IPD /ED Indekskonference, København d. 23/2.2011

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2 Påbegyndt byggeri Kilde: Danmarks Statistik statistikbanken.dk Solgte investeringsejendomme Kilde: Danmarks Statistik statistikbanken.dk Note: Erhverv er ekskl. fabrikker 2

3 Realkreditinstitutternes nettoudlån fra 1. kvartal 1995 til 4. kvartal 2011 Kilde: Realkreditrådet og Realkreditforeningen 3

4 IPD Dansk Ejendomsindeks 2011 Torben Damgaard Client Manager Denmark/ Manager Nordic Fund Index IPD Norden København, d. 23 februar 2011 IPD 2012 ipd.com 7 Dagsorden IPD Dansk Ejendomsindeks Resultat for 2011 Set i historisk perspektiv Tendenser på ejendomsmarkedet Konklusion IPD 2012 ipd.com 8 4

5 IPD Dansk Ejendomsindeks Hvad indeholder databasen 2011 Samlet ejendomsværdi (mia) 108,892 Antal ejendomme Hvor godt dækker indekset? ca. 40% Antal porteføljer 19 Ejendomspartnerselskabet af 1/ % 11% 2% 59% 26% Butikker Kontor Industri Bolig Øvrig IPD 2012 ipd.com 9 IPD Dansk Ejendomsindeks Antal ejendomme Gnst. markedsværdi i mio. kr pr ejendom Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 10 5

6 Vurderingspraksis i IPD Danmark 41% af IPD Dansk Ejendomsindeks opgøres nu ved hjælp af eksterne kilder DCF metoden vinder større udbredelse 100% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% % 80% 70% 60% 50% 40% 30% 20% 10% 0% Ekstern Kombination Intern DCF metoden Afkast metoden IPD 2012 ipd.com 11 IPD Dansk Ejendomsindeks Totalt afkast 4,7% Ultimo året: ejendomme Værdi DKK 109 mia Direkte afkast +4,9% Værditilvækst -0,1% Et totalt afkast på 4.7% og værditilvækst på -0,1% kan sammenlignes med 5,3% og 0,3% i Det direkte afkast falder fra 5,0% til 4,9% i Ud af 12 afkast siden 2000, rangerer 2011 som 10 af 12 på totalt afkast 10 af 12 på værditilvækst 11 af 12 på direkte afkast Markedslejevækst +1.0% Effekt af afkastkrav +0,1% Residual -1.2% Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 12 6

7 Butikker klarer sig bedst i 2011 Butikker Kontor Industri Bolig Alle ejendomme Afkast, % Direkte afkast Værditilvækst Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 13 Forklaring på værditilvækst Butikker Kontor Industri Bolig Alle ejendomme Markedslejevækst Effekt af forrentningskrav Residual Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 14 7

8 IPD Danmark IPD 2012 ipd.com 15 København CBD har det højest afkast for kontor Kbh CBD Kbh Broer & Frb Øvrig DK Kbh Havneområde Od, Aarh, Aalb, Tre Kbh Sydvest København CBD har opnået det højeste afkast i 2011 og den højeste værditilvækst fulgt af Kbh Broer & Frb. Kbh Sydvest, Kbh Nord og Kbh øvrig bydele har de største fald i værdi med -2,4% og -2,8. Kbh Nord Kbh Øvrig Bydele Afkast, % Direkte afkast Værditilvækst Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 16 8

9 Bolig fortsætter med at falde mens butikker stiger i værdi Bolig øvrig Danmark Bolig København Bolig Od, Aarh, Aalb, Tre Boliger udenfor storbyerne har det bedste afkast i boligsektoren, men generelt fortsætter boliger deres fald. Bolig Butikker øvrig butikker Butikker shopping centre Butikker Butikker har positiv værditilvækst som den eneste sektor. Dette gælder både shopping centre og øvrige butikker Afkast, % Værditilvækst Direkte afkast Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 17 Værditilvæksten flader ud i 2011 (alle ejendomme) Afkast, % år Direkte afkast Værditilvækst Totalt afkast Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 18 9

10 Værditilvækst forklaret over tid Set over tid er det effekten af ændringer i forrentningskravet, der har haft størst betydning for værditilvæksten. I 2010 kunne ændringen i værditilvækst beskrives ud fra et fald i markedsleje på - 1% og en effekt af ændring i forrentningskravet på +1,2% I 2011 kan værditilvæksten ikke direkte forklares ud fra ændringer i markedsleje og forrentningskrav. Markedslejevækst Effekt af afkastkrav Residual Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 19 Faldende aktivitetsniveau Købsvolume mio. Kr Antal køb Salgsvolume mio. Kr Antal salg køb /vol. 1,8 mia DKK - 9 salg /vol. 0,6 mia DKK Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 21 10

11 Aktiv. investeringer er på vej op igen (mio. kr) Butikker Kontor Industri Bolig Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 22 Stigende tomgang men ikke for bolig 12 Butikker Kontor Industri Bolig 10 Tomgangen beregnes som den økonomiske tomgang over et år. 8 % Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 23 11

12 Stigende tomgang for kontor Kbh CBD Kbhs Havneomr. Kbh Broer & Fred. Kbh Øvrig Bydel. Kbh Sydvest Kbh Nord Od, Aarh, Aalb, Tre Øvrig Danmark Tomgangen er stigende for alle kontorsegmenter undtagen København CBD. København Nord er hårdest ramt, tomgangen er gået fra 4,9% til 18,5% på 2 år Tomgangen beregnes som den økonomiske tomgang over et år Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 24 Ejendomme vs andre aktivklasser % Afkastet på obligationer var bedst på den korte bane (1 år) Afkastet på aktier er mere volatilt men på den lange bane er afkastet solidt. Over en 10 årig periode er ejendomme stadigvæk den bedste aktivklasse år 3 år 5 år 10 år Ejendom Aktier Obligationer Kilde: IPD Dansk Ejendomsindeks, OMXCCAP, JPM GBI 7-10yr, Ecowin IPD 2012 ipd.com 27 12

13 Butikker nærmer sig det bedste segment Butikker Kontor Industri Bolig år Kilde: IPD Dansk Ejendomsindeks IPD 2012 ipd.com 28 Konklusion 2011 Mere udbredt brug af DCF og ekstern information til værdiansættelse Butikker er den sektor der klarer sig bedst grundet Stigende markedsleje og faldende afkastkrav Kontor København CBD klarer sig bedst Industri og bolig klarer sig dårligst Ikke mange transaktioner og generelt stigende tomgang Historisk performance Bolig har stadigvæk klaret sig bedst på 10 år IPD 2012 ipd.com 29 13

14 IPD Drottninggatan 33, SE Stockholm Sweden Tel: +46 (0) Contacts: Torben Damgaard Tel: +46 (0) Intellectual Property Rights and use of IPD statistics as benchmarks Whether in the public domain or otherwise, IPD's statistics are the intellectual property of Investment Property Databank Limited. It is not permissible to use data drawn from this presentation as benchmarks. Investment Property Databank Limited (IPD) 2012 Database Right, Investment Property Databank Limited (IPD) All rights conferred by law of copyright and by virtue of international conventions are reserved by IPD IPD 2012 ipd.com 30 IPD International Indices 2011 Results Denmark Annual Launch Copenhagen 23rd February 2012 Mark Clacy-Jones - Head of Indices, IPD IPD 2012 ipd.com 14

15 Agenda IPD Indices across the world Where we have got to in the cycle 2011 Results Fund Index Results Conclusions IPD 2012 ipd.com IPD Databank Coverage Countries Value (US$bn) Australia Czech Rep 2.7 Hong Kong 37.4 New Zealand 7.1 South Africa 27.9 UK Austria 9.8 Denmark 21.9 Ireland 3.7 Norway 23.6 South Korea 10.3 USA Belgium 11.9 Finland 32.1 Italy 27.8 Poland 6.6 Spain 13.2 CEE 18.3 Canada 97.6 France Germany 72.3 Japan 95.8 Netherlands 60.7 Portugal 15.3 Singapore 31.0 Sweden 38.7 Switzerland 80.9 IPD Offices IPD databank contains more than 1,400 funds with 70,000 real estate assets worldwide Pan-European US$ 729bn Global US$ 1,205.3bn Pan-Asian US$ 202bn IPD 2012 ipd.com 3 15

16 The Current Cycle - IPD Global Index % Income Return Capital Growth Total Return %pa local currency IPD 2012 ipd.com The Current Cycle - IPD National Indices %pa local currency total returns IPD 2012 ipd.com 16

17 2010 Performance % UK US South Africa Canada Sweden France Australia Norway Finland Switzerland Korea Austria Poland Denmark Italy Spain Belgium Income Return Capital Growth Total Return Netherlands Portugal Germany Czech Republic Japan Ireland %pa local currency IPD 2012 ipd.com 2010 Performance 9 Countries reporting to results Strong in North America, Australia, Sweden, UK Huge rebound from 2009 for many countries Ireland still negative Canada USA Australia Sweden UK Finland Denmark Netherlands Ireland Source: IPD. KTI IPD 2012 ipd.com 17

18 2011 Performance 9 Countries reporting to 2011 Canada 2011 results Strong in North America, Australia, Sweden Performance similar to 2010 UK seeing marked slowdown Australia, Canada only improving markets Ireland still negative USA Australia Sweden UK Finland Denmark Netherlands Ireland IPD 2012 ipd.com Source: IPD. KTI 2011 Performance 9 Countries reporting to results Strong in North America, Australia, Sweden Performance similar to 2010 UK seeing marked slowdown Australia, Canada only improving markets Ireland still negative Canada USA Australia Sweden UK Finland Denmark Netherlands Ireland IPD 2012 ipd.com Source: IPD. KTI 18

19 2011 Performance % Canada US Australia Sweden UK Finland Denmark Income Return Capital Growth Total Return Netherlands Ireland IPD 2012 ipd.com The Current Cycle - IPD National Indices IPD 2012 ipd.com 19

20 2011 Total Return by Sector %pa Retail Office Industrial Residential Australia Canada Denmark Finland Ireland Netherlands Sweden UK USA IPD 2012 ipd.com The Current Cycle - IPD Global Index % Income Return Capital Growth Total Return %pa local currency IPD 2012 ipd.com 20

21 Fund Index Performance Fund Indices show performance of unlisted funds, including effect of cash & debt er quarter Returns based on Net Asset Value (NAV) Can include both open & closed ended funds UK Quarterly Index UK PPFI Comparison with direct property shows asymmetric impact of debt Source: IPD IPD 2012 ipd.com Fund Index Performance Fund Indices show performance of unlisted funds, including effect of cash & debt er15.0 quarter Quarterly fund performance for UK funds, Nordic funds and Pan- European funds Nordic Pooled Property Fund Index Q Release 28 th February 16 funds GAV 22bn UK PPFI Nordic PPFI PEPFI Source: IPD IPD 2012 ipd.com 21

22 UK Market in Uncertainty % per quarter Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Total Return Rental Value Growth Yield Impact Real estate market enters a new and uncertain phase Out of the V... Capital values fell 42% from Q to Q Values have risen 21% since Q (only 1.7% within 2011); values still a 30% down since the market peak Into the...? Rental growth is weak and weakening and yield falls have tapered off Source: IPD IPD 2012 ipd.com UK Investor Sentiment % of votes Q4 Feb 2011 Q1 May 2011 Q2 Aug 2011 Q3 Nov 2011 Less than (-10%) (-10) -(-5)% (-5) -0% 0-5% 5-10% More than 10% Investor expectations for 2012 total returns were quickly downgraded to income only Source: IPD IPD 2012 ipd.com 22

23 Conclusions Global real estate cycle has slowed Commodity rich markets with stronger economies have better real estate returns Uncertainty means outlook largely remains cautious, particularly in Europe Focus is on income in many markets IPD 2012 ipd.com IPD, 1 St. John s Lane, London, EC1M 4BL UK Tel: +44 (0) ipd.com Intellectual Property Rights and use of IPD statistics as benchmarks Whether in the public domain or otherwise, IPD's statistics are the intellectual property of Investment Property Databank Limited. It is not permissible to use data drawn from this presentation as benchmarks. Investment Property Databank Limited (IPD) Database Right, Investment Property Databank Limited (IPD) All rights conferred by law of copyright and by virtue of international conventions are reserved by IPD. IPD 2012 ipd.com 23

24 Udviklingen i dansk økonomi København den 23. februar 2012 Fra pessimister og mørkemænd til lidt mere lyse toner Topøkonomer: Recessionen kommer uden tvivl - Ritzau på baggrund af BBC s netavis, december 2011 Nyd krisen nu den bliver værre - Blog af Lars Nielsen, redaktør JP, december 2011 Vismænd: Lavvækst eller dyb krise - Børsen, januar 2012 Forbrugerne tæt på depression - Børsen, januar 2012 Topøkonomer afblæser frygt for recession - Børsen, februar 2012 C20 i otte måneders højdepunkt - Børsen, februar 2012 p51 24

25 Bedre stemning på de finansielle markeder Indeks OMXC20 >> << VIX-indekset - "Frygtens indeks" Indeks ECB har bidraget til den bedre stemning Finanspagt og små skridt i retning af fortsat hjælp til Grækenland p52 Frygten for en eskalering af gældskrisen på retur 7, årige statsobligationer % 7,0 Italien 6,5 6,0 5,5 Spanien 5,0 4,5 4,0 3, ,5 7,0 6,5 6,0 5,5 5,0 4,5 4,0 3,5 Men alt for tidligt at erklære sejr i gældskrisen! Euroen ventes at overleve men risiko for opbrud eksisterer p53 25

26 Bedre stemning også understøttet af nøgletallene % << Arbejdsløshed, % ISM, industrien >> Indeks Amerikansk genopretning er normalt en ledende indikator Emerging Markets trækker eksporten op Håb om mild europæisk recession Recessionen skyldes til en vis grad over-produktion (lageropbygning) Den finanspolitiske modvind er markant men tager ikke til p54 Status på den økonomiske udvikling herhjemme: Sløj 415 BNP pr. kvartal, mia. kr K1 2001K3 2003K1 2004K3 2006K1 2007K3 2009K1 2010K3 Næsten 5,5 % fra aktivitetsniveau i 07/08 Godt 22 mia. kroner lavere aktivitet i kvartalet p55 26

27 Forbrugsmotoren en stor skuffelse 104 Privatforbrug 2007q4 = Danmark Sverige p56 Forklaringen er ligetil: Økonomisk usikkerhed og store formuetab 2,925 2,875 2,825 M io. personer Samlet beskæftigelse 2,775 2,725 2, ,925 2,875 2,825 2,775 2,725 2, Indeks 2005 =100, Huspriser Sverige Danmark Beskæftigelsesfald på næsten personer Formuerne er skrumpet med mia. kroner Det svarer til pr. dansker p57 27

28 Huspriser under pres en rum tid endnu Kvadratmeterpris Kvadratmeterpris Huspriser Huspriser vil være under pres over de kommende kvartaler Prisfald på cirka 5 % i 2012 håb om stabilisering i andet halvår Psykologien en af de store jokere for prognosen p58 Har vi også levet over evne? Verdensmestre i gæld Husholdningernes bruttogæld men formuesituationen langt bedre end sit rygte Husleje og boliglån betales i stor stil dukse i en international kontekst p59 28

29 Ikke behov for større pengepung i år Forbrugernes stadig præget af sortsyn især på egen økonomi Efterlønspenge kan dog give et rygstød til forbrug Cirka 60 mia. kr. hvis alle hæver! FM: 17 mia. kr. hæves -> 6 mia. til forbrug p60 Eksporten har overrasket positivt Norge Eksport q1 = 100 Danmark Sverige Finland Men eksporten får næppe vinger i 2012 Konkurrenceevnen i svag bedring men fortsat en hæmsko p61 29

30 Erhvervslivets sortsyn er bedre end rygtet 30 Nettotal Service Nettotal Industri Bygge og anlæg Ledigheden har været faldende de seneste fire måneder men erhvervslivet peger på lavere beskæftigelse i den kommende tid p62 Lave centralbankrenter består en rum tid endnu! 4,5 % % 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 ECB refi rate ,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 Den amerikanske centralbank ventes først på banen i 2014 Markedsrenterne ventes at stige en smule over det kommende år Men lad nu være med at skele alt for meget til renteprognoser Billigt at binde renten for en længere periode p63 30

31 Transmission af lave centralbankrenter hæmmes? Nettotal Mere lempelig kreditpolitik Kommende kvartal, erhverv Mere restriktiv kreditpolitik -70 Dette kvartal, erhverv K4 2009K2 2009K4 2010K2 2010K4 2011K2 2011K4 Det er blevet dyrere at skaffe kapital hjem Forværring af risikobillede over det seneste år p64 Kortsigtet økonomisk politik holder væksten oppe i 2012 Udsigt til lav økonomisk vækst - også i Men trods alt positiv vækst! Især offentlige investeringer ( kickstart ) giver en hjælpende hånd i år Privatforbruget står ikke foran større optur trods adgang til efterlønspenge Ledighedsstigninger i vente personer over de kommende år Masser af risikoelementer: Eurokrisen, kreditopstramninger, oliepriser p65 31

32 Den danske banksektor hvad sker der? Indekskonference trends på ejendomsmarkedet D. 23. februar, 2012 v. Jørgen A. Horwitz Direktør, Finansrådet Punkter Bankernes aktuelle situation Konsolidering svenske tilstande? Bankernes eksponering mod ejendomme Basel III/CRD IV Realkredittens udfordringer Solvency II Finansrådet 32

33 Generelt har den danske banksektor det godt Kilde: Finanstilsynet Finansrådet Konsolidering? Svenske tilstande? Antal danske banker Finansrådet 33

34 Nødlidende banker har skabt megen omtale Men fylder lidt Kilde: Finanstilsynet og Finansrådet Finansrådet Nødlidende banker fællestræk: Bl.a. høj eksponering mod ejendomme Kilde: Finanstilsynet Finansrådet 34

35 Banker overtager flere og flere ejendomme Bankernes ejendomsinteresser (ekskl. Domicilejendomme) Mia. kr Kilde: Finanstilsynet og Finansrådet Finansrådet Basel III/CRD IV Skærpede egenkapitalkrav Supplerende kapital Hybrid kernekapital Cyklisk buffer Konservationsbuffer Egenkapital 8 Pct Finansrådet 35

36 Betydningen af de fremtidige egenkapitalkrav? Kapitalbehov i EU s banker: kr. Kilde: EU-Kommissionen, juli Finansrådet Konsolidering - 3 muligheder 1. Udstedelse af aktier og anden ansvarlig kapital 2. Reduktion af balancen 3. Akkumulering af overskud Finansrådet 36

37 Basel III/CRD IV og ejendomsfinansiering Uændret solvensbehandling af lån med pant i fast ejendom Bortset fra spekulative ejendomsprojekter Finansrådet Basel III/CRD IV og ejendomsfinansiering Eksempel: Kapitalkrav til finansiering af forskellige ejendomme Lån: 100 mio. kr. Solvensbehov:12 %: Usikret lån Lån med pant i en Lån til spekulativt erhvervsejendom ejendomsprojekt 12 mio. kr. 6 mio. kr. 3 mio. kr. 18 mio. kr Finansrådet 37

38 Udfordringer for det danske realkreditsystem Kommende likviditetsregler i Basel III/CRD IV - Vi forventer, at realkreditobligationer kommer til at tilhøre den bedste likviditetsklasse i CRD IV - Fortsat usikkerhed om modellen bag F1-lånene Refinansiering af rentetilpasningslånene - auktionerne er ved at blive spredt ud over året Krav om sikkerhedsstillelse ved ejendomsprisfald - en udfordring for realkreditsektoren Men den europæiske gældskrise har vist styrket tillid til dansk realkredit. Flight to safety => faldende renter Finansrådet Solvency II Øget kapitalkrav for livs- og pensionsselskaber: => det bliver dyrere for L&P at investere i realkreditobligationer, aktier og ejendomme. Statsobligationer fritages for øgede krav. => Øgede kapitalkrav som følge af risiko stigende levetid. Solvency II => strengere krav om løbende sammenhæng mellem aktiver og forpligtelser => L&P kan ikke stå igennem en krise og holde aktiver på samme vis som før => kan medføre større udsving under kriser. Ejerformen ved ejendomsbesiddelser kommer til at have stor betydning for risikovægten => incitament til direkte ejerskab Finansrådet 38

39 Indekskonferrence 2012 Status Bæredygtighedscertificering Byggeri Mikael Koch Chief Advisor Sustainability Danish Association of Architectural Firms Board member DK-GBC Status certificering 2012 COP - 15 Var det slutningen? 39

40 Nuværende løsninger 2012 Hidtidig fokus

41 ICELAND 2012 ICELAND

42 Indtænk fra start 2012 Green Building Pay? 2012 Extract from Siemens citation: Henning Larsen s winning design was selected for its comprehensive approach to sustainability an approach that meets the highest standards for ecofriendliness and energy efficiency. 42

43 Green Building Pay? 2012 Green Building Pay? 2012 CEO Peter Löscher, Siemens, says in a press release: We re creating a futureoriented symbol of sustainability that will set the standard for advanced urban architecture and innovative, efficient building technology for the benefit of our employees and the citizens of Munich. 43

44 Green Buildings Pay 2012 Bæredygtigt byggeri Fremtidens forretningsområde er bæredygtighed. De 3 søjler 2012 Brundtland Rapporten Ligelig vægtning af Social Miljømæssig- og økonomisk bæredygtighed 44

45 Helhedssyn 2012 Byggeriet bør dømmes efter Evnen til at lave en holistisk syntese Vitruvius i dag? 2012 Utilitas Firmitas Venustas Funktion Holbarhed Skønhed Økonomi Teknisk kvalitet Levetid Vitruvius (ca. 80/70-25 bc) Social funktion Miljø 45

46 LCC - LCA 2012 Matche EU krav Et system der inkluderer LCA og LCC baseret på Europæiske CEN standardter En central europæisk LCA data base ( ESUCO ) Green Building Pay 2012 De nye Krav CSR Offentlig udbud skal være bæredygtigt EPD 2013 EU udbud laveste omkostninger LCC 2014 LCA kalkulation alt byggeri

47 Green Building Council 2012 DK-GBC Bestyrelse Investorer Entreprenører developere Byggemateriale industrien Ingeniører Arkitekter Bygningsmyndigheder Forskning Caracterization of the methods LEED & BREEAM Well-known International DGNB Life cycle oriented Second generation European standards HQE Process oriented 47

48 The Incentive System Number of Buildings Voluntary Incentive System Bronze Silver Gold Legal Regulations Building Performance 98 DGNB 2010 Holistic building evaluation 6 areas of evaluation 49 criteria 99 DGNB

49 DGNB Certificate for Sustainable Building Weighting of evaluation areas Protection Area Natural Environment Natural Resources Health Economic Value Social & Cultural Value Protection Goal Protection of the Environment Protection of Natural Resources Decreased Life-Cycle Costs Guarantee of Economical Value Assurance of Health & Thermal Comfort People-friendly Surroundings / Guarantee of Social and Cultural Value Assessment Ecological Economical Quality Quality 22,5% 22,5% Technical Quality Process Quality Site Quality Sociocultural and Functional Quality 22,5% 22,5% 10,0% 100 DGNB 2010 Pre-Certification: advantage of integrated planning Improved risk management More transparency and process clarity in planning and construction Higher security in achieving the performance goals of a building upon its completion Higher building quality Pre-certification promotes improved building optimization and offers marketing advantages 101 DGNB

50 Advantage: Transparency for Planner and Client Software-supported evaluation enables precise optimization of the building in the planning stage Evaluation results are summarized descriptively by topic and criteria 102 DGNB 2010 The pathway to certification Registration of the building at DGNB Defining of goals for characteristics of the building according to gold, silver, or bronze Use of the pre-certification for marketing Documentation during planning- and construction period according to DGNB regulation DGNB checks the planning- and construction documentation Award of the German Sustainable Building Certificate 103 DGNB

51 System adaptation: global problem global solution A global problem requires a global solution Market demands for one system / more comparability Different regions require different solutions (climatic, social, cultural, technical, legal, political, economical) 104 DGNB 2010 The DGNB Partner Network

52 French example: Asset managers needs? To pilot and maintain assets value through uncertainty management 2.To gain insight about sustainability performance 3.To ascertain compliance with government regulatoryrequirements or specific client requirements 4.To monitor portfolios and assure they are futureproof 5.To provide guidance for better management 6.To benchmark properties French example: Market and future proof Location Connectivity infrastructure Local services and shops (density) Security Attractivity ( image...) Quality Indoor environemental quality Energy performance Lifespan Flexibility 52

53 French example: In conclusion Use of sustainability assessments (ratings, certifications... ) as an information source for assets management, valuation, monitoring... Prerequisites: Ensure usability of sustainability assessments through the requirement of detailed reports which present results on a disaggregated levels French example: Next steps Agree on underlying main metrics and their links with performance so that raw material data correspond to the same conventions and boundaries Due diligence at purchase Certifications and ratings Maintenance operations and controls Bygningsmassen er ansvarlig for %af energiforbruget og affaldsproduktionen 53

54 Dutch example Commercial real estate has embraced sustainability Social real estate and housing still has to come (on a large scale) Also momentum in infrastructure market Dutch example: Market research Question: Office users demand for sustainability? Researchgroup = 163 end users 73% have sustainable building policy (x2 since 2008) > 21% move within 2 years > 12% move within 2 years 83% is willing to pay more rent for green building (2-8%), 81% better image, 62% lower energy costs 56% Health & comfort 54

55 Tidsplan DGNB DK 2012 Videre forløb 8 pilot test kontor kategori 24 maj offentliggørelse DK kriterier kontor Bydels kriterier i gang pilot aug. Hospitals kategorier påbegyndt Skoler og Institutioner efter sommer Eksisterende kontorer efterår Green Building Pay?

56 Bygherrens målsætning Niveau Plan (P), bygning (B), bygningskomponent (BK), materiale (M) BETA Strategi / Virkemiddel og værdi Effekt Fokus Anlæg Drift Aktør Fase Prioriteres Mål opnås Analyse / vurdering / beregning / metode Notat, referat, tegninger, beskrivelser, mm. (nævn konkrete redskaber) (nævn konkrete notatnumre, referatnumre, tegningsnumre mm.) Lille Stor Drift PLUS 0 0 ARK ING Højt Lavt Nej JA NEJ IPD /ED Indekskonference, København d. 23/ Bæredygtig projektering 2011 BILAG A, SCREENING, CASE, MASTERPLAN (LARGE) KORTLÆGNING 1 Klima X 2 Proces X 3 Energiforbrug X 4 Vand X 5 Indeklima X 6 Kontekst X X 7 Materialer og ressourcer Produktion af byggevarer Udførelse X X X 8 Affald X X 9 Tilgængelighed X # Byggeplads X # Drift og vedligeholdelse 12 Trafik / transport X X Drift og vedligeholdelse Nedrivning og bortskaffelse Bæredygtig projektering 2011 BILAG B, PLAN, CASE, MASTERPLAN, M2 (LARGE) SAGSNR. Bæredygtighedslog Mål Niveau Skala Økonomi Ansvar Design og arkitektur Livs-cyklus Tidspunkt Beslutnings-og Vurderingsmetode Dokumentation realiseringsniveau ALPHA DELTA GAMMA i i i i i i 1 Klima / CO2 - minimering af klimapåvirkninger 1.1- CO2 rigtigt byggeri er det samme som energirigtigt Solvarme -f.eks.passivi form af solvæggeog lign. eller aktiv form Beregninegr, simuleringer, f.eks. BYGSOL Notater, referater 1.2 byggeri hvis energien kommer fra de samme kilder! af solvarmepaneler eller solceller Hvis man skifter til en mere klimavenlig energikilde, begrænser man C02-udslippet. El, kul, koks og olie giver størst udslip. Naturgas, fjernvarme og varmepunper er bedre. Halm, tre, sol og vind er C02-neutrale kilder. Hvad der præcist er godt for klimaet, kommer an på de lokale forhold. At opvarme et dårligt isoleret hus med halm eller træ er ikke godt for klimaet, hvis biomassen kan anvendes på en anden måde, der fortrænger mere C02, f.eks. Kraftvarme eller ethanol. Der er forskellige typer X P/B X X X X X X X X X X X X virkemidler til substitution af forbruget af fossile brændsler. Hver dansker udleder 10 ton CO2 pr. indbygger om året. I denne masterplan er det intentionen at brugernes CO2 skal være max 6 ton C02, knyttet til områdets drift, og min 50% af energiforsyningen skal komme fra vedvarende energikilder 1.1- Jordvarme f.eks. via varmepumper til f.eks. opvarmning af BSIM, BE10 Notater, referater 1.2 P brugsvand X X X X X X X X X X X 1.1- Termisk energi 1.2 P X X X X X X X X X X X 1.1- Grundvandskøling 1.2 P X X X X X X X X X X X 1.1- Forvarmning/køling af ventilationsluft gennem kanaler jorden Beregninger, BSIM Notater, referater 1.2 P X X X X X X X X X X X 1.1- Vindkraft, f.eks. Vindmøller 1.2 P X X X X X X X X X X X 1.1- Biomasse, f.eks. halm eller flis, der som energikilde er CO2- neutralt. 1.2 P X X X X X X X X X X X 2 Helhedstanke i formgivning af ressourceoptimeret byggeri 2.4 Form, funktion, teknik, bokvalitet, lokalitet og miljø skal Der skal afholdes rådgiverteams afholdes tværfaglige workshops Metode Referater hænge sammen en overordnet helhedstanke for med brugere ved start og slut på konceptfase, dispositionsforslag, bebyggelsen. hovedprojeketering og udbud, for at sikre at alle fag og X P X X X X X X X X X X funktionskrav sammentænkes hele processen, miljøplanen skal føres ved alle workshop løbende processen 2.4 I bebyggelse skal indarbejdes fleksible løsninger vedr. bebyggelsens Metode Referater anvendelse og/eller for så vidt komponenter, klimaskærm, P installationer, m.h.p. Ressourceoptimering X X X X X X X X X X X 3 Optimering, energiforbrug, drift Medium Udførelse Produktion af byggevarer Bortskaffelse MINUS HOVEDPROJEKT PROJEKTFORSLAG / UDBUD DISPOSITIONSFORSLAG ANDRE 56

57 Green Building Council 2012 Vi har et certificeringssystem der Er Holistisk Anden generationssystem der er i overensstemmelse med EU CEN standarter Er ydelses baseret og ikke tjekliste baseret Sikre Innovation Green Building Council 2012 Vi har et certificeringssystem der Giver højere kvalitet Ser på total økonomi over 50 år Værdisikrer ejendom Giver et hurtigt overblik i ejendoms porteføljen Evaluerings data skal ikke genetableres ved handel 57

58 Green Building Pay? 2011 Vi har et certificeringssystem der Ser på total miljøbelastning over 50 år Matcher CSR krav Giver en klar profil Giver højere produktivitet, tiltrækker arbejdskraft Green Building Pay? 2012 Tag del Bliv involveret Bliv del af det gode selskab Eksponering og fordele Medlemskab kr. Indmelding www. DK-GBC.dk 58

59 Pay? Yes 2012 Tak for opmærksomheden Mikael Koch Chief Advisor Sustainability Danish Association of Architectural Firms Board member Green Building Council Denmark Pay? Yes

60 Seeing Value in Real Estate 23 februar 2012 IPD Indekskonference 2012 MGPA overblik - og hvorfor Danmark og Illum? Private and Confidential 122 Introducing MGPA Independently managed private equity real estate advisory company Focused on real estate funds management, co-investments and separate account mandates for institutional investors 12 year investment and development track record across Asia and Europe 1 - Overall gross realised IRR of 18%, EM 1.5x Over 88 investors from across four regions: Australia, Europe, Middle East and North America US$8.3 billion total capital raised to date Current global assets under management of US$11 billion 2. 1 Including Lend Lease Global Properties Fund SICAF 2 As at 30 September 2011 Private and Confidential

61 Global presence Extensive local network with over 240 staff in 11 offices throughout Asia and Europe Europe Frankfurt London Luxembourg Paris Warsaw Asia Beijing Hong Kong Kuala Lumpur Shanghai Singapore Tokyo Private and Confidential 124 Why MGPA? Strong network local people with a global outlook On the ground presence; over 240 staff in 11 offices throughout Asia and Europe Experienced management team and extensive real estate expertise Stable and motivated team Long and proven track record Ability to complete cross border, complex transactions quickly and successfully Ability to form value add JV partnerships with local operators across all sectors Ability to add value Deep understanding of real estate fundamentals Research focused investment strategy Tailored business plans for each investment; buy, fix, sell strategies Active asset management that reduces real estate risk and extracts optimal value from each investment Enhance real estate returns through application of finance expertise. Private and Confidential

62 Realised investments 18% IRR and 1.5x EM (US$ millions) 4 Sales Equity IRR 2 EM 3 Realised vehicles LLGP / Fund 1 1 4, % 1.9x Vicwood Co-invest (HK) % 1.9x 181 Co-invest (HK) % 1.6x Sogo Co-invest (Tokyo) % 2.4x M Tower Co-invest (Seoul) % 1.6x 56 RBR Co-invest (HK) % 1.7x Realised investments by region Asia 2, % 1.3x Japan NA 0.7x Asia ex Japan 2, % 1.6x Europe 3, % 1.7x Global realised investments 6,045 1,495 18% 1.5x 1 Returns are shown net, all other returns are shown gross 2 Internal rate of return is calculated on a consolidated cash flows basis 3 Equity multiple is calculated on an equity weighted average return basis 4 All data as at Q Private and Confidential 126 Europe Management Digby Okell Chairman Europe Laurent Luccioni CEO Europe Steve Willingham CFO Europe Digby Okell is Chairman Europe providing operational support for the Chief Executive Officer - Europe and is involved in strategy development for MGPA s European business. He was previously Chief Operating Officer - Europe and was responsible for the acquisition and asset management operations for all of MGPA s European funds. Digby is a founding shareholder of MGPA and has over 30 years experience in the real estate sector. Prior to establishing MGPA, Digby worked in the investment management, asset management, development and project management disciplines across the Lend Lease Group. He has experience in managing investments in Asia, the UK, Europe, Australia and South Africa. Digby has a Bachelor of Science degree in Quantity Surveying from Natal University in South Africa. Laurent Luccioni is Chief Executive Officer - Europe. He is responsible for the management of MGPA s European operation as well as the oversight of the day to day operations for all of MGPA s European funds. Laurent has over 16 years experience in real estate development and finance in both Europe and the US. He has been responsible for over 20 investments presenting over US$2.5 billion in gross asset value. Prior to joining MGPA he worked for Cherokee Investment Partners, focusing on acquisition and business development in the US and Europe. Laurent has a PhD (Hons) in Civil and Environmental Engineering from the University of California at Berkeley and a Masters in Business Administration with distinction in Finance and Accounting from the JL Kellogg School of Management at Northwestern University. Laurent was selected as a PREA scholar and awarded the Chookaszian Prize in Risk Management. Steve Willingham is Chief Financial Officer Europe. His responsibilities include accounting and financial reporting activities, the development of fund finance strategies with regard to capital management, foreign currency & interest rate hedging and the assessment of all real estate transactions for the European Funds. He also manages MGPA s debt financing relationships and exposures. Steve has almost 23 years experience in the real estate finance and investment markets. Prior to joining MGPA, he worked for Merrill Lynch as a Managing Director of Global Principal Investments, where he managed the team responsible for European real estate investment. Earlier roles included Managing Director Real Estate Finance & Securitisation (Merrill Lynch), Head of Structured Property Finance and Head of Fund Management (both at Nationwide Building Society). Steve has a Masters in Business Administration from Henley Management College and is a Fellow of the Chartered Institute of Bankers. Private and Confidential

63 MGPA in Europe proven performance Well established European presence with over 80 staff in five offices 13 nationalities, 24 languages 285 properties acquired since 1999 across 13 countries Gross asset value of US$6 billion 19 development projects undertaken in ten countries Investments in 95 properties realised 1 Total gross asset value at disposition of US$3.1 billion Realised investment gross IRR 20% Realised weighted average EM 1.7x. 1 As at 30 September 2011 Private and Confidential 128 Assets in 13 European countries Belgium Banimmo Portfolio (corporate, office & retail) Sony Portfolio (office) Denmark Illum (retail) France Banimmo Portfolio (corporate, office & retail) Akeler Portfolio (corporate, office/ logistics) Capital Sud (office) Logiffine (light industrial/ logistics) Balthazar (office) Les Trois Quartiers (office & retail) Upsilon (office) Germany Akeler Portfolio (corporate, office/ logistics) MCT (office) GLI Portfolio (logistics) Sony Portfolio (office) Dial and August Portfolios (retail & industrial) Greece Academy Gardens (retail) Italy Sony Portfolio (office/ logistics) Light Building (office) Luxembourg Banimmo Portfolio (corporate, office & retail) Poland Roundabout (office) Angel Wings (residential) Rondo 1 (office & retail) Wilanow One (residential) Karolinka (retail) Pogoria (retail) Portugal Arrabida Shopping Centre (retail) Akeler Portfolio (corporate, office/logistics) Spain Amura (office) Metrovacesa (equity) Switzerland Sony Portfolio (office) The Netherlands Haslemere (equity) Sony Portfolio (office) UK Meadow Portfolio (mixed use) Hayes Office Park (office) Storage King (self storage) Akeler Portfolio (corporate, office/logistics) Chancery Exchange (office) Sony Portfolio (office) LIH (corporate) Exchange Tower (office) Moorgate Exchange (office) Viking 6 Bevis Marks (office) Realised assets Currently owned assets Private and Confidential

64 Aldi Portfolio - Germany Current portfolio repositioning Key figures Gross investment amount 63 million Ownership MGPA Europe Fund III (100%) Acquisition date September 2010 Size Opportunity Key information 221,000 sqm High yeild with value add opportunities Acquisition at attractive yield and below replacement cost Rationalise portfolio to create strong long term income stream. Sell off non-core assets & create value in through lease up and change in zoning. Position for multiple exit options including public offering, open end fund or private sale 135 value retail properties located in south and west Germany with a total NLA of 221,000 sqm. Private and Confidential 130 Les Trois Quartiers Paris, France Current asset repositioning Key figures Equity (current) 60 million Ownership MGPA Fund III (100%) Acquisition date June 2009 Size Opportunity 30,000 sqm Buy, reposition, sell Key information Prime location mixed use building in Paris CBD acquired at cyclical low point Reposition retail offering from inefficient gallery towards flagship store with strong major retailer tenant covenant. Reposition and renovate office accommodation, with new entrance lobby and common access Extend existing office leases where possible whilst refurbishing all office floors prior to sale to an institution. Private and Confidential

65 Exchange Tower - London, UK Current asset management Key figures Equity (current) 60 million Ownership MGPA Europe Fund III (100%) Acquisition date June 2010 Size 45,000 sqm Opportunity Buy, actively manage, sell Key information Landmark building well located within docklands sub-market, offering 45,000 sqm of good quality office space in two interconnected 16 storey towers. Acquired for 8% below replacement cost excluding land cost. Opportunities for extending existing leases and leasing up vacant space. Refurbish common areas and vacant office space Secure tenants with good covenant in refurbished space Capture reversion in recovering central London occupier market. Private and Confidential 132 Lands Improvement Holdings - UK Current corporate repositioning Key figures Equity (current) 60 million Ownership MGPA Europe Fund III (100%) Acquisition date Dec 2009 Size Opportunity Key information 1,600 acres (2,600 acres at acquisition) Buy, value, sell non core sites, develop Acquire portfolio of land with potential for residential development in a market with strategic shortage of housing stock 29 strategic land sites located across the UK covering 2,600 acres. Rationalise portfolio through sale of non-core assets and acquire additional land sites at attractive prices from market distress. Take advantage of low supply of specific types of residential property in certain micro locations. Private and Confidential

66 Illum handlen Transaktionen Closing 12. august 2011 Købspris DKK 1,65 billion Finansiering SEB, Københavns kontor To matrikler, Østergade 52 (ILLUM) og Østergade 60 (McDonald's Bygningen) Ejerskab MGPA EF III og to JV-partners Asset & Development Manager MGPA Europe Private and Confidential 134 Illum projektplan Illum fortsat hovedlejer Assistere Illum bedst muligt til at udbygge og forbedre forretning Udviklingsarbejder Etablere et antal flagship stores Øge lejeindtægter via flagship stores Forbedre samlet afkast på bygningen gennem nyt lejermix Drift forbedringer Aktiv ejendomsdrift Opgradere bygning, f.eks. via miljøcertificering MGPA og vores strategi Anderledes end mange andre Private Equity selskaber, startet af en håndfuld ejendomsudviklere ikke udsprunget af finansbranchen Vi er ikke fly in, fly out managers. Det tager altid tid at få det ud af ejendommene, som vi forventer. De skal udvikles før, vi giver slip og det tager tid We buy, we fix, we sell Private and Confidential

67 Hvorfor danske ejendomme? Nyt marked, ny region for MGPA Begrænset antal internationale spillere Markedet generelt Ikke noget umiddelbart økonomisk opsving generelt i Europa Skift fra Sydeuropa mod Nordeuropa Stigende interesse for mere sikre havne såsom de nordiske lande Retail Detail salg per capita i Danmark er ca euro per år hvilket er top tre i Europa Internationale retailere ser Danmark som et mindre usikkert sted at investere. De vil hellere bruge kræfter i mindre markeder med mindre risiko Danmark har stadig plads til mange af de større internationale mærker Flere mærker søger mod direkte operatør og ikke franchise medfører typiske stærkere lejere Transparens Typisk er det danske marked anset for at mangle transparens, hvilket holder nogle investorer væk Manglende transparens kan også give flere muligheder da der kan være muligheder andre ikke ser Private and Confidential 136 MGPA Investeringsstrategi Opportunistisk drevet investor Når den rigtige ejendom til den rigtige pris dukker op, så slår vi til Vi ser individuelt på de muligheder, der byder sig Lokal tilstedeværelse Når vi er etableret i et marked, så sætter vi altid et lokalt kontor op med henblik på at ekspandere Vi har ingen intention om at være alle vegne, men er 100 procent opportunistisk drevne Størrelse Da vi altid åbner et kontor lokalt, når først vi er der, skal der være tale om massive investeringer fra start Når vi er etableret i et marked kan vi gå helt ned til for eksempel millioner kroner Segment Kontor og detail er kernesegmenter Lager og logistik er ved at blive interessant med store internationale selskaber, der efterspørger højklasseejendomme Typisk ikke boliger, da det ofte er meget lokalt MGPA vil gerne investere mere i de nordiske lande Typisk ikke kun som finansiel partner, vi vil gerne udnytte vores udvikler kompetence Private and Confidential

68 Disclaimer The information in this document is being delivered and provided on a confidential basis and as an information only document. No offer is being made by MGPA by delivery of this document and no reliance should be placed upon the contents of this document by any person who may subsequently decide to enter into any investments, investment services or transaction which may be described herein. This document is provided for assistance only and is not intended to be and must not alone be taken as, the basis for a decision to enter into any investments, investment services or transaction which may be described herein. Recipients of this document should not treat its contents as advice relating to legal, taxation or investment matters and are advised to consult their own professional advisers concerning any investments, investment services or transaction that may be described herein. Third party information contained in this document has been compiled from sources believed to be reliable but no liability is accepted if this is not the case. In considering any performance data contained herein, you should bear in mind that projected returns are not indicative of future results, and there can be no assurance that an investment will achieve comparable results or that projected returns will be met. This document is proprietary to MGPA. By accepting delivery of this document, the recipient agrees not to reproduce or distribute this document in whole or in part and not to disclose any of its contents (other than to obtain advice on it from a legal, business, investment or tax advisor) without the prior written consent of MGPA. MGPA 2011 Private and Confidential 138 Invesco Real Estate European Property Markets IPD, 23 rd February 2012, Copenhagen Presentation by: Simon Mallinson Director, European Research This presentation is for use by Professional Clients in the UK, Continental Europe and Dubai only and is not for consumer use. Please do not redistribute. INVESCO REAL ESTATE London Munich Paris Prague Madrid Luxembourg Dallas San Francisco Newport Beach New York Atlanta Hong Kong Tokyo Shanghai Seoul Singapore 68

69 Themes for this Morning What has driven demand for European Real Estate? Flight to security? Will it continue in 2012? Europe in context with US & Asia What are the short-term risks? Our European expectations for 2012 and beyond. Local drivers of real estate performance Short-term versus long-term opportunities Successful Investment Is About Understanding Local Drivers 140 What has driven demand for European Real Estate? 69

70 Despite Economic Uncertainty Real Estate Demand Remains Long-term benefits of real estate Attractive cash yield with inflation hedge characteristics Diversification expected to offer best risk-adjusted returns Short-term advantages, this isn t 2008 Market Values Per Square Metre remain at low levels Financing remains available at attractive historic levels Low rent levels & a limited supply of new space Businesses well positioned for growth 142 Long-Term Benefits Of Real Estate Remain Attractive Current Real Estate Initial Yields % 9% 8.3% 8.1% 8.0% 8% 7% 7.1% 7.0% 6.7% 6.9% 6.2% 6.4% 6.1% 6% 5.5% 5.5% 5.7% 5.8% 5% 4% 3.6% 3.1% 3% Real Estate Initial Yields % 2% Residential Retail Offices Residential Retail Offices Logistics Retail Offices Logistics Retail Offices Residential Industrial Retail Offices United States Developed Europe Emerging Europe Developed Asia Emerging Asia 143 Source: Invesco Real Estate, CB Richard Ellis, Jones Lang LaSalle, NCREIF August (Yields represent equal weighted aggregates for each of the regions based on end Q data). 70

71 Long-Term Income Yields Continue To Attract Investors Investor Flight to Security Real Estate Income Distribution %pa, Average Q409-Q311 IPD Pan-European Fund Index* Investors are focused on income and liability matching; European REITs European Corporate Bonds Direct real estate pan-european funds and European securities continue to deliver higher income distributions; Revenue has held up well across prime, diversified portfolios. Eurobond Averages FTSE Euro Dividend 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Distribution Yields %pa 144 Source: Invesco Real Estate, Thomson Reuters Datastream, IPD, Q f = forecast * an index of open-end direct real estate funds with a pan-european focus the average income distribution shown is NET of all fees. Limited Development Supports Revenue Levels Lack of development financing, subdued occupier market and lack of equity interest means development pipelines across all sectors remain weak; This is supporting existing revenue levels and provides optimism about how quickly occupier recovery can feed through into rental growth. European Average Stock Growth ( , 2012f-2016f) European Shopping Centre Development (m sqm) 3.5% 3.0% Office Stock Growth %pa 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2012 is expected to be the first year in many that no new shopping centres will open in the UK; f 2013f Europe Average ( ) 2014f 2015f 2016f Western European centre development pipelines remain subdued into 2012 with the main risk being in Central & Eastern Europe. 145 Source: Invesco Real Estate, CB Richard Ellis, Cushman Wakefield/BofA Merrill Lynch, January f = forecasts 71

72 But There Remains Risks - Key Short-Term Risks To Watch Political uncertainty Impact on real estate pricing Reaction of occupiers to uncertainty Banks reduce available financing Significant changes to capital flows Regulatory impacts International liquidity versus domestic stability 146 Our European expectations for 2012 and beyond 72

73 Short-Term Outlook Allocated capital expected to sustain short-term values. We expect investor capital flows to continue putting downward pressure on yields and stabilise prices in the short-term. Prime assets remain the focus. Investors continue to have a narrow market view on best of best. Yields may be pushed down further than anticipated. Extended time frame for rental growth expectations. However a lack of development financing and pipeline is expected to continue for longer and therefore elongate the rental recovery phase. Prime assets should expect rental growth in the medium-term. Value-add remains attractive for long-term holders. Strategies focused on curable deficiencies that manufacture core will find little investor competition and has a place in portfolios. As investors continue to avoid these assets the period in which these strategies are possible is extended. 148 Source: Invesco Real Estate, Autumn 2011 Sustainable Recovery Expected To Arrive In 2013 GDP Growth %pa (2012f-2016f) 4.5% 3.5% 2012f (as at Mar 2011) 2012f (as at Dec 2011) f (as at Dec 2011) Key Economic Takeaways: We expect European economies to deliver a diverse range of growth; 2.5% Non-Eurozone economies + Germany expected to be the strongest performers; GDP Per Annum % 1.5% 0.5% Nordics & Central Europe showing best growth prospects long term; 2012 downgraded during the course of 2011 Eurozone is expected to enter a shallow recession; -0.5% -1.5% Poland Sweden Denmark UK Eurozone France Germany Netherlands Spain Deeper recession expected in Southern Europe, recovering from Source: Invesco Real Estate, Experian Business Strategies based on an Invesco scenario, January f = forecasts 73

74 Local Factors Important Gateway Cities Out-Perform Countries GDP Growth %pa (2012f-2016f) 3.5% Key Economic Takeaways: 3.0% Don t forget real estate drivers are local; GDP Per Annum % 2.5% 2.0% 1.5% 1.0% Key gateway centres expected to grow faster than national economies; Key occupiers will continue to focus on these locations in terms of investment and job growth; Retailers are expected to narrow requirements to dominant retail locations; 0.5% 0.0% London UK Frankfurt Munich Germany Stockholm Sweden Paris France Krakow Warsaw Poland Madrid Spain Amsterdam Netherlands Copenhagen Denmark Hotels should benefit from local demand drivers in these cities attracting global passenger flow; This does mean secondary and/or peripheral locations will see more pain, for longer. 150 Source: Invesco Real Estate, Experian Business Strategies based on an Invesco scenario, January f = forecasts Passenger Flows Are Increasing Supporting Hotel & Retail Airline Passenger Flows into Europe, % Change YOY Global into Europe Asia into Europe South America into Europe Passenger flows through European airports are increasing; Passenger Flow Increase % Driven particularly by a growing BRIC middle-class with rising disposable incomes spending more on retail & leisure; Business travel is also expanding as cashrich BRIC and developed world businesses look for new deals; Total average annual growth of 2.8% forecast for the period between *. -30 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Source: Association of European Airlines ( AEA ), January *UN World Tourism Organisation. BRIC = Brazil, Russia, India and China. MICE = Meetings, Incentives, Conferences & Events. 74

75 Rental Growth Expected To Drive Value Growth Long-Term Drivers of Office Market Value Growth, Q Q2 2016f London (City) Paris (CBD) London (WE) Stockholm Prague Oslo Paris (LD) Helsinki Bratislava Lyon Milan Madrid Brussels Barcelona Copenhagen Warsaw Edinburgh Birmingham Bristol Berlin Munich Vienna Hamburg Amsterdam Rotterdam Frankfurt Stuttgart -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Components of Capital Growth % Rental Growth (Annualised) Yield Impact (Annualised) We expect continued short term inward yield movements - driven by weight of capital wanting prime; Long-term outward yield movements expected for several markets as bond rates rise putting upward pressure on yields; Over the next 5 years, a number of markets expected to see negative yield impacts; Rental growth expected to drive market value growth rather than yield movements; Lack of development pipeline helping rental growth feed through to returns. 152 Source: Invesco Real Estate, August f = forecasts Total Return Expectations Varied Across European Markets Unleveraged Prime Total Return Expectations, Q Q2 2016f W Europe Offices W Europe Retail W Europe Industrial 6.1% 6.5% 6.0% Strong GDP prospects in Nordics expected to drive better total returns in the short-term, with Western Europe delivering stability; Nordic Offices Nordic Retail 6.4% 8.0% Recovery in Southern Europe is expected towards the end of the forecast period ( ); Nordic Industrial S Europe Offices S Europe Retail S Europe Industrial CEE Offices 6.6% 8.1% 8.0% 8.6% 8.6% Most attractive long-term returns expected in Central & Eastern Europe; Offices expected to be the best short-term performer with retail out-performing long-term; CEE Retail 10.1% CEE Industrial 8.6% 0% 2% 4% 6% 8% 10% 12% Chart ranges demonstrate importance of local knowledge and market selection. City range 5-Yr Total Return Expectations %pa 153 Source: Invesco Real Estate, August f = forecasts; CEE excludes Russia, Romania and Bulgaria; S Europe includes Ireland. 75

76 European Market Values Continue To Stabilise And Recover... a range of market and sector opportunities exist Declining Long Term Medium Term Short Term Recovering Retail: Bulgaria Retail: Ireland Logistics: Ireland Office: Ireland Office: Bulgaria Logistics: Bulgaria Office: Belgium, French Regions, Switzerland Retail: Finland, French Regions, Poland, Spain Logistics: Finland Logistics: Portugal, Spain Office: Austria, Denmark, Czech Rep, Slovakia Retail: Austria Office: Portugal Logistics: Hungary Office: Spain Retail: Czech Rep, Portugal Logistics: Belgium, Italy Office: London Retail: London Office: Norway, Sweden Office: Finland, Germany Retail: Norway, Paris Logistics: Sweden Office: Paris, Poland Retail: Germany Logistics: Czech Rep, Poland, Germany Office: Belgium, UK Regions Retail: Sweden, Slovakia, UK Regions Logistics: France, Germany, Netherlands, Slovakia Office: Italy, Hungary, Netherlands Retail: Belgium, Denmark, Italy, Netherlands Logistics: UK 154 Source: Invesco Real Estate, January 2012 Strategic Implications Returns in the UK, France, Germany & Nordics expected to be relatively attractive in the short term. Longer term, Central & Eastern Europe and Southern European markets expected to provide best return prospects. Offices expected to deliver the best short-term returns. Supply constrained key city centres offer best opportunities for growth. Retail is forecast to produce strong medium- to- long-term returns. Grocery anchor schemes should offer best security of income while main high streets and dominant centres are forecast to deliver strongest growth. Gateway city hotel assets on long-leases to strong brands can offer very strong income returns with medium term value uplift. Logistics expected to offer an attractive bond like income return. 155 Source: Invesco Real Estate, Autumn