PRIVATE & CONFIDENTIAL European Market Outlook April 2012

Agenda European overview European property market – recent trends and forecasts Capital market trends European scenario analysis 1

Divergent economic outlook Source: Various Statistics Agencies, DTZ Research 2 GDP growth forecasts for 2012

Bond markets calmer following LTRO, but Italian and Spanish yields have risen once again Source: Bloomberg, DTZ Research 3 5 year government bond yields, selected countries

Agenda European overview European property market – recent trends and forecasts Capital market trends European scenario analysis 4

Little rental growth expected in near term Source: DTZ Research 5 European rental growth

Prime office and retail rents mostly flat in recent months 6 month % change, Q3-11 to Q Prime rents Source: DTZ Research

Vacancy rates stable in most markets Q3-11 and Q1-12, % 7 Office market vacancy rates Source: DTZ Research Q X Q Region Average Average= 11.3%

Strongest growth seen in Eastern Europe Source: DTZ Research 8 Office rental growth 2012

Stable yields points to period of weak capital growth Source: DTZ Research 9 European capital growth

Office and retail yields also little changed over past 6 months Q1-12 yields and 6 month bps change, Q3-11 to Q Prime office yields Source: DTZ Research

Yields in core markets to edge upward as interest rates normalise.... Source: DTZ Research 11 Prime yield forecasts for selected markets –

.....yields in CEE to edge inward as the European economy recovers Source: DTZ Research (%pa) 12 Prime yield forecasts for selected markets –

Agenda European overview European property market – recent trends and forecasts Capital market trends European scenario analysis 13

Full year volumes up 6% year on year despite increased caution Source: DTZ Research; Propertydata 14 European investment activity

Contrasting fortunes across Europe Source: DTZ Research; Propertydata 15 European investment activity by geography

2011 growth mostly driven by capital value increases Source: DTZ Research 16 Drivers of European investment activity

Rise in lot size over the quarter, but down for the year as a whole Source: DTZ Research 17 Investment activity by lot size

Growth in domestic investment … Source: DTZ Research 18 European investment activity by source of capital

But non-European investors remain net-buyers Source: DTZ Research 19 Net investment by source of capital

Listed property companies less active on the buy-side Source: DTZ Research 20 Investment activity by investor type

and become net sellers in Q4 Source: DTZ Research 21 Net investment by investor type

Growth in office investment and retail holds steady over the year Source: DTZ Research 22 European investment activity by sector

Uncertainty could push volumes lower in 2012 Source: DTZ Research 23 European investment volume forecast

Agenda European overview European property market – recent trends and forecasts Capital market trends European scenario analysis 24

Why do scenario analysis? This is NOT our base case forecast, which shows continued recovery But, many market participants focused on managing downside risks Scenario analysis helps quantify the downside for office markets Using a four-step approach in our scenario analysis: – Define the downside economic scenario – Measure impact across 45 European office occupier markets – Take into account yield impact and quantify total return change – Use DTZ Fair Value Index methodology to assess attractiveness 25

European scenario analysis assumptions Base case probability = 45%, break-up scenario probability = 10%. Supplied by Oxford Economics, Jan 2012; Disorderly defaults in Greece, Portugal and Ireland which hit banks hard, particularly in France and Germany; Business and consumer confidence fall, firms cut back on investment, labour markets weaken and economies across Europe are plunged back into recession; Authorities hold interest rates at record lows for an extended period; Impact of crisis reaches well beyond the borders of the Single Currency bloc, tipping the UK back into recession as well. 26

Euro-zone break-up scenario prompts deep recession in Europe Source: DTZ Research, Oxford Economics %y/y EU27 GDP Average%pa Base case1.8 Scenario Euro-zone to break up Greece, Ireland, Italy, Portugal and Spain leave single currency Banks suffer heavy losses 27

Nordics/UK/Emerging Europe hold up better than Eurozone Source: DTZ Research, Oxford Economics %pa GDP, %pa Spain-4.6% Italy-4.2% Ireland-4.0% Belgium-3.9% EU % France-1.6% Netherlands-1.5% Finland-1.5% Eurozone-1.3% Sweden-1.1% Germany-0.7% UK-0.7% Poland-0.3% Turkey-0.2% Russia0.1% Eurozone markets in grey 28

Euro break-up scenario sees rental declines in many markets Source: DTZ Research Prime rents pa

Risk aversion and recession push yields higher under euro break-up Source: DTZ Research European prime yields by sector 30

Euro break-up results in capital value declines in some markets Source: DTZ Research Prime capital values Cumulative % change 31

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