WBJ #9 2013

11-21

WWW.WBJ.PL

SPECIAL EDITION

• Colliers interview • Residential market • Warsaw office market • Post-industrial revitalization • Luxury apartments in Warsaw

VOLUME 19, NUMBER 9 • MARCH 11-17, 2013 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

3.25%

Since 1994 . Poland’s only business weekly in English

Building momentum

Surprise cut Poland’s monetary policy makers caught markets unaware with their 50 basis-point 7 interest rate cut

A wave of office projects will come online in Poland in the coming years. Will they find tenants?

11, 18

COURTESY OF THE MINISTRY OF REGIONAL DEVELOPMENT

Exclusive interview

Minister of Regional Development El˝bieta Bieƒkowska discusses Poland’s goals for its 24-25 EU funds

In this issue

SHUTTERSTOCK

News . . . . . . . . . . . . . . . . . . . . . . .2-6 Finance & Economics . . . . . . . . . . .7 Business . . . . . . . . . . . . . . . . . . . .8-9 Lokale Immobilia . . . . . . . . . .11-21 The List . . . . . . . . . . . . . . . . . . .22-23 Interview . . . . . . . . . . . . . . . . .24-25 Opinion & Analysis . . . . . . . . .26-27 Markets . . . . . . . . . . . . . . . . . . . . .28 Sports . . . . . . . . . . . . . . . . . . . . . . .29 Lifestyle . . . . . . . . . . . . . . . . . . . . .30 Last Word . . . . . . . . . . . . . . . . . . . .31

Gowin’s reprieve

Where is the solidarity?

The justice minister keeps his job, but for how long?

4, 27

Solidarity icon Lech Wa∏´sa offends many with homophobic comments – and refuses to apologize

6

NEWS

www.wbj.pl

Two Polish climbers presumed dead

IN THE SPOTLIGHT

Numbers in the News

Who will be the next pope?

€5.5 billion

is how much the European Investment Bank will lend towards Polish projects in 2013.

Quote of the Week

Polish Finance Minister Jacek Rostowski was unimpressed by the Monetary Policy Council's decision to cut interest rates by 50 basis points, to 3.25 percent.

Figures in focus Live long and prosper How many healthy years children born in 2011 can expect 80 74 * Highest in the EU ** Lowest in the EU

68 62 56

Ita ly Re pu bli c Po la nd Po rtu ga l Hu ng ar y Ge rm an y Slo va kia **

50

Source: Eurostat

Company index On WBJ.pl House divided European countries are drifting far away from each other in terms of their economic well-being and priorities. What needs to be done to be done to stop this trend?

Read more on WBJ.pl.

Polish WSI involved in CIA prisons?

The Polish Military Information Services (WSI) provided assistance to the CIA in its alleged prisons in Poland, Dziennik Gazeta Prawna reported, quoting declassified documents.

The WSI, a Polish military intelligence agency operating between 1991 and 2006, is said to have provided technical and security support to the CIA in Poland. ●

bardi, the Vatican spokesman, told reporters. “They can use the time they think best.”

The slow pace, some Vatican experts speculated, may benefit those who want to reform, since those who benefit from the current order would want things to move more quickly.

Italian daily Corriere della Sera has reported that Cardinal Angelo Scola is a frontrunner for the post. He apparently has some 40 votes locked in, mostly from Italy, Central Europe and a few from the United States. Mr Scola wants to reform the church. His main opponents are cardinals Angelo Sodano and Tarcisio Bertone. Together they are pushing Brazilian Cardinal Odilo Scherer to be the next Jacek Ciesnowski pope.

Cz ec h

ican’s rigid bureaucracy, especially the administrative body known as the Roman Curia.

“The first thing [the secretary of state] has to do is put greater order in the central administration of the Curia,” Cardinal Edward Egan, the retired archbishop of New York, told The New York Times. “He has to be willing to take criticism.”

As a result, both proponents of church reform and those who want to maintain the status quo have been putting out feelers to see whose support they can count on, and who each candidate would choose as his deputy if elected.

“The cardinals wanted time to organize themselves according to their rhythm of reflection and the need for information,” the Rev. Federico Lom-

n*

After five days of deliberation, the 115 Roman Catholic cardinals that will choose the next pope have finally decided that their conclave will begin on Tuesday, March 12.

Judging by statistics, they will need less time to elect a new pope than they did to set the date of the conclave. Since the early 20th century, no conclave has lasted more than five days. Benedict XVI was chosen after one day of voting, and his predecessor, John Paul II, after three days.

Experts say the cardinals took so long to decide on a conclave date because they spent the five days politicking, teasing out who the candidates might appoint as secretary of state – the pope’s deputy. That position would be the one to either fight or expand the Vat-

“It’s a pity, because Poland still has the highest real interest rates in the EU. Why should Polish business pay more for loans than all of the others in Europe?”

Ma Un ite l d K ta ing do m

Prime Minister Donald Tusk has been receiving death threats in anonymous letters for the past few weeks, radio station RMF FM reported.

The case is under investigation from the police and the Internal Security Agency.

According to experts, the letters were written by one person, most likely a soccer hooligan.

z∏.793.85 billion was the value of Poland’s public debt at the end of 2012.

ed e

Prime Minister receives death threats

14.4% is how high the unemployment rate was in February, according to Labor Ministry estimates. That’s 0.2 percentage points higher than January, and if confirmed by official statistics, would be the highest level since March 2007.

COURTESY OF WIKIMEDIA COMMONS

The Democratic Left Alliance (SLD) political party has suspended one of its best-known members, Ryszard Kalisz.

The party’s executive committee made the decision on Wednesday.

He may even be expelled from the party, if the party arbitration court so decides. Mr Kalisz earned the ire of his fellow party members because of his connections with an initiative by Janusz Palikot, leader of the socially liberal Palikot’s Movement, and former Polish president and SLD founder Aleksander KwaÊniewski.

3.25% is the National Bank of Poland’s benchmark interest rate after the Monetary Policy Council cut rates by an unexpectedly steep 50 basis points last week.

Maciej Berbeka and Tomasz Kowalski went missing during their descent from Broad Peak (8,047 meters) on the border of Pakistan and China. After three days of searching with no result, they were declared presumed dead. They were a part of fourperson team, along with Artur Ma∏ek and Adam Bielecki, that had successfully ascended the mountain during winter for the first time ever.

SLD suspends Ryszard Kalisz

MARCH 11-17, 2013

Sw

2

Angel Poland Group ................................16

Kredyt Bank................................................8

ARE ..........................................................13

Kury∏owicz & Associates ........................18

Auchan......................................................14

Liberty Development................................18

Banco Santander ......................................8

Liebrecht & Wood ..............................13, 18

Bank BPH ..................................................9

Mazowiecka Spó∏ka Gazownictwa ..........13

BBI Development NFI ........................11, 13

Mucha Architekci ....................................13

BBI Investment ........................................18

Patriotów Park ........................................16

BGK ............................................................9

PBG ..........................................................24

BIG InfoMonitor........................................25

Peter Nielsen & Partners..........................8

BNP Paribas Real Estate Polska ............16 BNY Mellon ..............................................18 BRE Bank ..................................................9 Budimex ..................................................12

Calendar

Bulanda ....................................................13 CBRE ............................................11, 13, 21

March

Colliers ..................................11, 17, 18, 21

12-15 MIPIM

Echo Investment ......................................17

Event:

Location:

Web:

The world's leading real estate event for property professionals.

Palais des Festivals Cannes, France MIPIM.com

Danske Bank..............................................7 Location:

Web:

PRCH RETAIL TRENDS SEMINAR

Event:

During this seminar, experts will discuss the latest trends in the field of research, development and investment in shopping centers and retail chains.

Energa ........................................................9 Ernst & Young ......................................8, 25 Ghelamco ....................................11, 17, 18 Grupa ING ................................................18

21-22 EUROPEAN EXECUTIVE FORUM Event:

18

Warsaw Mariott Hotel Aleje Jerozolimskie 65/79, Warsaw PRCH.org.pl

Location:

Web:

This conference, entitled “Leadership in a Changing Europe,” will examine various leadership issues.

Hotel Sheraton ul. Boles∏awa Prusa 2, Warsaw Executive-club.com.pl

PGNiG ........................................................9 PHILIPS ....................................................31 PKO BP ....................................................28 Polkomtel ..................................................8 Polski Holding NieruchomoÊci ..............21 Polskie Inwestycje Rozwojowe ..................9 PRC Architekci ........................................13 Pro Urba ..................................................12 Skanska....................................................17 Steelcase ..................................................31 SwedeCenter............................................18 Talanx ........................................................8

Grupa Radius ..........................................21

Totalizator Sportowy ................................11

Hewlett Packard ......................................18

Triumph International Polska ................16

Home Broker............................................16

UBS ..........................................................17

Jastrz´bska Spó∏ka W´glowa....................8

Unibep ......................................................16

Jeronimo Martins ....................................11

Unidevelopment ......................................16

Juvenes-Projekt ......................................13

Warsaw Chopin Airport............................11

Katowicki Holding W´glowy ......................8

Warsaw Stock Exchange..........9, 13, 16, 21

KINESI ......................................................31

Warta ..........................................................8

Kompania W´glowa ..................................8

X-Trade Brokers ..................................7, 28

4

NEWS

www.wbj.pl

MARCH 11-17, 2013

Politics

Prime Minister wins no-confidence vote Only 137 MPs in Poland’s 460member lower house of parliament, the Sejm, voted to support opposition party Law and Justice’s motion to replace Prime Minister Donald Tusk with Piotr Gliƒski, a sociology professor. In effect, only Law and Justice MPs supported the motion while MPs from the Democratic Left Alliance and Solidarna Polska abstained, bar one.

Meanwhile members of the socially liberal Palikot’s Movement party left the parliamentary floor before the vote in protest. Their leader, Janusz Palikot, said the party would not take part in a “charade.” “The choice between Tusk and Gliƒski is no choice at all,” he said.

Before the vote, Law and Justice leader Jaros∏aw Kaczyƒski raised eyebrows by standing at the podium while holding an iPad on which a video of a speech from Mr Gliƒski played. Mr Kaczyƒski said it was the only choice he had left, since the parliament’s presidium had not agreed for the sociology professor, who is

not an MP, to address the chamber in person.

The ‘Mount Everest of bad governance’ After that, Mr Kaczyƒski addressed parliament himself.

He criticized Mr Tusk’s government for spending EU funds “irrationally.”

“The government pledged that it would build 3,000 kilometers of highways and expressways before the Euro 2012 soccer championship,” said Mr Kaczyƒski. “In the end it built 600 [kilometers] and introduced a new term: ‘a drivable but unfinished road.’ ” He blamed “rigged tenders” for the state of affairs, saying the prime minister had failed to react to the numerous reports of massive corruption in Poland’s highway building process.

“To have a lot of money [from the EU] and still not build the roads, that is the Mount Everest of bad governance,” the Law and Justice leader added.

He also accused Mr Tusk’s government of abandoning

Poland’s security by neglecting the army and bungling energy policy.

Poor economic policies Mr Kaczyƒski also criticized the government’s economic policy, saying that when Mr Tusk’s Civic Platform took over the reins from the Law and Justice-led government (which ruled from 2005-07), Poland’s economy was in good shape.

“In 2008, when the crisis was not yet in Poland, our budget deficit rose. In 2009 it rose to 7.3 percent of GDP despite an increase in revenues for the government,” said Mr Kaczyƒski.

“In 2010, the deficit rose to 7.9 percent before dropping to 5.1 percent in 2011,” he added. “But that was because of a 13.2 percent increase in government revenue due to changes in the law.”

He also described the government’s policies as “antifamily and leading to depopulation in Poland,” and lambasted the state of the health care system in Poland. Mr Kaczyƒski went so far as to question the state of democracy in Poland, saying the gov-

REPORTER

Poland’s parliament rejected a motion to remove Donald Tusk from office and install a sociology professor as prime minister

Mr Kaczyƒski didn’t succeed in ousting the PM, but he did cause a stir by presenting a speech by his party’s candidate, Piotr Gliƒski, on an iPad ernment wants to silence its critics and is “expelling critical journalists from public television channels.”

A ‘masquerade’ The prime minister responded that Mr Kaczyƒski and his party’s problem was such that “they do not accept Poland

when they don’t win elections.”

“This is the problem of a politician who believes that democracy is respected in a country only when it gives him victory and since that happens very rarely, Law and Justice’s leader permanently questions Poland’s democracy,” said Mr

Tusk.

After the no-confidence motion had been defeated, Mr Tusk said, “The voting result showed that ... this was a one-party party, a masquerade.”

“Now we can get back to normal work.”

Remi Adekoya

Politics

Gowin to remain in government DAILY EXECUTIVE DIGEST Poland A.M. gives you the biggest Polish stories of the day.

Have the most valuable news delivered to your inbox each weekday morning.

S i g n u p f o r a 2 - w e e k f r e e - t r i a l ! w w w. p o l a n d a m . p l G e r m a n v e r s i o n : w w w. p o l e n a m m o r g e n . p l

The conflict between the PM and his justice minister has been resolved, says Donald Tusk. Has it?

When Prime Minister Donald Tusk emerged for a press conference last Monday, many observers were certain he would announce the dismissal of his justice minister, Jaros∏aw Gowin. He didn’t.

Instead, he announced that Mr Gowin would remain in his position despite the politicians’ public disagreement over the issue of civil unions.

Polish media had begun speculating on the fate of Mr Gowin after government spokesman Pawe∏ GraÊ wrote on his Twitter account that on March 4 the prime minister would “make a decision regarding the presence of minister Gowin in the government.”

One leader too many?

Jaros∏aw Gowin is often referred to as the leader of a strongly conservative faction

in Civic Platform and is seen by many liberals as an obstacle to progressive reforms.

Commenting on the situation that had led to the conflict – specifically that Mr Gowin had publicly opposed a Civic Platform draft law aiming to sanction civil unions – the prime minister said that he thought the issue could be resolved in a manner that is in accordance with the Polish constitution.

This came after the justice minister had described Civic Platform’s original legislative proposal as unconstitutional.

Mr Tusk said he has now asked the speakers of both houses of parliament to supervise work on a civil union draft law to make sure it remains in line with Poland’s constitution.

Why keep Gowin?

So why did the PM keep a minister who has publicly called into question his judgment?

“I think both politicians realize that now is not a good time for an internal war in

Civic Platform and thus decided to take a step back,” said Sergiusz Trzeciak, a political marketing specialist.

“However, Jaros∏aw Gowin must realize that Donald Tusk could hit him hard just before the next parliamentary elections [in 2015] by cutting out [Gowin’s] supporters from their party’s electoral list,” he added.

That would leave Mr Gowin without an “army” in parliament.

Pre-emptive actions possible Mr Trzeciak said that Mr Gowin could act before then by forming a tactical partnership with some disgruntled Civic Platform MPs in order to try and unseat Donald Tusk.

“People think because they dislike each other, Jaros∏aw Gowin and [deputy Civic Platform leader] Grzegorz Schetyna can never team up, but in politics my enemy’s enemy is my friend,” he added.

Remi Adekoya

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6

NEWS

www.wbj.pl

MARCH 11-17, 2013

LGBT issues

Health care

Wa∏´sa’s comments on gays cause uproar Tragic death puts The former president health system in and Solidarity icon said gay MPs should spotlight sit “behind a wall” house of parliament] is also a varied place. You cannot divide people based on their sexual orientation, age, skin color or gender.”

The head of Palikot’s Movement, Janusz Palikot, told media that “Until now Lech Wa∏´sa had stood for tearing down walls, and not building them up.” The Solidarity movement, which Mr Wa∏´sa led throughout the 1980s, is credited with the downfall of communism in Poland.

Former Polish President Lech Wa∏´sa caused an outcry recently after saying that gay members of Poland’s parliament should sit in the “back row” of the parliamentary chamber, if not “behind a wall.” The comments were made on the TVN24 news station.

“I do not wish for the sexual minority, that I disagree with, to come out on the streets and preach its ‘minority propaganda’ to my children and grandchildren,” Mr Wa∏´sa added. The words elicited a strong response from politicians and commentators in Poland as well as from the international community.

Mr Wa∏´sa’s remarks may even lead to legal proceedings, after Ryszard Nowak, president of the Committee for Protection against Religious Sects and Violence, reported him to the prosecutor’s office in Gdaƒsk for hate speech.

COURTESY OF THE EUROPEAN COMMISSION

and that people “live to reproduce”

‘No apologies’

Lech Wa∏´sa’s remarks were widely criticized ‘Dividing people’ Mr Wa∏´sa made the comments in the context of an ongoing discussion on gay rights in Poland. The ruling party, the center-right Civic Platform, tried and failed earlier this year to pass civil union legislation that would have given homosexual couples some of the same rights that married couples have. The measure was defeated, but the party is preparing a new bill that it hopes will manage to pass.

During the public debate on the issue, the spotlight was

thrown on Robert Biedroƒ, Poland’s first openly gay MP, as well as on Anna Grodzka, Poland’s first transsexual MP. Both are members of the socially liberal Palikot’s Movement party.

Mr Biedroƒ expressed his disappointment at Mr Wa∏´sa’s comments. “When I hear the man who once became a symbol of fighting for freedom speak such words, I feel some dissonance,” he said, adding, “Lech Wa∏´sa doesn’t realize that we are a diverse society and the Sejm [Poland’s lower

However, Mr Wa∏´sa has steadfastly refused to apologize for his comments.

“I will never apologize.

Nobody has yet succeeded in bringing Wa∏´sa to his knees,” the former president said in an interview with Rzeczpospolita.

“I don’t like people flaunting their homosexuality. It is not the mainstream, people live to reproduce and pay taxes,” he added.

After the comments, Mr Palikot gave Mr Biedroƒ and Ms Grodzka seats in the prestigious front row of the Sejm as his party’s response to Mr Wa∏´sa’s comments.

Beata Socha, Remi Adekoya

Will a little girl’s lost life finally spur the reform of Poland’s creaking state health care apparatus?

Outrage erupted in Poland when news emerged in early March that a two-and-a-halfyear-old girl named Dominika had died because medical authorities refused to send an ambulance to pick her up in time. Emergency services arrived a full seven hours after first receiving a call from her distressed parents, who reported that she had an abnormally high temperature.

It was only after they received a second call from Dominika’s parents that they sent an ambulance, but by the time the toddler got the hospital, the doctors were unable to save her.

In response, Jerzy Owsiak, the founder of the Great Orchestra of Christmas Charity (WOÂP), a huge Polish charity drive that uses its proceeds to buy state-of-the-art hospital equipment, said “the further

activities of WOÂP regarding children’s medicine has to be put under a question mark.”

The equipment WOÂP purchases mostly goes to pediatric wards. The charity raised over z∏.50 million this year and has raised z∏.546 million since it began operations in 1993.

‘What’s the use?’

“What’s the use of buying modern equipment if the patient is not brought to the hospital at all?” Mr Owsiak rhetorically asked reporters, adding that WOÂP could support the Health Ministry but could not “replace the state.”

Health Minister Bartosz Ar∏ukowicz was forced to react, and he appeared at a press conference with Mr Owsiak and doctors’ representatives.

He said that in conjunction with doctors, he would try to create a blueprint for change in Poland’s health care system.

“We want to create a situation in which patients in our system have a sense of safety,” said Mr Ar∏ukowicz.

Remi Adekoya

Media patronage

Extraordinary times call for extraordinary leaders leaders to rethink their strategy for the next few years.

Some didn’t manage to adjust to the new, highly altered circumstances, others did but with varying results. While I was meeting with politicians I kept hearing that it would be Aleksander Beata great to exchange KwaÊniewski Radomska some of our observations on politics Former President Aleksander and business with KwaÊniewski and Beata Radomska, political elites from other countries. This president of Executive Club, discuss gave us the impulse the new European Executive Forum to join forces and initiative and its significance in times create a platform for of economic crisis exchanging experiences. The idea finally took the form of the EuroWhere did the idea for creating a pean Executive Forum.

European Executive Forum come We want both the panel speakers from? How is this congress different as well as participants to represent from so many other economic the highest global level [of decision events in Poland?

AK: The first thing that makes this makers] so that they will be able to congress special is the fact that exchange unique experiences. There Poland’s first president democrati- is not a single “star” at the congress; cally elected for two terms got the guests and participants of the involved in it [smiles]. Seriously, European Executive Forum will all though, the economic crisis which be equals as they are the most came to Europe two years ago prominent and outstanding experts forced many political and business in their fields.

BR: The purpose of organizing the congress is to answer the question: “What kind of management does today’s Europe need?” The market environment that we operate in can be unpredictable therefore we try to present ideas that will equip contemporary leaders with tools they need to face all the challenges that organizations encounter today.

“We need to reevaluate and redefine the role of leadership.”

We have begun cooperating with the best business schools and MBA programs in Europe, as well as the leading business practices.

What inspired us to do this was my own experience, which tells me that any knowledge you get from an MBA program very quickly becomes out of date. Many managers and company presidents have complained that they don’t have enough time to stay up-to-date with the latest trends. The forum is to become the most cutting-edge and up-to-date knowledge base in management.

Why did you decide to invite politicians, businesspeople as well as scientists? Why do former political leaders form the biggest of these groups?

AK: As I mentioned before, the cooperation between [my foundation] Amicus Europae and Executive Club has already brought together business with politics.

Leadership stems from politics and many of our guests have suggested that such an important event should include both people who create management systems and strategies as well as those responsible for the administrative and political framework for business. As far as former politicians are concerned, we have tried to bring together the greatest minds with the highest authority, politicians with unquestionable merits and achievements.

Former politicians can present their independent and unbiased opinions. They do not succumb to current political pressures which very often influence those still active in politics. However, there is a very fine line between an active and a former politician.

BR: By joining forces with President KwaÊniewski’s foundation, we have managed to find the origins of leadership by combining business with science and politics. We have

secured the cooperation of professor Manfred Kets de Vries from [business school] INSEAD, the greatest European scientific authority in the area of leadership. Professor de Vries, inspired by the unique combination of science, politics and business, made the time in his very busy schedule to appear at our congress as a special guest. Combining theory with practical application is the best platform for exchanging experiences.

Is a time of economic crisis good for creating a leadership forum?

AK: It’s the best time. We need to reevaluate and redefine the role of leadership. An economic crisis is demanding, but it also creates extraordinary leaders. We want to show how difficult times – and economic crises definitely qualifies as such – help true leaders grow. It is the right time for leaders who set new standards and not just go with the flow.

BR: The year 2013 is to be the breakthrough year, the year when recovery begins, but also the moment of truth for economy and business. Economic crisis requires hard work and helps distinguish true leaders from mere administrators. Our forum will be an ideal platform for exchanging views on this matter. ●

FINANCE & ECONOMICS

MARCH 11-17, 2013

www.wbj.pl

7

Monetary policy

but retail sales positively surprised with a 3.1 percent rise, after a -2.5 percent drop in December. The manufacturing sector seems to be slowly improving, while GDP was shown to have grown by a higher-than-expected 1.1 percent in the fourth quarter of last year.

But in previous months the data had been decidedly negative. The more positive data recently had led Marek Belka, president of the

COURTESY OF THE INTERNATIONAL MONETARY FUND

Poland’s interest-rate setting body, the Monetary Policy Council (RPP), slashed the National Bank of Poland’s reference rate by an unexpected 50 basis points last Wednesday, bringing it to an historic low of 3.25 percent.

The cut is the fifth in the row for the council, which previously had cut 25 basis

points each month from November through February.

Most analysts had expected a cut, but not such a steep one. Out of 26 economists surveyed by press agency PAP, 19 had expected a 25-bp cut, while seven had expected the RPP to hold rates unchanged.

Recent macroeconomic figures coming out of Poland had sent mixed signals. The unemployment rate jumped in January to 14.2 percent,

The easing cycle is likely over, though NBP president Marek Belka wouldn’t definitively rule out further cuts

National Bank of Poland and chairman of the RPP, to opine that the Polish economy had reached the “bottom” of its current slowdown and was “rebounding.”

That, along with statements from Mr Belka early in February that the council’s rate-cutting period was “coming to an end,” led some to think that the RPP would pause with its cuts.

Instead, the council slashed rates by 0.50 percent, a surprise to nearly everyone.

The reference rate – which is used by banks and others to set interest rates in everything from mortgages to consumer loans to interbank loans – is now lower than it was during the darkest days of the economic crisis.

‘Wait-and-see’ At a press conference after the decision, Mr Belka told the media that the council wanted to put a “full stop placed after a certain series of rate cuts” and that the council is now taking a “wait-and-see” approach.

He wouldn’t go so far as to rule out further cuts, but said that

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The council wanted to put a “full stop” at the end of its easing cycle

The National Bank of Poland’s reference interest rate, March 2011-March 2013 (in %)

Ma

Surprise cut puts interest rates at historic low

Cut, cut, cut

Source: National Bank of Poland

the council would need “inflation and GDP data to differ significantly from what we see in the [current NBP] projection,” before any further cuts are made.

Nevertheless, some economists still expect the council to further cut rates this year.

“Going forward, we think that more rate cuts have to be penciled in,” said analysts at Danske Bank in an e-mailed statement. They called the cut “the right move.”

Economists point out that inflation – the main factor that the RPP is supposed to take into account when making its decision – has been falling rapidly, from 3.8 percent in September last year to 1.7 percent in January this year. The council’s target

inflation rate is 2.5 percent, with a band of flexibility of plus or minus 1 percent.

Przemys∏aw Kwiecieƒ, chief economist at X-Trade Brokers, said that the decision would “help the Polish economy.”

“The 50bp interest rate cut it is certainly not a mistake by the RPP,” he told WBJ. “An economic slowdown is clearly visible, while there are no inflationary pressures. What is worse, the slowdown comes not only from declining exports, but also from falling consumption. The cut also does not hurt the z∏oty, which is still strong relative to other currencies.”

Andrew Kureth, Kamila Wajszczuk

8

BUSINESS

www.wbj.pl

MARCH 11-17, 2013

Mergers and acquisitions

Mining

Poland a regional M&A leader

Poland’s mining giants to invest z∏.7 billion over next two years

A total of 276 M&A deals were transacted in Poland last year, fewer than in Turkey (297) but more than in the Czech Republic (155), according to a report

by Ernst & Young.

In terms of value, Poland came in a close third, with M&A deals worth a total value of $8.02 billion, behind Turkey and the Czech Republic.

Less money than last year But despite the high ranking, Poland saw a significant decrease in the value of deals from 2011, when it amounted to $21.2 billion. The decline is mainly attributable to the lack of blockbuster transactions, of which there were several in 2011, E&Y said (the number of total transactions in 2011, at 254, was smaller than in 2012).

Meanwhile, Slovakia and the Czech Republic saw significant increases, mainly due to

single transactions with values of over $1 billion.

“It should be noted that the drop in value of transactions in Poland is connected with the fact that a year earlier particularly valuable mergers and acquisitions were carried out, mainly the takeover of Polkomtel,” said Brendan O’Mahony, a managing partner at Ernst & Young.

Hungary, Poland, Romania, Serbia, Slovakia, Slovenia and Turkey. Only in the Czech Republic, Greece, Poland, Slovakia and Turkey did the M&A market grow in 2012, while throughout the region it shrunk by 17.6 percent.

In total, 1,108 merger and acquisition transactions took place in the countries surveyed, amounting to a cumulative value of $41.8 billion.

High-value transactions The majority of M&A deals in Poland last year were carried out in the industrial sector, but the highest-value transactions took place in the banking and insurance sectors, namely the takeover of Kredyt Bank by Banco Santander and the takeover of insurer Warta by Talanx.

In Poland, 90 percent of the mergers and acquisitions were carried out with the help of strategic investors. The most active investors hailed from the United States, Germany and the United Kingdom.

M&As down in region The survey was carried out in 11 countries: Bulgaria, Croatia, the Czech Republic, Greece,

Remi Adekoya Favored industries for investment in particular regional countries Bulgaria

Energy and mining

Croatia

Retail & wholesale/ construction

Czech Republic

Services

Greece

Energy & mining

Polish mining firms will be spending billions on new equipment

Hungary

Telecom & media

Poland

Manufacturing

Romania

Retail & wholesale

Serbia

Manufacturing

Three-quarters of the money will be spent on drilling and mining equipment

Slovakia

Food & beverages/ Telecom & media

Slovenia

Manufacturing

Turkey

Energy & mining Source: Ernst & Young

SHUTTERSTOCK

The country took second place in the region when it comes to the number of merger and acquisition deals conducted last year

Poland’s largest mining companies, Kompania W´glowa, Katowicki Holding W´glowy and Jastrz´bska Spó∏ka W´glowa, will spend about z∏.7 billion on investments in the years 2013-2015, Deputy Economy Minister Tomasz Tomczykiewicz said last week.

About 75 percent of this money will be spent on maintaining production levels, through drilling or the purchase of mining equipment, Mr Tomczykiewicz added.

The Economy Ministry said

that since 2008, investments in the mining sector have surpassed z∏.2 billion annually. In 2012, they were an estimated z∏.3.7 billion.

This year, Kompania W´glowa, the biggest coal producer in the European Union, expects roughly z∏.100 million in net profit, while preliminary 2012 results show z∏.150 million or “a bit more” in net earnings, Joanna Strzelec-¸obodzinska, the company’s president, announced in January.

Kompania W´glowa’s production output reached 39.28 million metric tons last year, in line with the firm’s plans, while in 2013 production is expected to come down to some 36.5 million tons.

The company is currently in talks with two Asian partners on establishing a special purpose vehicle to build a power plant with a capacity of 1,000 MW for about z∏.6 billion, where Kompania W´glowa would hold less than a 50 percent stake. The deal is expected to be agreed upon by summer.

Meanwhile, according to preliminary data, Katowicki Holding W´glowy had a net profit of z∏.52 million last year.

The last of the trio, Jastrz´bska Spó∏ka W´glowa, is expected to make a net profit of roughly z∏.1 billion for last year while it expects z∏.500-600 million in profit this year.

Remi Adekoya

Legal News Contact: Miros∏aw Stefanik ms@pnplaw.pl

Debt settlement between partners of a general partnership On February 28, 2013 the Supreme Court decided that a partner in a general partnership who, as a result of court proceedings, had to satisfy financial claims of the partnership’s creditors, may claim the money or a part of it from his other partners together with the costs of court proceedings (court ref no. III CZP 108/12). However, the other partner may bring a suit against the partner who had been sued by the creditor, accusing him of conducting the litigation improperly.

This is how the Supreme Court answered a question as to whether a partner in a general partnership liable for the partnership’s debts with his personal property under the Commercial Partnerships and Companies Code may claim from the other partners not only some of

the money paid to the creditors, but also the cost of court and enforcement proceedings.

Draft amendment to Farmland and Woodland Conservation Act On March 6, 2013 the Sejm examined a draft amendment to the Farmland and Woodland Conservation Act. The new provisions relate to the procedure of granting permits for the appropriation of farmlands and woodlands for non-agricultural and non-forest purposes.

Moreover, the amendment is to facilitate the procedure of adopting new local zoning plans for areas where no such plans have been issued and to speed up the rezoning process for areas where the existing classification is not compatible with current economic and investment conditions.

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

BUSINESS

MARCH 11-17, 2013

Investments

Polish Investments appoints CEO Poland’s state-owned investment vehicle, Polskie Inwestycje Rozwojowe (Polish Development Investments, PIR), which is to manage the recently announced Polish Investments program, finally has a CEO. The company’s supervisory board has appointed Mariusz Grendowicz, the former chief executive of BRE Bank, to the post.

The Treasury Ministry had earlier stated that it would look for a banker with investment experience to head the vehicle. A competition was announced in January and 14 candidates applied.

Mr Grendowicz was recently a management board member at Bank BPH and a supervisory board member in companies from the Aviva insurance group. In 2008-2010, he headed Commerzbank’s subsidiary BRE Bank.

PIR plans to take up shares in investments that it will be involved in along with other strategic investors. The value of investments will amount to between z∏.50 million and 750 million, and will be short term,

COURTESY OF BRE BANK

An experienced banker will lead the investment vehicle

Mariusz Grendowicz previously headed BRE Bank from 2008-2010 PIR will be one of the pillars of the Polish Investments program. Another one will be state-owned bank BGK. They will provide about z∏.10 billion each to manage the program.

Bank BGK will guarantee loans for potential investments.

The government plans to list PIR on the Warsaw Stock Exchange within a few years.

meaning that the Treasury wants to withdraw from the investments as soon as they have been completed.

The sectors in which the vehicle wants to be involved include energy (production and distribution), gas and shale gas (storage, extraction), transport, industrial and telecommunications, as well as local government projects.

KW, JC

Energy

Energa’s IPO soon, 2012 results ‘satisfactory’ The company recorded higher revenue but lower profit than in 2011

COURTESY OF ENERGA

Poland’s fourth-largest energy provider Energa reported a consolidated net profit of z∏.456 million in 2012, compared with z∏.703 million in 2011. The company’s revenue was z∏.11.18 billion last year, up by 7.8 percent over the previous year. The

value of the group’s EBITDA was z∏.1.629 billion, up by 7.3 percent year-on-year.

Energa CEO Miros∏aw Bieliƒski said that the results were “satisfactory.” He added that the net profit figure fell as a result of one-offs.

Energa is currently owned by the state, but the Treasury has announced plans to find a sector investor that will take over a majority stake. The

Up to 35 percent of the company’s shares will be floated on the WSE

company is also due to sell a stake of up to 35 percent in an IPO by June.

The firm has been looking for a sector investor for some time. The previous plan was to find one before the end of 2013, but the state has now changed tack.

“We’re not looking for a sector investor right now, it won’t happen in 2013,” said Poland’s Treasury Minister Miko∏aj Budzanowski. The ministry’s view is that an investor with Polish assets would be most suitable for the company. However, Mr Budzanowski denied that another state-owned entity – natural gas distributor PGNiG – could be the buyer.

Mr Budzanowski confirmed earlier announcements that Energa’s IPO would take place in the first half of 2013.

Up to 35 percent of the company’s shares are to be traded in the offer. The Treasury has also said that a new share issue will be considered if Energa’s investment needs are larger KW, JC than expected.

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9

Colliers’ Hadley Dean on the Polish and CEE office markets

Luxury apartments have no trouble finding buyers despite the slow economy

17

Residential market developers adjust to changing demand 12

16

SPECIAL MIPIM EDITION

LOKALE IMMOBILIA

W a r s a w B u s i n e s s J o u r n a l ’s w e e k ly s u p p l e m e n t o n re a l e s t a t e , c o n s t r u c t i o n a n d d e v e l o p m e n t

More distribution centers for Biedronka Portuguese retail company Jeronimo Martins, which owns the Polish discount supermarket chain Biedronka, has announced that it plans to open two distribution centers this year and around 290 new stores, company officials announced. The two new distribution centers will bring the number the company has in Poland to 15, with each of them supplying some 150-200 stores. In 2012 Jeronimo Martins opened 263 new stores, which brought the total number of its facilities in Poland to 2,125. ●

In this issue Office space . . . . . . . . . . . . .11, 18 Post-idustrial revitalization .11, 13 Residential market . . . . . . . . . .12 Polish cities at MIPIM . . . . . . . .14 Luxury apartments . . . . . . . . . .16 Hadley Dean interview . . . . . . .17 Malls for youth . . . . . . . . . . . . . .19 Bierut decree . . . . . . . . . . . . . . .20 Retail market . . . . . . . . . . . . . . .21 PHN privatization . . . . . . . . . . . .21

Poland awaits a wave of new office space The supply will outstrip demand in Poland this year, but the biggest cities are still hungry for office space The Polish office market saw a higher total lease volume in 2012 than in 2011, which had been considered a good year for the sector. Despite slowing GDP growth, both demand and supply of office space in Poland are still expanding.

Experts predict this year should also be good, with vacancy rates slightly higher as the supply of office area in major cities continues to grow.

Colliers experts report that office stock reached 5.8 million sqm in Q4 of 2012. Leasing activity in Q4 of 2012 increased by 10 percent in

comparison with the same period of 2011 with pre-let agreements constituting 34 percent of transaction volumes. The vacancy rate stood at 9 percent. This is, however, expected to increase in 2013.

This year will witness an increase in Poland’s total office stock of 630,000 sqm, which will result in growing vacancy rates in the majority of office markets. Leasing activity is expected to remain at levels similar to those in 2012, but due to the increased supply, rental levels may demonstrate a slight downward trend.

Big buyers back in the game In 2012 there were some spectacular transactions in the office sector in Poland, includContinued on p. 18 ➡

The first floors of Ghelamco’s Warsaw Spire will go up this year

Investments

Warsaw reborn New subway line construction boosts the revitalization of post-industrial dilapidated buildings The construction of the second subway line in Warsaw is leading to a rise in the number of old and neglected buildings being revitalized, some of them in cooperation with the city’s curator of historic buildings.

Construction of the central stretch of the new subway line between Rondo Daszyƒskiego in the Wola district and the Warszawa Wileƒska railway station in the Praga Pó∏noc district began in August 2010.

The construction of the central part of the second subway

line is scheduled for completion at the end of 2013. This section of subway will comprise seven stations.

The improvement in transportation infrastructure has spurred a number of projects involving the revitalization of old and long-neglected buildings. The districts in the capital that host the biggest number of such developments are PowiÊle (along the Vistula River), Wola (in the northwest) and Praga Pó∏noc (in the northeast).

PowiÊle – the Soho of Warsaw Warsaw’s PowiÊle neighborhood is becoming an increasingly attractive destination for office tenants who appreciate its central location, quiet natu-

ral surroundings and competitive rents, according to a recent report by CBRE. “PowiÊle is one of those rare instances in Warsaw where the demand for office space seems to significantly outstrip the supply,” ¸ukasz Ka∏´dkiewicz, director in the office agency of CBRE in Poland, said in a statement.

He added that PowiÊle’s strongest assets lie in its close proximity to Warsaw’s downtown and its soon-to-improve public transport connections.

The PowiÊle station of the under-construction second line of the capital’s subway system is scheduled to open in 2014.

Currently, PowiÊle houses only 10 modern office buildings, offering a total of 60,000

COURTESY OF BBI DEVELOPMENT

Totalizator Sportowy is planning a thorough revitalization and redevelopment of the S∏u˝ewiec horse racing track in Warsaw’s Ursynów district.

Totalizator wants to develop a new sports and exposition hall and new office and hotel areas. The S∏u˝ewiec horse racing track is situated close to the international Warsaw Chopin Airport.

Office

COURTESY OF GHELAMCO

S∏u˝ewiec horse-racing track to be revitalized

MARCH 11-17, 2013 LI 18/09

BBI Development plans to transform the former Koneser vodka distillery into a modern mixed-use complex sqm of space, accounting for 1.5 percent of Warsaw’s entire existing office stock. However, the supply of new office space in the neighborhood is set to increase significantly before the end of 2015, by which time four projects comprising a combined office area of 52,000

sqm are expected to be delivered.

These will include the first phase of the planned Copernicus Square complex, which will be located on the site of a former power and heat plant and will entail the construction of Continued on p. 13 ➡

Warsaw Business Journal presents Real Estate weekly newsletter • Know about the newest projects before they’re on the market • Keep up to date on the latest tenders and auctions • Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate To subscribe: e-mail subscribe@wbj.pl or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

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LOKALE IMMOBILIA – S P E C I A L M I P I M E D I T I O N

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MARCH 11-17, 2013

Residential

Residential developers tighten their belts As the economic slowdown increasingly weighs on people’s purchasing decisions, developers need to adjust to what the market is demanding

Warsaw’s urban sprawl halted

Budimex’s WiÊlany Mokotów will comprise apartments from 27 to 81 sqm Urba reduced the sizes of the apartments in the second stage of its 19. Dzielnica development in Warsaw’s Wola district, fitting two rooms in 42 sqm or even three-bedroom apartments in just 59 sqm, thus adjusting them to market demands.

Waning demand Even after the conclusion of

the “Rodzina na swoim” program, people continue to favor compact units, preferably consisting of two or three rooms and comprising space of up to 75 sqm. The next government initiative, “Mieszkanie dla M∏odych” (“Apartments for the Youth”) will also impose stringent conditions of price and area on subsidized

Mortgage activity down, again Number of new mortgage loan contracts

Value of new mortgage loan contracts (in z∏. billion)

350,000

60

300,000

50

250,000

40

200,000

30

150,000

12 20

20 11

10 20

20 09

20

07 20

12 20

20 11

20

20

20 10

0 20 09

0 08

10

07

50,000

08

20

100,000

Source: National Bank of Poland

dwellings, although price ceilings will be as much as 20 percent higher than they were in the “Rodzina na Swoim” program.

The program will be directed at people under 35, purchasing their first dwelling with a mortgage loan covering at least 50 percent of the transaction value.

The new initiative is to be introduced next year.

In the meantime, however, demand has taken a dive, putting even more pressure on prices. In 2012 apartment prices fell in all major Polish cities, with Wroc∏aw and ¸ódê noting the highest drops of 8.1 and 6.4 percent respectively. The residential market in Bia∏ystok and Kraków also had a rough year, with both cities seeing a price slump of 6 percent.

Still, there are cities which managed to hold their own.

The residential market in the capital of Poland is bearing the full brunt of continued economic slowdown. The average apartment price in Warsaw in January was at z∏.8,392 and had fallen by z∏.404 since January 2011, a 4.6 percent drop.

No wonder developers are increasingly reluctant to start new projects. In January 2013 they began construction of 1,708 units, 50.6 percent fewer than a year earlier. At the end of 2012 the total number of units on offer in Warsaw was at 20,600.

Assuming the activity on the market remained unchanged, the current stock would be sold out within 7 quarters.

With all this negative out-

look, developers are putting new investments on hold and are waiting to see if 2013 brings economic recovery.

They have already made the mistake of engaging in excessive optimism and are reluctant to do it again. In 2011, relying on better-thanexpected economic growth (of 3.9 percent in 2010), they ramped up development.

Assuming an average construction period of 18 months, most of these investments have already been delivered and the last few will soon be turned over for use.

Experts warn, however, that if the belt on new investment is tightened too much, supply might not meet the demand once the market rebounds, which could push up apartment prices, potentially leading to another real estate bubble like the one in 2007.

Beata Socha

COURTESY OF RED REAL ESTATE DEVELOPMENT

COURTESY OF BUDIMEX

A significant slowdown is hitting Poland’s residential market, after a surge in activity in the final months of 2012 subsided. The short-lived boom in the market resulted from the “Rodzina na swoim” (“Family on its own”) program coming to an end in December of last year. But even with the government program, which involved subsidizing interest paid on mortgage loans for families purchasing their first apartment, 2012 saw 15 percent fewer transactions than 2011.

Nonetheless, the program, which put strict price and size requirements on the subsidized apartments, contributed to the already existing market trend of developers shifting from big, spacious apartments to smaller, more compact dwellings.

Spanish developer Pro

Opole and Rzeszów noted only a slight price adjustment of -0.2 and -0.7 percent respectively.

Apartments in the Alpha estate in Warsaw Skorosze sell for as low as z∏.6,490 per sqm

MARCH 11-17, 2013

LOKALE IMMOBILIA – S P E C I A L M I P I M E D I T I O N

COURTESY OF NORBLIN

Warsaw reborn

Capital Park’s revitalization of the former Norblin factory in Warsaw is due to create a vast office complex, as well as a service and cultural center ➡ Continued from p. 11 several new buildings and the renovation of existing ones.

Other office facilities that are either under construction or planned in PowiÊle include the Carpathia Office House

11 buildings listed in the historical buildings register. It also includes a development of a number of new structures with office and retail-service space. Altogether, over 61,000 sqm of usable space, including

“It’s not only the left side of the Vistula River that is considered a prime location for investors.” building, the headquarters of gas distributor Mazowiecka Spó∏ka Gazownictwa and rowing association Warszawskie Towarzystwo WioÊlarskie.

What will significantly increase the attractiveness of PowiÊle in the eyes of tenants and investors is the restoration of the Vistula River boulevards, which is planned for the near future.

The low volume of investment transactions recorded in PowiÊle over the past few years was the result of limited supply in the neighborhood, but since the number of new projects in the area will rise in the near future, investment activity is expected to pick up too, the CBRE report said.

approximately 22,000 sqm of retail-service and cultural space, and 39,000 sqm of classA office space, will be built at the Norblin site.

After the revitalization and construction of the complex, Art Norblin’s two hectares of land will, according to the developer, become the vibrant center of this part of the capital. The company had analyzed hundreds of projects around the world before it approved the design of these multipurpose buildings.

Art Norblin will apply for a building permit for the scheme in the upcoming months, with construction expected to commence next year and finish in 2015. The investment will cost around z∏.500 million to build.

Wola – buzzing with life Warsaw’s Wola district, despite its central location, still has a lot of room for investment opportunities, such as the revitalization of the former Norblin factory located close to the new subway line at the intersection of ul. Prosta and ul. ˚elazna. The investor on the project, Art Norblin, which belongs to Capital Park, plans to create a vast office complex, as well as a service and cultural center.

The scheme, designed by the PRC Architekci studio, envisages the preservation of

Praga Pó∏noc – the artistic soul of Warsaw It’s not only the left side of the Vistula River that is considered a prime location for investors looking to revitalize old post-industrial buildings.

The right bank of the river offers some great opportunities in that scope, too.

Warsaw Stock Exchangelisted developer BBI Development NFI and Liebrecht & Wood presented their vision of the development of the residential, office and retail part of the revitalized historic Koneser

site in the capital’s Praga Pó∏noc district. The scheme is located on a city block formed by ul. Zàbkowska, ul. Niepor´cka, ul. Markowska and ul.

Bia∏ostocka.

The company plans to transform the former vodka distillery into a modern mixed-use complex within the next few years. Altogether, the Centrum Praskie Koneser project will comprise 330 housing units, 22,500 sqm of retail space and 22,000 sqm of office space. One of the historical buildings is also expected to house a design museum which will operate under the aegis of the National Museum in Warsaw.

BBI Development NFI’s officials state that they want to harmoniously combine the revitalized historical buildings of the former vodka distillery with modern architecture inspired by industrial motifs.

The first units to be developed will be three buildings with lofts and retail space on the ground floors, as well as one building housing a restaurant. By the end of 2013, two buildings with office and retail space are also scheduled to be completed.

BBI Development NFI hopes to finish the whole Centrum Praskie Koneser scheme in 2015. The company estimates the value of the investment at approximately z∏.410 million. Architects from Juvenes-Projekt, a subsidiary of BBI Development NFI, are responsible for the architectural designs of most of the buildings in Centrum Praskie Koneser. The Bulanda, Mucha Architekci and ARE studios are also involved in the project.

Marta Mardosz Karolina Kowalska

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LOKALE IMMOBILIA – S P E C I A L M I P I M E D I T I O N

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MARCH 11-17, 2013

Polish cities

Better connected and still underpriced Major Polish cities attract investors with low labor costs and improving transport networks

Katowice Katowice, the capital of the Silesia voivodship, is a city that has undergone a series of rapid developmental changes.

Silesia is located in southern Poland, relatively close to major European capitals such as Berlin, Bratislava, Budapest, Prague, Vienna and Warsaw, at the cross-roads of two trans-European transport corridors.

Within a 100-km radius around Katowice, there are three international airports, including one of the most rapidly developing airports in Europe – the Katowice International Airport. It provides easy access by plane and train

SHUTTERSTOCK

While many European countries have struggled to attract investments in real estate in recent years, Poland hasn’t been one of them. One of the major reasons for the success is the location of the country.

Poland is Europe’s sixthlargest country, situated in the heart of the continent with an area of some 312,000 square kilometers and a population around 38 million.

The country has seven neighbors: Belarus, the Czech Republic, Germany, Lithuania, Russia, Slovakia, and Ukraine, which makes Poland a very important transit country as well as a great location for the increasingly common near-shoring of businessprocess outsourcing. Its borders extend for almost 3,600 kilometers, including 530 kilometers on the Baltic Sea. Poland’s largest metropolitan areas, besides the capital city of Warsaw, are Kraków, Wroc∏aw, Poznaƒ and Gdaƒsk.

These, as well as other major cities in Poland, offer new development opportunities for investors.

Wroc∏aw

Bydgoszcz

to major European cities.

Katowice is located at the intersection of trans-European transport corridors.

The assets of the region include its central location in the CEE region, the availability of its highly skilled workforce, well-developed transport infrastructure, investment incentives and highly entrepreneurial business environment.

Retail centers to be completed in 2013: Europa Centralna and Galeria Katowicka

rently being privatized.

The capital city, together with surrounding towns, make up the biggest residential market in Poland. Real estate investments in the area offer the highest profit margins.

Warsaw is one of the leaders in the CEE region, with the

Warsaw

biggest number of buildings qualifying for LEED or BREEAM certification.

Office schemes completed in 2012: Wilanów Office Park A – 20,400 sqm; Mokotów Nova – 15,000 sqm; Iris – 13,500 sqm; Green Corner – 24,500; Senator – 21,000 Retail space completed in 2012: phase one of Auchan ¸omianki – 18,000 sqm

Warsaw, the capital of Poland, remains the main economic and business center of the country. It is also one of the most important and largest metropolitan areas in the CEE region, and continues to attract investors. It also offers a well-educated and constantly growing workforce, as well as a big volume of state capital cur-

Kraków Officials say Kraków’s greatest advantage is its convenient geographic location, at the intersection of important routes. It is also close to the Silesia agglomeration and the southern border of Poland. The city’s accessibility is constantly rein-

“Bydgoszcz is one of the fastest-developing centers of administration, science, culture and sport in the country.” forced by investments in infrastructure. The A4 motorway provides quick and easy connection with Silesia and Germany, and in the future also with Lviv, Ukraine.

Kraków is connected to the rest of the world through its modern international airport in Balice, the second-largest in the country.

A wide range of real estate, an expanding business services sector and cutting-edge research facilities are some of the reasons why investors choose to come to Kraków.

The area also attracts investors with its rapidly growing hotel base as a result of an increasing number of tourists visiting the city.

Recently completed office scheme: Enterprise Park – 15,160 sqm

the country’s east-west axis.

When the A2 motorway construction program is completed, Poznaƒ will gain fast and easy access to the European highway network in the West and to the Polish-Belarusian border.

The international Poznaƒ¸awica airport is one of the fastest-growing in Poland. Airlines operating in Poznaƒ offer more than 260 direct flights a week.

Poznaƒ offers incentives to investors interested in the city.

The local government supports investors in areas such as investment promotion, recruitment of employees and in finding suitable office space.

Local authorities also say they work with investors to promote their projects in Poznaƒ.

Recently completed office scheme: Andersia Business Center – 11,600 sqm

SHUTTERSTOCK

SHUTTERSTOCK

Wroc∏aw

Bydgoszcz Bydgoszcz is the administrative capital of the KujawskoPomorskie voivodship, and also the most populous city in the region. The city is one of the fastest-developing centers of administration, science, culture and sport in the country.

The city, located northwest of Warsaw, is situated at an intersection of major national roads, and boasts connections with the rest of the country by rail, especially with Warsaw, Poznaƒ and the Tri-city region.

The city can attract investors with moderate labor costs, which are significantly lower than in other major cities, as well as with attractive prices of real estate and office space.

Soon to be expanded: Galeria Pomorska shopping center – by over 13,050 sqm Marta Mardosz

Kraków

Poznaƒ Located halfway between Berlin and Warsaw, Poznaƒ has one of the best road infrastructures in Poland, mainly thanks to the A2 motorway, which greatly facilitates transportation along

Situated within easy travel distance from Prague, Warsaw and Berlin, Wroclaw boasts a well-developed transportation infrastructure that connects the city with the rest of Europe. Over the last decade, Wroc∏aw has developed into one of the major office locations in Poland. As of December 2011, the existing total modern office stock in the city, capital of the Lower Silesia voivodship, was nearly 307,000 sqm, which ranks Wroc∏aw third among the major Polish office markets, after Warsaw (2.89 million sqm) and Kraków (405,000 sqm).

Officials say the significant development potential of the local market stems from a proactive local government policy supporting developer activity and authorities’ active involvement in attracting major commercial tenants.

Recently completed office scheme: Aquarius Business House – 14,200 sqm Recently completed retail projects: Sky Tower – 25,000 sqm

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Sales begin at Wola House Warsaw-based developer Unidevelopment, fully owned by the WSE-listed Unibep, has recently started the commercialization of its Wola House office building at Al. Prymasa Tysiàclecia 79 in Warsaw’s Wola district.

BNP Paribas Real Estate Polska has been chosen as the leasing agent for the investment. The 11-floor scheme will offer approximately 12,500 sqm of office space. Construction is scheduled to begin late in the first quarter of 2014.

Triumph leases space in Wilanów Office Park

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MARCH 11-17, 2013

Luxury residences

Premium residences still selling well in Warsaw Slowdown or no, luxury residences aren’t having any trouble finding buyers Most of the real estate deals in Poland worth over a million z∏oty are conducted in the country’s commercial and political capital, Warsaw, according to a 2012 survey by residential real estate advisory Home Broker.

That should come as no surprise. As of Q3, 2012, the average wage in the Mazowieckie voivodship, where Warsaw is located, stood at

z∏.4,571.83, according to the Central Statistical Office. In comparison, next in line is Silesia, where the average wage was z∏.3,859.13.

Moreover, people living in Warsaw itself earn more than people living in other cities in Mazowieckie, meaning the average wage in the capital is higher than in the voivodship itself.

Who buys the expensive stuff?

Luxury apartments are most often purchased by people in their 30s, mostly top man-

COURTESY OF COSMOPOLITAN

16

The most luxurious units in Warsaw’s Cosmopolitan building are going for an average of z∏.24,000 per sqm

Triumph International Polska has leased 1,300 sqm of modern office space in the B3 building in the Wilanów Office Park complex in Warsaw and will move into the facility by the end of April 2013. The complex is located at Aleja Rzeczypospolitej 3, within the Miasteczko Wilanów residential district. It offers 40,000 sqm of GLA within three buildings.

agers, company owners, freelancers and artists who said they wanted more comfortable accommodation.

It should be noted though that two in seven of those who purchase apartments worth over z∏.1,000,000 in Warsaw are foreigners. Meanwhile, two in five previously lived outside Warsaw before deciding to move to the capital. The average value of luxury real estate sold by Home Broker in the 12 months preceding the survey was z∏.1.5 million.

Slowdown?

What slowdown?

Patriotów Park group has launched construction on its eponymous office complex in Warsaw’s Wawer district. The investment, comprising two buildings and situated on ul. Patriotów, will offer 3,100 of GLA. The three-storey investment is scheduled for completion in December 2013. ●

The economic slowdown has not had a great effect on this segment of the market, experts said. “The luxury apartment market this year will probably be similar in value to what it was last year,” said Bartosz Turek, a real estate analyst at Home Broker.

“This segment is less dependent on the economy, so while recent news about the Monetary Policy Council

COURTESY OF ANGEL GROUP

Patriotów Park to build in Wawer

The interior of the Angel Wawel penthouse

reducing the benchmark interest rate by 50 basis points is huge news for the average Joe, it doesn’t make much of a difference for people who want to buy luxury apartments,” he added.

However, Mr Turek said, there is a problem in the market with finding large flats – developers are not currently building new, large apartments because they have enough on their hands to sell for “the next two years.”

“So there is something of a lack of selection at the moment when it comes to this segment,” Mr Turek said.

Going cosmopolitan The most upscale apartment units are equipped with stateof-the-art control systems that allow you to open the blinds, draw a bath or boil water at the touch of a button. These apartment buildings often have swimming pools and massage parlors so their residents can enjoy true luxury without leaving their homes.

An example of such a luxurious apartment building in Warsaw is the 160-meter Cosmopolitan building on Twarda 2/4, which has 44 storeys and 252 ready flats. Cosmopolitan is selling its most luxurious units for an average of z∏.24,000 per sqm. Also, there is Z∏ota 44, a residential development 192 meters high with 54 storeys, where the cheapest apartments go for z∏.28,000 per sqm.

Then there is the 600-sqm octagon-shaped apartment in the former chapel of a monastery in the center of Kraków that Angel Poland Group is refurbishing. The group expects to “easily” sell the penthouse, worth as much as z∏.20 million.

But while the luxury apartment segment is doing well amidst a slowdown, if the Polish economy does indeed pick up in 2014, as some have predicted, then it is almost certain that luxury apartment dealers will have even bigger reason to smile.

Remi Adekoya

MARCH 11-17, 2013

LOKALE IMMOBILIA – S P E C I A L M I P I M E D I T I O N

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17

Office

Poland, Russia remain attractive Lokale Immobilia sits down with Hadley Dean, managing partner at Colliers International/Eastern Europe, to talk about the real estate markets across the region, and office space in Poland in particular

So the Poles should be happy with their situation?

Absolutely. Let’s take Hungary, Romania and Bulgaria.

The three biggest lenders for these countries were Greeks, Italians and Austrians – that’s where 90 percent of the money came from. Some 18 months ago the Austrians said: “We are not lending any more money to these markets, there will be no new term sheets, you only can roll over your existing terms, if you are a good existing customer.”

Obviously, the Greek banks and the Italian banks had their own challenges to deal with.

So these real estate markets have no one to borrow from and there is very little new stock being built. Romania is the only country in the region doing slightly better.

How would you explain the phenomenon of Romania?

We all remember when the previous government was in power in Poland and we were all worried they would have a negative impact on the economy, but in the end they didn’t.

The power of economics and businesses somehow outweighed the negative effects of politics. The same thing is now happening in Romania, where you have a prime minister and president who are at war with each other. In theory, this should scare off investors, but instead businesses are carrying on as usual and the politics is not getting in their way too much.

Coming back to Poland – which cities are doing well, apart from Warsaw?

Other than Warsaw, which still represents around 90 percent of

office activity, there are five other major markets – Poznaƒ, Wroc∏aw, Kraków, Katowice and Gdaƒsk – that are most active in this sector. As to smaller towns, I see a great potential in Radom. It is great for Polish back offices rather than international ones coming in. Nowadays, you will find several Polish companies looking to outsource back-office functions to the skilled population living in Radom, which will cost you half of what you pay in Warsaw. The other potential new markets are Toruƒ, Bydgoszcz and Szczecin.

Gdaƒsk surprises me in a sense that so far it hasn’t really attracted as much business as it should have.

How would you explain the increasing demand for office space in Warsaw?

What we have is a huge supply coming online in the next three to five years. One cause for concern is that soon we are going to have four towers built in rather close proximity to one another and the question is how it will affect the market.

I’m talking about towers from Echo Investment, Skanska and UBS as well as Ghelamco’s Spire.

As the market is growing – a 2 percent rise in GDP may feel like a recession but this is still growth – tenants will continue to look to expand into new office space. My feeling is that the Warsaw office market is going to be pretty flat within the next five years. What you are going to see is a lot of tenants upgrading and moving from the first generation office buildings, built in the 1990s, to modern office stock. But when you are looking at the city center’s development outside these four towers, it is pretty limited and new projects in the city are planned mostly in its western districts, along the new subway line.

How do you think that will affect rents in the city center?

I think they will hold up. All the developers will need a big anchor and there are only 10 to 15 big anchors in the market, and a lot of those are already in long-term leases. So they will have to be quite aggressive in attracting an anchor to their buildings. As always, the biggest tenant gets the best deal. Ghelamco’s Spire has been in the market for two years and it still lacks a key anchor in the tower. The general feeling in the market is that the increasing demand

“The institutional investment market still finds Poland and Russia very attractive. The other markets are struggling.”

COURTESY OF COLLIERS

Karolina Kowalska: How would you characterize the situation in the real estate market in CEE countries at the moment?

Hadley Dean: You have two markets that are doing well or are active in terms of banks and lending: Poland and Russia. Then there is one other city – Prague. South of Prague, however, it is very difficult to get any form of financing.

Those markets are flat with the exception of Romania, where there is strong tenant demand.

Poland and Russia are doing well, better than we expected them to at the beginning of 2012. The institutional investment market still finds Poland and Russia very attractive. The other markets are struggling.

Colliers’ Hadley Dean expects rents in Warsaw to hold up, despite huge supply coming online in the near future will soon be offset by supply, but perhaps one out of the four towers won’t get built.

Which towers do you think will be the first ones to find tenants?

If I was to bet, I would put my money on Ghelamco and Skanska securing an anchor tenant first. They have amazing ways of finding tenants, they are very good at it.

What will happen with the Warsaw office market in the meantime?

In the next couple of years, there will be limited space available in the city center, so supply will start to shrink. This is a great opportunity for some older, first-generation buildings to lock their tenants in long-term leases.

But something quite interesting is happening in the property market in the West at the moment. Five years ago,

the cost of refurbishing and making offices erected in 1970s and 1980s suitable for modern tenants was often higher than the buildings themselves were worth. What is happening now, with wifi connections, iPads and iPhones, is that we are so mobile that we don’t need the same office cabling, air conditioning or raised floors as we did five years ago. The cost of refurbishing these older buildings is now a lot less, because you can leave a lot of the existing walls as you don’t have to have cabling running through it, and when you have less and less cables and electrics, it also means that the office doesn’t generate as much heat, so you don’t need as much cooling, etc.

Does that mean office buildings from the 1970s and 80s will be hot again?

What I believe and see as a

real trend for the future is the Y generation taking over the use of these buildings. We all know that the Y generation is a group that loves interacting with people, requires a balance in life and is more project-oriented rather than 9-to-5 orientated. But there is a growing trend among the big multinationals to outsource more and more fixed overheads by outsourcing projects to preferred suppliers.

So there is a growing number of focused supplier companies that need to get either big or small quickly based on individual projects. Such tenants don’t fit in an institutional office building, where you have to sign a five- to ten-year lease. By default, they are being offered these older office buildings, which are often located right in the city center, with the best access to public transportation, infrastructure, with cafes and bars

right next door.

Currently you can operate a modern business from these buildings because you no longer have to drill the walls.

The Y generation loves working in them, because, apart from being in the center, they’ve got a lot of character, they’re a bit quirky and slightly different. In the West we are already observing a growing demand for them.

It seems such buildings are a great investment. Do you recommend them to your clients?

I think buying these older buildings is an interesting long-term investment opportunity as you can still buy these buildings for less than replacement cost. It offers a different opportunity for smaller investors over the next 10 years. The outsourcing and leasing of this short-term office space is only going to get easier. ●

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MARCH 11-17, 2013

Poland awaits a wave of new office space ➡ Continued from p. 11 ing the sale of Warsaw Financial Center, International Business Center and Platinium Park, all in the capital. The total volume of investment transactions in Poland amounted to approximately €2.7 billion, which was the largest figure since the beginning of the Great Recession in 2008.

Colliers experts anticipate that there won’t be an increase in investment transaction volumes in 2013, but that international and local investors will continue to show interest. As regards leasing, 2013 will remain a good year both in terms of the new supply as well as tenants’ activity, which should stay at similar levels to those in 2012.

Warsaw corners the market Of the total 5.8 million sqm of leasable space at the end of 2012, some 67 percent was located in Warsaw. The other major office markets in Poland – Kraków, Tri-city, ¸ódê, Katowice, Lublin, Wroc∏aw and Szczecin, noted an average of 25 percent growth in leasable space compared with 2011. Occupier activity was biggest in Kraków and Wroc∏aw.

The largest deals outside Warsaw included Hewlett Packard renewing its 6,700sqm lease in Wroc∏aw’s Globis and investment management company BNY Mellon’s prelease of 6,230 sqm in Aquarius Business House in Wroc∏aw.

Throughout the whole of 2012, more than 35 percent of the transactions concluded were pre-leases.

But the majority of office leasing activity was and will be concentrated in Warsaw. And it is the country’s capital where the office space supply will be the biggest.

New stock about to roll out In early spring, the first tenants should move into the Business Garden Warszawa office complex, developed by SwedeCenter at the intersection of ul. ˚wirki i Wigury and ul. 1 Sierpnia in Warsaw. The two buildings, comprising a total of 32,000 sqm of GLA, will be ready in Q3 this year.

The whole development will comprise seven buildings with a total area of 90,000 sqm. The first structures will provide 14,600 sqm and 17,500 sqm.

The Plac Unii mixed-use investment on a triangular plot between ul. Waryƒskiego, ul.

Pu∏awska and ul. Boya˚eleƒskiego in the center of Warsaw, is set to be delivered

by October. The completed

COURTESY OF COLLIERS

18

The sale of the Warsaw Financial Center last year was one of the biggest transactions in Poland's office market project will consist of three buildings connected by a glass roof 30 meters above ground level.

In addition to offering around 40,000 sqm of office space and 16,000 sqm of retail and commercial space, the development will also contain

December, digging up some 230,000 cubic meters of earth.

The lower structures of the Spire are scheduled for completion in the fall of 2014 and the tower will be delivered a year later.

In the spring Echo Investment will launch construction

“The majority of office leasing activity was and will be concentrated in Warsaw.” restaurants, cafes and various service points. The office space in the building currently being constructed by Liebrecht & Wood and BBI Investment has obtained a “Very Good” BREEAM certificate of energy efficiency and environmental performance.

Designed by the Kury∏owicz & Associates architectural studio, the development will offer 15,500 sqm of retail space and 41,300 sqm of classA office space anchored by Grupa ING, which will occupy 11 out of the total of 21 office floors available in the investment.

More on the way Other office buildings will soon start emerging as well. In the second half of 2013 Warsaw should see the first floors of Belgian developer Ghelamco’s flagship commercial investment in the Polish market – Warsaw Spire, a 220meter, 49-storey skyscraper and two lower buildings, of 55 meters each. The developer completed excavation of underground floors last

on a 3,300-sqm plot on Al. Jana Paw∏a II, where the recently demolished Mercure hotel building stood. A new office tower, for which the company has already obtained a planning decision, will stand 155 meters tall and comprise some 50,000 sqm of space.

Just a city block away, on ul.

Grzybowska and ul. ˚elazna within Warsaw’s Central Business District, Liberty Development hopes to begin construction of its Liberty Tower this August. The developer has already obtained several building permits. The project comprises a 26-storey, 140-meter office skyscraper, two low-rise office buildings and the additional reconstruction of prewar historical monuments in the surrounding area.

Already in April, Centrum Bankowo-Finansowe Nowy Âwiat plans to launch construction on its Nowy Âwiat BIS office building in downtown Warsaw. The facility, comprising almost 11,000 sqm of office space, is scheduled to be turned over for use in June 2015.

Karolina Kowalska

MARCH 11-17, 2013

LOKALE IMMOBILIA – S P E C I A L M I P I M E D I T I O N

Retail

COURTESY OF GEMINI HOLDINGS

Investing in youth and in a better future

Rafa∏ Sonik saw that malls were becoming gathering places for youth, and decided to begin putting centers for underprivileged children in his shopping centers

Lokale Immobilia sits down with Rafa∏ Sonik, president of Gemini Holdings, to talk about his idea of opening Siemacha youth centers for underprivileged children within shopping malls Karolina Kowalska: You were the first owner of a retail center to open a Siemacha Recreation and Intervention Center for Children within its premises. How did you come up with this idea?

Rafa∏ Sonik: It was an idea that Father Andrzej Augustyƒski, the founder of Siemacha, and I came up with together. The first time we discussed it was in the late 1990s.

That was when retail centers started evolving into meeting places for the youth. That was also when stories about bad things happening to children there became more common and increasingly alarming. It was clear to us – to Father Augustyƒski and me – that the centers were taking over the role of playgrounds, as the place where children go to after school to spend their free time.

And to engage in dangerous activities?

Commercial centers have brought about a lot of change in Poles’ lives, both the adults and the young. They started promoting the culture of consumption among young people, who are more vulnerable to the tricks used by marketing specialists. They can’t tell illusion from reality and such an

overabundance of commercialism may make them believe there is no life outside consumption and material wealth.

The first Siemacha center in a mall opened in 2010 in your Gemini Park Tarnów. If you were thinking of opening such facilities already in the 1990s, why did it take so long?

The timing had nothing to do with the popularity of the idea.

The idea simply had to evolve, as I had to come up with a

ners, as I bought the land and constructed these centers on my own. And the tenants seemed to understand that Siemacha centers are something good for all of us. I haven’t met a person who would ask about the dangers of having children under the same roof as retail stores, especially since the Siemacha center in Tarnów has a separate entrance. Not a single firm has backed out of a lease in Gemini Park Bielsko-Bia∏a, where a Siemacha center will be opened [in November] on the third floor of the mall and will share the same entrance with the rest of the building.

Statistics don’t lie and mine are pretty good. As much as 99.7 percent of Gemini Park

“Siemacha centers prevent children from wandering around stores.” detailed plan for introducing Siemacha not just to one commercial center but also to other malls, run by other companies. I wanted to make it a systemic solution, ready to be implemented in other commercial centers. I wanted to turn Siemacha youth centers into a chain, not of retail stores but of charities.

Did your tenants and partners have any objection to opening such facilities for underprivileged children?

I didn’t have to talk to my part-

Tarnów is leased out, with another three units expected to be leased out by the end of April. The current rent collection is at 98 percent. The number of clients increased by 26.5 percent last year and the mall’s footfall by 25 percent.

What is it that Siemacha centers have to offer tenants that outweighs their fear that underprivileged children might scare their clients off?

For starters, Siemacha centers prevent children from wandering around stores.

They choose the place where they can use computers, learn to play musical instruments and dance, or use fitness equipment and interact with their peers. Where they can talk to therapists about their problems and find someone who can help them with their homework. Siemacha centers are not just places where you can kill time after school.

They provide children with opportunities to learn useful skills, and teach them responsibility and hard work. In a way, tenants who share the same shopping mall with Siemacha centers can feel they are bringing up their future employees, perfect candidates for any job within the commercial center, as they know it very well and feel a certain responsibility for it. What is more, employers could save on the recruitment process. It will be enough to go to the nearest Siemacha center, where each child has his or her file, as well as teachers and psychologists who know these children as they’ve been working with them for years.

What kind of profit do you make on Siemacha youth centers?

None. I invest in them as I have done for the last 15 years, long before I introduced them to shopping malls. People keep asking me why I keep helping and most of them simply can’t believe one could do it without any hidden agenda. But I’ve seen enough to know that there is more to life than making money. As a quad racer I have had six serious accidents, three of which nearly killed me. While in pain, which is excruciating at first and then slowly subsides, I had time to think about things that are important in life. And I decided that sharing with others is what counts.

Have other mall owners caught on?

After the first Siemacha center in a mall opened in my Gemini Park Tarnów in 2010, other shopping mall owners followed suit. There are now Siemacha centers in the Bonarka commercial center in Kraków, and in Millenium Hall in Rzeszów. There will be one in Kielce and in Radom, too. And I believe it will continue spreading throughout Poland and hopefully even Europe. ●

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LOKALE IMMOBILIA – S P E C I A L M I P I M E D I T I O N

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MARCH 11-17, 2013

Landowners’ rights

Warsaw still paying price of ‘Bierut Decree’ Compensating former landowners for property confiscated during communist times could cost the city up to z∏.500 million this year alone

Legislation proposed

COURTESY OF WIKIMEDIA COMMONS

Nearly 68 years since the end of World War II, the Decree on Ownership and Usufruct of Land in Warsaw (commonly known as the “Bierut Decree”) remains in effect in Warsaw. That law, introduced in 1945, moved all of the land within Warsaw’s borders under the control of the state.

At the time, the decree applied to over 12,000 hectares of land and required the state to pay compensation to landowners whose property had been confiscated. However, the appropriate regulations for paying out the compensation were never issued.

Nearly 25,000 properties were confiscated as a result of the Bierut Decree.

In all of the years since, Poland has still not passed comprehensive legislation resolving the issue, and as a consequence individual compensation claims have flood-

investments that are crucial to the city and to the state. For example, one of the thousands of cases involves the land on which Poland’s new National Stadium was built.

Hotel Europejski was returned to its previous owners in 2006 ed the courts. Even though the cases are often simple in terms of the proceedings (very often the original owners are still listed in the land and mortgage registers), their effects can be complex.

In many instances the land, or the buildings on it, have been either sold to someone else, used for public purposes such as schools,

libraries, city offices or public housing. In these instances the return of the property is either very complicated or nearly impossible.

And the compensation that will have to be paid out as a result is hefty indeed. Preliminary calculations by Warsaw officials have found that the amount of compensation to be paid out for confiscated

land will come to z∏.500 million this year alone, as many proceedings are set to wind down. Over the previous nine years, such compensation added up to a total of z∏.844 million.

Currently there are some 8,000 cases pending that regard compensation claims related to the Bierut Decree.

Some of these are related to

Civic Platform, the political party that controls both Warsaw City Council and Poland’s national parliament, wants to introduce new laws that would finally set out regulations to untangle this Gordian knot.

The draft legislation (Civic Platform politicians have submitted proposals) would put a statue of limitations on all cases regarding the Bierut Decree. Currently there is no time limit for when former landowners and their heirs can ask for compensation, meaning Warsaw and the state could be on the hook decades into the future.

The new bill will give former landowners or their heirs one year to file a motion if they haven’t done so already.

After that period, no new claims will be allowed. The proposals would also give beneficiaries the choice of either receiving monetary compensation or land and

property in a different location if the original property cannot be returned.

However, in accordance with current Polish regulations, former landowners or their heirs will not be able to receive land or compensation for land upon which roads have been built.

Who pays?

The drafts propose that compensation be paid out from a fund created especially for the purpose, or from the State Treasury’s “Reprivatization Fund.” However, the Treasury Ministry has already announced that this fund was established for cases not connected to the Bierut Decree.

In 2007, the Supreme Court ruled that the Treasury should cover all expenses stemming from every court ruling related to decisions made by national or local governments before May 27, 1990. That would, of course, include the Bierut Decree.

The question is whether the new legislation – or any legislation resolving the matter – will finally be passed by parliament. After nearly 70 years, it’s about time.

Jacek Ciesnowski

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Privatization

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21

Retail market

State-owned real Prime locations estate holding to be still in demand sold this year Poland will sell a controlling stake in Polski Holding NieruchomoÊci to a strategic investor The Polish State Treasury has successfully placed shares of property management and development group Polski Holding NieruchomoÊci (PHN) on the Warsaw Stock Exchange. It now hopes to make an equally profitable sale of a majority stake in the firm to a real estate investor.

The long-awaited bourse debut of PHN took place on February 13. The Treasury’s 25 percent stake was sold for z∏.238.6 million. The firm was the 439th to be listed on the Warsaw Stock Exchange and the second debutant on the bourse’s main market in 2013. PHN’s current share price puts its market capitalization at over z∏.1 billion.

Soon after the IPO, Deputy Treasury Minister Pawe∏ Tamborski told members of parliament that a strategic investor could take over the company before the end of 2013. “We plan the launch of the second stage of privatization of PHN, which means going out to the market and offering the purchase of a stake that could potentially give [its buyer] control over the company,” he said.

The holding has been raising interest ever since its formation was announced, as the Treasury Ministry had made it clear from the beginning that it would privatize PHN. In the second half of 2012, before IPO details were announced, the market was already speculating on the potential buyer. Grupa Radius, a Warsaw real estate firm, was considered a strong candidate. It even obtained antimonopoly approval to buy a

stake in PHN. However, as interest in PHN grew, the Treasury changed its initial plan.

Instead of selling a minority stake through an IPO and another minority stake to an investor at the same time, it decided to move forward with the IPO first, and then sell a majority stake to a strategic investor later.

PHN was created in 2011 by combining several stateowned real estate companies. It now owns 150 buildings across Poland, some of which are located in major cities such as Warsaw, Wroc∏aw, Gdaƒsk and Gdynia. The holding’s property portfolio, valued at z∏.2.1 billion, comprises land as well as office, commercial, logistics and residential buildings with a total leasable area of 305,385 sqm. One of its best known assets is Warsaw’s Intraco office scheme.

Kamila Wajszczuk

Poland’s retail market is becoming saturated and increasingly polarized

The retail market in Poland, which has so far had the reputation of being one of the country’s safest real estate investment bets, is slowly losing its allure.

“After two decades of dynamic development, the Polish retail market is now mature,” said Karina Kreja, associate director in the development consultancy department of CBRE. At the end of 2012, total modern retail space in Poland reached 9.17 million sqm, with 485,600 sqm delivered to the market in 2012.

A much as 30 percent of the space completed in 2012 was concentrated in the eight biggest Polish urban agglomerations.

Currently there are nearly 800,000 sqm of retail space under construction, with most of it scheduled for completion in 2013.

Despite increasing supply, prime rental levels are

expected to remain relatively stable in most markets, according to a report by Colliers International. In 2012 vacancy rates in major Polish retail markets were below 5 percent, with the lowest availability of retail space in Warsaw and Szczecin.

A widening gap Apart from market saturation in major Polish cities, the biggest obstacles to further growth are lower consumer

demand caused by the prolonged economic slowdown and increasingly limited financing options. The continuing economic crisis has undermined the purchasing power of Polish consumers, particularly in smaller cities.

Warsaw remains one of the few locations where consumer purchasing power is still strong, which, combined with a still relatively low saturation level, suggests there is room for further investment.

Beata Socha

2012’s malls Main retail schemes completed in 2012 City

Project

Developer

Size*

Rzeszów

Galeria Rzeszów

Star Europa Holding

42,200

Kielce

Korona Kielce

Church Land Development

34,400

Gorzów Wielkopolski

Nova Park

Futureal, Caelum Development

32,400

Wroc∏aw

Sky Tower

LC Corp Sky Tower

25,000

Grudziàdz

Alfa Centrum

JWK Invest

22,000

K´dzierzynKoêle

Odrzaƒskie Ogrody

PA Nova

22,000

Warsaw

Auchan ¸omianki (Phase I)

Immochan

18,000

Szczecin

Outlet Park Szczecin

Echo Investment

16,500

Âwidnica

Galeria Âwidnicka

Rank Progress

15,500

*sqm of GLA

Source: Colliers International

22

THE LIST

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MARCH 11-17, 2013

Construction & Real Estate

Green Buildings Listed alphabetically A guide to Polish business and industry

www.bookoflists.pl

Przewodnik po polskim biznesie i gospodarce

Certificates

Solutions applied/Technologies used

Major tenants

Architect / Developer / General contractor

Leasing agent / Building manager

Year completed

11,500

EU Green Buildings Certificate

Aluprof TT facade system; Daikin VRV III based air conditioning system; advanced building management system (BMS)

Intel Technology Poland; Young Digital Planet

AukettFitzroyRobinson Allcon Investment Allcon Budownictwo

WND AIP3 Investment

2011

Office; retail

10,400

LEED Core & Shell pre-certificate (Platinum)

Use of environmentally-friendly materials; bicycle parkings; sanitary and locker-rooms for cyclists; parking for LEV (Low-Emitting and Fuel-Efficient Vehicle); unlimited access to daylight; waterefficient fittings; reducing energy consumption and CO2 emissions

Alma Market

nsMoon Studio (P. Nawara, B. ¸obaziewicz); Wizja Biuro Architektoniczne (S. Deƒko) UBM Riviera PORR Polska

Knight Frank WND

2014

Aquarius Business House ul. Swobodna 1, 25-323 Wroc∏aw

Office

25,000

BREEAM-0044-1097 (Very Good)

WND

Tieto Poland; PwC; AXIT; Randstad; Lux Med; BOÂ Bank; Credit Agricole; Jad∏omania

Arcad Kielce Echo Investment Eiffage Budownictwo Mitex

Echo Investment Echo Investment Property Management

2013

Astra Park Al. SolidarnoÊci 36, 25-323 Kielce

Office

16,200

EU Green Buildings Certificate

Ventilation and air-conditioning system based on heat pumps; energy-efficient elevators

Echo Investment; Rovese; Barlinek

DDJM Echo Investment WND

WND Echo Investment Property Management

2007

LEED Core & Shell pre-certificate (Platinum)

Green energy (building will be supplied with energy with certificate of origin from a renewable source); reducing heat island phenomenon; bicycle parking and sanitary for cyclists; power stations for electric cars; increased ventilation; zone heating control system; use of materials with low volatile organic compounds content; use of plants that don’t need watering in open green areas

Skanska Property Poland

Biuro projektów Kazimierski i Ryba (KiR Architekci) Skanska Property Poland Skanska

WND WND

2013

WND

Ahlqvist & Almqvist arkitekter / Perspective, Arcade Polska SwedeCenter PORR Polska

WND WND

2014

Building name Address

ALLCON@park 3 ul. S∏owackiego 173A, 80-298 Gdaƒsk

Alma Tower ul. Pilotów 10, 30-964 Kraków

Atrium 1 Al. Jana Paw∏a II 17, 00-854 Warsaw

Gross Building type Building Area (GBA) (sqm)

Office

Office; retail

30,353

Business Garden Poznaƒ - Etap I ul. Marceliƒska, Poznaƒ

Office

69,300

Bicycle parkings, sanitary and locker-rooms for cyclists; use of regional materials and products with low emissions; green roofs; water-efficient fittings; LEED 2009 Core & Shell pre-certificate collection and re-use of rainwater for irrigation of (Gold) green areas; energy-efficient lighting (control system, motion sensors); energy-efficient ventilation and cooling system

Centrum Handlowe Europa Centralna ul. Pszczyƒska 315, 44-100 Gliwice

Retail

80,000

BREEAM GROP-BIB-HVD02-09 (Design Stage, Good)

WND

Tesco; Saturn; Castorama; Jula; Jysk; Bershka; Stradivarius; H&M

Pracownia Architektoniczna Czora&Czora Helical Poland Polimex Mostostal

Helical Poland Europa Centralna

2013

Centrum Handlowe Ster ul. Ku S∏oƒcu 67, 71-047 Szczecin

Retail

39,516

BREEAM BIUP10000281 (Very Good); BREEAM BIUP20000258 (Excellent)

Water-efficient fittings; amenities for cyclists; solutions supporting local fauna and flora

Real; Rossmann; New Yorker; Serpe Meble; RTV Euro AGD; Empik; Smyk

CSI France Domy Towarowe Casino Fougerolle Polska

METRO Properties METRO Properties

1999

Centrum Ursynów ul. Pu∏awska 427, 02-801 Warsaw

Retail

36,840

BREEAM BIUP10000291 (Very Good); BREEAM BIUP20000268 (Excellent)

Water-efficient fittings; amenities for cyclists; solutions aimed at fauna growth

Real; OBI; RTV Euro AGD; Go Sport

ART Group DTC Prochem/OTRA Polska

METRO Properties METRO Properties

1997

Crown Square ul. Przyokopowa 31, 01-208 Warsaw

Office

24,000

BREEAM GROP-BUIB-HVD02-4 (Very Good)

Energy-efficient elevators and lighting; waterefficient fittings; use of materials with low emissions

GATX; Nike; Oracle

Konior & Partners Ghelamco Poland Ghelamco Poland

WND WND

2010

Eurocentrum Office Complex Al. Jerozolimskie 124/134, 00-813 Warsaw Office; retail

65,800

LEED Core & Shell pre-certificate (Gold)

Amenities for cyclists; electric car charging station; use of regional materials; waste management; water-efficient fittings; external blinds; air conditioning and ventilation system with heat recovery; energy-efficient lighting

Imtech Polska; Tebodin; Qumak; CEPD Management (Pelion)

PRC Architekci Grupa Capital Park ERBUD

Cushman & Wakefield WND

2014

FACTORY Warszawa Annopol ul. Annopol 2, 03-236 Warsaw

Retail

26,342

BREEAM WIP-BIB-JL21-1

Water-efficient fittings; energy-efficient lighting; heat exchangers; use of recycled materials

Tommy Hilfiger; Brand; Lee Cooper; Levis; Rey; Jay; Cross; Big Star; MC Arthur; Soda; Face Just Be Yourself

APA Wojciechowski NEINVER Polska Budimex

NEINVER Polska NEINVER Polska

2013

FUTURA Park Kraków ul. Prof. A. Ro˝aƒskiego 32, 32-085 Modlniczka

Retail

60,000

BREEAM HBG-BIB-VS03-2 (BREEAM Europe Commercial, Very Good)

IMB Asymetria NEINVER Kraków HOCHTIEF

Cushman & Wakefield NEINVER Kraków

2011

Office; retail

28,757

Green energy (building will be supplied with energy with certificate of origin from a renewable source); LEED Core & Shell pre-certificate (Gold) use of recycled materials; increased ventilation; use of products with low emissions; zone heating control system; maximized access to daylight

WND

Maçków Pracownia Projektowa Skanska Property Poland Skanska

WND WND

2014

58,944

Increased ventilation; use of products with low emissions; zone heating control system; maximized access to daylight and views; use of LEED Core & Shell pre-certificate (Gold) recycled materials, regional materials and certified wood; energy-efficient lighting; freecooling system; fan coil units

Infosys BPO Poland; Medicover; SouthWestern; BNP Paribas; PKO Bank Polski

Medusa Group Skanska Property Poland Skanska

WND Cushman & Wakefield

2013

Maçków Pracownia Projektowa Skanska Property Poland Skanska

WND Colliers International Poland

2013

Green Day ul. Szczytnicka 9, 50-832 Wroc∏aw

Green Horizon ul. Pomorska 106, 90-233 ¸ódê

Office; retail

Utility meters; water leaks detection system; water supply shut off system; daylight sensor system; Tommy Hilfiger; Mango; Benetton; energy-efficient elevators and escalators; heat Designual; Tatuum; Solar; Simple; Soda; exchanger system; highly efficient air heating and Ochnik; Tom Tailor cooling systems

Energy optimization; green energy (building will be supplied with energy with certificate of origin from a renewable source); increased ventilation; use of Ernst & Young; Allegro Group; Talex; products with low emissions; zone heating control Dolby; Medicover; Becton Dickinson system; maximized access to daylight and views; ; energy-efficient lighting; freecooling system; fan coil units

Green Towers A, B ul. Ârubowa 1/ul. Strzegomska 36, 53-611 Wroc∏aw

Office; retail

41,949

LEED Core & Shell (Platinum) for building A; LEED Core & Shell pre-certificeta (Platinum) for building B; EU Green Buildings Certificate for building A

Grzybowska 81 ul. Grzybowska 81, 00-844 Warsaw

Office

10,000

BREEAM (pending)

Raised floors; suspended ceilings; building management system (BMS); structured cabling; smoke/heat sensors; openable windows

WND

Grupa 5 Unidevelopment Unibep

WND Unidevelopment

2012

Office; retail

60,450

LEED Core & Shell pre-certificate (Gold)

Increased ventilation; use of products with low emissions; zone heating control system; maximized access to daylight and views; water-efficient fittings; energy-efficient lighting; freecooling system; fan coil units; adiabatic humidifiers

WND

Medusa Group Skanska Property Poland Skanska

WND WND

2014

Katowice Business Point ul. Âciegiennego 3, 40-114 Katowice

Office

27,000

BREEAM GROP-BIB-HVD02-2

Raised floors; suspended ceilings; central ventilation and humidification system; central building management system (BMS); unlimited access to daylight

PwC; PGD Tauron, ˚ywiec

Jaspers-Eyers & Partners Ghelamco Poland Ghelamco Poland

WND Cushman & Wakefield

2010

¸u˝ycka Plus ul. ¸u˝ycka 3C, 81-537 Gdynia

Office

7,270

Facade with high thermal and acoustic parameters; BREEAM-0044-4844 pre-certificate (Very freecooling system; advance building management Good) system (BMS); maximized daylight; acoustic analysis

WND

AEDAS Polska Allcon Investment Allcon Budownictwo

WND ¸u˝ycka Investment

2013

M1 Bytom ul. Strzelców Bytomskich 96, 41-931 Bytom

Retail

32,402

Energy-efficient lighting; water-efficient fittings; BREEAM BIUP100002190 (Very Good); solutions supporting local fauna and flora; amenities BREEAM BIUP20000267 (Excellent) for cyclists

Real; Praktiker

Biuro Projektów MEXEM, M. Matheja METRO Properties WND

METRO Properties METRO Properties

1998

Kapelanka 42 ul. Kapelanka 42, 30-347 Kraków

THE LIST

MARCH 11-17, 2013

Building name Address

Gross Building type Building Area (GBA) (sqm)

www.wbj.pl

Certificates

Solutions applied/Technologies used

Major tenants

Architect / Developer / General contractor

Leasing agent / Building manager

Year completed

M1 Czeladê ul. B´dziƒska 80, 41-250 Czeladê

Retail

57,835

BREEAM BIUP2000263 (Excellent); BREEAM BIUP10000286 (Very Good)

Waste management; water and sewage management; air protection; energy optimization; protection of natural resources; sustainable construction and modernization; energy-efficient lighting

Real; MediaMarkt; Praktiker

Biuro Projektów MEXEM METRO Properties WND

METRO Properties METRO Properties

1997

M1 Cz´stochowa ul. Kisielewskiego 8/16, 42-200 Cz´stochowa

Retail

31,877

BREEAM BIUP20000261 (Excellent); BREEAM BIUP10000284 (Very Good)

Water-efficient fittings; waste sorting; solutions supporting local fauna and flora; energy-efficient lighting; openable windows

Real; MediaMarkt; Praktiker

SAP-Projekt WND Strabag

METRO Properties METRO Properties

1999

M1 Kraków Al. Pokoju 67, 31-580 Kraków

Retail

61,079

BREEAM BIUP10000280 (Very Good); BREEAM BIUP20000257 (Excellent)

Energy optimization; segregation of garbage; parking for bicycles;energy-efficient LED lighting

Real; MediaMarkt; Praktiker

BIPROWUMET Metro Properties WND

METRO Properties METRO Properties

2001

M1 ¸ódê ul. Brzeziƒska 27/29, 92-103 ¸ódê

Retail

48,189

BREEAM BIUP10000282 (Very Good); BREEAM BIUP20000259 (Excellent)

SAP-Projekt, S. Polak, Z. Mackiewicz METRO Properties Strabag Polska

METRO Properties METRO Properties

1999

M1 Marki Al. J. Pi∏sudskiego 1, 05-270 Marki

Retail

53,158

BREEAM BIUP10000283 (Very Good); BREEAM BIUP20000260 (Excellent)

Protection of natural resources; amenities for cyclists; energy-efficient lighting; openable windows

Real; MediaMarkt; Praktiker

SAP- Projekt METRO Properties BSV Bau, Bauserviceund Vervaltung

METRO Properties METRO Properties

1999

M1 Poznaƒ ul. Szwajcarska 14, 61-285 Poznaƒ

Retail

50,796

BREEAM BIUP10000279 (Very Good); BREEAM BIUP20000256 (Excellent)

Motion sensors; energy-efficient lighting; waterefficient fittings

Real; MediaMarkt; Praktiker

Pentagram, A. Strykowski METRO Properties WND

METRO Properties METRO Properties

1998

M1 Radom Al. Grzecznarowskiego 28, 26-604 Radom

Retail

40,384

BREEAM BIUP20000269 (Excellent); BREEAM BIUP10000292 (Very Good)

Animal-friendly facilities; amenities for cyclists

Real; MediaMarkt; Praktiker

Agencja Us∏ugowo-Handlowa Royal Projekt METRO Properties WND

METRO Properties METRO Properties

1998

M1 Zabrze ul. Plutonowego Ryszarda Szkubacza 1, 41-800 Zabrze

Retail

59,673

BREEAM BIUP10000285 (Very Good); BREEAM BIUP20000262 (Excellent)

Building Management System (BMS)

Real; MediaMarkt; Praktiker; TK Maxx; Martes Sport; Empik; H&M; Smyk; KFC; McDonalds

Biuro Projektów MEXEM METRO Properties WND

METRO Properties METRO Properties

1999

LEED Core & Shell pre-certificate (Platinum)

Facade with high thermal insulation; ability to use the heat recovered from the offices for heating the garage; reducing heat island phenomenon; use of materials with low volatile organic compounds content; use of certified wooden components; bicycle parkings, sanitary and locker-rooms for cyclists; water-efficient fittings; use of recycled materials

Skanska

Pentagram Architekci Skanska Property Poland Skanska

Savills WND

2013

BREEAM-0032-1166 (Very Good); EU Green Buildings Certificate

Building Management System and Supervision (BMS): energy-efficient air conditioning (economy Cargill; Hyundai Motor Poland; Medicover; mode after 7 p.m., on weekends and holidays); BMW; LG Electronics Polska; Reckitt highly efficient heat and humidity recovery Benckiser; CBG International; Svenska systems; highly efficient air cooling systems; Handelbanken; Lego Polska; Prima Pasta; ventilation of technical facilities with air removed Ghelamco Poland from office floors

Jaspers-Eyers & Partners Ghelamco Poland Ghelamco Poland

DTZ WND

2011

Reducing heat island phenomenon; bicycle parking and sanitary for cyclists; power stations for electric cars; increased ventilation; zone heating control system; use of materials with low volatile organic compounds content; ability to use the heat NORDEA; General Directorate for National recovered from the offices for heating the garage; Roads and Motorways; Ruch modern air conditioning system; water-efficient fittings; energy-efficient lighting; facade and windows with high thermal insulation; freecooling system; highly efficient heat recovery system

MW Projekt Skanska Property Poland Skanska

WND Jones Lang LaSalle

2013

Malta House ul. Abpa Antoniego Baraniaka 1/17, 00-054 Poznaƒ

Mokotów Nova ul. Wo∏oska 22, 02-675 Warsaw

NORDEA HOUSE/Green Corner ul. Ch∏odna 52/54, 00-872 Warsaw

Office; retail

Office

28,960

79,000

Praktiker; H&M; Martes LED outdoor advertisments; water-efficient fittings Real; MediaMarkt; Sport; Rossmann

Office; retail

46,500

LEED Core & Shell (Platinum); EU Green Buildings Certificate

Olivia Business Centre (Olivia Gate) Al. Grunwaldzka 472A, 80-309 Gdaƒsk

Office

18,000

BREEAM Post-construction (pending)

Unlimited access to daylight; openable windows; green roof; amenities for cyclists; energy-efficient lighting; water-efficient fittings; waste management

SII; GFKM; AOS; EO; EC; Goyello; PwC; Meritum; Tax Care; Energa

Konior & Partners TPS Otwarta Przestrzeƒ Przembud / Pekabex

TPS Otwarta Przestrzeƒ TPS

2011

Olivia Business Centre (Olivia Point + Olivia Tower) Al. Grunwaldzka 472A, 80-309 Gdaƒsk

Office

23,800

BREEAM Design Stage, BREEAM Post-construction (pending)

Unlimited access to daylight; openable windows; green roof; amenities for cyclists; energy-efficient lighting; water-efficient fittings; waste management

Bayer; American Bureau of Shipping; Grupa Energa; Tax Care

Konior & Partners TPS Otwarta Przestrzeƒ Pekabex

TPS Otwarta Przestrzeƒ TPS

2012

OXYGEN ul. Malczewskiego 26, 71-612 Szczecin

Office

18,091

EU Green Buildings Certificate

Ventilation and air conditioning system based on heat pumps; heat recovery; energy-efficient elevators

Tieto Poland; Medicover; Enea

Arch-Deco Echo Investment WND

WND Echo Investment Property Management

2010

Park Rozwoju ul. Konstruktorska 10, 02-673 Warsaw

Office

32,000

BREEAM-004305206 (Very Good)

WND

Schneider Electric Polska

JEMS Architekci Echo Investment WND

Echo Investment WND

2014

LEED Core & Shell (Gold)

Use of environmentally-friendly regional materials; bicycle parkings; sanitary and locker-rooms for cyclists; parking for LEV (Low-Emitting and FuelEfficient Vehicle); unlimited access to daylight; water-efficient fittings; reducing energy consumption and CO2 emissions; external blinds

Tetra Pak; Astellas Pharma

UBM Polska Poleczki Business Park PORR Polska

Jones Lang LaSalle; Colliers International FMP Planning and Facility Management Poland

2012

ILF Consulting

UBM Polska Poleczki Business Park PORR Polska

Jones Lang LaSalle; Colliers International FMP Planning and Facility Management Poland

2012

Poleczki Business Park B1 ul. Osmaƒska 14, 02-823 Warsaw

Office

8,500

Office

12,700

LEED Core & Shell (Gold)

Use of environmentally-friendly regional materials; bicycle parkings; sanitary and locker-rooms for cyclists; parking for LEV (Low-Emitting and FuelEfficient Vehicle); unlimited access to daylight; water-efficient fittings; reducing energy consumption and CO2 emissions; external blinds

Quattro Business Park A Al. Bora-Komorowskiego 25A, 31-476 Kraków

Office; retail

16,286

BREEAM Asset, Building Management (pending)

WND

Capgemini Polska; UBI Factor; Berner Polska; Open Finance; Aviva; Buma Service

Kury∏owicz & Associates Buma Inwestor Buma Contractor

WND Buma Service

2010

Quattro Business Park C Al. Bora-Komorowskiego 25A, 31-476 Kraków

Office; retail

15,880

BREEAM WSPSP-BIB-MS45-2 (Very Good)

Energy-efficient lighting and elevators; waterefficient fittings; use of certified materials; waste management; bicycle parking; sanitary and lockerrooms for cyclists; protection of local wildlife during construction work

WND

Kury∏owicz & Associates Buma Inwestor Buma Contractor

WND Buma Service

WND

Senator ul. Bielaƒska 12, 00-085 Warsaw

Office

45,000

BREEAM-00032-1141 (Very Good); EU Green Buildings Certificate

Jaspers-Eyers & Partners / AB-Projekt, Architraw GB Ghelamco Poland Ghelamco Poland

DTZ WND

2012

Trinity Park III ul. Domaniewska 49, 02-672 Warsaw

Office

27,000

BREEAM GROP-BIB-HVD02-5

Jaspers-Eyers & Partners Ghelamco Poland Ghelamco Poland

WND WND

2009

Poleczki Business Park C1 ul. Osmaƒska 12, 02-823 Warsaw

Notes: WND = Would Not Disclose. Research for The List was conducted in February/March 2013. Companies not responding to our survey are not listed.

23

Raised floors; suspended ceilings; building control computer system; HVAC system with central air PKN Orlen; Grupa Rabobank; Euronet; BRE humidification function and the ability to individually Bank; Discovery Networks CEEMEA; Legg adjust the temperature; BMS (Building Mason Management System); structured cabling

Energy-efficient elevators and lighting; use of materials with low emissions; extensive system of building management (BMS)

Unilever; Arval; Enelmed; MTV; CTL Logistic; Kraft Foods Polska; Lu Polska; Amadeus Polska; PPD

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Monika Brysiak, ul. Elblàska 15/17, 01-747 Warsaw, via fax to (+48) 22 639-8569, or via email to wbjbol@wbj.pl. Copyright 2012, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

INTERVIEW

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PBG to cooperate with Chinese ’giant’ Polish construction company PBG may launch cooperation with a major Chinese firm, PBG’s chief executive Jerzy WiÊniewski told Dziennik Gazeta Prawna. The CEO said that during his recent trip to China, he met representatives of large banks, investment funds, and energy firms that invest in Europe or are planning to do so.

Few Poles make money on the web According to a survey carried out by CBOS, 14 percent of Poles have at least once earned money with the help of the internet. Only two percent of the respondents said they have regular earnings from the web. It is mostly young and well-educated Poles that have internetrelated earnings. Within the 18-34 age group, 29 percent said they had earnings of this kind. So did 31 percent of those holding university diplomas. ●

MARCH 11-17, 2013

EU funding

Europe’s largesse to support research and entrepreneurship Minister of Regional Development El˝bieta Bieƒkowska talks with WBJ about the absorption of EU funds awarded to Poland in the current 2007-2013 financial framework, Poland’s priorities for the funds from the 20142020 budget and the general impact of EU funds on Poland’s development Ewa Boniecka: What do you think of Poland’s absorption of EU funds from the current budget?

El˝bieta Bieƒkowska: We have already invested over z∏.238 billion, nearly 85 percent of the whole amount of money allocated to Poland in the EU budget for the years 2007-2013. This is a spectacular result, even more so because we can make use of those funds until the end of 2015.

There are certain areas of spending that require more attention, like railway projects, but even here we have seen significant improvement over the past few months.

Over 80,000 projects are being implemented all over Poland, and with such a large scale of investments, occasional diffi-

culties are bound to happen.

But we are constantly monitoring the process of fund absorption and trying to prevent any possible disruptions.

Overall, the process of absorbing EU funds from the current budget is positive.

Well-invested EU funds contribute to our economic growth, increase the competitiveness of our economy, help to develop entrepreneurship and create new jobs. And I want to stress that investing European funds effectively should be seen as a nationwide, long-term and continuous task.

You have earned a reputation as a good minister of regional development, even among politicians from the opposition party. Has that helped

COURTESY OF THE MINISTRY OF REGIONAL DEVELOPMENT

24

Minister of Regional Development El˝bieta Bieƒkowska

INTERVIEW

MARCH 11-17, 2013

you deal with the enormous amount of funding Poland has been awarded by the European Union?

The position of minister is important, but the people I work with are equally important and I have been extremely lucky to have reliable and hard-working associates. And

“It is very important to realize that the cohesion policy benefits each EU country.”

I see myself more as a civil servant than a politician. Before I was appointed minister I worked for a local government and I know the issues of dealing with European funds inside out.

We have a challenging task ahead of us. We need to absorb z∏.300 billion in funds from the 2014-2020 budget. In order to do that effectively, we are already working on our priorities for implementation.

And what are Poland’s priorities for 2014-2020?

During the next budget period we want to support investment that will emphasize the biggest advantages of our economy. According to the

priorities set forth in the Europe 2020 strategy, there will be a significant increase in funding for scientific research, technological development, innovation and entrepreneurship – and in ways of combining these together.

[Creating and supporting a] low-emission economy will definitely gain more importance. We will also help small and medium-sized enterprises. We are going to continue developing transport infrastructure, railways and road connections. One of the most important investment priorities will be environmental protection and [creating a] “green” economy.

At the moment, we are making preparations for the distribution of funds from the new EU budget. The ministry is responsible for allocating money for the cohesion policy, but the operational programs themselves will be organized differently. The manner of cooperation with regions will change as well. As the implementation of European funds is increasingly decentralized, we want to allocate even more money to regional authorities.

As a result, local governments will have 40 percent of the whole budget at their disposal.

While in the current budget they have received €19.8 billion, in the next financial period they will see an increase of €22.8 billion. Each voivodship

will receive much more money and I am convinced that it will be spent as effectively as it is being spent now.

Do the EU’s biggest beneficiaries, such as Poland, employ funds differently than net payers?

It is very important to realize that the cohesion policy benefits each EU country. Therefore, in recent months, I undertook a tour to net paying countries to convince our partners of the necessity to further support the cohesion policy. I pointed to the strengthening in the job market, increased growth in the whole European economy, as well as its innovative and competitive nature.

Our studies show that each euro invested in the countries that make up the Visegrad Group [the Czech Republic, Hungary, Poland and Slovakia] generates 61 cents in the form of additional exports from the 15 “old EU” member states. The joint value of such benefits in the period 2004-2015 will amount to nearly €75 billion. This shows the real boost that EU funds give the European economy.

What are Poland’s main assets when it comes to handling EU funds?

Our biggest asset is not only our pace, but also our effectiveness in spending EU

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funds. In 2009, when the rest of Europe was in recession, Poland recorded 1.7 percent GDP growth, and we owe this mainly to those well-invested funds from the European Union.

Now, with most projects nearing completion, the beneficial impact of EU funds is all the more prominent. More than 270,000 jobs have been created, including 150,000 in small enterprises established by formerly unemployed peo-

ple. We have set up over 2,000 new laboratories and research facilities. More than 11,000 km of new roads have been built.

But there have been more changes taking place in Poland than just in infrastructure. What really matters is the fact that European funds have empowered people to use their ingenuity and enthusiasm to come up with not only successful, but also highly innovative, projects. ●

Big bucks for Poland Poland is the biggest beneficiary of the EU’s 2014-2020 cohesion policy (in € billions) 80

60

40

20

0

PL IT ES RO HU CZ PT DE FR SK EL UK HR BG LT LV EE SL BE SE NL FI IE AT MT DK CY LU

EU funds for Poland from the 2014-2020 budget (in € billions) 70 66 62 58 54 50 2014

2015

2016

2017

2018

2019

2020

Source: Estimates by Ministry of Foreign Affairs

25

Poland’s economy becoming more globalized Poland ranked 27th in Ernst & Young’s 2012 edition of the Globalization Index, higher than countries such as Italy, South Korea, Japan, or the BRIC countries.

Poland’s score has gone up by 0.6 points since 2011. However, Pawe∏ Tynel from Ernst & Young said that Poland still faces challenges in making its economy internationally competitive. He mentioned extending the lifespan of special economic zones and expanding foreign trade as possible growth catalysts.

Companies less secure in Q1 Polish companies feel less secure in the business environment, according to a recent survey conducted

by BIG InfoMonitor. The company’s BIG business security indicator has fallen 3.14 points since December to 5.42 points in January. ●

26

OPINION & ANALYSIS

www.wbj.pl

MARCH 11-17, 2013

A rest stop for Europe Ashoka Mody

L

ast month, in a highly anticipated speech, German President Joachim Gauck cautioned against the blind pursuit of an “ever-closer” European Union, acknowledging that the growing inequality among member states is generating “a sense of unease, even unmistakable anger,” and increasing the risk of national humiliation. He pointed out that, in addition

“Rather than indecisively pursuing more unity, this may be the moment to restore effective sovereignty to national authorities in euro zone countries.” to the economic crisis, there is “a crisis of confidence in Europe as a political project.”

While Mr Gauck made clear that he remains decidedly pro-Europe, he highlighted the need for closer reflection about Europe’s future – and especially that of the euro zone. Standing on the verge of greater integration, Europeans are hesitant, “unsure whether we should really stride out on the onward journey.” Addressing this hesitation, he declared, will require a

thoughtful, nuanced understanding of what “more Europe” actually means.

Far enough?

Mr Gauck may not have gone far enough: At this point, an ever-closer union may be a political mirage. Any meaningful progress toward stabilizing the euro zone would require a significant – potentially open-ended – financial commitment, and the EU is not politically ready to cross that threshold.

Repeatedly pretending to move forward, then pulling back at the critical point, exacerbates political uncertainty and economic vulnerability.

Rather than indecisively pursuing more unity, this may be the moment to restore effective sovereignty to national authorities in euro zone countries.

Such a move would alleviate anxiety in the short term, thereby giving Europeans the opportunity to regroup in preparation for future steps toward a more integrated Europe and a more resilient euro.

To this end, euro zone leaders must take three key steps. The dysfunctional system of European fiscal governance should be dismantled; fiscal responsibility should be returned to member states; and, to minimize the risk of excessive future lending, private lenders should be required to bear the losses implied by unsustainable sovereign debt.

A straightforward case The case against European fiscal governance is straightforward. Before the crisis, the single-minded emphasis on reducing national budget deficits to

less than 3 percent of GDP led to extensive abuse. Either the target was openly flouted, as it was in leading economies like Germany and France, or the data were manipulated to obscure problems (a common practice throughout the euro zone, not just in Greece). And the belief in economic growth as a fiscal panacea led to unrealistically optimistic GDP forecasts.

When the crisis struck, the 3 percent deficit target became the focal point for unrelenting austerity – a form of what anthropologist Clifford Geertz described as “involution,” which occurs when a process intensifies rather than changes in response to external or internal pressure. In other words, EU leaders began to complicate fiscal governance, ultimately creating an inefficient, inescapable labyrinth of regulation and bureaucracy. As fiscal metrics become increasingly intricate, monitoring efforts will become ever easier to undermine.

The case for returning fiscal responsibility to national authorities is also strong – and not only because centralized fiscal authority has proved to be so inefficient. With citizens of distressed countries bearing the fiscal burden of the crisis, the enduring presumption that they will not act responsibly is patronizing, at best. And the current strategy of exchanging goodies for good behavior encourages gameplaying and dilutes responsibility.

While the risk that governments will succumb to fiscal temptation remains, citizens’ current suffering is likely to deter future excesses.

National fiscal sovereignty would

facilitate the final crucial step: building a more mature relationship with private lenders. The euro zone was founded on the “no bailout” principle: if member states could not repay their debts, lenders would bear the losses.

But lenders chose – correctly, as it turned out – to disregard that threat.

Instead of enforcing the no-bailout principle and establishing a precedent, debtor countries used official loans to repay private creditors.

As a result, these countries have condemned themselves to continued austerity, low growth, and high debt, while diminishing any future incentive for private lenders to impose fiscal discipline on sovereign borrowers. Only by shifting the burden of responsibility back onto private lenders can debtor countries escape this quagmire.

Falling forward In the United States, each state is responsible for its fiscal management, without being forced to comply with a single, overarching template. The states are not regulated by the federal government; they are disciplined by the knowledge that no one will repay their debts for them. And the system seems to work: entering the crisis, US states had significantly lower deficit and debt ratios than the euro zone’s vulnerable member states.

So far, European integration has largely been a process of “falling forward,” with each stumble serving as a lesson from which a stronger union emerges. But, while this uncertain approach may suffice as a basis for declarations of good intentions, it does

not inspire the confidence required for countries to make the profound financial commitment that is now needed.

Europeans should have the chance to regain their footing. Transferring fiscal responsibility back to national authorities would not only mean the end of counterproductive efforts to manage fiscal affairs centrally; it would also diminish the sense of frustration and lack of control that is fueling Euroskepticism.

In short, taking a step back would provide an opportunity to reset, to reflect, and to plot the best course toward a more stable, more integrated Europe. For a fiscal union to function – however unlikely that outcome may be – a solid foundation is crucial. As Mr Gauck explained, Europeans “are pausing to… equip [themselves] both intellectually and emotionally for the next step, which will require [them] to enter uncharted territory.”

Giving Europeans the time and space to choose more Europe would reinforce the core values upon which integration has rested for more than six decades. Continuing to stumble forward, however, would inevitably lead to a debilitating, if not fatal, fall. ● Ashoka Mody, a former mission chief for Germany and Ireland at the International Monetary Fund, is currently visiting professor of international economic policy at the Woodrow Wilson School of Public and International Affairs, Princeton University.

Copyright: Project Syndicate, 2013.

Project-syndicate.org

Learning from Germany Daniel Gros

T

en years ago, Germany was considered the sick man of Europe. Its economy was mired in recession, while the rest of Europe was recovering; its unemployment rate was higher than the euro zone average; it was violating the European budget rules by running excessive deficits; and its financial system was in crisis. A decade later, Germany is considered a role model for everyone else. But should it be?

In considering which lessons of Germany’s turnaround should be applied to other euro zone countries, one must distinguish between what government can do and what remains the responsibility of business, workers, and society at large.

The one area in which government clearly is in charge is public finance. In 2003, Germany ran a fiscal deficit that was close to 4 percent of GDP – perhaps not high by today’s standards, but higher than the EU average at the time. Today, Germany has a balanced budget, whereas most other euro zone countries are running deficits that are higher than Germany’s 10 years ago.

Reduced spending The turnaround in Germany’s public

finances was due mostly to a reduction in expenditure. In 2003, general government expenditure amounted to 48.5 percent of GDP, above the euro zone average. But expenditure was cut by five percentage points of GDP during the next five years. As a result, on the eve of the Great Recession that began in 2008, Germany had one of the lowest expenditure ratios in Europe.

But the government could not really do much about Germany’s key problem, namely its perceived lack of competitiveness. It is difficult to imagine today, but during the euro’s first years, Germany was widely considered uncompetitive, owing to its high wage costs.

When the euro was introduced, it was widely feared that Germany’s competitiveness problem could not be resolved, because the authorities would no longer be able to adjust the exchange rate. But, as we now know, Germany did become competitive again – too competitive, according to some, owing to a combination of wage restraint and productivityenhancing structural reforms.

In fact, that analysis is only half right. On one hand, wage restraint was the key element, though the gov-

ernment could not impose it. Persistently high unemployment forced workers to accept lower wages and longer working hours, while wages continued to increase by 2-3 percent per year in the euro zone’s booming peripheral countries.

On the other hand, while the German government did enact important labor-market reforms a decade or so ago, those measures apparently had no impact on productivity. All of the available data show that Germany had one of Europe’s lowest rates of productivity growth over the last 10 years.

That is not surprising, given the absence of any reforms whatsoever in the service sector, which is widely regarded as over-regulated and protected. Manufacturing productivity increased somewhat, owing to intense international competition.

But, even in Germany, the service sector remains twice as large as the industrial branches.

Deep service-sector reforms would thus be necessary to generate meaningful productivity gains in the German economy. But this did not happen even in 2003, because all the attention was focused on international competitiveness and manufactur-

ing.

Useful lessons Nonetheless, the German model does hold some useful lessons for the euro zone’s embattled peripheral countries today. Long-term fiscal consolidation requires, in the first instance, expenditure restraint; and labor-market reforms can, over time, bring marginal groups into employment.

But the biggest challenge for countries such as Italy or Spain remains competitiveness.

The periphery can grow again only if it succeeds in exporting more. Wages are already falling under the weight of extremely high unemployment rates. But this is the most painful way out, and it generates intense social and political instability. A much better way to reduce labor costs would be to increase productivity – and Germany is no model in this respect.

Fortunately, however, some peripheral countries are now being forced by their creditors to undertake drastic reforms not only of their labor markets, but also of their service sectors. The reforms, even if initially implemented under duress, represent the strongest grounds for optimism.

Over time, they will foster productivity and flexibility, and the countries that implement them thoroughly should thus become more competitive.

The most important lesson that has emerged from the reversal of fortunes within the euro zone over the last 10 years is that one should not extrapolate from the difficulties of the moment. The reforms undertaken in some peripheral countries are much deeper than those undertaken

by Germany a decade ago. Those countries that persist with these reform efforts could well emerge leaner and more competitive.

Those that do not (Italy appears to be heading in this direction) will be stuck in a low-growth trap for a long time, while Germany’s top position is not guaranteed forever. Indeed, where individual countries will end up in 10 years is highly uncertain, and the current pecking order within the European economy could change quickly.● Daniel Gros is director of the Center for European Policy Studies.

Copyright: Project Syndicate, 2013.

Project-syndicate.org

OPINION & ANALYSIS

MARCH 11-17, 2013

www.wbj.pl

Gowin survives. For now

T

he Polish media spent the first weekend in March consumed in speculation over whether Justice Minister Jaros∏aw Gowin was finally going to get the boot from his boss, Prime Minister Donald Tusk. It seemed likely. On February 28, the PM’s spokesperson Pawe∏ GraÊ wrote on Twitter that Mr Tusk would decide on the future of his justice minister on March 4. Why the announcement if there was no intention of relieving Mr Gowin of his duties?

The tweet stirred the media into a frenzy, and most politicos pronounced Mr Gowin a goner. Social liberals cheered at the thought of finally seeing the back of the ultraconservative minister. But when Monday came, Mr Tusk announced that he had resolved his differences with Mr Gowin, and that the justice minister would keep his job.

Wolf or sheep?

“I accepted with relief Minister Gowin’s readiness for further cooperation, because in old age the heart softens and I don’t want to exagger-

dentials.

The justice minister is often described as the leader of an ultraconservative faction in the ruling Civic Platform. There are roughly 45 Civic Platform MPs who fall into the “ultra-conservative” category – but not all of them consider Mr Gowin their leader. Still, speculation had it that if Mr Gowin were to be fired, a couple of MPs could quit the party, possibly costing Mr Tusk his parliamentary majority. The government rules by a margin of four votes.

But regardless of how many foot soldiers he actually has, Mr Gowin has become a symbolic figure on the Polish political scene for admirers and detractors alike. He has often been at the forefront of moves to block liberal bills in parliament, including those supported by his party’s leadership. He presents himself as the guardian of conservative principles in Civic Platform and spends more time talking about social issues in the media than justice-related matters.

Removing Mr Gowin from his

ate with all this,” said the prime minister while making the announcement. “Human impulses are possible in politics as well.”

That might have been moving were it not for the fact that Mr Tusk has exhibited precious few signs of any softening of his political heart. In the past he has publicly humiliated his party colleagues, ministers or anyone else who dared incur his wrath.

The prime minister clearly enjoys using his power to take opponents down a notch – just as he did with his sarcastic statements about accepting Mr Gowin’s readiness to cooperate “with relief.”

A Gowin win?

The question now is for how long Mr Gowin will keep his job and how Poland’s political dynamics have been affected.

Mr Tusk was upset with the conservative politician because in January he had publicly criticized legislation that the PM supported. But that was not the first time Mr Gowin had striven to prove his conservative cre-

ministerial post would certainly have been problematic for the prime minister, and the fact that he has kept his job despite stepping on Donald Tusk’s toes is clearly a political victory for Mr Gowin and his supporters.

Temporary ceasefire The genius of Civic Platform is that it is an unusually eclectic party, consisting of politicians decidedly to the left of the center, centrists and ultra-conservatives like Mr Gowin. Everyone can find a politician they identify with in Civic Platform.

That’s one of the reasons the party has won roughly 40 percent of the vote in the last two parliamentary elections. Getting rid of Mr Gowin would no doubt be sold by his supporters as a swerve to the left by Donald Tusk – and that could alienate significant chunks of conservative voters from the PM’s party.

Future moves The prime minister would like to pass some progressive legislation on issues like civil unions and state funding for

27

Remi Adekoya the in vitro procedure. Mr Gowin opposes these moves. Many liberal supporters of Civic Platform had hoped the justice minister would get the boot precisely because they rightly see him as one of the biggest obstacles to these and other progressive causes.

For now at least, Mr Gowin will keep his job. But the tensions between him and the prime minister will not abate for long. He knows the prime minister wants to get rid of him, it’s just a matter of the right timing.

Jaros∏aw Gowin will therefore likely try to use his remaining time as minister to further strengthen his own political position so as to be ready when the bullets come flying.

For now, there will be quiet in the ruling party – until the next big social issue appears on the public agenda. ● Remi Adekoya is Warsaw Business Journal’s politics editor. Read his blog, “The business of politics” on WBJ.pl

Independence lost Sylvester Eijffinger and Edin Mujagic

E

very major economic crisis has its victims. Some bounce back, while others experience longlasting, even permanent, damage.

When it comes to the global crisis that erupted in 2008, output growth has been a resilient victim. Central bank independence, by contrast, has been undermined severely – and possibly forever.

In the 1970s, the Western world was confronted with a unique phenomenon: simultaneous recession and rising inflation. Germany’s success in maintaining low inflation in this environment was explained by the fact that the Bundesbank was de facto independent from the German government. This triggered a global movement, in which country after country adopted legislation to increase the independence of its monetary authority. Soon, inflation began to fall.

With rapid economic growth leading to lower-than-expected outlays and higher-than-expected income for Western governments, maintaining central banks’ independence from political pressure was easy. Governments did not need their central banks to print money.

But, in a less favorable economic climate, printing money becomes a handy alternative to difficult deci-

sions and painful adjustments, such as tax hikes and deep cuts in government spending. Indeed, since the onset of the ongoing financial and sovereign-debt crisis, advanced-country governments and central banks have allowed fiscal policy to prevail over monetary policy.

Bowing to the government The Bank of Japan is the most recent example of a major central bank bowing to its government’s wishes, which Prime Minister Shinzo Abe bluntly declared should be accommodated.

The BOJ’s recent decision to buy an unlimited number of government bonds to meet its new inflation target of 2 percent has effectively ended the guise of autonomy.

Likewise, the Bank of England is effectively buying almost every new British government bond that is issued, even with annual inflation above the legally established ceiling of 3 percent. Although British inflation has been higher than 4 percent in recent years, even rising above 5 percent, the Bank of England has continued to loosen monetary policy. Meanwhile, the US Federal Reserve is now buying more than 90 percent of newly issued US Treasury securities.

All three countries are violating

the most important central-banking commandment: Thou shalt not engage in monetary financing of government spending. But this is not surprising, given that these countries’ central banks have never actually been independent.

For example, Article 4 of the Law on the Bank of Japan states that the bank “shall … always maintain close contact with the government and exchange views sufficiently, so that its currency and monetary control and the basic stance of the government’s economic policy shall be mutually compatible.” This means that the BOJ can pretend to be independent, but only for as long as the government permits.

Similarly, Article 19 of the Law on the Bank of England permits the Treasury to direct the Bank’s monetary policy, if it is “satisfied that the directions are required in the public interest and by extreme economic circumstances.” A favorite phrase among politicians, “public interest” is sufficiently vague to allow substantial room for maneuver, as is “extreme economic circumstances.” Indeed, these criteria have resulted in the Bank of England accommodating the UK Treasury’s wishes fully.

In the US, the Federal Reserve Act

can be amended by a simple majority in Congress, a fact of which the Fed is acutely aware. Moreover, in the last few years, the system of checks and balances in place within the Fed’s Board of Governors has been severely hampered by the fact that, in his first term, President Barack Obama had the rare opportunity to appoint or reappoint almost all of its members, enabling him to replace hawkish governors with doves.

Accommodating politicians By law, the European Central Bank is among the world’s most independent.

And the cumbersome and difficult process of amending the ECB’s statutes – which, as part of the Treaty on the European Union, cannot be changed without agreement of all European Union member states – protects it from political pressure.

But, rather than taking advantage of this, the ECB has accommodated European politicians, behaving less and less independently since the beginning of the crisis.

In southern Europe, central banks have traditionally been part of the government, which means that representatives from most EU member states consider central-bank subjugation natural. Given that they all have an equal

say in ECB decisions – and that, since 2008, majority voting has replaced unanimity in ECB decision-making – the ECB has begun to resemble the Banca d’Italia far more than the fiercely independent Bundesbank. The ECB’s policy of purchasing large quantities of government bonds from ailing euro zone countries reflects this change, prompting two experienced German bankers, Axel Weber and Jürgen Stark, to resign from their respective posts as Bundesbank president and the ECB’s chief economist.

Independent central banks are becoming a relic of the past. The fact that inflation has increased in many Western countries, despite the severe recessions of recent years, could mean that financial markets have begun to account for this fundamental shift. If central bank independence is the key to maintaining longterm price stability, the era of low inflation may well be over. ● Sylvester Eijffinger is professor of financial economics at Tilburg University in the Netherlands. Edin Mujagic is a monetary economist at Tilburg University.

Copyright: Project Syndicate, 2013.

Project-syndicate.org

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28

MARKETS

www.wbj.pl

MARCH 11-17, 2013

Stocks report

world stock indices DJIA

NASDAQ

S&P500

FTSE100

DAX

Cautious optimism reigns

NIKKEI

14,329.49 (Mar 7 close)

3,232.09 (Mar 7 close)

1,544.26 (Mar 7 close)

6,439.20 (Mar 7 close)

7,939.77 (Mar 7 close)

11,968.08 (Mar 7 close)

1.96% (for the week)

2.28% (for the week)

1.95% (for the week)

1.23% (for the week)

2.56% (for the week)

3.54% (for the week)

CHANGE: 6.84% (year to Mar 7)

CHANGE: 3.85% (year to Mar 7)

CHANGE: 5.60% (year to Mar 7)

CHANGE: 6.83% (year to Mar 7)

CHANGE: 2.07% (year to Mar 7)

CHANGE: 11.98% (year to Mar 7)

52-week high: 14,354.69

52-week high: 3,235.10

52-week high: 1,545.78

52-week high: 6,461.00

52-week high: 7,977.64

52-week high: 12,069.60

52-week low: 12,035.09

52-week low: 2,726.68

52-week low: 1,266.74

52-week low: 5,229.80

52-week low: 5,914.43

52-week low: 8,238.96

Andrew Nawrocki WBJ market analyst Investors across the Atlantic had much to cheer about last week, with the Dow Jones Industrial Average (DJIA) setting a new record high.

Polish stocks seemed immune to the positive hype that has gripped markets in recent weeks. Bearish comments by PKO BP on the banking sector for this year pulled equities lower. Both the blue-chip WIG20 index and the main WIG index closed nearly half a percent lower.

Tuesday was an entirely different story, with betterthan-expected macroeconomic news from both France and Germany pushing bourses higher across Europe. US markets opened with a bang, with the DJIA smashing its previous record from October 2007. In Poland the WIG gained 1.17

Major indices WIG

46,745.26 (March 7 close)

WIG20

2,474.70 (March 7 close)

07.03

06.03

05.03

04.03

01.03

28.02

27.02

26.02

25.02

22.02

21.02

20.02

19.02

07.03

06.03

05.03

04.03

01.03

28.02

27.02

26.02

25.02

2,400

22.02

45,000

21.02

2,420 20.02

45,400

19.02

2,440

18.02

45,800

15.02

2,460

14.02

46,200

13.02

2,480

12.02

46,600

11.02

2,500

08.02

47,000

18.02

52-week low: 2,035.80

15.02

Change year to March 7: -5.77%

14.02

52-week low: 36,653.28

13.02

52-week high: 2,628.36

Change year to March 7: -2.83%

12.02

Change for the week: 0.93%

11.02

52-week high: 48,222.72

08.02

Change for the week: 1.00%

Top 5 ABMSOLID MONNARI IDEATFI BYTOM WOJAS

Closing 0.36 3.24 2.09 0.41 5.61

% change (week) 140.00 58.05 39.33 36.67 34.86

52-week high 4.75 3.45 5.41 0.79 6.00

52-week low 0.10 0.71 1.31 0.25 3.51

Top 5 SYNTHOS PZU BORYSZEW TAURONPE TPSA

Closing 6.36 430.00 0.49 4.68 7.15

% change (week) 15.01 6.73 6.52 6.36 5.15

52-week high 6.55 442.00 0.82 5.11 17.34

52-week low 4.83 272.07 0.42 3.84 6.71

Bottom 5 BOMI HBPOLSKA SOBIESKI HERKULES DREWEX ENERGOPLD

Closing 0.06 0.01 97.00 1.34 0.27 0.20

% change (week) -64.71 -50.00 -28.41 -24.72 -20.59 -20.00

52-week high 2.64 1.27 285.00 2.15 0.84 2.04

52-week low 0.04 0.01 92.50 0.80 0.19 0.15

Bottom 5 KERNEL KGHM PKOBP TVN BOGDANKA

Closing 60.75 172.50 34.61 9.50 127.00

% change (week) -6.68 -4.54 -2.78 -2.06 -1.85

52-week high 76.00 194.80 38.50 11.09 143.00

52-week low 51.00 92.14 28.93 5.90 114.00

Currency report

RPP slashes rates

Other indices sWIG80

11,042.08 (March 7 close)

WIG-Banki

6,440.05 (March 7 close)

07.03

06.03

05.03

04.03

01.03

28.02

27.02

26.02

25.02

22.02

21.02

20.02

19.02

07.03

06.03

05.03

04.03

01.03

28.02

27.02

26.02

25.02

22.02

21.02

20.02

6,300

19.02

6,360

32.0

18.02

32.4 15.02

6,420

14.02

32.8

13.02

6,480

12.02

33.2

11.02

6,540

08.02

6,600

33.6

18.02

52-week low: 5,163.30

15.02

Change year to March 7: -4.21%

14.02

52-week low: 32.13

13.02

52-week high: 6,723.16

Change year to March 7: -0.93%

12.02

Change for the week: -1.01%

11.02

52-week high: 43.47

08.02

Change for the week: -0.48%

34.0

Adam Narczewski X-Trade Brokers DM SA

07.03

06.03

05.03

04.03

01.03

28.02

27.02

26.02

25.02

22.02

21.02

52-week low: 8,984.43

18.02

15.02

07.03

06.03

05.03

04.03

32.91 (March 7 close)

52-week high: 11,245.80

SOURCE: WSE

NewConnect

01.03

28.02

27.02

26.02

25.02

10,800

22.02

2,500

21.02

10,900

20.02

2,540

19.02

11,000

18.02

2,580

15.02

11,100

14.02

2,620

13.02

11,200

12.02

2,660

11.02

11,300

08.02

2,700

14.02

Change year to March 7: 4.85%

13.02

52-week low: 2,147.52

12.02

Change year to March 7: 3.32%

11.02

Change for the week: -0.09%

08.02

52-week high: 2,653.74

20.02

2,653.74 (March 7 close)

Change for the week: 1.75%

19.02

mWIG40

percent, while the WIG20 posted a 1.59 percent gain.

Moving Polish equities on Wednesday was the unexpected half-percentage-point cut in interest rates by Poland’s Monetary Policy Council. Polish stocks immediately jumped following the decision, though the euphoria was short-lived. The WIG saw a 0.19 percent gain.

On Thursday, despite bullish comments by ECB President Mario Draghi, Polish stocks were unable to record gains. The WIG saw a 0.04 percent loss, while the WIG20 shed 0.27 percent.

However, on Friday, the WIG and WIG20 ended the week strongly. Both were both up, by 0.70 and by 0.65 respectively, after betterthan-expected jobs numbers were released in the United States. ●

This past week put central banks in focus. Mario Draghi of the ECB lowered the forecasts for the euro zone’s GDP growth. Much more was expected from the Bank of England, but it decided not to increase its asset-purchase program. A similar decision was made by the Bank of Japan, but that did not stop the yen from depreciating further.

Risk aversion on the markets was lower than during the last couple of weeks and this lifted the Dow Jones Industrial Average to historic highs. Currency markets were also affected. The EUR/USD was unable to break the support level of $1.30 and finished the week just above $1.31.

Much more surprising news, however, came from

Poland’s Monetary Policy Council (RPP), which cut interest rates by 50 basis points to 3.25 percent. The decision itself is not such a big shock, as previously some RPP members had voted for such a steep cut.

The z∏oty instantly weakened as a result of the RPP’s decision, causing the EUR/PLN to rise to z∏.4.16 (from z∏.4.12) and the USD/PLN to z∏.3.19 (from z∏.3.16).

Towards the end of the week, the market calmed down a bit and the z∏oty regained some ground. The EUR/PLN finished the week at z∏.4.14 while the USD/PLN ended at z∏.3.15.

A larger depreciation of the z∏oty is expected when US stock markets enter their corrective movements. ●

currency rates 3.4006

3.3890

3.3779

05.03

06.03

07.03

08.03

3.4015 04.03

SOURCE: NBP

3.4265 01.03

0.1036

0.1032 08.03

3.0

3.3172

PLN-100JPY

3.5

07.03

06.03

0.1031

0.1033 05.03

0.1035

0.1034 04.03

08.03

07.03

06.03

05.03

04.03

01.03

3.3583

3.3630

3.3510

3.3691

3.3846

PLN-RUB

0.104

0.103

01.03

4.7696

4.7618 08.03

3.3

3.3737

PLN-CHF

3.5

07.03

4.7735 06.03

4.8077 05.03

04.03

4.7705 01.03

3.1808

3.1690 08.03

4.7

4.7815

PLN-GBP

5.0

07.03

3.1660 06.03

3.1665 05.03

04.03

3.1769 01.03

4.1472

4.1497 08.03

3.1

3.1837

PLN-USD

3.2

07.03

4.1269 06.03

4.1361 05.03

04.03

4.1432 01.03

4.1

4.1350

PLN-EUR

4.2

SPORTS

MARCH 11-17, 2013

www.wbj.pl

29

Basketball

Dortmund through in Champions League

Gortat injured in Suns match

Poland captain Jakub B∏aszczykowski scored in the 3-0 win over Shakhtar

COURTESY OF FACEBOOK.COM/KUBABLASZCZYKOWSKI

A trio of Poles played a significant role in Borussia’s 3-0 home win over Shakhtar Donetsk in the Champions League round of 16 last week.

The win, in front of more than 65,000 fans at the Westfalenstadion, earned Dortmund a

5-2 aggregate victory, and made them one of the favorites to lift the Champions League trophy at Wembley on May 25.

Striker Robert Lewandowski led the line well and was a constant threat all night.

He almost opened the scoring early in the first half, latching onto a Mario Goetze through ball only for Shakhtar’s goalkeeper Andriy Pyatov to

Jakub B∏aszczykowski

advance quickly to block the Pole’s shot.

Dortmund then put themselves on route to victory when they scored the game’s first goal at the 31-minute mark, when Brazilian defender Felipe Santana powered home a header straight from a corner. Then, just six minutes later, Mr Lewandowski found space on the right and fired in a low cross to allow Goetze to find the net from close range.

Polish defender ¸ukasz Piszczek was involved in another chance but saw his run into the box blocked as Dortmund began to exert consistent pressure on the away side.

But it wasn’t all one-way traffic as both Douglas Costa and Fernandinho went close for the Ukrainian side. However, the result was put beyond doubt when Jakub B∏aszczykowski was first to react after Ilkay Gundogan’s long-range shot was parried by Mr Pyatov, enabling the Polish captain to calmly side-foot the ball home.

Dortmund’s Champions League quarterfinal first-leg match will take place on April 2 or 3.

David Ingham

COURTESY OF WIKIMEDIA COMMONS

Soccer

Marcin Gortat (middle)

The Polish center fell awkwardly against the Toronto Raptors Phoenix Suns star Marcin Gortat left the court injured last week during his team’s match against the Toronto Raptors.

Mr Gortat had scored eight points before he went over on his right ankle with 38 seconds of the first quarter remaining.

The injury now looks set to keep the Pole out of the Suns’ games for at least three weeks, but it’s quite possible he won’t be able to play again this sea-

son, which ends in six weeks.

“I actually stepped on someone’s toe or foot with my heel, and that’s why ... I don’t know what happened, I just heard a pop,” Mr Gortat was quoted by Fox Sports as saying.

“I’m definitely not going to work all this [time] just to come back for one or two games,” he added.

With Mr Gortat forced off, his team put in a woeful display, going down 98-71 to the Raptors. If not for a threepointer from Marcus Morris with just 23 seconds left on the

clock, the Suns would have tied the all-time lowest score in the franchise’s history.

The injury might also force Mr Gortat out of this year’s European championships, which will take place in Slovenia in September.

“I’d rather just rest the rest of the year. I can tell you [one] thing: I’m going to definitely consider not going to the (Polish) national team again and not playing another 20 games in the off-season. That’s what really screwed me over. I was just stupid.”

David Ingham

30

LIFESTYLE

www.wbj.pl

MARCH 11-17, 2013

Concert

Cinema

Unknown pleasure

'Manhunt' wins best film award

city, I will always hold good memories of playing there. I must say our gig in Warsaw last year was amazing. My god, what an audience they were, it really blew us away.

We were initially booked to play at a smaller venue. …

But when we got to Palladium we were really surprised because it’s a great venue and it was packed out. And I couldn’t believe the range of people there, there were people who looked about 16, then there were others who looked even older than I am.

Peter Hook

David Ingham: Joy Division were originally named after the Polish capital. Why was that?

Peter Hook: Well at first the band was called the Stiff Kittens but that was very early on in our career when we hadn’t really done anything of note.

We changed our name to Warsaw because we thought it sounded cool and it was under that name that we recorded a

COURTESY OF FAC51/STEFANO MASELLI

Peter Hook, bass player and founding member of the seminal Manchester bands Joy Division and New Order, returns to Warsaw this March just over 12 months on from his new band’s first show here. This time round they will be playing both of Joy Division’s critically acclaimed albums “Unknown Pleasures” and “Closer” in their entirety, in what will be the band’s 150th live show since they formed in 2011. Here “Hooky” talks to WBJ about Joy Division, New Order, and his upcoming Warsaw gig.

lot of early material which was very punky. We actually changed our name to Joy Division initially because at the time there was another band called The Warsaw Pact who were bigger than we were and whenever we tried to get gigs

the person on the other end of the phone would just say “Oh you’re not The Warsaw Pact?” then they wouldn’t book us.

What do you make of Warsaw and the Polish fans?

I think Warsaw is a fantastic

Will we ever see the original New Order lineup back together on stage again?

I really don’t think the original New Order lineup will ever play together again. It’s a great shame but that’s just the way it is now unfortunately.

We are fighting each other through our lawyers at the moment. It’s sad and frustrating but they won’t negotiate with me so it looks like it won’t be ending any time soon. Of course I miss playing in New Order, but I’m having the best time I ever had on tour with my band now, so it all worked out in the end. ●

The film won the Eagle statuette at the Polish Academy Awards A Polish movie about World War II resistance fighters took home the top prize at Poland’s 15th Academy Awards last week.

“Manhunt” (“Ob∏awa”) was directed by Marcin Krzyszta∏owicz, whose own father was a member of the country’s resistance movement. The film tells the story of Corporal Wydra and his role carrying out death sen-

tences handed down by underground courts. Acclaimed Polish actor Marcin Dorociƒski plays the lead role, with Maciej Stuhr playing Wydra’s old school friend who becomes a Nazi informer.

Speaking at the awards evening Mr Krzyszta∏owicz said, “I am happy and surprised that the film that I directed has achieved so much.”

In addition to this Polish Academy Award victory “Manhunt” also won the Silver Lions award at the Gdynia Film Festival.

David Ingham

COURTESY OF OBLAWA.PL

Peter Hook and the Light March 27 Klub Palladium ul. Z∏ota 9 Warsaw

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31

Tech Eye

The Gesture Techeye is a model employee, the kind that’s hunched over a desk all day, fingers (and occasionally nose) dutifully banging away at the keyboard. Our boss loves us, thinks we’re busy putting together articles to win the next Nobel Prize in Business Journalism.

Little does he know, we’ve actually outsourced our job to some old ladies in Saskatchewan, Canada.

Oh, the increase in productivity made him suspicious at first, as did our new habit of writing “aboot” instead of “about.” He’s no dummy, that boss of

designed to accomodate Price: €285. ours. But every time he asks more postures than an questions, we just remind him One final ergonomic device we’re interpretive dance troupe, looking into: the Advantage USB about that Nobel Prize and he and it has splendidly ver- Contoured Keyboard from Kinesis backs off. satile armrests. It’ll be (Kinesis-ergo.com). This quirky keyAnyway, instead of slaving available this autumn; no board is built to alleviate carpal tunnel away Techeye now spends all day, word on pricing yet. and other typing-related health comevery day, writing “Scooby-doo The ErgoSensor moni- plaints. It reportedly makes typing meets Fifty Shades of Grey” fan fiction, making giant phallictor from Philips more fun as well, though there is an shaped objects in Minecraft (a (Philips.com) might go adjustment period.

The Advantage is PC- and MacLego-esque computer game) well with the Gesture.

COURTESY OF PHILIPS and giggling at kitten pictures.

According to its maker, compatible and incorporates a pair of The ErgoSensor This, folks, is the good life … this is “the world’s first USB ports, but at $269 it ain’t cheap. except for all the hunching. It’s the intelligent display that can advise you On the plus side, the key placement best way to keep our boss from seeing how to sit in an ergonomically correct discourages others from using the keyboard. how shockingly unproductive we are, position at your computer screen.”

For Techeye, that’s even more yes, but it’s also wreaking havoc on gies.” Apparently Steelcase went to That’s right, Philips has created a our posture. great lengths in designing it, conduct- display that nags you to sit up straight important than the ergonomic Time to invest in some ergonomic ing research in 11 countries to learn and, occasionally, to go get some air. stuff. Anything that discourages gear, then. Not for the workplace, of how tablets and smartphones are A Momitor, in other words. our boss from snooping about our course – our colleagues are known impacting how we sit at work.

The ErgoSensor has a 24-inch, full “workspace” is worth its weight in scavenge new stuff within minutes of The results of this research are a HD TFT-LCD display. It’s relatively lolcats. ● its installation – but rather to have at bit fidgety, in our opinion. “Nine new eco-friendly, being 65-percent home. postures uncovered,” Steelcase boldly composed of recyHaving the right chair will be cru- proclaims, including two dubbed “the cled plastics and cial. There are lots of ergonomic smart lean” and “the strunch.” The boasting low energy chairs on the market, but the Gesture, thing is, we’ve been smart leaning at c o n s u m p t i o n . from white-collar furniture maker work for years – it’s our go-to posture There’s also the Steelcase (Steelcase.com), looks par- when we want something that’s just expected ergoout of reach. It’s easy: just lean a little, nomic adjusticularly intriguing.

The Gesture is described as “the then whisper, “Hey intern, hand that tability and the aforemenfirst chair designed to support our over, would you?” Voila.

Regardless, the Gesture is tioned nagging. interactions with today’s technoloThe Advantage USB Contoured Keyboard Ever met a Nobel laureate in Business Journalism? Let us know: techeye.wbj@gmail.com

Museums, galleries and venues in Warsaw Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 www.csw.art.pl Czarna Gallery ul. Marsza∏kowska 4 www.czarnagaleria.art.pl

Katarzyna Napiórkowska Art Gallery ul. Âwi´tokrzyska 32, ul. Krakowskie PrzedmieÊcie 42/44 and Old Town Square 19/21 www.napiorkowska.pl

Fibak Gallery ul. Krakowskie PrzedmieÊcie 5 www.galeriafibak.pl

Królikarnia National Gallery ul. Pu∏awska 113a www.krolikarnia.mnw.art.

Galeria 022, DAP, Lufcik pl ul. Mazowiecka 11a www.owzpap.pl Le Guern Gallery ul. Widok 8 Galeria 65 www.leguern.pl ul. Bema 65 www.galeria65.com Museum of Galeria Appendix 2 Independence ul. Bia∏ostocka 9 Aleja SolidarnoÊci 62 www.appendix2.com www.muzeumniepodleglo sci.art.pl Galeria Asymetria ul. Nowogrodzka 18a National Museum in www.asymetria.eu Warsaw Al. Jerozolimskie 3 Galeria Foksal ul. Foksal 1-4 www.mnw.art.pl www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A www.milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 www.galeriaschody.pl Galeria XX1 Al. Jana Paw∏a II 36 www.galeriaxx1.pl Galeria Zoya ul. Kopernika 32 m.8 www.zoya.art.pl Green Gallery ul. Krzywe Ko∏o 2/4 www.greengallery.pl

Polish National Opera at Teatr Wielki Pl. Teatralny 1 www.teatrwielki.pl

Simonis Gallery ul. Burakowska 9 www.simonisgallery.com State Archaeological Museum in Warsaw ul. D∏uga 52 www.pma.pl State Ethnographic Museum ul. Kredytowa 1 www.ethnomuseum.pl Historical Museum of Warsaw Old Town Square 28-42 www.mhw.pl History Meeting House of Warsaw ul. Karowa 20 www.dsh.waw.pl Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl Warsaw Rising Museum ul. Grzybowska 79 www.1944.pl

Wilanów Palace Pracownia Galeria ul. Emilii Plater 14 Museum and Wilanów www.pracowniagaleria.pl Poster Museum ul. St Kostki Potockiego Rempex Art and 10/16 Auction House www.wilanow-palac.pl ul. Karowa 31 www.postermuseum.pl www.rempex.com.pl Royal Castle Pl. Zamkowy 4 www.zamekkrolewski.com.pl

Zachęta National Art Gallery Pl. Ma∏achowskiego 3 www.zacheta.art.pl

COURTESY OF KINESIS

COURTESY OF STEELCASE

Outsourcing, lolcats and ergonomics