Modern Production and Warehouse Facility with Office Space for Lease in Pärnu, Estonia

Modern Production and Warehouse Facility with Office Space for Lease in Pärnu, Estonia

Modern Premises Offer on Kodara 7, Pärnu, Estonia Lease: From January 2013; 5,156 sq m Production space; 1,000 sq m Office space; 794 sq m Warehouse; 80 parking places for cars, with the additional option to park cargo transport near warehouse. Benefits: Production premises Warehouse Office premises Technical rooms Conveniently located with developed infrastructure; Distance from: Railway 1 km Pärnu Harbour 7 km Pärnu Airport 7 km Tallinn-Riga Highway 0.2 km 24MW CHP plant 0.6 km 110 kv electrical substation- 0.1 km The total land plot of 34,884 sq m enables additional expansion up to 5,500 sq m of buildable area. The detailed plan allows a construction of 1-storey industrial building with a max. height of 12 meters. 2

Modern Office Space Lease: 1st floor layout plan 1,000 sq m Office space on 2 floors; 3 open office spaces; 3 private office spaces with 2 or 3 workplaces; 4 meeting rooms; Office kitchen, dinery; It is possible to adjust Office space layout to meet tenant needs. 2nd floor layout plan 3

Modern Warehouse and Production Premises Lease: 5,156 sq m Production space; 794 sq m Warehouse; Warehouse ceiling height of 7 m; Production premise s ceiling height of 4.25 m; Availability of equipment- Kardex, FIFO, production workstations, warehouse shelves. 4

Technical Specification District heating; 2x800A Electricity supply; ESD floor & network; CAT6 LAN; 1000 lx work surface lighting; Ventilation, cooling system; Fire safety system; Possible up to 30 Mbit/s network connections. Available to acquire from former tenant: Nitrogen supply (contract); Video surveillance system; Security and access control system; Kardex storage systems; FIFO shelves; Warehouse equipment; Office furniture. 5

Warehouse, Production and Office Space Costs* Lease fee: Up to negotiations. Maintenance fee**: Warehouse ~1 euro / sq m; Office space ~1,5 euro / sq m; Production space ~1 euro / sq m. Public utilities payment: Electricity, water, waste removal according to quantity consumed. *given information about Warehouse, Production and Office space cost is only indicative in nature and has no legal obligations. **maintenance fee is extracted after the fact, based on actual costs. 6

Staff Competencies (current tenant will move its activities to China and the competent staff of Efore in Pärnu is available for the new tenant) page 1 of 2 Languages: Estonian, English, Russian, Finnish, German; Nordic business culture; Knowledge of Ericsson, GE, ABB, EADS quality requirements; Service cover: Technical Sales; Sourcing; Operations; Product Engineering; After Sales service. Operational models: STO ship to order/from warehouse in same day + HUB in Sweden and in Tallinn for Ericsson; ATO assembly to order/ order lead time 2 days + transportation; MTO make to order/ order lead time 3-5 days + transportation. Local (50 km) sourcing contacts: Sheet metal, cable sets, inductives. Global sourcing contacts: Arrow, Avnet, Tyco, TTI, Elgood, Premo, etc. Global logistics : UPS, TNT, Incoterms 2010 knowledge. IT competencies : MS Office, Novell network, Keybox MRP, ATON PDM, Autocad, Solidworks, Cisco IP Phone system. Sourcing and logistics 7

Staff Competencies page 2 of 2 Manufacturing management: Demand planning tools, sourcing, supply and warehouse; World class manufacturing models, lean manufacturing, 5S; Working methods standardizing, working time standardizing (MOST); Assets utilization follow up (U1, U2); Statistical process control (SPC); QMS, EMS, OHSAS knowledge (ISO standards); 8D root cause analyzing and correction actions planning. Technical competence: Product engineering and troubleshooting; SMT and HMT (thru hole); Wave soldering; Manual assembly; Gluing; Coating; Testing: Safety test, automated functional test. IP test. RSS, Gage R&R, Yield, Cpk analysis. NPI (New Product Introduction) Prototypes manufacturing and analyzing; DFM (Design for Manufacturing); Control Plans and Product Flow Charts; FMEA (Failure Mode and Effects Analysis) during manufacturing; Ramp-up planning, multi-site manufacturing experience. Manufacturing competence: Operators Electronics components knowledge; IPC 610 and other electronics standards knowledge; Hand soldering competence; Mechanical assembly competence; Competence to read technical documentation; Ability to work 7/24. 8

Contacts and Property Visits The property The property is owned by German open ended real estate fund Focus Nordic Cities. The owner is represented by Catella Corporate Finance www.catella.ee; www.catella.lv. All questions regarding the rental terms should be addressed to: Kaia Pärnoja kaia.parnoja@catella.ee, mobile +372 53 74 30 81 Sandijs Martinovs sandijs.martinovs@catella.lv, mobile +371 29 22 91 05 The staff and competences The current tenant in the building is Efore (www.efore.com). All questions regarding the staff competences and about the availability of equipment and furniture should be addressed to: Juhan Lasn juhan.lasn@efore.ee, mobile +372 53 47 69 46 Property visits For the property visits please contact Juhan Lasn (juhan.lasn@efore.ee, mobile +372 53 47 69 46) and put Kaia Pärnoja (kaia.parnoja@catella.ee, mobile +372 53 74 30 81) as CC. 9

Estonia Competitive Advantages: Communications Equipment Estonian Investment Agency April 2012

Introduction Estonia offers distinctive opportunities as a near-shore electronics hub for both in-house and outsourced production and distribution. Estonia is the emerging Nordic location and an excellent gateway between Northern, Western and Eastern Europe and Russia. Estonia offers a unique blend of Scandinavian culture, infrastructure and business values, familiarity and knowledge of Russia and highly competitive business costs. Estonia has the lowest corruption in Eastern Europe. Besides good geographical location there are no earthquakes, no floods, no volcanoes nor any kind of other natural hazards in Estonia.

Summary Why Estonia? Strategic location global vision Dynamic electronics industry ecosystem Competitive advantages in Communications Equipment Baltic, Nordic and Western European connections Proximity to Russia and other CEE markets Exports represent 93% of Estonia s GDP No natural hazards World class foreign investors supported by extensive local supply chains Very high growth: electronics devices output grew by 400% in 7 years Development and production of globally innovative products Quality talent pool resourcing for business R&D know how Competitive costs & taxes outstanding value Progressive Infrastructure Easy to do business Low risk 98,000 engineers and 24,000 technical IT professionals 50% of engineers studied specialized or vocational engineering courses High quality universities - Ranked 16th in the world Government support - Zero % tax on re-invested profits Labour costs are at least a third of those in Sweden or Finland Cheapest electricity in Europe Simple, flat rate tax system Sites scalable and accessible Ports growth potential, open year round 100% fibre broadband by 2015 Ranked by the IMD, World Bank and the World Economic Forum as the easiest place to do business in CEE Ranked 3 rd in the world for ease of trading across borders Lowest government debt in Europe (5.8% of GDP in 2011) Sustainable workforce 12% unemployment; latent engineering talent pool Political & economic stability accession to the Euro in 2011 Security NATO chose Estonia for its cyber security operations

Estonian Success Stories We work with Tallinn Technical University to direct the courses they offer toward our specific needs and we handpick our engineers through this cooperation. It takes only simple maths to conclude this is a great place to do business. In Sweden, one employee has roughly 1,400 workable hours. In Estonia, the same employee has 1,750 hours. Even when the labour market has been at its tightest, ABB has been able to recruit and train the specialists it needs. When ABB could not find the specialists it needed to produce turbines for wind generators, it created programs and trained them itself. For one-and-a-half years now we ve added value with design and development. We have always managed well getting the engineers we need. From the point of having an ambitious vision, we have quite quickly come to having a fully functional team of bright young engineers integrated with the overall R&D team at Stoneridge Electronics.

Strategic Location -

Excellence in Higher Education Education system 9 universities (6 public, 3 private) - ca 52 000 students o University of Tartu 18 250 students o Tallinn University of Technology 14 400 students o Tallinn University 9 600 students 24 other professional higher education institutions ca 16 400 students 51 vocational schools - ca 28 500 students 242 gymnasiums (high schools) - ca 30 000 students World class talent: - Ranked 16 th in world for quality of higher education (World Economic Forum 2010) - Ranked 5 th in the world for high school education standards (PISA ) University of Tartu (UT) http://www.ut.ee/index.aw/set_lang_id=2 UT was founded in 1632 and is Estonia s leading centre of research and training. UT s robust research potential is evidenced by the fact that it is the only Baltic university that has been invited to join the Coimbra Group, a prestigious club of renowned research universities. The University hosted the Science Education Centre organized the 2010 World Conference on Science and Technology Education. Tallinn University of Technology (TUT) http://www.ttu.ee/en Founded in 1918 by the Estonian Engineering Society, TUT has a strong focus on engineering studies. There are 8 faculties including: Civil Engineering; Power Engineering, Mechanical Engineering; Chemical & Materials Technology and Information Technology. Tallinn University (TU) http://www.tlu.ee/?langid=2 TU Estonia s third largest university, consisting of 18 institutes and 4 colleges. It has more than 9,500 students as well as more than 540 faculty members and research fellows, and is the fastest growing university in Estonia. Return to Index

Competitive Costs Labour & Property Approximately three to four times lower labour costs compared to Scandinavian countries in: manufacturing of communication equipment as well as in manufacturing of electronic components. Low labour costs, with a Scandinavian-like culture Source: fdibenchmark.com April 2012 Type of space Tallinn Tartu Pärnu Narva Industrial lease 2.8-6.0 2.0-4.0 1.6 4.5 3.2-8.0 Office 6.5 14.1 6.0 12.8 6.0 9.2 4.5 8.3 Source: Colliers International: January 2011 Return to Index Indicative range for rents (excluding VAT and operating expenses) and industrial land price in major towns of Estonia for industrial and office premises (EUR/m2 per month). Also the cheapest electricity in Europe

Cutting Edge ICT connectivity Back to Contents By 2015 all Estonian households, enterprises and institutions will have access to the broadband Fiber optical network in 2015 network with the data connection speed of up to 100 Mbit/s Fiber optical backbone network connects all Estonian county centers The country is completely covered by digital networks providing wireless internet A network of Public Access Points covers most cities and towns Return to Index Fiber optical network today

Low risk politically and economically stable Political stability. Estonia is seen as the most stable country in CEE more stable than Czech Republic, Poland, Lithuania, Romania or Hungary. No 1 in Europe in lowest government debt. Government debt was 5.8% of GDP in 2011. A stable and future oriented state budget, with a growing interest in entrepreneurs and foreign investors. Estonia was ranked in joint second place in the 2010 table ranking European countries by the European Economic Sustainability Index (EESI). Low inflation 5% in 2011 The higher the rank, the lower the risk Source: IMD World Competitiveness Yearbook 2011

Pärnu location on Via Baltica

Business environment in Pärnu Favourable geographic and logistic location -Via Baltic road (1,5 ha drive from Tallinn) -harbour (all year around) -airport -railway (new high speed Tallinn-Varsawa to be built) Electronics sector in county 2010-1035 employees - turnover 77 931 326 EUR, 95% export - 10 companies Summer Capital of Estonia - positive image - sea, beach, river, parks - various cultural and sport events - up to 1 mln visitors per year Nice and secure living environment

For additional information please contact: Name: Ele Merike Pärtel Position: Senior Advisor Estonian Investment Agency Phone: +372 6 279 526 Mobile: +372 56 654 357 Email: ele-merike.partel@eas.ee Estonian Investment Agency Enterprise Estonia www.investinestonia.com www.tradewithestonia.com www.eas.ee