An Investor Perspective Mountgrange Real Estate Opportunity Fund Rob Mills, Partner Acquisitions

Overview Market Forecast Leveraged Investors: Opportunities and Challenges Investment supply

Market Forecast Yields -Generally stable -Continued flight to quality Rents -Few areas of growth but supply more moderate than previous downturns -Corporate UK most likely source of any demand Development -Prime retail -Central London offices -Southeast Industrial

Leveraged Investors: Opportunities and Challenges OpportunityChallenge Yield GapFinance Emerging SectorsFinding Growth Unleveraged/Restructured Transactions Competition

Investment Supply Impact of lender driven sales? Flood of forced sales unlikely LBG: Methodically working through loan book RBS: Treasury-level transactions Others However property factors will increase the incentive to lenders to act

Conclusion If there is a double dip, capital values will dip but not much more than that, especially for prime Corporate UK can fill the gap left by government cuts There are opportunities to buy for leveraged investors but financing levels are stopping capital values run away despite the size of the yield gap Anyone building a business based on a flood of cheap forced sales from the banks will continue to be disappointed