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European Investment Briefing

European Investment Briefing. Presented by: Michael Haddock , Director, EMEA Research & Consulting. 05/10/2010. Key themes for today’s market. The downturn was syncronised the recovery is more uneven Uncertainty is everywhere not least in the economic outlook

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European Investment Briefing

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  1. European Investment Briefing Presented by: Michael Haddock, Director, EMEA Research & Consulting 05/10/2010

  2. Key themes for today’s market The downturn was syncronised the recovery is more uneven Uncertainty is everywhere not least in the economic outlook Debt is available to buy commercial real estate but only if you don’t need it New allocations to real estate are coming at the expense of bonds, not equities

  3. Changes in risk free rate 10-year government bond yield Source: ECOWIN, Financial Times

  4. Investment Activity

  5. Investment market turnover in Europe € Billion Source: CB Richard Ellis

  6. Changes in investment market turnover H1 2010 versus H2 2009 Source: CB Richard Ellis

  7. Economy, Occupier Markets, Vacancy & Development

  8. Extent of the recession Peak to trough decline in output (% of GDP) **still in recession as at Q2 2010 Source: Eurostat, CB Richard Ellis

  9. Future economic growth Real GDP growth Source: Consensus Forecasts Inc

  10. European office absorption and vacancy Net absorption (rolling six months) and vacancy (% of stock) Source: CB Richard Ellis

  11. Office development – Western Europe ‘000 Sq M Source: CB Richard Ellis

  12. Office development pipeline Currently vacant office space, plus developments scheduled for completion by end 2012 As percent of Stock Source: CB Richard Ellis

  13. A M F G P E V T A M H R B H B B B L B L L B L O M C S Z D M D W M Office rent cycle – Q2 2010 As at 30th June 2010 Rental Decline Accelerating Rental Decline Slowing Rental Growth Accelerating Rental Growth Slowing Athens Madrid Manchester Helsinki Birmingham Bucharest Frankfurt Barcelona Milan Moscow London City Lisbon Warsaw Dublin Rome London West End Geneva Lyon Oslo Copenhagen Prague P Paris Zurich Munich Berlin Dusseldorf Budapest Hamburg Stockholm Vienna London TV Brussels Edinburgh Amsterdam NB. Markets do not necessarily move along the curve in the same direction or at the same speed. The rental cycle is intended to display the trend in net effective rents

  14. Capital Values and Pricing

  15. Drivers of capital values EU-15 Offices Capital Value Growth, % per annum Source: CB Richard Ellis

  16. Capital value change: June 09 to July 10 Source: CB Richard Ellis

  17. Prime – secondary yield spread UK secondary yield spreads Source: CB Richard Ellis

  18. Summary

  19. Prime – Secondary dislocation is the key feature of markets everywhere in Europe Investors Investment activity driven by risk averse institutional style capital Lenders have no appetite for secondary either Occupiers Weak net absorption Uncertain economic outlook Any rental growth is due to lack of development activity Conclusions

  20. Panel Discussion Jonathan Hull, Head of EMEA Capital Markets John Welham, Head of European Retail Investment Peter Schreppel, Head of International Investment, Germany Natale Giostra, Head of UK & EMEA Debt Advisory

  21. Investment market – Germany Total value of transactions by purchaser nationality 2009 Total transactions €10.45 billion H1 2010 Total transactions €8.65 billion Source: CB Richard Ellis

  22. Panel Discussion Jonathan Hull, Head of EMEA Capital Markets John Welham, Head of European Retail Investment Peter Schreppel, Head of International Investment, Germany Natale Giostra, Head of UK & EMEA Debt Advisory

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