A presentation to ' Other details'''

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CZECH REPUBLIC INVESTMENT MARKET 24th April 2006
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DISCUSSIONS TOPICS

• The Czech Republic
• Investment Property Market
• Retail, Office Industrial markets
• Transaction Structure and Advisers
• Capital markets overview
• Investment transactions

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CZECH REPUBLIC ECONOMIC STATISTICS
Economic Growths - Interest Rates - Unemployment
- Inflation
Source Cushman Wakefield
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INVESTMENT IN CZECH REPUBLIC

• On a global level, there is increasing interest
  in property investment. Property as a percentage
  of invested funds in pension schemes was as low
  as 5 in 2001. This increased to 7 in 2004 and
  is expected to be 9 by 2009.
• 350 bn Euro Invested in Real Estate Worldwide in
  2005
• 140 bn Euro Invested in Europe in 2005
• Increasing investor demand, combined with the
  continued attraction of property investment
  against a backdrop of low interest rates and
  volatile equity markets.
• The Czech Republic offers investors higher
  returns compared to that of Western markets.
• The Czech Republic investment market continues
  to be characterised by low liquidity.

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YIELD PROFILE

• Yield gap
• - compared to Western markets
• - over attainable financial rates

• Yield trends across both mature and emerging
  markets across Europe.
• Yield trends across Europe and future
  convergence

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CZ RETAIL PROPERTY MARKET

• Retail
• - The retail property market continues to be
  active.
• - Retailer demand remains strong, high street
  locations and shopping centres.
• - A number of new out-of-town shopping centre
  developments are due for
• completion in the next two years across Czech
  Republic.

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EUROPEAN SHOPPING CENTRE YIELDS ()
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EUROPEAN HIGH STREET YIELDS ()
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OFFICE MARKET PRAGUE 2003 - 2007

• Office
• - The office market continues to be robust.
• Take-up levels have remained constant at circa
  160,000 sqm per annum
• - The occupier market is expected to continue to
  grow

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EUROPEAN OFFICE YIELDS ()
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INDUSTRIAL PROPERTY MARKET
Industrial - The industrial market is strong
and remains stable. - Demand is high across the
Czech Republic. - Rents are continuing to fall.
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TRANSACTION STRUCTURE

• Asset transaction
• - Sale of the property
• - Reduction of execution risk
• - Reduced transaction time costs
• Share deal (SPV)
• - Sale of the company
• - Vendor avoids Real Estate Transfer Tax
• - Complicated due diligence process
• - Latent Capital Gains Tax Issues
• - Finance Implications
• Due Diligence
• - Cash flow analysis
• - Commercial Adviser
• - Legal Adviser
• - Financial Tax Adviser
• - Property/Asset management

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CENTRAL EUROPEAN PROPERTY INVESTMENT
Source Cushman Wakefield
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CZECH INVESTMENT TRANSACTIONS 1998 2006
By sector and volume in million
By nationality and volume in million
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CZECH INVESTMENT TRANSACTIONS 1998 1Q 2006
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MAJOR SHOPPING CENTRES INVESTMENT DEALS

• Galerie Butovice
• Location Prague 5
• Size 46 660 sq. m.
• Purchaser Babcock Brown
• Vendor ING RED
• Price over 100 mil. EUR
• Yield 8.25
• Date April 2005
• Adviser CW

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MAJOR OFFICE INVESTMENT DEALS 2006

• Hadovka Office Park
• Location Prague 6
• Size 25,000 sq. m.
• Purchaser Heitman
• Vendor DIFA
• Price ca 70 mil.
• Yield confidential
• Date March 2006
• Adviser CW

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THE INVESTMENT MARKET IN SUMMARY

• Monitoring Investment Market
• - Total 3.44 billion of Institutional
  Investment since 1998.
• - Over 2.18 billion sqm transacted
• Low Liquidity
• - Only 30 Institutional investment transactions
  completed in 2005.
• - Total value in excess of 957 million in
  2005.
• Office sector has been dominant during this year
  though the retail sector has been also very
  strong.
• Large volume of Retail Shopping Centres
  transacted in 2005.
• Investment has been both institutional and
  private.
• Austrian German investors have been most
  prevalent investors.
• New sources of foreign capital (America, UK,
  Netherlands, Australia)

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CONTACT DETAILS FOR FURTHER INFORMATION

• Cushman Wakefield
• Mr Mark F Richardson BLE (Hons) MRICS
• Na Príkope 1
• 110 00 Praha 1
• Czech Republic
• Tel [phone]
• E-mail mark.richardson_at_eur.cushwake.com
• Web site www.cushmanwakefield.com