JLL in CEE. 6 countries 9 offices over 350 staff. MD Czech Republic 1 office 75 people. MD Poland 4 offices 160 people. MD Slovakia.

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1 JLL Czech Republic

2 JLL in CEE MD Poland 4 offices 160 people MD Czech Republic 1 office 75 people Tomasz Trzósło Tewfik Sabongui MD Hungary 1 office 50 people Ferenc Furulyas Prague Gdańsk Warsaw Wroclaw Kraków Bratislava MD Slovakia 1 office 25 people Miroslav Barnas Budapest MD SEE 1 office (Belgrade) 15 people Zagreb Belgrade Bucharest MD Romania 1 office 30 people Andrew Peirson Sofia Gijs Klomp 6 countries 9 offices over 350 staff 1

3 JLL in the Czech Republic The Prague office of JLL was established in 1992 as one of the very first international real estate firms to enter the local market. Since that its local branch has become the leading provider of professional real estate services in the Czech Republic. JLL Prague has 78 professionals and support staff with wide ranging experience. In our IFM business, we currently employ 36 professionals (incl. 4 on Maternity) across 4 major corporate accounts (P&G, Sony, Honeywell and Computer Associates). 2

4 JLL History Jones Lang LaSalle merged with King Sturge - Growing the region to 7 Countries The first truly modern office building in the Czech Republic - IBC Building LaSalle Partners and Jones Lang Wootton merge to create Jones Lang LaSalle Czech Republic and Slovakia join the EU Jones Lang LaSalle becomes JLL Velvet Revolution Established its first branch office in Central and Eastern Europe - Prague Dissolution of Czechoslovakia First modern shopping centre in the Czech Republic - Centrum Černý Most First modern warehouse project in the Czech Republic - Rudná Business Park Slovakia joins the Eurozone Tétris CZ established 1 Number of Staff 3

5 Innovations 4

6 Did you know? Ferdinand To name just a few 5

7 CEE Market Overview CEE in a European Context - H1 2014

8 Economics CEE in a European Context - H1 2014

9 GDP Growth Forecast 2014 Positive growth forecast for most European countries Source: Oxford Economics (July 2014) 8

10 GDP Growth Forecast Multi-speed growth forecast across Europe Source: Oxford Economics (July 2014) 9

11 Economic sentiment very positive European Confidence Indicators Economic sentiment 1. United Kingdom 2. Hungary 3. Malta 4. Croatia 5. Germany 6. Sweden 7. Spain 8. Slovenia 9. Greece 10. Latvia 11. Belgium 12. Denmark 13. Bulgaria 14. Portugal 15. Lithuania 15. Czech Republic 16. Netherlands 17. Slovak Republic 18. Italy 19. Cyprus 20. Austria 21. Poland 22. Estonia 23. Romania 24. France 25. Finland 26. Luxembourg Source: European Commission, Ireland n/a,data as July 2014 The Economic indicator is a composite measure and includes following parameters: Industrial confidence indicator (40%); Services confidence indicator (30 %); Consumer confidence indicator (20%); Retail trade confidence indicator (5%); Construction confidence indicator (5%) 10

12 Offices CEE in a European Context - H1 2014

13 Greece Spain Portugal Italy Serbia Croatia Slovakia Poland Hungary Ukraine Romania Czech Republic Russia Ireland France Belgium Finland Sweden Netherlands Denmark United Kingdom Luxembourg Germany Austria Norway Switzerland Challenges in labour markets remain Unemployment rates across Europe % Southern Europe Central & Eastern Europe Northern / Western Europe 0 Jul F Source: Oxford Economics, Data as end of June

14 Greater Paris Greater London Munich Berlin Moscow Madrid Hamburg Brussels Milan Rome Frankfurt/M Stockholm Copenhagen Dusseldorf Helsinki Oslo Zurich Amsterdam Barcelona Lisbon Warsaw Dublin Luxembourg Istanbul Budapest Prague Athens St. Petersburg Bucharest Kiev Sofia Bratislava Zagreb Belgrade Total Stock Q (in '000 sq m) Office market sizes across Europe 52m 34m 20,000 20m 15,000 10,000 5,000 0 Source: Jones Lang LaSalle, July

15 Moscow Prague ***Bucharest ***Zagreb ***Belgrade ***Bratislava Luxembourg Budapest Utrecht Rotterdam Amsterdam Hamburg Munich Milan Brussels Paris CBD The Hague Madrid Barcelona Dublin Edinburgh Warsaw Lyon London City Paris LDF London Paris Frankfurt/M London WE Dusseldorf Stockholm Berlin Supply in 2014/2015 in many markets above 10y average levels Average Annual Office Completions 2014** & 2015 as % of current stock and 10Y Avg* completions as % of stock In % 14% 12% 10% 8% Below 10Y average Avg Above 10Y average 10-Yr average 6% 4% 2% 0% Source: JLL, July 2014 *10 Year Average ( ); **includes Q1+Q2 ***5 Year Average 14

16 Vacancy rates across EMEA Q % Vacancy Rates Q % 10 15% 5 10% 0 5% 16.6% 6.5% 7.5% 11.1% 9.1% 12.2% 14.8% 5.5% 14.9% 7.4% 7.9% 14.3% 13.4% Johannesburg 7.5% 10.6% 11.4% 7.0% 14.5% 14.4% 4.5% 22.6% 11.9% 5.9% 6.1% 13.5% 6.6% 18.3% 17.6% 14.7% 13.2% 12.2% 14.0% 5.1% 8.3% 8% 25% 19% 30% 25% 19.6% 10% Source: JLL, July

17 Leasing market activity gradually increasing Office Take-up change (Q3'13-Q2'14 vs Q3'12-Q2'13) Rotterdam Utrecht Edinburgh Stuttgart Milan Dublin Bucharest London City Slovakia Amsterdam Budapest Paris CBD Lisbon Barcelona Luxembourg Dusseldorf Cologne Madrid Stockholm Hamburg Berlin Paris LDF Europe Leeds Kiev London WE The Hague Frankfurt/M Prague Warsaw Brussels Lyon Istanbul Munich Moscow Rome Source: JLL, July % -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% % Change 16

18 London-WE Moscow London-City Paris Stockholm Dublin Istanbul Rome Milan Frankfurt/M Munich Manchester Helsinki Dusseldorf Edinburgh Amsterdam Lyon Kiev Hamburg Brussels Berlin Warsaw Madrid Prague Stuttgart Lisbon Budapest Bucharest Barcelona Prime rents remain supported by incentives Prime rents & effective rents 2014 Q2 Rent EUR/m² pa % % 20% % 600 9% 8% % 4% 17% 12% 6% 23% 2% 11% 27% 15% 10% 5% 6% 10% 4% 16% 18% 10% 8% 8% 18% 13% 13% Effective rent Prime Rent % = Average Incentives as % of Prime Rent Source: JLL, July 2014 Effective annual rents are based on average rent free month and other incentives such as fit out costs calculated over the standard lease length in each market 17

19 Athens Moscow Madrid Barcelona Warsaw Bucharest Belgrade Zurich Dublin Milan Geneva Lisbon Prague Bratislava Rome Paris CBD Oslo Budapest London City London WE Copenhagen The Hague Utrecht Paris LDF Frankfurt/M Brussels Amsterdam Berlin Edinburgh hamburg Stockholm Manchester Luxembourg Helsinki Munich Rotterdam Stuttgart Lyon Dusseldorf Prime rents mostly below last peak Nominal prime office rents Q vs. last peak, based on local currency 30% 20% 10% 0% -10% -20% -30% -40% -50% -60% Q-o-Q Movement Increased Decreased Stable Source: JLL, July

20 Retail CEE in a European Context - H1 2014

21 Retail Sales Growth Forecast 2014 Positive short-term retail sales growth forecast across Europe RS per Capita 2014 ( ) Source: Oxford Economics (July 2014) 20

22 Retail Sales Growth Forecast Positive growth outlook for Europe, strong in Northern and Eastern Europe RS per Capita 2014 ( ) Source: Oxford Economics (July 2014) 21

23 Spain Romania Netherlands Hungary Italy Ireland EU (27 Countries) Czech Republic Germany Austria Finland Belgium United Kingdom France Sweden Norway Switzerland Poland Russia Retail Sales Europe 2008 vs 2013 Structural change driven by e-commerce and debt crisis Index 2008 = 100 Online Retail Sales '13 Physical Retail Sales'13 Total Retail Sales '08 40 Source: Oxford Economics (July 2014), Centre for Retail Research (2014), Ecommerce Europe (2013) 22

24 E-Commerce Key Stats 2013 Europe UK, Germany and France account for about 60% of E-Commerce market E-Commerce Turnover by Country (%) E-Commerce Growth Forecast 2014 (%pa) Germany Untied Kingdom 2% 3% 3% 3% 3% 4% 4% 18% 14% 29% 17% United Kingdom Germany France Russia Spain Italy Austria Netherlands Finland Switzerland Rest of Europe Italy Spain Russia France Switzerland Netherlands Austria Finland 0% 5% 10% 15% 20% 25% Source: Ecommerce Europe (2014) Source: Ecommerce Europe (2014) Note: B2C E-commerce sales includes online travel, digital downloads and event tickets; excludes online gaming and financial services 23

25 Destination Europe: Leading Cities London remains springboard to Europe for non-european retailers Source: JLL (Destination Europe 2013) Note: Based on retailer presence in the 57 markets covered 24

26 Retailer Demand Q Demand remains focused on prime retail space Unit Shops Shopping Centres Retail Warehouses Prime Secondary Prime Secondary Prime Secondary Bulgaria Croatia Czech Republic France Germany Hungary Ireland Italy The Netherlands Poland Portugal Romania Russia Serbia Slovakia Spain Sweden Turkey United Kingdom Current Demand Hot Cold Change Q-o-Q Increased Stable Decreased Source: JLL (July 2014) Note: Demand indicators based on sentiment. 25

27 Existing Shopping Centre Stock Per Capita H Highest density in mature retail markets, Eastern Europe increasing significantly Luxembourg Netherlands Ireland Sweden Finland United Kingdom Spain Portugal Italy France Czech Republic Poland Slovakia Croatia Germany Hungary Turkey Romania Russia Bulgaria Belgium Greece Ukraine Serbia Source: JLL (July 2014) Average Density: 196 sq m GLA / 1,000 inhabitants Average Density (GLA / 1,000 inhabitants): All countries West-Europe East-Europe 196 sq m 260 sq m 128 sq m Total GLA in sq m / 1,000 inhabitants Note: Includes schemes >5,000m² GLA only; excludes Retail Warehousing and Factory Outlet Centre. Average density figures based on countries shown on the graph. 26

28 Shopping Centre Pipeline H m sq m of new space planned in Europe; 48% located in Russia/Turkey Russia Turkey Germany Ukraine Poland Netherlands Sweden Italy France United Kingdom Romania Croatia Finland Bulgaria Slovakia Greece Spain Czech Republic Belgium Portugal Ireland Serbia Luxembourg Hungary Source: JLL (July 2014) Total GLA in 000's Sq M ,000 1,500 2,000 2,500 3,000 3,500 Note: Includes schemes >5,000m² GLA only; excludes Retail Warehousing and Factory Outlet Centre. Pipeline figures should be treated with caution. 27

29 Prime Shopping Centre Rents Europe Q Strong growth outlook for Poland, Hungary and Greece 1, ,330 Portugal 1,020 Source: JLL (July 2014) 1,400 1,010 Ireland 1,020 3, United Kingdom Netherlands France 1,600 Belgium Norway Finland Sweden 1,320 1,140 Poland Czech Republic Germany Ukraine 2, Hungary Croatia Romania Serbia Spain Italy 930 Denmark 540 Russia Rents Growing: 2% to 3% ,080 Greece Turkey 3,290 Rental Growth (% p.a.) 1,260 Category Absolute Rent Level 700 Maximum Rental Growth: > 4% 720 Rents Growing: 3% to 4% Rents Growing: 1% to 2% Rents Stable: 0% to 1% Rents Falling: 0% to -2% Rents Falling: < -2% Not Available Prime rents in /sq m per annum Note: Forecast growth based on rental levels in local currency 28

30 Industrial CEE in a European Context - H1 2014

31 CEE Transport Corridors The Central & Eastern European region has grown dynamically over the past decade, starting its development even before the accession of many of the leading economies to the European Union. The migration of manufacturing eastwards has been one of the defining trends and challenges of European supply chains. In addition, international retailers have scrambled to take advantage of the new wealth generated in these countries, helping to meet the needs of consumers with growing disposable income. This has led to the introduction of sophisticated distribution strategies and the demand for high end logistics service providers. Source: Transport Intelligence 30

32 Sep '10 Dec '10 Mar '11 Jun '11 Sep '11 Dec '11 Mar '12 Jun '12 Sep '12 Dec '12 Mar '13 Jun'13 Sep '13 Dec'13 Mar'14 Jun'14 Manufacturing PMI shows further slowing expansion 65 Global Eurozone UK Germany France Netherlands Spain Italy Poland Czech Republic Russia Source: Markit, JP Morgan 31

33 CEE Automotive PL CZ SK HU RO SRB A Major Regional Driving Force 32

34 Modern logistics stock Western Europe maintains the lead In million sq m > <1 Source: JLL 33

35 Speculative development expanding but remains low End Q End Q Source: JLL 34

36 Increasing shortage of available modern supply Helsinki Edinburgh Stockholm St. Petersburg Moscow Birmingham London Amsterdam Rotterdam Brussels Frankfurt Hamburg Berlin Prague Poznan Warsaw Vacancy Rates, Q Madrid Paris Wroclaw <5.0% Budapest Munich Milan Lyon Bucharest Barcelona % % >15.0% Source: JLL Increase y-o-y Decrease y-o-y Stable 35

37 Take-up increasingly uneven and volatile Germany UK France Spain Russia Netherlands Poland Belgium Italy Czech Republic Hungary H H year H1 average ,000 1,250 1,500 1,750 2,000 2,250 2,500 2,750 3, sq m Source: JLL Distribution Warehousing Take-up >5,000 sq m (UK: >10,000 sq m) 36

38 EMEA rental map, Q Prime warehousing rent / sq m pa, Q Rental Changes Rents increasing Rents stable Rents decreasing Source: JLL Madrid 55 Dublin 65 Edinburgh 72 Birmingham 75 Hamburg Amsterdam London 67 Rotterdam Berlin Warsaw Brussels Frankfurt Prague Paris Bratislava Budapest Munich Milan Zagreb Lyon Belgrade Barcelona 75 Rome 52 Stockholm 98 Helsinki Athens 48 St Petersburg 95 Bucharest Istanbul Kiev 61 Moscow 99 South Africa > 10% 5 10% < 5% Johannesburg 48 % Rental Changes (Y-o-Y) Saudi Arabia & UAE Riyadh Jeddah Dubai 99 Abu Dhabi 37

39 Investment CEE in a European Context - Q1 2014

40 million CEE: Investment Volumes by Countries Q3 2014* (excl. Russia) 14,000 12,000 10,000 Other CEE Slovakia Romania Hungary Czech Republic Poland 9,978 11,853 8,000 6,000 4,000 2,000 2,499 3,538 6,114 6,058 2,022 3,760 6,900 3,936 6,180 4,528* Q1-Q3 2014* Source: JLL CEE Capital Markets, *Preliminary Q Data Volumes include development transactions. 39

41 million CEE: Investment Volumes by Sectors 2003-H (excl. Russia) 14,000 12,000 Hotels Residential Mixed Industrial Retail Office 11,853 10,000 9,978 8,000 6,000 6,114 6,058 6,900 6,180 4,000 2,000 2,499 3,538 2,022 3,760 3,936 2, H Source: JLL CEE Capital Markets, Q Volumes include development transactions. 40

42 million Czech Republic: Investment Volumes by Sectors 2003-H ,500 3,000 Hotels Residential Mixed Industrial Retail Office 2,872 2,500 2,075 2,000 1,500 1,285 1,675 1,625 1,183 1,386 1, H Source: JLL CEE Capital Markets, July

43 German vs. CEE4 Prime Office Yields % Romania Hungary Czech Republic Poland Germany Q Q Q Q Q Q Q Q Q Q Q Source: JLL, July

44 German vs. CEE4 Prime Shopping Centre Yields % Romania Hungary Czech Republic Poland Germany Q Q Q Q Q Q Q Q Q Q Q Source: JLL, July

45 German vs. CEE4 Prime Industrial Yields % Romania Hungary Czech Republic Poland Germany Q Q Q Q Q Q Q Q Q Q Q Source: JLL, July

46 Thank you Kevin Turpin Head of Research & Consulting Central & Eastern Europe (CEE) Robert Paulson Senior Investment Analyst Czech Republic COPYRIGHT Jones Lang LaSalle IP, INC All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of Jones Lang LaSalle. It is based on material that we believe to be reliable. Whilst every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors. We would like to be told of any such errors in order to correct them.