Poland Today Business Review+ No. 041

No. 041 / 30th June 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

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MANUFACTURING & PROCESSING

France's Asquini to expand Lublin plant page 2

Chemicals firm PCC Rokita's completes Warsaw IPO page 2

Automotive exports up 5% in Q1 with full-year growth seen at 8% page 3

BANKING & FINANCE EBRD to buy up to 20% of shares in Altus TFI page 3 Getin Bank to sack 400 em-ployees by Q3 page 4

ENERGY & RESOURCES

LNG terminal is 90% complete, despite alarming revelations from secret recordings page 4

Alstom wins EUR 80m wind turbine order from PGE page 6

PROEPRTY & CONSTRUC-TION

Polimex-Mostostal creditors approve restructuring plan page 4 PKP seeks partners for train station retail projects page 7

HOSPITALITY

Huge new Hampton by Hil-ton opens in downtown War-saw page 7

SERVICES & BPO

Capgemini expands Wrocław software unit page 8

TRANSPORT & LOGISTICSŁódź launches new commut-er train service, Tri-city is next page 9 Goodman breaks ground on next phase of Kraków park page 10

RETAIL

May retail sales data disap-point analysts page 11 Clothing & footwear market grows 3.6% in 2013 as consol-idation continues page 12

POLITICS & ECONOMY

Poland moves up in UNCTAD ranking page 13

KEY FIGURES

Up-to-date macroeconomic figures, currency & stock market data and lots of other hard-to-find info pages 15-17

The delaying completion of the Polish LNG terminal in Świnoujście also popped up in the recordings, but officials assure the project will be ready next year (see page 4). Photo: Polskie LNG

GGGGovernment survives confidence voteovernment survives confidence voteovernment survives confidence voteovernment survives confidence vote Prime Minister Donald Tusk and his government have survived a parliamentary vote of confidence amid an eavesdropping scan-dal involving prominent members of the ruling Civic Platform party and other key officials. Prosecutors have pressed charges against the first four suspects in the case. They include waitstaff at upscale restaurants and and influential businessman. page 13

weekly newsletter # 041 / 30th June 2014 / page 2


France's Asquini to France's Asquini to France's Asquini to France's Asquini to expand Lublin plantexpand Lublin plantexpand Lublin plantexpand Lublin plant

French aerospace components manufacturer Asquini Polska will expand its Polish business unit at the cost of PLN 41.8m, creating 40 new jobs in the Lublin area. The project will be implemented under the aegis of the Euro-Park Mielec special economic zone. "Asquini has been operating in Lublin since 2005. We decided to invest in the zone because Lublin is a great location not only for manufacturing, but also for R&D. We have been offered a perfectly prepared investment site and we have plans for fast-paced growth in Po-land," Asquini Polska CEO Ludovic Asquini said in a statement released by the Lublin City Hall. The investor seeks to onboard some 30-40 new em-ployees over the coming four years in order to reach a total headcount of 80-100. The company plans to build a new plant on a 2ha site and invest additional re-sources in production and quality assurance. Asquini Polska is Poland's only certified supplier of critical components to Airbus Helicopters, formerly known as Eurocopter. The Poland-based unit provides also machining of fuselage and landing gear parts used in the Airbus A320, A340, A350, A380 airliners, as well as steering, transmission and shock absorption com-ponents for helicopters. The Lublin section of the Euro-Park Mielec zone in-cludes 116ha of investment land, of which close to two thirds are already occupied. It is home to 27 compa-nies which declared total investments to the tune of PLN 750m and creation of 1,000 new jobs.


Chemicals firm Chemicals firm Chemicals firm Chemicals firm PCC PCC PCC PCC Rokita's Rokita's Rokita's Rokita's completes completes completes completes Warsaw IPOWarsaw IPOWarsaw IPOWarsaw IPO

Polish chemical firm PCC Rokita made a successful landing on the Warsaw Stock Exchange last week as the 485th company listed on the Warsaw bourse and this year's 13th newcomer. Shares in the company opened at PLN 36 apiece, marking a 9.1% improve-ment on the issue price. The heavily oversubscribed offering included PLN 52.4m worth of newly issued shares as well as a PLN 45.9m stake sold by the com-pany's main shareholder, Germany's PCC Group. Overall, new investors acquired an estimated 15% share in the business, corresponding to less than 10% of votes at the company's AGM.

Based in Brzeg (40km south east of Wrocław), PCC

Rokita is major producer of foams used by the furni-

ture and upholstery industry. Photo: PCC Rokia

Having reached sales of some EUR 262m and an oper-ating result (EBITDA) of EUR 30m in fiscal 2013, PCC Rokita SA is the main source of revenues and earnings

for the PCC Group. The company's business activities include the production of chlorine and chlorine com-pounds as well as polyols and polyurethane systems. PCC Rokita will be the third company of the PCC Group to be listed in Warsaw, following the successful listings of its logistics unit PCC Intermodal in 2009, and PCC Exol SA, the surfactant producer from Brzeg Dolny, in 2012. The equity boost is meant to support the company's ambitious investment program. PCC Rokita seeks to spend PLN 35m on boosting its production capacity in polyols and polyurethane systems (total capex: PLN 45m), PLN 16m on increasing its polyoxypropylene output (total capex: PLN 30m), and PLN 5m on re-search & development (total capex: PLN 7m). The Duisburg-based German company PCC group fo-cuses on chemicals, transportation, energy, coal & coke, plastics & metallurgy. With a total workforce of 2,800 people, it operates across 16 countries in Central and Eastern Europe. Besides PCC Rokita, its Polish as-sets include the Gdynia-based intermodal freight for-warder PCC Intermodal, which moved more than 125,000 TEU in 2013 between its inland terminals in Poland and seaports in Poland, Germany, and the Netherlands. In 2013 PCC Group turned over EUR 625m and posted net earnings of EUR 7.9m. PCC group CEO Waldemar Preussner told reporters last week that he may float other companies from the group on the Warsaw bourse over the coming two years, after reaching an adequate scale of activity. PCC Consumer Products Kosmet, a producer of domes-tic chemicals and cosmetics, is likely to be PCC's next IPO, Preussner said, adding that size and scale of op-erations would be decisive criteria for which firm to float.



AutomotivAutomotivAutomotivAutomotive exports up e exports up e exports up e exports up 5% in Q1 with full5% in Q1 with full5% in Q1 with full5% in Q1 with full----year year year year growth seen at 8%growth seen at 8%growth seen at 8%growth seen at 8%

According to the market research firm AutomotiSuppliers.pl, Poland's automotive industry exported EUR 4.66bn worth of products in Q1 2014, marking a 4.7% improvement y/y. In March alone the figure came to EUR 1.69bn – the best result in nearly three years, including a historic result in the parts and components category: EUR 702m. As a result, the country is likely to export a total of EUR 19.4bn worth of cars and components this year, up from EUR 17.9bn in 20013, Rafał Orłowski of AutomotiveSuppliers.pl told Poland Today. The improvement is mainly due to increasing orders from the EU countries, which receive the bulk of Po-land's automotive exports. Exports to Germany, Po-land's main trading partner, increased by 12% and to-taled EUR 532m in March. Italian customers bought EUR 174.4m worth of Polish automotive production (+16.5%), whereas exports to the Czech Republic boosted by more than a half and topped EUR 122.7bn. Orders from the UK dropped 3.3%, down to EUR 130.3bn. In the first three months of the year Poland shipped out EUR 1.98bn worth of parts and components, EUR 1.28bn worth of passenger cars and light commercial vehicles and EUR 579.4m worth of diesel engines. The main recipients were Germany, with a 31% share in the total exports, followed by the UK (9.4%) and Italy (9.2%).

Automotive exports to grow 8% in 2014 Automotive exports in EUR bn

14

1 5

16

17

1 8

19

20

2008 2009 2010 201 1 2012 201 3 *2014

Source: AutomotiveSuppliers.pl *) projected

"A few years ago Poland's main automotive exports were cars, but since mid-2001 the top spot belongs to parts and components, which represented more than 42% of the total figure in Q1 2014. We are expecting this segment to set more records this year," says Orłowski. "Many suppliers operating in Poland are ex-panding production, and new factories are being built. Inalfa Roof Systems has just opened in Września and next month BASF will launch production in Środa Śląska. It should be said that we owe the robust growth over the past months not only to Western Eu-ropean clients, but also factories in other CEE coun-tries, such as the Czech Republic and Hungary, where car production is on the rise."

BANKING & FINANCE

EBRD to buy up to 20% EBRD to buy up to 20% EBRD to buy up to 20% EBRD to buy up to 20% of shares in Altus TFIof shares in Altus TFIof shares in Altus TFIof shares in Altus TFI

The European Bank for Reconstruction & De-velopment (EBRD) is considering an investment of

up to PLN 50m in the forthcoming IPO of fund man-ager Altus TFI S.A. on the Warsaw Stock Exchange. Altus is a privately held mutual fund and asset man-agement company in Poland with assets under man-agement of more than PLN 5 billion across 36 funds. It is ranked 17th with a 1.5% market share. Following a successful book building, in which de-mand exceeded supply three times, Altus set the price at PLN 9.5, bringing the value of the entire offering to PLN 175m. The IPO includes 16.4m new shares and 2m existing shares in Altus TFI. New shareholders will end up with just over 30% of the company. In its listing prospectus the company said it will use the re-sources to finance investments and boost the scale of its business mainly via acquisitions of other Polish fund managers. Altus said it was analyzing two poten-tial transactions at the moment. Altus TFI was established in 2008 by Piotr Osiecki, former Deputy CEO and CIO of PZU Asset Man-agement, who is currently the CEO of Altus with a 59% ownership. The remaining shares are owned by managers of the fund and founding shareholders. "The EBRD’s investment will support Altus TFI in its transformation from a private to a publicly listed com-pany with enhanced governance and transparency re-quirements. The EBRD plans to appoint an independ-ent experienced board member to assist in institution-alizing the business and provide guidance on corpo-rate governance," the EBRD said. "Furthermore, the EBRD's investment will represent its continued commitment to supporting the develop-ment of Poland's capital markets where asset man-agement companies are expected to play an increas-ingly important role, particularly in the context of the recent pension reforms," it added.


BANKING & FINANCE

Getin Bank sacks 400 Getin Bank sacks 400 Getin Bank sacks 400 Getin Bank sacks 400 employeesemployeesemployeesemployees as part ofas part ofas part ofas part of broader downsizing broader downsizing broader downsizing broader downsizing trend in banking sectortrend in banking sectortrend in banking sectortrend in banking sector

Polish Getin Bank will lay off 400 employees by Q3, in a move to "cut ineffective sales channels," as its press office euphemistically announced last week. Getin Bank is a retail brand of Getin Noble Bank, a Warsaw-listed financial services group belonging to billionaire Leszek Czarnecki. Last year Getin Noble Bank boosted its net earnings by 20% to reach of PLN 400m, whereas its total assets increased by 9% and came to PLN 63.6bn. In recent years Getin Noble Bank has made a number of small acquisitions in the banking sector in Poland (GMAC, Allianz Bank, Dexia, parts of DNB Nord and DZ Bank) and other CEE countries (most recent-ly Romania). Now, the billionaire's attention is said to be shifting to the leasing segment, with the recent pur-chase of VB-Leasing International's operations in Poland and Romania. With PLN 6.4bn worth of assets, Czarnecki is one of Poland's five wealthiest individuals. His portfolio in-cludes a 55.8% share in Getin Holding, 55.7% in Getin Noble Bank, 51.3% in LC Corp (property developer) as well as 54.2% in Open Finance (financial inter-mediation firm). To-date, he has completed seven list-ings on the Warsaw Stock Exchange and in recent in-terviews he hinted that another IPO is likely to take place by the end of the year. Analysts are betting on Idea Bank.

The redundancies at Getin are part of a broader trend in the Polish and global banking industry, as customers grow more accustomed to online and mobile banking. According to Poland's financial markets regulator KNF, some 7,000 banking jobs were lost in Poland over the past four years and at the end of April the sec-tor employed approximately 173,100 people - the low-est number since 2009, when KNF began publishing the data. The layoffs affect primarily banking branches, where staff numbers dropped from the all-time-high of 107,012 in April 2010 down to a historic low of 100,868 four years later. Positions at head offices seem to be more stable, as they employ close to 72,000, only 1,000 down on the December 2012 record. Further redun-dancies are likely as the sector consolidates. For in-stance, the coming BNP Paribas-BGŻ and PKO BP-Nordea mergers will almost certainly trim some over-lapping functions. Not all layoffs are as spectacular as sudden as the one at Getin, however, as most banks choose to cut staff gradually and quietly. Although the downsizing trend is clear, it is yet to af-fect the number of branches, which remains relatively stable. In April there were 15,383 banking units in the country, including 7,330 proprietary ones. A year ear-lier the total figure stood at 15,446 and majority of the closures that have taken place since that time have impacted banking agencies/franchise-based units.

ENERGY & RESOURCES

LNG terminal is 90% LNG terminal is 90% LNG terminal is 90% LNG terminal is 90% complete, despite complete, despite complete, despite complete, despite alarming revelations alarming revelations alarming revelations alarming revelations fromfromfromfrom secret secret secret secret recordingsrecordingsrecordingsrecordings

Poland's natural gas giant PGNiG suspended deputy CEO for corporate affairs Andrzej Parafianowicz, fol-lowing the publication of a secretly taped conversation with former Transport Minister Sławomir Nowak, in which the two discuss, among others, the likely delays in the completion of Poland's LNG terminal in Świnoujście. During the same tete-â-tete Parafianowicz, a former deputy Finance Minister, also seemingly offered to help tone down a tax investiga-tion into Nowak's wife. The tapes, published by the weekly Wprost, are part of a larger eavesdropping scandal that in the past two weeks has engulfed Po-land's ruling party and the government in the worst crisis since it came to power in 2007. In the recordings, Parafianowicz tells Nowak that the 2010 contract with Italy's Saipem, for the construc-tion of the terminal, puts Poland at a major disad-vantage, and enables the contractor to draw out the construction process without any sanctions. Accord-ing to original plans, the terminal was supposed to launch in 2014, but its opening has since been pushed back to mid-2015. In the recordings, PGNIG executive expresses doubts about the new deadline and men-tions a 2017 completion as a possible scenario. Accord-ing to the most recent official statement from Econo-my Minister Janusz Piechociński, the terminal will go online in May/June 2015, while testing should begin by the end of this year.


Poland's Today asked Polskie LNG, the special pur-pose company in charge of the project, about the cur-rent status of the latter. According to the information we received from communications director Maciej Mazur, the terminal was 89.5% complete as of June 26, 2014 nearing the much anticipated finale at the av-erage monthly rate of two percentage points since the beginning of this year. Approximately 1,500 workers are currently employed at the site. According to earlier plans, the project, which is of strategic importance for Poland's energy security, were to reach completion in mid-2014, but the Saipem-Techint-PBG consortium has been given an additional six months to deliver the facility. The construction of the Świnoujście terminal will cost state-controlled Polskie LNG a total of about PLN 3bn. Another PLN 4.5bn is expected to be spent on all the related infrastructure.

According to Polskie LNG and government minis-

ters the Świnoujście terminal is very close to comple-tion. Photo: Polskie LNG

Its large-scale investments in gas transmission infra-structure will enable Poland to import significant amounts of gas from directions other than Russia, which currently supplies close to two thirds of Polish gas. As part of the ongoing efforts aimed at improving

its energy security, Poland seeks to integrate the do-mestic transmission system with those of neighboring countries (see more on that in PT Business Review + No. 022 page 5). Particular focus has been placed on the north-south pipeline and the integration of con-nections in the Baltic Sea region. These connections, together with the expansion of the LNG terminal and the national transmission network, are to create a common regional gas market. The first supplier of LNG to Świnoujście will be Qatargas, under an agreement signed in 2009, which stipulates that starting from July 2014 the Qatar com-pany is to deliver 1m cb.m of the fuel annually over a period of 20 years. However, PGNiG s it would seek to renegotiate the deal with Qatargas. PGNiG would like to reschedule the timetable of future deliveries, as well as the price of the Qatar gas, because of the delayer completion of the terminal as well as significant drop in global gas prices over the past years. The prices in the initial agreement, while competitive five years ago, are now seen as too steep.

ENERGY & RESOURCES

Alstom wins EUR 80m Alstom wins EUR 80m Alstom wins EUR 80m Alstom wins EUR 80m wind turbine contract wind turbine contract wind turbine contract wind turbine contract from PGE groupfrom PGE groupfrom PGE groupfrom PGE group

PGE Energia Odnawialna, the renewable energy arm of Poland's top power utility firm PGE has awarded a EUR 80m contract for the supply of 30 wind turbines to PGE's "Lotnisko 90MW" wing farm, which will be based in Kopaniewo. The French engi-neering giant beat Danish Vestas and Germany's Siemens, which offered to deliver turbines with the same total capacity for EUR 87.9m and EUR 90.5m (net) respectively. With a total output of 90MW and

scheduled for commissioning at the end of 2015, Lotnisko is one of the largest project in the Polish wind power industry, and the first wind power project implemented by Alstom in Poland. The new farm in Kopaniewo is part of PGE strategy to reach at least 234 MW of power from wind farms by 2016. The scope of the contract covers the project manage-ment, supply, erection and commissioning of 30 Al-stom ECO110 3 MW wind turbines equipped with a 110 m diameter rotor, a 90 meter high steel tower, and a SCADA remote control system. Alstom will also provide turbines operation and maintenance for 2 years. So far Alstom has installed more than 130 tur-bines of the ECO100 type throughout Europe, includ-ing Spain, Great Britain, Turkey and Finland.

Alstom's ECO110 3MW turbines in operation at a

wind farm in Bretagne, France. Photo: Alstom

"A contract for 30 wind turbines delivery opens a new range in a long-term co-operation between our com-panies. We are convinced that Alstom competences in Poland in the conventional energy sector, combined with the proven technology represented by ECO110 turbines, will translate into an efficient execution of the contract and guarantee Alstom a successful debut


on the Polish wind market," said Krzysztof Müller, In-vestments Department Director, PGE Energia Odnawialna. Alstom builds and operates wind farms globally – more than 2,600 turbines are currently installed or under construction in more than 200 wind farms, de-livering over 5,000 MW. Alstom designs and manufac-tures onshore and offshore wind turbines in a range from 1.67 MW to 6 MW.

Poland's installed wind energy capacity in MW

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2005

2006

2007

2008

2009

2010

2011

2012

2013

*2014

Source: URE *) as of end of Q1

Alstom employs more than 3,200 people in Poland in power generation, grid, and transport sectors. Its Polish operations include a turbine factory and found-ries in Elbląg, generator plant in Wrocław, rolling stock factory in Chorzów, EPC project implementa-tion in Łódź and Warsaw as well as switchgear unit in Katowice, specializing in grid solutions. Earlier this year Alstom signed contracts worth approximately EUR 1.25 billion with Polimex, Rafako and Mostostal Warsawa, members of the consortium in charge of the supply of two 900 MW units for PGE's new ultra-supercritical coal-fired power plant in Opole, south-western Poland. It is also delivering the new high-speed Pendolino trains to Poland's PKP Intercity.

Poland's installed renewable energy capacity came to 5,823 MW as of end of Q1 2014 , up by over 1,400 MW compared to end-2012, according to energy market regulator URE. Wind power capacity increased the most, reaching 3,677 MW as of March, followed by hy-dro-power capacity amounting to 974 MW and bio-mass-fueled plants with 9995 MW, the data showed. Renewable energy currently represents slightly over 10% of Poland's energy supply. The country seems to be way on its way to reach its 15% target for the share of renewable sources in gross final consumption of en-ergy in 2020.

PROPERTY & CONSTRUCTION

PolimexPolimexPolimexPolimex----Mostostal Mostostal Mostostal Mostostal creditors approve creditors approve creditors approve creditors approve restructuring restructuring restructuring restructuring planplanplanplan

Poland's largest construction company Polimex-Mostostal, which ended up on the verge of bankrupt-cy due to poor risk assessment on a number of huge in-frastructure projects in the run-up to the 2012 Euro-pean football championships, has finally reached an agreement with creditors and bondholders that en-sures survival of its business. According to a term sheet signed by the builder and its creditors (mainly the PKO BP and Pekao SA banks), a large portion of Polimex's debt (at least PLN 470m) is to be converted into shares, whereas repayment of the outstanding dues is to be pushed back until the end of 2019. Although no exact figures were provided at this time, Polimex had earlier estimated its dues to creditors and bondholders at some PLN 900m. Its creditors are to receive 2.69bn newly issued shares in Polimex, whose equity currently includes 1.47bn shares.

Additionally, Polimex is to issue PLN 140m worth of bonds (some of them convertible) to finance its day-to-day activities. It will also get access to PLN 60m worth of bank guarantees that will enable the company to take part in new tenders. Polimex will become a hold-ing company divided into two units providing services to the energy and petrochemicals segments. Shares in the said two units will serve as a collateral for the new bonds and guarantees.

Polimex-Mostostal key financial figures

0

1

2

3

4

5

6

2006 2007 2008 2009 2010 2011 2012 2013

-1.25

-1.00

-0.75

-0.50

-0.25

0.00

0.25

Turnover in PLNbn, left axis

Net profit in PLNbn, right axis

Source: Polimex-Mostostal

An annex to the original restructuring agreement from December 2012 is to be signed in July and its cove-nants will give the company more flexibility, the com-pany said. Polimex estimates the value of its order book at some PLN 9bn at the moment. The company participates in the largest two projects in Poland's energy sector: the PLN 11.5bn expansion of Opole power station and PLN 6.4bn Kozienice power plant investment. Polimex's share in each of the two contracts tops 42%. Its creditors have also approved a further sell-off of Polimex assets, including the 100% stake in rail engi-neering company Torpol, which is currently being floated on the Warsaw Stock Exchange. The Torpol


IPO, which includes also newly issued shares, is ex-pected to generate some PLN 105-125m worth of pro-ceeds for Polimex. Last year Polimex-Mostostal posted a PLN 262m net loss on PLN 2.36bn turnover. In 2012 its net loss to-taled a massive PLN -1.24bn while its revenues came to PLN 4.11bn.

PROPERTY & CONSTRUCTION

Railway giant PKP Railway giant PKP Railway giant PKP Railway giant PKP seekseekseekseekssss developers for developers for developers for developers for train station projectstrain station projectstrain station projectstrain station projects

Poland's state railways operator PKP is inviting prop-erty companies to join its new initiative that will focus on development of retail and service facilities at se-lected train stations across the country. The pilot of PKP's "Small Development Projects" program encom-passes seven stations: Mińsk Mazowiecki, Warszawa Włochy, Oświęcim, Konin, Włocławek, Dębica and Katowice. "Commercial investments at railway stations are bene-ficial both for investors and local communities. Train stations make very good locations for retail and we hope the projects will liven up the areas around train stations," says Jarosłąw Bator, Managing Director Real Estate at PKP. Developers selected by PKP will be able to build com-mercial projects measuring between 700 sq.m and 7,500 sq.m, which means that the largest may reach several tens of million euros. The first investments are likely to launch as early as next year.

"We are analyzing another 130 properties throughout the country, with varying sizes and potential. From that pool we intend to select further locations that may be suitable for development," Bator adds. Typically, PKP takes possession of the newly built train stations along with the adjacent railway infrastructure, where-as the commercial premises are being sold.

Galeria Katowicka, is a joint project of PKP and

Spanish developer Neiver. Image: Neinver Polska

So far, PKP has completed two large mixed-use pro-jects under a similar formula: Galeria Katowicka (with Spanish developer Neinver) and Poznań City Center (with Hungary's TriGranit), with a combined floor space of some 108,000 sq.m. PKP also contributed sites to major retail projects such as Złote Tarasy (66,200 sq.m GLA) and Warszawa Wileńska (34,000 sq.ma GLA) in Warsaw and Galeria Krakowska (58,000 sq.m) in Kraków. The coming months are to see Slovakian developer HB Reavis break ground on the new Warszawa Zachodnia station, which will be accompanied by an office park. PKP has also named a partner (Belgium's Ghelamco) for the redevelopment of the Warszawa Gdańska station.

Although the "Small Development Projects" initiative is unlikely to attract such big names, PKP should be able to find local partners for most investments. With retail chains seeking ways to get closer and closer to their clients, and amid shortage of suitable retail units outside of shopping centers, newly-developed com-mercial space at railway stations is likely to attract tenants pretty quickly.

HOSPITALITY

Huge new Hampton by Huge new Hampton by Huge new Hampton by Huge new Hampton by Hilton opens in Hilton opens in Hilton opens in Hilton opens in downtown Warsawdowntown Warsawdowntown Warsawdowntown Warsaw

Hampton by Hilton announced the official opening of its latest property in Poland, the 300-guestroom Hampton by Hilton Warsaw City Centre. The proper-ty is Hampton's largest hotel outside the US and one of the biggest hotels to open in the city centre in the last few years. Last year, the hotel was the first in Warsaw to receive the prestigious LEED Gold Certification, in recognition for its eco-friendly construction and ener-gy efficiency. The scheme was delivered by Austria's S+B Gruppe, which acquired an unfinished 55-tall edifice a few years ago from the original investors who had sought to fill its 12,500 sq.m of floor space with offices, before going bust. S+B decided to turn the project into a hotel at the cost of approximately EUR 40m. Located on 72 Wspólna St., close to the Marriott hotel and the central station, Hampton by Hilton Warsaw City Centre offers easy access to a number of Warsaw key tourist attrac-tions as well as a wide range of shopping and dining venues.


Hampton by Hilton Warsaw City Centre features 300 guestrooms across 17 floors, parking, fitness centre and 24/7 snack area. A separate business zone equipped with computers and printers also caters to business guests. Complimentary high-speed Wi-Fi is available throughout the hotel. The new hotel is the second Hampton by Hilton in Warsaw following the recently completed property near the Chopin airport, and number four in Poland, alongside hotels in Gdańsk and Świnoujście. Other Hilton brands available in Po-land are Hilton Garden Inn (Kraków, Rzeszów), Dou-bleTree by Hilton (Warsaw, Łódź) and Hilton (War-saw, Gdańsk). The latest opening, prior to Hampton by Hilton Warsaw City Centre, was the 360-room Dou-bleTree by Hilton Hotel & Conference Center in War-saw, developed by Polaris Hospitality Enterprises, which welcomed first guests in May.

Hampton by Hilton Warsaw City Centre is Hamp-

ton's largest hotel outside the USA and one of the biggest hotels to open in the city centre in the last few years. Image: Hampton Hotels

The Hilton brand is yet to appear in Wrocław, where two projects (Hilton and Hilton Graden Inn) experi-enced serious delays due to financing problems on the part of investors, but according to recent reports they are about to take off. A Hampton by Hilton property is also under construction in Bydgoszcz.

"Poland continues to be a strategic development mar-ket for Hilton Worldwide. In 2013, over 23 million tourists chose to visit Poland. The number of guests booking hotels increased by nearly one million versus the previous year, with Warsaw as the top destination. Hampton by Hilton Warsaw City Centre is in a prime location to welcome these guests and provide the val-ue offering for which Hampton is internationally known," said Simon Vincent, president, Europe, Mid-dle East & Africa, Hilton Worldwide.

Hilton Worldwide Hilton Worldwide Hilton Worldwide Hilton Worldwide –––– Polish hotelsPolish hotelsPolish hotelsPolish hotels Property No of rooms Opening

Hilton Warsaw 314 2007

Hilton Gdansk 152 2010

Hilton Wroclaw 255 TBA

Hampton by Hilton Swinoujscie 104 2012

Hampton by Hilton Warsaw Airport 116 2013

Hampton by Hilton Gdansk Airport 116 2013

Hampton by Hilton Bydgoszcz 130 2014

DoubleTree by Hilton Lodz 200 2013

Doubletree by Hilton Warsaw 365 2013

Hilton Garden Inn Krakow 155 2010

Hilton Garden Inn Rzeszow 102 2012

Hilton Garden Inn Krakow Airport 150 2013

Hilton Garden Inn Wroclaw 150 TBA

Source: Hilton Worldwide / archives

Hilton Worldwide is the leading global hospitality company, spanning the lodging sector from luxurious full-service hotels and resorts to extended-stay suites and mid-priced hotels. Its brands are comprised of more than 4,100 hotels and timeshare properties, with 685,000 rooms in 92 countries and include Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Hilton Hotels & Resorts, DoubleTree by Hilton, Em-bassy Suites Hotels, Hilton Garden Inn, Hampton Ho-tels, Homewood Suites by Hilton, Home2 Suites by Hilton and Hilton Grand Vacations..

SERVICES & BPO

Capgemini expands Capgemini expands Capgemini expands Capgemini expands Wrocław software unit Wrocław software unit Wrocław software unit Wrocław software unit

Global technology outsourcing and consultancy giant Capgemini seeks to create 100 jobs at its Software So-lutions Center in Wrocław by the end of the year, in addition to the estimated 100 positions it has created there over the past six months. The company's rapid growth in Wrocław is partly due to a recent launch of a dedicated testing unit within the Software Solutions Centre. Created from latter's existing employees as well as specialists from Capgemini's subsidiary Sogeti, the new unit focuses on software testing solutions, for instance testing automation and mobile testing. Capgemini currently employs 600 professionals in Wrocław, who work on 80 business projects for 30 global clients. In a move to accommodate its growing staff numbers Capgemini will relocate to new offices in Millennium Tower IV, part of an office park devel-oped by a local company Descont. "Our Wrocław centre is handling a growing number of projects for our current and new clients," Capgemini's Joanna Nowocień told Poland Today in November last year. "We have signed a framework agreement with Poland's social security administration ZUS regarding development and upgrade of their IT system KSI, one of Europe's largest." The company is recruiting both experienced staff as well as IT graduates for the software solutions unit in Wrocław, which cooperates closely with Capgemini centers in Germany and provides services to many German clients, such as Daimler, BMW, and ZDF. The centre specializes in change management, business


process outsourcing, IT infrastructure management services and tailored software solutions. Its clients in-clude top brands from the automotive, finance, logis-tics and media sectors. One of its best-known imple-mentations in Poland is the Express Elixir system for Poland's national clearing house KIR, which enables immediate transfers between banks.

Employment at BPO/SSC centers in Poland

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

2008

2009

2010

2011

2012

*2013

*2014

**2015

Source: ABSL *) as of April **) projected year-end

With more than 130,000 people in 40 countries, Capgemini is one of the world's foremost providers of consulting, technology and outsourcing services. The group reported 2013 global revenues of EUR 10.1bn. Capgemini has five centers in Poland (Kraków, Kato-wice, Warsaw, Wrocław, and Opole) that employ 5,800 staff and deliver a whole range of applications services, business process outsourcing, and infrastruc-ture services in nearly 30 languages. "We are already Poland's number two BPO employer, and considering our growth pace to-date, we are on track to pass the 6,000 employment mark in 2015," Ms. Nowocień told Poland Today a few months ago, and now it seems like they might hit that milestone already this year.

TRANSPORT & LOGISTICS

Łódź launches new Łódź launches new Łódź launches new Łódź launches new commcommcommcommuter train uter train uter train uter train serviceserviceserviceservice, Tri, Tri, Tri, Tri----city is nextcity is nextcity is nextcity is next

Łódzka Kolej Aglomeracyjna (ŁKA) a local com-muter train operator owned by the Łódź region, offi-cially launched passenger services in mid-June, con-necting the central Polish city with the nearby town of Sieradz. Other routes (to Zgierz, Koluszki, Łowicz, and Kutno) are to be introduced gradually over the coming year. In December 2012, ŁKA ordered 20 FLIRT3 two-carriage electrical trains from the Swiss-owned train maker Stadler Polska Sp. z o.o. The first six vehi-cles have already been put into service, and the re-maining ones are to be delivered by February 2015. Af-ter commissioning the vehicles, Stadler Polska will be responsible for the technical maintenance of the vehi-cles for 15 years in a new depot to be built in the Widzew district of Łódź. This solution allows the new railway to concentrate on transport management while Stadler will be responsible for the everyday availability of the vehicles. The new depot is to be commissioned in September. The vehicles and the new depot are part of the region-al "System Łódzka Kolej Aglomeracyjna" transport project, one of the largest infrastructure developments in the region. The capital expenditures on ŁKA has come to PLN 457m, of which PLN 193m was contrib-uted by the European Union's cohesion fund. As part of this investment, 24 platforms at 14 stops and three train stations (Stryków, Głowno and Chociszew) have been modernized or developed from scratch. Works

are underway to integrate other means on public transport in the (train, tram, bus) with the ŁKA net-work.

ŁKA ordered 20 two-carriage FLIRT3 trains from

Stadler. Image: Stadler

Stadler Rail, which employs 500 staff at its Polish as-sembly plant in Siedlce near Warsaw, has sold over 960 units based on the FLIRT concept over the past 10 years to many markets, including Hungary, Serbia, Norway, and Estonia. In August last year the Swiss train maker, working in a consortium with Polish rail vehicle manufacturer Newag, won an international in-vitation to tender from Polish State Railways PKP In-tercity for 20 long-distance trains. The contract relates to eight-carriage FLIRT3 trains with a high-quality in-terior to allow comfortable long-distance travel. The FLIRT3 is the latest generation of Stadler's best-selling train, made up of various modular sub-ranges. Stadler had earlier sold 10 four-unit low-floor FLIRTS to the Mazowieckie region operator Koleje Mazowieckie as well as four similar vehicles to Sile-sia's Koleje Śląskie. "Between September 2007 and the end of April 2014 the Siedlce plant completed 180 trains. Besides the ŁKA contract, we are currently working on orders


from Austrian-Hungarian GYSEV, Germany BeNEX GmbH as well as GTW vehicles for Arriva," Tomasz Prejs, COO of Stadler Polska tells Poland Today. "Re-cently we have completed deliveries of wide-gauge FLIRTs for Estonia's Elektriraudtee and Belorussian Railways. Stadler Polska is also providing maintenance services to Koleje Śląskie, Koleje Mazowieckie and LEO Express. Our factory will also fulfill a portion of PKP Intercity's order of 20 FLIRT trains." "Stadler set up the Siedlce plant in order to carry out orders from Poland. Over the 2007-2013 period we ac-quired only two contracts from this market, but since the Stadler group decided to produce trains from some of their other contracts in Poland, we became the country's largest exporter of rail vehicles in the coun-try. Our further growth depends on the kid of new tenders are being announced in Poland and whether we succeed at winning those deals," says Tomasz Prejs. Indeed, over the past years a lot of lucrative contracts landed with Polish-owned firms, such as the Byd-goszcz-based train maker PESA which has just ob-tained a PLN 114m contract for the delivery of 10 elec-tric multiple units to Pomorska Kolej Metropolitalna (in Polish abbreviated into PKM) – a brand new 20km commuter line that will connect the Gdańsk city centre with the city's airport and the Kashubia region. PESA's rival in the tender was Stadler's partner in the PKP Intercity project, Polish Newag. Brand new railway line for Tri-city Scheduled to reach completion in 2H 2015, PKM is be-ing currently developed by a Polish-Spanish consorti-um of Budimex and its strategic investor Ferrovial Agroman at the cost of PLN 716m. The investor be-hind PKM is a special purpose company established by the regional authorities, which are counting on the new railway line to significantly greatly improve pas-

senger transportation between the airport, downtown Gdańsk, Gdynia as well as a number of towns in the region. In 2011 the EU assigned PLN 612m funding for the project, which was at the time expected to cost PLN 914m. The eight-station line will branch off the Gdansk – Gdynia line west of Gdansk Wrzeszcz sta-tion, turning south through Bretowo and Jasień, cross-ing the S6 highway to reach a park-and-ride station at Matarnia. From here the line will continue west to the airport, before joining the existing Kościerzyna – Gdy-nia line at a triangular junction south of Osowa station.

The Gdańsk authorities are counting on PKM to

stimulate economic growth in the region. Image: PKM

Phase one of the entire undertaking involved electrifi-cation of the existing Gdynia - Gdańsk Osowa route, which is being handled by the railway infrastructure operator PKP PLK under a separate budget. The se-cond stage is reinstatement of a 14 km line from Gdańsk to Kokoszki, near the airport. The line was se-verely damaged in World War II and was subsequent-ly used to train soldiers in the destruction of rail infra-structure, and as a result needs to be completely re-built. The third stage is a new alignment of around 4km connecting Gdańsk Airport with a triangular junction to the Gdynia - Koscierzyna line south of

Osowa, which will also enable the operation of Gdansk - Kościerzyna regional services. According to plans, PKM train will operate a 15-minute interval service, with a journey time of 18 minutes between Gdańsk Wrzeszcz and the Lech Wałęsa Airport. It should provide a welcome growth stimulus to the area, with investment sites located near PKM stations being highly sought after. "The PKM will undoubtedly increase Tricity's invest-ment attractiveness," Marcin Piątkowski, director of the regional investment support agency Invest in Pomerania told Poland Today's Lech Kaczanowski. "PKM will represent a vital factor for investors who decide on the location of their projects and, in a con-sequence will contribute to the economic recovery of the areas located along Metropolitan Railway. So far investors looking for a compromise between conven-ient access to the workplace and cost effectiveness have been choosing locations situated along main transportation road or in the vicinity of the commuter train. PMR, which will link the southern part of the agglomeration with the city centers of Gdańsk and Gdynia, will particularly boost development of service centers in the suburbs, which until now were accessi-ble only by car or bus."

TRANSPORT & LOGISTICS

Goodman breaks Goodman breaks Goodman breaks Goodman breaks ground on next phase ground on next phase ground on next phase ground on next phase of Kraków paof Kraków paof Kraków paof Kraków parkrkrkrk

Although the slightly weaker-than-expected macroe-conomic figures in recent weeks have somewhat dampened widespread hopes for a rapid recovery, there is at least one sector where confidence in the


Polish economy seems stronger than ever. After a few years of relying almost exclusively on built-to-suit pro-jects, since the beginning of 2014 Polish warehouse and industrial property developers have all gone spec-ulative. We have already written about new speculative schemes from the leading warehouse developers Panattoni and ProLogis and last week another major player, Goodman, said it had commenced the con-struction of its fifth warehouse at Kraków Airport Lo-gistics Centre. The 11,000 sq.m facility is also being built on a speculative and its completion is scheduled for November 2014. According to Goodman, the build-ing can be split into smaller units to meet customer re-quirements, and will also feature office and social space.

Warehouse market as of end of 2013 Region Existing stock Effective rents

Warsaw Inner City 563,000 3.6-5.1

Warsaw suburbs 2,063,000 2.1-2.8

Wrocław 780,000 3.4-3.9

Kraków 141,000 3.3-4

Łódź 300,000 2.75-3.7

Central Poland (excl. Łódź) 721,000 2.1-2.8

Poznań 1,023,000 2.5-3.15

Szczecin 48,000 2.8-3.4

Upper Silesia 1,431,000 2.4-3.3

Tri-City 184,000 2.8-3.3

Source: Jones Lang LaSalle, warehousefinder.pl Q4 2013

"The decision to build this new facility in Kraków was made in response to the needs of our potential cus-tomers and the substantial demand in the local market for small warehouse facilities with immediate availa-bility. We have the capability to develop this type of project given the strong capital backing from Good-man Group and our managed funds," said Błażej

Ciesielczak, Regional Director Central and Eastern Europe. The new warehouse is Goodman's fourth speculative development at Kraków Airport Logistics Centre, which is a 50/50 joint venture between Goodman Group and Goodman European Logistics Fund (GELF). The existing four warehouses have a com-bined area of 55,230 sq.m, all of which had been leased prior to delivery. The entire project has a target lease area of over 150,000 sq.m and on completion will comprise nine warehouses with additional office space, staff and technical areas.

Kraków Airport Logistics Centre is located in

Modliniczka near Kraków, 4 km from Kraków-Balice International Airport and close to the A4 expressway linking Kraków and Wrocław. Its current tenants in-clude Farutex, KMC Services, Valeo Autosystemy, DS Smith, Royal Canin, Logfarma, Schenker and Boni-to.pl. Image: Goodman

Due to limited availability of suitable investment sites and reluctance of local companies to cooperate with large industrial developers, the Kraków market sees very few new high-quality industrial and warehouse projects. Last year only 9,000 sq.m of industrial space was delivered in the Kraków area compared o 56,000 sq.m in Upper Silesia and 129,000 sq.m in Wrocław, according to Cushman & Wakefield figures.

CONSUMER GOODS & RETAIL

May retail sales data May retail sales data May retail sales data May retail sales data disappoint analystsdisappoint analystsdisappoint analystsdisappoint analysts

Polish retail sales advanced in May by 3.8% y/y as compared to 8.4% y/y in April and 3.1% y/y in March. This result was considerably lower than market ex-pectations (6.2% y/y). The surprise was significant but it was caused mostly by weak sales in usually volatile categories. Excluding car, food and fuel, retail sales in-creased by 8.4% in real terms and 7.1% y/y in nominal terms.

Retail sales in Poland (y/y)

-5%

0%

5%

10%

15%

Nov 11 May 12 Nov 12 May 13 Nov 13 May 14

Source: GUS

"Sales were dragged lower mainly by declining pur-chases of cars – after very strong gains in the first quarter due to expiring tax allowances on purchases of commercial vehicles," BZ WBK analysts said in a comment. "Sales of cars declined strongly for the se-cond month in a row (this time by 12.2%MoM), stronger than we expected. Additionally, as compared with April, food sales weakened considerably but this was no surprise as it was due to Easter effect in April. Other categories showed upward tendencies."


"The slower retail sales growth comes after disap-pointing industrial output and therefore the signal shouldn’t be easily dismissed. Our economic growth momentum indicator (see Figure 3) suggests the econ-omy lost some of its impressive momentum in recent months and therefore we look for a slowdown in GDP growth will around 3% y/y in Q2 2014. However, given the strength of the labor market (continued decline in unemployment rate and quick rise in real wages) as well as accelerating lending growth we believe the slowdown is only temporary and probably partly driv-en by weaker exports to Russia and Ukraine," CitiBank economists added.

CONSUMER GOODS & RETAIL

Clothing & footwear Clothing & footwear Clothing & footwear Clothing & footwear market grmarket grmarket grmarket grows 3.6% in ows 3.6% in ows 3.6% in ows 3.6% in 2013 as consolidation 2013 as consolidation 2013 as consolidation 2013 as consolidation continuescontinuescontinuescontinues

Poland's clothing and footwear sales expanded by 3.6% last year, reaching PLN 22.2bn, according to a new report by market research company PMR, which expects further growth in 2014 and 2015 as the eco-nomic situation in the country improves. The 2013 was overall a rather challenging year for clothing retailers, due to a mixture of unfavorable factors, including eco-nomic slowdown, late arrival of spring and mild win-ter. "This year will be even better for clothing and foot-wear retailers in Poland, as indicated in figures from the past few months. A gradual improvement of mac-roeconomic indicators should translate into better consumer mood and higher spending, although cus-tomers will continue to buy smart, expecting good val-

ue for money," PMR's retail analyst Patrycja Nalepa commented on the report's findings. PMR analysts argue that the consolidation of Poland's clothing & footwear market is likewise likely to pick up speed, as data shows that the key market players: LPP, Inditex, and H&M continue to strengthen their position vis-à-vis smaller chains. Their strength is par-ticularly evident in shopping centers, where they can count on more attractive rents than their competitors, who take up less space in total. "This leads to consolidation. In 2010 the top ten cloth-ing retailers were responsible for 31% of total sales in the market, whereas by 2013 their share rose to 42%. Other companies were focused mainly on optimizing their chains last year," PMR said. The most impressive growth was recorded by clothing discounters, which, similar to their grocery counter-parts, took advantage of the economic slowdown to strengthen their position. According to PMR, Poland's three largest discount textile retailers boosted their turnover by 17% and their store numbers by 12%. The leading player in this segment is South Africa's PEPCO, which expands at the pace of 70-80 new stores per annum. In April PEPCO launched its 500th store in Poland.

RETAIL PROPERTIES

Newly opened retail Newly opened retail Newly opened retail Newly opened retail cecececentre in Ostrołęka to ntre in Ostrołęka to ntre in Ostrołęka to ntre in Ostrołęka to be expandedbe expandedbe expandedbe expanded

The northeastern Polish city of Ostrołęka has recently seen the opening of the largest shopping centre in the region. Developed by Polish Narev Inwestycje and

located close to the city centre, the newly built Galeria Bursztynowa offers 27,000 sq.m of GLA and due to high interest the investor is already planning an exten-sion. Ostrołęka is a city of 54,000 inhabitants situated some 110km north east of Warsaw. "We’ve completed the largest retail development in Ostrołęka and within a 110 km radius. We are confi-dent that Galeria Bursztynowa will drive our region’s growth further with its broad retail and cultural offer, and new jobs,” said Roman Tomczak, President of Narev Inwestycje. Upon its opening in the last week of May the project was 93% let to tenants that include Tesco, OBI, RTV EURO AGD, H&M and LPP’s fashion stores (Reserved, Sinsay, Mohito, House and Cropp). "Galeria Bursztynowa is a regional shopping centre with stores leased by both well-known international retailers and local entrepreneurs. Its occupancy level is high given the current market conditions. There are only a few vacant small stores which could appeal to local businesses. The developer already plans to ex-tend the shopping centre before it is even fully opened, which proves that the region has a huge potential and the investor was right in his decision," said Tomasz Górski, a senior negotiator from the Retail Department of Cushman & Wakefield. The property consultancy is responsible for commer-cialization of the centre and its project management team helped architect Jacek Zub with preparation of technical documentation for the investment. The de-velopment was financed by Bank BPS and a consorti-um of cooperative banks.


POLITICS & ECONOMY

Polish goPolish goPolish goPolish gov't wins vote v't wins vote v't wins vote v't wins vote of confidence amid of confidence amid of confidence amid of confidence amid eavesdropping scandaleavesdropping scandaleavesdropping scandaleavesdropping scandal

Poland’s government has survived a parliamentary vote of confidence amid a wire-tapping scandal involv-ing prominent members of the ruling Civic Platform (PO) party and other key officials. The coalition gov-ernment of Civic Platform (PO) and Polish People’s Republic (PSL) secured a vote of confidence on Wednesday, receiving backing from 237 MPs, with 203 against in the 460-member parliament. The PM need-ed a simple majority of 231 for the vote of confidence to pass. Prime Minister Donald Tusk said he wanted to make sure his government still enjoyed majority support be-fore heading to the EU summit in Brussels, where cru-cial structural and personnel decision were to be made, with Poland seeking a number of high positions. "I need to be certain that I have a majority that allows me to continue work in the parliament and in the gov-ernment," Tusk had said calling for the vote. "Without this mandate, I will not be effective, the government will not be able to clarify the eavesdropping scandal in a satisfactory manner state interests in mind," he said. By calling for the vote, Tusk also outmaneuvered the opposition, which had earlier hinted it would seek a constructive vote of no-confidence against his gov-ernment. On Thursday, only one day Tusk won the vote, the PM's key opponent Jarosław Kaczyński said his party Law & Justice (PiS) had indeed filed a mo-tion for a constructive vote of no confidence against the cabinet. Since the opposition can replace the cur-rent government in a constructive vote of no-

confidence on an absolute majority, the scenario seems very unlikely to materialize according to the current parliamentary arithmetic. The scandal erupted over two weeks ago after a week-ly Wprost published secret recordings containing pri-vate conversations by senior Polish officials, including the central bank governor and foreign minister as well as a number of high profile businesspeople. In the most controversial such recording, central bank chief Marek Belka is heard discussing possibilities for cen-tral bank help in financing the budget should the economy fail to accelerate sufficiently to ensure gov-erning party victory in the next elections. The secret recordings were made over a year and a half at various locations including three Warsaw res-taurants. By the end of last week prosecutors had pressed charges against four people allegedly involved in the bugging. The first two to hear charges were Łukasz N. - manager of the restaurant where illegal recordings took place - and Konrad L. - waiter at an-other such location. Wednesday night the prosecutor's office said that charges were also pressed against busi-ness Marek Falenta - shareholder of several companies including coal distribution firm skladywegla.pl and telecom infrastructure firm Hawe - and Krzysztof R. - Hawe's deputy CEO. A number of media outlets im-plied that with its recent crackdown on illegal distri-bution of Russian coal to Poland, the government has may have upset vested interests in the coal trading in-dustry in Poland and Russia. Appealing for the vote of confidence, PM Tusk called on MPs not to act accord-ing to the scenarios orchestrated by criminals standing behind the recordings. Although the contents of the recordings (many of which have not yet been made public) have been a PR disaster for the ruling party as well as Central Bank chief Marek Belka, it seems like the government and the parliament may survive the scandal in the end, es-

pecially if evidence is found to back the "coal mafia" hypothesis. Winning next year's general election will be a much more difficult task, however. According to the most recent poll conducted by TNS Polska for the public broadcaster TVP1 after the outbreak of the tape scandal PO enjoys 24% voter support in, 7 pps behind its chief rival PiS. The far-right grouping Kongres Nowej Prawicy, which won seats in the European Par-liament in May, came third with 10% support, the poll showed.

POLITICS & ECONOMY

Poland moves up in Poland moves up in Poland moves up in Poland moves up in UNCTAD rankingUNCTAD rankingUNCTAD rankingUNCTAD ranking

Poland is the 5th most attractive destination for for-eign direct investment (FDI) in Europe and no. 13 worldwide, shows a brand new report by UNCTAD, the UN trade and development body UNCTAD. The institution carries out an annual survey among com-panies, asking about the best global locations for greenfield projects. In this year's edition, which refers to projects to be implemented over the 2014-2016 pe-riod, the top 20 list includes only five European coun-tries and only one CEE economy – Poland. Last year, Poland ranked as number six in Europe and No. 14 worldwide. According to the official FDI figures published by the Central bank as part of their balance of payments data, Poland experienced a significant outflow of FDI re-sources last year (USD 6bn), but the result is largely misleading due to the bank's methodology. Besides ac-tual investments in fixed assets, such as factories and machinery, NBP statistics include capital in transit, and therefore also investments and divestments that are purely financial in nature, such as sales of banking


share etc. Greenfield investments, according to UNCTAD data, totaled USD 7.960bn last year, down from USD 11.891bn in 2013 and the 2005-2007 pre-crisis average of USD 16.236bn.

Greenfield investments in USDm

Poland 2005-

2007* 2011 2012 2013

As destination 16,236 13,024 11,891 7,960

As source 1,389 850 1,409 855

Source: UNCTAD *)pre-crisis average

Global FDI inflows rose by 9% last year to USD 1.45 trillion, UNCTAD said. FDI inflows increased in all major economic groupings − developed, developing, and transition economies. Global FDI stock rose by 9%, reaching USD 25.5 trillion. UNCTAD projects that global FDI flows could rise to USD 1.6 trillion in 2014, USD 1.75 trillion in 2015 and USD 1.85 trillion in 2016. The rise will be mainly driven by investments in de-veloped economies as their economic recovery starts to take hold and spread wider, the UN agency said.

FROM OUR PARTNERS

DZP law firm DZP law firm DZP law firm DZP law firm distinguished in distinguished in distinguished in distinguished in prestigious global prestigious global prestigious global prestigious global rankingrankingrankingranking

The Spanish Desk of the Domański Zakrzewski Palinka (DZP) law firm has recently been distin-guished in the Corporate/M&A – Foreign Desks cate-gory of the prestigious Chambers Global: The World’s Leading Lawyers for Business 2014 ranking.

DZP established the Spanish Desk with the aim of providing specialized legal advice to Spanish-speaking investors doing business in Poland. At the moment, the team comprises ten people and is headed by Katarzyna Kuźma, partner at DZP. Since its establishment in 2006, the Spanish Desk of DZP has been involved in a significant number of pro-jects for almost 200 of the Spanish entities present, di-rectly or indirectly, in the Polish market. Spanish companies remain very active in Poland. While some withdrew from the country following the outbreak of the global economic crisis, many others have stayed and continue to do business in Poland, Kuźma said.

Jose Luis Villacampa Varea, senior associate at DZP & Katarzyna Kuźma, partner at DZP. Image: DZP

Before the crisis, Spanish developers had been among the key players in the Polish real estate market. Now-adays, Spanish companies in Poland are particularly active in the infrastructure and energy sectors, she added.

According to Kuźma, the Spanish companies which are doing business in Poland are these days much bet-ter organized and involved in more interesting and better thought-out projects than before the crisis. Spanish investors, like all the other foreign investors active in the Polish market, are faced with the same le-gal and administrative problems as Polish investors. Additionally, they often have to cope with problems which are specific for them. These result from differences in the legal systems and business culture in Poland and Spain. “Spanish inves-tors sometimes joke that in Poland the employment of good lawyers is much more important than the em-ployment of good engineers,” Kuźma said. She added that Spanish companies in Poland often seek assistance with their participation in tender pro-cedures and then with the conclusion of public con-tracts (not only with regards to infrastructure pro-jects). They also ask about tax issues, as well as assis-tance with M&A transactions or litigation cases. Jose Luis Villacampa Varea, a senior associate at DZP, said that Spanish investors also complain about the bureaucracy in Poland. In Spain, many issues are dealt with in a less formal way than in Poland, he said.

by Adam Zdrodowski

IN BRIEF: Poland's GDP growth will recover to 3.3% in 2014 and

then edge up to 3.5% in 2015, the International Mone-

tary Fund Executive Council said. The IMF thus raised

its former 2014 GDP growth forecast for Poland by 0.2

ppt and the 2015 forecast by 0.1 ppt.


KEY STATISTICS

Consumer PriceConsumer PriceConsumer PriceConsumer Pricessss

Data in (%) Feb '14 Mar '14 Apr '14 May '14

Sector y/y m/m y/y m/m y/y m/m y/y m/m

Food & bev +1.6 -0.2 +1.2 -0.3 +0.3 -0.5 -0.8 -0.4

Alcohol, tobacco +2.2 +1.4 +3.7 +0.7 +3.9 +0.3 +3.9 +0.2

Clothing, shoes -4.7 -1.7 -4.3 +0.8 -4.4 +2.8 -4.6 -0.1

Housing +1.9 +0.1 +1.8 -0.1 +1.7 0.0 +1.6 0.0

Transport -1.1 +0.4 -2.7 +0.1 -2.1 -0.1 -0.1 -0.4

Communications -3.2 +0.4 -0.3 +0.6 -1.7 -1.5 -1.1 -0.1

Gross CPI +0.7 +0.1 +0.7 +0.1 +0.3 0.0 +0.2 -0.1

IIIInflationnflationnflationnflation

-1%

0%

1%

2%

3%

4%

5%

Ma

y 1

2

Ju

l 12

Se

p 1

2

No

v 1

2

Ja

n 1

3

Ma

r 13

Ma

y 1

3

Ju

l 13

Se

p 1

3

No

v 1

3

Ja

n 1

4

Ma

r 14

Ma

y 1

4

y/y m/m

Retail Retail Retail Retail TurnoverTurnoverTurnoverTurnover

Month Jan '14 Feb '14 Mar '14 Apr '14 May '14

m/m (%) -21.3 -0.6 +12.5 +2.3 -2.7

y/y (%) +4.8 +7.0 +3.1 +8.4 +3.8

Year 2009 2010 2011 2012 2013

Turnover in PLNbn 582.8 593.0 646.1 676.0 n/a

y/y (%) +4.3 +5.5 +11.6 +5.6 +2.3

Residential ConstructionResidential ConstructionResidential ConstructionResidential Construction

Dwellings

(in '000 units)

2009 2010 2011 2012 2013 Jan-May

2014

y/y

(%)

Permits 178.8 174.9 184.1 165.1 138.7 61.9 +14.9

Commenced 142.9 158.1 162.2 141.8 127.4 58.7 +23.8

U. construction 670.3 692.7 723.0 713.1 694.0 697.9 -0.7

Completed 160.0 135.7 131.7 152.5 146.1 55.8 -3.0

Source: Central Statistical Office (GUS)

GGGGross Domestic Productross Domestic Productross Domestic Productross Domestic Product

Period Growth y/y unadjusted

GDP in PLN bn current prices

Current account def. in % of GDP

Q1 2014 +3.4% 397,429 n/a

Q4 2013 +2.7% 455,528 -1.5%

Q3 2013 +2.0% 405,554 -1.9%

Q2 2013 +0.8% 296,314 -2.3%

2013 +1.6% 1,635,746 -1.5%

2012 +1.9% 1,596,379 -3.7%

2011 +4.5% 1,528,127 -5.0%

2010 +3.9% 1,416,585 -5.1%

Key Economic Data & ProjectionsKey Economic Data & ProjectionsKey Economic Data & ProjectionsKey Economic Data & Projections

Indicator 2010 2011 2012 2013 *2014

GDP change +3.9% +4.5% +1.9% +1.6% +3.5%

Consumer inflation +2.6% +4.3% +3.7% +0.9% +0.5%

Producer inflation +2.1% +7.6% +3.4% -1.3% -1.3%

CA balance, % of GDP -5.1% -5.0% -3.7% -1.3% -0.8%

Nominal gross wage +3.9% +5.2% +3.7% +3.4% +4.5%

Unemployment** 12.4% 12.5% 13.4% 13.4% 12.2%

EUR/PLN 3.99 4.12 4.19 4.20 4.11

Sources: NBP, BZ WBK, GUS *) projections **) year-end

Gross WagesGross WagesGross WagesGross Wages A: avg monthly wages in PLN B: indexed avg wages, 100=2005

Sector Q1 2013 Q2 2013 Q3 2013 Q4 2013

A B A B A B A B

Coal mining 6,060 138 6,290 143 6,061 138 8,615 196

Manufacturing 3,491 152 3,560 155 3,625 158 3,690 161

Energy 6,196 188 5,828 177 6,021 183 6,736 205

Construction 3,556 152 3,693 157 3,766 160 3,895 166

Retail & repairs 3,432 146 3,421 146 3,408 145 3,456 147

Transportation 3,439 122 3,547 125 3,589 127 3,913 138

IT, telecoms 6,685 174 6,707 174 6,654 173 6,695 174

Financial sector 6,356 143 6,702 151 6,109 137 6,602 148

National average 3,741 149 3,613 144 3,652 145 3,823 152

Source: Central Statistical Office (GUS)

Construction OutputConstruction OutputConstruction OutputConstruction Output

Month Nov '13 Dec '13 Jan '14 Feb '14 Mar '14 Apr '14 May '14

m/m (%) -2.9 +21.5 -64.0 +18.7 +24.2 +3.2 +14.0

y/y (%) -8.9 +5.8 -3.9 +14.4 +17.4 +12.2 +10.0

Year 2007 2008 2009 2010 2011 2012 2013

y/y (%) +15.5 +12.1 +5.1 +4.6 +11.8 -0.6 -12.0

Source: The Central Statistical Office of Poland, GUS

Sentiment IndicatorsSentiment IndicatorsSentiment IndicatorsSentiment Indicators

Economic sentiment and consumer confidence indicators

-40

-20

0

20

Au

g 1

1

No

v 1

1

Fe

b 1

2

Ma

y 1

2

Au

g 1

2

No

v 1

2

Fe

b 1

3

Ma

y 1

3

Au

g 1

3

No

v 1

3

Fe

b 1

4

Ma

y 1

4

60

80

100

120 Co nsumer confid ence (left axis)

Economic sentiment (right axis)

The economic sentiment (1990-2010 average = 100) is a composite made up of 5 sectoral confidence indicators, which are arithmetic means of seasonally adjusted balances of answers to a selection of questions closely related to the reference variable. Source: Eurostat

Producer PriceProducer PriceProducer PriceProducer Pricessss

Month Nov'13 Dec'13 Jan'14 Feb'14 Mar'14 Apr'14 May'14

m/m (%) -0.3 -0.1 0.0 -0.1 -0.2 -0.2 -0.2

y/y (%) -1.5 -1.0 -1.0 -1.4 -1.3 -0.7 -1.0

Year 2007 2008 2009 2010 2011 2012 2013

y/y (%) +2.0 +2.2 +3.4 +2.1 +7.6 +3.3 -1.3

Construction PriceConstruction PriceConstruction PriceConstruction Pricessss

Month Nov'13 Dec'13 Jan'14 Feb'14 Mar'14 Apr'14 May'14

m/m (%) -0.1 -0.1 -0.2 -0.2 -0.1 -0.1 0.0

y/y (%) -1.7 -1.7 -1.7 -1.6 -1.5 -1.5 -1.4

Year 2007 2008 2009 2010 2011 2012 2013

y/y (%) +7.4 +4.8 +0.2 -0.1 +1.0 +0.2 -1.8

Industrial OutpuIndustrial OutpuIndustrial OutpuIndustrial Outputttt

Month Nov '13 Dec '13 Jan '14 Feb '14 Mar '14 Apr '14 May '14

m/m (%) -6.2 -9.7 +2.9 -1.8 +9.4 -2.3 -1.7

y/y (%) +2.9 +6.6 +4.1 +5.3 +5.4 +5.4 +4.4

Year 2007 2008 2009 2010 2011 2012 2013

y/y (%) +10.7 +3.6 -3.5 +9.8 +7.7 +1.0 +2.2


TTTTraderaderaderade

Poland exports and imports according to commodity groups, according to SITC classification

EXPORTS in PLN bn IMPORTS in PLN bn

Jan-Apr 2014

y/y (%)

share (%)

2013 share (%)

Jan-Apr 2014

y/y (%)

share (%)

2013 share (%)

Food and live animals 24,353 +9.8 10.9 69,304 10.9 16,611 +4.9 7.5 47,906 7.4

Beverages and tobacco 2,874 +9.8 1.3 8,624 1.4 1,223 -5.0 0.6 4,150 0.6

Crude materials except fuels 5,642 +1.1 2.5 15,744 2.5 7,290 -0.3 3.3 21,585 3.3

Fuels etc 9,750 -3.8 4.4 30,013 4.7 25,443 +2.9 11.6 75,539 11.7

Animal and vegetable oils 639 +35.8 0.3 1,864 0.2 866 +2.3 0.4 2,646 0.4

Chemical products 20,370 +5.1 9.1 59,103 9.3 33,213 +6.9 15.1 92,917 14.3

Manufactured goods by material 43,767 +2.4 19.6 129,915 20.3 38,999 +6.6 17.7 112,392 17.3

Machinery, transport equip. 85,634 +11.0 38.4 239,434 37.5 71,343 +3.9 32.4 216,608 33.4

Other manufactured articles 30,002 +12.5 13.4 82,816 13.0 20,529 +12.1 9.3 58,210 9.0

Not classified 266 n/a 0.1 1,782 0.2 4,804 n/a 2.1 16,242 2.6

TOTAL 223,297 +7.7 100 638,599 100 220,321 +4.4 100 648,195 100

Poland's ten largest trading partners, ranked according to 2013

EXPORTS in PLNbn IMPORTS in PLN bn

No Country Jan-Apr 2014

share *2013 share No Country Jan-Apr 2014

share *2013 share

1 Germany 58,734 26.3% 159,622 25.0% 1 Germany 47,765 21.7% 139,334 21.5%

2 UK 14,109 6.3% 41,503 6.5% 2 Russia 26,387 12.0% 79,601 12.3%

3 Czech Rep. 13,475 6.0% 39,421 6.2% 3 China 21,405 9.7% 60,914 9.4%

4 France 13,093 5.9% 35,745 5.6% 4 Italy 11,303 5.1% 33,703 5.2%

5 Russia 9,809 4.4% 34,058 5.3% 5 Netherlands 8,172 3.7% 25,005 3.9%

6 Italy 10,033 4.5% 27,450 4.3% 6 France 8,705 4.0% 24,533 3.8%

7 Netherlands 9,048 4.1% 25,292 4.0% 7 Czech Rep. 7,648 3.5% 23,778 3.7%

8 Ukraine n/a n/a 18,037 2.8% 8 USA 5,028 2.3% 17,350 2.7%

9 Sweden 6,395 2.9% 17,498 2.7% 9 UK 5,830 2.6% 16,861 2.6%

10 Slovakia 5,526 2.5% 16,795 2.6% 10 Belgium 5,526 2.5% 14,913 2.3%

Source: Central Statistical Office (GUS) *) preliminary estimates

CurrencyCurrencyCurrencyCurrency

Central Bank average rates

as of 27 June 2014

100 USD 304.85 ↓

100 EUR 415.28↑

100 GBP 519.00 ↓

100 CHF 341.37 ↑

100 DKK 55.69 ↑

100 SEK 45.15 ↓

100 NOK 49.77 ↑

10,000 JPY 300.63 ↑

100 CZK 15.12 ↑

10,000 HUF 134.64 ↓

100 USD/EUR against PLN

300

350

400

450

12 Jul 13

19 Sep 13

28 N

ov 13

10 Feb 14

17 A

pr 14

27 Jun 14

USD EUR

MMMMoney Supplyoney Supplyoney Supplyoney Supply

in PLN m Feb '14 Mar '14 Apr '14 May '14

Monetary base 158,330 173,213 168,511 162,246

M1 548,033 558,954 548,394 557,651

- Currency outside banks 114,680 116,657 119,261 119,649

M2 954,284 964,624 969,754 975,001

- Time deposits 423,296 422,990 439,137 435,386

M3 968,442 980,377 986,142 991,120

- Net foreign assets 135,759 132,849 126,943 142,260 Monetary base: Polish currency emitted by the central bank and money on accounts held with it. M1= currency outside banks + demand deposits M2= M1+ time deposits (inc in foreign currencies) M3= the broad measure of money supply Source: NBP

CCCCreditreditreditredit

The financial sector's net lending in PLN bn,

loan stock at the end of period

Type of loan Feb '14 Mar' 14 Apr' 14 May' 14

Loans to customers 914,068 923,709 928,450 930,652

- to private companies 263,941 267,553 270,886 273,360

- to households 567,257 569,334 573,332 574,800

Total assets of banks 1,616,891 1,628,519 1,639,359 1,660,583

Source: Central Bank NBP

IIIInterest ratesnterest ratesnterest ratesnterest rates

Average weighted annual interest rates

on loans to non-financial corporations

Term / currency Nov '13 Dec '13 Jan '14 Feb '14 Mar '14 Apr '14

PLN (up to 1 year) 4.5% 4.3% 4.2% 4.5% 4.5% 4.4%

PLN (up to 5 y ) 4.9% 4.9% 4.9% 4.8% 4.9% 4.8%

PLN (over 5 y) 4.8% 4.7% 4.8% 4.7% 4.7% 4.7%

PLN (total) 4.8% 4.7% 4.8% 4.7% 4.7% 4.7%

EUR (up to 1m EUR) 1.9% 1.9% 2.0% 2.0% 1.9% 2.0%

EUR (over 1m EUR) 3.0% 2.9% 3.6% 3.4% 3.3% 3.0%

Warsaw Inter Bank Offered Rate (WIBOR) as of 27 June 2014

Overnight 1 week 1 month 3 months 6 months

2.74%% 2.60% 2.61% 2.68% 2.69%

Central Bank (NBP) Base Rates

Reference Lombard NBP deposit Rediscount

2.59% 4.00% 1.00% 2.75%

Stock ExchangeStock ExchangeStock ExchangeStock Exchange

Warsaw Stock Exchange, rates in PLN

WIG-20 stocks in alphabetical

order

Price 27 June '14

Change 20 June

'14

Change end of '13

↓ Alior Bank 81.5 -3% 0%

↓ Asseco Pol. 40.65 -3% -12%

↓ Bogdanka 116.5 -5% -7%

↓ BZ WBK 363 -4% -6%

↓ Eurocash 40 -7% -16%

↓ Grupa Lotos 36.73 -4% +4%

↓ JSW 46.65 -1% -12%

→ Kernel 33.6 0% -12%

↓ KGHM 124.3 -1% +5%

↓ LPP 8305.1 -2% -8%

↓ mBank 497 -4% -1%

↓ Orange Pol. 9.7 -6% -1%

↓ Pekao 171.5 -4% -4%

↓ PGE 21.74 -1% +34%

→ PGNiG 5.18 0% +1%

→ PKN Orlen 40.95 0% 0%

↓ PKO BP 37.72 -3% -4%

↓ PZU 445 -1% -1%

↓ Synthos 4.37 -4% -20%

↓ Tauron 5.39 -3% 23%

Source: Warsaw Stock Exchange

Key indices

as of 27 June 2014

WIG Total index

55551111,,,,713713713713....44444444 Change 1 week -2% ↓

Change end of '13 +1% ↑

WIG-20 blue chip index

2,2,2,2,572572572572....84848484 Change 1 week -2% ↓

Change end of '13 +7% ↑

WIG Total closing index

last three months

49,000

50,000

51,000

52,000

53,000

54,000

12 M

ar 14

3 A

pr 14

13 M

ay 14

4 Jun 14

27 Jun 14


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New Business Consultant

Tomasz Andryszczyk

RRRRegional Dataegional Dataegional Dataegional Data

Poland's regions

(main cities indicated

in brackets)

Industrial output

Jan-May 2014 *

Monthly wages (PLN)

Jan-May 2014**

Unemploy-ment

May 2014

New dwellings Jan-May 2014

Indus-

try

Constru-

ction

Indus-

try

Constru-

ction

in '000 % Num-

ber

Index *

Dolnośląskie (Wrocław) 100.3 119.3 4,182 4,054 140.4 12.2 5,640 85.4

Kujawsko-Pomorskie (Bydgoszcz) 108.1 117.6 3,428 3,232 137.3 16.8 2,538 92.2

Lubelskie (Lublin) 105.6 89.0 3,743 3,017 123.8 13.4 2,014 78.1

Lubuskie (Zielona Góra) 116.9 113.1 3,466 3,069 53.1 14.1 1,230 94.5

Łódzkie (Łódź) 101.2 122.8 3,707 3,255 142.1 13.2 2,557 100.5

Małopolskie (Kraków) 99.5 110.0 3,817 3,320 151.4 10.8 6,624 93.2

Mazowieckie (Warszawa) 105.1 112.6 4,593 5,247 268.3 10.5 11,930 108.2

Opolskie (Opole) 107.5 140.0 3,645 3,482 47.6 13.3 768 116.5

Podkarpackie (Rzeszów) 106.7 116.4 3,431 3,099 141.0 15.2 2,495 102.5

Podlaskie (Białystok) 107.1 117.3 3,312 3,753 64.6 13.9 1,447 114.4

Pomorskie (Gdańsk-Gdynia) 111.5 120.9 4,021 3,376 105.4 12.4 3,525 80.0

Śląskie (Katowice) 100.4 110.6 4,599 3,545 196.5 10.6 4,392 98.5

Świętokrzyskie (Kielce) 114.0 103.6 3,420 3,210 82.3 15.2 1,190 121.6

Warmińsko-Mazurskie (Olsztyn) 105.7 110.6 3,294 3,088 102.6 19.6 1,723 94.9

Wielkopolskie (Poznań) 107.9 112.3 3,762 3,659 130.2 8.7 5,708 106.2

Zachodniopomorskie (Szczecin) 102.9 95.7 3,538 3,403 100.2 16.4 1,985 91.4

National average 104.7 112.7 3,991 3,815 1,986.7 12.5 55,766 97.0

*) Index 100 = same period of the previous year. ** without social taxes

Sources: Central Statistical Office GUS, NBP, C&W

Foreign Direct Investment (EUR m)Foreign Direct Investment (EUR m)Foreign Direct Investment (EUR m)Foreign Direct Investment (EUR m)

Quarter Q3 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13

in Poland 1,381 2,886 175 -3,020 1,885 -3,614

Polish DI -550 -1,203 957 2,588 -1,449 1,588

Year 2008 2009 2010 2011 2012 2013

in Poland 10,128 9,343 10,507 14,896 4,763 -4,574

Polish DI -3,072 -3,335 5,484 -5,935 -607 3,684

Current Account (EUR m)Current Account (EUR m)Current Account (EUR m)Current Account (EUR m)

Period 2011 2012 2013 Q2 '13 Q3 '13 Q4 '13

Trade balance -10,059 -5,175 2,309 1,203 1,094 151

Services, net 4,048 4,642 5,249 1,686 1,032 1,257

CA balance -18,519 -14,191 -4,984 486 -2,086 -1,071

CA balance vs GDP -5.0% -3.7% -1.5% -2.3% -1.9% -1.5%

Source: NBP, BZ WBK

UUUUnemploymentnemploymentnemploymentnemployment

Registered unemployed, in ‘000 and

% of population in working age

1,800

2,000

2,200

2,400

2,600

Q1

11

Q3

11

Q1

12

Q3

12

Q1

13

Q3

13

Q1

14

6

9

12

15 number (left axis) % (right axis)

Source: Central Statistical Office GUS

IndustrIndustrIndustrIndustrial ial ial ial PropertiesPropertiesPropertiesProperties

by region, Q4 2013

Existing stock, sq.m

Under const ruction, sq.m

Va-cancy ratio

Effective rents EUR/ sq.m/mth

Warsaw central 563,000 17,000

22.3% 3.6–5.1

Warsaw suburbs 2,063,000 12.5% 2.1–2.8

Central Poland 1,021,000 80,000 15.2% 2.1–3.3

Poznań 1,023,000 215,000 4.4% 2.5–3.15

Upper Silesia 1,431,000 37,000 9.3% 2.4–3.3

Wrocław 780,000 259,000 11.7% 2.6–3.1

Tri-city 184,000 46,000 9.2% 2.8–3.3

Kraków 141,000 0 4.0% 3.3-4.0

CommercialCommercialCommercialCommercial PropertiesPropertiesPropertiesProperties

City

New apartments* Offices 2H'13 Retail rents**2H'13

Q1 '14

PLN/sq.m

Change

y/y

Headline

rents**

Vacancy

ratio

Retail

centres

High

streets

Warsaw 8,005 -0.1% 11.5-25.5 11.75% 80-90 85

Kraków 6,419 +1.8% 13-15 4.90% 35-45 78

Katowice 5,531 0.0% 13-14 7.30% 35-45 56

Poznań 6,666 +4.0% 14-16 14.20% 35-45 55

Łódź 4,808 -1.8% 12-14 14.40% 35-45 25

Wrocław 5,928 -0.2% 13-15.5 11.75% 35-45 40

Gdańsk 6,031 -5.7% 13-15 11.20% 35-45 31

*avg, offer-based ** EUR/sq.m/month; Retail units 100-150 sq.m

Country Credit RatingsCountry Credit RatingsCountry Credit RatingsCountry Credit Ratings

Agency rating outlook

Fitch Ratings A- stable

Standard & Poor's A- stable

Moody's A2 stable

Source: Rating agencies

Real EarningsReal EarningsReal EarningsReal Earnings

Average gross wage vs inflation.

100

120

140

160

180

May10

Jan11

Sep11

May12

Jan13

Sep13

May14

Wage CPI

Index 100 = Jan 2005. Source: GUS

Poland Today Business Review+ No. 041

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