań)
108.5
85.8
3,769
3,545
152.3
10.0
1,368
137.8
Poznań
Zachodniopomorskie (Szczecin)
110.7
93.0
3,474
3,422
117.2
18.7
511
69.9
Łódź
National average
104.1
93.8
4,076
3,967 2,260.7
14.0
12,187
87.2
Wrocław Gdańsk
Małopolskie (Kraków)
Pomorskie (Gdańsk-Gdynia)
Commercial Properties New apartments* Q3 '13
City
PLN/sq.m
*) Index 100 = same period of the previous year. ** without social taxes Sources: Central Statistical Office GUS, NBP, C&W
Offices 2H'13
Retail rents**2H'13
Change Headline Vacancy Retail ratio
High
y/y
rents**
centres streets
8,146
+3.4%
11.5-25.5
11.75%
80-90
5,989
-13.1%
13-15
4.90%
35-45
78
+9.0%
13-14
7.30%
35-45
56
6,351
-6.7%
14-16
14.20%
35-45
55
4,780
-3.8%
12-14
14.40%
35-45
25
5,997
-4.3%
13-15.5
11.75%
35-45
40
6,398
-1.2%
13-15
11.20%
35-45
31
85
*avg, offer-based ** EUR/sq.m/month; Retail units 100-150 sq.m
Poland Today Sp. z o. o. ul. Złota 61 lok. 100, 00–819 Warsaw, Poland tel/fax: +48 22 464 82 69 mobile: +48 694 922 898, +48 602 214 603 www.poland-today.pl Business Review+ Editor Lech Kaczanowski office: +48 22 412 41 69 mobile: +48 607 079 547 lech.kaczanowski@poland-today.pl
Foreign Direct Investment (EUR m) Q1 '13
Q2 '13
Q3 '13
1,861
1,381
2,886
175
-3,020
-1,794
310
-550
-1,203
2007
2008
957
2,588
-1,529
2009
2010
2011
2012
in Poland
17,242
10,128
9,343
10,507
14,832
4,716
Polish DI
-4,020
-3,072
-3,335
5,484
-5,276
375
CA balance vs GDP
-8,893 -10,059
-5,313
-139 1,203
1,017
2,334 4,048
4,816
1,274 1,686
1,047
-18,129 -17,977 -13,332 -5.1%
-5.0%
-3.7%
15
-2,313
486 -2,027
-3.1% -2.3%
-2.0%
A-
stable
Standard & Poor's
A-
stable
Moody's
A2
stable
12
6 months- EUR 375 (PLN 1480) 3 months- EUR 245 (PLN 980) Sales Director James Anderson-Hanney
Real Earnings
mobile: +48 881 650 600
Average gross wage vs inflation. 9
2,000
1,800
6
Source: NBP, BZ WBK Source: Central Statistical Office GUS
Wage
180 160 140 120 100 Feb 10
Oct 10
Jun 11
Business Review+ Subscription 1 year- EUR 690 (PLN 2760)
Source: Rating agencies
Q4 13
CA balance
2012 Q1 '13 Q2 '13 Q3 '13
outlook
2,400
Q2 13
Services, net
2011
number (left axis) % (right axis)
2,600
rating
Fitch Ratings
% of population in working age
Q4 12
Trade balance
2010
Agency
Registered unemployed, in ‘000 and
2,200
Current Account (EUR m) Period
Unemployment
Q2 12
Year
Q4 '12
Q4 11
Polish DI
Q3 '12
Q2 11
in Poland
Q2 '12
Q4 10
Quarter
Country Credit Ratings
Feb 12
james.anderson-hanney@poland-
CPI
Oct 12
Index 100 = Jan 2005. Source: GUS
Jun 13
today.pl
Feb 14
Publisher Richard Stephens Financial Director Arkadiusz Jamski Creative Director Bartosz Stefaniak New Business Consultant Tomasz Andryszczyk