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DECEMBER 2014

Number 11

OF REAL ESTATE N EWS

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BIG DATA

WARSAW 2.0

BRINGING US CLOSER OR TEARING US APART? > 32

HOW WILL THE MULTI-BILLION ZŁOTY INVESTMENTS RESHAPE THE CITY? > 62

SHARING ECONOMY

+

HOLE IN A POCKET WHY POLES’ PIGGY BANKS ARE HALF-EMPTY > 26 TOMASZ SIEMONIAK: POLAND IS PREPARED TO RESPOND TO THE PRESENT CRISIS > 37

e! ar Sh economy of the future

WIND IS POWER POLENERGIA PLANS TO CASH IN > 42

A TOUCH OF LUXURY ARE POLES INTERESTED IN HIGH-END APARTMENTS? > 56

DECEMBER 2014

ALSO IN THIS ISSUE:

• L i fe st y le • C i t y s c a p e • C o m m e n t a r y • N ew s • R a n k i n g

lll IN THIS ISSUE Try these:

4

lll NEWS

4-11 In Review Latest News 12 Time Machine 13 Dateline 14 Economy

15

lll COMMENTARY 15 Legal Crowdfunding 16-18 Legal Noisy neighbors

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20-25

lll FEATURES

26-30 Poles’ Savings Wallets full of holes 32-36 Big Data Should we be afraid?

SHARING ECONOMY

42

lll ENTREPRENEURS 42-45 P olenergia Interview with Zbigniew Prokopowicz 72-73 Cityscape Bydgoszcz 74-75 Ranking Law firms

76

lll LIFESTYLE

37-41

TOMASZ SIEMONIAK TALKS DEFENSE

47-71

76-77 Gadgets 78-79 Warsaw Whisky Fest 80-82 Chemical Industry Forum 84 P olin Museum of the History of Polish Jews 86 Labirynth of Light in Wilanów 88 On a Final Note

LOKALE IMMOBILIA

WBJ OBSERVER • DECEMBER 2014

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Visit our brand new site - wbj.pl For latest news, features and commentaries.

Morten Lindholm Publisher mlindholm@valkea.com Jacek Ciesnowski Editor-in-Chief, WBJ Observer jciesnowski@wbj.pl Beata Socha Managing Editor, Lokale Immobilia bsocha@wbj.pl Kamila Wajszczuk Editor, Poland A.M. kwajszczuk@wbj.pl Matthew Czaja Copy Editor mczaja@wbj.pl Contributors Ewa Boniecka Alex Hayes Vedika Luthra Sergiusz Prokurat Alex Webber Tomasz Chwinda Art Director tchwinda@wbj.pl Marta Topolewska Graphic Designer

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DECEMBER 2014 • WBJ OBSERVER

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NEWS

lll INREVIEW News highlights of the past month

A

ll members of Poland’s State Electoral Commission (PKW) have resigned after vote counting in local elections extended for as much as a week after the first round of voting, held on November 16. Opposition politicians have called for repeating the ballot.

The delays, attributed to a failure of the PKW’s IT system, caused a wave of criticism and concerns about the legality of the vote. In the week after the ballot, the PKW’s website was hacked and protesters from right-wing group occupied the commission’s headquarters for several hours.

Both President Bronisław Komorowski and Prime Minister Ewa Kopacz spoke out against holding new elections.

According to official local election results announced on November 22,

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DECEMBER 2014 • WBJ OBSERVER

politicians from the ruling Civic Platform (PO) won 179 seats in Poland’s voivodship councils. Their main rivals from Law and Justice (PiS) won 171 seats.

Junior coalition partner Polish People’s Party has 157 seats in the councils and the Democratic Left Alliance has 28. There are altogether 555 seats, a minority of which was allocated to smaller groupings.

The Civic Platform won elections in Zachodniopomorskie, Pomorskie, Lubuskie, Kujawsko-Pomorskie, Wielkopolskie, Opolskie, Silesia and Lower Silesia. Law and Justice has the majority in Podkarpackie, Podlaskie, Lubelskie, Małopolskie, Mazowieckie and Łódzkie. The Polish People’s Party won in Świętokrzyskie and Warmińsko-Mazurskie.

The ballot also involved choosing mu-

nicipal and county councils. In 889 municipalities, a second round had to be held on November 30.

PO member Hanna Gronkiewicz-Waltz retained the post of mayor in Warsaw, receiving 58.64 percent of the votes. Her rival, Jacek Sasin from PiS received 41.36 percent support.

In Poznań, PO-supported Andrzej Jaśkowiak won against independent candidate Ryszard Grobelny, who had been the city’s mayor since 1998.

In Wrocław, Rafał Dutkiewicz, also supported by the ruling party, will remain mayor after winning against Mirosława Stachowiak-Różecka from PiS. In Gdańsk, the same is true for Paweł Adamowicz, who won against Andrzej Jaworski from PiS.

Image: Shutterstock

Chaos surrounds local elections

NEWS

Shorts FORMER TRANSPORT MINISTER SENTENCED FOR FALSE FINANCIAL DECLARATION

Donald Tusk takes over as European Council president F

ormer Polish Prime Minister Donald Tusk officially took over as president of the European Council on Decemeber 1, taking part in a handover ceremony with outgoing President Herman Van Rompuy. “In these difficult times, Europe needs success,” Tusk said in his inaugural speech. He named four priorities: protecting fundamental values, “ruthless determination” to PKP INTERCITY DISMISSES EXECUTIVES AFTER TICKET SALES BREAKDOWN Passenger railway operator PKP Intercity has fired CFO Paweł Hordyński and his subordinates responsible for the company’s IT system. The decision stems from a major breakdown of the firm’s online ticket sales system in mid-November.

The failure happened just after the launch of PKP Intercity’s new ticket category, the Express InterCity Premium, to be operated by high-speed Pendolino trains starting from December 14. The company said it was working on restoring the system as soon as possible.

6

end the economic crisis, international strength and EU-US relations. Tusk praised his predecessor for leading Europe “out of the storm.” It is not easy to take over after such leadership, he said. The former Polish PM was chosen European Council president in late August. He succeeds Belgian politician Herman van Rompuy in the post.

Abris to sue Poland for forced sale of bank A bris Capital Partners is in the process of suing Poland for PLN 2 billion. The fund claims that it will incur losses after the Polish Financial Supervision Authority (KNF) forced it to sell lender FM Bank PBP. The regulator orderedw the sale of the bank after deciding that Abris did not meet their obligations as an investor. The suit has been lodged with the Arbitration Institute of the Stock-

holm Chamber of Commerce. KNF reserves the right to approve CEO appointments, and this was the main point of contention between Abris and the regulator. FM Bank PBP has a book value of PLN 300 million. According to Reuters, Hungarian lender OTP, as well as Alior Bank and BOS Bank, and private equity firm AnaCap Financial have submitted offers to buy FM Bank PBP.

PLN 41.1 bln

DECEMBER 2014 • WBJ OBSERVER

is how much Poles spent on alcoholic beverages in 2013, according to KPMG.

Images: European Council, Slawomirnowak.pl

Former Transport Minister Sławomir Nowak has been found guilty of providing false financial statements as an MP. He withheld information about a watch worth over PLN 10,000. He was given a PLN 20,000 fine. The former minister failed to appear at the sentencing hearing.

After Polish media revealed the scandal in the second half of 2013, Nowak was forced to resign from his ministerial post and later he also gave up his parliamentary immunity.

Polish MPs are obliged to disclose all assets worth over PLN 10,000 in their annual financial declarations.

NEWS

“QUESTIONING POLISH DEMOCRACY IS QUESTIONING THE POLISH STATE. UNDERMINING OUR DEMOCRACY IS VERY HARMFUL TO OUR NATION. Prime Minister Ewa Kopacz in response to accusations from opposition party leader Jarosław Kaczyński that the local government elections were rigged.

10% is how

many Poles save for retirement, according to a poll by TNS Polska.

Some 215 people were detained after clashes with police that took part during the annual Independence March on November 11. The violence was started by groups of people who split from the march itself.

Earlier that day, official celebrations

with the president took place. An Independence Run was also organized in the capital.

Independence Day celebrations have been marred by violence also in previous years, with an especially tumultuous situation in 2013, when fire-

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DECEMBER 2014 • WBJ OBSERVER

crackers were thrown at the Russian Embassy and the “Rainbow” artistic installation was burnt. This year’s march was routed to avoid those places.

November 11 is the anniversary of Poland’s regained independence in 1918 after 123 years of partitions.

Image: Shutterstock

Clashes on Independence Day in Warsaw

NEWS

Poland to spend billions to save state coal – S&P

A

ccording to the creditratings agency S&P, Poland will need several billion złotys in state funding until 2016 to save the struggling coal mining sector.

“We believe that unless coal prices recover, which we don’t expect in the coming years, the government will need to provide funding to the industry to the tune of several billion Polish złotys in 2015 and 2016,” S&P analyst Elad Jelasko was cited in the statement as saying.

Low coal prices are not the only factor why the sector faces tough times and many

companies are hemorrhaging money. Due to the new EU environmental targets, its importance in the nation’s energy mix will be fading.

“New EU environmental targets will require the country to adopt more environmentally friendly energy sources, and it may rely more heavily on cheaper imports as we expect domestic coal production to trend down on the back of low growth spending,” the report said. In the first nine months of 2014, Polish coal mines lost PLN 1.9 billion in sales, which fell by 10.9 percent year-on-year.

PGNiG counting on new prices from Gazprom Poland’s natural gas giant PGNiG is counting on a price change in its contract with Russia’s Gazprom, deputy CEO Jerzy Kurella said in mid-November. It has already asked for new price negotiations. The board member added that there could also be talks on the volume of supplied gas, but price would be a crucial issue. “The contract gas price does not reflect pricing on the European market. So we have a reason to renegotiate,” Kurella said. He explained that the talks could take up to six months.

Discovery and Time Warner seen as main bidders for TVN

87th

IS POLAND’S POSITION IN THE PAYING TAXES 2015 RANKING PREPARED BY CONSULTANCY PWC.

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DECEMBER 2014 • WBJ OBSERVER

Images: Shutterstock, TVN, PGNiG

US media groups Discovery Communications and Time Warner are seen as the main contenders for a controlling stake in major Polish broadcaster TVN, according to sources quoted by Puls Biznesu.

Bidders were scheduled to file non-binding offers by November 24. “There are four strategic investors and a number of funds left in the competition,” said a source quoted by the daily.

Time Warner has already tried once to buy a stake in TVN, but that time ITI chose Canal+ (Vivendi) as a partner for the investment. Media holding 21st Century Fox and publisher Axel Springer are also expected to place offers in the sale process. In mid-October, ITI and Canal+ said they were considering a possible sale of its 51 percent stake in TVN. The deal is likely to be concluded in 2015.

NEWS

15 years ago

10 years ago

5 years ago

December 1999 The Polish State Railways (PKP) cancelled a $200 million contract to purchase new Pendolino tilting trains, citing internal changes and poor financial condition that generally cancels out the introduction of modern highspeed service anytime soon. PKP didn’t rule out further cooperation with Fiat Ferroviaria, the company supplying the Pendolino trains.

December 2004 The New Year will herald a shattering, new development in mobile technology that is expected to leave users baying for more and businesses battling for a slice of the action. The Opera Internet operation is currently on a whirlwind tour of the globe to demonstrate its mobile version of what looks set to become the must-have gadget of the next few years and will erase the disappointment of the WAP-flop.

December 2009 As government leaders and representatives meet in Copenhagen to talk climate change solutions, the use of renewable sources of energy will be a major topic of discussion. For its part, Poland has no choice but to invest in such sources. The European Union has set an ambitious target for itself – 20 percent of the bloc’s overall energy consumption is to come from renewable energy sources by 2020.

December 1999 LOT Polish Airlines’ restructuring efforts in the last year helped the airline turn a $8.3 million profit during the first nine months of 1999. And unlike in the past, this year’s positive nine-month result came from lower costs and greater efficiency as opposed to extraordinary gains. u

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DECEMBER 2014 • WBJ OBSERVER

December 2004 US-based alcohol distributor CEDC plans to enter the Warsaw Stock Exchange and purchase the leading vodka-maker Polmos Białystok, producer of the world-famous Żubrówka. “Next year we are planning to enlarge our group by another three or four companies, which should boost our revenue by $100 million,” CEDC CEO William Carey said. u

December 2009 Prime Minister Donald Tusk wants to make rapid changes to the Constitution which would transfer executive powers from the president to the government before next year’s elections. Tusk claims he wants to eliminate the possibility of future power struggles which could hamper potential reforms. “Let’s determine who holds executive power,” Tusk said. u

Images: Shutterstock, Wikimedia

TIMEMACHINE From our pages . . .

CALENDAR

DECEMBER / JANUARY POWER RING 2014

DECEMBER

8-10

Event: The theme of this year’s edition is – The European Energy Market: between a united Europe and national autonomy. Speakers include Former PM Jerzy Buzek, Chief Economist of the International Energy Agency Fatih Birol, Director-General of Directorate-General for Energy Dominique Ristori and Poland’s Minister of the Economy Janusz Piechociński.

Location: Ministry of the Economy, Warsaw Web: proinwestycje.pl

11

DECEMBER

10

NEW YEAR’S BUSINESS RENDEZ-VOUS

SUPPLY CHAIN NETWORKING

DECEMBER

ETHICS IN BUSINESS

Event: The conference will tackle the future of ethics in business, new trends and forecasts.

How it affects innovation and how it should be implemented in companies. With businesspeople and members of academia in attendance the discussion should be insightful.

Location: Akademia Leona Koźmińskiego Web: kozminski.edu.pl

Event: This meeting of CEOs and Managing Directors is aimed at verification of present strategies, operation improvement and the strengthening of company market position in the light of the current economic situation.

Location: Hotel Sofitel Victoria, Warsaw Web: eurologistics.pl

JANUARY

13

Event: The meeting of the representatives of the French Chamber of Commerce in Poland. This will be the first such event in 2015. The honorary guest will be Ryszard Petru, president of the Polish Association of Economists.

Location: French Embassy in Warsaw Web: ccifp.pl

KPMG TAX AND ACCOUNTING CONGRESS

JANUARY

15

Event: The congress will cover the most important issues in VAT taxes and accounting news, forthcoming amendments to PIT and CIT regulations and their practical implementation in accounting.

Location: Hilton Hotel, Warsaw Web: kpmg.pl

WBJ OBSERVER • DECEMBER 2014

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NEWS / ECONOMY

FACTS AND FIGURES Data overview - October Data overview - October Data overview - October

1.6% y/y industrial output growth 1.6% y/y1.6% industrial output growth y/y industrial output growth 0.6% y/y CPI deflation 0.6% y/y0.6% CPI deflation y/y CPI deflation 2.3% y/y retail sales growth.

2.3% y/y2.3% retail sales growth.

WARSAW STOCK EXCHANGE AS OF OCTOBER 2014

486 486 486

WARSAW STOCK EXCHANGE AS OF OCTOBER 2014 WARSAW STOCK EXCHANGE of listed companies AS Number OF OCTOBER 2014 Number of listed companies Number of listed companies

Trade volumes Trade volumes Trade volumes

11.3% 11.3% 11.3%

Shares

Shares

UNEMPLOYMENT (October)

Shares201.13 Bonds PLN billion PLNPLN 201.13 856billion million

UNEMPLOYMENT (October) UNEMPLOYMENT (October)

Bonds

Bonds 856 Futures million PLN PLNPLN 856 7.68 million billion

y/y retail sales growth.

Growth of main index (WIG), ytd

Growth of main index (WIG), ytd 5.2% 5.2%

Nationalinterest Bank ofrate Poland’s reference

Slower slowdown reference interest rate

Contrary to earlier expectations, the Polish economy fared well in the third quarter of 2014. According to the Central Statistical Office (GUS), it grew by 3.3 percent year-on-year in that period.

GUS also revised the figure for Q2 2014 to 3.5 percent y/y compared with the earlier estimated 3.3 percent.

The CPI figure y/y not only remained below zero but fell in October, to -0.6 percent. It is expected to remain slightly below zero in the coming months.

At the same time, registered unemployment declined by 0.2 percentage points to 11.3 percent in October. The Ministry of Labor and Social Policy sees the figure at around 12 percent at the end of the year.

Steadily down

GDP growth in Q3 2014

Deeper decline

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DECEMBER 2014 • WBJ OBSERVER

-1

Oct. '14

Sep. '14

Aug. '14

Jun. ‘14

Apr. '14

May '14

Mar. '14

Jan. '14

Feb. ‘14

Jul. '14 Oct. '14

Oct. '13

Oct. '14

Sep. '14Oct. '14

Aug. '14Sep. '14

Jul. '14Aug. '14

Jun. ‘14 Jul. '14

May. '14Jun. ‘14

Apr. '14May. '14

-1 -0,5

Dec. '13

Oct. '14

Sep. '14

Jul. '14

Aug. '14

Jun. ‘14

Apr. '14

May. '14

Mar. '14

Jan. '14

Feb. ‘14

Dec. '13 Feb. ‘14Mar. '14

0

Oct. '13

-1 Nov. '13

1

0 0,5 -0,5

Mar. '14Apr. '14

10

Oct. '13

11

Nov. '13

10

0 -0,5

0,5

Jan. '14Feb. ‘14

12

Nov. '13Dec. '13

11

1 1,5

10

Dec. '13Jan. '14

13

Oct. '13

12

0,5

1,5 11

Oct. '13Nov. '13

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Nov. '13 Oct. '13 Dec. '13 Nov. '13 Jan. '14 Dec. '13 Feb. ‘14 Jan. '14 Mar. '14 Feb. ‘14 Apr. '14 Mar. '14 May '14 Apr. '14 Jun. ‘14 May '14 Jul. '14 Jun. ‘14 Aug. '14 Jul. '14 Sep. '14 Aug. '14 Oct. '14 Sep. '14

Poland’s 13registered unemployment rate, October 2013 – October 2014

13

“What I fear is a continuing trend of appreciation of the złoty against the euro. This may complicate business recovery.”

GDP growth in Q3 2014 GDP growth in Q3 2014

Year-on-year CPI inflation in Poland, October 2013 – October 1,5 2014 1

14

14

3.3% 3.3% 3.3%

National Bank of Poland President Marek Belka.

Images: OECD, Shutterstock

FuturesGrowth of main index (WIG), ytd PLN 7.68 billion PLN5.2% 7.68 billion

Data source: Warsaw Stock Exchange, Central Statistical Office

Futures

2.0% National Bank of Poland’s 2.0% reference interest rate 2.0% National Bank of Poland’s

14

PLN 201.13 billion

COMMENTARY / LAW

ANNA WOJCIECHOWSKA LL.M. LEGAL COUNSEL AND HEAD OF THE GERMAN DESK AT WKB WIERCIŃSKI KWIECIŃSKI BAEHR LAW FIRM

Crowdfunding – how to harness the power of the crowd?

T

here is no doubt that the popularity of crowdfunding is constantly growing, directly connecting those who can give, lend or invest money with those who need financing for a specific project. Since the financial crisis and due to the subsequent difficulties in obtaining financial support from a bank, crowdfunding is gaining importance and is becoming an attractive alternative for financing a business.

What is crowdfunding actually?

Crowdfunding can be defined as a collective effort of many individuals who network and pool their resources, usually via or with the help of the internet, to support efforts initiated by other people or organizations. Entrepreneurs’ projects and businesses are financed with small contributions from a large number of individuals. Currently, four types of crowdfunding are distinguished and used in practice: donation-based (people donate money to a given project and are not promised anything in return), reward-based (in exchange for contributions people get some products or services), equity-based (transferred money is exchanged for shares or a small stake in the business, project or venture) and lending-based crowdfunding (campaigners take the position of borrowers and contributors act as lenders).

Polish crowdfunding grows in strength Crowdfunding is gaining momentum all over the world and Poland is providing its own examples for this phenomenon as well. About 12 crowdfunding platforms, both equity-based and non-equity-based, are now active in Poland and are achieving significant successes in their activities. Despite the fact that all platforms declare an openness to all types of projects, we can observe a focus on specific thematic categories. For example, Polakpotrafi.pl engages mainly in sport projects, Wspieram.to attaches great importance to games, Wspieramkulture.pl focuses on cultural projects and Siepomaga.pl supports

only fundraising for charitable and social purposes. One of the most interesting initiatives on the Polish crowdfunding market appeared recently on Beesfund.com. By means of equity-based crowdfunding, InPay (supplier of payment solutions with crypto-currency Bitcoin) is conducting a public offering of shares, allowing anyone interested to invest. The company plans to raise PLN 200,000 offering 5 percent of shares. A similar form was also used for the first Polish equity-based crowdfunding project for Beesfund (owner of the Beesfund.com platform).

Change for the better For a long time, the development of crowdfunding in Poland encountered considerable difficulties. The provisions were not adapted to the new reality and the former Act of 1933 on public fundraising, if not explicitly prohibited such financing, certainly stifled its growth.

In 2014, the European Commission launched a consultation document clearly supporting the idea of social financing as a stimulus for the EU economy. It constituted a direct incentive for the Polish government to change anachronistic laws and facilitate the development of crowdfunding platforms by way of adopting a new act on public fundraising. According to the new regulation, fundraising by means of money transfers through SMS or a bank transfer (including online transactions) do not fall within the scope of the act. However, equity-based crowdfunding, regulated restrictively by the Act on Public Offering and Conditions Governing the Introduction of Financial Instruments to Organized Trading and Public Companies, still faces some difficulties. Whereas conducting a public offering of up to €100,000 is rather not burdensome, a public offering of more than €100,000 requires a prospectus, approval by the Polish Financial Supervision Authority and making it available to the public. Despite some imperfections of the Polish legal system, it seems worthwhile to face the crowdfunding challenge and exploit its potential as an investor or as an initiator. u

WBJ OBSERVER • DECEMBER 2014

15

COMMENTARY / LAW

JUDYTA KRUK-ANTOSZEWSKA LEGAL TRAINEE AT KANCELARIA PRAWNA NOWICKI I ZIEMCZYK ADWOKACI I RADCOWIE PRAWNI SP. P. IN WARSAW

Neighbor being rowdy?

Here is all you need to know about the forced deprivation of property rights

W

hile Polish law provides a legal basis for property rights revocation, public awareness of the existence of such a remedy is still pretty low. Meanwhile, let us imagine that some disruptive owner or tenant of premises within a residential or commercial property, subject to separate ownership, hinders other owners or generates extra maintenance costs as a result of improper behavior or outstanding fees. As a matter of fact, most flagrant are cases related to commercial properties where business activities are performed.

Legal provisions At the outset, a few words of clarification to this slightly dramatic title should be in order. Namely, all legal provisions on deprivation of property rights (meaning the request to sell given premises by way of public auction) refer solely to situations where an apartment or a commercial property is subject to separate ownership, i.e. has an established realestate register. Premises which are not subject to separate ownership cannot be separated for compulsorily sale.

The currently binding legal provisions state that housing communities are entitled to take legal action and request the sale of premises by way of public auction if their owner: is in long-term arrears with the payment of their fees; seriously or persistently violates house policy; behaves improperly, impeding the use of other joint property premises.

in case law and legal writings. According to one conclusion, long-term outstanding payments constitute a justified reason to request the sale of premises, as other owners are compelled to finance their neighbor. What’s more, such a situation often prevents a property manager from carrying out the necessary repairs and renovations, maintaining the adequate level of cleanliness or proper technical condition of the whole building. Persistent debtors who are constantly in arrears with their payments lead to a lack of funds necessary to pay bills for collectively settled electricity and water delivered to the building. In such an event, there is a threat to the entire building of discontinuation of supply, which might be disastrous for all residents as well as entrepreneurs performing business activities in such premises.

According to one court’s judgments, property owners who intentionally run up debts and pay them subsequently after the court’s decision has been taken, could be regarded as being “long-term” in arrears with payments and lose their premises on these grounds. It is a good sign for the future – the owner, who acts unfairly using existing legal mechanisms, would not be able to defend himself in such a case.

However, let us bear in mind that outstanding fees are not the only thorn in the flesh. Sometimes, owners use their properties in a way that makes normal coexistence impossible. This problem is becoming even more vexatious, especially for business owners. Many claims have been brought before Polish courts so far, starting from persistent noise-making to obsessive waste gathering on the premises due to so-called collecting patterns.

”SOMETIMES, OWNERS USE THEIR PROPERTIES IN A WAY THAT MAKES NORMAL COEXISTENCE IMPOSSIBLE.

Forced deprivation of property Based on the idea of forced deprivation of property rights, several opinions have already been established

16

DECEMBER 2014 • WBJ OBSERVER

COMMENTARY / LAW

Made in Poland a guide to Polish

EXPORT

available December 2014 WBJ OBSERVER • DECEMBER 2014

17

Stumbling block Or maybe your neighbor is a stumbling block to your business activities? You better report it to the board of your housing community or building administrator. Remember that your housing community has the sole right to refer a case to court, if it concerns the deprivation of property rights. No owner, nor owners, who are directly affected by illsuited behavior of their neighbor, have the right to go to court on their own behalf.

Polish law requires housing communities to obtain a consent from other owners to bring a legal action to court in such an event. Their approval is expressed by way of a resolution, i.e. generally half of all the owners (based on their share in common property) must opt for bringing a case to court.

A court’s assessment on the validity of owner removal through the sale of their premises to another owner varies highly. In order to ensure that any abuse is prevented, the actual situation is always subject to detailed examination. In practice however, an owner removal remains a last-resort remedy

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DECEMBER 2014 • WBJ OBSERVER

taken where no other measures are effective.

Worth noting is also the fact that forced deprivation of property rights, as a very invasive action to the protected right of property, was examined by the Polish Constitutional Court for compliance with the Polish Constitution. However, the Constitutional Court found that provisions legitimizing the forced sale of premises are compatible with the Constitution, as they are necessary to ensure the execution of the constitutionally protected rights of others.

Signs point to the spreading of the practice of forced sale of premises. An increasing tendency to reduce property rights protection is apparent in all cases of violating neighborly standards or outstanding fees. Thus, I would call for possible changes in the regulations to facilitate distressed owners’ selfinitiation of the whole procedure. The current need to get a housing community involved, which in turn has to obtain the consent of 50 percent of owners’ shares, severely hampers the possibility of a court case solution. u

Image: Shutterstock

COMMENTARY / LAW

NEWS

WBJ OBSERVER • NOVEMBER 2014

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COVER STORY / S PH OL A IRTI INCGS E C O N O M Y

Sharing is the new economy TO SOME, A SHARING ECONOMY IS A SOCIALIST’S PROMISED LAND, TO OTHERS IT’S A RETURN OF THE WORST FORM OF CAPITALISM. EVEN THOUGH HIGHLY CONTROVERSIAL, IT HAS MANY SUPPORTERS AND IT LOOKS LIKE IT’S HERE TO STAY

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oliday lodging from Airbnb, transport from Uber or Blablacar. Need financing for your invention or petty cash for holiday presents? Try Kickstarter or Kokos.pl. There are even projects that let you swap your clothes, meals and even employees. To paraphrase the popular ad campaign – there’s a website for that.

The recent popularity of the sharing economy comes from a few factors. First and foremost, the recent economy crisis made everyone smarter about their spending. When people have less resources they’re bound to share the ones they have. The internet facilitates exchange by serving as a round-the-clock community (or international) ad board.

“I’d characterize the sharing economy trend not as a revolution but as a pursuit of achieving something that could be called an ‘optimization of ownership,’” said Jan Gmurczyk, economist at Instytut Obywatelski. “The crisis that affected the economy not only pushed people to manage their money wiser, but it also affected ideas and concepts behind the modern economy. People became more critical of it.

In such conditions, new ideas for the economy are gaining traction,” Gmurczyk added.

As resources and environmental capacity continue to be stretched, younger generations choose to live more minimalist lifestyles, opting for money-saving frugality rather than the posh style.

On the other hand, it created opportunities for many to earn money from things they already own. Renting a car or a room in their apartment has become easier than ever thanks to the internet and social media sharing.

“Solutions such as Uber or Airbnb show that it’s very easy to build simple solutions in the digital world for effective use of existing resources. The global reach of the digital market results in better and more efficient use of resources, and the price of available resources continues to fall, since less and less added value is derived by intermediaries,” said Jerzy Kalinowski, partner, head of information, communi-

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cations & entertainment industry in KPMG in Poland and CEE. At times, a sharing economy is a matter of survival in a world hit hard by economic austerity. The Spanish version of the community exchange system, a modern day webbased bartering network, has a whopping 213 community exchange networks nationwide. The next country on the list, the United States, has 118 networks. It’s important to remember that youth unemployment in Spain is above 50 percent. Young people are desperate just to make it by without the help of their parents, hence a barter system is a natural remedy for their current ills. The community exchange system is alive and well in Poland’s capital of Warsaw where Wymiennik.org has 3,000 members.

Thanks to the internet and easy access to both consumers and providers, the sharing economy is growing exponentially. Consultancy PwC estimates that the market is currently worth $15 billion and will reach $335 billion by 2025.

Mi casa es su casa Hospitality is one of the staples of the sharing economy; from the apartment sharing website Airbnb to Couchsurfing, which has 9 million members worldwide and is active in 120,000 cities. It’s almost impossible not to find a host.

The service is very popular in Poland. The capital city of Warsaw has over 12,000 active members.

Couchsurfing, and other websites such as Bewelcome. org, allow willing hosts to offer a bed, a room or just some floor to sleep on. The traveler can respond with hospitality at a different time and place, but doesn’t have to.

Couchsurfers exchange not only a place to stay, but also help their guests giving tips on places worth visiting, take them to events, etc. It’s not only a hospitality service but also a social experience. On the other hand, in some circles couchsurfing has been dubbed “sexsurfing.”

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COVER STORY / POLITICS

Furthermore, Couchsurfing has garnered some criticism due to their change from a non-profit model to a business model without the consent of the community. Currently, the company charges an optional $25 verification fee.

It’s not entirely clear how the company plans to increase income in the future, but it does hold vast amounts of data on user preferences and travel patterns. The San Franciscobased company has raised over $22.5 million in venture capital from the likes of Benchmark Capital, General Catalyst Partners, Menlo Ventures and Omidyar Network.

In the carpool lane Another peer-to-peer system that’s on the verge of entering the Polish market is carsharing. In carsharing, 22 22

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social skills are also put to the test. Finding an empty bag of potato chips on a car seat when you’re checking out a vehicle for a nice weekend with a new crush can be very embarrassing. It’s not just the consumption that’s shared, but also the standard of quality needs to be collaboratively taken care of.

But what if one is traveling across the country? What the Poles have really caught onto is the ridesharing service Blablacar.pl. The company was launched in France in 2006.

The Polish version has been initiated by Michał Pawelec and Piotr Jaś and funded by venture capital fund Accel Partners. Blablacar is by far the most popular ridesharing website in Poland. It includes a profile with a talkativeness rating for users. Shy users can match up with talkative us-

Images: Shutterstock

“IN ALL THOSE SITUATIONS WHERE YOU HAVE A SMALL LOSS AND A BIG GAIN, THE SHARING ECONOMY MAKES SENSE..

COVER STORY / SHARING ECONOMY

PWC ESTIMATES THAT THE MARKET IS CURRENTLY WORTH $15 BILLION AND WILL REACH $335 BILLION BY 2025. ers, if they so wish. The company recently analyzed how much ridesharing participants talk and, lo and behold, Poles were found to be the most talkative, even more so than Italians or Spaniards. The French Blablacar has initiated a fee system, and the Polish version may do the same soon. Since the network is growing quickly, a small fee should not interfere with or hamper the existing process.

The other popular vehicle sharing platform in Poland is Germany’s NextBike, which (in cooperation with city governments) is promoting their bike rental systems in all major Polish cities.

The company boasts of having reached over 4 million rentals in Warsaw since 2012. It has 290,000 users, 202 stations and almost 3,000 bikes in the capital. This makes Warsaw’s bike sharing program the seventh largest such network in Europe. A year ago, USA Today listed the Warsaw system (also known as Veturilo) as the tenth best bike rental system in the world. The company’s mobile IT system is its bread and butter, and besides city patronage, the company does very well by incorporating advertisements on bikes and recruiting commercial partners who sponsor bike stations at key locations. The Bike-sharing World Map shows how popular this service is becoming. According to this website, it seems like Spain and Italy are the most saturated bikesharing countries in the world.

Nothing new While the concept of a sharing economy has skyrocketed in recent years it has been around for years. Mitfahrgelegenheit.de, or Carpooling.pl as it’s known in Poland, has been around before the advent of the internet. They used to have local outlets where potential drivers and riders could post announcements about their planned trips. “Offline carpooling was functioning for a long time in Germany (usually in small offices close to the train station) where drivers could leave their offers,” explained Carpooling.pl press secretary Agnieszka Kornas. The online project was started by MBA students from Würzburg, who wanted to transfer the system to an online platform. After a few years of operating on a part-time basis, the founders decided to go full-time and expand internationally.

Carpooling hired Markus Barnikel, an internationally experienced internet executive as CEO. “Now in the Munich office we have over 70 people working to make it the best service from a technology and security point of view,” said Kornas.

Carpooling earns money on user fees for successful rides, commission from transport companies who use the service for announcements and income from commuter platforms for bigger companies. Carpooling boasts of having helped reduce CO2 emissions from cars by 630,000 tons since the inception of the company.

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Other variations of carpooling could have huge potential in Poland. This was acknowledged by Uber, which launched its service in Warsaw in 2014.

AIRBNB IS NOW WORTH MORE THAN $10 BILLION WHILE UBER IS CURRENTLY VALUED AT $18 BILLION.

Images: Shutterstock

Creating giants The idea of collaborative consumption started, just like most concepts, as a way to make the world a better place. One of the first entrepreneurs to dabble in a sharing economy, was Martin Varsavsky, who in 2005 set up Fon, a service that shares home wifi networks. “My general thinking at the time was that we live in a world in which benefits are only accrued through economic growth and the endless consumption of resources, and that there have to be other ways that are of more benefit to people. … Why should everyone have their own car when most of the time they are not using it? Think of a marina full of boats. How frequently do those boats go out?” said Varsavsky in the British daily The Guardian. “In the case of wifi, we came up with the concept that if you share a little wifi at home, you can roam the world for free,” he explained. “That’s a small loss and a huge gain. And now [years later] we see that in all those situations where you have a small loss and a big gain, the sharing economy makes sense,” Varsavsky added.

But like with everything, the market had its own way to reshape the sharing economy concept and adapt it to free market reality. “The market has the tendency to turn everything into a product. That includes ideas as well.

Every day, entrepreneurs are looking for new niches. Besides, exchanging resources has been moving the economy

forward for ages. If it wasn’t for banks, the current Western civilization wouldn’t be at the level it is right now,” Gmurczyk explained.

With such huge growth potential, many companies are trying to get in on the sharing economy action. Telecommunication giant Verizon is working on a platform that will allow its users to share virtually everything thanks to the use of QR codes. Retail behemoth Walmart has its own game trading platform, BMW has its own car sharing platform.

On the other hand, companies that were at the forefront of the sharing economy movement are now becoming giants themselves. Airbnb is now worth more than $10 billion while Uber is currently valued at $18 billion. And this is where perhaps the biggest complaints against sharing economies come to mind. Under the guise of progress and making the world a better place, companies are actually reaping huge profits with low fixed costs, shifting risk to participants, while pushing down wages at the same time.

The news has been flooded with such stories. Uber drivers held protests around the US, complaining about low fares and long hours and a hostile working environment.

“Drivers are subject to hostile environments and sexual ha-

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COVER STORY / SHARING ECONOMY

rassment, assault, and being involved with people who are potentially dangerous, like extremely intoxicated people,” Joseph De Wolf Sandoval, president of the California AppBased Drivers Association, told Business Insider.

No control Other charges include the lack of regulations. Companies usually don’t have to follow the same rules as their competitors. Uber drivers don’t need permits like taxi drivers, Airbnb hosts don’t follow local housing laws and don’t pay hotel or tourist taxes. Crowdfunding and social lending sites do not fall under the same supervision as banks. All of this can lead to some horror stories. Airbnb apartments are occasionally rented to host sex parties or to use drugs, Kickstarter can be used by fraudsters to cadge money from unsuspecting supporters.

There is also a matter of how the sharing economy will affect the world in the long term. After all, increased consumption leads to bigger economic growth. Factories which increase production, need to hire more employees who will spend their wages buying even more products.

Will the sharing economy decrease the demand for goods and services and cause the economy to crash?

“I don’t expect such a thing to happen. For example there are many goods, that people buy to show their social status, such things can’t be shared. There are also many products and services that simply cannot be shared, like getting a haircut,” Gmurczyk explained saying that the standard economy shouldn’t be affected. “The problem which the West has to tackle is not how to ensure economic growth but how to share it with others so everyone will have better lives,” Gmurczyk added.

On the other hand, it can help many launch their own

businesses. Good magazine wrote: “Technology and peer communities are enabling old market behaviors including bartering, swapping, trading, renting, lending, and sharing to be reinvented in ways and on a scale never possible before.”

Indeed, the simplicity of some of the systems is laughably mundane. In a world of increasing legal loopholes and administrative red tape, sharing could be the remedy for a limping European economy. But will the traditional business community embrace, incorporate or engulf the idea?

It’s important to stress that the sharing phenomenon lowers the cost of entry into the market for many participants and hence could be a fantastic bottom-up jump-starter for the economy. Thanks to the free-flow of information that is the backbone of a sharing economy, people are participating in investing, traveling or consumption that otherwise would have been unattainable. u

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FEATURE / POLES’ SAVINGS

The Polish wallet – mainly empty and full of holes B Y S E R G I U S Z P R O K U R AT

SENECA ONCE WROTE, “IT IS TOO LATE TO SPARE WHEN YOU REACH THE DREGS OF THE CASK.” THIS ALSO GOES FOR THE FINANCES OF POLISH HOUSEHOLDS. THEY WANT TO SAVE, AND EVEN KNOW THEY SHOULD, BUT THEY’RE JUST UNABLE TO DO SO

The amount of the average deposit per Polish citizen

According to statistics from the European Central Bank, the average deposit amount per Polish citizen in 2013 was €3,400, that is around PLN 14,000. But that’s over two times less than the average for Czechs and eight times less than the equivalent number in Belgium or the UK. What’s more, the distribution of the saved amounts is very unequal among households. Six out of ten Poles do not have any savings at all. They live day to day, not creating any financial security for the future.

Why aren’t Poles saving more? The simple answer is that they don’t have anything to save. “Earnings in Poland are a couple times lower than in Western Europe. Meanwhile, the prices of goods and services are comparable, and that’s why saving in Poland is a real

challenge,” Aleksandra Jezierska, who works at a Warsaw-based corporation, said. “Your income is just enough for ongoing consumption, and you’re left with no additional funds you could set aside for the future. This is especially the case for young people who want to make it on their own, but they’re often unable to earn enough to save after subtracting all current living costs,” Marek Szulgowicz, a student at one of Warsaw’s universities added.

Apart from barriers of an economic nature, such as low GDP per capita in comparison with Western Europe, there are also psychological barriers. Some Poles lost their savings during the inflationary years of the 1980s and 90s, which is reflected in a distrust towards saving in general. Furthermore, ac-

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FEATURE / POLES’ SAVINGS

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cording to professor Dominika Maison, the author of the book entitled “Polak w świecie finansów” [Poles in the world of finance], the state took care of citizens for many years during the socialist period, thereby lowering incentives to act. “In Poland, you don’t have a widespread custom of taking responsibility into your own hands,” Maison added.

Who saves in Poland and how much The Social Diagnosis 2013 report is a study which included over 12,000 households and 26,000 survey participants. The report from this study shows that only 40.8 percent of households have any savings at all. The most acute lack of savings can be

observed among disability claimants (nearly 80 percent of households have no savings), those living on unstable financial sources (over 75 percent) together with single-parent families and families with many children (71 percent and nearly 70 percent respectively).

Most households have savings amounting to 1-3 times their monthly income (31 percent). The 3-6 monthly multiple range of savings is held by 23.4 percent, while only 12.8 percent of survey participants had savings worth more than half their annual salary.

Even worse, only 6.4 percent of households have more than a year’s salary worth of savings, out of the entire group of households declaring any savings. Polish families usually

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save using term deposits (around 43 percent of savings is held in this way). Saving is treated as an insurance policy for old age (19 percent of savings), unforeseen situations (18 percent), or is used for the specific purpose of buying an apartment or a house (10 percent) or insuring the future of children (9 percent).

It’s time to start thinking about our finances Despite the problems tied to accumulating savings, the number of people putting

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away some funds is on the upswing. As recently as four years ago, only one-third of the society had savings. Poles mostly saved for unforeseen events and for their mortgage, which was easier to come by before. New regulations in 2014 imposed an obligatory 5-percent equity contribution for a person wishing to take out a loan. In 2015, the loan-to-value ratio will further decrease to 90 percent, in 2016 - to 85 percent and finally in 2017 - to 80 percent.

This shows that Poles are aware of the

importance of having an adequate financial cushion. However, declarations are not always translated into reality. The propensity to save will surely rise in Poland. Extending the retirement age and news about the demographic tsunami which will overload the Polish pension system are strong incentives to save.

Poles don’t always know how to save.

“Although people differ a lot between themselves, saving is due to the views one holds, the ability to exert self-control, and

Image: Shutterstock

40.8%

The number of Polish households that have any savings.

Investing in Poland available now !

FEATURE / POLES’ SAVINGS

* voivodships * special economic zones * trends

featuring

2015

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FEATURE / POLES’ SAVINGS

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one’s level of education. You can learn how to save,” said Maison. The problem of Polish society is inadequate knowledge about the possibilities they have for managing their personal finances. Despite the fact that the pros of financial education are significant, only two-thirds of savers entrust banks with their money. It’s still very popular to keep money “under the mattress” – a large group of Poles still prefers using cash only, exhibiting high levels of distrust towards tools with higher risk.

Citizens of Western Europe are much more accustomed to using riskier investment

devices, such as investment funds or equity markets, but this difference may be due to the fact that they have more funds to invest and may absorb potential losses easier than the average Pole, who would be left without much financial cushion.

It can only get better Although the Polish society is still not that knowledgeable about saving and doesn’t have the possibilities and incentive for accumulating capital, Poles do show much enthusiasm for action. Knowledge is also a form of capital, and in the last 25

years Polish society has seen a true transformation, going from a country where foreign languages were unheard of to an educated, informed society, which expects further institutional change and development.

“Faster economic growth raises the savings rate among households,” said economist Aleksander Łaszek. This should be helped by reforms – raising the labor participation of the Polish society, especially among women and older age groups. Pecunia non olet – money doesn’t smell, as the ancient Romans used to say. Soon you may not have to be Caesar to save in Poland. u

Most households have savings amounting to 1-3 times their monthly income (31 percent). The 3-6 monthly multiple range of savings is held by 23.4 percent, while only 12.8 percent of survey participants had savings worth more than half their annual salary.

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FEATURE / BIG DATA

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Some say it empowers people and democratizes data.

Companies can’t wait to tap its seemingly endless potential.

Still, there are quite a few naysayers who point to the potential threats of big data – not only to our privacy, but more importantly, to social relations and stability

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Image: Shutterstock

To know or not to know

FEATURE / BIG DATA

After cloud computing, big data has been the buzz word of the business world for at least a couple of years. Big data means different things to different people. To some, it is the internet and social media; to others, it’s synonymous with digital data analytics. Whichever aspect of big data we discuss, we are bound to encounter both fervent enthusiasts and fierce opponents of the technology.

One thing is certain, it is a growing phenomenon and a fast expanding business. The size of this year’s big data market is estimated at $16 billion. By the end of 2015, it will have expanded to $48 billion and 4.4 million jobs will have been created globally to support the industry, according to estimates by McKinsey Global Institute.

Judging by these figures, it is clearly one of the fastest-growing industries, expanding six times faster than the overall IT market.

What’s not to like Big data enthusiasts have quite a few arguments to support their claim that the internet, social media and digital analytics are improving the quality of life everywhere. For one thing, it is a powerful tool that can be used to organize people and ignite social change, the recent Arab Spring being one example.

“Today, social media and the internet are unquestionably accelerating change and empowering people who want to change their political system all across the globe,” said Amy Gershkoff, director of Consumer Analytics and Insights at eBay, as well as the architect of Barack Obama’s advertising strategy. According to Gershkoff, at the height of the protests in Egypt and Tunisia in March of 2011, a survey found that nine out of 10 Egyptians and Tunisians were using Facebook to organize protests or spread awareness about the protests. “Between January and April of 2011, the number of Facebook users in Egypt sprung 30 percent compared to the previous year,” she added.

Digital technologies are increasing political awareness also in developed, stable economies. “Nearly all Western democracies now have websites that allow citizens to see legislation under consideration by their government, including searching full texts of bills before they’re even voted on,” Gershkoff said.

As the head of the advertising strategy in Barack Obama’s both electoral campaigns, Gershkoff engineered a novel and extremely effective application of big data.

“Using a neighbor-to-neighbor mobile

application, Obama supporters could see which of their neighbors needed persuading to vote for Barack Obama and could knock on their doors and talk to them,” she explained.

Democratization of data Another aspect of big data is digital analytics, the use of which “has democratized luxury, making it no longer the sole purview of the elite and wealthy,” as Gershkoff put it. It can provide services of a concierge, a personal shopper and a stylist to regular people.

Data science algorithms can review and analyze not only users’ behaviors based on their previous choices, but also the choices of people with similar tastes and preferences. In this way, mobile apps can recommend a restaurant, a trip or a movie that is tailored specifically to the needs of the user, just like a concierge service in a five-star hotel. The same goes for the selection of party music or an evening ensemble that fits the body shape and preferences of the person.

“Big data enables services that until just a few years ago were a luxury, to be delivered to regular people at affordable prices,” the eBay director added. She also believes that by providing more transparency to customers worldwide, big data will contribute to the proliferation of sustainable and green technologies in the future. A recent study by the Pure Research Center found that Millennials are the most sustainabilityconscious generation yet. “Millennials are more likely to be willing to pay for products made by environmentally responsible firms that any previous generation, and the willingness to pay higher prices for green and sustainable products also extends to low-income Millennials,” Gershkoff said.

Do you know what you know?

Both global and local companies are already taking notice and spending sizable sums on learning more about their customers’ preferences. The demand for utilizing large data sets in decision-making is clearly growing. According to IBM, one out of every three business leaders doesn’t trust the information they use to make decisions. However, few realize that to get ahead in the game it is not really necessary to make major investments in data storage.

According to Deloitte, 75 percent of senior executives from over 500 companies say that they are wasting more than half the data they already hold. To utilize the data

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well they need competent people who not only know how to do it but also who can ask the right questions.

“The most important part of data analytics is not the data itself, nor the computers that run it, nor any of the technology – it’s the person doing the analysis. I’ve run teams of data scientists and statisticians in many jobs and the difference between good work and great work is the person who’s doing the work. It’s about combining creative thinking with scientific thinking,” said Gershkoff.

The job of a data scientist didn’t exists until just a few years ago. Today, there is an ever-growing demand for specialists who understand what large data sets can offer and how to use them to our advantage.

McKinsey predicts a global shortage of 190,000 scientists capable of mining big data by 2019.

A paradigm shift What is it that makes these data scientists so valuable? What can they glean from the endless rows of ones and zeroes that is so important? Undeniably, analytics help companies make decisions more quickly, which is crucial in today’s social media-driven business. “Big data changes the paradigm that decisions should be made based on traditional statistics. Previously, a statistician made a hypothesis and tested it on a sample which verified whether the supposition was correct or not. With big data we are supposed to make decisions with absolute certainty,” said Arwid Mednis, legal counsel and partner at Wierzbowski Eversheds.

He went on to give an example of an American automotive company which collected a large amount of data from car manufacturers, dealers and mechanics. Based on the data collected, the firm discovered that the type of car least prone to accidents is a car painted orange. “In the era of big data, don’t ask why it is the way it is. The data tells you it is so and that’s that,” he concluded.

Another important aspect of big data is that the information collected never becomes outdated. Past data is and will continue to be used to make predictions about the future. Forecasts and projections are in fact one of the most crucial aspects of big data. “It is already used to predict where crimes will be committed. It can even be applied to predict what verdict the jury will reach,” Mednis explained.

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NOT CONVINCED

68%

% of companies that use big data analytics

63% -

Geographically speaking, the big data hype is clearly the strongest in the US, while European companies fall behind their American counterparts when it comes to using big data solutions.

45%

the UK

Europe

Source: TCS

34%

Not all that glitters Collecting data about consumers and their preferences is nothing new. Retailers have been doing it for years. Based on their clients’ purchase history, they can easily predict what and when consumers are most likely to buy and send them a relevant enticement in the form of an ad or a coupon. Once big data algorithms compile the purchase history of all clients with similar preferences and tastes, the chances of a perfectlytailored offer increases even further.

And that is exactly the bone of contention between big data enthusiasts and haters. One of the concerns most often raised about the use of big data is that the ominous “Big Brother” is already too “all-knowing” and fueling it with more information about us will only help confine people without their realization.

Mednis also gave an example of a teenager who was sent a pregnancy care package by a retailer a few years back because, based on the girl’s search entries, the company deduced that she must be pregnant. And indeed she was, but she wasn’t aware of it yet. To add insult to injury, the package was collected by the teenager’s father.

Illusion of anonymity Anonymity is something we’ve all gotten used to thanks to the internet.

It is supposed to keep the use of data troves within bounds. Opponents of

Germany

“OUR BANKS ALREADY HAVE DETAILED DATA ABOUT OUR PAYMENTS AND BASED ON THAT DATA THEY CAN PREDICT WITH 95 PERCENT CERTAINTY WHICH YOUNG COUPLE WILL GET DIVORCED WITHIN THE NEXT FIVE YEARS.

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FEATURE / BIG DATA

the big data phenomenon claim that no one can be truly anonymous or forgotten once information is released.

When Netflix released anonymous data of about 500,000 members of its club, it soon turned out that scientists were able to match the film reviews with actual members of the club. The controversy resulted in a class action lawsuit and a subsequent settlement.

This year, we witnessed Google lose its case against a Spanish lawyer, Mario Costeja, who demanded that his name be deleted from Google search results.

He complained that entering his name in the search engine led to debt notices over a decade old. The European Court of Justice finally decided to favor the notion of privacy over the unencumbered flow of information, a decision which came as a big surprise to many.

Self-fulfilling prophecy The risks that big data pose to privacy seem to go beyond receiving prompts and ads that seem to know us better than our spouse does. “Our banks already have detailed data about our payments and based on that data they can predict with 95 percent certainty which young couple will get divorced within the next five years,” said Maciej Ślusarek, attorney and partner at the LSW Leśnodorski, Ślusarek i Wspólnicy law firm.

The question is what happens when banks start using that knowledge when deciding about e.g. mortgage loan applications. “This could lead to a self-fulfilling prophecy. A bank that knows the couple will split up will deny them the loan. Then they will be forced to continue living in the cramped apartment they have, which will lead to a marital crisis.” The same quandary

applies to insurance and medical data and how it can be used against regular people.

The problem with privacy is further exacerbated by the fact that we are not really sure how safe our data is. Even if the company does collect it and use it for the purposes we specifically consented to, there is still no guarantee that no one else will gain access to it illicitly. A recent study by consultancy EY revealed that most organizations (56 percent) admit that they would have difficulties with the identification and early detection of hacker threats. A third of them also said they don’t know how long it would take them to respond to these threats.

You say ‘tomato’ There seems to be one more ax to grind between the opponents and proponents of big data and its application – data profiling.

We all know how profiling works. When

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[

What do Polish managers say about big data?

36% Their business would benefit from big data.

39% Only companies that use big data will be successful in the long run.

43% Their business has no plans to implement big data for now.

two people enter the same phrase in a search engine they could get very different results, and different ads, depending on their previous queries. Enthusiasts will say: “What’s wrong with that? As a man I won’t mind not getting nail polish ads anymore.”

Meanwhile, opponents say that feeding people with information based solely on their previous choices will inevitably limit their understanding of the world.

“Information profiling can lead to us stewing in our own sauce. We will only get information we want and the ads we want.

Thus, no foreign stimuli will be able to reach us,” said Igor Ostrowski, president of the Council for Digitization (MAC) and Partner at law firm Dentons. Ślusarek concurs. “We will read different things, compatible with our political

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Source: EMC

views. Socialists will receive information only from left-wing sources and right-wing voters, from conservative sources. It will not bring us closer. It will likely make any understanding impossible,” he concluded.

As a matter of fact there is already a gaping abyss between how supporters of different political factions perceive facts, according to Radosław Markowski, head of the Democratic Studies Center at the University of Social Sciences and Humanities in Warsaw.

A study was conducted where supporters of the ruling Civic Platform party and opposition Law and Justice were confronted with plain and proven facts.

When Civic Platform supporters were asked whether Poland’s crime rate fell in 2005-2007 (when Law and Justice was in

power), most of them said “no.” Similarly, when Law and Justice supporters were asked whether Poland was the only country with positive GDP growth in 2009 in Europe (during the rule of Civic Platform), most of them also said it wasn’t true. “If we cannot agree on simple facts, how can there be any agreement on views and opinions, especially when we are fed polemic information over and over again?”

Markowski mused.

Whether we think big data and its applications are a blessing or a curse, it is definitely here to stay. Once we tap the endless source of information, we will never be fully satiated. One question that data scientists and their algorithms probably cannot answer yet is: what will we do with all the data and where will it lead? u

INTERVIEW / TOMASZ SIEMONIAK

I N T E R V I E W B Y E WA B O N I E C K A

TOMASZ SIEMONIAK, MINISTER OF DEFENSE, TALKS WITH WBJ OBSERVER ABOUT POLAND’S MILITARY AT A TIME OF CRISIS IN UKRAINE AND AGGRESSIVE MOVEMENTS OF RUSSIA

Prepped and ready Images: Jan Malinowski/WBJ, shutterstock

WBJ Observer: How is Poland prepared to respond to the dangerous situation close to our borders following the Russian aggression in Ukraine?

Tomasz Siemoniak: Very quickly after the breakout of the Ukrainian crisis and aggressive action of Russia, NATO, with Poland’s active participation, introduced concrete measures to respond to it. Now, many aspects of NATO activity are organized in a different way. At the summit in Newport in September decisions were taken for moving the gravity of the Alliance’s activity to its eastern part. This is of crucial importance to Poland’s security and fur-

ther strengthening and modernization of our army. We are well prepared to respond to the present crisis and our armed forces are ready, together with our allies, to secure Poland’s borders and the eastern flank of NATO.

>>

Nevertheless, Poles are worried about our country’s security and recent research conducted by polling house Maison for Warsaw Enterprise Institute, shows that 70 percent of Poles are of the opinion that Poland is not adequately prepared for the defense of its borders and 63 percent hold a negative view of the capability of our army. What is your reaction to this?

WBJ OBSERVER • DECEMBER 2014

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INTERVIEW / TOMASZ SIEMONIAK

The Polish army is met with trust and confidence of the public, so I think that the findings you have mentioned show mainly certain emotions, dependent on the moment of polling and the way the questions are formulated. But the present crisis in Ukraine is a matter of Poland’s security. A topic which seemed to be closed, is now open. Poles know their history. They remember very well what happened to our country in the generation of their fathers and grandfathers, so no wonder an alarm bell was set off.

And as far as criticisms towards the condition of our army are concerned, I think it should motivate us to do more to strengthen it.

Those feelings of insecurity among Poles are galvanizing the activity of various civil groups of people, who are preparing themselves for defending the country in case of war. It is a new phenomenon altogether.

Those organizations gather thirty thousand members and there is now a public discussion whether to call those groups the Home Army, referring to the famous Polish AK forces acting under Nazi occupation during

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WW2, while some members of AK combat organizations are protesting against using such a name. What do you think about those civil movements?

Whatever that citizens’ movement for defending our border would be called, it is a demonstration of Poles’ willingness to be directly engaged in defending the country, in case of need. I look at those movements in a very positive way and think that my ministry and the recently organized Bureau of Defense Initiatives should help them to cooperate with each other and with the army.

For some time, military experts have been preparing a reform of the Military Reserve Forces. We also see a growing number of recruits. All of this shows that the security of our country is a top priority for the Ministry, but also for the society.

It seems that during years of stability and peace in Europe, we have moved away from looking at our country’s security as a concern of each citizen, leaving the problem of defense to the professional army. But now, at a time of crisis and Russian military presence close to our

INTERVIEW / TOMASZ SIEMONIAK

Images: Shutterstock, Jan Malinowski/WBJ

borders, more of our citizens, regardless of their profession, start to think that it would be worthwhile to have certain military training and they are willing to obtain it and use it in time of need.

I look at this willingness also from a broader perspective � as building a responsible civic society, creating the feeling of togetherness. The will to act, to help authorities in case of flood and other natural disasters is growing.

You have recently announced the enlargement of Polish military presence in the eastern part of Poland. How will this affect our armed forces and the security of our borders?

For many years, we’ve concentrated armed forces in the western part of the country, which was a legacy of the previous political system.

I want to strengthen our military presence in the eastern part, which is obviously needed to bolster our defense system. It has to be stressed that it does not mean simple moving of some garrisons from the west to the east, but rather building up modern military infrastructure in the eastern part of our country. With the current strength of the eastern garrisons at about 30 percent, it is obvious that their capabilities have to be raised to a higher level. The military infrastructure in the eastern part is still a relic of the previous system, and so is the equipment.

During a period of 3-4 years the number of soldiers in the east will be significantly increased, the military equipment will be modernized, new military facilities will be built. It is a demanding task but if we want to significantly strengthen our security, it must be done.

But when will the crucial political decision taken at the NATO summit in Newport be implemented and the NATO rapid reaction force be put into operation?

Those crucial political decisions taken in Newport show that there is a common agreement within NATO that we have to act accordingly with regard to the new situation and implement a new strategy. Russia is violating all principles of international law and openly provoking the western world, so the response of NATO has to be clear and firm. Now the military experts of the Alliance are working on the details of the new strategy, which will be approved by NATO defense ministers in February 2015.

There are three domains which are of crucial importance for Poland. First, a continuous rotational presence of NATO forces in Poland.

Second, the creation of NATO Rapid Reaction Forces, the so called “spearhead.” The third is the strengthening of the existing North-East Corps in Szczecin, which is to become the center of defense operations of the Alliance on the eastern flank. The spearhead forces, with a Polish component, would be ready for action within a couple of hours in case of need. It will be a fully operational NATO force structure, with a strength of at least 4,000 soldiers and it could be ready to operate on the eastern flank of the Alliance, as well as in the south of Europe. Anywhere that threats occur.

Every day, we learn of Russian inspired fighting in the east of Ukraine and Russian military planes violating the space of some NATO members, so wouldn’t waiting for alliance actions till February increase our present feeling of insecurity?

The practical steps will be taken in a couple of weeks. The allies are at an all time high vigilance level reacting to provocative actions of Russia’s air force, which were intercepted and forced to leave NATO air space. Let me remind you that there are constant military exercises being conducted on the territories of the eastern member states of the Alliance. Only yesterday, 1,500 soldiers: British, Americans and Poles took part in exercises in Poland.

“THE MILITARY INFRASTRUCTURE IN THE EASTERN PART IS STILL A RELIC OF THE PREVIOUS SYSTEM, AND SO IS THE EQUIPMENT.

Yet, it is now clear that permanent NATO bases will not be installed in Poland, while we wanted to have at least one of these bases.

How do you look at this?

I look at it in a pragmatic way. I think that for Poles and for our security, a constant rotational presence of NATO soldiers conducting various military exercises in the eastern part of the Alliance is needed more. The world around us has changed and so have the threats. We cannot look for analogies to the Cold War, when the armies of two opposite blocks were facing each other directly on the border. I would like to assure you that we are working very hard to obtain the biggest possible presence of Allied Forces in Poland. Rotational presence of those forces and well-prepared military infrastructure are crucial to assure swift action of the NATO spearhead in time of need. A strong proof of American presence in Poland will be the anti-missile shield in Redzikowo, where ground works are already under way and will be completed at the end of 2018. We are closely cooperating with our allies, doing our home-

WBJ OBSERVER • DECEMBER 2014

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INTERVIEW / TOMASZ SIEMONIAK

work in the field of defense and investing in it.

From 2016 on, our defense spending will reach 2 percent of GDP and during the nearest 10 years we want to spend PLN 130 billion on the modernization of our army.

Yes, it will be a tremendous effort. The exact amount of money spent on the army will be linked to our GDP growth. These expenses will generate development and innovation in our military industry and in the whole economy.

This money will also be spent on purchasing some new equipment, like drones, much needed helicopters and missiles. These will be high-value contracts and there is a pending competition among foreign companies. The ministry is setting up mechanisms for the careful monitoring of all purchases, aiming to link them with obtaining new technologies for our military producers.

The reform of the command system of our army is criticized by some analysts, claiming that there is a lack of clarity of command in the armed forces in case of war. What is your response?

The reform was adopted one year ago and our system is adjusting to the new tasks and allowing for full cohesion with NATO systems and armies. The present system concentrates command around three basic functions: strategic planning, the general command and the opera-

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tional command. The General Staff is defined as the planning body and the main strategic adviser to the minister of defense, while the functions of the armed forces command are divided between the general commander, called the force provider and the operational commander, called the force user. While the general commander is commanding the army during peace, the operational commander would be responsible for commanding during war. The criticism that there is no clear chain of command in our army in case of war is unfounded.

President Bronisław Komorowski has said that sending Polish soldiers to participate in operations outside NATO territory would be considered, but our primary task is the defense of our country. Does this mean that we will limit our participation in NATO missions outside Europe?

Poland belongs to those NATO members who have taken part in all of the Alliance’s operations abroad. Our soldiers are considered to be courageous and professional contributors and our credibility in fulfilling NATO missions is well established. In my view, President Komorowski pointed to the need of keeping a certain balance between our participation in operations outside of Europe and our military tasks at home. The crisis in Ukraine shows how crucial keeping that balance is.

INTERVIEW / TOMASZ SIEMONIAK

Images: Airbus, Jan Malinowski/WBJ

What help is NATO ready to offer Ukraine?

It has been decided that NATO will establish four special funds for helping reform and modernize the Ukrainian army and provide some military equipment. There is no NATO embargo on the sale of weapons to Ukraine and any NATO member can make their own decision.

Poland is involved in military cooperation with Ukraine by, for example, setting up the PolishLithuanian-Ukrainian Brigade, which will help reform the Ukrainian armed forces. We are sending helmets and bullet-proof vests to the Ukrainian army, providing Ukraine with humanitarian assistance and financing the medical care of wounded Ukrainian soldiers in Polish hospitals.

NATO strongly supports the territorial integrity of Ukraine and its pro-European policy. During the last years, Ukraine has been an active partner of NATO with active participation in different missions, for example in Afghanistan. But it is clear that its accession to the Alliance is not a current issue.

Do we have a new cold war between Russia and the West? As many analysts, especially in the US, claim?

We are at an entirely new stage of relations with Russia, when Moscow uses military force to push towards its goals. I think that it will be very difficult to return to business-as-usual relations between the West and Russia. But whether we can talk about a new cold war, is easier to answer by analysts than by acting politicians. Certainly we, in the West, are not interested in a new cold war. Still, Russia seems to run its policy towards a hostile confrontation with the West. We are ready to address this policy.

Coming to some other world issues, are cyber attacks a new kind of war and a serious threat to our security ?

The threat of cyber attacks is treated very seriously by NATO and Poland. In the Ministry of National Defense, a center of defense against such attacks has been created. We concentrate on defense of military and government institutions, but possible cyber attacks on banks and other public institutions are also treated very seriously. Secretary General Jens Stoltenberg stated recently that any cyber attack on a NATO member state will be considered an act of violence and will call for an appropriate response, accordingly to Article 5 of the NATO Treaty, calling for common defense. u

“ANY CYBER ATTACK ON A NATO MEMBER STATE WILL BE CONSIDERED AN ACT OF VIOLENCE AND WILL CALL FOR AN APPROPRIATE RESPONSE.

WBJ OBSERVER • DECEMBER 2014

41

INTERVIEW / POLENERGIA

LOOKING FOR DIVERSIFICATION ZBIGNIEW PROKOPOWICZ, PRESIDENT OF THE BOARD, POLENERGIA

POLENERGA, A COMPANY FROM THE KULCZYK INVESTMENT GROUP, HAS AMBITIOUS PLANS NOT ONLY IN THE WIND ENERGY SECTOR

What were the reasons behind the decision to merge Polenergia with Polish Energy Partners with the participation of CEE Equity Partners?

Zbigniew Prokopowicz: Polish Energy Partners and Polenergia, as two entities under the same owner, were working together on the present growth strategy. They decided to focus on diversification and on creating the first independent Polish energy group interested mainly in renewable energy but also diversified in terms of energy sources, such as natural gas. Another goal was further integration by adding distribution and trade. These goals were meant to help carry out the existing strategy over a period of ten years.

Polish Energy Partners took over assets belonging to Polenergia Holding. At the same time, we needed additional funds in order to carry out our strategy, based mostly on the development of onshore wind energy. They came from the introduction of CEE Equity Partners as a shareholder. This provided PLN 240 million.

The second stage will be a share issue on the market that we would like to carry out next year. It is meant to provide additional funds for the implementation of our strategy. The proceeds could be at up to PLN 420 million.

I N T E R V I E W B Y K A M I L A WA J S Z C Z U K

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At the beginning of 2014, we launched an investor search process, with cooperation on the part of Rothschild. Hence, CEE Equity Partners was picked as part of this process.

Their offer was advantageous of course. Also, some other elements were important for us. CEE Equity Partners has an investment perspective that is in line with our strategy. We are in the energy segment and building value is definitely a mid-term or longterm process. Their investment period is eight to ten years, which is cosistent with the period that we need to generate optimal return for shareholders.

The second important factor is that the fund was capitalized mostly by Exim Bank, which is one of the biggest banks in China.

This means that there is a potential option of broadening our scope of cooperation to other areas. Taking into consideration the assets of CEE Equity Partners, which plans on raising new funds apart from what it already has, they are a long term partner with access to new financing. This may be important when new development opportunities appear.

Image: Jan Malinowski/WBJ

What process led you to decide on teaming up with CEE Equity Partners? What was their advantage?

INTERVIEW / POLENERGIA

The third factor is that we have easily managed to work out the conditions of the transaction, the amount they could invest and other obligations on the part of the company and the investor.

Renewable energy is your priority. How do you see the perspectives of this energy segment in Poland?

To answer this question, we need to describe how the energy sector is developing worldwide and in Europe. Changes that are happening, the broad introduction of renewable energy into production capacity, are generally causing price cuts on the wholesale market, which in the long term is favorable to the economy.

Renewable energy is now becoming more competitive, mostly thanks to technology development. I am sure that onshore wind energy will not require any subsidies for further growth after 2020.

Today’s energy sector investments take place either in areas that are subsidized, such as renewables; or regulated, such as distribution and transmission. Other segments do not see investments that would be market-based and approved by shareholders. With today’s energy prices, such investment would not be reasonable. Such a situation cannot last long and significant changes on the energy market will take place. They will result from growth in the renewables segment and in distributed energy resource systems. The shape of the typical energy system will definitely change over the coming ten years, due to an active approach to demand management.

“WE ARE IN THE ENERGY SEGMENT AND BUILDING VALUE IS DEFINITELY A MID-TERM OR LONG-TERM PROCESS.

Because it is easier to make decisions in the subsidized segment of renewable energy and in the regulated area of transmission and distribution, these are the directions that we want to develop in. So it happens that in the current conditions in Poland, it is wind energy that is most competitive.

There are three major issues related to the development of renewable energy in Poland. The first one is the final shape of the new law. We expect the regulation to come into force at the end of the first quarter of 2015 and the new subsidy system to start operating from January 1, 2016. The question is what the potential investment gap will be. If the new support system comes into force in January 2016 and the old one ends in December 2015, then there will be a period when no investments are launched, at least until

WBJ OBSERVER • DECEMBER 2014

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INTERVIEW / POLENERGIA

President of the management board at Polenergia since 2008.

Before assuming the post, he served as president of the company’s supervisory board for four years.

He has managerial experience at a wide array of companies and industries, including the automotive sector, packaging and utilities.

In 1999-2004, he worked at the executive level of paper industry firm Mondi Packaging.

He is a graduate of the Paris Dauphine University and studied at the Warsaw School of Economics.

He holds an MBA from the Paris Institute of Political Studies.

the first auctions take place. The first installations will be completed probably some 18 months after those first auctions take place.

The second issue is that if we have an auction system with the goal of lowering energy costs for end users, we will have to hold more auctions in a shorter time. But the higher the number of auctions and the higher the auctioned capacity, the more expensive they will be. So the goal of lowering costs may be impossible to achieve, especially as the cost in the certificate system is already low.

The government and parliament may unintentionally raise costs with the two-year pause.

The third issue is the cost for the end user. The longer the gap, the less investment and less opportunity for using technology progress in the sector, which could contribute to raising energy costs.

What role does conventional power generation play in your strategy?

When it comes to conventional energy sources, we have a gasfired combined heat and power plant in Nowa Sarzyna. Thanks to the stranded costs compensation system and to gas compensation, it provides a foreseeable return until 2020. After 2020, it will certainly be a very valuable asset because it will be fully amortized, with all debts paid off. If anything gas-fired turns out to be cost-effective, it will be this unit.

As far as new projects are concerned, our portfolio includes the Północ Power Plant, in the Pelplin municipality in northern Poland. The project is practically ready to be carried out. However, due to market conditions, we are unable to secure a longterm contract for selling electricity from this plant, which could otherwise be a base for obtaining long-term debt financing. Also, based on the current prices, we are unable to secure a relevant,

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“SO IT HAPPENS THAT IN THE CURRENT CONDITIONS IN POLAND, IT IS WIND ENERGY THAT IS MOST COMPETITIVE.

reasonable return. That is why we cannot make an investment decision. We are nevertheless counting on changes in the configuration if wholesale energy prices grow. We would need them to grow to, let’s say, PLN 230 per MWh. Or, what is perhaps more probable, the government could introduce some form of support, such as capacity payments. It would then follow the example of other countries, such as France, Belgium or the United Kingdom and soon Germany, which saw the lack of investment in the conventional segment within a ten-year perspective. After all, the construction of a conventional power plant takes five years. It would be sensible to debate the issue with investors and decide on possible support in order for new capacity to be built.

Polenergia has recently suggested its involvement in building the Bernau-Szczecin gas pipeline, which would be part of a system linking Poland’s border with Germany and Ukraine. What are the perspectives of this project?

Images: Jan Malinowski/WBJ, Shutterstock

Zbigniew Prokopowicz

INTERVIEW / POLENERGIA

Germany. For example, more use could be made of the soon to be opened LNG terminal in Świnoujście.

After the agreement with Gaz-System, we will need to carry out an open season procedure, hopefully this year, which would help define demand for transfer capacity. If this stage is successful, the pipeline could be completed by early 2019.

The timing is a major asset in view of potential gas supply contract negotiations between PGNiG and Gazprom. The present contract expires in 2022, so new negotiations are likely to start in 2019.

The more options there are for buying gas from various sources, the better the negotiating position and the bigger the chance for lower prices.

What are Polenergia’s plans for the near future?

The general plan for the near future is 460 MW in wind farm capacity by the end of 2016. The company will mostly invest in this area. It depends highly on the transition period in the earlier described legal regulations, which would allow for the investments to enter the present certificate system in 2016. A transition period will be necessary from the macro perspective and for new investments to surface in that year.

What funds have you earmarked for upcoming investments?

Our strategy includes the transmission and distribution segment and this project fits into that area.

On one hand, it would provide the possibility of introducing 5 billion cubic meters of German natural gas from the German market, which has high liquidity, allowing for higher diversification in Poland. On the other hand, the project envisages the inclusion of Ukraine in the European gas system. It will also give Polish businesses the opportunity to buy German gas at prices lower that those offered now.

This project is now awaiting political decisions. The further carrying out of this very advanced venture, which is largely developed on both the German and the Polish side, requires an agreement with Gaz-System, because as a privatelyowned entity we cannot operate a gas pipeline in Poland. We also need to agree on the conditions of the entry of gas to Poland after its exit from Germany has been agreed upon with German operators. Another thing to discuss is gas exiting from Poland, because an option also exists for Polish gas to be sent to

We have recently launched two wind farms with a total capacity of 67 MW. We are building a 37 MW facility. This accounts for some PLN 250 million. Apart from that, another possible 200 MW will require PLN 1.5 billion.

Do you want to grow organically or will there be asset purchases?

Our strategy is based on our current portfolio in development.

We have a lot of assets that we can work on, so organic growth will be the main focus. Nevertheless, if acquisition opportunities appear we will consider them. If they fit in and if the competitive process does not excessively inflate the price of the assets, then we will approach them. We do not want to do things at all cost and we do not want to make expensive purchases. u

WBJ OBSERVER • DECEMBER 2014

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COMMENTARY / LAW

What are TUI, PZU and Play doing at Valkea Media?

– Custom Publishing

more at: cp.valkea.com 46

DECEMBER 2014 • WBJ OBSERVER

DECEMBER 2014

25 PAGE HIGH-END LOCALES

SOTHEBY’S ENTERS THE POLISH MARKET. BUT ARE POLES PROSPECTIVE BUYERS? > 56

A VIABLE ALTERNATIVE

25 PAGES OF REAL ESTATE NEWS

REAL ESTA NEWS HIGH STREET

WILL POLES TAKE TO COMMERCIAL RE INVESTMENT FUNDS? > 66

DILEMMAS

BRANDS FANCY HIGH STEETS. YET, NEW MALLS OVERSHADOW DOWNTOWN REVIVAL > 54

SECTION PARTNER

LOKALE IMMOBILIA / NEWS

>LOKALE IMMOBILIA

FOCUS MALL in Bydgoszcz features 41,000 of

NEWS

GLA

l INVESTMENT

Atrium buys Focus Mall in Bydgoszcz

l INVESTMENT

l INVESTMENT

Kapelanka 42 sold for €29 million

Orbis with prelim agreement to buy Accor hotels for €142.3 million

S

kanska has sold its Kapelanka 42 office project, located in Kraków, to an SPV of REINO Dywidenda FIZ, a closed-end dividend real estate fund managed

by REINO Partners. The value of the deal is €29 million. Kapelanka 42 offers 11,700 sqm of office space and is 88 percent leased to tenants like Tesco, Apriso and Sygnity.

(Read interview with REINO Partners’ CEO on p. 66-67). u

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in popularity to expand and revitalize older buildings. This trend is now reaching smaller cities,” said Mike Atwell, Head of Capital Markets CEE, CBRE. Focus Mall was developed by Parkridge Retail Development and delivered in 2008. It offers 41,000 sqm of GLA. Its list of tenants includes supermarket Alma, electronics store Saturn, the Cinema City multiplex, sports accessories store Intersport and a number of fashion brands, like Zara, Reserved and C&A. Its catchment area is estimated to include 470,000 residents. u

DECEMBER 2014 • WBJ OBSERVER

O

rbis has signed a preliminary sales agreement with Accor, Accor Polska, Holpa and Accor Hotels Belgium to purchase their shares in 46 hotels in Poland, Hungary, Romania and the Czech Republic for a total sum of €142.26 million. The company wants to finalize the deal in Q1 2015. The portfolio includes 11 own (1,974 rooms), 17 leased (3,573 rooms), 11 managed (1,685 rooms) and seven franchised hotels (821 rooms). They are operated by Accor subsidiaries in Hungary, Czech Republic, Romania and Poland. In Poland, Orbis will acquire 100 percent of shares in companies Hotel Muranowska and Hotek Polska. u

Images: Wikimedia, Wechta, Link Leaders

A

trium Real Estate has purchased Focus Mall in Bydgoszcz from Aviva Investors for €122 million. Consultancy CBRE advised the buyer in the negotiations.

“Investors are increasingly interested in regional commercial real estate markets, both large and smaller, recognizing their growing potential. In the coming years, these cities will witness a gradual increase in the number of transactions across all segments of the commercial real estate market as well as the implementation of new projects. There is an interesting trend that is rapidly gaining

LOKALE IMMOBILIA / NEWS

l INVESTMENT

l RESIDENTIAL

Prologis buys logistics scheme from Invesco

Apartments for Rent fund buys its first property

P

rologis European Properties Fund II (“PEPF II”) has acquired a 50,000-sqm logistics facility from Invesco Real Estate. The value of the transaction has not been disclosed.

The building is 100-percent leased to Castorama. The facility has been renamed Prologis Park Stryków II. It is located 18 kilometers southwest of Łódź city center and 2 kilometers from the intersection of the A1/E75 highway (Gdansk-Vienna) and the A2/E30 highway (Berlin-Warsaw).

“This acquisition is a unique opportunity to purchase a premium-quality asset,” said Ben Bannatyne, managing director of Prologis Central and Eastern Europe. “This facility complements PEPF II’s existing portfolio and meets rising demand for well-located logistics infrastructure in Poland,” he added.

The transaction follows PEPF II’s first acquisition from Invesco Real Estate consisting of two logistics facilities (94,200 sqm) in Poland and Hungary. That transaction was concluded back in July of this year. u

T

he Apartments for Rent Fund, launched in Q1 2014 by stateowned lender BGK, has acquired its first apartment block, from a developer called Wechta. The property is located in Poznań and contains 124 apartments of 23-72 sqm. The fund did not disclose the deal value, nor the rent levels for the units.

The first tenants will be able to move into the building in March 2015. The building is situated on ul. Saperska, in the Wilda district, 6 kilometers from the center of Poznań.

Earlier this year, BGK stated that it is planning on buying over a thousand rental apartments in 2015 and between 2,000 and 5,000 in 2016. u

€477 million

was the total real estate investment volume recorded in Q3 2014, according to Knight Frank.

WBJ OBSERVER • DECEMBER 2014

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LOKALE IMMOBILIA / NEWS

AXIS WILL OFFER 20,000 sqm of office

l OFFICE

Skanska launches new project in Kraków constructed near ul. Przy Rondzie in the vicinity of the Rondo Mogilskie roundabout, an important transport hub in Kraków.

“We recognized [Kraków’s] potential when we were developing our first investment here – the Kapelanka 42 office complex, which quickly found both tenants and its first purchaser,” said Mariusz Krzak, Regional Director at Skanska Property Poland. u

l OFFICE

Avestus launches phase three of Enterprise Park in Kraków

A

vestus Real Estate has launched the construction of the third phase of the Enterprise Park office complex in Kraków’s Podgórze district. Eiffage Polska Budownictwo, which had worked on the two previous Enterprise Park phases, was chosen as the general contractor.

The leasing area of the D building will total 5,800 sqm and will feature a parking lot for 102 cars.

The scheme was designed by DDJM Biuro Architektoniczne.

It is scheduled for delivery in November 2015. u

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OFFICE

105,000 SQM OF NEW OFFICE SPACE WILL HAVE BEEN ADDED TO THE KRAKÓW MARKET

BY THE END OF 2014, THE HIGHEST NEW SUPPLY IN THE CITY’S HISTORY, ACCORDING TO JLL.

Images: Skanska Property Poland, Avestus Real Estate

S

kanska Property Poland has launched its second office investment in Kraków. The project, called Axis, will offer its tenants some 20,000 sqm of modern office space. Its completion is scheduled for Q4 of 2016.

The new building will feature nine floors and three underground levels with a car park and technical rooms. The scheme will be

LOKALE IMMOBILIA / NEWS

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LOKALE IMMOBILIA / NEWS

l LOGISTICS

Goodman delivers 40,000 sqm for new retail chain

G

oodman has completed a 39,700sqm logistics center near Konin for a newly established grocery retail brand called market-Detal, which currently operates under the Polomarket brand.

“In January 2015, market-Detal will start operating within a network of 170 grocery stores under the new brand,” the company said in a statement. The company is planning on opening at least 30 stores each year and does not rule out future acquisitions.

In August of this year, market-Detal decided to discontinue its cooperation with Polomarket and instead chose to “pursue business goals independently.” u

THE REDEVELOPED CEDET building will total 15,000space sqm of office space and 7,000 sqm of retail

l O F F I C E / R E TA I L

S l CONSTRUCTION

Construction industry expects nearly 4 percent growth in 2015

T

he construction industry will see overall production growth of 0.8 percent this year and of 3.9 percent in 2015, according to a survey conducted by consultancy KPMG, CEEC Research and Norstat Polska. In a similar survey conducted last year, companies expected to see a 1 percent decrease in production this year.

As much as 59 percent of the respondents expect to see a slight increase in the construction sector, over 10 points more than last year (48 percent). A quarter of those polled (27 percent) expect to see a decline in the industry next year.

“After a period of declines in the Polish construction industry, the market has become stable. According to construction company managers, the slow market growth will lead to a gradual increase in revenues,” said Jiri Vacek, CEO of CEEC Research. u

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tate-owned Bank Gospodarstwa Krajowego (BGK) has announced it would provide a €56.5 million loan to Immobel for the redevelopment of the Cedet building in downtown Warsaw. The financing comes from the Polish Investments program.

The retail and office scheme is located on Al. Jerozolimskie and ul. Krucza in Warsaw. Its reconstruction is set to be

completed in Q1 2017.

The redeveloped scheme will comprise 22,050 sqm of GLA and feature seven stories above ground and four underground levels. It will combine office and retail functions, with 15,000 sqm designated for offices on levels 1 through 7 and 7,050 sqm for retail units on floors -1, 0 and 1. Levels -4 through -2 will feature parking for 140 cars. u

l OFFICE

Echo gets loan financing for Q22 Echo Investment has signed an agreement with lenders BZ WBK and PKO BP, securing €116 million for its Q22 office building in Warsaw, the company said in a recent statement.

“Q22 is the largest project in the history of Echo Investment and a priority not only for us, but also for our partners,” said Grzegorz Iwański, financing director at the firm.

The scheme will be located in the CBD area of Warsaw. It will be 155 meters tall and will offer 50,000 of office space. In November, consultancy Deloitte signed a lease agreement for 11,000 sqm in the building. u

Images: Goodman, Shutterstock, Echo Investment, JLL, DTZ, Vastint, Immobel

Cedet gets Polish Investments loan

LOKALE IMMOBILIA / NEWS

WHO’S NEWS Justyna Williams has been appointed as JLL’s director of retail operations at the Property Management department in Poland. She will be responsible for the management of retail properties in JLL’s portfolio. She will oversee 37 retail projects across Poland including Forum Gliwice and Pasaż Świętokrzyski.

Before joining JLL, Williams worked as retail asset manager for Cushman & Wakefield. Before that, as Property Asset Management team leader for Tesco Polska, she was responsible for the management of over 400 properties across Poland, including shopping malls, offices, warehouses and land plots.

She has 12 years of experience in the commercial real estate market in Poland.

Monika Woźniak-Zawioła has been appointed as director for retail properties in the Capital Markets department of DTZ. She has 16 years of experience in the Polish market. She previously worked for Tri-Granit, Apsys and ECE Projektmanagement. In her previous roles, Woźniak-Zawioła was involved in various shopping center projects and in addition to the development process, she has experience in mergers & acquisitions, transaction management, due diligence and financial analysis. At DTZ, she will be responsible for retail and shopping center investment transactions.

RETAIL

980,000 SQM OF RETAIL SPACE WILL BE DELIVERED IN MAJOR CITIES BY 2017, ACCORDING TO COLLIERS INTERNATIONAL.

PHASE TWO OF Business Garden Warszawa will feature 56,000 sqm of leasable

l OFFICE

Hochtief to build phase two of Business Garden Warszawa

V

astint Poland has selected Hochtief Polska as the general contractor for the construction of five buildings comprising stage two of the Business Garden Warszawa office complex, located on ul. Żwirki i Wigury in Warsaw. The project is set to be completed in early 2017. Phase two of the complex offers 56,000 sqm of leaseable space. Hochtief was the general contractor on the first stage of the development. The Warsaw complex is one of Vastint’s three Business Garden investments. In October 2014, the first phase of Business Garden Wrocław was launched, while stage one of Business Garden Poznań will be delivered in early 2015. u

l C O M PA N I E S

l C O M PA N I E S

Ghelamco issues bonds for individual investors

Capital Park could launch second retail fund in H1 2015

helamco has announced it would carry out a PLN 50 million bond issue directed to individual investors.

It will be part of a broader issue program worth a total of PLN 250 million, the company said in a press release.

The securities will have interest based on the six-month WIBOR rate plus a 3.5 percent margin. They will mature in June 2019.

Subscriptions for the bonds are scheduled to take place November 26 – December 9. The company wants to list them on the regulated market of the Warsaw Stock Exchange. u

apital Park could create its second closed-end investment fund based on the retail asset portfolio in the first half of 2015, the firm’s CEO Marcin Juszczyk told ISBnews.

“We now have properties worth PLN 40 million gross and they could be the basis for the closed-end investment fund. We are negotiating the purchase of further assets. I think we will decide to create the fund with assets worth some PLN 50-60 million,” Juszczyk said.

The firm’s Vis-a-Vis convenience center in Łódź, set to be completed in early December and with 93 percent already leased, will be added to the portfolio. u

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High streets issues Despite strong interest from foreign retailers, Poland’s high streets are hardly welcoming to premium brands.

As a result, retailers choose shopping malls instead, which leads to a further decrease in high street rent levels and investor interest. Thus, the vicious circle goes on... likely because of their experience with high streets in Western markets,” Mroczek added.

Major deterrant However, the scarcity of suitable commercial space in Warsaw’s and Kraków’s high streets is deterring premium and luxury brands from entering the Polish market, DTZ wrote in its “Retail Therapy” report. “The influx of high-end brands is restricted by a shortage of appropriate retail space. Iconic designer names prefer

DEVELOPING AN ALTERNATIVE “Poland’s retail market still has a niche in the form of high streets. This part of the market remains highly underdeveloped. However, it could and should be an alternative to shopping malls, as it is in developed Western markets. International funds and retail networks are interested in investing in high streets. I am convinced that the situation will start to improve in the next few years, but it requires creating a strong lobby that will influence the decision-makers, both at the central and at the city level.

Investors are very interested in investing in Polish city centers and creating real high streets would be beneficial to the city fabric, adding new functions and helping keep residents in city centers, which are currently depopulating.

Beata Kokeli, senior director, Retail, CBRE

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high street locations for their flagship stores, but even in Warsaw and Kraków the availability of such quality units is limited,” the report reads.

As a result of the scarcity of adequate space on high streets, premium and luxury brands such as Louis Vuitton, YSL, Bottega Veneta, and Gucci have opted for the Vitkac shopping mall. Numerous other tenants have also chosen shopping malls, such as Warsaw’s Klif, Atrium Promenada, Galeria Mokotów, Galeria Krakowska in Kraków, Stary Browar in Poznań and Klif in Gdynia.

Rents getting lower The problem is further exacerbated by the fact that high street rents are falling or remain unchanged in all major cities except Warsaw. Over the past year, the capital saw a moderate increase of between 1.4 and 3.8 percent in high street rent levels, according to Cushman & Wakefield.

The strongest drop was recorded in Gdynia, where rents on ul. Świętojańska declined by as much as 6.5 percent year-on-year to a level of €29 per sqm per month. Monthly rents on ul. 3 Maja in Katowice saw a decrease of 5.4 percent to €53 per sqm, followed by ul. Floriańska in Kraków, 3.8 percent to €75 per sqm.

Images: Shutterstock, PHN, CBRE

As

many as 31 new brands have entered the Polish market in 2013, more than in 2012 (30) and a year earlier (24), according to a report by real estate consultancy CBRE. Despite strong saturation, foreign brands are still interested in entering Poland, which continues to be the retail leader in the CEE region, said Joanna Mroczek, head of Consultancy and Research at CBRE. “Foreign brands are more willing than Polish brands to invest in high streets,

OA K LA EL EI MI M M O IBLI ILAI A/ /R E N TEAWI L S L OL K OB

IN GOOD COMPANY “Warsaw’s ul. Nowy Świat is a special place. In the past it was where the capital’s cultural and artistic elites would gather. Today, it is one of the places most readily chosen by luxury brands looking to enter the Polish market, as well as companies looking for a prestigious office location. It is also a business and social meeting place as well as a must-see for tourists visiting the city.

No wonder then that ul. Nowy Świat has been high on the list of the most expensive high streets in the world. In a recent “Main Streets Across the World” report by Cushman & Wakefield, ul. Nowy Świat placed 44th in terms of rent levels for retail units, one spot up from last year’s result.

Warsaw is the most rapidly developing commercial real estate market in Poland and remains the top destination for investors and tenants. Most tenants prefer prestigious and one-of-a-kind locations, such as ul. Nowy Świat.

What makes tenants willing to pay high rents?

Most commercial real estate being built now has very good technical standards. It is, however, increasingly difficult to find a unique property, and that’s what luxury brands, government institutions, diplomatic outposts and law firms are looking for. The address of the property is and will continue to be the value-creating factor for premium investments.

Rafał Krzemień, managing director at PHN

€120/SQM IS THE MONTHLY RENT FOR RETAIL UNITS ON UL. NOWY ŚWIAT, THE MOST EXPENSIVE HIGH STREET IN POLAND.

Wrocław’s top high street ul. Świdnicka also saw a 2.4 percent drop in rents to €40 per sqm per month.

The main high streets in Poznań, Szczecin and Łódź saw no change in rents.

Ul. Półwiejska in Poznań has monthly rents at €55 per sqm, al. Niepodległości in Szczecin – €33 per sqm and ul.

Piotrkowska in Łódź – €26 per sqm.

Warsaw’s ul. Nowy Świat remains the most expensive high street in Poland, and 44th worldwide, with rents at €120 per sqm per month, 2.4 percent more than a year earlier. Pl. Trzech Krzyży saw the biggest increase in rents, 3.8 percent to a level of €55 per sqm per month.

Shopping centers return to major cities The data hardly comes as a surprise given that Warsaw hasn’t seen any major shopping malls erected in the city center

for seven years (Złote Tarasy delivered in 2007). Since then, only 15,000 sqm was added to the capital’s city center, within the Plac Unii retail scheme. Meanwhile, most other agglomerations have recently seen major completions: Riviera in Gdynia, Poznań City Center in Poznań, Galeria Katowicka in Katowice and Galeria Bronowice in Kraków.

Still, Warsaw may soon face the same plight as other major agglomerations, given how much shopping center space is in the pipeline. After a few years of increased activity in small and medium-sized cities, developers are once again turning their eye to major agglomerations and Warsaw in particular. “Within the next three years, the deficit in good quality space for lease [in Warsaw] will be offset by new retail investments totaling 400,000 sqm GLA,” said Marta Machus-Burek, director,

Retail Strategies & Development Advisory Services at Colliers International. The capital currently has 1.4 million sqm within 43 schemes.

Altogether, developers will add 980,000 sqm of GLA by 2017 to all major Polish agglomerations, according to Colliers International.

Shopping malls located close to the city center are only one of the problems.

Experts say that one of the biggest limitations for the development of Warsaw high streets is the ownership issue of units located there. Some units are communal and some are privately owned. CBRE postulated that a central re-privatization law, reinstating the position of the Chief City Architect, as well as better dialogue between investors, residents and the city are necessary to allow retail to expand on high streets. u

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Ready for

B Y B E ATA S O C H A

luxury?

As the number of Poles who can afford luxury apartments increases, Sotheby’s International Realty has decided to enter the market. Are Poles interested in upmarket properties?

45,000

The number of Poles with net worth of over $1 million 56

DECEMBER 2014 • WBJ OBSERVER

LOKALE IMMOBILIA / RESIDENTIAL

T

he value of the luxury residential market in Poland stands at a little below PLN 1 billion a year according to KPMG. As the economy continues to develop, the number of wealthy Poles is growing steadily. In 2013, there were close to 40,000 individuals with assets worth between $1-5 million, another 3,000 in the $5-10 million bracket and 1,670 worth $10-50 million, according to Credit Suisse’s Global Wealth Databook. Accord-

ing to forecasts, the number of Poles with assets over $1 million could see a doubledigit increase by the end of the decade.

“I believe that Poland is doing substantially better than Western Europe. Most young Poles believe that their quality of life will be better than that of their parents, which is not something you can say of people in France, Germany or the US,” said Asaf Gottesman, co-founder of Gottesman-Szmelcman Architecture, the author behind the architectural concept of

OVO Wrocław.

Market players seem confident about the future of the luxury residential market in Poland. So much so, that a major international agency, Sotheby’s International Realty, opened its first office in Poland in November. The company will offer luxury apartments and houses as well as commercial properties to wealthy Poles.

It will also sell upscale Polish properties to international clients. Apart from its flagship office in Warsaw, Sotheby’s plans

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Asaf Gottesman, co-founder of GottesmanSzmelcman Architecture, the author behind the architectural concept of OVO Wrocław

Lifestyle choice Your OVO project, scheduled to be completed in April 2016, is a unique one, combining all functions under one roof. Who are your target clients?

The building is like a vertical city in the way that you have retail, hotel, offices and apartments. Potentially, residents on location may want to buy an office or business people may have a lot of international guests. So it will be convenient to have the hotel in the same place as the office with conference facilities.

What do you think makes an apartment a luxury product?

A residential product could be superior for various reasons: design, location, a mixture of amenities and these elements take the product outside the basic commodity market.

How many of the residential units have you sold already?

We’ve already sold 75 percent of the units.

We’ve seen a very strong demand. Poland is a remarkably sophisticated market. You have a very healthy young and middle-aged population. I believe that Poland is doing substantially better than Western Europe. Most young Poles believe that their quality of life will be better than that of their parents, which is not something you can say of people in France, Germany or the US. Do you think that prices for luxury apartments will go up?

Prices for the luxury segment are the least volatile during turbulence. I think that prices in Poland are still extremely low in comparison with other places and I believe there is still a long way to go.

I think the luxury market is just at its beginning.

The most expensive apartment currently on the Polish market costs €5 million

Design, location and a mixture of amenities are what separates a luxury market from the commodity market

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“MOST YOUNG POLES BELIEVE THAT THEIR QUALITY OF LIFE WILL BE BETTER THAN THAT OF THEIR PARENTS, WHICH IS NOT SOMETHING YOU CAN SAY OF PEOPLE IN FRANCE, GERMANY OR THE US.

LOKALE IMMOBILIA / RESIDENTIAL

Ron Ben Shahar, co-owner of Angel Wawel

Market still undervalued Recently, Sotheby’s International Realty opened its first office in Poland. Do you think the Polish market for luxury housing is mature enough? Are there many international investors interested in this market segment?

Definitely. Before the credit crunch, in 2005-2006, we already had a lot of clients from abroad buying luxury apartments in Poland. Poland has become more international, its market is well-known, especially in the European Union. Ukrainians as well as Russians are also potential buyers, given the current political climate. One of our clients was a Ukrainian member of parliament, probably looking for security for a rainy day.

However, most of our clients are local. Yet, about 15 percent of clients are internationals with Polish roots. Those people are planning to live in Poland or buy apartments as a form of investment.

Are luxury apartments an attractive form of investment? Some say the prices are still undervalued in the luxury segment. Would you agree?

I think so. Even in southern European countries suffering dramatically from economic failure, such as Spain, Portugal, Italy, etc., apartment prices are at about €12,000-13,000 per sqm. In Poland, we’re still below that level. In Angel Wawel, we are at €4,000-5,000 per sqm. I believe the prices will at least double within the next 2-3 years maximum.

Is the demand for luxury apartments increasing in Poland?

We definitely see a big increase in demand for luxury for a very simple reason: people have more money now than they had 10 years ago. The supply is growing too.

What other markets outside Kraków are attractive for this type of development?

Warsaw is a big and very interesting market and we are currently looking for projects there. I’m negotiating for a few plots. We are also working on a project in Wrocław.

We’re opening our new elderly care center with a geriatric hospital there. I think all of the secondary cities have potential.

to launch regional offices in major Polish cities: Wrocław, Kraków, Poznań and the Tri-City. Sotheby’s services will also be available to clients of Noble Bank’s private banking services in all of its offices across Poland.

“We have been monitoring the market for some time now and I’m convinced

The average price for a higher standard apartment in Poland stands at PLN 10,000-15,000 per sqm

this is exactly the right time to introduce this type of service. Over the past few years, real properties in various places around the world have become accessible to Poles,” said Arkadiusz Wojciechowski, managing director of Poland Sotheby’s International Realty.

Inbound demand Market analysts are a little more conservative in their optimism. “I’m not entirely convinced that there is enough demand from rich Poles. I think that the real reason behind Sotheby’s entry into Poland is to offer Polish real estate to foreigners rather than the other way around,” said Bartosz Turek, market analyst at Lion’s Bank. “I know there are foreigners interested in Polish land due to its 380 percent price increase in less than 10 years. There is also a demand for unique apartments, which are still much cheaper than elsewhere.

Not to mention purchases of properties

for rent, which can generate appealing yields,” he added.

Developers of luxury apartments are already seeing some demand from outside the country. “About 15 percent of the clients are internationals with Polish roots. Those people are planning to live in Poland or buy apartments as a form of investment,” said Ron Ben Shahar, co-owner of Angel Wawel. “Poland has become more international, its market is well-known, especially in the European Union. Ukrainians as well as Russians are also potential buyers given the current political climate. One of our clients was a Ukrainian member of parliament, probably looking for security for a rainy day,” he added.

Sotheby’s predicts that international investors will be interested mostly in properties along the seaside, in towns like Sopot and Jastarnia, in the Mazury lake district, in the mountains and in major cities: Kraków, Warsaw and Wrocław.

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Long-term perspective Where do wealthy Poles purchase real estate?

The richest Poles invest predominantly in Poland. However, on the premium market they usually buy properties for their own use rather than as a form of investment.

Where is the Polish residential market now compared to other economies?

Prices are significantly lower in Poland than in the West. Polish real estate is cheaper across the board, not only in the luxury segment. The average price of an apartment with a higher standard in the center of Warsaw stands at PLN 10,000-15,000 per sqm. In Paris, it’s four or five times higher, and the difference is even greater compared to London, New York and Singapore, not to mention Monaco and Hong Kong, where the prices are ten times what they are here. Poland is very affordable by that kind of comparison.

Do you think prices for Polish luxury properties will increase or remain stable over the next few years?

In my opinion, prices for all residential properties will continue to increase (due to record low interest rates). However, the luxury segment will see slower price growth than the market as a whole. It’s difficult to observe in Poland, due to insufficient statistics and reporting on the market, but in Western economies, the fluctuations are smaller in the luxury segment than in the other market segments. During crises, luxury property prices decrease slower or remain unchanged, and consequently, appreciate more slowly during recovery.

Do you think that the Polish market will eventually catch up to the mature ones?

As Poles’ wealth increases, so will the prices. But that’s a long term perspective of some 20-30 years. For instance, the most expensive apartment in Poland, an Angel Wawel property, costs PLN 20 million. Meanwhile, even mid-range properties in Western capitals can be several times more expensive.

Do you think that the entry of Sotheby’s International Realty to Poland makes sense right now?

Until now, there hasn’t been an agency in Poland that offers high-end properties on international markets. Very few firms could procure such offers and carry out the transaction safely. Whether it will pan out is another question. I’m not entirely convinced that there is enough demand from rich Poles. I think that the real reason behind Sotheby’s entry into Poland is to offer Polish real estate to foreigners rather than the other way around. I know there are foreigners interested in Polish land due to its 380 percent price increase in less than 10 years. There is also a demand for unique apartments, which are still much cheaper than elsewhere. Not to mention the purchase of properties for rent, which can generate appealing yields.

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“THE REAL REASON BEHIND SOTHEBY’S ENTRY INTO POLAND IS TO OFFER POLISH REAL ESTATE TO FOREIGNERS RATHER THAN THE OTHER WAY AROUND. “The hundreds of historical properties, such as palaces and manor houses, before or after renovation, are also Poland’s forte,” the firm said.

Ballpark figures The main allure of the Polish residential market is, no doubt, its prices, which are still significantly below Western levels, including the upmarket segment.

While the average price of a higher standard apartment in the center of Warsaw stands at PLN 13,000-15,000 per sqm, it’s four or five times higher in Paris. “The difference is even greater compared to London, New York and Singapore, not to mention Monaco and Hong Kong, where the prices are ten times what they are here,” Turek explained.

Poland is not even in the ballpark of Southern Europe, which has seen the biggest downturn over the past seven years. “Even in southern European countries suffering dramatically from economic failure, such as Spain, Portugal, Italy, etc., apartment prices are at about €12,000-13,000 per sqm.

In Poland, we’re still below that level. In Angel Wawel, we are at €4,000-5,000 per sqm,” said Shahar.

Gottesman concurs. “I think that prices in Poland are still extremely low in comparison with other places and I believe there is still a long way to go.

I think the luxury market is just at its beginning.”

It seems that now is the best possible moment to invest in Polish luxury real estate. But is it really? Opinions vary greatly on where the market will be in the next few years. Some say they might even double in the next few years, others predict the market will mature more gradually. “As Poles’ wealth increases, so will the prices. But that’s a long term perspective of some 20-30 years,” Turek explained. u

All images: Wings Properties, Angel Wawel, Lion’s Bank, Orco Property Group

Bartosz Turek, market analyst at Lion’s Bank

EVENTS / XXXXXXXXXXXX

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LOKALE IMMOBILIA / WARSAW INVESTMENTS

Warsaw back on track The long-awaited opening of Warsaw’s second metro line on December 14 will only be a part of the infrastructural changes that are set to transform the Polish capital B Y A L E X H AY E S

The idea of a subway system for Warsaw was first proposed in 1927. However, it was not until 1995 that the first section of the capital’s metro line was actually opened.

Construction work on the first line then continued until October 2008. It seems that Warsaw’s subway was a long time in coming. The second line is now to be opened on December 14 this year, with the Prime Minister Ewa Kopacz and the Mayor of Warsaw Hanna GronkiewiczWaltz having already ridden the length of the new line. However, this latest investment is not the end of the proposed infrastructural changes that are soon to hit Warsaw.

Remarkably, many of the city’s developers seem unfazed by the changes that are now occurring. Dom Development admitted in an email that all the pro-

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DECEMBER 2014 • WBJ OBSERVER

posed changes to the city’s infrastructure had already been factored into the company’s strategy: “We usually plan a few years ahead,” the company wrote.

Likewise, office and retail developers also show little astonishment at the changes taking place. IKEA is the owner of the Wola Park mall, which incidentally has been built almost on top of a proposed subway station to be built with future extension of the second line. Although they admit that they were fully aware of the proposed subway before the development of the center, the company underplays the significance of these future transportation links.

“Increased footfall will also be a result of the expansion and the way the center is managed as much as it will be of the new transport solutions,” said Dagmara

Pozowska, the shopping center manager at Wola Park. In her opinion, the opening up of the city with new transportation links will not necessarily lead to the development of new locations: “Warsaw has one of the lowest rates of retail space saturation in Poland’s major cities. Currently, we have 438 sqm of retail space per 1,000 inhabitants, so the capital is begging for retail space. The solution is to extend and upgrade existing shopping centers, like we are doing with Wola Park, so they are more in line with the changing expectations and habits of today’s consumers.”

Taking a long term view Despite their apparent nonchalance, developers (particularly of apartments) have been scrambling over each other to acquire and develop sites close to future

Image Shutterstock

LOKALE IMMOBILIA / WARSAW INVESTMENTS

subway stations: Atal is planning its Nowe Bemowo estate near the future Lazurowa station; Atlas Estates is currently completing its Capital Art Apartments next to the Rondo Daszyńskiego station; Dolcan is investing in its Czerwona Jarzębina II estate near the Zacisze station; Okam is completing its InCity estate just 300 meters from the Rondo Daszyńskiego station. The list just goes on. Łukasz Maciak, the director in capital markets for DTZ is not surprised by developers’ lack of excitement while adapting their strategies to the new realities of Warsaw’s infrastructure: “The property market is all about vision and planning.

Developers and investors are looking at the current market stage and always trying to predict the future. I am sure that the most active players are analyzing the

PLN 2.8 bln

in EU funds was secured for the construction of the central section of the 2nd subway line

438 sqm

of retail space per 1,000 inhabitants is currently available in Warsaw

PLN 25 bln

will be spent by PKP and the city of Warsaw by 2022 to integrate different forms of transport within the city

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transportation network and allowing people to move around faster and in a more comfortable way, locations in the vicinity of the Dworzec Gdański railway station, where we are currently developing the second phase of our Gdański Business Center project, are becoming even more appealing.”

neighborhood, surroundings and the city itself in the long term,” he said.

There is however, little doubt that the changes to Warsaw’s infrastructure will have a profound effect on the functioning of the city. “The opening of the second metro line, along with various other infrastructure improvements carried out over recent years, such as new bridges over the Vistula River and the modernization of several railway stations, in my opinion, may result in an increased interest in the Praga district,” explained Stanislav Frnka, the CEO of HB Reavis Poland.

“Up till now, Praga was among the least developed areas in the capital city in terms of office supply. This was mainly due to the poor state of many buildings, the poor transportation infrastructure and ‘the bad part of town’ image, which discouraged commercial property developers from any investments. However, things have started to change and there has already been a positive shift in the way the district is perceived. Today, with its revitalized post-industrial properties and bustling cultural life, Praga is seen as a trendy place and the second line of the metro is bound to improve access to the city and allow an easier commute for those employed with companies located in Praga,” he said.

He also admited that access to transportation is key when considering the viability of office projects. “Looking at the larger picture, I would say that the launch of the second line of the metro also increases the attractiveness of other noncentral locations, such as those north of the city center. By improving the public

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A 7-minute ride into town There can be no doubt that getting around the central part of the city will be much, much easier. “The central section of the second metro line will be the quickest and most convenient connection for Praga to downtown and also, after changing trains at the Świętokrzyska station, to the southern and northern areas on Warsaw’s left bank,” claimed the city of Warsaw.

“The trains running on the second line will be an alternative to traveling by car, because riding the subway from the Dworzec Wileński station to Świętokrzyska will take only 7 minutes.”

The municipal transport authority estimates that the metro will take approximately 25 percent of the traffic from the roads between Wola and Praga; a similar number of passengers will substitute trams and buses for the subway. And this will mean that fewer cars will drive into the center and moving around the downtown area will be easier and more pleasant. “We expect a similar effect after the extension of the line by a further six stations (three to the west and three to the north-east). The second metro line will be the quickest and most convenient connection for Targówek and Bemowo with the center and connecting

Rondo Waszyngtona

first line destinations. The journey from (for example) the Targówek II station or from the Księcia Janusza station to ul. Świętokrzyska will take around 10-12 minutes.”

Spending billions Obviously there is a cost to all this investment. People often talk about Poland being modernized with EU funds and the scale of those funds comes to PLN 2.8 billion for this central section of the second line. The total cost of the investment (including the PLN 1.3 billion purchase of rolling stock) comes to nearly PLN 6 billion with most of the money coming from the city budget. But if you think these figures are large, you should see what the city and railways are now proposing to spend to improve the city’s commuter transport links.

A total of PLN 25 billion is to be spent

by PKP (Polish State Railways), its subsidiary PKP PLK and the city of Warsaw between 2014 and 2022 on integrating and improving different forms of public transportation within the city. The city states that much of this money is to be

Images: Shutterstock, Metro Warszawskie

LOKALE IMMOBILIA / WARSAW INVESTMENTS

spent on the further extension of the subway’s second line (the next stage should be opened in 2017, with a third stage planned for 2020, while no completion date has yet been announced for the final stages of the investment).

The city will also be investing in subway station parking lots, rolling stock (including buses and trams) and new tramlines. When it comes to investing in integrating the rail network with the subway system, Piotr Ciżkowicz, member of the management board of PKP said that, “Bringing the second line of the Warsaw metro to the Dworzec Wschodni station is still in the planning stage. It will only be undertaken after its final approval from the city. Of course, we will try in the meantime to integrate both forms of transportation as best as possible.”

However, there are already concrete plans in regard to other stations. For example, the next stage of Warsaw’s second metro line to be completed in 2017 will be integrated with the railway and with the Koło tram stop. There will be a 150 meter roofed platform, escalators and a footbridge over ul. Górczewska. A simi-

lar integration of the metro station with the railway is also being considered in the vicinity of the Wola Park mall.

And even more investment But, it’s not just the city and the railways that are investing in Warsaw’s infrastructure. Eventually, Warsaw should not only have an extended subway system and improved commuter rail links but also two ring roads (an inner and an outer one), while the outer ring road will also include a 2.3 km tunnel under

7 minutes will be the travel time from Praga’s Dworzec Wileński to the City Center

the city’s Ursynów district at a cost of around PLN 6.7 billion, but this time it is the General Directorate for National Roads and Highways (GDDKiA) that is making the investment with funds from the national budget.

The truth is that Warsaw’s infrastructure is in the middle of a long-term investment program that encompasses all aspects of the city’s public transportation network. According to DTZ’s Łukasz Maciak, “the transport investments like the construction of the city’s inner ring road will not only reduce the amount of time on a journey and allow redevelopment of certain parts of the city especially in retail development where catchment areas will be widened, thus increasing a project’s profitability. There are plans to redevelop Centrum Krakowska 61 and build an additional 20,000 sqm retail/fashion area.

All believe that the new investments will boost economic growth in the city and make Warsaw a modern and vibrant city with potential for further growth.” u

WBJ OBSERVER • DECEMBER 2014

65

LOKALE IMMOBILIA / INTERVIEW

A strong debut Until recently, individual Poles had very few possibilities when it comes to investing in commercial real estate. This is about to change. REINO Partners has launched its first closed-end dividend real estate fund REINO Dywidenda FIZ, which purchased Skanska’s latest office scheme in Kraków, part of the Kapelanka 42 complex. It is but a first step towards creating a viable investment alternative for Poles

CEO of REINO Partners

I N T E R V I E W B Y B E ATA S O C H A

Why did you decide to launch the fund now?

The current combination of circumstances is extremely conducive to such endeavors: bleak scenarios for the pension system, coupled with historically low interest rates as well as recent nega-

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DECEMBER 2014 • WBJ OBSERVER

tive experiences with corporate bonds and uncertainty on the stock market (also related to the recent changes in private pension funds).

Another reason for investing in a real estate fund is the scale of transactions, as evidenced by the fund’s first purchase, which usually exceeds the means of even a wealthy individual investor. A fund is the best option for someone looking for more than a small retail unit or an apartment for rent, including in terms of risk, costs and yields. Many of our clients have analyzed these options and chose to invest in a fund.

What kind of investors does the fund target?

The REINO Dywidenda FIZ is a dedicated product, created for wealthy individual investors, who are clients of private banking services. If you want to raise enough money for the purchase of a property such as the Kapelanka office scheme and you want to do it through a nonpublic offer, i.e. targeted at no more than 149 investors, the individual investor has to put in no less than €50,000-€100,000.

It’s basic math, and you have to remember that not everyone who is invited to join the fund actually goes through with it.

How many investors did you get for REINO Dywidenda FIZ? Over 50 investors entrusted us with their savings in our first fund. We are hard at work to prove that they’ve made the best possible choice. For instance, we purchased the Kapelanka 42 scheme within only three months of the fund’s registration.

Do you have plans for more funds?

We want to create more funds straight away. Our next project is scheduled for Q1 2015. We believe that the number

Image: REINO Partners

Radosław Świątkowski,

Do you think Poles are ready to invest in commercial real estate?

Unlike investing in real estate development, purchasing and managing a well-situated property that brings stable leasing returns is a very safe investment.

We believe this is definitely the best alternative to deposits and treasury bonds.

In mature markets, wealthy individual investors locate a sizable part of their financial surpluses in real estate.

There is no reason why Poles shouldn’t do the same. It’s only a matter of time before they start doing it, provided they are presented with a good offer. Particularly those interested in long-term investment. The forecasts for the social security system and the recent regulatory changes in private pension funds [transferring over a half of their assets to the social security system and prohibiting them from investing in bonds thus forcing them to rely on more risky instruments] clearly indicate that in order to ensure a decent pension, we need to look elsewhere. Also because, for inexplicable reasons, Polish pension funds do not invest in real estate.

REINO Partners was created particularly for the purpose of providing Polish investors with an opportunity to make money on Polish real estate. We are one of the most attractive commercial real estate markets in Europe, but thus far, only foreign capital has been making a profit off it. Polish investors are interested in real estate and are ready to entrust their money to experts.

LOKALE IMMOBILIA / INTERVIEW

of investors will increase. Retailers of financial products will also have to change their strategy. With interest rates being so low, the total sum of deposits is still far to big.

force changes in private pension funds, as well as be a catalyst for other projects combining private money with pension savings. Real estate is an ideal asset for that purpose.

Why do you think it is so? Are Poles too risk-averse?

There is simply not enough variety in financial products offered. Yes, there is strong competition when it comes to traditional asset classes. But no reasonable investor will ever invest all their savings in equity and corporate bond funds. The risk is too great. Meanwhile, real estatebacked products bringing stable returns are a perfect middle ground between open-ended funds and deposits.

Financial product retailers will have to expand their offer with alternative assets, particularly real estate. We should expect an influx of such projects next year. Sure, their cumulative value will still be nowhere near the value of foreign investment funds, but the next three to five years should bring a significant change.

The success of funds raised among wealthy individual investors should then

How big a yield can the fund bring?

The projected annual yield will amount to at least 5 percent. That is also the hurdle rate, that is any bonuses will be paid only

“FINANCIAL PRODUCT RETAILERS WILL HAVE TO EXPAND THEIR OFFER WITH ALTERNATIVE ASSETS, PARTICULARLY REAL ESTATE. WE SHOULD EXPECT AN INFLUX OF SUCH PROJECTS NEXT YEAR.

from the surplus over the minimum of 5 percent. This is a novelty on the Polish market and we believe it should become the standard.

Your first purchase, the Kapelanka scheme is a strong core-plus scheme.

Are you going to continue in that asset class or perhaps pursue higher returns in more opportunistic investments?

As far as dividend funds are concerned, we are not going to look for niches. Foreign funds are not only our competition, but also the most likely future buyers of our assets. Exiting an investments is as important as purchasing the right asset.

Naturally, acquiring assets in a market dominated by large foreign players isn’t easy. However, few foreign investors usually have a strong, local team. Meanwhile, keeping apprised of the market situation and identifying potential investments is a key element for success. Creating the right investment vehicles and raising capital are also important. These are the reasons why many major international players are currently talking with REINO about strategic cooperation. u

Every year, a million visitors come to the Copernicus Science Centre. The paths of many people cross here: families with children; teachers and students; members of academia, art and business communities; youth and adults; local activists as well as global innovators. Copernicus opens a space for them in their search for innovative solutions.

The Centre is developing thanks to cooperation with business. Partners are able to get involved in projects related to their line of operations or propose totally new projects. The most innovative solutions are offered, which allows the newest trends and technologies to emerge. As Copernicus' strategic partner from the beginning, Samsung supports the Robotics Lab, the Robotic Theatre, Evenings for Adults and contributes equipment to exhibitions. The company is also engaged in possibilities for new technology presentation: in 2013, during the “Good vibrations” exhibition Copernicus was filled with the sound of a concert played entirely on... tablets. This same equipment has become a part of the Centre, along with 3D screens – special, mobile stations allowing animators to lead science experiments. The guests are enthralled, as their interest in new technolgies peaks.

Another example is the Encoding Zone, where young visitors can become acquainted with the Scratch programming language. Such custom-designed cooperation leads to extraordinary innovative projects. Surely, it's important for business to know that such cooperation and the resulting offer of original endeavors is more aptly accepted by target consumers, as opposed to standard advertising. The Copernicus Science Centre, thanks to its network of cooperation with various partners, can inform, educate and influence society in a wider scope than it would be able to do so working alone. As a result of joining efforts a new quality emerges.

WBJ OBSERVER • DECEMBER 2014

67

LOKALE IMMOBILIA / BIM

B Y A L E X H AY E S

On the eve of a BIM revolution

The proponents of Building Information Modeling claim a revolution is coming to the Polish construction industry

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DECEMBER 2014 • WBJ OBSERVER

I

magine you are responsible for maintaining a building and you need to hunt down a faulty electrical installation. After a day in the cellar, looking through incomplete documentation that was stored only as an alternative to being thrown away, a miracle occurs and you find something: a scrap of paper that states (probably in pencil) where this installation should be. With flashlight in hand, you make your way to yet another forgotten recess of the building only to be confronted with a sewage pipe.

Obviously, due to some oversight, there must have been a clash during the design process and the general contractor, on

LOKALE IMMOBILIA / BIM

discovering that he was to install a pipe in the same place, must have decided to find somewhere else to place your elusive faulty wiring. God alone knows where it might be now since the general contractor will have had forgotten it long ago. Theoretically, with BIM such a nightmare scenario should never occur.

More than just a concept But what is BIM? The acronym itself stands for Building Information Modeling. David Philp, the head of BIM at consultancy Mace claims that: “BIM has many definitions but essentially it is about the

WBJ OBSERVER • DECEMBER 2014

69

creation and management of digital data in our built environment, it allows the virtual production, analysis, evaluation and optimal development of an asset in a digital environment that mimics the understanding and behavior of the solution to the realization of that solution in reality.”

The basic concept seems simple: All the information regarding a building or structure is held digitally and can be made fully accessible to interested parties over the internet. Even during the very earliest design stages when building to BIM specifications, all the details of a future construction are held in a central database in the form of a three-dimensional digital model. In fact, this data model will slowly grow ever more elaborate as different parties collaborate on its development until the model becomes the actual design itself.

At the beginning, the building might be no more than an amorphous block. An architect might then add windows. The placement of these windows can instantly be seen by every party involved, including for example the investor or maybe even the general contractor.

Later on, someone other than the original architect might specify what kind of frames these windows will have. Even minutiae such as the exact make of electrical socket might eventually be specified by a subcontractor, who just happens to know that this is the type of fitting he has stored away in stock. The model will go down to the finest possible detail so the exact number of screws and rivets required should be known. Design clashes should be minimized because everyone is

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DECEMBER 2014 • WBJ OBSERVER

working on the same centralized data and problems will become apparent in the model and not on the site.

But BIM goes beyond just the design stage. It also includes modeling the construction process itself. Before any work starts on the site, it will already be known how long each stage of the construction should take; what work must be completed before the next phase begins and even what materials need to be delivered to the site and when. In effect, the structure is first built in the virtual world, again, eliminating problems before they manifest themselves in the real world.

If somehow some kind of clash still does occur and a contractor is forced to come up with his own creative solutions, the changes that he makes are added to the central design.

BIM can even be used by property managers since it will also model the costs and energy usage of a building over its lifetime. In effect, with a BIM building everything that can be known is known and these data are easily accessible.

Raising the standard “For me, it’s obvious in the long term that it will become industry standard,” insisted Jonathan Cohen the director of building consultancy for Eastern Europe at Colliers International. He pointed out that, “In Western markets it’s already becoming industry standard and in Central Europe we are generally a little bit behind in terms of this type of innovation, as has been the case with green certification.” He’s not the only one who believes that BIM will soon be adopted universally.

“What you’ve got to realize,” said Iain Leyden the country manager for Poland at Turn-

er & Townsend, “is that in many other industries simulation is not new, it’s been around for a long time. In the car industry, in the aeronautical industry they work on the basis of designing cars or planes through modeling them and simulating them before they actually get into the factory production stage, so it’s not a new thing. It’s a new process for the construction industry, but BIM models associate additional information about asset components with geometry in a structured way. This lets us build project documentation that enables buildings and other assets to be constructed, used and maintained efficiently.”

For Jonathan Cohen, “having all project information easily accessible is just common sense.” He enthused, “At the moment when you look at a lot of buildings, when they get built, the documents are incomplete, then they get adapted and the documents for that are incomplete and then some people do other things in the building and there are no documents at all. People maintain the buildings and don’t keep complete documentation, people move the documentation, it gets lost and 15 years after the building has been built, you go and look at it and the documentation bears little or no resemblance to the actual state of affairs. Having a system where you’ve got everything in a very managed, ordered format in one file which allows you to see everything electronically and allows other people in other countries to look at the same information that you’re looking at obviously just makes complete sense.”

That sort of product is already available in Poland, but developers are not generally prepared to pay extra for it and as the majority of designers do not use BIM platforms as

Images: Shutterstock

LOKALE IMMOBILIA / BIM

LOKALE IMMOBILIA / BIM

standard, it produces an extra cost. “The reality is that in the long term, if your product isn’t equipped with this and all of the other products that are being brought to market do have it, then your product is going to be considered inferior, as is now the case with uncertified green buildings,” Cohen said.

A collaborative approach Despite his enthusiasm, there are very few that have adopted this approach in Poland.

Jonathan Cohen knows of only a few tenants that have insisted on BIM for their fit-outs.

Recently, at a conference at the British Embassy in Warsaw representatives from the General Directorate for National Roads and Highways GDDKiA and Polish State Railways PKP saw a presentation of how BIM is being used to model a bypass around Stockholm in Sweden, which includes many kilometers of tunnels. In Iain Leyden’s opinion those representatives were concerned more with the immediate cost of implementation and whether Polish professionals have the skill set to implement it instead of whether the BIM process would benefit their projects.

He claimed that Polish construction professionals already have the necessary skills and that the costs can be quickly recouped.

“If it costs one to design it, ten to build it and one hundred to operate it, over the life cycle of the asset, you may expect 10-20 percent reduction of construction costs and

10-20 percent in the operational costs. That’s huge compared to the cost of implementing a BIM process. The point is that Polish architects and engineers are already working with technologies that model geometry, however, BIM-enabled working allows this information to be shared by different project participants and also between different stages of design, construction and operation to

“IN MANY OTHER INDUSTRIES SIMULATION IS NOT NEW, IT’S BEEN AROUND FOR A LONG TIME. allow other parameters to be modeled such as cost, construction process, time schedule, operational maintenance. Clients would benefit from an improved understanding of design, reduced costs, less re-working, optimized delivery time and reuse of the information for maintenance and alterations,” he explained.

Robert Handzel of MCKB has also emphasized the value of this collaborative ap-

proach. “It’s not only the designer that can make use of the data model, but also the general contractor and later on the property manager. BIM eliminates a number of painful current problems such as a lack of coordination and the successive reduction of time for a building venture including the design phase, the valuation, the schedule analysis and the analysis of the work progress. The design and construction work can as a result become cheaper.” He also believes that BIM reduces misunderstandings between the different parties involved in the construction of a BIM building. “The greatest benefits result from the immediate access to information, which is valuable at every stage of a construction investment. For example, it makes it easier to come to an agreement with the investor with regard to the building and it is easier for the investor to understand designers when the understanding is based on a three-dimensional graphic instead of flat documents.”

All the experts seem convinced that BIM is the future of the construction industry.

And there is also clear official support within Europe because in January of this year an EU directive was passed that stated that governments can, if they so choose, make BIM a mandatory requirement for all public tenders from 2016. Despite all this, it still seems strange that few people have heard of this innovation in Poland. u

WBJ OBSERVER • DECEMBER 2014

71

CITYSCAPE / BYDGOSZCZ

Did you know?

The city is one of the biggest railroad junctions in Poland, with two national lines intersecting here. The east-west connection from Kutno to Piła and the north-south coal trunk-line which connects Silesia with the Baltic seaport of Gdynia. It also services several local and regional rail lines. The city is an important part of the Pan-European transport corridor VI, which connects Gdańsk with Zilina and Brno. The city has a rich past when it comes to rail transport. In 1849, the first ever headquarters of a state-owned railway was located there.

It supervised railways in East and West Prussia and the only connection at the time between Russia and Germany (Warsaw-Bydgoszcz line).

may 2014

Number 04

PLN 24.50 (VAT 8% included) ISSN 2353-3714 INDEX-RUCH-332-127

polaNd’s fIrst decade IN the eu > 22

FoR DAILy NEwS VISIT US AT

wbj.pl

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DECEMBER 2014 • WBJ OBSERVER

INfrastructure update the state of polIsh hIghways > 32

dice+ the first polish

product to hit apple stores > 40

3:26 PM

stayINg healthy how poles are becomINg obsessed wIth fItNess > 36

INtervIew

4/25/14

Kulczyk Jan Kulczyk, currently Poland’s talks global richest man was born business here. He started his business career in the early

The city aims to grow even more, with future investments planned to enrich the current business landscape of the city and secure its position as the economic leader of the region.

OF REAL

ESTATE NEWS

REAL ESTA NEWS TE

ean-13_9772353371403_04.pdf

20 PAGES

20 PAGES

CY

CMY

Y

M

C

• we G i r l s • C o c k t a i l b a rs • S e le n a • C o m m e n t a r y • N ew s

K

ALSo IN THIS ISSUE:

80s when he set up one of the first companies in Poland that specialized in foreign trade. His father Henryk helped him by giving him the funds to set up the enterprise. He mostly sold chemical and construction materials.

He was also a Volkswagen dealer and served on management boards of his father’s many companies. After the fall of communism, Kulczyk invested in real estate, energy, telecommunications, where he made billions. Since 2000, he has missed the top spot in the richest Poles ranking only once, after his divorce in 2007.

MY

Nowadays, the city is expanding as a business center, with numerous IT companies stationed in Bydgoszcz, not to mention other important players, such as train manufacturer PESA, which are also looking at the city as a perfect place for future investments. Such a conclusion can be clearly justified by looking at the number of business parks located in Bydgoszcz.

1

WITH

may 2014

The city’s history begins in the Bronze Age, when the first settlements were established at the location of the current city. Since then, the city has effectively used its location near the rivers Brda and Vistula to consolidate its position as the center of trade in the

region, especially as an important point on the amber trade trail.

+

pat cox oN europe’s problem wIth russIa >16

CM

H

ome to the Voivode, Bydgoszcz is a cultural, economic and educational center located in Kujawsko-Pomorskie voivodship, in northcentral Poland. Together with Toruń, Bydgoszcz holds the right to directly impact changes occurring in the voivodship, not only because it is the most rapidly developing city in the region, but also because the main bodies governing the region are located in those two cities.

EuropEan Economic congrEss 2014

On the right tracks

Images: Wikimedia, Shutterstock, PESA, Kulczyk Investment Press Service/WBJ

Favorite son

LONDON 1,243 KM PARIS 1,192 KM BERLIN 316 KM

MOSCOW 1,298 KM

PRAGUE 419 KM

ROME 1,318 KM

MAYOR: RAFAŁ BRUSKI AREA CODE: 52 AREA: 175,98 SQ KM

MAJOR AIRPORT BYDGOSZCZ AIRPORT

POPULATION (DEC. 2013) 359,428 HIGHWAY S10

WORKING-AGE POPULATION (DEC. 2012)

229,244

UNEMPLOYMENT RATE (JULY 2014)

8.0%

AVERAGE PAY (DEC. 2013)

PLN 3,589.06

NUMBER OF UNIVERSITIES (VOIVODSHIP)

21

NUMBER OF STUDENTS (VOIVODSHIP)

49,494

NUMBER OF GRADUATES A YEAR (VOIVODSHIP)

14,307

PERCENTAGE OF CITY COVERED BY ZONING PLANS: 31.97% MAJOR INDUSTRIES: Transport IT Electronics

MODERN OFFICE SPACE 39,000 SQM OFFICE VACANCY RATE 24.6% PRIME HEADLINE RENTS €8.50-€10.00

WBJ OBSERVER • MAY 2014

73

OBSERVER TOP 10 Law firms

RANKED BY TOTAL NUMBER OF LAWYERS IN 2014

1

Dentons

Total number of lawyers: 174 Number of board certified lawyers: 107 Number of licensed advocates: 35 Number of licensed legal advisors: 72 Total number of employees: 305 Representative transactions: client service; value in PLN mln; cooperating law firm: PEKAO (negotiation and documentation preparation for the financing of ITI Group and Canal+ companies; 400.0; Weil & Gotshal); Immofinanz (advising the Austrian real estate group on the sale of Silesia City Center in Katowice; 1,750.0; Linklaters); TAURON Polska Energia (advice on financing granted by Bank Gospodarstwa Krajowego; 1,000.0; Allen & Overy)

2

CMS Cameron McKenna Dariusz Greszta Sp.k.

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DECEMBER 2014 • WBJ OBSERVER

Number of board certified lawyers: 71 Number of licensed advocates: 18 Number of licensed legal advisors: 53 Total number of employees: 230 Representative transactions: client service; value in PLN mln; cooperating law firm: WND

Image: shutterstock

Total number of lawyers: 135 WND = Would Not Disclose. Research for the list was conducted in January - March 2014. Number of employees is as of February 2014. All information pertains to the companies' activities in Poland. Companies not responding to our survey are not listed.

Only 11 law firms are listed. Full list is available at: bookoflists.pl

3

Sołtysiński Kawecki & Szlęzak Kancelaria Radców Prawnych i Adwokatów Sp.k.

Total number of lawyers: 123 Number of board certified lawyers: 78 Number of licensed advocates: 15 Number of licensed legal advisors: 63 Total number of employees: 230 Representative transactions: client service; value in PLN mln; cooperating law firm: WND

4

GWW Woźny i Wspólnicy Sp.k.

Total number of lawyers: 93 Number of board certified lawyers: 64 Number of licensed advocates: 4 Number of licensed legal advisors: 45 Total number of employees: 116 Representative transactions: client service; value in PLN mln; cooperating law firm: Telecom operator (legal services for the restructuring of the intellectual property management process in the corporate group; 1,350.0; WND); INEA (securing a strategic investor -Warburg Pincus; 400.0; Włodzimierz Głowacki i Wspólnicy, Clifford Chance); aviation fuel supplier (consultancy in the field of sharing fuel infrastructure for the needs of other market participants, consultancy on the transfer of sales activity; WND; WND)

5

Koksztys Kancelaria Prawa Gospodarczego Sp.k.

Total number of lawyers: 91 Number of board certified lawyers: 39 Number of licensed advocates: 18 Number of licensed legal advisors: 21 Total number of employees: 320 Representative transactions: client service; value in PLN mln; cooperating law firm: WND

6

Weil, Gotshal & Manges - Paweł Rymarz Sp.k.

Total number of lawyers: 72 Number of board certified lawyers: 46 Number of licensed advocates: 7 Number of licensed legal advisors: 39 Total number of employees: 136 Representative transactions: client service; value in PLN mln; cooperating law firm: IBZ WBK (advice on merger with Kredyt Bank; 4,500.0; Domański Zakrzewski Palinka, Allen & Overy); PKP, PKP Cargo (advice on IPO and quotation of PKP Cargo shares on WSE; 1,400.0; White & Case); PLL LOT (representation in connection with claims against Boeing (suspension of ability to operate Boeing 787 aircraft); 100.0; WND)

7

Drzewiecki, Tomaszek & Wspólnicy Sp.k Total number of lawyers: 70 Number of board certified lawyers: 39 Number of licensed advocates:18 Number of licensed legal advisors: 21 Total number of employees: 93 Representative transactions: client service; value in PLN mln; cooperating law firm: Polski Holding Nieruchomości (advisory in the field of real estate; WND; WND); Red Bull GmbH (application proceedings before the Polish Patent Office; WND; WND); Emperia Holding (representation in the arbitration dispute against Ernst & Young Audit; WND; WND)

7 Total number of lawyers: 70 Number of board certified lawyers: 40 Number of licensed advocates: 17 Number of licensed legal advisors: 15 Total number of employees: 120 Representative transactions: client service; value in PLN mln; cooperating law firm: Griffin Group (representation in litigation with the city; WND; WND); Griffin Group (advising on the acquisition of Batory Office Building, Philips House and Nordic Park; 710.0; WND); Arseus NV (advising on the acquisition of Polish company from the pharmaceutical sector; 1,590.0; WND)

9

Greenberg Traurig Grzesiak Sp.k.

Total number of lawyers: 66 Number of board certified lawyers: 45 Number of licensed advocates: 10 Number of licensed legal advisors: 30 Total number of employees: 117 Representative transactions: client service; value in PLN mln; cooperating law firm: Cyfrowy Polsat (acquisition of Polkomtel; 6,150.0; Dentons, Lockelord); Energa (IPO; 2,400.0; Linklaters C. Wiśniewski i Wspólnicy, Allen & Overy); Blackstone (purchase of 14 logistic centers; WND; Hogan Lovells)

10

Linklaters, C.Wiśniewski i Wspólnicy, Sp.k.

Total number of lawyers: 63 Number of board certified lawyers: 43 Number of licensed advocates: 5 Number of licensed legal advisors: 38 Total number of employees: 100 Representative transactions: client service; value in PLN mln; cooperating law firm: Alinda Capital Partners (acquiring of 100 percent of shares in Emitel; WND; Weil, Gothsal & Manges); Allianz Real Estate (purchase of Silesia City Center by a consortium of companies (Allianz Real Estate and ECE); €412 million; Dentons); Ministry of State Treasury (Energa IPO on the Warsaw Stock Exchange; 2,400.0; Greenberg Traurig, Allen & Overy)

10

T. Studnicki, K. Płeszka, Z. Ćwiąkalski, J. Górski Sp.k.

Total number of lawyers: 63 Number of board certified lawyers: 47 Number of licensed advocates: 18 Number of licensed legal advisors: 29 Total number of employees: 82 Representative transactions: client service; value in PLN mln; cooperating law firm: WND

WBJ OBSERVER • DECEMBER 2014

75

TECHNOLOGY TO MAKE YOUR LIFE EASIER

WE LIVE IN AN AGE OF GADGETS: some are useful, but most are just a waste of time and money. We sift through the latest tech available to pick those that we believe will help you live your life more comfortably and confidently.

Theorangechef.com

kyoceradocumentsolutions.pl

Ototo

Ototo is a device that lets you create an instrument out of anything that conducts electricity. You can plug into any product, be it vegetables or fluids, and even the human body. It’s got 12 sensitive inputs and a range of different sensors which lets you make even more combinations. Just grip an object using crocodile clips and plug it into the soundboard and make music simply by touching the objects. You can also plug Ototo into your PC and use it as a MIDI controller.

Price: £60

Ototo.fm

Images: Kyocera. Ricoh, Ototo, Firebox, LG, the3doodler.com, getdoxie.com,

Price: 3040 model PLN 3,600, 3540 model PLN 4,000

DECEMBER 2014 • WBJ OBSERVER

Price: $150

Kyocera’s M3040dn and M3540dn With the impact of the economic crisis still felt, today’s office workers are busier than ever. When workloads are high, deadlines are short and budgets are tight, the last thing work groups need is a slow and unreliable multi-function printer (MFP) that requires their constant attention. With scan speeds equaling or even surpassing engine speeds, the Kyocera’s M3040dn and M3540dn, 75-sheet reversing document processor makes light work of big copy and scan jobs. Its capability of scanning A6 even in duplex is perfect for vertical markets such as healthcare and the financial sector.

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Prep Pad is a scale that not only weighs your food, but also tells you how many calories it has and gives you real-time insight into your nutrition with an accurate breakdown of carbs, protein, fats, minerals and vitamins.

It has over 300,000 food products in its database. Although you need an iPad (3 or newer) or an iPhone (4S or newer) to use the Prep Pad, as without the Apple devices it can be used as a chopping block at most.

>>

>>

Prep pad

>>

GADGETS

Ricoh PJ WX4141

Price: PLN 7,000

The Doxie Flip

Ricoh.com

Getdoxie.com

KizON band

>>

>>

Price: $150

>>

The Doxie Flip is a battery-powered compact scanner which you can take with you anywhere. It has a detachable lid and a transparent scanning window, so you can scan not only books and documents, but coins, pictures, pieces of paper, or even graffiti on the wall. It can scan spaces as big as A6 format, but also lets you merge multiple scans into a larger image if you want to scan something bigger.

Ricoh PJ WX4141 series projectors offer all the flexibility and versatility demanded by today’s agile businesses.

The ultra short throw devices can be placed just centimeters from a screen and still display vivid, eye-catching images up to 80 inches in size. Compact and lightweight, they convert the smallest spaces into ad hoc meeting rooms or information displays. With integrated speakers and extensive connectivity options, the 3D-ready projectors are suitable for everything from business presentations to eyecatching multimedia entertainment.

Poland is the second country in the world (after South Korea) where LG has released its KizON band, which allows parents to track their children’s activity.

It looks like a watch and thanks to the GPS adults can see where their young ones currently are. It also allows the kids to call a pre-programmed number by pressing the large (and only) button on the device. It can also receive calls (from up to three numbers).

Price: PLN 299

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3Doodler The 3D printers are still a little bit pricy, but you can now join the revolution with 3Doodler. You won’t be able to produce intricate products and designs, but rather crude 3D drawing-like designs, but at least you’ll be able to test drive the phenomenon before the prices of professional 3D printers drop to acceptable prices.

The 3Doodler is basically a printing pen. You draw in the air and the melting plastic quickly hardens forming three-dimensional shapes. Be careful though not to burn yourself as the plastic can reach 270°C. Price: £99

The3doodler.com

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WBJ OBSERVER • DECEMBER 2014

77

EVENTS / WARSAW WHISKY FEST

WHISK ME UP SCOTTY! Producers of whisky (and whiskey) from around the world met in Warsaw

Overall, nearly 30 producers and distributors showcased their products. Some well-known names in the whisky world, like Ardbeg or Glenmorangie, were there, but also present were brands that are very hard to find in Poland, or are not yet even available here.

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Images: Whisky Warsaw Fest

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ith Poles drinking more whisky each year (currently 19 million liters vs 3.2 million in 2004), it’s no wonder that someone has finally decided to organize a festival dedicated to this fine alcohol. Such events are organized all over the world and Poland has finally joined in.

The two-day long event could be considered a success, especially given that the second edition has already been announced.

Overall, nearly 30 producers and distributors showcased their products.

Some well-known names in the whisky world, like Ardbeg or Glenmorangie, were there, but also present were brands that are very hard to find in Poland, or are not yet even available here, like Lost Distillery products. The Scottish company has a unique mission, to recreate old whisky formulas from centuries ago, researching old recipes and documents.

Most of the producers were from the birthplace of whisky – Scotland, but whiskey makers from other nations were also strongly represented, from Japan and India to Italy and Sweden. Other spirits were also proudly displayed, from rum (and rhum) to cognac, armagnac and many, many more. The festival was a perfect opportunity for beginners as well as seasoned veterans. The first group could sample a huge variety of whisky, from fruity-ones to peaty-ones and see which are more suited to their tastes. Ev-

EVENTS / WARSAW WHISKY FEST

ery stand had a number of products that you could taste for free and some more special bottles, for which you had to pay a small fee to try a dram. Experts could buy tickets to master classes, where selected brands presented their most unique and exclusive bottles. Each class was hosted by a professional from that company who could talk for hours about every single bottle sampled.

Pretty much every bottle on display could be purchased with a 23 percent discount at the store next door, so you could bring home the bottle that you fancied the most during the tasting.

If the event had any drawbacks, it would be a lack of quality food on location. Whisky goes well with some dishes (like Indian food, or seafood) and filling up your stomach is recommended when you sample so much alcohol. The only available food was from the simple cafeteria that serves food for those working in the office building on location. A soup or grilled chicken are hardly dishes that should compliment such fine whiskies.

The only solution was to occupy the Manufaktura Czekolady stand, which served and sold some delicious chocolate.

Overall, it was a great weekend for a whisky connoisseur, or if you just wanted to try something different than the popular Johnnie Walker’s and Jim Beam’s and since, according to organizers, some 1,500 guests attended, next year’s edition should be even a bigger success.

1 3

2

1. (L-R) Jarosław Buss, co-organizer of the festival; Justyna Grzelak, PR manager Warsaw Whisky Fest; Bożydar Iwanow, journalist 2. (L-R) Charles MacLean, Scotland’s leading whisky expert; Jarosław Buss 3. Steven McConnachie, International Sales Manager at Duncan Taylor 4. Attendees sampling fine spirits

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79

EVENTS / CHEMISTRY

FORUM

CHEMICAL INDUSTRY FORUM & AWARDS GALA The chemical industry has become one of the leaders of Polish foreign expansion in recent years On November 20, the third edition of the “Chemical Industry Forum & Awards Gala” was held in Warsaw. It was organized by the Executive Club in cooperation with the Polish Chamber of the Chemical Industry.

The debate was attended by the most important leaders of the chemical industry, represented by the presidents and members of the board of the largest Polish and international companies as well as government representatives

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The Polish Chemistry Diamonds await the winners

Images: Executive Club

D

uring the third edition of the “Chemical Industry Forum” conference, under the auspices of the Ministry of the Treasury, the Polish chemical sector was evaluated in the context of the potential to compete on the global market.

Efficiency in the implementation of innovation, collaboration with the world of science and taking on challenges related to changes in environmental regulations were also discussed.

In his opening speech, Treasury Minister Włodzimierz Karpiński pointed to the strengths of the sector and emphasized opportunities associated with the development of foreign markets. “It is encouraging that the chemical industry is growing with private companies in the sector, as well as state interest companies, creating a dynamic vehicle for Polish export and increasing production. The chemical industry has become one of the leaders of Polish foreign expansion in recent years. It also provides the possibility of contributing many jobs in related fields. This shows very

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of the chemical industry also took place.

It is one of the most important and rapidly growing sectors of the economy, but still requires modernization and full utilization of its most important assets.

“We have trace amounts of oil and no arguments to influence its price. We need to look for strengths elsewhere. I see them in our scientific resources and educated, talented people who have the satisfaction of directly affecting the outcome and development of their companies,” pointed Marek Sokolowski, vice president of the Board of Grupa Lotos.

The crowning of the forum was the “Polish Chemistry Diamonds” awards gala held to award prizes for the best entities in the chemical sector. In the category of Investment of the Year, the award went to Kulczyk Investments for its acquisition of a majority stake in Ciech. The Leader in Innovation award went to the Sochaczew branch of Boryszew - Boryszew ERG (the jury did not award prizes). For Product of the Year – Grupa Azoty Zakłady Azotowe Kędzierzyn received recognition for Oxoplast Medica. The Leader in Ecology award went to Grupa Azoty and a special mention went to Kemipol. CSR chapter title leader honored two entities equally: Lotus Group and BASF Poland.

The award for the Supporting Entity of the Year went to the Polish Chamber of the Chemical Industry and the title of Top Executive of the Year was won by Tomasz Kalwat, Chairman of the Board of Synthos. A special award in the category of Efficiency in Management, was awarded to PKN Orlen.

Adam Leszkiewicz, CEO of the Grupa Azoty Zakłady Azotowe Kędzierzyn

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Images: Executive Club

Treasury Minister Włodzimierz Karpiński

clearly that without chemistry you can not create a strong and dynamic economy,” said Minister Karpiński.

The minister also pointed to actions taken by the chemical industry towards innovation, "We must use the time, which is given to us in the next budget perspective. The chemical industry can boast, compared with other industries, of very good and effective cooperation between the industry and scientific research centers, and the quality of R & D departments may be the subject of envy. We have a great opportunity to effectively use the money for innovation, new technologies, extension of the production chain, increased margins on finished products, etc. Here we must look for competitive advantage,” stressed the minister.

The issue of innovation and development of the industry were raised in discussion panels, which focused on the topic of the position of Polish chemistry on the European and world markets.

Adam Leszkiewicz, CEO of the Grupa Azoty Zakłady Azotowe Kędzierzyn indicated that the sector is facing an opportunity to strengthen the position of Polish chemistry on a global scale. “Innovation in the industry does not look as we would like it to look, but there are ideas for improving it. The Innochem program, carried out jointly by the Polish Chamber of the Chemical Industry and the National Centre for Research and Development is very important here,” said Adam Leszkiewicz.

A debate on improving the efficiency

LIFESTYLE / RESTAURANTS

By Vedika Luthra

POLIN MUSEUM OPENS A shimmering glass edifice sits on ul. Anielewicza, a sector of what used to be the Warsaw ghetto. “We built our museum in glass to show that there is no fear or shame in being Jewish,” our tour guide explained.

The extravagant structure is quite a contrast to its austere surroundings; nonetheless, the location of the Museum of the History of Polish Jews (POLIN) couldn’t be more perfect

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ithin the building, a spiraling staircase gives way to the entrance of an extensive exhibit, which was unveiled to the public on the 28th of October. In attendance were the Polish and Israeli presidents. Other lauded guests included the founding benefactors who contributed sums that totaled roughly PLN 145 million. No doubt, their donations were put to good use.

The plight of Jews in Poland often focuses on the holocaust. However, Jewish culture had existed in the country for over a millennium before the World War II. With an aim to showcase a vast timeline of Jewish culture on Polish soil, the museum’s main exhibit consists of eight massive galleries.

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It is evident that meticulous effort has gone into each presentation. Take their replica of a cupola originally from the Gwoździec synagogue (a wooden synagogue built during the 17th and 18th centuries in what is now Ukraine) – 400 artists, students and craftsmen from the United States, Israel and Poland have intricately and very accurately reconstructed the original designs.

exhibitions is that in the process of displaying Jewish culture, the creators have masterfully showcased Polish history as well.

After all, the two are intertwined.

Within the gallery “On A Jewish Street,” a long hallway imitates the streets of urban Poland prior to World War II – an old movie theater, pharmacy and supermarket are projected on the walls. The beauty in these

Unlike a traditional museum, POLIN is very much in line with 21st century ideas. The concept of multimedia prevails throughout. Sound effects in the backdrop and short films playing on screens deliver

DECEMBER 2014 • WBJ OBSERVER

a realistic experience. Today, the Jewish community in Poland has nearly ceased to exist, but a million or so Israeli Jews visit Poland annually – their history belongs here.

A line of people extending well past the walls of the museum can be seen. Everyone knows that a visit inside is well worth the wait.

Images: Vedika Luthra/WBJ

Each gallery shows a chapter of Jewish history in Poland – arranged by date. Within the first few galleries, the Middle Ages, the Baroque period and the Renaissance are featured. Each section has carefully selected artifacts and representations.

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LIFESTYLE / RESTAURANTS

By Vedika Luthra

THE HIGHLIGHT OF WINTER: WILANÓW’S LABYRINTH OF LIGHT

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broad archway illuminated in streams of yellow fairy lights gives way to the gardens surrounding the Wilanów Palace, a magnificent structure that has survived Poland’s partitions in addition to both World Wars. Exiting the archway reveals a glimpse of what is to come: A medley of bright colors, meticulously arranged resembling a maze, known as the Labyrinth of Light. Walking through it is like entering a fantasy. The theme of the exhibit, like last year, is Lewis Caroll’s Alice in Wonderland. Within the bright green walls of the maze are key symbols essential to Caroll’s original story – a giant tea set bathed in white, a multiple-tier cake for the tea party, all complex structures built out of a variety of small, colorful fairy lights. Throughout the week, the Alice in Wonderland exhibit is open to visitors from 16:00 to 19:00 for a minimal fee (make sure to visit before March of 2015). However, on Saturday evenings, you can witness the

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main jaw-dropper, a spectacle of lights illuminating the night sky, changing colors, flashing on and off across the palace and its garden to tell a story. The whole concept seems almost unreal. This is the Labyrinth’s main attraction, and for good reason: Prepare to be amazed. A riveting experience for the senses – the whole show appears three-dimensional even if the flickering of light is projected on a flat surface. Sound effects compliment the visuals and hence, the whole show is brought to life. On Saturday, a small turnout is rare – the area is often busy.

But during weeknights, the atmosphere is quiet – perfect for a nighttime stroll followed by a nice dinner in the Wilanów area. The amount of work and careful planning put into the construction of this display is evident. It is definitely worth a visit. Summer may have a range of exciting events to choose from, but none can compare to what winter brings: the Labyrinth of Light.

Images: Shutterstock, Vedika Luthra Images: Vedika Luthra/WBJ

While the best of Warsaw’s events are scheduled for the summer, here’s one that thrives during the wintertime. As the days get shorter and shorter, Wilanów’s vast arrangement of lights gets brighter and brighter

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LIFESTYLE / R ON E S AT AFUI R N AA N L TNS O T E

ALEX WEBBER EDITOR OF THE WARSAW INSIDER

The year’s best

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nd so, with the calendar flipped to December, it feels right to conclude the year with an appraisal: my own private little awards ceremony in which the winners win nothing.

Drums please... First off, it might be an idea to kick-off with the sensible stuff first, like what’s happened in the world of current affairs. Unfortunately, I’ve reached the stage where the news terrifies me. It’s best, I’ve decided, to wrap myself in an expat cocoon in which only the bizarre regional stories count.

There’ve been other reasons for cheer as well.

For instance, I’ve liked how Warsaw is developing. There’ve been some ghastly additions to its skyline in recent times, but Helmut Jahn’s Cosmopolitan is not one of these. It’s a tower you understand: clean and classical, but with enough twists to keep it thrilling – did you know, for instance, there are floor-to-ceiling windows here that open.

Only a row of safety bars save you from plunging to earth and landing with a splat. It’s a beauty, and definitely my building of the year.

On to food, and I found myself impressed in Wrocław by a place called Mosaiq. Forget that it sounds like an ad agency, the cuisine is fantastic. But there’ve also been calamities aplenty with my most harrowing meal of 2014 served in Toruń’s Prowansja. The dead fly squashed between the pages of the menu was the least of my troubles as I entered this murky world of crime dining.

No, for all the gastronomic advances around the rest of PL, Warsaw continues to be the pacesetter, with a clutch of new restaurants (Salto, Senses, L’enfant Terrible) adding to the astonishing adventures found in Atelier Amaro, Nolita and Concept 13. Will the capital see more Michelin stars this year? If it doesn’t, then an enquiry should be called.

“DURING THE COLD WAR, IT WAS A TOP SECRET GOVERNMENT ESCAPE, STAFFED

BY A CUBAN HAREM AND GUARDED BY A EUNUCH.

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Finally, I’ve also been drinking up culture. Warsaw’s Museum of the History of Polish Jews is set to become an international sensation, and deservedly so, but for me my museum of the year goes to the one dedicated to drunkenness and cycling in the rural town of Gołąb. Essentially a rusty shed, it’s an eccentric goldmine of impossible bikes and the owner’s empty bottles. It is utterly unique, but then so too is Poland. It’s been an interesting year alright, so here’s a tipple to the next.

Image: Shutterstock

Outside the capital, my travels have taken me to some pretty special hotels. Pick of the bunch has to be the treehouse escape, Dom W Drzewach in Nałęczów, but as I’ve scribbled about it in the last issue I shan’t do so again. Instead, I’ve got to namecheck Hotel Arłamów. During the Cold War, it was a top secret government escape, staffed by a Cuban harem and guarded by a eunuch. Now a massive modernization has seen Arłamów, set amid the rolling valleys of Bieszczady, reinvented as a giant leisure complex that appears on the horizon like that hotel in The Shining. My God, the place even has its own aircraft runway.

Trend-wise, the multi-tap craft beer bar is in the ascent, though danger signs are looming. It’s become a numbers game for some pubs – Piw Paw on ul. Foksal, for example, have installed 97 taps in a display of pure peacocking excess.

Instead, my trend of the year has been the emergence of the “qualitap” – small bars with a steady rotation of five or so beers from the non-commercial breweries.

Places like Browar Podgórz, for example, is run by one bloke who allegedly used salvaged scraps from a dairy to create his own brewery. Good work sir.

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COMMENTARY / LAW

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