materiały konferencyjne

INVESTMENT MARKET IN POLANDvs. EUROPE

May 2007

AGENDA

Rationale for investing in Poland (Retail, Industrial, Office)

Investors in Poland

Adding value and success in Polish retail market

Evolution of Polish Investment Market to Date1

2

3

4

Returns

5

6

Case studies

Recent Trends

7

Evolution of Polish Investment Market to Date

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Retail

Office

Industrial

Investment Volume (mln €)

€ 1.9 bn

€ 0.3 bn

€ 2.5 bn

€ 1.1 bn

€ 0.2 bn

€ 2.0

Source: King Sturge Research

Rationale for investing in Polish Retail

Source: King Sturge Research

Investment Yield (%)

Rent (€ / m2 / p.a.)

Warsaw

Rationale for investing in Polish Offices

Source: King Sturge Research

Investment Yield (%)

Rent (€ / m2 / p.a.)

Warsaw

Rationale for investing in Polish Industrial

Source: King Sturge Research

Investment Yield (%)

Rent (€ / m2 / p.a.)

Warsaw

0

100

200

300

400

500

600

700

800

Norway

Netherlan

ds

Sweden

Irelan

d UK

DenmarkSpain

Austria

France Ita

ly

German

y

Czech

Repub

lic

Poland

Hungary

Belgium

Shopping centre floorspace (GLA m2) per 1,000 population by country in 2006

m2

Source: Retail Research Forum

Source: King Sturge Research

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

45000000

50000000

Paris

London

Stockho

lm

Brussels

Frankfu

rtMila

n

Copen

hagen

Vienna

Zurich

Amsterdam

Moscow

Barcelo

na

Genev

a

Warsaw

Dublin

Prague

Budap

est

Office floorspace (GLA m2) by cities in 2007

m2

Rationale for investing in Poland

Rental growth in the all sectors

Growing spending purchase power

Business Process Offshoring

Increasing tenants diversification in regional cities

Dynamic development of regional cities and Euro 2012

Optimistic economy growth prospect

Challenges faced by investors in Poland

Lack of transparency and quality of data

Local approach vs. institutional experience

Immature market

Increasing competition

Little historic data

Lack of investment product

Yield levels and DSCR

5,00

6,00

7,00

8,00

9,00

2004 2005 2006 2007F 2008F

%Prime Retail, Warsaw

Prime Retail, Regional Cities

Yields in Polish retail – history & forecast

Source: King Sturge Research

*

* Information at the end of 2006

5,00

6,00

7,00

8,00

9,00

2004 2005 2006 2007F 2008F

%

Prime Office, Warsaw

Prime Office, Regional Cities

Yields in Polish office – history & forecast

*

* Information at the end of 2006

Source: King Sturge Research

5.00

6.00

7.00

8.00

9.00

2004 2005 2006 2007F 2008F

%

Prime Industrial, Warsaw in-townPrime Industrial, logistics locations

Yields in Polish industrial – history & forecast

*

* Information at the end of 2006

Source: King Sturge Research

Recent trends

Smaller lot sizes / portfolios

Newcomers

Joint ventures

Forward fundings / purchases

Resales of assets

New products

Investors in Polish investment market

Core Investors

Opportunistic Investors

Institutional Investment Funds

Property Companies

Small / Medium Asset ManagersUK

German

American

Dutch

French

Spanish

Austrian

Irish

Investor Type Structure of the investor Country of origin

Source: King Sturge

Adding value

- Active asset and property management- Adding income- Repositioning / refurbishments- Building portfolio- Changes to tenant mix- Extensions

How can investors succeed in Poland?

- Know the market- Choose location- Target properties- Prepare clear strategy- Detailed due diligence- Active sourcing

Industrial Sale

Diamond Business Park JankiPurchase price: $ 30,000,000Size: 28,000 m2

Seller: AIG LincolnBuyer: Teesland / IOGMain tenants: Hellmann, Coty

Retail Sale

Promenada (Warsaw)Purchase Price: € 127,000,000Size: 50,000 m²Seller: Private IndividualBuyer: Dawnay Day CarpathianMain tenants: Cinema City, Zara, H&M, Alma, Empik

Office Sale

Euromarket (Kraków)Purchase Price: € 32,000,000+Size: 16,000 m²Seller: InvescoBuyer: CIT GroupMain tenants: BP, Fortis Bank

Retail schemes joint ventures

Focus ParkTotal target lot size: € 500,000,000 +Partners: Parkridge CE Retail & Morley Fund Management

Michał ĆwiklińskiInvestment DepartmentKing Sturge

T: +48 22 653 48 48E-Mail: michal.cwiklinski@kingsturge.com

Al. Jana Pawła II 2500-854 Warszawa

Questions