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No. 028 / 31st March 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter
The government believes the new oil hub will boost Poland's energy security.
Photo: PERN
PERN breaks ground on new oil hub
Poland's oil pipeline operator PERN has officially commenced the construction of a large new terminal for transshipment and storage of crude oil in the Port of Gdańsk. Phase one of the PLN 820m project is to reach completion by the end of 2015. page 3
Orco to sell its flagship failure Złota 44 Nearly six years after it launched the project, developer Orco has admitted that its luxury residential tower Złota 44 in Warsaw was a fiasco and seeks to sell the building. page 4
tel. +48 881 650 600
MANUFACTURING & PROCESSING Polpharma teams up with the Strüngmann brothers to develop and sell biosimilars page 2
CONSUMER GOODS & RETAIL Retail sales increase by 7% in February, fastest since May 2012 page 10
MANUFACTURING Bilfinger gets EUR 60m power engineering contract from Dalkia page 4
RETAIL PROPERTIES Atrium completes EUR 120m shopping centre in Lublin page 11
PROPERTY & CONSTRUCTION Skanska launches Wrocław office project Green Day page 5
Polish investor breaks ground on retail park in Bielsko-Biała page 12
Griffin expands Warsaw portfolio with four new acquisitions page 6 SERVICES & BPO Business services firms took up 200,000 sq.m of offices in regional cities last year page 7 TRANSPORT & LOGISTICS Danish Prime Cargo to establish distribution centre in Szczecin, create up to 120 jobs page 8 US Prologis returns to speculative development with large Wrocław project page 9
POLITICS & ECONOMY Polish exports to Russia and Ukraine may drop by a fifth in 2014, minister says page 13 Unemployment drops to 13.9% in February page 13 KEY FIGURES Up-to-date macroeconomic figures, currency & stock market data and lots of other hard-to-find info pages 14-16
Ĺšroda, 9 Kwietnia 2014, Villa Foksal, ul. Foksal 3/5, Warszawa 8.30 -11.30
Organizatorzy
Partnerzy
Partnerzy medialni
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MANUFACTURING & PROCESSING
Polpharma teams up with the Strüngmann brothers to develop and market biosimilars The leading Polish generic drug maker Polpharma has teamed up with Germany's Santo Holding GmbH, owned by billionaires Andreas and Thomas Strüngmann, to create a joint venture that will focus development and marketing of biosimilars. The two partners are to share the costs and risk involved in development of biosimilars and use their market presence in different regions (Polpharma in Central and Eastern Europe and Santo Holding in Germany, Western Europe and South America) to subsequently sell their creations. According to their managers, the two groups complement each other from both a strategic and geographical point of view. Biosimilars also known as follow-on biologics are biologic medical products whose active drug substance is made by a living organism or derived from a living organism by means of recombinant DNA or controlled gene expression methods. Biosimilars are officially approved subsequent versions of innovator biopharmaceutical products made by a different sponsor following patent and exclusivity expiry on the innovator product. They are seen as particularly effective in cancers treatments and immune system disorders. With a global turnover of more than USD 1bn, some 7,000 employees, and seven factories in Poland, Russia, and Kazakhstan, Polpharma is one of the world's 20 largest generic drug makers. In Poland alone the company employs more than 1,600 people and has an-
nual sales revenues of approximately PLN 1.5bn. Its product range includes some 600 items and its six R&D centers are working on a further 400 products. The newest R&D unit, opened in 2012 in the Gdańsk Science & Technology Park, specializes in biosimilars. As for Polpharma's new partner, Santo Holding, it was established by Andreas Strüngmann and his twin brother, Thomas, who together founded generic drug maker Hexal AG in 1986, to sell the business nearly two decades later (along with their 68% stake in U.S.based Eon Labs) to Novartis for USD 7.5bn. Since then they've been investing primarily in German biotech and pharma via a family entity, Santo Holding, with a focus on cancer research. The brothers, who hail from South Africa, established a neuroscience research center in Frankfurt named after their father, Ernst Strüngmann. "This is an important step that will speed up the development of our company. Due to their lower price, the biosimilars that will be the outcome of our cooperation will give many seriously ill patients access to effective therapy. The joint venture is also a starting point for a potential cooperation with the Strüngmann group also on other innovative biologics," Polpharma's CEO Jerzy Starak, said in statement. The first biosimilar development project in the SantoPolpharma joint venture will be a drug conceived by the Munich-based Formycon AG. Santo Holding signed an exclusive, worldwide licensing agreement with Formycon AG, obtaining rights to the biosimilar FYB201 in December 2013. Under the deal, Formycon received a single-digit million euro up-front payment and will be entitled to additional payments based upon the attainment of specific regulatory and sales results. "We welcome the new partner, through whom it will be possible to considerably increase the turnover potential and the market penetration of our biosimilar,"
Nicolas Combé, CFO of Formycon AG, commented on Polpharma becoming a 50% license partner in this first Formycon development project alongside Santo Holding.
MANUFACTURING & PROCESSING
Enterprise Investors buys stake in Estonian kayak manufacturer Enterprise Venture Fund I (EVF), the venture capital fund managed by the Warsaw-based private equity company Enterprise Investors (EI), has purchased 32.8% of shares in Estonia's Tahe Outdoors, one of Europe's leading watersports companies. The total value of the transaction came to EUR 3.4m. Tahe Outdoors is a top European manufacturer and distributor of quality watersports equipment, with 25 years of experience. It offers a full range of kayaks, canoes, paddles and related accessories under five brands: Tahe Marine, Egalis, Zegul, Trapper and Beluga. The company has two factories in Estonia and one in France, and currently employs 90 people. Tahe Outdoors' sales network covers more than 35 countries worldwide, including markets as exotic as Chile, Venezuela, Taiwan, South Korea, Singapore, Papua New Guinea and Martinique. "The company is a growing and profitable business that is systematically gaining market share. It is already the biggest kayak supplier in Scandinavia – Europe's most demanding market," said Alek Wasiukiewicz, Vice President at Enterprise Investors in charge of the investment. "Tahe's modern production facility is one of the company's many competitive advantages. Moreover, its production and transport
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cost structure as well as shorter delivery times give Tahe an advantage on the European market over Asian and American producers." "This partnership will safeguard the company's strategy to become the European leader in watersports equipment," commented Janek Pohla, President of Tahe Outdoors. "It confirms the quality of our value proposition, which we have built by developing our brands and modernizing our value chain. We will continue to introduce the industry's newest materials and cutting-edge technologies."
More focus on Poland
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 funds have invested EUR 1.6bn in 132 companies across a range of sectors and exited 104 companies with total gross proceeds of EUR 2.1bn. In a recent interview for the Polish press agency PAP, EI's CEO Jacek Siwicki said the company has some EUR 200m to spend on investments and could float some of the companies from its portfolio on the Warsaw Stock Exchange. Siwicki confirmed that EI is currently analyzing a number of potential takeover targets. "A clear two-thirds of our resources is invested in Poland and I think we could exceed this level in connection with the situation in the East," Siwicki said. "The realistic assumption is that we will rather conduct transactions in Poland than elsewhere."
ENERGY & RESOURCES
PERN breaks ground on PLN 820m crude oil terminal in Gdańsk
ticipate in the global trade in crude oil, fuels and chemical products. It provides an opportunity to boost the competitiveness of the Polish economy and offer flexibility in the case of a fuel shortage on the market," commented Treasury Minister Włodzimierz Karpiński.
Poland's oil pipeline operator PERN Przyjażn has broken ground on a new terminal for transshipment and storage of crude in the port of Gdańsk. The ceremony last week was attended by Prime Minister Donald Tusk and Treasury Minister Wlodzimerz Karpiński, who emphasized the project's importance for Poland's energy security. "I am very pleased that the diversification of energy supply in Poland has become reality. We are striving to achieve diversity and self-sufficiency of energy sector and adapt it to the needs of the 21st century," said Donald Tusk.
PERN's new sea hub in Gdańsk will significantly improve Poland's energy security. Image: PERN Przyjażń
PERN's Gdańsk project will be implemented in two stages. Phase one will include the development of 6 tanks for crude oil with a capacity of 62,500 cb.m each (375,000 cb.m in total) along with all the necessary auxiliary infrastructure. According to PERN, their completion will enable the company to handle and store crude oil as well as provide a range of additional services. The second stage will see the construction of tanks for storing petroleum products, chemicals, JETA aviation fuel as well as bio-additives, with a combined capacity of 325,000 cb.m. Simultaneously a railway siding and a road tanker station will be built at the site.
The first stage of the Gdańsk Crude Terminal is being developed at the cost of PLN 415m by an international consortium led by Polish IDS-BUD under the "design and build" formula. The project is to be operational by the end of 2015. The entire undertaking, with a total price tag of PLN 820m, should be completed in 2018. The Warsaw-based IDS-BUD was established by Marek Stefański, the founder and former shareholder of Polish engineering firm Pol-Aqua. In 2012 IDS-BUD posted net earnings of PLN 13m on turnover of PLN 437m, but its current order book is worth in excess of PLN 1.2bn.
"It is the first investment of this kind in Poland and one of 16 similar projects that are being currently implemented around the world. Owing to the terminal, Poland will join a group of countries that actively par-
The state-controlled PERN Przyjaźń operates a network of pipelines, transporting Russian crude oil for the largest producers of fuels in Poland, as well as in Germany. The two lines of the Przyjaźń pipeline, span
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from Adamowo, on the Polish-Belarussian border, to Płock in central Poland, and then to Schwedt in Germany. Apart from its network of crude oil pipelines, PERN also owns a number of product pipelines, used for transporting liquid fuels produced by refineries. This network radiates from Płock towards Warsaw, Poznań and Częstochowa. Last but not least, it provides crude oil storage with three storage depots (Płock, Gdańsk, Adamowo) with a combined capacity of 3m cb.m. In 2012 PERN turned over PLN 1.18bn and posted net earnings of PLN 279m. The company employs more than 2,400 staff.
ENERGY & RESOURCES
Bilfinger gets EUR 60m power engineering contract from Dalkia The French-owned utility Dalkia, one of the key investors in Poland's district heating sector, has awarded a EUR 60m contract for the modernization of a thermal power plant in Łódź to German construction and engineering company Bilfinger. Following the planned installation of two steam generators with lowemission firing systems, the emission levels at Dalkia's Łódź cogeneration unit will live up to EU limits. Bilfinger began work on the project in March and plans to complete it in two years. In addition to design and engineering, the scope of the contract includes also delivery, assembly and commissioning of the plant components. According to Bilfinger, the upgrade will boost the plant's specs and service life to that of a brand-new unit, increasing the safety of heat supply for the city of Łódź, while improving air quality by reduction of nitrogen oxide emissions into the atmosphere.
"With the new order, we can further expand our position as a highly qualified service provider in the Polish power plant market", says Joachim Enenkel, the responsible Member of the Executive Board at Bilfinger SE. "Demand for services for conventional power plants remains high, especially in Eastern Europe."
power plants stations, even though recently it has made some moves towards the development of natural gas-based and renewable energy sources as well as nuclear power. PGE is heavily investing in environmentally friendly equipment and in the modernization of its power stations.
Due to their age, a significant share of Eastern European power plants have to be retrofitted with modern technology, and in recent years Bilfinger has made substantial investments to better explore opportunities created by this marketplace. Its subsidiary Bilfinger Power Systems last year acquired Polish flue gas cleaning specialists ELWO, which designs, produces and installs of electrostatic precipitators and bag filters for conventional power plants.
Headquartered in Mannheim, Bilfinger Berger is a multinational German company specialized in civil & industrial construction, engineering and related services. In the recent years it has participated in many key infrastructure development projects in Poland. With approximately 70,000 employees globally, the company turned over EUR 8.5bn last year. With a workforce of 9,800 staff, the Bilfinger Power Systems is a subgroup of Bilfinger SE. Numerous German and international companies operate under the Power Systems umbrella, which concentrates on the power generation sector.
Members of the Bilfinger Berger Group have obtained a number of lucrative retrofit contracts in Poland's power industry in recent years. Bilfinger is currently modernizing ten of the twelve boilers at Europe's largest coal-fired power plant in Bełchatów, Poland. The latest EUR 78m contract for modernization of boiler 2 was awarded to Bilfinger's subsidiary Babcock Borsig Steinmüller GmbH in July last year, with delivery scheduled for January 2016. In September 2013, the Würzburg-based Babcock Noell GmbH and Bilfinger Infrastructure SA jointly won a EUR 120m contract for the retrofit of three flue gas desulfurization units at PGE's Turów lignite & biomass-fuelled plant in Bogatynia. All major components are to be provided by Babcock Noell GmbH, with the Warsaw-based Bilfinger Infrastructure SA being responsible for the construction work for the foundations and buildings including their inner installations and the gypsum storage for the flue gas cleaning units. In both cases the client was Poland's top energy utility PGE which operates mainly lignite & hard coal-fired
PROPERTY & CONSTRUCTION
Orco to sell Złota 44, admits the luxury residential tower was a financial disaster The ailing European developer Orco Property Group has finally admitted what most market observers have known already for quite a while – what a spectacular fiasco the Złota 44 residential high-rise has been for the company. In the full year financial report, published last week, Orco said it would sell the project, leaving its completion to the new owner. "The luxury residential project Zlota 44 was exposed as a major financial failure for the Group in the fall of
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2013. There are many causes of this situation, including lack of bank financing due to covenants default, termination of the general contractor, unsuccessful sales re-launch on the local Warsaw residential market. Therefore, late in 2013 the Board of Directors decided to terminate this strategy, suspend the works and later to sell the entire project as is and not to complete the development. On 26 March 2014, a short term option was granted to OTT Properties (an entity related to the former management) to acquire the project; no new losses would be generated for the Group in case of exercise of that short term option," Orco said.
Złota 44 has been a disappointment both for Orco's shareholders as well as fans of Daniel Liebeskind's architecture.
Złota 44 aimed to be the most luxurious apartment building in Poland, offering a wide range of additional services and facilities available exclusively to its residents, including a 25m indoor swimming pool, sauna, and spa. Located between the Palace of Culture and the Central Railway Station, the 192m high tower were to become Europe's second-tallest all-residential skyscraper, with 54 storeys and 251 apartments. However, its completion has been delayed several times and sales of apartments have been rather disappointing. Meanwhile, Orco ended up on the verge of bankruptcy with Czech billionaire Radovan Vitek rescuing the collapsing business with an equity boost. Last year, its revenue decreased to EUR 146m from EUR 245m in 2012. The loss in fair value adjustments on investment properties and the impairments of development assets recognized in the income statement amounted to EUR 193m over 2013 with the Złota 44 project alone being responsible for EUR 121m worth of impairments. Orco's net loss amounted to EUR 227m last year, compared to EUR 42m in 2012. Its gross asset value stood at EUR 1.035bn last year, down by EUR 313m from the prior year, largely due to a like-for-like drop in assets' value.
vestec Bank and GLL Real Estate Partner, for EUR 43.4m. The building has been LEED Gold precertified and is currently undergoing final certification, in line with Skanska's green building policy. Built in slightly less than two years at Wrocław's Szczytnicka St., Green Day has a total GLA of 15,930 sq.m, of which office space makes up 14,500 sq.m, all of which has been taken up by the Credit Suisse shared services unit. The small retail section will include a canteen, café and convenience store operated by HDS Polska. The fit-out of the interiors is currently being finalized.
Image: ARUP
PROPERTY & CONSTRUCTION Designed by the Polish-born celebrity architect Daniels Liebeskind, Złota 44 were meant to become Warsaw's new landmark, but so far it has been nothing but a disappointment, both for the developer, as well as most Varsovians, as the final look of the sail-shaped edifice only remotely resembles the sleek glass structure they remember from the drawings Orco distributed prior to obtaining the residence permit back in 2007.
Skanska launches Green Day office project in Wrocław Swedish developer Skanska Property Poland has officially opened its latest office project in Wrocław: Green Day, which has been fully leased to a single tenant: Credit Suisse Center of Excellence. Skanska sold the project in the autumn of last year, five months before its completion, to a fund managed jointly by In-
Green Day is home to the Wrocław-based Credit Image: Skanska Property Poland Suisse Center of Excellence. "Green Day is a great commercial success – we leased the whole office space to Credit Suisse and sold the building to an investment fund five months ahead of its completion," commented Katarzyna Zawodna, President of Skanska Property Poland. "Wrocław is emerging as an important investment market in the commercial property sector and I believe that Skanska’s projects have played a role in this. We are very pleased because we are interested in Wrocław with regard to further developments."
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Green Day is Skanska Property Poland’s third office project in Wrocław – over the past few years the company has completed Grunwaldzki Center near the Reagan Roundabout (sold to RREEF) and two Green Towers buildings situated at Strzegomska Street (sold to PZU). Construction of the Dominikański office building is also underway in Wrocław, where total leasing area will be around 40,000 sq.m. The first lease has already been signed by Deloitte. Skanska Property Poland is very active in Poland's other regional cities, with investments in Poznań, Łódź, Kraków and Katowice, where it has recently broken ground on its largest Polish office project todate, the 46,000 sq.m Silesia Business Park. In Warsaw, the developer is currently finalizing work on Atrium 1, its flagship office project in the city centre, which the Swedes have recently sold to the German open-ended property fund Deka Immobilien-Global for EUR 94m (see BR+ No. 011 page 5). Scheduled to reach completion in the coming weeks, Atrium 1 will offer 18,000 sq.m of leasable office and retail space. Currently the building is 75% leased, with Santander Group subsidiary BZ WBK as the key tenant. The 12year contract for 12,200 sq.m signed in September 2013 was the largest lease agreement in Warsaw's Central Business District in recent years. Atrium 1 will house the new headquarters of BZ WBK along with the bank's flag-ship branch. The remaining space 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, which currently has 57,000 employees in selected home markets in Europe, the U.S. and Latin America. Skanska’s revenue in 2013 totaled SEK 136bn (EUR 15.8bn).
PROPERTY & CONSTRUCTION
Griffin expands Warsaw portfolio with four new acquisitions Griffin Group, a property investment group operating in Central and Eastern Europe, has considerably expanded its Warsaw portfolio in recent weeks with the acquisition of a shopping centre and three office buildings for an estimated PLN 350m. Perhaps the most interesting of the four acquisitions is the Jupiter shopping centre, which Griffin bought along with 2.5 hectares of land, from Spain's Catalunya Banc for an undisclosed amount. The property in question is located at Towarowa St., right by the Rondo Daszyńskiego station on the new subway line, in the heart of Warsaw's booming office district of Wola. Although its previous owner secured a planning decision that allows for the construction of two high-rise buildings on the plot, Griffin said it was considering a number of possible options with regard to the future redevelopment of the Jupiter site. For the next two to three years, the existing shopping centre will continue to operate, Griffin Group said in the statement. The size of the new project that Griffin Group will develop on the Jupiter site is not known yet, but according to Emil Domeracki, senior associate, land agency, at Colliers International, the plot could probably house up to 80,000 sq.m of leasable space. If Griffin Group is actually planning to develop that much space on the site, this would mean that the company paid approximately EUR 40m, or even more, for the property, Domeracki said adding that the plot in question in well located and enjoys good visibility.
According to Mikołaj Martynuska, senior director, development consultancy, at CBRE, Griffin Group may choose not to develop high-rise buildings on the Jupiter site because of the large number of office towers that are planned by other developers in the neighborhood. A large-scale retail project would be an ideal solution for this location, he said. The urban development of both the entire modern Wola district and the Towarowa corridor, as well as strong market fundamentals would support such a scheme. To a certain extent, also a classic mixed-use development with several mid-rise buildings featuring approximately 10-12 floors of offices. Besides Jupiter, Griffin has acquired three office buildings in Warsaw over the past few weeks for a combined PLN 200m, the company said. Following the transactions, Griffin's office portfolio in Warsaw includes nine properties. The first of the two acquisitions is Bliski Office Center, located at Żurawia street in Warsaw’s Central Business District. With Eurozet and Mini SA among its key tenants, the building offers ca. 4,900 sq.m of office space. The transaction was financed in part by mBank Hipoteczny, the mortgage arm of the German-owned mBank and the seller was Ireland's Castle Carbery Properties. In a separate transaction, Griffin purchased Nordic Park, a class-A, 8,260 sq.m office property located on Krzuczkowskiego St., in the Powiśle area. The two transactions totaled PLN 130m. At the end of February Griffin added Company House II, a 9,379 sq.m building in Warsaw's Aleje Jerozolimskie office corridor, bringing its total expenditures in excess of PLN 200m. The building's main tenants are Microsoft and Agfa. The transaction was co-financed by Westdeutsche ImmobilienBank AG, which was also the creditor to the previous owner of the property, AXA Real Estate. Griffin had earlier acquired a twin building, Company House I, occupied by Philips.
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Property empire in the making
Griffin Group was founded in 2006 as a joint-venture between Polish Cornerstone Partners and British Chelsfield Partners, as a platform to manage funds focused on real estate investment in Central and Eastern Europe, mainly in Warsaw. A year ago the global private equity giant Oaktree Capital Management joined the project with a view to create a long-term platform for real estate-related investments in Poland, including direct purchases of assets, development projects and lending activities. Griffin and Oaktree had been cooperating since 2010 with the private equity partner providing the Warsaw-based property investor with some EUR 150m for acquisition of several key assets, including Hala Koszyki, Meble Emilia, Renoma shop-ping center, office buildings in Warsaw and a land bank for residential development. Following the takeover of Chelsfield's stake in Griffin, as a shareholder, Oaktree pledged to invest a further EUR 200m into their projects.
Company House II is one of the three office buildings Griffin Group acquired so far this year.
Bemowo district together with a zoning permit and plans for a residential development totaling 90,000 sq.m. Together with Belgian developer Immobel, Griffin acquired seven investment sites from Poland's press distributor Ruch. Other projects include an investment site and a historic tenement house on Warsaw's Szucha street, a stone's throw from the Prime Minister's office, a 37ha site in Wilanów district and Prima Court office building in Warsaw. In December last year Griffin obtained PLN 18.2m worth of EU funding that will enable the company to transform a former Polonez Hotel in Poznań (acquired from Orbis for PLN 23m) into a private student dormitory. The project is to open by the end of this year and according to Griffin, it will be "competitive in terms of quality and price" in comparison with existing university dorms. Perhaps the most publicized investment by Griffin was its 2012 acquisition of state-owned furniture retailer Meble Emilia, which owns a handful of attractive investment sites in Warsaw, including the Emilia store, sandwiched between the Warsaw Financial Center and the Intercontinental hotel. The new owner seeks to knock down the two-story socialist-era building and erect a new skyscraper at the site. Griffin took over also the Hala Koszyki project in downtown Warsaw from Irish developer Quinlan Private Golub, which had sought to build retail space and apartments at the site. After demolishing a historic market hall in 2006 (which is to be reconstructed following completion of an underground parking lot), Quinlan (which in the meantime changed name to Avestus Real Estate) changed the project's profile to offices and Griffin plans to follow in their footsteps, aiming to break ground on the project in the coming months.
Image: Griffin
Besides a number of office buildings, Griffin's assets assets include also a 5.5ha site in Warsaw's western
Another high-profile acquisition by Griffin was the Renoma shopping center in Wrocław, which the fund acquired for EUR 117.6m from Centrum Develop-
ments&Investments. The recently expanded landmark property includes 31,000 sq.m of retail GLA and 10,000 sq,m of office space. In downtown Katowice, Griffin is developing a 21,000 sq.m shopping centre Supersam, with 100 retail outlets, cinema, fitness center, food court and 400 parking spaces. The project, most of which has already been pre-let, is to reach completion in 2015.
SERVICES & BPO
Business services firms took up 20 200,000 sq.m sq.m of offices in regional cities last year Besides being one of the key sources of jobs for Polish graduates, the country's thriving Business Process Outsourcing industry is a crucial driver of growth in the office sector, particularly in regional cities. According to the property consultancy JLL, business services providers leased more than 220,000 sq.m of office space last year alone, most of which outside . The total office space volume occupied by foreign-owned business services companies operating in Poland, tops approximately 1.2m sq.m, JLL said. "JLL’s analyses show that in 2013 business services sector companies leased approximately 200,000 sq.m of office space outside Warsaw, which is, when the capital city is excluded, about 50% of Poland's total demand for office space. If we take Warsaw into consideration, the business services sector companies’ share in 2013's total office space demand was approx. 20%," said Anna Młyniec, Head of Office Agency and Tenant Representation.
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"Over 120,000 specialists work in foreign-capital business services centers operating in Poland which translates into a 20% increase y/y. This means that the most optimistic scenarios forecast by ABSL have come true," commented Jacek Levernes, President of the outsourcing lobby ABSL and Member of Executive Management Board HP Europe.
– signed several years ago by, e.g., HP and Credit Suisse in Wrocław, Shell and State Street in Krakow and by Infosys in Łódź. Today, companies from the business services sector occupy approx. 50% of the total office space volume in Krakow, 36% in Łódź and 35% in Wroclaw," added Mateusz Polkowski, Associate Director, Research and Consultancy. Some of the largest leases signed by BPO tenants in Poland last year included: IBM Global Services Delivery Polska (total approx. 12,000 sq.m, Katowice), Lufthansa Airline Accounting Center (8,500 sq.m, Kraków), ING Services Polska (total approx. 7,300 sq m, Katowice) and Cisco (7,000 sq m, Kraków).
TRANSPORT & LOGISTICS IBM leased more than 12,000 sq.m in Katowice last year, including 9,000 sq.m at Echo Investment's A4 Business Park, pictured above.. Image: Echo Investment
The business services sector continues to be among the fastest developing segments of the Polish economy. According to the forecasts by ABSL, this growth is set to continue with business services centers generating between 15- 20,000 new vacancies per year, hitting 150,000 by 2016. To satisfy its growing appetite for new talents, the business services sector continues to enter new regional markets in Poland, boosting demand for new offices in larger markets (excluding Warsaw ) - Krakow, Wrocław, Poznań, Katowice, TriCity, Łódź, Lublin, Szczecin, as well as in smaller cities. "Virtually since the very start of Poland's outsourcing sector, business services centers have been and continue to be key occupiers of office space outside Warsaw. This kind of lease agreements typically concern a large volume of space, comparable to the space occupied by the largest financial and telecommunication companies. The process started with pivotal contracts
Danish Prime Cargo to establish distribution centre in Szczecin, Szczecin, create up to 120 jobs International forwarder Prime Cargo is joining a growing number of Danish companies that have discovered the advantages of Poland's northwestern Szczecin region as a distribution hub for the Nordic region. The company has recently inked an agreement with global industrial property developer Prologis for a built-to-suit facility at Prologis Park Szczecin. The 11,200 sq.m warehouse is to reach completion in Q3 at a total cost of roughly EUR 12m, a third of which will be on Prime Cargo's side. "The warehouse will be built to serve as distribution center for our Scandinavian clients. The facility will be designed to handle both business to consumer distribution, such as e-commerce, and business to business
operations," Jesper Bejstrup, CFO at Prime Cargo tells Poland Today. Prologis Park Szczecin is a fully-leased, modern distribution centre in northwest Poland totaling 41,800 sq.m. It is located within the Goleniów Industrial Park off the S3 motorway, about 40km east of the German border and seven kilometers from Szczecin-Goleniów Airport. Other Prologis customers at the park include: Swedwood, Rhenus Logistics, KIM HURT, and DB Schenker. "We have been through a very detailed process of selecting the optimal site for our facility. The local authorities have been very helpful in this process and the access to a reliable and stable workforce in this area was an important factor behind our decision. As was the proximity to Scandinavia, because it is key for us to offer our clients a very competitive process time from receipt of order to delivery to the customer, either by road or by sea," says Mr. Bejstrup. "We will be operational August 2014, and we expect to employ approx. 120 people in the peak season. As more customers are attracted to the facility the number of employees is expected to increase." Founded in 1998 and based in Kolding, Prime Cargo is a privately-owned third-party logistics operator, with 10 global offices and four distribution terminals in Denmark totaling 80,000 sq.m. With a total workforce of 475 employees, the company had revenue of approximately EUR 90m in the financial year 2012/13. Its air shipping volume came to 13,000 tons last year with a further 660,000 cb.m shipped by sea. The Szczecin area has attracted a number of Western European e-commerce operators in recent years as a perfect handling hub for Germany and Scandinavia. The Rhenus Contract Logistics unit in Prologis Park Szczecin is in fact the distribution center for German online retailer Limango, handling more than
weekly newsletter # 028 / 31st March 2014 / page 9
30,000 parcels a day. Danish online fashion retailer SmartGuy Group (operator of the stylepit.com website) has recently launched a distribution center in Goleniów near Szczecin, creating more than 150 jobs. Another European e-tailer to have chosen Szczecin for distribution is MyTrendyPhone, a company of Danish origin that sells mobile phone accessories online. With a modern warehouse stock of merely 49,000 sq.m as of end of 2013 (according to Cushman & Wakefield), Szczecin remains one of Poland's smallest regional industrial property markets, but the robust take-up of 27,000 sq.m last year signaled a potential for considerable growth in the future. Last year saw the delivery of warehouse A of North-West Logistic Park (7,000 sq.m) with subsequent stages of the project being under construction. The vacancy level in the Szczecin area stood at 7.5% as of end of last year.
ior V-ce President & Market Officer Prologis Poland tells Poland Today. "Our ongoing projects at the moment include a 11,200 sq.m BTS scheme for Prime Cargo in Prologis Park Szczecin as well as a 27,000 sq.m speculative development in Prologis Park Wrocław V. We are considering further speculative projects in regions where unoccupied warehouse space is becoming scarce Thanks to our proprietary land bank in key locations we can develop a warehouse in a matter of months." At the moment, Prologis Park Wrocław V includes four BTS buildings with a combined floor space of 90,000 sq.m, developed for Eko Holding, Neonet, Tradis, and UPM Raflatac. According to Prologis, the park can be expanded by a further 125,000 sq.m of warehouse space.
sq.m, Prologis is the primary operator of distribution facilities in Central & Eastern Europe (as of 31 December 2013). Last year alone, the company leased 1.15m sq.m of industrial distribution space in the region, including 595,000 sq.m in renewals and 363,000 sq.m in new leases. Prologis’ occupancy in the CEE was 89.5% as of Dec. 31, 2013.
"Few developers can react to market demand as quickly as Prologis, thanks to our large land bank in key locations," Bartosz Mierzwiak, Senior V-ce President and Market Officer at Prologis Poland tells Poland Today. Image: Prologis
TRANSPORT & LOGISTICS
US Prologis returns to speculative development with large Wrocław project
In 2013 Prologis in CEE began construction of three new facilities totaling 75,300 sq.m in the region, including the first speculative facility since 2009 in the Czech Republic - fully leased within two months of construction - a 17,800 sq.m facility at Prologis Park Wrocław V for Neonet, and a 7,000 sq.m facility at Prologis Park Janki for ROHLIG SUUS Logistics.
You know things are looking up for the Polish economy when commercial property developers are building speculative again. US-owned Prologis, one of the leading players on the global industrial property market, has just broken ground on a 27,000 sq.m warehouse unit at its Prologis Park Wrocław V site, without first securing any leases for the project.
Prologis Park Wrocław V is located in Nowa Wieś Wrocławska, directly by the Wrocław ring road and 3km west of the Wrocław Bielany exit, near the junction of A4 (Berlin-Wrocław-Ukraine) and S8/E57 exImage: Prologis pressway.
"Responding to positive signals from the market we have embarked on new investments both in the BTS as well as speculative formula," Bartosz Mierzwiak, Sen-
With its active engagement in five countries across the region (Poland, Czech Republic, Hungary, Slovakia, and Romania) and a portfolio totaling more than 3.6m
"Over the coming months we aim to focus our activity on key markets, in response to a growing demand from tenants. We expect that due to improving economic conditions as well as an increasing consolidation and reorganization of supply chains, clients will be seeking new space as well as extend and expand their existing leases. Hence, we will continue to focus on markets where supply is limited. It is worth noting, that smaller markets, such as Szczecin and Gdańsk, remain ac-
weekly newsletter # 028 / 31st March 2014 / page 10
tive and Poland's continuously expanding road infrastructure generates demand for distribution centers in new regions," says Bartosz Mierzwiak. Prologis, Inc., is the leading owner, operator and developer of industrial real estate, focused on global and regional markets across the Americas, Europe and Asia. As of December 31, 2013, Prologis owned or had investments in, properties and development projects of approximately 52.9m sq.m in 21 countries. These properties are leased to more than 4,500 customers, including third-party logistics providers, transportation companies, retailers, manufacturers, and other enterprises.
Wrocław is booming
Poland's 5th largest warehouse market, Wrocław saw a number of large deals signed last year with its total industrial space stock likely to exceed 1m sq.m this year. At the end of 2013 the figure stood at 780,000 sq.m. The key elements driving demand for warehouse space in the Wrocław region are its strategic location, sizeable and relatively affluent local market, and welldeveloped transport infrastructure. Three Special Economic Zones with numerous investors representing FMCG, automotive, aviation and manufacturing industries operate in the region. Two of Amazon’s three Polish distribution centers developed by Panattoni and Goodman will be constructed in Wrocław and will deliver more than 220,000 sq.m of new space to the market this year. These transactions pushed the region’s total take-up in 2013 to 482,000 sq.m – a twofold rise on 2012 – accounting for more than 20% of Poland’s total take-up, according to consultancy Cushman & Wakefield. Some 259,000 sq.m is under construction with the largest projects underway including BTS Amazon (123,000 sq.m) developed as part of Goodman Wrocław South Logistics Centre, another phase of
Prologis Park Wrocław V (35,000 sq.m), and a BTS scheme for Polaris Industries (33,000 sq.m). Headline rents remain stable at EUR 3.0–3.9/sq.m/month. The highest concentration of warehouse space in the Wrocław region is along the A4 motorway (Bielany Wrocławskie, Kąty Wrocławskie, Kobierzyce, Krajków) and national road no. 8. "Wrocław's location in the heart of Central Europe, with its proximity to Germany and the Czech Republic, makes the area an increasingly popular warehouse location for companies providing cross-border logistics services. This has been fostered by the gradual development of the road network. Today, the capital of Lower Silesia enjoys convenient motorway connections with Germany and Upper Silesia. However, the future looks even brighter with two projects, the S8 express road, connecting Wrocław with Łódź and Warsaw due to be completed this year and the S5 towards Poznań, whose construction is planned in the next few years already influencing the market in northern Wrocław. In addition, the planned S3 expressway between Legnica and the Czech border will further increase the international accessibility of the region," says Michał Śniadała, Senior Consultant, Industrial Agency, at JLL.
y/y increase and a 1.4% m/m decline. In real terms, Polish retail sales were up by 7.0% y/y in February after a 5.0% y/y increase in January, GUS added. In the whole of 2013 retail sales rose by merely 2.3% from the prior year. "February brought an acceleration of the retail sales growth to 7% y/y, the highest level since May 2012. This was partially due to high sales of passenger cars registered as commercial vehicles and low statistical base. However, according to our estimates, retail sales excluding cars and fuels also accelerated – to 4.2%y/y (the highest growth rate since August 2012)," BZ WBK bank wrote in a commentary
Retail sales in Poland (y/y) 15%
10%
5%
0%
-5% Aug 11
CONSUMER GOODS & RETAIL
Retail sales increase by 7% in February, fastest since May 2012 Polish retail sales rose at an annual rate of 7.0% in February, on a 0,6% monthly fall, the Central Statistical Office (GUS) said last week, beating average proejctions. The Polish news agency (PAP) analyst survey had shown consensus expectations for a 6.2%
Feb 12
Aug 12
Feb 13
Aug 13
Feb 14
Source: GUS
"High growth rate of sales and, in general, of consumer demand is underpinned by recovery of the labor market, which results in faster growth of personal income and improving consumer confidence. Recent data are in line with our scenario of economic recovery, driven not only by net exports, but also by consumption and investment. These figures support our scenario of GDP growth in Q1 by slightly above 3% and by 3.5% y/y in the entire 2014," the analysts concluded.
weekly newsletter # 028 / 31st March 2014 / page 11
RETAIL PROPERTIES
Atrium completes EUR 120m shopping centre in Lublin Retail property company Atrium European Real Estate has completed its first major greenfield development, Atrium Felicity, in the eastern Polish city of Lublin. The 172,000 sq.m project is the largest and most modern shopping centre in this city of 350,000. Built in approximately 17 months by Strabag and officially opened on March 20th, Atrium Felicity attracted 220,000 visitors over the first four days of its operations. "The total investment costs for Lublin are estimated at approx. EUR 120m," Ljudmila Popova, head of business development and investor relations at Atrium, told Poland Today. According to Atrium's Warsaw press office, the company spent EUR 13m on redevelopment of the traffic network in the surrounding area. Atrium Felicity offers 75,000 sq.m of gross leasable area of retail across 120 units. The centre is 95% occupied, with a further four stores in solicitors’ hands. The shopping centre is anchored by a 20,000 sq.m hyper market which was pre-sold to Auchan in 2011, a 12,600 sq.m Leroy Merlin DIY store and a 3,500 sq.m Saturn electronics store . It also houses a number of popular fashion brands such as H&M, the Inditex Group (Zara, Bershka, Stradivarius, Pull & Bear, Massimo Dutti), C&A and LPP Group (Reserved, Mohito, Sinsay, Cropp, House and Home&You). In addition, Tommy Hilfiger and New Yorker are among many brands which have chosen Atrium Felicity as the location for their first stores in Lublin in Atrium Felicity.
As shopping alone is not enough to keep large retail schemes busy, the investor is hoping the project to become a dominant family or social destination for Lublin residents. To this aim, Atrium Felicity has come up a comprehensive leisure offering with 15 cafés and restaurants, free wifi and a nine screen Cinema City complex which will be the first in Lublin and only the second in Poland to offer the new 4D experience. Atrium Felicity has been designed and constructed in line with the up – to - date standards of efficiency and sustainability, and an application has been made for a BREEAM rating. Atrium is hoping the centre will attract visitors from the nearny cities of Zamość and Chełm ans estimates the project's total catchment area at some 470,000 people.
centre itself and the hard work and expertise of our leasing teams. I am confident that Atrium Felicity will be a great success and be seen as an exciting and desirable retail and leisure proposition for both residents of and visitors to Lublin," said Rachel Lavine, Chief Executive Officer of Atrium.
Some 70,000 people visited Atrium Felicity on its Image: Atrium opening day.
Atrium is a leading real estate company focused on shopping centre investment, management and development in Central and Eastern Europe. The company is based in Jersey and dual listed on the Vienna and Euronext Amsterdam Stock Exchanges. As at 31 December 2013 the Group owned 153 shopping centers and retail properties, with a market value of EUR 2.4bn, diversified across seven countries with a total gross lettable area of 1.3m sq.m. In 2013, Atrium produced a gross rental income of EUR 203.5m. Prior to the opening of Atrium Felicity, Atrium owned 22 properties in Poland with a gross lettable area of 423,000 sqm and a market value of EUR 1.2bn. Last year, Atrium's Polish unit generated Gross Rental Income of EUR 78.9m, marking an increase by close to 7% on the prior year (+1% in like-for-like terms). Atrium's largest investment in Poland last year was the EUR 151.7m acquisition of Galeria Dominikańska in Wrocław. On the development side, besides the Lublin project, the company is expanding its Atrium Copernicus property in Toruń, which will get an additional 17,300 sq.m of GLA and 640 parking spaces by the end of the year. Ms. Popova declined to comment on the capex involved in the Toruń project.
"The opening of the Atrium Felicity shopping centre today is an important milestone in both Atrium's history, being our first major greenfield development, and for the city of Lublin, as its largest and most modern retail and leisure centre. The fact that Atrium Felicity has been delivered almost fully occupied to such a wide range of strong international and regional retail brands is testament to the quality and location of the
The 2014 will be a truly busy year for developers in Lublin, as another major retail project, Tarasy Zamkowe, is soon to be delivered near the city's Old Town. 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. The investor behind Tarasy Zamkowe is Austria's Immofinanz.
weekly newsletter # 028 / 31st March 2014 / page 12
RETAIL PROPERTIES
Polish investor breaks ground on retail park in BielskoBielsko-Biała
decided to diversify into retail properties and medical facilities. Last year it opened a 2,700 sq.m retail park in Puławy, anchored by Biedronka, Media Expert, PEPCO, and Drogeria Aster, and in 2011 completed a 3,500 sq.m elderly care unit in Chorzów.
Kraków-based developer Biuro Inwestycji Kapitałowych (BIK), has broken ground on its third retail project, Retail Park Bielsko, in the southern Polish town of Bielsko-Biała. With a total GLA of 6,300 sq.m and 230 parking spaces, the scheme is to reach completion at the break of Q3 2014. Built by one of Poland's top construction firms Erbud, Retail Park Bielsko will include a free-standing Biedronka supermarket as well as the retail park section with 11 units, including a PEPCO discount textile retailer, Rossmann drugstore as well as an electricals outlet, footwear store, a healthcare centre and pharmacy. Retail Park Bielsko will feature also a 1,129-sq.m Decathlon Easy, a new smaller format the French bigbox sports goods retailer has recently introduced to the Polish market. So far Decathlon has opened three outlets under the Easy logo in Poland (in Katowice, Chorzów, and Rybnik) and plans to increase their number to 10 by the end of next year. Ranging between 1,000 and 1,500 sq.m in size, Decathlon Easy outlets carry only sports goods manufactured under the private labels of Decathlon's parent, the Oxylane Group (for instance Tribord, Quechua, Domyos, Kalenji). Backed by Polish capital, BIK has been developing logistics properties since 2000 and its current portfolio includes some 85,000 sq.m of commercial space in Kraków, Ożarów Mazowiecki, Pruszcz Gdański, Sosnowiec, Chorzów, and Puławy. In 2010 the company
Retail Park Bielsko will include a free-standing Biedronka supermarket and 11 other outlets. Image: BIK "We decided to diversify into small retail parks, measuring between 3,000 and 6,000 sq.m, in small and medium-sized towns," commented BIK's Business Development Manager Krysztof Mucha. "The demand for such properties in those locations is very high at the moment. As an investor, we can see the potential in small towns and local communities, and we tailor our properties to meet the expectations of customers in these markets. Projects like Retail Park Bielsko should be close to the customer and answer to their daily needs." A few months ago (see BR+ No. 008 page 9) BIK embarked on the construction of Galeria Dzierżonów, in the Silesian town of Dzierżoniów (50km south of Wrocław). Scheduled to open in Q3/Q4 2014, the Galeria Dzierżoniów strip mall will feature 25 retail & service units with a combined GLA of 5,000 sq.m as well as 105 parking spaces.
DATA BOX: RETAIL PARKS IN 2013 The supply of large-scale non-food stores in Poland both in retail parks and as free-standing buildings – retail warehouses – comprises a total of nearly 2.5m sq.m. The largest scheme completed in 2013 was the Europa Centralna Park in Gliwice offering 40,000 sq.m. In Poznań, 14,000 sq.m was added to IKEA Park Franowo while Szczecin saw the completion of Marcredo Center (14,000 sq.m). Several smaller retail parks also came onto the market last year, including Park Handlowy Szombierki in Bytom, Multishop in Sochaczew, Pasaż Wiślany in Grudziądz, Dekada in Grójec and Vendo Park in Nysa. Poland’s total retail park stock reached 800,000 sq.m, of which 70,000 sq.m was added in H2 2013. More than 60,000 sq.m is currently under construction in small retail parks in small and medium-sized cities such as Era Park in Radomsko and Marcredo Center in Piekary Śląskie. Occupier demand in retail parks remains stable with key tenants from the following sectors: DIY (Castorama, OBI and Leroy Merlin), household appliances and electronics (Media Expert and RTV Euro AGD), furniture and home accessories (Agata Meble and Jysk) and sports equipment (Martes Sport). The retail offer of such schemes is completed by drugstores (Rossmann and Hebe), accessories (Pepco), and discount fashion and footwear (Takko, KIK, Deichmann and CCC). The vacancy rate in retail parks stands at approx. 3.7%. Rents at retail parks are stable at EUR 6– 8/sq.m/month for large units and EUR 9– 13/sq.m/month for medium-sized space with the highest rents in large retail parks in Poland’s largest conurbations and the lowest in small schemes in small cities. Source: Cushman & Wakefield
weekly newsletter # 028 / 31st March 2014 / page 13
POLITICS & ECONOMY
Polish exports to Russia and Ukraine may drop by a fifth in 2014, minister says The prolonging crisis in Ukraine is beginning to impact Poland's foreign trade. According to figures provided last week by Economy Minister Janusz Piechocinski, Polish exports to Russia in the year to March 18 fell by around 7.3% in annual terms to some USD 2.17bn. Exports to Ukraine in the same period fell 6.3% y/y. Polish exports to Russia in 2013 amounted to USD 10.8bn and to Ukraine - USD 5.72bn, together representing according to data from the Central Statistical Office (GUS). "The slowdown in exports can be traced down to a decline in the Russian economy, deepened by the crisis around Ukraine," Piechocinski told reporters, adding that the weakening of the ruble in the past months has negatively affected imports to Russia, according to data from the country's Federal Customs Service. "The economic weakening combined with the current geopolitical crisis have a strong effect on the ruble, which is losing considerably both against the dollar and the euro - the Russian currency has already lost 11-12% against the main currencies this year. That, in turn, significantly hampers Russian imports from partners outside the former Commonwealth of Independent States, hence also trade with Poland," the deputy prime minister told the Polish Press Agency PAP. The scale of Russian exports decline varies depending on the category of goods, with over 40% declines in pork, fresh fruit, chemical substances, reagents, poly-
mers, jewelry, metallurgic products, tools, refrigeration devices, construction machines, engines, electrotechnical machines, farming machines, turbines, rolling stock parts, casting devices and toys. Piechociński told PAP the full-year decline in Polish exports to Russia and Ukraine in USD terms may amount to some 20-25%. "In Ukraine's case the result is much harder to predict as the forecast is burdened by a significant degree of uncertainty as to further developments in the social and economic situation in the country." According to central bank head Marek Belka, who called the 1-2% depreciation of zloty negligible, Poland's economy has so far been nearly unaffected by the Ukrainian crisis, with exports being the only area of concern at the moment. "There may be problems, there already are, with exports to Russia and Ukraine," Belka said in a televised interview pointing to the declining competitiveness of Polish exports due to the recent weakening of the ruble and the hryvnia. The two countries bought some 8% of all Polish exports last year. The NBP governor has said in recent weeks that the Ukrainian crisis may force the Poles to rethink their reluctant position on the potential adoption of euro. According to Belka, the Ukrainian crisis has not altered the economic balance but has brought to light the political side of the debate. "The Ukrainian crisis has shown that it is good to be where decisions in the EU are taken, and it seems to me that they are taken in a circle of insiders," he said. "The situation in Ukraine should remind Poles that there is that political plane of the euro debate. I wanted to highlight that."
POLITICS & ECONOMY
Unemployment drops to 13.9% in February Poland's registered unemployment rate declined to 13.9% in February from the prior-month level of 14.0%, according to the Central Statistical Office (GUS) figures released last week. The unemployment rate figure was slightly below the Labor Ministry's prior estimate of 14.0%. "The decline in registered unemployment rate was deeper than expected. In February the figure reached 13.9% versus 14% in January 2014 and 14.4% in February 2013. The number of unemployed persons amounted to 2.256m and was lower by 4,800 than in the previous month and by 80,800 as compared the same period of 2013," BZ WBK economists said in their weekly commentary. "The number of unemployed people fell in monthly terms, and such a development is untypical for this month (last time we saw it in 2008) and is suggesting that recovery on the Polish labor market is gaining steam. In upcoming months we expect this downward trend in registered unemployment to continue. The improvement will come from not only further economic recovery, but also from increase in seasonal works," the bank added. According to Eurostat's preferred Labor Force Survey methodology, January unemployment in Poland stood at 10.5% and was lower than the EU 28 average of 11.3%. The two countries with the highest unemployment rate in Europe are Spain (26.3% in January and Greece (27.3% in December).
weekly newsletter # 028 / 31st March 2014 / page 14
KEY STATISTICS Consumer Prices Prices
Inflation
-0.2
0.0 +3.4 +0.8
+0.1 +3.7
Clothing, shoes
-4.9
-0.2
-4.9
-0.6
Housing
+1.8
+0.1
+1.8
0.0
Transport
+2.2
+1.4
-3.7
-4.7
-1.7
+1.9 +0.2
+1.9
+0.1
-5.0
-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
Oct '13
Nov '13 Dec '13
Jan '14 Feb '14
m/m (%)
+3.6
-5.8
+17.3
-21.3
-0.6
y/y (%)
+3.2
+3.8
+5.8
+4.8
+7.0
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
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
0
100
-20
80
-40
60 M ar 14
Q2 2013
-4.9
442,167
+21.5
Dec 1 3
Q1 2013
-1.5
23.7
393,725
-2.9
Sep 13
Coal mining
Q4 2012
+56.4
+1.9%
+14.3
Jun 1 3
Sector
GDP in PLN bn current prices
16.5 687.5
+2.7%
+9.4
M ar 1 3
A: avg monthly wages in PLN B: indexed avg wages, 100=2005
146.1
+0.8
Q3 2013
-0.8
Source: The Central Statistical Office of Poland, GUS
Gross Wages
Growth y/y unadjusted
131.7
(%)
18.4
Q4 2013
m/m (%)
Dec 1 2
y/y (%)
-0.1
Period
Aug '13 Sep '13 Oct '13 Nov '13 Dec '13 Jan '14 Feb '14
S ep 12
Year
-0.2
Month
J un 1 2
y/y (%)
Aug'13 Sep'13 Oct'13 Nov'13 Dec'13 Jan'14 Feb'14
M ar 1 2
m/m (%)
Aug '13 Sep '13 Oct '13 Nov '13 Dec '13 Jan '14 Feb '14
Construction Output
Construction Prices Price s Month
Month
Dec 11
y/y (%)
Aug'13 Sep'13 Oct'13 Nov'13 Dec'13 Jan'14 Feb'14
Sep 11
m/m (%)
J un 11
Month
2014
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
2013
*2014
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%
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
55.82 ↓
100 SEK
46.83 ↓
10,000 JPY
USD EUR
350
300
50.59 ↓ 296.88 ↓ 15.22 ↓
100 CZK 10,000 HUF
400
12 Apr 13
100 NOK
WIG-20 stocks Price Change Change in alphabetical 28 Mar 21 Mar end of order '14 '14 '13
WIG Total index
134.70 ↑
Money Supply
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
EUR (up to 1m EUR) 1.9%
1.8%
2.0%
1.9%
1.9%
2.0%
EUR (over 1m EUR) 3.5%
3.2%
2.5%
3.0%
2.9%
3.6%
Overnight
1 week
1 month
3 months
6 months
2.60%%
2.60%
2.61%
2.71%
2.74%
in PLN m
Nov '13
Dec '13
Jan '14
Feb '14
Monetary base
153,672
164,010
161,544
158,330
2.59%
- Currency outside banks
538,837 113,718
555,851
546,487
114,401
113,455
548,033 114,680
M2
934,713
960,361 947,443
954,284
- Time deposits
412,469
421,160
423,296
M3
953,446
978,924
418,259 962,416
968,442
- Net foreign assets 148,702 143,430 140,617 135,759 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
NBP deposit
Rediscount
4.00%
1.00%
2.75%
+3%
+8%
51,831. 831.67
46.5
-2%
+1%
Change 1 week
+3% ↑
124.65
0%
-1%
Change end of '13
+1% ↑
↑ BZ WBK
413.7
+3%
+7%
↓ Eurocash
38.84
-2%
-19%
WIG-20 blue chip index
36.8
+1%
+4%
→ JSW
43.99
0%
-17%
2,433 2,433. 433.74
→ Kernel
28.75
0%
-24%
↑ KGHM
107
+7%
-9%
8947
+5%
-1%
↓ Asseco Pol. → Bogdanka
↑ Grupa Lotos
Central Bank (NBP) Base Rates Lombard
87.74
↑ Alior Bank
Warsaw Inter Bank Offered Rate (WIBOR) as of 28 Mar 2014
Reference
M1
Aug '13 Sep '13 Oct '13 Nov '13 Dec '13 Jan '14
↑ LPP
Change 1 week
+3% ↑
Change end of '13
+1% ↑
537
+4%
+7%
WIG Total closing index
↓ Orange Pol.
10.30
-3%
+5%
last three months
Credit
↑ Pekao
192.5
+4%
+7%
55,000
The financial sector's net lending in PLN bn,
↑ PGE
19.2
+4%
+18%
54,000
4.3
+2%
-17%
42.09
+4%
+3%
41.89
+2%
+6%
50,000 49,000
↑ mBank
loan stock at the end of period Type of loan
↑ PGNiG
Nov '13
Dec '13
Jan '14
Feb '14
Loans to customers
906,298
903,890
914,189
914,068
↑ PKO BP
- to private companies
262,396
259,061
263,063
263,941
↑ PZU
424
+4%
-6%
563,157
562,381
567,984
567,257
↓ Synthos
4.89
-3%
-11%
1,627,119 1,601,293
1,628,197
1,616,891
→ Tauron
5.23
0%
+20%
- to households Total assets of banks
↑ PKN Orlen
Source: Central Bank NBP
53,000 52,000 51,000
28 Mar 14
341.94 ↓
as of 28 March 2014
6 Mar 14
504.66 ↑
100 CHF
28 Mar 14
100 GBP
Warsaw Stock Exchange, rates in PLN
on loans to non-financial corporations PLN (up to 1 year)
21 Jan 14
416.77 ↓
7 Nov 13
100 EUR
Key indices
Term / currency
450
30 Aug 13
303.74↓
24 Jun 13
100 USD
Stock Exchange
Average weighted annual interest rates
12 Feb 14
as of 28 March 2014
Interest rates
21 Jan 14
100 USD/EUR against PLN
Central Bank average rates
20 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 Jan 2014
y/y (%)
share (%)
2013
EXPORTS in PLNbn
IMPORTS in PLN bn share (%)
Jan 2014
y/y (%)
share (%)
2013
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%
5,692
+4.4
10.6
69,304
10.9
4,066
+3.5
7.6
47,906
7.4
1 Germany
599
-8.0
1.1
8,624
1.4
275
-17.9
0.5
4,150
0.6
2 UK
3,488
6.5%
41,503
6.5%
2 Russia
7,852 14.8%
Crude materials except fuels
1,547
+4.9
2.9
15,744
2.5
1,908
+0.9
3.6
21,585
3.3
3 Czech Rep.
3,394
6.3%
39,421
6.2%
3 China
5,497 10.3% 60,914 9.4%
Fuels etc
2,713
+5.4
5.0
30,013
4.7
7,191 +17.7
13.5
75,539
11.7
4 France
3,313
6.1%
35,745
5.6%
4 Italy
2,357
4.4% 33,703 5.2%
176
+56.6
0.3
1,864
0.2
187
-15.3
0.4
2,646
0.4
5 Russia
2,140 4.0% 34,058
5.3%
5 Netherlands
1,856
3.5% 25,005 3.9%
4,833
+7.8
9.0
59,103
9.3
7,585
+0.3
14.3
92,917
14.3
6 Italy
2,391
4.4% 27,450
4.3%
6 France
1,971
3.7% 24,533 3.8%
10,662
+2.5
19.8
129,915
20.3
9,221
+3.7
17.3
112,392
17.3
7 Netherlands
2,269
4.2%
25,292 4.0%
7 Czech Rep.
1,869
3.5% 23,778 3.7%
20,448
+14.8
37.9
239,434
37.5
16.711
+3.0
31.4
216,608
33.4
8 Ukraine
n/a
2.8%
18,037
2.8%
8 USA
1,209
2.3%
17,350
7,198
+8.1
13.3
82,816
13.0
4,685
+1.1
8.8
58,210
9.0
9 Sweden
1,723
3.2%
17,498
2.7%
9 UK
1,295
2.4%
16,861 2.6%
94
n/a
0.1
1,782
0.2
18,091
n/a
n/a
16,242
2.6
10 Slovakia
1,293
2.4%
16,795
2.6% 10 Belgium
1,309
2.5%
14,913 2.3%
100
53,226
0.0
100
648,195
100
Food and live animals Beverages and tobacco
Animal and vegetable oils Chemical products Manufactured goods by material Machinery, transport equip. Other manufactured articles Not classified TOTAL
53,962
+8.4
100
638,599
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 # 028 / 31st March 2014 / page 16
Industrial Industrial Properties
Regional Data Industrial output Jan-Feb 2014 *
Poland's regions (main cities indicated
Indus-
in brackets)
Monthly wages (PLN) Jan-Feb 2014**
Unemployment Feb 2014
Constru- Indus- Constru-in '000
%
New dwellings Jan-Feb 2014
Existing stock, sq.m
by region, Q4 2013
Num- Index *
Warsaw central
563,000
17,000
22.3%
3.6–5.1
12.5%
2.1–2.8
try
ction
try
ction
100.8
103.3
4,061
3,663
160.5
13.7
2,682
99.3
Central Poland
1,021,000
80,000
15.2%
2.1–3.3
Kujawsko-Pomorskie (Bydgoszcz) 108.6
112.9
3,324
3,132
157.0
18.8
1,116
86.7
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)
ber
VaEffective Under const cancy rents EUR/ ruction, sq.m ratio sq.m/mth
Warsaw suburbs 2,063,000
106.8
80.0
3,801
2,996
140.1
15.0
729
73.6
Upper Silesia
1,431,000
37,000
9.3%
118.5
105.2
3,397
2,964
62.6
16.3
596
86.0
Wrocław
780,000
259,000
11.7%
2.6–3.1
102.6
110.1
3,686
3,110
158.9
14.6
1,111
108.5
Tri-city
184,000
46,000
9.2%
2.8–3.3
Kraków
141,000
0
4.0%
3.3-4.0
95.6
97.0
3,659
3,286
172.4
12.1
2,570
77.7
107.2
100.0
4,457
4,793
295.4
11.4
5,028
107.3
Opolskie (Opole)
105.5
145.9
3,481
3,449
54.3
14.9
332
100.6
Podkarpackie (Rzeszów)
104.8
120.3
3,347
2,991
160.3
16.9
1,105
117.3
Podlaskie (Białystok)
106.1
118.8
3,207
3,666
73.4
15.5
564
120.5
Pomorskie (Gdańsk-Gdynia)
105.9
101.2
3,866
3,415
120.0
13.9
1,312
66.5
Śląskie (Katowice)
100.5
108.9
4,708
3,460
218.3
11.7
1,681
93.0
Warsaw
115.1
62.6
3,325
3,150
94.3
17.1
524
133.7
Kraków
Warmińsko-Mazurskie (Olsztyn)
105.6
129.7
3,295
2,950
120.4
22.3
956
116.9
Katowice
5,898
Wielkopolskie (Poznań)
110.3
93.2
3,685
3,593
152.6
10.0
2,437
103.6
Zachodniopomorskie (Szczecin)
113.0
87.0
3,418
3,332
115.5
18.5
965
82.8
Łódź
National average
104.7
101.1
3,930
13.9 23,708
95.1
Wrocław Gdańsk
Małopolskie (Kraków) Mazowieckie (Warszawa)
Świętokrzyskie (Kielce)
3,967 2,255.9
Commercial Properties New apartments* Q3 '13
City
PLN/sq.m
Poznań
*) 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