POLAND RESEARCH & FORECAST REPORT

POLAND RESEARCH & FORECAST REPORT 2013 Accelerating success.

COLLIERS INTERNATIONAL Research & Consultancy The Research & Consultancy department at Colliers International undertakes research and advisory services for Clients in the area of the Polish real estate market in particular; office, retail, industrial and hotel sectors. Our knowledge is supported by years of experience and highlydeveloped analytical methods, which support our Clients in their decision-making processes, identifying opportunities and threats and possible scenarios resulting from changing market conditions. Services provided by the Research & Consultancy department include economic analysis and market studies of the real estate market with respect to future market trends, feasibility studies, competition analyses, investment strategies, location analyses, etc. Our database includes the most current information on the real estate market in Poland, and our close cooperation with Colliers International s agency departments allows for a better understanding of the individual needs of our Clients. Dział Badań Rynku i Doradztwa Colliers International zajmuje się badaniami i szeroko pojętym doradztwem dla Klientów w zakresie rynku nieruchomości komercyjnych w Polsce, w szczególności: biurowych, handlowych, przemysłowych i hotelowych. Nasza wiedza poparta jest wieloletnim doświadczeniem i wypracowanymi metodami analitycznymi, którymi wspieramy naszych Klientów w procesach decyzyjnych, określając szanse i zagrożenia oraz możliwe scenariusze wynikające ze zmieniających się warunków rynkowych. Usługi działu obejmują analizy ekonomiczne i badania rynku nieruchomości komercyjnych z uwzględnieniem przyszłych trendów rynkowych; analizy opłacalności; analizy konkurencji; strategie inwestycyjne; analizy lokalizacji, itp. Nasza baza danych obejmuje najbardziej aktualne informacje na temat rynku nieruchomości komercyjnych w Polsce, a ścisła współpraca z działami agencyjnymi firmy pozwala na lepsze zrozumienie indywidualnych potrzeb naszych Klientów.

TABLE OF CONTENTS Executive summary 6 Economic overview 7 Hotel market 8 Investment market 10 Land market 12 Industrial market 14 Office market 16 Retail market 18 Poland legal overview 20 Key metric definitions 22 Zarys ogólny 25 Gospodarka 26 Rynek hotelowy 27 Rynek inwestycyjny 30 Rynek gruntów inwestycyjnych 32 Rynek magazynowy 34 Rynek biurowy 36 Rynek handlowy 38 Przegląd przepisów prawa polskiego 40 Podstawowe definicje 42

POLAND > POLAND RESEARCH & FORECAST REPORT ANNUAL 2012

RESEARCH & FORECAST REPORT 2013 POLAND FOREWORD Dear Clients and Friends, It is my pleasure to present our latest publication summarizing the trends observed in the Polish commercial real estate market during 2012 as well as our forecast for 2013. 2012 turned out to be a very good year for commercial real estate in Poland. There were many price benchmarks and spectacular transactions in the office and retail sectors including the sale of Warsaw Financial Center, CH Manufaktura, DH Renoma, International Business Center and Platinium Park. There were also several logistics and hotel transactions including the sale of the Intercontinental Hotel. The total supply of office, industrial and retail space increased, although not significantly in every market. Tenants activity remained high and in some regional markets we observed a record volume of transactions. The total volume of investment transactions in Poland amounted to approximately 2.7 billion EUR which was the largest figure since the bankruptcy of Lehman Brothers. We anticipate that there will not be an increase in investment transaction volumes in 2013 but that international and local investors will continue to show interest. As regards leasing, 2013 will remain a good year both in terms of the new supply as well as tenants' activity which should remain at similar levels to 2012. As a leading advisor in a global market we were involved in successful negotiations for many prestigious clients in a great number of key deals. We recorded an impressive result in the Industrial and Logistics Department, where our specialists leased a total of 550,000 m² giving us the dominant position among our competitors and a market share of 56%. Our CEE Investment Services Department made a remarkable achievement acting as an agent in the sale transaction of Warsaw Financial Center and DH Renoma in Wrocław. Colliers International also succeeded in winning the tender for the management of Warsaw Financial Center and Platinium Business Park. As we want to continue to maintain high standards of business and ethics, another four our employees became members of the Royal Institution of Chartered Surveyors (RICS), the world s leading organisation for setting industry standards. Our professionalism and expertise have been recognized by our clients and acknowledged by the industry. Colliers International has won Eurobuild Awards 2012 for Office Agency Team of the Year, Warehouse Agency Team of the Year, Retail Agency Team of the Year as well as CIJ Award 2012 for Agency of the Year and 5* award for Best Property Consultancy in Poland - International Property Awards 2012-2013. We were also awarded the prize for Office Agency of the Year 2011, Industrial Agency of the Year 2011 and Property Management Company of the Year 2011 during CEE Quality Awards Gala 2012. 2012 has been for Colliers International in Poland a year of further development of its business. We have opened new departments, consistently promoted strategy of our brand, and fully committed to provide Service Excellence. We are looking forward to working with you in 2013! Yours sincerely, Monika Rajska Wolińska Managing Partner As part of our company strategy we aim to deliver high standards and offer a wide scope of integrated services. In order to address our clients needs and meet the market demands we have opened new branches in Poznań and Szczecin as well as launched a new business line - Facility Management. 5 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND EXECUTIVE SUMMARY Executive summary RECENT TRENDS Economy: Relative to majority of European countries, Poland is considered to be in good economic condition. However, tight financial markets in the Euro zone have affected the Polish market and contributed to slower economic growth in 2012. GDP growth amounted to 2.25% over the year, the unemployment rate stood at 12.9% and inflation sank to 3.85%. Hotels: 2012 was a good year for hotel operators in Poland. Much of the positive trading results were due to the UEFA Euro 2012 Championships. Also the construction of infrastructure investments in roads, stadia, railway, and airports, contributed to the positive results in hotel trading in most of Poland. Investment: Poland maintained its position as the the leading CEE market in terms of investment volume, liquidity and availability of debt financing for core product. Land: 2012 turned out to be an attractive and optimistic year for the land market which is demonstrated by the total volume of concluded deals. This doesn t mean a return to the growth trend that was witnessed before 2009. It shows however a sign of systematic stabilization in this area of economy, felt in particular by strong and capital-healthy developers and investment funds. MARKET INDICATORS 2012* 2013* GDP GROWTH UNEMPLOYMENT WAGES INFLATION INVESTMENT VOLUMES OFFICE RENTS INDUSTRIAL RENTS RETAIL RENTS YIELDS * COMPARED TO THE PREVIOUS YEAR Industrial: At the end of 2012, the total supply of warehouse space in Poland reached 7.27 mln m². The transaction volume reached the level of 1.65 mln m². The vacancy rate fell in comparison to the previous year and amounted to 9.2%. Offices: At the end of Q4 2012 the office stock reached 5.8 mln m 2, 67% of which was represented by Warsaw market. Leasing activity increased by 10% in comparison to the same period of 2011. Pre-let agreements constsituted a 34% of transaction volumes. The vacancy rate stood at 9%. Retail: At the end of 2012, total modern retail space in Poland reached 9.17 mln m². In 2012 485,600 m² was delivered to the market, which is approx. 22% less than in the previous year. Vacancy rates in major Polish retail markets were lower than 5%. MARKET PROGNOSIS Economy: Although the economy is expected to weaken during the first quarter of 2013, a gradual improvement over the year is expected. The driving force will be economic progress in the Euro zone, which directly impacts the growth of exports incomes and consumption. GDP is unlikely to exceed 2%, while the unemployment rate will rise marginally to 13.6%. Inflation is anticipated to fall to around 3.5%. Hotels: There is no evidence, that 2013 will be strong for the hotel operators. It will be back to curtailing costs and yielding for occupancy. One bright aspect to years 2013-2014 is that it will be considerably cheaper to construct hotels in Poland. Investment: Poland will maintain its position as the dominant market in the CEE. Also Investors confidence and market activity is to be maintained, subject to the EU macroeconomic outlook. Prime yields for core properties are to remain firm. Land: there is a chance that at the end of 2013 we will exceed the value of the last year s transactions. However we should bear in mind that, most of the transactions on the land market will take place in Warsaw. Industrial: Continued interest in investing in regions: Silesia, Wrocław, Warsaw, Poznań, Central Poland will be observed in 2013. The market will be dominated by pre-lets and BTS types of agreements. Lowering vacancy rate will be seen in the whole Poland and sustained price per sqm of warehouse and slight raise of price in regions with vacancy below 5%. Offices: 2013 will witness an increase in the total stock of 630,000 m 2, which will result in growing vacancy rates in majority of office markets. Leasing activity is expected to remain at level similar to 2012. Due to high new supply rental levels may demonstrate a slight downward trend. Retail: Nearly 800,000 m² of retail space is currently under construction, the majority of which should be completed in 2013. It is estimated that new supply will reach 600,000 m². Prime rental levels should be relatively stable in most markets. 6 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND ECONOMIC OVERVIEW Economic overview GENERAL DATA Population Poland 38,542,000 100% Top 3 Cities 3,194,759 8.29% Warsaw (Capital) 1,714,242 4.45% Kraków 759,780 1.97% Łódź 720,737 1.87%, based on Central Statistical Office Exports Imports Germany 25.3% Germany 21.3% UK 6.7% Russia 14.1% France 5.9% China 9.07% based on Central Statistical Office GDP, INFLATION & UNEMPLOYMENT 15% 12% 9% 6% 3% 0% GDP CPI Unemployment rate, based on National Bank INDUSTRIAL PRODUCTION (2005=100, SA) 160 140 120 100 80 60 40 20 0 Poland Germany EU27, based on Eurostat NATIONAL FINANCING SUMMARY Due to effective government policy and firm macroeconomic fundamentals Poland has achieved satisfying economic results, placing it in a strong position relative to other European countries. However, tight financial markets and weakening economic sentiment in the Euro zone have negatively impacted the Polish market. According to the International Monetary Fund (IMF), Polish GDP amounted to 2.25% in 2012. In comparison with 2011, when the economy grew at around 4.3%, the scale of the economic slowdown is apparent. Nevertheless, quarter by quarter, other indicators provide evidence of improving economic performance. The Polish balance of trade reached PLN 30 mld in 2012, which is an improvement in comparison to 2011. The export rate increased by 8%. Imports increased by 4%. One primary cause of this improvement in trade was the weaker zloty, which boosted the profitability of foreign investing. According to Central Statistical Office (GUS), Polish entrepreneurs decided to diversify their trade partners. While exports to Sweden and Italy decreased, exports to countries such as: Russia, Ukraine, United Kingdom, Hong Kong and India increased. Poland continues to attract foreign investment given its significant workforce resources (the share of people in working age in relation to the whole population amounts to 68%), located in economic growth centres spread across the country. This is helping to drive growth in economic and foreign direct investment, which in turn is helping to drive the growth of real estate growth markets, especially in the larger regional cities. PROGNOSIS According to economist s forecasts, economic growth will reach 2% in 2013. It is anticipated that at the beginning of 2013 Poland will be on the edge of recession and will be one of few countries in Europe, in which the tempo of GDP growth will be worse in comparison to the previous year. The lower rate of GDP is the consequence of the decline in domestic demand, caused by deterioration of the labour market. The Gdańsk Institute for Market Economics (IBnGR) predicts an increase of the unemployment rate to 13.6% and poor consumer moods. According to BZ WBK, after the economic downturn during the first quarter in 2013, however, a gradual improvement of the situation is expected. The driving force will be an improving situation in the Euro zone, which directly affects the growth of exports, incomes and domestic consumption. A significant barrier of economic growth in 2013 in Poland will be low dynamics of domestic as well as foreign investment. According to predictions of IBnGR, this investment will grow by only 2% in the year ahead. The foreign investment forecast is down in light of greater perceived risks considering the uncertainty of the European market and variability of exchange rates. Experts indicate that in the long-term there is a possibility of appreciation of the zloty (in 2012 the euro average exchange rate accounted to PLN 4,2 and in 2013 it is predicted to be PLN 4). 9% 6% 3% 0% -3% -6% -9% Government Deficit (% of GDP) Current Account Balance (% of GDP), based on OECD 7 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND HOTEL MARKET Hotel market OCCUPANCY AND ADR IN MAJOR POLISH CITIES CITY* *2 5-star hotels OCCUPANCY Warsaw 69% 82 Kraków 63% 62 Gdańsk 64% 63 Wrocław 66% 59 Poznań 49% 69 Łódź 55% 62 SELECTED HOTELS OPENINGS IN 2012 HOTEL NAME CITY ADR (EUR) Express by Holiday Inn *** Warsaw 124 NO. OF ROOMS Ibis *** / Ibis-Budget ** Kraków 135 / 167 Ibis Syles *** Gdynia 86 Holiday Inn **** Łódź 127 Hilton Garden Inn **** Rzeszów 101 TOURIST ARRIVALS (mln) 20 15 10 5 0 GENERAL OVERVIEW 2012 was a good year for hotel operators in Poland. Much of positive trading results were due to the UEFA Euro 2012 Championships. We estimate this event produced over 175,000 room nights for the host cities. HOTEL SECTOR IN MAJOR CITIES IN POLAND WARSAW Warsaw registered the highest ever ADR s during the UEFA Euro 2012 game play days. As an example, on June 8th (Poland vs. Greece), 5-star hotels increased their RevPars to EUR 200 and experienced over 87% occupancies. The next two games played at the National Stadium produced over 98% occupancies, with historic ADR s and RevPars. Some MICE business was cancelled during the June and July months in the hotels, but these months are typically slower for the MICE sector. Warsaw, registered high occupancies in the 5 star segment hotels with ADR s at EUR 113 the highest ADR in the past 10 years - and a very favourable occupancy of 74.6%. The strong demand for room nights in the business and small conference segments were noticed throughout the year. This, combined with the EURO 2012 Championships, the 5 star hotels performed at an average occupancy of 74.6% and ADR s of circa EUR 113. The 3 and 4 star hotels also enjoyed a good trading year, occupancies were reported at the level of 69.5% and ADR s of EUR 82.5 were achieved. KRAKÓW The city was chosen as the Euro 2012 British football home base for the championships. This factor, as well as a relatively long summer season helped Kraków perform positively versus 2011. The branded hotel products fared well, the occupancy in that segment was circa 68% at an ADR of EUR 76. 5-star hotels fared well at occupancies of circa 74% with a yearend ADR of EUR 94. TRICITY (GDAŃSK, GDYNIA AND SOPOT) Tricity achieved the highest ADR across all the Polish cities during the Euro 2012 tournament, with ADR reaching EUR 225. Gdańsk realized 64% occupancy through all hotel categories, with an average daily rate of EUR 63. The 5 star branded hotels finished the year at 69% occupancy and an ADR of EUR 87. Sopot city, we estimate that the 5 star hotel segment performed at the level of 61% in occupancy at an average achieved rate of EUR 105. POZNAŃ, based on Institute of Tourism During the Euro 2012 games, Poznań RevPAR growth started on a high note during the kick-off match in Poznań, with RevPAR increasing to EUR 179, RevPAR growth was led by ADR growth and occupancy. However, during the subsequent tournament nights, RevPAR growth remained lower as occupancy reached 91.6% (+14.3%) on 14 June when Italy faced Croatia, and during the last match played in Poznań on 18 June. During the Italy versus Ireland game, occupancy reached 97.4% (+57.7%); ADR increased to EUR 198. 8 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND HOTEL MARKET HOTELS BY CATEGORY IN MAJOR POLISH CITIES 19% 8% 8% 16% The city of Poznań 2012 showed some improvement for a few hotels there. The Sheraton, the IBB Andersia, the IBIS and the Campanile are the city s best performers. The city in all categories managed to do 49% in occupancy and achieved an ADR of EUR 69. The best performing hotel had a ca. 66% occupancy, at a EUR 91 ADR. SZCZECIN The city performed with slight decline over 2011. Occupancies finished at 59%, with an overall ADR of EUR 54. 49% Hotel ***** Hotel **** Hotel *** Hotel ** Hotel *, based on Hotel Registered in Poland FORMALLY RATED HOTELS AS OF END 2012 CATEGORY WARSAW KRAKÓW POZNAŃ Hotel ***** 10 10 3 Hotel **** 8 26 5 Hotel *** 27 75 25 Hotel ** 16 20 15 Hotel * 9 6 2 Total: 70 137 50 CATEGORY WROCŁAW GDAŃSK ŁÓDŹ SZCZECIN Hotel ***** 5 4 0 0 Hotel **** 11 6 2 4 Hotel *** 25 18 13 7 Hotel ** 4 7 9 5 Hotel * 4 1 2 7 Total: 49 36 26 23, based on Hotel Registered in Poland SELECTED PLANNED HOTELS OPENINGS IN 2013 ŁÓDŹ Regional and local conferences held in the city were smaller, with less overnight paying guests. Andel s Hotel in the Manufaktura shopping centre continues to be the leader in the market. The best performing 4-star hotel managed to perform at a 57% occupancy and EUR 75 ADR. The city did 55% in occupancy across all branded hotels, and an achieved rate of EUR 62. WROCŁAW Wrocław also enjoyed a considerable uptick during the Euro 2012 championships. In Wrocław, occupancy was higher than 92 percent during the three matches, and hoteliers benefited from the strong RevPAR growth on both 8 June and 16 June. Interestingly, during the mid-week game between the Czech Republic and Greece on 12 June, ADR growth only increased moderately. This low uptick can be explained by the proximity of Wrocław from the Czech border - a little more than an hour away - which saw many fans coming on a day trip from the neighboring country. The branded hotels leading in occupancy at levels - 64% and an achieved ADR of EUR 63 was achieved across all categories. The 5-star hotels managed to deliver circa EUR 86 in ADR and a 64% occupancy rate. OTHER POLISH CITIES Katowice city wide occupancy was 51.5% with an ADR of EUR 61, the market leader is the Angelo hotel which performed above the city average achieved results. Other notable hotel investments include PGB Dom in Świnoujście and Golden Tulip condo hotel in Międzyzdroje, which opened in April and July respectively. In Rzeszów, the Hilton Garden Inn, with 104 rooms, was opened in September of 2012. PROGNOSIS Aside from Warsaw and the COP 19 World Climate Conference, there is no evidence, that 2013 will be strong for hotel operators. It will be back to curtailing costs and yielding for occupancy. HOTEL NAME DoubleTree by Hilton Conference Centre ***** CITY Warsaw 367 NO. OF ROOMS We will see a significant amount of privately owned and operated hotels to be placed on sale, we also envision some of the existing branded hotels in major cities changing ownership. Renaissance by Marriott ***** Warsaw 250 Hampton by Hilton *** Warsaw 116 SoundGarden ** / *** Warsaw 206 Puro *** Kraków 128 DoubleTree by Hilton **** Łódź 197 One bright aspect to next year and 2014, is that it will be considerably cheaper to construct hotels in Poland due to the building and construction industry contraction. We continue to support our last year s recommendations, seeing optimistic horizons for globally branded 1-, 2-, 3-star products in most regions, towns and cities. Thanks to the UEFA Euro 2012, we can observe increasing availability of efficient modes of communication, such as road, rail and air network, which are significant factors of hotel industry growth. It allows us to be optimistic about the future. 9 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND INVESTMENT MARKET Investment market Key Investment Figures Investment Turnover EUR 2.7 bln Prime Office Yields 6.25% Prime Retail Yields 6.00% Prime Industrial Yields 7.75% SUMMARY Total transaction volume of approximately EUR 2.7 billion approached pre-crisis levels of 2007. Large single transaction volumes such as Manufaktura or Warsaw Financial Center underline the confidence vested in the Polish market by the international investment community. Poland maintained its position as the the leading CEE market in terms of investment volume, liquidity and availability of debt financing for core product. YIELDS PRIME (NET INITIAL) YIELDS 14% 12% 10% 8% 6% 4% 2% 0% Office Retail Industrial Prime office yields for Warsaw CBD are in the range of ca. 6.25-6.50% for prime CBD Core prime assets and ca. 6.75% for CBD Fringe. Core yields in Warsaw s Mokotów district (second largest office sub-district in the city and one of the most active submarkets in terms of real estate investment over the last 24-30 months) have been subject to an upward movement from sub-7% levels in Q4 2011 to ca. 7.5-7.75% in H2 2012 due to market saturation and softening leasing environment. Notwithstanding the above, this district recorded two significant transactions in 2012, i.e. the acqiusition of Platinum Business Park by Allianz and Marynarska Business Park by Heitman. Prime retail yields are in the range of sub-6%- 6.5% in Warsaw and sub-6% (selected trophy assets )- 8.5% in secondary cities. Prime logistics yields are in the sub-8 region (selected locations only), where the pricing is largely driven by the weighted average unexpired lease term. Properties with a shorter residual lease term would be expected to trade with a ca. 50-75 bps discount. VOLUMES Total investment volume of EUR 2.7 bln reached 2007 levels and exceded last year s performance, mostly due to the impressive fourth quarter, which accumulated approximately EUR 1.6 bln in closed transctions. INVESTMENT VOLUME (EUR M) 5,000 VOLUMES BY SECTOR Predominantly due to the scale of the Złote Tarasy, Manufaktura and Renoma transactions, the retail sector volume accounted for 45% of the market share, followed by the office asset class at 34% and industrial at 17% - the latter recorded a sigificant growth in volume in comparison to the previous 2 years. 4,000 3,000 2,000 1,000 0 DEALS SPECIFICS AND STORIES The market recorded in excess of 40 institutional transactions with an average ticket of ca. EUR 65 mln and 8 transactions exceeding the EUR 100 mln mark. Most notable transactions included the acquisition of Złote Tarasy by AXA Real Estate and CBRE Property Fund Central Europe LP for a reported EUR 475 million, the acquisition of Manufaktura by Union Investment for a reported EUR 390 million as well as the Warsaw Financial Center for ca. EUR 210 mln by a joint venture between Allianz Real Estate and Tristan Capital Partners. We note that the transaction cycle has lengthened and now on average amounts to approximately 6-9 months from commencement of marketing to closing of the deal, depending on the transaction structure. 10 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND INVESTMENT MARKET INVESTMENT VOLUME BY SECTOR (EUR M) 4% Activity in secondary cities in 2012 (39% of total investment volume EUR 1.07 bln) has been predominantly driven by retail and logistics transactions. Office sales outside of Warsaw have been limited to a minimum, partly due to the limited availability of investment grade product but also due to the fact that Warsaw is the main market generating tenant interest. 17% 34% Office PROGNOSIS Retail Warehouse Hotel Any further movement in pricing is expected to depend largely on the impact of the sovereign debt crisis and additional capital requirements of the main senior lenders in the market. 45% Prime yields fore core properties will remain firm. Investor confidence and market activity is to be maintained, subject to the EU macroeconomic outlook. Poland will maintain its position as the dominant market in the CEE. 11 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND LAND MARKET Land market TRENDS 2013 SUPPLY DEMAND PRICES TRENDS 2013 SUPPLY DEMAND PRICES OFFICE RETAIL GENERAL OVERVIEW As expected, 2012 turned out to be an attractive and optimistic year for the land market which is best proven by the total volume of concluded deals. This doesn t mean a return to the growth trend that we witnessed before 2009. It showever a sign of systematic stabilization in this area of economy, feltin particular by strong and capital healthy developers and investment funds. Investors most willingly were buying land for office and residential development. Overall funds divided their investments by 85% for office and residential, 10% retail and 5% for industrial investment sites. Warsaw accounted for 80-85% of all land purchased for residential or office developments. Despite the progressive stabilization on the land market in 2012, there were also some negative trends, which were as a result of financial problems that lead some developers and investment funds to sell their land or to offer for sale the investment areas taken-over by banks from their customers. It is also worth noting that, according to our forecasts, some business entities on the market were seeking possibilities of temporary or permanent cooperation with their competitors. TRENDS 2013 SUPPLY DEMAND PRICES RESIDENTIAL TRENDS In 2012, we could observe a change in the strategy of the companies participating in the investment processes on the land market and looking for new investment possibilities. We noticed an increase in their interest mainly for the office development land. Residential developers, in particular, but also some dealing in the retail real estate market, began an intensive search of land suitable for construction of office buildings. This trend was particularly evident in major Polish cities such as Warsaw, Wrocław and Kraków. A similar situation, although in a slightly smaller scale, applies to the land suitable for retail development, located in cities with more than 30 thousand inhabitants. This land is of interest to the entities previously investing in the housing market. TRANSACTIONS PLANNED TO BE CLOSED IN 2013 CITY INVESTMENT POTENTIAL (m 2 ) PURPOSE Warsaw 65,000 Office Warsaw 45,000 Residential Wrocław 10,000 Office Kraków 10,000 Office This phenomenon is the result of the entry into force of the so called Developer act, but also limited access to investment finance, banks' lending policies and good indicators and forecasts for the office market in Poland. Among the factors increasing interest in investing in the land assigned for construction of offices one should also mention signals from companies specializing in this segment, according to which in the near future, a demand for land suitable for office development should be observed in cities such as Łódź and Poznań. In case of Łódź, among factors accelerating its development two should be enumerated: opening in 2012 of a highway connecting the city with the Warsaw and the announced reduction of travel time between these two cities up to 35 minutes due to the construction of a new high-speed rail link. 12 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND LAND MARKET PRICES AND TRANSACTIONS PRICES LAND TYPE Office Office Mix-use Residential LOCATION Grzybowska, Warsaw Koszykowa, Warsaw Modlińska, Warsaw Powstańców Śląskich, Warsaw SIZE (ha) 0.2 41 PRICE (PLN mln) 0.9 confidential 6 32.5 2.3 14 In 2012, the value of land transactions for office, retail, residential and industrial development, including acquisition of companies holding such assets, reached PLN 1.5 billion (this is up on 2011 s land investment transaction volumes which totalled PLN 1.2-1.3 billion). One of the main reasons for the volume of transactions in 2012 was a reduction, in the whole Poland, of the prices of all sectors of the land market. It is a continuation of the trend observed in 2011. In comparison to transaction prices in 2011, transaction prices in Polish cities are falling down. Overall prices decreased by 7% in Katowice and 7% in the suburbs of Warsaw. Residential Jaśminowa, Warsaw 6.8 68 Office land grew cheaper in particular in Katowice by 12%, in Tricity by 10% and in Wrocław by 11%. PRICES FOR THE OFFICE DEVELOPMENT SITES (EUR/m² of GLA) CITY/REGION MIN MAX MID-POINT Warsaw - city centre 400 800 400 Warsaw - suburbs* 160 400 280 Kraków 150 320 235 Łódź 100 170 135 Poznań 140 280 210 Katowice 75 160 117.5 Tricity 100 260 180 Wrocław 100 300 200 PROGNOSIS 2013 years will be characterized by dynamics of transactions on office and retail land markets, primarily in cities such as Warsaw, Kraków and Wrocław, and secondly in Łódź and Poznań. We expect that new sales of land for housing development will take place mainly in Warsaw and Kraków. In other local markets, such as the Tricity, Poznań and Szczecin, residential land sales occur, transactions will be made primarily by local developers. From our recent consultations with developers and investment funds regarding their planned expenditures on real estate properties in 2013, we draw a conclucion that there is a chance that at the end of 2013 we will exceed the value of the last year s transactions. However, we should bear in mind that most of the transactions on the land market will take place in Warsaw. LAND DEPARTMENT SELECTED ONGOING PROJECTS IN 2013 SELLER S REPRESENTATION PORTFOLIO PRICES FOR THE RESIDENTIAL DEVELOPMENT SITES (EUR/m² of PUM) CITY/REGION MIN MAX MID-POINT Warsaw - city centre 300 900 600 Warsaw - suburbs* 100 380 240 Kraków 120 300 210 Łódź 70 180 125 Poznań 80 280 180 Katowice 50 180 115 Tricity 100 300 200 Wrocław 130 300 215 * Mokotów, Ursynów CLIENT PROJECT FUNCTION PLOT SIZE (ha) Aurantia Sp. z o.o. Piaseczno Residential 1.16 Longbridge Sp. z o.o. Land portfolio Residential ca. 5.39 Bacoli Properties Sp. z o.o. Piotrkowska, Łódź Mix-use 0.57 Bumar Sp. z o.o. Land portfolio Residential and office ca. 51.31 Instalexport S.A. Grodzisk Mazowiecki Retail 8.01 Central Plaza Sp. z o.o. Grzybowska, Warsaw Office 0.22 Metsa Tissue/Konstans Konstancin-Jeziorna Mix-use 66.35 IGD Silesia Sp. z o.o. Bukowińska, Warsaw Office 0.6 Ancona Sp. z o.o. Land portfolio Mix-use ca. 25 Private person Konopnickiej, Kraków Office - CEE Centrum Sp. z o.o. Warsaw Airport Business Park Mix-use 14.15 Pepsi Cola General Bottlers sp. z o.o. Chrzanowskiego, Warsaw Sucholeska, Poznań Mix-use 5.41 13 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND INDUSTRIAL MARKET Industrial market TRENDS 2013 SUPPLY DEMAND RENTS VACANCY DEVELOPERS MARKET SHARE BY EXISTING SUPPLY GENERAL OVERVIEW The year 2012 was a good period for the Polish industrial market. Throughout the year over 430,000 m 2 of modern warehouse space was delivered to the market, which represented almost 10% growth in comparison to 2011. The largest amount of new projects was delivered in Wrocław. Currently the total supply of warehouse space in Poland amounts to more than 7.27 million m 2. In terms of transaction volume, 2012 turned out to be similar to 2011. Demand throughout the year was fairly steady. During the four quarters almost 1.7 million m 2 of warehouse space was leased, the majority of which was located in Warsaw and Central Poland. The most popular among the signed lease agreements were new deals, which constituted 56% of tenants activity. In comparison to Q4 2011 the vacancy rate in Poland dropped from 11.4% at the end of 2011 to 9.2% at the end of December 2012. A decrease in available space was observed in most markets. Over the year, rents remained relatively stable. Upward trend was observed only in the regions where the vacancy rate was low. 32% 26% SUPPLY 3% 2% 4% 4% 8% 21% Warsaw at the end of 2012 the supply of modern warehouse space in three Warsaw zones amounted to 2.59 million m 2. There is currently approximately 43,000 m 2 of warehouse space under construction, most of which is located in Warsaw zone II. Central Poland at the end of 2012 total resources of warehouse space in Central Poland increased to over 1 million m 2. During the whole year about 50,000 m 2 were delivered to the market. Prologis SEGRO MLP Group Goodman Panattoni CA IMMO PointPark Properties Others Poznań in terms of supply, 2012 did not bring any significant changes in the Poznań warehouse market and at the end of the year, the total stock of modern warehouse space amounted to nearly 895,000 m 2. Currently almost 20,000 m 2 are under construction. Upper Silesia right after Warsaw, it is the second largest warehouse market in Poland. The current supply is estimated at over 1.37 million m 2. Throughout the year about 38,000 m 2 were delivered to the market within 3 projects. Kraków in terms of existing supply, Kraków is still one of the smallest industrial markets in Poland. Total warehouse space amounts to slightly more than 136,000 m 2. TOTAL SUPPLY BY REGIONS 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Wrocław the current supply of modern warehouse space amounts to over 717,000 m 2. In 2012 almost 58,000 m 2 were completed and in 2013 another 67,000 m 2 of space are planned to be delivered to the market. Gdańsk at the end of Q4 2012 warehouse recources increased to 170,000 m 2. Throughout the year the supply increased by almost 35,000 m 2. There is currently 14,000 m 2 of modern warehouse space under construction. Toruń in comparison to 2011 the total stock of warehouse space in Toruń did not change. At the end of 2012 there was almost 100,000 m 2 of modern warehouse space located in the city. Szczecin in terms of existing modern warehouse space, Szczecin is the smallest industrial market in Poland. Its resources have remained unchanged for several years and amount to nearly 42,000 m 2. Currently there is approximately 6,900 m 2 under construction within the North-West Logistic Park. DEMAND Warsaw in terms of transaction volume three Warsaw zones have dominated the market. During 2012 almost 570,000 m 2 of space was leased, 38.5% of which was located in Warsaw zone II. Most of the lease agreements were signed in the fourth quarter of 2012. Among the agreements, new contracts dominated the market and constituted 57.5% of tenats activity. Central Poland leased space in 2012 reached the level of 290,000 m 2, representing about 30% growth in comparison to the previous year. The majority of space was rented in the third quarter (almost 52% of the total transaction volume). Renegotiations dominated the market and constituted almost 69% of all signed deals. 14 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND INDUSTRIAL MARKET SELECTED LEASE TRANSACTIONS TENANT AREA (m 2 ) BUILDING Leroy Merlin 56,000 Panattoni Park Stryków DSV 36,500 Panattoni Park Teresin DHL 33,800 Prologis Park Dąbrowa Lear 32,300 Panattoni Legnickie Pole FM Logistic 32,000 Pilkington Automotive 31,000 Logwin 30,700 VACANCY RATE 60% 50% 40% Europolis Park Poland Central Panattoni BTS Tarnobrzeg Diamond Business Park Piaseczno Poznań the year 2012 turned out to be another record in terms of leased warehouse space. The transaction volume reached the level of almost 175,000 m 2. Renegotiations and new agreements dominated, which represented 63% and 33.7% respectively. Upper Silesia space leased in 2012 reached the level of 250,000 m 2, which represents a significant drop in comparison to the year 2011, when approximately 355,000 m 2 of space was leased. Among the contracts, new agreements dominated and constituted more than 50% of all signed deals. Kraków in terms of transaction volume, the year 2012 was not very impressive. During the whole year almost 18,900 m 2 of space was leased, which represents significant drop compared to the year 2011 with over 54,000 m 2 of leased space. Wrocław the volume of transaction in comparison to 2011 remained at the similar level of more than 200,000 m 2. Most contracts were signed in the first and third quarter of 2012. Nearly 63% of the contracts were new deals. 25% of transaction volume were BTS agreements. Gdańsk from year to year steady growth of interest in the region among tenants is observed. The transaction volume increased by 18% compared to 2011 and was close to 67,000 m 2. New agreements continued to dominate and constituted almost 63% of total demand. Toruń it is the only region in Poland where, similarly to the situation in the previous year, no lease transactions of modern warehouse space were signed. Szczecin in 2012 there was nearly double increase of transaction volume reported, compared to 2011. There were 4 lease agreements signed for a total area of over 23,000 m 2. 30% 20% 10% 0% Q4 2011 Q4 2012 VACANCY At the end of 2012 vacancy rate in Poland amounted to 9.2%, which represented 670,791 m 2 of space and is a significant drop compared to 2011 (11.4%). Warsaw the vacancy rate in 2012 showed a decreasing tendency and stood at 11.7% at the end of the year, with 16% at the end of 2011. Regional markets in relation to the end of 2011, the vacancy rate declined in Wrocław, Upper Silesia, Gdańsk and in Szczecin (where the most significant drop from over 50% to nearly 20% was recorded). The lowest rate was recorded in Gdańsk, Poznań and Upper Silesia and the highest invariably in Szczecin. EFFECTIVE RENTAL LEVEL (EUR/m²) REGION MIN. (EUR/m²) MAX. (EUR/m²) Warsaw Zone I 3.90 5.50 Warsaw Zone II 1.90 2.80 Warsaw Zone III 2.00 2.50 Central Poland 2.00 3.10 Poznań 2.60 3.10 Upper Silesia 2.85 3.35 Kraków 3.50 4.50 Wrocław 2.75 3.25 Gdańsk 3.00 3.55 Toruń 2.50 2.90 Szczecin 2.65 2.85 RENTAL RATES Rental rates remained rather stable throughout the year, with a slight upward trend in the regions, where demand was the highest and vacancy rates were the lowest. PROGNOSIS It is estimated that new supply in 2013 will reach a slightly lower level than in 2012. At the end of 2012 approximately 250,000 m 2 of modern warehouse space was under construction. It is worth mentioning that about 88% of space in active construction has already been leased. Therefore we can expect that the vacancy rate will be gradually reduced, which may cause slight increase of rents in selected markets. A further decrease in the vacancy rate is expected. However, the number of speculatively built projects will not increase. The demand should remain relatively stable, both in Warsaw and in most regional markets. Although it does not exclude a small drop in the second half of the year. 2013 will still be dominated BTS and pre-let agreements, the majority of which will be located in the west part of Poland, in the vicinity of highways. 15 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND OFFICE MARKET Office market TRENDS 2013 KEY OFFICE FIGURES CITY SUPPLY DEMAND RENTS VACANCY 28.1% SUPPLY (m 2 ) (%) Warsaw 3,859,000 8.8% Kraków 485,650 4.6% Wrocław 385,990 9.2% Tricity 283,300 9.9% TAKE-UP STRUCTURE IN WARSAW 3.2% 3.2% 65.5% New deals Renegotiations and Renewals Expansions Owner-occupied space VACANCY Poznań 242,480 15.1% Łódź 211,790 14.7% Katowice 201,600 8.4% Lublin 69,180 4.5% Szczecin 61,820 19.8% TAKE-UP IN WARSAW (in thous. m 2 ) 250 GENERAL OVERVIEW At the end of 2012 the total office stock amounted to 5.8 mln m 2. New supply delivered to the market reached 0.5 mln m 2. Tenants activity reported in 2012 exceeded 960,000 m 2, 40% of which was registered in the regional cities. Pre-let agreements accouted for 34% of total transaction volumes. At the end of the fourth quarter the overall vacancy rate stood at the level of 9%. The highest indictor was registered in Szczecin (19.8%), while the lowest in Lublin (4.5%) and Kraków (4.6%). At present over 1 mln m 2 of modern office space is under construction. Developers activity focuses on Warsaw, where nearly 60% of new supply will be delivered. In case of regional cities, the most active markets are Wrocław, Trójmiasto and Kraków. Rental rates remained stable. SUPPLY Warsaw - the new supply delivered in 2012 amounted to 268,000 m 2. The total resources of modern office space increased to 3.86 mln. Over 70% of newly completed office space was delivered outside the city centre. The highest growth in supply was noted in the Upper-South (US) and the South-East (SE) zones, where such schemes as Wilanów Office Park A (20,400 m 2, SE), phase II of Mokotów Nova (15,000 m 2, US) and Iris (13,500 m 2, US) were completed. When it comes to central zones the highest level of activity was observed in the City Centre-Fringe as two office projects Green Corner (24,500 m 2 ) and Senator (21,000 m 2 ) were delivered. Regional cities thanks to completion of 245,000 m 2 of office space, the total supply in the eight regional cities reached the level of 1.94 m 2. Wrocław (70,000 m 2 ), Kraków (51,300 m 2 ) and Poznań (39,000 m 2 ) recorded the largest increases in terms of the amount of delivered space. A significant growth was also registered in Szczecin, where in comparison with the fourth quarter 2011 the total office resources rose by 43%. The biggest investments completed in 2012 were phase I of Green Horizon (16,000 m 2, Łódź), Aquarius Business House I (14,200 m 2, Wrocław), Andersia Business Center (11,600 m 2, Poznań) and two buildings within Enterprise Park (15,160 m 2, Kraków). DEMAND Warsaw demand for office space surpassed 600,000 m 2, which represented a 6% growth in a yoy analysis. Over 70% of tenants activity was recorded in the non-central zones, among which Mokotów was the most popular location. The average deal size in the city centre amounted to 885 m 2, whereas outside the city center it reached the level of 1,150 m 2. The majority of registered demand constituted new contracts and renegotiations/renewals. In comparison to 2011 the share of pre-let transactions in the total volumes increased by 12 percentage points and reached the level of 34%. Prelets were the biggest agreements signed during the discussed period: T-Mobile (27,000 m 2, T-Mobile Office Park), Asseco (20,400 m 2, Wilanów Office Park), Frontex (14,500 m 2, Warsaw Spire) and ING (12,100 m 2, Plac Unii). 200 150 100 50 0 16 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND OFFICE MARKET TAKE-UP LEVELS IN MAJOR REGIONAL MARKETS 120,000 100,000 80,000 60,000 40,000 20,000 0 2011 2012 SELECTED LEASE TRANSACTIONS IN 2012 TENANT AREA (m 2 ) BUILDING Regional cities in 2012 tenants activity in regional markets reached the level of 354,000 m 2, which translated into a growth of 18.5% in comparison to 2011. The share of pre-let transactions increased to 35% (against 24% in 2011). In case of some markets (Wrocław, Trójmiasto), pre-lets comprised over 50% of demand. The highest take-up level was registered in Kraków (107,000 m 2 ). Very good results were also noted in Wrocław and Trójmiasto, where 90,100 m 2 and 62,400 m 2 were rented respectively. The biggest transactions signed in 2012 were BPH in Euro Office Park (18,800 m 2, Trójmiasto), Nokia Siemens Networks in Green Towers (14,400 m 2, Wrocław) and Delphi Poland in Enterprise Park (8,400 m 2, Kraków). VACANCY Warsaw the vacancy rate continued the upward tendency and reached 8.8% at the end of December 2012. The vacancy in the city centre amounted to 8.82%, whereas in the non-central locations it stood at 8.78%. Regional cities the lowest vacancy rates were registered in Kraków (4.6%) and in Lublin (4.5%). Wrocław, Poznań and Szczecin, due to significant new supply, recorded increases in the vacancy rates, which amounted to 9.2%, 15.1% and 19.8% respectively. RENTS Delphi Poland Gaz System Tieto Pre-lease 8,400 Renegotiation & expansion 6,360 Expansion 3,800 Enterprise Park Kraków Cristal Park Warsaw Aquarius Business House Wrocław Warsaw the rental rates remained stable throughtout the year. The average base rents in the central locations amounted to EUR 22.20 /m 2 /month. The office space in the schemes outside the city centre was offered at EUR 15.25 /m 2 /month on average. Regional cities average rents recorded no significant changes and varied from EUR 12.00 /m 2 /month to EUR 15.50 /m 2 /month. Łódź and Katowice offered the most attractive leasing conditions. Euro RSCG Renegotiation 3,350 Antares Warsaw PROGNOSIS Roche DSV LG Merck Renegotiation 3,220 Pre-lease 3,000 New deal 2,800 Pre-let 2,400 Malta Office Park Poznań Ambassador Warsaw Mokotów Nova Warsaw Oxygen Park Warsaw In 2013 total resources of office space in Poland will increase by approximately 630,000 m 2. In 2013 the Warsaw market will recorded a growth of 320,000 m 2. New investments will be compeleted mainly in the zones outside the city center (Mokotów, Włochy, Wola). Among regional markets the biggest growth in supply will be observed in Wrocław, Tricity and Szczecin. Demand for office space is expected to remain at level similar to 2012. Due to growing new supply, regional markets may register stronger tenants activity. AVERAGE ASKING RENTS CITY Warsaw: city centre Warsaw: outside city centre MIN. (EUR/m 2 ) MAX. (EUR/m 2 ) 17.00 27.00 12.00 17.00 Kraków 12.00 15.00 The vacancy rate in Warsaw will continue the upward tendency, mainly due to increasing availability of space in the non-central locations. Similar to Warsaw, a rise in vacancy will be reported in majority of regional markets. Kraków will be the only exception as the vacancy rate in the city is expected to decrease. Rents will demonstrate a downward trend, especially in case of markets with increasing vacancy rates. Wrocław 11.00 16.00 Tricity 12.75 15.00 Poznań 14.00 16.00 Katowice 11.00 13.50 Łódź 11.00 13.00 17 COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT 2013 POLAND RETAIL MARKET Retail market TRENDS 2013 SUPPLY DEMAND RENTS VACANCY EVOLUTION OF RETAIL STOCK IN POLAND m² mln m² 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Annual Supply MAIN RETAIL SCHEMES COMPLETED IN 2012 CITY PROJECT DEVELOPER Rzeszów Kielce Gorzów Wielkopolski Wrocław Galeria Rzeszów Korona Kielce Nova Park Sky Tower Star Europa Holding Church Land Development Futureal, Caelum Development LC Corp Sky Tower Total Supply 10 9 8 7 6 5 4 3 2 1 0 SIZE (m² GLA) 42,200 34,400 32,400 25,000 Grudziądz Alfa Centrum JWK Invest 22,000 Kędzierzyn -Koźle Warsaw Szczecin Świdnica Odrzańskie Ogrody Auchan Łomianki (Phase I) Outlet Park Szczecin Galeria Świdnicka PA Nova 22,000 Immochan 18,000 Echo Investment 16,500 Rank Progress 15,500 OVERVIEW In 2012, developers delivered 485,600 m 2 of modern retail space to the market, representing a 22% decrease compared to the previous year. The new supply was dominated by smaller retail developments with a leasable area not exceeding 35,000 m 2. The largest retail scheme supplied in 2012 was Galeria Rzeszów (42,000 m 2 of leasable space), which was completed in November 2012. More than 30% of the new supply was located in the eight largest Polish agglomerations, while almost 60% was delivered in small and medium-sized cities (less than 200,000 inhabitants). New developers of outlet centres have appeared on the Polish retail market. The first outlet centre was delivered in Szczecin (Outlet Park Szczecin) by Echo Investment, while in Rzgów (near Łódź) Ptak Outlet was completed by Centrum Targowe Ptak SA. At the end of the year, the total supply of modern retail space stood at 9.17 million m 2. In 2012, new international retail chains entered the Polish market, e.g. the American brands Victoria s Secret, Bath&Body Works and American Eagle Outfitters as well as Scandinavian COS (Collection of Style) owned by H&M Group. Pop-up shops, temporary shops that open in a given area for only a specified time, are starting to appear in shopping centres. This type of store allows retailers to identify the market and is generally a solution chosen by new brands and young designers, such as Pop-Up Shop Bohoboco and Loft37.pl and Pop-Up Store Blessus located in Stary Browar or the Łukasz Jemioł boutique in Manufaktura. The vacancy level in the largest Polish agglomerations did not exceed 5%. The lowest space availability was recorded in Warsaw and Szczecin. RETAIL SECTOR IN MAJOR CITIES IN POLAND Warsaw with more than 1.35 mln m² of modern retail space is the biggest retail market in Poland. Specialised SCs constitutes 25% of total stock (almost 278,000 m²). In 2012 one shopping centre was delivered to Warsaw market, namely the first phase of Auchan Łomianki (18,000 m²). Currently there is 59,000 m² under construction in three new retail schemes (Galeria Miejska Plac Unii, Galeria Podkowa and Factory Annopol outlet centre) and two extensions (Galeria Mokotów and the 2nd phase of Auchan Łomianki). The vacancy rate is very low, at the level of 1.6%. Retail market in Warsaw records the highest rents in Poland. Prime rental value for units of approx. 100 m² located in the best shopping centres and leased by fashion tenants amounts to more than EUR 90/m². Kraków retail market offers 490,000 m² located in 13 shopping centres. One retail complex represents specialised SC Futura Park with Factory outlet. In terms of retail pipeline one scheme is under construction Galeria Bronowice (60,000 m²) developed by Immochan. Vacancy rate recorded in shopping centres in Kraków is 4.5%, which is the highest level among major Polish agglomerations, however there are significant differences between individual shopping centres. Poznań at the end of 2012 total retail stock amounted to 520,000 m², nearly 15% of which are specialised SC. Currently two traditional shopping centres are under construction located at the railway station Poznań City Center (58,000 m²) and small mix-use scheme Galeria MM (5,000 m² of retail space). Retail market in Poznań is relatively balanced with vacancy rate at the level of 2.3%. Prime rent amounts to approx. EUR 48/m², however some decrease of rental levels may be expected due to relatively high pipeline. 18 COLLIERS INTERNATIONAL