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

Retail

Logistics

Hotel

2008

Office

2007

Investment: Poland vs other CEE 5,000

€ million

4,000

3,000

2,000

1,000

Poland

RCA

CEE excl. Poland

Q1-Q3'12

2011

2010

2009

Q1-Q3'12

2011

2010

2009

2008

2007

0

Investment: Volumes Offices

Retail

5,000

Logistics

Hotels

94

EUR million

4,000

58

3,000

76

48

36

51

2,000

40 23

1,000 5

10

2000

2001

12

25

12

0

Savills

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011 2012 (f)

Investment: Office yields Prime CBD

Prime Mokotów

Non-prime CBD

Non-prime Mokotów

9.5% 9.0% 8.5% 8.0%

7.5% 7.0%

6.5% 6.0% 5.5% 5.0% 2005

Savills

2006

2007

2008

2009

2010

2011

2012

Investment: Prime retail yields Warsaw

Major regional cities

Smaller cities

9.0% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 2005

Savills

2006

2007

2008

2009

2010

2011

2012

Investment: Offices 5,500 Finalized

Marszałkowska 76

5,000

Zebra Tower

Under offer 4,500 Ujazdowskie 10 Crown Square

On the market 4,000 EUR/m²

North GateNorway House

3,500

BTC

Canal + Alma

Green Office Park

1,500

9.0%

8.5%

8.0%

7.5% Yield

Savills

Stratos

Point

2,500

1,000 9.5%

N21 WFC

Focus Park Postępu Pałac Millenium Młodziejowskich Park II Miasteczko Platinium BP Orange Marynarska

Atrium International

Prima Court

3,000

2,000

Mokotowska Square

7.0%

6.5%

6.0%

Investment: Retail 7,000 Finalized 6,000

Złote Tarasy

Under offer

EUR/m²

5,000

Manufaktura On the market

4,000 Alfa Centrum Wzorcownia

Magnolia

3,000

Promenada

Galeria Tarnovia

2,000

1,000 9.5%

Echo Echo Pabianice Belchatów 9.0%

Osowa Tęcza Twierdza Zamość Twierdza Kłodzko Biedronka

8.5%

8.0%

Wars Sawa Junior

Molo Pestka 7.5%

7.0% Yield

Savills

Galeria Mokotów

6.5%

6.0%

5.5%

5.0%

Warsaw Office: Market performance Q3 2012 Stock (m²)

Constructed (m²)

Vacancy (%)

1,250,000

15% Year-on-year change

1,000,000

12%

9%

500,000

6%

250,000

3%

0

0%

m²

750,000

Core

Savils

Fringe

East

Lower South

North

South East

South West

Upper South

West

Warsaw office: Market performance 2012 and beyond Net absorption (m²)

New supply (m²)

Vacancy (%) 10%

280,000

8%

210,000

6%

140,000

4%

70,000

2%

0

0%

m2

350,000

2006

Savills

2007

2008

2009

2010

2011

2012(f)

2013(f)

2014(f)

Warsaw office: New supply completed

under construction

building permit

planned

400,000 350,000 300,000

m²

250,000 200,000 150,000 100,000 50,000 0 2012

2013

2014

City Centre

Savills

2015

2012

2013

2014

Non Central

2015

Regional cities office: Market performance Stock (m²)

Constructed (m²)

Vacancy (%)

700,000

14% Year-on-year change 12%

500,000

10%

400,000

8%

300,000

6%

200,000

4%

100,000

2%

0

0%

m²

600,000

Katowice

Savills

Kraków

Poznań

Tricity

Łódź

Wrocław

Szczecin

Lublin

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

Retail: New projects vs extensions New (m²)

Extension (m²)

900,000 7 750,000

9 10

600,000

9

1

m²

1 450,000

11 8

9

2

300,000

150,000

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Savills

Retail: Shopping centres Generation of shopping centre I

II

III

IV

 RE-positioning (eg. Klif Warsaw, Blue City, Galeria Mokotów)

100%

10% 80%

4 RE process:

17% 23%

31% 35%

39%

60%

 RE-modelling (eg. Echo Kielce, Wzgórze Gdynia, Promenada)

57%

 RE-commercialization (eg. Złote Tarasy, Arkadia, Galeria Kazimierz, Manufaktura)

46%

40%

29%

20%

 RE-branding (eg. Molo aka Piast Szczecin, Dom Mody Klif aka Klif)

0% 2000

Savills

2005

2012

Retail: What about REVITALISATIONS? Selected completed projects

Manufaktura

Stary Browar

Wzorcownia

Łódź

Poznań

Włocławek

Retail: What about REVITALISATIONS? Selected completed projects

Bonarka

Dukat

Dekada

Kraków

Olsztyn

Żyrardów

Retail: What about REVITALISATIONS? Selected ongoing projects

Sukcesja

Koneser

Art Norblin

Łódź

Warsaw

Warsaw

Retail: What about REVITALISATIONS? Selected ongoing projects

Bawełnianka

Alchemia

Hala Koszyki

Bełchatów

Lublin

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

Renata Kusznierska

Managing Director

Director, Retail Agency & Property Management

T: +48 22 222 4004

T: +48 22 222 4014

E: [email protected]

E: [email protected]

Savills Sp. z o. o. ul. Złota 59 00-120 Warszawa T: +48 22 222 4000

E: [email protected]