The Polish Commercial Real Estate Market Overview 14 June 2012

Agenda 1.The Polish economy and investment market 2.Retail market 3.Office market 4.Industrial and logistic market 5.Summary 6.DTZ in Poland 1

Economy 2 Poland is considered as a target market among investors. 6th largest economy in EU by population (38 million people) EU entry in May 2004: fast development of ICT and BPO sectors Diversified economy - manufacturing, light and heavy industry, automotive and increasing share of services Boost for infrastructure - Poland is to receive nearly 20% of the EUs 308 billion structural funds for the period Eight cities with more than 400,000 inhabitants, 17 cities with more than 200,000 inhabitants, 39 cities with more than 100,000 inhabitants 4 Polish cities to host Euro 2012 championships – Warsaw, Poznań, Wrocław and Gdańsk In recent years the Polish economy has proved to have a strong macroeconomic base as it was relatively immune to the negative situation and instability on many European markets.

Poland - Macroeconomic Overview Economy in good dynamic shape 3 Source: Central Statistical Office (GUS), Oxford Economics Poland the only country within the European Union to avoid recession in 2009: Well-capitalised financial sector, low degree of openness of the economy and timely reactions from fiscal and monetary policies Strong GDP growth compared with other EU countries (4.3% y-o-y in 2011), with inflation slightly above the target Positive macroeconomic trends result mainly from growth of internal demand and large-scale infrastructure investments The Warsaw stock exchange is the largest one in Central Eastern Europe and one of the fastest growing in the world Acceptable level of public debt: 56.7% of Gross Domestic Product Due to the global macroeconomic slowdown expected in 2012, the Polish economy may also experience a decrease in GDP growth to approximately 2.5% (-0.3% for the euro area). Annual GDP Growth and Inflation, f Consumer Prices Employment Gross Domestic Product

Economy indicators Annual GDP Growth Industrial Output FDI Inflows ( bln) Retail Sales Source: Central Statistical Office (GUS), National Bank of Poland, Oxford Economics 4

Road infrastructure 5 Legend: Motorways completed to 2008 Motorways completed to 2010 Motorways scheduled for 2012

Central and Eastern Europe vs Poland Poland far more dynamic than other CEE countries. The country has proven its position as the leading market in the CEE Region * Czech Republic, Hungary, Ukraine, Slovakia Source: IVG Research/European Commission Ø Economic growth Investment volumes* 6

The Polish real estate investment market 7 2.5bn of investment transactions was recorded in 2011 representing 37% increase year on year. 1,5bn transacted in the second half of 2011 contributing 60% to the total volume represents the strongest six months since the beginning of Market activity in 2012 is expected to remain polarised between core players looking for security at better price in Poland and opportunistic players targetting % IRRs, the latter group being more volatile to financing restrictions. Banks remain cautious but financing is available for best in class assets, including larger lot sizes via club deals. Investment Volumes Poland, 2000 – 2011 Investment Transaction Volume by sector, 2011

Prime Investment Yields – 2005 – 2012(f) 8 After two years of upward revision, prime yields in all sectors compressed by 25 – 50 p.p. Therefore prime office and retail yields as at the end of 2011 were at the level of approximately 6.25 and 6.00% respectively. Prime yields in the logistics property sector stood at 7.75%. DTZ expects prime yields to remain relatively stable in the first quarters of Yields for the secondary assets are traded on average bps higher.

Poland - Investment highlights Poland has not only a large domestic market but also has developed strong growth momentum as a result of its successful transition to a market economy. The prospects that the success story will continue are good, considering the moderate national public debt, essential improvements to the transportation infrastructure and the large pool of low-cost, dedicated and skilled workforce General Economy The classification of Poland as CEE country appears out-of-date, as the individual countries of Central and Eastern Europe have developed very differently in the last two decades. But also a comparison of Poland with Western Europe is not adequate, because Poland is much worse off with regard to income per capita, but better positioned in terms of economic growth and public indebtedness Poland not part of CEE The Warsaw office rental market has been experiencing a steep upswing since mid 2010, leading to a considerable reduction in the vacancy rate and a strong recovery in rent levels. The expected high demand for office space in 2012 and especially 2013 will be met by a number of potential completions Poland has a liquid, relatively transparent investment market characterised by international players and, due to its relatively short history and growth dynamics, a large supply of modern and core properties. Real Estate Market In a number of international surveys, Poland is currently ranked as one of the most attractive countries in Europe for commercial real estate investments. Reasons for this are, in addition to the broad range of investment opportunities and relatively high achievable yields, the Polish economys good position as compared to other European economies and its growth prospects, which are relatively good in spite of the sovereign debt crisis in the Eurozone Poland – Investment highlights in Commercial Real Estate

Złote Tarasy Warsaw 10 The Polish retail market DEVELOPERS AND OWNERS Tesco, Metro Properties, Unibail-Rodamco, Axa, Apollo Rida, Blackstone, Rockspring, Union Investment RETAILERS Auchan, Carrefour, Leroy Merlin, Sephora, Promod, Decathlon, H&M, C&A, LPP, Tatuum, NG2

Modern retail stock in Poland 11 Total modern retail stock in Poland: 11 m sq m Shopping centres: 9 m sq m 390 schemes Average size of shopping centre: 23,000 sq m Density in Poland: 236 sq m per 1,000 inhabitants Source All Data: DTZ Research sq m per thousand inhabitants

The Polish retail market Comments Large agglomerations dominate the retail market, however over the last four-five years secondary and tertiary cities have been gaining on importance, substantially increasing their market share in the overall volume of annual retail supply. Around 59% of total modern retail supply is situated in 8 major Polish agglomerations with a population over 400,000. These are Warsaw, Krakow, Silesia, TriCity, Poznan, Wroclaw, Lodz and Szczecin. Source: DTZ Supply split by city size, 2011 Retail supply by formats,

Evolution of the Polish retail market 13 Stage I largest Polish cities and agglomerations Stage II cities with population of 100,000 to 400,000 Stage III cities with population of 50,000 to 100,000 GDAŃSK LUBLIN WARSZAWA POZNAŃ ŁÓDŹ WROCŁAW KRAKÓW KATOWICE SZCZECIN BYDGOSZCZ LEGNICA LUBIN WAŁBRZYCH PIŁA LESZNO OSTRÓW WLKP. KALISZ PRZEMYŚL RZESZÓW TARNOBRZEG STALOWA WOLA NOWY SĄCZ BIAŁYSTOK ŚWIDNICA KOSZALIN CHORZÓW TARNÓW ZIELONA GÓRA WŁOCŁAWEK GORZÓW WLKP. ELBLĄG PŁOCK OPOLEDĄBROWA GÓRN. TYCHY RYBNIK OLSZTYN BIELSKO-BIAŁA BYTOMGLIWICE KIELCE TORUŃ SOSNOWIEC RADOM CZĘSTOCHOWA GDYNIA ZAMOŚĆ TOMASZAÓW MAZ SUWAŁKI STARGARD SZ. SŁUPSK SIEDLCE RACIBÓRZ PIOTRKÓW PABIANICE OSTROWIEC ŚW. OSTROŁĘKA OLKUSZ MIELEC ŁOMŻA LEGIONOWO KONIN KĘDZIERZYN-KOŹLE JELENIA GÓRA JASTRZĘBIE ZDRÓJ INOWROCLAW GRUDZIĄDZ GNIEZNO GŁOGÓW EŁK CHEŁM BIAŁA PODLASKA

The Polish retail market Comments 50% of supply delivered in 2010 was situated in eight major Polish agglomerations with a population over 400,000. In 2011 it oscillated around 25%. New stock delivered in 2011 amounted to ca. 740,000 sq m, what indicates around 35% increase in comparison to DTZ notice growing interest of landlords in redevelopment and repositioning activities as large part of the stock is already over 10-years old Retailers are still picky when it comes to new projects, but more confident about expansion plans. Food and DIY chains, as well as established fashion brands and new entrants are very active. Source: DTZ Annual supply split by city size Vacancy rate in major cities, End of

The Polish retail market: opportunities Comments Wrocław, Warsaw, Poznań and TriCity are the most developed markets in terms of operating formats. 51% out of over 6,5 million sq m located in eight major agglomerations is occupied either by large scale big boxes (food operators, DIY, electronic appliances etc.) located as stand alone projects or in shopping centres. Prime rents remain stable, while secondary properties are under strong retailers pressure. Modern Retail Space mix Prime Retail Rents 15

The Polish retail market: forecasts 16 Source: DTZ Prime retail rents Prime yields Saturation in large cities calculated per pure population, yet niches still available Strong development pipeline but slowdown foreseen beyond 2014 Rents stable for properly positioned urban malls, others facing rental decline, especially in effective rents (large fit out contributions, etc) Decreasing space of hypers (lease surrenders) Extensions of established schemes – Piaseczno Auchan, Bielany Wrocławskie, Janki Letting in mid and small sized cities difficult Small formats on the move (small retail parks, convenience centres) Vacancy differentiation: large agglomerations – low at around 2-3%, followed by secondary – 5-7%, and tertiary – 5-10% Repositioning gaining on importance Luxury niche still not popular – failure of Likus Ecommerce as a threat to traditional shopping month

The Polish office market Rondo I Warsaw 17 INVESTORS Deka Immobilien, CA Immo, Immofinanz, Heitman, SEB, Arka, RREEF, ING REIM, Polonia Property Fund, PZU AM DEVELOPERS GTC, Ghelamco, Echo Investment, Skanska Property Poland, Liebrecht&wooD, Karimpol, Swedeprop, Dantex, Hochtief Project, Development, AIG/Lincoln, ECI

The Polish office market 18 Source All Data: DTZ Stock End 2011 Overall stock – 5,6 mln sq m

The Warsaw office market 19 Overall stock – 3,6 mln sq m Vacancy rate – 6.7% Source: DTZ Stock, End 2011 (34%) (3%) (27%) (16%) (7%) (5%) (4%)

Comments 120,100 sq m of modern office space was completed in 2011, which is the lowest value recorded so far on the Warsaw market. Demand is strong with several significant transactions in progress. Buildings located in the Upper South, City Centre and South West are still the most attractive for occupiers leasing new office space. Annual new Supply and Take-up, f New Supply, 2011 Take-up, 2011 The Warsaw office market 20 Source: DTZ

The Warsaw office market Comments Availability oscilating around 6-7%. It is likely to remain relatively stable till the end of After 2012 – possible growth of the vacancy ratio. Source: DTZ Annual Vacancy Levels, f Vacancy levels, End Source: DTZ

The Warsaw office market Comments Prime asking rents in the city centre stabilized at per sq m per month ( /sq m/year). In non central locations they are at a level of per sq m per month ( /sq m/year). Till the end of 2012 rents are likely to remain stable. Source: DTZ Prime Headline Rents, f Prime Headline Rents, End Source: DTZ

The regional office market 23 Source: DTZ Comments Office market in Poland is dominated by Warsaw with 64% share in a total stock. Among regional markets, the largest office supply is located in Kraków (516,900 sq m) and Wrocław (375,000 sq m). In 2011 significant drop in annual supply levels. Strong pipeline for Existing and pipeline supply Office stock, End of 2011 Annual supply

The regional office market 24 Source: DTZ Comments Apart from Łódź and Wrocław, the vacancy rate in all analysed regional cities dropped throughout 2011 Prime asking rental levels vary from per sq m per month. Vacancy rates, End 2011 Annual vacancy levels, Prime headline rents, End 2011

The Polish office market: forecasts 25 Source: DTZ Office prime yield Comments Warsaw Further concentration of business clusters (Core, area bordered by Prosta/Towarowa, Służew Przemysłowy – Mokotów and along Żwirki i Wigury) Strengthening of metrolines importance for the development of office areas – rental differentiation Many office towers planned in the centre – large pipeline but only 1-2 could succeed over the next 3-5 years (planning constraints and lack of financing Substantial levels of new deliveries planned for – downward impact on rents both in CBD and non central locations Vacancy should not exceed 8-10% as demand is still sustainable and large occupiers are on the move Going green is on the radar screens more often Comments Regional cities Wrocław and Krakow still dominate, but TriCity is catching up specialising in ITC (information, technology and communication), Łódź lagging behind Rents remaining flat with stable vacancy

The Polish industrial and logistic market Panattoni Park Poznań 26 INVESTORS Valad, CA Immo, NBGI, Hines DEVELOPERS Prologis, Panattoni, SEGRO, MLG Group, Point Park Properties, Goodman

The Polish industrial and logistic market 27 Total industrial and logistic stock in Poland at the end of Q was estimated at 6.9 mn sq m. Approx. 40% of the stock is located within Greater Warsaw area including three zones – Warsaw Zone 1 (within the city limits), Warsaw Zone 2 (approx km from Warsaw centre) and Warsaw Zone 3 (approx km from Warsaw centre). Among the largest regionals market there are: Upper Silesia, Central Poland, Poznań Region and Lower Silesia Source: DTZ Research *numbers on the map show total stock (000 sq m) at the end of 2011 Major industrial and logistic hubs in Poland Tricity Region 140 Poznań Region 840 Greater Warsaw 2, Central Poland Lower Silesia 680 Kraków Region 1, Upper Silesia Source: DTZ Research Stock split by regions, Q4 2011

The Polish industrial and logistic market 28 Developers focused on pre-let and BTS projects which resulted in a substantially low level of new supply (approx. 350,000 sq m in 2011). Taking into consideration level of space under construction we expect higher level of deliveries in Record level of take-up, including new agreeements as well as renegotiations, in 2011 (1.8 million sq m) which is a 20% increase y-o-y. Constant decrease of vacancy rates – from 18.0% at the end of 2009 to 11.7% at the end of 2011 resulting from strong take-up and very low level of speculative developments Prime headline rents oscillating from 5.20 per sm per month (62 /sq m/year) in Warsaw Zone 1 to 3.8 – 4.0 per sq m per month ( /sq m/year) in Warsaw Zone 2, Upper Silesia, Tricity Region and Krakow Region to 3.10 – 3.30 (37-40 /sq m/year) in other major regions.

The Polish industrial and logistic market: forecasts 29 Source: DTZ Prime headline rents ( per sq m per month), Greater Warsaw Prime yields, Greater Warsaw Comments Supply correlated with demand – continuation of BTS model Few spec with stable headline levels.

Summary Warsaw 30

Poland is an attractive market for property investors 31 High investment volume in spite of limited stock: High share of modern commercial properties Continuation of Polish economic success story: Moderate public debt, infrastructure improvements etc. Classification as CEE country out-of-date: Poland much more dynamic and larger than other countries Warsaw office market extremely dynamic both on demand and supply side: More balanced in 2012/2013 Regional office markets maturing thanks to BPO, but relatively volatile due to their limited market size

DTZ in Poland Warsaw 32

DTZ in Poland 33 Office Project and Building Consultancy Industrial and logistics Retail Property and Asset Management Consulting & Research Valuation Investment, land and hospitality advisory Established in 1994 in Warsaw Over 280 professionals 326,000 GLA sq m under current leasing [office, retail, industrial] 2,500 lease contracts under management in 42 properties 3,200,000 GLA sq m in valuation within the last 12 months

Patrick Delcol Country Head Poland Lumen / Złote Tarasy ul. Złota Warszawa tel fax DTZ Polska Sp. z o.o. Thank you for your attention