1. Infrastructure – A New Dimension of Real Estate? June 27 2009 Infrastructure – A New Dimension of Real Estate? An Asset Allocation Analysis Tobias Dechant, Konrad Finkenzeller

2. Infrastructure – A New Dimension of Real Estate? June 27 2009 ADefinition of Infrastructure BThe Infrastructure Universe CIs Infrastructure Real Estate DThe Role of Infrastructure in a Multi-Asset Portfolio EConclusion Agenda

3. Infrastructure – A New Dimension of Real Estate? June 27 2009 ECONOMIC INFRASTRUCTURESOCIAL INFRASTRUCTURE TRANSPORTUTILITIESCOMMUNICATIONS Toll roadsGasCable networksHealthcare facilities Bridges -DistributionSatellite systemsEducation facilities Tunnels -Storage Judicial facilities Sea portsElectricity Airports -Distribution Rail -Generation FerriesWater -Distribution -Treatment Economic Infrastructure: Providing key intermediate services to business and industry Enhancing productivity and innovation initiatives Social Infrastrcuture: Providing basic services to households Improving the quality of life and welfare in the community Definition of Infrastructure

4. Infrastructure – A New Dimension of Real Estate? June 27 2009 Enormous market size of $20.5 trillion (REEF 2008) More than 95% of all interviewed institutional RE investors intend to remain or increase their infrastructure allocation (PFG Survey 2008) More than 60% of all institutional RE investors consider an investment in the infratructure sector in 2009 (INREV Survey 2009) More than 53 trillion US $ will be invested into the major infrastructure sectors until 2030 (Ernst& Young 2007) Economic stimulus packages around the world show significant investments into the infrastructure sector. (USA, € 90 billion; Germany, € 20 billion; Japan, € 35 billion)  Infrastructure is one of the most crucial elements to a countrys‘s productivity and competitiveness (The World Economic Forum 2008) The Infrastructure Universe

5. Infrastructure – A New Dimension of Real Estate? June 27 2009 COMPETITIVE MARKETS OWNERSHIP POSSIBLE INDIVISIBILITY LONG LIFE CYCLES SITE DEPENDENCY LONG INVESTMENT HORIZONS RESTRICTED LIQUIDITY STABLE/PREDICTABLE CASH FLOWS HIGH LEVERAGE LEVELS LARGE LOT SIZES PRICING VALUATION BASED REAL ESTATE INFRASTRUCTURE PUBLIC DECISION COMPETENCE MONOPOLY CHRACTERISTICS INTRANSPARENT MARKETS LACK OF MARKET PRICES LOW DEMAND ELASTICITY USER RIGHTS LARGE INVESTMENT SCALES LIMITED TO SPECIFIC USE ALTERNATIVE USES POSSIBLE Is Infrastructure Real Estate?

6. Infrastructure – A New Dimension of Real Estate? June 27 2009 Is Infrastructure Real Estate - Applied Data Time Frame: Q1 1998 – Q4 2007 Total Returns Included Assets: Equities (ASX All Share) Government Bond (JPM Govt. Bond Index) Direct Real Estate (IPD Australia Property Index) Direct Infrastructure and Utilities (Colonial First State) Indirect Infrastructure and Utilites (UBS Australia Infrastructure & Utilities Index) Real Estate Investment Trusts (NAREIT Index) Financial Characteristics ASXGovBondIPDIndirect I & UDirect I & U AVG3.331.352.683.482.90 STD4.742.043.956.915.19 TSV 0.0%4.060.651.6111.503.64 TSV 1.5%7.132.403.7916.167.23 TSV 3.0%11.696.547.6322.6912.96

7. Infrastructure – A New Dimension of Real Estate? June 27 2009 Is Infrastructure Real Estate? Matrix of Correlations ASXGovBondIPDIndirect I & UDirect I & UNAREIT ASX1.00-0.410.140.090.150.29 GovBond 1.000.020.37-0.020.31 IPD 1.00-0.05-0.650.20 Indirect I & U 1.000.070.63 Direct I & U 1.000.04 NAREIT 1.00

8. Infrastructure – A New Dimension of Real Estate? June 27 2009 Infrastructure in a Multi-Asset Portfolio Semivariance Semicovariance Minimise Portfolio Semivariance Subject to: Limited in terms of: Lot sizes, liquidity, transaction costs

9. Infrastructure – A New Dimension of Real Estate? June 27 2009 Infrastructure in a Multi-Asset Portfolio

10. Infrastructure – A New Dimension of Real Estate? June 27 2009 Concluding Remarks Real Estate and Infrastructure seem to constitute two different asset classes with differrent financial characteristics Infrastructure constitutes an attractive investment class to institutional investors Infrastructure offers portfolio diversification benefits Portfolio allocation for indirect infrastructure up to 46% depending on expected/target return Portfolio allocation for direct infrastructure up to 23% depending on expected/target return Infrastructure and real estate are together allocated to a portfolio Further outstanding performance is questionable