Issue No. 22

Contact Magazine Issue No. 22

Will Polish manufacturers be able to find suitably qualified employees in the future? 3

Spotting Polish real estate investment opportunities 4

Start-ups and their role in urban regeneration 5

7 October, Doing Great Business with Great Britain. Develop your business and export to the UK. WSEZ Invest- Park Wałbrzych7

IT in healthcare – the promises and barriers 7

Opportunities and threats for Poland’s renewable energy sector to 2050 9

"Can we be hackers’ target?" is no longer the question. It’s now "When?" 12

Practical aspects of tax, accounting and legal for enterprises functioning at special economic zones13

Legendary Lech makes BPCC's 23rd Ball an unforgettable night 14

Men as Allies in Achieving Gender Balance in the Workplace 15

Wrocław Agglomeration Real Estate Forum - Analysis of business development directions of Wrocław16

Top Honours for Modry Las Golf Club 17

Paweł Oszczyk announced chef of the year 2016 by "Gault & Millau" 18

Helping put Mazovia’s heritage on the International Stage 19

Last mile distribution may be better off grounded. Commercial drone deliveries not a real option yet - says Colliers International’s report20

New office of ARP S.A. (IDA JSC) was officially opened in Wrocław 21

The Second Congress of Polish Entrepreneurs in the UK 23

The Visit of BPCC Representatives at the Świętokrzyskie province 25

Business Travel Survey - Kraków Airport 26

Quality space prime locations will always make money 27

A look at the Export Insight Visit to Poland 6-8th October 2015 29

BPCC helps UK firms buy from Poland 30

Taste of Britain hits Poland for the third time 32

Table of Contents

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New Flavour in Town – Building a Successful Export Strategy for North East coffee company Beanies32

Chairman & CEO Note 33

How hotels can save money with LED lighting 35

Do fund managers and investors understand the investment opportunities for office property in Polish regional cities?38

Renovate or relocate? 10 tips that will help you decide. 41

It was a good year for commercial real estate 42

The road to maturity: Poland’s real estate and construction market since 1989 44

International architecture firm AHR champions Zero Carbon 46

Risk factors in office lease agreements 48

Minimising the risk when buying real estate property 50

Student Housing – An Emerging European Investment Class – ‘Food for Thought’ 51

What’s the future for leisure investment in Poland? 52

How does the office affect your work? 54

Looking for the ‘Shopping Experience’ 56

Destination: Poland. Blazing a trail for e-commerce logistics. 57

Editorial note 59

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Will Polish manufacturers be ableto find suitably qualifiedemployees in the future?

This was the question posed at the secondmeeting of the BPCC’s ManufacturingIndustries Group, held at the Puławy Scienceand Technology Park (PPNT) on 18 November.It was jointly organised with Grupa AzotyZakłady Azotowe S.A. and PPNT.

Poland continues to advance in global rankingsassessing investment attractiveness; in the 2016World Bank Doing Business survey, Poland is nowin 25th place, up from 75th place just four yearsago.

In the Polish inward investment agency PAIiIZ’sreports, Investment Climate and InvestorSatisfaction, the potential, qualification andavailability of Polish workforce is highly rated, as isincreasingly its loyalty. Confirmation that decisionsto invest in Poland were sound is borne out in theresults of a report published by the Germanchamber of commerce in Poland in 2015,according to which 96% of German companieswould once again invest in the country.

At the same time, however, there are reportssuggesting a shortage of qualified manual workers,as well as specialists. Among the skills sought byemployers are programmers, engineers, but alsomechanics, lathe operators or welders. As EwaTomczak, senior consultant and managing partnerat Diversa Talentor, said: “in Poland we have aparadoxical situation – despite relative highunemployment [in September 2015 it stood At9.7%], employers are indicating difficulties infinding workers”. This has an effect on companies’competitiveness.

Zenon Pokojski, vice-president of the managementboard of Grupa Azoty Zaklady Azotowe Pulawy,said: “we have taken issue with the problem ofshortage of skilled workers here at the nitrogenplant in Pulawy. We are Poland's largest – and theEU’s second largest – producer of nitrogen-basedfertilisers, as well as being the world's third largestproducer of melamine. A company with such astrong position on the market is forced to take careof its human resources,” said Dr Pokojski, addingthat the company is also preparing to face thechanges in the labour market as well as inindustry.

Zaklady Azotowe is in a privileged positionbecause every fifth person employed in Pulawy anemployee of the plant. It also has loyal employees,with average length of employment being 18 years.The average age of those working in the plant isaround 42. Azoty actively engages in building itsemployer brand as a socially responsiblecompany.

Five years ago, Zaklady Azotowe begancooperating with the Maria Sklodowska-CurieTechnical Schools in Pulawy. As a result of thiscooperation, Azoty has had the opportunity toinfluence the direction of teaching in the school,thereby gaining suitably qualified young workers.High-school students also have the opportunity toundergo training at the plant, and the top 10graduates from each academic year get a job atthe company.

Azoty Group has also established cooperation witha local institution of higher education – the Pulawycampus of Lublin’s UMSC university. Here, afaculty of Technical Chemistry was establishedunder the auspices of Azoty. The best graduatesfrom this department are also offered theopportunity of employment at Azoty.

The town’s most important education institutions,the main employer in the region and the locallabour office cooperate closely, and the effects aretangible. Their joint initiatives are beneficial to all.

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Robert Fila from the Tarnobrzeg office of ARP, theindustrial development agency, says that theneeds of investors are particularly listened to. TheWisłosan Special Economic Zone took the initiativeto bring together interested parties – localemployers, representatives of education and thelabour office. “It is important that they talk aroundthe same table, rather than just send official lettersto one another,” said Mr Fila. “Cooperationbetween science and business has improved andhas become less bureaucratised as both sidesrealise that they must work together if they are toface up to the changing demands of the market.”

During a panel discussion, participants positivelyassessed recent developments concerning dualvocational training, providing employers with theopportunity to influence the content of thecurriculum through practical activities carried out atthe employer’s premises. Panellists stressed thatindustry currently suffers the consequences of theway vocational education was run down in the1990s. “We had a really good system, we have toadapt it to current realities. Does Poland need 41%of its population with higher education?” asked theDr Pokojski. “It is necessary to work on restoringthe positive image of vocational education,” saidTeresa Modzelewska, chief specialist, from theOffice of the Marshal of Lublin Province’sDepartment of Culture, Education and Sport.

Pulawy Science and Technology Park was anexcellent place to showcase ARP’s Platform forTechnology Transfer (PTT) (http://www.ptt.arp.pl/)."This technology transfer platform combinesowners of innovative solutions, those who wish topurchase them and experts willing to share theirknowledge. All this has a single purpose: tocommercialise technologies for the benefit ofPolish industry," said Jakub Moskal, director of thein-house projects at ARP.

PTT is based on the concept of open technologies.“Companies are becoming aware that innovationdoes not necessarily have to be sourced fromwithin, from a company’s own resources and ownresearch results, but also from commercially

available external resources that exist in thecompany's neighbourhood. These are worth reachout for,” said Mr Moskal.

“And here in Puławy, home of Poland’s largestchemicals plant, it’s worth saying that our databasecurrently contains 141 technologies from the fieldof chemistry. This should be good news for ourdomestic fertiliser champion.

By 2020, the Ministry of Education plans to allocate€120m of EU funds from the current financialperspective on vocational education, while at theregional level, almost €700m has been reservedfor this purpose. There are funds to be used; thisrepresents an opportunity for the Polish economyin the context of plans to re-industrialise thecountry, participants heard.

After a networking lunch, there was a chance tovisit the Azoty Puławy plant, as well as to see theScience and Technology Park.

Spotting Polish real estateinvestment opportunities

The BPCC, together with PAIiIZ, the trade andinvestment section of the Polish Embassy inLondon, Jones Lang Lasalle and Cushman &Wakefield, held a seminar to outline the maininvestment opportunities in the real estatesector for foreign investors. The event washeld on the evening of 26 November 2015 at thePolish Embassy. The focus was on commercial,retail and industrial properties.

After an introduction and welcome from JerzyBartosik, minister-counsellor, head of the trade andinvestment section at the Embassy, and MichaelDembinski, the BPCC's chief advisor, participantswere presented with an overview of Poland'smacroeconomic prospects by Witold Kowalczyk,head of the Public Aid Group at PAIiIZ, the Polish

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Information and Foreign Investment Agency. MrKowalczyk mentioned the advances in Poland'sattractiveness to foreign investment, not least itsjump up the World Bank's Doing Business ranking.“In terms of ease of doing business, Poland is now25th in world, up from 74th four years ago,” hesaid. From the point of real estate investment, MrKowalczyk mentioned that permits for EEAnationals or businesses registered in the EEAwishing to purchase property would no longer beneeded after 2 May 2016.

The next three presentations broke down thePolish real estate by sector. Anna Bartoszewicz-Wnuk, head of research & consulting at JonesLang Lasalle, outlined the Polish retail market. Shesaid that Poles have become accustomed toshopping in modern retail spaces. “They loveshopping and shopping centres – mainly becausethere's a lack of traditional high streets,” she said.Ms Bartoszewicz-Wnuk gave an overview of thedifferent sizes of city and town in Poland,suggesting that investors should have a look at thesmaller towns, not so well-served with modernretail centres as Warsaw and the other big Polishagglomerations. Comparing provision of top-qualitymalls with towns across Western Europe, the bigPolish cities do well.

Anna Kwiatkowska, associate, landlordrepresentation manager at Cushman & Wakefield,presented a city-by-city office-space guide forinvestors. She went through the supply, vacancyand pipeline data for top-quality office spaceacross the main Polish cities. Much of thedevelopment is driven by the inflow of businessprocess outsourcing/shared services centres toPoland, a sector growing at over 20% a year.BPO/SSC hotspots such as Kraków and Wrocławhave very low office vacancy rates, which makesthem a good location for new developments, shesaid. As well as ultra-modern, state-of-the-artworkspaces for global corporations, there's also aneed for 'funky projects' that will attract youngstart-ups, said Ms Kwiatkowska, citing Warsaw'sArt Norblin and Google Campus projects at thetype of space that tech firms are interested

in. “Edge-of-town campuses are no longer ofinterest to today's breed of IT start-up,” she said;“they want to near the city centres, where theaction is.”

JLL's Ms Bartoszewicz-Wnuk returned to thepodium to cover the industrial and warehouseproperty market in Poland, which she said had theeconomic rationale for the fastest growth. She saidthat speculative development showed that thissector of the market was becoming moreconfident, with firms like Pannatoni, Goodman,SEGRO and Prologis taking the lead. Poland'sstrong performance in export-led manufacturingexplains the take-up for industrial space over thepast three years, she said, while the rapiddevelopment of Poland's transport infrastructurenetwork has been creating new logistic hubs – notonly by the biggest motorway junctions, but alsonear smaller towns that until now had not been wellserved by warehouse facilities.

The formal part of the event over, participants wentdownstairs for the cocktail reception and had achance to have one-to-one discussions with theexpert speakers and swap business cards witheach other.

Start-ups and their role in urbanregeneration

At a joint meeting of the BPCC's Real Estate &Construction and TMT policy groups at TeatrScena Prezentacje on 28 October 2015, BPCCmembers had a chance to look into the futureof Warsaw. Capital Park and Cushman &Wakefield hosted the event at the former, 19thCentury Norblin factory, located in the centreof Warsaw, which is to become the ArtNproject - a revitalised, mixed-use destination,where startups and corporations can cooperatewith each other.

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The world's cities are constantly reinventingthemselves. As 19th and 20th-Centurymanufacturing moves away from city centres, thepremises it once inhabited have the potential tobecome home to 21st-Century high-tech start-ups.They are looking for real estate that's not onlyfunctional, but also well located close to the heartof the city, and full of character. Post-industrialbuildings, if sensitively and intelligently refurbished,can form prestigious locations for new, growingbusinesses seeking headquarters with character.How can cities revitalise themselves by turningheritage buildings into hubs of IT activity? Thisevent offered members the chance to witness onesuch project, and at the same time to discuss thefuture of cities, based on the needs of tomorrow'stenants and employees from Generation Y.

Deputy mayor of Warsaw, Michał Olszewski,presented an overview of the city's strategy fordevelopment. It centres on the idea of keeping theyoung in town. “No out-of-town campuses forWarsaw's universities, no 1960s-style technologyparks built on the city's edge” he said. “Start-upsneed to recruit and retain the best talent – youngpeople who want to work and spend time in thecentre of a thriving city,” For them, he said, post-industrial spaces full of character and in goodlocations are preferable to sterile buildings in adistant business park.”

The future, he said, will be around notions such asco-creation, open innovation, shared ideas andexperience; what will be needed are spaces thatcreate an environment that fosters suchsymbiosis. By mixing startups spaces with retailand corporates, start-ups can test their innovativeproducts on real consumers and clients, and bringthem to market quicker as a result. The places forsuch start-ups to operate are Warsaw districtssuch as Praga, Wola and Ochota, that still haveplenty of post-industrial brick buildings available forrevitalisation. Mr Olszewski called this

the szlak czerwonej cegły (red-brick way).

Anna Kwiatkowska, Landlord representationmanager at Cushman & Wakefield provided anoverview of the ArtN project [click here for link topresentation]. Ms. Kwiatkowska stressed the first-class public transport links – tram, suburban train,metro, cycle paths. She also mentioned thehistoric touch of the place and the innovative retailconcept with 7 thematic zones ranging from slowretail to high tech. Mikołaj Niemczycki, Juniornegotiator at Cushman & Wakefield presented theArtN project as a response to the co-creationmovement, offering dedicated coworking andprivate office space for startups, regularnetworking events for all tenants in the building,pop-up shops and a tech demo zone for startups toget feedback on their products. He called this typeof building ‘TECHfriendly’ - a new wave of buildingsthat will one day become a standard in the officemarket like eco-friendly buildings have become inthe past.

Anna Walkowska from Startup Grind and WAW.actalked about the need for high-quality premises forthis type of business. She defined start-ups as newbusinesses working on an immature businesssolution that needs to test its business model untilit gains a path to sustainable growth. The key thingis doing it first, experimenting in business. MsWalkowska stressed that business acceleratorsand incubators only worked if there was a criticalmass of firms in close proximity to one another,and they had the opportunity to constantlyexchange ideas and experiences. Developmentssuch as the ArtN project would create the rightconditions for a start-up ecosystem.

After a Q&A session with panel, there was time fora look-and-feel walk-through on the developmentsite with Artur Setniewski the CEO of the OpenMuseum of the Former Norblin FactoryFoundation, who explained the history of thefactory and how it will be developed, to retain asmuch of its character as possible while becominga thoroughly modern retail and commercialcomplex.

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7 October, Doing Great Businesswith Great Britain. Develop yourbusiness and export to the UK.WSEZ Invest- Park Wałbrzych

The Wałbrzych Special Economic Zone Invest-Park with the British Polish Chamber ofCommerce organised a training session forlocal exporters entitled Doing Great Businesswith Great Britain. Develop your business andexport to the UK.

The meeting began with Michael Dembiński, theBPCC’s chief advisor giving an macroeconomicintroduction into the dynamics of the economicrelations between the Poland and the UK as wellas an analysis of the UK market in terms ofdemand for Polish products. He drew the attentionof listeners to legal and cultural differencesbetween the UK and Poland, and talked about thesize and importance of the Polish Diaspora. MrDembinski then outlined the BPCC’s four-phaseexport support service presented aimed at Polishfirms interested in entering the UK market. JacekTacik from 1MoneyMail explained how bet totransfer money between the UK and Poland,explaining the benefits of using a service tailored toa single corridor (UK->Poland) as opposed toletting a bank to it. He also talked about thepossibilities of monitoring business and financialtransactions by verifying a potential customer inUK. He said that 18% of all cross-border fraud outof the UK is between our two countries.

After a networking lunch break, Piotr Smagała fromSmagała Strzelczyk law firm introduced the role ofcontracts in international business. He said that thebiggest single cause of conflict between businesspartners is niedomówienie – a word that isinadequately translated into English as‘understatement’, but which more accuratelymeans ‘leaving too much unsaid’. He also drewattention to securing payment and guaranteeing ofthe proper performance of the contract, and saidthat it was difficult to agree which court should beused in the case of dispute – a Polish or UK one.Contracts should be written down, either in longform, or better still – short form. Mr Smagała alsowent over the latest Incoterms, explaining therights and responsibilities of exporter and importer.He suggested that exporters hold back some 2%-4% of the transaction as ‘retention money’ to coversmall repairs. After the presentations, there was a discussionin which fraudulent transactions were the biggestissues Mr Dembinski pointed participating Polishexporters to the website of the Trade andInvestment Promotion Department at the PolishEmbassy in London.

IT in healthcare – the promisesand barriers

The BPCC's Healthcare policy group met at theBritish Embassy on 1 October to discuss theimplications of advances in IT for Poland'shealthcare sector.

Tomasz Judycki, deputy chairman of AtendeMedica, gave an overview of the technologies thatwould be revolutionising healthcare in comingyears. He mentioned the Internet of Things,telemonitoring via wearable

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devices, speech recognition for doctors, and thedigital pen which, taking 50 photos a second, canenter handwritten data into computers. Mr Judyckipassed the digital pen around the participants sothey could try it for themselves. He also talkedabout more controversial technologies, such asexpert systems, which doctors fear will supplanttheir own knowledge.

IT systems also offer solutions for hospitalmanagement. In the same way as monitoringdevices can create smart homes, so sensors inhospital refrigerators and generators can save timeon manual checking. Patients too can bemonitored – blood pressure, temperature and pulse– and the data stored. And finally hospitals'administration can be fully integrated, he said.

Dr Andrzej Osuch, director of businesstransformation at Luxmed, Poland's largest privatehealthcare provider, talked about theimplementation of an IT system that linkedLuxmed's 180 hospitals, clinics and surgeries and1,600 cooperating healthcare professionals. He putthis 13-month project into the context of fallingnumbers of doctors (down to 78,000 from 100,000over the past 20 years) and rising co-morbidity inpatients (with 12% having six or more chronicconditions – and these patients being responsiblefor nearly half of all healthcare costs).

He said that data processing and patientengagement will become increasingly important,with patients demanding greater online access totheir records. Data needs to be stored for five to 30years (average length 20 years). Luxmed's aimwas to totally do away with paper originals, and toensure privacy through cryptography. The systemis currently dealing with 2.1 million documents amonth, a has peaked at 32 documents a second,dealing with 2,700 sessions at the same time.

Dr Osuch talked about e-prescriptions, e-referralsand telemedicine. The e-sick-note, howeverbelongs to the realm of social security. He alsooutlined changes to the law as it affectstelemedicine, as set out in the third

reading of the current draft, now on its way to theSenate before becoming law. He mentioned anabsurdity that had been picked up – a doctorproviding remote medical services – sitting at acomputer and looking at ECG results or ultrasoundscans – no longer needs to be located in a roomwith washable white tiles on the wall.

Smarter implementation of IT solutions will offergreater coordination and interoperability,personalised medicine and remote diagnosis. Byallowing doctors to focus on their patients, ratherthan on administration, they'll be able to achievemore in the same working hours. By 2020, the EUwill face a shortage of one million healthcareprofessionals, and around 220,000 fewer doctorsthan required. Intelligent use of cutting-edge IT maybe the answer, said Dr Osuch.

The biggest barriers to the implementation of thesesolutions are regulatory rather than technical innature. Dr Ewa Butkiewicz and Sylwia Paszekfrom Wardyński & Partners law firm focused onthe legal question marks hanging over thedevelopment of telemedicine in Poland. Thebiggest one relates to data protection issues. InPoland, written consent for the storage andprocessing of personal data is needed – simplyclicking 'OK' is not enough. Providers of healthcareservices need to be registered with Poland's dataprotection registrar, GIODO. When wearabledevices such as smart watches begin to monitorpatients' health parameters such as pulse or bloodpressure, additional safeguards are needed.

The presentations were followed by a livelydiscussion into the matters raised. Expertsystems, so feared by doctors, are not intended toreplace doctors, only to stand in for them whenthey are physically not present. Mr Judyckimentioned a case of a hospital Warsaw where twopatients died from strokes over the weekendbecause there was no specialist on hand todiagnose their symptoms. An expert system wouldhave detected the risk.

Streamlining the 'patient journey' is crucial. Saving

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time where possible – two minutes per patient on anurse's round, for example – will bring hugebenefits to efficiency.

There was a general agreement that the Polishhealthcare system needs to adapt to technology.The deficit of knowledge was underlined, as wasthe need to training and communication.

Opportunities and threats forPoland’s renewable energy sectorto 2050

The BPCC’s CleanTech & Energy policy groupmet at the British Embassy in Warsaw on 15October for an overview of where Poland stoodin the area of renewable energy.

The event allowed BPCC members to get togetherwill representatives of the public sector and NGOsand discuss the current state of power generationfrom renewable sources. Local authorities,investors, engineers, consultants and ecologistshad a chance to exchange views. Although therewas a strong consensus in favour of renewableenergy, there were differences of opinion regardingsubjects such as waste-to-energy, nuclear powerand the economic costs and benefits of goinggreen.

Acting director of UKTI in Poland, Ewa vanVeenendal-Rawicz opened the meeting by setingout how the UK was doing in the area. “Renewableenergy is better for health and for the environment,she said. The UK had already invested £8bn inrenewable energy, and had hit its 2020 target, bygenerating more than 20% of its energy fromrenewable source. Ms van Veenendal-Rawicz saidthat the sector was experiencing jobs growth at arate seven times faster than the UK economy as awhole. Over 120,000 people are currentlyemployed in generating electricity

from renewable sources in UK, she said. She alsospoke of the cooperation between the UK andPoland in the nuclear industry as well as inrenewable energy.

Beata Wiszniewska, director-general of the Polishchamber of renewable and distributed energy,PIGEOR, gave an overview of the state ofrenewables in Poland today and up to 2050. Shesaid that Poland still has some way to go to meetthe 20% target by 2020. She highlighted the conflictbetween the EU’s goal of decarbonisation of theeconomy with Poland’s current dependence oncoal. “Each country can choose the renewableenergy mix it will choose to hit the 2020 targets,which are “3 x 20” – reducing carbon dioxideemissions by 20%, increase the share of powergenerated from renewable sources to 20%, andimprove energy efficiency by 20%. Building asingle European energy market was another goalof the EU for this period.

Ms Wiszniewska explained that the targets for2030 were more stretching – a 40% reduction ingreenhouse gases, and renewables’ share up to27%. By 2050, renewables would have a dominantrole and there would be a 80-95% reduction ingreenhouse gases. She said that in contrast withthe UK and Scandinavian countries, Poland has novision of how to get there. “Today’s mix is 51%hard coal and 35% brown coal. Currently, 86% ofPoland’s energy is generated by burning coal).Only 6% comes from renewable sources. Manypower stations will have to be closed over next 10-15 years due to old age. The will have to bereplaced. We don’t know by how much demand forenergy will grow. Will electric cars becomecommonplace? Factors like this will determine ourfuture usage,” she said, saying that it is a goodmoment to think about development.

Other factors that must be borne in mind areenergy security and the need to distributegeneration – bringing it as close as possible to theconsumer.

Local generation from sources

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such as solar, water, wind, and biogas plantswould need to come from millions of small-scaleinvestments across the countryside. MsWiszniewska mentioned the falling cost and risingeffectiveness of wind and photovoltaictechnologies. Costs would continue to fall, whileconventional power generation costs would remainthe same.

The main technical problem facing wind and solarenergy was the unstable delivery, with peaks andtroughs. “The storage of electrical power is wherewe expect breakthroughs. It is expensive atpresent; solutions include pumping water up hillwith cheap power, and dropping it back downthrough turbines when power is needed,” she said.

Ms Wiszniewska covered co-fired powergeneration, where biomass (renewable) and coal(not renewable) are burnt together. “This should notbe considered a renewable source of energy. Itleads to absurdities, such as feedstock beingtransported from distant countries so as to earngreen certificates. Co-firing will finish in 2016,” shesaid. Ms Wiszniewska also spoke aboutprosumers – small businesses or householdsgenerating their own electricity from solar panels ormicro-windmills, and selling the surplus power tothe grid.

Paweł Puacz from law firm Clifford Chance spokeabout the legal framework within which renewableenergy operates in Poland.

“If there were no laws, there’d be no renewableenergy in Poland other than a few pre-war hydroplants. The development of renewable energy onlybegan in earnest after EU accession as the firstsystems based on green certificates started in2004,” he said. Mr Puacz spoke about the new lawintroduced this year, where public support forrenewable energy will be based on an auctionsystem. He said that the government’s goal was tohit the 20% renewables target by 2020 – but to gono further. “If we are to reach the target, we willneed several hundred renewable energy sourcepower plants plugged into the network each year,

as we once did,” he said. The next government willdetermine the reference prices and organise theauctions: “The support mechanism depends onpolitical will. The risk to investors is minimised, buttheir appetite is suppressed, due to uncertainty.”

Anna Trudzik, a project engineer from AECOM,talked about waste-to-energy plants. She hadworked on the newly-opened Bydgoszcz plant.There were questions from participants as towhether waste-to-energy should qualify as arenewable source. Oil has to be burnt to initiate theincineration process, and part of the waste streamused as feedstock for such plants comes fromnon-renewable sources such as plastics.

But once the incineration process begins, it heatswater, drives turbine, generates electricity, and theheat is reclaimed and used to heat local housingestates.

The EU has set challenging targets for Poland toreduce the amount of waste that goes into landfill.And so, EU funds have been successfully used tobuild waste incineration plants, in Bydgoszcz,Konin, Szczecin, Białystok and Kraków all havethem.

But is there enough feedstock? Surely as muchwaste as possible should be recycled, askedseveral of the participants. Once the plastic, card,paper, textiles and food waste have beensegregated, is there enough left over – and is itsuitably calorific for incineration? Another issue isthe transportation of waste. Often it has travel along distance to reach the incineration plant.

Ms Trudzik said that waste-to-energy is governedby 10 different sources of law – four EU Directives,four Polish laws and two regulations from theMinistry of the Environment. The development ofwaste-to-energy has contributed to Poland havingreduced its CO2 emissions by 47.6% compared to1990.

In order to meet the criteria for claiming the waste-to-energy incineration is indeed

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a renewable energy source, operators have toprove that at least 42% of the feedstock isbiodegradable. This needs to be sampled, fourtimes a month, each sample must show that thecalorific value of the waste is sufficiently high.However, with targets set for recycling andreducing the waste stream, there is a hierarchy ofwhat should be done with the waste, withincineration at the very bottom. First, you mustrecycle, and then, in the end, you can incineratewhat’s left. Yet that has to tick nine boxes if youwant that to qualify as renewable energy source,said Ms Trudzik.

Participants voiced their concerns about landfill,the cost of which varies between 240zł/tonne inWarsaw and 30zł/tonne in the Kaszuby region. Thenew Polish law on waste collection spells out whoowns the rubbish – the municipal authorities – andthus it is that the municipal authorities direct wherethe rubbish goes, and this often decides the fate ofa waste-to-energy plant. Co-firing waste with coalis also controversial – waste being brought in fromabroad in order to qualify for tradable greencertificates.

The final presentation was from Tomasz Hoffman,managing partner of PNO CEE Consultants, a firmfocused on securing EU funds for projects. Settingthe scene, Mr Hoffman said that the current debatewas about the scale and nature of public-sectorintervention – how to use public money wisely toreach long-term goals. If we don’t take steps toprotect the environment, our children andgrandchildren will suffer, he said. In the late 19thand early 20th century there was lobby againstsewer systems in towns – agriculture was said todie if that happened. Fossil fuels will eventually runout – so how will we cope, if we don’t invest inrenewable energy sources now, even though theyare not competitive without subsidies?

There was a discussion about why Germany hassuch expensive energy. On the one hand, theclosure of the nuclear sector means that moreinvestment is needed in renewable sources, but asit does so, emissions of CO2 are

rising, as more brown coal from the east is havingto be burnt. High taxes on energy are transferringmoney from manufacturing industry to the socialsecurity system, making the economy lesscompetitive. At the same time, we learned inAugust that as sun and wind peaked, Germanymanaged to generate 80% of its energy needsfrom renewable sources.

Mr Hoffmann outlined the accents of national andregional operational programmes in Poland. Intotal, more than €150m has been earmarked forlarger-scale renewable energy schemes, up to amaximum level of 85% of the capital costs.However, unlike previous EU budgets, the currentfinancial perspective foresees the funds taking theform of repayable loans, rather than grants. Thecapital costs must, in the end, be repaid out ofoperating revenues. A further €150m is to be madeavailable for small scale distributed prosumerschemes – micro-generation for homes and smallbusiness.

Following the coffee break, a panel discussion tookplace moderated by Ms Wiszniewska, duringwhich Arkadiusz Sekściński, a board member ofthe Polish wind-power association, PSEW, DariuszSzwed, advisor to the mayor of Słupsk, MariuszPopiołek, advisor to the climate protectiondepartment at the national environmental protectionfund, NFOŚiGW, and Paweł Puacz, answeredquestions from the floor.

A networking lunch concluded the meeting.

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"Can we be hackers’ target?" is nolonger the question. It’s now"When?"

The cyber security landscape is changingrapidly thanks to our greater dependency onthe virtual world. One examples of the growingsymbiosis between man and the cyber world isthe Internet of Things. This increased relianceon the internet and technology has sadly gonehand-in-hand with greater frequency,sophistication and professionalism of hacking.

While until recently companies asked whetherthere’s a chance that they can find themselves inthe crosshairs of hackers, now they are posing thequestion, "when?".

During the meeting of the BPCC’s Technology,Media and Telecoms (TMT) policy group held on 3November 2015 members had the chance to learnabout the various threats and the possibility of riskmanagement, connected with the company'spresence in the virtual world.

Roman Skrzypczyński, PwC’s cybercrime issuesexpert, began by showing the scale of the problem.The number of cyber attacks is increasingdramatically. It grew by 48% from 2013 to 2014.The business sectors at greatest risk to hackingare: financial services, energy, technology andhealthcare. "Given the amount and the importanceof information which are processed by thosesectors, it is right that there should be so muchattention given protecting it," he said.

To emphasize the massive scale of failuresassociated with poor securing the data processed,Mr. Skrzypczyński presented the results of 20simulated attacks carried out on Polish companies.Most of the companies were found to

have very poor security measures – the averagetime it took to break into their systems was a merefour hours. In addition, only 10% of organisationsdetected and responded to the attack. What wasperhaps most shocking, 100% of employeesrevealed (consciously or unconsciously) apassword. Improving security comes from aheightened awareness of who is usually acybercriminal, and what errors are the mostcommon. Perhaps it’s not so obvious, but 70% ofabuse is committed by the current (oftenunconsciously) or former employees, and only35% by skilled hackers: "An employee is just amedium for transferring malicious software," saidMr Skrzypczyński, who ended his presentation bypointing out the most important things to keep inmind: speed of response, assessment of the scaleof crime, damage limitation, coordinatedcommunication. Above all, he said, "if we can notsecure experts to look after the information anddata used by us, employ an external contractor.The measurability of material loss is difficult todetermine – it can be huge; but the damage doneto the company’s image is far worse. This is war!They will attack us, and we must be able to react,”he added.

The second speaker, the special guest at theevent, Mark Camillo, head of cyber for EMEA atAIG UK, addressed the topic of cybercrime in thecontext of insurance. He said: "Because theinsurance market of cyber attacks has greatlydeveloped, the nature of threats has also changed.As the global economy is increasingly movedonline, cyber disruptions are causing huge financiallosses and loss of reputation. Initially they focusedon data leaks, while nowadays such insurancealso covers issues of business continuityinterruption, theft of intellectual property and manyothers.” Thus, so-called ‘cyber-risk’ has evolvedfrom something that only affects IT to enterprise-wide risk management that requires intervention atboard level. According to Mr Camillo, the mostimportant thing to do is to take measures toprevent hacker attacks and to raise awareness ofthe dangers of these crimes, not only among rankand file employees

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but also among board members. “As we learnedfrom a survey conducted by AIG among scores ofboard-level executives, 50% of them had no idea ofthe scale of the consequences resulting fromcybercrime. "And it is mainly board members whoare affected by the consequences of suchevents," said Mr Camillo.

After the presentations, there was a paneldiscussion including both speakers, who werejoined by representatives of law firm SafeLaw andIT services firm Support Online. The panellistsagreed that awareness is the cornerstone formanaging cyber risks. Apparently 90% of hackingattacks are carried out using social engineering, soongoing training was needed, and employeeswould need to stick to previously establishedcompany policy company. Secondly, there is aneed for better selection of employees during therecruitment process, and thirdly, to ensureadequate protection of both fixed and mobiledevices.

There were many questions from the audience, sothe formal part of the event ended, allowingparticipants to discuss issues informally andexchange business cards over a networking lunch.

We encourage you to look over the attachedpresentation and to take a ‘guided tour’ of cybersecurity issues, created to help businesses get adeeper understanding of the risks.

Practical aspects of tax,accounting and legal forenterprises functioning at specialeconomic zones

"Practical aspects of tax, accounting and legalfor enterprises functioning at special economic zones" was the title of a training which took place on 6 November at the headquarters ofthe Kraków Technology Park in cooperationwith the BPCC.

The meeting was addressed to those who havestarted functioning in the zones recently, on thebasis of permits issued last year and to those whostart to think about locating their businesses in thezones.

The exclusive partner of the training was Rödl &Partner and its experts provided technicalexpertise to participants of the event. The meetingwas officially opened by by Krystyna Sadowska,Director of Promotion and Marketing at KPT, alsotwo other persons from KPT were present andavailable during the session: Jacek Bielawski, Investor Service Department and Mariola Kocoń,Director of the Legal Department.

The training was started by Anna Smagowicz-Tokarz, Associate Partner, SEZ Team at Rödl &Partner. In her speech Anna focused on issuessuch as rules of granting the permits to start doingbusiness at special economic zone and a possiblechange of boundary conditions, increase ordecrease capital expenditures, increasing anddecreasing staff numbers, changing the date ofexecution or non-fulfillment of the investment.

This part of the training has already generated adiscussion on the possible risk that arises inconnection with the failure to achieve theconditions granted by ministerial decision. Annaencouraged entrepreneurs to notify as soon aspossible the relevant authorities on the changes ofconditions for the functioning of companies to avoidfurther difficulties and also presented a specific"case study" which described a path of reducingstaff numbers by one of the companies. Thesecond part of the training focused strictly on fiscalaspects. Current tax issues for companiesoperating in the zones were presented DorotaBiałas, Associate Partner, SEZ Team at Rödl &Partner in Wrocław. Dorota talked on the divisionof revenues and costs (including the

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Host

situation when part of the company's activity iscarried out outside the zone), also showedconcrete decisions issued by the directors of taxchambers. The third part of the training and thesession of Q&A was run the auditor from Rödl &Partner, Piotr Dylak. The conversations talks werecontinued afterwards during lunch that was acourtesy of Kraków Technology Park.

Legendary Lech makes BPCC's23rd Ball an unforgettable night

The BPCC's 23rd Annual Ball, held this year atthe Sheraton Warsaw Hotel, was a fantasticevent at which over 200 VIP guests enjoyed amemorable evening. Guest speakers includedLech Wałęsa, legendary Solidarity leader andmodern Poland's first democratically electedpresident, who spoke about the new Europe,and the need for reform within the free-marketdemocratic system. Other speakers were thePolish Ambassador to the UK, Witold Sobkówand Sarah Tiffin, Deputy Head of Mission at theBritish Embassy Warsaw.

Organiser

Partners

BPCC chairman Antoni Reczek, and CEO PawełSiwecki took care of the introductions, while akilted Martyn O'Reilly served as Master ofCeremonies for the event, as well as running thewhisky-tasting. The presidents of GrupaKapitałowa Marvipol SA, the owner of BritishAutomotive Centrum, Mariusz Książek, ArkadiuszMiętkiewicz and Arkadiusz Rutkowski

took to the stage and said a few words about thelatest Jaguar, Aston Martin and Land Rover carsthat graced the ballroom, foyer and hotel drive.They also introduced Mr Wałęsa. Martyn O'Reillypresented Lech Walesa with his Wojtek the BearTartan tie and a bottle of Benromach 10 year-oldSpeyside Malt, and told the former president that inScotland his name translates to 'Wallace' - and hemay therefore be related to Mel Gibson!The menu was phenomenal, featuring EnglishLamb from EBLEX (the English Beef and LambExecutive) that was universally acclaimed for itssucculence and taste. A tap dancing performancefrom husband-and-wife team Chris and JoannaErnest got everyone in the mood for dancing - andindeed the dance floor was full till 2:00am, enjoyingthe music of band 36i6, while out in the foyer,many attractions diversified the entertainment.

The BPCC would like to sincerely thank the eventpartners and many sponsors - HSBC Bank Polskaand Grupa Kapitałowa Marvipol SA, the owner ofBritish Automotive Centrum; EBLEX for theprovision of the excellent English lamb; MeliMelum for our Polish cider; Elgin and Dobre Winafor the whisky tasting and all of the providers oflottery prizes.

This year the BPCC supported Habitat forHumanity, an international development charitythat aims to break the cycle of poverty byeliminating poverty housing and homelessness.Over 10,000zł, collected from prize raffle lotteryplus 5% of the table proceeds, will go to thischarity.

Prize & Foyer Sponsors

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Media Partner

Men as Allies in Achieving GenderBalance in the Workplace

On 5 November 2015, over 70 businesswomenmet in Warsaw for an afternoon seminar andnetworking reception entitled Men as Allies inAchieving Gender Balance in the Workplace.

The event organised by the K&L Gates Warsawteam in cooperation with the BPCC and WoltersKluwer publishing house.

Halina Więckowska, partner in K&L Gates’

Warsaw office, responsible for K&L Gates' Womenin the Profession in Poland and EwaŚwiętochowska, membership developmentmanager of BPCC welcomed guests, emphasisingtheir organisations’ commitment to celebratingwomen’s entrepreneurship. They introduced apanel of experts for a discussion on men’s role insupporting women's careers and businesssuccess.

The debate was open by an inspirational speech,delivered via videoconference by Bryan Olson,chief human resources officer from the K&L GatesPittsburg office. In his presentation, Mr Olsonfocused on the challenges relating to gender parityin today's workplace and shared his experience indealing with leading diverse teams.

Following the presentation packed with facts andfigures, a discussion panel on the role of men insupporting women's career took place, moderatedby Dominika Kozakiewicz, managing director ofMarsh & McLennan. High profile panelistsincluding: Włodzimierz Albin, the CEO of WoltersKluwer and president of the Polish Chamber ofBooks; Marcin Góral, chief compliance officer atPZU SA; and Magdalena Kicińska,communication, public affairs & sustainabledevelopment expert, shared openly their views onthe key factors which determine a woman’scareer, and how men can support theirdevelopment.

The panel was followed by a cocktail reception andwine tasting courtesy of a new BPCC Member,Wineonline sp. z o. o. As always, the event was anexcellent fact-finding opportunity as well as achance to make new business contacts andreinforce existing ones. K&L Gates' office waspacked with business women representing keymarket players in real estate, banking, IT, pharma,media, FMCG and the energy sector. Thenetworking, which lasted over four hours,concluded with a business cards draw for prizes.

Last but not least participants of the meeting areinvited to visit one of the eight Winestory

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shops – a retail network owned by Wineonline sp.z o.o., wine & cider importer, which offers BPCCmembers a special discount for Christmas giftsets. To take advantage of this 15% discount,please contact Maciej Skowronek, B2B manager,on +48 881 004 175, or e-mail:maciej.skowronek@wineonline.pl Visit a chosenWinestory shop (click here to fine one near you) –mention Sojusz Męsko-Damski BPCC and claim10% discount on wine; 5% discount on spirits andWinestory Loyalty Card. The offer is valid until 31December.

Photos were taken by Dariusz Iwański and flowerarrangements were provided bySekunda&Sieradzan – Floral Design.

Wrocław Agglomeration RealEstate Forum - Analysis ofbusiness development directionsof Wrocław

The second in this year edition WrocławAgglomeration Real Estate Forum took placeon Wednesday 18th November 2015 inRadisson BLU hotel in Wroclaw in cooperationwith Wroclaw Agglomeration DevelopmentAgency, AD Capital, CBRE, Kinnarps, KnightFrank, Reesco, Smagała Strzelczyk law firmand Vantage Development SA.

The meeting in which over 100 representants oflocal business interested in real estate took part,was officially opened by Ilona Chorodowska,British Polish Chamber of Commerce BranchDirector Wrocław & Poznań. The Forum wasdivided to two parts, each ending with

discussion panel.

First part was initiated by Łukasz Czajkowski fromWroclaw Agglomeration Development Agencytogether with professor Tomasz Ossowicz fromWroclaw Development Office. They presented themost actual development directions and plans ofthe Wroclaw Agglomeration. The real estatemarket in Wroclaw foundation of strategydevelopment of the city and the new land useplanning study. Then Krzysztof Cipiur from KnightFrank shared information on the investmentmarket in response to the questions: who'sbuilding, who's buying, what investors pay attentionto. This was followed by presentation on investing in commercial real estate Marcin Jański from theCrownway Investmens. There was also enteringinto legal issues, in presentation by Piotr Smagałafrom Smagała Strzelczyk law firm focusing onissues surrounding the investment process incommercial real estate. The last lecture in the firstpart of the conference was about an optimalisationof operating costs in A class buidlings as inexample of the complex Promenade BuildingBusiness Park- Zita presented by Daniel Betlewiczfrom OPM, Vantage Development SA.

To summarize the first part of the Forum HenrykWojciechowski Development andCommercialization Director from VantageDevelopment led discussion with ŁukaszCzajkowski from Wroclaw AgglomerationDevelopment Agency, Krzysztof Cipiur fromKnight Frank, Piotr Smagała from SmagałaStrzelczyk law firm, Marcin Jański fromCrownway Investments and Paweł Boczar fromCBRE.

After the coffee break, during which the Forumparticipants had the first chance to exchangebusiness cards and make new business contacts,the second panel was opened by Paweł Boczarfrom CBRE. Paweł shared with participants of themeeting the most importants points aboutpreparing the tenant to enter into the leaseagreement. Right after that, Dorota Kościelniak,regional director and partner at Knight Frank

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in a very interesting way told about renegotiationsof lease agreement. Later Artur Winnicki fromReesco told about the process of changinglocalization as seen by the expert, focusing onstructure, communication, timetable, and costs ofthe process.

The last speech during the Wroclaw AgglomerationReal Estate was byJarosław Solima fromKinnarps, who prsented Office Trend Report. Hedemonstrated interesting and innovative designsfor easy and enjoyable time spent in the office forworkers

After the presentations Ilona Chodorowska invitedguests to participate in a discussion panel led byPaweł Boczar Senior Property Negotiatora fromCBRE. Participants of this panel were: DorotaKościelniak from Knight Frank, Artur Winnicki fromReesco, Jarosław Solima from Kinnarps, MarekStasieńko from Skanska, Paweł Łopatka fromSoftServe and Jakub Mirosławski from UBM.

After the official part, all participants of the Forumwas invited for a hot lunch and networking in theAquarelle restaurant.

Presentations (in Polish):

Wrocław - inwestycje a demografia - ŁukaszCzajkowski, Agencja Rozwoju AglomeracjiWrocławskiej

Obszary rozwoju - Tomasz Ossowicz, BiuroRozwoju Wrocławia

Wrocław - kupno/sprzedaż - Krzysztof Cipiur,Knight Frank

Inwestowanie w nieruchomości komercyjne weWrocławiu - Marcin Jański, CrownwayInvestment

Zagadnienia prawne realizacji procesuinwestycyjnego w nieruchomości komercyjne,Regulacje prawne w praktyce - Piotr Smagała,Smagała Strzelczyk Kancelaria

Radców Prawnych

Optymalizacja kosztów eksploatacyjnych wbudynkach klasy A. - Daniel Betlewicz, OPM

Renegocjacje umów najmu - Dorota Kościelniak,Knight Frank

Projektowanie przestrzeni życia i pracy wdekadzie różnorodności - Jarosław Solima,Kinnarps:http://issuu.com/kinnarps/docs/kinnarps_trend_polhttp://issuu.com/kinnarps/docs/kinnarps_trend_eng_low_orginalWersję papierową można zamówić przezformularz.

Top Honours for Modry Las GolfClub

Modry Las Golf Club has been named Poland’sbest golf course at a prestigious global awardsceremony in Portugal. For the secondconsecutive year, the West Pomerania GaryPlayer designed-course picked up Poland’snational prize at the World Golf Awards whichaims to benchmark excellence in golf tourism.

The accolade came in a category that has seenthe number of nominees nearly double since theawards were launched a year ago. Moreimportantly, it affirms Modry Las as one of centralEurope’s leading golfing venues at a time whenPoland is emerging as a bone fide golfingdestination.

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“It was a great honour to pick up the award at theWorld Golf Awards, especially as we retained thetitle from last year,” said Arthur Gromadzki,Chairman at Modry Las. “Golf in Poland has seenhuge strides forward in the past few years and weare extremely proud to be at the forefront of thisexpansion.”

He continued: “Modry Las opened six years agoand since then we have added a fabulous nine-holecourse and doubled our on-site accommodation.As a result, much has changed since Gary Playerfirst came to Poland to inspect our beautifulcountryside and tranquil lakes. We have achieveda lot, but despite the progress, our objectiveremains unchanged and that is to deliver adistinctive and exceptional golfing experience.”

Since opening in 2009, Modry Las has added newGarden Suites and a stunning new nine-holecourse, Orli Las, which many view as achampionship course in miniature, to its acclaimed18-hole championship. The improvements haveattracted universal praise as well as a host ofaccolades. For instance, Modry Las became theonly Polish entry in Germany’s leading golfmagazine’s Top 100 list of European golf coursesand was named Poland’s best golf course by thecountry’s leading golf website www.Polishgolf.pl.

This latest award is the culmination of over sixmonths of voting by professionals working withinthe golf travel and tourism industry, as well asvotes cast by the public. World Golf Awardsmanaging director Christopher Frost said: “It is anhonour to recognise Modry Las as Poland’s

Best Golf Course for a second consecutive year.Our voters, from across the golf hospitality world,have recognised the stunning location, exceptionalfacilities and pristine environment available at thecourse as the best on offer and it is with pleasurewe present them with the title this evening.”

Modry Las received votes from leading tourismprofessionals and consumers from across theglobe, which Gromadzki said reflects another busyyear at the Polish resort. “This award cementsModry Las as a truly international resort,” he said.“This has been an extremely busy year for us withthe highest number of international visitors ever.The votes cast for Modry Las only bolsters ourdetermination to create the best possible golf resortexperiences.”

Paweł Oszczyk announced chef ofthe year 2016 by "Gault & Millau"

Paweł Oszczyk from La Rotisserie restaurant inMamaison Le Regina Hotel was announced theChef of the Year 2016 by the prestigiousinternational culinary guide “Gault & Millau”2016. On 29 November 2015 at the SłużewiecRacetrack the Polish edition of the „Gault &Millau” guide held its ceremony and galadinner for more than 500 guests and presented2016 edition of the yellow guide.

It’s the first time in the 50 year history of thisFrench origin publication that the local edition isbilingual – Polish and English. “Gault & Millau”2016 presents 390 restaurants and 100 hotels fromthe whole country, all verified by the professionalinspectors. Mamaison Hotel le Regina and its LaRotisserie restaurant have been recommendedwith a very high rank this year – 3 chef hats and 15of 20 points.

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“I’m very happy to be here as the part of thisgreat culinary celebration – said Paweł Oszczykfrom the scene shortly after being voted the CHEFOF THE YEAR 2016. “Every single day, formore than 11 years, my talented team has beenfocused on serving the top quality food basedon the finest and freshest ingredients, withmatching top wines. The quality is our goal andmotto, we do not agree on any compromises inthat field. Thank you for this award, it goes tothe whole team of La Rotisserie restaurant!” –Paweł added.

For this very special occasion 6 chefs from thegroup of the top nominees created a unique 6-course gourmet menu with alcohol pairing. Chef ofthe Year 2016 was responsible for the planning andmanaging the work of the whole kitchen team.During the gala he was hard working behind thescenes to satisfy more than 500 hungry guests,including chefs from the whole country. PawełOszczyk had prepared a unique cold starter :smoked cold water trout, parsley and wild plumserved with Riesling 2013 Constance Muller,France, selected by the sommelier Chloe Bey.

MORE ABOUT LA ROTISSERIE RESTAURANTThe cozy La Rotisserie restaurant is set withinboutique Mamaison Hotel Le Regina Warsaw. Chef Paweł Oszczyk presents unique gourmetmenu available during business lunches, dinners and Sunday Linners. During Christmas seasonthe restaurant becomes a great venue forcorporate dinners and parties. Elegant New Year’sEve Dinner includes eight culinary

masterpieces paired with Andrzej Strzelczyk,sommelier champion of Poland 2012 and 2013,wines and subtle live music to make this eveningunforgettable.

Agnieszka Naumiuk, Marketing & PR ManagerT: 22 531 60 42, E: anaumiuk@mamaison.com

Helping put Mazovia’s heritage onthe International Stage

Friday saw the official launch at theInternational Travel Show TT Warsaw of threenew tourist heritage trails across Poland’sMazovian Province.

The trails, which are accompanied by expertly-written guides available in four languages, a mobileapp and dedicated website, are the latest in a lineof initiatives of the Mazovian Regional TourismOrganisation, and part of an EU co-financedproject entitled “Tourist trails of Mazovia’s culturalheritage”.

The trails provide visitors with a wealth ofinformation, and access to historic sights andmonuments. The first of the trails relates to thedukes and rulers of Mazovia during the middleages, whilst the second is a two-part trail tracingthe footsteps and life of Frederick Chopin duringthe first twenty years of his life in Poland. The thirdof the trails provides unrivalled insight into theevents and places surrounding the battle on theVistula in 1920 when Poland’s newly formed army,through a series of spectacular military victories,saw off the threat of the Soviet Bolsheviks, and indoing so changed the course of twentieth centuryEuropean history.

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Lacrosse is proud to have been involved in thisprestigious project, through its work on preparingversions of the accompanying guides andinformation boards on the route of the trails, intoEnglish, German and Russian, so that as manyforeign visitors as possible will be able to enjoy tothe maximum the many cultural and historicalattractions of the region.

The Guides received a commendation at a recentcompetition – Regional Roses 2015, and areconsidered to be among the best regional guides inPoland at present. The awards were announced inOctober at the “Tour Salon” Fairs in Poznan.

We are also very proud to be able to say that theChopin guides in the four language versionsavailable already made a great impact and wereenthusiastically received by visitors from acrossthe globe who attended the XVII edition of theInternational Chopin Competition held in Warsaw inOctober.

As a result of this project, Mazovia now has over1000 kilometres of dedicated themed culturaltourism trails, there are a total of 36,000 guidesavailable in Polish, English, German and Russian,400 road signs indicating the trails, 100 informationboards along the routes, 60 monuments dedicatedto the trails, a mobile app and dedicated website –www.dziedzictwomazowsza.pl, and a programmein place to promote and develop the tourist trailsand the cultural heritage of the region.

We encourage you to spend your holidays in thisregion, and to get to know its rich historical

and cultural treasures!

Last mile distribution may bebetter off grounded. Commercialdrone deliveries not a real optionyet - says Colliers International’sreport

Huge rise in demand for urban logistics spaceas most companies deliver goods in cities. Newanalysis suggests that commercial dronedeliveries may prove impossible due toextensive government regulation.

Warsaw, November 20, 2015 – A new reportentitled European Retail & Logistics Insights –From Sheds to Shelves, by Colliers Internationalhas said that the future of drone deliveries may beat risk due to soaring property costs and calls fromthe European Commission for tighter regulation.

“Realistically with rising rents and increasingcomplication of airspace regulation drones maybecome more trouble than they’re worth,” said TimDavies, head of EMEA industrial and logistics atColliers International.

As more sales are conducted online, there is agrowing need for local delivery hubs to ship goodsto consumers.

Analysis in the report has shown that industrialproperty has outperformed all other types ofcommercial real estate. Demand for space fromcompanies like Amazon has seen a reversal offortunes for the sector with values now rising.Costs for last mile deliveries will be driven by landconstraints around cities such as London, whereother uses such as housing often receive greaterpolitical support.

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While property costs make moving goods aroundmore expensive, it is like to be regulation thatcreates a real barrier for drone deliveries. TheEuropean Commission said last year that it wantedfurther regulation on commercial drones that wouldapply across the EU.

The announcement specified that further regulationwould be needed to prevent issues with safety,privacy and data protection.

Worries around privacy for residents, businessesand public bodies in the flight path of commercialdrones carrying recording devices have led toworries around national security and breaches ofprivacy as well as noise pollution.

Head of EMEA industrial and logistics, Tim Davies,predicts that increasing anxiety over the place ofcommercial drones within airspace regulationscould scupper plans for a high-tech deliveryrevolution.

“The report suggests that retailers may instead belooking to better utilise existing modes, such asincreasing network of Uber taxies or in-storecollection,” explained Paul Souber, Head of CentralLondon Retail Agency.

Amazon’s announcement in 2013 that deliveries inselected areas would be carried out by commercialdrones from 2015 sparked mass excitement abouta deliveries ‘space age’. But as of yet, it hasn’tmanaged to get off the ground.

For more information or to download the report,visit: http://goo.gl/AKRhSL

European Retail & Logistics Insights FromSheds to Shelves 2015

New office of ARP S.A. (IDA JSC)was officially opened in Wrocław

On 26 November 2015 a new office of ARP S.A.(IDA JSC) was officially opened in Wrocław.The office of the Wrocław-Kobierzyce Sub-Zone Team was relocated from the centre ofWrocław to the outskirts of the city to ensureeven better sub-zone management.

The ceremony was opened by PrzemysławStrzelec, Deputy Director of the Euro-parkWisłosan Tarnobrzeg Special Economic Zone. “9September 2015 marks the tenth anniversary ofoperation of the Wrocław-Kobierzyce Sub-zone inthe EURO-PARK Wisłosan Tarnobrzeg SpecialEconomic Zone. Taking into consideration thehitherto dynamic development of the industrialpark, which was set up in the KobierzyceCommune as a result of signing investmentcontracts with the LG Group in 2005, with a view tocooperation with existing Investors and futureinvestment projects, to improve management ofthe area and cooperation with companies runningtheir business activities within the zone, the IDAresolved to relocate the office from the centre ofWrocław to be closer to the Sub-Zone,” he said.

Mr Marcin Zieliński, Vice-President of IDA JSC,emphasized that “After the ten years, the

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rural Commune of Kobierzyce may serve as anexample to follow for local authorities not only inPoland, but also all over Europe. Credit for thesuccess achieved by the Wrocław-KobierzyceSub-Zone goes out to various communities:entrepreneurs, MPs, state institutions andemployees who are always open to cooperation.”

The meeting was attended by foreign investorswho had located their investment projects withinthe Wrocław-Kobierzyce Sub-Zone(representatives of such companies as LGDisplay, LG Chem, LG Innotek, Kessel, LappKabel, Samwha, Linde- Gaz and other), as well asrepresentatives of local authorities and foreignchambers of commerce. All of them expressedtheir appreciation for the zone’s managers. “I amsurprised with the way the Sub-Zone is growing, itis fantastic, the entire infrastructure, excellentroads, great connection with the airport,motorways. Over the last few years, ourcooperation with the Industrial DevelopmentAgency, with the Kobierzyce Commune, has beengoing so well that we plan to continue the growth,”said Leszek Sobczyk, Vice-President of theManagement Board of Kessel Sp. z o.o.

The plots of land offered by the Tarnobrzeg SpecialEconomic Zone in Lower Silesia are unrivalledwhen it comes to road and power supplyinfrastructure. A network of local and transit roads,an international airport, a network of passenger andfreight rail and connections with the Europeanmotorway network are among the incentives forinvesting in our sub-zone, and thus the investmentland continues to attract numerous foreign

entrepreneurs. Mr Maciej Ślęzak, Head of theTSEZ, said: “The fact that the Wrocław-KobierzyceSub-Zone is the area of the largest concentration offoreign capital commits us to create favourableconditions for the growth of our existing and futureinvestors, so that they can take decisions,implement their plans, and create new jobs. Wehope that with the new location of the office, ourstaff can become even more effective inwelcoming investors, managing the Wrocław-Kobierzyce Sub-Zone and taking care of existingInvestors.”

The Wrocław-Kobierzyce Sub-Zone within theEuro-Park Wisłosan Tarnobrzeg Special EconomicZone was set up in 2005 in Biskupice Podgórne,Kobierzyce Commune, to establish the firstEuropean technological cluster of the world’sleading LCD producer, LG.Philips, in the vicinity ofWrocław. The special economic zone set up in theKobierzyce Commune attracted other foreigninvestors. Initially, the zone covered approximately275 ha and it was the place of business for LGfactories and their sub-suppliers. Currently its areais 410 ha, and, apart from the group of Koreancompanies, its investors include: UPM Raflatac,Linde Gaz and large international companies suchas Compal, Lapp Kabel, or Amazon.

The new ARP office in Wrocław is located at ul.Wyścigowa 56e.

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The Second Congress of PolishEntrepreneurs in the UK

The Second Congress of Polish Entrepreneursin the UK took place on 16 October at thepremises of RBS in the City of London.

The high-profile event was judged by participantsto have been a huge success, both in the amountof business knowledge imparted and the effectivenetworking that the Congress afforded. Withdelegates coming from all over the UK as well asfrom Poland, the Congress brought togethersuccessful owner-managers of high-growthbusinesses in one place to learn, shareexperiences and swap business cards.

With innovation as the main theme of this year's

Congress, the day-long event was divided into amotivational session, a business clinic addressingspecific issues relevant to running a firm in the UKtoday, and a panel discussion which focused oncase studies of innovative Polish businesses andthe cultural differences between runningbusinesses in both countries.

The event was opened by His Excellency WitoldSobków, the Polish Ambassador to London,Michael Dembinski, the BPCC's chief advisor, andBartek Kowalczyk, the driving force behind thePBlink.co.uk series of events and businesswebsite. Ian Spero, founder of Creative Skills ForLife and a strategic advisor to Innovate UK,outlined the role of Innovate UK as a source ofgrants for innovation-led businesses, "free money"as he put it, which hardly any UK-based Polishentrepreneur had heard about. Veronica Heaven,owner and founder of The Heaven CompanyLondon Ltd, spoke compellingly about the need toput sustainability into the heart of business.Working with British firms that are currently run bythe fourth or fifth generation of the founder's family,she stressed the importance of taking the long-term view of business growth, that takes accountof society and the environment as well as thebottom line. Marcin Zaba from crowdfundingplatform Syndicate Room explained howcrowdfunding works as a way through whichentrepreneurs can finance their innovative ideas.He said there were three models - equity, loan anddonation. Participants had the chance to hold one-to-one meetings with the speakers during a 45-minute long structured networking coffee break.

Following the break, the Business Clinicconcentrated on the day-to-day aspects ofentrepreneurship. Neil Butler, from CompaniesHouse, explained how this institution works, howentrepreneurs can set up Limited LiabilityCompanies in the UK, the duties andresponsibilities of company directors, and theamount of information that is freely available fromCompanies House - which can help entrepreneursassess the trustworthiness of potential businesspartners. Bartosz Maj

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from Simpkins & Co. Solicitors spoke about themajor changes to the state pension scheme, andhow auto-enrolment will affect every singleemployer in UK, regardless of size. He explainedsteps that employers need to be taking now to beready for the introduction of auto-enrolment in2017. Peter Lorenz from UK Trade & Investmenthighlighted the advantages that the UK can offer asa base for entrepreneurs from around the world. Asan inward investment destination, the ease of doingbusiness (the eighth best in the world, the second -after Denmark - best in the EU) makes the UK anideal springboard for global expansion. Serialentrepreneur Helen Roberts from CPG ExecutiveConsulting, originally from Ireland, followed onalong this theme, explaining the many ways inwhich the UK can help entrepreneurs boost theirbusiness success.

After a networking lunch, again with structuredone-to-one meeting opportunities with thespeakers, the third session - focused on innovation- commenced. Michael Dembinski, from the BPCCintroduced the session, saying how important it isto the future direction of Poland. "Either Poland canremain an operation economy, outsourcingmanufacturing and services to more advancedcountries - or it can become a strategic economysetting the course for innovative growth for othersto follow," he said. Lack of access to financinginnovation and outdated structures in Polishuniversities hold the country back, but EU funds inthe 2014-2020 financial perspective, driven byprivate-sector initiatives, offer hope for a step-change in how Poland approaches innovation.Ziemowit Ekiert from Acuarius Consulting spokeabout market entry in both directions - findingsuitable business partners in Poland and in the UK,while Patrick Ney, director of BPCC Trade, talkedabout the key barriers holding back UK businessesfrom entering the Polish market - lack ofcommitment, budgets and marketing. MarcinKozlowski from Business Link put Polish start-upsinto a global perspective, pointing out thecomparative cost advantage of doing R&D or ITwork in Poland.

The final part of the conference was a paneldiscussion, in which five entrepreneurs swappedopinions about running a business in the UK,based on their own case studies. MichałKrajewski, from Polsteel Ltd, Michał Wojnar, fromTeam@One Ltd, Paulina Sygulska fromGrantTree, Przemyslaw J. Sulich, from A1 Europeand Andrew Humphries, the co-founder ofbusiness incubator The Bakery and a UKTI globalentrepreneur dealmaker, exchanged views aboutsome of the soft issues that make such adifference in operating in a multi-national businessenvironment. There was an observation that Polishentrepreneurs - with their drive, vision, intelligenceand capacity for hard work - often under-sellthemselves when pitching to UK clients of potentialbusiness partners. Mr Humphries observed thatthey have no need t0 feel inferior as they are sharpand able.

After closing remarks from Nick Howe of NatWestBusiness Banking, the main networking sessionbegan. As well as Congress delegates, additionalPolish entrepreneurs came along, just for theevening mixer. Every person had a 30-secondopportunity to introduce themselves and theirbusinesses, after which the informal networkingbegan in earnest, interrupted only for the businesscard draw. At eight o'clock, the day-long eventcame to an end, but delegates carried on acrossthe road at a pub until closing time!

The BPCC would like to thank Bartek Kowalczykfor his sterling work in bringing together the Polishentrepreneur community; Confidalia Events fromLeeds which put together such a well-organisedconference; and RBS for hosting the Congress inits excellently equipped conference facility.

Photo gallery http://pblink.co.uk/galeria

Presentations http://www.pblink.co.uk/download

https://youtu.be/RS2oY0bSWSU

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The Visit of BPCC Representativesat the Świętokrzyskie province

At the invitation of the Marshal of theŚwiętokrzyskie province, Adam Jarubas, theBPCC paid an official visit to Kielce on 20October. The aim was to establish workinglinks with the province. The meeting, held inthe marshal's office, was attended by UrszulaKwaśniewska, director of the BPCC's Krakówoffice Kraków, Marta Smolarek, the BPCC'sexport consultant, and Michael Dembinski, theBPCC's chief advisor.

Mr Jarubas was joined by Cezary Tkaczyk, theCEO of the Starachowice Special Economic Zone(SEZ), Gregory Orawiec, director of the province'sRegional Policy Department, and Andrzej Lukasik,the marshal's adviser on international cooperation.

The meeting was focused on two areas: first thepromotion of the investment opportunities that theprovince and the SEZ can offer British firms, thesecond was the help that the BPCC and itsmembers can offer firms from the province inentering the UK market. Ms Kwaśniewska outlinedhow the BPCC's Kraków office supports inwardinvestment and Polish exporters, as well as thenetworking benefits the Chamber offers. MrDembinski presented the latest data on tradebetween Poland and the UK, underlining

the success of many Polish brands. He alsopointed to the strong growth trend in demand forproducts from Poland. "According Poland's centralstatistical office, during the first eight months of thisyear, the value of Polish exports to the UK was upby almost 14% compared to the same period lastyear. The UK is a great partner for Poland,because its economy - the world's fifth-largest - isgrowing faster than any other large westernEuropean country, and because there are a millionPoles living in the UK who can act asambassadors for Polish brands. Over 22,000limited liability companies belong to Polishentrepreneurs in the UK, and a further 65,000Poles living there are self-employed," said MrDembinski.

President of Cezary Tkaczyk, who is also head ofthe Chamber Staropolska Industry andCommerce, said: "We want to present our offerand to work together to raise the profile of the UKas a destination market for exports from ourprovince. This requires bilateral contacts and thefull use of all the tools which we have at ourdisposal." The meeting was a follow-up to anearlier meeting between Mr Jarubas and HerMajesty's Ambassador to Poland Robin Barnett,held in Kielce the previous month.

The BPCC delegation was hosted in VI Liceumhigh school in Kielce, renowned as the city's best.Classes are taught in Poland and English. MrDembinski compared the quality of education inboth countries and the cultural differences incommunication, directly connected with theknowledge of foreign languages. Pupils had manyquestions relating to the appropriate

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choice of study to improve their competitivenesson the labour market. Ms Kwasniewska stressedthe importance of foreign language skills in therecruitment process, as well pointing out theimportance of additional activities undertaken bystudents such as internships. She explained howsuch internship programmes work at institutionssuch as the BPCC.

Later in the day the BPCC visited at Targi Kielce,Poland's second-largest trade fair (after Poznań).Targi Kielce is a first-class international venue forconferences and exhibitions, and the BPCC looksforward to organising events here. This wasfollowed by a visit to the newly opened RegionalScience and Technology Centre in Podzamczenear Checiny. The centre is focused on lifesciences, which is logical for a region that offershealthcare tourism to two large spa complexes - atBusko Zdrój and Solec Zdrój.

The first of the BPCC events aimed at presentingits export services to entrepreneurs from theprovince will be held in Kielce in January.

Business Travel Survey - KrakówAirport

This will be a record year for Kraków Airport.For the first time in history we will exceed 4million passengers handled throughout a year.This great result is due to the attractiveness ofKraków and the region of Małopolska, but alsoour efforts to expand our route network, makeit more interesting every year and bring in moreand more airlines.

In the Summer 2015 season Kraków Airportoffered 61 regular direct connections and 10charter connections in cooperation with 17 airlines,including Europe’s biggest carriers such as KLM,British Airways, Lufthansa, Ryanair and

easyJet. Our Winter 2015/16 season offer isappealing too, with four new regular directconnections added to our route network: Tenerife,Gran Canaria, Eilat Ovda and Olsztyn Mazury.

We are focused not only on attractive destinations,but also on the high standard of passenger service.Kraków Airport has changed a lot over the recentmonths. A new terminal - spacious, with moderninfrastructure and very interesting architecture wasput into operation in autumn. Conversion of the oldterminal will be completed by the middle of nextyear and the two parts of the building will becombined into one, European-class facility.

In November we also completed a thoroughrestructuring of the operating area of our airport.Taxiways have been upgraded and additionalaircraft parking spaces have been added. As aresult, we are able to take in more aircraft and thelevel of safety of flight operations has improved.

We work to provide our passengers with the besttravelling experience from Krakow Airport. Iencourage you to personally see how we changeby choosing to fly from our airport. Below you willfind a link to a short survey on the travelpreferences of passengers, the purpose of whichis to expand our offer of direct connections fromKraków Airport. I would be much obliged if youcould help us by filling it out.

Jan PamułaPresident of the Board of Kraków Airport

https://www.surveymonkey.com/r/KrakowAirport please fill out the survey by 18 December 2015.

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Quality space prime locations willalways make money

Michael Dembinski talks to Mike Strong, ExecutiveChairman of CBRE for EMEA

These are challenging times for investors.Interest rates are at a historic low, stockmarkets are underperforming, governmentbond yield rates are flat and emerging-marketgrowth is evaporating.

So are investors choosing to move into real estateas an asset class? Mike Strong, ExecutiveChairman of CBRE for EMEA, says that this is thecase. “There has been a readjustment in the totalinvested universe, something like a 1% shift inweighting towards real estate – though as you canimagine, that 1% is a very large number,” he said.

“Volumes were last at this level back in 2006-2007,but then a large amount of it was funded by debt.Bank leveraging was heavy and widespread. Thisled to a development boom,” said Mr Strong. Theresults of that debt-fuelled boom could be seen incountries like Ireland and Spain – developmentsstanding unfinished for many years. “There’snothing like those levels of debt leverage this time.The market is better funded,” he said. “The yieldgap between a 10-year treasury bond and well-positioned real estate with a solid rental incomehas never been as great, it’s currently around threeto four percent above the risk-free rate.”

“More equity is currently aimed at real estate thanhas ever been seen – more than in the previouspeak in 2007. It is coming from multiple sources –China, the Pacific Rim, the Middle East, Europe –although the ‘New Europe’ is not so prominent –and Norway. Most Sovereign Wealth Funds arepresent in real estate markets, many havingentered only four-five years ago; traditionally SWFshave invested in bonds, equities and cash. We'vealso seen the Canadian pension funds very activein real estate over the past four-five years.

Greater diversity of investors, with a deep pool ofequity. They don't need to leverage when buying.”

We go into greater detail. Which sector of realestate attracts the most investment? “By value thebiggest component is still offices,” says Mr Strong.“There are a number of dynamics converging.Supply of new, high-quality office space is at avery low level in absolute terms. And what are theoccupiers doing? They’re using floor space moreefficiently and flexibly. People are still the biggestcost for business; attracting and retaining the besttalent is the biggest challenge. The trend is lessspace per head in the best-quality buildings. Andthe focus is on prime property – there's not muchabout, tenants are chasing it. At the same time,less-than-prime space on the peripheries of citiesis being turned into residential and being adaptedfor other uses. Landlords in such areas need to dosomething or lose tenants to better quality, betterlocated property.”

Corporates have always been big drivers of trendsin commercial real estate. But there are newplayers entering the market – tech start-ups incities like London and New York. “Tech start-upshave different occupational needs,” said Mr Strong.“They tend to cluster around the outer ring of thecity’s Central Business District (CBD). Start-upsdon’t feel comfortable with big corporateneighbours. The model we’ve seen from the 1970sand 1990s – business parks custom-built on theedge of town, the US model – is coming to an end.Google is into the heart of the city. Predictions thateveryone would work from home have proved far-fetched. Young employees want to socialise andwork in an interesting environment.” And not onlyemployees. Yahoo!’s CEO, Marissa Mayer,stopped home working in February 2013, toimprove collaboration, internal communication andthe speed and quality of work.

In the tech world, chance meetings andconversations can spark new creative ideas. ForGoogle, the coffee machine is a key officeinstallation. In today’s war for talent, the quality ofthe working conditions determine whether

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an employer holds on to the best people. “Newusers want vibrancy of workplace. They like thenew ways of working; the cellular office isoutdated. Employers are seeking to provide thebest environment for everyone.”

These trends affect everyone. “Investors anddevelopers need to enhance, not restrict. Thisflexibility is not limited to the lease terms;everything has to be flexible – new fit-out, privaterooms for quiet work, co-working environment,”said Mr Strong

Retail property trends are also changing along withour cities. The biggest game-changer has been therapid development of e-commerce. “It’s a small- tomedium-sized revolution. There are clear trends.The best malls have prospered, even though theeconomic environment has been rocky. In Europe,there’s been a strengthened trend for destinationand experience shopping – food and entertainmentalong with retail. The best malls have tenantswaiting – leisure, retail, food courts. They are goingup-market, with fine dining and art galleries. This isgood for consumers and tenants,” said Mr Strong.A similar picture has emerged with the highstreets. “The very best high streets havemaintained their positions or have evenstrengthened. As for the rest – it’s too early to say.”

We talk about the challenges that e-commerce hasbrought to retailing. Mr Strong points out that therehave been hiccups along the way. “The issue ofthe last kilometre - distribution to the consumerremains a problem. The complexity of deliveriesand returns of faulty goods cause massivelogistics problems for online shops. It looks likethere’s a second level of retailing taking shape,with the biggest players in e-commerce looking toopen physical shops, so they can get closer to theconsumer. But it’s too early to say if there’s a cleartrend there. And pop-up stores are appearing to fillthe gaps, another new trend we’ve noticed.”

Food retailing is also undergoing change. Thegrowth in building edge-of-town hypermarkets isclearly slowing. “Retailers are

coming to neighbourhood retailing – this is wherewe see massive expansion. And it’s affecting theshape of our cities. In London, New York, Paris orBerlin, car usage has been dropping progressively.Citizens are turning to bicycles and publictransport, moving away from cars. They don’t haveto worry about car parking-space angst. They wantto be near cinema, sports, fitness, theatre, artgalleries,” says Mr Strong.

“City centres are giving over less space forparking, broadening pavements. And publictransport is being prioritised. Without goodconnections, even the best building with the lowestrent is not going to fly. The young want to live neartheir workplace. I go back to the war for talent –short commuting time is shown in survey aftersurvey as being more important than a highersalary. There’s a cycling revolution going on. Citiesare following the examples set by Holland andDenmark in providing safe, segregated cyclepaths. London’s Cycle Superhighway will be anexcellent facility. This is a trend that’s comingglobally. The old trend to move out into the ever-more distant suburbs has been reversed, peopleare living closer and closer, ideally within walkingdistance to their place of work, which ideally issituated in the city centre,” he says.

Today’s city dwellers “don’t want to waste a singleminute of their time,” says Mr Strong. This leads toan exceptionally dynamic, well-balanced mix ofoffice, leisure facilities in a prime city location.Cities are being more lived in cities – Paris, hebelieves, shows the way forward, as opposed tothe City of London which still has low levels ofresidential occupancy. Optimising cities for 27/7living, working, shopping and relaxing will inevitablypush up property values; investors are sensingthis. In manufacturing another big trend is beingreversed – to move offshore, to the Far East, butnow manufacturing trend is to bring it back.Smaller batches, mass customisation, and newtechnologies such as 3D printing will bringmanufacturing back, nearer

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to the consumer, as well as higher social andenvironmental awareness. This – along with thewarehousing implications of this shift – willinevitably have some impact on the real estatemarket.

Mr Strong also talked about CBRE as an employerin Poland. “As well as the 250 staff we haveadvising clients, who are working here in RondoONZ 1 in Warsaw, we employ a further 600 peoplein our GBS (Global Business Services)outsourcing hub in Służewiec. This is workingexceptionally well for us.”

A look at the Export Insight Visitto Poland 6-8th October 2015

13 British companies representing 9 differentsectors arrived in Warsaw on Tuesday, October6th to participate in a 3-day Export Insight Visit(EIV) organising by BPCC Trade and UK Trade& Investment (UKTI) South West.

The visit, full of meetings and seminars, was agreat opportunity to gain knowledge about theprocess of exporting, an in-depth understanding ofthe Polish market opportunity, as well as insightinto other CEE markets, including Romania,Hungary and the Czech Republic.

The first day of the EIV was divided into threesegments. During the morning session thedelegates were welcomed by HMA Robin Barnett,UKTI Regional Director Tom Salusbury, as well asBPCC Trade Director Patrick Ney who alsointroduced the participants to the OverseasBusiness Network Initiative (OBNi), the markets ofCentral and Eastern Europe, as well as providedtop tips on how to be a successful exporter.

The second session involved round-tablediscussions (one table for each market) as well as1-2-1 meetings with trade consultants whodiscussed how we the OBN and UKTI could helpwith the export journey. After lunch the delegateswere invited to a seminar session, where theylistened to two successful British businessesalready exporting to Poland - Loake and RomanLtd. Afterwards, experts in the field of retail anddistribution, e-commerce, as well as logisticsdelivered a thorough overview of these sectors.

The first day concluded with a networkingreception in the British Embassy, which was anexcellent opportunity to meet new contacts,exchange remarks and business cards.

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The second day of the Export Insight Visit began inthe beautiful office of Accreo located on the historicPróżna Str. The delegates had an opportunity tolisten to two presentation delivered by experts inthe field of language, cultural, legal and tax issuesassociated with doing business in Poland.

The EIV concluded with a visit to the British PolishChamber of Commerce, where the delegates hadone more opportunity to talk to their dedicatedexport consultants, as well as discover the richhistory of Poland in a presentation delivered byPatrick Ney, BPCC Trade Director.

The Export Insight Visit was the first visit of its kindorganised by BPCC Trade and UK Trade &Investment, and it is considered a success withmany delegates providing positive feedback andthank you notes:

“Many thanks for your e-mail and in particular forthe support and assistance which I received fromyou and your team last week. It was pleasure tohave been a part of the Export Insight Visit toWarsaw and I will now pursue the possible leadswhich I made, as well as using the information toexpand my business into Central Europe.” - DonGillanders, Chief Executive, Airboss Limited.

“Very helpful. I learned more is short space of timethan I could with a number of ‘unassisted’ visits.” -Gareth Leonard, Managing Director, Regenesis.

“Great presentations, Informative 1-1 meetingswith country experts.. this would have taken memonths of research and time that I just don’t havein my working day.” - Tim Lovell, Director,Talkback Communications.

„Well organised, informative, lots of help andadvice available to make exporting easier.” -James Brown, Managing Director, ClickInnovation.

BPCC helps UK firms buy fromPoland

The BPCC has great contacts with exportersacross Poland wanting to sell to the UK. Useour service to help you buy directly fromthem. In response to strong interest fromPolish manufacturers wishing to export theirproducts and services to the UK, last year theBPCC launched a support service intended tohelp businesses from all over Poland bymatchmaking them with potential Britishpartners.

The focal point is to identify the suitable UKimporter, buyer, agent, distributor and end-user.Additional help is provided by BPCC membersoperate in sectors such as translation, logistics,marketing, legal and IT. The entire process issupported by utilising the BPCC’s unrivalledexpertise and its strong B2B networks across bothcountries.The BPCC spreads the word about exportopportunities to the UK by organising conferences,seminars and workshops across Poland. This yearit held 13 such events – more than one a month onaverage, visiting Kraków, Katowice, Wrocław,Warsaw, Toruń, Białystok, Lublin, Opole andWałbrzych. Demand for information was such insome cities – Toruń, Lublin, Wrocław andKatowice, were visited twice. The meetingsprovide a unique opportunity for local exporters tolearn from the BPCC and its members more aboutthe UK market, product demand,

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export procedures and finally partner acquisition.The next event of the series takes place in Januaryin Kielce. The number of Polish exportersrepresented at these seminars ranges between 20and 80. The culmination of this series of meetingswill be the second Export Forum scheduled forThursday 19 May in Kraków.Typical Polish firms attending these events aremedium-sized firms that are already successfullyexporting to countries like Germany, Sweden orCzech Republic, and are now looking to enter theUK market. Increasing numbers of Polish firms arefrom eastern Poland, finding their traditionalmarkets of Russia and Ukraine no longer as openas they once were. For these firms, the UK marketrepresents a major challenge, not least because ofthe different business culture.

The most difficult and challenging task in tradesupport is to find an appropriate business partner.For this reason, following the demands of theexporters, the BPCC is making every effort toestablish cooperation between the parties. Thechamber collaborates with Polish companiesoperating in different business sectors, and seeksto identify and create new export opportunities tothe British Isles.At the moment, the BPCC cooperates with thefollowing Polish producers:

Miwex, manufacturer of tomato ketchups,condiments and saucesBeer Fingers, manufacturer of savourysnacks Lider Trade, manufacturer of fresh andfrozen fruits and vegetablesWalpol, manufacturer of meat and sausageand provider of meat processing services,i.e. slaughtering, cutting and boningScorpio Poland, manufacturer of children’sclothing and accessoriesBialcon, manufacturer of women’s clothingLIM, manufacturer of women’s footwearSanwil, manufacturer of leather-like products,

coated materials, PVC and PU products forfurniture and for the medical industryLibella, manufacturer of household cleaningproductsAl-Tech, manufacturer of aluminium windowsand doorsBP Techem, manufacturer of doormats andfloor matsInject Plast, producer of plastic elementsmanufactured with injection method UK-based companies looking to buy from Polandshould contact:

Marta SmolarekExport Consultant

Mobile: +48 660 761 300Email: marta.smolarek@bpcc.org.plAngel Plaza, ul. Zwierzyniecka 24 / A 20631-105 Kraków

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Taste of Britain hits Poland for thethird time

UK Trade and Investment and the BPCCorganised a series of trade meetings for foodand drink producers from the UK on the 23 and24 November 2015. The trade meetings wereorganised as part of the Taste of Britain Series3 programme.

Taste of Britain is an original project devised by theFood is GREAT team working at the BPCC. Theproject aims to launch and promote selected UKfood and drink products onto the Polish market.Thanks to the project, around 300 British food anddrink products have already been launched, andaround 30 UK producers have started running theirbusinesses in Poland, either directly or viadistributors.

The Food is GREAT team has run successfulevents such as British Week (in Polish, DniBrytyjskie) at the Alma delicatessen chain – anupmarket retailer similar in profile to Britain’sWaitrose, and The British Aisles (in Polish,Brytyjska Wyspa Smaków) organised incollaboration with the Kuchnie Świata chain, aspecialist retailer selling exotic foods from all overthe world in smaller-format stores situated in topmalls around Poland.

The companies that have taken part in Taste ofBritain Series 3 were Musk’s Sausages, FairfieldsFarm, Linwoods, Scarlett & Mustard, Rakusen’s,Asiana, Saitaku, SHS Drinks, Hogan’s Cider andbrewers Pistonhead. Throughout the event, whichwas held over two days, there were over 70 face-to-face trade meetings organised between theBritish firms and Polish distributors, retail chainrepresentatives and other companies from the foodsector.

New Flavour in Town – Building aSuccessful Export Strategy forNorth East coffee companyBeanies

Durham based producer of premium freezedried coffees Beanies Flavour Company haslifted the lid on the Polish market thanks toBPCC Trade, innovative products and a greatmarket entry strategy.

‘Europe is a key focus for our export strategy andwe’re looking at markets with a clearly defined andmature retail supply chain, so Poland wasabsolutely one of those’ John Evans, Beanies’Managing Director, told us, and little wonder sincePoland is the 6th largest population in Europe. Beanies have embarked on a long-term project toenter Poland backed by a dedicated team of FoodSector advisors, amongst them BPCC Trade’sMalgorzata Kaczmarek who told us, ‘the thingthat’s great about working with Beanies is theircommitment to their own success and theirperseverance throughout, which is not somethingevery British exporter brings to the table.’ Thanksto the support of BPCC Trade and this committedapproach, Beanies now have listings in Poland’slargest independent food and drink retailer anddistributor Kuchnie Swiata and have recentlyentered all 52 major stores of one of Poland’slargest retailers, Auchan, with their unique range offlavoured coffees. ‘We’d had some limited salesin Poland, mostly on the web, but our journey intomarket has been much faster thanks to BPCCTrade,’ John told us, ‘and working with a clearlydefined sales plan our growth has taken off.’ Key toBeanies’ success has been tailoring their salesand marketing to the Polish consumer, somethingthat BPCC Trade advises call companies toconsider: ‘Beanies have adapted to the market andresponded to our feedback on sales andmarketing, including designing a new label in Polishand investing

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energy into Facebook B2C marketing, which iscrucial in a competitive sector like food and drink,’Malgorzata said. Polish consumers all acrossthe country now have the chance to wake up andsmell the coffee on hundreds of new British foodand drink products entering the market thanks toMalgorzata and her colleagues.

For more information about Beanies please contactmalgorzata.kaczmarek@bpcc.org.pl.

Chairman & CEO Note

Dear Members,

December is traditionally the time to reflect onsignificant changes and developments thathave happened throughout the year, so wethought that we would look back over the last11 months and remind you what has beenhappening at the Chamber as 2015 has been amemorable year for the BPCC.

Needing a new home after HSBC’s kind grant ofrent-free offices ended with the bank’s move toother premises, the chamber has settled in at itsprestigious and convenient city-centre location onul. Zielna 37. The 250 m² of class A office spaceequally funded by UKTI will hopefully serve forlonger than the current three-year lease. The officeon Zielna is already known for its great “views andcoffee”. Please stop by anytime you are nearby!

On the staff side we sadly waved goodbye toMarta Mikliszańska who joined our member firmCEC Government Relations in May. We veryquickly thereafter welcomed Agnieszka Garbacz,Marta’s replacement who very efficiently moved tolead our policy groups. She brings with her sevenyears of experience and government contactsfrom her previous job at Polish inward investmentagency, PAIiIZ. In June the number of groupsincreased to 12, with the Manufacturing Industriespolicy group being our latest initiative in this area.Michael Dembinski will continue to be our chiefpolicy advisor. Michael has been carrying out thisrole since 2003, after 16 years experience at theCBI. Its hard to think of anyone who has been atthe Chamber that deserves a bigger thanks formagnificent effort.

Poland’s most important political event of the yearwas the parliamentary elections which took placeon 26 October. They have resulted in a newgovernment that our policy groups will be engagingwith for the objectives of generating an openpublic–private dialogue and to share best practiceacross wide range of topics. A calendar

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of policy meetings for Q1 of 2016 will be graduallyuploaded on our events calendar.

Of equal importance to our policy work is ourexport support project for British SMEs. The BPCChas become part of the UKTI Overseas BusinessNetwork initiative which has successfully enteredits third consecutive year. UK Trade andInvestment has tasked 41 delivery partnersincluding the BPCC to double British exports by2020. Much effort has been put to meet this targetby BPCC’s eight full-time export consultants andseveral researchers, led by Patrick Ney andRussell Towlson. Russell told our trade successstory to the UK trade minister, Lord Maude, whovisited the BPCC in September. Our exportconsultants who support British SMEs entering thePolish market have achieved global recognition forbeing one of the leaders in the network of 41countries who form the OBN – well done all! A younger brother of the OBN initiative was set upfrom the scratch in our Krakow’s office. ThisOctober, Marta Smolarek completed her first yearwith the BPCC. Marta is leading on export supportactivities for the Polish firms wanting to trade withthe UK. The BPCC’s youngest export service hasalready made a big impact. There have been 13‘Export to the UK’ events across Poland this year,from Białystok to Wałbrzych, from Toruń toKraków. Marta has assisted clients from all partsof Poland and will soon be adding to her team. Welike to think that our efforts in the trade field havecontributed to what will be a record year when itcomes to the value of trade flows between Polandand the UK.

Many members and friends have noticed the newface of the Chamber with the re-launch ofwww.bpcc.org.pl on 1 September. A new look withimproved functionalities to our website wasunveiled. The changes were managed by DorotaKierbiedź and Kuba Piegat. Look out for furtherenhancements in 2016. Many thanks to Dorotaand Kuba for their commitment and skill on thisinitiative.

The BPCC’s regional work is a natural extension ofour central offerings from Warsaw, so please don’tforget that your membership is corporate andcovers all activities that are happening be they inKraków, Wrocław and London and across the UK.Urszula, Ilona and Michael are eager to welcomeyou at the BPCC offices and events that are takingplace in the regions.

In the UK, we have supported the hard work ofBartek Kowalczyk at Polish Business Link, whohas done so much to integrate Polishentrepreneurs that have set up businesses in theUK. The BPCC has supported Bartek in theorganisation of the First Congress of PolishEntrepreneurs in London, which attracted over 180participants, as well as a Scottish forum inEdinburgh, and numerous seminar-mixer eventsup and down the UK from Southampton toGlasgow.

As ever, the social highlight of the year was theAnnual Ball, held for the 23rd time on 25 October.As well as great entertainment, a display of Jaguarand Land Rover cars and fabulous food (Englishlamb), there was a surprise special guest –Solidarity legend, and modern Poland's firstpresident, Lech Wałęsa.

At the AGM in April, Antoni Reczek wasunanimously elected for his fourth year as theBPCC’s chairman, while Nicholas Richardson andMichael Clay both retained their position as vice-chairmen. Additionally Katarzyna Chabinka ofKMC Services and Patrycja Rogowska-Tomaszycka of Provident were elected as boarddirectors, and Ewa van Veenendaal-Rawicz of UKTrade & Investment Poland has joined the boardas ex-officio director. The next AGM is confirmedfor 27 April. Please save the date in your calendarsif you wish to participate in person.

The chamber’s honorary presidents, WitoldSobków, the Polish Ambassador to the Court of StJames’s and Her Majesty’s Ambassador toWarsaw Robin Barnett, have attended numerousBPCC events and we would

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like to thank both presidents for the tremendoussupport that the two embassies have lent ourorganisation, in particular for acting as marvelloushosts to so many events hosted in the respectiveembassies. Teamwork between the BPCC and theembassies has never been better. Sadly, there is afarewell ahead of us, as HMA Robin Barnett will beleaving his post in Warsaw after four years –please join us for Christmas Carols on Wednesday16 December at the British Embassy in Warsaw tosay good bye! Last but certainly not least, wewould like to express our deepest gratitude to ourstaff for their dedication, hard work and great ideasin 2015. All that’s been mentioned above could nothave happened without the work of all our staff,who day-by-day support our members, clients,partners and friends and further build the wealth ofBritish-Polish business relations. Words can onlypartly express our gratitude and we simply want tosay: thank you and dziękujemy for all that youhave delivered!

To our members who ensure the Chamber’sfinancial stability and who collectively form, underthe BPCC umbrella, a vibrant business networkthat so effectively links our great nations, we say‘keep on doing it!’

We wish a very Merry Christmas and a Happy2016 to our members, friends, partners and indeedall our readers.

How hotels can save money withLED lighting

by Kinga Raczak, biuroKR architectural practice,and Mateusz Szubel, Estera Przenzak andWojciech Goryl, AGH University of Science andTechnology, Faculty of Energy and Fuels

Poland has over 2,250 hotels, of which over 350are premium class, four- and five-star hotels1.These facilities are built with the intention tosatisfy the customer by offering comfortable,functional space and also excellent service.

Many of thesehotelsdemonstrate anoriginalarchitecturalconcept. Anannual hotelindustry awardrecognisesoutstandingprojects. Winnersof the Hotel With AConcept award include Hotel Arłamow (2014),Narvil Conference Spa Serock (2013), Pure HotelWroclaw (2012), and Hilton Gdansk, the Andel’s hotels in Lodz and Krakow in previous years.

In the era of architecture with pro-environmentalvision, does the term ‘concept’ also apply to theefficient use of energy? If so, what kinds ofsolutions are most often applied? Are they theresult of the economic balance of an investment, orare they as well a response to an increasingcustomers’ awareness regarding theenvironmental protection?

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From theinvestor’s point ofview, long-termsavings areachieved forexample by usingheat recovery inair-conditioningunits withrecuperation,monitoring andfluid temperatureadjustment in the rooms and energy-efficient lightsources. For the customer, important elementsaffecting the comfort of the stay in the room includeadjustable lighting (adjustment of its colour as wellas intensity), de-chlorinated bath water, air purityand noise level.

The interests of service providers and recipientsoften diverge. However, the lighting aspect seemsto be equally important for the investor – ineconomic point of view – and for the customer whowants to relax after a hard day's work in a roomwith the adequate quality and intensity of light.

In recent yearsclassicincandescent lightbulbs have beenreplaced withfluorescent lamps,and nowincreasingly oftenwith light-emittingdiodes (LEDs).This is due to the significant difference in theefficiency of these light sources. Efficiency inlighting is called ‘luminous efficacy’ – the amountof luminous flux that can be radiated from one wattof electric energy supplied to a certain source. Thisparameter may also be given as a percentage ofthe ideal source (which emits a maximum of 683lumens per one watt). Luminous efficacy of atraditional, incandescent bulb is only 1-3%. Thismeans that the remaining 97-99% is lost mainly inthe form of

heat. For fluorescent lampsthis parameter is varied inthe range of 6-17%, whileLED lights are definitely thefavourite here, with theluminous efficacy at a levelof up to 44%.

The costs of lighting of atypical hotel room – lit by two bracket lampsabove the bed, a small desk lamp, and armchairlamp, and general room lighting – depend on thebulbs used. With traditional lighting, this would lookas follows: bracket lamps: 2x15W, desk lamp:75W, armchair lamp: 75W, general lighting: 75W.In total, the power needed to illuminate a room withincandescent light bulbs is 255W. But use insteadLEDs, and the power requirement is as follows:bracket lamps: 2x2W, desk lamp: 9W, armchairlamp: 9W and general lighting 9W. The total powerneeded now falls to a mere 31W. Such a set ofLED lamps was used in the project of a relativelysmall (25-room) 5-star hotel in Krakow.

The authors of this analysis have modelled thefollowing average consumption of lighting: in the sixsummer months, one hour in the morning andthree hours in the evening. For the six wintermonths, two hours in the morning and six hours inthe evening. The analysis assumes 100%occupancy of hotel rooms and the use of installedlight sources. The total time of lighting used duringthe winter amounts to 2,920 hours, whereas duringthe summer – 730 hours. The total energyconsumption of incandescent light bulbs is 744.6kWh over the winter and 186.2 kWh over thesummer. In total, for incandescent light bulbs,annual energy consumption in one hotel room isaround 930 kWh. Using LEDs, energyconsumption drops to 90.5 kWh (winter) and 22.6kWh (summer), which averages out at 113 kWhper year (more than eight times less energy thanwith conventional lighting). Assuming the averageprice of electricity in Poland is 0.56/kWh zlotys,this works per room at out at 521 zlotys forincandescent light bulbs, and 63 złotys for LEDs.Over all 25 rooms in the space of one year,

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LED lighting saves around 11,500 zlotys comparedto the use of traditional light bulbs.

Now, if we look at larger hotel facilities, the savingsresulting from the use of LEDs compared toincandescent light bulbs are as follows:

Nosalowy Dwór Resort (263 rooms): 120,000zlotysHotel Arłamów (250 rooms): 115,000 zlotysHotel Hilton Wroclaw (189 rooms) 86,000zlotys,Hotel Dr Irena Eris (85 rooms): 39,000 zlotys.However, given that the average annualoccupancy rates of hotels are less than 100%(72% in Warsaw, 75% in Krakow, 65% in the Tri-City and 64.3% in Wroclaw), actual energyconsumption and the potential benefits of LEDlighting are correspondingly smaller. But this studydoes shows huge potential savings for the ownersof hotel facilities willing to replace traditional bulbswith LEDs.

The decision to use LED light sources in a hotelresults from the investor’s economic interests butshould also take the customers’ requirements forcomfort into consideration. Lighting needs to beintegrated into the intelligent building automationsystem (Building Management System). Theadjustment of LED light sources should depend onthe natural flow of light through the windows,without sacrificing efficiency, resulting in additionalsavings ranging from a few to a dozen percent.Effective collaboration of LED lamps withprogrammable power supplies facilitates thecreation of so-called ‘scenes’, popular with guestsbecause of the possibility to adjust the atmospherein the room depending on the situation.

So far, we’ve looked at the energy- and costsavings of using LEDs. But what about the comfortof staying in the hotel room – how does the qualityof light emitted by LEDs affect the guests? Youdon’t need sophisticated measuring equipment todetermine that the colour of light emitted bytraditional light bulbs is different to the colour offluorescent lamps or some LED lamps.

This is because different light sources arecharacterised by a different colour temperature. Aclassic light bulb gives a warm light, creating apleasant, relaxing atmosphere. The colourtemperature of this source is relatively low.Wherever the light should stimulate, it isreasonable to use lighting with high colourtemperature, which gives the effect of a cold light,characteristic of fluorescent lamps. Manufacturersof fluorescent and LED lamps today offer sourcesof different colour temperature, depending on thecustomer’s requirements.Why, then, an investor considering variousalternatives for light bulbs should decide to chooseLED lamps, and not for example fluorescentlamps? The quality of light is not due solely to itscolour temperature. A very important parameter isthe CRI - Colour Rendering Index. It ranges from0-100, where the highest value means that thecolour of illuminated surfaces is rendered the sameway as by solar radiation (sunlight). Due to theprinciple of operation of an incandescent light bulb,it is characterised by a CRI of 100. Nowadays, youcan get the same result using LEDs with the colourof the light corresponding to individual componentsof white light (red, green, blue). Good colourrendition is, however, difficult to obtain fromfluorescent sources. In the case of hotel interiors,this parameter may be of particular importance: thelight with poor CRI characteristics may cause rapideye fatigue. In addition, it is necessary to providecolour rendering close to 100% for lighting works ofart. Good quality LED lamps are one of the bestlight sources available on the market. The qualityof light emitted from the LED is comparable to thelight coming from the incandescent bulbs andmuch better than from the fluorescent lamps. Andcompared to conventional sources, LEDconsumes much less energy to emit the sameamount of light. The price of these modern energy-efficient light sources is continuing to decrease,which causes a significant increase of interest intheir use.

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[1] ”Hotelarz” magazine - August 2015 ”2014 – 1.5 mln more guests in

hotels”, table ”Hotel market in 2005-2014”

[2] ”Hotelarz” magazine - August 2015 ”2014 – 1.5 mln more guests in

hotels”, table ”Hotels according to star rating”

Do fund managers and investorsunderstand the investmentopportunities for office property inPolish regional cities?

by Soren Rodian Olsen, associate, head of office &industrial investments, Cushman & Wakefield,Poland

The large regional cities of Poland

In addition to the capital, Poland has six largeregional cities with populations between 400,000and 1,000,000 people. These include Kraków,Łódź, Wrocław, Poznań and the respectiveagglomerations of Tri-City (Gdańsk/Gdynia/Sopot)on the coast and Katowice in the southern part ofthe country.

Similar to large cities in Germany, these six Polishcities have a specific heritage and role in the Polisheconomy e.g. shipping and trading withScandinavia in Tri-City, textile and film industries inŁódź, heavy industry and mining around Katowice,trade and exhibitions in Poznań, as well asbusiness process services in Kraków andWrocław.

Following Poland’s EU accession in 2004, thecountry saw constant road/rail infrastructureimprovements across the country as well as agradual, positive change in the way localauthorities support foreign investors, improving theease of doing business. Subsequently, Polishregional cities have emerged as Central Europe’sbest-in-class locations for setting up new business.Poland’s large regional cities enjoy a purchasingpower parity 15-35% above the national average,sub-7% unemployment levels

and excellent access to young talent fromnumerous, highly reputed universities.The take-off of Business Process Outsourcing(BPO) and Shared Service Centres (SSC)

Whereas Kraków has enjoyed many years ofbeing a sought-after destination for BPO/SSCindustries, the cities of Wrocław, Tri-City and Łódźhave started to catch up during the past two tothree years.

Polish regional cities offer easy access to young,multi-lingual talent, availability of new, modernoffice buildings – sometimes build-to-suit –accessibility either via international airports or high-speed trains, as well as tax incentives forcorporations that generate new work places. Thefact that one can arrive to Poland

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by plane from any Western or Northern Europeancapital within 2½ hours supports Poland’s imageas Europe’s ‘near-shoring darling’. The BPO sectoris steadily moving up in the value chain, offeringmore advanced services that can easily be offeredfrom Poland due to access to high-educatedresources.Major international corporations that have chosenPolish regional cities as their BPO or SSC hubsinclude among other Capgemini, Infosys,Lufthansa Systems, State Street, ThyssenKrupp,Amazon, Bayer, Thomson Reuters, Arla Foods,Deloitte, PwC, Jeppesen, Accenture, Wipro, EY,McKinsey, Credit Suisse, 3M, IBM, AlexanderMann Solutions, Delphi, Cisco, Heineken, HSBC,Rolls-Royce, RWE UBS and Motorola.

Polish regional cities rarely compete against oneanother for BPO/SSC occupiers, althoughnewcomers do pay careful attention to theavailability and potential drain of human resourcesin specific markets. The cities seem to havespecialised in specific industry segments that hascreated a win-win situation for the major cities andthe country as a whole. That said, smalleruniversity cities such as Opole, Rzeszow andBialystok are becoming increasingly “aggressive”in the offering incentives for new, large employers. In 2014 and 2015 Kraków was ranked by Tholons

as the world’s ninth best outsourcing location, andNo. 1 in Europe. An outstanding achievement andrecognition.

What does that mean for the office market inPolish regional cities? During the past two tothree years both office stock and employment inthe business services sector have substantiallyincreased. According to a research by theAssociation of Business Service Leaders (ABSL)in Poland, the number of employees in servicecentres with foreign capital have increased bymore than 33% between 2013 and 2015. In order tocope with the growing demand for modern officespace, driven by new entrants to the market, inparticular in regional cities, as well as expansion ofexisting

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service sector occupiers, Poland’s large regionalcities have seen the take-up of office space morethan doubling between 2010 and 2015. Today thecombined office stock of these regional citiesaccounts for approx. 3,000,000m², or 66% ofWarsaw’s total office stock.During the first three quarters of this year, the netabsorption of office space has outstripped newsupply in Kraków, Wrocław and Łódź. The averagevacancy rate of the six large regional cities hasbeen stable around 9% since 2012; evidence of a good balance between supply and demand.

The organic growth combined with stable rentlevels and falling vacancy levels have attractedinternational core capital to focus on offices inPolish regional cities, with particular interest in thethree largest markets, Kraków, Wrocław and Tri-City. In 2015 Cushman & Wakefield researchestimates that over 50% of total office investmentvolume in Poland will derive from transactions inthe six large regional cities – a record and high,never seen before in any market in Central andEastern Europe.

Three-year outlook Cushman & Wakefieldexpects BPO/SSC growth in Polish cities tocontinue, driven by the availability of highly skilledyoung labour and increasing availability of high-quality office stock, in particular in Tri-City andŁódź, that historically have had low office stockand low attractiveness for corporate occupiers andinvestors. Whereas Kraków and Wrocław are nowwell-established BPO and SSC locations withinEurope, and will continue to be, the new growth islikely to be seen in Tri-City and Łódź andpotentially in Katowice.

Source: Cushman & Wakefield research.

In terms of the investment aspect, Cushman &Wakefield envisages a continuing yieldcompression, moving from a prime initial yield levelof 7.25% in 2014, expected 7.00% in 2015, towardsto 6.50-6.75% in 2016 for assets with long-termleases and outstanding tenant covenants.

The time is n o w for investing in offices inPolish regional cities

With a mid-term outlook anticipating stable rentlevels, average stable vacancy and significantgrowth in leasing take-up, net absorption driven bya combination of new demand as well asexpansion of established occupiers, Cushman &Wakefield expects the international inflow of coreand core+ capital sources to grow in Polishregional cities. Selected transactions in 2015 pointin a direction of a narrowing yield gap betweenWarsaw and regional cities during the next two tothree years, offering compelling opportunities forboth short-term and long-term investors, lookingfor sustainable growth and income. Cushman &Wakefield expects, everything else being equal,the prime yields in major regional cities tocompress 50-75 basis points during the next 24months and that 2016 will be “an open window” forcapitalising on the opportunity to capture primeoffice assets in Polish regional cities

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yet at discounted price levels.

Renovate or relocate? 10 tips thatwill help you decide.

by Jarosław Pilch, associate director, head oftenant representation at Savills Office Agency

It’s hard to define a good formula for a suitableworking space that will please every company.Currently, average leases are signed for aroundfive years. No later than one year before thelease agreement expires, a tenant shouldconsider the future of their office space.

It’s worth remembering that in case of extendingthe contract, an additional fit-out budget can berenegotiated. Take this opportunity – or considerrelocation to a more modern and newer building.Occupiers can count on fit-out incentives and freerent if they relocate to a new development. In thecurrent market, occupiers have more power tonegotiate rates and incentives.

Consider these aspects before taking a decision:

Your company’s current situation and its plansfor the next five to seven years. Analyse the current working style of your companyand compare it with plans for the future. Do youroffice space and its location correspond with thevalues proclaimed by your company and representyou proudly? Should the floor space be increase,decreased o simply changed? Perhaps you shoulddecide to consolidate some functions of your firmto one location.

A suitable locationAccording to What Workers Want? published in2013 by Savills and the British Council for Offices(BCO), 73% of employees aged 18-34 years ratedlocation as the greatest influencer on employmentdecisions. Ask yourself the following questions: Isthe building located near transportation hubs? Arethere any amenities available? Is the location

optimal? Is it easily and quickly accessible foremployees and your clients?

Age of the buildingDepending on the age of a building’s fittings,facilities and equipment, the property will wear outdifferently over time. This depends on the quality ofconstruction materials, where older fittingssystems generating higher operating costs.Therefore, relocating to a new and more modernbuilding, often with green certification and coveredby the developer’s guarantee, is a more frequentchoice. Usually such a decision leads to savings inoperating costs and enhances the prestige of atenant.

Availability of a parking spaceHow big is the car fleet owned by your company?How many employees drive to work? In the citycentre with dense settlements, there are onlyunderground car parks available as city councilsattempt to reduce traffic by limiting the number ofparking lots in new office developments.Consequently the price of a parking space is highas there are not enough parking facilities and thecosts of building an underground parking is high.Generally, the further away from the centre, thecheaper parking space is, especially surfaceparking.

The condition and quality of common spaceWhen considering lease extension in the currentlocation, take into account conditions and thequality of common space, including air-conditioning, tidiness and state of toilets and qualityof lifts. The reference point could be otherbuildings, especially new ones. In new officeschemes, to increase the comfort of tenants,developers provide many facilities, includingrelaxation zones with Wi-Fi.

Property manager and technical supportA well-managed building operates more efficiently.Property managers working on behalf of the ownertake responsibility for the efficient maintenance ofequipment, in order to avoid problems and failuresconnected with their exploitation. The

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property manager is responsible for manyimportant issues, including cleanliness. If it ispossible, ask other tenants for their opinion on theproperty manager of the building you areconsidering.

Functional division of office spaceConsider whether an area available in the buildingand its division meet the requirements of yourorganisation. Currently, we can observe a growinginterest of workplace strategy services thatanalyse office space functionalities. Such ananalysis will help you in designing the optimal officespace, which could improve employees’productivity, efficiency and satisfaction.

Employees’ opinionAccording to What Workers Want? employersshould not ignore the expectations of theiremployees. Therefore, before taking a decision tochange your office, find out what your employeesthink about it.

Office facilitiesThe report also highlights that respondents ratedkitchen and good Wi-Fi connection among themost desirable office facilities. Wi-Fi connectionallows employees to use tablets or laptops outsidetheir workstation and kitchen serves as anetworking and meeting place.

Design – coherent office fit-outWe all wish to work in a nice, well-equipped andcomfortable office. An office fit-out should beconnected with the organisational culture andvalues. Architects can certainly meet clients’expectations to design a creative and inspiringoffice space that will not necessarily break thebank. Choosing the colours associated with thecompany brand, the purchase of new, comfortablefurniture will certainly improve employees’satisfaction and will raise the prestige of theemployer.

Renovation and relocation are associated with highcosts. It’s better to avoid hasty decisions and findan experienced advisor to represent your

company’s interests and guide you through youroptions.

It was a good year for commercialreal estate

by Magdalena Sobota, senior account manager,real estate expert at Grayling Poland

Poland remains one of the best-performingmarkets in the CEE region. A good macro-economic situation, falling unemployment, anuninterrupted flow of EU funds, low interestrates and developed markets continue tostimulate investors’ curiosity in Polishcommercial properties and this is not likely tochange in the upcoming months.

Thanks to a well-developed telecoms and transportinfrastructure, an excellent location and broadavailability of an efficient, skilled, and relatively low-cost workforce, Poland will continue to attractforeign investors with plenty of businessopportunities. Warsaw will remain the topinvestment destination in the region.

According to Marketbeat Poland – Autumn 2015report from Cushman & Wakefield, a leading globalreal estate services company, the investmentvolume in the first half of this year reached €794m,of which the office sector accounted for 47%,followed by retail with 34%, the industrial andwarehouse sector taking around 19%. However,compared with the same period last year, theinvestment volume decreased by 47% and thenumber of deals was down by 16%. But theexperts say this situation is temporary as Poland isbecoming increasingly popular among internationalinvestors, who not only move here their regionaloffices, but also BPO/SSC centres that used to belocated in such outsourcing heavyweights asVietnam, China or India. In result, in the comingyears we will still be observing the launch of manyinteresting and high-quality projects

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in each of the three commercial real estatesectors. Office sector – high demand, high supply andhigh vacancy rate

In the course of 2015, we have recorded strongactivity of developers in Warsaw and in regionalcities. In Q1 across the whole Poland there wasalmost 1.4 million m² of office space underconstruction. In Warsaw alone, 240,000 m² of newoffice space was completed during the first threequarters of this year. As Cushman & Wakefieldreports, by the end of this year and additional80,000 m² are scheduled for delivery. This meansthat the annual volume of supply in 2015 mayreach 320,000 m² – the highest recorded since2001.

From the very beginning of this year, the demandfor office space was very strong, reflected in therecord-breaking volumes of take-up and netabsorption. As a result, the vacancy rate droppedfrom 14.1% at the end of Q2 2015 to12.9% whichis the lowest value recorded on the market sinceQ1 2014. The positive sentiment in the leasingmarket is expected to continue into 2016, in linewith the economic cycle, strongly spurred by theexpiry of ten-year leases signed in 2006-2008 andfive-year leases signed in 2011-2013.

However, despite the relatively high leasingactivity, the large number of office buildings comingon stream in the nearest months will lead to a rapidrise in vacancies that in 2016 may amount even to17-20%. The increasing supply of new office spaceand the rising vacancy rate once again have puttenants in a comfortable position, at the same timeenforcing more flexibility from developers.Companies looking for office space are gettingmore and more demanding. In the light of thistrend, only developers who will adequately analysethe market and manage to adapt appropriately theiroffer to tenants’ demand will succeed in 2016.

Robust development of logistic andwarehousing sector

2015 was a good year in the logistics & warehousespace real estate sector in Poland. In the course ofthe first three quarters of this year, more than839,000 m² was delivered to the market. In result,by the end of Q3 the existing modern warehousespace stock in Poland amounted to over 9.6 millionm², what ranks Poland as ninth in Europe.

Since the beginning of the year, gross demand forwarehouse space in Poland amounted to 1.6million m², which pushed the vacancy rate downfrom 6.8% to 6.5%. The developers’ activityremains very strong – currently there are nearly663,000 m² of warehouse space underconstruction, part of which will be delivered by theend of this year. According to the Cushman &Wakefield report, in 2015 Poland’s new supply islikely to exceed 1 million m² and most schemesare either build-to-suit (BTS) projects or havesecured substantial pre-lets.

Although the Warsaw region still remains thelargest warehouse market in Poland, hugeinvestments in transport infrastructure havespurred development activity in the regionalmarkets such as Upper Silesia, Central Poland,Poznań, and Wrocław whose industrial spaceaccounts for 60% of the country’s total marketshare compared to Warsaw’s 31%.

Retail needs more space

Just as the office and warehouse sectors arelooking healthy, so the Polish retail market canalso consider the year 2015 a success. Accordingto data from Jones Lang LaSalle, at the end ofSeptember 2015 total modern retail stock in Polandincreased to 12.58 million m². Cushman &Wakefield reports that in the first half of 2015 over176,000 m² of modern retail space was deliveredto the Polish market. Further 800,000 m² is nowunder construction with about 439,000 m² to bedelivered this year. This means that the totalsupply of retail space in 2015 will amount to616,000 m², and will be

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30% higher that the supply recorded in 2014.In recent months, demand for modern retail spacehas remained at a stable level across the majorPolish cities. The most successful were high-profile schemes with a large number of visitors andsatisfactory revenues. However, schemes locatedwithin the existing retail projects that have beenrecently redeveloped, refurbished or re-commercialised are also getting increasinglypopular. Year by year the Polish retail market is showingthe need to develop new formats. Therefore in thecoming months we will experience theimplementation of specialised projects, includingexclusive shops designed for premium brands,convenience shopping centres, strip malls or retailstreets.

The road to maturity: Poland’sreal estate and constructionmarket since 1989

by Marcin Klammer, CEO and Peter Maitland,business advisory director Arcadis

Those who remember the Polish real estate andconstruction market as communism wasending are aware of just how far it’s come insuch a short time.

There wasvirtually noopen marketactivity,certainly incommercialspace, in theearly 1990sand very littlefunding wasavailable tostimulateactivity inconstructionactivities.

Polishcompanies of a certain size tended to occupy theirown buildings which were largely unimproved andwere a hark-back to the days in which buildingswere over-specified and constructed to give theimpression of strength rather than provide thefacilities which modern businesses needed. Officebuildings provided cellular accommodation but littleor no open plan space could be found. Foreign-owned businesses opening their doors in Polandwere generally forced, in Warsaw at least, to takespace at outrageous rents, in one of the Intracobuildings. The alternative was often to operate outof an apartment with a change of lighting and atelephone switchboard being the only indication ofa change of use.

The mid 1990s saw the first real signs of foreigninvestor interest in Poland. This was earlyacknowledgement of the potential to come, andstimulated activity by a players who saw theopportunity to provide accommodation for foreignbusinesses in

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modernspacecomparableto that offeredi n maturemarkets.

In Warsaw,one of the firstcommercialdevelopmentswasWiśniowyBusinessPark, acampus-styleoffice schemebetween the city centre and Okęcie airport. It wasdesigned by an international architectural companyand launched by a British developer. To ensurethat construction standards were at aninternationally acceptable level, the developerbrought in a UK based general contractor, andemployed a British project management company. The sale of Building A, which was leased to Sonyand IBM, to Commercial Union (now Aviva) wasthe first open market investment transaction on thePolish market.

One of the early commissions on which Arcadis(then EC Harris) was engaged was the fit-out ofBuilding B at Wiśniowy Business Park for ABNAmro.

By this time, Polish contractors were winningbusiness as subcontractors to larger generalcontractors and providing resources in key tradessuch as concreting, brickwork, MEP (Mechanical-Electrical-Plumbing) and finishing. Closemanagement, however, was still needed toachieve the standards demanded by users andinvestors and, importantly, to follow stricter healthand safety standards on site. At this time it wasnot uncommon to see workers on site wearing softor open-toed shoes, no safety goggles andfrequently no hard hats.

Mainly British and some international constructionconsultants also saw opportunities in Poland andopened offices in the early/mid ‘90s; most of themincluding Arcadis (then EC Harris and AYHHomola) still have a strong presence on themarket today. These companies brought in adisciplined approach to project and costmanagement of projects as well as a focus onhealth and safety.

The international real estate brokers also sawopportunities in Central and Eastern Europe; by theend of the 1990s most of the large agenciesaround today had established a presence. Theheads of those businesses were mostly Britishprofessionals, bringing with them a body ofknowledge and expertise into a market that lackedthe skills needed in the real estate and constructionbusiness as it expanded to take advantage of thedrive to rebuild Poland after 45 years ofcommunism.

The Royal Institution of Chartered Surveyors alsoestablished a Polish branch in the 1990s. The bigconsultancies saw the benefit of their staff havingan internationally recognised qualification. As aresult, RICS membership has grown from about 10mainly British chartered surveyors to around 300members today.

Whilst the office market was the first to benefitfrom this rush of activity, retail started to test thewaters with IKEA’s Janki project creating a totallynew offering to the Polish market. In order to getshoppers to the centre, IKEA laid on a free busservice from the city centre to Janki. It would besome time before modern city centre shoppingdevelopments became commonplace. Since thelaunch of the first-generation centres however,Poland now has some of the best shopping-centrefacilities in Europe. Stary Browar in Poznań, aproject in which we were proud to be involved, wasthe first Polish centre to receive (in 2005)recognition from the International Council forShopping Centres as the “best new medium-sizedshopping centre in the world”.

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The logistics (warehousing and light industrial)market was a late developer, dependingsubstantially as it does on a good road network. This sector has really taken off in the last five toten years as Poland has constructed, withsignificant support from the EU, a nationalmotorway network which has shrunk journey timesand dramatically improved the efficiency of thelogistics industry. Developers and contractorsworking in this sector have gained expertise whichplaces them on a par with the best in Europe. Thestrength of the economy has allowed activity tocontinue in the Polish market when much ofEurope has seen a muted performance.

As regards construction, the most notable changein the last 25 years has been the extent to whichthe sector has consolidated. Over this period, theconstruction industry has experienced severalepisodes of slack activity which squeezed marginsand forced many smaller contractors out of themarket. They were often caught out by late or non-payment from the main contractor and did not havedeep enough pockets to withstand a longdownturn. General contractors are even todayworking on margins which are unsustainable butthe pressure on smaller Polish contractors in the1990s to mid 2000s allowed the large Europeancontractors from Scandinavia, Germany andAustria, to take strategic positions in the marketand take over or supplant the local businesses. These large contractor groups were often able tocover deficiencies in their real estate projects bytheir large infrastructure projects which gave asteady income stream to finance operations.

As Europe struggles to throw off a wide economicinertia, we are seeing threats to economic stabilityfrom multiple fronts, the most recent being theunsettling impact of massive migration andchallenging security issues. Both of these alsocreate opportunities for the real estate andconstruction markets in the countries mostaffected. Poland is currently hardly engaged, butgiven its demographics there may yet be somereconsideration which would create a boost todomestic activity.

International architecture firmAHR champions Zero Carbon

by Judit Kimpian, director of sustainablearchitecture and research at AHR, and chair of theArchitects Council of Europe Sustainability Group

‘Nearly Zero Carbon’ is great for architecture

Recent years have seen a plethora of legislationand incentives introduced to improve the energyperformance of buildings. It is hardly surprising thatbuilt-environment professionals find it challengingto keep track of compliance requirements. At EUlevel, two Directives driving national regulations arethe EU Energy Performance of Buildings Directive(EPBD) and Energy Efficiency Directive (EED).Recent updates to these require the EU toimplement a 40% binding reduction in greenhousegas emissions below 1990 levels by 2030, and fornation states to increase energy efficiency by atleast 27%.

So how is the construction industry going to deliverthis?

The 2010 recast of the EPBD required thatmember states ensure that by 31 December 2020,all new buildings are nearly-zero energy buildings(nZEB) and after 31 December 2018 all newbuildings occupied and owned by public authoritiesare nZEBs. The exact definition of ‘nearly zero’ isup to member states. It’s set out by the EPBD as abuilding with a ‘very high energy performance’whose very low energy demand should be coveredto a significant extent from renewable energysources.

However, despite the increasingly strict energyefficiency targets, a growing body of evidencepoints to a sizeable gap between expected andachieved energy performance of new buildings andrefurbishments. The UK Green Construction

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Board’s latest report states that up to £5 billion isinvested in new buildings each year and thesebuildings on average consume two to three timesmore energy than intended. In the UK, the RoyalInstitute of British Architects (RIBA) and CharteredInstitute of Building Services Engineers (CIBSE)have a joint benchmarking platform calledCarbonBuzz, created with the technical leadershipof AHR. CarbonBuzz has demonstrated a one-and-half to two-fold difference between calculatedand achieved energy use in the education andoffice sectors, using crowd-sourced data. Builtenvironment professionals across the EU arerightly asking whether the next recast of the EPBDshould target operational outcomes moreeffectively.

One of the fundamental features of current EUlegislation is the lack of a feedback mechanismbetween as designed and actual performance atboth building and stock level. It is currently notrequired during the design stage to assessconstruction and operational risks, nor is it requiredto report the actual operational energy use of abuilding. Yet these factors have a significantbearing on operational building performance, andcan be addressed if planned for from the start of aproject.

Influential organisations are taking note. TheArchitects Council of Europe (ACE) has declared‘open and harmonised building performance data’to be a key campaigning priority and hasresponded accordingly to the recent EPBDconsultation. The World Green Building Councilnow requires the reporting of operational energyuse as part of its prestigious sustainability awards.The European Commission is also studying howlow impact buildings, certified according to existingschemes, perform in reality.

AHR, building on its expertise gained from theCarbonBuzz project and over 15 buildingperformance evaluations carried out over the pastfive years, has trail-blazed a new approach.

A way forward AHR, working closely with engineering firm MaxFordham, has designed the recently completedoffices and civic centre for Bath and North EastSomerset Council in Keynsham, which had set outto target operational energy use from the start.

The process not only delivered innovativearchitecture but helped eliminate many of the usualproblems encountered on other projects arisingfrom the value engineering of critical elements orpoor commissioning. Building features relating tothe long-term resilience of the building wereretained, such as the passive ventilation, floor-to-floor heights, the vent voids, the thermal mass, thewindow specification, etc.

If the project performs to expectations after YearOne, it will exceed building regulationsrequirements and operate over and above nZEBtargets. It would also demonstrate that setting theright key performance indicators and opting formeasurement, verification and disclosure couldachieve better-than-nZEB performance in use, andsignificantly reduce regulatory burden.

The building has just won the British Council ofOffice’s 2015 Best of the Best award testifying thatgoing beyond compliance and targeting actualperformance, is great for architecture.

--------------------------------------------------------------------- AHR Founded on over 180 years of tradition theAHR brand re-emerged in 2014 following ademerger with Aedas as one of the largest andmost recognised architectural practices in Europeoperating globally. AHR celebrates it's 10 years inPoland this year, and provides it's Clients withcutting edge design services in the fields ofcommercial office, hospitality, retail and residential.A strong masterplanning and interiors sectionsupports the architects in the practice to provide afull scope of design support on real estate projectsin Poland and throughout the region. The office nownumbering around 50 professional

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staff was founded in 2005 by Martin Hyams andMichal Kus - who as founding partners are todaysupported by management board directorsKrzysztof Gryczynski, Piotr Kalbarczyk andGrzegorz Pietrzak. For additional information visit:www.ahr-global.com

Risk factors in office leaseagreements

by Tomasz Dyła, commercial real estate brokerand managing partner, Vertigo Property Group.

The lease rent and other payments associatedwith the lease of a commercial office spaceconstitute a significant part of costs incurredby a company. In the case of lease agreements,they also form long-term liabilities. Concludinga lease agreement therefore, although itundoubtedly offers a company manyopportunities for development, may also posecertain risks.

This article presents an overview of basic types ofrisk associated with the office space leaseagreement, from the tenant’s point of view.

The risk associated with the term of the leaseagreement

One of the basic risk factors for a tenantconcluding commercial lease agreements is thelease period of the agreement. The decisionconcerning the term of a lease agreement shouldbe thoroughly thought over as it may entail severalrisks. The lease agreement can be concluded for aspecified or an unspecified period of time.

The decision to conclude an agreement for aspecified or an unspecified period of time should beinfluenced by a variety of aspects which arecharacteristic for a particular company. Theinterests of the landlord and the tenant concerningthe term of the agreement are often divergent.Negotiating an agreement, one should

analyse the actual indications of both partiesconcerning the choice of a specified/unspecifiedperiod of time, which can significantly enhance theefficacy of the negotiations and protect bothparties’ interests.

The risk associated with rent indexation

The landlord and the tenant may agree on thelease rent being not changed during the whole termof the lease agreement, however on a commercialmarket this happens quite rarely. Most commonlylease agreements include a yearly increase of thelease rent, known as indexation, made on thebasis of an index agreed by both parties of theagreement. The choice of a proper indexation ofthe lease rent, properly adjusted to a particular typeof a lease agreement, is of great significance.

A variety of indices are used in commercial leaseagreements and their choice is usually determinedby a currency denominating the lease rent. Themost common inflation indices are those based onthe general Consumer Price Index (CPI). Anotherimportant risk factor associated with the indexationof the lease rent is also its frequency and term.

The risk associated with the change ofownership of a property during the lease term

Another significant risk a tenant may face is thechange of ownership of a property during the termof the lease. This is particularly common on acommercial market, where properties are oftentreated as products of investment. In the event ofthe property being sold, the new owner legallybecomes its landlord. This does not entail anychanges in the provisions of the concludedagreement, but the new landlord is in this situationentitled to terminate the agreement, preserving thestatutory notice period, regardless of the termsstipulated in the agreement. It poses a significantrisk for the tenant who may be forced to vacate theleased space before the termination of theagreement or to renegotiate the lease rent. Thetenant should be aware of the fact that Polish legalregulations still protect them from

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any unfavourable effects of the change of theproperty ownership.

Foreign exchange risk associated with thelease rent

On a commercial market, due to the specificationof the loan taken by the real estate owner, thelease rent is often stated in a foreign currency andis each time exchanged into the equivalent amountin Polish zlotys, which exposes tenants toexchange risk, one of the basic risk factors in anyinternational business activity.

In the current market situation, office space leaseagreements are usually stated in euro and thepayments are made in PLN on the basis of anaverage exchange rate published by the NationalBank of Poland (NBP). Most companies operatingin Poland favour lease agreements stated in zlotysas they are safer. Commercial practice observedin the recent years shows that many landlordsadopt a more lenient exchange rate policy, andallow for the lease rent to be expressed in zlotys.

The risk associated with the service charges

Service charges constitute a significant part ofcosts incurred by commercial building tenants.They cover expenses and costs associated withthe functioning of a building, including its commonparts. In A-class buildings, situated in best Polishlocations, their value is estimated to be 20-25% oftotal lease costs. Service charges are a significantand controversial element of each leaseagreement due to the fact that they are impossibleto predict in detail, as their amount is usuallystipulated to be paid in advance. And in manybuildings, the catalogue of service charges is notfinite. Therefore, in view of the keen competitionbetween owners of the buildings and the growingawareness of tenants, a general tendency towardslowering the service charges, which have asignificant impact on negotiating the leaseagreement conditions, has been observed in therecent years.

Insurance

Insurance is a significant element of each leaseagreement as it eliminates the potential risksassociated with concluding it. Under the terms of alease agreement, both parties are usually obligedto insure a property concerning two basicelements: the property itself and the civil liability.When negotiating the lease agreement, it’s vital tostipulate who’s obliged to ensure a property, what’scovered by the insurance, who pays for it and whatthe consequences of lack of insurance may be.

The risk associated with the change of thelease rent during the term of the lease

Conflict over the possibility and the terms ofincreasing the lease rent is often observedbetween both parties of a lease agreement.Regardless of the provisions concerning the leaserent indexation, the regulations of the Civil Codestipulate that the landlord is entitled to increase thelease rent during the term of the lease agreement.Lawyers still argue whether lease rent can beterminated in the agreements concluded for aspecified period of time or only in the case ofagreements concluded for an unspecified period oftime. There are several ways, however, to ensureprotection against the above-mentioned situation.One of them is, for instance, the exclusion of therelevant Civil Code regulations from the leaseagreement.

Summary

This article presents but a selection of risk factorsa tenant may face when concluding commerciallease agreements; the list is necessarily morecomprehensive. The analysis of the above-mentioned risk factors of a lease agreementseems essential in the process of consciouslymanaging the risks of running a company and isvital for the overall real estate policy of acompany.

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Contact Magazine Issue No. 22

Minimising the risk when buyingreal estate property

by Tomasz Dobrzyński and Artur Dziubak, HillInternational Sp. z o.o.

Buying a property can fall into one of thesethree categories:

1. Purchase of a land with no buildings on it – thisis a green-field investment.2. Purchase of a property, where constructionworks had started but have yet not beencompleted (project-in-delivery).3. Purchase of a land with existing buildings on it –this is a brown-field investment. The year ofbuilding completion may vary from ‘just finished’ to‘seasoned, long lasting’, through to heritage ones.

In each of these categories, the buyer has to dealwith the various risks associated with thetransaction. Some of them are of technical nature. As an engineering consulting firm, Hill Internationalcan help reduce such risks with the Technical DueDiligence audit.

For the first category – ‘green field’ projects – thedue diligence inspection includes analysis of theland surveys, utilities and infrastructure availability;planning permit status; environmental andarchaeological issues or comments on constraintsof site development potential or any identifiedconditions that may affect severely the investment(eg. set-backs, easements, encroachments,influence of immediate neighbourhood, abnormalcosts of investing, floods, etc). Eventually, thereport provides a risk assessment of most obviousthreats to investing on the site. For projects-in-delivery – due diligence examination assessesrisks associated with both formal and technicalaspects of completing a construction process ontime, in budget and to the planned quality. It will beconcerned with

the formal status of the planning and permittingprocess, status of design, advancement ofconstruction works and budget spending. Theanalysis also comments on the organisation of theconstruction process, their participants, contractingterms, and assesses the likelihood of obtainingrequired approvals and decisions.In the third category – existing buildings - TechnicalDue Diligence evaluates the formal completion ofthe construction process and analyses the existingpremises against the ‘wear and tear level’. Theinspection findings focus on reviewing the planning,design and construction phase documentation aswell as guarantee status and operational issues,and are complemented with the list of deficienciesrequiring to be remedied followed by estimation ofcosts of necessary works to maintain the qualitystandards.

It’s worth mentioning that Technical Due Diligencefindings can often be utilised either by - the client (potential purchaser) to evaluateattractiveness of the opportunity, or- the potential funder of the transaction (usually thebank or other financial institution) to obtain anindependent opinion on risks related to transaction.Therefore, the key to the satisfactory TechnicalDue Diligence Report is it is prepared by:

reputable consulting firm, constantly provingthe highest delivery standards to local andinternational Clientscompany able to utilise the best cross-borderpractice and expertisecompany capable to offer a qualified in-houseteam of all required disciplinesand most importantly by

experienced practitioners, who understand theconstruction process inside out and who canreliably help their clients avoiding traps thatmay occur after the purchase.To meet the market demand, Technical DueDiligence examination is usually

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carried out in two phases. The first one, known asthe Red Flag Report, allows the client to get anoverview of risks related to the potentialtransaction. Should no deal-breaker be identified, aFinal Report provides for the detailed outcome ofinvestigation, always documented withphotographs.The advantage of such approach is that the clientis able to recognise potential pitfalls at the veryearly stage of the transaction and save on costs incase the opportunity did not fit into the expectedcriteria.

A Technical Due Diligence Report doesn’tsubstitute any legal or financial due diligence,which can be provided by entities specialised intheir fields.

Student Housing – An EmergingEuropean Investment Class –‘Food for Thought’

by Joe Daniel FCIB FRICS, chairman, MREPartners

Driving along Kraków’s ul. Reymonta towardsthe AGH University swimming pool facility, onecannot help but see the extent of the universitycampus with block after block of studentaccommodation.

Today more than 850 universities in Europeaccommodate 13.6 million students on 170 millionm² of gross floor space. The EuropeanCommission aims to have 20% of its studentsspend time in other European countries, and the€14.7 billion Erasmus-plus programme is designedto make this a reality for 4m students by 2020.Clearly this increasing student mobility is anopportunity for outdated infrastructure to bemodernised, and of course for new provision.

Most of the student accommodation in continentalEurope is either subsidised with public money orsourced on a bed-by-bed and house-by-housebasis by students who move away from home. Incomparison to the US and the UK, this proveninvestment class is very much in its infancy inrelation to retail, office, and logistic property. Thecontinuing economic difficulties across global andEuropean markets have led to a surge in domesticstudent numbers, driving the need for studentaccommodation at home, and further boostingdemand for accommodation. This has helped tomake student housing performance less cyclicalthan some other property asset classes, providinginvestors with stable income flows, low voids and asolid demand base.In the current environment, institutional investorsseeing lower or even negative returns from theirtraditional investments consider new ormodernised student housing as an interesting andserious alternative, as it offers stable cash flowswith generally higher returns than other real estateclasses. Importantly, rather like infrastructureinvestment, student housing investment has theability to meet such Institutions’ medium- to long-term liabilities as part of a diverse portfolio. Theexperience of university is taken very much as a‘right of passage’ to adulthood through being awayfrom home and this will undoubtedly reinforce thegrowing demand for student accommodation. Inthe German market, early investors have foundsuccess by offering a premium product to competeagainst the affordable not-for-profit(Studentenwerk) product. The premium approachhas also worked in key Spanish cities,differentiating against an affordable private rentedsector. Some institutions or developers insist thatsites are within 1.5 km of the main campus whicheffectively means short supply andaccommodation is limited, again putting downwardpressure on yields. It may be that supplying thepremium end of the student housing market,whereby rooms are en-suite with a kitchenette anda concierge service for students from mid-upperincome brackets often from abroad, can deliver

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a sound long-term investment but local market andcustom cannot be ignored in this market which isin its infancy. Looking to the future, university andcity representatives and institutional capitalproviders need to engage positively with eachother. The delivery of affordable and acceptablestudent housing provision is vital, especially wheregrants and subsidies may well be subject toreduction or removal over time. The nature ofhigher education is changing with technologicaladvances but, with global employers searching forhuman talent and skills, the universities are thevital component.

[Sources: extracts from Property EU Editorial November 2015 and

Savills World Student Spotlight 2015/16 October 2015]

What’s the future for leisureinvestment in Poland?

by Christopher Lowe, CEO, Trebbi Polska

Before we ask ourselves about the future forleisure, we need to look to other countrieswhich have developed a comprehensive offer,one that remains successful and profitable andhence can be deemed sustainable over themedium to long term.

Leisure works if it targets an audience and deliversinterest and excitement that keeps the dwell-timewithin the venue to its optimum. To do this it’s clearthat your target audience must have disposableincome, generally driven by a growing middleclass. They are prepared to spend to enjoythemselves and feel good.At Trebbi we have worked in a number ofEuropean countries developing very specific offerfor each country both from an urban perspective(urban entertainment centres) and edge-of-cityexperiences (theme parks, aqua parks). It isnoticeable when I came to Poland that

there was no real integrated family offer in a majorcity like Warsaw. I was engaged to help AdventureWorld Warsaw deliver one of the most excitingleisure offers in Central Europe, but when I lookedinto the existing offer, it revolved around shoppingor individual offers like ten-pin bowling. If you didnot like shopping or what was on at the movies,what did you do? Let me take you to two examples of what workedand what did not and lessons learnt.

I am going to take you to Madrid, Barcelona andValencia – here you would think that they hadwonderful leisure past times and yes they did but itwas based on shopping or eating in individualvenues or restaurants. The Heron Corporation sawthe opportunity to create a leisure destination withina semi-urban environment. The sites were inconurbations; they had a name – ‘Heron cities’ andthey offered high-quality entertainment(cinema/nightclub/music venue/bowling and healthand fitness) some specialist (niche) shopping,good-quality individual restaurants from around theworld and a significant public realm or square. Theidea was to first attract, then keep your customersby introducing them to interesting concepts,changing moods. Over $1m was spent on lightshows with magic fountains that in the summerchildren could enjoy. On initial opening it was slowbut word of mouth is a wonderful thing and after ayear it became a go-to place for the family and thedwell time increased from initially up to 2 hrs to 3.5to 4hrs.

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Now I’ll take you to Stockholm, where the samedeveloper as part of the roll-out of his leisureconcept chose to create a leisure village inKungens Kurva, 20 minutes from Stockholm,based on the same criteria as Spain. Of course,the agents were saying that the Swedish enjoy thecinema, they enjoy bowling and eating with thefamily, just having a good time. The ‘Heron City’centre was opened; it was enclosed and verystylish, and the components were the same. Butthe pre-lettings of the space was slow – the keyanchor AMC Cinema was under contract, but whywere the restaurants and other ancillaryentertainment spaces not letting? Research wascommissioned and the outcome was that, whilepeople like the idea, they had a cinema inStockholm and a range of restaurants and they didnot want to embrace new restaurant brands, andcertainly did not want to drive 20 minutes to see amovie they could see in the city. In a country withstrict driving rules – people did not end up wantingto stay and eat – the dwell-time was significantlyreduced and therefore tenants did not see thevisitors staying for long enough to fill theirrestaurants and venues.

Changes had to be made to meet local habits.Reports now are that it is a premier shopping andleisure destination, the cinema is now a local brandallowing food to be taken in, thus differentiatingfrom the city centre cinemas. The dwell time hasmoved closer to the 4hrs that was originallyplanned. Heron did not listen to its customer andtried to impose a solution to which the customersaid “No!”We now look to Poland: the current offer isfragmented, we have bowling, we have shoppingmalls with cinemas and food courts, water parks,small themed parks – so what do we need now?My answer is to look to why the Heron Cityconcept has been so successful – it offers a placewhere the family can go and spend time, enjoyingdifferent experiences, doing things that fit within aday out without travelling. In my opinion, majorcities do not have the integrated leisure offer for thefamily that delivers a quality experience, highquality service and a great exciting environment.We all know that the Polish people enjoy a party, ifthey are offered the chance to have fun at areasonable price, they take it. Economically, aclassic middle class is growing, with the level ofdisposable income is increasing , a criterion whichis a prerequisite of increasing any leisure offerwithin a country.From an investment perspective, our clients arelooking at a blended yield of 7.5%, which doesrequire key anchors with good covenants to becourted; this currently is the biggest issue and maylead our clients to look to longer-term holding as aninvestment category working the balance sheetand then selling on a multiple of profits earned. Theappetite for Poland is strong, but the deal has to beclear and clean. Given the maturing investmentmarket in Poland and its growing middle class, wecan see that the leisure market can be re defined.

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Contact Magazine Issue No. 22

How does the office affect yourwork?

by Aleksandra Krawsz, marketing & PR manager,Kinnarps Polska Sp. z o.o.

Recent changes in the way of thinking aboutoffice architecture allow for higher workefficiency in any company. Today, the office isa place that creates opportunities foremployees to effectively implement varioustasks, develop personally – and rest.

According to the Swedish Statistical Office, 55% ofpeople worked remotely in 2014, up by 20% in fiveyears. More than 29% of us work at home at leastonce a week. It means that architects andcompany managers face a challenge - how toadapt office space to the changing workingpatterns. The changes occurring in the way wethink about the office make it possible to reducemaintenance costs, ensure the wellbeing of thestaff, enable intergenerational cooperation andfacilitate staff integration.

Diversity of teams made up of people of differenttemperaments and age is increasingly seen asbeneficial; more and more women also work inbusiness. Other challenges are associated withtechnological changes. On the one hand, we seethe phenomenon of technology fatigue, on the other- it is estimated that the number of devicessupporting M2M (Machine-to-Machine)communication will rise to nearly 26 billion(Gartner, 2013) by 2020. A modern officeecosystem implements the principles ofergonomics, taking into account the complexity ofthe employees’ needs - physical, mental and socialones. In the UK, from the onset of the economiccrisis in 2008 to 2013, the number of self-employedpeople increased by 10%, while the number ofpeople employed on permanent employmentcontracts fell by 434,000. This is another importantphenomenon – we operate in a society where‘work’ no longer means a place you come to, but aset of actions and activities performed at any placeand time for the principal.

This fosters the spread of the model of activity-based working, where employees have diversespaces at their disposal and they can chooseplaces adequately to their tasks. In modernorganisations, demand for individual workstationsis decreasing, while demand for flexible anddiverse space is on the rise. As the popularity ofactivity-based working keeps rising, employeeshave fewer opportunities to personalise theirworkstations, because they don’t have their owndesks at their disposal. At the same time, thissolution enables team integration around

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the arrangement of the commonly used space,encouraging creativity, positive attitudes to changeand a sense of belonging. Today’s office is aninspiring place for performing professional dutiesand a strategic tool for gaining competitiveadvantage.

Autonomy and motivating atmosphere result inincreased efficiency of workers, because they usetheir potential better. Choose a place to work in theoffice to suit the tasks is an investment in thewellbeing of employees, which translates into theircommitment and productivity. In a favourableenvironment, it is also easier to manage a teamand develop leadership skills.

Adapting the workplace to the most recent socialand technological developments brings benefits inmany areas, including cooperation, communicationand response to changes. Understanding thetrends and taking advantage of them allows us tocreate a workplace in tune with the diversedecade.

Do you know what is the diverse decade andhow it impacts your life?

The “Trend Report 2015” produced byKinnarps will help you to understand thisphenomenon! We have analysed the behaviourand habits of workers and examined workingenvironments. The findings have allowed us toidentify the directions for development of office

architecture.

The diverse decade is shaped by five trends:

Co-creationToday, success is an effect of cooperation, that’swhy it’s essential to provide employees with officeworkspaces that encourage them to collaborate.

‘Techiture’Architecture and technology combined createcompletely new workspace solutions. The office aswe know it is almost history.

Office biologyThe workspace should support a harmoniousdevelopment of body and mind. It is a place wherethe threads of our professional and private lifebecome integrated.

Design for diversityA modern workspace should ’adapt itself’ to thediversity of goals and needs of contemporaryteams – not the other way round.

‘Micromultinationals’Office layouts should ensure a maximum level ofeffectiveness of teams of employees, regardlessof the way work is carried out – be it on-the-spot orremotely.

You can read more about the changes related tooffices in the Kinnarps Trend Report 2015Workplace and lifespace design for the diversedecade at www.kinnarps.pl/TrendReport.

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Contact Magazine Issue No. 22

Looking for the ‘ShoppingExperience’

by Bożena Kozłowska, senior consultant,research, Knight Frank

The total modern retail space in Polandamounts to 10.6 million m². Traditionalshopping centres constitute majority of thisvolume. There are also two other formats ofretail projects: retail parks and outlet centres.

All of them are schemes of minimum 5,000m² and10 tenants. The retail market in Poland has beendeveloping systematically since the early ‘90s.Thus it is getting more mature and moresaturated. The average saturation of retail spaceaccounts for around 240m²/1,000 inhabitants whichis slightly higher than the EU average. Increasingretail saturation makes the market moredemanding. In order to stand out against thecompetition, it’s essential to adjust to new markettrends and to consumers’ changing needs.

The traditional retail offer in shopping centres nolonger satisfies modern consumers. It’s becomingmore popular that retail schemes should alsooperate as a community spaces. It should not beabout only being in particular place, makingpurchases, being entertained and enjoying culturalfacilities, but also about being remembered as aninteresting place, exceptional in the market, one towhich the customer wants to stay and remainloyal.

Due to the increasing competition in the retailmarket, the landlords of aging retail facilities, havehad to look at them in a new light. It’s necessary toadapt the offer and the design of this schemes tothe market’s needs, usually by extension,modernisation or re-commercialisation.

In the current climate of rapidly growing e-commerce sector, the wide range of pure retailoffer is not enough. Instead of

traditional shopping centres, retail schemescombining various functions such as retail,service, cultural and entertainment with anextended food service offer are becomingincreasingly popular and expected. Such newfacilities are necessary to be implemented in orderto attract consumers on a regular basis.

As a consequence of increasing customer’sdemand, developers work on the large-scaleschemes, called mixed-use projects. Bycombining the commercial features such as retail,office, entertainment and cultural, which areforming one unit, the mixed-use projects createan unique and recognisable place on the map ofthe city. This kind of project can be considered asa similar to the high street, which constitutes asupplement to the traditional shopping centres, andcannot be considered as their competition. Theexample of mixed-use project combiningresidential, retail, business and cultural featuresmight be Koneser located in the Praga district inWarsaw.

Shopping has to become easier and moreconvenient. As a result, projects which becamemore popular in recent times, are convenienceshopping centres. These are the schemes withless than 5,000m² and only a few tenants and –what’s most important – easy access to the itemsof daily needs. In the smallest cities they areusually the only shopping centres, in which onlyfew retail chains operate. In the largestagglomerations these are alternative solutions forhypermarkets in the shopping centres, and areusually located "on the way", close to residentialareas.

Another supplement to the traditional retail offer isthe high street market, which is still at the phaseof development. However, improving transportationsystems around the most attractive locations in thecity centres as well as improving standards ofretail space along the high streets, undoubtedlyattract new brands and potential customers. Highstreet retail is an interesting alternative to theshopping centres not only in terms

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Contact Magazine Issue No. 22

of business aspects but also of the aspect of doingshopping. The market of high street retail has beendeveloped only in few cities in Poland: Warsaw,Kraków, Wrocław and Poznań. It is expected thattogether with development of the Polish retailmarket, high streets will gain in importance in othermajor cities.

One of the key factors, responsible for thetransformation of the Polish retail market,undoubtedly is rapidly growing e-commercesector, affecting consumer’s behaviour.Nowadays, online shopping is becomingincreasingly popular. According to the Gemiusreport, E-commerce in Poland 2015, 54% of thePolish population is buying online (an increase of 9percentage points. when compared to 2014).Moreover, according to the data compiled by e-Commerce Polska, the growth rate in e-commerceindustry in Poland amounts to 15-20% annuallyand it is expected to remain at this level. This willinvolve changes in existing stores (the volume ofstore retail space, exhibition space and the pickupplace of the purchases made online).

The retail sector in Poland is still changing as themarket is maturing. The most important is followingthe market trends, especially by developers,owners and retail chains which adjust the offer tothe demanding consumers, looking for new‘shopping experience’.

Destination: Poland. Blazing a trailfor e-commerce logistics.

by Paweł Sapek, senior vice president, countrymanager at Prologis Poland and Jan Zombirt,associate director, research and consulting at JLL

Is the Polish warehouse market ready for asector boom?

Gathering Pace

Poland’s e-commercemarket isclearlygatheringpace, withomni-channelsolutionsbeing high onretailers’agendas, andmany internetstart-upsrecordingsteadygrowth.However, the country lags far behind some of themore developed European economies in terms ofthe share of online retailing in total retail sales. Thissituation is likely to change going forward, and thegap is expected to shrink. That, combined withPoland being a markedly cost-effective location inEurope, looks set to affect future warehouse spacedemand nationwide.

Prologis, a global leader in industrial real estate,and JLL, the international advisory company, haverecently released a joint research initiativeDestination: Poland. Blazing a trail for e-commercelogistics. The report analyses how thedevelopment of e-commerce in Poland affects thestrategies of retailers and logistics operators inadjusting their supply chain to market requirementsand, as a result, generate changes to the

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warehousemarket. Thereportincludesresults from asurveyconductedamongcompaniesfrom the e-commercesector1.

Some Stats

Onlinespending inPoland has experienced double-digit growth overthe last couple of years and --according to PMR -in 2014 it accounted for 3.9% of total retail sales.Most of these goods must transit through amodern warehouse/distribution centre. It isanticipated that online spending will increase to10% of retail sales by 2020, resulting in an evenmore pronounced impact on both the supply chainand the logistics real estate as well as an increasein demand for warehouse projects.

The dynamic development of the e-commercesegment creates new challenges for logisticsoperators working on behalf of retailers. Accordingto the logistics operators surveyed, the mainchallenges for e-commerce in the next five yearsinclude: same-day delivery (100%), handlingreturns (60%), cross-border (40%), security (20%),increasing labour cost (20%), short- term contractsvs long- term leases (20%) and sourcingappropriate warehouse space (10%).

Are we ready?

Around 50 large warehouse modules will beavailable for lease in Poland over the next sixmonths. Furthermore, around 280,000m² ofwarehouse space is currently being developed ona speculative basis - that is without binding leaseagreements.

E-commerce warehouse formats available ondeveloped markets feature certain specializationsincluding: a dedicated e-fulfilment centre, parcelhub/sorting centre, parcel delivery centre andurban logistics depot, returns processing centre,and a dot.com warehouse for online food fulfilment.A survey conducted by JLL among third-partylogistic providers (3PLs) and retailers show thatsome warehouse functions will be increasinglysought after in Poland. For example, according tothe research, in the next five years, 71% of 3PLswill express demand for return processingcentres.

According to the surveyed logistic operators, themost important features of an e-commercewarehouse in terms of specification include:flexibility to expand or contract leased space,mezzanine levels, high security, ancillary space,more power, intensive HVAC, and sufficientparking for employees. In terms of location, thekey factor is availability and access to staff,access to an extensive road network, andproximity to the end-customer.

The existing modern warehouse space stock inPoland is currently 9.6 million m². Most of theprojects meet the requirements of e-commercetenants. In addition, developers can adjust theirinvestments to tenant needs, for example byadding mezzanine space or increasing power.There is also a possibility to launch build-to-suit-projects.

What’s the difference?

The major differences between traditionaldistribution of goods and e-commerce include:BTC instead of BTB – Delivery locations fromfulfilment centres are no longer limited to physicalstores, but instead include locations chosen bycustomers, such as private homes, parcel lockersor collectionpoints at physical stores. This often extends thedelivery time and increases the cost of suchdeliveries.Fast deliveries – E-commerce logistics

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Contact Magazine Issue No. 22

are the same as traditional logistics, but faster.Customers require rapid deliveries, typically same-day or next-day, as opposed to weekly or bi-weekly store deliveries.Different approach – Adifferent approach: delivery is now a part of brandmarketing – in e-commerce the appropriatedelivery provides much of the shoppingexperience. Efficient logistics, which includeefficient returns processing, become critical toperformance and profitability.Merchandise ordered online includes fast-moving goods as well as slow-moving ones. Thisposes a challenge for retailers who keep bothtypes of goods in stock.High levels of seasonality require flexiblewarehouse capacity, with the retailer having theability to ramp up operations (and labour) at peakperiods

Take-up continues apace

70% of the surveyed 3PLs forecast a furtherincrease in demand for logistics services. This willresult in increasing demand for warehouse space -generated by the sales of products such as clothesand accessories, household equipment,cosmetics, electronics, multimedia, and food.

It is expected that more foreign e-commerce firmswill relocate to western Poland, the location thatenables cost-effective handling of e-fulfilmentoperations in, for example, Germany. On the otherhand, more central regions are well-suited forhandling nationwide distribution. This growingdemand will also involve specialised projects (forexample cross-dock) located closer to urban areasand enable efficient deliveries within cities.Suburban parks will still be the locations mostsuitable for distribution hubs. Furthermore, SmallBusiness Units and logistics centres within citieswill also gradually gain higher recognition amongtenants.

E-commerce boom

The boom in e-commerce combined with Poland’sinvestment attractiveness

is creating new opportunities for the warehousemarket along with the expansion of companiesalready present here, an inflow of foreign firms tothe market as well as the launching of new brands.All of these entities state the necessity for modernlogistics infrastructure. It is predicted that newlease agreements signed by e-commerce firmsmay be on track to hit 700,000m² by 2020. Thegood news is that the Polish warehouse market iswell-placed to cope with this increase in demandand that the majority of existing space currentlymeets tenant requirements.

Editorial note

Dear Readers,

This issue of Contact Magazine Online looks atthe commercial, retail and industrial propertysectors in Poland. There are solid investmentopportunities here, if you choose your marketwisely.

The Polish office market is currently being drivenby inward investment in the business processoutsourcing/shared services centre sector, whichis likely to grow by 25% this year. These hugeglobal investments are creating a huge demand foroffice space, particularly in BPO/SSC hotspots likeKraków and Wrocław. Office vacancy rates varywildly from city to city, as you will see. In retail,high-quality shopping centres are where the actionis. There are queues of retailers waiting for spacein the best locations in Poland's mainagglomerations. However, there are alsoopportunities in smaller towns, which have beennot been well served when it comes to providingtheir citizens with quality shopping experiences.Industrial and logistics real estate - factories andwarehouses - also offer good return on investmentas Poland's manufacturing continues its export-ledgrowth and a new motorway network creates newhubs for the logistics sector. And e-commerce willalso make its presence felt by creating newdemand for logistics space.

The ever-growing demand for business premises

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Contact Magazine Issue No. 22

of all sorts should be great news for theconstruction sector and for architects - as well ascompanies manufacturing the fittings that turnempty shells into efficient workplaces. As new realestate comes onto the market, tenants of offices,factories and shops start looking at their existingspace and wondering whether or not to move intosomething more modern. This in turn meanslooking over existing lease agreements andconsidering expansion plans. All good news forlawyers, removal firms and of course real estateadvisors. All in all, real estate is a subject thataffects all businesses, and this issue of ContactMagazine includes a broad range of articleslooking at property from different angles. Athoroughly good read, then, which offers multi-faceted insight for anyone running a business inPoland - or thinking of investing.

The editorial team, Micheal Dembinski, Chief Advisormichael.dembinski@bpcc.org.plDorota Kierbiedź, Head of Media & Marketingdorota.kierbiedz@bpcc.org.pl

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