VOLUME 18, NUMBER 9 • MARCH 5-11, 2012 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127 S a l t y s c a n d a l Three firms stand accused of selling road salt for use in food 6 Since 1994 . Poland’s only business weekly in English WWW.WBJ.PL Warsaw’s office market is seeing significant rises in lease and construction activity: a special report for MIPIM 2012 15 B e l a r u s i a n b u g b e a r The EU and Minsk are caught in a tit-for-tat spat over sanctions 4 SHUTTERSTOCK News . . . . . . . . . . . . . . . . . . . . . . .2-6 Business . . . . . . . . . . . . . . . . . . .9-10 Lokale Immobilia . . . . . . . . . . .11-22 The List . . . . . . . . . . . . . . . . . . .24-25 Business in Brief . . . . . . . . . . .26-27 Markets . . . . . . . . . . . . . . . . . . . . . .28 Sports . . . . . . . . . . . . . . . . . . . . . . .29 Lifestyle . . . . . . . . . . . . . . . . . . . . .30 Last Word . . . . . . . . . . . . . . . . . . . .31 Banking on Poland Santander will increase its presence in Poland by merging its Polish lender with Kredyt Bank 9 Fashion foul Retail group EM&F posted a profit, despite a difficult year for most of its fashion brands 10 In this issue • Warsaw office market • Euro 2012 progress report • Trends in Warsaw’s land market • Investment climate 15-25 S P E C I A L E D I T I O N Moving up COURTESY OF WIKIMEDIA COMMONS
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VOLUME 18, NUMBER 9 • MARCH 5-11, 2012 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127
SaltyscandalThree firms stand
accused of selling road
salt for use in food 6
Since 1994 . Poland’s only business weekly in English
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Warsaw’s office market isseeing significant rises inlease and constructionactivity: a special reportfor MIPIM 2012 15
On March 7, Polish ForeignMinister Rados∏aw Sikorskiwill meet with US Secretary ofState Hillary Clinton in Wash-ington, DC. They are expectedto discuss security issues con-cerning NATO, Afghanistanand the situation in the MiddleEast, as well as issues relatingto general Polish-US coopera-tion.
Last month, Mr Sikorskidescribed the Poland-US rela-tionship as “mature andfriendly.” He also pointed tothe fact that Poland recentlytook on the role of represent-ing Washington’s interests inwar-torn Syria.
In a phone conversation inwhich Ms Clinton thanked MrSikorski for Poland’s role in
Syria, the two also reportedlydiscussed a proposed missiledefense shield which would bepartially located in Polandstarting from 2018.
Last year, ahead of a meet-ing with Mr Sikorski in Wash-ington, Ms Clinton confirmedthe US government’s plans todeploy the missile defenses aswell as US Air Force units inPoland.
Moreover, with US Presi-dent Barack Obama making atrip to Poland last year, itwould seem that relationsbetween Poland and the USare warm, despite certain dif-ferences and some lingeringirritations.
One issue that particularlyrankles is Poland’s absence
from the US’s Visa WaiverProgram. As a result, Poles stilldon’t enjoy visa-free entry tothe United States, while mostother European Union coun-tries – some of which are muchless supportive of Washingtonon the international scene –are included in the program.This includes Poland’s neigh-bor, the Czech Republic.
US firms are also activelyexploring for shale gas inPoland, another topic dis-cussed during Mr Obama’svisit to Warsaw last year. IfPoland’s shale gas reserves areproven to have significant com-mercial potential, then USinterests in Poland could growfurther still.
Remi Adekoya
z∏.11.3 billionwas Polish copper miner KGHM’s net profit for 2011,
2.5 times higher than a year earlier.
$1.2 billion was the loss recorded in 2011 by CEDC, a producer of
vodkas such as Bols and ˚ubrówka. It is reportedly thelargest loss ever for a company on the Warsaw Stock
Exchange.
300is the number of companies that Poland’s Treasury
Ministry wants to sell within the next two years,according to its latest privatization plan.
6.5% was the percentage by which the number of hotel bedsin Poland increased year-on-year by the end of 2011,according to real estate firm Cushman & Wakefield.
“I hope that the future guests of the Kempinskihotel will remember how long people had tospend in prison so that they could stay in the
hotel.”Foreign Minister Rados∏aw Sikorski, commenting on Slovenia’s veto againstputting businessman Yuri Chizh on a list of Belarusians to be banned from trav-eling to the European Union. Mr Chizh has hired a Slovenian company to builda €100 million residential and office complex in the center of Minsk, which willinclude the Kempinski hotel.
Quote of the Week
Does shale gas extraction really pollute?According to a study released by Poland’s GeologicalInstitute last week, shale gas exploration isn’t dangerousfor the quality of soil, air or water. Polish findings, basedon the study of a single well, contradict several previousscientific analyzes on the controversial process ofhydraulic fracturing. To learn more, log on to WBJ.pl
On WBJ.pl
Numbers in the News
Company index
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6-8 POLISH ECONOMIC CONGRESSEvent: This congress and its accompanying confer-
ences offer debate on Poland’s current eco-nomic situation, along with discussions onspecific issues in each sector.
Location: Warsaw University of TechnologyWeb: polskikongresgospodarczy.pl
6 -9 MIPIMEvent: MIPIM is the world’s leading international
real estate fair. Over 4,000 investors andover 19,000 participants attend these fourdays of workshops, debates and networking.
Location: Palais des Festivals, Cannes, FranceWeb: mipim.com
6-10 CEBIT 2012Event: CeBIT is the world’s largest trade fair show-
casing digital IT and telecommunicationssolutions.
Location: Hannover, GermanyWeb: cebit.de
16-17 NORDIC CROSS POINTEvent: Poland’s leading event dedicated to Nordic-
and Scandinavian-Polish cooperation,focused on business issues, education andculture.
Location: SzczecinWeb: nordiccrosspoint.pl
28 GREAT PLACE TO WORK GALAEvent: This event honors the Polish enterprises
using unique practices and human resourcemanagement programs that promote the val-ues of credibility, respect, fairness, pride andcamaraderie in the relationship betweenmanagement and employees.
Behind barsPrison population rate per 100,000, average per year, 2007-2009,selected EU27 countries
Source: Eurostat
*Highest in EU27
**Lowest in EU27
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MARCH 5-11, 2012NEWS4 www.wbj.pl
Poland working to get dead US journalist’s body out of SyriaAs WBJ went to press, the Pol-ish embassy in Damascus,Syria, was still trying to locateand evacuate the body ofAmerican journalist MarieColvin, who was killed in a Syr-ian government attack on thecity of Homs on February 22.
“The embassy is making
every effort to recover thebody of Marie Colvin. Theambassador stays in contactwith Syrian authorities and theSyrian Red Crescent, [as wellas] US, French and Britishdiplomats,” the Ministry ofForeign affairs wrote to WBJin a statement. In February,
the Polish Embassy in Damas-cus took over the representa-tion of US interests in Syria.
Last Thursday, the officialSyrian news agency Sana quot-ed a Syrian Foreign Ministry“competent source” as sayingthat Syrian authorities hadlocated the bodies of Ms
Colvin and French journalistRémi Ochlik, “buried in thearea which armed terroristgroups had controlled in BabaAmr, in Homs.” After DNAtests, Ms Colvin’s body will behanded over to the Polishembassy, and Mr Ochlik’sbody to the French embassy,
Sana reported. As of presstime, the Polish Foreign Min-istry declined to make furthercomments on the situation.
Meanwhile, last Thursdaythe United Nations HumanRights Council voted to con-demn the government of Pres-ident Bashar al-Assad for
widespread violations ofhuman rights in the crackdownon its opponents and todemand an end to violence.The UN estimates that “wellover” 7,500 people have diedsince the beginning of Syria’s11-month uprising.
Alice Trudelle
Following an escalationof tensions, diplomatson both sides havebeen withdrawn
A diplomatic spat betweenBelarus and the EU broke outlast Tuesday when Minskexpelled the Polish ambassadorand the EU’s permanent repre-sentative to Belarus, and said itwould withdraw its own repre-sentatives from Brussels andWarsaw.
The move came in responseto the decision of the EU For-eign Affairs Council on Febru-ary 28 to widen sanctionsagainst Belarus. This includedthe addition of 21 people to thelist of Belarusian judicial andlaw-enforcement officials whowill have their assets in the EUfrozen and be barred fromreceiving visas allowing them to
travel within the bloc. There are now roughly 200
names of high-ranking Belaru-sian officials, among them Pres-ident Alexander Lukashenko,on the list.
Poland was instrumental inpersuading the EU to toughensanctions on Minsk, a move ithas made on the grounds thatthe human rights situation inthe country is deteriorating.
‘Nervous and drastic’Polish Prime Minister DonaldTusk said the “nervous andquite drastic” reaction of Minskshows that the sanctions areproving troublesome for MrLukashenko’s regime. Address-ing Belarusians in their lan-guage, Mr Tusk said “Long liveBelarus. Hold on.”
He also stated that Polandwould continue to work with
Belarusian opposition activists.The Polish Foreign Ministry
released a statement saying itregarded Belarus’ expulsion ofthe representatives as “anunfriendly step taken byBelarus towards the wholeEuropean Union” and that theEU would “respond to themeasure.”
Tit for tatThen, last Wednesday, the EUwithdrew all of its ambassadorsfrom Belarus. Minsk stronglycriticized the bloc’s move, say-ing it is a “path into deadlock.”At the EU summit which tookplace on March 1-2, EU lead-ers expressed their dissatisfac-tion with the worsening situa-tion in Belarus and called fortheir foreign ministers to workon even more sanctions againstMinsk.
Alexander Lukashenko hasled Belarus with an authoritar-ian hand for some 18 years,maintaining Soviet-style con-trols over the economy and sti-fling political opposition and
independent media. As the riftbetween Belarus and the EUwidens, the country is likely tobe pushed closer to Moscow,even though Mr Lukashenkoand the Kremlin have tussled
in the past, with MrLukashenko accusing Moscowof trying to erode his country’ssovereignty and gain control ofits assets.
Remi Adekoya
Belarus
Diplomatic face-off between EU and Belarus
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MARCH 5-11, 2012NEWS6 www.wbj.pl
Changes in the residential
real estate market
Expert commentary
BROUGHT TO YOU BY BEITEN BURKHARDT
New legislation enacts additional security measures for purchasers ofresidential real estate
Until now developers have held a privilegedposition in Poland’s residential real estatemarket due to the economic and organiza-tional advantage of the developer over thepurchaser.
Decades ago a number of countries inWestern Europe took note of this problemand introduced relevant legal regulations tohelp minimize the risk of the purchaser los-ing money. We prepared the first draft ofthis kind of regulation in Poland with Profes-sor Fryderyk Zoll at the Jagiellonian Universi-ty as early as 10 years ago. On April 29,2012, the residential real estate market willenter into a new era of legal protection forthose who purchase residential premises ordetached houses through the implementa-tion of the act often referred to as the“developers act,” as it governs the relation-ship between the developer and the cus-tomer.
The purpose of the regulation includesintroducing regulations concerning a meansfor protecting the purchaser as well as fordrafting contracts to be concluded betweendevelopers and purchasers. In accordancewith the act, the contract should be con-
cluded in the form of a notarial deed andcomprise specific elements, described indetail in the Act. The developer is obliged toenter into an escrow agreement with a bankfor each investment.
If the developer declares insolvency,monies held in the escrow account, owner-ship of the real estate or perpetual usufructand the liabilities of the developer towardsthe purchaser would constitute a separateinsolvency estate and a receiver or a trusteewould be obliged to continue the develop-er’s project, should the committee of pur-chasers decide that it should do so.
The only transitional provision in the actexcludes the obligation for developers tosecure purchasers’ claims following thecommencement of the sale. The aim of thetransitional provision is to ensure that oncethe developer starts the investment, italready bears certain costs and planningfinancing with the customers’ money, and itwould be able to finish that investmentunder the provisions.
Investigation launched into use of industrial salt in foodThree companies aresuspected of sellingroad salt for use inmeat and dairyproductsPoland’s Chief SanitaryInspectorate (GIS) launchedan investigation last Wednes-day into revelations that somecompanies had been sellingindustrial salt – repackaged asedible salt – to food-process-ing plants.
The investigation startedafter five men were arrestedlast Monday following the dis-covery by Poland’s CentralBureau of Investigation that
companies the men workedfor had been engaged in thepractice. If faced with chargesof placing food on the marketthat poses a danger to humanhealth, the men could face upto five years in prison.
The type of salt in questionis used for deicing roads. Asmuch as 1,000 metric tons ofindustrial salt could have beensold to food companies eachmonth for the past 10 years,TVN24 reported. Last Wednes-day, GIS and the Chief Veteri-nary Officer began inspectingfacilities where the salt mayhave been used in food.
Chief Sanitary Inspector
Przemys∏aw Biliƒski told theSejm last Thursday that threecompanies had marketed largeamounts of non-edible salt toproducers of meats, fish, dairy,and baked goods, and thatthese producers seemed tohave bought it in good faith.However, he stressed thatfirms producing and placingfood on the market wereresponsible for the safety oftheir products.
Mr Biliƒski also said thatpreliminary results of studieson the possible risks the salt inquestion could pose to humanhealth, commissioned by GIS,would be available within a
few days. Last Monday, Prime Minis-
ter Donald Tusk told a pressconference that he had askedthe Minister of Agriculture toprepare a report on the poten-tial dangers of consumingindustrial salt.
“There is no doubt thatsomething bad was going on,however, for now we do nothave all the information aboutthe effect this could have hadon the quality of the foodproducts, and ultimately onpeople’s health,” Mr Tusksaid.
Izabela Depczyk, Alice Trudelle
Auschwitz
US and Poland disagree over return of Auschwitz barrack Poland says a museumin Washington shouldgive back thehistorical artifact
The fate of a barrack that oncehoused prisoners of theAuschwitz death camp inNazi-occupied Poland is cur-rently the subject of intensediscussion between Polish andUS authorities.
Presently on display at the
United States HolocaustMemorial Museum in Washing-ton, DC, the barrack wasshipped to the US over 20 yearsago. Poland is now demandingthe artifact’s return, since Polishlaw says any historical objectloaned to another country mustbe handed back once every fiveyears for inspection. The lawwas introduced in 2003 toensure the preservation ofPoland’s cultural heritage.
Poland’s Culture MinisterBogdan Zdrojewski has saidthe barrack should return toPoland. He told reporters lastweek that the barrack hadoriginally been loaned for 10years in 1989, before the peri-od was extended for another10 years, meaning the loanperiod has passed.
He also stressed, however,the “importance of Americanexpectations … that the bar-
rack could stay [in America]for the anniversary of theUnited States HolocaustMemorial Museum.”
The US Holocaust Memor-ial Museum opposes thedemand for the barrack to bereturned partly on the groundsthat the object is in a fragilestate.
“Due to the barrack’s sizeand the complexity of its instal-lation, removing and trans-
porting it to Poland presentsspecial difficulties, includingpotentially damaging the arti-fact,” the US Holocaust muse-um said in a statement sent toThe Associated Press. “Boththe Museum and our Polishpartners have been actively dis-cussing various proposals, andwe remain committed to con-tinue working with them toresolve this matter.”
Prisoners slept in the bar-
rack and others at Auschwitzin appalling conditions as theyawaited extermination. Theobject is in fact one half of afull barrack, the other half ofwhich still stands at Birkenau,part of the Auschwitz-Birke-nau complex.
Up to 1.5 million people –most of whom were Jews –were killed by the Nazis in thecamp during WWII.
Gareth Price
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The salt in question is used for deicing roads
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Implications of new residential legislationExpert commentary
Andrzej Lulka, a legal advisor andpartner at the Gide Loyrette Nouellaw firm, talks about the changesthat will come about as a result ofthe new “Developers Act”
What are the most importantissues concerning real estate inPoland now?Andrzej Lulka: Looking at the real estatesector in Poland, I would say that themost important issue to have arisen in thelast few months is new legislation con-cerning the residential market. The Act onProtecting the Rights of Purchasers ofApartments and Houses, known as the“Developers Act,” was adopted inSeptember last year, after the Polish Con-stitutional Tribunal showed the Polish Par-liament a loophole in the legal regulationof developer contracts in violation of con-stitutional principles on housing policyand consumer protection. Even thoughtthe act will not come into force until endof April 2012, it has already raised a lot ofcontroversy in real estate circles and pro-voked widespread discussion. The devel-opers and the banks are not sure how tomeet the new obligations imposed onthem, and the new regulation will certain-ly generate costs to be borne by thedevelopers, and passed on to propertybuyers.
What is the aim of this newlegislation?The need to implement a law regulatingdevelopers contracts has been discussedin Poland for many years, with the Consti-tutional Tribunal decision acting as thecatalyst for rushing through this law assoon as possible. The aim of the new leg-islation is to protect anyone purchasingapartments or houses, or obtaining theperpetual usufruct to the land on whichhouses are located, from the negativeeffects of a developer going bankrupt orviolating the contract for other reasons.The goal of the new act was to contributeto the development of improved marketstandards in the preparation of new hous-ing investments. Has this goal beenachieved? Partly yes, but there are cer-tainly corrections to be made to the act,
hopefully before it enters into force. Theact applies only to private, non-profes-sional investors.
What will this act mean fordevelopers?This act imposes several new obligationson real estate developers. They will have toconclude developer agreements on con-structing and selling the properties they aredeveloping in the form of a notarial deed,and the buyer’s claims will have to beentered in the relevant land and mortgageregister, meaning that if the developer want-ed to back out of the contract, the buyerwould be able to apply to the court for anorder conveying title to the property.
There are some informational dutiesimposed on the developer, which can becontroversial as some of the information,according to developers, should not bemade public or can constitute businesssecrets. Upon the first contact with a“potential buyer” interested in purchasing aproperty, and in any case before a develop-er contract is concluded, the developer hasto deliver an informational prospectus set-ting out detailed information on the devel-oper, its professional experience and theproperty being sold. The developer has topresent this prospectus to potential clientsat their request. Some of the informationprovided in the prospectus may changebetween the delivery of this document tothe client and the conclusion of the devel-oper contract. If so, the developer is obligedto provide potential buyers with a list ofchanges, which may lead to complicationsas, for example, it is hard to define a “poten-tial buyer”.
The act provides a list of contractual pro-visions that must be implemented in thecontract, including penalties, and specifiessituations in which both parties can rescindthe contract.
What, in your opinion, is themost important change imple-mented by the new DevelopersAct?The most-discussed change implementedby the act is the obligation for developers tohold an open-end or closed-end escrowaccount in a bank for the investment. Anescrow account may be used exclusivelyfor storing funds entrusted by a third partyto the account holder under a separateagreement. The escrow account agreementis concluded between the bank and thedeveloper, and should specify the condi-tions under which the funds may be trans-ferred to the developer. Prospective home-or apartment-owners will pay cash directlyinto this account.
Developers may choose between fourkinds of collateral offered to secure themonies of prospective purchasers: aclosed-end escrow account, an open-endescrow account, an open-end escrowaccount with a bank guarantee, and anopen-end escrow account with a insuranceguarantee.
Opening open-end escrow accountswith bank or insurance guarantee is unlikelyto be popular, as it would generate extracosts, and one way of securing the project
is sufficient. For open-end escrowaccounts, the bank which is financing theproject is obliged to monitor the perform-ance of the construction work and to trans-fer funds to the developer only after approv-ing the completion of each given stage ofthe construction, i.e. if the developer’s obli-gations concerning the respective invest-ment stages have been duly fulfilled.
In the case of a closed-end escrowaccount, all the funds will be disbursedonce the ownership title to an apartment ora plot of land has been transferred to thebuyer. This will definitely have an impact onthe costs of financing, since the moneypaid by the purchasers may not be used inadvance to cover the costs of ongoingworks.
However, developers will not be obligedto offer an escrow account if the sale of res-idences started before the act comes intoforce. According to the act, “starting thesale” means publishing information oncommencing the process of offering apart-ments or houses within a certain residentialproject. What this actually means is a topicof intense discussion and could prove to bea nightmare. There are developers eager topublish information on their investmentplans for the decade to come, in order toavoid opening escrow accounts.
What consequences does theobligation to provide escrowaccounts bring for developers?One possible implication of the new regula-tions will be that banks will effectively gaincontrol over investment projects carried outby developers, that is, carrying out projectswill be de facto dependent on the bank con-senting to open a special kind of account. Ifbanks insist on closed- rather than open-end escrow accounts, then the residentialproject will have to be financed completelyfrom the developer’s own funds or througha bank loan. This would lead to the risk ofsmaller developers going under.
If the banks agree to offer open-endescrow accounts, the developer will bearincreased costs connected with the bank’smonitoring of the project, so housing pricesmay go up. As mentioned above, the costsof financing will also increase.
What is the banks’ reaction tothis new law?Banks are generally critical of the new regu-lations. They will share responsibility for thesuccess of the projects with the develop-ers. They will be obliged to monitor thecourse of developments in an effectivemanner, they will be entitled to check cer-tain documentation owned by the develop-er and will have access to the developer’sbank accounts, finally they will be obliged toassess the legal effects of certain docu-ments, for instance the validity of the pur-chaser’s statement on the rescission of thedevelopment contract, a role that banksusually are reluctant to assume. Upon deliv-ery of such a statement by the purchaser,the bank is legally bound to release fundsfrom the escrow account to the purchaser.
It is hard to predict at this point how thebanks will carry out their tasks related tosupervision over investment projects car-
ried out by developers. Banks will probablyprefer to cooperate with more experiencedcompanies, to minimize the risk of sufferingthe consequences of failure of a residentialproject. It seems that the bank financing theproject will tend to be the bank holding theescrow account, in order to have easiercontrol over the disbursement of themonies from that account.
On the other hand, banks can financiallybenefit from the new act, once they suc-cessfully work out their new products:closed-end and open-end escrow accountsfor the purpose of residential projects.
Other provisions of the act that are seenas unfriendly to the banks concern thebankruptcy of the developer. The act pro-vides that the land and the money inescrow are excluded from the bankruptcyestate, and serve to secure the purchasers’claims and/or the continuation of works.This is not fully coherent with the standardcollateral for a bank loan, namely a mort-gage on the land. The act is not clear onwhat the impact of the developer’s bank-ruptcy on that mortgage is. In any case,enforcing such a mortgage is illusory, sincenobody would purchase such property.Unless the act is amended to provide formore detailed terms on that issue, the fur-ther continuation of the project would prob-ably require an agreement between thebank and the community of the purchasers.Otherwise, it would have to be financedfrom the purchasers’ funds solely and, inaddition, before the purchase of the apart-ments it would have to cover fully and rea-sonably the bank’s claims under the facilityagreement with the developer secured bythe mortgage.
How does this new legislationaffect your work and yourclients?Real estate and construction law is one ofGide Loyrette Nouel’s key areas of special-ization. The Real Estate Department at GLNoffers legal services at every stage of realestate projects, for commercial, office, res-idential or logistics purposes, and others.We have naturally analyzed the new regula-tion carefully, even though it is unclear inmany points. We have taken or recom-mended all necessary actions, even purelyout of precaution, in order to help ourclients, who are developers and banks, tomeet the requirements of the DevelopersAct. The interest in the legal know howconcerning the new act is spectacular. Wehave done our best to help our clientsunderstand the new law and how it mayaffect them. Since there are no court deci-sions based on the new regulation yet, therisk cannot be completely excluded, but weare prepared to give our clients full andaccurate legal advice concerning this act.The criticism of the new regulation maylead to an amendment of the DevelopersAct in the near future. It may also turn outthat, due to the massive publication ofdevelopers’ investments plans and thecommencement of the sale of their proj-ects scheduled for the decade to come,the provisions of the act relating to escrowaccounts may actually start to apply with afew years’ delay. ●
BROUGHT TO YOU BY GIDE
MARCH 5-11, 2012 BUSINESS www.wbj.pl 9
Banking
BZ WBK-Kredyt Bank merger to create Poland’s no. 3 bankBZ WBK and KredytBank will merge tocreate the third-largest financialinstitution in Poland
Spanish lender Banco San-tander has reached a deal tomerge its Polish unit BankZachodni WBK with KredytBank, the Polish arm of the Bel-gian financial group KBC.
The tie-up will create thethird-largest bank in Poland bydeposits, loans, branches andprofit, Santander said in a state-ment. The total value of themerged entity will come to €5billion and it will have 899branches and 3.5 million clientsin Poland.
“Thanks to this merger,Banco Santander will signifi-cantly strengthen its presence inPoland, one of the most dynam-ically growing economies inEurope,” Emilio Botin, execu-tive chairman of Banco San-tander, said in a statement.
“I think in the short-term,meaning 2012 and H1 of 2013,BZ WBK will try to consoli-date, do some cross-selling andupselling, especially on the cor-porate side and in the insurancebusiness. There will be a more
aggressive strategy which willprobably start to be very visibleby 2014,” said Tomasz Bursa, ananalyst at Ipopema Securities.
Mr Bursa also said themerged company will be signifi-cantly diversified, since pre-merger BZ WBK was largelyfocused on corporate clients,while Kredyt Bank concentrat-ed on the mortgage business.
KBC will initially hold a 16.4percent stake in the mergedentity, with Santander holding76.5 percent. KBC will thengradually divest itself of itsstake. The remainder of the
company will be owned byminority shareholders.
The deal requires a finalagreement from BZ WBK andKredyt Bank, as well as the reg-ulatory approval of the PolishFinancial Supervision Authori-ty.
The Belgian lender, whichreceived €7 billion from Bel-gium and the region of Flan-ders during the 2008-09 finan-cial crisis, has agreed with theEuropean Commission to selloff assets such as Kredyt Bankin order to pay back the aid.
Remi Adekoya
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Airlines
Eurolot buys eight planesfrom BombardierThe deal is reportedlyworth some z∏.400million
Poland’s Treasury Ministryapproved the purchase of eightQ400 NextGen planes by Polishregional budget airline Eurolotfrom Canadian aerospace com-pany Bombardier.
Eurolot, meanwhile, hassaid that several of the newplanes will be ready for usebefore the start of the Euro2012 soccer championships.
The transaction was worth atotal of z∏.400 million, reportedPuls Biznesu. Eurolot also saidit may opt to purchase an addi-tional 12 more planes of this
type in the future. “We want to expand our air-
line,” said Mariusz Dàbrowski,president of Eurolot, addingthat, “we will be able to flyfaster and further than we donow.” The company hopes thenew aircraft will make it morecompetitive and allow it toexpand, as well as providegreater opportunities toimprove its offer.
The planes will operate notonly on Eurolot’s network butalso on connections used by itspartner, Poland’s national carri-er LOT Polish Airlines.
The Treasury currently owns62.1 percent of Eurolot whilethe remaining stake – 37.9 per-
cent – belongs to LOT. Is is expected that Eurolot’s
new purchase may enable it toadd international flights to itscurrent regional list of destina-tions. Presently, the companyservices flights to most ofPoland’s major cities includingGdaƒsk, Kraków, Poznaƒ,Szczecin, Warsaw and Wroc∏aw.It also flies to one city outside ofPoland: Poprad, Slovakia.
Bombardier first announcedthe order of four Q400 modelsby a buyer who wished toremain anonymous back inAugust 2011, with the optionfor that buyer to purchase anadditional four planes.
Ella Pa∏ka
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MARCH 5-11, 2012BUSINESS10 www.wbj.pl
Publishing
Agora profits down less than expected in Q4The publisher’s profitsfell in the last quarterof 2011, although itscinema chain enjoyed ahealthy rise in revenue
Agora, the publisher of Polishdaily Gazeta Wyborcza, earneda net profit of z∏.9.7 million inthe final quarter of 2011, 47percent down from a year earli-
er, according to data releasedlast week by the company.
The firm said in a statementthat an impairment loss ofz∏.14.3 million affected the con-solidated results of the compa-ny in the fourth quarter. Butdespite the year-on-year drop,the results were still better thanthose predicted by analysts.Market expectations were for az∏.5.1 million net profit.
Agora’s consolidated rev-enues for the whole of 2011increased 10.6 percent to z∏.1.23billion, but at the same time thepublisher saw its net profitdecline for full-year 2011 by 39percent to z∏.43.8 million.
“Agora’s results were betterthan expected mainly becauseof the good performance oftheir cinema business. Also theEBITDA of their press business
is declining more slowly thanexpected,” said Piotr Grzybows-ki, analyst at Dom InwestycyjnyBRE Bank.
Agora’s cinema business,the Helios cinema chain,enjoyed a 30.6 percent rise intotal revenues to z∏.60.2 millionin Q4 2011.
Mr Grzybowski said Agorais in good shape, since the firmhas roughly z∏.110 million in net
cash, a “huge” EBITDA and noproblem with covering itsinvestment needs.
Its profits as a whole arefalling though, due to the gen-eral decline in the advertisingsector, which shrunk by 4 per-cent as a whole in Q4 of 2011,Mr Grzybowski said. Agora’sadvertising sales for full-year2011 fell 1.4 percent y/y toz∏.705.6 million.
The company’s board is yetto make a dividend recommen-dation for 2012 but Piotr Niem-czycki, Agora’s CEO, said lastweek that “we have a specificdividend policy and we are notplanning to make exceptionsfrom it this year.” In 2005,Agora adopted a policy of pay-ing out z∏.0.5 per share in divi-dends.
Remi Adekoya
Retail
EM&F sees profit despite tough year in fashionThe retail group has“too many” fashionbrands, its CEO said
Polish retailer Empik Media &Fashion Group (EM&F)recorded a profit both in Q42011 and for the full-year 2011,despite nagging difficulties withits fashion segment, the compa-ny revealed last week.
For the whole of 2011, thecompany’s total sales rose 11percent y/y to z∏.3.22 billion.Net profit for all of 2011 stoodat z∏.89 million, an increase of 9percent over the previous year.The company saw profit
growth of 19 percent year-on-year for the fourth quarter of2011, from z∏.77 million to z∏.91million.
Three of the group’s seg-ments – Empik bookstores,Smyk toy stores and its lan-guage schools – are “doingfine,” EM&F CEO Maciej Szy-maƒski told journalists lastweek. However, the group’sfashion segment is continuingto suffer “massive losses,” hesaid.
Peacocks, a clothing brandfranchise from which the com-pany was recently forced toexit, had a particularly “bad
year,” Mr Szymaƒski said. Butunder current conditions, headded, it may be possible to sellother brands in stores that oncesold Peacocks products.
EM&F’s other fashionbrands, including Esprit andWallis, did not fare much bet-ter. Unseasonably warm weath-er led to a decrease in sales ofwinter clothing at the end of2011, while lackluster collec-tions also contributed to weakresults, the company said.
EM&F also withdrew fromits Hugo Boss and Springbrands, and sold off a 31 per-cent stake in Empik Parfums
Christian Dior, a distributor ofChristian Dior cosmetics. Itcontinues to hold a 49 percentstake in the company.
With so many of its fashionbrands underperforming or introuble, EM&F does not planto introduce any new clothingbrands on the Polish market.“The problem isn’t that wedon’t have brands but that wehave too many,” Mr Szymaskisaid, adding that the groupdoesn’t want to withdraw fromfashion. “We just want to workwith four to five larger partnersand not with 20,” he said.
Ella Pa∏ka
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Empik group’s profits rose 11 percent y/y
LOKALE IMMOBILIAW 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 l y s u p p l e m e n t o n r e 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 • MARCH 5-11, 2012
Anchor tenant
at Enterprise
Park
Automotive electronics
and technologies supplier
Delphi Poland has leased
8,500 sqm in developer
Avestus Real Estate’s
Enterprise Park office
complex, construction on
which is now underway in
Kraków’s Podgórze
district. The tenant will
take up space on four
floors in two buildings
comprising the first
phase of Enterprise Park.
This phase, which will be
spread over 15,000 sqm,
is expected to obtain its
occupancy permit in
September this year.
LPP brands
in Gdynia’s
Wzgórza mallBrands of the LPP
clothing company will
open their stores in the
under-construction
Wzgórze shopping center
project in Gdynia. The
company has taken up
3,500 sqm of space in the
70,000-sqm mall.
The Wzgórze project,
which involves the
extension of an existing
retail facility, is being
developed by Mayland
Real Estate. Construction
on the development
launched in October last
year and is scheduled to
finish in Q3 of 2013. ●
Office property
HB Reavis Group acquiresInflancka plot in central WarsawDeveloper LubasaPolska was originallyplanning its GdaƒskiBusiness Court at thesite
HB Reavis Group hasacquired approximately 28,700sqm of land located on ul.Inflancka in Warsaw’s centraldistrict from Spanish develop-er Lubasa. The value of thetransaction has not beenrevealed but is said to havebeen one of the largest single-asset deals in the capital inrecent years.
“The Inflancka site was oneof the best and most desiredWarsaw development sites andwe would like to congratulateboth sides on concluding sucha successful transaction,”Miko∏aj Martynuska, directorof development consultancy atCBRE, which brokered thedeal, said in a statement.
Originally, Lubasa intend-ed to develop its Gdaƒski
Business Court office projectat the site, but the troubledinvestment was neverlaunched. The property holdsa building permit, with HBReavis planning to announce
the details of its scheme forthe site within the next fewweeks. It says it will start con-struction in H1 of this year.
The first phase of thedevelopment is scheduled to
be completed in the secondquarter of 2014. By that time,the company, which is nowbuilding Konstruktorska Busi-ness Centre in Warsaw, is alsoexpected to launch construc-
tion on its €110 millionWarszawa Zachodnia schemein the city.
“The acquisition has been alogical conclusion of our con-tinuing interest in the Polishproperty market. This primeasset is a desired addition toour already very extensiveproject pipeline in Poland,”Stanislav Frnka, CEO of HBReavis Poland, said in a state-ment.
“Furthermore, this transac-tion proves that the underlyingfundamentals of our group arestrong and financially soundwith long-term commitment tothe CEE market and beyond,”Mr Frnka added.
Established in 1993, HBReavis is an international com-mercial property developeroperating in Croatia, theCzech Republic, Hungary,Poland and Slovakia. Thecompany currently developsand manages assets worth atotal of €1.3 billion.
Adam Zdrodowski
Galeria EMKA mall in Koszalin to double its space in Q3 2014The Galeria EMKA shoppingcenter project in Koszalin,Zachodniopomorskie voivod-ship, will see its leasable retailspace increased from the cur-rent 15,000 sqm to 30,000 sqmby the third quarter of 2014.
Jones Lang LaSalle has justbeen appointed the exclusiveleasing agent of the extensionof Galeria EMKA, whichbelongs to LCP Properties. Thecompany will also advise theinvestor on the re-modeling ofthe existing part of the mall.
“We would like to confirmour intention to continue the
investment in and moderniza-tion and extension of GaleriaEMKA as a priority project inour portfolio,” James Fife,CEO of LCP Properties inPoland, said in a statement.
“We are very excited tohave the opportunity to par-ticipate in an assignmentwhich has a chance to trans-form the gallery into the mostimportant shopping center inthe city,” stated Gra˝ynaMelibruda, associate directorin the retail agency of JonesLang LaSalle.
She added that the Galeria
EMKA project would get amore comprehensive tenantmix which will make its fash-ion offer more attractive. Themall will have a larger diningoffer and will also see theopening of new leisure facili-ties.
Opened in 2002, GaleriaEMKA currently houses 100stores and points of serviceand offers parking spaces for550 cars. Major tenantsinclude Reserved, Rossmann,Empik, Sano and RTV EuroAGD.
Adam Zdrodowski
HB Reavis buys land . . . . . . . . .11
Galeria EMKA expansion . . . . .11
Euro 2012 progress . . . . . . . . . .13
Investment land . . . . . . . . . . . . .14
Warsaw office market . . . . . . .15
PHN plans . . . . . . . . . . . . . . . . . .16
Polish cities . . . . . . . . . . . . . . . . .17
Property-related stocks . . . . . .17
Investor advice . . . . . . . . . . . . . .19
WSE trends . . . . . . . . . . . . . . . . .20
MIPIM events . . . . . . . . . . . . . . .22
In this issue
1514
Land deals in Warsaw this yearwill exceed the nearly z∏.1 billion done in 2011
The Polish capital now features the second-mostactive office market in Europe
PUBLISHER VALKEA MEDIA SA EDITOR-IN-CHIEF ANDREW KURETH ([email protected]) MANAGING DIRECTOR MONIKA STAWICKA
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The 28,700-sqm plot was originally meant to house the Gdaƒsk Business Court project
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The Galeria EMKA shopping center currently features
15,000 sqm of GLA
SPECIAL MIPIM EDITION
MARCH 5-11, 2012 www.wbj.pl 13
Euro 2012
A work in progressWith three months togo before Euro 2012begins, LokaleImmobilia assessesPoland’s readiness forthe event
When UEFA president MichelPlatini announced in April 2007that Poland and Ukraine wouldco-host Euro 2012, there werereal fears among many Polesthat the challenge of moderniz-ing or building new stadiums,highways and accommodationwould prove to be an almostimpossible task.
Concerns were understand-able given the state of the coun-try’s transport infrastructureand the fact that three of thetournament’s four stadiums didnot even exist.
However, just last weekPoland’s Sports Minister Joan-na Mucha told journalists at apress conference held to mark100 days until the tournament’sstart date, that “Everything isgoing as planned.”
But is that really the case?
Match day seatsThe program to build stadiumsin time for the championshiphas certainly been a success,since all venues are now com-
plete. Yet according to Miko∏aj
Martynuska, director of devel-opment and consultancy atCBRE Poland, problems maybegin to surface after the tour-nament.
“The stadiums were notproperly designed to servefuture needs,” Mr Martynuskasaid.
“At the National Stadium inWarsaw there are thousands ofsquare meters of commercialspace not leased and I am con-cerned they serve short-termprojects but do not meet long-term requirements.”
The road to victoryPoland’s program to build ade-quate road infrastructure in timefor Euro 2012 has without adoubt been the most problemat-ic aspect of the country’s prepa-rations, plagued as it has been bynumerous delays caused by fac-tors including flooding and con-tractual disputes.
In February the country’sMinister of Transportannounced that both the A1(which will connect Gdaƒsk onthe Baltic Sea to the Polish-Czech border) and the A4(which will connect Poland withboth Germany and Ukraine)highways will almost certainly
not be fully ready before thestart of the tournament.
The government has sinceannounced that cars will be ableto use certain sections of high-ways that lack planned facilities,including petrol stations andsound barriers, as long as theroads in question are deemedsafe by authorities.
According to experts whospoke with Lokale Immobilia,delays were to be expectedgiven the ambitious nature ofthe transport infrastructureproject, but the main positive isthat the country will eventuallyhave far superior transportinfrastructure than it wouldhave had without Euro 2012.
However, Mr Martynuskadid say “the biggest concern isthat the transport infrastructurewas prepared only with theEuros in mind ... we can’t justlook at it being about Euro2012.”
A place to stayBy the end of 2011, Polandoffered 2,106 officially licensedhotels with 201,360 beds, arecent report by Cushman &Wakefield shows. This repre-sents a 6.5 percent year-on-yearincrease in capacity.
According to Dorota Mali-nowska, a hospitality consultant
at Cushman & Wakefield, theincrease in supply was in linewith what could be expected ina normal year. This is becausemany of the hotel projects thatwere proposed after Poland wasawarded the right to co-hostEuro 2012 were never realizeddue to the financial crisis of2009.
However, Ms Malinowskadoes not expect there to be anyshortage of places to stay duringthe tournament.
“I would say there won’t be
a problem. We already knowthere are enough rooms for theteams and UEFA officials ...with fans it could be an issue onsome specific days but consider-ing the variety of lodgingoptions, hotel supply is expect-ed to meet the demand,” shesaid.
Waiting gameIt certainly hasn’t been easy forPoland to prepare itself to co-host Euro 2012. But in terms ofproviding venues and accom-
modation, as well transportingfans between its major cities, itseems the country is now rela-tively well prepared, or at leastas prepared as it could be in thetime available.
The real success of the proj-ects will depend on their long-term sustainability and theimpact they have on the futuregrowth of business in the coun-try. Only time will tell if theEuro 2012 project will bedeemed a success.
David Ingham
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Gdaƒsk’s PGE Arena was officially opened in August 2011
LOKALE IMMOBILIA – SPECIAL MIPIM EDITION
MARCH 5-11, 2012LOKALE IMMOBILIA – SPECIAL MIPIM EDITION14 www.wbj.pl
Investment land
Demand for investment land in Warsaw on the riseThe total value of 2012transactions in thecapital is expected toexceed last year’s sumof almost z∏.1 billion
The demand for investmentplots in Warsaw has been onthe rise in recent months, withdevelopers having spentalmost z∏.1 billion on landacquisitions in the city in 2011.According to real estate advi-sors who deal with land trans-actions, the volume is likely tosee a further increase this year.
Daniel Puchalski, an asso-ciate director at Colliers Inter-national, said the market isnow bouncing back after thecrisis, with both supply of anddemand for land seeing anincrease. “I am 90 percent sure
that the 2012 transaction vol-ume will be higher than lastyear’s,” he said.
He added that the price ofland has now stabilized andaccounts for 15-20 percent ofthe total investment value,measured per sqm of leasableand sqm of usable space in thecase of office and residentialprojects, respectively. This is alevel that is considered “nor-mal” in the property market,he said.
In the office market, thismeans land owners currentlyexpect z∏.650-2,500 per sqm ofGLA that can be developed onplots located outside the citycenter. In Warsaw’s CentralBusiness District, the pricesrange z∏.2,000-4,000 per sqm ofleasable office space, MrPuchalski said.
Large dealsSignificant levels of residentialdeveloper activity, large vol-umes of individual transac-tions and a focus on estab-lished locations in Warsawhave characterized the capi-tal’s land market of late, saidMiko∏aj Martynuska, directorof development consultancy atCBRE.
He noted that among landdeals carried out in 2011 weretransactions involving JWConstruction’s takeover of asite in the Wola district forapproximately z∏.174 millionand Dom Development’sacquisition of land in ̊ oliborzfor some z∏.168 million.
“We expect that this trendwill also prevail in the courseof 2012. However, it hasalready been noticed that an
increased level of investmentactivity will be registered inthe office sector,” Mr Mar-tynuska said.
He added that a notableexample of this is the recentacquisition of the GdaƒskiBusiness Court developmentsite in Warsaw’s central dis-trict. Slovak developer HBReavis recently took over thistroubled investment fromSpanish company Lubasa.
“The transaction, complet-ed in February 2012, will prob-ably be one of the largest sin-gle-asset land deals of the lastfew years,” Mr Martynuskasaid. The exact value of thetransaction has not yet beenrevealed.
Transactions galoreMany more transactions areexpected to take place in War-saw this year. Colliers Interna-tional’s Puchalski pointed tothe growing popularity of theWola district where, he esti-mates, plots worth a total ofover z∏.200 million will be soldthis year.
Another z∏.100-120 millionwill be invested in Ochota andOk´cie, while the LowerMokotów area will accountfor some z∏.30 million. “Thelatter figure will increase toover z∏.100 million if the sale
of land currently belonging todeveloper Sando comes tofruition,” Mr Puchalski said.
Leading Polish and inter-national developers alreadypresent in Poland will remainthe most active players. How-ever, a number of newcomersto the market are also expect-ed to execute their first invest-ments in the office and resi-dential sectors, CBRE’s Mar-tynuska said.
Both he and Colliers Inter-national’s Puchalski men-tioned the growing role ofbanks in the Warsaw landmarket. “We also expect that2012 may finally become ayear when the banking sectorinvolved in the developmentmarket will become an impor-tant player,” Mr Martynuskasaid.
Downtown dearthAccording to Mr Puchalski,the so-called “near” and “far”Wola areas currently featureland on sale that would allowfor the development of200,000 sqm and 300,000 sqmof leasable office and usableresidential space, respectively.
Other locations in Warsawwith considerable develop-ment potential include Ok´cieand the area around Al. Jero-zolimskie between ul.
¸opuszaƒska and RondoZes∏aƒców Syberyjskich. Inboth of these areas there isavailable land that wouldallow for the construction ofapproximately 500,000 sqm ofspace.
Little land will changehands in the city center in theupcoming months. One of thefew deals, the details of whichare to be announced in thenext few weeks, will involvethe sale of a downtown plotfor approximately z∏.40 mil-lion.
City Hall should announcea tender for the sale of aninvestment plot on the capi-tal’s Plac Defilad in autumn,but otherwise the prestigious-ly located area around thecapital’s Palace of Culture andScience will likely continue tosuffer from problems includ-ing complicated ownershipissues.
“I know at least fourinvestors who would be inter-ested in acquiring land on PlacDefilad,” Mr Puchalski said,adding that in his opinion themuch-anticipated develop-ment of new high-rise projectsnearby, on the eastern side oful. Emilii Plater will not com-mence within the next fiveyears.
Adam Zdrodowski
Investor Location, district Value (z∏. millions)
JW Construction ul. Kasprzaka, Wola 174
Dom Development ul. Powàzkowska, ̊ oliborz 168
Echo Investment Hotel Mercure, CBD 125
Skanska Property Poland ul. Ostrobramska, Praga Po∏udnie 110
Echo Investment ul. Konstruktorska, Mokotów 63
Land deals
Selected major land transactions signed in Warsaw, 2010-2011
Source: Colliers International, CBRE
MARCH 5-11, 2012 www.wbj.pl 15
Office space
Warsaw office market – further growth in 2012The Polish capital isnow the second city inEurope in terms ofoffice constructionactivity
The office market in Warsawsaw a rebound in 2011 withsector analysts saying growth isset to continue this year. ThePolish capital has recentlyrecorded a major rise in leaseactivity to which developersare already responding byannouncing increasingly ambi-tious development plans.
Capital dominanceAccording to CBRE’s Poland
Office Destinations 2012report, Warsaw is now the sec-ond-most active market inEurope in terms of the devel-opment of new office space,ranking above Moscow andlower only than Paris.
“Although Warsaw is farbehind Western Europe interms of total office stock,CBRE underlines that thecapital of Poland is ranked assecond in Europe in terms ofoffice construction activity,with over 700,000 sqm underconstruction or planned,” thereport said.
Joanna Mroczek, directorof research and consultancy atCBRE, noted that the city is
currently seeing massive infra-structural work, including theconstruction of a new bridgeand a new subway line, andthat its image should also beenhanced due to the Euro2012 soccer championships.
Warsaw also saw highinvestment activity in 2011, instark contrast to the situationin Poland’s regional cities.According to a recent reportby Cushman & Wakefield,only one out of the 19 salesagreements for office build-ings last year was signed out-side the Polish capital.
“The stock of modernoffice in Warsaw significantlyexceeds the total stock of mod-ern offices located in majorregional markets,” said Micha∏St´pieƒ, a senior consultant inthe research and consultancydepartment of Savills.
He added that the capitalnow accounts for approxi-mately 64 percent of the totalmodern office stock in Poland.Admittedly, the share ofregional cities is growing withthe share of Warsaw expectedto decrease to approximately60 percent by the end of 2013.
Development boom“Nevertheless, it doesn’t meanthat the development activityin Warsaw is slowing down.
The new supply of offices isestimated at around 225,000sqm in 2012 and even up to280,000 sqm in 2013,” MrSt´pieƒ said.
“Warsaw is a clear leader interms of construction activitywith almost 630,000 sqm ofmodern office space under con-struction, including a 100,000-sqm tower planned for 2015,”CBRE’s Mroczek said.
She added that the capitalhas recently recorded some ofthe best leasing demand andvacancy rate results on thecontinent. “Given the highnumber of inquiries registered
both from existing tenants andnewcomers, 2012 should alsobe spectacular in terms ofdemand in Warsaw,” MsMroczek said.
Arguably among the mostimpressive of the new projectswill be the office towers thatare planned for downtownWarsaw. A number of thesehave recently been announcedby developers and investorsincluding BBI Development,Echo Investment and PHN.
“Our preparatory activitiesaimed at the introduction tothe market of the project onAl. Jana Paw∏a II are proof of
our conviction about thedevelopment potential of thecapital,” said Waldemar Lesi-ak, office and hotel spacedepartment director at EchoInvestment.
He added that his companyis also in the process ofpreparing two other largeoffice investments in Warsawwhose total leasable space willamount to some 80,000 sqm.“Warsaw is the most impor-tant office market in Polandand so we are interested inobtaining new schemes in thecapital.”
Adam Zdrodowski
SH
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Warsaw accounts for approximately 64 percent of Poland’s modern office stock
0
300,000
600,000
900,000
1,200,000
1,500,000
Pragu
e
Amste
rdam
Madrid
Sofia
Berlin
Frank
furt a
m Main
Brusse
ls
Londo
nVie
nna
Moscow
Warsaw
Paris
(Ile-d
e-Fran
ce)
Big plans Office space planned in major European cities, 2012-2013
Source: CBRE
LOKALE IMMOBILIA – SPECIAL MIPIM EDITION
MARCH 5-11, 201216 www.wbj.pl
SEGRO
Industrial Park
Wroc∏aw tenant
Parcel delivery services
provider DPD Polska has
taken up a 7,000-sqm
cross-dock terminal that
will be built within the
first phase of the
planned SEGRO
Industrial Park Wroc∏aw
logistics project in
Lower Silesia.
Scheduled to be
delivered in Q1 of 2013,
the scheme will be the
first logistics project of
developer SEGRO in the
Lower Silesia region.
The company will build
the scheme in
partnership with state-
owned real estate
holding PHN.
Mondi stays at
PointPark
MszczonówContainerboard and
sack-paper producer
Mondi Warszawa has
renegotiated its lease
agreement for 3,600 sqm
of space at developer
PointPark Properties’
PointPark Mszczonów
logistics park in
Mszczonów near Warsaw.
The deal was brokered by
Colliers International. ●
PHN IPO
Waiting for the right momentThe state hopes tofloat real estateholding group PHNthis year, but analystssay it’s still unclearprecisely what theentity will bring to themarket
Poland’s Treasury Ministry ishoping the right moment tolaunch the initial public offer-ing of the Polish Real EstateHolding Group (PHN) willfinally present itself at somepoint this year.
Citing unnamed sources,daily Parkiet recently reportedthat the IPO of the state-owned real estate companymay take place in June. Con-tacted by Lokale Immobiliahowever, Treasury spokesper-son Magdalena Kobos said noconcrete date for the WarsawStock Exchange debut hadbeen set, but that the ministryhopes to float the company“some time during this year.”
The Treasury created PHNin 2011 by grouping together180 diverse real estate hold-ings whose assets include morethan 1,300 hectares of unde-veloped land. Many of theseare located in the vicinity ofmajor transportation linksthroughout Poland. The com-
pany also owns numerousbuildings, including the Intra-co tower, one of Warsaw’s old-est skyscrapers.
Valued by analysts at z∏.2.8billion, the state could poten-tially add more properties toPHN’s portfolio, thereforemaking it more valuable aheadof its IPO. PHN CEO Woj-ciech Papierak has said thecompany could potentiallyfetch up to z∏.3 billion.
However Ms Kobos saidthe “package of shares [thatwill be offered] and the moneywe will get from the IPO willdepend on the market situa-tion.”
Reuters recently reportedunnamed sources as saying theTreasury may sell part of thecompany publicly on the stockexchange and part to a realestate fund, to ensure it meetsits z∏.10 billion privatizationtarget for this year. Inresponse, the Treasury’sKobos told Lokale Immobiliathat “all investors can takepart in the process of the IPO,there is no limitation.”
Uncertain marketAnalysts are nevertheless farfrom certain that the equitymarket will be stable enoughto support the IPO this year.“We don’t know yet if market
conditions will even allowPHN to go public,” saidAndrzej Kasperek, an analystat UniCredit.
“We also don’t know whatthe equity story is behind thecompany. There are many realestate companies on thebourse, so we have to ask:What is the company bringingthat is new? At present it isunclear where the value is andhow management will releasethis value for shareholders,”
he added.The firm’s CEO, Mr
Papierak, has in the past moot-ed the idea of turning the com-pany into an investment firm,but since PHN owns so muchland, analysts say it wouldneed to develop this to realizethe firm’s full potential.
Diverse holdingsCertainly, PHN has shown awillingness to engage in devel-opment projects, either on its
own or with sector partners,and already has a number ofdiverse schemes underway orin the planning stage.
In partnership with RealEstate Investment TrustSEGRO, PHN will developthe SEGRO Industrial ParkWroc∏aw logistics project on aplot it owns in Lower Silesia.The development will sit on 10hectares of land and comprise40,000 sqm of usable spacewhen it is delivered in the firstquarter of 2013.
Among other projects,PHN is also planning to builda 150-meter skyscraper on ul.Âwi´tokrzyska in Warsaw.Called PHN Tower, thescheme will offer a total areaof 60,000 sqm and functioneither as an office or as a com-bined office-hotel project.
While PHN may not be astreamlined, sector-specificdeveloper in the convention-al sense, the sheer range ofwell-located assets it ownsand the investment opportu-nities these afford means thecompany is well-placed togenerate income. Only timewill tell though if the equitymarket will be in the mood towelcome PHN’s potentiallymammoth IPO later thisyear.
Gareth Price
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The PHN Tower will be a 150-meter skyscraper
located on Warsaw’s ul. Âwi´tokrzyska
LOKALE IMMOBILIA – SPECIAL MIPIM EDITION
Choosing a Polish city to invest in
MARCH 5-11, 2012 www.wbj.pl 17
Security Closing % change 52-week 52-week % change Total Marketprice (week) low high (year) shares value
With perhaps the exception ofKraków and Gdaƒsk, Poland’ssecondary cities can still seemlike a mystery for investors.But an increasing number arepicking up on the potential ofcities such as ¸ódê, Wroc∏awand Poznaƒ. Although by nomeans the only ones, projectssuch as Sterlinga BusinessCenter and Green Horizonoffice building in ¸ódê, Poz-naƒ’s Business Garden andIntergrated Transport Center,and Wroc∏aw’s Synergy Busi-ness Park and Idylla shoppingcenter attest to the fact thatsecondary cities are clearly oninvestors’ radar.
WarsawThe capital is the center of mostof the nation’s political, admin-istrative, financial, and educa-tional institutions, and thecountry’s wealthiest city, whileremaining a relatively cheapplace to locate a business. Plansto develop new museums andskyscrapers in the city centerare expected to give Warsaw amodern look, bringing newoffice and service space to themarket at the same time.
The country’s largest seaport,Gdaƒsk is gradually turninginto a major European trans-port hub. Other thriving indus-tries there include oil andchemicals, pharmaceuticalsand cosmetics, IT, and manyothers. The Euro 2012 soccerchampionships have given thecity a new soccer stadium, thePGE Gdaƒsk Arena, as well asa second terminal at itsGdaƒsk Lech Wa∏´sa Airport.
KatowiceThe capital of Silesia is at theheart a region situated within600 km of Berlin, Bratislava,Budapest, Prague, Warsaw andVienna. A major revitalizationproject worth over z∏.1 billionis currently underway. Newpublic buildings, museums,
commercial and retail space,and a new road system are dueto be built as part of thescheme, which also includesthe complete revamping of thecity’s main railway station.
The city of Kraków is knownas one of Poland’s major cul-tural, historical and educa-tional centers. Major infra-structure investments cur-rently underway include roadrenovation, as well as the con-struction of a modern confer-ence center (KrakówCongress Center) and a newheadquarters for the localinvestor service center.
¸ódêLocated at Poland’s geograph-ical center, ̧ ódê lies within 200km of each of the country’seight other major cities. Con-struction on a multi-billion-z∏oty high-speed railway link isdue to reduce travel timesbetween Warsaw and ¸ódê tojust 75 minutes, and the A1and A2 motorways which runnorth-south and east-west,respectively, will intersect thecity. Many of ¸ódê’s post-industrial properties have beenrevitalized to serve moderncommercial and residentialpurposes.
Contact:¸ódê City Hall
Investor Relations Officetel. (+48) 42 638 59 38
Poznaƒ
Located halfway between Ber-lin and Warsaw, Poznaƒ isalready a popular transporthub, and the new 150 km sec-tion of the A2 motorway willultimately connect the city withthe German border, openingthe way for future visitors andinvestors. Already known forits cultural life, Poznaƒ saw itssoccer stadium upgraded forthe Euro 2012 soccer champi-onships, and will host sportingand cultural events during andafter the event.
The capital of Lower Silesia,Wroc∏aw is an important logis-tics hub, and has long enjoyed agood reputation among foreigninvestors. Arts, culture and
sports are also becoming drawsfor the city. Its new stadium willhost several matches during theEuro 2012 soccer champi-onships, for example, andWroc∏aw has also been selectedas European Capital of Culturefor 2016.
A good return on investmentKnowledge is the keyto cracking Poland’sreal estate market
In the World Bank’s DoingBusiness 2012 report, Polandranked 63rd out of 183 coun-tries in the world for doingbusiness, a figure which sug-gests there are some signifi-cant barriers to investing inPoland’s real estate market.
However, experts say theadvantages and potentialreturns far outweigh the disad-vantages for those consideringmaking an investment in thePolish property market.
Patrick O’Gorman, head ofCEE capital markets atCBRE, told Lokale Immobiliathat there are no specific lawsthat would inhibit an investor’sability to do business inPoland. Instead he feels thatthe main obstacle is a lack ofknowledge and understandingof how to do business in thecountry.
“Investors have to under-stand the Polish market andthis takes time,” he said.
“You definitely have toinvest the time to get to knowthe market and the peopleinvolved, and if you do thisthen the benefits are obvi-ous.”
Get the right adviceTomasz Puch, national directorof capital markets at JonesLang LaSalle, agrees thatunderstanding the market is thekey to making a solid invest-ment. He advises investors toget in touch with a good com-mercial advisor and legal firmas part of a first step towardsdoing business in Poland’s realestate sector.
Mr Puch explained thatalthough “there are no specificbarriers [to investing] in gener-al, there may be administrativeissues that need to be resolved.”
These administrative issuesmay include the lengthy proce-dure involved in getting the cor-rect permits, with Poland cur-rently ranked 160th in the worldfor dealing with constructionpermits, according to the WorldBank report. Other potentialproblems include the issue ofaccessing the correct data relat-ed to the investment process,which is why seeking profes-sional advice is a must for first-time investors in Poland.
Returns on investmentIn terms of the main advan-tages of the Polish real estatesector, the potential for a siz-able return on investment isseen as a major plus point for
foreign investors.“The fundamental factor is
the huge growth potential thatexists across all sectors,” MrO’Gorman said.
“On a property level, theoffice market is a particular sec-tor which provides a solidinvestment. We have seen a realsolid upswing in office take-up,particularly in Warsaw,” headded.
From a retail perspective,
strong economic growth inPoland in recent years hashelped increase consumerspending power and as a resulthelped maximize rent potentialfor retail outlets and shoppingmall developments.
“The key element thatmakes Poland attractive is thestrong economic fundamentals,particularly in retail,” Mr Puchsaid.
According to the World
Bank report, Poland does scoreparticularly highly in terms ofaccess to credit, an importantfactor in today’s environment.
So with the correct profes-sional advice, a genuine under-standing of the Polish marketand the right investment proj-ect, Poland really does offer agreat location for foreign firmsseeking to ensure a return oninvestment.
David Ingham
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LOKALE IMMOBILIA – SPECIAL MIPIM EDITION
MARCH 5-11, 2012LOKALE IMMOBILIA – SPECIAL MIPIM EDITION20 www.wbj.pl
Warsaw Stock Exchange
Real estate stocks rising in 2012Poland’s major realestate players areseeing a recovery intheir stock prices
Since the start of the new year,many of Poland’s top proper-ty-related stocks haveincreased their share pricessignificantly.
The improvement comesafter a long and steep declinethat plagued the sector formost of last year. In 2011, thereal estate indices on the War-saw Stock Exchange, the
WIG-deweloperzy (develop-ers) and WIG-budownictwo(construction) were down54.72 and 51.29 percentrespectively.
“In 2011, [these two] werethe worst indices on the War-saw Stock Exchange,” saidZbigniew Obara, an analystfrom Alior Bank.
“In the case of residentialdevelopers, such decreasesoccurred, among other things,because of investor concernswith regard to changes intro-duced in 2011, some from the
recommendations by [regula-tors] which limited the ‘Familyon its Own,’ [government sub-sidy] program, which caused adrop in demand in the primarymarket due to lower loan op-portunities for buyers,” he said.
But commercial developerswere not without problemseither. “Investors’ expecta-tions about the economicslowdown and an increase inyields translated into a down-ward valuation of real estate,”Mr Obara added. Construc-tion companies were largely
affected by the same environ-ment, he said.
Recovery modeHowever, looking at the stockperformances of companies inthe sector over the past twomonths, it appears many areentering recovery mode. Near-ly all of the companies thatsaw their stock prices dropover the past year – some by asmuch as 60 percent – are nowinching higher. And it appearsthat trend is set to continue.
“The beginning of the yearis bringing a decidedly vastimprovement in sentiment andI would expect that the rates ofreturn on shares of develop-ment companies in 2012 willbe among the highest. Thereason for this is the over-selling of shares of companiesin this sector in 2011,” MrObara said.
Highly undervalued during2011, real estate companiesare finally bouncing back onthe Polish bourse. The sectorappears healthier overall sincethe start of the year with boththe WIG-budownictwo andthe WIG-deweloperzy up11.25 and 13.86 percentrespectively over the past twomonths.
Only a few of the top com-
panies have so far recordeddrops in their overall shareprices since the beginning of2012. These include CelticProperty Developments,Energopol Po∏udnie, GlobeTrade Centre, PBG, Ulma andUnibep.
This year’s rebounds havebeen most noticeable for com-panies such as Rank Progress,Hydrobudowa, Trakcja andPol-Aqua, which have seentheir share prices rise by 65.56,65.33, 64.20 and 57.06 percentrespectively.
Signed contracts for work in2012 and higher profits have
contributed to their share priceincreases. Rank Progress, whichrecently sold Galeria T́ cza inKalisz to Blackstone for z∏.154.3million, has five new projects inthe pipeline. The company alsoincreased net profits to z∏.95.39million for the first ninemonths of 2011 – an increase of23.4 percent y/y. Moreover, aconsortium controlled by Pol-Aqua recently signed an agree-ment to build the S8 express-way for around z∏.1.13 billionand won a tender for railwaywork for LCS ¸ukow forz∏.427.39 million.
Ella Pa∏ka
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Construction and development companies have fared better on the WSE recently
0
10
20
30
40
50
60
70
80
Erbud
ERB
Polno
rd PN
D
Dom D
evelop
ment D
OM
Plaza
Center
s PLZ
Gant G
NT
LC Corp
LCC
Pol-A
qua P
QA
Trakcj
a TRK
Hydrob
udow
a HBP
Rank
Prog
ress R
NK
Re-building valueTop ten performing real estate stocks since January 1, 2012
Source: Warsaw Stock Exchange
MARCH 5-11, 2012LOKALE IMMOBILIA – SPECIAL MIPIM EDITION22 www.wbj.pl
Unidevelop-
ment to build
in Warsaw
Developer
Unidevelopment, a
subsidiary of WSE-listed
construction company
Unibep, will build a
multifamily residential
project called Lykke on
ul. Berensona in
Warsaw’s Bia∏o∏´ka
district. Construction on
the complex, which will
comprise nine buildings
with a total of 165
apartments, is
scheduled to launch in
the second quarter of
this year.
ATAL launches
Kraków
projects
Developer ATAL has
launched construction on
its Lindego Park and City
Towers residential
projects in Kraków.
Located in the city’s
Bronowice and Czy˝yny
districts, the investments
are valued at a total of
almost z∏.150 million.
The Lindego Park
scheme will comprise
seven four-storey
buildings offering a total
of 154 apartments.●
MIPIM 2012
CEE-related events you shouldn’t miss
Tuesday, March 6
10 am – 11 amMarkets, malls and mainstreets – where is the future ofEuropean retail investment?
Location: Palais des Festivals,Le Corbusier room, Level 01
The key speaker at thisevent, which aims to answer awide range of questions relat-ed to Europe’s retail market,is Josip Kardun, the deputymanaging director of ECE, aEuropean market leader inretail real estate development.
2:30 pm – 3:30 pmMore to come from Poland’sInvestment Market
Location: Palais des Festivals,Hoban room, Level 3
This conference seeks touncover whether investmentdemand is starting to outstripdevelopment supply inPoland and what regionaldemand is like in Poland’smajor cities.
4 pm – 5 pmCEE investment: where is thefinance coming from andunder what conditions?
Location: Palais des Festivals,Hoban room, Level 3
With investors sitting onthe sidelines and fewer bankswilling to lend money forinvestment purposes, whatshould investors and develop-ers expect in the upcoming12-18 months? TomaszTrzós∏o, international directorat Jones Lang LaSalle, willseek to provide the answers.
Wednesday, March 7
9:30am – 10:30amPassion for Real Germany –60 places to see before you …invest
Location: Palais des Festivals,Auditorium H, Level 3
What’s hot and what’s notin MIPIM 2012’s country ofhonor? IVG Research givesvaluable and focused insightsinto the current developments
on the German market.
4 pm – 4:40 pmThe Czech Republic – TheDynamic Hub of CentralEurope: The potential of sci-ence and research centerprojects in the Czech Repub-lic
Location: Palais des Festivals,Agora, Level 01
This event, organized bythe city of Prague, aims tohighlight the current role ofthe Czech Republic as adynamic center for scienceand research centers.
Thursday, March 8
10 am – 10:45 amRiga – Smart EuropeanInvestment
Location: Palais des Festivals,Agora, Level 01
This seminar will provideinformation on investmentopportunities in Latvia’s capi-tal Riga. Among the keynotespeakers are Nils Usakovs,mayor of Riga and Uldis Jan-sons, the director of the city’sdevelopment department.
3 pm – 4 pmFormer military real estate –attractive offer for foreign
investorsLocation: Palais des Festivals,Lerins Hall – Stand: LR 3.03
Presentation by the PolishMilitary Property Agencyabout selected investmentoffers as attractive proposalsfor foreign investors.
7:30 pm – 8:30 pmMIPIM Awards 2012 Ceremony
Location: Palais des Festivals,Grand Auditorium, Level 1
The most innovative, ambi-tious and exciting real estateprojects battle it out in theprestigious MIPIM awards.
Friday, March 9
10 am – 11.30 amWrap-Up Keynote address:Austerity-Stimulus, Risks-Opportunities: Fresh insightsand way forward
Location: Palais des Festivals,Le Corbusier room, Level 01
How should investorsapproach the market today?What strategies are investorspursuing for a brightertomorrow? This combinationof panelists’ research andinsights gathered duringMIPIM looks to provide theanswers. ●
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This year’s MIPIM international property tradefair takes place in Cannes from March 6-9.Below, Lokale Immobilia sets out the keymeetings that will be of particular significancefor those interested in the CEE region
MARCH 5-11, 2012THE LIST24 www.wbj.pl
Construction & Real Estate
Commercial Real Estate Developers - OfficeRanked by office investments completed in 2010 www.bookoflists.pl
Rank
Company nameAddressTel./FaxE-mailWeb page
Office investmentscompleted: total area
sqmOffice investmentscompleted overall
(sqm)Specialization
Key current investments: name(location; total space - sqm, rentablespace - sqm; class, completion year)
Largest investments completed in2010-2011: name (location; total
Notes: NA = Not Applicable, NR = Not Ranked, WND = Would Not Disclose. Research forthe The List was conducted in September 2011. Number of employees and ownership structureare as of August 2011. All information pertains to the companies’ activities in Poland. Companiesnot responding to our survey are not listed.
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 andtypographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Joanna Raszka,ul. Elblàska 15/17, 01-747 Warsaw, via fax to (+48) 22 639-8569, or via e-mail to [email protected]. Copyright 2011, Valkea Media SA. The List may not be reprint-ed or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.
Rank
Company nameAddressTel./FaxE-mailWeb page
Office investmentscompleted: total area
sqmOffice investmentscompleted overall
(sqm)Specialization
Key current investments: name(location; total space - sqm, rentablespace - sqm; class, completion year)
Largest investments completed in2010-2011: name (location; total
space - sqm, rentable space - sqm;class)
Total employees /Year established
Ownership: Polish /Foreign
Top local executive /Title
NR
ECC Real Estate Sp. z o.o.ul. Ostrobramska 75C, 04-175 Warsaw22 611-3700/22 [email protected]
WNDWNDWNDWND
22,500 Office, residential, retailbuildings
Office building (ul. 17 Stycznia, Warsaw; 2,500;1,530; B; WND)
Andersia Business Centre (Poznaƒ; 22,703;20,254; A; 2012); Nowy Âwiat Atrium (Warsaw;
6,500; 5200; A+; 2013-2014)WND
1401991
WNDJavier Errejón Sainz de la
MazaManaging Director
NR
Yareal Polska Sp. z o.o.ul. Krucza 16/22, 00-526 Warsaw22 331-3000/22 [email protected]
WNDWNDWNDWND
WND Office and residential buildings Oxygen Park (Warsaw; WND; 18,293; A; 2013) Cristal Park (Warsaw; WND; 10,300; A)23
2005WND
Yareal International - 100%Eric Dapoigny
President
1st half of 2011 / 2010 / 2009 / 2008
MARCH 5-11, 201226 www.wbj.pl BUSINESS IN BRIEF
Poland infor windenergyboom?Investments in offshore windfarms to the tune of aroundz∏.680 billion are in the works,according to calculations bydaily Rzeczpospolita.
The paper, citing unnamedsources, reports that the Polishgovernment is currently pro-cessing 54 applications frominvestors who are seeking todevelop wind power projects.
Domestic firms that havesubmitted applications includeutility PGE, smaller rivalEnerga, oil refiner PKN Orlenand Kulczyk Investments. For-eign firms that have expressedan interest in building offshorewind farms in Poland includeBelgium’s DEME, Portugual’sEDPR, Spain’s Iberdrola andDanish Dong Energy.
The daily calculated thatthe size of the wind-farminvestment proposals rangefrom 700 to 1,500 Megawatts.Assuming that the average ofthe 54 projects will be 1,000MW, and knowing that thecost of a 1,000-MW offshorewindmill is around €3 million,Rzeczpospolita puts the totalvalue of potential investmentsat €162 billion, or about z∏.680billion.
The first farms could bebuilt around 2018, the dailyadded.
Alice Trudelle
Polish billionaire to look for rare earth metals in Mongolia?Roman Karkosik, Poland’ssixth-richest man according toForbes’ 2012 annual ranking,may be preparing to enter theMongolian market in search ofraw materials. The foraywould be made possiblethanks to a number of M&Asthat the businessman hasmade or plans to make.
Citing unnamed sources,daily Puls Biznesu reportedthat Mr Karkosik was mullingthe acquisition of WSE-listedDolnoÊlàskie Surowce Skalne(DSS), a leading Polish
crushed aggregate supplier forPoland’s roads and motor-ways. As part of its own expan-sion strategy, DSS acquired aconcession in Mongolia’s GobiDesert and a 100 percent stakein a Mongolian company inJuly 2011. DSS is hoping tofind rare earth metals, com-monly used in electronicdevices, military guidance sys-tems, wind turbines and solarpanels.
According to Puls Biznesu,Mr Karkosik’s acquisition ofPBG at the end of February
would give him an advantagein the search for suchresources in Mongolia. PBG, aPolish contractor providingdomestic and foreign geophys-ical exploration services for oiland gas, minerals, and geot-hermal sources, has in the pastbeen engaged in projects inLibya, Tunisia, and morerecently in the Philippines.
Mr Karkosik owns overhalf the stock in WSE-listedBoryszew, one of Poland’slargest industrial groups.
Alice Trudelle
place, had been owned by thePolish State Treasury and sev-eral utilities, including PGE,Elektrim and Energa.
The WSE’s target is to buyover 90 percent of POLPXshares. Last week it acquired82.66 percent of shares forz∏.179.4 million, and hasalready signed agreements toacquire a further 7.68 per-cent.
With the takeover,POLPX becomes the WSE’sfifth trading platform. TheWarsaw bourse already runstrading platforms including itsmain market, its NewConnectalternative market, its Cata-lyst bond market, and its PoeeRynek Energii electric energytrading platform.
“We are closing yet anoth-er stage of integrating thenational trading and clearinginfrastructure on the capitaland commodity markets,”said Mr Sobolewski.
Poland’s competitionwatchdog gave the green lightfor the deal in January thisyear.
Alice Trudelle
WSE acquires PolishPower ExchangeThe Warsaw Stock Exchangelast week finalized the knottyprocess of acquiring themajority of shares in thePOLPX power exchange.
“It was a complex dealsubject to almost all condi-tions, restrictions and formal-ities possible in an acquisi-tion,” WSE CEO LudwikSobolewski said in a state-ment.
POLPX, which runs thecommodity exchange whereelectric energy turnover takes
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MARCH 5-11, 2012 BUSINESS IN BRIEF www.wbj.pl 27
Polish Q4GDPgrowthaboveforecastPoland’s economy grew by 4.3percent year-on-year in thelast three months of 2011, onlyslightly higher than marketexpectations and confirmingPoland’s economy is on solidground, data showed lastThursday.
Poland’s economy grew by4.2 percent in the third quarterof last year and a preliminaryestimate of the statistics officeput 2011 full-year growth at4.3 percent.
Analysts polled by Reutersexpected fourth-quartergrowth at 4.2 percent in annu-al terms. The zloty gained 0.1-0.2 percent against the euroafter the data were released,while bond yields fell by 3-4basis points.
In reaction to the news,Anna Zieliƒska-Gl´bocka, amember of Poland’s MonetaryPolicy Council, said, “There isa chance that GDP growth [in2012] will be higher than 2.5percent, it may stand ataround 3.0 percent.”
AK
Bank controlling in the light of the Polish ‘Developer’ law
Expert commentary
Legislation in Poland will soon besupplemented by a law providingcomprehensive consumer pro-tection for the buyer of a houseor apartment. Sales contractsbetween the purchaser anddeveloper will therefore soonoffer improved legal protection.
According to Polish bankrupt-cy law, the assets of an insolventdebtor – here the developer –are, in cases of liquidation insol-vency, sold by the liquidator in atender. Under the legislation thatwill soon be replaced, the situa-tion of the consumer – here thepurchaser of an owner-occupiedapartment or single-family home– is difficult in such cases. Thepurchaser’s claims in the form ofadvanced payments are repaidonly according to a legal catego-ry that puts the purchaser in thesame bracket as creditors, suchas construction companies orbuilding material suppliers. By
contrast, the claims banks haveon developers to whom theyhave given mortgages have pri-ority in Polish law. This meansthe purchaser has a very highrisk of losing his or her claims foradvanced payments. Since thesale contracts to date are com-pleted only rarely by notarialauthentication, the purchaserdoes not get his or her propertyrights transferred. He may assertagainst the developer onlyindemnity claims, which weak-ens the position of the purchasersignificantly and, in case of thedeveloper’s insolvency, entailsthe complete or substantial lossof the advanced payments hehas already made.
Under the planned law change,the developer can choose to pro-tect the purchaser through:
• Closed housing fiduciaryaccount
• Open housing fiduciaryaccount and insurance con-tract / -guarantee,
• Open housing fiduciaryaccount and bank guarantee,
• Open housing fiduciaryaccount (4th option – changedby the Senate),
In the above cases banks havespecific, important monitoringrequirements. This arises fromthe fact that developers will beobliged under the new law tocreate for each of their projects afiduciary account in a bank. Thefiduciary account must exist forthe entire duration of the devel-oper’s project and cannot be dis-solved. The funds credited to thefiduciary account may only beused by the developer for theproject in question, and thenonly if the developer carries outthe project as agreed in the rele-vant contract. The banks areobliged to make availableadvanced payments only if thecontractual requirements aremet by the developer.
In order to fulfil this statutoryobligation banks need to ensurethat constructors carry out theirduties according to the technicaland economic aspects of thecontract. In addition to the levelof work completed on the con-struction, the actual, or “intrin-sic” value of the quality of workcarried out must also be verifiedbefore advanced payments canbe made. This is reviewed duringa site inspection.
These reviews can be carriedout by banks, either on their ownusing specially trained staff, orby external competent and spe-cially authorized serviceproviders. International investors
and financiers have used compa-rable services for decades andalso use management and con-sulting services offered by theinternationally active KVL group.Its subsidiary, KVL Consult Pols-ka Sp z o.o., now also offers itsservices and expertise on thePolish market and especially forPolish banks. The KVL group (kvl-group.com), with its internationalstaff, is active in the core busi-ness of project management andrelated segments. It also worksin bank controlling, offering serv-ices related to:
• Scheduling/schedule review• Determination of construction
performance levels• Cost planning/budget monitoring• Quality management and mon-
itoring• Valuation/due diligence.
Services related to the so-called “bank controlling” ofdevelopment projects include thenecessary (and unannounced)inspection of sites, and the pro-duction of informative and sum-marized reports. Where it is nec-essary or desired, the client canalso be supported in enforcingobligations or claims against con-tractors. The KVL group has car-ried out bank controlling projectsin the residential, office and com-mercial, industrial, and systemsengineering sectors, as well as inthe transport and infrastructure(highways, railways, etc.) sec-tors. ●
www.kvlgroup.com
BROUGHT TO YOU BY KVL BAUCONSULT GMBH
Univ.-Prof. Dr.-Ing. Bernd Kochendörfer
Virgin to enterthe Polish mobile market?UK giant Virgin Mobile, theworld’s first mobile virtual net-work operator, is looking toenter the Polish market, report-ed daily Rzeczpospolita. A tele-coms blogger for the daily,Tomasz Âwiderek, wrote, citingunnamed sources, that Virgin islikely to begin operations inPoland in cooperation with P4,operator of the mobile networkPlay, the fourth largest mobiletelecom in Poland.
Virgin Mobile, mostly inpartnership with local compa-nies, has operations in Aus-tralia, Canada, Chile, France,India, South Africa, the UnitedKingdom and the UnitedStates.
Meanwhile, P4 announcedlast week that it is steadilygrowing its share of the thrivingPolish telecoms industry.According to P4 president Jor-gen Bang-Jensen, who dis-closed the company’s 2011results at the Mobile WorldCongress in Barcelona, lastyear Play’s client base expand-ed by 37 percent, reaching 7.8million people.
According to Mr Bang-Jensen, this gives Play a 14 per-cent share of the Polish mobilemarket. The firm also said that70 percent of users switchingcompanies over the last yearchose Play. AT, KA
KGHM triples revenue, gains
final approval for Quadra dealCopper miner KGHM hastripled its consolidated netincome in the fourth quarterafter the sale of its stake incellphone operator Polkomtel.The income in the same peri-od last year was z∏.1.3 billion,increasing in the last threemonths of 2011 to z∏.3.81 bil-lion. The figure exceeded thez∏.3.72 billion average estimatefrom analysts polled byBloomberg. Poland’s sole cop-per and silver miner reporteda yearly profit of z∏.11.3 billion.
Also last week, KGHM
received the go-ahead fromCanada’s Ministry of Industryfor its takeover of Canadiancopper miner Quadra. Thisrepresents the final conditionthat KGHM needed to meetbefore the transaction couldbe closed. KGHM will nowtake a 100 percent stake inQuadra, valued at CAD3 bil-lion (z∏.9.5 billion). The com-pany says the new assets willallow it to increase productionof mined copper by around 25percent this year, and eventu-ally by nearly 50 percent.
Meanwhile, last Friday theSejm, Poland’s lower house ofparliament, approved a newcopper and silver mining tax,which the government expectswill bring over z∏.2 billion tothe state budget annually from2013 and will be drawn mainlyfrom KGHM. The bill willnow go to the Senate, whichcould modify it and send itback to the Sejm for a newvote. The tax will come intoforce after it receives the pres-ident’s signature.
RG, KA
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Virgin could team-up with P4 in Poland’s mobile market
MARCH 5-11, 2012MARKETS28 www.wbj.pl
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Depreciationahead?
Currency report
The European Central Banklent €530 billion in three-year loans, known as LTROs,to 800 banks last week. Thissuccess of the program,which is designed to injectmoney into the financial sys-tem, helped boost Europeanstocks.
The EUR/USD, lifted bythe LTRO lending, attackedthe resistance at $1.3485,but, unable to break it,retreated to $1.32 with theoutlook set for a possiblelarger decline. Some blameUS Federal Reserve chair-man Ben Bernanke’s state-ment last week that thespeed of recovery in the USis “uneven and modest.”
Moreover, macroeco-nomic reports from euro-zone countries as well asfrom the US were worsethan those in January, possi-bly indicating that investorswill be forced to yield some
of their recent gains. The z∏oty remains one of
the strongest currencies sofar this year. GDP data sur-prised the markets, with thePolish economy growing by4.3 percent y/y in Q4 2011.Moreover, several invest-ment banks increased theirgrowth forecasts for Poland.The gains on the z∏otyextended, with theEUR/PLN reaching z∏.4.10(its lowest since August2011) while the CHF/PLNreached z∏.3.40 (lowest sinceJuly 2011). The USD/PLN,due to moves on theEUR/USD, didn’t changemuch
This week should bring acorrective movement for thez∏oty, but not higher thanz∏.4.18 against the euro. Inthe longer term, we shouldworry about oil prices, which,if they remain high, will slowthe recovery. ●
Adam Narczewski X-Trade Brokers DM SA
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Major indices
Top 5 Closing % change (week) 52-week high 52-week low
Change year to March 1: 5.78% 52-week low: 2,089.84
mWIG40 2,462.28 (March 1 close)
Change for the week: 0.71% 52-week high: 2,987.72
Change year to March 1: 12.42% 52-week low: 2,076.52
sWIG80 10,317.07 (March 1 close)
Change for the week: -1.01% 52-week high: 12,932.00
Change year to March 1: 19.91% 52-week low: 8,218.71
NewConnect 42.72 (March 1 close)
Change for the week: -1.50% 52-week high: 59.16
Change year to March 1: 2.96% 52-week low: 40.23
WIG-Banki 5,964.99 (March 1 close)
Change for the week: 1.22% 52-week high: 7,387.49
Change year to March 1: 7.61% 52-week low: 4,944.19
DJIA12,980.30 (Mar 1 close)
-0.03% (for the week)
CHANGE: 4.70%
(year to Mar 1 close)
52-week high: 13,005.04
52-week low: 10,404.49
NASDAQ2,988.97 (Mar 1 close)
1.08% (for the week)
CHANGE: 12.85%
(year to Mar 1)
52-week high: 3,000.11
52-week low: 2,298.89
S&P5001,374.09 (Mar 1 close)
0.78% (for the week)
CHANGE: 7.60%
(year to Mar 1)
52-week high: 1,378.04
52-week low: 1,074.77
FTSE1005,931.25 (Mar 1 close)
0.19% (for the week)
CHANGE: 4.06%
(year to Mar 1)
52-week high: 6,103.73
52-week low: 4,791.01
DAX6,941.77 (Mar 1 close)
1.94% (for the week)
CHANGE: 14.26%
(year to Mar 1)
52-week high: 7,600.41
52-week low: 4,965.80
NIKKEI2259,707.37 (Mar 1 close)
1.17% (for the week)
CHANGE: 13.40%
(year to Mar 1)
52-week high: 10,768.43
52-week low: 8,135.79
world stock indices
03.0
2
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341,000
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42,200
42,600
43,00003
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32,200
2,240
2,280
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2,360
2,400
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32,300
2,340
2,380
2,420
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2,500
03.0
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39,600
9,800
10,000
10,200
10,400
10,600
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06.0
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10.0
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01.0
341.0
41.6
42.2
42.8
43.4
44.0
03.0
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06.0
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07.0
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08.0
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09.0
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10.0
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13.0
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01.0
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5,800
5,880
5,960
6,040
6,120
6,200
Other indices
Mixed feelings
Stocks report
Investors started last weekwith mixed feelings. At theprevious weekend’s summitof G20 finance ministers, anappeal had been made thatthe EU support the IMFwith more funds to addressthe debt crisis and stimulatethe economy. Someinvestors interpreted this asa signal that the Europeaneconomy will not be able torecover without furtherhelp.
Most indices in Europeand the US lost more than 1percent, but the WSE didn’tdo too badly, reacting well topositive news from the UShousing market. The blue-chip WIG20 gained 0.06percent, while the mainWIG index lost 0.09 percent.
On Tuesday, the WIG20ended the day slightly higherthan at Monday’s close.Kredyt Bank was the star,with its share price rising by18 percent as investorsheard it would be merged
with BZ WBK. On Wednesday, US Fed-
eral Reserve chairman BenBernanke spoiled investors’moods when he warned theUS Congress of mountinginflationary pressures.Investors interpreted this asa sign that the Fed couldclose the tap on the money ithas been pumping into theUS economy. The WIG20ended the day 0.09 percentdown, while the WIG ended0.11 percent down.
Thursday was a roller-coaster ride with good macro-economic news from Poland(4.3 percent Q4 GDP growthversus the 4.2 percent expect-ed) but disappointing indus-try news from the US. TheWIG20 ended the day 0.2percent higher.
Friday also ended on amodestly positive note, withthe WIG20 closing 0.19 per-cent up while the WIGgained 0.25 percent.
Remi Adekoya
MARCH 5-11, 2012 SPORTS www.wbj.pl 29
Tennis
Radwaƒska wins in DubaiThe Polish star hasnow moved up to fifthplace in the latestWTA rankings
Poland’s top female tennisplayer, Agnieszka Radwaƒska,secured the eighth title of hercareer at the end of February,following a 7-5 6-4 victory overJulia Goerges at the DubaiDuty Free Open.
The 22-year-old fromKraków produced a com-manding display to overcomeher German opponent 2-0 inthe final and ensure shemoved up one place to fifth inthe latest WTA world rank-ings.
In the first round Ms Rad-waƒska faced a tough testagainst Aleksandra Wozniak,eventually overcoming theCanadian 6-1, 6-7, 7-5. Shethen dispatched both Israel’sShahar Peer and Germany’sSabine Lisicki in straight setsbefore facing Serbia’s JelenaJankoviç in the semi-final. Ms
Radwaƒska took the first setbut then lost the second to theworld number 8. The Polethen produced some of herbest tennis of the tournamentto take the decider 6-0.
After the match Ms Rad-waƒska said she was pleased tohave moved up one place inthe rankings but stated thather main goal of taking the
number-one spot was stillsome way away.
“I’m not really going tothink about it too much. I’mgoing to keep playing my gameand try to keep up my goodtennis, especially in big eventslike this. I just want to enjoymy tennis and try winningmatches,” she told reporters.
David Ingham
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National Stadium
Poland fails to winin National Stadium openerThe game endedgoalless despitechances for both sides
The Polish national soccerteam played its first-evermatch at the new National Sta-dium in Warsaw last Wednes-day night, but despite highhopes from the capacity crowdof 55,000, the friendly matchwith Portugal ended in a 0-0draw.
In a game of few chancesfor either side, the Portuguesedominated possession butfailed to turn their territorialadvantage into goals. Man-chester United winger Naniarguably had Portugal’s bestopportunity, but he squan-dered a one-on-one withPoland’s goalkeeper WojciechSzcz´sny.
The Polish team, playingwithout injured striker RobertLewandowski, never reallylooked likely to break thedeadlock. Adrian Mierzejews-ki and FC Köln midfielder S∏a-womir Peszko both hadchances, but neither playerwas able to capitalize.
Nevertheless, the Polishteam can take some heartfrom the result, considering itwas playing a team ranked 62places above it in the latestFIFA world rankings. More-over, Portugal features one ofworld soccer’s best players inReal Madrid’s Cristiano Ron-aldo. Admittedly, Ronaldowasn’t at his best on the night,although he did draw a finesave from Szcz´sny in the first
half.Following the game,
Poland’s head coach Fran-ciszek Smuda told journalists,“After this match against Por-tugal, I’m as calm aboutthings as I was before thematch. … What can we dobetter? Score goals ofcourse.”
Poland’s next internationalfriendly takes place on May22 when the team takes onLatvia at the Hypo-Arena inAustria. The game will be oneof three more warm-up gamesbefore Poland plays Greeceon June 8, in Euro 2012’sopening match.
David Ingham
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MARCH 5-11, 2012LIFESTYLE30 www.wbj.pl
Soc-Design-Photo 50.60.Through April 3Asymetria Galleryul. Jakubowska 16 Warsaw
A recently launched exhibi-tion at the capital’s Asyme-tria Gallery aims to show thetrue face of Polish designfrom the 1950s and 1960s.Soc-Design-Photo 50.60., whichforms part of the PolishDesign Photo series, includesphotographs of neon signs,buildings, furniture, and inte-riors from this importantperiod of the country’shistory.
Exhibition curator Rafa∏Lewandowski said in a pre-view for the show that as wellas documenting the period,the exhibition also aims toimprove people’s under-standing of the functiontaken on by design during the
Socialist era. “Its power lay not only in
rejecting the socialist realistdoctrine imposed by the com-munist regime, but also in thequalities … of a new formallanguage. Totality was themodern project’s fundamen-tal feature, since everything
was now to become modern:art, architecture, science, butalso dwellings, furniture,fashion, photography and,above all, man,” MrLewandowski said.
David InghamFor more information log on to asymetria.eu
Exhibition
Real Polish design
Centre for ContemporaryArt at Ujazdowski Castle ul. Jazdów 2www.csw.art.pl
Czarna Gallery ul. Marsza∏kowska 4www.czarnagaleria.art.pl
Galeria 022, DAP, Lufcik ul. Mazowiecka 11awww.owzpap.pl
Galeria 65 ul. Bema 65www.galeria65.com
Galeria Appendix 2 ul. Bia∏ostocka 9www.appendix2.com
Galeria Asymetria ul. Nowogrodzka 18awww.asymetria.eu
Galeria Foksal ul. Foksal 1-4www.galeriafoksal.pl
Galeria Milano Rondo Waszyngtona 2A www.milano.arts.pl
Galeria Schody ul. Nowy Âwiat 39www.galeriaschody.pl
Galeria XX1 Al. Jana Paw∏a II 36www.galeriaxx1.pl
Galeria Zoya ul. Kopernika 32 m.8www.zoya.art.pl
Green Gallery ul. Krzywe Ko∏o 2/4www.greengallery.pl
Katarzyna Napiórkowska Art Galleryul. Âwi´tokrzyska 32, ul.Krakowskie PrzedmieÊcie 42/44and Old Town Square 19/21www.napiorkowska.pl
Królikarnia National Galleryul. Pu∏awska 113awww.krolikarnia.mnw.art.pl
Le Guern Galleryul. Widok 8, www.leguern.pl
Museum of IndependenceAleja SolidarnoÊci 62www.muzeumniepodleglosci.art.pl
National Museum in Warsaw Al. Jerozolimskie 3www.mnw.art.pl
Polish National Opera atTeatr WielkiPl. Teatralny 1www.teatrwielki.pl
A relative newcomer to War-saw’s restaurant scene, Grill &Co. just celebrated its one-year anniversary. It offers whatfew other restaurants in War-saw do: simple, fresh, tastyMediterranean food. And itmanages to do it at a reason-able price, especially for lunch.
For now, people working innearby offices in the Mokotówdistrict are the main benefici-aries of the lunch specials,which consist of two coursesplus a drink for z∏.25. But dur-ing the evenings and week-ends, customers from all overtown pile in. They include theowners of famed Warsawrestaurant “U Kucharzy,” whohave become regular clients.
An additional venue isplanned closer to the centersoon. It seems owner JoãoRodrigues, a serial Portugueseentrepreneur who first came toPoland a decade ago and triedhis hand at different sectors
before settling on therestaurant business, hasfound a winning formu-la. Of his menu, he said,“People like to compli-cate their lives. Webelieve in keepingthings simple.”
“We don’t want theowners or the chefs tobe stars. The restau-rant has to maintainthe same quality inde-pendently of singleindividuals,” he added.For that reason, thestaff were instructednot to tell the cooksthey were preparing ameal for reviewers.Whether or not that instruc-tion was followed, the restau-rant’s bet on simple disheswith high-quality ingredientswon us over.
From the Spanish olives tothe caramel mousse withMadeira wine, with grilleddorada stuffed with freshherbs in between, everythingon our plates was uniquelydelicious, and a taste from thevast selection of affordablewines from small Portugueseproducers provided a greataddition. For the carnivoresamong us, an important plus isthat Grill & Co. might just beone of the best places to get agood steak in the capital,
whether you prefer the classicfilet mignon or are in for amore exotic Madeira-stylegrilled beef skewer.
As spring settles in, therestaurant is also introducingnew dishes, including a halfBoston lobster with half filetmignon. It is also gearing upfor this summer’s Euro 2012matches, and plans to showthem on giant HD screens.We advise you to judge thefood for yourself – perhapseven on the restaurant’s out-door terrace, once the weath-er warms up.
Due to her distinctive voice andneo-soul tinged music, Belgiansinger-songwriter Selah Sue hasalready been compared to suchmusical greats as Lauryn Hilland the late Amy Winehouse.And there is no doubt that
traces of an Amy Winehouseinfluence can be found on SelahSue’s eponymous debut album,which was released last year.
A massive hit in both Bel-gium and France, the albumsold more than 400,000 copiesworldwide, with standout tracks“Raggamuffin” and “ThisWorld” having already beenviewed more than 13 milliontimes on YouTube.
The success of the albumalso ensured that when guitarlegend Prince came to Antwerpfor a major concert last sum-mer, Ms Sue was asked to sup-port him. During her visit toPoland, she will play a gig inWarsaw and one at Wroc∏aw’sKlub Eter.
David InghamFor more information
log on to stodola.pl
MARCH 5-11, 2012 LAST WORD www.wbj.pl 31
Tech Eye
You know what the worst thingabout old people is? That weirdgummy chewing thing they do,seemingly for hours, like a horse eat-ing peanut butter. It’s probably theirway of torturing the young.
Unfortunately, last week some-body pointed out that Techeye wasdoing the weird gummy chewingthing. And it was horribly, terriblytrue. We’re becoming an old people.
We’ve noticed the signs, ofcourse, but tried to ignore them.People have begun to address us as
“venerable oaf,” for example, andthere’s that other thing … the onethat, um … you know, the thing withthe thing?
Nevermind. Let’s just concentrate on tech-
nology, that ever-flowing fountainof novelty, ok? Last week at theMobile World Congress 2012 inBarcelona, Spain, a whole slew ofnewfangled telecommunicationsequipment was unveiled. One thingto keep in mind: pricing and releasedates were hard tocome by at the event,but most everything isexpected to appearwithin the next fewmonths.
Lets start with thenew Nokia 808 Pure-View, a newly an-nounced smartphonewith a four-inch touch-screen. This thingpacks a 41-megapixelcamera, which is supe-rior to Techeye’s cur-rent phone by approxi-mately 36 megapixels.
Still, that’s notquite as ginormous asit sounds. The camera
achieves its eye-popping level ofmegapixeltude through a trick called“oversampling,” which we can’t beasked to explain. Suffice it to say that41 megapixels on a smartphone isnot the same quality you’d see in anequivalent SLR camera. The pic-tures are still pretty amazing, but theextra megapixels also mean thephone is a bit chunkier than itspeers.
Also, the 808 PureView runsNokia’s much-maligned Symbian
operating system (OS),a choice which hasplenty of peoplescratching their heads.
Another phone offi-cially unveiled at MWC2012 was the HTC OneX, a smartphone run-ning Android IceCream Sandwich OSon a quad-coreNVIDIA Tegra 3processor. Unless youhappen to live in theUS, of course – thosepoor schmucks have tomake do with a dual-core Snapdragonprocessor.
Anyway, the One X
has a 4.7-inchtouchscreen and aneight -megapixe lcamera, which isn’thalf bad. Unless youcompare it toNokia’s 808 Pure-View, of course.Then it’s more likefour-fifths bad.
Finally, Sam-sung took thewraps off theGalaxy Tab 2, thesuccessor to thefairly popular tab-let released by theKorean electronicsgiant in 2010. TheGalaxy Tab 2 comes in two versions– seven-inch and 10.1-inch (pic-tured). The latter is the same sizeas the original Tab and has a betterbattery, but it’s also a mite thickerthan its predecessor. The deviceruns the latest Ice Cream SandwichOS on a one GHz dual-coreprocessor and has just a three-megapixel main camera.
If you’re not getting too excitedby the Tab 2’s tech specs, don’tworry. You’re not the only one. It’ssimply not a flashy machine. But
therein lies the rub – judging fromthe data sheets, Samsung plans tocompete against the iPad on price,rather than flashy tech.
Good luck with that, Samsung.Apple is expected to reveal its iPad 3this week and retailers are alreadyslashing iPad 2 prices.
The exact hardware specs of theiPad 3 were still the subject of greatspeculation as WBJ went to press,but one thing seems clear – it’s goingto make the Tab 2 feel more than alittle antiquated. ●
Ever started a sentence but then … um … What were we talking about? Let us know: [email protected]
