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No. 010 / 8th November 2013 / www.poland-today.pl / magazine, conferences, portal, newsletter
MANUFACTURING & PROCESSING Toshiba sells Polish TV factory in Wrocław to Taiwan's Compal Electronics page 2
TRANSPORT & LOGISTICS PKP Cargo lands on Warsaw bourse with a splash, stock up 18% on first day page 11
BANKING & FINANCE BNP Paribas bidding on Rabobank-owned Polish BGŻ Bank page 3
PointPark Properties to intensify expansion in Poland under new owners page 12
ENERGY & RESOURCES Grupa Lotos to pay USD 176m for share in Norwegian oil fields page 5
Energa generates most of its profits from power distribution.
Photo: Energa
Energa's IPO may total PLN 2.62.6-3bn
Following the successful floatation of state-controlled rail freight company PKP Cargo, the Warsaw bourse is gearing up for another huge IPO. The government is about to sell 34% of power utility Energa for an estimated PLN 2.6-3.0bn. page 4
EI pay EUR 57m for prefab home maker
Private equity company Enterprise Investors has acquired 100% shares in Danwood, one of Europe's leading makers of prefab timber houses, from Polish construction giant Budimex. The new owners seek to expand Danwood's market footprint. page 2
tel. +48 881 650 600
Tauron opens two new farms, boosting wind power capacity beyond 180MW page 6 PROPERTY & CONSTRUCTION Developer Capital Park hopes to raise PLN 210m from Warsaw IPO page 7 New report shows first signs of upturn on Poland's residential property market page 8 SERVICES & BPO Korea's Samsung expands Polish R&D unit, creates tech jobs in Kraków page 10
CONSUMER GOODS & RETAIL Austria's Immofinanz lays foundation stone for new EUR 95m retail center in Lublin page 14 Rank Progress completes large retail project, more to come by 2015 page 15 IT & TELECOM Publicis Group buys top Polish digital agency page 16 POLITICS & ECONOMY Doing business in Poland got easier, World Bank says in new report page 16 KEY FIGURES Up-to-date macroeconomic figures, currency & stock market data and lots of other hard-to-find info pages 18-20
weekly newsletter # 010 / 8th November 2013 / page 2
MANUFACTURING & PROCESSING
Enterprise Investors acquire prefab timber house maker Danwood from Budimex One of Poland's top construction companies, the Spanish-owned Budimex, has sold its subsidiary Danwood to Polish Enterprise Fund VII, a private equity fund managed by Enterprise Investors. The latter agreed to pay EUR 57m for 100% of shares in Danwood, which is one of Europe's largest and fastestgrowing producers of prefabricated timber houses. Danwood produces prefab houses using modern technology that is well established in Germany and Scandinavia. The company's official seat, production plant as well as design and research department are located in Bielsk Podlaski and Białystok, near Poland's eastern border. In 2012 Danwood built 565 houses, generating revenue of EUR 76m. The company sells 91% of its output to Germany, the biggest European market for ready-made houses, where it is the dominant player. Danwood controls all key areas of the value chain, from design through production and sale of prefabricated elements, construction and finishing. "We see considerable further growth potential for Danwood, which has already succeeded in building its position on Europe's most demanding markets with a technologically advanced product. We believe the company will be able to continue its dynamic development with our support." said Sebastian Król, partner at Enterprise Investors in charge of the investment. "The key to Danwood's growth will be the expansion of its geographical footprint, further strengthening of
its presence in Germany, Austria, and Switzerland and Poland. We will also seek to penetrate new market segments. With the "Family" range we intend to build a strong position in the lower segment of the market, where customers are more cost-conscious and can accept standard fit-out features as well as carry out certain simple work, such as painting or laying floorboards, themselves, in exchange for a lower price. We are also counting on further efficiency improvements that should come with economies of scale," Mr. Król told Poland Today.
funds have invested EUR 1.6 billion in 131 companies across a range of sectors and exited 102 companies with total gross proceeds of EUR 2bn.
MANUFACTURING & PROCESSING
Toshiba sells Polish TV factory to Taiwan's Compal Electronics Japan's Toshiba Corporation has sold its Polish manufacturing plant in Kobierzyce near Wrocław to Taiwan's Compal Electronics Inc., the world's No. 2 contract notebook maker. The deal to acquire 100% ownership of Toshiba Television Central Europe will cost Compal USD 25m and is expected to be completed in Q1 2014, Compal said in a filing to the Taiwan Stock Exchange.
Danwood plans to focus on organic growth and building its position as leader on key markets. Image: Danwood
Commenting on this market segment, Danwood’s president Jarosław Jurak said: "Prefabricated houses are increasingly popular throughout Europe. They are environmentally friendly, energy efficient and economical, and their construction takes less time and is cheaper than in the case of traditional technology." Enterprise Investors is one of the largest private equity and venture capital firms in Central and Eastern Europe. Active since 1990, the firm has raised eight funds with total capital exceeding EUR 2bn. To date the
Toshiba opened the factory back in 2007 at the cost of approximately PLN 136m. With a staff of 700 employees the plant makes LCD TV sets for the European and Russian markets. The move is part of Toshiba's global restructuring program, triggered by unsatisfactory performance of the company's TV-manufacturing division, which posted a USD 166m net loss last year. The Japanese electronics giant has recently decided to lay off a half of the estimated 6,000 employees who work for its TV arm. According to IHS, Toshiba had a 5% share in global TV sales in Q3 2013, way behind the leading Samsung (19%) as well as other competitors (LG, TCL, Sony). "Toshiba is one of Compal's major customers in the LCD TV business. This deal will undoubtedly further strengthen the relationship between Compal and Toshiba," Compal spokesman Gary Lu said in a statement on its website. "After the completion of the deal,
weekly newsletter # 010 / 8th November 2013 / page 3
Toshiba will continue to supply the European market with LCD TVs manufactured at the plant, through an original design manufacturer (ODM) partnership with Compal," Lu said. The Taipei-based company said the acquisition fits in with its long-term growth strategy to focus on the "4Screens" sectors: notebook computers, tablets, smartphones and LCD TV products. The new factory will help it expand its LCD TV manufacturing flexibility, diversify its geographical coverage and generate revenue growth momentum in the future, the company said.
MANUFACTURING & PROCESSING
PMI data shows gradual improvement in manufacturing Poland's purchasing managers' index PMI moved up to 53.4 points in October, the highest level since April 2011, from 53.1 pts in September, according to a survey of 300 industrial companies, prepared by Markit Economics for HSBC. It was the fourth consecutive month when the indicator remained above the key 50point threshold, which separates expansion from contraction, indicating improving business conditions in manufacturing.
What is more, October saw input prices rise faster than a month earlier while output prices fell more sharply than in September. This still points to weak demand and highlights how vulnerable the recovery still remains at this stage. And that is exactly in line with the recent comments from several rate setters who highlighted disappointment with the pace of recovery and lack of inflationary pressures," commented Agata Urbańska-Giner, Economist, Central & Eastern Europe at HSBC. According to the report, new export orders rose for the fifth month running in October, the longest sequence of growth in nearly two and-a-half years. Moreover, the rate of expansion accelerated sharply reaching the fastest rate in the survey's 15-year history. The rate of growth of total (domestic and export) new orders also accelerated since September, and was the second-fastest in two and-a-half years.
Purchasing Managers' Index (PMI) The 50 mark separates growth from contraction
Toshiba's factory in Kobierzyce near Wrocław has been one of Japan's flagship greenfield investments in Poland. Image: Prochem
Compal generates 84% of its sales from its notebook and personal computer business, against only 7% from smart devices and 9% from other businesses, according to Macquarie Securities. By 2015, however, Compal should derive 60% of its revenue from notebook and PC sales, 30% from smart devices and 10% from other businesses, Macquarie estimated. Compal produces notebooks for the likes of Lenovo and HP. Five years ago the company opened a service center for portable PCs and other electronic equipment in Łódź, Poland.
BANKING & FINANCE
BNP Paribas Paribas bidding on RabobankRabobank-owned Polish BGŻ BGŻ Bank
54 53 52 51 50 49 48 47 46 45 Aug 12 Oct 12 Dec 12 Feb 13 Apr 13 Jun 13 Aug 13 Oct 13 Source: Markit & HSBC
"The highlight in the October survey was a surge in new export orders while output and employment indices inched lower. For the fourth month in a row rising input prices were matched by falling output prices.
After Italy's UniCredit (see PT Business Review+ No 006, page 3), another major European bank - France's BNP Paribas, has placed a non-binding bid on a 98.5% stake in Polish lender BGŻ. The latter's owner, Dutch Rabobank is reportedly contemplating an exit from Poland, where it has failed to establish a strong enough presence so far. In a statement BNP Paribas said it needs to carry out a detailed due diligence and obtain all the necessary regulatory permissions before making a final decision regarding the acquisition. According to media reports, BNP Paribas is offering EUR 1bn for BGŻ.
weekly newsletter # 010 / 8th November 2013 / page 4
Bank BGŻ is number 11 in Poland by assets and its capitalization totals some PLN 2.5bn, but its stock is anything but liquid. Last year Rabobank increased its ownership in the Polish lender by 40%, reaching the current 98% and later boosted the bank's equity by PLN 0.5bn. Rabobank, the biggest Dutch retail bank, said in June it was reviewing its options for BGŻ, but had not officially put the unit up for sale. At the end of October the Dutch bank confirmed plans to merge its Polish unit Rabobank Polska that serves primarily large corporate clients, with BGŻ. Rabobank Polska will become a separate division of BGŻ focusing on corporations. In most of the markets where it operates, Rabobank is among the top three-top five players, but in Poland the only way to achieve such a position would be through acquisitions. In the first three quarters of the year BGŻ boosted its net earnings by 73% y/y, reaching PLN 134m. Net lending remained unchanged from the end of 2012 at PLN 26.3bn, whereas deposits dropped 4% and totaled PLN 25.8bn. The bank's solvency ratio stood at 13.1% as of end of September 2013. Besides BNP Paribas and UniCredit also Alior Bank, Credit Agricole and Santander are said to be interested in BGŻ, which has a strong position in the agri sector. Foreign banks control about 70% of the Polish banking sector, but several have looked for an exit to boost capital positions hit by the global economic crisis. Major recent exits from Poland's banking market included Belgium's KBC and Ireland's AIB which sold their Polish units to Spain's Santander, Greek Eurobank EFG (their Polbank EFG merged with Raiffeisen Polska), and Swedish Nordea (their Polish arm was acquired earlier this year by Poland's largest lender PKO BP).
IN BRIEF: BANKING & FINANCE
Finnish Ferratum Ferratum Bank to operate in Poland under Maltese license Finnish micro-loan provider Ferratum Group has launched a banking unit in Poland, under a license the company obtained in September last year from the Malta Financial Services Authority. The newly established Ferratum Bank will incorporate the Ekspres Kasa operation, which the Finns have been rolling out in Poland over the past few years. Earlier this year, in March, Ferratum Bank had entered Slovakia. Ferratum Bank seeks to lend money both online and offline, with small short terms loans (PLN 100-2,000 for 15-60 days) to be offered under the Ekpress Kasa brand, and longer-term ones (PLN 400-2,000 for 3-12 months) to be distributed under the aegis of Ferratum Bank. The whole concept is based on simple and clear unsecured credit products, offered mainly via the internet, similar to other payday loan providers, such as British Wonga, which has recently entered Poland, and a number of other domestic and foreign players. According to the company, even though all risk assessment procedures are to be carried out by the bank's head office in Malta, customer screening should not take longer than before. Independent of any financial institutions, Ferratum claims to be the world's first provider of microloan services online and via mobile phone. Since commencing its activities at the beginning of 2005, the company has opened offices in 20 countries (with a particular focus on the CEE region), and employs more than 220 customers who serve 1.5m clients.
Austria's Erste Group is interested in acquiring a Polish bank, but sees current market valuations as too high, Erste representatives told the media. "In the mediumterm we want to be present in Poland in the banking sector, but current valuations that are in the range of 1x to even twice the book value are too high for us to think about an acquisition," Erste investment banking head Ingo Bleier told Polish news agency PAP. "We would like to take over a bank that would give us a notable share in the retail segment." High valuations of Polish banks might be justified by low costs of risk, Bleier said.
ENERGY & RESOURCES
Poland to sell 34.2% of Energa and raise some PLN 2.6bn in upcoming IPO of power utility Following last month's successful floatation of rail freight company PKP Cargo, hopes are high for the upcoming IPO of power utility Energa, details of which emerged earlier this week. The government plans to offer a 34.2% stake in the Gdańsk-based company, Energa announced, and according to estimates by Bloomberg the sale may raise about PLN 2.6bn for the state budget, helping the government curb debt growth. The financial regulator KNF is to approve Energa's prospectus in the coming days. Energa is the last state-owned Polish energy company to hit the bourse and its IPO would be the biggest in central Europe since Polish coal producer Jastrzębska Spółka Węglowa's PLN 5.37bn (USD 1.74bn) sale in 2011. Over the last five years, Poland sold stakes in Energa's competitors including PGE,
weekly newsletter # 010 / 8th November 2013 / page 5
Tauron, Enea, and PAK, raising a total of PLN 12.9bn from their IPOs, according to data compiled by Bloomberg. Energa is one of Poland's leading vendors of clean energy, with some 36% of renewable energy produced in the country last year coming from the company. Earlier this year Energa, which operates the country's biggest hydroelectric plant in Wloclawek, bought 165 MW of wind farms from Denmark's Dong Energy A/S and Sopain's Iberdrola SA, raising its total renewable energy capacity to 508 MW, or 40% of its portfolio.
4.9% below its first sale in 2008. The sector has seen its earnings slide due to decline in electricity prices. However, the power plant group PAK, controlled by Polish billionaire Zygmunt Solorz-Żak, has climbed 7.3% since the government sold its remaining 50% last year.
JP Morgan and UBS Investment Bank have been appointed global coordinators and joint bookrunners. Dom Maklerski PKO BP will offer the shares. Banco Espirito Santo, BofA Merrill Lynch, Citi, DM PKO BP and UniCredit are also joint bookrunners. Biuro Maklerskie Alior Banku, DM BOŚ, DI BRE Banku and Ipopema Securities are also managers of the offer.
Most profits come from distribution Energa's EBIDTA structure in Q1-Q3 2013
Sales & profits on the rise Sales 11%
Energa, key figures*
Q1-Q3 2012
Q1-Q3 2013
Sales revenues, PLNbn
8.2
8.5
Net result, PLNbn
0.5
0.6
Generatio n 13%
Source: Energa
The company plans to spend PLN 19.7bnthrough 2021, with PLN 12.5bn of that amount earmarked for investments in power distribution. Energa's power plants can generate up to 1.3 GW of energy and last year it sold some 28 TWh of electricity. Energa, which makes most of its profit from a regulated powerdistribution business, boosted nine-month earnings before interest, taxes, depreciation and amortization 13% to PLN 1.5bn. Net income rose 15% from a year earlier to PLN 610.8m. According to analysts, Energa needs to come up with a convincing business model and offer attractive valuation to make the IPO a hit, as its competitors have so far failed to impress, as far as their stock market performance is concerned. Poland's top electricity producer PGE has seen its share price drop 19% since its IPO in 2009, Tauron shares trade 2.9% below the company’s 2010 offering, while Enea’s stock price is
Distributio n 76%
In the coming years the bulk of Energa's investment projects will focus on the power distribution segment. Image: Energa
The Treasury Ministry first tried to sell Energa in 2010. The PLN 7.5bn sale of an 84.2% stake to PGE was blocked by Poland’s antitrust regulator. PGE is currently valued at 9.9 times this year's profit, according to Bloomberg. Tauron, the second-biggest power utility, trades at 6.3 times this year’s profit, while Enea 10.3 times earnings. Energa's relatively high valuation has to do with the fact that the company relies to a significant extent on the regulated (and therefore predictable) distribution segment. Poland's state railways sold a PLN 1.42bn stake in its cargo unit's IPO last month and shares in the company opened at 18% above the issue price on the first day of trading (see page 11).
Source: Energa, Estimates
ENERGY & RESOURCES
Grupa Lotos to pay USD 176m for share in Norwegian oil fields Poland's second largest refiner Grupa Lotos will buy stakes in several Norwegian oil fields for USD 176m from Centrica PLC, the company announced. Lotos will buy stakes ranging from 7.9%-50% in 14 oil fields, which are expected to produce around 5,000 barrels of oil equivalent a day in 2013.
weekly newsletter # 010 / 8th November 2013 / page 6
The transaction, which is expected to close in December, is part of the company's efforts to diversify away from its low-margin core business of oil refining toward more lucrative, but risky, oil production. A few weeks ago Lotos announced that its oil exploration project in the Baltic will receive financing from Poland's state investment vehicle Polskie Inwestycje Rozwojowe (PIR). 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 agreed to inject up to PLN 563m in Lotos Petrobaltic's B8 exploration project in the Baltic Sea (see PT Business Review+ No. 007 page 5).
Poland's only domestic oil producer Lotos Petrobaltic's crude oil production in '000 tons 300
Poland
in Norway, if it acquires new assets. Grupa Lotos operates in Norway via Lotos Exploration & Production Norge, a subsidiary of its exploration arm Lotos Petrobaltic. Controlling approximately a third of Poland's fuel market, Grupa Lotos is the country's second largest company by revenue. The firm operates in exploration, production and crude oil processing, as well as in distribution and sales of a wide range of petroleum products. Over the past year's the production capacity if its Gdańsk refinery has risen from 6 to 10.5m tons. In the first half of 2013 Grupa Lotos turned over PLN 13.3bn, 18% down y/y, and posted a net loss of PLN 273m, reflecting dropping margins and unfavorable economic conditions. Its retail network includes more than 400 petrol stations.
Lithuania
ENERGY & RESOURCES
250
Tauron opens two new farms, boosting its wind power capacity beyond 180MW
200 150 100 50 0 2005
2006
2007
2008
2009
2010
2011
2012
Source: Grupa Lotos
The Polish company had been searching for an opportunity to acquire assets in the Norwegian Sea in order to take advantage of a tax shield it is entitled to after failing to produce oil from the Yme field in the North Sea. The Yme field failed to produce oil due to problems with an oil platform, forcing Lotos to write off the investment and making it eligible for tax benefits
Polish power utility Tauron has opened two new wind farms in the past weeks, boosting its combined installed wind power capacity in excess of 182 MW. The company seeks to expand its renewable capacity beyond 800MW by 2020, CEO Dariusz Lubera said in a statement. The first of the two new completions - an 82MW wind farm in Marszewo (120km west of Gdynia) is the third largest facility of this kind in Poland. The project comprises 41 turbines (V80 and V90 manufactured by Vestas) of 2 MW capacity each. The height of the
towers varies from 60 to 100 m. Annual output of the farm is expected to reach almost 184 thousand MWh, which meets the demand for electricity of approx. 80 thousand households. Spain's Iberdrola Group developed the project for Tauron at the cost of PLN 632m net, including 3-years warranty service. The second new wind farm (and Tauron's fourth in total), was launched at the end of October in Wicko, 60km north west of Gdynia. Developed at the cost of PLN 244m the 40MW project includes 20 Vestas V90 turbines. The contractor was Spain's Aldesa. Both in Marszewo and in Wicko substantial investments were made in local power distribution networks as well as service roads. The Warsaw-listed Tauron is Poland's leading distributor and vendor of electric energy as well as the second largest power producer in the country. Last year the company generated 11.11TWh of electricity and sold 44.74 TWh. Beside's four wind farms (Marszewo, Lipniki, Wicko, and Zagórze, with a combined capacity of 182.5MW), Tauron's renewable energy arm Tauron Ekoenergia also owns 35 hydroelectric power plants, capable of producing up to 133 MW of electricity. Most of them are being currently upgraded in an effort to boost their efficiency and improve water management systems. Tauron's domestic competitors are all busy developing their renewable energy sources. Earlier this year Denmark's Dong Energy and Spain's Iberdrola Renewables sold their wind energy projects in the country to Polish utilities PGE and Energa Hydro. As part of the DONG deal, PGE has taken over 60.5 MW in operating wind farms and a portfolio of 555 MW in projects, including 130 MW in advanced projects, while Energa Hydro has acquired a 51 MW wind farm and 220 MW in wind farm projects under development. In the subsequent transaction with Iberdrola (worth PLN 840m), PGE and Energa purchased oper-
weekly newsletter # 010 / 8th November 2013 / page 7
ating wind farms with installed capacity of 70.5 MW, with contracted off-take of electricity as well as certificates and pipeline of projects with planned capacity of 36 MW at an advanced stage of development. Foreign investors operating in the sector include Germany's RWE, France's EdF, and Portugal's EDPR.
Poland's installed wind energy capacity in MW
PROPERTY & C0NSTRUCTION
Developer Capital Park to raise PLN 210m from Warsaw IPO
in Warsaw represented nearly three quarters of the total portfolio value. The company has been rather conservative when it comes to the use of financial leverage, as reflected by its low net indebtedness ratio of 35.4% as at 30 June 2013. Its limited dependence on bank financing makes Capital Park less susceptible to turbulence on the credit and loan market.
Warsaw-based property developer Capital Park seeks to hit the Warsaw bourse hoping to raise some PLN 210m for its ongoing and pipeline projects. New institutional and retail investors are being invited to acquire a 20% share in the company, which has been investing jointly with London-based private equity fund Patron Capital Partners.
3,000 2,500 2,000 1,500 1,000 500
Source: URE
*2013
2012
2011
2010
2009
2008
2007
2006
2005
0
*) as of end of September
Poland's installed renewable energy capacity came to 5,177 MW as of end of Q3 2013 , up by over 761 MW compared to end-2012, according to energy market regulator URE. Wind power capacity increased the most, reaching 3,080 MW as of September, followed by hydro-power capacity amounting to 969 MW and biomass-fueled plants with 973 MW, the data showed. Renewable energy currently represents slightly over 10% of Poland's energy supply. The country seems to be way on its way to reach its 15% target for the share of renewable sources in gross final consumption of energy in 2020.
Since the start of its operations in 2003, the Capital Park group has completed approximately 100 investment transactions and now comprises 76 projects of approximately 247,560 sq.m of lettable area in 39 towns and cities, including office projects (93,030 sq.m), retail projects (26,700 sq.m), mixed-use projects (112,423 sq.m) and 13 other projects. The company describes itself as an active opportunistic investor with a track record of more than ten years in developing and managing real estate properties and projects in Poland. One of Capital Park's specialties are small real estate assets such as high street retail properties. Out of the 76 projects in the group’s portfolio, 39 high street retail properties are within the structure of a recently launched closed-ended investment fund – Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych Real Estate Income Assets, which is being actively managed by the group. As of 30 June 2013 Capital Park's existing retail portfolio was worth PLN 1.3bn, with a target value amounting to more than PLN 3.2bn. Properties located
With a planned GLA of more than 70,000 sq.m
Eurocentrum is one of the largest office projects currently under construction in Warsaw.
Image: Capital Park
As far as its development pipeline is concerned, Capital Park is working on three large projects in Warsaw. Its flagship development is the Eurocentrum scheme on Jerozolimskie avenue in Warsaw's Ochota district. The investor, which acquired the site back in 2007, awarded the PLN 337m contract for the construction of Eurocentrum to Polish Erbud. Eurocentrum will be a 15-floor building housing more that 69,578 sq.m of office and more than 2,400 sq.m of retail-service space as well as more than 770 parking spaces. According to the developer it will be the largest LEED CS Goldcertified office scheme in Poland, employing a whole range of energy-efficient solutions. Phase one (42,337
weekly newsletter # 010 / 8th November 2013 / page 8
sq.m) of Eurocentrum is to reach completion in June 2014. In August 2013Capital Park Group broke ground on its latest office project in Warsaw – Royal Wilanów. Located at the corner of Klimczaka and Przyczółkowa streets in Warsaw's up-scale suburb of Wilanów, the five-storey building will offer close to 36,707 sq.m of office space as well as some 7,000 sq.m of retail space, accommodating restaurants, bars, cafes, shops and service units, all much needed in this largely residential neighborhood.
Warsaw office market Key indicators as of end of 1H 2013 Office zones
Stock
Vacan-
sq.m
cy
1,287,000
9.9%
CBD-Central Business District
501,000
11.4%
CCF-City Centre Fringe
786,000
8.9%
2,724,000
10.8%
Central locations
Non-central locations E-East (Praga)
172,000
9.8%
LS-Lower South (Puławska)
176,000
13.0%
N-North (Żoliborz)
135,000
9.0%
SE-South East (Wilanów & Sadyba)
188,000
2.2%
SW-South West (Jerozolimskie & Okęcie)
660,000
15.6%
US-Upper South (Mokotów)
1,105,000
10.5%
W-West (Wola) Total
288,000
6.4%
4,011,000
10.5%
Source: CBRE H1 2013 Warsaw Office MarketView
Their third key Warsaw project is the Art Norblin development in Wola district, on the edge of Warsaw's central business district, a stone's throw from the ONZ roundabout and its iconic Rondo 1 building. Art Norblin will incorporate the pre-war Norblin factory buildings, striving to create a trendy mixture of industrial architecture, class A office and shops spread across a total lettable area of 64,164 sq.m.
Although the company does not communicate financial details of its undertakings, the combined capex for the three projects is likely to come in excess of PLN 1bn. Besides large office buildings, Capital Park develops and manages retail properties (Vis à Vis shopping plazas) as well as residential projects. Their overall investment approach is to acquire properties with significant value creation potential, be it through changes to land use decisions, obtaining building permits, construction of new facilities or alteration of existing ones and improved management of existing buildings. Last year Capital Park group cashed in PLN 42.3m in rental income. However, due to a new valuation of its property portfolio, the company posted a net loss of PLN 115m. In 1H 2013 the net result was a PLN 46m profit. Capital Park hopes to finalize the IPO before the end of the year with Espirito Santo Investment Bank and DI BRE Banku acting as joint bookrunners and the latter being also the global coordinator and offering agent.
PROPERTY & CONSTRUCTION
New report report shows first signs of upturn on Poland's residential property market Sales of new homes are picking up according to a brand new report from Poland's top residential property market consultancy REAS. Close to 9,600 new dwellings were sold in Q3 2013, marking an 18% increase over the prior quarter and the strongest result since the boom times of 2007, even though the aggregate value of transactions was considerably lower . Transaction volumes were exceptionally high despite two holiday months which usually result in reduction
in buy activity. The total number of new homes sold between Q4 2012 and Q3 2013 in the six markets analyzed by REAS came to 33,500. There are a number of factors behind this sudden surge in residential demand. One the one hand, we are seeing increased activity on the part of cash buyers, who treat mortgage as a supplementary form of financing and often focus on larger and more expensive dwellings. With interest rates at their lowest level in years, those with fat wallets and little appetite for risk are turning to good old real estate as a safe form of long-term investment.
Selling the future Residential units available for purchase from developers in Warsaw, Kraków, Poznań, Wrocław, Tricity, and Łódź, breakdown by delivery date. after 2014 12% 2014 41%
2010 & before 5% 2011 4%
2013 27%
2012 11%
Source: REAS
Low interest rates are also attracting those at the other end of the earnings curve, as chances for the cost of credit to get any lower in the near future seem rather slim. Moreover, some buyers may have sought to get loans before the regulator further tightens its already conservative approach to lending by gradually limiting
weekly newsletter # 010 / 8th November 2013 / page 9
REAS findings match the figures provided by Poland's central statistical office GUS. According to the latter, countrywide, developers commenced construction of some 36,400 dwellings in Q3, down 21.2% compared with the same quarter last year. Over the same time, they obtained building permits for upwards of 41,000 units (down 24.6%). According to REAS, the full-year result is likely to go down to the crisis level from 2009.
170,000 160,000 150,000 140,000
developers and worth 16-18% of the total annual value of transactions, REAS said. In Warsaw and Kraków the scheme's impact will be limited, however, with less than one in ten available properties meeting the minimum requirements, but in Gdańsk and Łódź over a half of all homes may qualify. Another potentially groundbreaking development could be the creation of a state-backed rental housing fund, an idea that has received some media attention in recent months. The fund, to be set up and later managed by Bank Gospodarstwa Krajowego, is to invest PLN 5bn in apartments, mostly in the country's major cities, making it the largest home buyer or key developer in these markets. Constructed and turn-key finished dwellings are to be leased at rates ensuring a 4% annual return on equity. Details of this program are still being discussed and its potential consequences for the market as a whole are still largely unclear.
130,000
PROPERTY & CONSTRUCTION
120,000 110,000
Source: GUS
*2013
2012
2011
2010
2009
100,000 2008
Thanks to sales which considerably outpace new releases, the overall number of dwellings offered in the six major markets has dropped for the fifth consecutive quarter. It now stands at ca. 44,000 and is nearly 9% lower than the previous three months and over 22% lower than in the record Q2 2012. Although a decline was recorded in all six cities, the steepest/q decline, by 13.4%, was recorded for Kraków. Sizeable drops were observed also in Warsaw (9.4%) and in Poznań (8.5%).
No. of newly completes homes in Poland
2007
The number of new dwellings released to the market in Q3 in the six key cities came to 5,300, some 3,000 fewer than the quarterly average from the past few years. Over the past 12 months the combined new supply came to 23,000 – way below the earlier annual average of 35,000-37,000 units. A large portion of the newly released dwellings are still being offered without escrow accounts, which are required for all investments formally launched after 29th April 2013.
2006
On the supply side, average prices are also relatively low, remaining at a level comparable to that from late 2011. Besides a minor appreciation in Warsaw, where sales have picked up in the low-end segment, asking prices remain flat in other markets. According to REAS, developers are not feeling confident enough yet to be raising prices, but they have been doing so indirectly by putting a cap on discounts and special offers.
Compared to the preceding quarter, the aggregate number of completed, unsold dwellings decreased in Q3 by some 1,300 (8.5%) in all six cities. At the end of September, over 13,800 such units were available on the market. In some markets, such as Warsaw, Wrocław, and TriCity, the market is nearly balanced, as on the average it takes only five quarters to sell new properties there. Łódź, on the other hand, suffers from the highest oversupply rate, but due to the market's small size it should be able to regain balance with relative ease.
2005
the maximum LTV level for mortgage (the so-called "S" Recommendation).
*) Q1-Q3
The report argues that the key driver in the low-end segment next year will be the government's new support scheme "Home for the Young." Next year, the new program is to offer PLN 600m in subsidies on deposits for loans taken out for the purchase of new-built dwellings. REAS expects the scheme's impact to be comparable to that of Family’s Own Home in 2012. Assuming the new program is launched in the beginning of January, 2014 will most probably record some sixteen to eighteen thousand subsidized home purchases, accounting for around 20-23% of sales concluded by
Swedish Skanska lays cornerstone for its first office project in Kraków Swedish developer Skanska Property Poland has laid the cornerstone for its first project in Kraków. Phase one of the development, known under a working name of Kapelanka 42, is to cost EUR 32m, including a EUR 26m building contract for Skanska's construction unit. Kapelanka 42 will comprise two A class office buildings, with nine storeys above and three below ground level. The total leasable area will amount to 30,000
weekly newsletter # 010 / 8th November 2013 / page 10
sq.m. Nearly 400 parking spaces will be available for tenants in the underground car park connecting the two buildings as well as at the ground level. Overground construction work is currently in progress. The first building is due for completion in Q2 2014. "Kraków is currently considered the leading center for the outsourcing sector not only in Poland but in the whole region”, said Bartosz Kalinowski, Skanska Property Poland regional director. "We are currently in talks with a number of tenants who are interested in locating their offices in our building. We plan to finalize some lease contracts in near future, with the project to be 60%-leased by the end of the year. Tenants value green buildings by Skanska, as they provide comfortable working environments where people can thrive."
DATA BOX: KRAKÓW OFFICE MARKET IN 1H 2013 • In June 2013, total prime stock in the second-largest office market in Poland stood at 605,000 sq.m. Only one small office building in Dekerta Street totaling around 1,800 sq m has been delivered since the beginning of the year. In H1 2013, Krakow’s absorption declined by more than 50% compared with the same period of 2012, which, however, owing to the low supply should not stir anxiety among investors. • Take-up remained high at close to 55,000 sq.m. The largest deal was Lufthansa’s lease of approx. 8,500 sq.m in building D of the Bonarka4Business complex.. • At the end of June 2013, there was 16,400 sq.m of vacant space, accounting for 2.7% of Krakow’s total stock, being its record high vacancy rate. Around 28,000 sq m is in the development pipeline to be completed by the end of this year. The largest schemes under construction include phase III of the Quattro Business Park (12,000 sq.m), developed by the Buma Group, and building D of the Bonarka4Business complex (8,700 sq.m), developed by TriGranit. • Despite the relatively low supply, rents remained stable. Asking rents stood at EUR 13–15/sq.m/month, with effective rents at EUR 12–13/sq.m/month. Source: Cushman & Wakefield
Although Skanska Property Poland has been very active in other regional cities, Kapelanka 42 will be its Image: Skanska first project in Kraków.
All of Skanska’s recent office investments are being designed and built in line with the principles of sustainable development, and Kapelanka 42 will be no exception. The complex is Kraków’s first office project which has been LEED-precertified at the Gold level. The building will also receive EU GreenBuilding certificate.
Skanska Property Poland is the leading office developer operating outside Warsaw, with investments in Poznań, Łódź, Cracow, as well as in Wrocław, where it has just launched its 4th project, the Dominikański (see PT Business Review+ No. 006 page6). In Warsaw, the company is building one of its most ambitious undertakings to-date: Atrium 1, which according to Skanska will be the greenest office building in Central
and Eastern Europe. The project is to reach completion by the end of this year, offering 18,000 sq.m. In September, Skanska signed a 12-year agreement with a key tenant for Atrium 1, Poland's third largest bank BZ WBK, belonging to Spain's Banco Santander. The bank will take up 12,200 sq.m at Atrium 1, making it the largest office deal in Warsaw's central business district in years. Atrium 1 will house the new headquarters of BZ WBK along with the bank's flagship branch. The remaining space in the office building, located by one of War-saw's key intersections, Rondo ONZ, will be occupied by the property consultancy CBRE as well as the developer, Skanska Property Poland itself. Skanska Property Poland has been operating in Poland since 1997 and is part of the Skanska Group, one of the world’s leading project development and construction groups. The group currently has 57,000 employees in selected home markets in Europe, the U.S. and Latin America. Skanska's revenue in 2012 totaled EUR 15.2bn.
SERVICES & BPO
Korea's Samsung expands Polish R&D unit to Kraków One of Europe's fastest growing research and development centers for consumer electronics, the Warsaw unit of South Korean giant Samsung, continues to branch out to Poland's regional cities. After opening R&D units in Poznań in 2011 and Łodź earlier this year, Samsung Electronic Polska has launched a brand new division in Kraków. The official opening of Sam-
weekly newsletter # 010 / 8th November 2013 / page 11
sung R&D Institute Poland's newest office took place on 30th of October. "We have been present in Poland for 13 years, continuously growing and now employing more than 1,000 highly skilled engineers," said Dae-Hyun Sim, VP and Head of Samsung R&D Institute Poland, praising Poland's technology talents and business friendly environment. The company is recruiting telecommunications, embedded programming and software development specialists for the new office, which currently employs several dozen staff and plans to double their number over the coming years.
ments in R&D activities is a part of the global strategies of the company. Samsung Electronics invested around USD 10bn in research and development activities in 2012. Samsung's Warsaw R&D center is the company's second largest unit of this kind outside Korea and the largest in Europe. Established back in 2000, it is currently responsible for dozens of projects in the home and mobile entertainment segments. The center employs more than 1,000 engineers across four locations (Warsaw, Poznań, Łódź and Kraków). Established last year, the Poznań unit were to initially concentrate on developing software for digital television equipment (such as set-top boxes), including Samsung's own Smart TV platform, as well as mobile phone applications, but its responsibilities are being gradually expanded. In all four cities the Korean giant bets on tight cooperation with local universities. Over the past couple of years, Samsung's Warsaw center has been organizing shared research projects, conferences, training sessions, as well as faculty and student exchange programs in cooperation with top engineering schools in Poland.
Youngky Kim, EVP and Head of Networks Business at Samsung Electronics, Dae-Hyun Sim, VP and Head of Samsung R&D Institute Poland, and Polish officials took park in the official ribbon cutting cereImage: Samsung mony.
The Kraków unit will focus on development of software for mobile network infrastructures for major European telecom operators. With the new office, Samsung expects to enhance its capability to support European mobile operators with development of the highest quality of mobile network infrastructure solutions and accelerate the globalization of its Networks business, the company said. The increasing of invest-
Besides its 1,000 Polish R&D professionals, Samsung employs more than 1,700 staff at its Warsaw sales unit and manufacturing plants in Wronki, which the company acquired in March 2010 from Polish Amica at the cost of USD 65.5m. The investor is in the process of converting the factories into its European manufacturing hub, which by the end of 2013 will be making 1.5m washing machines and 1.5m refrigerators per annum. As far as financials are concerned, Samsung Electronics Polska turned over PLN 6.3bn and net-earned PLN 114m in 2012. Globally, Samsung employs 270,000 people across 79 countries with annual sales of USD 187.8bn.
TRANSPORT & LOGISTICS
PKP Cargo lands on Warsaw bourse with a splash, splash, stock price surges 18% on first day Shares in Polish PKP Cargo, the European Union's second largest railway freight company after Deutsche Bahn AG, jumped 18% on the first day of trading, valuing the business at PLN 3.5bn. The company's PLN 1.42bn IPO, Poland's biggest so far this year, was heavily oversubscribed, with demand exceeding the offer by nearly six times. PKP Cargo is the EU’s first listed rail-freight company. Its state-owned parent PKP, the nation’s ailing railway operator, sold 20.9m shares in Cargo at PLN 68 each to raise funds for cutting its own debt. The price range was set at between PLN 59 to 74 apiece. Foreigners bought 20% of the freight operator with the European Bank for Reconstruction and Development having acquired a 5.27% stake in the IPO and thus becoming the second-biggest shareholder in PKP Cargo. State-owned railway group PKP does not rule out selling another stake in freight firm PKP Cargo next year, the group’s CEO Jakub Karnowski said at a press conference following the floatation, adding that it would seek permission from the Treasury Ministry to decrease its involvement in PKP Cargo while at the same time maintaining control over the company. The current PKP Cargo articles of association prevents any other entity from having more than 10% of the votes at the shareholders meetings. Such solutions are in place in many other state-controlled companies,
weekly newsletter # 010 / 8th November 2013 / page 12
where the Treasury holds a 20-30% stake in a firm but maintains control. If PKP does decide to sell more shares, they will most likely sold on the WSE. The PKP-owned stock has a 180-day lock-up period.
Poland's top rail freight operators 2012 market shares based on freight volume Other, 13.8% PKP LHS, 4.5% Lotos Kolej, 4.5%
PKP Cargo, 50.5%
CTL Group, 6.5% DB Schenker, 20.2%
Source: Rail Market Regulator UTK
PKP Cargo saw its revenues drop 9.2% to 2.29bn, in 1H 2013, due to economic slowdown, while its net income slumped 44% to PLN 76.8m. Last year the company carried around 116m tons of freight (mainly hard coal and building materials) and generated net profits of PLN 267m on PLN 5.2bn worth of revenues, down from its record net result of PLN 400m in 2011. Warsaw-based PKP Cargo had a 60.3% share in the Polish market in 2012 and controlled 8.5% of total rail freight in the EU. That compares with DB Schenker's 28% and 5.4% shares in the EU and Poland, respectively. PKP Cargo's management will propose spending 35% to 50% of consolidated profits on dividends, according to the prospectus.
TRANSPORT & LOGISTICS
PointPark Properties to intensify expansion in Poland under new owners owners
"After 5 years working with Arcapita, who successfully assembled this portfolio, we look forward to TPG and Ivanhoé Cambridge becoming long term investors in P3," commented Ian Worboys, CEO of P3. "We are now in a position with our current land bank to build upon our established customer base. P3 will also look to enhance its existing portfolio by acquiring quality income producing warehouses in key logistic locations."
TPG, a leading global private investment firm, with its partner Ivanhoé Cambridge, one of the world’s largest real estate companies, have acquired warehouse developer PointPark Properties (P3) from Arcapita, an international investment company. As part of the transaction, the investors will also commit additional capital to strengthen P3’s balance sheet and to provide support for future growth. "Poland is a natural place for expansion of P3's business. It is a promising and leading market in CEE. Our business model has changed as a result of the new ownership. It means that P3 is looking at opportunities to grow its business through development as well as acquisitions," Anja van den Berg of PointPark Properties tells Poland Today. She declines, however, to disclose the value of P3 capital expenditures in the country. P3 is a specialist investor, developer and asset manager of warehouse properties, providing services to logistics, retail, automotive and electronics manufacturing companies. The company's real estate assets consist of 48 warehouses (1.46m sq.m) and a land bank allowing for the development of more than 590,000 sq.m of warehouse space across Europe. Besides its key market – France, P3 operates in Spain, Germany, Netherlands, Italy, Slovakia and the Czech Republic.
Under its new owners, Point Park Properties will look for new investment opportunities across the Image: P3 CEE region.
"This strategic investment represents a unique opportunity to acquire a large and independent logistics platform in Europe. With assets strategically positioned along major air, sea and rail transport routes, P3 offers a very attractive growth potential, and will contribute to the diversification of our real estate portfolio," added Meka Brunel, Executive Vice President, Europe, at Ivanhoé Cambridge. "The strong growth trend in e-commerce can only benefit the logistics industry in the long term and offers an opportunity to generate excellent returns from changing consumer lifestyles in Europe."
weekly newsletter # 010 / 8th November 2013 / page 13
In Poland, PointPark Properties owns close to 160,000 sq.m of in existing assets, has more than 27,000 sqm under construction and a land bank where a further 327,000 sq.m can be developed. Its overall warehouse space potential totals nearly 515,000 sq.m. "We are always looking at opportunities in Poland, but I am reluctant to put a number on our investment plans in the country because it will depend on what opportunities arise. These are hard to predict. What I can say is that with the support of TPG and Ivanhoe Cambridge, P3's ambition is be a prominent actor in the Polish industrial and warehouse market. We are looking at opportunities to expand our existing business, make investment acquisitions and to offer clients Build-to-Suit solutions in Poland," says Anja van den Berg. P3's two existing Polish logistic parks (in Mszczonów south of Warsaw and near Poznań), are both strategically located and have excellent transport connections. PointPark Mszczonow comprises three buildings totaling 95,857 sq.m, with the potential to expand this to 318,981 sqm. in 12 buildings. Its three largest tenants are Fiege, Jeronimo Martins Dystrybucja (operator of Poland's top retail chain Biedronka) and ID Logistics Polska. PointPark Poznan as a whole offers up to 194,570 sq.m of warehouse space, including more than 131,000 sq.m of zoned land for further Build-ToSuit developments. Key customers include Hager, DAMCO, Jeronimo Martins Dystrybucja, ND Poland, CEVA, and PF Concept. The parks have planning consents for new warehouse developments, while P3 is also able to offer other excellent locations for BTS projects near key Polish cities, including Warsaw, TriCity, Wrocław, Kraków, Rzeszów, Bydgoszcz and Lublin as well as in the industrial regions of Upper Silesia and Legnica.
TRANSPORT & LOGISTICS
Demand for warehouse space plunges in Q3 but developers remain remain optimistic, JLL says Demand for new warehousing space declined significantly in Q3 2013, despite higher construction activity and an increase in speculative volume, according to a brand new edition of Jones Lang LaSalle's quarterly report on Poland's industrial market report. Gross demand was 329,000 sq.m, a fall of some 29.8% as compared to the Q2 2013 and 23.4% weaker than in Q3 2012. New leases accounted for 54% (179,000 sq.m). Most new demand was concentrated in Central Poland (28% of net-take up), the Warsaw Suburbs (27%) and the Tri-City (17%). Renewed leases were important drivers of Wrocław, Poznań and Upper Silesia markets. The largest transactions were signed by Żabka retail chain (renewal of 26,000 sq.m, SEGRO Logistics Park in Poznań and lease of 25,000 sq m, SEGRO Logistics Park Gdańsk), Dino retail chain (22,000 sq.m, Logistic City, Piotrków Trybunalski) and ID Logistics (20,000 sq m, AB Logistyka building, Grójec). Third-party logistics providers remained the most active tenants (33.5% share of net take-up), but retailers leased only 1,000 sq.m less and accounted for 32.9% of new demand. "After the promising H1, when the take-up of industrial space recorded an increase, the demand registered in Q3 seems to be somewhat modest in size. Although take-up is lower than the previous quarter, the market fundamentals remain strong and optimism prevails re-
garding the overall performance of the market in 2013. Interestingly, the structure of demand has changed with logistics companies leading but retail chains have significantly enhanced their position with higher lease activity. We are also observing a rise in speculative activity," commented Tomasz Olszewski, Head of Industrial Agency in Central and Eastern Europe, Jones Lang LaSalle.
Poland's industrial property market Key indicators as of end of Q3 2013 Q3 2013
q/q
y/y
12 month outlook
7,390,000
1.2%
4.1%
↑
Gross take-up (sq.m)
329,000
-29.8%
-23.4%
↑
Net take-up (sq.m)
179,000
-39.1%
-5.1%
↑
10.3%
-0.30%
-0.90%
Stock (sq.m)
Vacancy rate (%) Vacancy (sq.m) Completions (sq.m) Under construction (sq.m)
761,000
-11,000 -31,000
89,000
+18,9%
-34.6%
↑
342,000
+37.5%
+107%
↑
Source: Jones Lang LaSalle Q3 2012
In Q3, the market grew by 89,000 sq.m, with the most notable projects including Prologis Park Wrocław V (36,000 sq.m), Tulipan Park Warszawa (24,000 sq.m) and Ideal Idea III in Warsaw (10,000 sq m). In the analyzed quarter, the Warsaw Suburbs strengthened their position as the largest industrial hub of Poland, hitting the threshold of 2m sq.m of existing supply. Along with Warsaw Inner City, these markets offer almost 2.6m sq.m, (more than 35% of the national supply). The second largest region is Upper Silesia (1.41m sq.m), followed by Poznań and Central Poland, each with 1,02m sqmm. The total modern warehouse space in Poland currently amounts to 7,39m sq.m, according to Jones Lang LaSalle. As of the end of Q3, 342,000 sq.m of new warehouse space was under construction across the country, which is the highest amount recorded since Q4 2011.
weekly newsletter # 010 / 8th November 2013 / page 14
The largest volume (74,000 sq.m) is being built in Central Poland (50,000 sq.m in the BTS building for Castorama, Stryków). Developers are also active in Poznań (61,000 sq.m), Upper Silesia (44,000 sq.m), Wrocław (42,000 sq.m) and the Tri-City (41,000 sq.m). The share of speculative projects in the total construction activity remains at the relatively low level of 18%. However, the increasing volumes underway translate into more speculative developments (63,000 sq m). This is the good news for regions with low vacancy rates, such as Poznań, argue Jones Lang LaSalle analysts. At the end of Q3, the overall vacancy rate on the market stood at 10.3% and had slipped back slightly from the 10.6% in Q2. The most pronounced shift in availability took place in Central Poland, where the vacancy rate dropped from 18.1% in Q2 to 14.9%, largely due to rising occupancy levels in Piotrków Trybunalski. In contrast, in Upper Silesia the recently vacated space in Mysłowice and Chorzów drove the availability up to 8.4% from the 5.8% in Q2. High vacancy remains in the Warsaw Suburbs (13.1%). The lowest vacancy rate among the major markets is found in Poznań (3.4%). Two industrial regions saw slight shifts in levels of rents in Q3: rents were being adjusted to fit the changing availability in the markets of Poznań (increase by approximately 1%) and Upper Silesia (decrease by 2.5% on average). The remaining industrial regions featured relatively stable rents. The Warsaw Suburbs remains the market with the lowest rents. Typically, the highest rents are found in small markets with limited existing stock and availability, such as Kraków, the Tri-City and Szczecin.
CONSUMER GOODS & RETAIL
Austria's Immofinanz lays foundation stone for new EUR 95m retail center in Lublin Austrian property giant Immofinanz AG has laid the cornerstone for its flagship retail development in Poland – Tarasy Zamkowe in Lublin. Scheduled to open in Q4 2014, the EUR 95m shopping and entertainment project will comprise up to 38,000 sq.m of rentable space divided into ca. 150 retail units.
tion works as well as the bottom slab and the diaphragm walls have already been completed.
Tarasy Zamkowe,
Immofinanz's first project in Lublin, is being developed only a stone's throw from the city's historic castle, which can be seen in the background. Image: Immofinanz
"Lublin is an attractive market for the retail trade with its 350,000 residents and a catchment population of 800,000. The interest from potential international, national and local tenants confirms this standing. We have recently signed a contract with the Spanish Inditex Group, which is one of the world's largest fashion retailers," explains Eduard Zehetner, CEO of Immofinanz Group. Inditex will be represented in the Tarasy Zamkowe with all seven brands (Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Zara Home) on 5,300 sqm. "We expect a broad and balanced tenant mix, including well-known brands that were previously not available in Lublin and the surrounding region." Designed by Polish architecture firm Stelmach i Partnerzy, Tarasy Zamkowe, is located in the heart of Lublin, close to the historic castle. The Austrian investor chose Warbud, part of the French construction group Vinci, for the general contractor. More than 230 persons are currently operating in two shifts at this largest construction Lublin has ever seen. The excava-
"Our aim is to revitalize the surroundings of the Lublin Castle and the Old Town. In order to do this, effective cooperation between the investors and owners of the adjacent lots is critical. The development of the Tarasy Zamkowe fits perfectly with our plans: the shopping center will be located in a historic area and also expand the retail offering in Lublin. At the same time, it will make an important contribution to the creation of a new road system in the area," says Krzysztof Żuk, the Mayor of Lublin. Immofinanz, which has just recently carried out a secondary listing in Warsaw, plans to bolster its development arm and sell properties more quickly in a strategy to increase profit. The company expects to hold assets from three to 10 years before selling them, CEO
weekly newsletter # 010 / 8th November 2013 / page 15
Eduard Zehetner said earlier this year. A few weeks ago Immofinanz AG completed one of the largest ever deals on Poland's property markets with the sale of Silesia City Center retail property in Katowice for EUR 412m to an international consortium of investors led by Allianz. Silesia City Center has about 340 stores with combined floor space of 89,000 sq.m, all of which is occupied. The company has also announced a new retail project in southern town of Stalowa Wola, 60 km north of Rzeszów, where they plan to build a shopping center with a GLA of approx. 30,000 sq.m. The investment is expected to total EUR 50m. Construction should start during the first half of 2014, and completion is scheduled for the first half of 2015, the company said. Besides the Lublin mall, Immofinanz Group's ongoing projects in Poland include the Nimbus office building (19,000 sq.m of GLA) in Warsaw, STOP.SHOP. retail parks in Mława and in Ketrzyn, and residential projects Riverpark in Poznań (189 apartments) and Dębowe Tarasy in Katowice (phase three with 317 apartments). Since its founding in 1990, Immofinanz has compiled a portfolio that now comprises more than 1,700 investment properties with a carrying amount of approx. EUR 10.5bn. The company concentrates on development management and sale of commercial properties in top locations. Immofinanz Group concentrates its activities in the retail, office, logistics and residential segments of eight regional core markets: Austria, Germany, Czech Republic, Slovakia, Hungary, Romania, Poland and Russia.
CONSUMER GOODS & RETAIL
Polish Rank Progress completes completes large retail project in Chojnice, Chojnice, more to come by 2015 Warsaw-listed property developer Rank Progress has completed its latest retail project, the 34,000 sq.m regional shopping centre Brama Pomorza in Chojnice, some 100km south west of Gdańsk. The grand opening of the scheme, which houses 50 retail units, will take place on 15th November. Brama Pomorza is Rank Progress' 2nd delivery this year, following the June completion of its 5,500 sq.m retail park Pasaż Wiślany. Based in Legnica, Rank Progress had long specialized in development of shopping centers for international retail chains, such as Tesco, Carrefour, Castorama, Leroy Merlin, or Jeronimo Martins. The company also carried out a number of highly-profitable short-term projects that typically encompassed site acquisition, permitting, and design, and eventually sale to renowned domestic and foreign buyers. However, in the past couple of years their key focus have been large shopping centers and retail parks in medium-sized cities. Since 2001 Rank Progress has completed 25 proprietary investments, including eight shopping centers, located in Legnica, Jelenia Góra, Świdnica, Zgorzelec, Kłodzko, Zamość, Kalisz (all three sold to Blackstone Real Estate), and Grudziądz (Pasaż Wiślany, opened earlier this year). Back in mid-2011 Rank Progress has announced plans to build 16 new retail centers at the cost of PLN 2.2bn over the 2011-14 period. Besides Brama Pomorza, the company is currently working on retail centers in Piła
and Oleśnica, and its future pipeline includes also schemes in Krosno (where final paperwork and talks with potential general contractors are close to completion), Mielec, Olsztyn, Kołobrzeg, Kielce, Duchnów near Warsaw, Kielce and Wejherowo. "A few projects have suffered delays due to prolonging administrative procedures," Łukasz Gruszczyński, marketing director at Rank Progress tells Poland Today. "Overall, by 2015 we plan to launch 10 shopping centers with a total floor space of 340,000 sq.m. and a GLA of 275,000 sq.m. Besides our current pipeline projects we continue to analyze new locations and acquisition opportunities."
Rank Progress' latest project Brama Pomorza (Gateway to Pomerania), is a large regional shopping centre located some 100km south west of Gdańsk.. Image: Rank Progress
With a GLA of 7,700 sq.m, Centrum Pogodne in Oleśnica will open in Q1 2014. Built by Erbud, the project is already 100% leased to tenants that include Media Expert electronics store, LPP fashion stores (Reserved, Sinsay, Cropp Town), CCC footwear store, supermarket & drugstore operators and other retail and service outlets. Recently Erbud has also broken
weekly newsletter # 010 / 8th November 2013 / page 16
ground on the new project by Rank Progress in Piła, which is likewise almost fully leased to Deichmann, Swiss, CCC, H&M, Adidas – Reebok, Nike, Levi's Mustang, Marilyn, Play, Techno Dry, Wrangler Lee, Hebe, Kolporter, Media Expert, as well as a supermarket and DIY store. With a GLA of 23,800 sq.m the Piła project is to reach completion in Q3 2014. In Krosno, Rank Progress is planning a small retail park (5,600 sq.m GLA) adjacent to an OBI home improvement outlet that opened in 2011. In the first half of the year Rank Progress posted operating gains of PLN 12.4m on revenues of PLN 20.3m. As of end of June its assets were worth some PLN 965m, approximately PLN 100m more than a year earlier. The company is currently in advanced negotiations on the sale of Galeria Świdnicka.
Targeting medium-sized towns
IT & TELECOM
Leading Polish digital agency to be integrated into Saatchi & Saatchi Poland French communications giant Publicis Group has acquired Interactive Solutions, one of Poland's leading digital agencies. Following the transaction, the value of which has not been disclosed, the new media shop will be integrated into the Warsaw-based Saatchi & Saatchi Poland, boosting the latter's consolidated sales revenues and staff numbers by a half, up to approximately PLN 90m and 300 employees, respectively.
Rank Progress and its retail center projects
City
Name
GLA sq.m Opening
Legnica Kłodzko* Zgorzelec* Jelenia Góra Kalisz* Zamość* Świdnica Grudziądz
Completed Galeria Piastów Galeria Twierdza Park Handlowy Eden Pasaż Grodzki Galeria Tęcza Galeria Twierdza Galeria Świdnicka Pasaż Wiślany
15,600 31,000 8,500 10,500 16,000 24,000 15,600 5,400
Chojnice Piła Oleśnica
Under development Brama Pomorza Galeria Piła Pogodne Centrum
25,600 Q4 2013 28,750 Q3 2014 7,700 Q1 2014
Olsztyn Kielce Krosno Warsaw/Duchnów Mielec Wejherowo
Planned CH Jaroty Regional Center S7 Miejsce Piastowe Warszawa Wschód Galeria Aviator n/a
30,000 97,800 5,600 62,300 26,000 18,200
Source: Rank Progress *) sold
2006 2009 2008 2010 2011 2011 2012 Q2 2013
TBA TBA TBA TBA TBA TBA
Founded in 2004, Interactive Solutions is one of the largest digital agencies in Poland with over 160 employees in Poznań and Warsaw. The agency specializes in developing complex e-marketing strategies for a range of international and local clients, including Procter & Gamble, T-Mobile, Toyota and Visa. Interactive Solutions was named Digital Agency of 2013 by the KTR Awards Committee. Since 2010, when Interactive Solutions turned over a reported PLN 10.5m, the agency has seen its sales triple. "We have been cooperating with Interactive Solutions on various projects since 2008 so this is a natural next step for us to fully integrate and increase the value we can deliver for our clients," said Igor Kaleński, CEO of Saatchi & Saatchi Poland. Since both companies have been working for Procter & Gamble, after their merger they will be pocketing some 80% of the FMCG giant's digital ad spending in the CEE region.
"Digital continues to rise as a key component of a fully integrated marketing mix. Having a track record of working for the most respected brands together for years, we expect the transition will go smoothly and bring numerous benefits to the current Saatchi operation," commented CEO of Interactive Solutions, Piotr Morkowski, who joins Saatchi & Saatchi Poland as Executive Vice President. The Paris-based Publicis Groupe, which is gearing up for a USD 35.1bn merger with US Omnicom Group, is the 3rd largest communications holding company worldwide, uniting some of the world's top brands in digital (DigitasLBi, Razorfish, Rosetta, VivaKi), creative services (BBH, Leo Burnett, Publicis Worldwide, Saatchi & Saatchi), public affairs, corporate communications and events (MSLGROUP), media strategy, planning and buying (Starcom MediaVest Group and ZenithOptimedia) and healthcare communications, (Publicis Healthcare Communications Group). Present in 108 countries, the Group employs 60,000 professionals. In October MSLGROUP merged its Polish units Ciszewski MSL and Ciszewski MSL Financial Communications under a single brand MSL Group. Publicis acquired the Ciszewski business, one of Poland's top PR agencies, in December 2011.
POLITICS AND ECONOMY
Doing business got easier in Poland, World Bank says Poland moved up in the World Bank's "Doing Business 2014" ranking that analyzes the ease of running a small or medium sized-firm in 189 countries worldwide, the World Bank's regional rep Xavier Devictor said during a joint conference with Prime Minister Donald Tusk
weekly newsletter # 010 / 8th November 2013 / page 17
for the report's publication. The country ranked as the world's 45th most business friendly location, marking a significant progress since the previous edition of the report, where it came in at 55th position (later corrected to 48th). Poland "reformed itself to the largest extent worldwide last year," Devictor said. In the 2014 ranking, topped by Singapore, Poland ranked behind highly developed countries, but ahead of its CEE-4 peers and several EU countries. World Bank praised Poland for easing the process of registering new businesses and facilitating the process for obtaining a construction permits. However, the country still lags on those two key measures, ranked no.88 worldwide for construction permits and no.116 for new firm registration, where authors point to long procedures and relatively high costs. Poland additionally takes weak marks for obtaining a new electricity connection (no.137), also burdened by procedures and costs. The country scores low also in the "Paying Taxes" category. Of 11 index categories, Poland ranks highest in 'Getting Credit' (No.3 worldwide). The World Bank gives high marks for Poland's system of access to credit information and notes that collateral and bankruptcy laws are designed to facilitate credit, the report showed. Commenting on the report, Prime Minister Donald Tusk emphasized that Poland had continued to move up in the ranking over the past years, even though year by year the advances are more and more difficult, adding that Poland is "at or about the EU average" in terms of being business-friendly.
POLITICS & ECONOMY
Local leadership vote deepens rift within Poland's ruling party The news of alleged irregularities during recent local elections in Civic Platform (PO) have dealt a fresh blow to the already declining public support for Poland's ruling party. According to cabinet spokesman Paweł Graś, the country could face early elections should the situation within PO ranks deteriorate further, forcing the ministers to focus more on the internal squabbles rather than domestic issues. According to Polish newspapers, an internal conflict in PO between the supporters of Prime Minister Donald Tusk and his rival Grzegorz Schetyna intensified after the publication of video material suggesting political corruption during the recent elections for regional leader in the Dolnośląskie (Lower Silesia - Wrocław) region in southwestern Poland. Schetyna unexpectedly lost the election to PO MEP Jacek Protasiewicz by merely 11 out of nearly 400 votes. Shortly after, a video recording leaked out showing one of PO MPs promising to help find job at state-controlled copper giant KGHM to one of the delegates in exchange for backing Protasiewicz in the elections. Protasiewicz denied any wrongdoing and said he did not authorize any such offers and was unaware of the whole situation. Most PO members are convinced that it was Schetyna's supporters, who released the video material, as a warning sign to PM Donald Tusk. Although the politicians shown in the video had their PO membership rights suspended, as the party investi-
gates the issue, the result of the election was upheld. According to Polish media, Tusk will seek to remove Schetyna from the post of PO's first chairman at the upcoming party convention. However, some sources went on to suggest that the ousted regional leader may have even embarrassing recordings in store, should Tusk attempt to marginalize him any further.
IN BRIEF: The Polish economy is expected to grow by 1.3% y/y in 2013 and accelerate to 2.5% in 2014 and 2.9% in 2015, the European Commission said in its autumn forecast, revising upwards its prior forecast. "Real GDP growth is expected to reach 2.5% and 2.9% in 2014 and 2015 respectively, with domestic demand projected to gradually replace external trade as the main growth engine," the European Commission wrote. According to the EU's governing body, the scenario "is subject to broadly balanced risks" with a weaker currency further boosting exports and enhancing import substitution on the upside and possible pick-up in inflation, which "might dent real incomes and lead to lower private consumption," on the downside. On the fiscal front, the European Commission underlines that 2014 and 2015 forecasts are largely based on the planned reform of private pension funds OFE, which is expected to result in a one-off general government surplus in 2014.
Poland will introduce checks at the internal EU borders between Nov. 8 and 23 to secure public order and security during the upcoming UN climate conference starting in Warsaw on November 11. Checks will be restored at 126 land border crossings with the Czech Republic, Germany, Lithuania and Slovakia as well at nine sea crossings and 18 airports. The checks will be profiled and held at random, and concern those entering Poland, authorities said
weekly newsletter # 010 / 8th November 2013 / page 18
KEY STATISTICS Consumer Prices Prices
0.0
Alcohol, tobacco +3.7
+0.2 +3.6
+0.1 +3.6 +0.2 +3.7 +0.2
Clothing, shoes
-0.8
-2.7
Housing Transport
-4.7 +0.9
-5.0
0.0 +2.0
-4.8
-2.7
-4.7 +0.7
+1.2 +2.0
+0.1
+1.8
+0.1
-3.5
+0.4
-1.2
+1.1
-1.4 +0.5
-1.4 +0.8
Communications -9.7
0.0
-9.7
0.0
-9.7
0.0
-9.7
Gross CPI
0.0
+1.1 +0.3
+1.1
-0.3
+0.2
y/y
m/m
+1.0 +0.1
Jul '13
Aug '13 Sep '13
+1.5
+3.8
-0.7
-0.9
+0.5
+1.8
+4.3
+3.4
+3.9
Year
2008
2009
2010
2011
Turnover in PLNbn
564.7
582.8
593.0
646.1
n/a
+13.3
+4.3
+5.5
+11.6
+5.6
y/y (%)
0.0
Jun '13
+1.6
y/y (%)
Sep 13
2.6
Jul 13
-1.2
May 13
2.5
Mar 13
-0.3
Jan 13
2.5
Nov 12
-0.3
May '13
m/m (%)
Sep 12
+0.7
Month
5% 4% 3% 2% 1% 0% -1%
Jul 12
y/y m/m y/y m/m y/y m/m y/y m/m
Retail Turnover
May 12
Sep '13
Mar 12
Aug '13
Jan 12
Food & bev
Jul '13
Sep 11
Sector
Inflation
Jun '13
Nov 11
Data in (%)
Residential Construction Dwellings
2008 2009 2010
2011
2012 Jan-Sep y/y
230.1
178.8
174.9
184.1
165.1
142.9
158.1
(in '000 units)
Producer Prices Prices
Industrial Indust rial Output
2012
Permits
2013
(%)
104.8
-18.1
Commenced
174.7
162.2
141.8
97.9
-16.2
m/m (%)
-0.3
-0.7%
+0.1
+0.7
+0.2
-0.3
+0.2
m/m (%)
-0.2
-2.3
-0.7
+2.6
+1.5
-4.5
+9.6
U. construction
687.4 670.3 692.7 723.0
713.1
707.4
-3.9
y/y (%)
-0.7
-2.1%
-2.5
-1.3
-0.8
-1.1
-1.4
y/y (%)
-0.6
+2.7
-1.8
+2.8
+6.3
+2.2
+6.2
Completed
165.2 160.0 135.7
152.5
103.2
-1.5
Year
2006
2007
2008
2009
2010
2011
2012
Year
2006
2007
2008
2009
2010
2011
2012
Source: Central Statistical Office (GUS)
y/y (%)
+2.0
+2.0
+2.2
+3.4
+2.1
+7.6
+3.3
y/y (%)
+11.6
+10.7
+3.6
-3.5
+9.8
+7.7
+1.0
Gross Domestic Product
Month
Mar '13 Apr '13 May'13 Jun '13 Jul'13 Aug'13 Sep'13
m/m (%) y/y (%) Year y/y (%)
Mar '13 Apr '13 May'13 Jun '13 Jul'13 Aug'13 Sep'13 -0.2
-0.1
-0.2
-0.1
-0.1
-0.2
-0.1
-1.8
-1.9
-2.0
-2.0
-1.9
-1.9
-1.8
2006
2007
2008
2009
2010
2011
2012
+3.2
+7.4
+4.8
+0.2
-0.1
+1.0
+0.2
A: avg monthly wages in PLN B: indexed avg wages, 100=2005
Coal mining
Month
Period
Mar '13 Apr '13 May '13 Jun '13 Jul '13 Aug '13 Sep '13
m/m (%)
+20.9
+7.9
+16.1
+19.1
+7.8
-0.8
+9.4
y/y (%)
-18.5
-23.1
-27.5
-18.3
-5.2
-11.1
-4.8
Year
2006
2007
2008
2009
2010
2011
2012
y/y (%)
+18.1
+15.5
+12.1
+5.1
+4.6
+11.8
-0.6
Source: The Central Statistical Office of Poland, GUS
Gross Wages Sector
Mar '13 Apr '13 May '13 Jun '13 Jul '13 Aug '13 Sep '13
Construction Output
Construction Prices Price s Month
Month
Q3 2012
Q4 2012
Q1 2013
Q2 2013
A
A
A
A
5,920
B
135 8,427
B
192 6,060
B
B
138 6,290 143
442,231
-3.5%
+1.3%
393,792
-4.1%
2012
+1.9%
1,522,736
-3.5% -4.9% -5.1%
+1.6%
1,344,384
-3.9%
Co nsumer conf id ence (lef t axis) Economic sentiment (right axis)
20
120 100
Transportation
3,543
125
3,816
135 3,439
122 3,547 125
IT, telecoms
6,493
169 6,379
166 6,685
174 6,707 174
Financial sector 5,875
132 6,044
136 6,356
143
O ct 13
60 Jul 13
-40 Ap r 1 3
146
Jan 13
152 3,693 157
143 3,432
O ct 1 2
163 3,556
142 3,365
J ul 12
158 3,829
3,322
A pr 1 2
3,709
Retail & repairs
J an 12
Construction
O ct 1 1
80
J ul 1 1
-20
Apr 11
152 3,560 155 188 5,828 177
J an 1 1
3,491
Source: Central Statistical Office (GUS)
+0.7%
Q3 2012
2009
198 6,196
3,613 144
Q4 2012
Economic sentiment and consumer confidence indicators
154
149
-2.8%
1,416,585
151 3,522
3,741
-1.9%
377,815
1,462,734
176 6,535
154
395,507
+0.5%
+3.9%
3,463
147 3,878
+0.8%
Q1 2013
+4.5%
5,790
National average 3,690
Q2 2013
2010
Energy
151
Current account def. in % of GDP
2011
Manufacturing
6,712
GDP in PLN bn current prices
Sentiment Indicators
0
3,421 146
Growth y/y unadjusted
131.7
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
Key Economic Data & Projections Indicator
*2010
*2011
2013
2014
+1.2%
+2.7%
+3.7%
+1.1%
+2.0%
+3.4%
-1.3%
0.3%
-3.5%
-1.2%
-0.2%
+5.2%
+3.7%
+3.0%
+4.3%
12.5%
13.4%
13.7%
13.2%
4.12
4.19
4.20
4.06
GDP change
+3.9% +4.5%
Consumer inflation
+2.6% +4.3%
Producer inflation
+2.1% +7.6%
CA balance, % of GDP
-5.1%
-4.9%
Nominal gross wage
+3.9%
Unemployment**
12.4% 3.99
EUR/PLN
*2012 +1.9%
Sources: NBP, BZ WBK, GUS *) actual figures **) year-end
weekly newsletter # 010 / 8th November 2013 / page 19
56.05 ↓
100 SEK
47.29 ↓
100 NOK
51.16 ↓
10,000 JPY
400
15.49 ↓
10,000 HUF
141.21 ↓
USD EUR
350
300
316.98 ↑
100 CZK
Money Supply in PLN m Monetary base M1 - Currency outside banks
WIG Total index
5.6%
5.4%
5.3%
5.0%
PLN (up to 5 y )
6.2%
PLN (over 5 y)
6.0%
PLN (total)
6.0%
4.7%
4.6%
5.9%
5.7%
5.4%
5.1%
5.1%
5.7%
5.6%
5.3%
4.9%
4.9%
↑ Bogdanka
5.8%
5.6%
5.3%
5.0%
4.9%
↓ BRE
EUR (up to 1m EUR) 2.3%
2.1%
2.3%
1.9%
2.3%
1.9%
↓ BZ WBK
EUR (over 1m EUR) 3.6%
2.9%
3.2%
2.9%
3.5%
3.5%
↓ Eurocash
↑ Asseco Pol.
↓ GTC
Warsaw Inter Bank Offered Rate (WIBOR) as of 8 Nov 2013 Overnight
1 week
1 month
3 months
6 months
2.58%%
2.55%
2.59%
2.66%
2.70%
↓ Handlowy
Jun '13 144,260 523,783 112,815
Jul '13 155,767
153,867
530,666
531,124
112,565
927,345
- Time deposits
418,252 405,900 946,586
Aug '13
921,662
114,083 928,359
540,873 113,223 931,042 947,228
- Net foreign assets 160,267 159,749 154,035 147,978 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
Lombard
2.50%
166,620
412,407 405,703
945,077 949,988
Reference
Sep '13
NBP deposit
4.00%
+2%
+14%
127.3
+9%
-6%
504
-4%
+55%
367.9
-3%
+52%
45.75
-9%
+5%
7.61
-6%
-23%
111.65
-9%
+14%
2,5 2,509. 09.11
-1% ↓
Change end of '12
+12% ↑
WIG-20 blue chip index
65.6
-1%
-29%
Change 1 week
-1% ↓
-4%
-35%
Change end of '12
-3% ↓
Rediscount
↑ KGHM
123.45
+1%
-35%
2.75%
↑ Lotos
38.52
+1%
-7%
↑ Pekao
193
+1%
+15%
1.00%
↓ PGE
17.79
-5%
-2%
The financial sector's net lending in PLN bn,
↑ PGNiG
5.69
+1%
+9%
loan stock at the end of period
↓ PKN Orlen
44.17
-1%
-11%
Jun'13
Jul '13
Aug '13
Sep '13
Loans to customers
900,999
896,635
901,863
908,106
- to private companies
263,453
261,000
263,491
262,963
- to households
553,055
552,503
556,027
560,608
1,634,587
1,616,221
1,627,182 1,626,489
Total assets of banks
Change 1 week
43.58
Credit
Type of loan
53,363. 363.39
51.73
↓ Kernel
↓ JSW
Central Bank (NBP) Base Rates
M2 M3
WIG-20 stocks Price Change Change in alphabetical 8 Nov 25 Oct end of order '13 '13 '12
Mar '13 Apr '13 May '13 Jun '13 Jul '13 Aug '13
Source: Central Bank NBP
WIG Total closing index last three months 55000 52500 50000
40.45
+1%
+10%
452.35
-3%
+4%
47500
↑ Synthos
5.22
+1%
-4%
45000
↑ Tauron
4.94
+2%
+4%
↑TP SA
9.97
+1%
-18%
↑ PKO BP ↓ PZU
8 Nov 13
100 DKK
as of 8 November 2013
16 Oct 13
339.79 ↓
8 Nov 13
500.26 ↑
100 CHF
2 Sep 13
100 GBP
Warsaw Stock Exchange, rates in PLN
on loans to non-financial corporations PLN (up to 1 year)
25 Jun 13
417.99 ↓
15 Apr 13
100 EUR
Key indices
Term / currency
450
5 Feb 13
311.13 ↑
26 Nov 12
100 USD
Stock Exchange
Average weighted annual interest rates
2 Sep 13
as of 8 November 2013
Interest rates
24 Sep 13
100 USD/EUR against PLN
Central Bank average rates
8 Aug 13
Currency
Source: Warsaw Stock Exchange
T rade Poland's ten largest trading partners, ranked according to 2012
Poland exports and imports according to commodity groups, according to SITC classification EXPORTS in PLN bn Jan-Aug 2013
y/y (%)
share (%)
2012
IMPORTS in PLN bn share (%)
Jan-Aug 2013
y/y (%)
share (%)
2012
share (%)
EXPORTS in PLNbn JanNo Country Aug share 2013
*2012
Share No
IMPORTS in PLN bn JanCountry Aug share *2012 Share 2013
43,520
+9.0
10.5
61,694
10.3
30,470
+3.1
7.3
44,287
6.9
1 Germany
Beverages and tobacco
5,633
+5.8
1.4
7,967
1.3
2,593
+0.1
0.6
3,989
0.6
2 UK
26,788
6.5%
40,184 6.7%
2 Russia
52,447 12.6%
Crude materials except fuels
10,501
+7.7
2.5
14,024
2.4
14,118
-7.9
3.4
22,053
3.5
3 Czech Rep.
25,260
6.1%
37,475 6.3%
3 China
38,360
Fuels etc
19,670
+1.7
4.8
29,389
4.9
48,392
-12.8
11.6
85,280
13.4
4 France
34,862 5.8%
4 Italy
1,088 +60.8
0.3
1,342
0.2
1,736
-8.8
0.4
2,887
0.5
5 Russia
22,508
5.4%
32,290 5.4%
5 France
17,805
4.3% 29,067 4.9%
Food and live animals
Animal and vegetable oils
103,223 25.0% 150,046 25.1%
23,321 5.68%
38,680
+6.2
9.4
54,295
9.1
61,502
+0.7
14.7
89,140
14.0
6 Italy
85,413
-0.2
20.7
126,161
21.1
72,837
-5.0
17.5
110,773
17.4
7 Netherlands
16,321 4.0%
Machinery, transport equip.
155,077
+3.3
37.5
223,646
37.5
137,560
+1.3
33.0
203,718
31.9
8 Ukraine
11,709
Other manufactured articles
52,390
+4.5
12.7
75,925
12.7
36,624
-7.0
8.8
57,646
9.0
9 Sweden
11,339
2.7%
1073
n/a
0.2
2,653
0.5
11,273
n/a
2.7
18,515
2.8
10 Slovakia
10,673
2.6%
413,045
+3.8
100
597,096
100
417,105
-3.1
100
638,288
100
Chemical products Manufactured goods by material
Not classified TOTAL
2.8%
1 Germany
88,967 21.3% 134,933 21.1%
21,213
91,033 14.3%
9.2% 57,235 9.0% 5.1% 32,782
5.1%
16,034
3.8% 25,303 4.0%
6 Netherlands
15,726
3.8% 24,543 3.8%
7 Czech Rep.
15,426
3.7% 23,327
3.7%
17,213 2.9%
8 USA
11,909
2.9%
16,436
2.6%
15,811 2.6%
9 UK
11,030
2.6%
15,509 2.4%
n/a
n/a
26,678 4.5%
15,288 2.6% 10 South Korea
Source: Central Statistical Office (GUS)
*) preliminary estimates, full year
14,619
2.3%
weekly newsletter # 010 / 8th November 2013 / page 20
Industrial Industrial Properties
Regional Data Industrial output Jan-Sep 2013 *
Poland's regions (main cities indicated
Indus-
in brackets)
Monthly wages (PLN) Jan-Sep 2013 **
Unemployment Sep 2013
Constru- Indus- Constru-in '000
try
ction
try
ction
%
New dwellings Jan-Aug 2013
Existing stock, sq.m
by region, 1H 2013
Num- Index *
Warsaw central
ber
3.5–5.0
2,728,000
41,000
15.9%
Central Poland
1,021,000
8,000
16.5%
1.9–3.1
50,000
3.6%
2.3–2.9
Warsaw suburbs
1.9–3.2
98.7
90.1
4,199
3,980
148.8
12.8 12,009
Kujawsko-Pomorskie (Bydgoszcz) 102.0
99.1
3,314
3,235
143.5
17.5
4,618 106.8
Poznań
1,041,000
100.5
98.7
3,630
3,014
126.9
13.8
4,435
89.4
Upper Silesia
1,478,000
33,000
5.8%
2.5–3.1
95.9
90.8
3,359
2,975
58.0
15.3
2,239
99.0
Wrocław
795,000
84,000
5.5%
2.4–3.0
91.1
Dolnośląskie (Wrocław) Lubelskie (Lublin) Lubuskie (Zielona Góra)
117.9
VaEffective Under const cancy rents EUR/ ruction, sq.m ratio sq.m/mth
104.3
89.0
3,611
3,024
147.4
13.7
4,537
Małopolskie (Kraków)
98.0
91.8
3,744
3,313
158.8
11.3
11,234 107.4
Mazowieckie (Warszawa)
107.5
81.0
4,474
4,722
281.0
11.0
20,771
94.9
Opolskie (Opole)
97.3
98.6
3,466
3,147
49.5
13.8
1,324
112.4
Podkarpackie (Rzeszów)
108.1
91.9
3,236
3,029
145.9
15.6
4,388
98.9
Podlaskie (Białystok)
105.4
91.3
3,181
3,769
68.1
14.6
2,801
85.9
Pomorskie (Gdańsk-Gdynia)
102.5
92.5
3,871
3,478
111.0
13.0
8,501
94.3
Łódzkie (Łódź)
Śląskie (Katowice) Świętokrzyskie (Kielce) Warmińsko-Mazurskie (Olsztyn) Wielkopolskie (Poznań) Zachodniopomorskie (Szczecin) National average
Gdańsk
192,000
n/a
9.6%
3.2–4.0
Kraków
149,000
n/a
7.6%
4.0-4.1
Commercial Properties New apartments* Q1 '13
City
PLN/sq.m
Offices 1H'13
Retail rents**1H'13
Change Rents** Vacancy y/y
Retail
High
centres streets
96.5
89.7
4,465
3,532
205.3
11.1
7,785
115.6
Warsaw
8,076
-5.9%
11.5-25.5
10.5%
85
100.5
88.7
3,339
3,199
86.2
15.9
1,764
84.7
Kraków
6,305
-12.1%
13-15
2.71%
41
78
98.8
84.1
3,160
3,065
107.6
20.4
2,998
84.6
Katowice
5,526
-5.0%
13-14
8.29%
48
56
85
103.5
91.2
3,638
3,589
141.8
9.4
9,791
94.7
Poznań
6,412
-13.3%
14-16
14.66%
44
55
111.6
86.7
3,408
3,296
103.3
16.9
4,027
78.4
Łódź
4,898
-9.2%
12-14
14.97%
31
26
101.4
87.8
3,880
3,672 2,083.1
13.0 103,222
98.5
Wrocław
6,031
-13.5%
13-16
12.37%
38
41
Tricity
6,453
-8.1%
13-15
11.24%
39
31
Index 100 = same period of the previous year. ** without social taxes Sources: Central Statistical Office GUS, NBP, C&W
*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) Quarter
Q1'12
Q2 '12
Q3 '12
Q4 '12
Q1 '13
Q2 '13
in Poland
-1,365
1,861
1,381
2,886
175
-2,883
310
-550
-1,203
957
2,719
2008
2009
2010
2011
2012
in Poland
17,242
10,128
9,343
10,507
13,646
2,455
Polish DI
-4,020
-3,072
-3,335
5,484
-5,276
375
-5,313 -1,050 4,816
-139
1,194
1,032 1,274
1,652
-18,129 -17,977 -13,332 -3,368 -2,313 -5.1%
-4.9%
-3.5%
-3.5% -2.8%
362 -2.8%
stable
Standard & Poor's
A-
stable
Moody's
A2
stable
9
6 months- EUR 375 (PLN 1480) 3 months- EUR 245 (PLN 980) Sales Director James Anderson-Hanney
Real Earnings
2000
1800
6
Source: NBP, BZ WBK Source: Central Statistical Office GUS
Wage
180 160 140 120 100 Sep 09
May 10
Jan 11
Business Review+ Subscription 1 year- EUR 690 (PLN 2760)
mobile: +48 881 650 600
Average gross wage vs inflation.
Q3 13
CA balance vs GDP
2,334 4,048
12
Q1 13
CA balance
-8,893 -10,059
2012 Q4 '12 Q1 '13 Q2 '13
A-
Source: Rating agencies
Q3 12
Services, net
2011
outlook
2400
Q1 12
Trade balance
2010
15
2200
Current Account (EUR m) Period
number (left axis) % (right axis)
2600
rating
Fitch Ratings
% of population in working age
Q3 11
836 2007
Agency
Registered unemployed, in ‘000 and
Q1 11
Year
Unemployment
Q3 10
Polish DI
Country Credit Ratings
Sep 11
james.anderson-hanney@poland-
CPI
May 12
Index 100 = Jan 2005. Source: GUS
Jan 13
today.pl
Sep 13
Publisher Richard Stephens Financial Director Arkadiusz Jamski Creative Director Bartosz Stefaniak New Business Consultant Tomasz Andryszczyk