Warsaw Business Journal August-September #79

POLAND'S ASCENT TOWARDS SILICON VALLEY STATUSSEPARATING HYPE FROM REALITY

8 In Review News

14 Opinion

War never changes. Neither Does Restoration by Sergiusz Prokurat

16 Exclusive

Interview: United States

Ambassador Mark Brzezinski by Ewa Boneicka

18

Cover Story

Interview: Béranger Dumont, General Manager at BPI Real Estate Poland by Morten Lindholm

27 Lokale Immobilia

News

The office rental market revolution By Anna Rzhevkina

Interview: Soren Rodian Olsen by Morten Lindholm

No room for micro-apartments? by Sean Reynaud

CEEQA's Ukraine Live Connect project Interview by Morten Lindholm

42 Investing in Poland

News

Is Poland the next Silicon Valley or tech hub? by Sean Reynaud

48 Features

Food of the future by Sean Reynaud

Luxury market by Sean Reynaud

57 Tech News

Interview: Nico Schoenerberger by Beata Socha

62 Life + Style

PERSONAL INSIGHTS FROM 2023 ABOUT BUSINESS IN POLAND

Poland's Ongoing Attraction for Global Business

Poland remains a magnet for foreign enterprises and investors. In the first half of 2023, I assisted over ten international companies in establishing operations in Poland, guiding them through their business setup, marketing strategies, talent acquisition, and proper online positioning. Their reasons for choosing Poland include a rich talent pool, competitive costs, and untapped consumer potential. Noteworthy nations represented among these companies are Lithuania, Finland, China, Dubai, Brazil, Georgia, Israel, Denmark, Germany, Norway, and the USA.

The Profound Evolution of AI

This year marks a pivotal moment in the widespread acceptance of artificial intelligence(AI). While AI has existed for some time, the emergence of applications like ChatGPT has showcased its transformative potential and disrupted established norms. While not unique to Poland, this development bodes well for countries fostering young, driven entrepreneurs. Poland is wellpositioned in this regard. Top local companies like Zabka, Allegro, and CD Projekt are already driving significant developments in this area. However, we have only scratched the surface of AI's potential.

Ukraine's Impact on Poland's Landscape

The complex influence of Ukraine cannot be disregarded as a factor shaping Poland's past, present, and future—both positively and negatively. We have seen a stabilization in the influx of refugees, along with the repatriation of many to Ukraine or their resettlement abroad. Since the onset of the war, Poland has successfully integrated over half a million individuals into its workforce while providing educational support for children and families. Conversations about Ukraine's reconstruction pervade governmental, corporate, and association discussions, positioning Poland as a vital leader in aiding Ukrainian investments and recovery. While the timeline remains uncertain, the shadow of the ongoing conflict underscores the need for vigilance in navigating its impact on various aspects of life.

Navigating Election Year Dynamics in Poland

Poland is preparing for the parliamentary election scheduled on October 15th. While Warsaw Business Journal maintains a nonpartisan stance as a business-focused medium, completely avoiding the political landscape is challenging. The media landscape is becoming polarized, with distinct factions aligning their narratives on the state of Poland's economy and citizens' quality of life. Noticeable discrepancies are emerging. Data from the first half of 2023 indicates that Polish GDP has slipped into a recession. Yet another news segment focuses on the projected 1% growth for the year. The contrast underlines what the forthcoming months of contrasting perspectives will be.

Several indicators paint an optimistic outlook as we zoom out to gain a broader perspective amidst the noise. July saw Warsaw's airport breaking passenger records, a testament to thriving connectivity. In stark contrast, local hotels report dwindling occupancy rates. The real estate sector contributes to the complexity, with apartment sales declining in the first half of the year. However, primary markets are now witnessing rising prices due to inflation and demand outpacing supply.

Amid this dynamic flux, Warsaw Business Journal remains committed to delivering nuanced insights; you can sign up for our daily news coverage on Polandam.pl. Our focus remains steadfast on providing valuable businesscentric perspectives, as we have done for nearly 30 years, particularly during this pivotal election year in Poland.

In this issue, we have gathered a selection of insights, investigations, and interviews with movers and shakers in Poland.

Enjoy the read!

Béranger Dumont

Béranger Dumont has been General Manager of BPI Real Estate Poland since 2020 and sits on the Belgian Chamber of Commerce Board. With a background as an Ernst & Young auditor, he holds an MBA in finance and real estate from Solvay Brussels School and Louvain School of Management.

Interview on page 18

GUESTS

Ambassador Mark Brzezinski

Ambassador Brzezinski, former U.S. Ambassador to Sweden, led transformative U.S.-European trade initiatives and secured major Swedish investments, including Volvo's $1 billion South Carolina factory. He orchestrated the historic U.S. Presidential visit to Stockholm, uniting Nordic leaders on energy and innovation. As the inaugural Executive Director of the White House's Arctic Executive Steering Committee, he tackled Arctic strategy. Previously, he excelled in law and finance, championing sustainability. Council on Foreign Relations and Trilateral Commission member. Academic achievements from Dartmouth, UVA, and Oxford.

Interview on page 16

Soren Rodian Olsen

Soren Rodian Olsen has 21 years of senior management and real estate experience in Poland. He heads Nrep’s logistics branch in Poland, Logicenters, and set up Nrep’s offices in Warsaw in 2021. Prior to joining Nrep, Soren was a Partner and Head of Capital Markets at Cushman & Wakefield. In previous roles he was Head of Aberdeen Asset Management in Poland and between 2002 and 2008 he worked for Bank BPH (Bank Austria Creditanstalt) and mBank (Commerzbank) as Head of Asset Management, Real Estate, Supply Chain and Business Continuity. He holds an MBA from the University of Westminster, is a member of RICS and is the Chair of ULI Poland.

Interview on page 34

Morten Lindholm

Editor-in-Chief/Publisher mlindholm@valkea.com

Kevin Demaria Art Director kdemaria@valkea.com

Jessica Sirotin Editor

Contributors

Nikodem Chinowski Sergiusz Prokurat

Sean Reynaud

Anna Rzhevkina Beata Socha

Sales Izabela Kaysiewicz ikaysiewicz@valkea.com

Agnieszka Mańkowska amankowska@valkea.com

Katarzyna Pomierna kpomierna@valkea.com

Print & Distribution

Krzysztof Wiliński dystrybucja@valkea.com

Event Director, Valkea Events

Magda Gajewska mgajewska@valkea.com

Contact:

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All photographs used in this issue are courtesy of partners and companies unless specified otherwise.

Copyright © 2023 by Valkea Media SA

Published by ul. Jerzego Ficowskiego

IN REVIEW

DEMAND FOR AC RISES WITH TEMPERATURES

Before the onset of Poland's scorching summer heatwaves, interest in renting apartments equipped with air conditioning surged by 91% in May, compared to the same period a year ago. There was also a 38% increase in the demand for purchasing air-conditioned apartments, according to Otodom. There are, however, twice as many apartments for rent with AC rather than apartments for sale. (biznes.interia.pl)

AGRICULTURE Poland second in blueberry production in the EU

Poland is the second-largest producer of blueberries in the European Union after Spain and the sixth in the world, the Polish Economic Institute reported. From 2013 to 2022, Poland delivered almost 100,000 tons of blueberries to foreign markets.

In 2022 alone, exports from Poland reached €107.3 million, which, according to Eurostat, accounted for 16.5% of the total value of EU exports. The largest recipients include Germany, Great Britain, the Netherlands, Sweden, and Latvia.

ENERGY Poland to create insurance instrument for companies investing in Ukraine

Polish companies waiting for over a year will soon have access to a new insurance instrument for investments in Ukraine. Minister Jadwiga Emilewicz announced that the insurance, backed by the Polish government, will be available to Polish firms and foreign companies, including Ukrainian entrepreneurs.

State export credit insurer KUKE will provide this unique instrument and aims to support bilateral economic cooperation. In addition, the Polish government is preparing a new investment fund, financed through PFR (Polish Development Fund) bonds, to further assist Polish investments in Ukraine.

ENVIRONMENT Poland lost €16 bln in 40 years due to climate change

Over the last 40 years, Poland lost €16 billion, or about PLN 70 billion, due to climate change, a report by the EY consulting showed. In 2021 alone, the total value of damages paid due to natural disasters amounted to PLN 994 million, mostly to cover damage caused by torrential rains, flooding, storms, hail, and hurricanes.

The report also notes that in the worst-case scenario, Poland’s GDP may decrease by up to 10% due to destructive weather phenomena by 2050. In an optimistic scenario, in which the goals set out in the Paris Agreement would be achieved, the relative decline in GDP is expected to amount to 3%.

RETAIL Food retail market will grow at 6% a year in 2023-2028

The grocery retail market in Poland is expected to grow at an average annual rate of 6% from 2023 to 2028, driven by factors such as inflation, increased demand from Ukrainian immigrants, and changing consumer behaviors. In 2022, the market saw a record double-digit growth, reaching a value of approximately PLN 368 billion.

Discount stores are the leading channel in the grocery retail market, accounting for over one-third of sales. These stores have been expanding their offerings, including fresh and convenience products, premium private label brands, and selected non-food items. Additionally, online sales are projected to grow at a higher rate, contributing to the market's overall growth.

HEALTH Private healthcare market expected to grow 7% annually in 2023-2027

The private healthcare market in Poland is projected to grow at a 7% annual rate from 2023 to 2028, with health insurance and medical subscriptions rising by 9% and 8%, respectively, according to PMR research. In 2022, the market’s value exceeded PLN 70 billion with double-digit growth, driven by increased demand for medical services amid the pandemic.

MILITARY Poland signs deal with Sweden for Saab 340 aircraft

On July 25th, the Armament Inspectorate signed a contract to supply Swedish Saab 340 AEW early warning aircraft. The two Saab 340 AEW aircraft will provide the Polish Armed Forces with early detection and warning capabilities for airborne threats. Polish Minister of National Defense, Mariusz Błaszczak, stated that this acquisition would enhance the eastern flank of NATO and make Poland’s airspace safer.

POLITICS Let the Games Begin: Only 2 Months Left Until the Next Election

Politicians are closing ranks. Their time is coming to try and persuade Polish voters about the positive impact only they can bring in the upcoming autumn parliamentary elections.

PROGRAMS OR PR?

The elections will also determine the parameters within which the forthcoming local elections will unfold, taking place four months after the parliamentary battles in autumn. The ruling party holds a significant advantage in this arena. While campaign funding for PiS is constrained by regulations, these restrictions do not apply to the government. The government utilizes the Family 500+ Program to set up information points that morph into campaign events, employs state television for propagandistic purposes, and exerts influence over major state-owned enterprises to shape advertising and content, all in an effort to steer voters towards the desired choice.

WHAT’S TO BE DISCUSSED?

The current political struggle revolves economic and social issues. Firstly, restoring the splendor of the Family 500+ Program.

The current social assistance of PLN 500 monthly, has eroded in value to about PLN 350 due to recent high inflation. Ahead of the elections in July 2023, the value of monthly social support paid by the Family 500+ Program was indexed from PLN 500 to PLN 800 (implementation to take place only from 2024).

Secondly, significant political discussions are ongoing about domestic living conditions. In mid-2023, a discussion about housing needs swept through the Polish media and reached the dangerous conclusion that housing is a fundamental right rather than a commodity. The result was the introduction of the First Apartment program, popularly known as the "safe loan" program, in July. This initiative offers a secure 2% loan, with the government subsidizing the disparity between the prevailing market interest rate and the fixed 2% rate for those under 45 years old and without prior property ownership. Moreover, the program circumvents the jurisdiction of both the Monetary Policy Council

(MPC) and the decisions made by the National Bank of Poland (NBP), both of which determine interest rates, alongside the credit holidays initiated during the summer of 2022.

For several months now, all opposition parties have been grappling with the challenge of devising strategies against a rival whose political strategies depend upon the progressive increase of state influence in the economy and social assistance to citizens. The opposition has responded with criticism of existing social programs while also advocating their extension with such inducements as a safer 0% credit option, and a rent subsidy of PLN 600, among others. From the point of view of the average voter, this strategy may seem rather contrived. But free social benefits guarantee votes, even if they cause debt and inflation.

IS IT ALL RIGGED?

Yet the numerous scandals and instances of misconduct involving individuals connected to the current authorities are not forgotten. Neither are the disruptions during the Covid pandemic and the noticeable inflation. In order to mobilise people to vote for PiS, the ruling party's marketers have conceived the notion of conducting a referendum with four questions to coincide with the elections. These questions are clearly designed to exploit voters’ emotions, evoking the fear that often accompanies issues such as the privatization of enterprises or immigration.

The election date, October 15, coincides with the global observance of Pope John Paul II Day, which is likely to intensify the activity within churches. Voters at church services are likely to receive information candidates and take these conclusions into the nearby polling station, conveniently situated next door. At the moment, everything indicates that the majority of those outraged by scandals, affected by inflation, and tired of the poor situation in the country will say, come Sunday, that things are not so bad after all.

More flops, fewer ventures

Due west 16.4%

y/y increase in Polish exports to Germany in 2022, reaching €96.4 billion.

(GUS)

21.3%

more companies went bankrupt in Q2 2023 than in the same quarter of 2022 (97).

-5.5%

fewer companies were founded in the same period (88,549).

(GUS)

Job market stabilizes

-0.8%

y/y drop in new recruitment processes launched in July, but a 2% increase m/m.

(Grant Thornton)

Sky high

1.94 million

the number of passengers traveling via Warsaw Chopin Airport in July – a new record. Since the beginning of 2023, the airport has handled over 10 million passengers.

13.8%

y/y increase in average monthly salary in Q2 (to PLN 7,005.76), but a decrease of 1.7% q/q.

(GUS)

53% of employers struggling to hire skilled industrial workers (Grafton Recruitment)

Growth forecast improves 0.7%

expected GDP growth in 2023, 2.2% in 2024

(Polish Economic Institute)

PMI still low 43.5 points

Poland’s PMI in July, a drop from 45.1 points the previous month.

(S&P Global)

Anyone interested in conducting business in the US has heard of companies based in the state of Delaware. This state's prominent position as investors' preferred choice for incorporation is entirely justified. Thanks to its business-friendly regulations and case law, Delaware, despite being the second smallest US state, is home to some 1.5 million companies from around the world. This roster includes 68% of Fortune 500 companies, among them Amazon, Facebook, Uber, Tesla, UPS and Nike, among others.

A Delaware-based company can do business in other states too by obtaining a foreign qualification while still retaining the right to the application of Delaware law. Other advantages of incorporating in Delaware include:

- absence of sales, capital gains, inheritance and VAT taxes;

- privacy protection for individuals holding positions in the company.

An additional advantage is the so-called "Delaware loophole" which is used by businesses operating outside the State of Delaware to minimize their tax liabilities. The State of Delaware does not impose any tax on profits flowing from "intangible assets," i.e., such as trademarks or intellectual property rights. It is estimated that the "Delaware loophole" costs other states about $1.5 trillion in taxes they could collect from companies. However, the use of the "Delaware loophole" is not a circumvention of the law and its compatibility with the US tax system seems undeniable.

Instead of a tax on profits, Delaware imposes a franchise tax ranging from $170 to $180,000, depending on the

INCORPORATING IN DELAWARE AND ALTERNATIVES FOR FOREIGN INVESTORS

by Jarosław Kurpiejewski, Attorney-at-law, Senior Associate at Ilasz & Associates

company's assets. The state also charges a small registration fee on the annual return and an agency fee. More than 40% of the State of Delaware's total revenue comes from small franchise fees. There is no minimum capital required to open a business.

Other entrepreneur-friendly states include Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Where Delaware imposes a franchise tax, those states have no income tax and thus often no tax on dividends. However, the lack of income tax is offset by exceptions, other taxes or lack of exemptions offered by other states. For example, Washington State imposes a 7% income tax on capital gains, targeting a specific segment of high-earning individuals with incomes exceeding $250,000. This tax pertains to gains realized on investments, including interest, dividends, or profits from the sale of stocks. Capital gains arise from the sale of capital assets, excluding real estate.

The state of Delaware is the undisputed leader among entrepreneurs. However, although it boasts many apparent benefits, the decision of where to establish a company should be guided by a comprehensive analysis of factors such as the nature of the business, and both local as well as federal tax implications. This is especially crucial for foreign investors who aren't obligated by tax considerations tied to their residence in a specific US state.

For more information, visit: www.ilaszlawfirm.com

OPINION

WAR NEVER CHANGES. NEITHER DOES RESTORATION

BY SERGIUSZ PROKURAT

even before the outbreak of the war, Ukrainians constituted the largest group of economic migrants in Poland. When the Russian aggression began, almost 8.5 million Ukrainian citizens came to Poland. Now it is estimated that from 1.5 million to 2.3 million of them permanently reside in Poland, including about 950,000 classified as war refugees. Nearly 500,000 are of working age, and most are women and children.

UKRAINIANS IN POLAND

Since January 2023, upon arrival in Poland, Ukrainians can easily obtain a Polish PESEL number. Having this number makes it easier to obtain a residence permit if the refugee finds a job. An estimated 50-55% of refugees from Ukraine are now employed in Poland. According to data from the latest edition of the “Barometer of the Polish Labor Market”, individuals from Ukraine are already employed in almost every second Polish company, typically in lowerlevel positions. This year, taxes and contributions collected from their salaries are projected to contribute approximately PLN 5.5 billion to the budget.

At the same time, on the expenditures side, Ukrainians receive various benefits: PLN 500 per month from the Family 500+ program, Family Care Capital (RKO), PLN 300 for school starter kits, family allowances (totalling PLN 2 billion) and education-related expenses (totalling PLN 2.9 billion), all amounting to a total of PLN 4.9 billion. They are satisfied and reportedly believe that their standard of living has improved significantly. This is hardly surprising, because the

minimum wage in Poland is PLN 3,600 gross, and in Ukraine it is UAH 6,500, approximately PLN 846.

Ukrainians value the security and peace found in Poland, which is understandable, considering many of them fled the conflicts in 2022 and 2014. They also clearly appreciate the Polish willingness to help and their kindness in high regard, sentiments that persist even a year after the outbreak of the war. Furthermore, they enjoy the availability of employment and a well-developed infrastructure. However, the question arises: Do they plan to return to their home country when the war is over?

This is a fundamental problem that is reluctantly raised during any discussion on the reconstruction of Ukraine. The acceptance and assimilation of Ukrainians is in the interest of every country that receives immigrants, especially since it was mainly women who left during the war. Yet, I believe that 3/4 of those who left will not return to Ukraine after the war.

Simply type the word “divorce” into Google (‘розлучення’) and it becomes evident that its usage has been on the rise in various locations worldwide since 2022, including Poland, the Czech Republic, France, Germany and beyond. In addition, many demobilised soldiers are expected to leave Ukraine after the war to reunite with their families abroad. For the moment, due to the ongoing conflict, Ukraine has imposed restrictions on men from leaving the country.

From a demographic perspective, Ukraine has already experienced substantial losses, even if it

Russia’s aggression against Ukraine caused numerous losses both among the population and the economy.  The country is facing a long and costly period of reconstruction, during which it will certainly need support. Ukrainians who are in Poland can help.

regains all the lost territories and Russia suffers defeat. Ultimately, the conflict between Russia and Ukraine has no winners, only losers.

THE FUTURE OF UKRAINE

Ambitious plans to rebuild Ukraine are already under consideration by politicians. But discussions about reconstruction projects have taken precedence over those concerning human capital, a resource that cannot be so easily replenished. Tenders are set to be announced for the reconstruction, as the money will come from EU and US funds. The World Bank’s estimation places reconstruction costs at that $411 billion. This amount, of course, increases with each Russian attack.

For comparison, Ukraine’s GDP in 2019, before the outbreak of the COVID-19 pandemic, had reached as much as $153.9 billion. This means that the cumulative value of the country’s goods and services is decidedly lower than the funds needed to rebuild the country following the extensive devastation caused by the Russian invasion. The impact of this devastation is substantial; in 2022 alone, the economy shrank by 30%, leading to an unemployment rate of 35%. More than three-quarters of companies have stopped or reduced production. Suffice it to say that three million people live in homes destroyed or damaged by the Russian invasion. The scale of the devastation caused by the Russian invasion of Ukraine is truly overwhelming. The Russians destroyed or seriously damaged over 150,000 housing estates in Ukraine, thousands of educational facilities, over eight hundred healthcare facilities and hundreds of bridges. This catastrophe is a dire consequence of Russia’s 19th-century ambitions.

The reconstruction of Ukraine will undoubtedly take place once the conflict ends. But even as the war continues, discus-

YAHIDNE, UKRAINE - JULY 8: Volunteers from the organization "Repair Together" are clearing the rubble of a war-damaged local House of Culture, cleaning and stacking bricks for reuse.

sions regarding the implementation of projects in Ukraine are underway. The funds required for this process will primarily come from Western countries such as the United States, Germany, Italy and France. Their vested interest transcends any simple consideration of profit and loss. Recently, the G7 countries established a donor platform to coordinate ongoing and long-term support to Ukraine and its post-war recovery.

Ukraine can get loans from the World Bank (£240 million), and is poised to receive potential EU funding of up to €50 billion over four years in the form of both grants and loans. Additionally, US assistance to Ukraine totalling $1.3 billion will be provided for the modernisation of Ukraine’s energy system and critical infrastructure.

The recovery plan is divided into three main pillars. The first pillar involves the rapid reconstruction of essential facilities and infrastructure for daily living. The second pillar addresses the urgent reconstruction of hospitals, schools and construction of temporary residential buildings. The third pillar consists of a long-term transformation plan for the country.

IS REBUILDING IS POSSIBLE?

The “Reconstruction of Ukraine” program has been initiated in Poland, spearheaded by the Polish Investment and Trade Agency (PAIH)., and three thousand Polish companies have already applied. The competition for contracts related to Ukraine’s reconstruction will certainly be fierce, and extend beyond the borders of Poland alone. Of course, the influence and power of various countries will play a pivotal role in the outcome.

For Polish companies interested in securing contracts in Ukrainian, several strategies should be considered. Perhaps employ Ukrainians, and look for partners among Ukrainian companies? This will facilitate communication and understanding of these difficult conditions of the very wild East.

Even before the war, Ukraine faced issues such as nepotism, corruption, and a range of macroeconomic challenges, coupled with geopolitical risks. After the war, if it will be necessary to clear the ports of mines, temporarily restricting water transport for business activities. The reconstruction of roads to facilitate land transport will be necessary and urgent. Nevertheless, the war continues, and Ukraine’s population is dwindling every day.

Insights on Poland: An Interview with the United States Ambassador

United States Ambassador Mark Brzezinski shares insights into Poland’s role on the global stage and its strong partnerships with international businesses.

WBJ: In Poland, parliamentary elections are coming soon and the rivalry between PiS and the democratic opposition is very tense. What do you think?

Mark Brzezinski: Poland’s political leadership is a matter for the people of Poland and their representatives to decide through their constitutional processes. Opinion polls show constant shifts, so I doubt anyone could predict the outcome. It would be inappropriate for me even to try.

My embassy colleagues and I are in communication with all parties across the political spectrum. We expect to have good relations with whichever government the Polish people choose in the elections. Because that is our job as representatives of the United States, but more importantly, we share common interests and values with Poland’s political leaders, both in the government and the opposition. I expect continuity on key issues such as support for Ukraine.

How does the economic situation of Poland affect the activities of foreign ambassadors in our country?

Over the last year and several months, the United States and Poland have strengthened our economic cooperation. I am proud that bilateral trade between the United States and Poland has increased exponentially over the last 30 years, and in 2021 trade was the highest in our history. American companies love working in Poland and want to expand our mutual prosperity. The most significant example is Poland's selection of Westinghouse to construct the first nuclear power plant here in Poland. That is more than just a business agreement. That is the start of a hundred-year strategic collaboration to address Poland's energy security and environmental commitment. Economic security and energy security are national security.

The Polish economy continues to attract American investment. I am constantly hearing from American CEOs saying, "We're coming to Poland because Poland is open for business. We understand it is next to a war zone, but Poland is open for business and a good place to invest. It is a good place to manufacture our products. It's a good place for engineering, tech innovation, and building regional hubs." I have programs at the American Embassy to which I invite specific CEOs. The CEO of Google, Sundar Pichai, the CEO of YouTube, Susan Wojcicki, the CEO of Boston Consulting Group, Hans-Paul Burkner, and the CEO of McDonald's, Chris Kempczinski, have all taken part.

In these meetings, they have shared that they are opening new McDonald's across Poland; YouTube has announced thousands of Polish white-collar tech jobs in Poland; Google has purchased the Warsaw hub, a major building complex here, for $1 billion last year. These are important signals that the Polish economy will continue to advance and thrive.

Our bilateral relationship is nurtured and cared for by the American business community investing in Poland and our shared future. This year, we have

seen expansion and growth, allowing for more opportunities for both countries.

When you finish the position of Ambassador to Poland, will you continue to work as a diplomat or work at a university?

Although I have been blessed to have been selected twice to represent my country abroad, I am a lawyer, not a career diplomat. I spent a decade as a partner in a law firm; later, I was Managing Director at a capital management company; most recently, I founded my own company – but I have put that on hold while I serve as Ambassador.

As U.S. Ambassador to Poland how do you see your role in promoting equality between men and women in all spheres of life?

I am absolutely committed to gender equality. Let me tell you why. The Brzezinski house has been filled with strong women throughout my life.

Let me say a bit about my mother. She was an artist, and her work was every bit as important as my father’s. My parents practiced true gender equality. When the kids came home from school, and my mom was working with her chainsaw on a huge sculpture, we did not interrupt her until she finished because her work was just as important as my dad’s. And I so respect now, as an adult – how my dad supported her.

I am also proud of my sister, Mika Brzezinski. She has stood up to political intimidation and established herself as a top journalist in the United States.

Professionally as well as personally, I have worked with many strong women.

You know, I served as U.S. Ambassador to Sweden. One of the things that I loved about Sweden when I was Ambassador was that well over half of the ministers in the Swedish government were women at that time. Magdalena Andersson was Minister of Finance; she’s Prime Minister now. Ann Linde, Foreign Minister now, was in the Ministry of Justice. These are the people leading Sweden into NATO now – whom I worked with and respected when I was Ambassador there.

If you want to talk about the U.S. government, look at some of the powerful women that have come to Poland while I have been Ambassador: Kamala Harris, the Vice President; Nancy Pelosi, when she was Speaker of the House; Janet Yellen, the Secretary of the Treasury; General Jacqueline Van Ovost, Combatant Commander of the Transportation Command; Samantha Power, the head of the United States Agency for International Develop-

ment (USAID). And that is only a few among many. There is still a lot of work to be done on gender equality, but as the father of a teenage girl, it is incredibly important to me. I am firmly committed to gender equality, and my team at the embassy has originated and been engaged in many programs to advance women in business, science, and other fields.

What are your thoughts about World Refugee Day and the position of Ukrainians in Poland today?  On June 20, we celebrated World Refugee Day to recognize the enormous contributions of refugees to the societies where they find new homes. This day was an appropriate moment to reflect on the incredible support Poland has provided not only to Ukraine but also to Ukrainians who found refuge in Poland after they were forced to flee their homeland.

Poland continues to rise to the occasion, particularly as it seeks to welcome Ukrainian women into the workforce, offering workplace flexibilities, training opportunities, and other tools to help refugees access jobs.

In many ways, American companies such as GE, Intel, Amazon, and others are leading the way, employing thousands of women from Ukraine, and launching programs to provide both Ukrainians and Poles with the opportunity to be trained or retrained to address the needs of the industries of the future. From digital technologies to advanced manufacturing, developing these important skills now is a key investment in the long-term success and prosperity of the entire region. The U.S. Embassy is also expanding the Academy of Women Entrepreneurs program in Poland to have a group just for Ukrainian women here in addition to the two for Polish women.

While these programs make it easier for Ukrainian women to find a job in Poland, they are also about investing in the future. Companies are smartly investing in their workforces – Poles and Ukrainians – so they can better collaborate today and be prepared to take on the challenges of tomorrow. But the knowledge gained will also prepare participants for the reconstruction of Ukraine's economy when it is safe for them to return home. This war will end, and when it does, Poles and Ukrainian will be at the forefront of the rebuilding process.

What an incredible opportunity for Ukraine, Poland, and the world to rebuild in a way that improves lives, strengthens security, and ensures we are all more prosperous, resilient, and united.

American companies love working in Poland and want to expand our mutual prosperity

BPI Real Estate Poland is on a mission to redefine the landscape of modern living in Poland. Béranger Dumont, General Manager at BPI Real Estate Poland speaks with WBJ about the company’s commitment to sustainability, innovation, and customer satisfaction.

Sustainability and Dynamic Growth: An interview with Béranger Dumont

, General Manager

at BPI Real Estate Poland

WBJ: You've been in the Polish market for nearly 15 years. Can you share some insights into the key changes you have observed in the real estate market during this period?

Since our debut on the Polish real estate market in 2009 with our first project – the multi-phase project Cztery Oceany in Gdańsk's Przymorze district, we have witnessed dynamic growth in the residential sector. Growing demand for housing in urban centers and on the outskirts has been driven by urbanization, demographic shifts, and improving economic conditions for Polish citizens.

Over the past decade, it's been hard not to notice changes in architectural trends and the

Chmielna DUO, Warsaw

application of new construction technologies, which are evident in more recent projects (such as Wola Libre and WolaRe in Warsaw, where we pioneered innovative ground remediation work preceding the construction of new buildings). The Polish real estate sector has matured significantly, and customers now increasingly emphasize energy efficiency, sustainable materials, and smart solutions in their homes. Quality of execution and real estate-related services have become increasingly important to clients, motivating us to elevate project standards and customer service.

Infrastructure development, including investments in new roads, communication networks, and the expansion of public transport, has increased the value of real estate in various regions of Poland. This, in turn, has prompted us to expand our operations to other Polish cities. We are already developing our second project in Wrocław since completing Bulwary Książęce –the Czysta 4 apartment building. In Poznań, we have completed the environmentally friendly Vilda Park development and are now building two new investmentsPanoramiqa and, with our partner Revive, the multi-stage Cavallia project on the site of the former military barracks.

With regard to changes in the Polish market, it is also worth mentioning that modern Polish cities are generating demand for sustainable mixed-use projects that combine residential, retail, and office functions. Examples of such an investment include the Cavallia project in Poznań or our latest project in Warsaw - Chmielna Duo, consisting of apartments and a green retail and service arcade connecting Chmielna Street with Złota Street.

Another change, particularly noticeable in recent years, has been the growth of the rental market. More and more people

are choosing to rent an apartment instead of buying one. At the same time, Poland has become an attractive market for foreign investors, influencing the development of the apartment rental market, especially in city centers. Accordingly, our company has adjusted its investment strategy to consider these changing dynamics. All of our projects currently under construction in top locations in Warsaw (Chmielna Duo), Wrocław (Czysta 4), Poznań (Panoramiqa and Cavallia), and Gdynia (Bernadovo) are responding to the visible increase in the purchase of residential properties for rent.

These insights reveal the dynamic nature of the Polish real estate market and highlight our ability to adapt to changing trends and customer expectations. We are proud of our contribution to the development of this sector and are ready to continue our mission of delivering highquality, inspiring development projects in key Polish cities.

The premium segment of the Polish residential market is especially strong at the moment. Could you provide examples or elaborate on your latest projects that confirm this trend?

Indeed, we consider the top segment of the residential market in Poland to be the most stable. Our portfolio of ongoing projects includes several premium developments that reflect our commitment to creating exclusive yet sustainable living spaces.

One example of these types of projects is the Chmielna Duo development currently under construction in Warsaw. The project is not only aligned with the aesthetics and functionality of the city, but it also provides future residents with multifaceted living comfort and the unique experience of living in a prestigious location in the heart of Poland's capital. The development will include 243 apartments, an underground parking garage, and six retail units in a shopping arcade. Residents will also enjoy a communal garden on the roof of one of the buildings.

Located in the center of Wrocław, the Czysta 4 apartment building is another excellent example of our commitment to developing the premium segment in Poland. The development offers high-quality apartments near the Renoma shopping center near the Old Town. The project provides 183 apartments as well as three commercial units. Each apartment will have

Czysta 4, Wrocław

COVER INTERVIEW

a smart home system, and most will have access to gardens, balconies, or terraces. The project's design also includes underground and above-ground parking spaces for cars and storage units, a bicycle room and a bicycle workshop. Additional perks for future residents include a public coworking space and a green terrace with a relaxation zone on the roof.

The Bernadovo eco-friendly development in Gdynia is an excellent example of our strategy to discover new attractive locations in key markets in Poland. This luxury development is being built on Gdynia's Bernadovo Hill, within the buffer zone of the Tricity Landscape Park, in accordance with BREEAM certification at the Very Good level. The estate has been designed following the principles of sustainable development, focusing on aesthetics and functionality to create an ideal living space for individu-

als seeking to combine urban comfort with proximity to nature.

As part of the Bernadovo project, 18 intimate, two-story buildings are being constructed, housing 108 apartments, featuring spacious gardens, balconies, or terraces. Over half of the plot's area is dedicated to a forest area with walkways and relaxation zones exclusively for the residents' use. The investment project incorporates numerous ecological solutions, such as green roofs, photovoltaic panels, and a specially designed system to utilize rainwater fully.

All of these projects reflect our commitment to creating beautiful spaces and comprehensive residential experiences that meet the high expectations of our customers in the premium segment.

Regarding your customer base, are Polish buyers and investors your main target audience, or do you also attract international buyers? Investments carried out by BPI

Real Estate Poland have garnered interest from a diverse group of buyers, both from Poland and abroad. The trend of market recovery observed in the last quarter of 2022 continues. Economic stabilization and the geopolitical situation have increased customers' confidence, including investors, in investing capital in the real estate sector. This, in turn, has contributed to increased interest in our investments.

Currently, more than 95% of our clients are individuals purchasing properties with cash. This demonstrates their confidence and trust in the quality and investment potential of our projects. However, recently we have noticed the impact of the introduction of subsidized loans on the real estate market, including on the sales of apartments in our projects. This is particularly noticeable in the case of our Panoramiqa project located in the

Panoramiqa, Poznań

Starołęka district of Poznań. This positive change heralds a promising sales growth trend for the third quarter of 2023.

Our offerings also attract investors and apartment buyers from abroad who recognize the potential and development prospects of the Polish real estate market. We are creating unique projects that deliver value for residents and the entire neighborhood.

With increasing emphasis on ESG regulations and sustainable building investments, how do you incorporate these aspects into your projects? Can you highlight some specific initiatives or features?

Principles of sustainable development lie at the heart of BPI Real Estate Poland's business strategy, and adhering to them forms the foundation of every development investment in our company's portfolio. We have already achieved significant milestones in this area.

We are undoubtedly helped by the fact that BPI Real Estate is part of the Belgian CFE Group. In the previous year, our company (operating in three European

markets: Belgium, Luxembourg, and Poland) utilized 17,795 tons of recycled materials in our investments, initiated the revitalization of premises spanning 25,535 square meters, and obtained permits for construction and constructed a total of 81,085 square meters of space without using fossil fuels.

BPI Real Estate Poland's residential investments are a testament to our company's commitment to realizing ambitious plans here in Poland.

In all our new projects, we implement eco-friendly solutions, such as green roofs, photovoltaic panels, ample bicycle parking spaces, and a rainwater harvesting irrigation system. Whenever possible, we preserve the majority of existing trees or plant new ones on our development sites. And also incorporate solutions such as nesting boxes for birds. Two of our recent investments, Chmielna Duo in Warsaw and Bernadovo in Gdynia, are being developed in accordance with BREEAM environmental certification at the Very Good level. In our Wrocław project, Czysta 4, we focus on recycling construction materials

and reusing a portion of materials salvaged from demolishing a former shopping gallery historically located at that address, including elements of the stone façade. Elements that couldn't find a new purpose were recycled during demolition. Meanwhile, in the Cavallia project in Poznań, we are revitalizing former military barracks buildings, seamlessly integrating them into a unique multifunctional project.

Cavallia is the largest investment in your portfolio so far, yet it's not being carried out solely by your company but also in partnership with Revive Poland. What sets this project apart?

Indeed, the project stands out due to its scale – it's currently the largest endeavor by BPI Real Estate Poland, but its complexity also marks it in terms of multifunctionality. After all, on a 5.5-hectare site, in the center of Poznań, there will be modern office buildings and over 8,000 sqm of service and relaxation zones. Of course, the residential buildings with 850 apartments will form the most significant part of the investment.

One of the critical aspects that makes Cavallia unique is the skillful integration of modern architectural buildings into the historical fabric of former cavalry barracks. Three historic buildings on Grunwaldzka Street will be revitalized and repurposed as well-designed office spaces. The stables and indoor riding arena will become cafes, restaurants, boutiques, and other public facilities.

The investment comprises a total of 10 residential buildings. The first phase is currently available for sale, including four buildings with 269 apartments. This phase also includes two intimate buildings on the side of Matejki Street with apartments of a higher standard.

Cavallia, Poznań

COVER INTERVIEW

The land on which Cavallia is being developed, acquired in collaboration with Revive Poland, was once home to the renowned 15th Poznań Uhlans Regiment's cavalry barracks. To incorporate the history of the area, we launched the historiawartapoznania.pl project, which included, among other things, a series of films with historical reconstructions. This online platform showcases the heritage of this area that is so important for the residents of Poznań while also highlighting the remarkable energy of the place.

As you plan for further expansion and continue to invest in land acquisitions, are there still promising opportunities available in the big urban cities of Poland? How do you identify and evaluate such opportunities?

Poland remains a key market for BPI Real Estate. We are currently developing five ambitious projects that will deliver a total of more than 900 modern residential units to the market. We see the current pace of sales as confirmation that our projects enjoy the trust of our customers. It is a clear signal of the attractiveness of our properties to people looking for high-quality housing in convenient locations. There are still promising investment opportunities in major Polish cities. We aim to identify these promising areas through careful market analysis, trend research, and insightful assessment of customer needs and preferences.

We have ambitious plans for the second half of the year. We are focusing our activities on acquiring new plots in the top end of the residential market

in Poland and have applied for a building permit for another premium development located in Mokotów, Warsaw. We aim to start construction work on this prestigious project in Q1 2024. We are confident that our continued expansion and consistent investments in land acquisition will further strengthen our presence in the Polish real estate market while providing customers with exceptional living spaces that satisfy their expectations and aspirations.

BPI Real Estate Poland's slogan "Urban Shapers" signified a strong vision for your company's projects. Can you elaborate on the actions or strategies you employ to bring this vision to life and positively impact the urban landscape? Our corporate motto is deeply rooted in the philosophy of BPI Real Estate Poland. As "Urban

Bernadovo, Gdynia

Shapers," we focus on actively shaping urban space. An essential element of this vision is the concept of the 15-minute city. Investments like Chmielna Duo in Warsaw and the Czysta 4 project in Wrocław align perfectly with these principles. Future residents can conveniently and swiftly commute to work, school, or shopping. Executing thoughtful and functional projects in city centers contributes to the density of the urban fabric, which also positively impacts the environment.

In the case of the Cavallia project in Poznań's Łazarz district, nearly all residents' daily needs can be fulfilled within the investment itself or via a 15-minute stroll. Similarly, the Bernadovo project in Gdynia and Panoramiqa in Poznań reflect our mission to create attractive living spaces through innovative, sustainable, high-quality development projects.

About:

BPI Real Estate Poland

BPI Real Estate Poland is a real estate development company owned by the Belgian CFE Group, founded in 1880, which operates in several areas, including real estate BPI Real Estate’s projects are executed in three European markets - Belgium, Luxembourg and Poland. They are distinguished by their innovation and attention to detail - in aspects related to urban planning, good architecture, and energy efficiency. BPI Real Estate Poland's mission is to implement the principles of sustainable develop-

ment at all stages of investment, with the goal of realistically reducing effectively reducing the carbon footprint attributed to the real estate and construction sector worldwide.

BPI Real Estate Poland's activities began in Gdańsk where a four-stage residential complex called Cztery Oceany was developed in the Przymorze district. BPI Real Estate Poland has also achieved success in Warsaw with projects such as Wola Tarasy, Wola Libre, wolaRE, and Rezydencja Barska which were developed

consecutively. Other completed projects include the Bulwary Książęce complex in Wrocław and the Vilda Park estate in Poznań. New projects in the developer's portfolio include the Bernadovo investment in Gdynia, Panoramiqa in Poznań, Czysta 4 in Wrocław and Chmielna Duo in Warsaw. In 2022, the company launched a total of four new investments in Poland. In addition, in cooperation with Revive, BPI Real Estate Poland is developing the multi-phase Cavallia investment in Łazarz, Poznań.

The Polish real estate sector has matured significantly, and customers now place a much greater emphasis on energy efficiency, sustainable materials, and smart solutions in their homes

SIX NEW GATEWAYS FOR EUROPEAN TRANSPORT

2023 has brought groundbreaking changes to the structure of the European logistics operator - Raben Group. Six locations in Germany, Poland, and Czechia were awarded the Eurohub status and competence to manage transport across Europe. Due to this consolidation of groupage cargo and faster and more efficient operational processes, these Eurohubs can successfully meet the needs of European customers.

Raben Group has reorganized its current structure in Europe. Six warehouses now function as Eurohubs. These Eurohubs are central points in the Raben network and are responsible for consolidating groupage cargo for European line traffic. They are designed to complement the company's regular, direct transport routes and guarantee well-timed connections between its European warehouses.

"The Eurohub structure allows us to respond more flexibly to changes in freight volumes and, above all, to reduce lead times. We can offer all our customers the added value of reaching all European destinations as quickly as possible - within 24 to 96 hours, depending on the distance. According to the lean philosophy, this organization of processes ultimately translates into a more efficient and reliable supply chain. We are closer to the customer and

PARTNER SPOTLIGHT

as the comprehensive integration of all European regions

designing a delivery network with greater resilience," explains Ewald Raben, CEO of Raben Group. "An additional benefit is the reduction of CO₂ emissions, which is also very important for us as a sustainable company."

The following locations were assigned the new status: Sarstedt (routes to Scandinavia), Mönchengladbach (northern France, Benelux, UK, Ireland), Fellbach (Spain, Portugal, rest of France) and Aichach (Austria, Italy, Poland, Czechia) in Germany, Legnica in Poland (connections inside this market and to the Baltic countries) and Rokycany in Czechia (south-eastern Europe). Implementing the Eurohub concept will further strengthen the logistics operator's presence in Germany - one of the strongest economies in the European Union - while securing the strategic role this market has to play in Raben's European network.

Eurohubs are characterized by significantly higher capacity, excellent location, and infrastructure. The foundation for operations and future success is, among other things, more than 130 direct connections between the locations above, a total of 600 connections per day, 40,000 sq m of capacity for cross-dock warehouses alone, and full traceability supported by a single Transport Management System (TMS). These standards apply to the whole of Europe, i.e., both markets where Raben has its own transport network and those where the company operates through its reliable partners.

All these changes have been made possible by achieving milestones the company has worked on over the past years. Systematic acquisitions have resulted, on the one hand, in entry into new markets (Austrian freight forwarder Bexity acquired in 2022; Greek logistics provider Intertrans in 2021) and, on the other hand, in the strengthening and densification of national networks. This change also applies to the region from which Raben originates - a fourth depot in the Netherlands, in the Maastricht area, was opened at the beginning of April 2023.

Four of the six Eurohubs are located in Germany, Europe's largest market, where Raben Group has been operating with its own groupage network since 2018. A substantial direct contribution to the creation of the Eurohub network has been infrastructure investments in the country.

Sarstedt is Raben Group's new warehouse in Germany - the operator moved there from Langenhagen in 2022. With a total area of up to 27,000 m2 (5,500 m2 of capacity with 52 cross-dock ramps), this facility has allowed the logistics capacity to be increased more than tenfold compared to the previous location.

Earlier this year, a new depot was opened in Aichach, northwest of Augsburg. The new site with 25,000 sq m capacity (of which 4,000 sq m with 42 cross-dock ramps), operating from the start as Eurohub, is located directly near the A8 motorway. It is an essential hub of the European network Raben uses for its daily

connections to Southern and Eastern Europe.

The same is true of the Rokycany facility in Czechia, which started operations in April this year. The warehouse covers 6,000 sq m of cross-dock capacity and has 56 ramps to facilitate the handling of goods, including those covered by the ADR convention on the carriage of dangerous goods and cargo by road. The site is located near the D5 motorway and provides a fast connection to Germany and other European road networks. It has the potential to accelerate and improve the flow of shipments significantly and, thanks to its flexibility, to contribute to the future development of connections not only in Czechia and Slovakia but also in other Raben Group countries: Hungary, Romania, Bulgaria, or Greece.

The Eurohub concept is a priority for Raben Group. At the moment, the company has no plans for further geographical expansion, however, it intends to densify its existing network and invest in digitalisation. The project to develop and reorganise the international lines in all fifteen Raben countries is still ongoing:

"Through targeted and systematic cargo consolidation, we want to stimulate the expansion of the network and the development of Eurohubs, as well as the comprehensive integration of all European regions. This will ensure that we can make better use of existing resources and thus make our transport operations more economically efficient and environmentally friendly," concludes Ewald

Raben.

We want to stimulate the expansion of the network and the development of Eurohubs, as well

CEE & SEE summit in London

in association with EBRD (6-7 February, 2024, London)

Overview

Entralon Club and EBRD are bringing CEE and SEE real estate leaders closer to the western capital. It is vital to keep the conversation going and advocate for the region as a sustainable and promising destination for investment especially now. The war in CEE affects its reputation and perception as a stable region. The current world is becoming less and less predictable. The real estate sector is bracing for some really tough times. Discussing the future of real estate, macroeconomics, global affairs, risk of major market crisis or even crises - is essential for decision-makers.

So we invite key real estate professionals to this annual gathering for high-level networking and deal flow in a truly business-facilitating environment. Meetings upon request are available to all participants of this event aimed to connect CEE real estate leaders to their Western European peers. This the place to be for pension funds, private family offices, asset owners, asset managers, funds, developers, lenders - everyone involved, active and interested in the real estate sector in CEE & SEE www.entralon.club/ceelondon

LOKALE IMMOBILIA

Wrocław Secures Silver Medal in Office Market Performance

According to a report by Knight Frank, the initial half of 2023 witnessed remarkable dynamism in both tenant activity and developer initiatives within Wrocław's office market, contributing to the establishment of nearly 151,000 square meters of new office spaces.

During the second quarter of 2023, the Wrocław office market expanded by an additional 11.7 thousand square meters, courtesy of the Brama Oławska project led by Tower Investments. Throughout January to June, approximately 32.6 thousand square meters of office areas were completed by developers, constituting over 28% of the total office space delivered within regional cities. The cumulative office space available within the capital of Lower Silesia reached a total of over 1.31 million square meters by the end of June, upholding its position as the second-largest market among regional counterparts.

Notably, the lion's share of this growth, accounting for more than 68%, originated from new lease contracts. Renegotiations represented nearly 28% of the transaction volume, while the remaining 4% was related to expansion endeavors. The robust demand played a pivotal role in reducing the vacancy rate by 1.2 percentage points on a quarterly basis, resulting in a vacancy rate of 16.1% at the close of June. This figure was 1.3 percentage points higher compared to the same timeframe in 2022.

As of June 2023, rental prices in Wrocław remained steady in comparison to the preceding quarter, spanning from €10 to €16 per square meter per month. Sustained elevated construction costs, coupled with ongoing expenses related to construction loans, have restricted investors' room for negotiation. Consequently, there is a possibility of rent hikes, particularly for newly constructed properties. Service charges ranged between PLN 16 to PLN 31 per square meter per month.

Facade of a high-rise building in the "Centrum Południe" in Wrocław

RESIDENTIAL Develia and Grupo Lar launch Ursynów#22 construction in Warsaw.

Develia and Grupo Lar Polska have begun construction on the Ursynów #22 project in Warsaw, a joint venture that will result in the creation of 174 apartments. The role of general contractor has been entrusted to Erbud. The first apartments are expected to be handed over to buyers by the end of 2024. Develia is one of the largest developers in Poland, involved in residential and commercial projects in Warsaw, Wrocław, Kraków, Gdańsk, Łódź, and Katowice. Since 2007, Develia (formerly LC Corp) has been listed on the Warsaw Stock Exchange (GPW) and is part of the mWIG40 index. In 2022, the company generated PLN 1,067.9 million in sales revenue.

RESIDENTIAL Buda sees significant interest in housing loans beyond 2% mortgages

In the second quarter, 97 companies went bankrupt, 21.3% more compared to the same period last year, the Central Statistical Office reported. The number of company registrations in the second quarter amounted to 88,549, a decrease of 5.5%. The Central Statistical Office reported that an increase in the number of bankruptcies was recorded in the industry, services, accommodation and catering, and other sections. On the other hand, the decrease in the number of bankruptcies took place in trade; repair of motor vehicles, construction, and information and communication. In transport and storage, the number of bankruptcies has not changed.

Poland is the CEE leader in commercial real estate investments – Colliers

CONSTRUCTION

The heavy concrete prefabrication market will grow to PLN 4.6 billion in 2023 – Spectis

The value of the heavy concrete prefabrication market will reach PLN 4.6 billion in 2023 and then increase to PLN 5 billion in 2025, according to a report by the research company Spectis. In 2021, the value of the market was PLN 3.5 billion, and in 2022 it is estimated at PLN 4.2 billion. For a decade, the prefabrication sector has been consistently increasing its share in the economy, both in terms of GDP and the value of the construction market, except for the weaker years 2019-2020. Compared to the Scandinavian countries or the German market, however, this share is still small, which proves the great potential for further growth.

The volume of investments in the commercial real estate market in Central and Eastern Europe amounted to €2.02 billion in the first half of this year, of which 42% (€801 million) accounted for Poland, according to Colliers' data. The Czech Republic came second with a share of 34%. Bulgaria was the only market in the region with year-on-year investment increases, while other markets recorded volume decreases ranging from 42% to 87%.

Colliers expects that in the third quarter, the market in Poland will continue to search for an appropriate price level, and activity will remain low due to the summer period. In the coming months, experts anticipate the finalization of several office and logistics transactions, as well as a slight increase in interest in commercial assets.

DOKI AND MONTOWNIA –BREATHING NEW LIFE INTO THE HISTORICAL CENTER OF GDAŃSK

On the historic lands in Gdańsk, the multifunctional DOKI Project is being built by the developer Euro Styl. London's Docklands or HafenCity in Hamburg are prime examples of reclaimed post-shipyard lands in Europe. In Gdańsk, their counterpart will be Młode Miasto, encompassing, among others, the grounds of the former Gdańsk Shipyard. This is the location of DOKI, recognized by the European Property Awards 2021-2022 as the best Mixed-Use Project in Poland.

Thanks to its significant scale and multifunctionality, the DOKI investment functions as a small district with a diverse structure including both a residential function and, in MONTOWNIA hotel and gastronomic once. They perfectly align with the concept of the 15-minute city.

The project is situated in the center of Gdańsk and is adjacent to the former shipyard wharves and The European Solidarity Center. Within a 10-minute walk, one can get to the beautifully renovated Main Railway Station, the Museum of the Second World War, and other tourist attractions.

Apartments with marvelous views and investment historic lofts

DOKI includes comfortable flats designed in line with the latest architectonic trends. Residents can enjoy a beautiful view of the water, the historical port cranes, and the panoramic Gdańsk cityscape. Two first residential buildings have already been completed.

MONTOWNIA, an integral part of DOKI, is a historic building with art elements that received a distinction in the Commercial Renovation/Redevelopment category in the EPA contest mentioned above. The building accommodates 114 serviced and fully equipped hotel lofts with floorage ranging from 37 to 45 or 51 sq m – each with a kitchenette and dedicated living room. The object started operating in April 2023 and has received excellent reviews from guests.

The entryway to the apartments (lofts) passes through a lobby with a 24-hour open reception desk. A professional operator belonging to the Dom Development Group, of which Euro Styl is also a member, is responsible for managing MONTOWNIA.

Breathing new life into a historical place

DOKI and MONTOWNIA are exciting proposals for those who want to live in this unique place and those looking to invest their capital in a real estate property. The exceptional character of the entire DOKI complex and the improvement in nearby areas are why this area's attractiveness will grow in the coming years – it is becoming the new center of Gdańsk.

More information can be found at: montowniagdansk.pl/en/

WARSAW EMBRACES THE OFFICE RENTAL MARKET REVOLUTION

The office market in Poland’s capital stands out as cities globally struggle with declining demand

BY ANNA RZHEVKINA

LOKALE IMMOBILIA OFFICE MARKET

The office market in Warsaw has been growing dynamically in recent years as more international companies choose the Polish capital for their business activities. According to a recent report by a consulting company Kearney, Poland has ranked second in Europe and 13th globally in terms of attracting investments in modern business services, thanks to the high digital competencies of employees and attractive labor costs.

On the other hand, the demand for office real estate is projected to decrease globally due to the shift towards remote and hybrid work. McKinsey revealed that office attendance in major cities across the globe has stabilized at 30% below the pre-pandemic norm. By 2030, McKinsey anticipates a 13% decline in office attendance in these cities compared to 2019 in a moderate scenario.

Major cities worldwide, including London, Munich, and Paris, are grappling with challenges, and Warsaw is no exception. Daniel Czarnecki, Head of Office Agency - Landlord Representation at the real estate services provider Savills, stated that in 2020-2021, demand significantly dropped, oscillating between 600,000-650,000 square meters. In 2022, as businesses adapted to the new reality, demand rebounded, reaching 860,100 square meters. However, in the first half of this year, it has plummeted by 32% year-onyear to 325,700 square meters.

Czarnecki specified that prolonged inflation and the revolution in office space usage, with a preference for smaller spaces, are influencing this decline in demand. He further explained that most companies have adopted a hybrid work model in Warsaw. Working from home a day or two per week is not only the norm but often a requirement. He added that the situation across the eastern border may be one of the reasons why, as in the case of the pandemic, tenants are holding back on further decisions.

DEMAND IN WARSAW'S CITY CENTER REMAINS STRONG

Vacancy rates vary significantly among the city districts. Over the past two years, the vacancy rate has steadily decreased in central zones. In contrast, it has been on the rise outside the city center. For instance, in Służewiec, which is the largest office district in Poland and offers more than 1 million square meters of office space, the vacancy rate grew to 20.6% at the end of June, according to real estate agency AXI IMMO. In Warsaw, the average vacancy rate outside the center was 11.4%, whereas, in central zones, it was 9.9%.

Jakub Potocki, Associate Director, Office Leasing Department, AXI IMMO, said landlords hold significant bargaining power due to high demand, especially for modern office space in the center. This status quo has made it challenging for tenants to negotiate lower rents, reduce other costs, or secure appealing incentives like rent-free periods. At the end of the second quarter, asking rents ranged from €18 to €27.50 per square meter in prime office buildings in the city center and started from €10 per square meter outside the center.

Czarnecki from Savills also highlighted that since 2020, the majority of demand has been concentrated in the center. He expects this trend to continue, despite high prices that may occasionally exceed €27 per square meter for the most attractive office spaces.

Warsaw is the largest office market in Poland, followed by Kraków, Wrocław, and the Tri-City. At the end of this year's second quarter, the total modern office stock in the eight major regional markets amounted to 6,513,800 square meters, a recent report by the Polish Chamber of Commercial Real Estate (PINK) showed. The new supply reached 48,100 square meters of office space. Interestingly, the largest projects were outside the capital: Nowy Rynek E in Poznan and Brama Oławska in Wroclaw.

Predictably, the regions' average vacancy

rate is higher than Warsaw's. By the end of the second quarter, it had risen to 17.1%, indicating a 1.9 percentage point increase from a year ago. However, there are cities with notably less available space when compared to the capital. A prime example is Szczecin, boasting a vacancy rate of merely 4.4%. In contrast, Łódź stands out with a vacancy rate of 23.4%, the highest among the regional markets.

CAN OLDER BUILDINGS STAY ATTRACTIVE?

As more modern office space expands rapidly across Poland, both in Warsaw and the regions, a question arises: can aging office blocks maintain their appeal? Tenants are becoming increasingly discerning, as they not only require facilities crucial for running their businesses but also consider sustainability criteria. Czarnecki emphasized that tenants, particularly corporations obligated to reduce their CO2 emissions in the upcoming years, are eager to select the most contemporary properties boasting certifications like BREEAM, LEED, or WELL. These certificates confirm that buildings create a healthy environment for employees and are eco-friendly.

Notably, Warsaw has one of Europe's highest levels of green-certified buildings. More than two-thirds of buildings in the Polish capital possess BREEAM, LEED, or WELL certificates. Czarnecki highlighted that tenants are typically eager to pay a premium for such spaces, considering that these properties help reduce service charges, which have recently been an increasing burden for tenants.

In the current year, demand for buildings constructed after 2015 constituted 47% of the total demand. However, does this imply that older buildings lack competitiveness? Not necessarily, as the escalating costs of conducting business prompt companies, especially small and medium-sized enterprises, to seek more cost-effective office spaces. "An important advantage of older buildings is their potentially more appealing location and lower costs, factors that are likely to attract tenants when the conditions are suitable," Czarnecki explained. He stressed that the key is to "make the right decision at the right time" to ensure the building is attractive to potential tenants.

However, Warsaw has witnessed several cases in which companies have made drastic decisions to demolish entire buildings that no longer meet their standards, opting to replace

them with new structures. One notable example is the demolition of the iconic nearly 100meter PZU tower, which used to be one of the most modern constructions in Poland, in 2000. The insurance company replaced it with a new 140-meter-high skyscraper, emphasizing that the new building is designed to cater to the needs of employees and align with an ESG strategy.

Another example is the demolition of Atrium International, less than three decades after its completion. Critics have pointed out that the building was relatively young and fully functional, despite being abandoned for an extended period. The new project - Upper One skyscraper - will consist of two partsa 131-meter-high office building and a hotel section, with completion scheduled for 2026.

Warsaw seems to be well-prepared for changes in the office market brought about by the increasing popularity of remote work compared to other major cities. Despite ongoing new completions, the vacancy rate remains stable, underscoring the continued demand for new office spaces.

Moreover, as the global demand for flexible office solutions continues to rise, Warsaw holds a strategic advantage due to its skilled workforce and attractive location. According to Czarnecki, the saturation rate of flexible office space in Poland's primary office hubs is around 2.6%, with Warsaw having the highest rate at 3%. This rate is still notably lower than Western Europe's, suggesting substantial potential for expanding this type of service in Poland.

MORE THAN TWO-THIRDS OF BUILDINGS IN THE POLISH CAPITAL POSSESS BREEAM, LEED, OR WELL CERTIFICATES

EXPERT VIEW

How have inflation and the rising costs of running a business impacted the office market so far, and what trends do you expect in the future?

Last year's record inflation, not only in Poland but also in the Eurozone, contributed to significant rises, whether in the form of rent indexation (over 8% inflation in the Eurozone in 2022, which will impact most Polish leases) or service charges - here, according to our forecasts from early 2023, potential rises could reach 30%-60%. Currently, charges exceeding PLN 35 per square meter a month are no exception. Furthermore, tenants are facing another indexation based on inflation in the Eurozone, which, according to Oxford Economics analysis, could reach over 5%.

The situation should stabilize in 2025. Higher inflation translates into higher fit-out costs. In recent years, tenants have been used to receiving a finished office to a high standard. At current prices, five-year contracts, which were the norm in the market some time ago, make it difficult for landlords to pin down their budgets and reduce the profitability of the investment. Therefore, to compensate for the high expenses incurred by landlords, we see contracts being extended to, for example, seven years, although ten-year contracts are appearing on the market.

What are the recent projects in the market worth keeping an eye on?

Some of the most exciting projects undoubtedly include those in the city center. New projects such as Upper One, The Bridge, or Towarowa 22 will add to the local skyline in the coming years. Outside the center, the most interesting projects include the renovation of an old factory in Praga, near the East Railway Station, where the mixed-use Drucianka project is being developed. In addition, there is a trend towards the refurbishment of older proper-

ties. Owners of B-class buildings understand current trends and are focusing on modernizing spaces so that the leased space and a high standard of finish can help companies achieve their climate neutrality goals. Examples of modernization in recent years include The HOP in the City Center or Diuna at Służewiec. The Saski Crescent building is currently being modernized, and there are also plans to modernize over 30,000 square meters at Warta Tower.

Daniel Czarnecki, Head of Office AgencyLandlord Representation at Savills

STRATEGIC TRANSFORMATION: Nrep’s new investment changes the face of Polish logistics

WBJ speaks with Soren Rodian Olsen, the head of Nrep’s Logicenters in Poland, about the company’s recent acquisition of a majority stake in 7R, one of Poland’s largest logistics developers, and the synergies driving future successes in the Polish market.

WBJ: The acquisition was one of the most significant logistics transactions in Poland and Europe this year. Is this a clear signal to the market?

Soren Rodian Olsen: The past 12-18 months have been challenging to navigate, but as markets are slowly stabilizing, it’s fair to say that uncertainty remains regarding the real estate market, which is why many international investors are holding back on capital deployment into this asset class. That said, Nrep has a proven track record in capturing investment

opportunities with risk-adjusted returns, and our recent acquisition of a majority stake in 7R, one of Poland’s largest logistics developers, is a clear testament to our abilities in sourcing highly attractive opportunities.

I think that this one deal alone does not necessarily signal that the market has completely turned around, but given the scale and strategic nature of our investment, we feel that we have firmly established our logistics business in the Polish real estate market and are strongly positioned for capturing the upswing

that may be expected during the next 24 months.

The investment is €200 million in equity. How much is being directed for further development?

Most of our investment will fuel the “well-oiled 7R development machine” to facilitate the delivery of a substantial pipeline of new projects in all sub-markets in Poland. Considering that some of 7R’s competitors have less access to forward-funding equity, we believe there is currently a great opportunity for a

well-funded developer to deliver new products to a logistics market that continues to enjoy strong demand and take-up.

Regarding further developments, the press release mentioned both Poland and Czechia. Can you elaborate on that?

Poland remains a critical logistics investment focus for Nrep outside the Nordics and our joint business plan for 7R. While 7R has a smaller presence and a development pipeline in Czechia, our €200 million investment is predominantly aimed at the Polish market.

The business will continue under the 7R name. Is this in line with Nrep's acquisition policy?

Nrep has acquired 7R via its NSF V fund, and 7R will not be integrated into Nrep (or Logicenters) but will continue to operate under the 7R brand and with the same management in place.

We have monitored 7R for quite a while and like the people, the culture, and the quality product that they deliver, which is why we do not intend to make any radical changes to the business. Yet clearly, our equity will help to take 7R to a much higher level.

Is this a first step for Nrep in CEE, and shall we expect more acquisitions?

While Nrep will actively continue its investments in the living sector (PRS and Serviced Living), our investments in logistics will aim to grow 7R’s development pipeline and market share in Poland and potentially in Czechia. We view the opportunity with 7R as a significant game changer in the Polish real estate market, and our capital deployment will be focused on driving the growth of 7R, not additional logistics acquisitions.

What were the fundamental issues that makes this such an ideal combination?

Our investment process with 7R has been detailed and prudent, during which we got to know the management board and 7R’s admirable founder, Tomasz Lubowiecki, as well as many other people within their organization.

It is fair to say that we have identified a great synergy between the culture and values of Nrep and those of 7R. Both firms passionately focus on creating positive change for people and the planet, evidenced by ambitious ESG agendas and targets. Moreover, 7R enjoys an excellent reputation in sourcing strong locations for its clients (tenants), and we envisage synergies for international clients that we serve in the Nordics.

Finally, we strongly believe in the sustainability and quality of 7R’s product which in many ways

Soren Rodian Olsen

mirror our Nordic approach, and we expect to explore additional synergies, considering Nrep’s unique track record in ESG and sustainability.

What is the market share after the acquisition?

7R is a Top 3 logistics developer in Poland, and our investment is not directly aimed at growing market share but to grow value for our investors and the clients of both firms. We are confident that the combination of our financial capabilities and 7R’s committed workforce and track record will help grow 7R’s position in the Polish logistics market and cement 7R's position as one of the most attractive development partners for tenants in the logistics and light production sectors.

Soren Rodian Olsen has 21 years of senior management and real estate experience in Poland. He heads Nrep’s logistics branch in Poland, Logicenters, and set up Nrep’s offices in Warsaw in 2021. Prior to joining Nrep, Soren was a Partner and Head of Capital Markets at Cushman & Wakefield. In previous roles he was Head of Aberdeen Asset Management in Poland and between 2002 and 2008 he worked for Bank BPH (Bank Austria Creditanstalt) and mBank (Commerzbank) as Head of Asset Management, Real Estate, Supply Chain and Business Continuity. He holds an MBA from the University of Westminster, is a member of RICS and is the Chair of ULI Poland.

OUR RECENT ACQUISITION OF A MAJORITY STAKE IN 7R, ONE OF POLAND’S LARGEST LOGISTICS DEVELOPERS, IS A CLEAR TESTAMENT TO OUR ABILITIES IN SOURCING HIGHLY ATTRACTIVE OPPORTUNITIES

INTERVIEW BY MORTEN LINDHOLM

NO ROOM FOR MICRO-APARTMENTS?

Aparthotels have long been a thrifty alternative to hotels for tourists in Poland. While far from the extremes encountered in other parts of the world, Polish apartments have gotten smaller over the years, and investors more creative in making as much profit from their investment as possible. However, a new regulation is about to change the rules of the game.

BY SEAN REYNAUD

One concern that occupies the minds of every traveler is finding a comfortable place to rest at night. While sleeping in a tent may suit some, particularly the young and tolerant of occasional discomforts like rocks poking into inconvenient places, others may consider sleeping in their car, assuming it is legally permissible in Poland. Hostels could be a viable, if somewhat lackluster, choice. But for most travelers, the options usually come down to either a hotel or an “aparthotel."

EXTREME DISCOMFORT

While traveling abroad, this author has encountered several experiences that would make some reconsider their choice of accommodation. In South Korea, an apartment provided for English teachers lacked a bathtub or shower, offering only a bucket, a spigot, and a drainage hole in the center of the apartment.

In America, there was an apartment with no windows, no kitchen, and barely enough space to accommodate a bed. It was essentially a converted closet from a nearby room. In Kosovo, it was a shipping container with no windows and a single door.

During this author’s travels within Poland, there has been a multitude of interesting experiences. Some of these include fingernail clippings on a window sill, bedding that emitted an odor of wet dog, and a bed as firm as frozen pierogi. It hasn’t been all negative, but certain unpleasant aspects can often leave one reeling.

It takes a certain level of audacity to enter an unfamiliar room and expect it to resemble home. However, is it too much to ask for clean bedding?

APARTHOTELS VS. CONDOHOTELS

Firstly, let’s clarify what aparthotels are. Are they distinct from condohotels? The primary distinction between the two lies in their composition. A condohotel comprises individual units resembling hotel rooms, typically lack-

LOKALE IMMOBILIA REAL ESTATE

ing a kitchenette. On the other hand, an aparthotel provides guests with residential apartments featuring a separate bedroom, a private bathroom and a kitchenette. They are usually individual units within regular apartment blocks.

In some areas, like the Gdańsk Granary Island, aparthotels seem to dominate the entire neighborhood. Every other apartment door is marked with an aparthotel operator sticker and is supplied with three separate aparthotel service offices located in the building lobby. So who owns these spaces?

PRIVATE INVESTORS

The commercial real estate industry in this country is predominantly owned by foreign investors. With portfolio investors dominating the market, condohotels and aparthotels have emerged as popular investment choices for individuals seeking to capitalize on the real estate market. These options provide opportunities for earning profits through tourism and business travel, from 8-10% a year, before the pandemic.

In 2022, approximately 5.9 million tourists utilized tourist accommodation facilities, resulting in a total of 15.5 million overnight stays. This marked a significant increase of over 280% compared to the previous year, with the number of overnight stays surging by 292%.

However, profiting from the common practice of purchasing an apartment for rental purposes, especially on a small scale, comes with numerous costs and operational challenges. These include expenses for maintaining the property, such as upkeep, and the need to hire cleaning staff, which may significantly eat into profits, especially outside the tourist season.

Despite these difficulties, the popularity of aparthotel models has grown, albeit with inherent risks due to the absence of legal safeguards. In Poland, the lack of regulations pertaining to national funds limits the opportunities for citizens to capitalize on this lucrative sector and earn income from it.

Given the absence of an official definition and the presence of diverse invest-

ment products in the market, it is vital to conduct thorough assessments of offers and ensure the reputation and reliability of the involved companies.

According to the report “Hotel and Condo Hotel Market in Poland 2022” by Emmerson Evaluation, there are currently 35,000 hotels in Poland, with an additional 5,000 under construction. While large international Real Estate Investment Trust (REIT) funds purchase apartments from developers for rental purposes, there is a scarcity of national REIT investment funds in Poland that would enable small investors to participate in the commercial real estate sector.

MAXIMIZING RETURNS AT ALL COST

Residential developers looking to accommodate this niche have devised creative ways of building as many units within an apartment building as is feasible, bringing the size of micro-apartments down to a dozen square meters.

The government is now taking measures to address these unethical practices. Building micro-sized units that were marketed as investment apartments will no longer be permitted. The Ministry of Development introduced a new proposal in early January, stipulating that the minimum usable area for new units in buildings must be at least 25 square meters, which aligns with the minimum allowable size for residential apartments.

“It’s good that the Ministry of Development is addressing this issue because developers have been consistently bending the rules. The existing law does not allow residential units to be smaller than 25 square meters in usable area,” says Tomasz Błeszyński, a real estate market expert. One can find units with an area of 18 square meters priced at around PLN 300,000 with a “turnkey” option.

SMALL, SMALLER…

So why not allow smaller units? “This pathology should indeed be curbed. If, for example, a 10-square-meter unit

treated as a commercial property is rented, it is difficult to adapt it for disabled people, and the existing regulations oblige compliance with safety and occupational health standards, as well as the provision of an adequate number of parking spaces,” said an architect who preferred not to provide their name to Money.pl. They admit that they had received numerous requests from private investors and declined to divide apartments into smaller units.

There are differing opinions regarding the value of compact units in the rental market, with some arguing that they cater to students and young professionals seeking affordable options in urban areas. However, others emphasize the drawbacks, such as the subdivision of larger properties into smaller units that may not meet technical standards or provide satisfactory living conditions.

During a recent stay in Gdańsk, this author stayed in an apartment subdivided from a larger one, which fea-

tured a single window, and only one air vent. Suffice it to say, the air quality, given the humidity and lack of airflow, left a lot to be desired.

NEW RULES, BIGGER SIZES

Concerns are being raised about the potential impact of regulations on the investment property market, particularly in tourist destinations where numerous units below the minimum size of 25 square meters are being sold as commercial properties.However, ongoing discussions and debates surround the effectiveness and potential consequences of these measures.

This author worked in South Korea, primarily in the regions of Incheon and Seoul, for fifteen years. The housing prices in these areas are exorbitantly high and served as the leading cause of bankruptcies and family debt in South Korea. The average price for an apartment in Seoul doubled in the past five years, reaching $963,000 in January of 2022, making it less affordable relative

to income than New York, Tokyo and Singapore. The movie “Parasite” vividly portrays the consequences of living in squalid conditions, particularly in “banjiha” homes, which are partially underground apartments. As the prices went up, landlords squeezed more people into smaller spaces

A CAUTIONARY TALE

In August 2022, tragedy struck in Gangnam District, Seoul, during the heaviest rainfall in a hundred years. A 40-year-old woman with Down syndrome, her sister, and the sister’s 13-year-old daughter lost their lives in a flooded home in Seoul. The water pressure prevented them from opening the door, leading to their unfortunate demise. Regrettably, this was not an isolated incident. Eight people lost their lives in Gangnam, one of the wealthiest districts of Seoul. These events serve as a somber reminder of the dire consequences that can arise from overcrowding and infrastructure

In some areas, like the Gdańsk Granary Island, aparthotels seem to dominate the entire neighborhood.

vulnerabilities, even in affluent areas. Poland is not pressed for space like South Korea, where 50 million are squeezed into half a peninsula equivalent in size to the US state of Illinois. So why make spaces smaller and smaller in Poland? Will Poland resort to even more risky practices than subdividing apartments into smaller units? One would hope not, especially considering the floods of 1997.

It is possible to strike a balance between business investment and the essential requirements of tenants. Regulations should tackle unethical practices and ensure that residential units meet the minimum size standards for humane living. Ongoing discussions are necessary to assess the effectiveness of these measures and evaluate their potential consequences on investments. Implementing regulations without careful consideration of their broader implications can result in further complications in the future.

Resilience and Rebuilding: Ukraine's Path to a Bright Future

Richard Hallward, Chairman of CEEQA, sits down with WBJ to discuss the way Ukraine's real estate sector is emerging as a symbol of unwavering resilience and extraordinary determination and how CEEQA's Ukraine Live Connect project is working to foster knowledge and understanding of the Ukrainian real estate landscape to pave the way for a post-war future that promises growth and opportunity.

What is the idea behind CEEQA Ukraine LiveConnect?

Richard Hallward:CEEQA's Ukraine Live Connect project is actively working to develop contacts, knowledge, and understanding of the Ukraine real estate sector for companies already active in the CEE real estate marketplace, in preparation for the post-war future. There are not many real estate sectors around the world equipped with the practical knowledge, experience, and tools to rebuild an East European nation's critical and commercial infrastructure from the ground up. We've been doing it - very successfully - for more than 30 years, from Estonia in the north to Albania in the south. Poland is particularly well placed geographically and culturally to make a real difference.

Our proposition is that, for opportunistic investors and developers, now is the time to develop early contacts and knowledge about the situation and the market there.

CEEQA recently awarded two CEEQA Resilience awards to two projects in Ukraine – tell us the story?

The idea sprung from a situation in the 2022 edition of CEEQA. A very strong entry came in for a large and, in our terms, exciting landmark shopping mall of 53,000 sqm GLA called NIKOLSKY in Kharkiv, Ukraine. At the time, Kharkiv was right on the front line of the war, so it attracted our attention.

Since the project was completed in Q2 2021, it fit our criteria for the 2022 awards. Ukraine has been within the CEEQA geographical coverage since its inception in 2003, and in fact, a few projects had won awards in previous years. Moreover, when the 2020 CEEQA Jury reconvened for the 2022 edition, we had - as always - a jury member based in Kyiv. It turned out that the juror, Maksym Gavryushyn, was a senior director of the company behind NIKOLSKY, the Budhouse Group.

NIKOLSKY did very well in the awards that year, coming in at a very close second in both the Retail Development of the Year and overall CEE Building of the Year categories.

During the judging process, on 9 March 2022, a missile struck NIKOLSKY, causing extensive damage. This incident really caught our attention, and, following a serious conversation, Ukraine Live Connect was born.

Eventually, at the CEEQA Gala, we connected with Maksym Gavryushyn to hear NIKOLSKY’s story and also about other such tragedies in Ukraine. He also informed us about another landmark mall, RETROVILLE, in Kyiv that had been completely destroyed by a missile.

By September 2022, both malls had reopened despite ongoing reconstruction works and by March 2023 both malls were nearly fully operational. These two stories of immense resilience symbolize the Ukrainian people's strength and defiance during this terrible war.

From there, you can join the dots pretty easily.You visited Ukraine to hand over the awards – what was your firsthand experience and impressions from the meetings?We weren’t quite

Kharkiv

Retroville

sure how to deliver the CEEQA statuettes to the management of two shopping malls in a war zone. Kyiv is still regularly shelled and Kharkiv is right in the middle of the fighting on the eastern flank of Ukraine, less than 30 km from the border with Russia and not far from the occupied Donetsk oblast. After very little thought we decided it was appropriate to deliver and present the awards ourselves.

With the help of Maksym, arrangements were made, and I caught a train to Kyiv a week after this year’s Gala. At RETROVILLE in Kyiv, I met the shopping and entertainment center director who had led the recovery, Renata Jakubcioniene. Seeing the restored parts of the project - most of it - and the parts still ravaged by the huge missile blast that literally tore the building apart was an inspiring but also harrowing experience.

After the meeting, Maksym drove me to the outskirts of Kyiv to witness the widely reported total devastation of Bucha, Irpin, and Moshchun. We traveled by car from Kyiv, passing through military checkpoints on the way.

I was unprepared for what I saw and heard in Kharkiv, the worsthit major city in Ukraine.

When we arrived at NIKOLSKY, I was given a tour. It is an incredible mall, eye-catching futuristic architecture fused with local cultural and historical design details showcasing numerous wellknown international brands. They showed me where the missile had

pierced through two floor plates in the upper floors of the building - the holes were still plainly visible.

For the award presentation, we were joined by a delegation from the Kharkiv City Council and the Department of International Cooperation, led by Viktoriia Kytaihorodska, the Director of the Department of Administrative Services and the Consumer Market. They took me on a tour of the most devastated parts of Kharkiv, which sat on the front line of the fiercest shelling and fighting of the war until the Russian forces were repelled by the Ukrainians early this year.

In the center, many important municipal, utilities, and residential buildings had been reduced to rubble by a missile strike. The edges of the town, where the Ukrainian forces had held firm were utterly devastated, including residential buildings, schools, and even a kindergarten.

Most striking, once again, was the proud defiance and resilience of the people of the city, who were already getting down to the task of rebuilding. Plans are underway to resource and begin the rebuilding and renewal of Kharkiv as a modern, sustainable. There is no looking back.

Why is NOW the right time to discuss the rebuilding of Ukraine?

During this year's CEEQA Gala, we organized a behind-closeddoors Ukraine Live Connect meeting between real estate and investment leaders as well as government leaders from Ukraine - including Ukraine's Deputy Minister of Economy, Oleksandr Grabin - to examine "what's next for Ukraine real estate."

An understanding of the massive task ahead and potential approaches at the government and private investment levels emerged from these discussions. With EU accession and NATO membership on the horizon and ongoing EBRD support, among other developments internally and externally, Ukraine is positioned as a major open and transparent European marketplace of the future.

In a nutshell, before the war began very few people in the world knew where Ukraine was. Now everyone knows exactly where Ukraine is, and who the Ukrainian people are. This has to make a difference on the road ahead.

What happens next for your Ukraine Connect project?

I’ve been invited to participate in a conference in Kyiv in September focused on rebuilding Kharkiv. The importance of a network of strong and reliable partners to do business with is something I have heard many times. We will continue to make these connections.

Certainly, we are engaging with Ukraine-based operators and support mechanisms like the EBRD, organizing further Live Connect meetings, spotlighting ongoing activity during the war, and plans for post-war activity.

But a large part of it is without a plan or a path, just following the trail and seeing how we can help and make a difference. Slava Ukraini!

INTERVIEW BY MORTEN LINDHOLM

UA Meeting

CEEQA Awards Gala

in Poland INVESTING

Poland ranks 2nd in Europe for attracting investments in modern business services

Poland has secured the second position in Europe and the 13th position globally in terms of attracting investments in modern business services, according to a report by the consulting company Kearney titled "Global Services Location Index 2023." This position marks an improvement of one place in Poland's global ranking compared to the report's previous edition.

Poland stands out due to its financial attractiveness and the high digital competencies of its employees. The report highlights that technologies such as artificial intelligence and machine learning are becoming increasingly mature, leading to high demand for skills related to these technologies in the market. In this context, Poland is emerging as a leader, securing the second spot after Great Britain in the ranking of European countries.

The current leaders in this year's report are India and China again, owing to their significant cost advantage, abundant talent pool, and highly skilled employees. The report also notes that India and China excel in talent regeneration, which refers to their ability to efficiently retrain and redeploy their workforce in response to market and technological changes.

Imperial Brands launches global service center in Kraków

Imperial Brands is expanding its global service center in Kraków, part of its worldwide operational model for financial activities. Currently, the center employs 100 people, with plans to have 500 employees eventually. The company views Poland, specifically Kraków, as a strategic market with significant growth potential. This global business services (GBS) center in Kraków is aligned with the company’s strategy and transformation, integrating tasks in finance, procurement, IT, and data analysis. It aims to create a hub of expertise, leveraging specialized knowledge in various fields. Imperial Brands, based in Bristol, UK, is among the world’s largest tobacco product manufacturers.

R.Power signs investment for PV projects in Romania

R.Power, a company based in Warsaw, has signed an investment agreement with Eiffel Transaction Infrastructure, a part of the Eiffel Investment Group in Paris, to develop 1 GWp of photovoltaic projects in Romania. The collaboration is subject to obtaining the necessary approval from the FDI Authority/Romanian Competition Council in accordance with Romania's foreign investment law (FDI Law).

The president of R.Power, Przemysław Pięta, said that Romania is a market similar to Poland, where connecting to the grid is also challenging. Eiffel Transaction Infrastructure plans to invest up to €26.5 million in developing selected photovoltaic projects in Romania.

Venture capital investments at PLN 429 million in Q2

The value of venture capital investments in Poland in the second quarter amounted to PLN 429 million, PFR Ventures and Inovo VC announced. The capital was distributed among 116 innovative companies. In the first quarter, investments stood at PLN 446 million.

“Looking at the data on a semi-annual basis, we recorded a decrease of 70% compared to the first six months, in the preceding year, and in 2021. At the same time, the number of transactions is constantly increasing,” PFR Ventures and Inovo VC stated. They added that in the long term, an upward trend is expected.

Central Hydrogen Valley to be created in Kozienice

Minister of Climate and Environment Anna Moskwa signed a letter of intent to establish the Central Hydrogen Valley. She noted that the valley is unique, connecting at least three provinces and benefiting from the specific gas potential in Kozienice.

The Central Hydrogen Valley will involve entities from the Świętokrzyskie, Łódź, and southern Mazovia provinces, aiming to integrate sectors, find business partners, and optimize processes and costs.

“If there’s a time for hydrogen, it’s now,” Moskwa said during a ceremony in Kozienice, Mazowieckie.

in Poland INVESTING

Silicon Valley or tech hub?

The tech industry in Central and Eastern Europe (CEE) is experiencing a surge of activity, with tech giants making significant investments in Poland, touting the country as a new “Silicon Valley.” However, after the eye-catching headline, what often follows is a list of reasons why Poland is simply a technology hub.

BY SEAN REYNAUD

in Poland INVESTING

While it may seem trivial to quibble over semantics, investors need to know whether they are investing in homegrown startups in Poland or supporting foreign capital interests that use Poland as a parking spot for their intellectual property.

The threats against Taiwan, where 50% of silicon chips are manufactured, have created a need for either reshoring or at least moving away from the volatility of the Chinese sphere of influence. Investors such as Intel recognize that now is the time to move away from Taiwan and towards more stable locations. Poland is one such location.

But what makes Poland unique with regard to the tech industry? Are we seeing the emergence of a new Silicon Valley, where homegrown, high-tech industries thrive? Or is Poland simply a tech hub composed of foreign IPs that has cheaper labor and less expensive real estate? Let’s begin by defining what “Silicon Valley” actually means.

KEY INGREDIENTS

San Francisco-based Silicon Valley is (though some would argue that “was” makes more sense) special due to its ecosystem of innovation that outweighed its high costs. Immigrants, especially those in their 20s and 30s with a desire to make that which does not exist, i.e., the desire to

BETTING ON THE RIGHT HORSE

Apart from capital and know-how, building a successful innovation hub requires a certain risk-taking mindset. An inclination to take chances on new ideas seems to be ingrained in American investors’ DNA. But even the overwhelming optimism of Silicon Valley needs to be balanced with classic, penetrating questions in an industry that has seen its fair share of fraudulent ventures. Silicon Valley is not just about access to money, which is still relatively easy. It is increasingly about picking the right horse to back in the right culture of innovation.

But what about investors in Europe? The common assumption was that European investors were more skeptical in contrast to their US counterparts. The reluctance of European VCs to fund major and uncertain undertakings has hampered European innovation in capitalheavy industries, such as semiconductors. This has changed, however.

MADE IN THE EU

In April of this year, the Council of the European Union approved the EU Chips Act, which amounts to €43 billion, for chipmakers to build new fabs in Europe.

The message was heard far and wide.

innovate, utilized vast amounts of cheap capital to operationalize their ideas in the 1970s and 1980s. Startups also took advantage of their location on the California coast, near two major trading hubs, Los Angeles, and San Francisco, to move products.

Successful enterprises innovated quickly, were first to market with new products, and adapted to crises. These key factors were what made Silicon Valley stand out. The dynamism of Silicon Valley was rooted in a decentralized and flat structure that allowed for rapid change. In addition, there was always someone around to bounce ideas off of, someone to talk to, or to mentor new start-ups.

Europe’s fragmentation, by contrast, with its multiple business cultures makes it difficult to compete with a US-based start-up’s vast home market.

Leo Apotheker, the former head of the German business software company SAP, stated that he had difficulties finding people to ask for advice during his time at SAP. He claims it wasn’t about money, as Europe is awash in venture capital. Instead, it was about know-how. This is why Apotheker is now with Boardwave, a group whose stated goal is to use “innovative and creative solutions to enable its members to access the knowledge, experience, support, and mentoring they need to build successful global businesses.”

Shortly after passage of the act, Intel declared that they would be investing $4.6 billion to construct a new chip plant in Wrocław, and a research and development center in Gdańsk worth $78.9 million. The Gdańsk facility will be the largest research and development center in the EU. European Commission President Ursula von der Leyen called Intel’s announcement of the new chip plant “a first major achievement” for the EU Chips Act.

It didn’t take long for other tech giants to follow suit, either launching new investments or expanding their existing ones. Microsoft announced an investment of $1 billion for a data center outside Warsaw, which will include access to local cloud services. In addition, Google has pledged to build a $2 billion Cloud Data Hub in Warsaw, marking it the first of its kind by Google in Europe.

The surge of high-tech Foreign Direct Investment (FDI) in Poland raises questions about the nature of these investments and their potential impact on the future of both Poland and the EU. Some have suggested that this could be the emergence of a new Silicon Valley or multiple smaller Silicon Valleys, while others argue that Poland may simply serve as a hub for established foreign intellectual properties with little focus on innovation. These are important considerations as the tech industry continues to grow in Poland.

“Poland’s location has been a geopolitical challenge, but its easy access to both developed and emerging markets makes it a highly desirable investment location”

The EU Chips Act, while beneficial to Poland, was not the first-time foreign investment flooded Poland, nor is it the sole reason for investment in Poland as a tech hub. The country is an attractive destination for corporations to invest in due to its strategic location, membership in the EU, and relatively low cost of living. Historically, Poland’s location has been a geopolitical challenge, but in today’s global supply chain landscape, its central position in Europe with easy access to major markets such as Germany, France, and the UK, as well as emerging markets, makes it a highly desirable investment location.

POLAND ON THE PODIUM

According to a recent report by Antal, a UK-based recruitment firm, Poland is the third preferred location globally for foreign investors, behind only the United States and Spain. This is based on data from fDi Markets, an analytical company from the Financial Times group. In 2020, approximately €1.6 billion worth of investment projects supported by the Polish Investment and Trade Agency (PAIH) were closed. This resulted in a more than 200% increase in new jobs created. Investments in new sectors were most often planned in cities like Wrocław (28% of investments), Warsaw (24%), and Kraków (20%), with Katowice not far behind with 19% of investment in 2021.

FROM GLOBALIZATION TO REGIONALIZATION

Salary considerations are also a reason to bring business to Poland. Poland has a strong presence on the global IT map, with highly qualified and cost-effective IT professionals. IT specialists in Poland earn significantly less than their counterparts in the US, making them open to remote work opportunities from foreign employers. The current trend in international business is shifting away from globalization towards regionalization. Foreign investors are increasingly localizing their businesses in Poland and seeking collaborations in the country. Factors encouraging business investment in Poland include the availability of competent employees from various countries, tax preferences (especially for the IT industry), flexible labor market models, the prevalence and popularity of remote work, competitive remuneration systems, and incentives for investors like Special Economic Zones.

The number of information and communications technology (ICT) specialists in the EU has been steadily increasing, with a notable rise in Poland. In fact, approximately 3.5% of the Polish workforce now specializes in ICT (2021), up from 3.1% in 2019. This growth is reflected across the EU, where demand for ICT specialists grew six times faster than total employment in the year before the pandemic.

REVERSE BRAIN DRAIN

In Poland, there are approximately 125.8 thousand people working in ICT in the Masovian voivodeship, 40,000 in the Lesser Poland voivodeship, and 22,000 in Silesia. Additionally, the majority of IT specialists in Poland are higher education graduates, making academic education a key factor in shaping the personnel supplying the domestic sector and making Poland an attractive destination for tech investors.

Because of the ever-growing opportunities in Poland there now exists a “reverse brain-drain.” Expats are returning from abroad to take part in the growing economy. Poland’s healthy economy is discouraging emigration, leading many Poles to return and invest in their homeland. The Polish government has implemented measures to support the return of the diaspora, including tax incentives for those who resettle in the country.

Poland boasts a vibrant scene of smaller startups, focusing on areas such as fintech, e-commerce, gaming, cybersecurity, and artificial intelligence. R&D spending is growing rapidly, particularly in areas like artificial intelligence (AI) and big data, making it an attractive destination for tech companies and startups. The country has shown impressive growth in online services, surpassing even larger countries like China, India, and Brazil, as reported by the World Trade Organization.

Some notable examples of startups that have managed to make a splash on international markets include: Brainly, an online learning platform with over 350 million users across 35 countries. Nethone is a cybersecurity company that uses AI to prevent fraud and identity theft. Infermedica is a health tech company that provides AI-powered diagnosis and triage solutions. Estimote is a company that creates wireless sensors and software for indoor location tracking and proximity marketing, and has clients such as Apple, Coca-Cola and Virgin Atlantic. Packhelp is a company that offers customized packaging solutions for e-commerce businesses. It has customers in over 30 countries, including H&M, L’Oréal, and Wrangler.

Looking at the solutions these million-dollar homegrown startups have brought to the market, it is clear that Poland no longer carries out repetitive processes at low cost. These processes are being redesigned in the region. Innovation is here, in Poland, and to say otherwise is to miss the big picture.

INNOVATOR AFTER ALL?

So, what’s the verdict? Is Poland a tech hub or an innovator? The answer is that it is a little of both. Foreign companies invest in Poland for all of the advantages outlined above but they are not the only game in town. Decades of investment in education, in a stable financial system, vigilant regulation, and cooperation in fintech with international regulators, inspire investor confidence abroad and at home.

What’s curious about Polish tech start-ups is the money. Of the start-ups mentioned above, most found capital investments in other countries as they looked to expand, in countries like the US and in other EU investors. Two of the companies listed above have offices in New York City and one, Brainly, acquired two US companies as they expanded during the COVID-19 pandemic. Will innovation stay in Poland, or will it be gobbled up by outside capital, like guppies in a shark tank? That remains to be seen.

At present, Poland appears to be evolving into a technology hub rather than a rapidly innovative Silicon Valley. Nonetheless, the groundwork has been laid. With time, we may witness something extraordinary in technology right in the heart of the CEE.

As food sources dwindle worldwide, alternatives are not just a necessity. They may in fact, be an opportunity.

BY SEAN REYNAUD

IF NOT MEAT. . . THEN WHAT?

Since 1945, the world has benefited from the stabilization of the geopolitical order in many ways, creating the mass consumption societies we now enjoy. A secure, global supply chain and a somewhat stable world order all have benefitted trade worldwide. The technological miracles of our modern age, and the fact that Mexican avocados can travel to Poland nestled in cheap cardboard boxes in a matter of days, have had a massive effect on the world.

Pause momentarily and reflect on the wonder of your double-shot macchiato, adorned with generous swirls of whipped cream and complemented by the subtle flavors of an accompanying tiramisu. The coffee beans were procured from Colombia, the chocolate from the Ivory Coast, and the cane sugar from Brazil, all of which somehow ended up in your Chinese-made ceramic cup. Let's not overlook the tiramisu's components: this delicacy's creation demands a complex network that spans the globe to gather materials from diverse corners of the world. Let us refrain from dwelling on the potential impact of this sugary onslaught on your dental health or its potential to spark diabetes or unsettle your digestive system. Instead, let’s focus on the effects the trade networks have had on the world.

GLOBAL MARKETS, GLOBAL CONCERNS

Consider a scenario where the movement of food across different regions triggers significant shifts in the demographics of entire populations. Borders become more permeable, allowing migrants to traverse freely for work, habitation, and immigration. The convenience of modern grocery store logistics leads to extended lifespans and a wider array of affordable food options, except for inflationary factors. Our societal progress has far exceeded the aspirations of our ancient cave-dwelling predecessors. Nevertheless, these advancements have come at a cost to our planet, presenting us with considerable challenges. Notably, a convergence of issues arises. Bacteria such as e-coli and salmonella, fostered by their proximity to factory farms, infiltrate our food chains through runoff, posing a threat to our lettuce and other consumables. And lest one thinks, “Well, let’s just dust it off!” No, you can’t. The only way to kill salmonella or e-coli is to boil the leaves, making for an unpalatable, goopy salad. Imagine it, eating salad with a spoon!

Documentaries such as “Super Size Me” and the latest offering on Netflix, “Poisoned: Revealing the Unhealthy Realities of Your Food,” shed light on the perils linked to mass food production. While sparing the explicit and, frankly, stomach-churning details from these documentaries, it’s reasonable to assert that our quest for the most succulent burger has contributed to some rather alarming ecological predicaments. And unless you’ve spent this summer residing beneath a boulder – which, by the way, might just

be a more comfortable choice given the heat – you’re likely aware of the ongoing wildfires in various regions in Canada, Greece, the USA, Siberia, and beyond.

Unfettered gluttony has expanded waistlines and caused environmental issues that may yet send us back to the caves – provided we can still fit through the entrances. The emergence of lifeless zones, those low-oxygen or hypoxic regions within lakes and oceans worldwide, can be traced back to agricultural runoff, emissions from fossil fuels, and pervasive water pollution. Algae blooms and the rapid proliferation of seaweed, largely spurred by elevated phosphorus and nitrogen levels originating from industrialized farming, are smothering our oceans.

Ammonia, a byproduct of animal activities, seeps into groundwater or navigates through waterways, eventually reaching larger aquatic bodies. Presently, an estimated 700 established dead zones sprawl across a considerable expanse of approximately 245,989 square kilometers – an area roughly comparable to the size of New Zealand. Among these expansive lifeless zones, notable ones include the Gulf of Oman, spanning an impressive 164,979 square kilometers, and the Baltic Sea, extending over 69,990 square kilometers.

SEARCHING FOR ALTERNATIVES

The picture may seem bleak, and it sure is. But for some, it presents an opportunity to get in on the ground floor of investments in alternative food sources that are more energy-efficient and more sustainable.

Venture capitalists such as Michał Piosik and Piotr Grabowski of Poland’s AC/VC Foodtech Impact Fund are actively funneling their investments into the future of food. At the 2023 Infoshare event, Michał Piosik delved into their approach towards food alternatives, and the results of which they have every right to feel proud: “For us venture capitalists, the more rapid the growth of our investments, the more advantageous it becomes. To be candid, the equity appreciation on our recent investments has skyrocketed by an impressive 700%.”

Simplified yet practical products like vegan yogurts, crafted from locally sourced soybeans in Poland, have the potential to swiftly penetrate the market and yield substantial returns. Anticipating the future, cell-based meats cultivated from animals will emerge as cruelty-free protein alternatives within a decade. Presently, plant-based proteins constitute around 30% of the total, but cell-based meats may contribute up to one-third in the future.

A decade ago, the cost of producing cell-based meats was roughly $150,000, a figure that has now plummeted to approximately $63. “Let’s not deceive ourselves. In the context of meat, pricing plays a pivotal role in driving consumer choices,” Piosik remarked.

Still, a $63 hamburger that isn’t wagyu beef, seems hard to swallow.

THE NEW MEAT MARKET

According to Piotr Grabowski, approximately 50 companies worldwide are currently engaged in the field of cell-based meats, and this number is likely to double by the end of this year. Raising awareness that cell-based meats are distinct from GMOs and are essentially cultivated protein derived from animal cells, can significantly contribute to their increased adoption. Additionally, ethical considerations play a role; the idea of sparing animals from slaughter for food production makes cultured foods a more morally acceptable option.

Indeed, AC/VC Foodtech has already invested in several Polish startups, including: Yoush, Apollo Roślinny Qurczak, Listny Cud, Hempiness, Frens, Tribe Natural Energy, myEgg, Planeat, SERio and many more. They are getting ahead of trends, forging a new future in alternative foods.

Government regulations will also play a pivotal role in assuaging concerns. While the traditional industry may attempt to impede innovation through lobbying efforts, historical patterns suggest that, like other advancements in food technology, acceptance of cell-based meats will eventually prevail. As Piotr Grabowski put it, cell-based meats are “not targeted to destroy industries, but in the end it will be a much more efficient way of producing protein for people.” The margins for meat producers have been in the single digits, but at the same time, margins for plant based meats are often in the double digits, even up to 30%, 40% or even 50%.

BEANS OR BUGS?

Bean-based proteins in the past didn’t always taste so good. However, because food producers benefited from an established distribution network, they could move products that, quite frankly, tasted more like cardboard than meat. The texture was not meaty either, with a lot of early efforts coming closer to hardened tofu than meat. Still, the technology has grown over the decades. More science is now involved in flavoring and injecting nutrients, like B12, into bean-based meats. Without a science-based approach to bean-meat production to produce flavorful, healthy bean proteins, the industry risks drying up.

Now we come to the icky six-legged basis for meat substitutes that most Westerners find appalling: insect-based protein. In 2018, the UN published a report on the state of protein consumption worldwide and suggested that insects may be a way to meet (meat?) demand. But Krzysztof Cieciora, a deputy agriculture minister in Poland, suggested that eating insects was part of a campaign to overturn the “dietary values of the West.” He went so far as to call the situation “a battle, a food war.”

So far, insects in Poland are bred only for animal feed. There is, however, interest in bug farm investments. HiProMine, a producer of insect protein used in animal feeds, is building a research and development facility worth PLN 215 million. The launch of the 25,000-ton feed production plant

is planned for the first half of 2024. Last year, the company completed the first stage of construction of a hatchery in Robakowo, enabling industrial production.

In some ways, Deputy Agriculture Minister Cieciora is correct in that diets will change, and we as a society will not like it. Whether we eat grasshopper burgers, soybean chicken, or Soylent Green (“It’s people!”) things will have to change if we are going to sustain 9, 10 or even 11 billion people. Yet 2 billion people worldwide already supplement their diet with insects. According to the UN, wasps, beetles, and other insects are currently “underutilized” as food for people and livestock.

The concept of entomophagy, which involves consuming insects, has garnered interest in Europe. A recent online survey was carried out in Poland, involving 419 participants. The findings indicate that the availability of processed insect products can enhance consumers’ inclination to purchase items based on insects. Among the respondents, nearly 60% of those who had previously tried insects, accounting for 15.51% of the total, rated the taste as either good or very good. The attributes of appearance, aroma, and taste emerged as significant sensory factors influencing the adoption of entomophagy.

PLANT OR DIE

But why even bother with alternative sources of protein at

Presently, plantbased proteins constitute around 30% of the total, but cell-based meats may contribute up to one-third in the future”

all? Because just as humans are susceptible to heat, our food-based animals are also. In 2015, 17 million chickens died from the heat. Honeybees in Arizona’s extreme heat are dying off as their hives are melting. Pigs, rabbits, and fish in China are dying while wheat fields are flooding. All placental mammals roughly share the same maximum internal temperature of blood that circulates through certain critical areas, such as the base of the brain, of about 37 to 38 degrees Celsius. Avians can suffer higher temperatures, up to 43 degrees Celsius. Anything above that, and the animals start dropping.

Our carbon emissions have had a direct impact on global temperatures. Approximately 10% of the greenhouse gas emissions in the United States stem from agricultural activities. Some estimates suggest that meat production contributes to nearly 60% of all greenhouse gas emissions within the realm of food production. This figure is due to the extensive land required for grazing animals, often acquired through deforestation, as well as vast expanses of land needed for cultivating their feed. It takes a larger biomass to sustain animals for the same caloric yield. For instance, producing one kilogram of wheat results in 2.5 kilograms of emitted greenhouse gasses. In contrast, a mere kilogram of beef contributes a staggering 70 kilograms of emis-

sions. And let’s not forget about the substantial methane emissions cow digestion generates.

Elevated temperatures also place crops such as rice in jeopardy. In 2022, researchers discovered instances where nocturnal heat was causing harm to rice and other vulnerable crops. During nighttime, plants possess fewer mechanisms to protect themselves, presenting a significant menace to the world’s food production network. “Given the mechanics of photosynthesis, plants require cooler temperatures during the night,” explains Dr. Argelia Lorence, a professor specializing in metabolic engineering at Arkansas State University. In the context of wheat cultivated in fields, heightened stress from nighttime warmth resulted in diminished yields, reduced grain weight, and decreased starch and protein content.

So, what’s to be done? A fundamental reevaluation of our food production methods is imperative to avert the looming threat of widespread famine. While Polish startups are actively engaged in this endeavor, their efforts require support and collaboration. It would be nice if we could avoid the dystopian future depicted in the 2013 movie Snowpiercer, in which train passengers are forced to consume gelatinous cubes made from cockroaches. However, when it comes down to it, the choice between a jellied cockroach bar and starvation isn’t much of a choice, is it?

SEEKING STABILITY & EXPRESSION

The luxury market rebounded in 2022 to reach a value of PLN 37 billion. What’s important to note about the growing opulence in Poland is that generational differences are about to shake up the status quo of luxury purchases.

BY SEAN REYNAUD

Seeking stability is a universal desire that resonates with everyone, which is precisely why the upheaval caused by the war in Ukraine and the pandemic has had such farreaching implications. A sense of stability, knowing when and where the money comes from, offers the ability to plan purchases strategically.

Certain luxury items, such as rare alcohols, unique timepieces, and rare handbags, are considered safe investments in uncertain times, especially when traditional investments, like gold, have become less than secure. What luxury goods hold over other forms of investment is scarcity, which has always been a strong determiner of price and resilience to market forces.

A WIDENING GAP

As has happened many times before, the instability experienced in recent years has polarized the market, and the middle class’s purchasing power has dwindled amidst high inflation. However, the rich have been able to hedge their bets in these turbulent times.

Andrzej Gałkowski, Partner in Advisory Services for the Financial Sector and Leader of the advisory team for the banking sector at KPMG in Poland, wanted to know how people fared in the current financial climate. A substantial 72% of Polish citizens surveyed signaled a decline in their financial circumstances. This demographic has taken measures to curtail expenses and address challenges in covering them, including exploring avenues to minimize or halt costs related to their commitments, such as opting for credit holidays. In contrast, a mere 13% of respondents reported an improvement in their financial standing.

The HNWI, whose ranks are growing at an accelerated pace in Poland compared to the global trend, have no such issues. The growing numbers of HNWI have resulted in noteworthy revenue expansion for banks specializing in private banking and wealth management services.

Unsurprisingly, in 2022, the luxury goods market in Poland witnessed a substantial 18.9% year-over-year increase, according to a recent report by consultancy KPMG. The market reached a total valuation of PLN 37 billion, a notable rise from the 2021 figure of PLN 31.1 billion.

WEALTH IS GETTING YOUNGER

Even more interesting than the overall recovery is the age profile of wealthy Polish individuals. Just like elsewhere in the world, Poland is on the precipice of a significant generational shift. Any investor worth their salt must know the spending habits of their more youthful consumers.

“I strongly recommend watching Gen Z and Gen Alpha. Ignoring them is unwise,” Justyna Adamczyk, the creator of Luxury Academy at the SWPS University in Warsaw, told Interia. “For one, Gen Z is the first one to consume hard luxury so early. They become luxury brand clients at the age of 15. The generations that preceded them usually started at 1921,” Adamczyk explained.

While Gen Y (Millennials) consume almost half of all luxury goods and services in Poland (48%) and Gen Z only 18%, the latter’s purchasing power and needs are about to explode. By 2030, Gen Y will consume more or less the same portion of the luxury cake (50%), while Gen Z’s cut will increase to 30%. That’s a total of 80% of luxury goods that will cater to today’s 20-40 year-olds. While Millennials were the first to put experience over possession, Gen Z is way ahead of the curve.

The younger generations value sensation, expression, and having a good time over dusty old golf clubs. They would rather live with their parents or rent than buy property. They want sustainability and products that reflect their ethical values and are responsible to the planet. In other words, they are less likely to buy Bugatti’s because Bugatti’s burn too much fuel and cost the environment more in the long run. Younger generations are pushing luxury brands into a more ethical stance vis-a-vis the planet and social issues.

The generational change has also opened new avenues for popular brands producers. The “high-low” approach is a major trend in the fashion sector. It involves collaborations between luxury brands and popular or sports brands (such as Gucci and Adidas, Balenciaga and Yeezy GAP, Dior and Birkenstock) or luxury brands and artists whose work resonates with the younger generation. At first glance, what might seem like an unusual pairing turns out to be an intriguing and lucrative partnership, drawing in a different, new group of customers.

WATCH THE EMISSIONS

Premium and luxury cars constituted the largest portion of the market, with a value of PLN 24.7 billion, reflecting a robust 20.5% year-over-year growth. In 2022, the registration of premium-class cars saw an increase of more than 5% compared to the preceding year, with 96,100 vehicles registered. Additionally, 329 luxury vehicles were registered within the same timeframe. The supply chain issues, which stalled all market segments during the pandemic, particularly the electronics-heavy models, have been worked out, and parts are now getting to where they need to be.

The market value, including premium brands, totaled PLN 24.7 billion, with over half of these cars featuring alternative drives. “Prestige is now determined not only by the car’s brand but also by its alignment with low-emission economic trends,” said Mirosław Michna, partner at KPMG. The trend is becoming increasingly pronounced as the younger, more

sustainability-conscious cohorts reach the luxury market. Interestingly, institutional buyers accounted for 80% of purchases, indicating a shift away from individual consumers. Looking ahead, there might be a minor decline in the luxury vehicle count. Experts see the market decline by -1.2% y/y over the next five years. It may seem surprising that the no. 1 status symbol may lose its hold, but this is just one of several signals that a broader generational change will shake up the luxury market.

EBBS AND FLOWS OF HIGH-END HOTELS

Since the number of HNWIs continues to increase, and the age at which new generations start spending their (parent’s) money on luxury is decreasing, one can only wonder where the surplus will go. What is the new standard of luxury? It seems that one segment is expected to see rapid and sustained growth over the next five years.

In 2020, the spa and hotel segment was hit the hardest, reporting a 60% plunge. Recovery in the segment also lagged in 2021, due to lockdowns and the fact that viruses do not respect wealth. But last year, the luxury hotel recorded a remarkable rebound, growing 45.6% yearon-year (to PLN 2.6 billion), up to approximately 70% of its pre-COVID-19 crisis value. As far as luxury hotels are concerned, things are back to or better than normal. In fact,

80% of luxury goods market will be consumed by Gen Y and Gen Z in 2030

PLN 24.7 billion was the value of the luxury car market in 2022, by far the largest luxury segment in Poland

45.6% y/y growth in the luxury hotel and spa segment in 2022, the most rapidly growing segment

they are predicted to be the fastest expanding luxury market segment – expected to grow 11.9% each year until 2027.

Paradoxically, the war in Ukraine contributed to higher hotel occupancy levels in large cities in Poland, especially during the first half of the year. Rzeszów joined the ranks of important cities in terms of hotels due to its proximity to the Ukrainian border.

GREAT RESILIENCE

Another luxury market segment that seems unfazed by the war in Ukraine, the waning pandemic, inflation, and highinterest rates is real estate. These disruptions seem to have bolstered the luxury real estate market. While the growth rate dipped to 9% in 2022 from 18% in 2021, this decline shouldn’t be misconstrued as a crisis.

The pandemic-induced lockdowns amplified the demand for personal havens of relaxation, with recreational land purchases surging among the general populace and luxury properties. Villas and terraced apartments seemed to be preferred.

High-interest rates have little to no bearing on these purchases, as most are made with cash. Conversely, higher interest rates have fueled investments in opulent properties, just like with other luxury segments. After all, just like different luxury segments, luxury property is seen as a solid investment in unstable times.

BY BEATA SOCHA

e all stood with mouths agape as the generative AI revolution started in late 2022. With trepidation and awe, we witnessed the early days of its initial lightningspeed growth (Chat GPT reached a million users in less than a week). With voyeuristic excitement, we saw tech giants roll up their sleeves and roll out their own versions of Large Language Models, like Google’s Bard and Meta’s LlaMa.

After the initial breakneck pace, however, and a few quite public hits-and-misses, tech firms are taking a step back, trying to figure out not just the tech behind their LLMs but, more importantly, the business soundness of it. Stability AI is reportedly bleeding talent, while OpenAI is facing some alarmist headlines questioning its long-term solvency.

Rather than staking a claim as a revolutionary product, Google’s Bard is called “an AI experiment” on its main website. Meta released their next LlaMa iteration as open source. Watching the AI race take new and sometimes unexpected turns, one can’t help but wonder: what is the business model behind these products, or more specifically – is there a business model at all?

LEGAL ISSUES AND ‘HALLUCINATIONS’

Marred by lawsuits over IP, scrutinized for the errors and “hallucinations” it makes, and for the first time losing users, OpenAI’s ChatGPT no longer seems to be the gold standard of LLMs, or at least not the only game in town. Reports of ChatGPT making more mistakes than before are common. Should the quality of a service decline with use?

wIt may if it makes business sense. Who will pay for the premium service if the free tier is good enough? On the other hand, the wonders of the free version may entice us to pay for more.

The problem with this strategy, as Cornell University’s Lutz Finger points out in his recent Forbes piece, might be that, unlike with other proprietary technologies, there seem to be fewer barriers to entry. The initial LLMs were costly to train, but as with the early versions of the calculator, the industry has ironed out the kinks and figured out how to significantly reduce R&D costs. Economists and business analysts call this a “no moat” problem. If a moat isn't protecting your cash cow, you will soon see an entire herd of bovines eating your grass.

DISLOYAL CUSTOMERS

One could argue that the “as-a-service” model, in which generative AI models are converted to cash, should be sufficient to recoup the costs. However, if the costs of running an AI exceed revenue, as rumor has it for ChatGPT, where does that leave the company accounts? Costs may be why AI models face declining accuracy, as their corporate parents are forced to cut corners to pay for basic maintenance.

Besides, the “as-a-service” model crumbles when customer loyalty is low, let alone non-existent. LLMs are ideal for ad hoc problems, like translating, creating standard copy, summarizing, etc. These are all oneoff tasks. And if the quality is comparable, there is no reason to choose one AI over another. In the early days of ChatGPT3, I would only switch to alternatives because it ran too slow as the service choked on the number of concurrent users. That does not seem to be a problem anymore. Without substantive differences, I could choose ChatGPT3.5 today and Bard tomorrow.

Between customer (dis)loyalty, ever decreasing barriers to entry, and a slew of open source alternatives, is there a sustainable business model behind AI?

As Nico Schoenerberger of 10x Founders points out, it’s all about AI’s application and what you build on top of the existing models (read the entire interview on page 62). Poland’s largest bank PKO recently boasted that the number of tasks its robots performed had exceeded 220 million across 270 processes, mainly large-scale repetitive tasks. Another lender, Alior Bank, has introduced a virtual customer assistant called InfoNina, and claims that around 45% of all customer interactions are now fully automated.

Perhaps, like the proverbial calculator, all the AI revolution will amount to is a bump in productivity as a cost-cutting measure. After all, 56% of Polish entrepreneurs believe that AI implementation in their companies will lead to reduced employment.

“Between customer (dis)loyalty, ever decreasing barriers to entry, and a slew of open source alternatives, is there a sustainable business model behind AI?”

AI

15% of companies use AI, 13% plan to implement it in 2023

According to a study by KPMG in Poland, 15% of companies in the country are currently using AI technology, while 13% plan to implement it by the end of 2023. Globally, almost 4 out of 10 companies use AI solutions. AI is most commonly used in marketing, production, and supply chain planning in Poland.

The study also found that 6 out of 10 companies using AI do not monitor its effectiveness. Mobile and computer-assisted decision-making solutions were among Polish companies' most commonly implemented technologies.

Only 41% of ChatGPT users verify sources

As many as 77% of participants in a study conducted by Symetria, a Polish UX company, encountered false information in search results using ChatGPT. Despite this, not all have developed a critical mindset when approaching presented news.

Most users do not verify the sources of the answers obtained. Only 41% of respondents asked about this, with the vast majority indicating difficulties in finding the references provided by ChatGPT to the allegedly sourced information for the prepared queries.

IT MARKET

Remote work jobs in IT down 7.7% in Jan-Jun

In the first half of 2023, the number of fully remote job offers for IT specialists decreased by 7.74% compared to the second half of 2022. Full remote options still make up nearly 73% of all IT job ads, but hybrid and

on-site work are gaining more traction.

Currently, 72.73% of offers are for remote work, 24.18% for hybrid, and 3.09% for on-site work.

Employers face the challenge of finding a balance between providing ideal working conditions for IT employees and maintaining a solid connection with the organization. In June 2023, the highest net salary for fully remote senior IT professionals on a B2B contract was PLN 24,600.

SPACE TECH

Creotech signs contract with ESA for large space detector prototype

Creotech Instruments has entered into an agreement with the European Space Agency (ESA) to develop and manufacture prototypes of large-surface detectors using superconducting nanowaire technology. The project’s total value is approximately €1 million, with Creotech contributing around €400,000. The detectors will serve two purposes: supporting quantum key distribution (QKD) networks to receive keys from satellites and facilitate optical communication. The project is expected to conclude in September 2025.

Creotech Instruments is a leading Polish company providing space technology and specialized electronics worldwide, including quantum technology. It moved from the NewConnect market to the main Warsaw Stock Exchange (GPW) in July 2022.

GAMING

Polish gaming industry revenue grows 250% over 5 years, export dominates

In 2022, the Polish gaming industry recorded revenues

€1,286 mln

revenue of Polish gamedev companies in 2022, with digital distribution accounting for 85% of global sales.

68%

of respondents in Poland exclusively use electronic banking, while 49% view banks as leaders in cybersecurity, according to the Polish Bank Association.

of €1,286 million, despite an 8% dip in 2021. Over the past five years, total revenues surged by 250%, mainly due to successful exports. Digital distribution accounted for over 85% of global sales of Polish games in 2020 and continued to rise.

The primary markets for these games were North America, Europe, and Asia, representing 20-40% of sales. The northern hemisphere continents together contributed 75-90% of overall sales. The major countries where Polish games gained popularity included the USA, China, the UK, Germany, and France. Japan favored Polish horror games on Steam, consoles, and Switch, while South Korea appreciated Polish strategic games.

MED TECH

Medicalgorithmics with a contract for 300 PocketECGs

Medicalgorithmics has signed an annex to its agreement with m-Health Solutions Inc., a Canadian firm. The new deal involves replacing the older version of the PocketECG device with the latest version

(PocketECG IV) by the end of 2023, along with a four-year leasing arrangement. The collaboration also includes delivering 300 new units of the PocketECG IV device and integrating mHealth Solutions Inc.’s DMS devices with software and algorithms for cardiac diagnostics. Medicalgorithmics specializes in non-invasive medical devices for cardiac diagnostics and is listed on the main market of the Warsaw Stock Exchange.

GAMING

CD Projekt RED plans to reduce workforce by 9%

CD Projekt has decided to reduce its workforce at CD Projekt RED studio by approximately 9% by the first quarter of 2024. The restructuring costs are estimated at around PLN 4.5 million and will impact the group’s financial results for Q3 2023. CD Projekt RED is known for developing RPG video games, with popular titles like “The Witcher” series and “Cyberpunk 2077.” The move comes as the company adapts its team size and structure to its operational needs and publishing strategies.

THE TIME FOR HARDWARE-HEAVY INVESTMENTS HAS COME

European startups, particularly in the CEE region, have long attracted interest from investors because of their innovative nature and how undervalued they still are. Capital is flowing into the new wave of environmental-oriented tech companies, even the hardware-heavy ones. WBJ caught up with Nico Schoenerberger of 10x Founders at Infoshare 2023 to talk about what makes CEE startups both so attractive and undervalued.

INTERVIEW BY BEATA SOCHA

WBJ:It is interesting to see so much US capital looking to invest in Europe. What is it about Europe that makes it attractive? In the past, it was undervalued but now?

Nico Schoenerberger:It still is. You can get a stake in a European company for a fraction of what Silicon Valley offers.

Do you think there are a lot of opportunities happening here or is innovation in Eastern Europe trailing Western Europe?

No, I would say things have changed. People have realized that the sheer number of developers in the CEE region is so substantial that you can easily build businesses around that. But what I realized is that the CEE lacks the ability to commercialize. I think product, tech, innovation is extremely strong across Europe. But what is needed is someone

with the ability to scale up a company from one million to five and then from five to a hundred. Businesses in the US are really strong at doing it; Europeans have yet to learn this skill. You have to have the right people and the right tech, and you need someone who can sell it.

Scaling up has been Poland's Achilles heel because it has a large enough domestic market, and most startups in Poland don't think about the international market until they have strengthened their position enough. In doing so, they miss their opportunity, their first mover advantage in other markets. Is this still the case?

This mindset is still there amongst many of the entrepreneurs of the older generation. I think the new generation of Polish startup founders realize the need for a global mindset from day one of building your company. That may be because of education: many young entrepreneurs have worked for US companies or CEE companies that became global champions. They see the opportunities in looking outside the domestic market. That is the case for Polish, and also Czech and German startups. They are becoming more international. You can see that in their very first pitch. You should always have your pitch ready in English rather than your local language. It also matters where you locate your headquarters, if you have a Delaware Inc., for instance.

Is it really that big an advantage to have a US office, the so-called "Delaware Inc."? Should a startup have an international HQ from the outset even when they also operate on their domestic market?

Definitely. I suggest that companies do both. Because if you sell domestically, it definitely helps to have a local legal entity. But if you want to raise funds from US investors, you need to think global from the beginning.

A few years ago, we saw mainly software companies in events like Infoshare. Now, you can see more startups developing environmental and energy tech.

Investors have realized that environmental tech and tackling climate challenges with tech solutions is where money can be made. It's very opportunity driven.

Are these more hardware-heavy tech solutions than we've seen in the past? Yes, they are. Sure, you can get the lowhanging fruit by helping the company optimize power use with software. But if you look at carbon capture – you need significant investments into hardware solutions to suck out the carbon from the atmosphere, to invest in renewable energy. It's still a tough game because of the amount of hardware involved and how capital-intensive these investments are. That's why we need public-private cooperation to see these investments properly funded.

Have the mass layoffs in the tech industry had a major effect on the startup scene? Are startups finding it challenging to raise capital?

I think the layoffs have been a consequence of the missing funding. The layoffs freed up a lot of talent. Over the past few years, with all of the startups hiring, everybody was looking for the same people. Two years ago, I heard people saying: "I can't find the right talent. I need to scale, I want to grow, but I'm lacking developers." And now we are at a place where companies are saying: "We don't need to grow anymore or search for funding."

Does that mean investors are becoming more selective?

Absolutely. Investors have become more picky. They are taking way more time in terms of due diligence now.

So the VC model is now more professional?

It was already professional, but we now see a clearing out to a certain extent. What has disappeared is what I like to call "tourist VCs." These are the people choosing to invest for lifestyle reasons without really understanding how to invest in startups. They are now pulling

back. And startups are also finally learning that it's not enough to simply have a cool proof of concept or a working piece of tech. That you can only get money if you have a sustainable business model that makes sense in the long term.

What is the future of AI? Do you see it more as an open-source tool available to all, or is it proprietary and entrenched?

It will be a mixture of both. Just like with public cloud solutions that have become the standard, and no one is building their own servers anymore. Underlying AI tools will become like cloud infrastructure. You will need to build on top of that AI scaffolding to train the generic models as use-case specific as possible, for example, train specifically for cancer detection. There is a lot of room for value creation in what you build on top of that underlying AI technology. The groundwork has been done, and the AI "infrastructure" exists. How you plug into that infrastructure and what you create out of it will determine your company's success.

What is needed is someone with the ability to scale up a company from one million to five, and then from five to a hundred. Businesses in the US are really strong at doing it; Europeans have yet to learn this skill

Life + Style

UNLEASHING ELECTRIFYING LUXURY

AND PERFORMANCE

Introducing the Mercedes-AMG EQE 53 4MATIC+ SUV: Electrifying Performance Meets Versatility

Experience the pinnacle of automotive excellence with the groundbreaking Mercedes-AMG EQE 53 4MATIC+ SUV. Packed with innovative features and an unrivaled drive concept, the EQE 53 SUV delivers uncompromising e-power like no other. Now available for orders at Mercedes-AMG dealerships, this remarkable electric vehicle redefines the driving experience. Feel the rush of electrifying acceleration with two powerful electric motors and the AMG Performance 4MATIC+ all-wheel drive, ensuring an unrivaled dynamic driving experience of unparalleled luxury and sustainable power. Don't miss your chance to own the Mercedes-AMG EQE 53 4MATIC+ SUV, a true marvel of automotive engineering.

A RANGE OF SENSATIONS AND DELICIOUS FLAVORS

A conversation with Konrad Kowalski, chef of the Opasły Tom restaurant

As a chef, you create your menu. What inspires you when creating new dishes?

I get ideas from everywhere, but I start with what I like the most and build from there. The chef of a small restaurant in Wales once said: we cook the food we enjoy eating and try to present it so our guests will also enjoy it. The satisfaction of a restaurant's guests is the best confirmation of a chef's talent.

In that case, I have to ask, what do you like to eat the most?

I love eating anything sweet - chocolate, all kinds of creams, desserts. I enjoy letting my imagination run wild and feel a sense of freedom when creating flavor compositions.

In 2020, Opasły Tom was recognized by Wallpaper* magazine as one of the five most beautiful restaurants in the world. Last year it made the 50 Best Discovery list. Are the stunning interiors and prestigious location also an inspiration for you? Definitely yes! Guests come to Opasły Tom for a unique aesthetic experience comprising exceptional dishes served in a breathtaking location. For a hundred years, there has been, is now, and will be - hopefully for the next hundred years - a great Warsaw restaurant in this location. I'm trying to carry on the tradition.

To make a reservation visit: . kregliccy.pl/opaslytom

PERFECT BY NATURE.

Agnieszka Zaremba, Magdalena Kostrzewa-Świątek, Katarzyna

Dąbek and the team from Tissu Architecture utilized a diverse palette of materials, textures, furniture, and details to create a cohesive composition that offers authentic experiences and promotes relaxation. Good space organization, a balanced color palette, and a human-friendly scale contribute to the comfortable usability of the house.

Natural materials play a significant role throughout the residence. A stone veneer with a structural surface adorns the walls of the open living area as well as the entrance doors. Strong contrast provided by concrete, beautifully showcases the building's natural texture. Wood on the floors and as veneer on the walls brings warmth. The building’s warm colors were selected to balance cooler materials used throughout the construction.

Tissu Architecture wins the main prize in the Residential Interior Private Residence category of the European Property Awards 2023-2024.

EVENTS

The WBJ relives or looks forward to the most important events in the world of business and economy

13TH ABSL SUMMIT 2023 - LEAD THE WAY. STAY AHEAD

The business services sector's scale, maturity, and flexibility have positioned the CEE region as a leader in implementing and delivering digital and innovative solutions. With resilience, adaptability, and growth all being part of the sector's DNA, we have the potential to stay ahead and become the driving force for economic renewal, both to the west and east of our borders. Will Eastern Europe lead the way out of the polyresins of the last four years?

This question will be debated by business leaders and representatives from the public sector, academia, and politics, who will sit on panels discussing three thematic streams, which this year focus on business resilience and forging a path forward in an uncertain environment. This adaptability keeps our region a leader in the business services sector and on a track dedicated to the growth that

POLAND'S ESTATE MARKET IS READY FOR NEW HEIGHTS

comes from the ability to implement unexpected change.

Participants will have the opportunity to hear from distinguished guests such as former Secretary General of NATO Anders Fogh Rasmussen, The Ambassador of the United States to Poland Mark Brzeziński, Pulitzer Prize-winning Historian, Journalist, and Commentator Anne Applebaum, Beata Javorcik, Chief Economist at the European Bank for Reconstruction and Development (EBRD) and Urszula Dudziak, famous Polish Jazz Vocalist.

Join the ABSL Summit 2023 "Lead the way. Stay ahead" in Kraków on 6-8 September to participate in the region's biggest business services event bringing together top decision-makers, thought leaders, and inspiring speakers! Each year the ABSL Summit is also a chance to dive into networking opportunities, so don't hesitate to find out more and register at https://abslsummit.com/.

operating in Polish real estate market. The participants will discuss the most important trends and changes in the Polish sector of office blocks, warehouses, shopping centers, hotels, flats and PRS.

This year’s edition of the event is organized under the slogan PropertyInvestment. The power of Polish real estate market, with the agenda of the event including subjects like:

• Leaders are not forever. Polish real estate market satisfies half of investment demand in Central and Eastern Europe. How to create an attractive market and maintain pole position?

• Who, and why, decides to invest in properties in Poland? The most active funds investing in real estate in Poland.

• Game Changer. Financing, prices, profitability and unpredictable interest rate. The scale of challenges and risk assessment in real estate

• The money market. Is property still an interesting asset for major investors? What are the alternatives?

Each year Property Forum attracts around 1,000 participants, among them the largest investors and developers, renowned experts, representatives of financial institutions, tenants, as well as politicians, both state and local. Property Forum consists of two days of inspiring thematic panels attended by 100 distinguished speakers from Poland and abroad, as well as the finals of Property Prize, a competition awarding the best properties, Proptech Festival, a competition awarding the best technologies for real estate, and an evening Gala.

Property Forum is the largest property market conference in Poland. The 13th edition of the event will be held on September 18-19, 2023, in the Sheraton Grand hotel in Warsaw. The conference will be attended by owners and managers of the largest companies