Blair Hagkull Managing Director Jones Lang LaSalle, Middle East & North Africa October 2008 Communicating with Investors Managing Risk in Gulf Real Estate Risk

2 Dubai : Boom or Bust – PredictionsBOOM “The supply is not keeping up with demand. If this were true, then market forces would be driving rents and house prices down, and the reverse is the case.” Dubai Property Group “Will demand ever be satisfied? I don’t think so – the constant demand for properties in Dubai will keep pushing prices up and make it into a premium city.” Faisal Ali Moosa, Managing Partner, High Rise Real Estate “Supply will never catch up with demand… What investors are paying for is not just square feet of built up space, but a quality of life that is rarely found elsewhere in the world.” Hashim Al Dabal, Chairman, Dubai PropertiesBUST “The market is cooling down, we are not seeing the prices rise as we saw last year.” Andrew Jeffreys, Editor In Chief, Oxford Business Group “The market has stabilized… in 2006 and beyond, unreasonable and unrealistic margins will come down to more realistic levels.” Abid A Junaid, Executive Director, ETA Star “Property prices have jumped over 1000% over the last three year period in some places in Dubai. Can you name a place in the world where such a growth has happened without a crash following it soon? I cannot!.” Mishal Kanoo, Deputy Chairman, The Kanoo Group – 2006

3 GCC Real Estate Investment Trends Destination Communities Economic Cities Integrated Mixed-Use Developments Infrastructure Investment Destination Communities Economic Cities Integrated Mixed-Use Developments Infrastructure Investment DIRECT Funds CMBS REITs Funds CMBS REITs INDIRECT MEED & JLL Estimates …Approximately USD 2.5 Trillion worth of real estate and infrastructure projects in the GCC… Merrill Lynch …UAE, Kuwait and Saudi Arabia constitute 44% of the USD 1.7 trillion equity market cap in “frontier markets”… HSBC...Active since 1973, ADIA’s assets account for approximately one-third of the world’s sovereign wealth funds…

4 Global Ascendancy- The Expansion of the Gulf Investor GlobalREACH Increasing DIVERSITY Mobilize CAPITAL Leveraging EXPERTISE Gaining INFLUENCE Facilitate CHANGE …Gulf based Investors are unique in the world in that they develop other markets at the same time as they develop in their own…

5 Major GGC Real Estate Investment Bodies by Type Financial Institutions Stable, Higher Yields Financial Institutions Stable, Higher Yields Government Sponsored Companies Large Scale Investments Government Sponsored Companies Large Scale Investments Sovereign Wealth Funds Prime Real Estate, Low Yields, Stable Sovereign Wealth Funds Prime Real Estate, Low Yields, Stable Family Offices “Trophy Assets” Personality Driven Family Offices “Trophy Assets” Personality Driven

6 The Rise of the Enterprising City States...Each city state is positioned as a regional gateway and has few natural resources Hong Kong Singapore Dubai...Each city state was has a more established regulatory framework than its region...The GCC to achieve in 20 years what others have taken 100 years to establish

7 Inward Investment: The Past 10 Years TECOM Announced 9/11 & Repatriation of Arab Capital Bahrain Freehold Property Law Dubai Freehold Property Law Abu Dhabi, RAK, Qatar Freehold Property Law Oman Freehold Property Law Regional Funds International Investors Dubai 99-Year Leasehold Law Announcement Dubai Strata Law & Green Building Code Establishment of RERA Registration of Land Titles Registration of Developers & Agents Escrow Accounting Procedure Landlord & Tenant Law – Law No 26 Strata Law – Law No 27

Inward Investment: The Next 10 Years Regional Funds International Institutional Funds Boutique Funds Yield Compression Increased Regulation Increased Transparency Yield Compression Increased Regulation Increased Transparency Short Term Export of Expertise Global Best Practices Excellence in Infrastructure Export of Expertise Global Best Practices Excellence in Infrastructure Medium Term Consolidation Maturing Market Setting Higher Standards Consolidation Maturing Market Setting Higher Standards Long Term

9 GCC Demographics: Sustaining Demand …2008 GCC population less than that of California GCC Population Growth Forecast 2002 – 2007 CAGR Source: IMF & EIU 0.45% 1.00% 1.45% -0.40% 1.60% 0.60% …GCC population to double by 2030

% 2.80% 3.60% 6.90% 8.50% 10.60% GDP CAGR 2002 – 2007 GCC Economic Overview 7% 11.5% 9.4% 5.0% 5.5% 9% …GCC CAGR is 7.2% Source: IMF & EIU

11 Branding / Delivery Sustainability End User Compatibility The Future: Developing International Investment Grade Product International Investment Grade Product

12 GCC Property Prices and Rents to Continue to Rise

The Next Wave: “Flight to Quality” Creates Two-Tier Market

14 “Flight to Quality” Creates Two-Tier Market Long Term Value  Rental Rates  Occupancy  Rental Rates  Occupancy Long Term Value Less Competitive 2008 Investment Grade January 2008 –Fragmented Management –Small Floor Plates –Poor Finishes –Secondary Location –Small Business Tenancy –Sustainability –Large Floor Plates –Quality Finishes –CBD Location –Multinational Tenants

15 Assessing Risk Company Financial Risk  Liquidity  Stability of Returns  Profit Margins  Financial Leverage  Operational Leverage  Expected earnings / Cash flow growth  Market share  Diversification of customer base  Diversification of products  Geographic diversification Industry Risk  Regulation / Customer specs  Cyclical nature of Industry  Competition  Barriers to Entry  Capital Intensity Economic Risk  Inflation Rate  Interest Rate  Economic Growth  Changes in government Policies  Exchange Rates

16 Investor Communications Substantive vs Hyperbole Appropriate to Market Understandable – “Straight Goods” Increasing Sophistication Global benchmarks - Quantify

17 Q: Best performing MENA real estate markets over next 12- Q: 24 months  Investors remain bullish towards the UAE, which is expected to show the best performance over the short-term  Qatar expected to offer strong performance building upon its reputation as the next emerging GCC real estate market  Saudi Arabia offers strong potential – large and rapidly growing market continues to open up and offer new opportunities

18 Where?Why? North Africa Sub-Continent China Central Asia South East Asia Sub Saharan Africa North America Culture & Capital Relationships & Experience Track Record & Appetite Invitation & Proximity Culture & Inclination Opportunity Profile – Market What? Destination Communities Distressed Assets Integrated Mixed-Use Developments Infrastructure Investment Middle East Investors: Where Next?

19 Acquire  Trophy Assets  Indirect Investments  Brands -Hampton’s -Sotheby’s -Four Seasons -John Laing Homes -MGM ACQUIRE Transfer  Expect Development Activity  Branding  Expertise  Recognition  Capital TRANSFER Implement  Local Development  Regional Development  Delivery of large communities  Achievements IMPLEMENT Leverage  Expertise  Brands  Execution  Resources  Experience  Mobilization LEVERAGE Middle Eastern Investment Cycle

20 Conclusion Global REACH Increasing DIVERSITY Mobilize CAPITAL Leveraging EXPERTISE Gaining INFLUENCE Facilitate CHANGE

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