RENTAL PROPERTY. Average floor space for rent over the year was 410,301 m 2. Due to asset turnover,

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1 [ANNUAL REPORT 2005] RENTAL PROPERTY In 2005, as shown in the following graphs, our rental revenues were 4% up on the previous year. Since 2000 accumulated growth in rental revenues has been 125%. Floor space for rent increased 71% over the same period. Average floor space for rent over the year was 410,301 m 2. Due to asset turnover, however, at year-end floor space to rent was 396,993 m 2, which was 20,674 m 2 less than the same figure for year-end As of January 1, 2006, our rental property was increased by two new retirement homes in Murcia and Pontevedra, totaling 10,757 m 2 floor space. With these new properties, floor space for rent at the start of 2006 was 407,759 m 2. REVENUES Thousands of euros LEASABLE SURFACE AREA (sq m) , , , , , RENTAL REVENUES ASSET DISPOSALS A further four retirement homes now under construction are scheduled to open in Las Palmas de Gran Canaria: 83 rooms, 127 beds. Zaragoza: 116 rooms, 138 beds. Alicante: 128 rooms, 148 beds. Villajoyosa: 189 rooms, 268 beds. All our buildings boast state-of-the-art technologies, facilities and services and are set in extensive landscaped areas to make life more pleasant for our residents. When our Badalona Retirement Home opens in 2008, Inmobiliaria Urbis will have eight retirement homes equipped with 1412 beds, under the management of the Ballesol Group. 154

2 BUSINESS REPORT Pazo Ferreiros retirement home. Poyo. Pontevedra. Mock-up of the Villajoyosa retirement home, and state of progress. Alicante. 155

3 [ANNUAL REPORT 2005] Business parks are also a key component of the Company s investment policy. Urbis Center Business Park At this business park in Pozuelo de Alarcón, Madrid province, we plan to build a fourth building with 5,500 m 2 surface area above ground and 140 parking spaces in an underground carpark. The three finished buildings - now fully occupied - and the new building will make up a set of distinctive, latestgeneration facilities set in a landscaped garden area, with an outdoor parking lot and two floors of underground parking space. Avenida de América Business Park Inmobiliaria Urbis is developing a project of uniquely high quality and cutting-edge architectural conception on a site between Parque de las Naciones and Madrid airport. The project comprises ten high-tech office buildings with a total 49,556 m 2 building area above ground and 1800 parking spaces above and below ground. The complex will be equipped with restaurants, cafés, a fitness center, a mall area and extensive gardens. Avenida de América Business Park information graphics Madrid. 156

4 BUSINESS REPORT Our target is for rental revenues to cover the Compan s general costs and financial expenses. In line with that goal, we have drawn up an ambitious strategic plan of asset acquisitions. Together with our assets under development, the new properties will enable us to make rental revenues in 2008 of around 80 million, making for an increase of close to 100% on the 2005 figure. In parallel, we have begun a property turnover policy to release latent capital gains and thus improve balance sheet ratios and optimize out tax rate. Avenida de América Business Park information graphics, interior zone Madrid. 157

5 [ANNUAL REPORT 2005] Offices are still predominant in our property portfolio, accounting 48% of total floor space and 46% of rental revenues. Next, Retail premises and mall space account for 27% of total surface area and 40% of rental revenues. Retail account for a larger proportion of revenues than their share of total surface area due to the unique advantages and locations of our malls, enabling us to achieve occupancy close to 100%. Our rental property portfolio continues to focus chiefly on Madrid, which accounts for 81% of rental floor space and 85% of total rental revenues. The next largest segment is the Canary Islands, with 13% of floor space and 12% of revenues. Our distribution across spanish provinces will be more widely diversified once our assets under development enter our rental property portfolio. RENTAL REVENUES BY REGION (%) LEASED SURFACE AREA BY REGION (sq m) 2% 12% 1% 5% 13% 1% 85% 81% A MADRID ANDALUSIA CANARY ISLANDS OTHER MADRID ANDALUSIA CANARY ISLANDS OTHER RENTAL REVENUES BY USE (%) SURFACE AREA BY USE (sq m) 7% 5% 6% 3% 11% 9% 5% 46% 7% 48% 33% 20% OFFICES SHOPPING MALLS COMMERCIAL LOGISTICS RETIREMENT HOMES OTHER OFFICES SHOPPING MALLS COMMERCIAL LOGISTICS RETIREMENT HOMES RESIDENTIAL 158

6 BUSINESS REPORT La Esquina del Bernabéu shopping mall. Madrid. 159

7 [ANNUAL REPORT 2005] Asset RENTAL PORTFOLIO* City Square meters Above ground Below ground OFFICES 117,234 72,254 Edificio Cardenal Marcelo Spínola, 42 Madrid 8,584 3,630 Edificio Gobelas, 15 Madrid 2, Edificio Gran Vía, 43 Madrid 7,441 - Edificio Torre Urbis-Ombu, 3 Madrid 13,096 7,994 Edificio Avda,San Luis, Madrid 18,570 14,809 Centro Empresarial Urbis Madrid 13,463 6,890 Parque Empresarial Urbis Center Pozuelo (Madrid) 15,411 12,331 Edificio Avda,Tenerife, 4-6 S. S. de los Reyes (Madrid) 25,874 20,748 Edificio Albareda Sevilla 3, Edificio León y Castillo, 431 Las Palmas 7,550 4,733 Miscellaneous offices 1,237 HOTELS 9,977 5,337 Ambassador Madrid 9,977 5,337 RETIREMENT HOMES 20,724 9,994 Principe de Vergara Madrid 10,909 9,052 Altorreal (rent started 1/1/2006) Murcia 4,463 - Poio (rent started 1/1/2006) Pontevedra 5, SHOPPING MALLS 29,829 51,750 ABC Serrano Madrid 14,019 6,750 La Esquina del Bernabeu Madrid 4,883 15,000 Las Piramides de Martianez Puerto de la Cruz (Tenerife) 10,927 30,000 COMMERCIAL PREMISES 27,709 - Puerta Urbis S,S,de los Reyes (Madrid) 2,110 - Miscellaneous premises 25,599 - INDUSTRIAL FACILITIES 43,061 - Logísticas Poligono Los Angeles Getafe (Madrid) 30,918 - Polígono Navexpo Sevilla 12,143 - RESIDENTIAL 15,917 3,383 Edificio Tres Cantos Madrid 11,314 3,383 Miscellaneous residential Madrid 4,603 - GARAGE SPACE Miscellaneous garage space TOTAL 264, ,300 (*) Only includes operating assets. Assets under development not included. 160

8 BUSINESS REPORT ABC Serrano shopping mall. Madrid. Logistics buildings at the Los Angeles industrial estate. Getafe. Madrid. 161

9 [ANNUAL REPORT 2005] OPERATING RENTAL PORTFOLIO VARIATION 05/04 DIFFERENCE (%) Net book value of rental portfolio (thousands of euros) 495, ,689-19, Net value of rental portfolio over total consolidated assets (%) Leasable area (sq m) 396, ,667-20, Average cost ( per sq m) 1, , Average rent ( per sq m per annum) Percentage occupancy as of 12/ Gross yield Application of International Financial Reporting Standards (IFRS) has brought about a revalorization of the net book value of our rental property, totaling 515,689,000 euros in 2004 and 495,870,000 euros in The net book value of the rental portfolio accounted for 15.6% of total consolidated assets. Average rent was 8.3% up on the previous year, while occupancy stood at 89.4% at year-end. Like-for-like growth in 2005 was 5.2%. Although average rent increased 8%, unoccupied floor space also rose. The increase in unoccupied area mainly reflects the fact that our Avenida San Luis office building, representing 17,200 m 2, is being marketed as a block for a sole tenant and remains as yet unoccupied. Not counting the special situation of this property, occupancy would be 97.8%. The unrealised capital gains in valuation of our rental property totals million euros, representing 40.9% of net book value. Gross yield in the year was 8.5%, an increase of 2.4% on the previous year. Edificio Gobelas. Madrid. 162

10 BUSINESS REPORT Torre Urbis office block. Madrid. 163

11 [ANNUAL REPORT 2005] PORTFOLIO PIPELINE NEW ASSETS INVESTMENTS sq m ab/gr sq m bw/gr Total sq m Starts operating RETIREMENT HOMES Las Palmas de Gran Canaria 5,263 2,366 7, Alicante (Villajoyosa) 13,497 2,000 15, Zaragoza 5, , Badalona 6,500 4,000 10, Alicante 6,299-6, OTHER Hotel and fitness center in Badalona (Barcelona province) 7,931 4,945 12, Madrid offices (former Amper head office) 11,153 8,293 19, Commercial area in Altorreal (Murcia) 5,500-5, Offices in Avenida de América (Madrid) 49,556 33,000 82, Fourth Urbis Center office building in Pozuelo (Madrid) 5,500 2,000 7, Shopping mall in Benidorm 45,000 52,000 97, TOTAL PORTFOLIO PIPELINE 162, , ,170 Urbis Center Business Park. Pozuelo. Madrid. 164

12 BUSINESS REPORT Centro Empresarial Urbis. Madrid. 165