The „degree of property equipment“ as „state of development index“ of a property.

1. ERES Conference Stockholm 2009 The „degree of property equipment“ as „state of development index“ of a property. Dipl.-Ing. (FH), Dipl.-Wirtsch.-Ing. (FH) Udo G. Priess

2. Outline • Introduktion • Tendencies & Development • Property Equipment • Degree of Property Equipment

3. Introduction • Udo G. Priess • born 17.02.1964 in Germany • married since 2002two sons, 4 years and 18 month • study of communication technology on the University of Applied Sciences, Wiesbaden • study of business administration on the University of Applied Sciences, Mainzphd study real estate management on the Comenius University, Bratislava (since 2007) • 7 year Manager Deutsche Telekom AG, General Manager Shop Organization • 2001 Foundation of UPCON Consulting GmbH, Partner and MD • 2004 takeover and redesign UPCON GmbH, Owner and MD • 2009 Foundation of UPReal GmbH, CEO

4. 2. Tendencies & Development (1) • real estate markets in transformation • process development transformation • high value increase in areas of high population density • international real estate investment companies spend a lot of money in modernization projects • high increase of the demand of technical services • more request from owners and renters in organizational andcommunication services

5. 2. Tendencies & Development (2) • transformation of the investment ratio between construction costs and costs for technical assets • transformation of validation and requirement structures fromhabitation to living and working • in the future the capital value will develop as an entity ofproperty and property services • in the future the degree of property equipment and the operation costs will be the most important factors of success • sustainable offer effectiveness will prior reached through the development of property services

6. A [%] 150 4 100 3 ^ = value of services public water infrastructure 1 2 2 public gas infrastructure 50 3 public power infrastructure 1 4 electronic and IT communication 0 land value and production costs of the ^ constructional facilities = value of the property 1950 2000 1900 2. Tendencies & Development(3) Generation steps 5 5 climate protection and ecology

7. 3. Property Equipment • the mission of real estate companies is to recognize and manage the determinants of the growth potentials • risk and potential management is orientated on rental and incomereturn expectations • property service investments are bundled in real capital and thegrowth is subject to structural changes • the changes in demand postulates a synthesis of habitation andproperty services • this creates a modified modernization adaption behavior as partof a continuous improvement process • property equipment can be technical nature (photovoltaic systems,video systems, heat recovery etc) or organizational nature (personalsecurity, health services, housekeeping etc)

8. 3. Degree of Property Equipment (1) property service costs base development first development property costs A: outdoor facilities T: technical assets N: depreciation of technical assets V: wear of technical assets B: land costs G: constructional investment M: structural defects W: age-related value reduction S: operational service costs second development

9. 3. Degree of Property Equipment (2) • The strategic development of the degree of property equipment • increase the value of benefit • improve the offer situation • causes a positive demand effect. The decision which kind of degree is to use depends on the questions which the management has to answer and/ or which financial systems the real estate company use.

10. ERES Conference Stockholm 2009 Thank you very much for your attention. Dipl.-Ing. (FH), Dipl.-Wirtsch.-Ing. (FH) Udo G. Priess, CEO Phone +49 (0) 151. 11 64 93 63 e-mail upriess@upreal.eu UPReal GmbH Post Im Breul 8 . D-63486 Bruchköbel bei Frankfurt/M. Visitors Mainzer Landstr. 47 . D-60319 Frankfurt/M. Phone +49 (0) 61 83. 928 260 Fax +49 (0) 61 83. 928 8570