WARSAW BUSINESS JOURNAL MAY 2021 #63

WARSAW

BUSINESS JOURNAL S i n c e 1 9 9 4 Po l a n d ’ s l e a d i n g

business magazine in English

MAY 2021 ~ No. 5 (63)

For daily news visit us at wbj.pl

POLISH INVESTMENTS GREEN ENERGY,

TRANSPORT INFRASTRUCTURE, DIGITALIZATION AND HEALTHCARE

PLN THE POLISH CURRENCY ANALYZED

PLN 28.50 (VAT 8% included) ISSN 2543-9529 INDEX-RUCH-332-127

WARSAW STOCK EXCHANGE NEW IPO’S

REOPENING RABEN: PAST AND PRESENT | POLITICAL CRISES? | MONETARY SYSTEMS

MAY

4 In The Frame 7 In Review News Ambassadors’ page

16 Features

Raben timeline PLN by Sergiusz Prokurat Polish investments by Jakub Rybacki IPO boom by Anna Zhuravleva Global monetary system by Ben Esmael

33 Talking Points

Interview Prof Jacek Raciborski, Polish sociologist

37 Tech

News Business expansion by Sygnis Tour Headphone Series by JBL

45 Lokale Immobilia

News Flex office space by Regus Expert opinion by Cushman & Wakefield Inventory development by Mountpark

40 49 Kolejowa St. II

MAY 2021 W B J

t: +48 22 572 57 00 W B J MAY 2021

PUBLISHER'S NOTE

Morten Lindholm

Re-opening IS THE BUSINESS BOOM COMING … OR ARE WE JUST WITNESSES TO THE NEW REALITIES OF POST-COVID WHERE SOME SECTORS HAVE SEEN AN IMMENSE STRENGTHENING OF BUSINESS WHILE OTHERS MAY CEASE TO EXISTS? The money available in the market (or present on the sidelines still) is huge indeed, with the EU, the US and Asian governments printing money and distributing support for innovation, green development and infrastructure improvements. We have for this issue asked one of Poland’s largest think-tanks about the status of Poland in respect to what to expect about domestic investments and the overall investment climate. Poland’s export was in 2019 over 55 percent of GDP — the highest ever. It has always been said that the key reasons for the Polish post-communistic miracle are driven by strong domestic demand. But as the numbers show, export is a growing important factor for Poland. Therefore, a weakening zloty, as we have noticed in the last six months, is good news for the Polish exporters. Our expert Sergiusz Prokurat takes a look at what to expect from PLN in the months to come. As we enter the new era of work-life after the pandemic we all wonder what does it mean for the office market, what changes to expect in functionalities of offices, what new services will be added as normal procedures and can the boom of new office space that Warsaw and Poland have seen in the last decade continue with the changing trends? We include opinions on this topic from IWG and Cushman & Wakefield for you in this issue. These updates and some political and business news in this issue will give you a good insight into what is influencing the Polish market situation s the society is opening up again.

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

Sankhyayan Datta Managing Editor

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Krzysztof Maciejewski Business & Web Editor

kmaciejewski@wbj.com

Kinga Nieśmiałek Art Director

kniesmialek@valkea.com Contributors & writers

Ewa Boniecka Ben Esmael Sergiusz Prokurat Jakub Rybacki Anna Zhuravleva Sales

Katarzyna Pomierna kpomierna@valkea.com Print & Distribution

Krzysztof Wiliński dystrybucja@valkea.com Valkea Events

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MAY 2021 W B J

MORTEN LINDHOLM

PORTRAIT BY KEVIN DEMARIA

We wish you a nice read and hope your business is ready for take-off as well.

April 20, 2021 A record number of doctors declared plans to work abroad in the first quarter of this year, the Supreme Physicians’ Council (NRL) has said. NRL head, Andrzej Matyja told PAP that close to 200 affidavits enabling foreign employment were issued to doctors in the first three months of the year, more than in any other recorded quarter. “Never before has the quarterly figure been this high,” Matyja said. He added he was not surprised to see so many physicians willing to work abroad, and blamed this on low pay and a failing healthcare system. He stressed the need for increased healthcare funding and predicted a “disaster” if the government did not do this soon. He also warned that the rising migration of physicians from Poland threatened with heavy staff shortages after the Covid-19 pandemic, which in turn could deprive patients with other illnesses of proper medical care. PHOTOGRAPH BY SHUTTERSTOCK

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W B J MAY 2021

THE MOST IMPORTANT BUSINESS NEWS FROM POLAND IN ENGLISH

NEWS HIGHLIGHTS OF THE PAST MONTH FROM WBJ.PL

Start every business day with selected, unbiased and valuable insights

The census is not adapted to the blind, minorities, transgender people and same-sex marriages” Adam Bodnar, Poland’s commissioner of human rights, wrote on 19 April to the Central Statistical Office (GUS). He added that the “discriminatory” census also lacks foreign characters, which prevents members of national and ethnic minorities from filling in the form in accordance with facts.

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TOP SHUTTERSTOCK, PRESS MATERIAL

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W B J MAY 2021

In Review | NEWS April 29. The project, started in 2015, uses technology to examine artefacts housed at the National Museum in Warsaw. The mummy was previously thought to be a male priest but scans reveal it was a woman in the later stages of pregnancy. Experts from the project believe the remains are most likely of a high-status woman, aged between 20 and 30, who died during the 1st Century BC.

INTERNATIONAL

‘EU-partner’ Poland thanked ARCHAEOLOGY

Pregnant Egyptian mummy

A team of Polish scientists says they have discovered the only known example of an embalmed pregnant Egyptian mummy. The discovery was made by researchers at the Warsaw Mummy Project and revealed in the Journal of Archaeological Science on

A total of 100 oxygen concentrators arrived from Poland in New Delhi on May 7 as part of humanitarian assistance to India in its fight against rising Covid-19 cases. “International collaboration continues. Consignment of 100 oxygen concentrators arrives from Poland. Thank our EU partner, Poland for this support,” tweeted Arindam Bagchi, official spokesperson of the Indian foreign ministry. With more

YOU ENVISIONED A WORLD WITHOUT CIGARETTES.

than 326,000 new cases of coronavirus reported in India on May 15, the South Asian country’s health ministry said that the second wave in the country was “stabilizing.” India has reported less than 400,000 daily infections for the past few days. Total cases are currently at 24.37 million while the death toll stands at 266,207 with 3,890 fatalities recorded in the last 24 hours. During the health ministry’s briefing, doctors said that Mucormycosis, a deadly fungal infection, has seen a significant increase. According to the doctors, Mucormycosis is fatal for people who have weak immune systems and also causes loss of eyesight, removal of the nose and jaw bone. With a population of over 1.3 billion, India’s nearly non-existent healthcare system is buckling as a record surge in Covid-19 cases puts pressure on hospital beds and drains oxygen supplies.

THANK YOU, ANDRÉ. It was a bold statement: In 2016, CEO André Calantzopoulos said he wanted Philip Morris International (PMI) to stop selling cigarettes as soon as possible. To do so, PMI would need to continue to develop products that were not only a better choice than continued smoking but would be widely adopted by current adult smokers. Five years on, we are well on our way to realizing André’s vision of a smoke-free future. With the right regulatory frameworks and support from civil society, we believe we can see an end to cigarettes within 10 to 15 years in many countries. As CEO, André transformed PMI’s business model and purpose, starting the process of turning a cigarette company into a technology company that offers real, tangible hope to the 1 billion+ smokers worldwide. But that’s not the only impact he has had on PMI. He guaranteed equal pay for equal work for men and women, making PMI the first company to earn global EQUAL-SALARY certification. He has confronted illicit trade and human rights issues while making PMI a leader in forest conservation, water stewardship, and waste reduction.

POLITICS

‘Gender equality’ blocked BUSINESS & ECONOMY

Lowest unemployment Poland had the lowest unemployment rate in March in the EU, according to data published by Eurostat, the bloc's statistical office. The office put the rate at 3.1 percent, slightly less than the 3.2 percent held by the Czech Republic in second place. The Netherlands came in third at 3.5 percent. In Poland, the number of unemployed people registered at labor offices stood at 534,000 in March against 540,000 in February, Eurostat said. Poland had 534,000 unemployed people at the end of March 2021, down from 540,000 in February. In the entire 27-member bloc, the average unemployment rate remained flat at 7.3 percent in March.

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Lobbying by Poland and Hungary has led to the removal of the phrase “gender equality” from a May-7 declaration on advancing social cohesion in the European Union as it strives to rebuild from the Covid-19 pandemic. Poland’s nationalist ruling Law and Justice party (PiS) and eurosceptic ally Hungarian Prime Minister Viktor Orbán promote what they call traditional social values at home and have repeatedly clashed with their more liberal Western peers over the rights of women,

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Thank you, André, for all you’ve done—and for agreeing to continue your journey with us as Executive Chairman.

ANDRÉ CALANTZOPOULOS

Executive Chairman of the Board, Philip Morris International

SHUTTTERSTOCK

WBJ

We’re delivering a smoke-free future, faster. See our progress at PMI.com/unsmokethefuture

UN SMOKE THE FUTURE W B J MAY 2021

In Review | NEWS WE ARE CONTINUOUSLY EVOLVING OUR COMPANY TO CREATE POSITIVE CHANGE IN THE WORLD.

gay people and migrants. The two countries opposed mentioning “gender equality” directly in a statement by the bloc’s 27 national leaders, who were set to meet in the Portuguese city of Porto to look for ways to reduce social and economic inequalities that widened during the pandemic. While an earlier draft said the bloc would “promote gender equality,” the later version seen by Reuters avoids the phrase and reads: “We will step up efforts to fight discrimination and work actively to close gender gaps … and to promote equality.”

BELOW ARE SOME OF OUR NOTABLE ACHIEVEMENTS AND AMBITIONS. POLITICS

Recovery fund legislation approved Poland’s lower house of parliament on May 4 approved legislation essential to the European Union’s €750 billion Covid-19 recovery fund, bringing the 27-nation bloc a step closer to implementing the plan. EU governments approved the recovery fund last year to help member states bounce back from the economic damage caused by the coronavirus pandemic. But all countries must ratify a decision to raise the upper limit for national contributions to the EU budget in order for the plan to go ahead.

2030

>50

~14.MM*

40.MM

≥$1BN

The year we plan to reach a net zero carbon footprint (scope 1+2)

POLITICS

PM-resignation calls grow louder Poland’s main opposition party Civic Coalition has called on Prime Minister Mateusz Morawiecki to resign over an apparently illegal attempt by the government to hold a presidential election by postal vote last year. The call follows the publication on May 13 of a report by the Supreme Audit Office (NIK), which controls the functioning of Poland’s government and administrative bodies, on the preparations for the postal vote. The election had been due to take place on May 10, 2020, but was later canceled owing to the pandemic despite around PLN 76 million being spent on preparations. According to NIK, there were no legal grounds for the PM to order the Polish Post Office and the Polish Security Printing Works (PWPW) to print the ballots and plan their distribution. NIK has notified the prosecutor’s office of suspected crimes by the management boards of Poczta Polska and PWPW.

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POLITICS

‘Polish deal’ unveiled Poland’s ruling Law and Justice (PiS) par-

ty promised a middle-class future for all on May 15, putting lower taxes for most, higher healthcare spending and support for young families at the center of its new “Polish Deal” to recover from the pandemic. The proposals include raising the tax-free income threshold, exempting minimum wage and lower pension recipients from tax, as well as raising the limit for entering the second tax bracket. “It’s a program of building a middle class for all, not for the few,” Prime Minister Mateusz Morawiecki said, presenting the plan. Critics said the measures would be offset by higher health insurance contributions for higher earners. Budget spending on healthcare is to rise to 6 percent of GDP by 2023 and 7 percent by 2027, the plan said, without giving a recent comparable figure.

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Number of adults who have switched to our leading smoke-free alternative and stopped smoking as of March 31, 2021

% of our R&D expenditure devoted to smoke-free products in 2020 SHUTTTERSTOCK

WBJ

% of our total net revenue we aspire to come from smoke-free products in 2025

Number of adult smokers we aspire to switch to our smoke-free products by the end of 2025

Our targeted net revenue from products beyond nicotine in 2025

*From PMI 2021 Q1 results Additional figures taken from PMI Investor Day, Feb. 10, 2021

We’re delivering a smoke-free future, faster. See our progress at PMI.com/unsmokethefuture

UN SMOKE THE FUTURE 11 W B J MAY 2021

In Review | NEWS

NO ONE IN THE COMPANY ASKS, ‘WHY ARE WE DOING THIS?’ THEY OUR 2025 GOAL IS ASK, ‘HOW CAN WE FOR SMOKE-FREE DO IT FASTER?’ PRODUCTS TO MAKE UP MORE THAN 50% OF OUR NET REVENUE.

right-wing ruling party to an advisory council at the state-run AuschwitzBirkenau museum in Poland. They argue that the former prime minister, Beata Szydło, has tolerated “openly fascist” groups and supported attempts to stifle research into the Holocaust, among other complaints. Szydlo was appointed in April to the Auschwitz-Birkenau State Museum Council, a body of experts that advises the museum director. That prompted three members of the ninemember panel of experts to resign, followed by a fourth resignation reported around May 1.

POLITICS

Poland’s Senate on May 13 rejected the latest candidate for the politically-sensitive role of national ombudsman, deepening an impasse that has pitted the ruling conservative party against opponents who say it is eroding democratic rights. The vote marked the fourth time the parliament has failed to fill the position, leaving a question mark over what will happen if no replacement is found by the outgoing ombudsman’s deadline to leave. The upper house of parliament voted down the candidature of Bartłomiej Wróblewski, a lawmaker from the governing PiS party, with a razor-thin result of 49 senators against, 48 in favor, and two abstentions. Ombudsmen are appointed to five-year terms by lawmakers from both the lower and upper houses. The role dates back to the final years of communism and the independence of the office is often fiercely contested. The current ombudsman, Adam Bodnar, was appointed just before PiS took power and his term formally expired in September. But the frequent government critic has stayed on because the lower house of parliament, where PiS and its smaller coalition partners hold a majority, and the opposition-controlled Senate have failed to agree on a successor. Last month, the Constitutional Court — that has been packed with PiS-friendly judges — ruled that Bodnar’s extension was not compatible with the constitution, giving him three months to leave.

Relatives of former Auschwitz prisoners from Poland are protesting the appointment of a top member of the country’s

Russia has expelled five staff members at Poland's embassy in Moscow in a titfor-tat move after Warsaw declared three

Impasse over ombudsmen

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Ex-PM in museum council opposed

Diplomats expelled

This is a time like no other for corporations and their leaders. A time when global challenges require ambitious action. At Philip Morris International (PMI), we are committed to creating a better, more sustainable future. And we know that the greatest positive impact we can have is by replacing cigarettes with better alternatives for those men and women who would otherwise continue to smoke. Today, as I take the reins as CEO, I will continue on the path forged by my predecessor and accelerate our progress and growth as we work to reduce the role of cigarettes in our business. In 2020, our smoke-free products accounted for almost 25% of our total net revenue, up from essentially 0% five years ago. We aim to increase that to more than 50% by the end of 2025, while growing the number of markets in which they are sold from 66* to 100–ensuring as many adult smokers as possible have access to smoke-free alternatives. Guided by science, facts, innovation, and new thinking, our roadmap to a better future remains unchanged. Our vision, unwavering. As we look to the future—to 2030 and beyond—our actions as a company will be grounded in our commitment to deliver the greatest positive impact as fast as possible. For our consumers, our employees, and our planet. Our goals are ambitious—and meeting them will require the efforts not only of PMI but also of governments, NGOs, and other stakeholders. Harm reduction is our common goal. We must cooperate to achieve it as soon as possible.

SOCIETY

Residence permits for almost 500K

Together, we will unsmoke the world.

Valid residence permits are held by over 483,000 foreigners, mostly by Ukrainians, Belarusians and Germans, a spokesman for the Office for Foreigners (UdSC) has claimed. Moreover, young people most often settle in Poland, the representative said, adding that almost 275,000 foreigners with valid residence permits are 20-39 years of age. According to data provided by UdSC, 483,500 people currently have valid residence permits. The largest groups include the citizens of Ukraine (265,300), Belarus (31,500) and Germany (20,000).In the entire 27-member bloc, the average unemployment rate remained flat at 7.3 percent in March.

>>>

JACEK OLCZAK

Chief Executive Officer, Philip Morris International

SHUTTTERSTOCK

WBJ

We’re delivering a smoke-free future, faster. See our progress at PMI.com/unsmokethefuture

UN SMOKE THE FUTURE *From PMI 2021 Q1 results. Additional figures taken from PMI Investor Day, Feb. 10, 2021 W B J MAY 2021 13

In Review | NEWS Russian diplomats in Poland personae non gratae for violating their diplomatic status. The Russian foreign ministry said in a statement on April 23 it had summoned Poland's ambassador to Russia, Krzysztof Krajewski, to the ministry in Moscow where he was informed of the decision.

RELIGION

Polish bishop resigns Pope Francis has accepted the resignation of a Polish bishop following a Vatican investigation into alleged negligence in addressing cases of sexual abuse of minors by priests under the bishop’s authority. The forced departure of Bishop Jan Tyrawa was the latest in a string of sanctions the pope has meted out since mid-2020 to Polish Catholic Church leaders over cases of cover-up of sexual abuse by other priests.

SOCIETY

LGBT+ rights gains halted Progress on laws to boost LGBT+ rights has come to a virtual standstill in Europe amid a rise in homophobic and anti-transgender rhetoric by politicians in countries including Poland and Hungary, an advocacy group said on May 17. Britain, Italy and Ukraine were among the nations that scored lower rankings in this year’s “Rainbow Europe” index compiled by ILGA-Europe, which said legislative reforms had stalled due to increasing polarisation over LGBT+ rights.

SPORTS

No.15 seed Iga Świątek was in ruthless form as she routed No.9 seed Karolína Plíšková 6-0, 6-0 in just 46 minutes in the Internazionali BNL d'Italia final. Świątek dropped just 13 points in total — four in the first set and nine in the second — and faced only four game points against her. The Pole picks up her third career title following Roland Garros last autumn and Adelaide in February, and the result ensures that she will break the Top 10 for the first time on May 17.

Robert Lewandowski netted his 40th Bundesliga goal of the campaign on May 15 to equal fellow Bayern Munich legend Gerd Müller’s single-season record from 1971-1972. Lewandowski found the net after 27 minutes of the German champions’ game at Freiburg, bringing his tally for the season to 40 goals in 28 league matches. That matches Müller’s tally from 49 years ago when the Bundesliga’s all-time leading goalscorer set the record with 40 goals in 34 games.

Iga Świątek wins Italian Open

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Lewandowski levels Müller’s record

SHUTTTERSTOCK

WBJ

Curated from: Curated from: afp.com, aa.com.tr/en, aninews.in, apnews.com, bbc.com, bundesliga.com, pap.pl, reuters.com, wtatennis.com

Ambassadors’ Corner Top diplomats in Warsaw tell the WBJ about...

media freedom, judiciary independence and healthcare system

Eduardas Borisovas Lithuanian ambassador

How free is the media in your country?

Article 25 of our constitution provides that everyone shall have the right to have their own convictions and freely express them. No one must be hindered from seeking, receiving or imparting information and ideas. To ensure the freedom of the media, Article 44 adds that the censorship of mass information is prohibited. The state, political parties, political and public organizations and other institutions or persons are not allowed to monopolize mass media. Freedom House’s latest annual report deems Lithuania “free.” The latest World Press Freedom Index prepared annually by Reporters Without Borders (RSF) ranks Lithuania 28 among 180 nations and territories. The main areas for improvement of the media sector include greater transparency in media ownership (including indirect political ownership). In recent years, the use of media in Lithuania has intensified and noticeably increased.

How independent is the judiciary?

The recent European Commission‘s rule of law report praises our justice system for its efficiency, its use of digital tools and the fact that some of the court activities have been maintained during the Covid-19 pandemic. The areas for improvement, highlighted in the report, include anti-corruption work and reforms on the appointment of judges, modifications of the judicial map and the structure of the Supreme Court, which would further improve the independence of the judiciary. Although public confidence in courts has been steadily improving since 2010, a judicial corruption scandal in February 2019 significantly damaged it, when 26 people, including eight senior judges (one of them a member of the Supreme Court) and five lawyers, were detained and charged with bribery and abuse of public duties. Five of the eight judges were subsequently dismissed.

How good is the healthcare system in your country?

Lithuania has made remarkable progress in reshaping its health system since the 1990s and now it provides adequate and equitable access to healthcare. Our healthcare system is based on largescale primary care centers, small-to-mediumsized hospitals, which are equipped with modern equipment and supported by professional specialists. Despite regularly developed e-health systems and networks of private medical institutions, there are still some shortages that could be improved — rationalization of the hospital sector, lack of some specialists in the regions, etc. We have one of the highest ratios of hospital beds in relation to population in the EU. During the pandemic, it turned out to be a real advantage. Because of this reason, Lithuania never reached such a critical level when hospitals were unable to accept a patient who needed medical help.

W B J DECEMBER 2020

PA RT N E R H I G H L I G H T

BIRTH OF THE GLOBAL BRAND

to robotization of office processes using RPA (Robotic Process Automation). It has implemented platforms that automatically provide information to customers and platforms which predict ETA (estimated time of arrival). In the area of warehouse automation and robotics, implementation processes include devices measuring shipments, autonomous or semi-automated forklifts as well as “cobotic” arms. Internet of Things (IoT) sensors and many other solutions increase the efficiency of warehousing and transportation processes.

In 1931, in the small town of Meddo-Winterswijk in the Netherlands, Jan W Raben, grandfather of the current CEO, started to transport products of the local farmers to the market. The next milestone was when the founder’s son, Theo Raben, took over the helm of the company in 1960, and he developed, e.g. the transport of textiles to and from Poland. But the first step abroad was taken by the grandson, Ewald. After the transformation of 1989, he spotted the opportunity for development on the Polish market and he went there with the aim of setting up a Raben branch. It was then he bought a map of Poland and marked twelve locations that were to become branches in different parts of the country.

90 YEARS ON THE WAY WITH ECOLOGY

EXPANSION INTO EUROPE

Raben Group has its own branches in 13 European countries, employs a total of 10,000 people and sends over 8,500 trucks on the roads every day. However, it started very inconspicuously – as a small Dutch family business. In 2021, the company celebrates its 90th anniversary and the values characteristic of family organizations are still important to it, which has a positive impact on employee engagement and customer relations.

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“A

PRESS MATERIAL: RABEN GROUP

FROM A FAMILY BUSINESS TO A GLOBAL BRAND

family business has an advantage over other businesses because it treats customers and employees as family members. Therefore, we offer ‘human face’ logistics. Partnership and loyalty are part of this style of cooperation. We have many long-term clients. Their business is changing over the years and we are adapting to them. This constant development is part of our company’s genes. We not only provide services but also make a promise that must be delivered – always on time, with attention to detail and at the highest level of quality. That is why we have been looking for innovative solutions for many years, always putting our clients first. In this way, we invest in the future, in sustainable solutions and projects that bring long-term benefits,” says Ewald Raben, CEO of Raben Group.

The last 30 years have been a history of continuous development of the company and dynamic expansion into foreign markets. In 2002, Fresh Logistics Polska appeared on the market, which specializes in servicing fresh products which require controlled temperature. The period from 2003 to 2010 brought about expansion to new markets. In 2003, the first branch was opened in Ukraine and a year later the operations of Raben Group in Europe covered Lithuania, Latvia and Estonia. In 2008, the company entered the Czech and Slovak markets and after two years it was also present in Hungary. 2016 was the beginning of business in Romania. In 2017, Raben started operation in Italy, and in 2020, it became the sole owner of Raben Sittam. Bulgaria joined the Raben family in 2019, where the company opened its first branch in Sofia. The German market is very important for Raben Group. The company is building up its position there organically and through acquisitions. Currently, Raben has its own independent transport network there with 34 branches. The Group portfolio is complemented by Raben East which, since 2017, has been offering international road transport services, including regular groupage connections with Eastern countries, as well as customs agency services and advisory in organizing transport to Eastern markets.

INNOVATIONS

Raben Group has been focusing on digitalization on many levels – from physical processes

Ewald Raben, CEO of Raben Group.

“We offer ‘human face’ logistics”

Corporate social responsibility is an inherent part of the Raben DNA. That is why the company decided to celebrate its 90th anniversary in a rather unusual way, by inviting customers and internet users on an eco2way tour of Europe. Company employees and eco-enthusiasts are playing the role of tour guides who tell the story of twenty places that are at risk due to climate change. You can follow the entire tour at www. raben90years.com and on the company’s social media. “We have achieved a lot over these 90 years through partnership and transparent cooperation with our customers, which makes us proud and at the same time ready to face new challenges, such as climate change. We want to set trends in the market in the area of sustainability not just by having green trucks and warehouses or planting trees, but by all the processes we use. We are trying to make them as environmentally friendly as possible. This is our responsibility. And because our relationship with our customers is based on partnership, I am confident they too will join us in this sustainable way of doing business,” explains Raben.

TIME FOR THE CELEBRATION OF BETTER TOMORROW

The year 2021 will undoubtedly be an interesting milestone in the history of Raben Group. It is not only another year of development of logistics and new technologies but above all a time to think about the future. If the overriding goal is to provide future generations with the same natural resources as are available now, it is the best foundation for the common efforts to have a better, green Europe.

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FEATURE

APPROVED JOURNEY

Złoty (PLN), the Polish currency remains weak and undervalued not only due to the Covid-19 pandemic but due to the will of the National Bank of Poland (NBP), which has repeatedly intervened in the market and exerted verbal pressure to weaken its emitted currency. Are the record low interest rates mismatching the condition of the Polish economy?

SHUTTERSTOCK

BY SERGIUSZ PROKURAT

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W B J MAY 2021

FEATURE

ilton Friedman wrote that

money is not an object of consumption. It is just a means that can be used to purchase other goods and services. A curtain behind which there are true determinants of the nation’s wealth, such as the possibilities, diligence, ingenuity and resourcefulness of its citizens, plus the tools they use and systems of their political and economic organization. The wealth of nations does not depend on the number of zeros on banknotes or on the language printed on the paper being a legal tender in a given country. This does not mean that economic processes do not matter or that money cannot be spoiled by interfering with its amount or exchange rate. Examples include countries such as Venezuela or Zimbabwe, wherein last couple of years the local currency collapsed. LITMUS TEST It’s not that bad with PLN, though. Nevertheless, the currency is considered a litmus test showing the strength of a country’s economy or its condition over time. For example, unfavorable changes in the law discourage investments and cause capital to flee the country, leading to a weakened currency. The same is happening in developing countries, during crises or pandemics. Moreover, politicians and economists in every country having an independent currency and a central bank face the question of whether the pockets of ordinary citizens should be aided at the expense of industry. Or maybe the economy should be boosted with low-interest rates, i.e. cheap loans, at the expense of costs. A strong currency, among others, is useful when we go abroad but also when we buy foreign products brought in by importers. It is fair to say that a strong currency is beneficial for the vast majority of society. At the same time, for example, economic migrants or exporters are doing worse with a weak currency. An industry that produces exports and 20

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THE BEST OPTION IS TO MAINTAIN A RELATIVE MARKET BALANCE maintaining a stable price level to keep inflation under control — may permanently weaken the credibility of NBP and Poland.

THE PROSPECTS FOR GDP GROWTH IN THE SHORT TERM ARE OPTIMISTIC employs workers generates much greater profits and the economy accelerates. The golden mean — the best option — is to maintain a relative market balance. The coronavirus and the threat of further restrictions in 2020-2021 may have contributed to the decline in the Polish currency. Successive waves of Covid-19 and thus restrictions and limitations exerted on business brought about an unstable economic situation. This goes along with growing fears that the number of cases will increase even more, and thus further restrictions will be introduced, which will harm the condition of companies and their employees, which will consequently lead to slowing down the economic

recovery. This factor may have had a negative impact on PLN, putting the Polish currency under sales pressure during the pandemic. STRENGTHENING OBSERVED From the beginning of November 2020, along with the improvement in global sentiment — including due to positive information about vaccines against Covid-19 — a strengthening of PLN was observed. As a result, the euro rate dropped from over PLN 4.60 to around PLN 4.43, and the dollar dropped from PLN 3.96 to PLN 3.62. When it seemed that we would end this year with a relatively stronger PLN, the NBP unexpectedly entered the game. Quietly, in December, without any announcement, it started buying foreign currencies on

a large scale while selling PLN. The fact that currently Poland has the highest price increase in the EU and the PLN is getting weaker is no coincidence. NBP can print and produce its country’s currency unlimitedly, exchanging it for foreign currency, leading to its weakening. In this way, it can, if exaggerated, easily make citizens poor. The other way around, it is not so easy, because foreign currency reserves are limited. The NBP interventions, the purpose of which was to present a higher profit at the end of the year, were motivated by increasing the value of foreign exchange reserves to increase the NBP profit, almost all of which (95 percent) were supplied to the state budget at the end of 2020. It is worth paying attention to this because such actions create the possibility of further interventions, which investors are afraid of. Once the central bank decides to help the government and make such a move, it may

decide to do this again. Why not, right? Secondly, it leads to an inflationary effect. The weakening of PLN will also result in more expensive imports, even in the event of weak consumer demand, particularly with an increase in the prices of food commodities, the share of which in the Polish CPI basket amounts to nearly 25 percent. The accumulation of an increase in commodity prices in the world, more expensive food and a weakening PLN may in a short perspective result in a sharp increase in the prices of consumer goods and services on the domestic market. ‘HIDDEN TAX’ Inflation often is called a "hidden tax" because it increases government revenues and at the same time, can hit the lowest-income households the hardest. Third, the more important effect of such NBP interventions and keeping interest rates at a level too low is, in fact, contrary to the purpose of the central bank’s existence — i.e.,

In March, when the EUR/PLN rate approached 4.70 and reached the highest levels in twelve years, among the reasons were bad epidemic situation and turbulence on global markets as well as the assumption that PLN might be weakened further by NBP. Even though the pace of economic recovery in Poland and the condition of Polish currency depends on the further developments of “defrosting” of the Polish economy, the implementation of the vaccination policy and the scenarios of returning to a relatively open and safe economic activity, the prospects for GDP growth in the short term are optimistic. The results of the Polish economy will be influenced by, among others, postponed demand following the pandemic, improvement in consumer sentiment, improvement in the situation of most industries most affected by pandemic restrictions and increased activity among Poland’s main trading partners. PLN should strengthen if the NBP allows it. The strengthening of the currency, however, might be hampered by the unresolved case of the European Union’s allegations of compliance with the rule of law in Poland and the issue of a favorable ruling for borrowers in Swiss Francs (CHF), which may have serious financial consequences for Polish currency, banks and economy. W B J MAY 2021

FEATURE

Infrastructure investments

he new decade will bring a structural shift in Polish investments. During the last ten years, Poland improved mainly road infrastructure. Presently, the challenges include energy transition toward less carbon-intense sources and expansions of railway transport and electromobility. Poland is lagging behind the western economies in the case of digitalization. The EU recovery plans should help Poland improve the infrastructure in these areas.

What does Poland plan for the coming years?

ANNUAL INVESTMENTS

According to the Global Infrastructure Investment Hub (GIIH), Poland should maintain annual investments in energy infrastructure at an approximate cost of $7.5 billion, highways and expressways at $5 billion, railways at $2 billion and ICT at $4.9 billion. The G20 agenda points that the country meets the target in road transport and to great extent in telecommunication. Still, the structure of the energy sector is obsolete and the number of high-speed rails insufficient. The GIIH suggests an imminent expansion of outlays of $1 billion each in those two sectors. The country plan will address these priorities related to the “Next Generation EU” (NGEU) recovery and resilience fund. The program contains nearly €24 billion of grants from the common budget. The draft currently proceeded by the parliament assumes €6.4 billion of spending in green energy and improvement of energy efficiency and another €6 billion in rail transport and electromobility

BY JAKUB RYBACKI

“THE NEW DECADE WILL BRING A STRUCTURAL SHIFT IN POLISH INVESTMENTS” during the years 2021-2026. The project stresses the importance of digitalization — nearly €8 billion will be spent on digitalization and the improvement of an innovation-friendly environment. Finally, €4 billion should improve healthcare systems.

SHUTTERSTOCK

POWER SUPPLY

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The exemplary energy projects include improvement of energy grids, construction of offshore wind energy farms on the Baltic Sea or hydrogen technologies development. Poland will be actively developing programs related to home installations of renewable energy sources. The project aims to create prosumers in the energy markets, i.e. households should be self-sustainable with their own produced energy and deliver the surpluses to the system. In the case of transportation, major outlays are assigned to the modernization of train lines and vehicles. The national rail operator will be supported in the introduction of modern connection management systems, which should allow for high-speed travel. Poland is set to expand intermodal transport, which should help exporters expand their activity on the Eurasian markets. Simultaneously, Poland is actively encouraging investment in electric vehicles — its NGEU program assigns funds for developing charging stations and

RECENT PARLIAMENT DRAFT ASSUMES (2021-2026) • €6.4 billion of spending in green energy and improvement of energy efficiency • €6 billion in rail transport and electromobility • nearly €8 billion on digitalization and the improvement of an innovation-friendly environment • €4 billion on healthcare systems

zero-emission transport. The government is considering providing financial support for the improvement of road safety in the small cities — the flagship program assumes the construction of bypass roads around built-up areas. Finally, Poland is lagging behind the western economies in the case of innovation and digitalization. According to the European Commission’s Innovation Scoreboards, the country is classified as a moderate innovator, similar to other Central European nations and southern European countries. The major obstacles include low financial R&D spending, weak productivity of the academia sector and small incentives for the SME sector to engage in the innovations. The NGEU addresses these problems. Poland will directly finance the work of the Łukasiewicz Research Network, which is focused on the development of advanced manufacturing, chemical innovations and biotechnology. Exemplary programs include providing incentives for bigger companies to engage in new digital products and circular economy. The government is considering providing new e-services, which should lower administrative burdens.

$7.5 $5 $2 $4.9

billion

in energy infrastructure billion

in highways and expressways billion

in railway transport billion

in ICT expected to be maintained Jakub Rybacki The Polish Economic Institute (PIE) is a Warsaw-headquartered public economic think-tank dating back to 1928. Jakub Rybacki, an economic advisor, works for the macroeconomics team at PIE.

W B J MAY 2021

FEATURE

IPO BOOM The Warsaw Stock Exchange (GPW) is growing at an unprecedented rate. BY ANNA ZHURAVLEVA

MAY 2021 W B J

W B J MAY 2021

FEATURE

he GPW recorded eight

IPOs in the first quarter of this year compared to only three a year ago, mirroring a wider European trend of IPO boom. In Europe, as many as 86 businesses went public, raising €22.6 billion, a report entitled “IPO Watch Europe Q1 2021” from the accountancy firm PwC shows. This is more than in the entire 2020, when the pandemic hit economies around the world, causing uncertainty about the future. London Exchange had the biggest number of IPOs with 26 debuts from January-March, followed by Euronext Amsterdam, which advanced to the second position. The stock exchange hosted four

In Poland, total proceeds from IPOs amounted to PLN 1.8 billion, out of which PLN 1.7 billion came from mobile games producer Huuuge. Its debut became the second biggest in Warsaw after e-commerce heavyweight Allegro, which raised about PLN 9.2 billion last year. USregistered Huuuge says it would use the IPO proceeds on potential acquisitions and investments. HUGE APPETITE The brand Huuuge Games has existed since 2014. However, Huuuge’s history is much longer. Its CEO Anton Gaufﬁn came to Poland in 2005 in his search for programmers for his firm, Gamelion. Two years later, he sold his share in Gamelion and moved to Silicon Valley. In 2014,

GROWTH OF THE GAME INDUSTRY IN POLAND YEAR-ON-YEAR REMAINS ON A STEADY LEVEL OF NEARLY 30 PERCENT public offerings, including the IPO of Polish parcel locker behemoth InPost, which was the largest in Europe in the first quarter. The recent increase in the number of IPOs is mainly driven by strong market conditions fueled by postpandemic optimism, improved macroeconomic backdrop and ample amount of quality issuers ready to go public, PwC says. It sees signs that momentum in the IPO market will continue throughout the year.

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Gaufﬁn received the opportunity to spin Gamelion out into an independent entity again and this is how Huuuge was born. The company, which has 10 offices worldwide and employs over 600 people, went public at a time when coronavirus-related restrictions kept people at home, boosting demand for online entertainment. Share in its debut on February 19 opened at PLN 50 per share, equal to its IPO price. The debut was among the 15 largest IPOs in Europe in the first quarter.

W B J MAY 2021

FEATURE

Warsaw Stock Exchange (GPW) recorded eight IPOs in the first quarter of this year compared to only three in 2020 *** In Poland, total proceeds from IPOs amounted to PLN 1.8 billion, out of which PLN 1.7 billion came from mobile games producer Huuuge *** The second debut at the GPW’s main market was the IPO of online fashion retailer Answear.com, which raised PLN 80.5 million *** In NewConnect — an alternative stock exchange run by GPW — medical technology company Genomtec raised the highest proceeds of PLN 8 million *** Home accessory retailer Pepco has decided to pursue an initial public offering in Warsaw rather than London, sources claim 28

MAY 2021 W B J

The second debut at the GPW’s main market was the IPO of online fashion retailer Answear.com, which raised PLN 80.5 million. Answear sells brand clothing, footwear and accessories in seven countries, including Poland, Czechia, Slovakia, Hungary, Romania, Bulgaria and Ukraine. The platform offers about 90,000 products from 350 global brands. Poland is still its largest market, however, about 70 percent of its revenue comes from abroad. “Entering the stock exchange is a natural step for us connected with a dynamic business development, a large scale of operations and an appetite for more,” Krzysztof Bajołek, president of the management board at Answear said ahead of IPO. The share price at the debut was PLN 29.9, showing an increase of nearly 20 percent against the offer price of PLN 25. NEWCONNECT WELCOMES TECH ENTERPRISES Run by the GPW, NewConnect – an alternative stock exchange allowing smaller concerns to float shares – welcomed six firms in the first quarter. Medical technology company Genomtec raised the highest proceeds of PLN 8 million. The Wrocław-based biotech business is one of the few producers of mobile molecular analyzers in the world as well as the only one on the European market. Its core product is Genomtec ID – a portable device for detecting infectious diseases and viruses. “Fast, inexpensive and reliable diagnostics is the dream of many doctors, veterinarians, parents, patients and scientists. It is also a condition for humanity to be able to effectively fight such threats as growing antibiotic resistance, increase in the number of cancer cases or complications due to bacterial and viral infections,” its website says.

MOMENTUM IN THE IPO MARKET WILL CONTINUE THROUGHOUT THE YEAR Genomtec shares jumped by more than 50 percent at the first minutes of trading on March 17 to PLN 16.6 versus an IPO price of PLN 11. It plans to use proceeds for clinical development and global commercialization of the Genomtec ID platform. Apart from Genomtec, the alternative market welcomed several game producers. As the video game market is booming in emerging Europe, Poland became among leaders thanks to its young educated workforce and relatively low labor costs. Growth of the game industry in Poland year-on-year remains on a steady level of nearly 30 percent, according to a report by the Polish Agency for Enterprise Development (PARP).

the debut, United Label raised more than PLN 4 million in a crowdfunding campaign. Other debuts were organized by game developers Simteract, Incuvo, Atomic Jelly and Kool2Play. ‘WARSAW OVER LONDON’ The first quarter marked a revival in IPO activity, however. The biggest debut on Warsaw Exchange this year may come in the next months. Home accessory retailer Pepco has decided to pursue an initial public offering in Warsaw rather than London, Sky News and Reuters reported, citing sources. The retail giant is valued at around €5 billion, Reuters sources said. Sky News reported that Pepco’s management and shareholders have opted for Warsaw due to Pepco’s huge presence in Poland and estimated group offer at €4.5 billion. Steinhoff International Holdings, Pepco’s South Africa-based owner, said in January that it was re-examining a range of strategic options for the Pepco Group, including a potential public listing. The retailer, which has over 1,000 stores in Poland, did not comment

on which stock exchange it plans to go public. Another IPO candidate is Polish payTV platform Canal+ Polska, which in April revived plans to go public after the deal was scrapped in November due to market volatility and a lack of demand. In early November, Canal+ Polska had set a maximum IPO price at PLN 60 per share, valuing its offering at PLN 1.297 billion. The company is majority-owned by Vivendi’s Canal+ Group (51 percent), with the remaining shares being held by TVN Media (32 percent) and Liberty Global Ventures Holding (17 percent). However, on May 7, financial market regulator KNF stated that the approval process for Canal+ Polska’s IPO prospectus had been suspended at the Polish pay-TV platform’s own request. The activity on the GPW in recent quarters and the debuts announced for 2021 indicate that this year, which marks the exchange’s 30th birthday, may also turn out to be the time of return for top European stock exchanges, says Bartosz Margol, director at PwC capital markets.

The first debut on NewConnect this year was held by United Label from the CI Games group. It generates profit from acquiring rights for independent games and managing their distribution. It signed publishing agreements for such games as “Eldest Souls,” “Tails of Irons” and “Horae.” Ahead of

W B J MAY 2021

FEATURE

he Bretton Woods Conference in 1944 is considered the birthplace of the current international monetary system of the global economy. It is a system that established the rules governing the commercial and financial relations between the industrial countries, namely the US, Canada, Western European countries, Australia and Japan. The agreement also established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), today part of the World Bank. More importantly, the same agreement coined the US dollar hegemony as a global currency thanks to owning two-thirds of the world’s gold reserve when the agreement was signed. However, that means the US has to inject enough currency units through trade deficit to ensure elasticity for the global economy’s growth. According to Bretton Woods, every dollar was gold-backed until 1971 when the US decided unilaterally to terminate convertibility to gold.

CHANGES GALORE

Changes in the global geopolitical landscape and the shift in its industrial and supply chain landmarks allowed the rise of new nations that weren’t necessarily part of key players in the 1944 conference, namely China, India and Brazil, which imposed the need for a change. It is also essential to understand that the decision-makers in the US realized the price paid for the dollar’s hegemony translated into public

THE US WILL DEFEND ITS TURF BY CREATING DIGITAL DOLLARS

The Federal Reserve System in the United States (the Fed) is one of the most critical players in the global economy. No wonder every investor, politician, business in the world will be watching every move of the Fed and its current chairman Jerome Powell. Thanks to the dollar, the global economic growth is tied to the prospect of the US economy. But why and how did that happen? BY BEN ESMAEL

MAY 2021 W B J

SHUTTERSTOCK

Global monetary system

debt reaching 130 percent of GDP, a high unemployment rate and the risk of a dependent supply chain of strategic manufacturing sectors. It is also essential to understand that fiat currencies are losing ground to technology — cryptocurrencies, to be specific — due to their instability and the mistrust of the general public in the monetary system. To understand the global monetary system and where we are going, we need to study history and understand the story behind the Fed and how it evolved as a critical institution for both the US and global economy. The current Fed isn’t the first but the third in US history. Modeled after the Bank of England, the Fed was established in the early 1790s by Alexander Hamilton, then-President George Washington’s secretary of the treasury, to deal with the war debt and put the government on sound financial footing. It was intended to help fund the government’s debt and issue currency notes. So, while in some ways the First Bank prefigured the current Fed, it also differed from it significantly by offering commercial loans directly into the real economy as an alternative to British banks at the time of the revolution. The Second Bank of the United States was founded in 1816. It lasted till 1836 when the then-President Andrew Jackson abolished it as he hated the rationale behind central banks. He hadn’t forgotten the lessons from the early years of the bank’s existence that such a powerful private institution was susceptible to corruption and would be difficult to control.

W B J MAY 2021

FEATURE

THERE WILL BE NO PERFECT SCENARIO, ONLY A TRADEOFF, ESPECIALLY WHEN THE GLOBAL ECONOMY IS ADDICTED TO DEBT AND A LOW-INTEREST-RATE ENVIRONMENT BANKING NOW

The shift to the current form of the Fed started to shape up during the 1930s when people like Milton Friedman blamed the Great Depression for the Fed contracting base money or bank reserve, which caused many commercial banks to go bust. At the time, most economists didn’t realize how dependent the economy had become on the commercial banking system. Economists pointed at the real bills doctrine as the reason behind policy errors committed by the Fed, which influenced and shaped modern monetary and central banks’ policies of today’s world. It is the scenario where businesses need a short-term loan to purchase widgets that they use in producing products to sell. And once they have sold that product into the real economy, they could pay back the loan. The short-term increase in money supply facilitates productivity without impacting the consumer’s price inflation. However, the global financial crisis (GFC) of 2007-2008 proved how far the monetary system went in the wrong direction in funding speculative, malinvestments and away from its primary mandate in controlling monetary expansion and maintaining price stability. It has become a certainty that the Fed lost control over the monetary system to commercial banks during the 1920s. No one understood how much the economy was tied to the commercial banking system, causing the Great Depression of the 1930s — in other words, losing control over the dollar.

LOSING OUT

Although the dollar became a global reserve currency in Bretton Woods in 1944, granting the US a powerful tool to control the global economy and politics, the Fed lost control of the international supply of dollars in the eurodollar system. Triffin Paradox explains the dilemma as the global economy growth at full capacity depended on running a trade deficit by importing goods and exporting dollars to ensure dollar elasticity. In the 1960s, economists started to understand that this banking system sprung out of the shadow of the eurodollar system. Hence, the Fed doesn’t just have to bail out US banks as they have done during the GFC, but they have to bail out the global banking system through an even more significant trade deficit and hollow out the manufacturing base even further. In 2020, we saw the IMF talking about a new Bretton Woods and reinventing the global monetary system deemed too dependent on the US dollar as a global reserve currency. I believe the decision has to do with the rise of populist politics in the US and the election of Donald Trump as president in 2016, who made reducing the trade deficit and bringing the manufacturing base home a top priority. It is also about China’s desire to reduce dependency on dollars and implementing its currency, the digital renminbi, in key commodities markets like Africa. However, decision-makers in the US are well aware

MAY 2021 W B J

of the dollar’s cost-benefit as a reserve currency. Understanding the history behind the Fed, I believe the US will defend its turf by creating digital dollars and reviving the first version of the Fed as a commercial bank that lends directly to the economy, targeting resources according to mandate and based on social and political narratives.

NO PERFECT SCENARIO

I think there will be no perfect scenario, only a tradeoff, especially when the global economy is addicted to debt and a low-interest-rate environment. Hence, the Fed and other central banks have to deal with different scenarios that will guarantee market liquidity to shore the global economy from its dependency on the commercial banking system while normalizing the monetary base as inflation increases without bankrupting governments and the private sector. One of the unconventional solutions is what American economist Paul Krugman called the one trillion-dollar platinum coin and what macro-analyst Luke Gromen discussed in a recent interview about the price of gold. The theory takes on the US being in a fiscally irrecoverable position. It highlights the need to increase the rate while recognizing the challenge of a high debt ratio to GDP. Therefore, it prioritizes getting the ratio down to a level where it is possible to increase rates significantly without breaking the system. The mechanism relies on a point in the Fed operation manual that says that if the treasury tells the Fed to revalue gold higher, the revaluation amount gets put into the Treasury General Account (TGA). Hence, allowing the US government to stimulate nominal GDP growth and reduce debt to GDP ratio. Thus, opening doors for the Fed to normalize rates accordingly. Now there are many questions we need to answer. Do we need a central bank digital currency (CBDC)? Or is it about the fear of missing out compared to the Chinese CBDC? Is the speculation and disconnect between the financial and the real economy the actual problem? Could we then see the central banks instead rethink their model and go back to a sound monetary system similar to what a Fed board member Adolph C Miller put forward in 1929? Only time will tell (but with uncertainties).

Ben Esmael is a Poland-based strategic advisor, investor and writer, and co-founder of Corporate Break – “a non-profit thinktank and experience-sharing platform focusing on helping individuals learn, professionally grow and make wellinformed decisions.”

Talking Points

GOVERNING CRISES Poland’s rightist ruling coalition United Right is now in a deep internal crisis. Polish society is divided into supporters of the coalition and those of the opposition as the pandemic fight continues. Professor Jacek Raciborski, a revered sociologist, throws light on the current situation and future possibilities. INTERVIEW BY EWA BONIECKA

W WBBJJ JULY MAY 2021 2020

Talking Points It is both possible and necessary to build a common opposition, an anti-PiS block” WBJ: What is the es-

sence of the present crisis in the ruling coalition? Jacek Raciborski: Five years ago PiS achieved a victory which I describe as a Pyrrhic victory. The reason for the victory was the radical polarization of voters, who wanted to see some “change” in the country. In 2015, which was a year of presidential and parliamentary elections, support for Andrzej Duda [current president and a faithful PiS ally] was much bigger than that for Bronisław Komorowski [then president]. And

among younger voters, the winner was PiS and Kukiz [on parliamentary level]. But later, there was growing discontent in society against certain ideas of PiS and its way of ruling. The electorate became further polarized. Such matters as the attitude of PiS toward abortion increased the resistance from the young and middle-aged voters. Now many Poles are protesting against PiS breaking the rule of law, controlling all public institutions, schools, universities, cultural institutions and civic freedoms.

The reason why PiS is also going through an internal crisis is that the leaders of their junior coalition partners — Zbigniew Ziobro, from Solidarity Poland, and Jarosław Gowin, from Agreement Party — are against PiS strongman Jarosław Kaczyński and some of his decisions. This inner crisis may force the government to break up from within since the democratic opposition is still too weak to cause the government to collapse. Why is the democratic opposition so weak and divided and not capable of building a common opposition block? We have in Poland a number of democratic and opposition parties, some traditional, and some new ones, who have elected members in Sejm [lower house of the parliament] and Senat [upper house

of the parliament], like the Civic Platform (PO), the Polish People’s Party (PSL), the Modern, the Left, the Geens and a new group led by Szymon Hołownia. But until now those parties have not established close cooperation. These opposition parties come from many various democratic backgrounds and the people who support them have also various views on the path to modernization, the structure of the economy, family life, education, culture and so on. Some have very liberal views, some more conservative, while others hold leftist views. But the principle ideas are common to all of the parties: democracy, freedom, the equality of people, respect for the law, building a modern country that would be respected in the European Union and beyond. It is both possible and necessary to build a common opposition, an anti-PiS block. And this opposition block has to establish a common strategy and a common language of communication with voters, as this is the only way to defeat PiS. But the problem of the democratic opposition is

There are also questions as to when and how Poles will respond to the current political crises” 34

JULY 2021 MAY 2020 W WBBJJ

2020]. But after winning power this coalition may become divided again.

that there is no strong leader and the opposition parties quarrel about who this leader should be? Those quarrels are not important. It is of secondary importance whether this leader will be Budka [PO], Kosiniak-Kamysz [PSL] or Hołownia. What’s important is for the leader of the opposition block to have credibility, reliable views, personality and strength of character, the ability to maintain contact with voters, but also an understanding of how to act as a politician in certain situations. Those Poles who are

against PiS have a different attitude than PiS toward the place of Catholicism in society and a different approach to people with different sexual orientations. As a sociologist who has been analyzing society for many years, I think that the opposition party should be democratic and liberal but with a central, and not a revolutionary attitude as to the way to rule. So probably Rafał Trzaskowski would be the best opposition block leader. After all, he received nearly half the votes in the last presidential election [summer

What will life be like in Poland if PiS loses the next parliamentary election — held early or in 2023? Poles have various views on many problems. There will be a place for Catholicism, for people of different color of skin, sexual orientation, for different views on the government. So life would be changing and organized in new ways with respect for democratic rules. I also want to point out that even after losing the elections PiS will remain the biggest party in opposition. Its attitude to the system of law may change when in opposition, but it will still be acting as a populist, strongly conservative party, hostile in its approach to modern history, culture, education and in its attitude to the liberal western countries. Let me make a general remark as a sociologist. In many democratic countries, the leaders of ruling parties often change, as do members of government. The pressure of society is strong and people often change their attitude

toward the ruling leaders. In Poland, PiS and [its de facto leader] Kaczyński are losing voters’ support. Poland both needs to and wants to abolish the authoritarian populist PiS government led by its outdated leader. But if the leader of the next government established by the united opposition will not have a strong personality, and if they will be unable to use language tactfully, to understand society and to present a democratic program of governance addressed to all citizens, then such a leader will be weak and will soon be changed. So there is a long way to go toward building a new policy in Poland? Yes, and there are also questions as to when and how Poles will respond to the current political crises.

Professor Jacek Raciborski is a distinguished sociologist and professor at the University of Warsaw. He has authored or co-authored over a dozen books in Poland and abroad.

W WBBJJ JULY MAY 2020 2021

BOOK OF LISTS

TECH i n s i g h t s

2019/2020

TECH NEWS

years on the market

rankings and alphabetized list

WWW.BOOKOFLISTS.PL

1,000+

firms included

SHUTTERSTOCK

A GUIDE TO POLISH BUSINESSES AND INDUSTRIES

Google officially opened its Polish $2-billion cloud center in Warsaw on April 14, the first facility in Central and Eastern Europe providing cloud infrastructure to companies based in Poland, as well as neighboring countries.

>>>

W B J MAY 2021

NEWS

TECH that Clubhouse is just a platform and all content will be created by the people who use it. APPS & PHONES

Cheap 5G Phones? Yes, two more!

APPS & PHONES

Android 12: what to expect? At a recent conference for Google I/O developers, we finally saw in detail what the new interface in Android 12 looks like. This is probably the biggest transformation of the Google system since its inception and certainly since the implementation of Material Design. Android 12 is still in beta, but we already know more and more about its new features and design. On Google I/O, its creators showed how much Android smartphones will change. The changes are clear, you can even say revolutionary, although some might see some clear similarities with Apple's solutions here.

Vivo has announced the introduction of the Vivo X60 Pro 5G smartphone to Poland, but this is not the end of the upcoming news from this manufacturer. Before the end of May and July, two more phones with 5G will appear on our market: Vivo Y72 and Y52. The new Vivo smartphones belong to the Y series, which means cheap phones "for everyone." Their specifications are therefore not too high, but they are supposed to compete for buyers with prices. These promise to be quite interesting, although they are not among the lowest on the market.

ing UEFA EURO 2020 championship. Sales in Poland will start in May. It was worth the wait because it is still one of the most interesting flagships of Chinese manufacturers. Vivo X60 and X60 Pro smartphones premiered in 2020, in December. At that time, devices with the Exynos 1080 system entered the Chinese market. Only in March 2021, both phones appeared in a modified variant in Malaysia, but the manufacturer still delayed their introduction to our continent. On May 18, the company announced the European debut of the better-equipped Vivo X60 Pro 5G.

APPS & PHONES

How pandemic affected roaming? The Office of Electronic Communications (UKE) has prepared a special report in which it describes what the use of roaming looks like in the era of the coronavirus pandemic. "The Covid-19 pandemic and travel restrictions have influenced the use of roaming services. In 2020, roaming activity was recorded for only around 17 percent of SIM cards, compared to around 30 percent a year earlier … shows that Poles traveled abroad much less."

not the result of an attack by hackers. Because as niebezpiecznik.pl claims, the file with the data on the ArcGIS website was made available by ... an employee of RCB. According to the website, this list is information about people reported for vaccination between April 12 and 20 this year. APPS & PHONES

Vaccination points on Google Maps

APPS & PHONES

Clubhouse available for Polish Android users Clubhouse, the voice social network, is now available in Poland for Android users. At the beginning of the year, the service was launched for iPhone users. The model for joining Clubhouse has not changed — an invitation is needed. Clubhouse has made a career on iOS thanks to an innovative form of communication. Here you can make a "room" and talk to everyone who decides to visit this room. The rooms can be varied — from singing training with a professional teacher to listening to a snoring bulldog. Keep in mind

APPS & PHONES

Vivo X60 Pro 5G enters Poland Five months after its debut in China, the Vivo X60 Pro 5G phone in the version with the Qualcomm chip has arrived in Europe and has become the official smartphone of the upcom-

Vaccinations against Covid-19 are in full swing and more and more points are opened where you can complete your referral or … take advantage of the free date. How to get to these places? In Poland, it will now be possible thanks to Google Maps. Google announced that Poland has become one of the first countries in Europe where you can check the locations of Covid-19 vaccination points in the search engine and on Maps. Previously, this feature was launched in the USA, Canada, India and France, among others.

CYBERSECURITY

A new method of fighting anti-Semitism online CYBERSECURITY

Data leaked Big data leakage of over 20,000 officers of Polish services. And it was not the result of the hacker attack, but the carelessness of an employee of the Government Security Center (RCB). The network includes telephone numbers, PESEL numbers, e-mail addresses, places of work and names of SOP officers, border guards, fire brigades, ITD, KAS, CBŚP officers and other services. And this is

Alarmed by the rise of online antiSemitism in the Covid-19 pandemic and research showing that young people lack even basic knowledge about Nazi crimes, Holocaust survivors on social media share their experiences of how hate speech paved the way to the Holocaust. Participants in the #ItStartedWithWords campaign hope to make public, through short videos telling their stories, how the Nazis began the campaign of dehumanization and marginalization of Jews, years before the death camps in which industrial-scale murders were established.

Curated from: technologia.dziennik.pl, telepolis.pl 38

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W B J MAY 2021

OPINION

TECH

THANKS TO 3D PRINTING, MANUFACTURING CAN BE TRULY AGILE, RAPID AND RESPONSIVE” technologies’ applications, the nature of 21st-century production processes and even the economic effects of the pandemic. All these areas are in desperate need of ingenuity and rapid, agile production opportunities to achieve nonstandard objectives. Additive technologies encapsulate the 21st-century production acceleration processes spot on. Just a few examples. The fashion industry is shifting towards a “see now, buy now” approach based on rapid production. The pandemic shows us that there is a deep need for more networked production capabilities when global supply chains are being torn apart. Fast production line shifting became a critical ability during the Covid-19 pandemic. The ongoing personalization and customization of products and services create a need for more and more sophisticated customer care relations and agile production lines. Among the most interesting projects regarding product personalization, one could mention HP FitStation and Ikea’s 3D-printed add-ons for people with disabilities.

BUSINESS EXPANSION WITH ADDITIVE TECHNOLOGIES: DYNAMIC PRODUCTION IN THE 21ST CENTURY

BY MAREK LORENT-KAMIŃSKI

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e, Poles, like to throw ideas around and clash them in order to figure out the best ways to solve problems. Perhaps that’s why Polish engineers are widely esteemed worldwide. This need to contrive can be partially attributed to our harsh history — full of underground conspiracies with access to very limited resources and proceeding “off the radar” in order to achieve one’s goals. Like in that popular urban legend from the 1980s where NASA was spending billions of dollars to create a “super-pen” that could

‘CONCOCTING’ BUSINESS Let’s apply that mentality to the business sector. Big, international companies often fall victim to bureaucracy and internal hierarchization, which slows down the realization of the initial idea. Smaller Polish companies (but not only) can go counter-procedural to achieve fast results and worry about writing down the formal procedures later. In this mental landscape, several concepts meet: the “maker’s movement,” new

SHUTTERSTOCK

LONG HAVE I SEARCHED FOR A WORD THAT WOULD ACCURATELY CAPTURE THE 3D-PRINTING MARKET, THE PRACTICAL SIDES OF RAPID PROTOTYPING AND POLISH MENTALITY REGARDING TECHNICAL PROBLEMS. FINALLY, I GOT IT. THAT WORD IS “KOMBINOWAĆ,” [IN ENGLISH: “CONTRIVE” OR “CONCOCT”] WHICH SOME WOULD SAY IS A GENERAL TENDENCY IN OUR NATIONAL MENTALITY.

work in hostile environments such as space, but we, Eastern Europeans, just took a step back and grabbed the pencil. In today’s nomenclature, we would call that “out-of-the-box thinking” or “design thinking.” Precisely such an attitude was forced on Poles by their past experiences.

LEADING THE WAY 3D printing, as a key part of Industry 4.0, allows companies to adapt to the customer’s needs and keep ahead of their competition. The most common perception of additive technologies is their rapid prototyping capabilities. But it’s just the tip of the iceberg. Thanks to 3D printing, companies can easily manufacture large quantities of differentiated end-products. During the pandemic, the most important aspect of 3D printing was rapid tooling, e.g. the decision to shift production and to start manufacturing large amounts of protective shields for medical staff and essential workers was done in a matter of days. The 3D-printing sector was leading the fight, as it couldn’t have been done so quickly with standard production technologies. Moreover, service and production

Marek Lorent-Kamiński CMO w Sygnis New Technologies

maintenance downtimes are being cut short not only during the times of “peace” (regular production span) but also during “war” (Covid-19 pandemic), when access to materials is difficult, partner companies are going bankrupt and supply chains are disturbed. In order to compare the classical and new forms of production, let’s look at injection molding and 3D printing. A new product created by injection molding requires

cover the incoming bigger demand by producing larger quantities of the product. Such hybrid methods of production allow companies to “catch the momentum” of social demand for certain solutions/ products. Business opportunities appear only from time to time and it is crucial to not only catch the opportunity but to be the first to do so. Thus, rapid prototyping implies and enables rapid thinking and decision-making. Just like in corporate communication we use the phrase “real-time marketing” to be up-to-date and grab the client’s attention by referring to ongoing events in a clever way, additive technologies allow companies to make “real-time production” possible and thus change the rules of the game. Thanks to 3D printing, manufacturing can be truly agile, rapid and responsive. Inherently, the Polish word “kombinować’ is here to stay with us for a while — in present times of the quickly shapeshifting landscape of the global economy and even faster-changing demand for innovative products and solutions.

ADDITIVE TECHNOLOGIES ENCAPSULATE THE 21ST-CENTURY PRODUCTION ACCELERATION PROCESSES SPOT ON” approximately three months of work before creating the first copy of the product. With the use of 3D printing, it can be reduced to a single day. Machines operating in the area of additive technologies are now able to cover lot more materials and production steps than the older, more standard production methods. As a result, the excess of tools is eliminated and replaced by a single machine – similar to how smartphones replaced calendars, notebooks, timers and so on. ‘CARPE MOMENTUM’ Prototyping is applicable not only in R&D departments. It is widely used to push the product to focus groups in order to verify the assumptions about the design and functionality. While the first batch of products goes “live” and covers the initial demands of the product, more conventional methods of production have enough time to start running and

W B J MAY 2021

ADVERTORIAL

JBL® TOUR HEADPHONE SERIES, DESIGNED FOR BUSINESS PROFESSIONALS Featuring over-ear and true wireless in-ear models, both headphones offer advanced technologies and smart features for productivity and received CES® 2021 Innovation Awards “Best of Innovation” honors.

JBL

is introducing the JBL Tour Series, designed for business professionals who are looking for headphones with advanced technology, smart features and a sleek design. The series includes two headphone models, the JBL Tour ONE over-ear noise-canceling headphones and JBL Tour Pro+ TWS (True Wireless) in-ear headphones. In addition to Adaptive Noise Cancellation, both models come equipped with JBL Pro

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Sound, Adaptive Ambient Aware and TalkThru technology. Additionally, users can access handsfree voice capabilities with Google Assistant, using voice commands or a simple press and hold on the earcup for a highly personalized user experience. The JBL Tour ONE offers True Adaptive Noise Cancellation technology, which instantly monitors environmental sound and adapts to the perfect level of noise cancellation for the user’s environment, eliminating distractions in real-time. SilentNow also gives users the ability to simply touch the dedicated button to activate noise cancellation mode without activating Bluetooth, for complete isolation from outside noise. With up to 50 hours of total playback time and 4-mic technology, the JBL Tour ONE can power a full week of activity on a single charge.

Prices: JBL Tour ONE PLN 1,369; JBL Tour Pro+ PLN 799

surroundings. Fast Pair automatically pairs the earbuds to an Android user’s device as soon as the case is opened, while Dual Connect + Sync provides the choice to seamlessly enjoy music or make calls with either one or both buds. Packed with over 30 hours of total music playback with Qi wireless charging and 3-mic beamforming array technology for voice clarity, the JBL Tour Pro+ is great

for streaming entertainment or taking a full day of work calls. Both the JBL Tour ONE and JBL Tour Pro+ are “Best of Innovation Honorees” of the prestigious CES® 2021 Innovation Awards, an annual competition honoring outstanding design and engineering in consumer technology products across 28 product categories..

“The Tour Series is dedicated to consumers looking for the best in noisecanceling technology, elegantly designed with business professionals in mind who are constantly on-the-go and taking work calls,” says Ralph Santana, chief marketing officer at HARMAN. “By launching with two different models, we’re ensuring that all consumers’ preferences are met, whether they prefer the comfort of overear cushions or the ease and minimalism provided by true wireless in-ear buds.” The JBL Tour Pro+ provides the ideal true wireless solution for those who prefer in-ear headphones. Adaptive Noise Cancelling technology shuts out all outside noises or lets in background audio if users need to stay aware of their

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strategia strategy // kreacja creation/ /social social media media/ /digital digital/ /custom custom publishing publishing/ /events events/ /PRPR

NEWS OFFICE

PRESS MATERIAL

OVER 80% of Carbon Tower leased

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One of the largest retailers of furniture and decorations in Poland, Selsey, has moved to Carbon Tower in Wrocław. The company will occupy a total of 930 sqm of space, which means that over 80 percent of the space in the Cavatina Holding office building has been commercialized. The new tenant was guided, among other things, by the very good location of the building, providing employees and customers with convenient access.

W B J MAY 2021

LOKALE IMMOBILIA | NEWS “In Poland, the share of Internet sales will probably exceed 10 percent this year … The development of e-commerce takes place at the expense of shopping centers but at the same time has led to an increase in demand for warehouse space” Dorota Lachowska, head of market research at Polish Properties, a Warsaw-headquartered real estate evaluation firm, stated in April 2021.

over

RESIDENTIAL BRIEFS

RETAIL

RETAIL PARKS MORE ATTRACTIVE

Investors already existing in this segment have intensified their activities. Moreover, a few newcomers have recently entered the Polish market. They are targetting properties food-anchored or leased on long-term to the financially strong tenants of a good reputation, such as health & beauty or DIY stores.

BOUYGUES IMMOBILIER INVESTMENT STARTS

Bouygues Immobilier Polska will build Aparté Mokotów in an attractive location. The apartments are now available for sale and have been designed with families as well as couples in mind. Aparté Mokotów will be built at ul. Polska, in a quiet part of Mokotów. Access to the center is facilitated by the nearby ul. Czerniakowska and several thoroughfares leading to Śródmieście. There is also Trasa Siekierkowska nearby, which facilitates access to other parts of Warsaw — including Praga or Okęcie — as well as a quick departure from the city. Near Aparté Mokotów there are green areas by the Vistula River, as well as a beach. This part of the left bank of the river is particularly picturesque. The value of greenery in the area is evidenced by the fact that it is here that the “Vistula Warsaw” nature trail runs. There will be plenty of space for recreation, also for people who value jogging or cycling.

2.5 million sqm

At the end of March, over 2.5 million sqm of office space remained vacant in A, B and C class buildings, according to the largest database on the real estate market in Poland, REDD Real Estate Digital Data, that summarizes the office sector. This is an increase from the end of 2020 by over 150,000 sqm. According to REDD data, currently, the office stock in Poland amounts to almost 13 million sqm and another 1.2 million sqm is under construction.

OFFICE BRIEFS

ROBYG INVESTMENT STARTS IN TRI-CITY

The ROBYG Group is launching a new investment in the Tri-City — it will be the estate of 3-story multi-family houses Szumilas in Kowale, 20 minutes drive from the center of Gdańsk. The first stage of the investment consists of 141 apartments. Already today, there are 57 1-, 2-, 3- and 4-room apartments for sale, with a view of the surrounding greenery or the nearby forest, with areas ranging 33-69.5 sqm. The estate will include playgrounds, recreation areas, an outdoor gym and two ponds. As part of the next stages, ROBYG will also build playgrounds for children, and ultimately a sports field as well as commercial and service premises available directly on the site of the investment.

CONSTRUCTION OF ATMO BEGINS

Kępa Mieszczańska in Wrocław will gain two modern residential buildings from Eiffage Immobilier Polska. The construction of Atmo, apartments located right next to the emerging central city park, has just started. Eiffage Polska Budownictwo is responsible for the implementation of the investment. Atmo consists of two six-story buildings at 13 Dmowskiego St., 113 apartments of various sizes have been designed (26-145 sqm). The project is also characterized by various layouts: from ergonomic studios to spacious five-room apartments. The investment will also include six service premises on the ground floor and an underground garage with 136 parking spaces.

REZYDENCJA KARŁOWICE ALMOST READY

The construction of Rezydencja Karłowice is fast approaching its end. A unique building with an intimate, even exclusive character is being built in Karłowice in Wrocław. Its greatest advantages also include modern, boutique architecture and elegantly furnished common areas. The investment is being carried out by G7 Invest, known for its attention to detail and the highest standard of finish. The construction of Rezydencja Karłowice reached the closed shell and entered its final stage in the spring. The elevations are currently being made. The common parts are being arranged inside. The apartments are already ready and the remaining works should be completed in the summer of 2021. Rezydencja Karłowice is a two-story building with 14 apartments and an underground garage. The investor is the G7 Invest developer company.

LOGISTICS BRIEF The headquarters of Millennium Bank, advised by CBRE, has just changed. The leader in banking services has chosen the City Forum office complex, developed by Archicom, which is located in the city center in Wrocław. Bank Millennium will lease a total of over 3,800 sqm of modern office space. City Forum consists of two modern office buildings called City 1 and City 2. The City 1 building was commissioned in 2019 and is fully leased, while the City 2 building was commissioned in 2020. Both facilities form an office center with a total area of 24,000 sqm with an inner courtyard, separated from the main street by a high glass partition. Archicom, one of the most dynamically developing office developers, is responsible for the implementation of the project. The new headquarters of Millennium Bank will be located in the City 2 building. The Bank will move to its new location at the turn of 2021 and 2022.

MAY 2021 W B J

OLENIS RELOCATES SERVICE CENTER

Specialized chemicals for industry producer, Solenis, has moved its regional service center to Warsaw. An office with an area of 3,100 sqm replaced the existing Solenis service center at Szturmowa street. The consulting agency CBRE represented the company in the process of selecting the new seat. The new Solenis office building is located in the Lixa B building on the corner of Giełdowa and Karolkowa streets in Warsaw’s Wola district (City Center West area). It is a new six-story facility built by Yareal in 2020, designed with sustainability and employee well-being in mind. There are recreational zones, green terraces and numerous environmentally-friendly solutions. The building provides a comfortable space for work and cooperation and its unquestionable advantage is its perfect location and proximity to public transport.

WAREHOUSE WITH BREEAM ‘EXCELLENT’CERTIFICATE

GLP LĘDZINY SECURES FIRST CLIENT PRESS MATERIAL

MILLENNIUM BANK IN NEW LOCATION

GLP has agreed to lease its GLP Logistics Centre in Lędziny, Upper Silesia to its first customer Eurotherm Poland only a few weeks after construction began on the site. Eurotherm, part of Schneider Electric, will be the building’s first occupier and it will use the warehouse as a site for its industrial automation plant that manufactures measurement and control instruments.

European industrial market leader Panattoni has raised the bar for the entire sector once again. The developer has obtained an ‘Excellent’ rating under the BREEAM International New Construction system for Panattoni Park Sosnowiec I. This is the first time such a high certification level has been achieved on the Polish industrial real estate market for a newly built project. The park was awarded the maximum score (100 percent) for water systems (through a 66.5 percent reduction of water consumption) as well as for land use and ecological features. Greenhouse gas emissions have been reduced to 46 percent of the baseline level, and — most importantly — the park has been built on a postindustrial site.

W B J MAY 2021

PA RT N E R H I G H L I G H T

FLEX-SPACE PROVIDER IWG OPENS UP ITS FRANCHISE OPPORTUNITY TO POLAND

SEPTEMBER MAY 2021 W2020 BJ WBJ

nspired by the remote working shift caused by the pandemic, companies worldwide are rethinking and reviewing how – and where – they work best. That’s why, despite the challenges of the past year, flexible workspace provider IWG is experiencing an unprecedented demand for its workspace solutions. Having remained resilient and even expanded its global network during 2020, the company saw the biggest deals in its 31-year history during Q1 2021, signing up large-scale international enterprises such as NTT and Standard Chartered (with respective global workforces of 300,000 and 95,000) who will allow employees to use IWG’s network of flexible workspaces. Now, with the demand for new workspace at a record high,

Michal Dorszewski Franchise Director CEE, IWG

PRESS MATERIAL: REGUS

Thanks to the global trend for a hybrid way of working, demand for flexible office space is soaring – and expert IWG is seeking franchise partners across the country.

the company is looking for franchise partners to help grow its network in Poland. Formed of a network of global and regional workspace brands which includes its two top signature brands, Regus and Spaces, IWG already has a strong presence in Poland, with 30 flex-space centers across its seven largest cities. But its plans for growth are vast. Recently appointed franchise director for CEE, Michał Dorszewski, is seeking investors in new regions to help him grow the network and cater to the rising demand for local workspaces. This is the first opportunity of its kind in Poland, and it’s a fruitful time to invest in a flexible workspace. The coming flex-space boom means that investors and franchisees who get ahead of the hybrid work trend stand to benefit from unparalleled ROI and strong cash flow. While spurred on by the pandemic, the use of flex space was a growing trend well before. In 2019, it was predicted that, by 2030, 30 percent of all commercial real estate will be a flexible workspace, while flexible working will be worth more than €9 trillion to the economies of 16 leading countries alone. Now that companies have had the chance to test the waters of a hybrid style of work – with employees operating from a centralized office when needed, but partly remotely, from home or a local office base – demand for flexible workplace solutions is rapidly outstripping supply. The next few years will see companies of all sizes moving to offer flexible work locations in towns and business parks away from the main urban centers, closer to where their employees live. The shift will serve to reduce property costs for businesses, reduce the workforce’s commute and align with employees’ new taste for remote working. As well as giving remote employees a professional, convenient place to work and boosting local economies, flex space can help reduce carbon emissions and enable businesses to meet their ESG commitments, making it as

ties of growth, which really fascinates me as an investor and entrepreneur.” He is in the process of opening eight centers in several under-served cities around Munich. “Regus, as a market leader, “The next offers a great basis to position myself in this few years sector with a strong brand, a professional infrawill see and a worldwide network.” companies structure Dorszewski concurs: “By partnering with IWG, of all sizes you’re tapping into over 30 years of expertise moving from the world market leader, with a proven business model honed over those decades, as to offer well as gaining access to a polished infrastrucflexible ture of systems, training and support.” IWG’s network work is six times larger than that of its nearest locations” competitor, and it already has a strong presence in Central Europe, with 425 locations across 13 countries. From sales to booking systems and auto-renewal of customer contracts, franchise partners are handed a framework that’s ready to run with. Every step of the opening and sales process is anticipated and prepared for. Another strength of the IWG offering is that it has multiple brands available to franchise, so partners can offer a range of flex-space environments to serve different customer bases in their region. Regus is the most established brand, as well as having the most global coverage and appealing to CEOs of larger companies as to therefore worldwide brand recognition. Spaces entrepreneurs and SME owners. According to is a contemporary, lifestyle-infused type of workRegus’ Suburban Economic Survey, local flex space, with inbuilt networking programs and a space could contribute €225 billion to smaller more entrepreneurial spirit. Signature – created cities, suburbs and towns over the next decade. to sit in iconic and sought-after buildings – and This shift is the catalyst for IWG’s plan to grow its the value brand HQ both provide a range of other network of flexible offices into more suburban solutions to fit your local business scene. locations and smaller regional towns. By mixing and matching these, says Dorszewski, As well as serving the workplace of the future, “You can lead the market with different brands. flex space is one of the safer investments you Essentially, you buy one franchise but become can make, unlike more common franchise opa multi-franchise owner.” Incorporating flex tions such as fast food, café and fitness brands, space is also a way for building owners to add many of which have suffered through the value to their assets, with the scope to generate pandemic. IWG is the market leader by a long more profit than from standard rent while also stretch. There’s also the opportunity to scale up: driving interest in more traditional leases as the most franchise partners will sign cluster deals demand for flex operators grows. to open multiple centers in one region or city This combination of collaboration with a reliable, within a two-to-five-year period. But you don’t market-leading company, the promise of a stable have to be in the franchise business to benefit, market investment and a strong chance of ROI says Dorszewski – this is a great opportunity for and cash flow are all compelling reasons to business people, entrepreneurs and investors of consider this investment. all kinds. “This is a once-in-a-generation opportunity,” conInvestor Ralph Altenburger says: “The sharing cludes Dorszewski. “You can jump on the train economy and flexible workplace solutions are now, get the first pick at territories and reap the important social trends and open huge possibili- benefits, or risk missing it altogether.”

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LOKALE IMMOBILIA | EXPERT OPINION

MARKET OUTLOOK

In 2020, the coronavirus pandemic pushed Poland into its first recession in 30 years which was visible in most sectors of the Polish economy, including the office sector that is currently at the epicenter of changes caused by the coronavirus pandemic, several lockdowns and remote working that has continued in most organizations since March 2020. BY CUSHMAN & WAKEFIELD

n the first quarter of 2021, the total office stock in Warsaw and the eight largest regional markets accounted for over 11.9 million sqm. The vacancy rate has continued its upward trend since the second quarter of 2020, largely driven by economic uncertainty caused by the outbreak of the Covid-19 pandemic. Amid subdued occupier activity in recent quarters and a build-up of new supply in the last twelve months, the vacancy rate rose to 12.2 percent, up by 3.8 pp year-on-year. Occupier activity has also continued a downward trend since the onset of the pandemic with total leasing activity accounted 213,500 sqm in the first quarter of 2021, reflecting a drop by 41 percent in comparison to the same period in 2020.

Dependent development

The future development direction of the office market will largely depend on how the pandemic unfolds and on the rollout of vaccinations. We are currently at a point where several countries are beginning to gradually return to normal thanks to massive vaccination programs. With high vaccination rates, countries such as the US, the UK and Israel are now gradually reopening their economies while many companies are opting for a phased return to office work. Looking ahead, this year’s office transactions volume is expected to be on a par with that of 2020. 2021 will also be a year of market recovery and recommencement of processes pushed back from last year. On the other side, office supply will probably take longer to respond to the outbreak of the pandemic as projects under construction continued and the development pipeline scheduled for 20212022 will, in large part, come to fruition as planned. In the next

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The future development direction of the office market will largely depend on how the pandemic unfolds and on the rollout of vaccinations

two years, we are likely to see a delayed response on the supply side with fewer new projects being delivered to the market in 2023-2024. Additionally, office availability and vacancy rates are expected to continue their upward trends over the next 12 months, resulting from weaker leasing activity and the growing availability of office space in older buildings.

The change of preferences

The Covid-19 pandemic and economic uncertainty have caused most tenants in 2020 to decide on a wait-and-see strategy regarding their occupational needs which was visible in the limited demand for office space in recent quarters. This situation has also caused a change of approach by investors because an increased share of remote work resulting from the pandemic also affected the parameters of a lease, negotiation processes and content of lease agreements in both new and renegotiated transactions. Tenants who cannot predict the development of the situation and cannot estimate the potential impact of the pandemic on the scale of their business are looking for flexibility and ways

W B J MAY 2021

LOKALE IMMOBILIA | EXPERT OPINION to reduce current costs related to the leasing of office space. Moreover, some tenants still haven’t decided what form of work will be implemented in their offices after the end of the pandemic. Therefore, optimizing costs and flexibility has become a crucial trend for tenants today. This can be achieved by negotiating extended rent-free periods. In order to obtain a sufficiently long period of “rental vacation,” tenants are ready to accept higher headline rents after the incentives are in force or to decide for a longer lease period. Such transactions with appropriately selected financial parameters may be a solution that meets the needs of the tenant and are beneficial for the landlord. On the other hand, a significant amount of negotiations was put on hold due to uncertainty and a lack of a stable business outlook. Return to negotiations was often conditioned by ensuring adequate contractual flexibility in terms of contract length and space occupied. Options such as the right of early termination of the lease agreement or the reduction of the part of occupied space have become important elements of the negotiations. Additionally, in our opinion, tenants who expect a quick return to a stable business model may focus on the option of extending their lease agreements and secure expansion or rights of first right of refusals. Tenants are also looking for solutions that allow them to manage a current or future temporary demand for additional space. We observe that projects that can offer flex services are capturing tenant’s interest. This trend is also visible on the landlord’s side. In recent months we could observe several investors who decided to open their flex services brands such as Cavatina (Quickwork), Immofinanz (MyCowork and MyOffice), Warimpex (Mogilska43 Cowork) and Buma (AtOffice).

MAY 2021 W B J

KEY TRENDS IN 2021 Paulina Misiak

Based on current the market situation, our surveys conducted during the pandemic and feedback from market participants, the following major trends are likely to be expected in upcoming months:

partner, head of Warsaw office agency

With vaccination underway, we can see light at the end of the pandemic tunnel, but it will be months before we get there. Until the situation stabilizes, the dominant need of market participants will be to minimize cost exposure and secure flexibility, enabling them to respond quickly to changes as they happen and to adapt operations to new strategies. Due to a prolonged need for working remotely, interim solutions are turning into long-term arrangements in many organizations resulting in the pandemic preference shift towards lease renewals and space reductions. Covid-19 accelerated earlier trends toward mobility and increased the scale of remote work. At the same time, the future hybrid work model, which is very likely to be the way forward, may result in the transformation of offices into less dense and more comfortable areas guaranteeing a safe distance and favorable conditions for team interactions. The possible future trend toward increasing occupancy comfort and space ratio per desk is likely to offset current space reductions and weaker demand. There is, however, a potential forward-looking scenario and it will take some time before the market stabilizes and we can establish a confident prediction.

Soren Rodian Olsen

partner, head of capital markets

The uncertainty related to future demand and occupation of office space has slowed down investment activity in the office sector, and most institutional investors have adopted strategies focusing on other sectors such as Logistics and PRS/Multifamily. While we anticipate capital markets to return to (almost) pre-Covid transaction levels in the latter part of 2021, the office leasing market and occupier demand are likely to take longer to recover. That said, core and core-plus investors continue to have an investment agenda in Poland that includes offices, albeit with a selective focus on centrally-located assets that are sub-€100m and leased up to strong-covenant tenants. At present and looking ahead, there is limited availability of office buildings that fulfill such criteria which means we anticipate further yield compression for prime, best-in-class offices.

• Flexibility: no matter how the pandemic unfolds flexibility will be the key factor in office leasing decisions for most tenants. This trend will result in stronger pressure on shorter lease terms, office downsizing or allocation of financial incentives. Against the backdrop of weaker demand for office space, projects, where landlords can adopt a flexible appro • Flex spaces: flex spaces can be a “safe haven” for companies looking to cut office occupancy costs as they offer increased flexibility. Serviced offices are also likely to attract strong interest from corporate clients reporting increased short-term space requirements. • Hybrid model: 100 percent remote working will be rare in the new reality as hybrid models combining work in a typical office space with flexible space and remote work in varied proportions will become more and more popular postpandemic. • Subleasing: being under pressure to cut costs, tenants have more frequently been offered office space for sublease during the past 12 months. Despite the growing marketing of such space, demand for sub-leasing space is relatively low amidst strong competition from flexible offices. The next few months will see fewer new sublease listings, with those failing to find subtenants being taken off the market altogether.

W B J MAY 2021

LOKALE IMMOBILIA | OFFICE

MOUNTPARK ANNOUNCES INVENTORY DEVELOPMENT

Ghelamco Poland's Warsaw UNIT

MAY 2021 W B J

PRESS MATERIAL

ountpark, a leading developer of industrial and logistics property, has announced that it is developing a 34,892 sqm inventory unit at Mountpark Wrocław to meet the rising demand for national and regional distribution hubs in Lower Silesia. Designed to provide maximum operational efficiency, the unit will have a 12-meter clear height, 70 kN/m2 floor loading and a secure service yard up to 57 meters. The building will be constructed to achieve BREEAM’s “Very Good” certification and offer a comfortable working environment with plenty of amenities for staff wellbeing. Strategically located close to the A4 international highway, Mountpark Wrocław offers easy access to Poland’s major commercial centres as well as to the German and Czech borders. “We are investing in Wrocław because it is a prime logistics location and offers excellent opportunities for our customers in Poland and the wider Central Europe market,” said Mario Sander, managing director, Central Europe at Mountpark. “The new inventory unit has been designed to the same high-quality technical specification that we developed in Western Europe and working with our trusted supply chain, we are confident we can deliver on schedule.”

>>> W B J MAY 2021

LAST WORD

Natural leather combined with nylon

Space for a 13,3" laptop be discounted in any assumptions in the present or the future. The loss of innocent lives — caught in the crossfire — is unequivocally deplorable.

“UNTIL THE LION TELLS HIS SIDE OF THE STORY, THE TALE OF THE HUNT WILL ALWAYS GLORIFY THE HUNTER” — AN AFRICAN PROVERB. Imagine a conflict. Any. All-encompassing. From a mere kerfuffle to a full-blown war. From sibling rivalry to January 2021 storming of the US Capitol and from warring neighbors to the ongoing (at the time of writing) Israel-Palestine flare-up of violence. Now. Are you someone who doesn’t bat an eyelash while going about their business, or do you, like me, fiercely refuse to bury your head in the sand? Nothing beyond the pale, if the former. However, if the latter, pat comes my answer in the form of another question. How do you keep yourself updated? For my daily, no wait, hourly fix of news, I turn to a whole host of sources. But time and again I am faced with the situation where, largely due to lack of concrete evidence, I find it increasingly difficult to decide who is right and who is in the wrong. An example is now in order. What, or rather who, exacerbated the new round of Israel-Palestine clashes? The region has been so mired in one of the bloodiest histories, the past cannot

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CITY BAG

WWW.CHOLEWINSKI.COM

Metal zipper

Moving on, in this day and age, it is possible for anyone with a phone (needless to add, armed with the knowledge about how to use it) to record an incident, in addition to “create” what never happened. However, how can we check the veracity of claims from before the advent of modern technology? Aside from the history books that have been rewritten and re-edited to fit the narrative, how can we confirm what happened hundreds of years ago or before? While it may be nearly impossible to ascertain certain facts from the past, unless we begin making concerted efforts immediately, there will always remain a few versions of the truth from the now in the future - SD

SHUTTERSTOCK

Your truth. My truth. The truth.

Detachable strap

Unfortunately, the plethora of media firms that peddle half-baked “facts” don’t make sifting through information any easier. I am often forced to take many of the news reports I actively read, hear or watch with a grain of salt. Unsurprisingly, some of the well-known worldwide media conglomerates, possibly due to implicit bias, have diametrically opposite ways of reporting similar incidents from two different corners of the world. Simplifying much ahead. On record, these companies have striven to represent suicide bombing in one part of the world as a terrorist attack and in another part of the world as a fight for freedom. A lot depends on your perspective, I have heard. Meanwhile, certain media firms have been accused of adopting the “look the other way” policy and of “playing down” the seriousness of atrocities. All this has led to debilitation of the already-fragile trust in those organizations besides threatening their veneer of respectability.

W B J JUNE 2021

III

Imagine a conflict. Any. All-encompassing. From a mere kerfuffle to a full-blown war. From sibling rivalry to January 2021 storming of the US Capitol and from warring neighbors to the ongoing (at the time of writing) Israel-Palestine flare-up of violence. Now. Are you someone who doesn’t bat an eyelash while going about their business, or do you, like me, fiercely refuse to bury your head in the sand? Nothing beyond the pale, if the former. However, if the latter, pat comes my answer in the form of another question. How do you keep yourself updated? For my daily, no wait, hourly fix of news, I turn to a whole host of sources. But time and again I am faced with the situation where, largely due to lack of concrete evidence, I find it increasingly difficult to decide who is right and who is in the wrong. An example is now in order. What, or rather who, exacerbated the new round of Israel-Palestine clashes? The region has been so mired in one of the bloodiest histories, the past cannot be discounted in any assumptions in the present or the future. The loss of innocent lives — caught in the

MAY 2021 W B J