Issue No. 40

Contact Magazine Issue No. 40

Editorial note 3

International Oktoberfest 2019 Wrocław 4

London: BPCC members share experiences of doing business in Poland to attract new investors 4

Optimising Energy Costs in Aerospace Manufacturing 5

Warmth and friendship at BPCC’s annual late-summer mixer 5

Teambuilding through rowing on the Vistula river 6

BPCC HR Review roadshow brings answers to employers’ big issues 7

Chairman’s and CEO’s note 7

Polish real estate – a sweet spot for global investors? 8

Location worth its weight in gold 12

Destination: Poland. How to transform your next office choice into a flagship project that defines your business and its aspirations.14

How architects add value 15

How productive is commuting? 18

25 years of Flowcrete in Poland – the company invests in R&D, launches a new laboratory in Warsaw20

Boom to bust. Legal insight into Polish construction sector difficulties 21

Rethinking the office lobby for the collaborative era 22

Innovative technology as a global standard for Blue Projects - Building information Modelling (BIM) 24

The Łódź Special Economic Zone. This is where you invest 26

What’s new in office-property operating costs? 27

Office Renovation – Risks and Traps 29

Mix Group implements its first prime apartment project 30

May the construction industry please care more about our planet? 32

Food and Place 34

Table of Contents

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Well, you better consider WELL 37

Buy or rent? What are young Poles choosing in 2019? 38

Construction 4.0… Seriously? 41

Retail (r)evolution 43

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Editorial note

by Michael Dembinski, chief advisor and DorotaKierbiedź, membership director BPCC

Welcome to the October 2019 issue of ContactMagazine Online. In this edition, we focus onPolish real estate and construction – animportant driver of the Polish economy, and anintegral part of any business in whicheversector it operates. How does the market looknow – and what are the prospects in the short-and medium term? What are the trendsinfluencing its development?

TomaszTrzósło, CEO ofJLL in Polandtalks to theBPCC’s MichaelDembinski aboutthe Polish realestate market,an overview setting out the main themes touchedon in the articles (below). He also talks about theexperience of JLL in locating its EMEA Centre ofExcellence to Warsaw, which now employs 1,000people.

Construction

Piotr Staniszewski, partner, Real Estate Poland,Dentons looks at the conundrum of why Poland’sconstruction sector is enduring bankruptcy andinsolvency while public- and private investment ispouring into the sector in record amounts. Thereason – Polish construction contracts are stilllump-sum based; the inflexibility means that allcost-upside risks are passed onto the contractor.Janusz Allina, property consultant, GleedsPolska, makes a heartfelt plea to the constructionsector to think about the planet a bit more whenputting up new buildings. Martin Hyams, director,AHR, considers how the value of a building is oftendifficult to assess or quantify, and

how architects seek to add to that value. HowardBates, whose design studio has carried out interiordesign for Vastint, says the office lobby needs tobe redesigned for the collaborative era. BartoszZamara, operations manager, Europtima, looksbehind the Construction 4.0 slogan and analyseswhy the construction sector lags behindmanufacturing industry when it comes to efficiencygains, while Michał Zając, BIM manager /seniorarchitect at Blue Projects, looks at how the designprocess is being revolutionised by technology – forthose who want to benefit from it. And flooringspecialist Flowcrete CEE has chosen to open itsnew R&D facility in Warsaw.

Investment

Andrzej Gutowski, associate director, GreenBuilding Certification, Colliers International sets outthe need for developers, letting agents and tenantsto consider the well-being of office workers that willone day be using new buildings. It’s good to buildgreen, but health can be built into offices from theoutset. Magdalena Oksańska, head of propertymanagement compliance, Knight Frank, looks atwhich operating costs are likely to end up beingpaid by tenants – rising energy prices, collection ofnon-segregated waste, new forms of taxation andcosts of marketing activities – who will end uppaying these – the landlord or the tenant? Essentialreading for anyone managing an office! GrzegorzChęciak, senior business development managerat Transformation, discusses out the mostcommon pitfalls associated with office renovations.Marek Michalik, president of the Łódź SpecialEconomic Zone, looks at the changes in the lawsrelating to investments in SEZs in Poland, andassesses how they have improved theattractiveness to investors.

Sectoral overviews

Marta Mikołajczyk-Pyrć, head of retail propertymanagement, Property & Asset Managementdepartment, Savills Poland, considers the latesttrends in shopping centres across the Polishmarket, and how technology and social shifts are

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changing the face of retail. Robert Kaminski,director of Warsaw Studio, Broadway Malyan,looks at how food courts in shopping centres – animproved gastronomic offer can do much to boostfootfall in Polish malls. Wojciech Zebura, director,head of Warsaw, Nuvalu, considers the price-quality equation as the crowning argument for whyPoland is an attractive location for officeinvestment. Spaces, asks how productive iscommuting, and offers alternatives to wasting timestuck in traffic. Meanwhile, a successful officedeveloper, Mix Group, is now branching out intohigh-end residential projects – is this a new trend?Kinga Odziemek from Resi4Rent, charts thechanging residential needs of the youngergenerations that are beginning their careers. Shebelieves that more properties for the rental marketwill be needed to meet the demand.

International Oktoberfest 2019Wrocław

Wrocław's 15th International Oktoberfestmaintained its famed profile as one of thelargest and most prestigious business eventsin Lower Silesia.

It was held once again in the City Arsenal on 13September 2019. The event was organised by thelargest international chambers of commerce inLower Silesia - the British Polish Chamber ofCommerce, the Polish-German Chamber ofIndustry and Commerce and the AmericanChamber of Commerce in Poland with support ofthe Irish Polish Chamber of Commerce and asalways enjoyed great interest. Guests filled theArsenal with a joyful and excited atmosphere.

The meeting was inaugurated by the traditionaltapping of the barrel by James Hughes, Minister-Counsellor for Economic Affairs at the BritishEmbassy, and Hans-Jörgen Neumann, consul-general of Germany in Wroclaw.

This year's event was hosted by TV presenterJarosław Kret, and the evening’s

attractions were traditionally the performances ofthe Bavarian Musikkapelle Niederwangen andmany other attractions.

Guests also had the opportunity to take advantageof the rich gastronomic offer and tasting thevarious types of beer and cider offered both bylocal producers and the largest beer brewery inPoland – Kompania Piwowarska.

The culmination of the evening was the selection ofthe winners of the Oktoberfest Game with a largenumber of attractive prizes funded by thesponsors. As ever, it was a time to swap businesscards, meet new contacts and discuss potentialnew business. The mix of participants representinglarge foreign investors across Lower Silesia, localbusinesses and local authorties, ensured a flourishof new business contacts that hopefully wouldcontinue to boost the region's economic growth.

List of Partners and Sponsors

London: BPCC members shareexperiences of doing business inPoland to attract new investors

BPCC members shared their experiences ofdoing business in Poland to an audience ofpotential investors gathered at the PolishEmbassy in London on 17 September 2019.

The event, held in association with Grant Thornton,the Polish trade and investment agency PAIH andSantander bank, was aimed at businesses locatedin the UK that were seeking a location within theEU from which to expand. The PolishAmbassador, Arkady Rzegocki, welcomedparticipants and gave a brief overview of how thePolish economy has been developing. MagdalenaCrosa, the London head of the Poland andGermany desk at the Santander, looked at thefinancial aspects of trading with

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and investing in Poland. Jolanta Jackowiak,partner, Grant Thornton, delivered a presentationentitled Time for Poland – stability, talent andgrowth,

Michael Dembinski, the BPCC’s chief advisor,showcased members’ activities in Poland,focusing on those high value-added investments inadvanced manufacturing or knowledgeoutsourcing. These included included FTSE 100companies Twinings Tea (AB Food), JohnsonMatthey, GKN Driveline, Standard Chartered,Sage and HLTech, as well as smaller family-owned firms in the aerospace supply chain suchas Poeton and McBraida. Conditions of investing inPoland – in particular, how Special EconomicZones function in Poland after the amendment tothe law in 2018 – was presented by MonikaGrzelak from PAIH.

Panellists included Nick Lakin from KingfisherGroup (Castorama), Leszek Maziarz (PoetonPolska) and Ian Franklin from Jones Lang LaSallepicked up and developed points raised in thepresentations from the perspective of businessesactive in the Polish market.

Around 40 participants with an interest in investingin Poland as a location secure within the singleEuropean market attended, represented includingsectors such as automotive, IT, logistics, financialservices and construction. Countries representedincluded Japan and India. Embassy interested inholding a further event along these lines in spring.

Optimising Energy Costs inAerospace Manufacturing

The BPCC’s Manufacturing Industries groupmet in Rzeszów again to discuss one of themost pressing issues facing manufacturers –the dramatic rise in energy prices, and what todo about them.

The event was help on 12 September with GrantThorton, in the Rzeszów Science & TechnologyPark by Jasionka Airport. All but one of theBPCC’s aerospace-sector member were present,the direct result of a series of visits to memberfirms in the region in July.

With energy prices rising by 38% over the past 12months, manufacturers are worried about what canbe done to mitigate the threat of further increases.Three main answers were discussed in detail byMarek Hołubowicz and Andrzej Matyja. The first isto audit energy use in detail, the second lies insmarter negotiations with suppliers, and the third iswise investments in renewable energy. There iscertainly the interest to take this topic to otherBPCC manufacturing members in the south andsouth-west of Poland in coming months.

Warmth and friendship at BPCC’sannual late-summer mixer

The regular gathering of BPCC members tocelebrate the end of the summer holidays washeld at the Mamaison Hotel Le Regina Warsawon Wednesday 28 August 2019.

A beautifully warm evening at the end of a hot,cloudless August day, it proved to be a great timeto meet up with old friends, make new contacts,share holiday anecdotes - and discuss thebusiness agenda for the busy months ahead.Aswell as the chance to mingle with the British-Polishbusiness community, other nations were alsorepresented in the form of the International Groupof Chambers of Commerce,

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of which the BPCC is currently holding thepresidency (from 1 July to 31 December 2019).

Participants of the event had the opportunity tasteSingleton single malt whisky, generously suppliedb y Reserve Business Club, delight in theoutstanding taste of barbequed British lamb fromAHDB, and try a range of excellent and unique (onthe Polish market) Scottish ciders from EMIXIT,including one aged in old whisky barrels. Greatsalads food was laid on by the Mamaison HotelLe Regina.

After a short welcome by Antoni F. Reczek, BPCCchairman, and Jarosław Huńka, the generalmanager of the Mamaison Hotel Le Regina, therewas a presentation of the Sue Ryder Foundationby Barbara Stachowiak-Kowalska, BPCC boardmember. “Lady Ryder of was a British-born Polishpatriot that will inspire your staff and enrich yourcompany’s CSR,” she said.

A thoroughly enjoyable – and useful – evening thatwill be remembered for a long time!

Teambuilding through rowing onthe Vistula river

One of the most innovative and useful eventthe BPCC has organised in a long while - and alot of fun!

Last Friday members of the BPCC took to theVistula on 12 July 2019 to see just how well suitedthe sport of rowing is to creating strong businessteam-work. When Linklaters' partner, DanCousens, approached the BPCC about possibilityof promoting his rowing club to the membership,the chamber's chief advisor Michael Dembinskicould see a perfect fit. Right now, most if not allBPCC members are facing a difficult time inrecruiting and retaining staff - so why not promoterowing as a form of corporate team-building?

Building strong, sustainable teams requires morethan flip-charts and pizza. Rowing requires focus,coordination, harmony and equilibrium. It is aninclusive sport, suitable for men and women of allages and physical strength; finding the balancebetween team members of different aptitudes isthe secret of success – and that translates readilyinto business excellence and reduced attritionrates.

Hardly any of the participants in the resultingBPCC HR policy group event have had anyprevious experience of rowing as a team sport, butthanks to the excellent tuition from experiencedmembers of the Towarzystwo Wisła dla Wioślarzy(TWDW) rowing club, everyone was ready to tryout on the Vistula. After a presentation entitledBuilding determination, focus and competitivenessinto teams from Adam Piekarski, of P3Recruitment, and stories of corporate rowingteams set up by our member companies,Linklaters and KR Group, the theory of pullingtogether with a purpose was put into practice. Butfirst - a quick try-out on the club's rowingmachines, during which participants learned how tocoordinate arms, bodies and legs to power theoars. The the hard part - lifting the boats, carryingthem down to the water's edge, and setting themgently onto the river.

The process is complicated and requires balanceto get into the sliding seats of the boat's narrowhull; stability is maintained while the boat is still byplacing all oars blade-down on the surface of thewater. Once safely in, the crews were instructedand monitored under the watchful gaze of TomekWiśniewski, Jacek Ojrzyński and Michał Zawadzkifrom TWDW staff, who ensured everyone's safetyon the water. Everyone who wanted to take to theriver had the chance to see for themselves justhow enjoyable working together as a team androwing a boat up the stream on a summer's daycan be. The BPCC hopes to repeat this eventagain before autumn days start drawing in!

Towarzystwo Wisła dla Wioślarzy offers long-termcorporate rowing trainings as well

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as one-day events for corporate teams. Please,get in touch with the staff of the chamber for moreinformation.

BPCC HR Review roadshow bringsanswers to employers’ big issues

Employers’ greatest challenge in Poland todayis retaining their best staff.

This issue has been reported to the BPCC bymany member companies in increasing numbersover the past two years. In response, the chamberhas organised a series of four meetings focusedon staff recruitment and lowering attrition ratesacross four cities – Kraków, Wrocław, Poznań andWarsaw – where investors from the UK have thestrongest presence.

Member companies that have come together tojointly create the programme are approaching thetopic from a holistic, 360-degree perspective,looking at the hard and the soft aspects of staffretention. The Wellness Institute’s Ewa Stelmasiakexplains how demographic and economicmegatrends are influencing the needs andexpectations of our employees, while speakersfrom office furniture manufacturer Kinnarps offer aninsight into how office space is organised now andhow it will change in the future, considering suchfactors as ergonomics and acoustics. Turning tothe ‘hard’ aspects of retention, Marta Partyckafrom ABC London Group asks which benefits canbe deployed in combination to create an offer thatemployees – and IT contractors on freelancecontracts – think twice about before changing jobs.Łukasz Chodkowski from Dehora considers theissue of working time and the work-life balance ofour employees, introducing innovative

solutions such as self-rostering where smartalgorithms match employees’ preferred shift-timeswith production plans. Lawyers from Linklatershighlighted the legal aspects of retention strategiesmost often used by employers.

Two editions of the BPCC HR Review havealready taken place, with events in Kraków andWrocław having received great feedback from HRprofessionals who took part. Join us in Poznań on22 October and Warsaw on 27 November) formore insights, and to take part in a major labourmarket survey that the BPCC will be presenting inLondon in January 2020.

More information and registration details:https://www.hrreview.bpcc.org.pl/

Chairman’s and CEO’s note

by Antoni F. Reczek, chairman of the board, andPaweł Siwecki, CEO, BPCC

Dear members and readers,

Welcome back after the summer. For theBPCC, the 14 weeks between the beginning ofSeptember and the middle of December hasalways been the busiest period of the year.

However, this year, the busy period started earlier,since our presidency of the International Group ofChambers of Commerce (IGCC) began on 1 July.On 27 August, during the group’s board meetingpresided over by the BPCC, we accepted theIsraeli-Polish Chamber of Commerce as theIGCC’s 16th member. The very next day wegathered for our traditional summer BBQ mixer atWarsaw’s La Regina hotel, heralding the ‘back toschool, back to work’ time after a wonderfulsummer holiday season.

Our intensely busy business period started on 4September with the launch of Economic RelationsBetween Poland and the United Kingdom

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– an Exceptional and Enduring Partnership at theKrynica Economic Forum. A project led by theBritish Embassy, the BPCC and a number of largeBritish investors, the report was very well receivedby the Krynica audience.

We are pleased that Poland is well perceived byprospective investors on account of the size of itseconomy and its growing integration with the globaleconomy and the EU market, as well as theavailability of local suppliers of goods and services.And we are particularly happy with the fact thatBritish companies have plans to further expandtheir footholds on the Polish market: the reportshows that three-quarters of them want to increasestaffing and investment levels.

The report can be accessed here. We would like tothank all our members who have contributed to theresearch that formed the basis of the report.

More good news came on 20 September when wewere been notified by the Registry Court ofWarsaw that our motion to register the BPCC asan employers’ organisation was approved and theBritish Polish Chamber of Commerce has beenentered into the register of associations andprofessional organisations. This the legacy of themembers voting unanimously to restructure theBPCC from an English Company Limited byGuarantee to a Polish employer’s organisation atthe Annual General Meeting, held on 29 May 2019.We are looking to fully complete the process by theend of this year, and to start operating as anemployers’ organisation on 1 January 2020. This isa formal process and will not change the way theBPCC works with its members. BPCC memberswill be informed about developments throughoutthe process until its completion.

These are key developments from the HQperspective; meanwhile our staff has been busydelivering a variety of regional events including theOktoberfest in Wrocław on 13 September, aninvestor briefing at the Polish Embassy in Londonon 17 September and the launch of our HR Reviewroadshow in Kraków on 24 September

to name just a few. Please stay informed and viewall activities on line and through events newsletter.

Our calendar is busy for the rest of the year withnumber of policy groups initiatives, IGCC events,networking activities across Warsaw, Wrocław,Poznań, Kraków and the UK. The last issue ofContact Magazine Online will be distributed inDecember with a focus on financial services, soplease get involved if you’re working in the sector!Contact Dorota at Dorota.Kierbiedz@bpcc.org.pl

Polish real estate – a sweet spotfor global investors?

Tomasz Trzósło, CEO of JLL in Poland, talks toBPCC's chief advisor, Michael Dembinski

How is Polish real estate perceived as aninward investment destination by globalcapital?

Poland is on the map for global capital and isviewed positively, and there are many importantreasons for this. Most importantly, this is a decent-sized and well performing economy, it’s an EUmember, there is a significant presence ofinternational companies with demand for spaceacross various asset classes, or that the rates ofreturn are at a premium over Western Europe.Other CEE countries are also attractive, but theyare significantly smaller as markets, which is whysome investors may be less interested. Poland’sreal estate sector is of the right scale, andtherefore provides investors with the comfortconcerning future liquidity. Moreover, this scalemeans diversification, both in terms of availabilityand variety of product in terms of geographicallocations, quality, value ticket, or risk-return profile.One other strength of Poland is its level ofeducation and subsequently the labour market, inthe meaning that it gives investors access to someof the best professionals in Europe, especially inthe IT or business services fields.

So, for all these reasons Poland continues, and

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- in my view - will continue to attract new capital,but also offers those funds who are alreadypresent in the country a constant inflow of newopportunities to further develop their portfolio.

Over the past 12 months, we've seen newinvestors entering Polish market, with most ofthem moving into the country's office or industrialsector, but there is also a growing interest in theresidential or hotel market. Investor confidence inPoland has remained strong, and that helped tolower the prime yields further. This was to someextent driven by very low interest rates around theworld, but wouldn’t have happened without theconfidence of investors in the Polish market andthe economy as such.

Coming back to the topic of new investors inPoland, in the last two years there was a significantinflow of capital from countries that have notinvested in Poland before. Clearly the capital fromKorea is such example, but there is also capitalfrom other countries, which invested both directlyand indirectly, via Europe-based fund managers,into Polish real estate. Capital from South Africa isalready active for some time, but funds fromChina, Singapore, Malaysia, Indonesia, or thePhilippines have all significantly increased theirinvestments in the last few years. The main driverfor them is a return premium available in Poland,but also the depth of the market meaningavailability of the product, and overall growthprospects. The market continues to be attractivealso for players with a longer track record inPoland, like the US, Canadian, or Australian funds,who also look for the right acquisitionopportunities.Finally, and that is an interestingdevelopment direction, Polish market has alsobeen entered by few funds with Central Europeanorigin, and that includes few players from CzechRepublic, Hungary and Slovakia, who alsocompete for product and grow the scale of theirassets under management in Poland.

An important feature of new core pension fund typecapital is that it is risk averse and therefore seeksprojects that do not require a hands-on

approach. As a result, they focus on the newly-builtprojects with long leases in place. This restrictstheir activity to a fragment of the market, but – onthe other hand – creates opportunities for thoseable and willing to be more proactive, such asinvestors with in-house teams in Poland, withmanagement capabilities to take care of moredemanding assets. A good example of this isSpectrum Tower in Warsaw, bought by UK-basedfund Europa Capital as TPSA's lease ran out. Theinvestor took over the building, spent money onrefurbishment of the property, leased it out to newtenants, and subsequently sold to a lessopportunistic investor.

What's the perception of cities outsideWarsaw?

Poland is a country with strong regional cities thatoffer a significant pool of graduate talent, andsimilar quality of life to Warsaw. At least sixreasonably large cities and conurbations, wellcommunicated in terms of road, rail and air, withattractive supply of well-educated workforce, andfinally attractive places for young people to live andwork – it means that Poland offers greatlydiversified choice for employers looking to expandhere. Such city diversification is similar toGermany and unlike the UK or France which bothhave an overdependence on their respectivecapital cities. In the office sector, the search fornew talent in an era of low unemployment and highstaff rotation, has led employers to move toregional cities in Poland, but thereafter also toconsider next-tier cities such as Opole, Rzeszów,Olsztyn, Lublin, Szczecin, etc – all of which areuniversity towns with not insignificant graduatecommunities.

The Polish government has recently sent out themessage that it intends to move some of its offices(probably not ministries, but various agencies andservice offices) to third-tier cities – I'm in favour ofthis. Such locations offer greater staff loyalty, andwithin certain competence areas it should beeasier to recruit people there. Without a doubt, itwould also be a great impulse for such cities.

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And on the subject of government real estate – ifyou ask me, there's such an ineffective use ofspace in some of the greatest locations in Warsaw!Ministries are housed in large, impressive buildingsbut very poorly utilise these locations. More publicsector tenants in private real estate would makemore sense; and at the same time these bigministerial buildings could be repurposed as, say,luxury hotels or quality city centre residential. It isalso worth underlining that there could besignificant savings for the state budget, achievedfrom both more efficient use of space, and sales ofcity centre buildings for hotel or residential use, andfurther supported by longer term commitment tomoving peripheral government activities to mid-sized cities, thus cheaper both in terms of realestate and labour. The UK did this many decadesago. Let’s hope this will be picked up in Poland,too.

How do you see the Polish economy faring inthe short to medium term?

There are some recessionary expectations, inparticular, pessimism stemming from recentGermany's economic indicators or overall length ofthe economic cycle. Poland is currently moreexposed to Germany, way more than in 2007-08,because many Polish mid-caps are sub-contractors for German firms, and thereforeintegrated into the German supply chain. Withsales going down for German exporters, Polisheconomy will see the impact, too. However, thesePolish firms are predominantly small and private,and because of their size and ownership structure– very proactive and agile, so I trust in their abilitiesto find new markets or new ways of doingbusiness and continue to do well.

Importantly, I'm not as yet seeing signs of arecession. Real estate firms seem to beoptimistically planning for the future, and assuminga continuing market growth. And there are reasonsfor it - we are contending with very lowunemployment in the main urban centres withcompanies struggling to find people who can workfor them. This, in turn, is pushing up salaries

and enriching cities. The risk of successivegenerations of Poles becoming less motivated, andso productivity going down, is mitigated by theconstant influx of people from smaller towns andrural Poland, who come to the big cities to make itthrough hard work. There is also migration fromabroad, especially from Ukraine. This is certainly afuel for the real estate development sector, acrossresidential, office, or retail asset classes, but also ageneral plus from an employer's perspective. So,as long as migration from poorer rural communitiesand abroad into larger cities is sustained, theeconomy should have a solid foundation to grow.

One other aspect supporting the short-term growthis clearly the consumption. It looks healthy inPoland and is expected to continue to be good. Onthe other hand though, the medium term issue forthe Polish economy can be the relatively lowinvestment rate. There is a big task for thegovernment to create and implement stimulus forprivate investments. We are not seeing enough ofthis at the moment, for sure.

Do you see public-private partnerships (PPPs)taking off in Poland?

The next EU financial cycle will contain way lessmoney for Poland, and this may suggest anincrease in public sector’s interest in PPPs, as analternative to EU funds. However, I believe thatinterest rates, very low at the moment, are notworking in favour of PPPs. And so, as aconsequence, while there still are EU funds –subsidies in effect – and they will continue to beused, I struggle to see why there would be appetitefor PPPs instead of lending at very competitiveterms, both via loans and bonds issues. Maybewhen interest rates and bond markets startheading up this will change, but that is clearly notso likely in the short to medium term.

Is the government helping or hindering theeconomy?

Regulatory changes are a substantial worry. Theend of the ZUS cap, if indeed implemented from

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January 2020, will significantly increase the cost ofskilled employees in Poland and this willundoubtedly slow down appetite for creating newjobs. Even though this change has not yet beenfully confirmed by the government, it already has anegative perception effect as the 2020 planning bythe companies is clearly well advanced and so thelikely government decision, which results in asignificant jump in total employment costs, clearlyhad to be taken into consideration by themanagement boards of all companies operating inPoland. Your five-year plan is suddenly up to 20%off which is obviously not what you want to hearfrom your country manager, and on a such a shortnotice. Foreign investors, wherever they are,expect greater predictability from the regulatoryenvironment. And the same, of course, it applies toPolish owned companies – every business needsstability in regulatory requirements. Naturally,changes can, and sometimes should be made, butin dialogue with the business community, andcertainly with sufficient preparatory time. After all, astrong economy is a common goal of all of us.

JLL has its EMEA Centre of Excellence inWarsaw – how's that looking?

I am not personally in charge of JLL’s EMEACentre of Excellence, but our Polish businessworks together with the CoE on daily basis, and weshare the same office. And so I know that the firmis very satisfied with the quality of Warsaw basedCoE team and their work ethos. Although ourchallenge right now is finding the right talent poolfor further growth of services provided by the CoE,we continue to be able to find and hire great qualitypeople. We have many different jobs in our Centreof Excellence right now, there are more than 1,000people working on shared- or client-shared jobsthat are not just focused on the Polish real-estatemarket, but provide a service on a Pan-Europeanor sometimes global basis. Some of thosefunctions are truly exciting with an access to greatglobal know-how of the firm. We have thereforeseen fast growth of employment in the last years inour Warsaw operations. And so as of now, we arestruggling with not enough space

– imagine that eight floors of the Warsaw Spire arenot enough! Warsaw was without doubt the goodchoice for JLL.

Looking in detail at the Polish office market,what are the main trends that you can see?

Co-working – or more precisely, flex space offering- is here to stay. Why do I believe in this trend?Running a growing company, you need increasingamounts of office space, so once every few years,you move. In the past, you'd have had 100 peopleand you'd have been looking to grow to 120 overfive years. Today, you win a project, or three; eachneeds another 100 extra people for short-termproject teams, so you take flexible space forpractical reasons. But you may need more spacefaster, or not need it instead of expectations togrow, or you win projects that require phasedrecruitment, and so on. As a result, your longerterm leased space is hardly ever going to beoptimal. And, in addition, you are not experiencedenough to make optimal decisions regarding fit-out.A 'what you see is what you get' product that youcan move into with the minimum of fuss, willtherefore be attractive – the notion of space-as-a-service which is applicable to every company,even to biggest corporations. In my view - aspecialist managed product which is at the rightcost premium and margin, and with proper quality,is what's going to be needed, and appreciated bythe market more and more.

Right now, there's a heavy price-discounting modelon the market as some of the big flex spaceoperators strived to gain market share. This pricingis not sustainable. And so this segment will facechallenges, both in terms of operators profitability,and users facing growing costs and thereforeperhaps taking a step back from expanding intoflex. It may take many years to rectify this, but - forboth tenants and landlords - it does make sense! Iam personally convinced about the value of flex forthe users, and therefore – with the right pricingcarefully balancing the cost for users with theirbenefits – flex will continue to evolve and grow.

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Similarly, flex space does also make sense forlandlords; let’s imagine that in a building of tenfloors, eight are regular offices, and two floors areflexible and managed by the landlord. As firmsgrow, they can expand painlessly into the flexspace. For the landlord, this means more comfortwith finding solutions for existing clients, and sosimply a better product for occupiers, but alsooptimising your revenue with a majority of stablelong term lease income and some percentage ofpotentially higher but shorter-term and thereforemore volatile income from your flex space.

For all of the above reasons, I believe that flexspace will succeed as a model for offices.

Retail is struggling in the UK; what's thesituation in Poland?

Retail is being transformed by e-commerceeverywhere, though on different pace. Poland stillhas a way to go before e-commerce hits UKlevels, so perhaps there isn't the same amount ofpressure on traditional shops, but it is clearlyhaving an impact. In addition, a number of largerPolish cities have reached saturation points interms of retail space – and the potential for newdevelopments is limited. But all of this doesn’t needto be bad news for our retail. Poland built somegreat shopping centres, a number of owners delivered attractive entertainment and foodfunctions, and such schemes will continue toattract customers. Importantly, Poland does nothave much of a high street, and that is animportant difference between us and countriessuch as the UK, where a lot of sales takes place inhigh street retail. And so, I believe there's a decentstory to be told for Polish retail, which should bedoing just fine alongside, and not in competitionwith, the growing e-commerce.

And e-commerce is clearly not free from itschallenges. Probably the biggest one is returns –people ordering five goods and returning four ofthem. Each returned product needs to betransferred, quality-checked, repacked, andreturned to stock. This work is time consuming

and costly. Physical, fully-staffed shops that usethe click & collect model where you can orderonline, go to the shop, try it on there and then payand take it away only if you're satisfied, may be theway to go. Retailers will have to revise theirbusiness model to address such issues, andtraditional bricks and mortar retail has an importantrole to play there.

The link between retail and manufacturing islogistics – this is doing well.

Yes, it’s doing extremely well. Poland participatesin global boom in logistics, and we see recordoccupier demand, resulting in heavy growth indevelopment activity, and capital values goingthrough the sky. Not a bad place to be in, if you area developer.

The logistical central hubs have been built inPoland for the last few years, in addition to whatwas already there, and current ‘hot topic’ in thesector is the bigger cities’ distribution network, i.e.the last-mile logistics. With more expensive land inthe city, the answer might be a multi-floor reallogistics centre product – such would delivermultiplied amount of area for logistics goods andso could afford the higher land prices.

Concluding, there is clearly still a lot of potential forinvestment in logistics real estate, across thecountry, and both developers and us agents shouldcontinue to be busy in this sector.

Location worth its weight in gold

By Bartosz Michalski, development director,SEGRO

Proximity to major transportation routes, alocation near an urban agglomeration andaccess to staff – these are the main featuresdistinguishing the best warehouse locations.

Market reports show that for many years, the most

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dynamically developing warehouse regions havebeen Central Poland, Upper- and Lower Silesia, aswell as areas around Warsaw. For these reasons,SEGRO, a leading owner, manager and developerof modern warehouse and light production space,is constantly expanding its development potentialwithin the best-located lands.

Dynamic development in Wrocław

In the last months, SEGRO has acquired a plot ofmore than 17 hectares in Biskupice Podgórne nearWrocław where SEGRO Logistics Park Wrocławwill soon be developed. Ultimately, at SEGROLogistics Park Wrocław, SEGRO will provide75,000 sqm of modern warehouse and productionspace, tailored to the needs of the customers fromvarious industries. Like the other newlyconstructed SEGRO facilities, this project will besubject to BREEAM certification, which guaranteeshigh quality of both the performance andergonomics during the operation of the building.The new SEGRO plot is located directly at theentrance to the A4 motorway, a short distancefrom the A4 and A8 motorway junction. Theconvenient location of the park will allow efficientdistribution on the local market in Poland on toforeign markets (Germany and Czechia arePoland’s no.1 and no 2. export marketsrespectively). An additional advantage is the shortdistance from the Wrocław airport.

This is SEGRO’s third logistics park in Wrocław.SEGRO Industrial Park Wrocław was the first tobe built, located on a 10-hectare plot in the north-eastern part of the city, near the entrance to theWrocław A8 Motorway Bypass, with total parkpotential of almost 35,000sqm. Recently, SEGROalso acquired a park located south of Wrocław,which was given the name SEGRO Industrial ParkWrocław 2, with a total area of 24,000sqm, with thepotential for further expansion by 10,700sqm. Thetransaction is part of the SEGRO strategy, aimedat strengthening the company's position near thelargest cities and major transportation hubs.

Closer to cities

The current situation, related to dynamicallygrowing urban populations and the growingdemands of e-commerce consumers for same-day deliveries, increases clients’ interest in urbanwarehousing. This category already constitutesover two-thirds of the value of SEGRO’s Europeanportfolio. In Poland, the FTSE 100-listed firm ownsand manage four urban parks: SEGRO BusinessPark Łódź, SEGRO Business Park WarsawOkęcie, SEGRO Business Park Warsaw Ożarówand SEGRO Business Park Warsaw Żerań, whichwill soon be expanded by 20,000 sqm thanks tothe revitalisation of the land. SEGRO plans to starta development project in the second quarter of2020. There is a high probability that the growingdemand for urban warehouse space will continuein the near future due to the growth of e-commercesector, which already amounts up to a quarter ofthe share in the warehouse market in Poland.

Development in the best locations

As in previous years, SEGRO strategy assumesthe parallel implementation of new developmentprojects as well as development through prudentacquisitions. The company strives to have a landbank in all key locations, thanks to which bothcurrent and potential customers can develop in thevicinity of the most important Polishagglomerations and major transportation routes.SEGRO carefully observes new phenomena onthe market, also analyses the land market on anongoing basis, thanks to which the firm is able torespond quickly to the needs and expectations ofits customers. It plans to consolidate its position oncurrent markets by building more big-box facilities– the flywheel for market development – as well asstrengthening our position on the small-business-units market in Warsaw.

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Destination: Poland. How totransform your next office choiceinto a flagship project that definesyour business and its aspirations.

By Wojciech Zebura, director, head of Warsaw,Nuvalu

If planned well and with enough forethought,relocating or expanding your business toPoland could not only accelerate your growthbut redefine how you are perceived in yourhome markets by your customers, employeesand other key stakeholders.

But what pitfalls should investors avoid, and whatsteps should they take to secure the success inPoland?

Why Poland?

Poland is the biggest market in CEE which makesit an optimal office choice for further expansion inCentral and Eastern Europe. The country itself hasmany advantages for entrepreneurs – one of thehighest GDP growth in the EU (4,5% in 2019 Q2year-to-year), the largest population (over 38million) and high internal demand. Due to EUsubsidies, the infrastructure is in the process ofdynamic development. The network of highways(currently 1,017 miles) and expressways (1,300miles) is growing every year at a rapid pace.Nearly 46 million passengers travelled via Polishairports in 2018 (up by 15% compared to 2017).The government has also announced its biggestsingle investment since 1989, the CentralCommunication Port, the largest transportation hubin the region with close access to Warsaw will costoverr $9 billion and is planned to start operating in2027. The geographical location of Poland as wellas its good connection to the markets of western,northern and eastern Europe (including Russia,Belarus and Ukraine), makes it one of the keylogistics hubs on the continent. It may be assumed

that its role will continue to rise due to the dynamicdevelopment of new EU member states.

Poland combines a highly qualified, hard-working,skilled and able workforce (who have alreadyproved their abilities, reliability, and level ofmotivation while working for thousands ofbusinesses in the UK) with a reasonable cost ofdoing business, especially compared to WesternEuropean countries. This is why there are alreadyover 1,400 BPO/SSC/IT/R&D centres in Poland(Q1 2019, up 10% year-on-year) of which 80% areinternational companies (ABSL report). 86investors who have their shared services centresin Poland are listed on Fortune Global 500.

Office real estate market: high quality for areasonable price

The office real estate market in Poland is in a veryspecific moment which creates many opportunitiesfor investors. It is in the process of extremely rapidgrowth, every year the market brakes newrecords. There is nearly 5,500,000m2 of officespace in Warsaw. Kraków and Wroclaw havealready surpassed 1,000,000 m2 mark, whist theTricity (Gdańsk, Gdynia, Sopot) already offernearly 800,000m2. The vast majority of officespace is located in modern A-class buildingsequipped with modern, ecological technologies thatfit into corporate sustainable developmentstrategies and produce lower running costs. Polishdesign studios follow the newest trends andimplement the most innovative workplace solutionsin their fit-out projects.

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They create modern, multifunctional, interactiveoffice spaces which become key assets in thecontext of the recruitment processes, enablingcompanies to employ and retain the most talentedcandidates. The cost of office fit-out is much lowerthan in London or other Western Europeanmetropolises.

Leasing rates, compared to the level of the biggestcities in Western Europe, are extremely attractive:the rates of the best office space in Warsawamounts to approx. €33 per m2 compared to €170-180m2 in London. Due to high demand, the leasingcosts in Poland will continuously grow; companiesthat invest in a long-term lease now will maintainlow leasing costs over the next few years. It is aperfect and probably unrepeatable occasion toopen a modern, high-quality office in the key CEEmarket, which would strengthen the image of theirbusiness and define their aspirations.

A step forward

In conclusion, Poland creates an opportunity forBritish companies to start a new branch in one ofthe most dynamically developing countries inEurope. Poland provides access to the highestquality of infrastructure and office space for a costwhich is still far more than reasonable. It is anatural destination for companies that plan theirexpansion or relocation due to the context ofBrexit. According to The Guardian, nearly one inthree British firms plan to relocate a part of theirbusiness to one of the EU states; Poland seems tobe one of the most attractive options. Yet thecommercial real estate market and itsopportunities keep changing all the time - it isessential to carry out the process with theparticipation of a trusted partner, who will sharelocal know-how and expertise to assure the bestpossible relocation conditions.

How architects add value

By Martin Hyams, director, AHR

The value of a building is often difficult toassess or quantify, with ‘value’ dependent onthe perspective of the individual.

Every building has numerous stakeholders, eachwith their own differing expectations and outlook;its owner, the developer, the local authority, thosewho use the building on a day-to-day basis, thesurrounding community, the person who lives nextto it, as well as the person that simply walks past itevery day.

How do we then maximise the ‘value’ of a building,when everyone has a different perspective?

According to CABE (the Commission forArchitecture and the Built Environment), buildingvalue can be divided into six value categories –financial (exchange), use, image, social,environmental and cultural. Whilst not allcategories are specifically appropriate for allbuilding types, they can be attributed

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to all buildings, the built environment and thecommunities they create.

Three areas to piece together

At the outset of a new project, a client brief willtypically outline the expectation and aspirations ofthe client, pertaining to a specific land plot andarticulating target functions, areas and financialspend. The architect then overlays this with themasterplan the land plot sits within, whichprescribes further parameters such as frontagelines, build densities, heights and footprintconstraints. Finally, designing to current buildinglegislation ensures the new space is safe, fit foruse and fully compliant.

These three components - the client brief, themasterplan, and the building codes - set the criteriafor which the building must work within, and – to anextent – set its inherent value. It may seem that thefinal ‘value’ of the building has already beendecreed – however, this is where the architectuses their experience, knowledge and skill to workwithin these areas and maximise the how thebuilding will provide value.

How can we define the role of an architect?

A visionary

The true talent of the architect is in theirimagination. Their creative thinking enables themto see the balance between all requirements,influences and aspirations – and to not onlyunderstand the needs of the project, but to makesense of them. This is then written into the buildingdesign and an equilibrium is captured that meetsnot only the prescribed ‘spoken’ targets of thebuilding, but also speaks to those ‘unspoken’needs that are not always given a metric to score.

The art of ‘unlocking’ potential is often the key tosuccess. Problematic sites, or those that requireintervention to increase quality and functionality,often requires thinking outside the box. Whetherthrough re-use, refurbishment,

new-build or a combination of routes – it is thearchitect who can recognise the best elements ofwhat’s there and incorporate them for the benefit ofmany of the CABE categories, from costefficiency, to retaining cultural and social value.

Image value and the attractive of spaces providereal, tangible value to a building or space. A welldesigned, contextually aware new building canproject an image of safety, care and respect for thebuilt environment. Buildings and spaces should beenjoyable and healthy places to be in, and spendtime within, and their visual appeal adds to this.

Futureproofing to allow for future market andevolving human needs is becoming increasinglyimportant. If we design buildings from the outsetwith future adaptability ‘built in’ then future re-usebecomes a viable alternative. Creating places thatprioritise longevity is vital, and planning for thelong-term is the only way to ensure that we canprotect our environment and create developmentsthat generations to come will want to continue touse.

A translator

The architect takes on the role of the custodian ofpublic interest, the desire to create bettercommunities, and together with the client andstakeholders, discovers the true opportunity thatthe brief presents. We read it, learn from it and thentranslate it – into a design language that maximisesthe potential for everyone.

Good architecture is a symbol of the care we havefor our environment and the quality of the spaceswe want to live our lives in. We also read thesurrounding community, absorb this and allow it toinform our design so that places respond to theircontext and are coherent and considerate of thelocation and area they live. Therefore, as thearchitect, we often speak many different languagesthrough our designs, always respecting andtranslating the culture and ethos of areas andweaving it into our new places and designs. Theyare an expression of our culture and can

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bring about wellbeing, health and social cohesion,all admirable goals.

In our recent project, the mBank HQ in Łódź, whileit’s use was to prominently provide 28,000m2 ofmodern Grade A office space, we understood thatthe scheme would become a focal point forongoing regeneration in the area – therefore, it wasimportant to respect the site’s historicalsignificance to the city and nearby 19th centurybuildings. This influenced and inspired ourarchitectural language, and we prioritised naturallight and views out towards the historic buildings inthe vicinity to instil connectivity with the local area.Externally, our design encourages public accessthrough the communal square to promote acommunity feel.

A problem-solver

A number of complex challenges are oftenpresented throughout the life of a project thatrequire the architect to be a problem-solver. Abuilding design re-applied to another site is rarelythe right solution for any other site – all sites aredifferent and all demand tailored solutions.

There are many macro and micro issues in today’sbuilt environment, from the needs to create morehomes, offices and schools in line with increasingdemand, to improving sustainability credentials andboosting the health and wellbeing of those within.

Well-designed, responsible

buildings and spaces are much more than the sumof their parts. By encouraging our team to lookwithin a wider context for ideas and opportunities,we open opportunities for value creation notpreviously considered. Opportunities often appearfrom what could be considered peripheral studiesor from looking in other realms of real estate andbeyond.

We also innovate – from utilising modern methodsof construction and new ways to visualise andexperience our designs, such as through virtualreality, to improving how we can collaborate toproduce better quality information that reduces thetime, cost and quality risk associated withdevelopments. These matters are all based on anunderlying requirement to make the world betterthan we found it, minimise material usage,minimise waste and environmental impact,creating and improving our communities to befantastic places for humanity to thrive in.

A team player

It takes a team to successfully deliver a project.Developments benefit from a shared vision, withthe strength diversity between team members anddisciplines adding considerable value. At AHR, apractice with multiple sectors and services underone roof, we are collaborators and knowledge-sharers by nature, and know first-hand how findingthe medial knowledge between differentperspectives can help make a development thrive.

Architects understand the different drivers for allparties and work together to understand the variedand complex elements which go into building adesirable and futureproof development. Beingflexible doesn’t mean we compromise on quality –a collaborative approach encourages intelligentdecision making.

The architect has a significant part to playthroughout the project in ensuring the integrity ofthe design throughout the journey. Goodcommunication is the secret ingredient to anysuccessful development

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– and through communication we understand whatour clients need and where to challenge the briefwhen needed.

A realist

Architects appreciate how the building will work inuse and innovate and invent to ensure the optimumfunctionality. It is important to not lose sight of howthe building is going to perform and to designbuildings that operate as they were envisioned toand minimise ‘performance gap’. In a world inconstant change, with expectations wideningbetween generations, buildings need to beversatile. This can particularly be seen inworkplace design, with the growth of co-working anexample of the rapidly evolving needs of a moreentrepreneurial society.

At 3T Office Park in Gdynia, while the developmentconsists of three office buildings, we haveembedded connectivity between them, as well asflexibility, encouraging social interaction andcohesion and helping to enhance the health andwellbeing of those within. The three buildings areconnected on the two lower floors with a podiumthat houses building entrances, food outlets, aswell as office and retail space – creating anenvironment that becomes more than just a placeto work. Further, we have imbued adaptability, withthe connecting podium also allowing larger floorplates to be created at level +1 if the marketdemands it in the future, embedding longevity inthe design.

As architects, our strength is understanding thepracticalities of the situation – those of our clients,engineers, contractors and those who use ourbuildings.

The value of an architect

Providing ‘architectural services’ on a project is arole which has many facets. At the heart of therole, an architect knows that building and spacesaffects people’s lives – as people, we spend muchof our time within these areas, therefore, it isimportant that they add value and not take away.Placemaking and high-quality design is essential ifbuildings are to be considered a positive addition tothe built environment

Complex briefs and problems don’t phase us – weenjoy challenges. One of the highest measures ofsuccess for a project is the satisfaction of thepeople who use the space, and this is achieved, inpart, by the architect designing with a considerationfor placemaking. However, the architect’s valueand experience within the built environment is alsoreflected in the fact that the solutions they providealways ensure that everyone involved achievestheir own objectives.

How productive is commuting?

By IWG, the world’s largest provider ofworkspaces like Regus and Spaces on the Polishmarket

The average urban commute in Poland is 41minutes. The average Pole spends 340 hours ayear just getting to work and back home.Employees are increasingly spending theircommute engaged in work – but how effectivethat time is.

Few things are more frequently discussed in theoffice than the nightmare journeys that colleagueshad to face navigating their way into the office.Whether it’s cancelled trains

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or fellow passengers disrupting the peace bylistening to loud music, precious hours can quicklyevaporate away, leaving workers behind on theday’s tasks before they have even sat down attheir desks.

Challenging commutes are a global problem. Riode Janeiro has been rated the worst city in theworld to commute in with workers in the Braziliancity spending an average of over 90 minutesgetting to and from work each day. For commutersliving in the city who drive to work rather than takepublic transport, this equates to 756 hours per yearwaiting in traffic.

Long commute became a problem in Poland aswell. Łódź, Warsaw, Kraków, and Poznań are themost crowded cities - reports TomTom. Accordingto the PageGroup research, the statistical Polespends 41 minutes commuting each day. It is veryclose to the European average, which is 42minutes. More than half of the respondentsdeclared that they tend to arrive late for work.These are just statistics, but from ourobservations, some Poles living in the capital citystruggle with over one hour-commutes to get towork.

Although those living in London fare better onpublic transport, those who use their car to getwork spend around 386 hours yearly stuck intraffic. In fact, people living in the British capitalhave the ninth worst commute in the world, and theworst in Europe. In the UK, according to the Officefor National Statistics, spending two hours eachday commuting is now a reality for many workers,who are travelling further, and for a longer amountof time, to work each day.

As commutes become longer, people areincreasingly using the time to do additional officework. Findings from the 2019 IWG GlobalWorkspace survey show that 42% of people thinkthat official working hours should include timespent commuting to and from work, as this is not‘free time’, with 48% of respondents stating thatthey usually carry out some work tasks while

commuting to and from work, such as makingphone calls and responding to emails. In addition,more than half of respondents (51%) think thatbusinesses should subsidies the cost ofcommuting for their employees.

However, being able to work on the commute isone thing, but is the work you are doing really thatproductive? Research shows it’s quite thecontrary. Lack of seating, loud noises andunreliable wi-fi all contribute to work not being doneas efficiently as it could be. Long commutes arealso stressful, which itself is rarely conducive toproductivity. A 2015 study conducted by theUniversity of Montreal concluded that the moretime spent commuting, the more susceptibleworkers are to chronic stress.

Further research shows it takes only 20 minutes ofbeing in the car, or on a bus, bike or train forworkers to be susceptible to chronic stress. Long-term, this can result in physical and emotionalexhaustion, which in turn can seriously hamperproductivity. The Global Benefits Attitudes surveyattests to this point, finding that levels of workplaceengagement significantly decrease whenemployees experience high levels of stress.

To help support workers to be productive, it’slogical that businesses should look for solutions tohelp alleviate the commute. Flexible workingenables employees to arrive at a desk within astress-free commutable distance from theirhomes. Employees living in suburbs and smalltowns are then able to access all the facilities theyrequire from an office, such as high-speed wi-fi butcloser to home.

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As evidenced, employees are more productivewhen less stressed, which ultimately leads tobetter outcomes, higher retention of talent andsuccess for your business. Find out more about how flexible workspace couldhelp boost your business here.

25 years of Flowcrete in Poland –the company invests in R&D,launches a new laboratory inWarsaw

By Flowcrete Poland, a leading manufacturer andprovider of resin floors in Central and EasternEurope

Flowcrete Poland, a leading producer of high-quality resin floors, celebrates its 25thanniversary in Poland this year.

To mark this occasion, the company opens a new,state-of-the-art laboratory, focused on R&D andproduct testing.

Flowcrete Poland has had its manufacturing plantand research laboratory in Warsaw since 2012. Asa result of ever-increasing export to 17 countries ofCentral and Eastern Europe, and rapidly growingproduction volume, the company moved to a newfacility, also in Warsaw, two years ago. This wastwice the size of the facility it replaced. Currently,Flowcrete Poland is the largest supplier ofFlowfresh antibacterial floors within the FlowcreteGroup around the world, and is also a leadingproducer of crack-bridging membranes. Inresponse to growing requirements in the field ofresearch and innovation, the company haslaunched a new, state-of-the-art 150m2 R&Dlaboratory.

In the recently opened laboratory, FlowcretePoland undertakes research activities with a focuson developing new products

that respond to the market needs of Central andEastern Europe. The company also shares know-how with Flowcrete Group R&D departmentsoperating around the world, among others inSweden, Great Britain and in the US.

"From the start of our operations in Poland, wehave focused on the highest quality and innovativeapproach. We launched with our original PeranSTB floor on the Polish market; this is technologybased on clear epoxy resin and coloured quartzsands. To this day, it is this flooring, which has thehighest abrasion resistance, that sets the marketstandard for industrial floors. For years our teamhas been creating tailor-made solutions to meet theneeds of our customers. Thanks to our newlaboratory, we have perfect conditions to developR&D activity in Poland to create innovativesolutions for the CEE market.” – said BarbaraRadziwon, managing director of Flowcrete Central& Eastern Europe.

The new Flowcrete Poland laboratory alsoconducts quality controls for each production batchand include visual assessments, density andviscosity tests, UV chamber tests, binding-timetests, and also mechanical and chemicalresistance tests. Flowcrete’s modern equipmentalso allows for on-site testing of concretesubstrates (‘pull-off tests’); humidity tests and slip-resistance tests of the ready-to-use resin floors.

Flowcrete Poland is part of the Flowcrete Group, aleading manufacturer of seamless resin floors forindustrial and decorative applications, which hasbranches and production plants around the world.The company offers world-class flooring solutions,based on synthetic resins such as epoxy,polyurethane, methacrylic and vinylester.Flowcrete resin floors are intended for all industriesand sectors of the economy. The company's offerincludes durable industrial floors, hygienicantibacterial floors, waterproof and flexible floorsfor car parks, decorative floors for shopping malls,hotels and head offices, so-called ‘stone carpets’and chemically resistant floors.

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Boom to bust. Legal insight intoPolish construction sectordifficulties

By Piotr Staniszewski, partner, Dentons RealEstate Practice Group

The Polish construction market has enjoyedunprecedented growth over the past decade,but at the same time construction companieshave incurred heavy losses and sufferedliquidity problems.

How can it be that as record funds are being spenton public- and private-sector projects, so manyconstruction firms are finding themselves infinancial difficulties?

To some extent, the legal environment may be toblame. In Poland there is no mandatory or at leastno commonly used construction works contractstandard, such as FIDIC or the German VOB.Such statutory standards applied in the past, butwere abolished in the 1990s as the foundations ofthe free market economy were being laid inPoland. The market evolved towards thewidespread use of a variety of contracts, withdifferent provisions and approaches to the legaland economic risks involved in constructionprojects. Most contracts, however, share similarfeatures – remuneration is defined as a fixed fee,without any adjustments of benefit to contractorsduring the construction period. Fixed fees arewidely used both for ‘build’ as well as ‘design andbuild’ contracts.The fixed-fee scheme is typically connected withcontractual provisions that tend to transfer asmany construction-related risks as possible to thecontractor.

There are many reasons for such an approach.The contractor is generally perceived by theinvestor as the professional, experienced party.Thus, the investor recognises that the contractor

should actually also be better placed to deal withthe risks than the investor. When differentcontractors compete on price (both in the privateand public sector), the investor then chooses themost beneficial offer, striving to ensure that thefinancial conditions offered do not change as theconstruction work progresses. If this gets out ofhand, the consequences become very severe forthe investor.

Bank financing of construction projects alsoimposes limits on price adjustments or theexecution of amendments to the originalconstruction contract. As bank-approvalprocedures are long, complicated and, sometimes,costly, the investor tries, as far as possible, to limitthe need for bank consent to a minimum. Typically,the bank will also assume a 10% overrun to becovered by the investor directly. If additional bankfinancing is necessary, once this overrun limit isexceeded, obtaining such additional funds may bedifficult, depending on the business parameters ofthe project.

Additionally, in state-funded investments,formalised tender procedures lead to longerperiods between contracting and project execution.This leads to an aggravated risk of price increases,as contractors need to propose pricing for workswhich will be executed at least several months oreven years ahead in time. Polish publicprocurement law also limits the legal possibilities ofamending contracts during the execution period.

Another legal challenge is the investor’s risk ofdouble payments for construction works – first tothe contractor, then to its subcontractors. Underthe Civil Code the investor is jointly and severallyliable with the contractor for payment of thesubcontractors’ remuneration. This implies that asubcontractor may raise a legally valid claimagainst the investor if the contractor did not pay thesubcontractor’s due remuneration, even if theinvestor had already paid the correspondingamount to the contractor. This principle cannot bechanged by the parties’ agreement. To mitigate thedouble-payment risk,

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investors implement complex contractualprovisions on monitoring payments tosubcontractors. Recent Supreme Court case lawand amendments to the Civil Code have eliminatedsome of the most severe risks of payment toentities which were not clearly notified to theinvestor as subcontractors. Nevertheless, theinvestor’s liability for payment of a subcontractor’sremuneration is also one of the factors thatpromotes the application of fixed fees inconstruction contracts and may lead to delays inpayments of the contractor’s remuneration until thecontractual monitoring requirements are fulfilled.

In recent years, the increase of demand forconstruction works coincided with labourshortages and increased costs of materials andsubcontractors’ remunerations. With fixed-feecontracts, the contractors secured investorsagainst such increases. But as costs began toincrease significantly, profitability proved difficult tomaintain.

Legally, unless provided for specifically in thecontract, there are very limited circumstanceswhich allow the contractor to unilaterally terminatean agreement or effectively demand a priceincrease. Statutory Civil Code provisions, whichallow for judicial adjustments are difficult to applyand involve costly and time-consuming courtproceedings. Such a measure is therefore notsufficient and quick enough to save a failingcompany facing current liquidity problems.

Even if globally, various contractual solutions areapplied to calculating and paying a contractor’sremuneration, such as GMP (GuaranteeMaximum Price), cost-plus or unit pricing, thePolish market standard still operates on a fixed(lump-sum) fee basis. Statutory regulation ofconstruction contracts is very limited and does notelaborate on risk allocation between investor andcontractor to a degree commensurate with therequirements of a modern construction market. Asa contractor has very limited legal means tochange the contract without the investor’s consent,if market conditions change

and the cost base increases, contractors becometrapped in non-profitable contracts. This in turnmay cause a systemic risk of insolvencies acrossthe construction sector, as large generalcontractors employ groups of subcontractors andsuppliers, who depend on liquidity provided bygeneral contractors. Delayed payments mayrender such entities insolvent, while the legalsystem does not provide for adequately quick andsimple solutions on enforcement of remunerationclaims.

Rethinking the office lobby for thecollaborative era

By Howard Bates, Vastint, Turnerbates studio,specialising in hospitality design

Turnerbates was approached by Vastint Polandthree years ago to take a fresh look at thedesign approach to the Business Gardenlobbies.

We have worked across sectors including retail,hospitality and leisure, and with BG Warsawalready completed and well occupied the challengewas clear for us to see. We felt the existing lobbyspaces needed to feel warm and welcoming. Stepaway from the grey floor, white walls and coldlighting. We want to encourage visitors and tenantsto really utilise the lobbies rather than using themjust as a transitional space on route to the lift andtheir office desks. We also believe it is important tobring some of the ‘biophilic’ elements (humans’innate connection to nature) within the surroundinggardens into the interior of the buildings.

Scandinavian design is popular, and with goodreason. With Vastint’s Swedish heritage it was notsomething we wished to ignore – classicScandinavian elements can be seen in the mutedcolour palette and natural materials used. A gooddesign project, however, must not just to respondto style or fashion but rather to

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achieve workable solutions that will stand the testof time. Our approach for the design across thelobbies was to have core common elements ineach building that reflect the innovative andwelcoming essence of Vastint Business Gardencomplexes. At the same time, we wanted toensure that all seven buildings had a uniquecharacter in the colour details, accessories andartworks. The functional layouts of the lobbies alsodiffer according to size and floor plan.

To achieve a different feel or personality for eachspace we drew inspiration on a given theme foreach building grounded in research on Warsaw’shistory and the surrounding region. All ourBusiness Gardens reflect different aspects of thevibrancy and culture local to Warsaw. Ourresearch in preparing the designs was not justlimited to the ‘tough’ Warsaw office market but alsofrom trends across many cities and townworkplace environments globally. Millennials andGeneration Z are changing the way we live andwork with the popular rise of co-working andflexible, collaborative workspaces. There are moreand more people for whom an office is any placewhere they can connect to the internet. This isespecially true in London, where Turnerbates isbased.

We wanted the new lobbies in Vastint buildings tobe perceived as attractive and friendly spaces thatencourage visitors and tenants to relax, drinkcoffee and hold less formal business meetings.Without having to leave the building or find a coffeeshop, the lobbies allow employees to take a breakfrom the daily office routine in a flexible andattractive space. The lobbies encourage a sense ofopenness and community, and can also beenjoyed by visitors who live and work nearby asco-working spaces. A good example of this ethosin practice is the book exchange in the lobbies,which allows tenants across the building to interactand share ideas rather than be confined to apotentially isolated office.

Office and hotel lobbies are slowly becomingsimilar in look and feel. We see

the Vastint lobbies as an extension to the office,and similarly to hotel lobbies; they have a warmand welcoming atmosphere designed to makevisitors feel at ease. As a studio we are interestedin how biophilic elements within interiors, forexample natural materials like wood and planting,can encourage tenants and visitors to feel at easeand relaxed in the space. Our experience indesigning hospitality interiors has allowed us tocreate a sociable layout, including a more casualdigital check-in welcome desk instead of thetraditional formal reception. A number of theTurnerbates team not only work in architecture andinteriors but are also artists in their own right.Joanna Gomm, an associate at Turnerbates, notonly designed the space but also produced uniqueartworks that hang in the spaces. Each building’sartworks are connected to its individual theme andreflect and tell a story about elements of Warsaw’svibrant culture.

We are working on the second phase of BGPoznan that’s just completing and also VastintBusiness Garden projects in Bucharest, also duefor completion. BG Vilnius in Lithuania has also juststarted groundwork with the first phase due forcompletion in 2021. It is a large scheme, with a bigcentral lobby that incorporates in an events space,café, retail and community meeting spaces. Weare excited about what the future holds with ourcollaboration with Vastint.

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Innovative technology as a globalstandard for Blue Projects -Building information Modelling(BIM)

By Michał Zając, BIM manager /senior architect atBlue Projects

Building Information Modelling (BIM), atechnology we use in the design process inBlue Projects, was introduced into the globalworld of construction over 10 years ago.

BIM is the next step digitalising the constructionprocess, bringing with it an innovativeness thatinduces changes in the way of thinking during thedesign process. The examples of its application allover the world can be easily found on the internet,Heathrow Airport’s third-runway expansion projectbeing among the most prominent ones.

BIM can be defined briefly as a process whichallows us to create a virtual data base representedin a 3D model.

It is a computer simulation of the constructionprocess conducted in the virtual environment,enabling us to view the building aspects, includingthe associated infrastructure, before constructionhas actually started on site.

While some call BIM a revolution, in Blue Projectswe prefer to view it as the evolution. The next stepafter the drawing board, CAD drawings andtraditional schedules and cost estimates.

BIM offers a much wider functionality comparedwith conventional design techniques.

Why do we use BIM technology in Blue Projects?

We have chosen it to offer our clients the benefitsof BIM which are of particular relevance whendealing with big and technologically

complex facilities. Founded in 2007, the companyhas grown globally and delivered hundreds ofprojects from manufacturing facilities to real estateand commercial developments in over 22countries including Poland, the UK, Romania,Belgium, Netherlands, Russia or Germany. Ourcore services include project management,construction management, design & engineering,commercial management, and health & safetymanagement.

Using innovative solutions allows us to continuallyimprove the quality of our services.

The most important benefit to the design processis the efficient exchange of information via aparametrised 3D model.

In conventional CAD techniques, designers dealwith a set of lines which make up flat 2D drawings,or simple 3D shapes. But in BIM, the designeruses objects, such as doors, walls, floor slabs andfoundations, whose physical properties aredetermined by the input parameters.

Working with 3D models that are parametrised inthis way, we can effectively conduct the process ofinter-disciplinary co-ordination. This enables us toeliminate problems that could otherwise emerge onsite. Such problems – such as when pipeworkclashes with wiring or pillars – give rise toadditional, often massive, unforeseen costs.

The output documentation, necessary for theprocess of gaining planning permissions, resultsfrom work on the parametrised model.

Using this technology and the 3D environmenthelps the client understand all the key aspects ofthe design; in this way the client becomes activelyand effectively involved in the design process.

When used in combination with virtual reality (VR)technology BIM models enable the client tovisualise the project from the earliest stage ofdesign.

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At the construction stage in turn, BIM technologyenables the entire project documentation to becompiled in one place. In this way, having the as-built database stored in a 3D model containing allthe information representing the actual situation,we avoid data fragmentation, which is all too easywith paper documents scattered across individualfiles and folders.

Easy retrieval of this information is of essencewhen it becomes necessary to introduce changesduring the premise’s operation.

These are just a few benefits offered by BIM. Justlike with any other sophisticated technology,appropriate level of standardisation andimplementation of processes to guide the actionsof BIM users are indispensable to make the mostof its capabilities.

In projects with BIM, we apply US and UKpractices and standards. At the same time, wealways work according to our client’s standardsand requirements.

Over the years, BIM is becoming a more and morepopular tool used in delivering constructionprojects. What makes us stand out next to ourcompetitors using BIM technology?

Blue Projects is distinguished by combining thework of construction engineers of different designdisciplines with the work of process engineerswithin a single project team.

In our design work we place focus oninteroperability. Interoperability means, to put is assimply as possible, using BIM models to combinevarious data exchange formats.

In our efforts we are assisted by sophisticateddesign tools which, when used by trainedpersonnel, ensure obtaining effective solutions.

This allows us to claim our position as a leaderamong design engineering companies usinginnovative technologies in the design process.

One of our key projects is the design of expansionof a manufacturing site located in central Poland. Inthis case BIM technology was used in the designprocess and will continue to be used duringconstruction.

One large completed project in Romania is that fora renowned furniture retailer, covering 67,000m2,including a furniture department store, acommercial building including auxiliary logistics,storage, restaurant, offices and technical areas.

At Blue Projects we say that difficult paths oftenlead to marvellous destinations. Using BIMtechnology in our day-to-day work is one of suchdifficult paths. One could ask why it is so importantfor us to follow this avenue.

The answer is, there is no other way!Technological progress allows for, and indeednecessitates continuous adaptation to changingconditions. And we are committed to continuousdevelopment!

About the author:

BIM manager at Blue Projects. IARP architect,graduate of the Faculty of Civil Engineering andArchitecture West Pomeranian University ofTechnology. BIM technology practitioner andenthusiast.

Consultant and trainer at the European BIMCertification Center Foundation.

Experience gained while working on complex industrial objects, public buildings and reverseengineering projects.

Has been working exclusively with BIM technologyfor over 12 years. Responsible forcoordination,creating standards and procedures aswell as a training system and BIM teammanagement

For more information about us please visit ourwebsite:

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https://blueprojects.com/

Information on BIM technology can be found at thefollowing sites:

https://bimforum.orghttps://www.buildingsmart.org/https://bim-level2.org/https://eccbim.org/

The Łódź Special Economic Zone.This is where you invest

By Marek Michalik, president of the Łódź SEZ

New regulations controlling the activity ofeconomic zones in Poland have opened themup even more to foreign investment.

Simplified regulations have resulted in anincreasing number of companies knocking on thedoor to the zones. After a year of the newregulations being in force, the Łódź SpecialEconomic Zone can boast 27 investments.

The amendments to the act turned the whole ofPoland into one huge investment zone. Thismeans that procedures are much simpler.Currently, an investor who would like to invest inthe Łódź zone and take advantage of the tax reliefcan do so on any real estate located in threevoivodships: Łódzkie, western Mazowsze andeastern part Wielkopolska, because that is thearea we manage. In the past, investors would havehad to choose a plot of land located in one ofseveral dozen sub-zones. Previously, forcomparison, the investment areas in the zonecovered an area of less than 2,000 hectares;today, we manage an area of over 3 millionhectares.

Łódź Special Economic Zone is a good place tolocate for many reasons; excellent location in thecentre of Poland at the intersection of twomotorways. The Central Transport Hub

will soon be built between Łódź and Warsaw,which will enable easy distribution of goods all overthe world. Highly qualified personnel and largehuman potential. Investors in the Łódź SpecialEconomic Zone attract university graduates fromŁódź, Warsaw and Wroclaw and from other Polishcities. Therefore, they have no problem when, forexample, establishing R&D centres. We also havemany additional services for business, but thebiggest incentive is still the exemption from incometax. Here, the rules are simple. In exchange for theinvestment outlays incurred, according to the Act,we grant governmental public aid in the form ofexemptions from personal and corporate incometax (PIT or CIT). The amount of aid depends on thesize of the company. For large enterprises, themaximum aid is 35% of the investment value. Soan investor building a factory for 100m złotys willnot have to pay 35m złotys of income tax. In thecase of medium-sized companies, the amount ofaid increases to 45% of the investment value; forsmall- and micro-entrepreneurs even up to 55%.This is a very advantageous solution, which in the22-year history of the Łódź Special EconomicZone has benefited over 300 companies; totaloutlays over that period have exceeded 15 billionzłotys.

Don’t worry about red tape and lots of complicateddocuments. Just contact us. We have opened aspecial investment hotline (00 48 800 800 280).Our specialists will select the right location for aspecific investment plan, type of production,infrastructure requirements and demand foremployees. This may be in an area owned by theŁódź Special Economic Zone, because as a zonewe’re preparing areas for potential investors. Webuild the necessary roads and we provide allutilities – power, water, gas, telecoms. Investorsoften choose plots of land that are owned by amunicipality or the State Treasury. Then we help infinalising such a transaction and providesubstantive support in the fit-out procedure. Thedecision about support – in particular granting taxrelief – may be made within a few weeks from thesubmission of the application. Our specialists, stepby step, guide the investor through the procedures

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related to the decision. It’s not a complicatedprocess. Our experience shows that one or twomeetings are enough for the investor to properlysubmit an application.

We’re not just angling for large corporate investors.Indeed, current regulations promote investmentsfrom small- and medium-sized enterprises. Therates of minimum expenditure required to get taxrelief have changed – to the benefit of SMEs.There are districts where it is enough to invest200,000 złotys to receive exemption from tax.Additionally, the zone – having foreign companiesin mind – has built the Stokowska Park productionand storage hall, situated in a very convenientlocation in Łódź, less than eight kilometres fromthe A1 motorway. It is an ideal solution forcompanies that want to try investing in Poland, butdo not want to buy land and build a plant. Rentingspace in the hall and conducting business thereallows investors to obtain tax relief. The hallconsists of eight modules each of 1,200m2. It isequipped with an automatic ramp for trucks, aswell as warehouse, production and office space.We already have the first tenants, who aresuccessfully running their businesses there,including companies from Japan.

We have several important projects in the plans.We are looking for a business partner to build anoffice and conference complex in the historicKsięży Młyn district in the very centre of Łódź.This post-industrial area is developing verydynamically. Residential estates are being builtnearby in revitalised factories. Investors are askingus for office space here, hence, we have decidedto implement the project. We have announced aninvestment memorandum in which we clearlypresent the concept of the investment. You canfind it on our website. We also focus onprogrammes aimed at investors. We are the onlyzone to implement solutions based on 5Gtechnology in Polish factories in cooperation withour investors. We provide startups with financialsupport under the Startup Spark programme sothat they can create innovations for companiesoperating in the zone. This is what

you call a win-win situation. Young companieslearn from companies operating in the zone how torun a business. They design innovations for them,which accelerates their development. The fDiMagazine (Financial Times Group) has given usthe Innovation Award for this programme. Amongeconomic zones, we have been ranked fourth inthe world and first in Europe as the mostinvestment-friendly place in the SME sector.

What’s new in office-propertyoperating costs?

By Magdalena Oksańska, head of propertymanagement compliance, Knight Frank

Operating costs in office properties areconstantly changing. The only constant is theirsystematic growth, even though last year it wasnot so drastic. There are many reasons behindthese increases.

Changing regulations result in higher employmentcosts. Each year, the minimum wage and hourlywages are rising.

On the other hand, rising media costs constituteabout one-third of operating costs. Electricity, inparticular, has an indirect influence on theremaining cost components. Electricity priceswere frozen in 2019, but in the long run it will beimpossible to keep them on the same level, andwe should expect them to rise on an annual basis.

Paradoxically, state-of-the-art properties are notthe most cost-effective in terms of energy. Users’demands are rising – better air quality, morelighting, have made property systems whichensure comfortable working conditions even moreenergy-consuming.

Property tax depends on inflation, while perpetual-usufruct fees are linked to market land-price.Inflation is on the rise, and land prices are movingup as well.

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The chart below illustrates changes in officeproperty operating costs within the last few years.In 2018 their level changed only by between 1%-2% in comparison to the previous year. In 2019, aswell as in the years to come, the cost of electricitywill have a crucial effect on many aspects.

Should office property marketing be part ofoperating costs?

Within the last few years, the marketing of officeproperties has been developing. Property ownersand managers follow the example of shoppingmalls, and try to organise various events foremployees of companies which lease offices toaddress their needs and expectations or simplymake their day better. Events which seem usefulfor all are held daily, while bigger events connect toecology, saving the environment, sport and charityare also organised.

Rumours have been swirling on the real estatemarket that the costs of such marketing events willsoon become part of the standard operating costs

paid by tenants in office properties.

This seems to be a rather far-fetchedinterpretation. The marketing fee in shopping mallsis legitimate cost to the tenant. Marketing eventshere are aimed at attracting footfall and clients,resulting in increased sales for the tenant. In officeproperties, however, the property owner's onlyconcern is for the property users (employees oftenant companies) to have a comfortable life in aparticular property, which does not directlyinfluence the tenant's earnings. It's rather unlikelythat companies will accept additional costs ofattractions for employees. Of course, they arewelcome, sometimes even expected, but not as acost for the tenant.

The key, as usual, is to be found in the provisionsof the lease contract. So far, no tendency can beobserved on the market to include the additionalelement of marketing events, aimed at building thebrand of the property or its owner, on the long list ofoperating-cost components

Property income tax

Formerly known as commercial property tax, andintroduced on 1 January 2018, the minimumincome tax is interpreted by some property ownersas a component of operating costs (even though itis not market practice). Taking into account thestandard provisions from lease contracts, there isno baseline to reconcile the subject tax in theproperty's operating expenses. It has beenintroduced as an amendment to the Act on IncomeTax. The fact that it applies to CIT and PITtaxpayers who are owners of leased properties,makes it possible to consider it an income tax.

This tax has been widely discussed on the realestate market, and the option to reconcile it inoperating costs carried by the tenant. The majorityof property managers, however, agreed with officeproperty owners and did not include the costs dueand paid by means of commercial property tax(property income tax) in reconciling operatingcosts for 2018 and in the budgets for 2019.

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Waste in commercial properties

Within the last years, waste disposal costs haverisen significantly. It was a result of legal changesintroduced a couple of years ago, and theobligation to pass communal waste to companieschosen by the city to collect it, as well as the factthat the majority of office properties have declaredthat they would collect mixed (rather thansegregated) waste. The fee itself, in form of a tax,was much higher than the offer of privatecompanies, with the segregation cost only addingto the total price.

Currently, tenants will have to get used tosegregating waste into five parts. These rules arealready in operation, and additional fines for notsegregating will be very high. The latest changes inthe legal act will most probably lower a little thecost of transporting waste from commercialproperties. The act gives property owners theoption to resign from city services in favour ofhaving a direct contract with a private companywhich have so far offered much friendlier rates.

Office Renovation – Risks andTraps

By Grzegorz Chęciak, senior businessdevelopment manager, Transformation

As the saying goes, fine feathers make finebirds. This applies not only to the image of aperson, but also of a company.

It goes without saying that the location anddecoration of the office has an influence on howour business is perceived. Clients have their own –not necessarily conscious – expectations, and feelbetter when we receive them in an interiorcompatible with the nature of our business. If weare able to meet those expectations, we increaseour chances for successful negotiations.

Office interior design has even a greaterimportance for the employees. They spend manyhours at work, hence the quality of the office spacehas a major impact on their mood and feelingsabout the employer – and thus on the pace andefficiency of work. It is no secret that the placeand conditions of work play a major role during therecruitment process and thereafter.

To put it simply, an aesthetically pleasing andcomfortable office directly translates into thecompany’s performance. Most employers areaware of that. They are afraid, however, to makean effort of modernisation of their headquarters,aware that seeing it through poses a majorchallenge and takes knowledge of the availablesolutions for HVAC, power supply,telecommunications, BMS, SAP, access controland many more.

Even the best Office Manager does not possessnecessary interdisciplinary skills to supervise theprocesses of interior design and space useoptimisation with similar effectiveness, ensure thesafety and performance of the materials andtechnologies used, prepare a timetable to time thetasks of all contractors and predict the final budgetto finance the project.

The Office Manager may more or less preciselydefine the company’s needs as regards the newoffice interior design, set the available budget andthe time frame for the implementation of changes.Translating these expectations into practicalsolutions, however, may turn out to be a difficultand high-risk task.

One of the common traps is the compatibility of

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the technical solutions used in the office with thecapacity of the building’s systems (automation,water supply, access control, HVAC) – one caninstall the state-of-the-art and very costly solutionsonly to find that they do not reach their full potential,being incompatible with the limitations of theinfrastructure of the entire office building. Mistakesare frequently made in the process of distribution ofthe employees across the office. One of thecommon mistakes is too high employment density.This matter is governed by the OHS regulations,which stipulate a minimum of 13 m3 and 2 squaremetres of free floorspace not occupied by technicaldevices, equipment etc. If only one person worksin a room, the floorspace must be at least 6 squaremetres. Any error at this stage may cost us dearly.Demolition or relocation of walls after the officerenovation was finished is the nightmare of manyOffice Managers. Such a reconstruction involveschanges to the lighting, power supply or heating.Seemingly cosmetic improvements, such asmoving a wall by a couple of centimetres, mayresult in enormous costs or even be infeasible.

Another challenge is the acoustics. There is atrend nowadays towards increasing the cubicvolume of offices by choosing not to installsuspended ceilings in order to achieve theimpression of spaciousness. Buy what happens tothe sounds of chatter or office equipment and AC?And what about employees’ chatter or telephoneconversations? How many sound-absorbingpanels and by which manufacturer should be usedfor comfortable working conditions? Thesequestions can only be answered by anexperienced Project Manager of a fit-out company.Tens of thousands of metres of deliveredworkspace allow it to provide expert advice andmake a conscious decision for the best results.

We must not forget that our office space is anintegral part of a complex organisation – thebuilding. It has its strengths, as well as limitationsin the access to utilities, hot and cold cool air or asewage system. Any changes must be compatiblewith that complex organisation. This takesengineering and technical know-how,

and necessitates consultation with theadministrator of the building. This is the task for areliable fit-out service provider. It is responsible forobtaining necessary documents and arrangementsor even building permits in certain cases where ourrenovation significantly interferes with the buildingstructure.

It is therefore advisable to use the services of arecognised fit-out company with an interdisciplinaryteam of experts and extensive experience incomprehensive office interior design projects. Theconsultant will be able to assess the condition ofour premises and offer advice on the optimisationof use of the office space, the acoustic parametersof the premises, the quality of the ventilation andheating systems, and the reduction of futureoperations costs. The consultant will also ensurethe compatibility of the technologies used with thefire safety requirements and the capacity of thebuilding systems.

The strength of such companies is comprehensiveservice. They guide the customer through thecomplex modernisation process – from the designthrough the final result of an aesthetically appealingand functional office. They work with provensuppliers to guarantee the quality and timelydelivery of work. A good fit-out company is able tonot only make the strenuous undertaking ofrenovation easier for the customer, but also toreduce the risk and capital costs.

Mix Group implements its firstprime apartment project

Mix Group, a Krakow developer with over 20years of experience, is associated with theoffice real-estate market.

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Now, a prime apartment complex in Konstancin-Jeziorna, a fashionable up-market Warsawdormitory, has appeared in the Mix Group portfolio.

Mix Group is a well-known Krakow developerwhich and office-building portfolio of about60,000m2. This includes new and modernisedbuildings adapted to modern standards. Mix Grouplooks after the comfort of its tenants, selecting thelocation potential of buildings within crucial parts ofa city.

Office developers are increasingly looking aroundat other areas of activity that can open newbusiness possibilities. If an opportunity arises, theytake it. This is a new trend on the Polish market –developers known for their office buildings aredeciding to build apartment complexes. This isgood news for those who are looking for somethingunique in the prime standard and in an excellentlocation.

Mix Group has just accomplished its first exclusivecomplex of 12 apartments ranging in size from150m2 to 330m2. The complex consists of threebuildings in Konstancin-Jeziorna (ulica Dworcowa13). This is a special moment for Mix Group,which, by investing in a residential complex inPoland’s most famous villa town, proves that

leaving the comfort zone can be an excellentchoice.

The complex, maintained in a classic style, refersto the architecture of Konstancin's old villabuildings. The buildings are arranged around aninternal, square courtyard which is the centre of anurban composition.

As far as prime buildings are concerned, everydetail is important, including the landscape.Precisely designed greenery, flower beds andplaces to relax emphasise the exclusive characterof the property. The classic architectural style hasbeen combined with modern housing andtechnological solutions that guarantee comfort andfunctionality. Such a careful approach and attentionto every detail create a space that gives the feelingof living in a unique place. Anyone who has everdreamed of living in a villa, can today fulfil thisdream, without having to invest in the entireproperty, but by purchasing one of the availableapartments.

This property can satisfy the most demandingcustomer looking for an apartment in a highlydesirable location. The individual apartments arelarger than what’s usually on offer (150, 180, 300and 330m2 units), on one or two levels or with anmezzanine; the three-metre high ceilings create asense of spaciousness; each apartment hasindividual air conditioning, while the complex haslifts, a modern boiler room, green areas for shareduse, security fencing with round-the-clock security

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monitoring, and underground garages withsufficient parking spaces. Its central locationprovides an easy access to a kindergarten, aprimary school, a bus stop, a market and aplayground; there is a park and a river in thevicinity.

Prime apartments make the aging districts shineagain. It is also a huge benefit for the city, which,by gaining a beautiful facility, becomes moreattractive to all its residents. Therefore, it is evenmore satisfying that such an experienceddeveloper as Mix Group is looking for newopportunities, expanding its portfolio with newproperties and setting a new direction on themarket.

May the construction industryplease care more about ourplanet?

By Janusz Allina, property consultant, GleedsPolska

The opportunity for a responsible constructionsector

With continually increasing number of reportsevidencing the impact of human activity to theearth’s climate and ecosystems, it is vital toconsider the role that we have to play in theconstruction sector.

As sustainability and corporate social responsibilityare deeply rooted in Gleeds

Polska approach, we have always taken care ofour teams’ knowledge of the impact we make onour environment. But now we know we have to actfaster and more effectively.

We recently invited respected environmentalexpert Marcin Popkiewicz to discuss the impactsof climate change. It also helped us in developmentof our internal awareness-raising informationstrategy for our staff.

We believe that small steps, such as rethinkinghabits, caring about our individual impact, if madeby everybody, could be meaningful.

As individuals, how can we help minimise theimpact of our everyday activities?

We all should be aware of our role in theenvironment and the impact which the business,that provides us a livelihood, can have on thecommunity we live in and in a broader perspective- the planet.

As an industry we need to give greaterconsideration to how the places we work, live andlearn in, affect the environment. We need to bemore attentive to the source of used materials,improving efficiency of existing buildingmaintenance and implementation of temperaturestability solutions that would make constructionprocess and building operating more sustainableand environmental-friendly.

Let’s realise that as we build our everyday lifespace – places we call home, school, workplace,we must not build it at the expense of the Earth.

We observe and appreciate changes implementedon our market – turning existing post-factorybuildings into residential lofts, performingmodernisations instead of demolishment and re-building. For example, Warsaw’s Q22 officetower’s construction was supported by the re-useof 1,500 tonnes of steel and 25,000 tonnes ofconcrete rubble, which came from otherconstruction sites across Warsaw, including the

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demolition of Mercure Chopin hotel that hadpreviously occupied the site.

Strong sustainability credentials are now expectedof built assets and we are seeing increasingdemand for certification of projects under theglobally recognised LEED and BREEAMstandards. That is why Gleeds Polska hasdeveloped its experienced sustainability & greenbuilding team of qualified assessors and advisors.

The construction industry is not the leader inpromoting and applying sustainable solutions,adequate to the current environmental challenges.And yet it remains among leading polluters andgreenhouse-gas emitters, as demonstrated below.

Chart 1. Waste generation by economicactivities and households

Source: Eurostat, Waste generation by economicactivities and households, EU-28, 2016(%),https://ec.europa.eu/eurostat/statistics-explained/index.php?title=File:Waste_generation_by_economic_activities_and_households,_EU-28,_2016_(%25).png, processed by Gleeds Polska

With its 0.6 billion tons of waste, the industry is infirst place, taking the 36% stake in total wasteproduced in Europe. The construction industryuses 1.8 billion tons of primary raw materials (25%of European demand), uses 40% of Europe’sgenerated power (including during the buildings’operational period) and is the source

of 36% of total CO2 emissions in the EU(according to Circular Construction in Practicereport by Polish Circular Hotspot, May 2019).These figures may be frustrating, as we realisethat the construction sector is responsible for suchan impact on the natural environment globally.

On the other hand, this situation leaves us withgreat potential for improvement. Any reduction ofthe environmental impact of the industry willtranslate to substantial results. Therefore, it isworth of considering how circular economy modelcould drive a real change.

Chart 2. Linear model of construction process

Source: Polish Circular Hotspot’s report CircularConstruction in Practice, May 2019; processed byGleeds Polska

Chart 3. Circular model of constructionprocess

Source: Polish Circular Hotspot’s report Circular

Construction in Practice, May 2019; processed byGleeds Polska

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What does construction industry owe to theplanet?

The Global Alliance for Buildings and Construction2018 Global Status Report details that as anindustry, we should be moving towards a zero-emissions, efficient and resilient building andconstruction sector. To aim for this, the sectormust consider how to transition from a linear tocircular model, through

investigating how product reuse and recycle canbe enabled

working out new adequate business models

returning materials back to the Earth or, back intoindustry

developing a strategy for, and promoting conditionsfor, the reuse of materials to enhance resourceproductivity

Polish Circular Hotspot’s report CircularConstruction in Practice, issued earlier this year,highlights the obstacles that the constructionindustry needs to overcome when developing itscircular strategy.

Chart 4. Barriers to overcome on the path toCircular Construction

Source: Polish Circular Hotspot’s report CircularConstruction in Practice, May 2019; processed byGleeds Polska

The journey to a circular construction model willnot happen overnight. As a sector we need to

embark on the following to move forward:

Educate: Increase awareness of the necessity forchange and promotion of best practice

Regulate: Identify the scale of the problem andagree a unified response

Provide cross-sector financial incentives for reuseand recycling

Show active government-led support for pro-circular innovation, new technologies (especiallyfor recycling)

Create a unified, common approach across thesector where a collaborative effort influenceschange

Working towards a common goal for a betterfuture

Without a pro-community, pro-environmentattitude, business may become just a callous,thoughtless profit-making machine. We all shouldfeel responsible for Mother Earth, for its nature,future generations and all other species that aredying out and change our approach. We oweeverything to our planet and we need to look furtherthan financial value alone, developing a strategicresponse to meet our obligations as a sector. Thisapproach needs to be a unified response, fromgovernments, businesses and regulatory bodies tohelp drive the change. The goals can only beachieved when the game is a team game.

Food and Place

By Robert Kaminski, director of Warsaw Studio,Broadway Malyan

Technology has fundamentally disrupted theretail sector.

The advent of smartphones has allowed people to

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rapidly shop for whatever they want or need,whenever they want or need it. Shopping nowcomes to the consumer.

However, people still need to go out to socialise,meet and spend their leisure time. This has beenthe case for time immemorial and is unlikely tochange any time soon.

One of the necessities that continue to bring peopletogether is food; designers are constantly beingchallenged to create integrated food environmentsthat respond to the realities of the new consumer.

The starting point today for a food offer within aretail environment starts at 30% of gross leaseablearea, emphasising the importance of food to thewider customer experience and reinforcing food asa critical anchor for any successful retaildevelopment.

But for a food offer to succeed it must embracethree key tenets – the food must be inventive andoriginal, the location needs profile and the designmust be engaging, resonant and unique – take oneelement away and the offer is likely to fail.

Design alone is not enough on its own without theright food, and the right food won’t work in thewrong environment.

Earlier this year saw the launch of Galeria Mlociny,one of Poland’s largest shopping centres.Broadway Malyan was commissioned by thecentre’s owners EPP and Echo Investmentfollowing a competition to design a 6,000m2 foodcourt.

Broadway Malyan’s approach was to considerGaleria Mlociny as a response to evolvinglifestyles, rather than seeing the centre as atraditional mall.

Retail is in a metamorphic state and the traditionalfood court is evolving into food halls and marketplaces – harking back to the market halls of daysgone by, but reinterpreted as gastro-destinations.

At Galeria Mlociny we wanted

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to create something unlike anything else inWarsaw. We wanted to create a place that wasintriguing and memorable, a place that wouldattract appropriate food operators and a placewhere people wanted to come back to again andagain.

The consumer has become so much moresophisticated and more travelled with all theinformation they need at their fingertips.Consumers have immediate access to everyreview and recommendation – so when it comes tofood, ordinary is just no longer viable.

People want genuine authenticity – they don’t wanta coffee or pizza or a burger, they want the coffee,pizza or burger. They are no longer prepared totolerate the ordinary when at the touch of a buttonthey can summon up the extraordinary.

At Galeria Mlociny there are three different zoneswith seating for up to 1,500 diners and 36 differentfood outlets, offering the kind of choice you mightfind in London’s Borough Market or Brooklyn’sSmorgasburg,

The quality of the food offer is clearly critical toGaleria Mlociny’s success but creating anenvironment that helped build its profile and image,that made it a destination where people didn’t justwant to be but wanted to be seen to be was also animportant aspect of our approach.

As designers we are looking to create spaces andplaces that offer that often intangible but well-understood instagrammable moment.

There isn’t an algorithm for this but relies on anunderstanding of the modern consumer and theiremotions.

To tap into these emotions it is important that aspace talks to the consumer, is recognisable andwelcoming and so the main inspirations for thedifferent zones in the food area were Bielany, adistrict of Warsaw associated with greenery, aplace of rest and entertainment which has beenpopular for picnics, festival and feasts since the17th century, and Huta Warszawa, a districtsynonymous with the steel industry since the endof World War Two.

The first of the three spaces – Karuzela – is theinvitation to the main food area and includes aseries of striking copper-clad ribbed cages fordiners that overhang the main atrium and retailarea and a swarm of bespoke light fixtures enticecustomers as they travel up the escalator. Thiszone is inspired by the local Bielany feasts, andserves as a family zone with a wide choice ofpopular restaurants within a vivid but relaxedatmosphere.

The second zone – Dechy na Bielanach - evokesa more homely and informal atmosphere and ismore focused on leisure and younger customerswith neon lights and graffiti by Polish andPortuguese artists. Within this zone there is anunusual seating solution inspired by games likeMinecraft where young people can freely choosetheir relaxed spot to eat.

This zone also has a wine bar and two gastronomyunits that face inwards and also outside to an2,300m2 outside terrace which has been dividedinto a garden zone with more than 1,500 shrubsand trees and a hard landscaped terrace, ideal asa meeting area in the day and for events andconcerts at night, as well as a children’splayground.

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The third space – Hala Hutnik - is more industrial inits look and feel, with rough concrete, simplefurniture, steel cladding and colours that evoke thedrama of the ovens and furnaces of the steelworkswhile the food offer in this zone is more focused onmodern tastes such as fusion, vegan food andcraft beers.

When it comes to creating fantastic foodenvironments, there is no standard solution – eachlocation demands a bespoke response.

As well as a stimulating design, it also needs alayout that functions properly. It needs to dictatethe right customer flow, provide the optimumamount of seating for the right atmosphere, whilealso ensuring that more prosaic issues such asfood delivery and disposal are taken care of. Allthis helps to underpin a successful design.

Well, you better consider WELL

By Andrzej Gutowski, associate director, GreenBuilding Certification, Colliers International

Sustainability has been a buzzword for the lastnine years in Poland.

The first building obtained green certification in2010, and since then the real estate market hasrapidly adopted green and environmentally friendlypractices. As reported in April 2019 by PLGBC,Poland has become the sustainability champion ofCentral and Eastern Europe, with more than

640 buildings certified, which exceeds the numberof green buildings in all the remaining countries inthe region put together.

Sustainability certificates were introduced as a wayto transform the real estate sector by balancing thetriple impact of buildings on people, the planet andprofits. Although human health was assessed inthe certification process it was never the mainreason behind the certifications. Fresh air,acoustics and harmful emissions from paints andcarpets may have been verified, but they haverarely been a priority. The major focus is placed onenergy efficiency and environmental benefits.

With green certification being more relevant thanever in view of climate change and the scarcity ofresources, the health of a building’s users hasbeen found to have a huge impact on productivityand thus the financial performance of companies.An estimated 90% of the cost for running an officeis related to HR, with only 9% going on rent andaround 1% on electricity and water. Moreimportantly, the living environment is expected tohave the greatest impact on our health, exceedingage or healthcare. Such a huge impact is drivenalso by the fact that modern people spend around90% of their time in buildings – places that cangenerate worse conditions in terms of air quality,acoustics or thermal comfort than the outdoorenvironment. Lack of physical activity, limitedopportunities for healthy nutrition and stress all addup to health issues and in consequence to theproductivity of a building’s users.

Research has been carried out into the impact ofbuildings on people. This was then translated intobest practices, which were combined to formWellbeing certification programmes, focused solelyon the health and comfort of building users.Systems like the WELL or FitWel certifications aimto transform the work environment and provideclear and scientifically based parameters forbuildings and working space. Air quality, thermalcomfort, ergonomics, promoting healthy behaviourand physical activity, aesthetics and art are allaspects of design that did not

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have clear and robust guidelines in the past, butnow with unified and clear requirements at thecenter of the new certification scheme, they can beimplemented.

The WELL standard, as the first wellbeingcertification scheme in the market – raised the barin terms of the scope of certification and in itsrigorous verification requirements. The system iscomposed of several prerequisites, such as airquality, that are mandatory for all certificationlevels. It is not only the design of space that isbeing analysed – actual measurements will betaken for several building environment parameters,for example internal smog levels (PM 2.5 and PM10), formaldehyde, carbon monoxide and ozonelevels. All these need to meet WELL requirements.WELL not only checks the design and current levelof assessed metrics – a lot of requirements willalso need confirmation that they are maintainedproperly, with annual documentation provided bythe space or building owner to the certificationbody. Such complex verification ensures that abuilding and its systems are in good condition notonly during certification, but also during normalbuilding use.

Such certification could not come at a better time,as many employers are experiencing problems inattracting and retaining talented staff and newworkers. The generational shift has enforceddifferent strategies. As new generation is enteringthe labour market, the requirements andexpectations about the working environment arenow crucial. According to the Well.HR report, 43%of Millennials are expected to change employerwithin two years and only 28% declare they wouldlike to work in the same company longer than fiveyears. The retention of talented staff will becomeincreasingly challenging, and wellbeing strategiesare expected to be the most relevant in this – 80%of candidates with 10 or more years’ experiencewill choose an employer mainly based on suchstrategies.

The benefits of investing in wellbeing strategies arevisible today – case studies and reports show

that investment in this area has significant rates ofreturn. Implementing measures aimed at wellbeingand health can lead to a 25% decrease in sickleave. Even only taking into account healthbenefits, investments show significant a ROI, notto mention productivity gains, which can besignificant as well. As more studies emerge, it isbecoming increasingly clear that the workenvironment has an impact on behaviour, thinkingand memory. The amount of fresh air, lighting,thermal comfort and acoustics have a significantimpact on productivity levels.

Wellbeing certification is definitely starting to gainmore traction. Currently in Poland only a fewbuildings have so far obtained certification orprecertification. Two major developers thatimplement WELL principles are SKANSKA and HBReavis, and other will follow. Market dynamicsand a growing focus on the work environment willfavour Wellbeing certification schemes – buildingusers’ and workers’ needs are becomingincreasingly important for companies and studiessuggest they will become even more crucial in thenear future. Co-working offices could benefit fromcertification the most as their core business isdelivering spaces that could greatly benefit fromsuch certification and from being able to showindependent confirmation that international bestpractices are implemented.

Buy or rent? What are youngPoles choosing in 2019?

By Kinga Odziemek,CEO @BrainyBees

If we were to pick a few milestones in mostpeople’s lives, deciding on buying a propertywould be one of them. However, times havechanged and not that many young people areon the lookout for owning property. It turns outthat for many of them renting a flat is not acurse, but a blessing and a desire.

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The genesis of the booming popularity ofrenting

While for baby boomers owning property was oneof the life goals, for younger generations it does nothave such an impact. They do not feel attached toplaces or properties, but to people. They are lessloyal in terms of employment and do not hesitatefor too long if they get a better job offer elsewhere.Renting a flat offers them the flexibility that theyneed as much as air. Being devoted to one place isnot what they want: it doesn’t mean, though, thatthey don’t want to feel like home in a rented flat.That is why they strive for perfection inaccommodation: they want cosy and comfortableapartments located in pleasant districts andfurnished with high-quality equipment. Offeringthem flats in bad condition simply does not worksince they have high requirements and won’t behappy with second best.

If you ask Millennials for the word that scares themthe most, many of them would mention ‘mortgage’as one of them. They don’t see mortgages as asign of stability, but rather a sentence that makesthem feel insecure or tied to one place. Thischange of approach impedes other changes.

What does it change?

Business investors have always seen the potentialof buying properties and renting or selling them outafterwards, but now the trend hits private investorsas well. The trend of investing in whole complexesfor renting has skyrocketed in Poland.

Along with the increased demand are increasedexpectations in terms of accommodation and livingstandards. Generations who rock the labourmarket right now are not the easiest nut to crackfor employers who need to live up to theirexpectations. Employers face the challenge ofadapting and adjusting these trends to theirstrategy, and they often need to go the extra mileto attract candidates. One of the main benefits thatcan impact the success of recruitment is renting aflat for newbies in the company. This can helpthem make a decision about relocation and acceptthe offer of that particular organisation.

It does not come as a surprise that companies arelooking for a reliable partner who can support therenting processes. While renting a flat for oneperson can be relatively easy (but still can causeseveral problems on the way), multiple rentingarrangements can be nothing but a pain in theneck. That is why companies like Resi4Rent cancome in handy and save the day.

Meet Resi4Rent

Resi4Rent seems to be the perfect match sincethe company focuses not only on individual tenantsbut also supporting companies who are looking forsolutions to relocate their staff, open a new office ina new city or attract new candidates throughbenefits. If your organisation is seeking expansion,taking care of accommodation for new members ofstaff can be a bargaining chip during recruitmentprocesses.

Resi4Rent is a project co-created by the most

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experienced representatives of the real estatemarket. The planning, design and execution of theinvestment are managed by Echo Investment, oneof the largest developers in Poland (30% shares).The second shareholder is a recognisedinvestment fund of global importance (70%). Thequality of services provided is supervised by avalued team of asset managers, Griffin RealEstate. The platform already has 1,700 flats inconstruction and 2,700 at an advanced stage ofplanning, with a goal of 7,000 apartments to be builtand rented throughout Poland. This rentingplatform manages the project from conception tocompletion, taking care of investment,management and renting processes. The firsttenants are to move already in 2019, andinvestments are already seen by 2022. Businesspartners can choose between strategic locationssuch as Warsaw, Kraków, Wrocław, Łódz,Gdańsk and Poznań, where apartments are beingbuilt in prestigious areas of those cities.

Why Resi4Rent?

Resi4Rent is the perfect answer to the growingneeds and expectations, and partnering with thefirm does not end with the final signature on theagreement.

Resi4Rent provides with 24/7 service, dedicatedconsultants and transparent rules, as well asimpressive flexibility, with possibilities of relocatingand transferring between locations and

apartments. You are given the choice between thelargest cities in Poland, where apartments arelocated close to the city centre and at a convenientdistance from business hubs. This helps youremployees stay happy and motivated, and feel likehome even if it is only rented. Modern andconsistent standard of finishing in buildings andapartments can help you win your employees’hearts and meet their requirements, since theymay not care where they live, but how and in whatconditions they live is crucial.

With Resi4Rent, you do not need to worry aboutmanagement that would definitely be troublesomein terms of renting flats for numerous people at thesame time. The transparency of the rental processis undisputable: predictable monthly fees,reasonable prices close to market ones and nohidden costs make the whole procedure simplypleasant. You receive full access to a panel formanagement that helps keep all rental agreementson track. With one monthly invoice for all of theservices, managing is simply a piece of cake.

Wrap-up

Bearing in mind the growing trend of renting a flatinstead of buying property, companies seekpotential in renting as a benefit for their staff.

Multiple renting for business purposes is not afuture trend: it is happening now. You can try to doit all manually but eventually give up, dealing withvarious companies and looking for accommodationin different parts of the city. It does not necessarilysound like fun. Or, alternatively, you can cooperatewithin solutions like Resi4Rent and let them worktheir magic for you and your employees.

More information: Kinga Gawor +48 884 202 495;kgawor@r4r.pl r4r.pl

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Construction 4.0… Seriously?

By Bartosz Zamara Ph.D., senior executive,Europtima

Most presentations about technologydisruption in construction begin with a diagramshowing a neutral or negative increase ofproductivity over years, with other industriesgaining up to 100% increase thanks to adoptionof technology and automation. How come theconstruction industry hasn’t seen this jump inproductivity?

Many say that technological revolution has arrivedto construction – BIM, PropTech, ConTech,Construction 4.0 are commonly used slogans.However, the productivity line is still flat. Despiteseveral years of campaign by BIM preachers, theoverall picture of the industry hasn’t improveddynamically. The construction business seems tobe slow in adopting novelties. On one hand, it’snothing new – construction is a very conservativebusiness. On the other hand, expectation thatconstruction will follow the path of mass-productionsectors is questionable. Industry 4.0 refers tomass production. The efficiency there has reachedanother barrier thanks to organisation, robotics andother technologies like IoT. It seems to beimpossible in construction. The reason is quitesimple. The final product is one and only, uniquebuilding.

Automotive and electronics are standardisedproducts consisting of customised elements. A caror a phone is assembled from many

individualised and adapted parts and components;the end goal is to reproduce results the same,repeatable way. Construction, on the contrary, isan industry of unique projects. The product is aunique building assembled from standardisedparts, materials, components. The difference isfundamental.

Components that make up a phone, car or anyother mass product are fine-tuned to create onlyone product. The scale of production absorbs thecosts of design and prototyping of components thatfit to a given model only. Some standardisationalso takes place here, such as a common floorpan for several models within one automotivegroup. However, we are still talking about massproduction.

Components that make up a building remain thesame. There are a few options for changes; eachtime designers decide how to put them together tobest meet certain expectations of the owner or theend user. The designer produces instructions forthe assembly of individual materials and devices,which is then implemented at the construction site.The results vary in quality and other aspects.

Are we able to standardise buildings so that themanufacture is more like automated production ofcars, with components that fit together perfectly?One of the goals of implementing BIM in design isto avoid collisions at the construction site. This isthe equivalent of virtual prototyping. We are able toprepare a digital model of the building forimplementation and be almost sure that theelements will fit together. Technology allows us tomonitor the progress of assembly, as well as itscompliance with the digital model (at least itsgeometric compatibility). And by unifying thelabelling – a common nomenclature – materialsand fittings can be tracked back to the sourceautomatically.

So why is the situation on construction sites interms of efficiency not rapidly improving? After all,we can prepare precise technical design. We canverify the compliance of the building with the

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documentation. What else needs to happen? Canconstruction follow the automated assembly of acar? The secret is in the building materials,components, their aggregation, and the meansused for assembly. It is particularly important whenthe industry is facing severe labour shortages.Some forecasts say it will not get any better.

There are two possible ways to increase efficiencythrough industrialisation.

One is assembly of large-size, ready-madeelements manufactured off-site. The other one isautomation of the processes on the site, with thehelp of various types of robots imitating humanoperations. The first way, called prefabconstruction, is well recognised and the degree ofproduction automation is the only limitation toefficiency. The second way – making robotsimitate people's work – seems to be a blind path.Currently available building materials are of a sizeand weight to suit the capabilities of the humanbody. The brick fits in your hand. Blocks are larger,but hollow, so a person can lift them. Plasterboardis 1.2m wide, because it’s easy to grab andstabilise vertically on a frame. Elements offormwork systems meet similar criteria. Is there apoint of building robots and have them assemblematerials and devices adapted to the size of thehuman body? After all, technical capabilities go farbeyond 1.2m and 30kg.

At this point, the barrier becomes the possibility ofdelivering the items to the location, but this then isa logistics problem. Another limitation of thedimensions is the architecture itself. All

irregularities interrupting the smooth workflowshould be limited to a minimum. Thoseirregularities that require extra cutting, bending andother non-typical operations consume time andgenerate waste. Construction is a well-knownwaste generator and this is an important issue aswell.

The off-site fabrication path is used quiteextensively in industrial, infrastructure andresidential construction. The path of on-siteautomation still seems to be in the R&D phase andwill remain so for some time.

To sum up, what was to be achieved with availabletechnologies and project organisation has alreadybeen achieved. Improvements in efficiency are notso impressive. Moreover, many projects are runusing old methods, hence the efficiency lineremains flat. Construction is a process consistingof consecutive tasks aimed at delivering of aunique product. It is the same process as anymanual craft, but on a larger scale. Will a clay potdesigned in 3D with use of a super-fast computerincrease the potter's efficiency? The rapid increaseof construction efficiency does not seem availablewithout process integration and without an increaseof the share of industrial production methods used.BIM is a fantastic integration tool at all stages; itallows architects, engineers and contractors toprototype and coordinate elements without limitingtheir complexity. It’s possible to design moreaggregated building elements with BIM. It’spossible to manufacture those elements off-site inindustrial plants with high precision. Such industrialprecision will then allow the fitting of complexelements on-site with minimal labour requirementsand no rework necessary. In this situation, the timeat the construction site can be significantlyreduced, and aggregated elements can beproduced simultaneously outside the constructionsite. This seems like the real and achievable pathto Construction 4.0 today.

Nevertheless, more effective project organisationmodels are worth considering. The processnowadays is troubled by the individual

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character and a large number of stakeholders atevery stage of the building life cycle. And that’swhere the industry loses money.

Retail (r)evolution

By Marta Mikołajczyk-Pyrć, head of retail propertymanagement, Property & Asset Managementdepartment, Savills Poland

The role of shopping centres is changing – theyare evolving to respond to the changing needsof consumers, lifestyle changes andtechnological development.

Shopping centre operators are increasinglyemphasising the social and entertainmentfunctions, providing new attractions andexperiences to shoppers. This is one of the mostimportant trends on the Polish retail propertymarket. Almost half of the retail space in Polandwas created between 2000 and 2010, and around17% of these facilities are already over 20 yearsold. Owners of commercial facilities and brandsmust keep up with the changing needs, so they areinvesting in expansion, reconstruction andmodernisation.

Savills data indicates that out of the 12.2 sq m ofmodern retail space in Poland, over 10% wascreated as a result of these shopping-centreexpansions. The Polish retail market is matureand, in some places, even saturated. For thisreason, in the coming years we can expect fewernew facilities and more modernisations andexpansions. In 2020 the new supply of retail spacein Poland is unlikely to exceed 300,000 sq m,around 55,000 sq m of which will be constituted byfurther expansions.

Customers are more and more willing to visit foodand beverage (F&B) facilities, allocating largerbudgets to consumption. The changes resulting

from the dynamic development of the F&B industrycan be demonstrated using the example ofshopping centres, which have upgrading their foodcourts. New F&B concepts are being introducedand the food-hall format is further developed.

The dynamic development of technology alsoaffects the way we buy products. Today all pointsof contact with a given brand intersect and mergein multi-channel sales, creating an omnichannelstrategy. The eobuwie.pl chain of footwear storesis a good example. The company initially operatedonline only, but eventually entered traditionalshopping facilities, where it implemented moderntechnologies aimed at, among others, reducing thenumber of returns and shorten delivery times.Customers of eobuwie.pl can, for example, scantheir feet and create a 3D model which will helpthem choose the right size of shoes whenshopping online.

The future of the commercial sector will certainlybe based on new technologies. The world in whichshopping is done by sliding your finger on a screenwill soon undergo another revolution, as a result ofwhich products will be ordered with your voiceusing voice-commerce technology. The latest ITsolutions allow for a better understanding of thebehaviour and needs of customers with the use ofartificial intelligence and data collection, enablingthe creation of tailor-made offers.

The social and ecological awareness of customersis also something that is growing all over the world,including Poland. Customers pay increasingattention to the origin of products and their impacton the natural environment. This is having an effecton packaging, which in turn has implications forlogistics.

Another visible trend is personalisation, forexample in the food and beverage sector. We wantto buy tailor-made products – accessories,clothing, but also food. This personalisation cantake many forms, such as adapting products tospecific diets (e.g. vegan, gluten-free) or enablingcustomers to compose their own meals.

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We anticipate further development of the F&B andentertainment offer in retail schemes as well asimplementation of innovative solutions in shopping-centre management to enable efficient functioningof such facilities throughout the week including onSundays. Changes on the market will also bedetermined by the transformations taking place inPoland, such as the aging of society, the growingrole of customer experience and the merging ofonline and offline channels.

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