CONTENTS. 1. Poland key stats Lublin in Europe Lublin key stats Lublin s investment potential Office market in Lublin 10

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2 CONTENTS 1. Poland key stats 4. Lublin in Europe 5 3. Lublin key stats 6 4. Lublin s investment potential 8 5. Office market in Lublin Warehouse market in Lublin Lublin s major investors Investor support organisations and institutions 17

3 POLAND KEY STATS. LUBLIN IN EUROPE Distances from key cities 38.5 M population [31/1/014] PLN 4,379 average gross monthly salary private sector 14.1 M working-age population 0.5% Inflation rate [014] 11% unemployment rate 3.3% GDP growth Poznań 445km Wrocław 514km 504km Gdańsk 308km Łódź 161km Warsaw Lublin Kraków 73km 600km Vilnius 509km Minsk 1,79km Moscow EUR 67.3 B European subsidies for Source: GUS EUR 8.5 B European subsidies for USD 55. B foreign direct investment in Poland [ ] London 1,570km Paris Brussels 1,558km 1,430km 751km Berlin Prague 65km Vienna 73km Lublin Lviv 0km 610km Kiev Lublin in Poland and in Europe EUROPE POLAND LUBLIN PROVINCE LUBLIN

4 LUBLIN KEY STATS 343,600 population [31/1/014] 5% population under the age of % working age population 8.6% unemployment rate PLN 3,81 average gross salary [013] 7% higher-educated population [011] Lublin Castle Historic apartment houses 71,000 university students Source: GUS 1,00 university graduates 9 universities and other higher education institutions New City Hall, City Office Grodzka Gate Tribunal Dominican Church and Monastery Krakow Gate Juliusz Osterwa Theatre Cathedral Pobrygidowski Church

5 4. LUBLIN S INVESTMENT POTENTIAL Infrastructure development A Biała Podlaska motorways, expressways and ring roads in use S19 motorways, expressways and ring roads under construction Lublin is the largest and the most rapidly developing city in eastern Poland. Thanks to its strategic location, dynamically evolving infrastructure and ready access to a young and welleducated workforce, it is currently one of the most attractive destinations for those looking to invest in Poland. The city provides attractive sites for future investments and numerous incentives for entrepreneurs, as well as competitive business costs. In recent years, Lublin s growing investment potential has been acknowledged by several local and global investors, who have decided to carry out several projects such as investments in new office and warehouse space. Lublin is of special interest to investors due to its close proximity to foreign markets, such as Ukraine and Belarus, and also thanks to lower labour costs and ready access to its highly-qualified workforce. motorways, expressways and ring roads bidding process S17 motorways, expressways and ring roads planned A S19 S1 S17 motorway and expressway numbers functioning railways SSE S17 Special Economic Zone [Specjalna Strefa Ekonomiczna] Lublin Airport S1 SSE Lublin S17 S19 S19 Chełm 74 Zamość 74 S17 Lublin was also voted one of the best cities for business in Poland in the Financial Times FDI 015 Polish cities of the future ranking, where it came second in the Cost Effectiveness category for large cities. The new Lublin Airport was completed and opened for use in 01. It offers convenient connections with 14 cities in 10 countries in Europe and beyond. In 014, about 190,000 passengers travelled to or from this airport on over 3,000 flights. The airport is located about 10 km from the city centre, close to the S17 expressway and Świdnik Regional Industrial Park. The opening of this airport significantly boosted the economic development of the Lublin region. The Lublin Subzone forms part of the EURO-PARK MIELEC Special Economic Zone. The Subzone was created in 009 and covers 118 hectares [with plans for expansion up to 00 hectares]. So far, around 30 industrial, logistics, and hightech entities have invested in the Subzone, creating over,000 jobs. Investment volume in the Subzone exceeds PLN 500M, and is expected to increase to several billion. Companies wishing to invest in the Subzone can expect public help in the form of a company income tax exemption of up to 70% on investment expenses, and property tax exemption, as part of the regional aid program for job creating investors Special Economic Zone 4. European funds Thanks to financing from the European Union, over 16,000 projects were completed, with a total value of more than PLN 9B. The total value of the projects financed in the Lublin Voivodship exceeded PLN 19B, including PLN 1.5B for projects in Lublin itself. Some major projects completed in Lublin with the help of European funds: several road infrastructure projects, infrastructure for the SEZ EURO-PARK MIELEC, incorporating new areas into the zone, and revitalising Lublin s Old Town Lublin Airport

6 10 5. OFFICE MARKET IN LUBLIN al. Warszawska Kraśnicka Nałęczowska Sławin Las Stary Gaj Sławinek Konstantynów Węglin Czuby 9 Czechów al. Solidarności Głębocka Choiny 15 Bursak Smorawińskiego Śródmieście Stare Miasto Piaski Wrotków The total supply of modern office space* in Lublin [classes A and B] is close to 150,000 m. Lublin is now the 9 th largest regional market in Poland in terms of office space supply. The modern office space market in Lublin started to develop in the years , when a total of around 3,500 m was delivered to the market, including Centrum Zana I and Green House. The largest supply growth was noted Las Dąbrowa in the years 007, 011, and 013, when the total office supply increased by nearly 64,000 m Droga dojazdowa, which equals 4% of the city s total. This period saw the completion of do A4 10 such office space projects as Gray Office Park [A, B, and C], with 36,700 m of space, 3 and Nord Park [B and C], with 8,50 m. * Modern office buildings completed after Office stock supply in Lublin New supply per year [m ] 30,000 5,000 0,000 15,000 10,000 5, Cumulative supply [m ] 160, ,000 10, ,000 80,000 60,000 40,000 0,000 7 pl. Unii Lubelskiej al. Tysiąclecia Bronowice Kunickiego Rudnik Ponikwoda Kalinowszczyzna Kośminek Dziesiąta Abramowice 5 Majdan Tatarski Hajdów Zadębie Wincentego Witosa Existing projects [larger than,000 m ] 1 Gray Office Park A-D Centrum Zana I, II 3 Nord Park A, B, C 4 Zana Office I, II 5 Witosa I, II 6 TPSA 7 CHB Dalimex 8 W9 Investment 9 JPBC Business Center 10 Rupes 11 Batory 1 TBV Office Center 13 Zana 11 Damar s c. 14 Centrum Biznesu Kaskada 15 Image Planned projects Felin SSE 5.1 Outlook and future trends In the next two years, the supply of new office space will reach about 50,000 m, while for the years several large projects are planned, which will significantly increase the total office space supply in Lublin. These investments include, among others, Soul Lublin located at the intersection of Szeligowskiego and Smorawińskiego streets, which will provide 18,000 m of office space, and a multi-use scheme in the former Helenów bus depot, which will be developed by Centrum Zana [the total leasing space of almost 100,000 m ]. 5. Office locations in Lublin Buildings such as Centrum Zana I and II, Zana Office I and II, Gray Office Park A-D, Zana 11 the Damar building, Hanesco Zana 41 or Zana House are located in the vicinity of Tomasza Zana and Konrada Wallenroda streets, as is the majority of Lublin s office supply. Most of the remaining office buildings are located near Witosa [in the vicinity of the Special Economic Zone], Jana Pawła II, Wojciechowska, and Związkowa streets. Another popular location is the city centre, especially the area of Krakowskie Przedmieście, where office space is located mainly in refurbished historical buildings, typically occupied by banks and law firms. In recent years, the northern parts of Lublin [Szeligowskiego and Smorawińskiego streets] have also been increasingly popular as locations for modern office buildings. The Nord Park buildings are located in this area [three buildings, 13,000 m ], and the Soul Lublin investment is planned [two buildings, 18,000 m ]. 5.3 Growing demand for new office space In recent years, BPO/SSC companies have increased their business activity in Lublin. The constant expansion of this sector, employing more and more people, results in a growing demand for office space. Several new players entered the market, thanks to the stable economic and political situation in Poland, a highly-qualified workforce and relatively low operational costs in Lublin as compared to more mature markets, such as Kraków, Wrocław, Tricity, Katowice, or Poznań. At the moment, a dozen or so BPO/SSC/IT centres operate in Lublin, including: Asseco Business Solutions, Britenet, CompuGroup Medical Polska, eleader, Comarch, Infinite, Genpact, Inteligo, PKO BP, Orange, Proama, Convergys, RTV EURO AGD, SII, Mobica and Transition Technologies. The rapid growth of the BPO/SSC sector in Poland further increases Lublin s potential. Large numbers of university students and graduates, relatively low salaries, and office leasing costs, as well as the creation of the Special Economic Zone, may well attract further international investors. As a result, we might expect a higher demand for office space and stronger activity in the lease market Centrum Biurowe Kraśnicka Soul Lublin New supply per year Cumulative supply (available) Source: DTZ

7 5.4 Decreasing vacancy rates Vacancy rates of modern office stock in Lublin 6. WAREHOUSE MARKET IN LUBLIN Czechów Choiny Bursak Rudnik al. Warszawska As a result of continued demand coupled with a decrease in the supply of new office space in 014, vacancy rates fell from 17.8% at the end of 013 to 9.3% in 014, which was one of the sharpest decreases in vacancy rates in Poland. 5.5 Attractive rental rates Asking rents for modern office space in Lublin are at about EUR 10-13/m /month. Average lease rates are at about EUR 11-1/m /month. In addition to the rents, utility bills run at about PLN 10-13/m /month. When compared to other major regional cities in Poland, rent rates for prime office space in Lublin are lower. In the coming years, Lublin should maintain this advantage, which will in turn result in attracting even more tenants. Lublin Łódź Katowice Szczecin Tri-city Wrocław Poznań Kraków 17.8% Source: DTZ 10.8% H 013 H1 014 H 014 Asking rents for prime office stock in Lublin vs. Poland s other regional cities [EUR/m /month] 9.3% Konstantynów Kraśnicka Nałęczowska Węglin Sławin Las Stary Gaj Currently, there are four modern warehouse properties* in Lublin and its environs totalling 7,400 m with plans to expand this figure to ca. 15,000 m. One of the projects Mełgiewska Logistics Centre is located next to the S1 ring road and will provide 3,000 m of warehouse and light industrial space. Another investment, Millenium Logistics Park, is located in the Lublin Subzone of the EURO-PARK MIELEC Special Economic Zone. The property comprises ca. 10,000 m of light industrial spacewith plans 3 and potential for future expansion up to 55,000 m. Go East Lublin Logistics Centre is located at 5 Do Dysa Street and offers small business units. Currently, the property has 1,600 m of industrial-warehouse space; in the second half of 015, a further,500 m will be delivered. Another modern warehouse property located in Lublin is a 33,400 m warehouse that is being constructed by Goodman; a built-to-suit scheme that will be completed and ready for use in Q 015. * Modern warehouse buildings completed after Sławinek Czuby al. Solidarności Głębocka 10 Smorawińskiego Śródmieście Stare Miasto Piaski Wrotków Las Dąbrowa 1 pl. Unii Lubelskiej al. Tysiąclecia Bronowice Kunickiego Ponikwoda Kalinowszczyzna Kośminek Dziesiąta Abramowice MLP Lublin Majdan Tatarski Hajdów Zadębie 1 4 Wincentego Witosa Existing space: 9,800 m Space under construction: 0 m Target space: 55,000 m 3 Felin Mełgiewska Logistics Centre Existing space: 16,000 m Space under construction: 1,700 m Target space: 3,400 m SSE 1 Source: DTZ 3 Go East Lublin Logistics Centre 13 Existing space: 1,600 m Space under construction:,500 m Target space: 4,100 m 4 Goodman BTS Existing space: 0 m Space under construction: 33,400 m Target space: 33,400 m

8 MLP Lublin 6.1 Outlook and future trends Lublin has one of the largest, largely untapped potential as a location for new logistics and industrial investments in Poland. Its main advantage compared to more developed Polish warehouse hubs is its strategic location near Poland s eastern border and, at the same time, the European Union s eastern border. It allows investors to locate future warehouse buildings in close vicinity to large markets [Ukraine, Belarus] while simultaneously maintaining business stability and security which has become typical for Poland. Another factor which encourages new investments from the industrial-logistics sector is a large supply of highly qualified personnel and relatively low labour and business costs. 6. Warehouse locations in Lublin One of the most attractive locations for new industrial-warehouse investments is the Lublin Subzone of the EURO-PARK MIELEC Special Economic Zone. The Subzone currently comprises ca. 10 hectares of investment area and is located next to Lublin Airport, as well as the S1/S17 expressway. Companies looking to invest in the Subzone can expect incentives such as a company income tax exemption of up to 70% on the capital invested in the zone. So far as many as 30 entities decided to invest in the zone, of which 16 have already started operating. These companies include Alipast Sp. z o.o., Ball Packaging Europe Sp. z o.o., Biomaxima S.A., and ABM Greiffenberger Poland. 6.3 Demand for warehouse space and vacancy rates The demand for warehouse and logistics-industrial space in Lublin remains high. It is generated mainly by industrial and logistics tenants, who highly value Lublin s convenient location and ready access to highly qualified personnel. Retail and FMCG tenants are also showing a growing interest in Lublin as a location for modern warehouse space. As the city develops and more transport infrastructure is built demand for this type of space in the local market is expected to grow steadily. Another cause for this will be the tenants need to move from older warehouse buildings to newly developed schemes. There are plans to expand the existing warehouse and industrial buildings in Lublin in the next years, and to construct new schemes. As a result, the total space of these assets will reach 130,000 m. Considering the Lublin market s strong potential for development, its power of attraction, and a significant interest on the part of warehouse investors, the supply of modern industrial-logistics space is expected to reach ca. 00,000 m by , making the Lublin region one of the fastest growing logistics hubs in Poland. Another location that interests investors is the area around the previously mentioned S1/S17 expressway, which serves as Lublin s ring road. 6.4 Rental rents Asking rental rates for warehouse space remain at a relatively high level of ca. EUR /m /month; a result of a limited supply of modern warehouses and high demand on the tenants part. Asking rates in Lublin are higher compared with Poland s other logistics hubs, which might be another factor encouraging further warehouse investments. Centrum Logistyczne Mełgiewska Warehouse stock in Lublin [m ] 00,000 Asking rents for warehouse stock in Lublin vs. Poland s other regional cities [EUR/m /month] Tri-city 14,900 Kraków region Upper Silesia Lower Silesia Lublin 14 7,400 37,600 Poznań region Central Poland Warsaw zone I Warsaw zone II 15 Existing supply Supply under construction Target amount of warehouse park supply Supply forecast [00] Warsaw zone III,00,50 3,00 3,50 4,00 4,50 5,00 5,50 6,00 Go East Lubelskie Centrum Logistyczne Source: DTZ Source: DTZ

9 7. LUBLIN S MAJOR INVESTORS 8. CITY OF LUBLIN DEPARTMENT OF STRATEGY AND INVESTOR SERVICES Plac Łokietka 1, Lublin Tel.: inwestorzy@lublin.eu 16 Office investors Batory Investment Centrum Zana Dalimex Damar Max-Bud Kamea Invest MNS Chrzanowscy Interbud TBV Warehouse investors CLM ECOFUNDDESIGN Goodman MLP Group Raben Group Other major investors in Lublin ABM Greiffenberger Polska Sp. z o.o. AgustaWestland PZL-Świdnik S.A. Aliplast Sp. z o.o. Asquini Polska Asseco Business Solutions S.A. Ball Packaging Europe Polska Sp. z o.o. Baxter Manufacturing Sp. z o.o. Biomed Clondalkin Pharma Comarch S.A. Compugroup Medical Sp. z o.o. Convergys Corporation DAEWON EUROPE Sp. z o.o. eleader Sp. z o.o. Genpact Herbapol Lublin SA Inergy Automotive Systems Poland Sp. z o.o. Infinite Sp. z o.o. LUBELLA Sp. z o.o. S.K.A. Mobica Limited Sp. z o.o. MW Lublin Orange Perła Browary Lubelskie S.A. PKO BP POL-SKONE Sp. z o.o. Proama PZ Cormay Sii Sp. z o.o. Solar Future Energy Stock Polska Trimetis Ursus S.A. Mariusz Sagan Director of Department Plenipotentiary of the Major for Euro-Park Mielec Special Economic Zone tel.: mariusz.sagan@lublin.eu Łukasz Goś Supervisor of the Division for Investor Assistance Project Manager for Food Industry tel.: lukasz.gos@lublin.eu Honorata Kępowicz-Olszówka Project Manager for IT/BPO tel.: honorata.olszowka@lublin.eu Michał Grabowiecki Project Manager for IT/BPO tel.: michal.grabowiecki@lublin.eu Przemysław Gruba Project Manager for Logistics and Hospitality Industry tel.: przemyslaw.gruba@lublin.eu Diana Ciszewska Project Manager for Biotechnologies tel.: diana.ciszewska@lublin.eu Igor Niewiadomski 17 Project Manager for Automotive Industry tel.: igor.niewiadomski@lublin.eu

10 Publication prepared for the Department of Strategy and Investor Services for the City of Lublin by DTZ Polska sp. z o.o. DTZ is a global leader in real estate services. We provide real estate services to business, corporate occupier and investor clients, including: retail, office and industrial lease agency, integrated end-to-end service covering property and facility management, capital markets, investment consultancy, valuation, project and building consultancy. Additionally, through the best quality market research and consultancy services, we provide our clients with global and local market knowledge. By forecasting market trends and development, we provide best-in-class long-term solutions and support our clients. DTZ has employees, operating across 60 offices in 50 countries. More information on

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