Polish Commercial Property Markets 2012

Polish Commercial Property Markets 2012 Breakfast Seminar 27 November 2012 savills.pl

Agenda 1 Economy 2 Investment 3 Office Warsaw 4 Office regional cities 5 Retail

Economy: Poland still a green island GDP growth in: Euro zone: -0.6% EU27: -0.4% UK: 0.0% France: 0.1% Germany: 0.9% Czech Rep.: -1.6% Poland: 2.1% (Q3 2012 year on year) Rzeczpospolita, Eurostat

2007 2008 2009 2010 2011 Q1-Q3'12 2007 2008 2009 2010 2011 Q1-Q3'12 million Investment: Poland vs other CEE 5,000 Office Retail Logistics Hotel 4,000 3,000 2,000 1,000 0 Poland CEE excl. Poland RCA

EUR million Investment: Volumes 5,000 Offices Retail Logistics Hotels 94 4,000 3,000 58 76 48 36 2,000 51 40 23 1,000 5 10 12 12 25 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (f) Savills

Investment: Office yields 9.5% Prime CBD Prime Mokotów Non-prime CBD Non-prime Mokotów 9.0% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 2005 2006 2007 2008 2009 2010 2011 2012 Savills

Investment: Prime retail yields 9.0% Warsaw Major regional cities Smaller cities 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 2005 2006 2007 2008 2009 2010 2011 2012 Savills

EUR/m² Investment: Offices 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 Prima Court Finalized Under offer On the market Canal + Alma Zebra Tower Mokotowska Square Ujazdowskie 10 N21 WFC Crown Square North Gate Norway House Stratos Atrium Focus Park International Millenium Postępu Pałac Miasteczko Park II Młodziejowskich BTC Platinium BP Orange Marynarska Point Green Office Park Marszałkowska 76 1,000 9.5% 9.0% 8.5% 8.0% Yield 7.5% 7.0% 6.5% 6.0% Savills

EUR/m² Investment: Retail 7,000 Finalized 6,000 Under offer Złote Tarasy 5,000 On the market Manufaktura 4,000 3,000 2,000 1,000 9.5% Galeria Tarnovia Echo Echo Pabianice Belchatów 9.0% Wzorcownia 8.5% Osowa Tęcza Twierdza Zamość Twierdza Kłodzko Biedronka 8.0% Pestka Alfa Centrum Magnolia Promenada Wars Sawa Junior Molo 7.5% 7.0% 6.5% 6.0% Yield Galeria Mokotów 5.5% 5.0% Savills

m² Warsaw Office: Market performance Q3 2012 1,250,000 Year-on-year change Stock (m²) Constructed (m²) Vacancy (%) 15% 1,000,000 12% 750,000 9% 500,000 6% 250,000 3% 0 Core Fringe East Lower South North South East South West Upper South West 0% Savils

Warsaw office: Market performance 2012 and beyond 350,000 Net absorption (m²) New supply (m²) Vacancy (%) 10% 280,000 8% 210,000 6% m 2 140,000 4% 70,000 2% 0 2006 2007 2008 2009 2010 2011 2012(f) 2013(f) 2014(f) 0% Savills

m² Warsaw office: New supply 400,000 completed under construction building permit planned 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2012 2013 2014 2015 2012 2013 2014 2015 City Centre Non Central Savills

m² Regional cities office: Market performance 700,000 600,000 Stock (m²) Constructed (m²) Vacancy (%) Year-on-year change 14% 12% 500,000 10% 400,000 8% 300,000 6% 200,000 4% 100,000 2% 0 Katowice Kraków Poznań Tricity Łódź Wrocław Szczecin Lublin 0% Savills

Retail: Shopping centres are ageing investors strategies MATURITY Marketing & PR: EXTENSIVE Renovation: MAINTENANCE OF FACILITIES Efforts to attract retail tenants: MODERATE Rents: COMPETITIVE Lease term: MODERATE GROWTH Marketing & PR: MODERATE Renovation: MINOR MODIFICATIONS Efforts to attract retail tenants: MODERATE Rents: HIGH Lease term: LONG LAUNCH Marketing & PR: EXTENSIVE Renovation: NONE Efforts to attract retail tenants: EXTENSIVE Rents: HIGH Lease term: LONG DECLINE Marketing & PR: MODERATE & CHAOTIC Renovation: NEGLECT OR EXTENSIVE REFORMATTING Efforts to attract retail tenants: EXTENSIVE Rents: LOW Lease term: SHORT

m² Retail: New projects vs extensions New (m²) Extension (m²) 900,000 7 750,000 600,000 1 9 10 9 450,000 1 2 8 11 9 300,000 150,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Savills

Retail: Shopping centres 100% 80% 60% 40% 20% 0% Generation of shopping centre I II III IV 10% 17% 31% 23% 35% 39% 57% 46% 29% 2000 2005 2012 4 RE process: RE-positioning (eg. Klif Warsaw, Blue City, Galeria Mokotów) RE-modelling (eg. Echo Kielce, Wzgórze Gdynia, Promenada) RE-commercialization (eg. Złote Tarasy, Arkadia, Galeria Kazimierz, Manufaktura) RE-branding (eg. Molo aka Piast Szczecin, Dom Mody Klif aka Klif) Savills

Retail: What about REVITALISATIONS? Selected completed projects Manufaktura Łódź Stary Browar Poznań Wzorcownia Włocławek

Retail: What about REVITALISATIONS? Selected completed projects Bonarka Kraków Dukat Olsztyn Dekada Żyrardów

Retail: What about REVITALISATIONS? Selected ongoing projects Sukcesja Łódź Koneser Warsaw Art Norblin Warsaw

Retail: What about REVITALISATIONS? Selected ongoing projects Bawełnianka Bełchatów Alchemia Lublin Hala Koszyki Warsaw

SUKCESJA, Łódź Savills Retail Leading Agent

SUKCESJA, Łódź Savills Retail Leading Agent

SUKCESJA, Łódź - 2011

SUKCESJA, Łódź Q3 2014

SUKCESJA, Łódź Q3 2014

SUKCESJA, Łódź Q3 2014

SUKCESJA, Łódź Savills Retail Leading Agent Mixed-use project: shopping & entertainment centre and hotel; 3.2 ha site; 131,897 m² of usable area; 51,538 m² of GLA; 1,010 parking spaces; Helios cinema: 9 screens with 2,150 seats; LPP Group, Pure Jatomi 172 retail units; 160 rooms in business class hotel; Q3 2014

For more information: Brian Burgess Managing Director T: +48 22 222 4004 E: bburgess@savills.pl Renata Kusznierska Director, Retail Agency & Property Management T: +48 22 222 4014 E: rkusznierska@savills.pl Savills Sp. z o. o. ul. Złota 59 00-120 Warszawa T: +48 22 222 4000 E: info@savills.pl