03.10.2006    The Panalyst Perspective

Welcome to our unapologetically opinionated look at business, finance and real estate in Krakow and Poland.

"Poland's undiscovered cities"

While Warsaw and Krakow are the usual starting point for investment in Poland, savvy investors also targeted the city of Wroclaw with its multi million pound airport expansion and Ryanair setting up its Central European hub there. Investors in these locations have experienced the rise in foreign and domestic property demand, Poland's burgeoning economy and double-digit capital growth.

But don't feel like you have missed the boat. If you want to emulate the success of your early to market predecessors, I would suggest being as forward looking as they were 3 years ago and consider a series of second tier cities, that have great potential. My approach is to think like a big property developer, standing atop his/her newly built Warsaw skyscraper in front of a map of Poland (You may or may not have a cigar in your hand), and look at Poland strategically.

Panalyst's key strategic success factors:

Location: Where is the city in relation to existing large successful cities, economic hubs and tourist attractions. Several cities are feeling the "ripple effect", with new wealth radiating out from established cities. Which key foreign borders does the city sit next to (Germany, Czech Republic, Slovakia, Scandinavia, Ukraine, Baltic states etc.)

Transport links: How easy is it to get to the city by road, rail and flights. If the city is to take advantage of its geographic location, manufacturing plants and tourist attractions, it must still be possible able to get there! Find the main motorways in Poland that run north to south and east to west.

Economy: A number of factors that we group together including, population, education (Including R&D), per capita income, employment levels, key industries, existing large domestic and international firms and EU structural funds to the region.

Tourism: Number of visitors to the city per year, the main tourist attractions, the number of hotels and hostels and tourist services.

Prettiness: Being vain this is a personal favourite of mine and can be a good and poor indicator of investment potential. Pretty cities will of course attract tourists but will therefore bring many foreign individual speculative buyers that may have already pushed prices up. If you can look beyond a city's post-industrial façade and appreciate its overall strategic potential, you will be starting to think like a developer.

Our cities, our ratings Our chief analyst has rated each of the cities that we think have potential (1-5, 1 being lowest, 5 being highest for each factor)

Poznań

Large population (600k), area known for its hard working people, quite pretty, good connections (half way between Warsaw and Berlin), many foreign investors, large university area.



Łódź

Second most populous city in Poland (1 million people), ugly, but huge growth potential. Many high schools, foreign firms have started to put offices there (eg. Philips) and production plants (eg. Dell). In the future transport links will be improved due to new soon to be finished motorways.



Toruń

Medium sized city (200k), one of the prettiest cities in Poland (UNESCO world heritage list), many foreign investors (especially from Japan)




Bielsko-Biała

A favourite in our office, this is a medium sized city (170k people). Very good location near the mountains and borders. Foreign investors such as automotive plants have set up taking advantage of good strategic transport links.

I hope this introduction has whetted your appetite for more exotic Polish investment locations and wish you the best of luck in your search


Next month "Sexy finance...in Poland?".



Tej Panesar - CEO of Panalyst