Conferinta “Strategii Anti Criza in Retail”BMG

RetailMarket Strategies 2009

Bucharest, 26 May 2009

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Contents

Romania Economic Performance 2009 - 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

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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

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Retail Market 2008

2008 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.

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BUCHAREST – Retail Market May 2009

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BUCHAREST – Retail Market May 2009

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, 400-600 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.

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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.

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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.

Evolution of Romania Total Investment Volumes - million Euro -

Sector Breakdown

0

500

1000

1500

2000

2003 2004 2005 2006 2007 2008

Retail Off ice Industrial Other

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.

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Evolution of Modern Shopping Centres Stock

Shopping Centre Stock - Supply/ year (sq m)

0

100.000

200.000

300.000

400.000

500.000

600.000

700.000

800.000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Evolution of Modern Shopping Centre Stock - sq m -

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

1.600.000

1.800.000

2.000.000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Retail Parks Stock - Supply/ year (sq m)

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

bef ore 2007 2007 2008 2009 2010

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Top 5 Shopping Centre Stock Delivered in 2008 in Europe

Country New Schemes ExtensionsTotal GLA

(2008)

1. Russia 1.341.712 311.391 1.653.103

2. Turkey 1.134.603 0 1.134.603

3. Ukraine 551.050 287.405 838.455

4. Spain 602.879 161.685 764.564

5. Romania 584.398 136.944 721.342

6. Italy 575.141 38.391 613.532

7. Poland 522.500 52.940 575.440

8. UK 329.643 126.021 455.664

9. Germany 335.919 0 335.919

10. France 159.400 174.711 334.111

11. Portugal 253.954 7.559 261.513

12. Czech Rep 148.838 46.000 194.838

13. Denmark 89.000 52.772 141.772

14. Sweden 14.000 122.500 136.500

15. Austria 76.600 47.500 124.100

16. Switzerland 123.500 0 123.500

17. Greece 99.700 0 99.700

18. Netherlands 55.000 22.050 77.050

19. Bosnia Herz. 74.000 0 74.000

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Country New Schemes ExtensionsTotal GLA

(2008)

20. Hungary 71.800 0 71.800

21. Bulgaria 63.500 0 63.500

22. Slovakia 25.300 37.590 62.890

23. Lithuania 52.000 0 52.000

24. Ireland 48.831 0 48.831

25. Finland 35.000 8.000 43.000

26. Slovenia 37.000 0 37.000

27. Serbia 29.000 0 29.000

28. Norway 11.500 10.000 21.500

29. Latvia 6.000 15.000 21.000

30. Luxembourg 20.000 0 20.000

31. Estonia 0 16.000 16.000

32. Croatia 15.000 0 15.000

34. Belgium 8.900 0 8.900

35. Malta 0 5.000 5.000

Top 5 Shopping Centre Stock Delivered in 2008 in Europe