1. Real estate allocation in institutional portfolios Some views from France (and Paris) ERES Vienna 2013 SPR/VOGON/GIF/AREIM Seminar Etienne Dupuy Chairman AREIM (and CIO BNP Paribas Real Estate SIAM)

2. agenda We are different Solvency II framework is of primary importance Real estate asset mix has evolved Where France buys and who buys in France 2

3. Home ownership 3

4. France PF sector is… small 4 Source : OECD 2012, data as of 2011 PF size as a % of GDP

5. We have a different system… 5 Population of France on January 1st, 2013 Source : INED 2013

6. And we may have a more direct understanding of issues (?) 6 Source : INSEE 2013 Population in thousands Women Men Age

7. How it should work Bear on demographics Bear on health –Education –Well being –Spending Bear on growth Bear on savings –(15% of disposable income) 7

8. Pension funds vs. Life Insurance 8 France is big in insurance premium accumulation Source : FFSA USA Japan UK France Germany China Italy Canada S. Korea Netherl’ds

9. Savings 9 Insurance savings turned negative in August 2011 for the first time Source : Banque de France / FFSA

10. agenda We are different Solvency II framework is of primary importance Real estate asset mix has evolved Where France buys and who buys in France 10

11. Regulation: Solvency II 11

12. Regulation: Solvency II 2.0 CRE loans not as favourably treated New or increased role of rating agencies ? Look through approach seems applicable Anyway : transparency on risks taken, disclosure, accountability Eventually: who will control those new OTC or non listed investments? We need… a market 12

13. Property under Solvency II 25% capital charge Should be near 10-15 But we lack data Leverage prohibited –Or limited to max 40% LTV Property vs Private equity –To be refined… –Transparency ? 13

14. How Solvency II is influencing asset allocation 14 Real Estate Cash Private bonds Sovereign Stocks DecreaseIncrease Source : 11/2011 OFI / AGEFI survey (47 Cos)

15. agenda We are different Solvency II framework is of primary importance Real estate asset mix has evolved Where France buys and who buys in France 15

16. Insurance asset mix Allocation is increasing towards (covered) bonds, marginally to (direct) real estate Among major French life insurance companies, RE allocation varies from 3.3% to 6.3%, av. 3.9% 16 Source : FFSA

17. Historical perspective From housing and office to office and retail, and « diversification » Source : IPD France. 17

18. Net investments since 1998 Selling residential (yet with a strong increase in value…) Source : IPD France. 18

19. agenda We are different Solvency II framework is of primary importance Real estate asset mix has evolved Where France buys and who buys in France 19

20. Investing at home is a kind of a tradition for French institutions Allocation to non-domestic real estate: 20 Source : INREV.

21. Invest in French CRE: where from ? Welcome home… 64% 2% 5% 18% 7% 4% 2013 66% 20% 4% 2% 1% 5% 2009 39% 9% 13% 11% 23% 3% 2% 2007 France Germany € Zone UK North America Middle East China Rest of the World Source : BNP Paribas Real Estate. 21

22. Buyers in France 87% 28% 4% 20% 7% 6% 19% 6% 2% 8% 2013 34% 13% 16% 10% 7% 10% 9% 1% 2009 53% 2% 26% 12% 4% 2% 2007 -Research Funds SWF Insurance SIIC Other listed Pty Co SCPI OPCI Private investors other 1% Source : BNP Paribas Real Estate. 22

23. Market asset mix : towards specialisation (CRE) Office 52% Retail 13% Log. 6% Indus 3% Services 26% Hotels 81% 19% HealthCare 4-5 stars 75% 1-2-3 stars 25% Source : BNP Paribas Real Estate. 23

24. Property ways More direct Less leverage Less Funds More club deals Listed property sector 24

25. Investment volumes : France still liquid 2013 25