CG malls europe - Commerz Real

10
Manager‘s Report on the Fund
On 19 October 2007, CG Real Estate Luxembourg S.à r.l. launched its first sub-fund under
the umbrella of Commerz Real Estate Master FCP-SIF by issuing the draw-down notices
for CG malls europe to investors. By 26 October 2007, the drawn capital was received by
our investors in order to purchase the Fund’s seed portfolio on 31 October 2007.
This report is based both on the INREV Reporting Guidelines and the reporting standards
for other real estate fund’s of Commerz Real, especially the open-ended real estate
funds, and should provide sufficient information on CG malls europe.
1. Strategy of CG malls europe
CG malls europe’s strategy is to invest in dominant regional shopping centres with the aim
of creating a portfolio, diversified both by geography and by real estate type. We define dominant
regional shopping centres as schemes which generally meet the following criteria:
1. The centre will typically have a gross lettable area of at least 35,000 sqm (although,
depending on the size of the relevant market, 25,000 sqm may suffice).
2. The centre will typically have a branch and tenant mix aligned with consumer
spending.
3. The centre will typically have a professional centre management.
4. The centre will typically be integrated into a city or city district.
However, on an individual basis, greenfield locations are permissible if the centre is or
has the potential to become the dominant shopping centre destination within its catchment
area. The relative importance of each of these characteristics varies when determining
whether a property is a suitable asset for the Portfolio. In other words, the abovementioned
criteria are important but not compulsory for the assets held by the Fund.
The Fund’s relevant target markets consist of the member states of the European Union
plus Norway and Switzerland, and present candidate countries to the European Union
Croatia, Macedonia and Turkey. However, in order to reduce country risks and meet the
requirements of our investors, the two member states most recently admitted to the EU,
Bulgaria and Romania, were excluded until January 2009.
2. Economic Environment
2.1 Macroeconomic View
The European Economy (EU 27) contracted by 4.2% over the whole 2009 compared
with +0.7% in 2008. The recession in the EU 27 bottomed out in the summer of the last
year when GDP declined by -4.3% in Q3 followed by + 2.2 in Q4. Apart from Poland, all
member states saw a negative GDP Growth rate. With -18% Latvia recorded the strongest
decline over the year. For 2010 we are estimating that the GDP in the EU 27 will
grow by 1.2% in total.