Real Estate Group in Poland - Ernst & Young

Real Estate Groupin Poland

Ernst & Young Real Estate Group is an international real estate consultancy firm. The scope of our services istailored to the needs of each client, whether from a private or public sector. Drawing on the expertise of aninternational group of Ernst & Young specialists gives us a broader perspective on the issues that real estatecompanies face. All services within our core solutions are offered worldwide. Our services help you operateefficiently from the acquisition process through the pre-investment stage, implementation of the project,development process to the stage of exiting the project, including sale.We will support and assist you in following core competence areas:••Real Estate Strategic Advisory Services••Real Estate Transaction Support & Appraisal Services••Real Estate Mergers & Acquisitions••Real Estate Financing••Tax services••Audit servicesWe grow alongside Poland••6 offices••Over 1600 professionals••The most recognized professional advisoryservices firm on the market••One of the best employers in PolandPoznanWroclawWarsawLodzKatowiceCracowOur consultants are advisers and auditors recognized in the market. They possessknowledge confirmed by numerous certificates and licenses, including: licensed propertyappraiser, property manager and property broker, member of The Royal Institution ofChartered Surveyors (RICS), chartered accountant as well as the qualifications of theAssociation of Chartered Certified Accountants (ACCA).Number of Ernst & Young employees1 – 100 101 – 500 501 – 1,500 1,501 – 3,000 3,000+

The success of our Real Estate Group results from a combination of:••understanding your problems and needs. As your business develops, we adjust our service offering to yourchanging expectations and thus contribute to your growth;••the philosophy underlying our approach – we continually seek to gain a greater understanding of yourbusiness and the risks you are facing. This makes it possible for us to map out a pinpoint analysis strategyand deliver valuable conclusions, proposals and recommendations.Our innovative outlook ensures a better guarantee of reliability and accuracy of your business decisions, riskassessments, valuations, financial statements and produces quantifiable benefits. Our professionals specializingin real estate markets guarantee high quality advisory in all above core competencies.Real Estate clients worldwide4,000Real Estate consultants5,000Number of countries in the world140Employees international167,000Our Real Estate practice has the ability to mobilize a team of professionals to addresscomplex and demanding challenges and provide a seamless service on a global basis.1

Real Estate Strategic AdvisoryStrategic AdvisoryThe continued intensification of competition and permanentshifts in market conditions require companies and privateand public sector institutions to be more and more efficientin their actions. A clearly defined corporate strategy andaccordingly aligned organizational and procedural structuresform the basic components of professional and targetorientedcorporate and public real estate management.In the areas of conflict between increased profitability andminimized risk on the owner side, and the provision of floorspace on the user side, we support you through targetedanalyses of your corporate organization and by bringingyour real estate strategy into alignment with your corporatestrategy.Our servicesDevelopment of Portfolio Strategy and Optimization& Restructuring••Restructuring of real estate portfolios;••Development of target-oriented real estate strategies forpublic and private sector portfolio owners as well as realestate funds;••Optimization of real estate portfolios;••Market entry strategies;••Analysis, selection and appraisal of high profile individualproperties, portfolios or project developments;••Structured selection procedure (identification andappraisal of investment options) for institutionalinvestors;••Business, financial and investment plans;••Performance and forecast projections throughdiscounted cash flow/financial modeling procedures;••Conceptualization of real estate investment products(e.g. special funds, fund of funds);••Real estate portfolio management models and processes;••Risk management advisory;••Profitability analyses;••Exit strategies.Development Process ImplementationWe offer services related to preparation of projects todevelopment process, which includes advisory in the areaof site acquisitions, highest best use analyses, business plans,development strategies, advisory related with planning,integration of results of other groups of consultants,obtaining financing, risk identification and advisory in thearea of optimization of operational structure.Advisory in the Area of Planning and AdministrationProcedures••Advisory in the area of administrative procedures relatedwith planning and permits;••Masterplans audits;••Advisory in the area of planning risks.Location Consultancy (International Location AdvisoryServices – ILAS) & Tenant Relocation Services••Tenant representation;••Optimal location strategies;••Business location analysis.Non-Performing Loans (Sell-Side und Buy-Side)••Planning, advising on and support of the transactionprocess;••Identification of financial and market oriented risks;••Structuring of the data room, capturing and analysisof all relevant information pertaining to loancommitments and collaterals;••Set-up of an investor database containing all datarelevant to the appraisal;••Execution of desktop and drive-by value indications,or full appraisals of the portfolio, or a sample.2

Real Estate Mergers & AcquisitionsCapital MarketsM&A Advisory ServicesReal estate has established itself in the capital markets asan asset class in its own right – one which is characterizedby a high degree of complexity. Transactions involvingreal estate portfolios or companies require wide-rangingskills and professional competence. From the diligentmanagement of data, through best-practice-based processmanagement, right up to detailed knowledge of the marketsand professional ways to approach market players, ourmulti-disciplinary team provides you with all the support youseek with respect to both the commercial and tax questionssurrounding real estate.Real Estate Financing••Determination of capital requirements;••Development of financial models/strategies;••Providing assistance with obtaining financing;••Providing advice or support during the implementationof the selected financing solution;••Supporting project developers in their strategic approachto investors in order to obtain financing or to close anequity gap in real estate project developments.We may assist you along the transaction lifecycle’s threestages: acquire, hold while increasing the value, and exit.Acquire real estate property/portfolio due diligenceWe support acquisitions by identifying attractiveopportunities, executing real estate due diligence, assistingin the negotiation process and deal closing.Hold while increasing the valueWithin the scope of our strategic advisory services we helpyou determine how to create value within a real estateportfolio and then assist in executing that plan.Exit - sell-side assistanceWe assist in preparing real estate for either a sale in wholeor to carve out an entity for sale. Frequently, we perform adiagnostic assessment as a first step, to help determine theactions needed to prepare for an exit.Our servicesWe identify alternative ways toproceed for you and compilethe information required fordecision-making; we help youto minimize transaction risksand to maximize your returns.••Identification of opportunities on the market;••Buy Side Advisory;••Sell Side Advisory;••Advising on Joint Ventures;••Structuring of the transaction (e.g. share deal vs. assetdeal, individual vs. portfolio sale);••Negotiations of transaction terms;••Coordination of financial and assets due diligence;••Bidding process management & assessment;••Identification of transaction risks.3

Real Estate Transaction Supportand Appraisal ServicesAppraisal ServicesDue to the current climate on the international capitalmarkets, you as a company are increasingly confrontedwith the requirement for improved corporate transparency.In addition to this, a fair and professional valuation of yourproperty or real estate portfolio has become increasinglycomplex, due to the heightened interest of your financeproviders in enhancing the efficiency of assets tied up in realestate.Our servicesOur multi-disciplinary consultant team with its long-standingvaluation experience is available to assist you. We providecomprehensive advice and efficient execution of valuations,both domestically and overseas.••Appraisals based on various value definitions: value,investment value, fair value;••Capital market appraisal of property assets and realestate portfolios;••Preparation of comprehensive real estate-relatedappraisal models within the framework of portfoliotransactions and company acquisitions;••Analysis, identification, structuring and appraisalof operationally essential and non-essential assets.Project organizationEstimation of valuesCompany-oriented appraisals••Appraisal of real estate assets for financial reporting andsecured lending purposes;••Preparation of real estate-related appraisal models.Real estate valuations may be conducted in accordancewith both Polish and international valuation standardsapproaches: market approach, income approach, costapproach;••Appraisal of complex individual properties (e.g. majorindustrial sites and disused land, property assets subjectto difficult planning law situations, development projects,as well as specialized real estate);••Appraisal of real estate portfolios and properties underconsideration of international and domestic accountingstandards;1Reporting5ValuationCoordinationwith ClientValuationprocess4Siteinspection2Analysis ofinformationand receipt ofof documents34

Due diligence Services & TransactionSupportTransparency is of great importance to the minimizationof transaction risks for all involved parties. We act asindependent consultants for vendors or purchaserswithin the framework of portfolio or individual propertytransactions and property loans. Beyond the independentappraisal of purchase or sales prices, we also support youin the selection of alternative courses of action, in order tominimize your transaction risks through identification offinancial and market-orientated risks.Our servicesThe execution of customer-specific due diligence forindividual properties (portfolio properties, projectdevelopments), portfolios or companies and property loans,may consist of the following services:Sell-side support••Financial vendor due diligence:••supporting shareholders and management throughthe entire disposal process, providing views not justthe facts,••focusing on answering potential investors’ keyquestions, with the aim of minimizing follow-onbuy-side due diligence requests;••Analysis of project and building information;••Analysis of rental and other contracts (interface withlegal due diligence);••Compilation of information for potential investors;••Investor database containing information relevantto appraisal of the site;••Compilation of data from financial, technical and legaldue diligence;••Structuring of the (virtual) data room and compilationof the site and building-relevant data to be accessed bypotential investors.Purchaser-side due diligence••Financial due diligence:••identification of financial risks and recommendationadvice,••translation of financial due diligence findingsinto an offer/bid and draft SPA (Share PurchaseAgreement),••reporting on commercial issues not just the facts,challenging the target’s assumptions,••giving our views on SPA and post-acquisition issues;••Analysis of the available information (data room);••Analysis of site and building information;••Analysis of rental and other contracts (interface withlegal due diligence);••Desk-top full appraisal of the portfolio, or of sampleselections from the overall portfolio;••Coordination, analysis and compilation of results;••Consolidated illustration of the facts relevant to decisionmakingin a due diligence report;••Coordination of legal, technical and environmental duediligence;••Integration of results of the technical and environmentaldue diligence into the valuation analysis.We advise you in optimizing your capital management to support strategicdecisions.5

Tax ServicesWe provide a comprehensive range of services to investorsand developers operating on the Polish real estate market.Using our expertise, we help our clients increase profitabilityof their investments by optimizing their tax effects andmitigating the related risks.Our services••Planning and implementing tax-optimal ownership andfinancing structures for investment in Polish real estate(both domestic and international);••Tax “due diligence” reviews;••Tax structuring of transactions involving acquisition/saleof real estate or shares in real estate companies;••Optimizing tax effects of such transactions, includingdebt push-down and step-up schemes;••Preparing and negotiating tax aspects of acquisition/salecontracts;••Support in tax compliance arising from real estatedevelopment (VAT refunds, depreciation basis andpolicies, cost segregation);••Restructuring assistance including mergers, de-mergers,contributions and transformations;••Tax assistance relating financing and refinancing;••Real estate tax assistance, including optimizationreviews;••Assistance in disputes with tax authorities and duringcourt proceedings;••Filing applications for tax rulings;••Ongoing tax advice regarding real estate operations.Profits and taxes are directly related. Reducing the tax burden increases yourprofits.6

Audit ServicesAccounting Advice and Corporate FinancialRisk Management GroupWe provide solutions to complex problems in areas ofaccounting, financial reporting (valuation and accountingstandards applicable to financial instruments) andmanagement option plans. Our services include:••Advice on how to interpret and apply accounting andreporting requirements for various transactions;••Transaction support in line with the IFRS;••Assistance with implementation of the IFRS andconversion of your financial statements to thesestandards;••Assistance with implementation of new and adjustedstandards and interpretations;••Identification of necessary changes in IT systemsas a result of changed accounting standards;••Analysis of compliance of accounting policies withaccounting standards;••Updates of accounting policies and/ or chartsof accounts;••Development of a financial statements template in linewith the IFRS and the specific of a given business;••Identification of areas in which financial statements arenot in line with applicable standards and/ or differ frombest practices of preparing financial statements;••Assistance with designing accounting processes;••Employee training;••Review of treasury operations at a company, specificallyliquidity management processes, market and credit risk;••Assistance with implementation of treasuryimprovements in areas of strategies, organizationalstructure, processes, procedures and appliedmethodologies and tools;••Structuring of hedging transactions and assistance innegotiations with financial institutions;••Valuation of financial instruments and incentiveprograms;••Design of financial risk measurement methods and rulesof evaluating effectiveness considering risks; assistancewith implementation.Audits of financial statements of WarsawStock Exchange companiesErnst & Young is a leading auditor of financial statements ofcompanies listed on the Warsaw Stock Exchange. We auditfinancial statements prepared in accordance with the PolishAccounting Standards and the International FinancialReporting Standards. We also provide other financialreporting services such as:••Assistance with drawing up prospectuses and in PolishFinancial Supervision Authority (PFSA) proceedings;••Assistance with drawing up dossiers of stock or debtsecurities offered on other public markets (London, NewYork);••Analyses of accounting standards in place andrecommendations of changes driven by legalamendments or implementation of the IFRS;••Seminars and training in accounting and financialreporting;••We provide, or participate as speakers in, multipleaccounting and financial reporting (IFRS) seminars andactively cooperate with regulatory bodies in processesof legislative changes affecting financial reportingin Poland and at the WSE.Our professionals have been members of PFSA teamsworking on amendments to the law governing financialreporting procedures of public companies. Ernst & YoungAudit is a Partner for the “GPW Firma Partnerska, LiderRynku Pierwotnego” program.7

ContactAnna KicińskaReal Estate Transaction Support & Appraisal ServicesReal Estate Strategic AdvisoryAnna.Kicinska@pl.ey.comAnna Kicińska is a Partner of the Ernst & Young Real Estate Advisory Group in Poland responsible for realestate Transaction Support and Strategic Advisory. She has over eighteen years of real estate experience invaluation, transaction support, market analysis, and corporate real estate management. She is a certifiedPolish appraiser and a member of The Royal Institution of Chartered Surveyors (MRICS).Michał ThedyTax ServicesMichal.Thedy@pl.ey.comMichał Thedy is the Head of the Tax Real Estate Group at Ernst & Young’s Warsaw office. He has over fifteenyears of tax advisory experience covering investments on the Polish real estate market, tax and businessaspects of mergers, acquisitions and other types of restructuring as well as tax effective planning methods.Michał is the co-author of the book „Taxation of the Polish real estate market” and numerous publications inthe real estate industry press. He is a certified tax advisor.Jarosław DacAudit ServicesJaroslaw.Dac@pl.ey.comJarosław Dac is a Partner in Assurance and member of the Real Estate Group at Ernst & Young’s Warsawoffice. Jarosław performs the role of Ernst & Young Regulatory Partner. He is also Country IndependenceLeader for Poland. He is responsible for all issues with regulatory obligations and for maintaining theindependence of Ernst & Young Audit Sp. z o.o. as the entity authorized to audit financial statements.Jarosław has over 13 years of experience in audit. He is a member of the Commission at Polish Chamber ofChartered Accountants giving opinions on legal acts and a member of the Association of Chartered CertifiedAccountants (ACCA).Kamil KowaReal Estate Appraisal ServicesKamil.Kowa@pl.ey.comKamil Kowa is a Manager of the Real Estate Advisory Group. He has eight years of experience in the real estatesector with a focus on valuations, market studies and analyses of real estate portfolios. Kamil graduated fromthe faculty of Finance and Banking, Warsaw School of Economics, with Real Estate Market specialization. In2005, he completed the post-graduate School of Real Estate Valuation at the Warsaw School of Technology.In 2011, he completed postgraduate program in Property Valuation and Management at the Sheffield HallamUniversity in United Kingdom and became a member of The Royal Institution of Chartered Surveyors (MRICS).8

Anna AndrzejewskaReal Estate Strategic AdvisoryAnna.Andrzejewska@pl.ey.comAnna Andrzejewska is a Manager of the Real Estate Advisory Group. She specializes in strategic advisoryconsultancy in the real estate sector, especially in the preparation and implementation of the strategy ofcorporate portfolio development and management as well as in investment process management. Shegraduated from the University of Łódź with Master’s degree in Finance and Banking and specialization inInvestments and Real Estate. She is a certified property manager.Marta Wrochna-ŁastowskaReal Estate Transaction SupportMarta.Wrochna-Lastowska@pl.ey.comMarta Wrochna-Łastowska is a Manager of the Transaction Advisory Services Group. She has over 6 years ofexperience in finance and accounting consulting supporting clients throughout the entire transaction processof acquisition of new business partners, as well as in the area of real estate financial due diligence. She isa Member of the Association of Chartered Certified Accountants (ACCA). She graduated from the WarsawSchool of Economics with Master’s degree in Finance and Banking and Management. She studied also on theMannheim University in Germany. She speaks fluently Polish, English and German.

Ernst & YoungAssurance | Tax | Transactions | AdvisoryAbout Ernst & YoungErnst & Young is a global leader in assurance, tax,transaction and advisory services. Worldwide, our167,000 people are united by our shared valuesand an unwavering commitment to quality. We makea difference by helping our people, our clients and ourwider communities achieve their potential.Ernst & Young refers to the global organizationof member firms of Ernst & Young Global Limited, eachof which is a separate legal entity. Ernst & Young GlobalLimited, a UK company limited by guarantee, does notprovide services to clients.For more information about our organization, pleasevisit www.ey.com.pl/real_estateErnst & Young00-124 Warszawa, Rondo ONZ 1Tel.: + 48 22 557 70 00Fax: + 48 22 557 70 01© 2013 Ernst & YoungAll rights reserved.SCORE: 002.01.13NoteThis publication contains information in summary form and istherefore intended for general guidance only. It is not intendedto be a substitute for detailed research or the exercise ofprofessional judgment. Neither EYGM Limited nor any othermember of the global Ernst & Young organization can acceptany responsibility for loss occasioned to any person actingor refraining from action as a result of any material in thispublication. On any specific matter, reference should be made tothe appropriate advisor.