Polish Construction Review A prime source of market intelligence for construction professionals

Transcription

1 Monthly Review and Analysis Published by PMR Publications Polish Construction Review A prime source of market intelligence for construction professionals IMPORTANT NOTICE: This is a free sample newsletter. Feel free to forward it to anybody in or outside your company to whom it might be of use. If you wish to reproduce the contents of this publication, you should first request permission from PMR Publications () giving details of what will be quoted and where. PMR Publications () is a division of PMR, a British-American publishing, consulting and market research company. PMR Publications provides reliable market intelligence for business professionals interested in Central and Eastern European countries as well as other emerging markets. Publications by PMR analyse the business climate in the region, in particular in the construction, retail, IT, telecommunications and pharmaceutical sectors. PMR Publications offers both free and paid subscription newsletters, internet news portals and in-depth reports.

2 Monthly Review and Analysis Issue No. 13 (118) Friday, 7 January 2011 Published by PMR Publications Polish Construction Review A prime source of market intelligence for construction professionals Analysis of the construction sector Excellent year-end construction performance page 2 WIG-Construction Index, December 5,600 5,500 5,400 5,300-1,8% Housing construction Homes completed page 4 Statistical data Polish economy page 6 Construction and assembly output page 7 Building materials page 8 Data on voivodships page 9 Construction market climate page 11 Features Construction permits issued in Q1-Q and page 13 Investments involving historic properties page 16 Upcoming events WIG-Developers Index, December 2,900 2,800 2,700 2,600 Source: Warsaw Stock Exchange, Source: Warsaw Stock Exchange, Excellent year-end construction performance -4.1% Construction output in November once more notched up impressive growth rates, raising expectations for the coming months. The improving growth rate for pay and employment, and stable prices provide a firm base for steady expansion in the construction sector in This means that the financial performance of construction firms should also improve. (...) Whole article on page 2 u Upcoming events page 17 Nov PLN 84.5bn 10.1% Industrial output Source: Warsaw Stock Exchange, Jan-Nov 9.7 % PLN 862.5bn Construction and assembly output Nov Jan-Nov PLN 7.9bn 14.2% 2.3% PLN 71.1bn 1 =PLN Nov Jan-Nov PLN PLN PMR Publications () is a division of PMR, a British-American publishing, consulting and market research company. PMR Publications provides reliable market intelligence for business professionals interested in Central and Eastern European countries as well as other emerging markets. Publications by PMR analyse the business climate in the region, in particular in the construction, retail, IT, telecommunications and pharmaceutical sectors. PMR Publications offers both free and paid subscription newsletters, internet news portals and in-depth reports.

3 Friday, 5 January Polish Construction Review Issue No. 13 (118) Construction and assembly output change (%, y-o-y), % 11.0% 13.4% 14.2% 9.6% 9.4% 7.4% 1.9% 1.2% 2.3% 3.1% 0.5% 0.5% 0.8% 2.7% 8.5% 9.9% 5.7% 0.3% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -15.7% -24.6% -10.2% -6.1% 2009 Note: percentage changes in real terms Source: GUS, Analysis of the construction sector Excellent year-end construction performance Construction output in November once more notched up impressive growth rates, raising expectations for the coming months. The improving growth rate for pay and employment, and stable prices provide a firm base for steady expansion in the construction sector in This means that the financial performance of construction firms should also improve. Construction and assembly output in Poland in November topped PLN 7.2 bn, Growth in employment in construction (%, y-o-y) Growth in remuneration in construction (%, y-o-y) Growth in employment levels, average gross remuneration and prices in construction in Poland, November 2009-November Nov Dec Jan Feb Mar Apr May Jun Jul Aug Growth in construction and assembly output prices (%, y-o-y) Sep Oct Dec giving growth of 14.2% in comparison with November 2009 and returning to doubledigit growth rates last seen in September. These outstanding results for November bring growth in construction output over the first eleven months of the year to 2.3%. The upturn in this instance was generated chiefly by the dynamic rise in output in the category of construction firms performing specialist work (growth of 30.3%) and those in the civil engineering sector (20%); building construction firms saw growth of 1.8%. Growth rates in employment and remuneration levels in the same period accelerated, while the rate of change in prices in construction once more slowed, which would suggest a diminished likelihood of significant construction price rises in With the improved optimism on the construction market the third quarter of also saw better financial performance by construction firms, which are still booking losses, but these are much slighter than the increased losses seen in the previous quarter. Over the first three quarters of companies employing more than 49 people generated combined net revenues from sales of products, goods and materials of PLN 68.1bn, which is 4.4% down on the same period of Their net profits slumped by 16% to just under PLN 3.9bn. We expect 2011 to bring further improvement in the dynamics of particularly revenues but also profits in comparison with those of. With regard to the profitability of construction companies, the introduction of the higher VAT rate could prove a hindrance, as could possible increases in contractors prices, which will affect the contracts signed when the market was at its slowest. Source: PMR Publications on the basis of GUS data,

4 Polish Construction Review Issue No. 13 (118) Friday, 5 January Rate of change in revenues and profits of construction companies in Poland, Q1-Q Q1-Q3 71.1% 44.5% Bartłomiej Sosna Senior Construction Analyst PMR Publications bartek.sosna@pmrpublications.com 7.0% -8.0% Q1-Q % 4.1% Q1-Q % 11.8% Q1-Q Data for companies employing over 49 people Source: PMR Publications on the basis of GUS data, % 19.7% Q1-Q Net revenue (%, y-o-y) 34.7% Q1-Q % Q1-Q Net profit (%, y-o-y) 23.0% 12.0% Q1-Q % Q1-Q3-16.0% A D V E R T I S I N G 3

5 Friday, 5 January Polish Construction Review Issue No. 13 (118) Housing construction Homes completed Homes completed and under construction, Jan-Nov Homes completed 114, , , , , ,710 in number of homes completed (%, y-o-y) 5.5% 0.1% 16.0% 24.0% -3.1% -16.1% Homes under construction (end of period, 000) in number of homes under construction (%, y-o-y) -2.0% 3.9% 8.3% 1.3% -2.5% 3.2% Source: GUS, Number of homes completed, January-October 2009 and January-October Total Total area of homes completed ( 000m 2 ) Voivodship Jan-Nov2009 Jan-Nov y-o-y Jan-Nov2009 Jan-Nov y-o-y Dolnoslaskie 12,701 11, % 1,144 1, % Kujawsko-Pomorskie 6,063 4, % % Lubelskie 5,217 4, % % Lubuskie 3,361 2, % % Lodzkie 5,783 5, % % Malopolskie 17,071 11, % 1,575 1, % Mazowieckie 35,753 25, % 3,400 2, % Opolskie 1,567 1, % % Podkarpackie 4,895 4, % % Podlaskie 3,421 3, % % Pomorskie 13,338 10, % 1,226 1, % Slaskie 9,415 8, % 1,137 1, % Swietokrzyskie 1,694 2, % % Warminsko-Mazurskie 4,128 4, % % Wielkopolskie 12,736 12, % 1,367 1, % Zachodniopomorskie 6,778 5, % % Poland 143, , % 14,262 12, % Number of flats for which construction permits were issued, flat starts and flats completed in Poland ( 000), January 2004-November Jan 2004 Apr 2004 Jul 2004 Oct 2004 Jan 2005 Apr 2005 Jul 2005 Oc t 2005 Jan 2006 Apr 2006 Jul 2006 Oct 2006 Jan 2007 Apr 2007 Jul 2007 Oct 2007 Jan 2008 Apr 2008 Jul 2008 Oct 2008 Jan 2009 Apr 2009 Jul 2009 Oct 2009 J an Apr J ul Oct Number of flats for which construction permits were issued Number of flat starts Number of flats completed Source: GUS,

6 Polish Construction Review Issue No. 13 (118) Friday, 5 January Home completions by type of investor, January-November 2009 January-November Individual For sale or rent : GUS, 20 Cooperatives Other 4.7% 3.9% 5.0% 5.0% Jan-Nov 2009 Jan-Nov 39.4% 44.1% 46.2% Commenced projects and issued construction permits ( 000), January-November 2009 January-November Source: GUS, Commenced projects Jan-Nov 2009 Jan-Nov Permits 51.8% In January-November a total of 120,710 flats were completed for use (including 4,698 in housing cooperatives, 62,499 in individual construction, 47,536 dwellings built for sale or rent; the remaining 5,977 comprised municipal, company and social rent housing units), which represented decline of 16.1% relative to corresponding period of The most substantial increase in the number of completed flats was reported in voivodships: Opolskie (by 26%), Swiętokrzyskie (by 20%) and Podlaskie (by 10.1%). The sharpest decline was observed in the Malopolskie voivodship (by 34.8%). Mazowieckie was, as usual, the region with the largest number of new residential projects completed investors completed almost 25,900 flats there. The capital city region was followed by Wielkopolskie voivodship with near 12,400 completed dwellings and Dolnoslaskie with more than 11,800 homes completed. From January to November, developers obtained permits to construct 61,900 housing units, i.e. 6.9% more relative to the previous year whereas the number of building permits secured by individual investors fell by 3% year on year to 92,200. Throughout the country, in the analysed period, all investors obtained construction permits for 161,100 housing units (a 1.9% decline compared to January-November 2009) and commenced work on 150,000 dwellings (increase by 11.5%). In terms of the number of dwellings completed per 1,000 residents, the Mazowieckie voivodship noted 4.95 housing units per 1,000 inhabitants, and Pomorskie region followed with Dolnoslaskie took the third place with 4.11 dwellings per 1,000 residents. The lowest ratios were noted in voivodships: Swietokrzyskie (1.60 housing units per 1,000 residents), Slaskie (1.86 dwellings per 1,000 residents) and Opolskie (1.92). The national average ratio stood at 3.16, while in January- November 2009 it was 3.76, and 3,53 in January-November

7 Friday, 5 January Polish Construction Review Issue No. 13 (118) Statistical data Polish economy Main macroeconomic indicators Q1-Q3 GDP GDP growth 3.6% 6.2% 6.8% 5.0% 1.7% 3.2% GDP value (PLN bn) , , , , Gross value added in industry value (PLN bn) Gross value added in industry 3.5% 10.0% 10.1% 6.6% -1.1% 12.1% Gross value added in construction value (PLN bn) Gross value added in construction 7.8% 11.6% 10.8% 9.1% 4.7% 0.2 Individual consumption 2.1% 5.0% 4.9% 5.9% 2.3% 2.6% Gross fixed capital formation 6.5% 14.9% 17.6% 8.2% -0.3% -6.2% Unemployment rate 17.6% 14.9% 11.4% 9.5% 11.9%, 11.7%, (Dec2009) (Nov) Jan-Nov Output Volume of industrial output (PLN bn) in industrial output 4.0% 11.9% 9.8% 2.5% -3.2% 9.7% Consumer prices Prices for consumer goods and services (CPI) 2.1% 1.0% 2.5% 4.2% 0.2% 2.5% Producer prices Prices of sold production of industry (PPI) 0.7% 2.0% 2.0% 2.2% 3.4% 1.8 % Prices in construction and assembly production 3.1% 3.2% 7.4% 4.8% 0.2% -0.1% Average gross monthly salaries: in gross monthly salaries in enterprise sector* 3.2% 5.1% 9.2% 10.3% 4.4% 2.7% in gross monthly salaries in manufacturing* 2.8% 5.9% 9.7% 9.1% 3.9% 5.1% Foreign investments Volume ( bn) (Jan-Oct) 6.3(Jan-Jun) * in nominal terms Percentage data present changes to the position compared to the correspondingperiod of the previous year (except for Unemployment, which representsvalues at the end of a given period). Source: GUS, NBP, Financial indicators GDP growth 2009 Oct Nov $1=PLN =PLN Discount Rate % 4.00% 4.00% Lombard Rate % 5.00% 5.00% 5.2% 1.7% 4.2% 1 average 2 end of a given period Source: GUS, NBP, Q Q Q3 Note: preliminary estimate. Source: GUS, Main macroeconomic indices forecast Q3 Q4 GDP 3.4% 3.5% GDP 1.8% 3.4% 3.6% CPI 3.5% 2.4% 2.9% PPI 3.4% 1.8% 3.3% 1=PLN ( e-o-p) Producer Price Index 3.9% 2.4% 2.0% Oct 2008 Oct 2009 Oct Source: BZ WBK, Citibank, Pekao, PKO BP, PKPP Lewiatan, PMR Publications, Raiffeisen Bank (mean forecasts, updated September ) Source: GUS,

8 Polish Construction Review Issue No. 13 (118) Friday, 5 January Statistical data Construction and assembly output Construction and assembly output (PLN m), October 2009-October In November construction and assembly output sold at current prices totalled around PLN 7.9bn. In real terms, it was 10.8% lower than the figure recorded in October and 14.2% higher than in November January-November Construction and assembly output up by 2.3% 6, ,973.5 Source: GUS, Total construction and assembly Civil engineering Construction of buildings Specialised construction activities 7, , , , , , Nov 2009 Jan Mar May Jul Sale of construction and assembly output, Domestic construction and assembly output realized by construction entities employing more than nine persons Source: GUS, Sep Jan-Nov Sale of construction and assembly output (total) PLN bn bn y-o-y - 3.7% 2.3 Construction of buildings PLN bn bn y-o-y % 0.4 Civil engineering PLN bn bn y-o-y % 1.5 Specialised construction activities PLN bn bn y-o-y % 7.8 Employment, salaries and financial indicators in construction, Nov Jan-Nov Average employment ( 000) in average employment (%, y-o-y) 3.6% 9.1% 5.4% 5.3% 0.9% Average gross salary PLN 2, , , , , Nominla change in gross monthly salaries in construction (%, y-o-y) 9.9% 15.5% 13.0% 4.2% 1.5% Price indices of construction and assembly output (%, y-o-y) 2.9% 7.4% 4.8% -0.6% 0.1%* Jan-Sep Total operating expenses to total income ratio (%) 95.6% 93.4% 93.1% 93.4% 95.2% Liquidity ratio (%) 40.0% 46.8% 42.0% 56.9% 38.4% Residential and non-residential building construction projects up by 0.4% Civil engineering construction projects up by 1.5% Specialist construction projects up by 7.8% Net profitability in industry and construction, Q1-Q Q1-Q3 6.1% 3.7% Source: GUS, Average employment in construction ( 000), November 2009-November % 4.9% 5.3% 4.5% Net profitability in industry Net profitability in construction % 4.7% Q1-Q Q1-Q Q1-Q Q1-Q3 * September Source: GUS, Oct 2009 Oct Source: GUS, 7

9 Friday, 5 January Polish Construction Review Issue No. 13 (118) Statistical data Building materials 8

10 Polish Construction Review Issue No. 13 (118) Friday, 5 January Data on voivodships Poland Dolnoslaskie Kujawsko-Pomorskie Lubelskie Lubuskie Lodzkie Malopolskie Mazowieckie Opolskie Podkarpackie Podlaskie Pomorskie Sląskie Swietokrzyskie Warminsko-Mazurskie Wielkopolskie Zachodniopomorskie Population, endjune, 000 Urban population, endjune, 000 Unemployment rate, end November Industrial output, 38, , , , , , , , , , , , , , , , , , , , , , , , , , , , % 12.5% 15.7% 12.3% 14.9% 11.6% 9.9% 9.0% 12.4% 15.1% 12.5% 11.8% 9.6% 14.1% 19.0% 8.7% 16.6% Jan-Nov PLN m 862, , , , , , , , , , , , , , , , ,572.7 m 215, , , , , , , , , , , , , , , , ,651.1 in industrial output, Jan-Nov Average employment in industry, 9.7% 13.3% 22.2% 13.1% 17.5% 12.4% 18.9% 7.7% 10.0% 16.9% 2.4% 14.4% 11.7% 4.0% 15.3% 6.8% 8.6% Jan-Nov 000 2, % -1.7% 1.7% 2.2% 0.5% -0.3% 0.1% 0.9% 0.4% -0.7% -5.4% -1.8% -1.9% -3.0% -0.2% -1.2% -3.7% Average gross monthly wage in industry, Jan-Nov PLN 3, , , , , , , , , , , , , , , , , , Nominal change in average gross monthly wage in industry, Jan-Nov Companies with foreign capital, end Oct 4.9% 5.9% 4.5% 6.9% 6.6% 9.6% 3.5% 3.6% 4.5% 5.8% 4.8% 2.8% 4.2% 2.8% 5.5% 6.3% 3.3% 67,506 6,490 1,679 1,062 2,690 2,690 3,688 25,140 1, ,128 5, ,789 4,229 Percentage data present changes to the position compared to the correspondingperiod of the previous year (except for Unemployment, which represents values at the end of a given period). Source: GUS,

11 Friday, 5 January Polish Construction Review Issue No. 13 (118) Data on voivodships Zachodniopomorskie Wielkopolskie Warminsko-Mazurskie Swietokrzyskie Podkarpackie Mazowieckie Kujawsko-Pomorskie Dolnoslaskie All statistics refer to Jan-Nov Sląskie Pomorskie Podlaskie Opolskie Malopolskie Lodzkie Lubuskie Lubelskie Poland Construction output PLN m 138, , , , , , , , , , , , , , , , ,392.5 m 34, , , , , , , , , , ,099.7 in construction output 3.3% -0.3% 10.2% 6.2% -13.6% 10.7% 21.2% 1.3% 6.3% 7.8% 16.8% -1.0% 3.5% 9.7% -3.2% -2.0% -9.5% Share in construction output 100.0% 6.3% 3.4% 2.7% 1.2% 4.2% 8.6% 32.3% 1.7% 3.2% 2.4% 5.3% 10.7% 2.6% 2.0% 10.1% 3.2% Average employment in construction, in average employment in construction 0.9% -3.6% 4.9% 1.3% -5.6% 3.8% 6.6% -3.1% 3.0% 8.1% 9.2% 9.7% -2.5% 5.4% -0.7% -3.3% 8.6% Average gross monthly salary in construction PLN 3, , , , , , , , , , , , , , , , , % 3.9% 1.0% 3.3% 4.2% 1.3% 3.9% 1.8% -2.0% 2.4% 7.3% -0.2% 1.9% -2.0% 2.7% 1.3% -0.5% in average gross monthly salary in construction Investment in construction companies, Jan-Oct PLN m 1, m Percentage data present changes to the position compared to the corresponding period of the previous year. Source: GUS, Explanatory notes on statistics in our newsletter Statistical data in all the tables refer to companies employing more than nine people. Construction output This figure covers all the revenues of construction companies, i.e. in addition to construction and assembly revenues, income not directly related to construction activities, such as financial revenues, extra-ordinary profits, and revenue from transport, trade and equipment leasing activities etc. Construction and assembly output This category encompasses revenues of construction firms generated only on construction and assembly business. According to the PKD 2007 classification, Section F Construction is divided into three sub-sections which group individual types of works: Sub-section 41. Construction works Group Building construction Group Residential and non-residential building construction Sub-section 42. Civil engineering works Group Motorway and railway construction Group Pipeline, telecommunications and power line construction Group Other civil engineering works Sub-section 43. Specialist construction works Group Demolition and site preparation Group Power, water and sewage and other building installation Group Finishing construction works Group Other specialist construction works 10

12 Polish Construction Review Issue No. 13 (118) Friday, 5 January Statistical data Construction market climate The indicator of the general economic climate in construction in December was pts, which represents a drop of 11.1 pts month on month. At the same time, it was 4 pts lower than in December It was also lower than the levels seen in the same month since Assessments of the current and future value of the order portfolio, the output level and financial standing of the construction companies have deteriorated in comparison with November. Only 3.1% of businesses felt they faced no obstacles to conducting their construction and assembly output activity in December, down from 4.5% in November, while in December 2009 this figure was 4.8%. The biggest hurdles for construction companies were related to weather conditions (for 54% of respondents in December against 26% in November and 24% in December 2009), which were the barrier whose importance grew the most year on year, competition of other firms, (54% against 56% in November and 63% in December 2009) and labour costs (50% in December, 53% November and 51% a year ago). The insufficient demand was the barrier whose significance decreased the most in comparison with the previous year (from 48% to 37%). Construction and assembly companies assessed their economic condition negatively in December and more pessimistically than a month before. Only large companies (of over 250 employees) are positive about their situation but less upbeat than in November; the most pessimistic, on the other hand, are small and micro-business of 49 employees and fewer. The order portfolios in December declined to a greater extent than it had in the previous month. In terms of company size, those employing under 50 people saw the most substantial decline. Construction and assembly output in December was assessed negatively and worse than in November. The small companies with employees had seen the most substantial decline, while the largest had registered the construction and assembly output growth. In December companies of all sizes were negative about their financial situation and more pessimistic than in the previous month. The micro companies (no more than nine employees) formulated the worst assessments in this respect. All sizes of company reported slight increase in delays in payment of accounts due for construction and assembly work performed. The least significant delays were reported by the largest units. The forecasts of construction and assembly firms regarding their economic condition over the next three months were pessimistic in December and worse than in November. The most pessimistic were the representatives of small firms. Order portfolio forecasts were pessimistic and worse than a month ago as well. In terms of company size, small companies predict the most substantial decline. The construction companies also expect construction and assembly output to dwindle over the coming three months, and the predicted decline is deeper than that expected in November. The largest decrease is predicted, again, by the small firms. The prognoses for companies financial condition over the next three months are also worse than those reported in November and the small companies are the ones that are the most negative about this. The construction firms in general foresee a decrease in the construction and assembly work prices similar to that forecasted in November. The largest price reductions are likely to take place in small firms, while the representatives of largest companies do not expect the prices to drop. Construction market climate note on methodology The construction market climate survey, conducted by GUS since July 1993, looks at companies engaged in construction and assembly works classified under section 45F ( Construction ) under the Polish Classification of Business Activity (PKD), excluding group 45.5 ( Renting of construction or demolition equipment with operator ). The survey is organised in the form of a monthly questionnaire which is completed by approx. 2,200 undertakings, some representing long standing respondents. The collected data is presented as weighted percentage shares of the enterprises which select a given response or as a balance, i.e. the difference between the weighted percentages of positive and negative responses. The result for the question on used production capacity is provided as a percentage value. The indicator of the general economic condition of Polish enterprises comprises a composite ratio, calculated as the arithmetic mean of the balances of responses concerning the current situation and outlooks for the general economic situation of the surveyed enterprise. The indicator can take on values ranging from -100 to +100, in which a positive value means good conditions and a negative poor conditions. An increase (decrease) in the indicator means an improvement (deterioration) in the economic conditions from the perspective of the surveyed enterprises. Indicator of general economic climate in construction sector, by company size, December 2007-December Dec 2007 Feb 2008 Source: GUS, Apr 2008 Jun 2008 Aug 2008 Oct 2008 Dec 2008 Feb 2009 Apr 2009 Jun 2009 No more than 9 employees employees employees 250 and more employees Aug 2009 Oc t 2009 Dec 2009 Feb Apr Jun Aug Oc t Dec 11

13 Friday, 5 January Polish Construction Review Issue No. 13 (118) Five main barriers to doing business on the Polish construction market, December Value All companies 1-9 employees employees employees 250 and more employees y-o-y Value y-o-y Value y-o-y Value y-o-y Value Weather conditions Competition of other firms Cost of employment Insufficient demand Cost of materials y-o-y Construction firm s present situation related to construction and assembly output on the domestic market, December Value All companies 1-9 employees employees employees 250 and more employees y-o-y Value y-o-y Value y-o-y Value y-o-y Value Output level Financial situation Order portfolio Payment bottleneck Capacity use (%) y-o-y Source: GUS, Construction firm s predictions for construction and assembly output on the domestic market, December Value All companies 1-9 employees employees employees 250 and more employees y-o-y y-o-y Value y-o-y Value y-o-y Value y-o-y Value Order portfolio Output value Financial situation Prices of construction services Employment

14 Polish Construction Review Issue No. 13 (118) Friday, 5 January Construction permits issued in Q1-Q and The total number of construction permits issued in the first three quarters of represented a slight decline in comparison with the same period of the previous year. This gave a dip of just 0.6% in the number of buildings for which permits were issued. In terms of the surface area of the planned buildings, however, the decrease was more marked, at 6.4%. Investor activity is thus still concentrated on somewhat smaller facilities. buildings for which investors were granted permits in the first three quarters of fell against that in the same period of the previous year in 10 regions. The highest rises were seen in Opolskie (21.8%) and Malopolskie (13.3%), while the sharpest declines were found in Mazowieckie (-22.9%), Podkarpackie (-20.9%) and Pomorskie (-14.5%). The largest numbers of non-residential buildings for which construction permits were awarded were in the Mazowieckie, Wielkopolskie, Slaskie and Podkarpackie regions. Mateusz Malicki Senior Business Editor PMR Publications mateusz.malicki@pmrpublications.com Over the first nine months of construction permits were issued for over 105,700 buildings, compared to more than 106,300 a year previously. At the same time, the decline was slighter than that recorded over the whole of 2009, when it was 9.8% y-o-y. In all, in terms of residential buildings, the drop weighed in at 1.8%, compared to a decrease in the equivalent figure a year before of 12.3%. In the multifamily category a rise in the number of buildings of more than 10% was noted, while there was a slight downturn in the number of single-family buildings. The more than 74,000 residential buildings for which construction permits were issued in the first three quarters of are to comprise nearly 125,000 residential units. The category of non-residential buildings for which permits were issued over the period Q1-Q3 saw a slight increase, of 2.5%. Discounting the small category of collective residential buildings, the sharpest downturn came in the case of office buildings (-12.6%). The highest rise in numbers of buildings for which permits were issued came in the hotel and tourist accommodation segment (17.3%). The highest numbers of residential buildings for which permits were issued were recorded in the Mazowieckie, Malopolskie, Wielkopolskie and Slaskie voivodships. At the same time, the surface area of the residential No. of buildings for which construction permits were issued in Poland, Q1-Q Q1-Q3 Q1-Q Q1-Q3 Rate of change Total 106, , % Residential buildings 75,521 74, % single-family 71,979 70, % two-family or multi-family 3,475 3, % collective residence % Non-residential buildings 30,788 31, % hotels and tourist accommodation 1,448 1, % offices % commercial and services 4,071 3, % transport and communication 6,953 7, % industrial and storage 4,254 4, % cultural, educational, physical culture and healthcare buildings and hospitals 1,283 1, % other 12,194 12, % Source: PMR Publications on the basis of GUS data, Surface area of buildings for which construction permits were issued in Poland ('000 m²), Q1-Q Q1-Q3 Q1-Q Q1-Q3 Rate of change Total 27, , % Residential buildings 15, , % single-family 10, , % two-family or multi-family 4, , % collective residence % Non-residential buildings 12, , % hotels and tourist accommodation % office , % commercial and services 3, , % transport and communication % industrial and storage 3, , % cultural, educational, physical culture and healthcare buildings and hospitals 1, , % other 2, , % Source: PMR Publications on the basis of GUS data, 13

15 Friday, 5 January Polish Construction Review Issue No. 13 (118) A D V E R T I S I N G No. of residential and non-residential buildings for which construction permits were issued in Poland (%, y-o-y), Q Q3 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q1 Q2 Q3-50% Residential buildings Non-residential buildings Source: PMR Publications on the basis of GUS data, No. of buildings for which construction permits were issued in Poland, by voivodship, Q1-Q3 Zachodniopomorskie 4,312 Pomorskie Kujawsko- -Pomorskie 5,818 Warminsko- -Mazurskie 3,495 Podlaskie 3,338 Lubuskie 2,521 Wielkopolskie 11,708 Mazowieckie 15,773 Dolnoslaskie 6,427 Opolskie 1,908 Lodzkie 7,016 Lubelskie 6,218 Swietokrzyskie 3,651 Slaskie 9,754 Podkarpackie 7,687 Malopolskie 10,182 Poland 105,710 Source: PMR Publications on the basis of GUS data, 14

16 Polish Construction Review Issue No. 13 (118) Friday, 5 January in the number and surface area of buildings for which construction permits were issued in Poland, by voivodship (%, y/y), Q1-Q Q1-Q3 Residential buildings total Single-family buildings Two-family or multi-family buildings No. of Surface area of No. of Surface area of buildings buildings buildings buildings No. of buildings Surface area of buildings Dolnoslaskie -8.3% -4.1% -9.0% -6.2% 28.3% 1.1% Kujawsko-Pomorskie -2.5% -7.7% -1.0% 6.1% 34.5% -49.0% Lubelskie -1.3% -7.4% 0.0% 1.8% 19.2% -30.2% Lubuskie 6.1% 4.2% 7.5% 5.1% 41.2% 0.0% Lodzkie -5.7% -10.0% -5.0% -1.3% 20.7% -39.3% Malopolskie 3.1% 13.3% 2.5% -0.3% 27.1% 58.4% Mazowieckie -6.0% -22.9% -7.1% -7.0% 27.3% -7.0% Opolskie 5.2% 21.8% 3.1% 5.9% 23.8% 5.9% Podkarpackie -6.8% -20.9% -7.2% -22.6% 17.3% 3.6% Podlaskie 3.1% 8.7% 2.2% 4.3% 52.0% 35.8% Pomorskie -8.8% -14.5% -10.8% -11.6% 26.7% -18.9% Slaskie 4.9% 0.9% 2.9% 0.1% 23.5% 4.7% Swietokrzyskie -1.8% -3.2% -2.4% -10.5% 64.0% 78.6% Warminsko-Mazurskie -3.5% 8.5% -3.0% -2.5% 17.1% 37.4% Wielkopolskie 3.5% -4.1% 0.4% 2.2% 35.9% -17.8% Zachodniopomorskie 5.6% -0.7% 9.5% 4.8% 26.1% -7.9% Poland -1.8% -6.9% -2.4% -3.5% 28.0% -14.2% Non-residential buildings total Hotels and tourist accommodation Office buildings No. of Surface area of No. of Surface area of buildings buildings buildings buildings No. of buildings Surface area of buildings Dolnoslaskie 13.0% -23.5% 16.0% -41.8% 47.1% 41.1% Kujawsko-Pomorskie 14.1% 7.9% -11.3% 87.3% -21.9% -46.6% Lubelskie 8.6% -4.6% -8.3% 38.0% -30.4% -56.6% Lubuskie -2.4% -4.2% -82.5% -93.2% -18.2% 54.5% Lodzkie 3.9% -8.5% -28.6% 77.8% -17.1% 137.8% Malopolskie -6.3% -38.7% -33.6% 16.1% -16.7% -32.3% Mazowieckie 2.2% -2.6% -49.5% 94.1% -22.3% 28.9% Opolskie 17.2% -4.1% 62.5% 276.2% -25.0% 36.9% Podkarpackie 19.2% 14.3% 291.8% 50.1% -26.7% -17.3% Podlaskie -9.1% 8.9% -48.3% 143.9% 87.5% -46.2% Pomorskie -10.4% -11.3% -33.9% -57.0% -7.1% 47.7% Slaskie -11.7% -8.4% 47.5% -16.1% -4.8% 67.1% Swietokrzyskie 2.1% 18.1% 0.0% -39.4% 35.7% 105.1% Warminsko-Mazurskie 5.3% 12.6% -16.7% -39.0% -12.5% -47.6% Wielkopolskie 4.7% 6.0% -29.3% -52.5% -28.1% -44.7% Zachodniopomorskie -1.1% 8.6% 45.6% 74.4% -16.0% 105.8% Poland 2.5% -5.8% 17.3% -0.9% -12.6% 17.7% Commercial and services buildings Industrial and storage buildings Cultural, educational, physical culture and healthcare buildings and hospitals No. of Surface area of No. of Surface area of buildings buildings buildings buildings No. of buildings Surface area of buildings Dolnoslaskie -9.5% -8.9% 14.1% -59.9% 29.5% -10.3% Kujawsko-Pomorskie 9.5% -40.0% 30.5% 34.2% 11.7% 86.8% Lubelskie -1.7% 8.9% -6.0% 3.0% -18.1% -5.4% Lubuskie -17.6% -10.9% 0.7% -29.2% 4.9% -23.9% Lodzkie 6.3% 7.5% -13.5% -37.8% 2.9% -3.3% Malopolskie 4.2% -34.8% -12.0% -47.5% -37.2% -63.5% Mazowieckie 0.5% -24.4% 22.1% -28.2% -20.1% -51.6% Opolskie 34.3% -72.3% 25.7% 23.0% 31.0% 43.8% Podkarpackie 29.4% 37.4% 0.4% 10.8% -3.4% 26.5% Podlaskie -62.0% 3.1% 20.2% -15.7% -13.3% -33.9% Pomorskie -28.7% 4.0% -12.6% -6.0% -36.1% -21.2% Slaskie -3.4% -21.5% -52.6% -15.8% 4.3% -0.7% Swietokrzyskie 11.2% 12.5% -6.8% 22.5% -30.3% -59.3% Warminsko-Mazurskie 5.0% 47.6% 25.3% 41.9% 47.8% -5.6% Wielkopolskie 1.8% -17.8% 20.9% 3.9% 65.9% -14.5% Zachodniopomorskie 5.2% 94.2% -38.2% -30.9% -19.4% -35.0% Poland -3.6% -13.4% -2.2% -18.6% -1.9% -20.7% Source: PMR Publications on the basis of GUS data, 15

17 Friday, 5 January Polish Construction Review Issue No. 13 (118) Investments involving historic properties Historic properties of historical, artistic or scientific value are subject to special legal protection. This special treatment is also reflected in the management of the investment process involved in a historic property (e.g. a building or complex of buildings). Given that it is becoming increasingly widespread to invest not only in old residential properties such as townhouses but also in whole former factory or military complexes, there would seem to be grounds for going through the specific details of the investment process where properties subject to the protection of the conservator of monuments are concerned. Pursuant to Article 7 of the Act of 23 July 2003 on the protection and care of historic buildings, protection of historic buildings may take one of the following forms: inscription on the historic buildings register, recognition as a historical monument, creation of a culture park, or provision of protection within the local zoning plan. Recently, this portfolio of options was expanded to facilitate protection of the building at the planning permission stage. Moreover, the amendment in of the above-mentioned act on the protection of historic buildings has introduced another form of protection: inclusion of the historic property in the borough historic buildings records. In practice, the aspects of greatest significance to the prospective investor are the implications of the inscription of the property on the historic buildings register, its protection within the local zoning plan or in the form of the terms of its planning permission, or its inclusion in the borough historic buildings records. Any investor undertaking a project involving a historic property must be prepared for additional obligations, both at the administrative stage prior to commencement of construction work and during the execution of the work itself. Planning permission, which is the first stage of any investment process regarding a historic property subject to any of the above forms of protection (including inscription on the historic buildings register or the borough historic buildings records) where there is no local zoning plan, is only issued with the specific approval of the voivodship conservator of monuments regarding its terms. This planning permission, or the local zoning plan, where one has been approved for a given property, may specify the steps necessary to prevent danger to the buildings, and ensure their protection during the investment process and their restoration to optimum condition. The execution of these steps during the performance of the work may engender additional costs or prolong the construction process. In addition, if the property is one inscribed on the historic buildings register pursuant to Article 25 of the abovementioned act on the protection of historic buildings, its adaptation for use and occupancy are contingent on possession by its owner or proprietor of the appropriate conservation documentation profiling its state of preservation and potential for conversion, as well as a schedule of conservation work approved by the voivodship conservator of monuments and a programme governing the administration of the building and its subsequent use. To enable the investor to meet these conditions, the voivodship conservator of monuments is obliged to grant the investor access, free of charge, to all documentation in the conservator s possession regarding the historic property. Also at the construction permit application stage, the relevant architectural and construction administrative authorities are obliged to cooperate with the conservator of monuments. Where construction work is to be performed on a building or structure inscribed on the historic monuments register or on a site inscribed on the historic monuments register, permission for execution of this work must be obtained from the relevant voivodship conservator of monuments prior to the issue of the construction permit. Permission for the demolition of a building or structure inscribed on the historic monuments register may only be issued pursuant to a decision to strike the structure off the historic monuments register by the General Conservator of Monuments acting on behalf of the minister with jurisdiction for culture and preservation of national heritage. The amendments to the above act on the protection of historic buildings introduced in have considerably increased the number of cases in which the architectural and construction administrative authority must liaise with the voivodship conservator of monuments before issuing a construction or demolition permit. At present this obligation applies to all structures inscribed on the borough historic buildings records (prior to the amendment it applied only to structures subject to conservator protection within the zoning plan). As indicated above, the protection of the voivodship conservator of monuments also extends to the construction work stage in the form of the conservator s right to monitor observation and application of monument protection and care regulations. In the course of an inspection the voivodship conservator of monuments is entitled to enter the property if there are justifiable grounds for suspecting destruction of or damage to the monument. He or she is also entitled to assess the state of preservation of monuments inscribed on the register and the conditions in which they are kept and safeguarded, to check the conformity of all action taken on monuments inscribed on the register, and to make entries in the construction log within the scope provided for by the Construction Law. Failure to adhere to the requirements detailed above regarding the participation of the conservator of monuments in the administrative process preceding the actual investment process could cause any decisions issued to be flawed, and consequently even see them annulled. Piotr Rusin Kancelaria Adwokatów i Radców Prawnych Miller Canfield., W.Babicki, A.Chełchowski i Wspólnicy sp. k. 16

18 Polish Construction Review Issue No. 13 (118) Friday, 5 January A D V E R T I S I N G Upcoming events Road Design & Construction Poland IQPC Hyatt Regency Warsaw, Warsaw, Poland, March 2011 tel: +44 (0) construction@iqpc.co.uk www: 17

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