CEE: Tricity – from backwater to international hub

Poland’s Tricity area has become home to multinational corporations and academia, reports Paul Strohm. 

The Tricity area that borders Poland’s Baltic coastline has been transformed in just a few years from a simple ports-and-resort settlement into a major international business hub. One significant catalyst for the change has been the dramatic improvement in the country’s infrastructure, particularly its transport networks, which accelerated following Poland’s full accession to the EU in 2004.

As transport infrastructure developed, the potential to attract both businesses and a skilled workforce became apparent and entrepreneurial developers could also see a gap in the market for modern business premises. 

Jake Jephcott, chief development officer of investment company TonsaRAIF says the decision to develop the 200,000 sq m Olivia Business Centre in Gdansk was a response to the change in sentiment that had occurred. 

“It was always our home market and a natural choice for us. We felt something was going to happen  and there had been a lack of office product – it had been a tourist destination,” he says. “Business was starting to locate here but there was a feeling that office product could be a key to getting more companies into the area – that was the gap in the market that we saw.”

He says the decision to build the Olivia Business Centre also originated from the availability of “a great plot of land” for sale next to the university. “Gdansk had the scale and size to absorb a big office project,” Jephcott adds.

Olivia Business Centre was developed in response to a change in sentiment towards Tricity

Adam Schroeder, associate regional director North Poland at Cushman & Wakefield, points out that the Tricity’s first three modern office parks were developed by local landlords. But before they became available corporates thinking of investing in the region had bounced away because of the lack of local infrastructure. “When proper office buildings were available, those investors came back,” he says. 

Rapid expansion 

PwC is one firm that started small in the Tricity area but has expanded rapidly. “When we made the decision [to open an office in Gdansk] five years ago the region was developing in terms of business services sector,” says Maciej Przybylowski, partner and head of CEE financial crime team at PwC. 

“It was not a decision that was all that obvious at the time. We saw the huge potential of the region against other more saturated parts of the country,” he adds. “We saw a big and talented pool of labour and the natural beauty of the Tricity area which makes it a great place to live and work – looking back I think we made the right decision.”

Przybylowski says PwC’s Gdansk unit was heavily reliant on local talent, which has been drawn from from universities and colleges regionally. “People from smaller towns in a radius of 200km were attracted by the business in the Tricity region,” he says, but the firm is able to attract people with more experience from various other regions within Poland and internationally. “We have over 25 different nationalities, including people from the US and South America, but the local talent pool remains important and it is growing.”

‘We saw a talented pool of labour and the natural beauty of the Tricity area – looking back I think we made the right decision.’

Maciej Przybylowski, PwC

Another major international presence is US aircraft manufacturer Boeing, which has a base in Gdansk. Rafal Stepnowski, Boeing’s director of government affairs Poland, says that access to a good local talent pool remains important even though the attractions of the Tricity area mean it is possible to recruit from further afield when the skills are not available locally. 

Stepnowski points out that the local university has played a key role in the economic growth of the region. In his own case, the then family-owned IT business that Stepnowski started and which later became part of the aircraft manufacturer, was associated with university, in part because at that time – the 1990s – it had the only office-type space available. 

“The reason we are here is coincidental – we started a family business. At that time universities were the only places where you could rent some space.”

As well as Boeing, the Tricity branches of Amazon and Intel originated in the same university faculty building and for similar reasons. 

Academic relationship 

“Our company was private until 2006 when Boeing acquired the assets. If you look at this component, the relationship with academia combined with entrepreneurship, it is the root of the success of many companies in the city. If you take Amazon, Intel and Boeing, three big brands, they all derive from the same building. Back in the 90s we were neighbours,” says Stepnowski.

Inevitably the crisis has also had an effect on the property market and the flow of deals. Schroeder says 2020 was expected to be a record year for attracting new investors to the Tricity area. “A lot has of course changed but none of it was cancelled. Many of the projects are frozen and they are adopting a sit-and-wait strategy, but Tricity remains their first choice in Poland,” he says.

Looking to 2021 Jephcott says “a big uptick” is due. “People want to live here and we are going to be aided by the current health crisis. It will give us momentum because business process services have been more resilient which is going to be very positive for the region.” 

Ingredients of Tricity’s success

Gdynia is one of two ports in the Tricity area

The Tricity area is the driving force behind Pomerania, Poland’s northernmost region, which lies on the southern edge of the Baltic Sea.

Tricity is the region’s largest conurbation. So-called because it comprises three adjacent urban areas: port city Gdynia, resort city Sopot and another port city, Gdansk, the Tricity area has changed dramatically in the last 20 years. Improvements to the transport infrastructure, both within and serving the region, have provided part of the impetus for progress, according to Adam Schroeder, associate regional director North Poland at Cushman & Wakefield.

Gdynia and Gdansk are both active ports. In Gdansk’s case, it is Poland’s largest port and has one of only two deep-water container terminals on the Baltic. The third point in what is effectively a logistics triangle is provided by Lech Walesa International Airport, Poland’s third largest airport. 

While the sea ports and airports have grown – in the airport’s case it now serves 80 international destinations and carried 5.4 million passengers in 2019 – the infrastructure that connects the region with the south of the country and the capital, Warsaw, provide the catalyst that transformed the future for the Tricity area, which now has about 1.6 million residents. 

Whereas it used to take a day to get from Tricity to Warsaw, it now takes about three hours by rail and 4.5 hours by road. The reduction has opened up the Tricity area in the eyes of the Polish workforce and the business services sector has, in a short time, become one of the area’s most important sources of employment – in the last five years the sector has gone from employing 5,000 people to 30,000 and there are now 155 business service sector companies there. 

Attracting skills 

The growth of the business services sector has been founded on Tricity’s ability to attract skilled people from the rest of the region and beyond, which is helped by the quality of life the area offers.

The language skills of the workforce are, in turn, a major attraction to incoming business services sector companies and their clients.  

The success of the business services sector is also behind the momentum for the development of new office stock. Much of the Tricity area’s modern offices were built within the last seven years, according to Schroeder. The roll out continues and he says there is currently about 100,000 sq m under development and due for completion in 2021. 

Due to Covid restrictions, most of the office space is either empty or partially so. While companies work out what their needs will be long term –  there is a substantial amount of space available for subletting, Schroeder says: “One thing is for sure, you can no longer simply link headcount and space requirements.”