DIRECT MARKET REPORT GERMAN RETAIL - Europe Real Estate

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Exhibit 26 Retail yields for prime retail per city Source: DEGI Research Exhibit 27 Retail yields for prime retail per city Source: DEGI Research German retail update - 28/11/2007 30
Rental levels Not only prime assets in major cities are faced with rising rents as these are occupied by financially healthy high turnover global franchise companies, but also in medium sized cities and conurbations. The major difference is the level of rents. Munich is still the most expensive place to lease retail space (EUR 260/m 2 ). Cologne (EUR 200/m 2 ), Düsseldorf (EUR 185/m 2 ) and not to forget Leipzig (+9.5% y.o.y.) due to the improved quality of shops and reversed migration of spending power. The Peterstrasse for instance has shown EUR 115/m 2 in some prime units, which is way above the eastern German average. A further increase is expected. In Berlin a pick-up is visible as well due to revitalisation and restructuring around the Alexander Platz. The Kurfürstendamm does EUR 200/m 2 today. In other prime areas –in for instance Hamburg- rents remained flat. For the whole of retail Germany it is expected that rents in prime locations increase by 3.6%, although clear regional differences must be taken into account. The study performed by the Hahn Group showed that only 30% of all surveyed retailers think rents will increase upon renewal. But 56.7% of retailers believe that rents in newly developed assets will rise, 73.3% expect rent rates of existing properties to remain unchanged or to rise. 33% think that they are still to reap the rewards of Germany’s economic growth. However, the situation in B-grade locations and urban district centres remains strained. Demand remains reserved and marketing of retail meters is still difficult considering the constant pressure on rents. In the most positive scenario rental levels stop declining. In fact, a focused retail trade compatible and urban development upgrade is recommended for these locations. Investments in newly custom built multi-functional retail centres with a first class yield oriented management structure are nevertheless attractive from an investment and tenant perspective. “We all need to shop”. Exhibit 28 Rent levels for prime assets in Germany 300 250 200 150 100 50 0 Essen Dresden Leipzig Hamburg Berlin Düsseldorf Cologne Stuttgart Frankfurt Munich Source: Cushman & Wakefield Prime retail rents/month Jun-06 Prime retail rents/month Jun-07 Another asset class is distressed retail on promising locations. These properties are mainly sought by Anglo-Saxon investors, who trust that they can achieve a speedy turnaround of the objects. This is essentially fuelled by the expectation that a change of tenant will go hand-in-hand with a mid-term increase of rent, either by raising the rent or through better exploitation of the rental area. Added to this is the view that the current economic climate will enable filling the existing vacancies in the objects with relevant usages and thus to improve rental income substantially. However, one needs to understand the needs of the indigenous tenant and market at best. German retail update - 28/11/2007 31
Page 1 and 2: www.petercam.com Real Estate Novemb
Page 3 and 4: Executive Summary “The secret of
Page 5 and 6: Introduction Following the record r
Page 7 and 8: The ZEW Indicator of Economic Senti
Page 9 and 10: 2 Destatis 3 Federal Statistical Of
Page 11 and 12: Consumer Price Index Consumer price
Page 13 and 14: Exhibit 11 Division median net inco
Page 15 and 16: Exhibit 14 Population, purchase pow
Page 17 and 18: Exhibit 16 Life cycles of the vario
Page 19 and 20: Corporate tax rate to 15.8% In the
Page 21 and 22: (30%) 4 . The preference for hyperm
Page 23 and 24: Exhibit 20 Indexed space developmen
Page 25 and 26: Exhibit 23 Shopping centre pipeline
Page 27 and 28: y approximately 25 basis points by
Page 29: spread of DIY over shopping centres
Page 33 and 34: Exhibit 30 Retail yields and rents
Page 35 and 36: acquisition of new shopping centres
Page 37 and 38: Dawnay Day Treveria • Bloomberg t
Page 39 and 40: Exhibit 34 Portfolio overview BBI I
Page 41: Petercam Institutional Research and

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