WBJ #45 2011

MAPIC: special pull-out section Poland’s retail market is prospering ... 13

Malls are expanding to remain competitive ... 14

WWW.WBJ.PL

Big deals are being made in the Polish market ... 10

VOLUME 17, NUMBER 45 • NOVEMBER 14-20, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

COURTESY OF THE EUROPEAN PARLIAMENT

Sejm difference?

Since 1994 . Poland’s only business weekly in English

Bad medicine

Poland’s new parliament was sworn in – and the same old bickering began anew

The Polish government’s attempts to rationalize spending could strangle the country’s pharmaceutical industry 18-19

4

Strengthening friendship Vietnam’s ambassador discusses increasing trade ties and the Vietnamese community in Poland 17

On the ropes

Business . . . . . . . . . . . . . . . . . . . .6-7 Opinion & Analysis . . . . . . . . . . . . .8

SHUTTERSTOCK

In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-5

Italian PM Silvio Berlusconi is on his way out. Can a new, technocratic government save the country’s finances?

2, 4, 8, 20

Lokale Immobilia . . . . . . . . . . .9-16 Interview . . . . . . . . . . . . . . . . . . . .17

Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

Staying strong Since its own IPO last year the Warsaw Stock Exchange has remained resilient despite a trying global economic situation 7

SHUTTERSTOCK/ ¸UKASZ MAZUREK/WBJ

Markets . . . . . . . . . . . . . . . . . . . . .20

COURTESY OF THE WSE

Cover Story . . . . . . . . . . . . . . .18-19

NEWS

www.wbj.pl

Solorz-˚ak completes Polkomtel deal Polish billionaire Zygmunt Solorz-˚ak has officially acquired ownership of Polkomtel, operator of the Plus mobile network, through his company Spartan Capital Holdings.

The z∏.15.1 billion deal was the largest ever in Poland’s telecoms sector. ●

3.2% is the Finance Ministry’s most optimistic forecast for GDP growth next year. The ministry is building its 2012 budget around three possible scenarios: GDP growth of 3.2%, 2.5% and a contraction of 1%.

z∏.1,950 is how much the average Polish household is expected to spend on Christmas this year, according to Deloitte’s “Christmas Spending Survey 2011.”

60% is how much of the planned budget deficit has been reached so far this year. It now looks like Poland’s budget gap will be significantly smaller than expected.

4.5% is the current reference interest rate in Poland, unchanged by the latest meeting of the Monetary Policy Council.

Quote of the Week “We could run the risk of what some commentators are already calling the lost decade” IMF chief Christine Lagarde on the need for more confidence-building measures in Europe.

Figures in focus

Remi Adekoya

On WBJ.pl

Work wanted Persons working part-time aged 15 to 74 who want to work more hours and are available to do so (as percentage of part-time employed), selected EU27 countries in 2010 80 70

Independence Day

60

For a country that lived under foreign occupation during much of the last two hundred years, Independance Day takes on a special meaning in Poland. Log on to WBJ.pl to read about the history of this Polish holiday as well as for video and photo coverage of this year’s celebrations.

*Highest in EU27 **Lowest in EU27

40 30 20 10

an Po y la nd Fra nc Slo e va ki Bu a lga ria Sp ain Gr ee ce La tvi a*

ly

0

Ge rm

DATELINE

50

UK

Euro 2012 travel problems UEFA operations director for Euro 2012 Martin Kallen said last week that Polish and Ukrainian transport infrastructure still requires significant improvement ahead of next summer’s soccer championships. “There is still major work to be done in the next three to four months, especially in transport, from the airports to the stadiums and to the city centers,” said Mr Kallen, who was giving a progress report on both Poland and Ukraine’s preparations.

commissioner, to take up the post of PM and steer the country through its current debt crisis as head of a technocratic emergency government.

Italian bond yields have soared recently and the country desperately needs a stable, strong government to appease the debt markets. Many analysts are saying that a Montiled government would be ideal, because it would likely draft judicious, effective bills.

As WBJ went to press it was not clear if Mr Berlusconi’s People of Liberty party would

accept a Monti government or try to gather together enough support to head a coalition government by itself.

Mr Monti, aged 68, is an experienced economist and a highly respected international figure. In a recent editorial in the Italian daily Corriere della Sera, he said that Italy’s major challenge was to “remove the numerous structural obstacles to growth that exist in many sectors because of corporatism and insufficient competition.”

A Yale University graduate, Mr Monti is currently president of Milan’s Bocconi university and an international advisor at investment banking firm Goldman Sachs.

But he is perhaps bestknown for holding the office of EU competition commissioner from 1999 to 2004. Then, he raised eyebrows by preventing GE’s takeover of Honeywell in 2001, ruling that a tie-up between the two US industrial giants would make them too dominant in Europe. In 2004, Mr Monti also launched antitrust proceedings and levied a record €497 million fine against Microsoft, earning him the nickname “Super Mario.”

Ita

Finance Minister Jacek Rostowski has announced the government is preparing three versions of the 2012 budget, dependent on the developments in the euro zone. One version assumes a moderate slowdown, the second a sharper slowdown and the final a recession. In terms of GDP growth forecast, these three scenarios would translate into 3.2% annual growth, 2.5% annual growth, and contraction of 1%, respectively.

As WBJ went to press it appeared likely that Silvio Berlusconi, Italy’s longestserving post-war head of government, would tender his resignation this week. Technocrat Mario Monti was touted as a likely candidate to take Mr Berlusconi’s place as prime minister.

Last week Italian President Giorgio Napolitano named Mr Monti, who isn’t an elected official, a senator for life.

Observers believe Mr Napolitano was setting the stage for Mr Monti, a former European

Numbers in the News

nd s* Be * lgi um

Three versions of 2012 budget

COURTESY OF EUROPEAN COMMISSION

Law and Justice leader Jaros∏aw Kaczyƒski has voiced strong opposition to Poland adopting the euro, saying that such a move would be “suicidal.” “The fact that Germany and France are completely dominating affairs in the EU is now the prevailing wisdom,” said Mr Kaczyƒski. “We are surrendering ourselves to the dictates of these two countries. The question is whether it’s in our interest to do so. In our opinion it isn’t,” he said.

Mario Monti

IN THE SPOTLIGHT

the rla

Kaczyƒski: path to euro is ‘suicide’

NOVEMBER 14-20, 2011

Ne

2

November

Source: Eurostat

ships.

Location: Poznaƒ boatshow.pl

14-15 GAS MARKET LIBERALIZATION IN POLAND Event:

Government representatives, regulators and international gas companies will share their expertise on gas market liberalization.

Location: Marriott Hotel, Warsaw top.consult.nazwa.pl

22-23 EUROPEAN EMPLOYMENT FORUM Event:

14-16 MAPIC Event:

MAPIC is a unique exhibition and conference dedicated to retail real estate.

Location: Cannes, France mipim.com/mapic

22-25 GMINA FAIR Event:

14-25 BELGIAN DAYS Event:

The Belgian Business Chamber invites you to participate in a series of business and cultural events during this year’s Belgian Days. belgium.pl

18-20 PROFESSIONAL INVESTOR CONFERENCE Event:

This conference features workshops, presentations and discussions on investment possibilities for individual investors.

Location: Ko∏obrzeg sii.org.pl

18-20 BOATSHOW Event:

Boatshow provides an opportunity for manufacturers and distributors involved in the boating industry to meet and form partner-

This annual conference and exhibition focuses on social and economic issues connected with employment.

Location: Brussels, Belgium employmentweek.com GMINA Fair will present leading-edge solutions that affect the technical, social and IT development of regions.

Location: MTP, Poznaƒ gmina.mtp.pl

Company index Axi Immo ....................13 Jastrz´bska Spó∏ka

PORR Polska................9

Balmoral ......................9 W´glowa ......................7 Ptak Holding ..............10 Blackstone ................10 Jones Lang Blackstone Real Estate

LaSalle ................10, 13 RBR ..............................6

Group..........................14 Kasama Investments 10 C&A and Helios..........14 Mace ..........................23 CBRE ..............10, 13, 14 Marvipol......................15 Colliers

PwC ..............................7

Real ............................14 Real Management ......9 RECARO ......................9

Mayland Real Estate..14 Sanofi ........................19

International ........10, 15 Monday Spartan Capital Deloitte ........................4 Development ..............15 Holdings ......................2 Diebold Poland ............6 Neinver ......................10

28

POLISH RESIDENTAL MARKET

Event:

This annual meeting of the residential real estate industry provides independent and reliable information about Poland’s market.

Location: Novotel Centrum Hotel, Warsaw konferencje.nowyadres.pl

Echo Investment ........10 Opel ..............................4

30

EUROPAPROPERTY OCCUPIER FORUM

Goldman Sachs............2 Pfizer ..........................19 Weltbild ......................13

Event:

This real estate conference ends with a networking evening and the CEE Green Building Awards presentation.

Location: Marriott Hotel, Warsaw europaproperty.com

EM&F ..........................6 Panattoni ......................9 Euronet ........................6 Peter Nielsen &

Tesco ..........................13 Unibail-Rodamco ......10 Warsaw Stock

Gazprom ......................7 Partners ......................6 Exchange................7, 15

Hochtief Polska............9 PGNiG ..........................7 Wierzbowski Immofinanz Group ....14 PMR............................19 Eversheds ..................19 Inditex Group..............14 Polkomtel ....................2 X-Trade Brokers ....7, 20

NEWS

www.wbj.pl

Polish households are expected to increase their Christmas spending to z∏.1,950 this year, up 4.1% from last year, according to Deloitte’s “Christmas Spending Survey 2011.”

The Europe-wide survey found Poland was among the countries expected to see a strong rise in holiday season budgets along with the Czech Republic, Germany, Slovakia and Finland.

The survey also found that 41% of Poles claimed that price was not a factor in choosing presents. The European average was 33%.

Polish banks’ profits reach z∏.12 billion The combined net profit of lenders in the Polish banking sector after the first nine months of 2011 totaled z∏.12 billion, according to figures from the Financial Supervision Authority (KNF). That comes to 40.7% more than for the same period of last year. In Q3 alone, Polish banks generated a combined net profit of z∏.4.2 billion, a 37.4% increase over Q3 2010.

Operating costs for the same period also increased, by 0.9% to z∏.6.4 billion.

New Astra to be built in Poland The Opel factory in Gliwice is getting ready to start producing a new Astra OPC (Opel Performance Center), reported Rzeczpospolita.

The car’s annual production will total several thousand units.

The car will be the fastest Astra to date, powered by a turbocharged, 280horsepower engine, allowing the vehicle to reach speeds of 250 km/h. ●

Euro-zone crisis

Italy on the precipice, government in turmoil Long-serving Italian Prime Minister Silvio Berlusconi is now expected to step down once key economic measures are passed The focus of the euro-zone crisis shifted from Greece to Italy last week as Italian bond yields surged to record levels and the country’s parliament began rushing through measures to bring public finances under control and avert the possibility of a default.

The government of the currency bloc’s third-largest economy also looked set for a significant shake-up as WBJ went to press, with Prime Minister Silvio Berlusconi expected to resign from his post.

Mr Berlusconi said he would step down following the loss of his government’s parliamentary majority in a vote last Tuesday and his failure to obtain approval from his cabinet for an austerity package. The following day, yields on Italian government bonds soared above 7 percent – a breach of the same threshold that forced Greece, Ireland and Portugal to seek bailouts from the European Union.

As WBJ went to press, it looked likely that the Italian parliament would pass a key economic bill approving the austerity measures over the weekend.

Mr Berlusconi, who promised that he would step down after the emergency measures

“We are in a war economy” had been accepted, could be replaced as soon as Monday of this week.

As with Greece, which last week appointed former vice president of the European Central Bank Lucas Papademos as interim prime minister, Italy looked likely to name a technocrat as prime minister to lead a government in implementing tough economic measures.

Italian President Giorgio Napolitano announced last week that he had appointed economist and former European Commissioner Mario Monti senator for life, seemingly laying the groundwork for him to lead an emergency government.

Urgent action needed The measures that Italy is expected to pass, apart from reducing the budget deficit with a €60 billion austerity plan, also involve raising the retirement age to 67 by 2026, liberalizing labor laws, easing access to many of the country’s closed professions, privatizing several state assets and introducing measures to reduce bureaucratic red tape.

Experts say that Italy needs to act fast if it wants to restore investor confidence.

“We are in a war economy,” Giovanni De Censi, chairman of Italian bank Credito Valtellinese, said in an interview with Italy’s Radio 24. “I’ve never seen anything like it, liquidity has disappeared,” he added.

Przemys∏aw Kwiecieƒ, chief economist at X-Trade Brokers, said, “Italy is probably already in a recession. If the government were to cut too drastically now, that could worsen the overall economic situation even more.”

Italy’s government debt currently stands at €1.9 trillion, which amounts to nearly a quarter of all euro-zone public debt. A serious economic recession, coupled with the debtservicing costs that Italy is being forced to pay, would likely

SHUTTERSTOCK

Christmas spending to increase

NOVEMBER 14-20, 2011

Silvio Berlusconi said he would resign after his government lost its majority in parliament result in even higher deficit levels, Mr Kwiecieƒ added.

Many analysts see Italy, whose economy is much bigger than Greece’s and which the EU’s bailout fund would not be sufficient to rescue, as the true test of the long-term durability of the euro zone.

Mr Berlusconi’s promise to step down might pave the way for the implementation of much-needed economic reforms in a country which has, despite low growth and high indebted-

ness, a stronger economic base than many of the euro zone’s other troubled countries.

“What Italy needs now is a credible government which will take decisive measures that would assuage the market’s anxieties but not cripple growth in the country completely. Maybe then the ECB, along with the IMF, could help them out by buying their bonds and offering some guarantees which would limit investors’ risk,” said Mr Remi Adekoya Kwiecieƒ.

New parliamentary term

‘Polish-Polish war’ resumes, first female speaker elected A new parliamentary term has started, and along with it another round of bickering between PO and PiS Poland’s newly-elected parliament met for the first time last week, choosing the country’s first-ever female Sejm speaker during its inaugural sitting.

Not all was unfamiliar, though, with the largest two parties resuming their war of words almost from the start.

After a round of voting, MP and former Health Minister Ewa Kopacz from the ruling Civic Platform (PO) party, was elected as the new speaker of Poland’s lower house of parliament, the Sejm. She received 300 votes from the 460-member assembly, becoming the first-ever female to be elected to the position in the history of all Polish parliaments.

But the debate preceding her election was not bereft of emotion, or of party politics.

Several politicians from the opposition Law and Justice (PiS) party accused the former health minister of having been “misleading with the truth” when she stated that Polish doctors were present at the autopsies of victims of the April 2010 plane crash in Smolensk, Russia.

That tragedy claimed the life of Polish President Lech Kaczyƒski, along with 95 others. It was later revealed that there were no Polish doctors present during the autopsy procedure.

PiS politicians argued that Ms Kopacz had “perhaps inadvertently” allowed for “the falsification of [autopsy] documents” by the Russians.

PiS MP Antoni Macierewicz said that Ms Kopacz had thus made possible the creation of

COURTESY OF KPRM

4

Ewa Kopacz, Poland’s first-ever female speaker of the Sejm the “Smolensk lie, which just like the Katyƒ lie, hangs over Poland.”

PO MP S∏awomir Nowak defended Ms Kopacz, saying the PiS politicians should “let the dead go and the living live.”

Meanwhile, speculation has grown concerning who will be part of Prime Minister Donald Tusk’s new cabinet.

Over a month after the parliamentary elections, Mr Tusk has not made the pic-

ture any clearer, declining to reveal who his choices are.

However, Mr Tusk has said that he wants the new government to be in place by November 18.

Remi Adekoya

NEWS

NOVEMBER 14-20, 2011

Politics

Members of PiS have declared their solidarity with a recently expelled former party leader A group within Poland’s main opposition party Law and Justice (PiS) have boldly defied its iron-fisted leader, Jaros∏aw Kaczyƒski, by establishing a new parliamentary caucus in support of former deputy leader Zbigniew Ziobro, who was recently booted out.

Mr Ziobro was expelled from PiS earlier this month, along with fellow MEPs Jacek Kurski and Tadeusz Cymaƒski.

His expulsion followed comments he made suggesting the party should split into two distinct entities, saying that such a division of PiS would improve the chances of a conservative victory in the next elections.

Mr Kurski and Mr Cymaƒski also made public statements that questioned how the party was run, implicitly criticizing Mr Kaczyƒski’s leadership.

A total of 16 PiS MPs and one senator have shown their

COURTESY OF THE EUROPEAN COMMISSION & EUROPEAN PARLIAMENT

Ziobro loyalists defy Kaczyƒski with new group

Mr Kaczyƒski (left) and Mr Ziobro clashed over the future direction of the party support for the excluded MEPs by creating a parliamentary caucus called Solidarna Polska (Solidarity Poland, roughly translated).

“Sixteen MPs signed a declaration in which we are showing our solidarity with our expelled colleagues. We are not resigning from membership of the PiS party, and we are counting on reaching an agreement with Jaros∏aw Kaczyƒski,” Solidarity Poland leader Arkadiusz Mularczyk told journalists.

Mr Mularczyk said that if Mr Ziobro was brought back into the party’s fold, members of the Solidarna Polska caucus would re-join PiS’s caucus.

MPs are required to register with a single parliamentary caucus. According to the party’s statutes, membership in PiS’s parliamentary caucus is mandatory for all its MPs. Jaros∏aw Kaczyƒski has stated clearly that if the rebel MPs don’t “reconsider” soon, they will also be expelled from the party.

Izabela Depczyk

Energy

European leaders mark official launch of Nord Stream Russian gas now reaches Europe directly, bypassing Poland

Grabarczyk had been invited, none of them attended.

Polish Foreign Minister Rados∏aw Sikorski said that he still believes the project is “a waste of money,” in an interview with The Wall Street Journal the day after the launch. Mr Sikorski, one of the most passionate critics of the project, had previously argued the case for an overland pipeline transiting Poland at lesser cost.

The Ministry of Foreign Affairs declined to make an official comment on the launch of the Nord Stream pipeline, and said that the ceremony was attended by an economic counsellor from the Polish Embassy in Berlin.

Alice Trudelle

COURTESY OF NORD STREAM

Russian President Dmitry Medvedev triumphantly announced the launch of the first leg of the controversial Nord Stream gas pipeline on the German Baltic coast last Tuesday.

“For the first time Russian gas will be delivered to EU countries directly,” he said.

“This opens a new stage in our country’s partnership with the EU,” he added.

The twin Nord Stream pipelines, which run under the Baltic Sea bed, will have the capacity to transport 55 billion cubic meters of gas per year

directly from Russia to the EU, via Germany, when they become fully operational in late 2012.

The event was attended by some of Europe’s leading politicians, with German Chancellor Angela Merkel, French Prime Minister Francois Fillon, Dutch Prime Minister Mark Rutte and EU Energy Commissioner Günther Oettinger all present.

Polish officials have strongly criticized the €7.4 billion project, which bypasses traditional transit countries such as Poland. And although Polish President Bronis∏aw Komorowski, Prime Minister Donald Tusk, Economy Minister Waldemar Pawlak and Infrastructure Minister Cezary

Polish political leaders were conspicuous by their absence at the launch of Nord Stream

www.wbj.pl

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BUSINESS

www.wbj.pl

NOVEMBER 14-20, 2011

Retail market

EM&F plans to launch several more Gap stores

The company has struggled in the fashion market recently and hopes Gap will ‘positively contribute’ to the segment Following an announcement that its revenues from the fashion segment fell in the third quarter, Polish retailer Empik Media & Fashion Group (EM&F) revealed further plans for the expansion of US clothing retailer Gap in the Polish market.

EM&F introduced Gap to the Polish market under a franchise agreement, opening the first store in Warsaw’s Arkadia shopping mall in October. The

group now plans to open a further two to three stores in Poland in 2012 and around five per year between 2013 and 2015.

“We have conservative plans for Gap, we don’t know if it will be as successful as Zara,” Maciej Szymaƒski, CEO of EM&F, said at a press conference last week, referring to one of the fashion brands the firm operates in Poland.

The company has struggled in the fashion market recently, with revenues from its fashion and beauty segment in Poland dropping by 16 percent y/y in the third quarter of 2011. “We have a big problem with fashion,” said EM&F CFO Jacek Bagiƒski.

One major issue, according

to Katarzyna Perzak, EM&F’s director of investor relations, is the company’s franchise model.

“Our competitors are doing well,” she said. In contrast to EM&F, “they design for the Polish market and react to what is happening in terms of trends and prices.”

In response, the company recently changed its business strategy, and is now planning to bring together four of its major fashion brands under joint-venture agreements starting in Q1 and Q2 of 2012. Previously, the company operated the brands under franchise agreements.

EM&F hopes the change will improve its results in the sector.

The company also recently sold off 13 Mango stores and will sell

another fashion brand in 2012.

Other fashion brands it operates include Hugo Boss, Aldo and Espirit.

The company revealed last week that its net profit for the third quarter rose by 101 per-

Beauty group, and the company’s language schools.

EM&F plans to open two more Smyk mega-stores in Poland in the fourth quarter of 2011.

cent year-on-year to z∏.29,000.

Its revenues for the same period rose by 13 percent to z∏.739 million. The amount comprises revenues from Empik Group, children’s store chain Smyk, the Fashion and

Ella Pa∏ka

Fashion flop EM&F's revenues from its various operations, Q3 2010 and Q3 2011 (in z∏. millions) 250

4 Q3 2010

y/y (% change)

Q3 2011

200 150

16 100

-16 139

50 0

Empik stores

Smyk

Fashion

E-commerce

11

73

Schools

Digital

Source: EM&F

COURTESY OF WIKIMEDIA COMMONS

EM&F pins fashion hopes on Gap

ATM market

Euronet snaps up 535 Diebold ATMs, consolidates position in Polish market The firm sees further potential for expansion, but analysts say that might not be so easy US electronic financial transactions firm Euronet Worldwide and its Polish subsidiary Bankomat24/Euronet have acquired a large number of automated teller machines (ATMs) in Poland from Diebold Poland.

Diebold Poland is the Polish arm of the eponymous American security systems company and owns the cash4you ATM network in the country.

Representatives of both Euronet and Diebold declined to comment on the value of the deal.

Euronet will acquire 535 cash4you cash machines and over 350 retailer contracts for ATMs. The firm has an established ATM network in Poland that includes agreements with 18 Polish banks concerning ATMs. The transaction increases the number of ATMs Euronet owns in Poland to over 3,500, said Marek Szafirski, Bankomat24/Euronet’s managing director.

According to Mr Szafirski,

Euronet’s network of ATMs in Poland is now larger than that of any bank in the Polish market.

The deal reinforces Euronet’s position in the ATM market, said analysts that spoke with WBJ. However, most did not expect the transaction to have a major impact on the banking sector.

Euronet is confident that there is much more room for growth in the sector. The firm calculates that Poland has a density of ATMs well below the regional average.

But according to analysts at London-based research and

consulting firm RBR, expansion might not be so easy, as Bankomat24/Euronet faces tough competition from giants such as Mastercard and Visa.

“The Polish ATM market has stagnated since 2010, when reduced domestic interchange fees were introduced

by MasterCard and Visa,” RBR analysts wrote in an emailed comment. “The independent ATM sector, which had driven much of the growth in the market, has been severely impacted by the lower interchange fees,” they added.

Izabela Depczyk

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

Limitation of duties for citizens and entrepreneurs The majority of provisions for the act governing limitation of certain duties for citizens and entrepreneurs will come into force on January 1, 2012. The act is set to change the provisions of 22 other acts. The amendment, among other things, will: extend the deadline for using outstanding holidays (from March 31 to September 30); extend the deadline for submitting real estate tax returns (from January 15 to January 31); change the rules for issuing interpretations of the general provisions of tax law; abolish the obligation of foreign banks and credit institutions to be entered into the register of representative offices of foreign companies; and enable application of simplified customs procedures to excise goods.

Medical benefits to be taxed The Supreme Administrative Court has confirmed that medical benefit packages bought by employers for their employees constitute an unpaid benefit for employees, according to art. 12 item 1 of the act on personal

income tax. As a result, the Supreme Administrative Court has brought to an end discussions on whether such subscriptions constitute a taxed revenue for employees.

Employees will now pay income tax on such medical subscriptions provided by their employers.

Finance minister cannot interpret all tax provisions In its judgment of October 13, 2011 (court ref. no. I SA/¸d 1046/11) the Voivodship Administrative Court in ¸ódê defined how far the power of the Minister of Finance reaches when it comes to issuance of an interpretation with regard to unclear tax provisions. The court decided that the minister could reply to taxpayers’ questions within the scope of material tax law, but not to provisions regarding proceedings (procedure provisions). In particular, the minister should not issue individual interpretations with regard to the procedure provisions defined in the act on tax inspection and in the act on freedom of economic activity. ●

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

BUSINESS

NOVEMBER 14-20, 2011

www.wbj.pl

7

Stock market

Warsaw Stock Exchange prospers in hostile environment

The first anniversary of the Warsaw Stock Exchange’s high-profile initial public offering was marked on November 9, with CEO Ludwik Sobolewski saying that since its debut the company had “kept its promise” to

investors, both in terms of its own financial results and the strength of the markets it operates.

“The IPO of the Warsaw Stock Exchange on the market operated by the WSE … has exerted a strong positive impact on investors and issuers. This is demonstrated not only by a record-high growth rate of the parameters of the markets operated by the WSE but also by increasingly robust financial results,”

A volatile year The Warsaw Stock Exchange's own stock price November 10, 2010 – November 10, 2011

Nov Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Source: Stooq.pl

Mr Sobolewski said in a statement.

The exchange’s third-quarter financial results, released on the one-year anniversary of its debut, included recordhigh sales revenues of z∏.70.4 million, up by 30.5 percent year-on-year, and a quarterly net profit of z∏.38.1 million, up by 71.6 percent y/y.

Przemys∏aw Kwiecieƒ, chief economist at X-Trade Brokers, said that in the current bearish market, stock is preserving its value relatively well.

“Investors who bought shares in the WSE one year ago now see similar prices as what they paid, and received dividends in between. I think that’s what you can expect from a very defensive stock in a hostile environment,” said Mr Kwiecieƒ.

WSE indices, which plunged along with major international stock markets in August, have performed well given the fact that Poland is

an emerging market, and is therefore expected to be more volatile, added Mr Kwiecieƒ.

Debuts high, capitalization low Through the first three quarters of 2011 the WSE held the highest number of debuts of any bourse in Europe, according to PwC’s “IPO Watch Europe” survey. Of the 121 debuts that took place in Europe in Q3, 61 were in Warsaw.

But the capitalization of the Warsaw bourse still remains well below that of some of its European counterparts. Its 61 IPOs were valued at €1.46 billion, but the €1.3 billion privatization of coal giant Jastrz´bskiej Spó∏ki W´glowej (JSW) accounted for the vast majority of that figure. In comparison, the six debuts on Spain’s main bourse in Q3 were valued at €6.07 billion.

Companies recently listed

COURTESY OF THE WSE

On the one-year anniversary of its own IPO, the WSE released strong thirdquarter earnings

Poland’s PM Donald Tusk (right) was present at the WSE’s IPO last year on the WSE’s alternative market, NewConnect, which form the bulk of new listings, are expected to find it difficult to access the capital needed to debut on the main market in the near future. Coupled

with continuing uncertainty regarding the global economy, PwC analysts expect this to lead to a decline in the number of IPOs in the fourth quarter.

Alice Trudelle

Gas-import prices

The Polish firm is looking to pay 10 percent less for the gas it imports from Russia Polish state-owned gas monopolist PGNiG has filed a case with an arbitration tribunal in Stockholm, Sweden, against Russian gas giant Gazprom for the reduction of import prices under a long-term gas-supply agreement.

Discussions over prices between the management boards of the Polish firm and

Gazprom started over six months ago, but the two companies have so far failed to reach an agreement.

The Polish company will argue in court that the Russian behemoth charges much lower gas prices for its customers in Western Europe than it does for PGNiG. The Polish firm said earlier this year that it wants at least a 10 percent discount on import prices.

“PGNiG is counting on reaching an agreement [in arbitration], which would allow for

gas purchases at prices in line with conditions that are shaping the European gas market,” the company said in a statement.

Just last week, the Polish distributor signed a contract for the supply of Russian gas from German distributors at a price lower by 15 percent than what it pays for gas directly imported from Russia.

Arbitration proceedings do not mean the end of commercial negotiations with Gazprom, which PGNiG hopes will continue, the firm added. Around

90 percent of the gas imported

by Poland comes from Russia.

In other news, PGNiG revealed last week that its thirdquarter net profit fell by 8 percent year-on-year due to higher import prices and a weaker z∏oty. The result did, however, beat expectations, due to the company receiving a large refund on its taxes. PGNiG’s net profit came in at z∏.319 million compared to the z∏.195 million forecast by analysts polled

by Reuters.

Gareth Price

SHUTTERSTOCK

PGNiG seeks lower prices from Gazprom through arbitration

PGNiG wants a long-term reduction in gas import prices

8

OPINION & ANALYSIS

www.wbj.pl

NOVEMBER 14-20, 2011

Crisis rewriting the rules in Europe E

vents in Europe over the past week have been nothing short of extraordinary.

The International Monetary Fund, rather than asking the Russians and their $500 billion in currency reserves to help, has advised Moscow to protect itself from fallout from the European financial crisis.

European government officials are no longer chastised by their peers

“Germany needs these states to feel the heat, but too much pressure could result in financial destruction” when they publicly raise the need to eject Greece from the euro zone.

European Commission officials are directly telling the Greeks and Italians what their governments should and should not look like. And in the United Kingdom there are requests that mainland Europeans finally choose someone to be in charge of everything.

If someone is going to be able to get ahead of the crisis, it is going to be the Germans – but they are working with a tool kit that isn’t even half full.

They don’t want the European Central Bank (ECB) to continually sup-

port damaged states by directly purchasing sovereign debt – Berlin sees that as rewarding bad behavior. Germany’s citizens don’t support continued transfers of wealth to Southern European states. Berlin cannot force these states to implement austerity measures, since EU treaties guarantee their member states’ fiscal autonomy. Germany cannot even use public pressure to nudge Southern European governments to do what they think is the right thing: The public image of Germany as a bully is now so prevalent in Southern Europe that German statements often generate the opposite of their intent.

Efforts to enhance what tools there are have actually weakened existing options. During a late-October summit, euro zone leaders tried to expand the reach of Europe’s bailout fund, the European Financial Stability Facility (EFSF). The EFSF could originally access €440 billion of state guarantees, which the Facility uses to raise cash on private markets, funneling the money raised to states under bailout regimens. Four-hundred forty billion euros might sound like a lot. Indeed, this sum is sufficient to fund the existing bailouts of Greece, Ireland and Portugal, with enough left over to make an honest effort to support Spain. Still, no one thinks the sum is sufficient to support a bailout of Italy. The October summits thus shifted the EFSF structure to guarantee returns on only 15-30 percent of investments (the details have not yet been finalized).

Instead of attracting more funds, this has disrupted external and private interest in the EFSF to the degree that the Facility – even using full guarantees – was barely able to raise €2 billion this week to fund its pre-existing commitments. Far from having the capacity to bail out Italy or even Spain, the EFSF right now is unlikely to be able to handle the smaller bailouts that have already been agreed to.

Yet those larger states are still in danger, most notably Italy. Rome has €1.9 trillion in outstanding government debt, about 120 percent of gross domestic product – proportionally twice that of Spain’s. An Italian funding shortfall, absent a much enlarged EFSF, will lead almost immediately to an Italian default. The after-effects make it impossible to see the euro zone surviving.

Germany’s plan Yet as the European financial crisis deepens and spreads, we are seeing the rough outlines of a German plan that uses what tools are available.

States that will not agree to austerity in good times are proving somewhat more pliable as they move closer to financial catastrophe. Germany has made considerable efforts to alter both Greece and Italy in recent days.

The Germans are nudging both the Greeks and the Italians toward forming national unity governments.

If successfully installed, the German hope is that these governments will be able to achieve four things:

• Full implementation of EU-mandated austerity programs. The hope is that technocratic governments can force through policies that would be political suicide for a normal, elected government.

• Constitutional amendments that would lock the states into somehow balancing their budgets. Germany needs these states to generate budget surpluses so they can whittle down their debt loads and mitigate their exposure to financial markets.

• Approval of treaty changes that will allow European institutions far more intrusive access to national procedures; the goal of which is to allow the direct rewriting of budget procedures so that these states can never again engage in what the Germans see as fiscal irresponsibility.

• Finally, Germans hope all of these things can be achieved without triggering elections. Berlin fears that any election now would be perceived in both Greece and Italy as a referendum on Europe in general, or specifically on German-inspired austerity measures, and that public rejection of Europe or austerity would bring down the entire European edifice.

That’s the plan, but there are several problems.

First, these governments must be successfully formed.

Second, the parliament of even a technocratic government is not excused from the requirement of voting on austerity, treaty and constitutional revision packages.

National unity governments sound nice, but the broad scope of changes the Germans are demanding mean that politics will not be held completely at bay.

Third, the citizens must not rebel.

Europe is in an agitated state; strikes and unrest are the orders of the day.

Governments – even national unity governments – seen as caving to the Germans are going to be challenged by citizens who do not wish to submit to the rules of a foreign state.

Fourth, changes agreed to by an interim government will not necessarily be honored by subsequent, more politically charged governments. European officials are attempting to force Greek parties to sign documents committing them to never challenge the austerity programs. So far, such efforts have been firmly rebuffed.

Finally, all of this has to happen without the markets bolting and thereby triggering immediate funding crises. This is perhaps the most dangerous catch. Germany needs these states to feel the financial heat, but too much pressure could result in financial destruction.

It’s a delicate dance: Applying sufficient pressure to induce sharp changes, while the ECB provides a financial drip feed. The margin for error is very slim. ● \This edited version of “Crisis rewriting the rules in Europe” is republished with permission of STRATFOR. stratfor.com

Italy’s politics: where it goes from here Paolo Messa

G

reece may be the fuse, but is Italy the bomb that will blow up the euro and perhaps the entire European Union? In the weeks since both Standard & Poor’s and Moody’s downgraded Italian sovereign debt, and gave it a “negative” outlook, the country has been repeatedly targeted by financial speculators.

But the country’s economic and financial fundamentals aren’t so bad; it is the country’s political disarray that is spooking investors and roiling markets.

Prime Minister Silvio Berlusconi’s government has lost the confidence of international investors. Even at home, as every opinion poll shows, the once huge Berlusconi majority has become a minority. For much of the crisis, Mr Berlusconi retained his grip on parliament, but daily it became ever more tenuous, with the balance shifting to other members of

his coalition and to the opposition.

Despite Mr Berlusconi’s best negotiating efforts, many MPs simply don’t want to be framed as accomplices to the Italian – and therefore European – failure. They insisted that he resign as the price of backing reform efforts to quiet the financial markets.

International pressure on Mr Berlusconi will not run out of steam, nor will protests from union workers, students, and indignados (anti-austerity protestors). Given this volatile mix, a political crisis has become unavoidable.

Thus, Italian President Giorgio Napolitano, who enjoys great respect at home and abroad, is bound to play a pivotal role. Still, it is impossible to predict whether Italy faces an interim government until the end of the current electoral term in 2013 or snap elections in early 2012. One thing is certain: the country’s political parties are gearing up for an electoral campaign.

Left, right and center On the center right, Mr Berlusconi has said he will not stand for re-election. The Northern League is deeply split: its historical leader, Umberto Bossi, seems tired and ill, but determined to maintain his alliance with the prime minister. But his party colleague, Interior Minister Roberto Maroni, wants a higher profile, and probably would not rule out other political combinations instead of a link with Mr Berlusconi. That might well prove necessary, given the extremely low likelihood that the current coalition government can win another parliamentary majority.

As for the center-left forces, the prospect of a coalition between the Democratic Party and the post-communist party Left Ecology Freedom, led by Nichi Vendola (now remarkably the president of the conservative southern Italian region of Apulia) is

growing. The former magistrate Antonio Di Pietro, whose crusading investigations of political corruption overthrew Italy’s party system in the early 1990’s, is also bound to join them.

Current opinion polls indicate that this alliance will win a majority. But political and financial analysts consider such a coalition to be excessively leftist. How would this potential government cope with the European Central Bank’s demand for fiscal austerity as the condition sine qua non for the ECB’s purchases of Italian bonds?

In the center of the field, a new coalition, called the Third Pole, has emerged, headed by the Catholic leader Pier Ferdinando Casini. It is attracting disillusioned moderates from both the right and the left. The Third Pole is in terms of its program comparable with German Chancellor Angela Merkel’s Christian Democratic Union or French President Nicolas Sarkozy’s

Union for a Popular Movement: a probusiness approach to economic policy, married, under the Vatican’s influence, to the social-welfare state.

Grand coalition The Third Pole almost certainly will not win the next election, but it could well tip the scales in forming a governing coalition. The underlying bet is to build a German-style grand coalition after the vote – an option that may be to Merkel’s liking. Having said that, whoever wins will have to deal with Italy’s highest-profile expatriate, Mario Draghi. As the ECB’s new president, he will be the true guarantor of Italy’s future. ● Paolo Messa is Editor-in-Chief of the monthly magazine Formiche and a former spokesman for the Italian deputy prime minister.

Copyright: Project Syndicate, 2011. project-syndicate.org

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SPECIAL MAPIC EDITION There are some big deals being made in the Polish market ... 10

Poland’s retail property market is prospering ... 13

Shopping malls are expanding to remain competitive ... 14

LOKALE IMMOBILIA

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

Panattoni lays RECARO cornerstone Developer Panattoni Europe has laid the cornerstone of RECARO Aircraft Seating Polska’s new production hall. The new investment is being constructed in Âwiebodzin, the location of the headquarters of RECARO, one of the world’s largest manufacturers of economy-class airplane seats. The development will provide a total of 10,700 sqm of space, of which 8,800 sqm will be dedicated to the manufacturing and storage of aircraft seats.

The remaining 1,900 sqm of space will serve as offices and space for employees. ●

In this issue Granary Island scheme

. . . . . . .9

Browar Lubicz revitalization . . .9 Retail investment . . . . . . . . . . . .10 Outlet centers . . . . . . . . . . . . . . .10 Property-related stocks . . . . . .10 Retail market prospects . . . . . .13 Shopping center extensions . .14 Monday Development homes .15 Marvipol’s Bielany Residence .15 Shopping centers ranking . . . .16

Granary Island project scrapped Gdaƒsk City Hall refused to accept changes the developer said were necessary to make it profitable Developer Polnord and Gdaƒsk City Hall have ended negotiations for a joint investment on the northern part of the city’s Granary Island, meaning the project has been scrapped.

Polnord signed a preliminary agreement with the city two years ago for the development of houses, offices, commercial space and a hotel on the island, which is located in the center of the city. The investment was due to be launched in the third quarter of this year.

Polnord suggested a number of changes to the investment plan in a document it sent to City Hall, based on an analysis of the investment and on current market conditions. The

changes were designed to ensure the cost-effectiveness of the project.

Gdaƒsk City Hall rejected the changes. At that point, Polnord decided that it could not go through with the project.

“We cannot – in light of the analysis and the prevailing market situation – carry out investments under the old model, since it would be unprofitable for the shareholders of Polnord.

At this point, we ended the negotiations and did not sign the investment agreement,” Polnord CEO Bartosz Puzdrowski said in a statement sent to the Polish Press Agency.

Gdaƒsk’s vice president, Andrzej Bojanowski, told reporters that “Polnord presented a business investment which is not balanced … fundamental errors were committed in the business plan.” These, in the opinion of City Hall, include Polnord’s valuation of the investment land.

Investment on the northern part of Gdaƒsk’s Granary Island was due to begin in Q3 2011

Gareth Price

Balmoral launches revitalization work on historic Browar Lubicz property in Kraków Real estate investor Balmoral Properties has selected PORR Polska as the general contractor of the Browar Lubicz revitalization project in Kraków, Ma∏opolskie voivodship. The latter company has already entered the construction site and launched work on the mixed-use scheme.

“The revitalization of Browar Lubicz is an ambitious and very demanding project; this is why we looked for a contractor whose experience and record could guarantee that it would manage this task,” Piotr OlbryÊ, member of Balmoral Properties’ management board, said in a statement.

The 19th-century Browar Lubicz property is located near

Kraków’s main railway station.

Following the revitalization of the estate and the construction of new buildings in its neighborhood, over 30,000 sqm of residential, office and service space is expected to be built.

The first phase of the project, which is scheduled to be delivered in May 2013, will cost approximately z∏.100 million to develop. The value of the whole investment is estimated at z∏.200 million.

Balmoral has been active in Poland since 2008. Its portfolio in Poland also includes three hectares of land located near Warsaw’s Arkadia mall, where it plans to build some 100,000 sqm of housing and office Adam Zdrodowski space.

COURTESY OF PREMEDIUM

Hochtief Polska has sold a 14,893 sqm office building located on Warsaw’s Al. Gen. Sikorskiego to a special purpose vehicle owned by real estate company Real Management. The value of the transaction amounted to €14.1 million. The property is a six-storey facility which was completed by Hochtief Polska in March 2008. The real estate is occupied, by virtue of a long term lease agreement, by TV broadcaster Canal+ Cyfrowy.

NOVEMBER 14-20, 2011, LI 16/45

Mixed-use properties

COURTESY OF WIKIMEDIA COMMONS

Hochtief sells office building

•

The first phase of Browar Lubicz is set to be delivered in May 2013

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

10

LOKALE IMMOBILIA – SPECIAL MAPIC EDITION

www.wbj.pl

NOVEMBER 14-20, 2011

Retail market transactions

Poland has proven to be a hot market for retail property deals in 2011. The total value of retail real estate transactions amounted to €510.5 million in the third quarter of this year, according to a report by Jones Lang LaSalle.

The most significant deals so far have involved UnibailRodamco, the largest commercial real estate company in Europe, and Blackstone, one of the largest investment and advisory firms in the world.

Unibail-Rodamco purchased a 50 percent stake in the Galeria Mokotów shopping center for €237.5 million earlier this year, taking full control of the Warsaw mall. Blackstone, meanwhile, purchased Magnolia Park in Wroc∏aw for €222.5 million through its sub-

sidiary Kasama Investments.

The mall comprises 74,400 sqm of retail and entertainment space and is one of Poland’s biggest retail centers. The company also purchased Galeria Twerdze in ZamoÊç in a deal for €44 million.

But it is not just Poland that has seen investment grow in recent months. In Q3, a total of €2.32 billion was invested in the markets of the Czech Republic, Slovakia, Hungary, Romania and Poland. That is significantly

higher than the €706 million invested in Q2 2011.

In year-to-date terms, investment volumes for the CEE region stand at €4.61 billion. By the end of the year it is anticipated that total investment volumes for the region could reach €6 billion.

“Retail centers, as generally larger objects, provide a high income and an attractive nominal weighted average time lease,” said Przemys∏aw B∏aszkiewicz, director of the department of real estate

Unibail-Rodamco paid €237.5 million for 50 percent of Galeria Mokotów appraisals at Colliers International. “At the moment, retail properties are by far the most

in demand in the investment market,” he added.

David Ingham

Outlet malls

Property-related stocks Security

Closing price on Nov 10

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏. mln)

BUDIMEX

75.00

-3.23

64.00

109.20

-26.90

25,530,098

1,914.76

CELTIC

18.45

-8.66

15.55

60.55

N/A

34,068,252

628.56

DOMDEV

33.10

8.42

23.50

50.80

-25.70

24,560,222

812.94

ECHO

3.45

-2.82

3.24

5.55

-35.03

420,000,000

1,449.00

ELBUDOWA

97.00

-3.19

98.00

176.70

-45.20

4,747,608

460.52

ENERGOPLD

2.40

-4.00

2.40

4.10

-36.68

70,972,001

170.33

ERBUD

18.80

-6.00

14.70

61.00

-65.19

12,644,169

237.71

GANT

7.08

-10.38

7.30

18.62

-62.74

20,499,953

145.14

GTC

9.55

-15.49

9.33

24.98

-61.60

219,372,990

2,095.01

HBPOLSKA

0.91

5.81

0.70

3.32

-72.59

210,558,445

191.61

JWCONSTR

7.05

-6.87

6.10

17.80

-60.01

54,073,280

381.22

LCCORP

1.08

-4.42

0.85

1.69

-35.71

447,558,311

483.36

MARVIPOL

9.00

0.11

7.22

12.81

-23.47

36,923,400

332.31

MIRBUD

2.41

-1.63

2.25

4.75

-41.79

75,000,000

180.75

MOSTALWAR

24.99

2.00

19.70

64.20

-60.95

20,000,000

499.80

MOSTALZAB

1.34

-3.60

1.07

3.42

-61.49

149,130,538

199.83

ORCOGROUP

16.70

-5.11

15.70

40.00

-43.56

17,053,866

284.80

PBG

89.00

4.71

56.05

223.00

-59.55

14,295,000

1,272.26

PLAZACNTR

2.28

5.07

1.80

5.15

-53.66

297,174,515

677.56

POLAQUA

7.20

-7.69

7.50

20.60

-58.14

27,500,100

198.00

POLIMEXMS

1.35

-11.76

1.23

4.30

-67.93

521,154,076

703.56

POLNORD

15.30

-1.10

11.03

36.60

-58.42

23,798,439

364.12

RANKPROGR

8.70

-3.44

8.64

13.60

-18.46

37,145,050

323.16

ROBYG

1.21

0.83

1.04

2.13

-39.50

257,390,000

311.44

RONSON

0.95

-8.65

0.94

1.60

-40.63

272,360,000

258.74

TRAKCJA

1.64

-2.96

1.39

4.84

-65.83

232,105,480

380.65

ULMA

61.50

-2.38

57.00

88.00

-28.65

5,255,632

323.22

UNIBEP

5.59

-2.78

4.47

10.30

-38.37

33,927,184

189.65

WARIMPEX

5.23

1.16

5.10

10.89

-41.10

54,000,000

282.42

ZUE

7.90

0.00

7.45

15.00

-47.30

22,000,000

173.80

A saturated market, for now Outlet centers are being built across Poland. There is little room for more growth Demand for discounted fashion items has led to a boom in the amount of retail-outlet space being built in Poland over the past few years. Presently, there are a number of large-scale outlet-park investments underway in the Polish market, but experts say opportunities for further developments are becoming scarcer.

Located for the most part outside of major city centers, retail outlet centers are able to offer lower rents for retailers.

This allows them to host shops that often offer discounts of up to 70 percent on brand-name fashion items.

In Poland, Neinver, Ptak Holding and Echo Investment all currently have major outletpark investments underway.

Spanish developer Neinver is developing Factory Warszawa Annopol in the capital’s Bia∏o∏´ka’s district. The scheme will comprise 19,700 sqm of space and house 122 stores when finished in 2012.

The first phase of Echo Investment’s Outlet Park Szczecin is planned to offer 23,000 sqm of space and host

120-130 stores. Construction is set for completion at the end of 2011.

Ptak Outlet, an outlet center being developed by Ptak Holding, will be the largest outlet scheme in Poland, the company says. Located in the town of Rzgów, near ¸odê, central Poland, the scheme will bring 27,000 sqm of space to the market and host 140 stores.

Autumn 2012 is the expected completion date.

Reaching its peak But given the scale of existing stock and the investments presently underway, analysts say the market may have reached a peak, at least for now.

“At this moment, the market for outlet malls is saturated,” said Natalia Pradelska, associate director of retail at CBRE in Poland.

“Catchment area for outlet centers should be of 2-2.5 million people. At this moment there is no place in Poland with such a catchment where an outlet center is not already present or under construction or [undergoing the] leasing process,” Ms Pradelska said.

In Ms Pradelska’s opinion, however, there is potential for growth in the future, due partially to the financial crisis, which has increased Poles’ appetite for bargins.

Ella Pa∏ka

COURTESY OF CISZEWSKI FINANCIAL COMMUNICATIONS

The sale of Galeria Mokotów and Magnolia Park were the biggest deals this year in Poland’s retail real estate market

COURTESY OF ADVANCED PUBLIC RELATIONS

Polish malls prove attractive targets

The Factory Warszawa outlet center will be located in Warsaw’s Bia∏o∏´ka district

12

www.wbj.pl

LOKALE IMMOBILIA – SPECIAL MAPIC EDITION

NOVEMBER 14-20, 2011

Advertorial feature

Great year for FORUM in Gliwice The FORUM Shopping Center Gliwice The managers of FORUM in Gliwice look to the future with optimism. And they have reason to do so. Over the last year the turnover and footfall in the centre grew by a dozen or so per cent and were higher than the regional and national indexes.

More and more customers shop at FORUM Shopping Center and they spend more and more money there. FORUM clearly stands out in regard to these two parameters, which determine success in the retail industry. These are strong arguments at the time of the recommercialization of the centre, which is currently pending. After four years of the facility being open it is time to extend contracts with the current tenants. Major tenants such as H&M, KappAhl, Cubus, Vision Express or Apart did not delay their decision and have already prolonged their leases. There are also new ones, such as Tom Tailor, a German giant on the clothing market. The company has joined tenants representing various business lines, with the majority of clothing and shoe brands. Bata, Bershka, Cropp Town, Cubus, H&M, KappAhl, Nike, Pull&Bear, Puma, Reserved, Royal Collection, Simple, Stradivarius, Triumph and Zara are among the most popular brands available in FORUM. The product offer of the shopping centre also includes entertainment. The first and only Cinema City multiplex in the town enjoys great popularity, just like a Pure Health & Fitness salon, which is also the first outlet of the chain in the region.

CAFÉ FORUM IN... CANNES In mid-November the Gliwice-based shopping centre will participate, already for the second time, in MAPIC, the most important fair for the industry which takes place in Cannes. It is on the French Riviera, where owners, facility managers of shopping centres and brands leasing space in them will meet. This is also where a lot of decisions concerning locations of new outlets are made.

The style of this year’s stand of FORUM resembles a café. It will be good to talk business in FORUM while drinking good coffee.

Particularly taking into consideration the current fashion to consider Poland a promising market. The run for retail space in our shopping centres also benefits FORUM in Gliwice. It is almost certain that the centre will gain new brands, which will clothe Silesians.

Thanks to an excellent road network in Upper Silesia about half a million of them are able to reach FORUM within half an hour and more than twice as many can do this in a slightly longer time. New traffic arteries which are successively being finished shorten the actual distance to the centre and extend its catchment area. Moreover, FORUM is located next to the main railway station, in the heart of Gliwice, a town with a population of 200,000, which is also an important academic centre and can consequently also count on students who are an increasingly important group of consumers.

OPPORTUNITY CHASERS LIKE FORUM According to marketing research carried out by the shopping centre, as many as 91 pct of customers like FORUM and believe that it is devoid of weak points. Customers not only appreciate its location and easy access but also the wide range of shops, the fact they are all located in one place, a pleasant atmosphere, convenient opening hours, numerous attractions that make it possible to spend time in an interesting way, good quality of products and services as well as attractive prices and promotions.

The latter ones are particularly favoured by the so-called ‘opportunity chasers’, who together with the so-called ‘shopping – my second name’ customers constitute approx. two thirds of all the visitors to the shopping centre in Gliwice. More importantly, they are the ones with the biggest shopping budget. Gliwice has been ranked among the top locations with above-average salaries of inhabitants for many years.

Having a treasure in the form of an ideal target group at its disposal, FORUM is careful to stay in touch with them. All the marketing campaigns and continuous communication are aimed at achieving this. They include a free magazine, which is sent to most of the households in Gliwice and its immediate area as well as a regular e-mailing addressed to the users of the KLIK loyalty platform. The programme introduced in spring 2010 has already got approx. 30,000 users benefiting from it on a regular basis.

This year the apple of the eye of C.H. FORUM’s marketers was the first exhibition of the Ice Age fauna and flora in Poland. The exhibition was held in May and was visited by thousands of pupils and students from local schools and nursery schools. Meanwhile, the May lottery, the main prize in which is an exclusive trip to Paris and EUR 4,000 for shopping, serves as a typical sales incentive.

most attractive shopping centre in the region in February earlier this year (in a competition of gazeta.pl). They must have also been impressed by the new ‘Under the Clouds’ food court, the opening of which coincided with the ranking.

ENJOY YOUR MEAL UNDER THE CLOUDS Delicacies of international and regional cuisine can be tasted in a number of restaurants located in the modern food court with an area of approx. 1,000 sqm.

The place is characterized by its functionality, unique design and high quality of finishing. Its unconventional decor takes its cues from nature creating a relaxing heaven in the busy restaurant area.

Specially designed natural wood and white elements such as sofas resembling stones, stylized trees, lamps and carefully selected furniture of the Vitra brand contribute to these associations. There is wireless Internet available in the area.

The top Mamacloud lighting which imitates clouds was designed by Frank Gehry and installed by the Swiss company Belux whereas the lamps in the shopping arcade are a product of the renowned company Luce Plan. ●

CRÈME DE LA CRÈME OF THE FASHION WORLD

Agnieszka Mielcarz, Managing Director

FORUM has been skilfully building its image of an in-vogue shopping centre. In order to achieve this, it has been cooperating with the fashion leaders. This year’s campaign was created in cooperation with such figures as designer Tomasz Ossoliƒski, photographer Marcin Tyszka and model Ola Kuligowska, a participant of the Top Model programme. The session was carried out on a grand scale and resulted in groundbreaking imagery which epitomises the values of the shopping centre in the region.

Such an opinion was expressed by Internet-users, which chose C.H. FORUM as the BROUGHT TO YOU BY FORUM GLIWICE SHOPPING CENTER

CONTACT: FORUM GLIWICE SHOPPING CENTER Agnieszka Mielcarz, Managing Director 44-100 Gliwice, ul. Lipowa 1 Tel. +48 32 335 73 05 E-mail: amielcarz@avestusrealestate.com

NOVEMBER 14-20, 2011

LOKALE IMMOBILIA – SPECIAL MAPIC EDITION

Retail properties

Poland’s retail property market continues to prosper in 2011 The country currently ranks third in Europe in terms of future supply of retail space

Growth areas One region that is seeing particularly impressive growth is Silesia. The Silesia City Center

Almost 300,000 sqm of new retail space has been delivered in the Polish market already this year extension, which provides 250 stores across 65,000 sqm, was completed in October, while Galeria Katowicka, which has a total area of 52,000 sqm, is currently under construction.

Both of these developments are located in the city of Katowice.

Work on the Europa Centralna mall in Gliwice, also in Silesia, and Supersam in Katowice is planned to begin in the near future. The four projects are set to provide a total of nearly 115,000 sqm of new retail space to the Silesian market in 2013.

According to Karina Kreja, an associate director at CBRE Polska, Silesia had been underestimated by retail developers for a long time. “In comparison to cities such as Warsaw, there is significantly less stock in terms of retail space, while many shopping centers are also of a very low standard,” she said.

As a result, in Silesia there are two directions in terms of retail growth, Ms Kareja said.

“First there is natural growth,

Retail rising Major retail projects completed in Poland in Q1-Q3 2011 City

Project

Developer

Area (sqm)

Galeria Echo (extension)

Echo Investment

70,000

Galeria Kaskada

ECE

43,000

Radom

Galeria S∏oneczna

AIG Lincoln

42,000

Opole

Turawa Park

Helical Poland

35,460

Leszno

Galeria Leszno

Agromex Development

32,000

Gdaƒsk

Morski Park Handlowy

Liebrecht & Wood

29,460

because the region lacks retail space with many blank spots where cities with populations of more than 100,000 do not have even one shopping center.

Second, there are many oldfashioned ... shopping centers that need a major facelift,” she added.

Bright future According to Jones Lang LaSalle, Poland currently boasts about 193 sqm of retail space per 1,000 inhabitants, slightly above the European average of 172 sqm, and behind countries including Italy, the Netherlands, the UK and Spain, suggesting there is still potential for further development. Wroc∏aw currently leads the way, providing 479 sqm of retail space per 1,000 inhabitants.

“The future is surprisingly optimistic ... and because the range of developers has really widened in recent years, we have a lot of domestic and international players becoming involved in the Polish market,” Ms Kreya said. “And with room for growth particularly in smaller cities, this suggests a good future for retail development.”

Tenant expansions Kielce Szczecin

13

Tesco in Centrum Handlowe Kowale A Tesco store will occupy 1,200 sqm of space in the Centrum Handlowe Kowale shopping center project that Warsaw-based investor Impress will build in the Tri-city area. The lease agreement was brokered

by AXI IMMO, the exclusive leasing agent for the scheme. Centrum Handlowe Kowale will be a two-storey scheme offering 4,700 sqm of retail space. The development is scheduled to be opened in the autumn of 2012.

Weltbild stays in Green House SHUTTERSTOCK

Construction activity in Poland’s retail real estate segment continues to be high, with the country poised to become a European leader in the near future in terms of provision of shopping center space. As the density ratio in Poland remains just above the European average, the market still has considerable growth potential, experts say.

The Polish retail property market is currently one of the three fastest-growing in Europe with only Russia and Turkey expected to have a larger amount of new retail space delivered within the next few years, a recent report by Jones Lang LaSalle has found.

According to the study, the overall maturity of Poland’s retail real estate market is moderate and indicates potential for further growth.

Jones Lang LaSalle data shows that almost 300,000 sqm of new retail space has been delivered in the Polish market so far this year and that an additional 250,000 sqm will likely be completed by the end of 2011.

A comparable level of development activity is expected to characterize both 2012 and 2013.

At the moment, construction is underway on almost 670,000 sqm of retail space across Poland. In a continuation of a trend that started in the market over a decade ago, new projects are now increasingly located in smaller cities.

Towns with fewer than 200,000 inhabitants now account for nearly 60 percent of construction activity in Poland, according to the study.

www.wbj.pl

Source: Colliers International

This is good news for both international and domestic retail chains, many of which plan to expand in the Polish market in the near future.

With the vacancy rates in major Polish cities ranging from less than one percent in Warsaw to almost three percent in the Tri-city area, the new projects will provide those looking for new locations with additional modern space to choose from.

“The Polish retail market is maturing. It is increasingly difficult to find locations with a clear shortage of modern retail space. This is good news for tenants who can count on a larger selection of high-quality

modern space, both in smaller cities and the largest Polish urban centers,” said Edyta Potera, retail space department director at Jones Lang LaSalle.

Adam Zdrodowski, David Ingham

Weltbild Polska has renewed its lease agreement for space in the Green House office building in Warsaw. The company, which occupies 2,451 sqm in the scheme, will stay in the property at least until mid-2016.

Green House is a three-storey office building located on ul. Hankiewicza in the capital’s Ochota district. ●

14

www.wbj.pl

LOKALE IMMOBILIA – SPECIAL MAPIC EDITION

NOVEMBER 14-20, 2011

Shopping-center expansion

Developers are Large investments building extensions to Large amounts are being spent existing retail space to by commercial real estate enhance their projects’ developers on expansion work throughout Poland. Mayland competitiveness Real Estate is hoping the extenIn a bid to meet growing demand in local markets and strengthen the competitiveness of their schemes, a growing number of developers in Poland are opting to expand existing shopping-center space.

Out of a total of 520,000 sqm of GLA completed in Poland so far this year, some 101,000 sqm, or 19 percent of all space, comprises extensions and next phases, according to data from real estate advisory CBRE. A further 204,000 sqm of GLA is scheduled to be opened by the end of the year, of which some 30,000 sqm (15 percent) will comprise of extensions and next phases of existing projects.

“Existing centers have an established location; it is easy to check the footfall for the center and convince new retailers to look at the location. This is real advantage of extended schemes,” said Magdalena Fràtczak, retail director at CBRE.

sion of its Wzgórze Shopping Centre in Gdynia will increase the project’s competitiveness in the local market. The company secured a €136.8 million senior financing loan to redevelop and extend the mall, with expansion work on the project having begun in October.

Real, Inditex Group, Al Shaya Group, C&A and Helios.

The biggest retail scheme completed in the Polish market in the third quarter of this year was the expansion of Galeria Echo in Kielce, which now offers 70,000 sqm of leasable space. Prior to expansion work it had 26,000 sqm of leasable area.

Connecting space The key to success, experts say, is in ensuring that the addition-

“The key to success is in ensuring that the additional space is physically connected with the existing mall” “We launched this project because we saw big potential for the market,” said company spokesperson Anna Skrocka, adding that 70 percent of the space had been successfully leased out before construction on the new section had started.

The redeveloped mall will occupy 70,000 sqm of GLA, compared to 22,000 sqm at present, and comprise 270 units. Anchor tenants include

al space is physically connected with the existing mall, that its offer is linked to the existing offer and that tenants who meet the growing expectations of the local market are secured.

“For an extension to be a powerful improvement, it needs to be well-designed and linked with the existing phase,” said CBRE’s Mr. Fràtczak.

Immofinanz Group, the

developer of the Silesia City Center shopping mall in Katowice, chose to expand the scheme and diversify its offer, with the aim of strengthening the mall’s status as a regional market leader.

“We managed to do this primarily through diversifying our range of brands, which you will not find in any other mall in the region,” said Ewa Marcinek, managing director at Silesia City Center.

“This move also provides Silesia with more competitiveness in relation to malls in Kraków, Warsaw and Wroc∏aw, where the residents of our region often make their purchases,” she added.

At a cost of just over €50 million, the mall was expanded from 66,000 sqm to 86,000 sqm.

Work was completed in October. The new space hosts 60 new shops, including outlets of H&M, Tommy Hilfiger, La Mania and Harpers Shoes.

To mark the extension’s opening, a five-day event was held with US socialite Paris Hilton the guest of honor.

More expansion announcements are expected in the near future, with Blackstone Real Estate Group, the owner of the

COURTESY OF ECHO INVESTMENT

Extending to compete

Galeria Echo in Kielce is one of the largest projects expanded in Poland this year Magnolia Park shopping center in Wroc∏aw, Lower Silesia, expected to announce plans concerning expansion of the

mall during this week’s MAPIC retail property fair in Cannes, France.

Gareth Price

NOVEMBER 14-20, 2011

LOKALE IMMOBILIA – SPECIAL MAPIC EDITION

Residential

www.wbj.pl

15

Monday Development to launch new housing project in Poznaƒ

COURTESY OF CISZEWSKI FINANCIAL COMMUNICATIONS

Marvipol builds Bielany Residence in Warsaw

NewConnect-listed developer Monday Development will launch construction on a new residential investment in Poznaƒ, Wielkopolskie voivodship later this month. Located on ul. Soko∏a in the city’s So∏acz district, the investment will comprise a total of 2,000 sqm, housing 35 apartments as well as commercial space.

Housing units in the project will be sized from 30-120 sqm and priced from z∏.6,9008,200 per sqm. Pre-sales of the apartments have just begun with the units being scheduled to be completed by the end of

next year. The developer is touting the investment’s proximity to green and recreation areas including two parks and Poznaƒ’s Rusa∏ka lake.

“Few new apartments are now being built in the So∏acz area and there are many people willing to live in the district,” Iwona Chmielewska, marketing manager at Monday Development, said in a statement.

She added that most of the new projects are exclusive schemes with prices that are unaffordable even for affluent Poznaƒ inhabitants. “Our

investment offers an alternative of kinds – modern architecture and comfortable homes at an affordable price,” Ms Chmielewska said.

The project on ul. Soko∏a has been designed by the Poznaƒ-based Insomia studio. Next year, Monday Development plans to launch another residential scheme in the So∏acz district. The investment, which is expected to be completed in Q2 2013, will be located at the intersection of Poznaƒ’s ul.

Soko∏a and ul. Gen. Maczka and will comprise some 2,500 AZ sqm of usable space.

The developer has also obtained a building permit for a scheme on the capital’s ul. Powàzkowska Warsaw Stock Exchange-listed developer Marvipol has launched construction on its Bielany Residence multi-family residential project in the Polish capital. The scheme, which is located on ul. Sokratesa, will deliver 378 apartments sized from around 30 sqm to 127 sqm.

Units in the Bielany Residence development are priced

at z∏.6,990-z∏.7,990 per sqm.

The investment, which is scheduled to be completed in October 2013, is being built by Strabag. The general contractor’s deal with Marvipol is valued at z∏.85 million.

In other news, Marvipol announced it has obtained a building permit for a residential project that the company wants to build on ul. Powàzkowska, in the capital’s ˚oliborz district.

Construction is expected to start in the first quarter of 2012, once the developer has selected a general contractor.

The Powàzkowska scheme,

which will be located on land that Marvipol bought from Ciech in the final quarter of last year, will comprise 304 housing units. Completion of the project is scheduled for H1 2014.

Established in 1996, Marvipol has so far delivered 14 investments. The developer’s ongoing projects include Hill Park Apartments and Osiedle Zielona Italia, both of which are located in the Polish capital.

Since 2008, the company has been listed on the Warsaw Stock Exchange.

Adam Zdrodowski

COURTESY OF PERCEPTION PR

Units in the Bielany Residence are priced z∏.6,990-z∏.7,990 per sqm

The investment will comprise a total of 2,000 sqm

Expert Opinion

The Polish retail market Gary Thursby, Retail Agency and Dominika J´drak, Research and Consultancy After a period of slowdown the retail market in Poland revived in 2011, both on the supply and demand side. Developers are returning to the market by presenting their expansion plans for the coming years. In 2011, over 340,000 sqm of retail space has been delivered to the market so far and another 700,000 sqm is under construction. The main retail schemes opened in the three quarters of 2011 are Galeria S∏oneczna in Radom, Turawa Park in Opole, Galeria Leszno and Galeria Kaskada in Szczecin.

At the moment the total supply of modern retail stock in Poland exceeds 8.3 million sqm.

The majority of shopping centers are located in eight polish agglomerations, however presently developers’ activity is

mainly focused on medium- and small-sized cities. In terms of formats the Polish retail market is still dominated by traditional shopping centers (92 percent).

However, the retail park format will continue to grow in terms of numbers and popularity as retailers such as TK Maxx, Toys R Us and Jula, all relatively new entrants to the market, will drive future demand and attract those retailers previously only seen within the traditional shopping centers. Moreover, there will be a shift towards smaller schemes such as convenience and neighborhood shopping centers anchored by the likes of Kaufland, Biedronka and the smaller format Tesco and Carrefour store concepts.

In terms of high street loca-

tions Warsaw (Nowy Âwiat with Trzech Krzy˝y Square) and Kraków (Floriaƒska) consistently top the list, and the demand for premium high street locations continues to exceed supply as an increasing number of top-end and exclusive brands enter the Polish market. As well as developers, tenants also seek possible gaps in the market, mainly by targeting small- and mediumsized cities. An increasing supply of modern retail space in secondary cities is facilitating the development of regional markets on the demand-side.

Many top international brands, present only in major Polish cities up until now, are opening their stores in smaller cities.

This is possible due to completion of modern retail schemes,

suitable for their expectations. A number of brands which entered the market in recent years have developed their chains dynamically, like TK Maxx, Starbucks, and Glitter.

This is coupled with an increasingly observed trend of existing retailers relocating to the best newly opened retail schemes and high quality existing shopping centres.

Considering the increasing activity of developers, as well as tenants, the forecast for the retail market in Poland is optimistic, but at the moment it is hard to estimate how the uncertain situation in relation to the global market and gloomy forecasts related to the debt crisis in the euro zone will affect the Polish market. However, very low

BROUGHT TO YOU BY COLLIERS INTERNATIONAL POLAND

vacancy rates recorded in Polish shopping centres (in eight major agglomerations, vacancy rates range between 0.5 – 3 percent), as well as the high interest shown by international brands, indicates that the market is still very attractive and there are still possible gaps and opportunities to be found. ●

For more details of opportunities for developers and retailers in Poland please visit the Colliers international stand at MAPIC (Level 01, Stand 12.16).

For more details on retail market or project analysis please contact Research and Consultancy in Poland. www.colliers.com

16

www.wbj.pl

LOKALE IMMOBILIA – SPECIAL MAPIC EDITION

NOVEMBER 14-20, 2011

Construction & Real Estate

Selected Major Shopping Centers Ranked by gross leasable area (GLA)

Rank

Space (sqm): Total number of GLA - Gross SuperUnder parking spaces / Leaseable Area / Hypermarket / construction / Number of GBA - Gross Shopping mall Total planned underground Building Area parking spaces

www.bookoflists.pl

Company name Address Tel./Fax E-mail Web page

1

Manufaktura ul. Drewnowska 58, 91-002 ¸ódê 42 664-9260/42 664-9290 marketing@manufaktura.com, www.manufaktura.com

125,699 158,692

28,142 85,272

158,692

2,955 -

Apsys Polska Apsys Polska: Micha∏ Siewierski, msiewierski@apsysgroup.pl, 42 664-9260

Zara: 1,796; C&A: 1,983; Van Graaf: 2,739; Empik: 1,248; Almi Decor: 1,139; RTV Euro AGD: 1,570

2006

Horyzont; Leroy Merlin Inwestycje; I.T. Poland Development Apsys Polska: marketing@manufaktura.com

2

Arkadia Al. Jana Paw∏a II 82, 00-175 Warsaw 22 331-3400/22 331-3401 www.arkadia.com.pl

110,000 287,000

30,200 80,000

287,000

4,300 4,300

ERE/BEG Group Unibail Rodamco

Carrefour: 18,400; Leroy Merlin:11,800; Saturn: 5,627; Cinema City: 4,985; Peek&Cloppenburgh: 3,635; Holmes Place; H&M: 2,787; C&A: 2,221

2004

Unibail Rodamco Unibail Rodamco

Anthony Vesin

Port ¸ódê ul. Pabianicka 245, 93-457 ¸ódê 3 42 298-1212 portlodz@ikea.com, www.portlodz.pl

103,000 118,935

WND 83,688

WND

4,500 WND

Inter IKEA Centre Polska Inter IKEA Centre Polska: Justyna Bergman, justyna.bergman@ikea.com, 506-008-158

IKEA: 33,000; Leroy Merlin: 11,176; Saturn: 5,082; Zara: 1,790; C&A: 2,477; H&M: 1,812; Reserved: 1,563; Marks&Spencer: 21,118

2010

Inter IKEA Centre Polska Andrzej CieÊlik, andrzej.cieslik@ikea.pl, 506-003-524

Andrzej CieÊlik

Centrum Handlowe ¸acina Poznaƒ(1) 4 22 701-9200/22 701-9201 office@apsysgroup.pl www.lacina.pl

98,000 WND

WND WND

WND

3,200 -

Apsys Polska Apsys Polska: Marzena Hengenius, mhengenius@apsysgroup.pl, 22 701-9230

Carrefour; Leroy Merlin; Multikino

2014

Apsys Polska WND

WND

5

Park Handlowy Targówek ul. Malborska 51-53, 03-286 Warsaw 22 334-4576 www.targowek.parkhandlowy.pl

90,640 102,746

WND WND

WND

4,500 WND

Inter IKEA Centre Polska IKEA: 23,112; Leroy Merlin: 14,805; Meble Emilia: 2,950; Meble Agata: Inter IKEA Centre Polska: Darek Forysiak, darek.forysiak@ikea.com, 1934; SMYK: 2,382; Piotr i Pawe∏: 2,038; EURO AGD: 1,667; Jula: 6,283 506-003-499

2006

Inter IKEA Centre Polska Urszula ¸atka, urszula.latka@ikea.com, 606-295-502

Urszula ¸atka

6

Park Handlowy Bielany ul. Czekoladowa 5-22, Bielany Wroc∏awskie, 55-040 Kobierzyce 71 360-7734/71 360-7738, www.bielany.parkhandlowy.pl

85,000 107,000

16,794 WND

WND

3,000 -

Inter IKEA Centre Polska Inter IKEA Centre Polska: Micha∏ Ma∏ecki, michal.malecki@ikea.com, 506-008-200

IKEA: 16,568; Tesco: 16,794; Alma: 2,747; RTV Euro AGD: 1,148; OBI: 13,400; Carpetright: 1,072; H&M: 1,988; McDonald’s: 2,000

1998/2004

Inter IKEA Centre Polska Ewa Kolondra, ewa.kolondra@ikea.com, 506-003-452

7

Park Handlowy Matarnia ul. Z∏ota Karczma 26, 80-298 Gdaƒsk 58 769-9444/58 799-9449 www.matarnia.parkhandlowy.pl

77,351 84,000

WND WND

WND

2,100 WND

Inter IKEA Centre Polska Inter IKEA Center Polska: Justyna Bergman, justyna.bergman@ikea.com, 506-008-158

IKEA; TK Maxx: 2,873; Bomi: 2,929; OBI: 13,400; C&A: 2,265; MediaMarkt: 4,047; Meble Agata: 2,785

2005

Inter IKEA Centre Polska Andrzej Hnatiuk, andrzej.hnatiuk@ikea.com, 606-555-392

8

Centrum Handlowe Karolinka ul. Wroc∏awska 152/154, 45-835 Opole 77 462-4800/77 474-3336 biuro@ch-karolinka.pl, www.ch-karolinka.pl

70,000 79,000

13,200 26,000

WND WND

2,600 -

Mayland Real Estate Mayland Real Estate: Jolanta Jasionowska-Kasiak, jolanta.jasionowska@mayland.pl, 22 546-9873

Real: 13,200; RTV Euro AGD: 1,000; Decathlon: 3,600; H&M: 1,650; TK Maxx: 3,300; Leroy Merlin: 10,530; Electro World: 3,312; Meble Agata: 9,183

2008

MGPA Europe Fund III Mayland Real Estate

Iwona Sitko

8

Wola Park ul. Górczewska 124, 01-460 Warsaw 22 533-4000/22 533-4004 www.wolapark.pl

70,000 110,000

27,000 43,000

20,000 88,000

2,500 -

Wola Park Cushman & Wakefield: 22 820-2020

Reserved; Zara; H&M; Empik; Multikino; C&A; Go Sport; SuperPharm

2002

PBW II Real Estate Fund AEW Central Europe: Agnieszka Sawicka

Magdalena Tadych

10

Z∏ote Tarasy ul. Z∏ota 59, 00-120 Warsaw 22 222-0000/22 222-0001 info@zlotetarasy.pl, www.zlotetarasy.pl

66,212 159,626

WND 61,097

WND

WND WND

WND DTZ: El˝bieta Powichrowska, elzbieta.powichrowska@dtz.com

Multikino; Saturn; Van Graaf; Carrefour; Marks & Spencer; H&M; Zara

WND

ING Real Estate Investment Management DTZ: info@dtz.pl, 22 222-3000

Bartosz Pustu∏

11

Centrum Franowo ul. Szwedzka 6, 61-285 Poznaƒ 61 879-9913/61 879-9913 www.franowo.parkhandlowy.pl

63,000 WND

11,636 WND

WND 80,000

2,000 WND

WND

IKEA: 14,564; Carrefoour: 11,636; Decathlon; OBI: 11,000; RTV Euro AGD: 1,508; McDonald’s: 2,000; TOPWERT: 1,205; Bank Pekao: 234

1993

Inter IKEA Centre Polska Andrzej Hnatiuk, andrzej.hnatiuk@ikea.com, 606-555-392

12

Galeria Mokotów ul. Wo∏oska 12, 02-675 Warsaw 22 541-3000/22 606-0756 info@galeriamokotow.pl, www.galeriamokotow.pl

62,300 90,400

5,273 57,027

WND

2,600 940

Globe Trade Centre Irmina Kondraciuk, irmina.kondraciuk@unibailrodamco.com

Cinema City: 6,370; Carrefour: 5,273; Peek & Cloppenburg: 3,649; Royal Collection: 3,595; Empik: 1,763; Holmes Place Energy: 1,722; Go Sport: 1360; Zara: 1,310

2000

Unibail-Rodamco Mariusz Koz∏owski, 22 541-3000

Pawe∏ Klimczak

13

Blue City Al. Jerozolimskie 179, 02-222 Warsaw 22 311-7000/22 311-7001 info@bluecity.pl, www.bluecity.pl

62,000 180,000

4,200 57,800

WND WND

2,500 500

Blue City Anna Gut, anna.gut@bluecity.pl, 22 311-7021

Saturn: 6,000; Piotr i Pawe∏: 4,700; Inditex: 3,000; TK Maxx: 2,500; C&A: 2,000; Pure Health & Fitness: 1,600; Royal Collection: 1,500; Enel Med: 1,500

2004

Blue City WND

Yoram Reshef

14

Galeria Krakowska ul. Pawia 5, 31-154 Kraków 12 428-9900/12 428-9920 galeria@galeria-krakowska.pl, www.galeria-krakowska.pl

60,000 130,000

WND 60,000

WND WND

1,400 WND

ECE Projektmanagement ECE Projektmanagement: shop@ece.pl

Carrefour; Saturn; Peek&Cloppenburg; Zara; H&M; C&A

2006

Kraków Nowe Miasto ECE Projektmanagement Polska

Ryszard Wysokiƒski

15

M1 Centrum Handlowe Zabrze ul. Plutonowego Ryszarda Szkubacza 1, 41-800 Zabrze 32 373-7551/32 373-7559 m1zabrze@metro-mam.pl, www.metro-mam.pl

57,542 68,952

27,985 29,557

6,000 63,542

3,780 WND

Metro Group M1 Mall - Metro Properties: 22 500-0041; Retail Park: Apollo Rida Poland: Joseph Karp, Maciej Tertelis, 22 528-2222

Real; Praktiker; MediaMarkt

1999

Apollo Rida Poland: jkarp@apollorida.com.pl, mtertelis@apollorida.com.pl, 22 528-2222 Metro Properties: 32 373-7551

16

Millenium Hall ul. Kopisto 1, 35-315 Rzeszów 17 770-0700/17 770-0703 www.milleniumhall.pl

56,612 108,195

WND 54,617

WND

793 WND

WND DTZ: Irena Ustinovic, irena.ustinovic@dtz.com

Multikino: 3,087; Zara: 2,135; Piotr i Pawe∏: 1,995; Media Expert: 1,910; H&M: 1,763; C&A: 1,762; Pure Health & Fitness: 1,271; Hilton: 7,749

2011

Develop Investment DTZ: info@dtz.pl, 22 222-3000

17

Centrum Handlowe Atrium Koszalin ul. Paderewskiego 1, 75-736 Koszalin 94 344-6910/94 344-6918 kgumieniak@aere.com, www.atriumkoszalin.pl

55,254 WND

9,963 44,010

70,000 70,000

1,600 470

WND Castorama: 8,768; Multikino: 3,097; Atrium Poland Real Estate: Katarzyna H&M: 1,800; MediaMarkt: 4,335; C&A: 2,015; New Yorker: 1,493; Dzieciàtko, kdzieciatko@aere.com, Reserved: 1,083; Pure: 1,243 22 458-2002

2008

Atrium Koszalin Atrium Poland Real Estate Management

18

Galeria Malta ul. Abpa Baraniaka 8, 61-131 Poznaƒ 61 658-1022/61 658-1022 biuro@galeriamalta.pl, www.galeriamalta.pl

54,000 162,000

2,700 51,300

WND WND

1,800 WND

Neinver Polska Neinver Polska: 22 822-1200

Piotr i Pawe∏: 2,700; Multikino: 3,800; Media Expert: 3,022; C&A: 2,750; Marks & Spencer: 2,600; Niku Fitness & Squash: 2,528; H&M: 2,250; Zara: 1,450

2009

Heitman; Neinver Barbara Topolska

Tomasz Wojsz

19

Janki Park Handlowy Pl. Szwedzki 3, 05-090 Raszyn 22 711-2436/22 711-2302 najem@ikea.com, www.parkhandlowy.pl

53,600 60,000

WND

WND WND

WND WND

Inter IKEA Centre Polska Marcin Zakrzewski, 506-003-502

IKEA: 25,000; Praktiker: 7,600; Piotr i Pawe∏: 1,250; RTV Euro AGD: 436; Jula: 4,373; Gravitan: 2,008; Komfort: 1,334; Belbazaar: 681

1995

Inter IKEA Centre Polska Urszula ¸atka, urszula.latka@ikea.com, 606-295-502

Urszula ¸atka

20

Centrum Handlowe Warszawa Wileƒska ul. Targowa 72, 03-734 Warsaw 22 331-6440/22 331-6001 www.Warsaw-wilenska.pl

53,000 110,000

22,000 16,500

WND

1,250 WND

ERE/BEG Group Unibail-Rodamco

RTV Euro AGD: 1,350; Go Sport: 1,070; Reserved: 960; New Yorker: 956; Smyk: 608; Deichmann: 580; Rossmann: 327

2002

Unibail-Rodamco Unibail-Rodamco

Filip Kry∏owicz

Notes: WND = Would Not Disclose. Research for The List was done in September - October 2011.

Number of employees and ownership structure are as of September 2011. All information pertains to the companies’ activities in Poland. Companies which did not respond to our survey are not listed.

Footnotes: (1) Under construction.

Developer / Lease agent – contact person

Selected tenants (name: space leased sqm)

Year completed

Ownership / Building manager

Mall director / Title

S∏awomir Murawski WND

Center Manager

Center Manager

Center Manager

Ewa Kolondra Center Manager

Andrzej Hnatiuk Center Manager

Center Director

Center Manager

WND

Andrzej Hnatiuk Center Manager

WND

WND

Center Director

WND

Wojciech Tereszkiewicz WND

Piotr Ga∏ka Center Manager

WND

Center Manager

Center Manager

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Joanna Raszka, ul. Elblàska 15/17, 01-747 Warsaw, via fax to (48-22) 639-8569, or via e-mail to wbjbol@wbj.pl. Copyright 2011, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

INTERVIEW

NOVEMBER 14-20, 2011

www.wbj.pl

17

Polish-Vietnamese relations

Building oriental connections Nguyen Hoang, Vietnam’s ambassador to Poland, talks to WBJ about the position of Vietnam on the world stage and how warm ties between Vietnam and Poland can be used to develop business opportunities for the two nations Ewa Boniecka: How would you describe the present economic and political position of Vietnam in the international arena?

Nguyen Hoang: It has been 25 years since Vietnam started conducting an open-door policy and participating in international political and economic cooperation. Our economy has maintained steady growth at an average rate of 7-8 percent per year, while our international trade has been growing over the last 20 years at a rate of 15-20 percent. Because of the global financial crisis,Vietnam has had to face, like other countries, some new challenges and problems.

These have been associated with volatile currency markets, the rise in prices of many commodities and the general risk of economic destabilization on a macro scale.

Our government undertook a number of actions aimed at stabilizing our economy and limiting inflation. As a result, from January to August 2011 our economy again grew strongly, at 6 percent.

Vietnam, whose role and position in Southeast Asia is becoming increasingly important, has the reputation of being politically stable. It is also known for its transparency when it comes to economic activity and investment. So the international community is looking with growing confidence at our economic progress. By 2010 Vietnam had attracted $180 billion in foreign direct investment from 89 countries and territories.

Vietnam has also become an international investor itself, presently running around 500 investment ventures in 50 countries.

So, with a population of 90 million people, of which 65

percent are under 35 years of age, with our fast-developing market economy and huge labor potential, Vietnam is seen as being on the road to becoming one of the Asian economic tigers. And along with the significant development of our economy, Vietnam’s political position is also growing in prominence on the international scene. Vietnam became a member of the World Trade Organization in 2007 and is active in the Association of Southeast Asian Nations (ASEAN), performing the role of ASEAN chairman in 2010.

We are still not a rich country, but according to UN statistics Vietnam is one of the countries which has achieved the greatest success in fighting poverty. We reduced the number of people living in poverty from 56 percent in 1993 to 10 percent in 2010.

How do you assess the economic and political relations between Vietnam and Poland?

I consider it to be a paradox that in over 60 years of longlasting, friendly political relations and close ties between Vietnam and Poland, our economic relations are still far behind where they could be.

The value of our mutual trade stood at $600 million in 2010.

Polish export to Vietnam is very limited, placing your country near the bottom among EU members, far behind Germany which is at the top. Poland, whose exports to Vietnam are valued at €100 million, is just a little ahead of the Czech Republic and Hungary.

In terms of imports to Vietnam, China accounts for 25 percent of the total, while Germany has 2 percent and the US 4 percent. Poland accounts

for just 0.12 percent of total imports to Vietnam. Those numbers speak for themselves, so I constantly encourage both our sides to explore the possibilities for enlarging our mutual trade.

The political climate is very favorable for this kind of cooperation. In September 2010, Prime Minister Donald Tusk made a visit to Vietnam, while Polish ministers also made several trips. Moreover, every year high-ranking Vietnamese delegations visit Poland. The

promoting Polish business in my country. We are living in a time of globalization, and while Vietnam could be a reliable door to a huge market in the rest of Asia for Poland, so Poland could be a reliable door to Europe for us.

I think that Poland should do better than provide only 0.12 percent of all Vietnamese imports, and our investments in Poland should be higher than the present amount of $8 million. There are Vietnamese investments in Poland, for

“Vietnam could be a reliable door to a huge market in the rest of Asia for Poland” recently launched direct air route between Warsaw and Hanoi has also helped tourists travel between the two countries.

What I consider to be very important for the development of much more dynamic cooperation between Vietnam and Poland is the fact that friendly ties already exist between our two nations. I was educated in Poland and I speak the Polish language. In my country there are over 10,000 former graduates of Polish universities, among them present and former mayors of Hanoi, a former minister of the environment, and many people from academic and business circles. Thus, our shared human capital is unique and as an ambassador of my country to Poland I am doing my best to make it mutually beneficial for our two countries.

Do you think that these positive feelings could be important in helping Poland and Vietnam to face up to the hard realities of the current global economic situation?

They could be important, if used wisely. I think that the positive feelings in Vietnam towards Poland should be exploited more vigorously in

example in distribution, and I am pleased that there are hundreds of Vietnamese and Polish people working together in the big [ASEANEU] trade center established in Wólka Kosowska, near Warsaw. But I think that there are possibilities for developing more ambitious economic cooperation in some other branches of industry.

Of course, there are also

some difficulties, such as those relating to the large distance between our two countries, as well as differences in tradition and climate. However, there are more advantages than problems. I think that when one considers that businesspeople from the US, Europe and Africa make big profits in Vietnam, Polish companies, which have additional advantages stemming from our friendly ties, can positively compete with them in our markets.

There are 20,000-30,000 Vietnamese living in Poland, comprising the biggest Asian community in the country. How do you see the opportunities and problems of that community?

I think that the Vietnamese community is well-adjusted to Poland and their relations with Polish people are good and friendly. As in every human community there are some [criminal activities], but we strongly reject insinuations in the media that there is a ‘Vietnamese mafia’ here, because it is completely false and no police authorities support that claim.

There is a second generation of Vietnamese in Poland, who were born here. Those children attend Polish schools, they absorb Polish culture and sometimes they speak better Polish than Vietnamese. Naturally, we want them to keep our language, so we have established a Vietnamese school in Warsaw. It is a private school with fees paid by parents, but our embassy is helping by providing textbooks and other supplies.

There are many Vietnamese living in many different countries. There are also many young Vietnamese going to study at universities in Britain, France, Germany and the US, partly under scholarships provided by those countries. However, the number of Vietnamese at Polish universities is much smaller than it once was.

There are fewer scholarships for foreigners here than in the West, but there are some Vietnamese who pay for their studies and choose to attend universities in Poland, among them Vietnamese who were born here. Later, many choose to carry on living and working in Poland. ●

Investment & Occupier Forum November 30th 2011 Warsaw, Poland – Marriott Hotel Organized by – EuropaProperty & ceegbc.org For further information contact: Craig Smith at +48 604 144 769 or craig@europaproperty.com Anna Kaliszewska at +48 601 382 667 or anna@europaproperty.com

Associate Partner:

Media Partner:

The

Commercial Real Estate NEWS

Poland’s Vietnamese community

Following the opening of the borders of the German Democratic Republic, many Vietnamese students and workers from

Today, Poland hosts the sixth-largest community of Vietnamese migrants in Europe, after France, Russia, the Czech Republic, Germany and the UK. Official estimates for the number of Vietnamese living in Poland vary from between 20,000-30,000. About 3.5 million Vietnamese live in countries outside of Izabela Depczyk Vietnam.

36 Projects already nominated

Central & Eastern European

Green Building Awards ceegbc.org

N

ILDING PROF BU E

NALS IO SS

By 1989, over 10,000 Vietnamese students were attending Polish universities and technical schools. Many others had come over to work in Polish industry.

Commonwealth of Independent States countries moved through Poland and East Germany towards Western Europe, where they had friends or relatives.

CEE G RE E

The Vietnamese community in Poland started life at the end of the Second World War. The first Vietnamese immigrants in Poland, or the “overseas Vietnamese,” as they call themselves, were students receiving education in Polish universities.

AS

S O CIATIO N

18

COVER STORY

www.wbj.pl

NOVEMBER 14-20, 2011

Pharmaceutical industry

A prescription for disaster?

Brian Davies

Poland’s pharmaceutical industry is set to undergo some major changes from the beginning of next year, when most of the measures contained in the new Reimbursement Act are due to be implemented.

Not all of these changes are expected to be good for the industry’s health, however, with many experts and industry players expressing deep concern at many aspects of the legislation.

Controversial cure Commonly referred to as the Reimbursement Act (Ustawa Refundacyjna), this wide-ranging piece of legislation has been hailed as the most significant regulatory development in the pharmaceutical sector for at least a decade, after it was signed by President Komorowski on May 30 this year.

However, it has alienated virtually every group involved

in the pharmaceutical industry to a greater or lesser extent, and there have been few signs of this opposition subsiding.

Perhaps the greatest amount of media attention has been given to the planned introduction of fixed prices for reimbursed medicines, which will have to be sold at the exact price decreed by the Ministry of Health, following negotiations with producers. A ban on all promotional activities and discounts relating to reimbursed medicines will also be introduced. Pharmacies dispensing reimbursed drugs will need to sign contracts with the National Health Fund (NFZ), agreeing to abide by the new rules.

No less controversial is the introduction of a cap on pharmaceutical spending as a proportion of the state’s overall health-care expenditures at 17 percent. Producers of reimbursed drugs will be obliged to

SHUTTERSTOCK

New legislation regulating the pharmaceutical sector has many industry players sick with worry.

The government says it is just trying to nurse the state budget back to health

The new legislation is a bitter pill for Poland’s pharmaceutical industry to swallow cover 50 percent of any eventual overspend above that limit in a new payback system.

The 17 percent limit is seen as likely to bring the growth in

public spending on drug reimbursement to a halt. This comes at a time when an aging population and an everincreasing number of people suffering from chronic diseases are creating demand for higher expenditures on medicines.

A myriad of other measures affecting all aspects of the pharmaceutical reimbursement system are included in the act, affecting various stakeholder groups involved directly in the system. The introduction of much stricter fines for pharmacists who dispense improperly written or fake prescriptions and the requirement that they sign an agreement with the NFZ to enable them to continue to dispense prescription drugs has already driven pharmacists’ groups to take their grievances over the act to Poland’s Constitutional Tribunal.

Meanwhile, there is concern that a new method for choosing the appropriate drug in a therapeutic group for hospital patients will mean that price will take precedence over efficacy. This, opponents argue, could have potentially negative consequences for patients and for the producers of more expensive, innovative

medicines.

Unhealthy spending On the other hand, the Polish government argues that it needs to bring some order into the pharmaceutical market, since public spending on pharmaceuticals has mushroomed in recent years.

This is particularly true in the case of expensive, innovative medicines used in therapeutic programs in hospitals, or as part of the NFZ’s chemotherapy services. Expenditure on these medicines soared from a total of z∏.1.69 billion in 2008 to z∏.2.84 billion in 2010. Indeed, Poland’s Ministry of Health cites the need to reverse this trend and rationalize public pharmaceutical reimbursement as a principal reason behind the creation of the Act. However, while many opponents of the act would accept that some rationalization is needed, it is the methods used in the legislation that has the industry up in arms.

Side effects “The Reimbursement Act creates a completely new reality in the management of the pharmaceutical economy in Poland,” said Pawe∏ Sztwiert-

nia, director of the Employers’ Union of Innovative Pharmaceutical Companies (Infarma), which represents Polish divisions of large multinational drug producers.

“As work progresses, numerous questions and uncertainties arise which we still don’t have the answers to.

For example, we still lack a definitive interpretation regarding the official sale price. It was not clearly specified whether it was to be the price of the Polish subsidiary or also the price of the parent company registered abroad.”

Mr Sztwiertnia also has strong concerns about the large number of documents which the newly created Economic Commission – which will make recommendations regarding the reimbursement of new medicines on the basis of cost-benefit criteria – requires from companies submitting applications to have their drugs reimbursed in Poland.

In particular, his concerns are focused on the type of documents that are required from companies that want to sell their drugs under the aegis of a risk-sharing agreement. The introduction of this kind of agreement is another novelty of the Reimbursement Act. A risk-sharing agreement is a form of agreement between pharmaceutical companies and health insurance funds, or other payers, under which the ‘risk’ posed by a new innovative drug in terms of its efficacy and cost is borne by both the payer and the producer.

“In the case of the requirement [under the Reimbursement Act] to present documents relating to risk-sharing agreements in other EU countries or European Free Trade Association countries – this is not a requirement pharmaceutical companies can fulfill,” Mr Sztwiertnia said. “These types of agreements are subject to confidentiality clauses and protected by legal regulations in those countries, which payers and producers are both bound by.”

These apparent oversights in the drafting of the Act are compounded by the seeming

The high price of health NFZ Expenditures on drug reimbursement, 2008-10 (z∏. billions) 2008

2009

2010

Reimbursement via pharmacies

7.37

8.24

8.55

Reimbursement of expensive hospital drugs and cancer medicines*

1.69

2.59

2.84

*Spending on medicines used in therapeutic programs, standard chemotherapy and non-standard chemotherapy combined Source: NFZ

COVER STORY

NOVEMBER 14-20, 2011

inability of the Ministry of Health to get around to starting the all-important negotiations with pharmaceutical companies on the subject of fixed, official prices of reimbursed drugs.

Delayed treatment “There’s plenty of talk about the negotiations,” said Mr Sztwiertnia. “But the first sitting of the Economic Commission, which is carrying out the negotiations on behalf of the Ministry of Health, only took place on October 19. It is now early November, and meetings with producers have only just begun,” he added.

“Bearing in mind that there are around 3,600 applications for reimbursement, the ministry has a very hard task on its hands if it wants to complete the talks and publish a new drug reimbursement list on the basis of the new act at the beginning of next year.”

Monika Stefaƒczyk, chief pharmaceutical market analyst at market research and consulting company PMR, echoed these sentiments. “Market players are in doubt about whether the Ministry of Health will cope with the enormity of the administrative duties imposed on it,” she said.

Moreover, as Polish daily Dziennik Gazeta Prawna reported at the beginning of November, the ministry is yet to issue a decree outlining the form of the agreement document which will be signed between the NFZ and individual pharmacies.

Taking into account the fact that there are 13,670 pharmacies with which the NFZ must conclude agreements by the end of the year, achieving this part of the plan by the official deadline for the act’s implementation seems virtually impossible.

Deep cuts This uncertainty about the implementation of the act, and the expected consequences of some of its measures, are leading many analysts to lower their growth predictions for the sector in the coming years.

In particular, the reimbursed drug segment is seen as likely to stagnate as a result of the ban on any promotional activities relating to these drugs, as well as the imposition of official prices.

In this context, certain large pharmaceutical companies have already announced their intention to reduce their Polish workforces. The Polish subsidiaries of two of the largest pharma companies in the world, Sanofi of France and Pfizer of the United States, are set to see job cuts.

Dziennik Gazeta Prawna reported that Sanofi was planning to lay off 150 of its 1,300 staff in the country, while Pfiz-

“There is doubt about whether the Ministry of Health will cope with the enormity of the administrative duties imposed on it” er plans to make 120 people – about one-fifth of its Polish workforce – redundant. A spokesperson from Sanofi was quoted as saying that the expected consequences of the Reimbursement Act were behind the decision to make the cuts.

However, PMR’s Stefaƒczyk was doubtful that implementation of the Act would herald a wave of cuts across the Polish pharmaceutical industry.

“I forecast a change of the employment structure rather than massive cuts,” she said.

“The size of sales teams cooperating with doctors will decrease, but there will be an increase in the importance of departments cooperating with distributors and managers for key clients.”

Moreover, the over-thecounter (OTC) drug market is expected to be less affected, and perhaps even to benefit from some of the changes.

“The segment of fully-paid [OTC] drugs will be the one to benefit the most, as these medicines will not be burdened with restrictions on price promotions – all price competition (in pharmacies) will be transferred here,” Ms Stefaƒczyk said.

www.wbj.pl

Legal Eye

Distribution disputes Judith Gliniecki is a Partner with Wierzbowski Eversheds judith.gliniecki@eversheds.pl

There are no fewer than three pharmacies within a five-minute walk from my office.

Given this density of competitive points of sale, there must be a strong demand for pharmaceutical products in Poland. It’s no wonder then that disputes regularly erupt between the various interests in the pharmaceuticals sector. In these skirmishes, however, the politics by other means results in changes to Polish law, the latest of which relates to reimbursed medicinal products and affects distribution models.

Prognosis: uncertainty With a number of essential aspects of the Reimbursement Act – such as the negotiations on fixed official prices and the signing of agreements between the NFZ and pharmacies – expected to be delayed well into next year, the Polish pharmaceutical industry faces a time of uncertainty and challenge.

As Pawe∏ Sztwiertnia told WBJ, Infarma believes that the best way to cope with this is through ongoing cooperation between all sides.

“In our view, a good solution will be to maintain permanent working contact between representatives of the Ministry of Health, the NFZ, representatives of the pharmaceutical industry and experts monitoring the pharmaceutical market,” he said.

Hopefully, all of the players will work together towards achieving the same aim – the betterment of health care in Poland. Nevertheless, the delays in the implementation of some of the Act’s measures – and the resulting uncertainty and upheaval – appear inevitable for now. ●

19

Reimbursed medicines As part of Poland’s universal health care, certain medicinal products subject to reimbursement (in other words, the patient pays less).

As with the overall state of Poland’s health care system, this is a sensitive topic. During the last few years, the battles and scandals over which drugs make the list of reimbursed products have provided journalists plenty of fodder. Patients have also seen increased bureaucracy, such as the requirement to evidence current payment of withholding for the health portion of social insurance.

This has also been an active area for Poland’s legislative branch. In fact, the next round of amendments to the reimbursement regulations and Pharmaceutical Law comes into effect in January 2012. The amendments not only relate to monetary matters, such as the introduction of fixed pricing and margins.

More fundamentally, they will create an upheaval in the manner of distribution of pharmaceutical products in Poland.

Uninterrupted supply Poland’s reimbursement regulations and Pharmaceutical Law espouse the noble goal of ensuring that patients will be able to buy the medicine that they need. In legislating this goal, the Pharmaceutical Law requires producers and wholesalers to ensure “uninterrupted meeting of demand” of both retailers and other wholesalers for medicinal products.

It sounds simple enough, but there is a catch.

It all comes down to difference of opinion on

how direct the distribution must be.

There are a lot of players in Poland’s pharmaceutical market. This is hardly surprising in a country with a pharmacy on nearly every corner. For logistical, financial and other reasons, pharmaceutical companies, in selling their own products, tend to prefer to work with one or more large distributors. These distributors then sell those products to other wholesalers or to pharmacies.

Some of the second-line wholesalers, however, insist that the pharmaceutical companies’ preferred model of exclusive or limited distributorship arrangements does not satisfy the requirement of “uninterrupted meeting of demand” of wholesalers. Thus, they believe that the pharmaceutical companies must sell their products directly to every wholesaler who wants to buy from them.

Up to the recent amendments, an impasse existed on this dispute. Everyone could have their own opinion on the appropriate model, but ultimately, there is no way to enforce one view over the other. The existing Pharmaceutical Law does not contain any sanctions for failure to supply to wholesalers. As of January 1, 2012, this changes.

New rules The recent amendments weigh in on the dispute and side with the wholesalers with respect to reimbursed medicinal products.

They set up a system for reporting and sanctioning of inappropriate distribution practices. If the Minister of Health receives information about a violation of the “uninterrupted meeting of demand” requirement, it must pass this information on to the Main Pharmaceutical Inspector. The Inspector licenses the various entities in the supply chain, including producer wholesalers. In case of a violation of this requirement, the Inspector will issue a decision to revoke a license. ● The author gratefully acknowledges the assistance of Bo˝ena Ciosek, the head of our life sciences practice, in preparing this article.

20

MARKETS

www.wbj.pl

NOVEMBER 14-20, 2011

Stocks report

world stock indices DJIA

NASDAQ

S&P500

FTSE100

DAX

Italy spooks the markets

NIKKEI225

11,893.79 (Nov 10 close)

2,625.15 (Nov 10 close)

1,239.70 (Nov 10 close)

5,444.80 (Nov 10 close)

5,867.81 (Nov 10 close)

8,500.80 (Nov 10 close)

-1.25% (for the week)

-2.70% (for the week)

-1.70% (for the week)

-1.82% (for the week)

-4.33% (for the week)

-1.62% (for the week)

CHANGE: 2.73%

CHANGE: -1.92%

CHANGE: -1.42%

CHANGE: -7.71%

CHANGE: -15.85%

CHANGE: -17.88%

(year to Nov 10)

(year to Nov 10)

(year to Nov 10)

(year to Nov 10)

(year to Nov 10)

(year to Nov 10)

52-week high: 12,928.50

52-week high: 2,887.75

52-week high: 1,370.58

52-week high: 6,105.80

52-week high: 7,600.41

52-week high: 10,891.60

52-week low: 10,362.30

52-week low: 2,298.89

52-week low: 1.074.77

52-week low: 4,791.00

52-week low: 4,965.80

52-week low: 8,227.63

Andrew Nawrocki, WBJ market analyst European indices continued to slide last week, with Poland’s main WIG index losing 2.5 percent for the four days starting November 7, while the blue-chip WIG20 lost 3.1 percent.

Though Greece continued to dominate the headlines, the euro zone’s third-largest economy – Italy – gave it a run for its money.

On both Monday and Tuesday attention turned towards the southern European nation as the Italian government’s bond yields spiraled higher. Despite this, markets edged upwards, driven by health-care and telecoms stocks. Among the best performers on the WIG20 was TPSA, gaining nearly 4.5 percent.

Sentiment turned extremely negative on Wednesday, with markets plunging as Italian bond yields rose further. They even sur-

Major indices WIG

39,853.18 (November 10 close)

WIG20

2,288.44 (November 10 close)

10.11

09.11

08.11

07.11

04.11

03.11

02.11

31.10

28.10

27.10

26.10

25.10

24.10

10.11

09.11

08.11

07.11

04.11

03.11

02.11

31.10

28.10

2,200

27.10

38,000

26.10

2,260

25.10

38,800

24.10

2,320

21.10

39,600

20.10

2,380

19.10

40,400

18.10

2,440

17.10

41,200

14.10

2,500

13.10

42,000

21.10

52-week low: 2,089.84

20.10

Change year to November 10: -16.93%

19.10

52-week low: 36,549.47

18.10

52-week high: 2,932.62

Change year to November 10: -16.36%

17.10

Change for the week: -4.54%

14.10

52-week high: 50,371.74

13.10

Change for the week: -3.54%

Top 5 PBSFINANCE MEDIATEL CAMMEDIA HAWE SKOK

Closing 0.60 1.80 3.99 3.55 3.18

% change (week) 52-week high 62.16 1.92 38.46 11.00 29.13 11.10 23.26 4.48 23.26 5.50

52-week low 0.32 1.12 2.68 1.98 2.26

Top 5 PBG TPSA PGNIG BZWBK KGHM

Closing 89.00 17.85 4.04 229.00 157.00

% change (week) 4.71 2.41 2.28 0.44 0.13

52-week high 226.90 19.19 4.65 240.00 200.30

52-week low 53.70 14.30 3.25 190.10 115.40

Bottom 5 CEDC IGROUP MIDAS PRONOX GTC

Closing 9.66 0.53 1.15 0.27 9.55

% change (week) -37.07 -19.70 -18.44 -15.63 -15.49

52-week low 10.06 0.16 0.62 0.14 9.12

Bottom 5 GTC TVN POLIMEXMS PEKAO PZU

Closing 9.55 10.70 1.35 138.00 315.50

% change (week) -15.49 -13.01 -11.76 -9.80 -8.02

52-week high 25.19 18.53 4.36 196.30 398.60

52-week low 9.12 10.53 1.19 115.10 283.10

52-week high 83.50 0.86 5.19 1.76 25.19

Currency report

Other indices sWIG80 Change for the week: -0.69%

Change year to November 10: -19.74%

52-week low: 2,086.64

Change year to November 10: -26.15%

52-week low: 8,483.22

WIG-Banki

5,558.87 (November 10 close)

10.11

09.11

08.11

07.11

04.11

03.11

02.11

31.10

28.10

27.10

26.10

25.10

24.10

10.11

09.11

08.11

07.11

04.11

03.11

02.11

31.10

28.10

27.10

5,500

26.10

41.0

25.10

5,620 24.10

41.6

21.10

5,740

20.10

42.2

19.10

5,860

18.10

42.8

17.10

5,980

14.10

43.4

13.10

6,100

21.10

52-week low: 4,944.19

20.10

Change year to November 10: -20.15%

19.10

52-week low: 42.38

18.10

52-week high: 7,387.49

Change year to November 10: -30.97%

17.10

Change for the week: -7.11%

14.10

52-week high: 64.39

13.10

Change for the week: 2.24%

44.0

The falling prices of Italian bonds and the rising tensions among investors in the financial markets are now the main factors affecting the Polish currency (EUR/PLN: z∏.4.39; USD/PLN: z∏.3.23 ; CHF/PLN: z∏.3.56).

The probability that Italy will not be able to tackle its debt problems, the lack of important reforms in PIIGS countries and the slow pace of change in the Greek government resulted in the sharp drop in the stock markets and the sell-off of risky assets (that is, the z∏oty and other currencies from the CEE region).

However, the National Bank of Poland, which did not change its interest rates, meliorated the Polish currency’s drop.

10.11

09.11

08.11

07.11

04.11

03.11

02.11

31.10

28.10

25.10

24.10

21.10

20.10

19.10

18.10

17.10

14.10

Pawe∏ Korda∏a, X-Trade Brokers Dom Maklerski SA

13.10

10.11

09.11

08.11

07.11

04.11

03.11

02.11

43.77 (November 10 close)

52-week high: 12,932.00

SOURCE: WSE

NewConnect

31.10

28.10

8,800

27.10

2,200

26.10

8,900 25.10

2,240

24.10

9,000

21.10

2,280

20.10

9,100

19.10

2,320

18.10

9,200

17.10

2,360

14.10

9,300

13.10

2,400

Tensions rise

9,046.46 (November 10 close)

52-week high: 2,987.72

27.10

2,253.56 (November 10 close)

26.10

mWIG40 Change for the week: -1.10%

passed 7.5 percent, a new high since the euro was introduced. Indices fell broadly, with the WIG20 tumbling 3.4 percent. Financials Pekao (down 5.72 percent) and Getin (down 5.06 percent) were hit particularly hard. Stocks in the US experienced their worst day since mid-August, with the S&P 500 falling 3.67 percent.

Thursday saw stocks throughout Europe extend their losses, with the WIG20 shedding an additional 1.18 percent, while the WIG fell nearly one percent. TVN continued its slide from last week losing nearly 15 percent on both Wednesday and Thursday. It is likely that volatility will continue next week, with the WIG catching up from a shortened week due to Polish Independence Day on Friday, November 11.●

The near future may still prove very volatile in the financial markets. In the long term, everything (including the exchange rate of the z∏oty) will depend on European politicians. If they decide to cut spending and introduce new structural reforms, the possibility of Italy and other PIIGS countries going bankrupt may fade away for a few years.

If not, the slowing pace of GDP growth and the lack of demand for PIIGS countries’ bonds may result in a new crisis.

That pessimistic scenario may lead to the strong selloff of the Polish currency and stocks, because Poland is still regarded as a relatively risky market. ●

currency rates 4.1423

4.0614 08.11

10.11

4.0891 07.11

SOURCE: NBP

4.0230 04.11

09.11

4.0758 03.11

0.1053

0.1052 10.11

3.5

4.1121

PLN-100JPY

4.5

09.11

0.1042 08.11

0.1040 07.11

04.11

0.1035 03.11

3.5459

3.5519 10.11

0.10

0.1029

PLN-RUB

0.12

09.11

3.5117 08.11

3.5393 07.11

04.11

3.6082 03.11

5.1118

5.1287 10.11

3

3.5574

PLN-CHF

4

09.11

5.0924 08.11

5.0722

5.1084 07.11

04.11

03.11

3.1925

3.2213 10.11

4.5

5.0259

PLN-GBP

5.5

09.11

3.1681 08.11

3.1913 07.11

04.11

3.1800 03.11

4.3757

4.3807 10.11

3.0

3.1385

PLN-USD

3.5

09.11

4.3619 08.11

4.3764 07.11

04.11

4.3809 03.11

4

4.3464

PLN-EUR

5

22

LIFESTYLE

www.wbj.pl

Exhibition

NOVEMBER 14-20, 2011

Concert

A picture of real life The sounds of Liverpool Liverpudlian rockers The Wombats return to Poland this November having already starred in last summer’s Open’er Festival in Gdynia.

This time around they’re here to promote their latest album “This Modern Glitch.”

The indie guitar band has won acclaim for its clever lyrics and catchy tunes, with hit records including “Kill the Director,” “Moving to New York” and “Let’s Dance to Joy

For more information log on to zacheta.art.pl

Division.”

Although The Wombats don’t exactly bring anything original to the world of music, they do provide an entertaining break from the more seri-

ous and sincere world of alternative music. Fans should expect more of the same from the new record. ● For more information log on to stodola.pl

COURTESY OF WIKIMEDIA COMMONS

The Wombats November 28, 7 pm Klub Stodo∏a ul. Batorego 10 Warsaw

together, like a bit of a screw up,” he said.

He was the first photographer and non-British artist to be awarded the Tate Gallery’s Turner Prize (2000), and is also a recipient of the Kulturpreis der Deutschen Gesellschaft für Photographie (The Culture Prize of the German Society for Photography). ●

The Wombats

Opera

Verdi’s masterpiece One of the last works of Giuseppe Verdi, “Aida” is still considered one of the most spectacular operas in the world. Written to celebrate the opening of the Suez Canal, this four-act performance, first performed in Cairo in 1871, is widely considered to be one of the best operas ever created.

Set in ancient Egypt, Aida is a story of love, betrayal, passion and revenge that tells the tale of an Ethiopian princess cap-

Aida at the Arena di Verona

tured and brought into slavery in Egypt. Tickets for the event are priced z∏.90- z∏.250. ●

For more information log on to kongresowa.pl

A picturesque dining experience A new restaurant review feature from WBJ Belvedere Restaurant Agrykola 1 Belvedere.com.pl Arguably the most beautiful restaurant on Warsaw’s culinary map, Belvedere Restaurant, which is located in the New Orangery of the city’s historic ¸azienki Park, has been a favorite high-class business lunch venue for years.

Although some newcomers may offer more exciting menus, the perfectly presented dishes, excellent service and above all the exquisite decor ensure that the Belvedere remains at the top of the list.

The “BELLUNCH” menu, which is priced at z∏.55 for two courses and z∏.65 for three courses, changes daily and is dependent on both the season and the availability of the freshest ingredients. Typically, the choice of two starters includes

one soup dish, such as the autumnal creamy pumpkin soup with homemade grisini .

Mains on offer include dishes such as roast duck with apples in caramel, red cabbage and cranberry sauce, or roasted salmon with vegetables, potato puree and caper sauce.

The restaurant also offers an excellent selection of wines.

But for diners keen to explore beyond the lunch menu, chef Henryk Nieciejowski has created two menus which aim to provide the best of both Polish and international cuisine. So, whether you’re looking for dishes such as beef loin

tartar, pierogi, and Masurian pike, or alternatively starters including foie gras terrine with pear chutney, and mains such as catfish baked with ginger served on vegetable julienne with black sesame, Belvedere has something for every palate.

For the perfect ending to a wonderful meal, diners have the option to take a gentle stroll in the picturesque surroundings of ¸azienki Park, the former gardens of Poland’s kings.

David Ingham

Reservations: 22 558 67 00 reservation@belvedere.com.pl

Belvedere Restaurant

COURTESY OF BELVEDERE RESTAURANT

Wolfgang Tilmans, “Toucan”

Aida November 28 PKiN Sala Kongresowa Pl. Defilad 1 Warsaw

COURTESY OF WIKIMEDIA COMMONS

German artist and photographer Wolfgang Tillmans will display his work in Poland for the first time at Warsaw’s Zach´ta National Gallery of Art this month. The New Yorkbased artist’s work constitutes an intriguing mixture of fashion photography and documentary reportage, with subject matters

varying from intimate portraits to politically engaging scenes that deal with topics such as homelessness, racism and gay rights.

For Mr Tillmans, photography is a way of viewing and documenting the constant changes that are part of reality. “To reconcile or address the randomness of the world is the biggest task, to let it all in but still hold course. ... I’m interested in the mind being stretched by trying to pull this world of pictures

COURTESY OF THE ZACHETA NATIONAL GALLERY OF ART

Wolfgang Tillmans November 19-29 Zach´ta National Gallery of Art Pl. Ma∏achowskiego 3 Warsaw

LAST WORD

NOVEMBER 14-20, 2011

www.wbj.pl

23

Tech Eye

COURTESY OF SPORTSMANSGUIDE.COM

notice when you’re doubled over on the floor of a crowded subway station.

Our assailant never apologized and by the time we stopped moaning and recovered enough to stand, he had already fled the scene. The police were no help, claiming that a vision-impaired man poses no threat to the public. They became outright hostile when we began unbuckling our belt and demanded that someone document the evidence.

Since that day the sound of periodicals whistling through the air has plagued our dreams and our waking hours have been spent plotting revenge. Our first plan was to get some Blast Knuckles (sportsmansguide.com). After all, 950,000 V of electricity-covered fist sounds like an effective way to deal with a stabhappy antagonist, no? And when the $50 price tag includes a holster and two batteries, revenge makes economic sense, too.

But then we watched a couple of YouTube videos in which future Darwin Award winners used the Blast Knuckles on themselves and their friends. One woman (whose parents are most certainly first cousins) sim-

ply laughed every time she was shocked, unless it was on the buttocks.

Now, Techeye has no qualms about tousling with the handi-

capped.

We’re soft and weak, like a jellyfish on valium, so it’s usually a fair fight. But sneaking up to punch a blind guy on the rump – that would be dishonorable.

So we decided that pepper spray might be a better alternative.

That’s how we started researching products from the industry champion, Mace (mace.com). The firm has plenty of flashy self-defense options, but Techeye took a liking to the “pepper gun with flashing strobe.”

For a little less than $80, you get “the most accurate non-lethal self defense spray available” and it’s

equipped with a disorienting LED strobe light. The pepper gun will deliver a stream of pepper spray to a target up to about six meters away. There’s a water cartridge to help you practice shooting too.

Eventually, though, we realized that the strobe light wouldn’t help much against a strobe-proof archnemesis. It might give the guide dog an epileptic fit, but the dog was just an unwilling accomplice.

Disappointed, Techeye considered a number of other self-defense gadgets, but none seemed fitting. Sword canes are out of vogue this season and ricintipped umbrellas are hard to come by. Exploding gerbils are apparently frowned upon these days.

In the end, we decided that the best option is to fight fire with fire. Meaning, in this case, a thoroughly dangerous, rolled-up magazine. A tech magazine, of course.

After much deliberation, Techeye chose Wired as our weapon of choice. There’s just something threatening about the paper it’s

COURTESY OF WIRED VIA HALO3PLANET.COM

Here’s a tragic event that recently befell Techeye – on our way to work one morning, a thuggish blind man stabbed us in the crotch with a rolled-up magazine. Undeservedly, we might add.

This malefactor was headed the wrong way through a turnstile, hunched over and attempting to find his way by jabbing forward with the magazine, dragging a slack-jawed “guide dog” along behind him. Not that Techeye saw any of this until after we’d pushed through the aforementioned turnstile and suffered a tremendous blow to our dignity.

It’s funny how many details you

COURTESY OF SPORTYS.COM

When justice is blind, Techeye turns vigilante

printed on.

Anyway, a year’s subscription to Wired will set you back $70 (for international subscribers), but that’s a small price to pay for something you can read on the way to work, then use to smack your foes around. Pictured is the last issue we actually bought (way back in 2007), but the latest issue has James Dyson on the cover.

In other words, our archnemesis is going to get smacked upside the head by “the king of suck.” The best part? He’ll never see it coming. ●

Ever seen a gerbil explode? Let us know: techeye.wbj@gmail.com