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The Warsaw Voice » Other » May 14, 2008
THE SILESIA VOICE
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Good Business Prospects
May 14, 2008   
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Silesia in southern Poland is one of the most attractive regions for business in the European Union. Some 13 percent of Poland's population lives in this relatively small area in large, neighboring conurbations. Silesia has the country's second largest student population. The region is not only a source of highly qualified workers but also a large future consumer market and an attractive investment location.

Progress
Recent economic changes in Poland have been reflected in the changing profile of Silesia. The region, which once was perceived as one of Europe's largest mining and steel centers, is systematically changing its image. Today the fastest developing industry is the automotive sector and Silesia has become the top car-producing region in Poland. The electrical-machinery and energy industries are developing fast, as is the high technology sector.

Silesia is the most industrialized region in Poland and one of the most industrialized in Europe. It is attractive to investors because of its large consumer market and good transport infrastructure. The Silesian region comes top with regard to communications infrastructure, access to transportation and industrial facilities.

Such rapid development could not have taken place without the scientific and technological skills of the local population, skills that have yet to be fully utilized. In an era of the information-based economy, Silesia has an invaluable asset in its strong network of science institutions and research and development centers. Moreover, Silesia has always had ties to industry, which is not the case in other Polish regions. Silesia is home to 36 higher-education establishments, branches of other colleges from beyond the region and also the best-developed network of career training centers in the country. All in all, there are over 200,000 students studying in Silesia and a similar number attend professional training courses. Potential employers do not have to worry about a lack of highly qualified workers. Thanks to the high standard in Silesian schools, the region also tops the league with regard to exporting talent to European Union countries. Although some experts warn about the dangers of such a brain drain, it gives young people the opportunity to gain invaluable experience.

Statistics confirm the changes already made in the region and its economic strength. At the end of 2006, Silesia generated 13.9 percent of Gross Domestic Product, the second highest share in the country after Mazovia's 20.4 percent.

Silesia is home to 426,000 businesses, of which 96 percent are privately owned. The pace of investment set by foreign firms is being matched by domestic businesses that are tailoring services to meet the demands of the European market.

Investment boom continues
The real estate market in Silesia continues to thrive, despite reports of problems on international markets. Moreover, experts reckon that the real boom is still to come. Katowice is beginning to attract interest from investors in the logistics sector and from developers, albeit a little later than in other large cities.

For two consecutive years Poland's Information and Foreign Investment Agency (PAIiIZ) voted the Silesian region as one of the most attractive locations for investors. This supports the ongoing trend to invest in Silesia and ensures that the region will attract investment capital more and more effectively. The real estate sector can also only benefit long term from the current significant deficit in office and retail space and housing in the region. These three factors-strong potential, economic growth and a lack of commercial properties-are likely to result in an investment boom for the region's real estate market.

The trend to invest in Silesia is further confirmed by the results of Metropolis commercial real estate consultancy firm's polls among foreign businesspeople from outside the region as well as local businesses and local governments that want to attract more investors. "The year 2007 saw a clear step forward with regard to real estate investment," said Marek Wollnik, Metropolis vice president. "Our analyses show a huge need for high-class office accommodation. Investors have noticed how fast Silesia is developing."

According to Metropolis, the region is experiencing a boom in the real estate sector previously unseen for many years. It ranks the Agora retail and service center in the center of Bytom, which is still under construction, as one of the most interesting real estate projects in Silesia of last year. The site is on one of the central squares in Bytom and the building's designers plan that it will be available for use by local cultural institutes and that cultural events, such as operas and dance theater performances, will be staged there.

Metropolis also points to a return of retail trade to city centers. In addition to Bytom, Gliwice has a new shopping and entertainment center, Forum Gliwice, and another center, Focus Park Gliwice, is being built near the Gliwice Steelworks.

Attractive investment
Among attractive investments highlighted in a Metropolis league table is a new addition to the Hotel System chain. The new hotel could not have been built without prior road modernization. It is being built in Katowice next to the A4 freeway. The new hotel will consist of two buildings connected by a conference center. The Hotel System sells ownership of the rooms and then pays each owner a regular percentage of profit generated by the room. Such an investment affords the owner safe and predictable earnings, which outperform interest earnings from a bank.

In the apartment market, Metropolis mentions the Osiedle Książęce estate in Katowice-Ligota. Energomontaż-Południe is building the estate, which will comprise 22 four-story buildings. Another estate of note is TriGranit's Dębowe Tarasy near the Silesia City Center shopping and entertainment complex. The project will include four high-rise and eight smaller buildings and Silesia Towers, two office buildings.

Expo Silesia, the largest trade fair exhibition center in southern Poland, has filled the void left by the former Katowice trade fair exhibition hall. The investor, Kolporter Expo, having already completed the first stage of the project, will continue development over the next few years. Expo Silesia has hosted regular events since 2007.

The most interesting projects in the logistics sector are those of ProLogis. The company has four sites in Silesia: Sosnowiec, Chorzów, Będzin and Dąbrowa Górnicza. After completion of its Park Sosnowiec development, ProLogis will have at its disposal a total area of 380,000 square meters, or a huge percentage of the estimated total of some 550,000 square meters of warehousing space available throughout Silesia at the end of 2007.

One of the largest logistics centers in Upper Silesia could be the Tulipan complex in Gliwice, which will have an area of some 60,000 sq m. The site is in a superb location: close to a designated economic zone, alongside the A4 freeway and near the proposed extension of the A1 freeway.

New projects in the region's center could boost the supply of office space, which is sorely lacking. Of particular interest are offices to be built by Globe Trade Centre in Katowice. The projects will transform 16 hectares of run-down former industrial sites into prime commercial land. One of the office buildings will be located on Francuska Street and another two on Mikołowska Street. The latter site will also include a complex of 500 apartments.

Two trans-European routes cross the Silesian region: the Berlin-Wrocław-Katowice-Cracow-Lviv road and the Gdańsk-Katowice-Zilina highway. Its railway network is also a very important element of Silesia's transport network. The Silesian rail network density is more than twice the country's average. Silesia also has three railway terminals that are part of the international E network (AGC). Tarnowskie Góry has one of the biggest rail terminals in Europe, and trains from the east on wide-gauge railway tracks can reach Sławków. Thus goods from Ukraine, Russia and the Far East can be offloaded in Silesia.

The Pyrzowice international airport near Katowice, which continues to enjoy the status of top regional airport in Poland, is located virtually in the middle of the region. The Gliwicki Canal links the region with the Oder River and thus the Baltic ports of Szczecin and Świnoujście.

Jan Bogulski
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