Wrocław Agglomeration Development Agency Take …...n within driving distance to Prague, Berlin,...

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Take a look!

Wrocław

www.araw.plWrocław Agglomeration Development Agencytel. + 48 71 783 5310, fax + 48 71 783 [email protected]

W r o c ł a w A g g l o m e r a t i o n D e v e l o p m e n t A g e n c y

Wrocław is a dynamic cosmopolitan centre at the forefront of change in the “new” Europe. As the capital of the province of Lower Silesia and Poland’s fourth largest city, Wrocław is a strong economic, scientific and cultural centre. Why Wrocław? Take a look!

Five key factors make Wrocław a superb place to do business:

1. Location – situated strategically between Prague, Warsaw and Berlin, Wrocław boasts a developed transportation infrastructure that connects the metropolis with the whole of the continent and beyond.

2. People – this young city is full of well-educated people who command many foreign languages. Wrocław’s inhabitants are hard-working, ambitious, open to change and innovation.

3. Knowledge Economy – the city offers a competitive and dynamic setting where leaders in international business can benefit from the ingenuity and competences generated in a rapidly developing knowledge-based economy. The highly regarded universities and research centres in Wrocław foster new ideas and innovation.

4. Quality of Life – Wrocław is steeped in history and full of charm. Situated on 12 verdant islands connected by 112 bridges, day or night, the city pulses with life.

5. Support – Local authorities pride themselves in taking a custom approach to meeting investors’ needs. For large investors, an experienced project manager is appointed to be the key contact person in the city, providing a one-stop-shop for addressing all investor needs during the launch and development of operations in and around Wrocław.

Basic facts about Wrocław:n city area: 293 km2

n population: 634 thousandn population of agglomeration: approx. 1 millionn capital of Lower Silesian region (population approx. 3 million)n within driving distance to Prague, Berlin, Warsaw

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Wrocław

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Poland for Investors

Poland is a leader on the continent in terms of economic transformation. Since joining the European Union in 2004 the country continues to implement bold political and economic changes. The effective absorption of EU funds has meant improved infrastructure key for the successful implementation of large scale investments. Poland is the largest beneficial of the 2007–2013 EU founds in the amount 120 billions EUR. However it’s the youth, determination and excellent qualifications of the workforce that continue to lure FDI.

Consider these facts about Poland:

Investment Potential

n Ranked number 1 in Europe in terms of planned investments*n Ranked number 4 in the world for R&D investments*n Ranked number 4 in Europe in terms of most attractive countries for the investmentn GDP growth (approx. 6.5% in 2007) – the highest in last 10 years

In the Heart of Europe

The top European most attractive countries in 2007

(Total superior to 100% – 3 possible choices)

Business Hot Spot

ARAWThe Wrocław Agglomeration Development Agency (ARAW) was launched in early 2006 as a partnership between eight local governments and then further enlarged by five more local authorities. The agency works to stimulate economic growth and entrepreneurialism by attracting know-how and new investments to the region. For strategic investors, ARAW serves as a one-stop-shop looking to do business in the agglomeration.

WROC¸AW AGGLOMERATIONDEVELOPMENT AGENCY

Ofiar Oświęcimskich 36, 50-059 Wrocławtel. + 48 71 783 5310 fax + 48 71 783 [email protected] www.araw.pl

Community name Number of inhabitants Area in km2

Brzeg Dolny 16,300 94

Czernica 9,100 84

Długołęka 20,600 213

Kąty Wrocławskie 17,600 176

Kobierzyce 13,500 149

Kostomłoty 6,900 146

Miękinia 11,600 179

Oborniki Śląskie 17,800 154

Oława Commune 13,400 234

Święta Katarzyna 13,000 99

Trzebnica 21,800 200

Wisznia Mała 7,300 103

Wrocław 634,200 293

ARAW Partner Communities



W r o c ł a w A g g l o m e r a t i o n D e v e l o p m e n t A g e n c yW r o c ł a w A g g l o m e r a t i o n D e v e l o p m e n t A g e n c y

Seventeen years into economic transformation, the agglomeration has moved away from its traditional communist-era manufacture base. At present, the following industries are the key drivers of the economy: information technology, financial services and automotive production. However, recent homegrown and international hi-tech investments mean that the agglomeration’s competitiveness will be increasingly

determined by knowledge and innovation. The Wrocław agglomeration is one of diverse landscapes and varied natural resources. Situated in the fertile Odra River valley at the edge of the Sudety Mountains, the area offers favorable conditions to carry out a variety of investments. The strong industrial heritage of the region has given rise to a strong workbased culture where education and entrepreneurialism are key.

Wrocław Agglomeration

source: Ernst&Young “EUROPEAN ATTRACTIVNESS SURVEY 2007”

*read this and more at www.paiz.gov.pl

Human Capital

n 50% of Poles are under the age of 34n 35% of Poles are under the age of 25n 448 higher education institutions train approx. two million university-level students

Large Markets

n Poland’s population: 38 millionn Retail market boasts 10% annual growth raten 250 million consumers within 1,000 km spann Poland bridges key markets to the east and west

Number of students in Middle-Eastern Europe in 2007

Poland 1,941,400Hungary 424,200The Czech Republic 321,200Slovakia 171,300

Source: national statistical offices: Poland, Hungary, The Czech Republic and Slovakia.

Working age population (15–65) as of 2006

(in millions)

Source: EUROSTAT

Germany Russia Poland The CzechRepublic

UK

18%

12%11%

7%

11%

Poland

Romania

The Czech Rep.

Hungary

Bulgaria

Slovakia

Lithuania

Latvia

Slovenia

Estonia

26,9

15

7,3

7

5,3

3

2,3

1,6

1,4

0,9

TRZEBNICA

CZERNICA

OBORNIKIŚLĄSKIE

WISZNIAMAŁA

KOSTOMŁOTY

GM. OŁAWA

KĄTYWROCŁAWSKIEO

ŚWIĘTAKATARZYNA

KOBIERZYCE

DLUGOŁĘKA

BRZEGDOLNY

WROCŁAW

MIÊKINIA

ARAWPartnerCommunities

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Connected



Wrocław is easily accessed by road, rail, air and water. Additionally, Lower Silesia has the densest road and railway networks in Poland, which has promoted the dynamic progress of the region. These networks are well connected with existing pan-European motor and railway systems. A key priority over the next decade is to improve the quality of the networks to ensure continued strong economic growth in the region.

RoadsThe city’s strategic location is enhanced by many international transport routes running across Wrocław, including the so called “3rd Pan-European Transport Corridor.” Three major Wrocław bypass routes are slated for completion in the next three to five years: the Wrocław Bypass, the Inner Wrocław Ring Road and the County Bypass.

CologneDortmundFrankfurt

Brussels

CorkDublin

GlasgowShannon

Copenhagen

GdańskWarszawa

MilanMunich

RomeBarcelona

Existing Highways

Under Construction

LiverpoolLondon

NottinghamBristol

Sheffield

Railway Connections The following communication routes pass through Wrocław:n E-30 Leipzig–Dresden–Wrocław–Cracow–Lvov–Kiev,n E-9 Ystad–Świnoujście–Szczecin–Poznań–Wrocław–Katowice–Bratislava–Vienna,n C-E-59 Szczecin (Berlin)–Zielona Góra–Wrocław–Prague,n Three lines of national importance, directions: Łódź–Warsaw, Jelenia Góra and Opole.

WARSAW

BERLIN

PRAGUE

VIENNA

BRATISLAVA

BUDAPEST

WROCŁAW

Gdańsk

Szczecin

Poznań

Kraków

Łódź

Białystok

Katowice

Lublin

Kaliningrad

Lvov

Kosice

Brno

DresdenLeipzig

Hamburg

Nurnberg

Munich

Salzburg

CZ

D

A

SK

H

RO

UA

BY

LTRUS

PL

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Wrocław



Air Transport

The Wrocław International Airport has grown signifi-cantly over the last decade and continues to expand its services for business and tourist travellers.

Telecommunication

The expansion of the telecommunication and IT sector in Wrocław is particularly dynamic. Investments carried out since the 1990s in the fiberoptic networks and digital teletransmission systems brought both the scope and standard of voice and data transmission services provided by the main telecommunication operators to the level of the most affluent West European countries. Initially, IT networks covered higher education and scientific institutions; subsequently they reached the private sector starting from banks, through service companies to manufacturing enterprises. Currently almost all small and medium sized businesses utilize Internet access and internal. 61% of Wrocław’s inhabitants are using Internet regularly and 68% have a computer at home. Recent years have also witnessed the development of telecommunication systems in government and municipal institutions, which also communicate extensively via Internet.

Waterway

The Odra River today is no longer a symbol of a divided Europe. This major waterway links Lower Silesia to the Baltic Sea and the dense European inland waterways system via Berlin. Barges filled with transport containers and even passenger cruise ships carrying tourists from Western Europe to Wrocław are becoming increasingly common sights along the river. Work is underway to develop the Odra’s tourist potential: in Wrocław a large marina with a hotel and restaurant complex is being constructed near the city centre.

Cities Served by the Wrocław Airport

Connections

Destination Airport AirlineFlights

per week

London

Stansted Ryanair 10

Gatwick Centralwings 3 Luton (starting 31.01.2008) Wizzair 10

FrankfurtAm Main Lufthansa/LOT 14

Hahn Ryanair 4

Warsaw Okęcie LOT 56

Munich Munich International Lufthansa/LOT 28

Copenhagen Copenhagen Airports Cimber Air 6

Rome Campio Centralwings 5

Milan Malpensa Volareweb 3

Glasgow Glasgow Ryanair 3

Dublin DublinRyanair 5

Centralwings 3

Dortmund Dortmund Wizzair 8

Cork Cork Centralwings 2

Liverpool John Lennon Ryanair 3

Nottingham East Midlands Ryanair 4

Shannon Shannon Ryanair 3

Brussels Brussels LOT 6

Barcelona* Girona Ryanair 2

Sheffield* Doncaster Wizzair 4

Bristol* Bristol Ryanair 7

Planned expansion of the Wrocław airport

Road Network:

* starting from autumn–winter season 2007Source: www.airport.wroclaw.pl

3% 1%

63%33%

Financial brokerage

Manufacturing activities

Wholesale and retail trade

Other

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Driving Forces



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Confidence & SupportWrocław and its environs offer the best investment climate in Poland. The agglomeration is also earning a reputation as a dynamic knowledge-driven business centre. In 2005 the Institute of Market Economics ranked Wrocław second only to the nation’s capital in terms of attractiveness for cutting-edge technology investments. In 2007 Wrocław in the Fitch Rating

Structure of Foreign Investment by Sector as of 28.02.2006

Source: Municipality of Wrocław



IT Technologies

In the pre-1989 era, Wrocław-based companies were leaders in the development and production of the first computers in the Communist Bloc. That tradition continues today. Prominent information technology companies from Wrocław and the region have transformed southwest Poland into an IT hub. The region is home to a wide-array of companies that specialize in advanced software design, while local universities and technical institutes have become centres of expertise in the area of new technologies. The potential of the local market has been recognized by world leaders such as Capgemini, Siemens, Volvo and KPIT Cummins who have chosen the city to launch cutting-edge software design centres. Moreover, in April 2007 Google company has established its innovation marketing center in Wrocław. Home-grown Polish software leaders such as Winuel, Teta or Yuma are enjoying increasing renown in the international arena.

Hi-Tech ElectronicsThe Wrocław agglomeration hit the international headlines at the end of 2005 when LG Philips LCD and their suppliers announced they would invest €850 million by 2011 in a major cutting-edge production complex just south of Wrocław. The South Koreans chose Lower Silesia to build a large facility that will produce liquid-crystal display (LCD TFT) modules for televisions, the first of its kind in Europe. LG cluster started production in 2007. In sum, nine factories are located at the Biskupice Podgórne. LG Philips LCD’s choice is expected to serve as a magnet for other cutting-edge investments. Also 3M and Toshiba have already launched new investments in Wrocław Agglomeration. For 3M, an LG supplier, its second Wrocław-based facility produces LCD optical films.

Automotive IndustryThe world’s automotive leaders are investing in Lower Silesia. Wrocław is the European bus manufacturing centre for Volvo. The city is also Volvo’s global production centre for backhoe loaders. Toyota investments in Lower Silesia have made the region a major world hub for the production of automotive components. Volkswagen too has been manufacturing engines for several years in Polkowice, a city located 80 km from Wrocław. Industry partners such as AAM, Autoliv, Bosch and Denso, ETO Magnetic, Faurecia, GKN, Metzeler, NSK, Takata-Petri, and Wabco have followed in the footsteps of these prestigious automotive concerns and set up shop here.

Financial Services

Wrocław ranks second only to Warsaw as a financial services centre. Five nationwide banks have established their headquarters here: BZ WBK, BWE Bank, Lukas Bank, Eurobank, Santander Consumers Bank. The following financial services companies also have their headquarters in Wrocław: AIG Credit, Credit Agricole, Getin Holding, Kaczmarski Inkasso, Kruk Inkaso. Together the 16 Wrocław-based leasing companies command 25% of the Polish leasing market. Wrocław is also a centre for debt collection services. Local companies hold a 60% share in the Polish market. The nation’s first and largest National Debt Register – Business Information Bureau – was founded in the city. Credit Suisse, Volvo, Hewlett-Packard and UPS have set up their European accounting/administration centres in the city in the last 2 years.

Life SciencesThe emergence of several important biotechnology companies is closely connected with the rapidly developing R&D infrastructure in the food, medical, pharmaceutical and IT areas. The growth in the medical field in particular has been fuelled by the excellent training facilities and highly qualified staff available in the city. The Wrocław Medical University, the University of Wrocław and the Technical University are the main sources of recruits for this industry. The Wrocław Technology Park and the Wrocław Centre for Technology Transfer have proven suitable partners for companies operating in this sector. Major investors include: MacoPharma, 3M, US Pharmacia, Hasco-Lek and Herbapol.

Household AppliancesLower Silesia is fast becoming a major European household goods production centre due to a cluster of world leaders now operating in the region. Two large white goods manufacturers are located in Wrocław: Whirlpool produces washing machines and refrigerators; and Fagor Mastercook operates a cookers factory. Sweden’s Electrolux manufactures cookers, dishwashers and washing machines in Żary, Oława and Świdnica. LG Electronics has started its production of the washing machines and two-door refrigerators. The knowledge cluster has inspired Whirlpool, Fagor Mastercook and Diehl Controls to establish R&D complexes for white goods in the region.

achieved the highest possible note in Poland (A-), measured credit reliability on a stable perspective. But the hallmark of doing business in the Wrocław agglomeration is the high standard of investment support. This unique approach has attracted top international companies to the region, but has also encouraged impressive home-grown entrepreneurs.

In Their Words

“Wrocław is a source of competent, well educated and qualified employees who constitute the main asset of Volvo.”Roberto Teixeira, President, Volvo Polska Industry

“Our numerous American and European guests from throughout 3M are always impressed by their visit in Wrocław and become perfect ambassadors of this amazing city in the world.”Piotr Freyberg, Managing Director, 3M Poland

“In Siemens Software Development Centre we hire nearly 1250 young engineers, mostly graduates from the Wrocław University of Technology. They are our big value. Thanks to their skills, motivation and constantly expanding knowledge, our centre is developing so dynamically. The atmosphere and openness in Wrocław favours the development of new technologies.” Krzysztof Kuliński, Director, Siemens

“Since the launch of its business activities, Hasco-Lek has invested in Wrocław and feels strongly connected with the city. Here we have found optimal conditions for growth, which is why the company has expanded so rapidly. Wrocław offers an excellent scientific base, with well-qualified staff, very good technical infrastructure where new ideas can be realized. It is a city of enormous possibilities, in particular of great economic potential.” Stanisław Han, President, Hasco-Lek

Investment Friendly City

For strategic investors, the City of Wrocław is able to: n appoint a Personal Project Manager to guide investors through all proceduresn provide exemption from property tax n assure together with Local Labour Office (LLO) professional recruitment process for all the positions based on the job candidates registered at the LLOn initiate and support collaboration between Wrocław business and academic centres by creating institutes dedicated to the investor’s needs

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The Largest Investments in the Wrocław Agglomeration

Investor Investment (mln €) Country of Origin Sector Location

Allied Irish Bank PLC 750 Ireland Banking Wrocław

Credit Agricole 740 France Banking, Finance Wrocław

Electricite de France Internationale (EDF) 600 France Heating Wrocław

LG Phillips LCD 430 Korea Consumer Electronics Kobierzyce

LC Corp 400 Poland Real Estate Wrocław

Toyota 250 Japan Automotive Jelcz-Laskowice

Prologis 125 USA Logistics Kobierzyce

Heesung Electronics 120 Korea Consumer Electronics Kobierzyce

LG Electronics 105 Korea Consumer Electronics, White Goods

Kobierzyce

Echo Investment 100 Poland Real Estate Wrocław

Whirlpool 100 USA White Goods Wrocław

PCC AG 100 Germany Chemical Brzeg Dolny

Fagor Mastercook 90 Spain White Goods Wrocław

Volvo 90 Sweden Automotive Wrocław

3M 85 USA Medical, Chemical Wrocław

Wabco 75 USA Automotive Wrocław

Parkridge 75 GB Logistics Kąty Wrocławskie

ADIF (Bosch/Denso) 70 Germany/Japan Automotive Wrocław

Fortum 70 Finland Heating Wrocław

AAM 60 USA Automotive Oława

LG Innotek 60 Korea Consumer Electronics Kobierzyce

Electrolux 60 Sweden White Goods Oława

Siemens 50 Germany R&D Wrocław

Skanska 50 Sweden Real Estate Wrocław

Ghelamco 50 Belgium Real Estate Wrocław

Archicom 50 Poland Real Estate Wrocław

American Restaurants 50 USA Retail Wrocław

Hewlett Packard 40 USA Finance Wrocław

LG Chem 40 Korea Chemical Kobierzyce

Tiner 40 Portugal Logistics Kąty Wrocławskie

Eto Magnetic 40 Germany Automotive Wrocław

Toshiba 35 Japan Consumer Electronics Kobierzyce

Dong Yang Electronics 35 Korea Consumer Electronics Kobierzyce

Cargill 30 USA Food processing Kobierzyce

Cadbury n/a GB Food processing Kobierzyce

Logistic CentreWrocław stands the chance of becoming a major logistic centre in this part of Europe. With superb location on the A4 motorway, the city connects Germany with the Ukraine and beyond. The large investments in the automotive, household goods and consumer electronics sectors mean that the Wrocław agglomeration has become a hotspot for logistic companies. Prologis, Tiner and Parkridge CE Developments have tapped the agglomeration’s potential by building large facilities at strategic locations.

Entertainment & RecreationWrocław is experiencing a veritable tourist boom. In 2006 approx. two millions foreign tourists visited the city, catapulting Wrocław to third place as the most popular tourist destination in Poland, following only Warsaw and Cracow. The advent of cheap airlines serving Wrocław in part explains the boom. Major investments in the cultural and tourist infrastructure are underway. Soon the largest Aquapark in Poland will open in Wrocław. A new state-ofthe-art concert hall, a theatre and a planetarium are also in the works.

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Wrocław



Innovation & Ingenuity

Innovation Strategy As a part of a European Union-wide pro-innovation effort, Wrocław has launched its own broad initiative aimed at increasing Lower Silesia’s competitiveness in the international arena. Known as EIT Plus, the strategy paves the way for a series of synergistic investments in education, research and innovation based industries that will transform the region into the leading knowledge-driven economic centre in this part of Europe.

EIT Plus concentrates on the development of four key areas:

Education The foundation of the knowledge-driven economy is human capital. Wrocław plans a series of investments that will improve the quality and availability of proinnovation curricula at both the high school and university levels.

Knowledge-based investments in Wrocław

Service Centres

Company Country Description Location

ACN Netherlands Call Centre Wrocław

Capgemini France IT Wrocław

Central Europe BPO USA Call Centre Wrocław

Credit Suisse Switzerland Finance Wrocław

Cybernet Slash Support USA IT Wrocław

Diehl Controls Germany R&D Wrocław

Fagor Mastercook Spain R&D Wrocław

GE Money Bank/Genpact USA Call Centre Wrocław

Google USA IT Wrocław

Hewlett Packard USA Finance Wrocław

KPIT Cummins India IT and Accounting Wrocław

Opera Software ASA Norway IT Wrocław

QAD USA R&D Wrocław

Remy International USA R&D Wrocław

Siemens Germany R&D Wrocław

UPS USA Accounting Wrocław

Volvo Sweden Business Services, IT Wrocław

Wabco USA R&D Wrocław

Whirpool USA R&D Wrocław

New University CampusThe blueprints for the new university campus feature an advanced research and innovation centre that will serve both the academic and business communities.

Advanced Applied Research EIT Plus will promote extensive co-operation between universities and the private sector by expanding the complex of specialised technology parks in the region.

Knowledge Society To foster a pro-innovation culture in the Wrocław region, EIT Plus also contains an extensive outreach agenda that will promote lifelong learning by broadening public access to the unique resources available at universities and research centres in the region.

www.eitplus.wroclaw.pl

European Institute of Technology As a flagship program of the European Commission, the European Institute of Technology (EIT) is intended to set a new standard of education, research and innovation in Europe. As a premier research institution, EIT will attract top students and scientists from around the world; it will also become an important centre where academic ideas are converted into business applications that will define the cutting-edge technologies of the future. The European Union is currently carrying out a continent-wide search for a suitable location for EIT. Wrocław is Poland’s official candidate for this important enterprise. The city’s bid has received broad recognition and support. Wrocław’s EIT Plus strategy sets out a road map for the creation of the superior infrastructure needed to establish a permanent home for EIT in Wrocław.

Total Students 134,500University of Wrocław 42,500

University of Technology 29,000University of Economics 17,000University of Environmental and Life Sciences

10,000

Medical University 3,500Others 32,500

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The Power of Tradition

Competency levels in business also derive from industrial tradition. The accumulation of human and social capital in Wrocław and its environs is the outcome of a longer continuum of forward-looking industry and commerce in the region.

After the Second World War Wrocław-based com-panies were on the cutting edge in the development of electronics and the production of digital machines. The city was a Polish leader in the mechanical and electrical industries. Indeed by the end of the 1980s, 60% of people employed in the Wrocław region worked in the mechanical and electrical industries. In particular, Wrocław became a key centre for white goods production.

However, the production of advanced technology goods has driven the region’s economy for roughly the past 150 years. Since the middle of 19th century Wrocław was transformed into a dynamic industrial centre for diverse industries. Modern Linke-Hofmann Werke AG locomotives, Heckmann steam tractors, Ruffer steam machines became products known and appreciated all around the world.

Higher Education

Wrocław is a leading academic centre in Poland along side Warsaw and Cracow. Approx. 135,000 students are enrolled here in 23 higher education institutions (public – 11, non-public – 12). Last year 25,000 people graduated from Wrocław higher education institutions.

Knowledge Centres



W r o c ł a w A g g l o m e r a t i o n D e v e l o p m e n t A g e n c y W r o c ł a w A g g l o m e r a t i o n D e v e l o p m e n t A g e n c y

Human ResourcesWrocław Technology Park The Wrocław Technology park caters in particular to advanced technology enterprises and laboratories as well as academic research and development centres.

Wrocław Technology Park offers:nHigh quality office spacenInvestment plotsnLaboratories and workshopsnConference roomsnGuest roomsnTelecommunication servicesnAdvisory and support services for entrepreneurs

The park is home to:n Lower Silesian Incubator of Science and Technologyn Incubator – Centre of Technology

For young entrepreneurs, WTP offers high quality office space, production facilities and workshop space at special rates.

www.technologpark.pl

The Lower Silesian Centre for Advanced Technology Based at the Wrocław Technical University, the Lower Silesian Centre for Advanced Technology was created to forge partnerships between the scientific and business communities. The centre’s work taps the specific academic and economic potential of the Lower Silesian region by concentrating on four areas:

nthe design and production of advanced materials ninformation technology nscience and technologies that improve quality of life nrenewable and alternative energy sources

www.dczt.wroc.pl

Wrocław Centre for Tech-nology TransferAlso headquartered at the Technical University, the mission of the Wrocław Centre for Technology Transfer (WCTT) is to improve efficiency and com-petitiveness of companies through innovation.

WCTT’s offer includes: nTechnology transfernEuropean Union research programs nAdvisory servicesnGrants for companies (PARP)nTraining programs and conferences

www.wctt.pl

Wrocław Medical Science Technology Park The mission of the Wrocław Medical Science Technology Park is to stimulate co-operation between the academic community and companies involved in the medical, pharmaceutical or related fields.

The park offers: nAcademic Incubator for EntrepreneurialismnMedical Technology Transfer Centre nProjects tied to the European Social Fund nAdvisory and training services

www.parkmedyczny.pl

Lower Silesia Innovation and Business ParkThe idea of creating the Lower Silesia Innovation and Business Park developed out of a cooperative venture between the Wrocław Technical University and Coventry University Enterprises Ltd. Work on the park began in 2006, with the first projects expected to be launched by the end of 2007. The core objective of IBP is to encourage innovation by applying Lower Silesia’s higher education research outputs to market opportunities in collaboration with the commercial sector.

Other Public InstitutionsnThe University of Physical EducationnThe Academy of Fine ArtsnThe Karol Lipinski University of MusicnThe Land Forces Military Academy nThe Papal Faculty of TheologynThe L. Solskiego State Theatrical School

Private InstitutionsnThe Lower Silesian Education TWP High SchoolnThe High School of Social Psychology – Faculty of SWPS based in WrocławnThe High School of Trade nThe „Edukacja” Management High School nThe High School of Finances and Management nThe „ASESOR” Lower Silesian Public Services High School nThe International Logistic and Transport High School nThe High School of BankingnThe High School of PhysiotherapynThe Higher School of Management and Marketing nThe „COPERNICUS” Information Technology and Management High School in WrocławnThe High School of Liberal ArtsnThe Wrocław Higher School of Philology

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Among Wrocław Residents Among Wrocław Students

Residents’ knowledge of English:




Unemployment as of June 2007 Working Population in Wrocław

Commuting to the City

The map below shows the areas from which residents commute to work in Wrocław.

Knowledge of ForeignLanguages

In 2007 the Municipality of Wrocław commissioned an extensive survey to assess the degree to which Wrocław citizens command foreign languages. The

Source: Statistical Office in Wrocław as of June 2007

18,3% 14,8%

66,9%

Pre-working age population

Working age population

Post-working population

results of the research, carried out by the Pentor Institute, are based on a pool of 1,000 respondents. Here we present the results of that survey.

Very goodGood

IntermediatePoor

Very poor

16.0%27.0%28.3%16.4%12.4%

Residents’ knowledge of German:

Students’ knowledge of English:

Very goodGood

IntermediatePoor

Very poor

15.9%44.1%29.9%7.8%2.3%

Very goodGood

IntermediatePoor

Very poor

6.5%15.0%29.7%28.7%20.2%

Students’ knowledge of German:

Very goodGood

IntermediatePoor

Very poor

5.4%15.0%33.0%32.2%14.4%

Students’ knowledge of Russian:

Very goodGood

IntermediatePoor

Very poor

7.1%9.1%20.7%29.8%33.3%

Lower Silesia

Wrocław Agglomeration (district)

Wrocław

Poland

13,5%

8,5%

6,3%

12%

Source: Statistical Office in Wrocław as of June 2007

Residents’ knowledge of Russian:

Very goodGood

IntermediatePoor

Very poor

5.8%19.6%37.9%24.5%12.1%

EnglishGermanRussianFrenchSpanish

ItalianOthers

None

48,8%41,3%39,4%7,8%3,5%2,3%6,8%22,3%

34,8%21,1%

25%3,1%1,4%1,5%

Declarativeknowledge

Actualknowledge

Declarativeknowledge

Actualknowledge

EnglishGermanRussianFrenchSpanish

ItalianOthers

None

99,7%84,7%26,7%18,9%7,8%7,0%18,1%0,1%

89,8%44,9%

9,9%6,4%1,4%1,4%

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The most important taxes Rates/Comments

PIT – income tax 19%, 30%, 40% 19% – flat tax for entrepreneurs

CIT – corporate tax 19%

VAT – Value added tax on goods and services

22% – basic rate7%, 3%, 0% – charged on some products and services

Stamp duty These fees are not high, but mandatory with certain types of contracts, certificates or official documents.

Utility Measurement unit Price (€)

Water and sewage m3 1.7

Phone 1 impulse 0.11

Garbage disposal m3 2

Electricity kwh 0.6

Internet access monthly fee 10–20

Gas m3 0.18

Polish Tax System Fully in accordance with standards of the European Union.



Type of dwelling Rent m2/month Price of purchase

Office in the city centre €12–15Office outside the city centre

€ 11–12

Office property under construction

€ 13–14

Office space service charges € 2.5–3

Source: Knight Frank


Labour CostsMinimum wage in Poland: PLN 1126 (starting from 1st of January 2008)

Components of social security premiums paid by employer and employee

Average Total Cost for Employer in EURO: (incl. Gross salary + components paid by employer)

(As of April 2007). Source: HRK PARTNERS S.A.

Scientist/research manager 1,980

Programmer 1,520

Engineering specialist 1,330

Shift leader 1,310

Quality specialist 1,240

HR specialist 1,225

Accounting clerk 1,010

Secretary/administrative support 810

Technical specialist 840

Call centre clerk 780

Blue-collar worker 575

Costs of Running a Business

Type of insurance %premium Breakdown of premium

Employer Employee

Retirement 19.52% of remuneration 9.76% 9.76%

Disability 13% of remuneration 6.5% 6.5%

Accident 0.67% to 3.60% of remuneration depending on occupational risk in a given industry

0.67%–3.60% –

Sickness 2.45% of remuneration – 2.45%

Additional contributions:

Labour Fund 2.45% of remuneration 2.45% –

Guaranteed Employee Benefit Fund

0.10% of remuneration 0.10% –

Source: www.paiz.gov.plThe employer is also obliged to pay a premium to the State Fund for Disabled (PFRON). The duty to pay the premium to the Fund and the amount of premium depends on the number of people employed, their average remuneration and the total number of disabled employees.

REAL ESTATE TAX with relation to business in Wrocław agglomeration (as for 2007)

Agglomeration community

LAND: BUILDINGS: CONSTRUCTION or a part of it

[e.g. parking place]Wrocław 0.62 PLN from 1 m2 area 17.19 PLN from 1 m2 usable area 2% from its certain value Brzeg Dolny 0.68 PLN from 1 m2 area 18.43 PLN from 1 m2 usable area 2% from its certain valueCzernica 0.64 PLN from 1 m2 area 17.70 PLN from 1 m2 usable area 2% from its certain valueDługołęka 0.69 PLN from 1 m2 area 18.60 PLN from 1 m2 usable area 2% from its certain valueKobierzyce 0.66 PLN from 1 m2 area 17.00 PLN from 1 m2 usable area 2% from its certain valueMiękinia 0.68 PLN from 1 m2 area 17.98 PLN from 1 m2 usable area 2% from its certain valueOborniki Śląskie 0.65 PLN from 1 m2 area 18.00 PLN from 1 m2 usable area 2% from its certain valueOława commune 0.60 PLN from 1 m2 area 17.00 PLN from 1 m2 usable area 2% from its certain valueŚwięta Katarzyna 0.68 PLN from 1 m2 area 17.50 PLN from 1 m2 usable area 2% from its certain valueWisznia Mała 0.65 PLN from 1 m2 area 17.10 PLN from 1 m2 usable area 2% from its certain valueKąty Wrocławskie 0.68 PLN from 1 m2 area 18.40 PLN from 1 m2 usable area 2% from its certain valueKostomłoty 0.68 PLN from 1 m2 area 17.80 PLN from 1 m2 usable area 2% from its certain valueTrzebnica 0.63 PLN from 1 m2 area 17.42 PLN from 1 m2 usable area 2% from its certain value

Sample Prices in Wrocław in € (gross)

Sample Prices of Real Estate

Cultural Appeal An added treat to doing business in Wrocław is the city’s sophisticated cultural life and around-the-clock social scene. For more than a half a century, Wrocław has forged an international reputation for its lively cultural events. Today, the existence of dynamic companies along with a large pool of young professionals and students has kept up the demand for high quality cultural and recreational activities. The 200 restaurants, pubs and clubs, 13 theatres, 13 cinemas and the countless fine and hip art galleries located within the vicinity of the Market Square all contribute to the richness of the city’s leisure time offer.

The Active LifeFacilities exist for the pursuit of virtually all sports in the capital of the Lower Silesia. Fans of golf can take advantage of three professional golf courses in Wrocław and its immediate environs. Swimming pools, fitness clubs and solariums are available in most neighbourhoods across the city. Soon Wrocław will also be home to the fourth largest water park in Europe, which will include a wide range of pools, a hi-tech solarium and a full-service health spa.

ShoppingWhether you prefer making your purchases in sleek new shopping centres and hypermarkets or filling your wicker baskets at quaint market halls or neighbourhood

stores, shopping in Wrocław is a breeze. The recently built shopping complexes in the city centre and at the edges of town provide easy access and variety all under one roof. But small, neighbourhood businesses have not lost their appeal. Specialty shops, bakeries and other local businesses continue to be popular places where local residents get their regular supplies.

Explore the RegionOne of the lures of life in Wrocław is the easy access the city offers to the historic sites and unspoiled nature of the surrounding province of Lower Silesia. Whether you want to pop out of town for an evening meal and a drive through the countryside, or pack up and spend a weekend away from home with the family without getting on a plane, Lower Silesia offers everything from rugged mountains to clean lakes; from castles and monasteries to swank spas and health resorts. All year round the beautiful Sudety Mountains, reachable in 1.5 hours by car, tempt lovers of hiking, biking, skiing, rock climbing and paragliding from across Poland and around the world.

A Sense of Community International Friends of Wrocław serves as an informal social club and support network for international families living and working in Wrocław. Club members meet and socialize regularly in spacious premises located on the Market Square provided by the Municipality of Wrocław. The IFW’s message to newcomers to Wrocław is simple: don’t be alone. The IFW offers a great place to make new friends and serves as an invaluable resource that will make getting settled in Wrocław that much easier.

16

Wrocław



17

Wrocław



Quality of Life – The Added Value

International Schools

BISC Wrocł[email protected] it educates approx. 160 pupils from 25 different countries

n Education for children aged 3–18n Programme based on English National Curiculumn Offers British public examinations: IGCSEs, AS and A levelsn Fully-qualified British and international teachersn Extra classes available in various native languages upon request

Diakonia [email protected]

n Polish-German Primary Schooln Possibility of continuing education in Polish and German schoolsn Exchange programme with schools in Germany

Ekola [email protected]

n Education for pupils aged 7–19n Programme: International General Certificate of Secondary Education (IGCSE)n Prep for either Cambridge International Exams or International Baccalaureate (IB)n Candidate: Centre for Cambridge International Examinations; International Baccalaureate School

Wrocław International [email protected]“Education for pupils aged 4–14”

n Education for pupils aged 4–14n Programme: New Zealand National Curriculumn Member: European Council of International Schools (ECIS); Educational Records Bureau (ERB)

Polish Bilingual Middle Schools

Gimnazjum 26 www.lo5.wroc.pl [email protected]

English-Polish

Gimnazjum 30 www.gim30.ac.pl [email protected]

French-Polish


German-Polish


English-Polish

Bilingual Classes in Wrocław’s High Schools

Liceum 5 [email protected]

English-Polish; International Baccalaureate (IB)

Liceum 8 www.lo8.wroc.pl [email protected]

French-Polish


German-Polish


English-Polish

International EducationA key concern for international families is the availability of quality education opportunities for their children. At present four international schools operate in Wrocław. However, some international families have placed their children in Polish public and private schools, and they’ve been pleased with the results. Many expats have discovered that Polish public schools are open to newcomers and work hard to meet specific learning needs of foreign students. Parents have also been extraordinarily pleased by the high academic standards on offer.

Getting Settled

��

19

CONTENTS

INVESTMENT MARKET ................................................................................................................ 20

OFFICE MARKET ........................................................................................................................... 22

RESIDENTIAL MARKET ................................................................................................................ 24

RETAIL MARKET ......................................................................................................................... 26

WAREHOUSE MARKET ............................................................................................................... 28

HOTEL MARKET .......................................................................................................................... 30

KNIGHT FRANK CORPORATE OVERVIEW ................................................................................ 33

KNIGHT FRANK SERVICE LINES ................................................................................................ 33

OFFICE LOCATIONS IN POLAND ............................................................................................. 36

Renaissance Business Centre

18

Wrocław



Convention Bureau-Wrocław

Wrocław is becoming a prime location in Poland to organise meetings and congresses, thanks in part to the activities of Convention Bureau-Wrocław (CBW). CBW provides professional support for conference and event organisers, international associations, meeting planners and representatives of the tourist industry.

Business Tourism

CBW is also active in growing the business tourism sector in Wrocław. In partnership with the Municipality of Wrocław, CBW has organised prestigious interna-tional events such as the European Summit of Regions and Cities (May 2005) and the 11th International Business Development Forum Futurallia (June 2006).

The increasing number of business meetings and important conferences in Wrocław has stimulated the development of many top-notch facilities that cater to the specific requirements of business travellers. The city has a wide-range of impressive venues suitable for congresses and conferences. For a full list of business meeting places in Wrocław, visit the CBW website.

www.convention.wroclaw.pl

The Meeting Place

Unique Congress Centre

A key asset to Wrocław’s congress infrastructure is Centennial Hall. Recently added to UNESCO’s prestigious list of World Heritage Sites, Centennial Hall offers a unique setting for large meetings in Wrocław. A major architectural achievement when completed in 1913, today this multi-functional facility is ideally suited to satisfy the needs of the most demanding organisers of large, high-profile events. The impressive large central hall with four apses offers enormous flexibility for event planners. The unique structure can accommodate more than 3,000 convention guests under one roof. A variety of stationary and mobile seating options are available as well as multiple alternatives for the arrangement of conference rooms.

0%5%

56%

39%

Retail

Office

Warehouse

Mixed/Other

Annual € Million Cumulative € Million

6,000

5,000

4,000

3,000

2,000

1,000

0

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Q1-Q3 2007

��

20

INVESTMENT MARKETn2006 was a record breaking year for the Polish investment market in terms of the total volume of investment. In 2006 the volume of investment in all sectors amounted to over € 5 billion, which was a 76% growth in comparison with 2005. With investment of almost € 2.2 billion recorded in the first three quarters of 2007, the total cumulative investment volume in Poland recorded by Knight Frank has been estimated at over € 13.5 billion.

Annual and cumulative investment volume in Poland by sector, 1997–Q3 2007


Quattro Forum

21

INVESTMENT MARKET

nBefore 2004, the office market accounted for the majority of the property investment sector in Poland. Since 2004, investors have turned their attention to the retail sector. In the first three quarters of 2007, the retail sector remained the most active with an investment volume of over € 1.2 billion which represents 56% of the total investment volume.

nThe office sector accounted for 39% of the total investment volume. There has been only a small number of deals in the warehouse and logistics market. Investment in this sector accounted for less than 1% of the inflow of investments in the first three quarters of 2007. The sector has had a similar proportion of the total volume of investment in property throughout the period between 1997 and Q3 2007.

Magnolia Park

Pasaż Pod Błękitnym SłońcemInvestment by sector (Q3 2007)

Magnolia Park

nAlthough a greater number of transactions were concluded in regional cities, the largest deals involving single assets were still in Warsaw. The largest deals in the Warsaw office segment in Q3 2007 included the purchase of Forum Gliwice for over € 128 million and Concorde Investissement Portfolio for € 83 million.

nDemand for investment products exceeds the supply of investment products being offered for sale, which puts downward pressure on yields. Knight Frank’s recent experience shows that in the case of tender procedures there are usually 15–20 offers competing for the same products. Aside from investors established on the Polish market there are new players with aggressive investment policies.

nDemand in the investment market in Poland is still dominated by international funds. The most active investors come from Germany, France and the UK. Investors have tended to turn their attention to provincial markets where more development opportunities can be found. Properties in prime locations are a particular focus of attention. In the medium term, the hotel and leisure sectors are also expected to gain importance.

nPrime yields achievable on the Polish investment market have been compressing over the last few years. In the case of the most recent transactions, the yields for prime office buildings in Warsaw were at the level of 5.45–6%, while in regional cities such as Cracow the yields varied between 6–7%.


1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

f

Centre Outside City Centre Cumulative

sq mAnnual sq m

0

5,000

10,000

15,000

20,000

25,000

30,000

0

50,000

100,000

150,000

200,000

sq m

Katowice Cracow Poznań Wrocław Warsaw

10,000,000

1,000,000

100,000

10,000

1,000

100

10

1

��

2001

Katowice (€)Poznań (€)Wrocław (€)

2002 2003 2004 2005 2006 2007

Cracow ($)Warsaw ($)

Cracow (€)Warsaw (€)

10

15

20

25

30

2002 2003 2004 2005 2006 Q1 2007 Q2 2007

Wrocław Poznań Cracow Katowice Warsaw

0%

5%

10%

15%

20%

23

OFFICE MARKET

22

OFFICE MARKETTotal modern office stock, comparison of major Polish cities

nAs in other major Polish cities the majority of modern office stock is situated outside the city centre (63%). There are two main areas of concentration of modern office space in the non-central districts, namely Western Business Centre (between Legnicka and Strzegomska Street) and the vicinity of Powstańców Śląskich. Wrocław is now witnessing the development of a third area of concentration within the southern boundaries of Wrocław, which can be defined as Southern Business Centre.

nDue to the limited supply of building sites in the city centre, the modern office space in this area is mainly located in refurbished period buildings which have been converted into modern offices.

Annual and cumulative office supply in Wrocław, 1998–2007f

Source: Knight Frank, f – forecast

nWrocław remains one of the most dynamically developing office markets among the major Polish cities. The total modern office stock in Wrocław in Q3 2007 is estimated at approximately 145,000 sq m.

nOver the course of first three quarters of 2007 two projects were completed, increasing the total supply of new office space by approximately 20,000 sq m. A further 22,000 sq m is scheduled to be delivered by the end of 2007.

nThere are also some spectacular and long awaited mixed-use commercial developments currently at the planning stage. These include the schemes of such international developers as Grupo Prasa (Centrum Południowe – 20,000 sq m of modern office space) and GTC (Karkonoska Project – 36,000 sq m of modern office space). Also, Polish developers are showing activity in the Wrocław market. The local developer Archicom is planning to deliver approximately 85,000 sq m of modern office space within the next few years, expanding its Zachodnie Centrum Biznesu scheme up to 100,000 sq m.

Vacancy in Wrocław, comparison to other major Polish cities


nDue to the growing popularity of Wrocław as a BPO centre, the city attracts a growing number of foreign investors, especially from the IT/telecommunication and finance sectors. New demand is being created not only by international companies who were previously not present in Wrocław but also by existing firms seeking expansion. Some of the companies whose expansion plans are currently restricted by the limited availability of office space are awaiting the completion of new developments. Such tenants are forced to temporarily occupy office space in B or C-class buildings until the completion of schemes currently under construction.

Grunwaldzki Center

Rental levels in Wrocław and in other major Polish cities

Times

nThere are currently 21 new developments at the construction stage. The main schemes are Bema Plaza (26,000 sq m by Ghelamco), Grunwaldzki Center (30,000 sq m by Skanska) and Globis (12,500 sq m by GTC). By the end of 2009 the schemes currently under construction should deliver over 164,000 sq m of modern office space to the Wrocław market. Almost 30% of the new supply will be located in the city centre.

nBetween the years 2002 and 2004, Wrocław noted a spectacular decrease in its vacancy rate as it fell from 20% to approximately 5%, reaching as little as 1% at the end of 2006. In Q3 2007, the vacancy rate increased to 2.3%. The increase in the vacancy level is mainly due to the new supply of almost 13,000 sq m that was delivered to the market in Q2 2007 and that has not been fully absorbed by now.

nWrocław rents have increased over the last year. Currently prime rental levels range between at €14.5–17/sq m/month in A-class buildings and €13–15/sq m/month in B+ and B-class buildings. These rental levels are negotiable depending on the amount of space leased and the length of lease term.

nThe insufficient office supply has resulted in the lengthening of lease terms. Additionally, many tenants secure their future expansion possibilities by placing expansion clauses in their lease contracts.


Globis


50%

24%

9%

6%

11%

n Krzykin Fabrycznan Psie Polen Stare Miaston Śródmieście

��

40%

23%

17%

20%

n up to 50 units n 50–100n 100–150n over 150 units

2004 2005 2006 2007f 2008f0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2524

RESIDENTIAL MARKET RESIDENTIAL MARKETnWrocław is currently considered as one of the fastest developing residential markets in Poland. When the residential boom began in Warsaw, Wrocław and Cracow were the first Polish markets to follow the trends observed in the capital. A large number of high standard residential schemes have been developed in Wrocław since then. Foreign investors have focused their attention on the Lower Silesia region.

Annual supply of residential units in Wrocław (2004–2008f)*

nThe annual new supply in 2006 amounted to 4,370 residential units, which represented a 170% increase in comparison to 2005. According to Knight Frank’s forecasts, the year 2007 will probably be record breaking in terms of the number of units delivered to the market. New supply delivered in the first three quarters of 2007 amounted to over 3,830 residential units. A further 2,160 residential units are expected to be delivered to the market by the end of the year .

nA review of projects currently under construction or at the planning stage indicates that the supply will continue to increase in the following years. According to the Knight Frank’s analysis the annual supply delivered to the market in 2008 may exceed 6,500 residential units.

Willa Księcia Witolda

* multi-family housing stock built by developers and housing co-operatives (CSO)f – KF forecast taking account of recent information

Scheme sizes and their share in the amount of schemes under construction

nAs in other major Polish cities, the demand for residential units is affected by the positive migration rate. Wrocław is an important centre of culture and education. Many young people move to Wrocław to study at one of the city’s universities. Additionally, Wrocław and the surrounding areas have recently welcomed several foreign investors, who plan to create, in total, over 100,000 employment opportunities within the next few years.

nThe upward trend in the demand for residential units has been also supported by the growing availability of mortgage financing.

Willa Księcia Witolda

nThe Wrocław residential market will remain dominated by developers rather than housing co-operatives. Their share in the amount of units delivered to the market in the first three quarters of 2007 amounted to 90% .

nAs the Wrocław real estate market develops, the presence of foreign developers seeking investment opportunities is growing. Over the last three quarters a number of international developers have declared the will to develop high-scale residential schemes in the near future. These include Grupo Prasa, Ghelamco, Star Enterprise, Clairmont Global and Neinver.

nSmall schemes including up to 50 residential units still prevail in the supply structure. They account for 40% of the schemes currently under construction.

nDevelopers still build less than the market requires which is mainly due to the lack of existing master plans for large areas of Wrocław. As a result, the residential sector has been developing the most dynamically in locations with available sites designated for residential developments.

nIn Wrocław, the number of dwellings currently under construction amounts to over 10,000 residential units in 112 schemes. Some 50% of the schemes currently under construction have been registered in Krzyki, which is traditionally a residential district of Wrocław. Also, Fabryczna has a large number of schemes under construction, with 24 % of the total.

nIn Wrocław, like in Warsaw and Cracow, the presence of high-standard schemes has now become evident. The number of such developments increased during the last 3 quarters. More developers are deciding to invest in the high-standard residential sector leading to the increase in its profitability.

Schemes currently under construction in districts of Wrocław

Minimum net unit price in new developments in Wrocław, (PLN/sq m, October 2007)

nAfter the substantial price increase in 2006, the first three quarters of 2007 brought stabilization in the prices of residential units in Wrocław. Since the beginning of 2007, the increase in prices amounted to 4%. In Q3 2007, the average net unit price in Wrocław stabilized at PLN 7,500, however prices range between PLN 4,500 and PLN 17,120 depending on location and the standard of the development.

nStare Miasto remains the most expensive district of Wrocław. The majority of high-standard schemes are located in this area. The average net unit price in Stare Miasto is PLN 11,900 per sq m.



27%

47%

9%

17%

n 4,500–6,000 n 6,000–8,000n 8,000–11,000n >11,000


Source: Central Statistical Office, Knight Frank

Annual supply (sq m) Cumulative supply (sq m)

0

20,000 100,000

0

200,000

300,000

400,000

500,000

600,000

700,000

40,000

60,000

80,000

100,000

120,000

to 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007cpl

2008f

��

Wrocław Poznań Kraków Tricity Warsaw Łódź

Existing Under Construction Planned

0

500,000

1,000,000

1,500,000

2,000,000

9%

9%

7%

7%

29%

15%

4%

15%

5%

n Wrocławn Poznańn Cracown Tricityn Warsawn Łódźn Lublinn Silesian Szczecin

2726

RETAIL MARKET RETAIL MARKETnAt the end of the third quarter of 2007, the total supply of modern retail space in major cities in Poland was estimated at 5.8 million sq m of which 29% was located in Warsaw.

nIn Wrocław, at the end of September 2007 there was 477,694 sq m of modern retail space. As presented below, the majority of the retail area was delivered during the years 1998 and 1999.

nThe level of retail stock in Wrocław per thousand inhabitants amounts to 753.52 sq m. The city is followed only by Cracow (with 533 sq m) and Tricity (528 sq m).

Share of major Polish cities in the retail market


Annual and cumulative modern retail supply in Wrocław, 1993–2008f

Source: Knight Frank, f – forecast

Idylla Wrocławska

Existing, under construction and planned schemes


nThe graph below shows that the biggest share of the market in Wrocław, 146,000 sq m, is occupied by shopping centres of the third generation. This amount of space increased in relation to last year thanks to the delivery to the market of two new schemes, namely Pasaż Grunwaldzki and Arkady Wrocławskie. These two new projects added an extra 81,000 sq m of retail area.

nCurrently in the regional cities, the majority of centres being developed are third generation modern shopping centres. These consist of shopping galleries (100–250 stores), big food hypermarket operators and enlarged entertainment areas including cinemas and bowling alleys.

nThere are a few new projects in Wrocław planned for completion in 2008. These schemes will deliver to the market about 108,300 sq m of modern retail space.

nThe extension of Renoma, which is very well known by shoppers in Wrocław, is under way and will add a further 31,000 sq m of GLA (Gross Leased Area). The opening is planned for Autumn 2008.

nThe three main anchors, Albert supermarket, Galeria Centrum and Zara (the first in Wrocław), are certainly increasing foot traffic around this centre.

nIdylla Wrocławska (50,000 sq m) will be built in a strongly developing part of Wrocław which makes the location extremely attractive for the customers.

nThe opening is planned for spring of 2008. The shopping centre will be anchored by a Real hypermarket and a cinema multiplex. There will be 145 stores in this in-town shopping centre.

41,50056,489

10,00054,360

31,000

138,335

146,000

n CH I n CH II n CH III n DIY n Retail park n Factory outlet n Other

Retail market in Wrocław by scheme type


nFutura Park with its 18,000 sq m will be completed during the second quarter of 2008. The first phase of this undertaking will deliver to the market about 11,000 sq m. During the second phase a DIY hypermarket will be opened with the area of approximately 7,000 sq m.

nIn Galeria Strzegomska there will be about 7,000 sq m of retail space, a hotel with 120 rooms and a covered car park with 200 spaces.

nMagnolia Park (former name – Galeria Legnicka) is going to be opened in October 2007. This will be the biggest new generation regional shopping and entertainment complex in Wrocław and is located to the west of the city. Its sheer size (74,000 sq m) will dominate other shopping centres in Wrocław. It should be indicated that there are already some well established shopping centres in Wrocław, like the ECE centre Galeria Dominikańska (30,000 sq m) or Korona Shopping Center (31,000 sq m) and as a result, subsequent developers have been forced to make greater efforts to attract clients.

nThe main high streets in Wrocław are Plac Tadeusza Kościuszki, Świdnicka Street, Oławska Street, Rynek and Ratusz Square, Wita Stwosza Street and Plac Solny. These streets are dominated by fashion stores and services. Currently rents on high streets in Wrocław vary between €25–40/sq m/month. The highest rents can be found at Świdncka Street where a wide range of fashion stores are located, while the lowest rents are noted at Plac Kościuszki.

nThe levels of rents in shopping centres are varied and are highest in modern shopping centres at between €35–50/sq m/month. In contrast, rents in the older shopping centres range between €6–20/sq m/month.

Galeria Strzegomska

��

Lower Silesia Wielkopolska Upper Silesia Central Poland

sq m

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

8%

15%

12%

65%

n Lower SilesianWielkopolskan Upper Silesian Central Poland

Lower Silesia Wielkopolska Upper Silesia Central Poland

sq m

0

100,000

200,000

300,000

400,000

500,000

2928

WAREHOUSE MARKET WAREHOUSE MARKETnThe strategic location of Poland at the intersection of European transportation routes as well as the advantages of the Polish accession to the European Union make Poland an attractive prospect for warehouse investments. The total supply of modern warehouse space in Poland at the end of Q3 2007 has been estimated at 2.9 million sq m. There are five main areas of concentration of warehouse space in Poland.

nInitially, the majority of modern warehouse schemes were located in the Warsaw area. As the warehouse market has evolved, developers have been focussing their attention on regional logistics locations such as Central Poland, Upper Silesia, Wielkopolska and Lower Silesia. Currently these markets account for over 47% of the total warehouse stock in Poland.

Total stock of modern warehouse space on leading regional markets


Warehouse projects in the pipeline on leading regional markets


Take-up (H1 2007)

ProLogis Park Wrocław


WIELKOPOLSKA

LOWER SILESIA

UPPER SILESIA

WARSAW

CENTRALPOLAND


nWell developed transport infrastructure, relatively low maintenance costs, qualified workforce as well as the proximity of the large markets are the main factors in favour of locating new warehouse developments in the Lower Silesia region.

nAlso, the positive approach of local government towards new investors is an important investment incentive for industrial developers.

nThe presence of foreign manufacturing companies such as LG Electronics, Volvo, Genpact, Mahler Polska, LG Philips, Whirlpool, Fagor Mastercook, Metroplan and Toshiba Corporation attracts logistics companies.

nThe total modern warehouse stock in the Lower Silesia area has been estimated at approximately 227,000 sq m. The main existing schemes include ProLogis Park Wrocław (164,400 sq m), Tinner (22,000 sq m) and Vatt Invest (30,000 sq m). The stock is located close to Wrocław and along A4 / A8 highways.

nOver the course of 2007, some 114,000 sq m of modern space has been delivered to the Lower Silesia market. This new supply included the following developments: ProLogis Park Wrocław I (55,430 sq m), ProLogis Park Wrocław II (24,000 sq m) and ProLogis Park Wrocław IV (16,000 sq m).

Tinner

nThe review of projects currently in the pipeline indicates that the increasing supply of modern warehouse space should continue in the following years. In the Lower Silesia region alone, logistics developers intend to deliver over 380,000 sq m of modern warehouse space. Warehouse developments currently under construction amount to approximately 25,000 sq m. These include Vatt Invest in Mirków (3,000 sq m) and ProLogis Park Wrocław IV (21,800 sq m).

nThe dynamic development of the warehouse market has led to the increased interest in land for warehouse developments. Expecting an increase in demand, industrial developers have been actively land banking, acquiring plots of land all over the country. As a result, the prices of commercial plots in the suburbs of regional cities have increased by 100–150% depending on location. Land prices in the Wrocław area are now comparable to those in the greater Warsaw area. ProLogis Park Wrocław

nDemand in the warehouse sector will remain dominated mainly by logistic operators and companies from the FMCG sector. The potential tenants are interested in modern warehouse space adjusted to their specific needs. Although the majority of new developments are still being built for speculative reasons, the number of “build-to-suit” schemes is growing steadily. Total warehouse space leased in Wrocław in 2006 amounted to over 130,000 sq m. A further 24,000 sq m was leased in the first half of 2007.

nAsking rents for modern warehouse space in Wrocław have stabilized between €2.8–3.5/sq m/month.

nDue to the improving economic situation in Poland and the increasing amount of goods produced and sold by companies, there is a continual requirement for additional warehouse space. Wrocław, with its positive approach towards investors, is likely to become the major warehouse area in Poland.

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14%

34% 3%

32%17%

*********

***

***

no of rooms

63

* * * * * * * * * * * * * * *

63 64

59

74

no of beds average room

50

60

70

80

0

500

1,000

1,500

2,000

3130

HOTEL MARKET HOTEL MARKET

Hotels in selected Polish cities by category (3*–5*)

Number of hotels/

beds

5* 4* 3* Awaiting classification

Cracow 89 / 11,260 5 / 1,488 7 / 1,187 47 / 5,359 5 / 212

Warsaw 63 / 18,187 8 / 3,754 5 / 2,057 17 / 6,461 8 / 672

Poznań 40 / 5,283 1 / 290 5 / 941 22 / 1,130 1 / 165

Wrocław 35 / 5,097 2 / 713 7 / 1,744 16 / 968 – / –

Source: Central Statistical Office

Hotel ”Mercury-Panorama” Wrocław

nIn 2006, Lower Silesia voivodship was visited by 1.6 million foreign tourists, of which 500,000 visited Wrocław. This represents 6% growth when compared to 2005.

nLow-fare airlines with direct flights to major cities in Poland contribute to the prosperity of tourism services.

nThe Polish hotel market is still developing. The main cities like Cracow, Wrocław, Łódź, Gdańsk and Warsaw are the most attractive to developers.

nIn four of the above cities (all except for Warsaw) developers are planning to build or rebuild a significant number of hotels from 2-star (including hostels and economy hotels) to 5-star hotels.

nIn Wrocław, the capital of Lower Silesia, Knight Frank has identified plans to rebuild 11 hotels and build 2 new hotels, whilst there are an additional 6 hotel projects at a very early stage.

nAmong the schemes planned in Wrocław, there are 3 hotels of 3-star standard with 350 rooms, a 4-star hotel with 120 rooms and also a 5-star hotel with 200 rooms. In addition, one hotel containing 80 rooms is under construction in a residential-retail-hotel complex in the city centre. It is unknown under which category it will be operating.

No. of rooms, beds and average occupancy rate Wrocław hotels in 2006

Source: Central Statistical Office, Tourism 2006

Source: Central Statistical Office, Tourism 2006, Knight Frank

Hotel stock in Wrocław – rooms by category in 2006

nAccording to Central Statistical Office data, in 2006 Lower Silesia had 161 hotels, of which 35 were located in Wrocław (9% more than in 2005). The city takes fourth place after Cracow, Warsaw and Poznań in terms of number of hotels.

nWrocław’s hotels have a total of almost 5,100 rooms. Most of these are located in 4- and 3-star hotels, with 1,744 and 1,530 rooms respectively.

nThe largest group of hotels are categorized as 3-star, with 16 hotels. The 2- and 4-star categories have 7 hotels each.

nIn 2006 two 5-star hotels entered the Wrocław hotel market: Radisson SAS with 162 rooms and Hotel Dorint Sofitel with 205 rooms. Both of these were previously categorized as 4 star hotels.

Hotel Holiday Inn Wrocław

nIn 2006 the average occupancy rate in Wrocław hotels reached 63%, which represents a 6% increase from 2005. A comparable level of occupancy was noticed in Cracow at 62.4%. The capital cities of Lower Silesia and Malopolskie were followed by Warsaw with 56.7% and Poznań with 45.6% of average occupancy.

nIn Wrocław the most popular are 3-, 4- and 5-star hotels, which all achieve almost the same occupancy level of 62% –63%. When compared to 2005, the highest increase was noticed in 5-star hotels, from 51% occupancy in 2005 to 63% in 2006.

nIn 2006 the average length of hotel stay in Wrocław was 1.4 nights. In 2007 this number has already increased by 10%.

nMost hotel guests prefer to stay in 3-star (31%) and 4-star (33%) hotels.

nThe main international hotel chains in Lower Silesia voivodship are Accor Group (Sofitel, Ibis, Novotel, Mercure), Holiday Inn, Best Western, Campanile and Radisson SAS.

Hotel Radisson SAS Wrocław

nThe average room rates in Wrocław hotels depend on the location and standard of the hotel. Currently the rates are as follows: - 5-star hotel: from PLN 500 for a single room to PLN 800 for a suite; - 4-star hotel: from PLN 230 for a single room to PLN 760 for a suite; - 3-star hotel: from PLN 170 for a single room to PLN 600 for a suite.

nDuring weekends, hotels offered rate discounts ranging from 30% to more than 60%.

nThroughout 2006 in Wrocław the number of occupied rooms was 604,380. The biggest share in the total number of occupied rooms was in 4-star hotels (207,806) and 3-star hotels (190,414).

nForeign tourists contribute to 50% of the total share of rooms. 3-star hotels were the most popular among this group (129,248).

nCurrently cities like Cracow, Wrocław, Łódź, Poznań and Gdańsk are the most attractive for developers investing in the hotel market, because of football’s European Championship in 2012, which will take place in those cities. 2- and 3-star hotels will be the most developing market sectors.

nMost of the developers who are investing in the capital of Lower Silesia want to re-build existing facilities or build new hotels.

nInternational hotel chains like Wyndham Hotels & Resorts, Choice Hotels and NH Hotels plan to enter Polish hotel market in locations including Wrocław, Cracow, Łódź, Poznań and Gdańsk.

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KNIGHT FRANK CORPORATE OVERVIEWThe team at Knight Frank has been operating on the Polish market for over 16 years. As the only real estate company in Poland with offices in the regional cities of Katowice, Cracow, Poznań, Wrocław, Łódź and Gdańsk, we can operate with great efficiency and accuracy within the regional markets.

Knight Frank in Poland currently employs over 100 staff including professionals with Polish and international licenses for valuations, agency and property management. Our key employees have unrivalled experience in Poland’s commercial and residential property markets

KNIGHT FRANK SERVICE LINES

The Commercial Agency experts are highly experienced in the rent and sale of office space, representing both landlords and tenants.

Real estate owners are represented either on the terms of exclusivity or of open cooperation. The wide range of services which we offer includes:

n development of marketing strategyn preparation of property particulars, tenant information packagesn draft lease agreementsn coordination and implementation of marketing campaignsn negotiations with potential tenants in cooperation with client’s legal advisors

We are part of Knight Frank the international real estate consulting company.

The Knight Frank Group headquartered in London and its New York-based partner Newmark Knight Frank operate from over 165 offices on real estate markets across six continents. Last year, the companies handled transactions valued at over 41 billion USD as annual revenues exceeded 545 million USD. With a combined staff of 5,300, this major force in real estate is meeting the local and global needs of owners, tenants, investors and developers worldwide.

With the help of 5,300 employees the Knight Frank team satisfies its clients requirements; ranging from individual owners and buyers to major developers, investors and corporate tenants all over the world.

We have been working on the Polish market for 16 years. Knight Frank’s head office is located in Warsaw. Thanks to the offices situated also in Katowice, Cracow, Poznań, Wrocław, Łódź and Gdańsk, we can operate efficiently within the regional markets.

The highly qualified staff at Knight Frank provide complex services in key areas of real estate. Our team includes professionals with Polish licenses for valuations, property management and agency as well as members of the Royal Institution of Chartered Surveyors (RICS) and the Royal Town Planning Institute (RTPI) in the UK.

Separate KF teams are qualified in:

n property and financial counsellingn market researchn development and investment appraisaln commercial property managementn real estate agency

Commercial Agency

Service package offered to companies seeking office space includes:

n description of tenant requirementsn finding and presentation of properties available on the market and corresponding to highlited criterian advisory service for selection and alternative solutions available on the marketn surface arrangement coordinationn negotiation of lease agreements

Thanks to our office network, we can operate efficiently within the regional markets. Our own database, which is regularly updated with the information gathered during research and market analysis, provides our Clients with access to the market’s most accurate information.

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KNIGHT FRANK SERVICE LINES KNIGHT FRANK SERVICE LINES

We have been active on the residential market since the year 2000. Our team offers a diverse range of residential investment services. The Residential Agency’s vast experience and specific knowledge of local conditions enables us to understand the changing needs and expectations of home buyers.

The range of services offered includes:

1. Product definition consulting

n Analysing projects in the context of competitive schemes: prices, standards, completion dates and SWOT analysis n Defining groups of potential buyersn Defining the productn Cooperation with investor’s architects throughout the design processn Advising on sales prices for the current marketn Preparing a marketing strategy and campaign

Residential Agency

2. Creation of project image – marketing and PR

n Selection of the most effective forms of advertisingn Preparation of press articlesn Organisation of press conferencesn Presentation of the offer on real estate fairsn Cooperation in creating of the Model Apartment

3. Sale of apartments

One of the key factors in the effectiveness of the sale is the precise acquaintance with the product. The sales are coordinated from our local Knight Frank offices and the on-site marketing suites. Our services:

n Project presentationn Follow-up with telephone calls and meetings with buyers until reaching a final decisionn Assistance in applying for mortgage financen Leading the buyer through the legal process n Advising the tenants during the construction process until hand-over

Capital Markets

1 Corporate finance

Our Capital Markets team has been operating on the Polish market since the early 1990s and is the leader in property, financial and investment advising. In the current fast changing market conditions we have the knowledge, skills and resources to meet the requirements of the most demanding clients.

We offer:

n Cash flow analysis and preparation of feasibility studiesn Reviewing of corporate property portfoliosn Raising equity and debt for investment in various sectors of the real estate market

We work with both Polish and international financial institutions.

2 Investment consulting

We have experience of evaluating and structuring investment acquisitions and sales of individual or portfolio properties in different market sectors, providing advice on comparative returns, yield analysis, property swaps and sale and leaseback options.

Over the last 3 years the Investment team has advised and completed development and investment transactions valued at over EUR 850 million.

The team has also advised on the creation and investment strategy of the first publicly listed real estate fund in Poland, namely ARKA BZ WBK FRN FIZ. Knight Frank is the leading advisor of the Fund with a purchasing capacity of PLN 1.3 billion of which was placed on the market within two years.

3 Market research

As one of the largest and most experienced research teams on the Polish market we are able to provide strategic advice, forecasting and consultancy services to a wide range of commercial and residential clients including developers, investors, financial and corporate institutions. We offer:

n Strategic consulting, independent forecasts and analysis adapted to specific requirements of Clientsn Specialized market reports and analysis for Knight Frank Clientsn Market reports and analysis available to the publicn Tailor made presentations

4 Due diligence analysis

Knight Frank offers unique pre-acquisition due diligence services for commercial and residential investments/developments including:

n Review of a property market sector relating to a selected propertyn Verification of real estate financial model assumptionsn Audit of operational expenses and maintenance chargesn Review of short and medium term capital expenditure budgetsn Verification of assumptions to planned investment budgetsn Evaluation of residential projects’ assumption

In this process we coordinate working teams of lawyers, tax consultants and technical experts thus creating an integrated selection of professional services.

We are the market leader in identifying vacant sites with development potential and arranging land sales on behalf of landowners. In recent years, we have been responsible for many large land sales and acquisitions representing private individuals, international funds and developers. This service line is extensively supported with research and pre-acquisition due diligence work of other Knight Frank teams.

The high-class professionalism of our property valuation staff is guaranteed by licensed surveyors, including those who have qualifications from the British Royal Institution of Chartered Surveyors (RICS).

The property appraisals are prepared in accordance with proffesional standards approved by:

n The Polish Federation of Valuers’ Associationsn The European Group of Valuers’ Associations (TEGoVA)n The Royal Institution of Chartered Surveyors (RICS)

Valuation

Realized commissions concern single properties as well as commercial and residential property portfolios which are performed for financial institutions, developers, investment funds and other institutional or individual subjects.

Offices based in Warsaw, Katowice, Cracow, Poznań, Łódź, Gdańsk and Wrocław ensure that our services are available across the whole of Poland.

Our task is to formulate strategies based on the landlord’s specific requirements which are geared towards the maximization of real estate value and investment returns.

We prepare and implement operational and asset management strategies.

Operational management includes:

n Strategizing procedures, system and financial reportingn Continual monitoring of buildingn Coordination and monitoring of subcontractor services n Working out budget and operational costs and structuren Rent service charge accountingn Rent collectionn Maintenance charge accountingn Tenant liaison

Property Management

Our property management team is currently responsible for over 50 properties which worth equals 900 million Euros.

Assets Management includes:

n Optimization of the income from properties and their operating costsn Identifying extra income from propertiesn Optimization of operating expensesn Restructuring of leases including: renewals/extensions/ expansionsn Free surface managementn Advisory services in development, redevelopment and refurbishmentn Loan restructuringn Investment consultingn Current portfolio appraisal

36

Poznań

Gdańsk

WARSAW

Wrocław

Katowice

Cracow

OFFICE LOCATIONS IN POLAND

Knight Frank Sp. z o.o.

ul. Mysia 500-496 Warsawphone: +48 22 596 50 50fax: +48 22 596 50 [email protected]

ul. Uniwersytecka 1340-007 Katowicephone: +48 32 350 50 50fax: +48 32 350 50 [email protected]

Rynek Główny 4631-017 Cracowphone: +48 12 623 70 79fax: +48 12 623 70 [email protected]@pl.knightfrank.com

Plac Andersa 561-894 Poznańphone: +48 61 850 52 25fax: +48 61 850 52 [email protected]@pl.knightfrank.com

ul. Św. Mikołaja 750-126 Wrocławphone: +48 71 790 27 10fax: +48 71 793 00 [email protected]@[email protected]

Corporate Finance & Research+48 (22) 596 50 50 Piotr Gó[email protected]

Elżbieta [email protected]

Investment Team+48 (22) 596 50 50

Mariusz Cieśliń[email protected]

Justyna [email protected]

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