Tailor Your Business in Lodz 2023

TAILOR YOUR BUSINESS IN ŁODŹ

WAREHOUSE & PRODUCTION MARKET IN CENTRAL POLAND

Published by Cushman & Wakefield

2023

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Introduction Foreword by Cushman&Wakefield Foreword by Łódź Special Economic Zone

Geography and Location Łódzkie Province - Basic Data Transport Infrastructure A1/A2 and S8 S14 Expressway Airport Cross-City Line Handling Terminal

Logistics and Production

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Geographical determinants of activities

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Essential features for Manufacturing

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11 12 12 13 13

Essential features for Logistics Market breakdown by Sectors and Industries Tenants by sector: Logistics and Production Manufacturing Activities Active Industries in the Central Poland region Active tenants and E-commerce Testimonials Sub-regional Strengths

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Warehouse market in Central Poland Łódź Region in comparison to Poland 30

Labour market in Łódzkie Region Perspectives on the Labour Market

Overview 3 Take-Away Reels 53

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Two Decades of Growth in the Łódź Industrial Market

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Investing in Łódź from the perspective of the labour market

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Warehouse Stock by Sub-markets

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A robust labour market

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Availability of Warehouse Space

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Competitive labour and living costs

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Stock Under Construction

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A strong educational base

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Rents

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Modern and functional infrastructure = a high quality of living

50

Outlook

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Łódź as a Model Smart City for Urban Logistics

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A diverse economy

51

A business-friendly environment

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Summary

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“I have no money, neither have you. Nor has he. So, we have just enough, just exactly enough to start quite a big factory” INTRODUCTION TAILOR YOUR BUSINESS IN ŁODŹ | PUBLICATION BY CUSHMAN & WAKEFIELD | PUBLICATION BY CUSHMAN & WAKEFIELD

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INTRODUCTION FOREWORD BY CUSHMAN & WAKEFIELD

I have no money; neither have you. Nor has he. So, we have just enough, just exactly enough to start quite a big factory.” Who doesn’t know this quotation from The Promised Land, a novel by Władysław Reymont? Had it not been for the period of fast paced growth that Łódź experienced during the Industrial Revolution of the 19th century, some of the first steam engines of Ludwik Geyer, the spinning mill of Karl Scheibler or the Grohman factory, perhaps today we would not be talking about modern logistics, supply chains and Central Poland as one of the largest warehouse markets in the country. Łódź - dubbed the Polish Manchester - was the largest centre of textile industry in the then Congress Kingdom of Poland. Today, in Central Poland we can still do good business - no doubt about that. This is why we decided to turn our focus in our second regional market report to the investment potential of this region - not only of Łódź and Stryków, but of the entire Łódź province as the road leading from Łęczyca to Piotrków Trybunalski, completed in 1821, marked the current route of Piotrkowska Street in Łódź. With nearly 4.5 million sq m of class A warehouse stock, Central Poland is the third-largest industrial market in Poland, behind Mazovia and Silesia, providing an excellent springboard for the growth of manufacturing, logistics and e-commerce. However, a closer look at the statistics reveals that more than 50% of that total is less than five years old and the region’s total warehouse stock more than quadrupled in the last 10 years. As a result, Central Poland offers first-rate modern warehouse and industrial infrastructure being a driving force for both local, Polish and international companies which have found in the Łódź province an ideal place for their business.

We think there is no need to reiterate the advantage of the region’s perfect location at the junction of two motorways as this factor has become so obvious for investors that it is no longer an additional category in network study analyses. The Łódź province is, however, a unique example of synergy between modern manufacturing space, big-box distribution centres for e-commerce, including for leading global fashion platforms and marketplaces, and logistics facilities operated by the world’s well known third-party logistics providers (3PLs). This is where shiny household appliances are made for the whole of Europe. This is where parcels are shipped from to more than a dozen European countries whose inhabitants can receive them the next day thanks to excellent 3PL services. This report looks at the potential created by the synergy between manufacturing and logistics, its underlying reasons, the current situation, trends and opportunities opening up for the region. It also explores the concept of a smart city and the resultant challenge to the warehouse and logistics sector. Ludwik Geyer, one of the pioneers of the textile industry in Łódź, would have said now: “Start the steam engine!” With the tall chimney and the beautiful historical space of the White Factory in mind, let us set off on a journey once travelled by the founders of Poland’s largest textile manufacturing companies. Let us do business in Central Poland together - warehouses are already there and so is land for new projects.

Damian Kołata Partner Head of Industrial & Logistics | Poland Head of E-Commerce | CEE Cushman & Wakefield

Katarzyna Misztal Negotiator Industrial & Logistics Department Cushman & Wakefield

Renata Krzyżanowska Associate Industrial & Logistics Department Cushman & Wakefield

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INTRODUCTION FOREWORD BY ŁÓDŹ SPECIAL ECONOMIC ZONE

Ł ódź is my city and home to the Łódź Special Economic Zone, of which I am president and which has for years been ranked as one of the world’s top ten. We enjoy top ranking positions because we are exceptionally successful at attracting investors and have created an ecosystem for companies. Łódź is a very good place to do business. Its orbital transportation route - perhaps the best solution in the whole of Poland - is ideal for logistics and industrial projects. It enables every entrepreneur, employee and manager to easily reach a company’s office or any other destination. And those without a car can use the train services of the large Łódź Metropolitan Railway network. However, in addition to excellent connectivity, we have other advantages too. The cluster of companies within the Łódź Special Economic Zone clearly shows that we are making progress towards service professionalisation - both in hard business and in production. This process is supported by the growing local scientific infrastructure and high quality tertiary education institutions producing increasingly specialised graduates. The Łódź Special Economic Zone also aims to address market needs – that’s why four years ago we decided to open the first Polish Automation and Robotics Secondary School. Our cooperation on this project with market-leading companies and the Łódź University of Technology has already brought meaningful results – in June the school produced its first graduates who had mastered specialist technological skills and are ready for new challenges. This is how we are building a network of business and scientific contacts and educating young people in new technologies. Youth and innovation are firmly embedded in the Łódź Special Economic Zone. In addition to the secondary school, we also strongly support start-ups, that is businesses which frequently reach new heights in terms of creativity and innovation. We support Polish and international start-ups in developing good ideas and guide them through all the formalities. TAILOR YOUR BUSINESS IN ŁODŹ | PUBLICATION BY CUSHMAN & WAKEFIELD

My

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INTRODUCTION FOREWORD BY ŁÓDŹ SPECIAL ECONOMIC ZONE

We are at the forefront of supporting the business community - this is important for international companies in particular. We create investment offers, propose bespoke locations, handle public aid and supervise the process of obtaining administrative decisions on time. We also have a partner zone. What should Łódź be proud of? I think it should pride itself on being a hub of the largest manufacturers of home appliances. This has resulted in a strong network of subcontractors who specialize in servicing such manufacturers but are starting to expand into related industries. It should also be remembered that Łódź has become a leader for office services. The city has high quality offices available at competitive rents and tailored to tenant needs, as well as residential stock (both to buy and rent) and ample cultural and sports facilities.

Do you want to spread your business wings? Come to Łódź, preferably straight to the Łódź Special Economic Zone!

Marek Michalik President of the Łódź Special Economic Zone

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“One of the most important of Łódź’s assets is its location” GEOGRAPHY AND LOCATION

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GEOGRAPHY AND LOCATION ŁÓDZKIE PROVINCE - BASIC DATA

O ne of the main advantages of Łódź is its location in the centre of Poland, near the intersection of two motorways. Key infrastructure projects in Central Poland include the completion of the 130 km long section of the A2 motorway in 2012, which connected Łódź and Warsaw, the S8 expressway leading to Wrocław (223 km) and the A1 motorway to connect Łódź to Gdansk (337 km) and Katowice (204 km). The largest Polish cities are less than a three-hour car drive from the centre of Łódź. The region’s favourable location is a catalyst for growth of logistics which has been one of the fastest-growing sectors of the Polish property market in recent years. The central location has become a strong asset in logistics for Poland.

ŁÓDZKIE - BASIC DATA (JUNE 2023)

CITY OF ŁÓDŹ

ŁÓDZKIE REGION Karol Młynarczyk

Hanna Zdanowska

President / Governor

293

18,218

Area (km 2 ) Population (as at 31.12.2022) Population of working age

658.4 k 371.6 k 102.9 k 138.4 k

2,378.5 k 1,362.6 k 279.7 k 350.0 k

(as at 31.12.2022) National economy entities

Average employment in the enterprise sector Unemployment rate Average gross monthly remuneration in the business sector Students

4,5%

5,5%

6,840.7 PLN

6,682.5 PLN

66,002 14,756

71,038 16,041

Graduates

17

19

Source: GUS

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GEOGRAPHY AND LOCATION TRANSPORT INFRASTRUCTURE

T he presence of appropriate road infrastructure has invariably been key to locating business. Areas with high road density are likely to benefit from intermodal transport facilities and an effective use of their respective strengths. The combination of the central location of Łódź, further improvements to its road infrastructure, rail and air connections as well as the availability of development land near motorways and expressways are all key factors that have made the Łódź province a prime location for warehouse, logistics and industrial parks. Other major advantages of Łódź for logistics growth are Łódź Airport and a rail transshipment terminal, one of the largest in Poland. As a result, Central Poland is well-connected with other parts of Poland and neighbouring countries.

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GEOGRAPHY AND LOCATION TRANSPORT INFRASTRUCTURE

A1/A2 AND S8 Ł ódź is the first large conurbation in Poland with an orbital route of motorways and expressways. It can be accessed by the A2 motorway from the north, A1 from the east, the S8 expressway from the south and the recently completed S14 expressway from the west. The region’s transport network comprises road, rail and air infrastructure with multimodal solutions. The motorways and expressways certainly support the region’s economic growth and are attractive for Polish and cross-border investors. A1 (commonly known as the Amber Highway) is a strategic high-speed road on the north-south axis, forming part of the international E75 route and the trans-European transport corridor TEN-T: Baltic Adriatic. The road connects the Łódź metropolitan area with the Tri-City ports and the highly urbanized and industrialized southern part of the country. A2 (commonly known as the Freedom Highway) is a strategic high-speed road on the east-west axis, forming part of the international E30 route and the trans-European transport corridor TEN-T: North Sea-Baltic. The road connects the Łódź metropolitan area with Western European countries and serves as a crucial transport corridor between Warsaw and Berlin. Due to increasing traffic volume, plans are underway to widen it by adding a third lane between Warsaw and Łódź. S8 is an express road forming part of the European route E67 (Prague-Helsinki). It is particularly significant as it provides an alternative to the A2 road, connecting Łódź with Warsaw and linking four major metropolitan areas (Białystok, Warsaw, Łódź, and Wrocław).

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GEOGRAPHY AND LOCATION TRANSPORT INFRASTRUCTURE

S14 EXPRESSWAY

W ith the completion of the S14 expressway, Łódź became the only Polish city with a motorway ring-road which is important not only for the region’s transport strategy, but is also an important part of the network of national roads. The diversion of the entire transit traffic onto the expressway has reduced congestion on nearby urban roads, bringing substantial user and environmental benefits. It has also balanced and eased traffic flow in smaller towns, with improvements to the comfort and safety of their inhabitants. S14 benefits mainly those living in Łódź, Pabianice, Zgierz, Konstantynów Łódzki and Aleksandrów Łódzki, as it has taken transit traffic out of these towns and cities, and cut journey times. The orbital route is approximately 112 km in length, including a northern 20 km long section of the A2 motorway, an eastern 30-plus km stretch of the A1 motorway, a southern 21-plus km section of the S8 expressway, and nearly 41 km of S14 to the south of Łódź.

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S 8 TAILOR YOUR BUSINESS IN ŁODŹ | PUBLICATION BY CUSHMAN & WAKEFIELD Ł ódź Władysław Reymont Airport is located approximately 6 km away from the centre of Łódź, close to an interchange of the A1 and A2 motorways. It has three terminals: passenger, business and cargo. The cargo terminal has a great growth potential thanks to its prime location. Another strong advantage is the proximity of a road junction and the recently completed S14 expressway - a link between S8 and A1 . Łódź Aiport also benefits from its proximity to the redeveloped Łódź Lublinek railway station, which provides train services between central and western Poland. Attracted by the location of the cargo airport and its contribution to the industrial sector’s growth, investors are increasingly seeking to acquire land for warehouse projects in its vicinity. AIRPORT

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GEOGRAPHY AND LOCATION TRANSPORT INFRASTRUCTURE

CROSS-CITY TUNNEL T he cross-city tunnel which is currently under construction will run across the centre of Łódź and connect key inner-city railway stations: Łódź Widzew, Łódź Fabryczna, Łódź Kaliska and Łódź Żabieniec. The new underground link will provide access to new train services and improve local and national passenger and cargo transport. This would mean less vehicles on the road and better railway connections between the key stations. This infrastructure project presents significant growth opportunities not only for Łódź,

TRANSLOADING TERMINAL but also for the whole region. It is likely to see Łódź grow into a major railway hub in Poland and to open up new opportunities for railway carriers to provide new and faster regional and long-distance train services. The cross-city tunnel is scheduled for completion in 2024, with trains expected to begin running through it in 2025. A multimodal terminal is a widely available platform where shipments are transferred from one mode of transportation to another. There are several types, including road-rail, rail-sea and road-inland waterway terminals. Modern terminals and multimodal nodes are essential links in the supply chain. They are part of an integrated transportation system based on intermodal cooperation and making the best of each mode to optimize costs and transportation processes. The terminal in Łódź is one of the largest in Poland, greatly contributing to the promotion of the region. The project , which is being developed in the Teofilów district, will certainly boost economic activity in this part of the city, with companies gaining access to logistics services and likely to see their competitiveness improve. It will be a strong advantage for new investors, especially for those from the food sector, because the terminal will feature special refrigerating units making it suitable for storing reefer containers. The transloading terminal in Kutno is also of great importance for the whole of Poland and can serve as a model for such projects. It is the first fully functional logistics and transloading facility, which handles cargo shipped to and from the centre of Poland east, west, north and south.

Gdynia

Gdańsk

Hamburg

Bremenhaven

Frankfurt (Oder)

Poznań

Kutno Teofilów

Rotterdam

Duisburg

Antwerp

Brzeg Dolny

Kolbuszowa

Gliwice

Mostiska

Source: “Intermodal a green way” PCC Intermodal Graphic design: Cushman & Wakefield Benefiting from its location in central Poland, the Łódź province continues to attract new transport projects having a positive impact on its economy. The region is an important transloading hub for container transport, as evidenced by completed and ongoing projects.

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“What factors determine companies’ activities?” LOGISTICS AND PRODUCTION

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LOGISTICS AND PRODUCTION GEOGRAPHICAL DETERMINANTS OF ACTIVITIES

An appropriate combination of several key aspects is crucial for manufacturing companies which need to consider their entire operational (logistics) chain, from sourcing raw materials and half-finished products required in manufacturing through to shipment of finished goods and products, i.e. choosing the right sales channel. Manufacturers very often operate in clusters to benefit from the synergy and availability of many other similar companies from their respective industries. Another critical factor to consider is the labour market and access to a skilled workforce. Manufacturing companies usually employ large numbers of people and tend to focus on locations that will facilitate recruitment of relevant specialists. A large workforce will also require appropriate infrastructure to be put in place: well-designed office and social space, and easy accessibility by public and private transport. Manufacturing companies usually choose one of two available options, depending on the type and size of their business. They opt either for well-connected urban locations with easy access to skilled labour and an appropriate transport network or for leasing space in BTS (Built-To-Suit) buildings. The latter option means operating in a non-urban location - chosen by a tenant - that meets the requirements of its supply chain and provides tailor-made business infrastructure from the start. Investors opting for BTS projects are also likely to have a greater choice of plots and to usually benefit from cheaper labour. ESSENTIAL FEATURES FOR MANUFACTURING T he choice of an appropriate location depends on the type of business and is key to success of any company. Among many aspects to consider when making a decision are access to transport infrastructure and labour markets.

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LOGISTICS AND PRODUCTION GEOGRAPHICAL DETERMINANTS OF ACTIVITIES

ESSENTIAL FEATURES FOR LOGISTICS

By contrast, for logistics providers and retailers, key factors in locating distribution and warehouse centres are the geographical distribution of sales points and access to main transport routes. Research shows that transportation costs generally account for more than 50% of the supply chain costs. Choosing the right location for a warehouse is therefore critical to a company’s bottom line. Companies providing logistics services from Poland to Western Europe have taken a particular liking to locations near the German border while those operating throughout Poland often have their central warehouses in Central Poland or nearby. Well-connected locations in non-urban areas with easy access to motorways and fast roads are optimal for logistics facilities. With further road infrastructure improvements, individual regions or parts of cities can see their popularity grow or wane following the completion of a new stretch of road. Warehouse lease costs are a major factor impacting location decisions by both logistics and manufacturing companies. They vary according to location and type of space, and are usually driven by market forces such as current trends, demand and supply, land prices and construction costs. A mature local market will have a wider choice of potential locations for tenants. Other magnets attracting companies seeking to acquire new space will also include regional investment incentives and the open and entrepreneurial approach of local governments. To sum up, a number of factors are likely to influence companies’ decisions to locate production and logistics facilities - these include geographical criteria, the type of business operations or purely financial aspects such as a simple profit and loss account. Each region in Poland has its own specific features that attract more manufacturing or logistics companies than others. Central Poland, which benefits from its geographical position, transport network and access to the interchange of the A1 and A2 motorways, proximity to consumer markets (Łódź lies close to many large cities such as Warsaw and Poznań) and its industrial past, attracts companies from various industries. It is an optimal location for a setting up a new production plant or a new distribution centre.

TAILOR YOUR BUSINESS IN ŁODŹ | PUBLICATION BY CUSHMAN & WAKEFIELD

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LOGISTICS AND PRODUCTION MARKET BREAKDOWN BY SECTORS AND INDUSTRIES

TENANTS BY SECTOR: LOGISTICS AND PRODUCTION The presence of many companies with a similar business profile in a given region is evidence of its specific strengths. This also suggests that the region also provides easier access to relevant suppliers, subcontractors and labour. Key tenants on the Polish market are logistics providers and retailers as they account for approximately 60% of warehouse take-up. Another major market player is light manufacturing. The percentage share of each of the above sectors in the economy of each region varies across Poland. In terms of region-wise distribution, especially with regard to the pillars of the Polish warehouse market, i.e. the Big Five (Warsaw, Upper Silesia, Central Poland, Poznań and Wrocław), Upper Silesia has a higher percentage of tenants specializing in light and heavy manufacturing. By contrast, in Poznań, logistics operators and retailers account for a larger proportion of tenants.

How does this look in the Central Poland region ?

SHARE OF LEASED SPACE BY TWO MAIN SECTORS Logistics Production

71,2%

28,8%

0%

20%

40%

60%

80%

100%

Source: Cushman & Wakefield

In Central Poland, logistics providers account for nearly 71% of occupied warehouse stock, with approximately 29% contributed by production companies. The dominance of logistics and other logistics-related industries (e.g. retailers) affirms the advantages of its central location, which is key for their business resilience.

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LOGISTICS AND PRODUCTION MARKET BREAKDOWN BY SECTORS AND INDUSTRIES

SUBREGIONAL STRENGTHS

Of all the smaller subregions of Central Poland, Stryków and Piotrków Trybunalski have attracted the highest percentage of logistics companies.

LOGISTICS AND PRODUCTION BY SUB-MARKET

100%

5%

23%

33%

39%

90%

95%

80%

70%

77%

10% TAILOR YOUR BUSINESS IN ŁODŹ | PUBLICATION BY CUSHMAN & WAKEFIELD 20% 30% 40% 50% 60% Piotrków Trybunalski

67%

61%

Sub-markets*

Stryków

Łódź

Logistics

Production

Source: Cushman & Wakefield * Głuchów, Piątek, Łowicz, Koluszki, Kutno, Radomsko, Zgierz, Rawa Mazowiecka

This is another confirmation of the importance to logistics providers of access to road infrastructure and an appropriate location. Stryków, which is part of the Łódź Conurbation, is located approximately 20 km north-west of Łódź. Being a central point on Poland’s road map and having access to the A1 and A2 interchange, it is one of the key transport nodes in Poland and in this part of Europe. There are nearly 327 km of existing expressways and motorways within a 50 km radius and around 728 km within a 100 km radius.

Stryków Radius 50 km TOTAL LENGTH OF EXISTING SECTIONS OF EXPRESS ROADS AND MOTORWAYS: 327 km

Stryków Radius 100 km TOTAL LENGTH OF EXISTING SECTIONS OF EXPRESS ROADS AND MOTORWAYS: 728 km

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LOGISTICS AND PRODUCTION MARKET BREAKDOWN BY SECTORS AND INDUSTRIES

Piotrków Trybunalski presents a similar picture. It is another major transport node thanks to its convenient location and national and international roads running through the city, i.e. the A1 motorway, the S8 expressway and national roads 12, 74 and 91.

Piotrków Trybunalski Radius 100 km TOTAL LENGTH OF EXISTING SECTIONS OF EXPRESS ROADS AND MOTORWAYS: 757 km

Piotrków Trybunalski Radius 50 km TOTAL LENGTH OF EXISTING SECTIONS OF EXPRESS ROADS AND MOTORWAYS: 203 km

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LOGISTICS AND PRODUCTION MANUFACTURING ACTIVITIES

T he Łódź province has strong industrial traditions. Historically associated with textile manufacturing, it had for years been an important centre of the cotton industry in Europe. What attracts manufacturers to the Łódź province todayisundoubtedlyitslocation,which provides easy access to suppliers, subcontractors, skilled labour and a strong investment potential and land availability. The percentage share of manufacturers in the vicinity of Łódź (around 33%) is above the regional average. So is their share in Koluszki, Kutno and Radomsko, where it is around 39%. TAILOR YOUR BUSINESS IN ŁODŹ | PUBLICATION BY CUSHMAN & WAKEFIELD 160,5 k sq. m 129,5 tys. mkw. 79,8 k sq. m 54,9 k sq. m 42,5 23,9 Pharmaceutical Automotive FMCG Printing k sq. m k sq. m 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

33%

39%

Production Logistics

67%

* Głuchów, Piątek, Łowicz, Koluszki, Kutno, Radomsko, Zgierz, Rawa Mazowiecka

61%

Sub-markets*

Łódź

Source: Cushman & Wakefield

MANUFACTURING TENANTS BY INDUSTRY

Other

Today, there are many production industries present in Łódź and other smaller towns - these include automotive, electronics, chemical, pharmaceutical, FMCG, printing and other. Engineering, construction and machinery companies are key manufacturing tenants accounting for approxi mately 402,000 sq m of occupied stock in the region. Among them is K-Flex, a global manufacturer of insulation and acoustic materials, which has a complex of buildings totalling approxi mately 100,000 sq m in Wielenin Kolonia near Uniejów.

Engineering, construction & machinery

402,4 k sq. m

228,7 k sq. m

Packaging

Electronics & white goods

Source: Cushman & Wakefield

Electronics and home appliances are also a major sector in Łódź which is represented by BSH Hausgeräte GmbH, the Polish daughter company of the global BSH Home Appliances Group of Robert Bosch GmbH. Its tumble dryer plant in Łódź, which occupies around 57,000 sq m, is the only factory of its kind across the Group in Europe. It is located within the Central European Logistics HUB alongside the 79,000-square metre BSH Logistics Centre with its own railway siding. The complex also includes the Appliance Park spanning approximately 30,000 sq m, which was built exclusively for the BSH dishwasher plant as a base for partner manufacturers and subcontractors. Another leading global home appliances maker active in the Łódź province is the Miele Group, which has a plant in Ksawerów. It is also worth noting that Dell has invested in building a plant in Łódź Widzew that produces computers, servers and IT infrastructure elements. The plant ensures supplies to its clients across EMEA. Other leading industries in the region include packaging, pharmaceutical and medical, as well as automotive.

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LOGISTICS AND PRODUCTION ACTIVE INDUSTRIES IN THE CENTRAL POLAND REGION

A classification of companies operating in Central Poland into individual sectors reveals two key tenant sectors. One is retail accounting for approximately 33% of occupied warehouse stock in the region and the other is logistics (3PL) with a 23% share. They are followed by engineering, construction and machinery (around 11%), e-commerce (8%) and electronics and home appliances, mainly manufacturers, with 6%.

RETAIL 33% 23% 11% ENGINEERING, CONSTRUCTION & MACHINERY UTILIZATION OF WAREHOUSE SPACE BY INDUSTRY

ELECTRONICS & WHITE GOODS 6% 3% 2% P A C K A G I N G PHARMA CEUTICAL

2% 4%

A U T O M O T I V

E-COM MERCE 8%

FMCG COURIER 2%

3PL

PRIN TING

O T H E R

2%

1%

Source: Cushman & Wakefield

Key retailers - the largest group of active tenants - by product category are those trading in Home & Living, that is homeware, garden supplies, building materials and many other products. These include such retailers as Leroy Merlin, OBI, Castorama and Jysk, which all operate large distribution centres in the vicinity of Stryków, Natolin and Radomsko. Retailers offering electronics and home appliances are the second-biggest group of tenants, accounting for 22% of occupied warehouse stock in the region. This relatively strong group is represented by Media Expert, which has a distribution centre in Łódź, Neonet with its distribution facility in Pabianice and Euro-net with a warehouse in Łódź.

Other leading tenants are from such sectors as FMCG, children’s items, sports equipment and apparel.

RETAIL INDUSTRY BY CATEGORY PRODUCTS

FMCG

RTV/AGD

16%

22%

Children items

5%

3% 1%

Sport equipment Apparel

53%

Home & Living

Source: Cushman & Wakefield

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LOGISTICS AND PRODUCTION ACTIVE TENANTS AND E-COMMERCE

Of all companies from the above sectors, more than 50% also operate e-commerce platforms to offer products online. Retailers trading in Home & Living items as well as electronics and home appliances account for the largest percentage share.

TENANTS ALSO ACTIVE IN E-COMMERCE

55,6% TAILOR YOUR BUSINESS IN ŁODŹ | PUBLICATION BY CUSHMAN & WAKEFIELD No Source: Cushman & Wakefield RTV / AGD FMCG Apparel Home & Living

44,6%

Yes

ACTIVE E-COMMERCE TENANTS BY PRODUCT CATEGORY

E-commerce platforms

Children items

Automotive parts

Sport equipment

Printing

Other

Industry components

Medical

100,000 200,000 300,000 400,000 500,000 600,000 700,000 sq m

Source: Cushman & Wakefield

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LOGISTICS AND PRODUCTION TESTIMONIALS

Logistics growth from the perspective of Arvato Why did the company set its sights on Strykow?

T he choice of location for a new logistics centre is influenced by many factors. We chose Stryków in the Łódź region for its central position in Poland and direct access to the A1 and A2 motorways. In addition, the presence of many inner-city courier hubs in Łódź makes for improved efficiency as orders can be picked up even in the evening. This enables us to provide next day deliveries which e-commerce customers frequently request. Another contributor to the attractiveness of Stryków is the availability of modern warehouse facilities. The world’s leading developers are present here - they offered us ready-to-occupy space within the time-frame required for our implementation schedule. The labour market of the Łódź province was also a significant factor. Above all, i t provides direct access to a skilled logistics workforce on account of the presence of many logistics and production companies here. In addition, according to the Polish Agency for Enterprise Development (PARP) , the region’s unemployment rate stands at just over 5 per cent and is higher than that in the other provinces where we have our logistics centres: in Greater Poland (3 per cent) and in Mazovia (4 per cent). This enables us to recruit employees in nearby towns and communes who will be commuting to Stryków.

Any decision to enter a new region and to open a logistics centre there must be preceded by a thorough analysis of the local market, labour availability and its suitability for a company’s strategy.

Lidia Ratajczak-Kluck President of the Management Board of Arvato Polska

23

LOGISTICS AND PRODUCTION TESTIMONIALS L ast year marked the 20th anniversary of Media Expert on the Polish market. In the last two decades we have grown into a leader in electronics and home appliances in Poland with more than 550 stores in 440 cities. Despite undeniable headwinds facing Polish and European companies, we have enjoyed strong growth in recent years. The pandemic, followed by the armed conflict in Ukraine, which continues to send ripple effects across key economic indicators, further motivated the company’s officers to adopt a bold but responsible approach to building its value. Our strategy included infrastructure investments to enhance the quality of customer service. Modern warehouses and logistics solutions, as well as the expansion of our fleet to include zero emission vehicles have translated directly into optimized omnichannel retailing which is key to us. Today, the effects of these measures are appreciated not only by customers but also by a wider business community, as best evidenced by the Best Omnichannel Brand award for Media Expert in the international Best Brands Awards competition, organized in Poland for the first time. Without a doubt, our presence in Łódź distribution centres is fundamental to achieving our objectives of optimizing our supply chain and cutting online order fulfilment times. The Central European Hub (CEH) and the distribution centre in Zakładowa Street are among the most modern facilities of this kind in our country. Last year saw the completion of the last phase of the CEH project, which brought our total warehouse footprint in Łódź to over 320,000 sq m. It consists of five buildings with advanced warehouse automation systems, conveyors, innovative parcel sorting technologies, mobile racking and put-to-light stations. These locations have created nearly 2,000 jobs. An important factor that influenced our decision to strengthen our presence in these distribution centres was their prime location near key motorway junctions enabling fast and safe deliveries to both online shoppers and to each of our 550+ stores. Key to efficient delivery logistics is also the presence of the central sorting facilities of leading courier firms in Łódź and in its immediate vicinity, which makes for even more efficient order fulfilment by offering 24 hour delivery services. Media Expert has been present in Łódź warehouse and logistics centres for over a decade. The positive business climate here has also been instrumental in our decision to remain here for many years and to launch new projects. Those behind it perfectly understand today’s needs and challenges of companies aiming to improve their competitiveness and to build relationships with end customers through a high service quality and reliable deliveries. Logistics growth from the perspective of Media Expert Why did the company set its sights on Łódź? TAILOR YOUR BUSINESS IN ŁODŹ | PUBLICATION BY CUSHMAN & WAKEFIELD

Michał Mystkowski Media Expert Spokesperson

24

LOGISTICS AND PRODUCTION TESTIMONIALS

W e are pleased to be able to share our perspective on the business potential of Central Poland. We at Completio are fascinated by the growing significance of the Łódź region and would like to make our own contribution to the rapid growth of this part of Poland. Łódź, which is situated in the centre of Poland, has long ceased to be just a geographical point on the country’s map. It is a place of vibrant businesses, innovations and ample growth opportunities. Our company consciously chose this location to build on our strategic thinking and the region’s potential. One of our latest achievements has been the introduction of a FIT-TO-SIZE automated packing machine that does packing in three seconds. It is only one of many tools that illustrates our commitment to innovation, further enhancement of our service quality and care about our planet. Our FIT-TO-SIZE machine combines modern technology and robotics with end-to-end and efficient warehouse logistics. With it, we are able to even better adjust the packing process to individual client requirements, saving time and resources and caring about the environment. We at Completio believe that modern business is not just about warehousing or logistics - it is, above all, about providing end-to-end support for clients. We offer fulfilment, contract logistics and picking services to deliver a full range of modern and sustainable business solutions. Order fulfilment with us is just three seconds between a click to a parcel being ready. We stay flexible and open to new challenges, which allows us to successfully respond to the growing needs of current and future clients. Your challenges are our logistics solutions. With our precise planning and efficient execution, we are able to meet even the most demanding expectations. Learn the art of perfect packing with Completio. Our company also shows concern for the environment. We are therefore proud to have received an international Cleaner Production Certificate which confirms our commitment to green practices and sustainable growth. Environmental responsibility is an important aspect of what we do. We are part of Łódzka Specjalna Strefa Ekonomiczna SA (Łódź Special Economic Zone), which underscores our relationship with the Łódź region and commitment to its economic growth. Since March 2021 this cooperation has opened up new prospects for us and enabled us to even more efficiently support the local labour market. Logistics growth from the perspective of Completio Why did the company set its business in Łódź?

Piotr Piaskowski President of the Management Board of Completio

25

LOGISTICS AND PRODUCTION TESTIMONIALS

T he popular real estate slogan ‘Location, location, location’ takes on a new meaning in the case of such a dynamic and demanding sector as CEP (courier, express and parcel services). We estimate that last year InPost couriers in Poland alone handled on average around 1.4 million parcels every day and the entire InPost Group delivered 745 million packages. Without appropriate logistics facilities, such stellar results would not have been achieved. When looking for new warehouse locations, we primarily target modern centrally located buildings close to key transport routes. In this respect, the Łódź province is undoubtedly one of the most attractive and promising markets for our business. Ample development land, a wealth of incentives and further improvements to local infrastructure make this region a top destination for leading logistics providers. This is why in 2022 we chose Łódź as a location for our 8,700 sq m logistics centre and decided to lease a larger space in an industrial park near Piotrków Trybunalski in which to accommodate our InPost Fulfillment warehouse providing end-to-end logistics services for the B2B e-commerce market. The facility will offer companies access to InPost’s warehouse space, automated order processing, as well as final order picking and shipping services. Our properties are so conveniently located that this translates into optimized delivery times and reduced carbon footprint. A sustainable approach to logistics processes is one of our business priorities. In addition to hundreds of electric courier vans already being in use, we are deploying new LNG powered tractor units and are doing our best to encourage our clients to go green. At the beginning of the year, together with Fundacja Odzyskaj Środowisko we launched ECOreturns with logistics platform Apaczka.pl as its partner. Customers can use the service to give away items which are in good working order but they no longer use so that they are redistributed, thereby supporting the circular economy. Logistics growth from the perspective of InPost Why did the company set its business in Central Poland?

TAILOR YOUR BUSINESS IN ŁODŹ | PUBLICATION BY CUSHMAN & WAKEFIELD

Dariusz Lipiński Vice-President of the Management Board of InPost

26

LOGISTICS AND PRODUCTION TESTIMONIALS Ł ódź has seen healthy growth in recent decades. This city, which has a strong textile-manufacturing tradition, has reemerged in the 21st century as a modern business centre. Manufacturing companies play a key role in it again - these include modern plants, mainly in the electronics sector, with many located next to R&D centres or shared services centres. Without a doubt, Łódź’s key strengths in competing for new projects are the immediate proximity of two motorways, expressways and upgraded railway lines. Another driver of the city’s economic growth is the planned construction of the Central Transport Hub (CPK). In addition, Łódź offers investors broad support, including a wide range of development sites within its administrative borders. Investors can also obtain tax exemptions in the Łódź Special Economic Zone. Łódź is also a strong academic centre with a large pool of educated, talented and motivated employees. All these factors will continue to drive the successful growth of Łódź and the revival of central Poland as an attractive place to work and live. The 30 years of BSH’s rapid growth in Łódź are testimony to this. Business development from the BSH perspective Why did the company set its business in Łódź?

Konrad Pokutycki President of the Management Board of BSH Domestic Appliances Sp. z o.o.

Central Poland has always been perceived as key logistics market in Poland by international investors. Both in terms

of achieved pricing and volumes of transactions, Central Poland is on the podium in Poland, together with Warsaw and Upper Silesia. Central location, excellent road connections in all directions, available labour force, all those factors attracted strong occupiers, which have been followed by investors.

Paweł Partyka Partner, Head of Capital Markets

27

LOGISTICS AND PRODUCTION TESTIMONIALS

Business development from the Miele perspective WWhy did the company set its business in the Łódzkie region? Ł ódź is located in the heart of Poland, naturally positioning it as a central logistics and distribution hub. The city is intersected by important highways, express roads, and railway lines, enabling swift and easy access to key domestic and European markets. The city and businesses in the region are actively investing in infrastructure development, including the construction of modern industrial parks and logistics centers. This is particularly attractive for companies looking to initiate or expand operations in Central Europe. The Łódź region boasts a long history of industrial production, especially in the household appliances sector, which translates to access to experienced workers and suppliers. This makes it an appealing location for manufacturing companies, including Miele, which has been heavily investing in its washing machine production facility in Ksawerów since 2018. There are plans underway to launch the second segment. Łódź is home to numerous higher education institutions, including the Łódź University of Technology, the University of Łódź, and many other educational institutions. They provide a steady influx of highly qualified employees, especially in the fields of engineering, logistics, and production, and serve as a talent pool for management positions.

TAILOR YOUR BUSINESS IN ŁODŹ | PUBLICATION BY CUSHMAN & WAKEFIELD

Labor costs in Łódź and Poland are lower compared to Western European countries. This can be a significant advantage for companies looking to reduce operational expenses.

Furthermore, local and regional authorities are eager to collaborate closely with investors to facilitate market entry and navigate through administrative processes.

All of these factors make Łódź an excellent place for business development, friendly and open to investors, both those already present in the market and those considering investing in the region.

Tomasz Kowalski Managing Director– Ksawerów Plant (KS/WL)

28

“Łódzkie voivodship has for years held the third position on the list of the largest regional markets”

WAREHOUSE MARKET IN CENTRAL POLAND

29

WAREHOUSE MARKET IN CENTRAL POLAND ŁÓDŹ REGION IN COMPARISON TO POLAND

4 326 000 518 000 330 000 377 000 3,60-4,80 7,6%

30 662 000 4 603 000 2 064 000

Stock (sq m) Supply (sq m) last 12 months Vacancy (sq m) Vacancy rate (%)

POLAND

ŁÓDZKIE

6,7%

Under construction (sq m) Headline rents (BIG-BOX) (Eur/sq m/month)

2 111 000 3,60-6,95

A t the end of June 2023, total warehouse and industrial stock in Central Poland stood at 4.33 million sq m, up by 14% year-on-year. The Łódź province has for long been the third-largest regional market in Poland, behind Silesia (5.27 million sq m; +16% y/y) and Mazovia (6.27 million sq m; +13% y/y), but ahead of Lower Silesia (4.04 million sq m; +20% y/y) and Greater Poland (3.35 million sq m; +23% y/y). The Łódź province has for years seen strong demand for warehouse space coming from established companies choosing to expand there and from newcomers from such sectors as logistics, retail, e-commerce, home appliances, electronics, packaging and fashion. Key tenants include well-known Polish and international brands such as Zalando, Amazon, Leroy Merlin, Smyk, Agata Meble, Castorama, Carrefour, Media Expert, OBI, Oponeo, B/S/H, Ontex, Corning, Kellogg’s, Whirlpool, Sonoco, K-Flex, InPost, Arvato, Kuehne+Nagel, Spedimex, and Rohlig Suus. The warehouse and industrial stock in Central Poland is dominated by big-box projects. The average usable area of such schemes exceeds 30,000 sq m, with the smallest warehouse units for lease starting from around 2,000-3,000 sq m. Also popular in the region are BTS (Built-To-Suit) projects that are designed to meet individual occupier requirements. The largest BTS projects range from more than 50,000 sq m to 130,000 sq m, with many serving as central warehouses intended for distribution of goods to domestic and international markets. Some are developed for manufacturing or special purposes such as returns centres, cross-dock warehouses and courier hubs enabling swift handling of goods. Smaller urban logistics projects - dubbed City Flex or City Logistics by some developers - have grown in popularity in recent years. Most are located in the central zone of the Łódź Conurbation, in Łódź or in its immediate vicinity, with the average size of such buildings being approximately 10,000 sq m. Warehouse units for lease in such projects start from around 1,000 sq m. Small urban warehouses attract strong interest from such sectors as light manufacturing, FMCG, logistics, courier services, printing and pharmaceutical. In contrast to, for instance, the Warsaw market, the smallest warehouse and office projects offering modern SBUs (Small Business Units) starting from around 400 sq m account for a small proportion of the region’s total stock. This is due to the fact that demand for class A warehouse space in the Łódź market centres on buildings starting from approximately 2,000 sq m, while occupiers looking for the smallest warehouse units tend to target class B facilities. Key developers that have been active in Central Poland for years include Panattoni Europe, 7R SA, Hillwood, Prologis, P3 Logistics Park, SEGRO, GLP, Logicor and MLP Group. Other investors who have acquired development plots or launched projects in the region include CTP, MDC2, White Star and Mountpark.

TAILOR YOUR BUSINESS IN ŁODŹ | PUBLICATION BY CUSHMAN & WAKEFIELD

WAREHOUSE STOCK ON REGIONAL MARKETS

Vacancies

Leased space

Vacancy rate

7,000,000

14%

6,000,000

12%

5,000,000

10%

4,000,000

8%

3,000,000

6%

sq m

2,000,000

4%

1,000,000

2%

0

0%

Silesia

Łódzkie

Lubusz

Masovia

Opolskie Warmia-Masuria

Lubelskie

Podlaskie

Pomerania

Subcarpathia

Lower Silesian

Lesser Poland

Świętokrzyskie

Greater Poland

West Pomerania

Kuyavia-Pomerania

Source: Cushman & Wakefield

30