Conferinta “Strategii Anti Criza in Retail” BMG Retail Market Strategies 2009 Bucharest, 26 May 2009

2 Contents Romania Economic Performance sld. 3,4 Retail Market 2008 – sld.5 Bucharest – Retail Market May 2009 – sld. 6 Retail Market Directions- 7,8 Evolution of Modern Shopping Centres Stock – sld. 9 Top 5 Shopping Centre Stock Delivered in 2008 in Europe – sld. 10

3 Romania Economic Performance 2009 Despite a strong first 9 months of 2008, where GDP growth was 8.9% and foreign direct investments equalled 9 billion Euros, the final few months showed a rapid slow down in economic activity. The international crisis has since begun to have a serious effect on the Romanian economy. As seen globally, there is uncertainty with regard to the economic evolution during 2009; how hard the local economy will suffer and when the conditions will improve are as yet unknown

4 Retail Market was a record-high year for shopping centre development; over 721,000 sq m GLA was delivered onto the market, including 25 new projects and 12 existing scheme extensions. Retail warehouses are still dominated by stand-alone units or units attached to shopping centre projects, few retail parks are operational. The first factory outlet centre in Romania, Fashion House developed by Liebrecht & Woods, was opened in December 2008 located in the Western part of Bucharest.

5 BUCHAREST – Retail Market May 2009

6 Bucharest accounts for over 30% of the total retail turnover in Romania. The existing shopping centre density = 277 sq m GLA/1,000 inhabitants, significant below the levels registered in others CEE Capitals, sq m/1,000 people. Main shopping centers are Baneasa Shopping City, Plaza Romania, Bucuresti Mall, Unirea SC and Militari Shopping Center. High streets retail is concentrated in downtown Bucharest, along the major boulevards of Magheru / Balcescu and Calea Victoriei. Existing hypermarkets: Carrefour, Cora, Real, Auchan and Kaufland. Existing cash & carry: Metro and Selgros. Existing DIY: Bricostore, Praktiker, OBI, Hornbach, Mr.Bricolage and Dedeman. International fashion retailers: Zara, Marks & Spencer, Promod, Mango, Intersport, Nike, Debenhams, Esprit, Next, Peek & Cloppenburg, Reserved, Cortefield etc.

7 RETAIL MARKET DIRECTIONS SUPPLY: Shopping centre stock under construction with announced delivery in 2009 is 32% lower than in 2008, but still accounts for a substantial 490,000 sq m of GLA DEMAND: Stable demand from major international anchors, however, this is accompanied with a decreasing interest for expansion from under 500 sq m retailers whom have been affected by the drop in sales and the lack of finance RENTS: Decreasing average levels for schemes outside Bucharest and peripheral locations VACANCY: Increasing vacancy rate especially for decentralised locations and cities with a population of less than 200,000.

8 RETAIL MARKET DIRECTIONS Despite a slowdown in November and December, total retail sales in 2008 registered a healthy year- on-year growth of 13%, with a higher result for the non-food sector (+14.4%), according to the Romanian Statistical Office. Retail development was dramatically hit in the last four months of 2008, a large number of projects have been postponed for an undefined period of time or cancelled. All types of developers have been affected by the worsening market conditions including a total lack of financing from banks, decreasing property value and an absence of possible investors for joint-ventures. There were no new projects started, while some of the schemes under construction that had not already secured financing were stopped.

9 Evolution of Modern Shopping Centres Stock

10 Top 5 Shopping Centre Stock Delivered in 2008 in Europe CountryNew SchemesExtensionsTotal GLA (2008) 1. Russia Turkey Ukraine Spain Romania Italy Poland UK Germany France Portugal Czech Rep Denmark Sweden Austria Switzerland Greece Netherlands Bosnia Herz

11 CountryNew SchemesExtensions Total GLA (2008) 20. Hungary Bulgaria Slovakia Lithuania Ireland Finland Slovenia Serbia Norway Latvia Luxembourg Estonia Croatia Belgium Malta Top 5 Shopping Centre Stock Delivered in 2008 in Europe