CBRE MARKET PRESENTATION PREPARED FOR PREPARED FOR Current trends - PowerPoint PPT Presentation

CBRE MARKET PRESENTATION PREPARED FOR PREPARED FOR Current trends and expectation on retail and industrial market February 2015

RETAIL MARKET Introduction to the 2014 overview Total stock: 2,313,000 sq m ( shopping centres ) + 1,100,000 sq m ( retail parks & outlets ) New supply: 78,100 sq m Space under construction: 54,900 sq m Planned new supply: 50,700 sq m Average shopping centre density : 220 sq m/ 1‚000 pop. Prime rents: 190 € / sq m/ month ( high street ), 100 € / sq m/ month ( shopping centre ) Main trends:  Retailers who had been successfully operating on the market saw the opportunity to grow either via expansion or consolidation of weaker retailers due to a general growth in sales.  The same trends have been appearing in the overall customer and trade confidence which has led to an increase in footfall.  Prime shopping centres and the high street remained the most attractive locations in Prague.  Upward pressure on prime rents due to a lack of new supply.  Significant retail investment activity in the second half of 2014. *expect from total stock, ale figures are for shopping centres 2 CBRE | AMCHAM | MARKET PRESENTATION 2014

RETAIL MARKET Completion 2014 & Future development GALERIE TEPLICE OC LUZINY OC PIVOVAR QUADRIO OC FRYDA City Teplice Prague Decin Prague Frydek-Mistek Completion Q1 2014 Q2 2014 Q2 2014 Q4 2014 Q4 2014 GLA ( sq m ) 21,800 16,000 17,500 8,000 14,800 Developer Dandreet Urban Developers Settimo Development CPI TK Development and Investors LTD CENTRAL NOVA PALMOVKA AUPARK CENTRUM CHODOV BORISLAVKA City Kladno Prague Hradec Kralove Prague Prague Completion Q1 2015 Q2 2016 Q4 2016 Q2 2017 Q4 2017 GLA ( sq m ) 26,000 8,000 20,900 40,700 10,000 Developer Crestyl Metrostav HB Reavis Unibail-Rodamco KKCG 3 CBRE | AMCHAM | MARKET PRESENTATION 2014

RETAIL MARKET Shopping centre density in Europe ( sq m/ 1,000 pop. ) CZ 206 up to 50 51-100 101-150 151-200 more than 200 Source: CBRE Research, year-end 2014 *included shopping centres above 10,000 sq m 4 CBRE | AMCHAM | MARKET PRESENTATION 2014

RETAIL MARKET Shopping centre density in regional cities Total stock Density sq m sq m/ '000 pop 900,000 1,600 1,200 600,000 Average density in regional cities 800 690 sq m/ '000 pop 300,000 400 0 0 Total stock Density Under construcion Avg. density Source: CBRE Research, year-end 2014 *included shopping centres above 5,000 sq m 5 CBRE | AMCHAM | MARKET PRESENTATION 2014

RETAIL MARKET Prime retail rents in Europe ( EUR/ sq m/ month ) PRIME HIGH STREET RENT PRIME SHOPPING CENTRE RENT CZ CZ 190 100 up to 100 up to 50 101-200 51-100 201-300 101-150 301-700 151-200 more than 700 more than 200 Source: CBRE Research, year-end 2014 * PRIME RENT – typical ‘achievable’ open market headline rent for a unit of a size 100-150 sq m 6 CBRE | AMCHAM | MARKET PRESENTATION 2014

CBRE SHOPPING CENTRE INDEX What is the added value? AIM OF THE INDEX To provide a benchmark based on which the performance of the shopping centres can be judge 730 RETAILERS VISITED 10 REGIONAL BY 38.5 MILLION CUSTOMERS SHOPPING CENTRES 7 OUT OF 12 REGIONAL 230,000 SQ M GLA CITIES COVERED IN TOTAL 7 CBRE | AMCHAM | MARKET PRESENTATION 2014

CBRE SHOPPING CENTRE INDEX Fundamental outputs AVERAGE TURNOVER AVERAGE RENT CZK/ sq m/ year EUR/ sq m/ month 49,800 19.2 19.0 18.5 48,400 47,100 2011 2012 2013 2011 2012 2013 CUSTOMER FLOW Total 2012 4.3 40.5 -1.7% y/y 40 Total 2013 3.8 39.5 -2.8% y/y 39 3.3 38.5 38 2.8 37.5 1.1.2011 1.1.2012 1.1.2013 Source: CBRE Research, year-end 2014 8 CBRE | AMCHAM | MARKET PRESENTATION 2014

RETAIL MARKET Outlook 2015 Main trends:  Limited development across the Czech Republic with three pojects under construction and two with expected completion in 2017 (three in Prague).  Future development will focus on smaller local projects, mainly on traffic intersections with high footfall, or as extensions of well performing schemes.  In an effort to hold or improve their position on the market, existing shopping centres will be forced to increase their quality via refurbishment, redesign, tenant mix or overall experience. Specialization of the shopping centres.  New way of shopping using the multichannel sale. The share of e-commerce will further increase.  We expect further consolidation of the market and expansion of well performing retailers.  Ongoing increase in services. The big potential lies in food and leisure activities, which enhance the shopping experience.  The lack of prime space (especially on Prague high street) and increasing saturation in terms of retail concepts will cause the growth of prime high street and shopping centre rents.  The prime rents in regions of the Czech Republic will remain stable or decline slightly. *expect from total stock, ale figures are for shopping centres 9 CBRE | AMCHAM | MARKET PRESENTATION 2014

INDUSTRIAL MARKET Introduction to the 2014 overview Total stock: 4,899,900 sq m ( Greater Prague: 1,926,000 sq m + Pan-regional Czech Republic: 2,973,900 sq m) New supply: 356,000 sq m ( Greater Prague: 126,400 sq m + Pan-regional Czech Republic: 229,600 sq m) Space UC: 374,000 sq m ( Greater Prague: 240,300 sq m + Pan-regional Czech Republic: 133,700 sq m) Vacancy: 401,200 sq m ( Greater Prague: 136,100 sq m + Pan-regional Czech Republic: 265,100 sq m) Take-up: 827,500 sq m ( Greater Prague: 417,900 sq m + Pan-regional Czech Republic: 409,600 sq m) TLA: 1,295,800 sq m ( Greater Prague: 631,900 sq m + Pan-regional Czech Republic: 663,900 sq m) Vacancy rate: 8.2% ( Greater Prague: 7.1% + Pan-regional Czech Republic: 8.9%) Prime rents: 4.25 € / sq m/ month Main trends:  New supply in 2014 totalling 356,000 sq m, the highest level recorded since 2009.  New, record levels were also set for both net and gross take-up which makes 2014 the strongest year ever in the market’s history .  Record demand was in line with net absorption and therefore the vacancy rate remained stable.  The structure of new demand was also significantly affected by large requirements of other distribution (e- commerce and retail) companies throughout 2014. Source: CBRE Research, Industrial Research Forum, Q4 2014 10 CBRE | AMCHAM | MARKET PRESENTATION 2014

INDUSTRIAL MARKET Czech Republic Industrial Market Trend Thousand (sq m) Vacancy Rate (%) 1,000 20 900 18 800 16 700 14 600 12 500 10 400 8 300 6 200 4 100 2 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Take-up (excl. reneg.) New completions Net absorption Vacancy Rate Source: CBRE Research , Industrial Research Forum, Q4 2014 11 CBRE | AMCHAM | MARKET PRESENTATION 2014

INDUSTRIAL MARKET Growth of the Stock Greater Prague Area Regions % Preleased Space 100% 1000 90% 900 80% 800 % of preleased new supply 70% 700 in thousand sq m 60% 600 50% 500 40% 400 30% 300 20% 200 10% 100 0% 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: CBRE Research , Industrial Research Forum, Q4 2014 12 CBRE | AMCHAM | MARKET PRESENTATION 2014

INDUSTRIAL MARKET Structure of Take-up GREATER PRAGUE CZECH REPUBLIC 7% 11% 3PL Distribution 18% Producer 28% 3PL 82% Distribution Producer PAN-REGIONAL CZECH REPUBLIC 54% 25% 3PL Distribution 50% Producer 25% Source: CBRE Research , Industrial Research Forum, Q4 2014 13 CBRE | AMCHAM | MARKET PRESENTATION 2014

INDUSTRIAL MARKET Major Deals in 2014 Panattoni Park Prague Airport Panattoni D5 Logistics Park, renegotiation 133,000 sq m (Q4) 29,000 sq m (Q3) CTPark Bor 59,000 sq m (Q4) Prologis Park Jirny, pre-lease 29,000 sq m (Q4) PointPark Prague D8, pre-lease Panattoni Park Stříbro, pre-lease 39,200 sq m (Q2) 27,000 sq m (Q4) Prologis Park Prague Airport, pre-lease Pilsen park West Nýřany, renegotiation 29,500 sq m (Q3) 23,600 sq m (Q1) Source: CBRE Research , Industrial Research Forum, Q4 2014 14 CBRE | AMCHAM | MARKET PRESENTATION 2014

INDUSTRIAL MARKET Ownership and Ownership Changes in 2014 Ownership Structure 2014 Czech Republic Industrial CRE Transactions PRICE CITY NAME EST. ( € M) PURCHASER VENDOR 21% PointPark Tristan Capital Various VGP Portfolio 523.00 Properties Partners(80%); VGP (20%) 37% Prague Business Park Rudna 95.00 Prologis Heitman 2% Panattoni Park Prague Prague 45.00 Blackstone Pramerica Airport 2% Prague Westpoint N/a Central Group Immofinanz 3% Prague D8 European Park N/a CTP Invest AFI Prague Tulipan Park Hostivice N/a Segro Standard Life 17% Koprivnice Bang & Olufsen facility N/a Palmer Capital Bang & Olufsen 18% Prague CTP Park Prague East 9.50 CTP Invest Kilcullen Capital Partners Pardubice Technopark Pardubice 6.65 Conseq Bankruptcy administrator Prologis Park Prague D1 Modletice 6.50 Prologis Invista West II CTP Invest PointPark Properties Prologis Kladno C-MEC Kladno building 6.00 Collis C-MEC D+D Real NBGI Segro Others Source: CBRE Research , Industrial Research Forum, Q4 2014 15 CBRE | AMCHAM | MARKET PRESENTATION 2014