1 CE Investment Market Overview

Investment Market Turnover in CE

CE volume hit significantly in recent quarters by credit squeeze and unclear pricing
Volum e (m n euros) Quarterly Average (2005-2008)

3000

2500

2000
Qrt Avg 2005-2008 –
€1.6 bn
€ million

1500

1000 -79% -92% -93% -87%

500

Q3 2009*
Q1 2005

Q2 2005

Q3 2005

Q4 2005

Q1 2006

Q2 2006

Q3 2006

Q4 2006

Q1 2007

Q2 2007

Q3 2007

Q4 2007

Q1 2008

Q2 2008

Q3 2008

Q4 2008

Q1 2009

Q2 2009
Source: CB Richard Ellis. * Q3 2009 data through end of August 2009.
CB Richard Ellis | Page 4
 % y-o-y change to office rents

-40%
-30%
-20%
-10%
0%
10%
20%
30%
Q1 2001 40%

Q2 2001
Q3 2001

CB Richard Ellis | Page 5

Q4 2001

Source: CB Richard Ellis.

Q1 2002

Q2 2002
Q3 2002

Q4 2002
Q1 2003

Q2 2003

Q3 2003
Q4 2003

Q1 2004
Q2 2004

Q3 2004
Q4 2004
Central Europe

Q1 2005

Q2 2005

Q3 2005
CEE

Q4 2005

Q1 2006
Q2 2006
EU-15

Q3 2006

Q4 2006

Q1 2007

Q2 2007
Q3 2007

Q4 2007
Q1 2008

Q2 2008

Q3 2008

Q4 2008
Q1 2009

Q2 2009
CE Office Prime Rent Indices
Rents have moved down as economic pressure and vacancy have increased
 CE Weighted Average Prime Office Yields
Yields have moved out significantly in recent quarters, although more stable in Q2 2009
Central Europe CEE EU-15

14%

CE Prime Office Yields Q2 2009:

Warsaw: 6.75%
12%
weighted net initial prime office yield (%)

Prague: 7.00%
Bratislava: 7.25%
Budapest: 8.00%
10%

8%

6%

4%
Q1 2001

Q2 2001
Q3 2001

Q4 2001

Q1 2002
Q2 2002

Q3 2002
Q4 2002

Q1 2003

Q2 2003

Q3 2003

Q4 2003
Q1 2004

Q2 2004

Q3 2004
Q4 2004

Q1 2005
Q2 2005

Q3 2005

Q4 2005

Q1 2006

Q2 2006
Q3 2006

Q4 2006
Q1 2007

Q2 2007

Q3 2007
Q4 2007

Q1 2008

Q2 2008

Q3 2008

Q4 2008
Q1 2009

Q2 2009
Source: CB Richard Ellis.
CB Richard Ellis | Page 6
 CE Prime Office Capital Value Movement
CE capital values significantly less affected than CEE as a whole, but still down 35%

Rent Effect Yield Effect Capital Value Change (y-o-y)

70%

60%

50%

40%

30%
capital value change (y-o-y %)

20%

10%

0%

-10% 1 2
-20%
3 5 (?)
-30%

-40%
4
-50%

-60%

-70%
Q1 2001

Q2 2001

Q3 2001

Q4 2001

Q1 2002

Q2 2002

Q3 2002
Q4 2002

Q1 2003

Q2 2003

Q3 2003

Q4 2003

Q1 2004

Q2 2004

Q3 2004
Q4 2004

Q1 2005

Q2 2005

Q3 2005

Q4 2005

Q1 2006

Q2 2006

Q3 2006
Q4 2006

Q1 2007

Q2 2007

Q3 2007

Q4 2007

Q1 2008

Q2 2008

Q3 2008

Q4 2008

Q1 2009

Q2 2009
Source: CB Richard Ellis.

CB Richard Ellis | Page 7

Story So Far in 2009 from Investors’ Perspective

•Credit Crunch +
•Recession +
•Negative Sentiment Regarding CE ....

•Declining Rents
•Yield Decompression ....

•Lower Capital Values

BUT...
There is still a strategic case to be made FOR property in CE!

Or at least....?

CB Richard Ellis | Page 8

2 CE Office Occupier Market
 GDP Forecasts
CE forecast to outperform EU-15 because of Poland and to lesser extent Czech Republic
2009 2010

-2
GDP Growth (%)

-4

-6

-8

-10

-12

-14

SEE

CEE

EE
EU-15
CE

Italy

Romania

Bulgaria

Hungary
United Kingdom
Poland

Spain
France

Slovakia

Russia
Czech Republic

Croatia
Austria

Serbia

Germany

Ukraine
Ireland
Netherlands
Sweden

Sources: CEE countries from UniCredit CEE Quarterly 03/2009; Western European countries IMF (May 2009).

CB Richard Ellis | Page 10

 CE Office Market Development Since 2000
Overall market growth slowing, will help markets across region rebalance

CE SEE EE CEE Stock Grow th Rate (y-o-y)

30 30%

25 25%

CEE Stock Growth Rate % (y-o-y)

20 20%
million sq m

15 15%

10 10%

5 5%

0 0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 H1 2009 2009(f) 2010(f)

Source: CB Richard Ellis. Based on aggregate totals for Belgrade, Bratislava, Budapest, Bucharest, Kyiv, Moscow, Prague, Sofia,
Warsaw and Zagreb.
CB Richard Ellis | Page 11
 million sq m

0
4
8
12
16
20

Belgrade

Zagreb

Sofia

CB Richard Ellis | Page 12

Source: CB Richard Ellis.
Bratislava

Bucharest

St. Petersburg

Marseille

Budapest

Prague

Warsaw

Dublin

Geneva

Lisbon

Lyon

Barcelona

Coperhagen

Rome

Amsterdam

Helsinki

Oslo

Milan

Vienna

Moscow

Stockholm

Madrid

Frankfurt

Brussels

Hamburg

Berlin

Munich

London - Central
Size of EMEA Office Markets – H1 2009

Paris Ile-de-France
CEE office markets remain small despite high rate of growth in recent years
52.9 mn
 CE Development Completions by Market
Office pipelines drying up across region, will lead to less new space in 2010-2011 especially

CE SEE EE CEE Half-Year Average (2003-2008)

4000

3200

2400
thousand sq m

1600

800

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009(f) 2010(f) 2011(f)

Source: CB Richard Ellis. Based on aggregate totals for Belgrade, Bratislava, Budapest, Bucharest, Moscow, Prague, Sofia,
Warsaw and Zagreb.
CB Richard Ellis | Page 13
 CE Development Pipelines v Current Stock
More sustainable growth ahead in Central Europe

Forecast Com pletions (U/C) H2 2009 Forecast Com pletions (U/C) 2010
Pipeline as % of Current Stock (H1 2009) Pipeline as % of Stock (end 2008)
1000 75
confirmed development pipeline (thousand sq m)

800 60

% of current stock
600 45

400 30
Central Europe

200 15

0 0

Kyiv

Dublin
Sofia
Bratislava

Munich
Budapest
Prague

Belgrade

Vienna

Paris
Zagreb

Bucharest
Warsaw

Moscow

Amsterdam
Source: CB Richard Ellis.

CB Richard Ellis | Page 14

 CE Vacancy v Pipeline
Prague, Warsaw well positioned vs. comparable Western European markets

Source: CB Richard Ellis. Because Budapest stock does not include owner-occupied space, adds 25% to Budapest’s stock to
estimate amount of owner occupied space, assumes that this space is occupied.
CB Richard Ellis | Page 15
 CE Vacancy Going Forward
Prague well positioned to resist downturn….

Historical 100% T-U 75% T-U 50% T-U 75% T-U w 50% Replace 50% T-U w 50% Replace

14%

PRAGUE CITY-WIDE VACANCY SCENARIOS

12%

10%
vacancy rate (%)

8%

6%

4%

2%

0%
Q4 2008 Q1 2009 Q2 2009 Q3 2009(f) Q4 2009(f) Q1 2010(f) Q2 2010(f) Q3 2010(f) Q4 2010(f)

Source: CB Richard Ellis.

CB Richard Ellis | Page 16
 CE Vacancy Going Forward
…..and Warsaw even better

Historical 100% T-U 75% T-U 50% T-U 75% T-U w 50% Replace 50% T-U w 50% Replace

14%

WARSAW CITY-WIDE VACANCY SCENARIOS

12%

10%
vacancy rate (%)

8%

6%

4%

2%

0%
Q4 2008 Q1 2009 Q2 2009 Q3 2009(f) Q4 2009(f) Q1 2010(f) Q2 2010(f) Q3 2010(f) Q4 2010(f)

Source: CB Richard Ellis.

CB Richard Ellis | Page 17
3 CE Office Rents, Yields, Capital Values
 € / sq m / month

0
8
16
24
32
40
48
56
64
72
80

Bratislava
Budapest
Prague

CB Richard Ellis | Page 19

Europe
Central

Source: CB Richard Ellis.

Warsaw

Copenhagen
Berlin
Lisbon
Bucharest
Lyon
Marseille
Vienna
Barcelona
Kyiv
Brussels
Hamburg
Amsterdam
Oslo
Helsinki
Stockholm
Munich
Madrid
Athens
Rome
Frankfurt
Dublin
London City
Milan
Geneva
St Petersburg
Zurich
Paris Ile-de-France
Moscow
EMEA Office Prime Rents – H1 2009

London West End

CE prime rents relatively low by EMEA standards
 CE Prime Office Rental Movement
Rental levels in most CE markets relatively stable in recent years

CE Prim e Rent Index (excluding Warsaw ) CEE Prim e Rent Index (including EE, Warsaw )

15%

12%

9%

6%
rental movement (q-o-q %)

3%

0%

-3%

-6%

-9%

-12% Period of increased

rental volatility in CEE
-15%
Q2 2000
Q3 2000
Q4 2000
Q1 2001
Q2 2001
Q3 2001
Q4 2001
Q1 2002
Q2 2002
Q3 2002
Q4 2002
Q1 2003
Q2 2003
Q3 2003
Q4 2003
Q1 2004
Q2 2004
Q3 2004
Q4 2004
Q1 2005
Q2 2005
Q3 2005
Q4 2005
Q1 2006
Q2 2006
Q3 2006
Q4 2006
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Q1 2008
Q2 2008
Q3 2008
Q4 2008
Q1 2009
Q2 2009
Source: CB Richard Ellis.

CB Richard Ellis | Page 20

 CE Prime Office Rent Movement from Peaks
Some markets more volatile than others

Upw ard Movem ent to Peak (from Q1 2005) Dow nw ard Movem ent from Peak (through Q2 2009)

90
80
70
maximum change in prime rent (€ / sq m / month)

60
50
40
30
20
10
0
-10
-20
-30
-40
-50
-60
-70
-80
-90

Kyiv
Sofia
Bratislava

Munich
Budapest
Prague

Belgrade

Vienna

London - Central
Zagreb

Madrid
Bucharest

Warsaw

Moscow

Paris Ile-de-
Amsterdam

St. Petersburg

France
Source: CB Richard Ellis. Data for upward movement not available for Belgrade.

CB Richard Ellis | Page 21

 CE Rental Growth Rates
Solid rental growth causes CE to outperform EU-15

7-yr grow th rate 5-yr grow th rate 3-yr grow th rate

12

9
average rental growth rate (%/year)

-3

-6

-9
EE

CEE

SEE

EU-15
CE

Kyiv
Sofia

Bratislava
Munich
Budapest

Vienna

Prague

London - Central
Madrid
Bucharest
Moscow

Warsaw

Paris Ile-de-
Amsterdam

France
Source: CB Richard Ellis. EE growth rate includes St. Petersburg and is calculated based on change in rents in USD.
Calculated through Q2 2009.
CB Richard Ellis | Page 22
 Prime Office Yield Movement in Western Europe
Evidence from key Western European markets suggests that yield decompression slowing

Paris Ile-de-France Madrid London - Central - West End EU-15

7%

6%
net initial yield (%)

5%

4%

3%
Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009

Source: CB Richard Ellis.

CB Richard Ellis | Page 23

 Prime Office Yield Movement CE
Outward movement of yields also slowed in CE in H1 2009

Prague Warsaw Bratislava Budapest Central Europe

9%

8%
net initial yield (%)

7%

6%

5%

4%
Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009

Source: CB Richard Ellis.

CB Richard Ellis | Page 24

 CE Prime Office Yields
Risk premium being re-established for office property in CE after near convergence with EU-15

EU-15 v CE Yield Spread EU-15 Weighted Average Prim e Yield

CE Weighted Average Prim e Yield CEE Weighted Average Prim e Yield
14

12

10 10.14%
net initial yield (%)

8
7.12%

6 6.19%

Yield Spread
Yield Spread Q2 2009:
Q2 2004: Yield Spread CE: 93 bps
CE: 265 bps Yield Spread Q2 2008:
4 Q1 2007: CE: 25 bps
CE: 94 bps

2
Q2 2002

Q3 2002

Q4 2002

Q1 2003

Q2 2003

Q3 2003

Q4 2003

Q1 2004

Q2 2004

Q3 2004

Q4 2004

Q1 2005

Q2 2005

Q3 2005

Q4 2005

Q1 2006

Q2 2006

Q3 2006

Q4 2006

Q1 2007

Q2 2007

Q3 2007

Q4 2007

Q1 2008

Q2 2008

Q3 2008

Q4 2008

Q1 2009

Q2 2009
Source: CB Richard Ellis.

CB Richard Ellis | Page 25

 The Case for Property in Central Europe
• CE’s economic outlook is better than for EU-15 in 2009 and 2010
• Investment markets in CE expected to see increased liquidity, but most likely
below rate of growth in EU-15
• Less prime product available
• Core product will become MUST have
• Trends on property markets CE and WE similar, but impact different
• Especially Prague and Warsaw well placed to attract continued attention from
investors
• Limited vacancy rates
• Pipeline expected to dry up quickly
• Once economy recovers, vacancy is likely to go down quickly
• Income return has proved to be solid and more stable than EU-15
• Rents in volatile markets saw quick correction, suggesting greater stability
may be ahead
• Yields have shown signs of stabilising in Western Europe and CE
• Risk premium for property re-established

CB Richard Ellis | Page 26