Valuation Report ‘Matrix Portfolio,
Valuation of 13 properties’’
prepared for Brack Capital Properties N.V.
May 2013
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Matrix Portfolio, Valuation of 13 properties – May 2013
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Contents
1 Brief & Scope of Instruction ................................................................................................................................. 3 1.1 Instruction ................................................................................................................................................................ 3 1.2 Valuer Status ........................................................................................................................................................... 3 1.3 Purpose of Valuation................................................................................................................................................ 4 1.4 Sources of Information ............................................................................................................................................. 4 1.5 Date of Valuation ..................................................................................................................................................... 4 1.6 Inspections ............................................................................................................................................................... 4 1.7 Basis of Valuation .................................................................................................................................................... 4 2 Market Considerations .......................................................................................................................................... 5 2.1 German Economy .................................................................................................................................................... 5 2.2 Retail Investment Market ....................................................................................................................................... 11 2.3 German Retail Warehouses and Retail Parks ....................................................................................................... 14 3 Valuation ............................................................................................................................................................... 22 3.1 Valuation Methodology .......................................................................................................................................... 22 3.2 Valuation Assumptions .......................................................................................................................................... 22 3.3 Valuation Results ................................................................................................................................................... 26 3.4 Sensitivity Matrix .................................................................................................................................................... 27 4 Confidentiality & Publication .............................................................................................................................. 30 Appendix I – Property Reports ...................................................................................................................................... 31 Appendix II – Overview ................................................................................................................................................... 32 Appendix III – General Principles for Valuation ........................................................................................................... 33
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Contents cont’d
Figure 1: Retail Transaction Volume Germany ................................................................................................................. 12 Figure 2: Transaction Volume Germany divided by Retail Asset Class ............................................................................ 13 Figure 3: Development of Prime Yields ............................................................................................................................. 13 Figure 4: Prime Yield Development in % ........................................................................................................................... 16 Figure 5: Prime Yield Development in % ........................................................................................................................... 20 Table 1: Transaction Evidence .......................................................................................................................................... 17 Table 2: Transaction Evidence .......................................................................................................................................... 21 Table 3: Inflation forecast Germany .................................................................................................................................. 26
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1 Brief & Scope of Instruction
1.1 Instruction
We refer to your instruction, dated 25 April 2013, instructing us to carry out a valuation of the Matrix Portfolio consisting of 13 properties. The portfolio comprises retail parks and self-service department stores. The instruction was ordered by Fred Ganea, Head of Financial Department of Brack Capital Properties N.V.
1.2 Valuer Status
We confirm that the valuation has been carried out by us as external valuers, qualified for the purposes of providing valuations in accordance with the Appraisal and Valuation Manual published by the Royal Institution of Chartered Surveyors (RICS). We also confirm that we have no conflict of interest relating to the property and that we have valued portfolios of a similar scope as well as larger scope in the course of other mandates.
The project team consists of the following members:
Andrew Groom
Since August 2001 Mr. Groom is head of the Valuation Advisory department in Germany with additional responsibility for valuation business in Austria and Switzerland.
As International Director, Mr Groom leads the overall direction of the Bank, Portfolio, Transaction, Residential and Retail Valuation business lines as well as mortgage lending valuations for German mortgage banks (Team of 50+ consultants).
He is also responsible for providing client management within the scope of major German and international mandates, comprehensive advisory services for real estate portfolios in terms of acquisition and disposal strategies and advising leading banks with regard to risk classification in property financing.
Prior to that he gained management experience leading international advisory departments for CEI Investment London and Drivers Jonas London as well as Berlin. Here he was not only responsible for the valuation department, but also for the investment sector.
Andrew Groom holds a Bachelor of Science with Honours in Estate Management and is also a member of The Royal Institution of Chartered Surveyors (MRICS) and a member of the RICS Valuation Faculty Board, Germany.
He has over 21 years development, valuation and international investment experience as well as over 18 years management experience leading international advisory departments.
Frank Rambow
Since 2007 Frank Rambow is Teamleader of the Bank Valuation Advisory team of Jones Lang LaSalle’s Valuation Department. Here he heads a team of 6 professionals. He currently holds the position of a National Director.
Frank Rambow has lead several buy-side advices and real estate appraisals for single assets as well as portfolios for various clients. All the valuations are conducted according to the IFRS standards.
He is a graduated economist and has over 15 years’ experience in real estate sector, thereof nine years at JLL. Frank Rambow is a member of The Royal Institution of Chartered Surveyors (MRICS).
Georg Charlier
In September 2008, Georg Charlier joined Jones Lang LaSalle Germany, focusing mainly on the valuation of retail and office portfolios/properties. He holds the position of Principal Consultant. Prior to that he was part of the Munich based team of a German Real Estate Investor.
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Georg Charlier holds a Diploma of Real Estate Engineering and Management and a certification of the society of investment professionals in Germany. He possesses more than 6 years of consulting experience on the German real estate market.
1.3 Purpose of Valuation
We understand that the valuation is required for financial statement reporting and that the valuation reports will be included in the financial statement of Brack Capital Properties N.V.
1.4 Sources of Information
In preparing this valuation report, we have predominantly relied upon information provided by Brack Capital Properties N.V. We received the documents listed below, which form the basis for our valuation:
Tenancy Schedule as at April 2013
Schedule of non-recoverable costs on an individual property basis
Overview of short-term tenants income, on an individual property basis
List of indexation clauses
Presentation regarding the development potential for the subject property in Neckarsulm
In the event that this information proves to be incorrect or additional information is made available to us, the accuracy of the valuation could be affected. In such case, we reserve the right to amend our opinion of value accordingly.
1.5 Date of Valuation
As specified in your instruction, we have set the valuation date to be 31 March 2013.
1.6 Inspections
For the current valuation, we did not conduct inspections. However, the properties were inspected by us in the scope of the valuation in February 2011.
1.7 Basis of Valuation
The valuation is carried out on the basis of Market Value as defined in the '8th Edition of the Royal Institution of Chartered Surveyors' (RICS) Appraisal and Valuation Manual. This is incorporated into the Jones Lang LaSalle “General Principles Adopted in the Preparation of Valuations and Reports”, which is attached in the Appendix 2. Market Value is defined as:
“The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”
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2 Market Considerations
2.1 German Economy
GROSS DOMESTIC PRODUCT In the fourth quarter of 2012, the price-adjusted GDP declined by 0.6%. In comparison to a stronger previous quarter, growth in the German economy slowed-down.
In the first three quarters, Germany achieved a considerable increase of 0.5%, 0.3% and 0.2% which led to growth of 0.7% in 2012. The calendar-adjusted increase was 0.9%.
In the previous quarter only domestic consumption achieved growth.
State (+0.4%) and private expenses (+0.1%) increased slightly – in price, seasonal and calendar-adjusted terms, while investment decreased in general. Equipment investment has continued to decrease and is currently -2.0%. In addition, the export sector slowed down in the fourth quarter with the export of goods and services dropping by 2.0%. Imports fell by 0.6%.
As forecasted by the German Institute for Economic Research (DIW), the German economy is expected to generate a slight surplus in the first quarter of 2013, which will accelerate further economic development.
According to the DIW, there is considerable uplift in the sentiment amongst businesses and increased demand from the Eurozone. Furthermore, economic development is supported by growing domestic demand, due to a stable German job market and a recent increase in wages.
Development of gross domestic product (Q1/2010 –Q4/2012) – Seasonally and calendar adjusted
Source: Federal Statistical Office, April 2013
BUSINESS CLIMATE In February 2013, the Ifo Business Climate Index noted its strongest upward movement since July and rose to an index level of 107.4. At the end of March, it was 106.7.
As a result, businesses view the current situation as well as future development more optimistically than they did in previous months.
The business climate in the manufacturing industry has improved because of more optimistic assessments regarding the current business situation. In addition, export demand is expected to be above average on a long-term basis.
Business confidence in the wholesale sector has improved in comparison to the previous month. This characterises the current climate a well as future expectations.
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Despite an improved climate in the retail sector, future expectations are characterised by scepticism.
The business climate in the construction industry rose again. The situation has improved slightly and the outlook for the coming months has reached its highest point since German reunification.
The Ifo Business Climate Index for the service sector rose significantly in February.
Despite a current decrease, figures for the next six months are expected to rise from 9.0 points to 19.0.
Ifo – Business Climate Index January - March 2013
Source: Ifo-Institute, April 2013
PRICE DEVELOPMENT According to the Federal Statistical Office (Destatis), the consumer price index for Germany in March 2013 was 1.4% higher than in March 2012 and compared to the previous month increased by 0.5%.
Compared to 2012, the main driver of the price increase in February 2013 was the rise in energy and food costs. Energy prices rose by 3.6% and food prices by 3.1% compared to February 2012.
Had it not been for this, the consumer price index would have only reached 1.1% in February 2013.
Domestic energy prices were mainly influenced by electricity costs, due to the increase in the EEG reallocation charge at the beginning of 2013.
Increased food prices were driven by fruits (+7.2%) and meat (+5.4%). Furthermore, prices increased for bread and cereal products (+2.7%) as well as fish (+2.6%) and candy (+2.3%). Cooking fat and oil on the other hand became cheaper (-2.4%).
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Development of inflation rate / consumer price index “original values” (January 2011-March 2013)
Source: Federal Statistical Office, April 2013
LABOUR AND TRAINING MARKETS Unemployment, Unemployment Rate
According to the Federal Employment Agency, the nationwide unemployment rate was 7.3% in March 2013, which was a slight decrease compared to the previous month.
With about 3.1 million people in Germany actively seeking employment, the unemployment situation is similar to that of February and March 2012.
Due to the winter season, the number of unemployed people rose by 18,000 compared to January. This is significantly less than the previous year, when the number rose by 46,000.
All sectors were able to record employment growth in a year-on-year comparison. The highest growth was registered in the business services sector (+168,000), the manufacturing industry (+75,000) and the healthcare and social services sector (+58,000).
Temporary employment services registered 70,000 less employees compared to the previous year.
The long-term unemployment rate (longer than 12 months) increased slightly in comparison to the previous year.
The 1% rise represents 9,000 people gaining employment, bringing the overall number of long-term unemployed people to 1,063,000. While the number of unemployed people has risen overall, the share of people that were unemployed for more than 12 months remained stable, with around 33.7% this year and 33.9% in the previous year.
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Development of unemployment (January 2011-March 2013)
Source: Federal Employment Agency, April 2013 PURCHASING POWER Purchasing power is the market-recognised benchmark for determining potential consumption. It delivers key information regarding the regions with the strongest purchasing power; purchasing power can indicate the total of all net revenues per region, while taking state transfer benefits like jobseeker allowance, child and retirement benefits into account.
Furthermore, purchasing power is localised and thereby a relevant indicator for the potential consumption of the population living in a specific community.
Retail Industry: Germany sees significant increase
The GfK purchasing power in Germany for 2013 is estimated to be approx. € 1,610 billion in total.
This is up by 2.9% from the previous year’s figure. The average citizen thereby has a purchasing power of € 20,621 this year, plus a nominal € 554 more to spend on consumer products, rent or cost of living.
Currently, the German Central Bank estimates an inflation rate of 1.5%, which will lead to not only a nominal increase in purchasing power but also a rise in real terms by 1.4%. Positive development in consumer spending is therefore expected.
However, not all demographic groups will benefit; retirement benefits are likely to fall below inflation in 2013 and cause a loss in purchasing power.
Nevertheless, most industries are expected to develop positive income growth.
German Federal State Comparison: Baden-Württemberg overtakes Hessen
This year Hamburg is at the top with 110.4 index points followed by Bavaria with 109.2. Baden-Württemberg comes in third (Index: 107.2), overtaking Hessen (107.1 points).
Six of the 16 federal states have an above average purchasing power per capita. Rhineland-Palatinate represents the national average.
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The federal states in eastern Germany remain below the national average. Saxony-Anhalt is last with €16,970 per capita.
Urban and Rural District Comparison:
The top ten urban and rural districts remain the same, with the exception of the first two districts exchanging position.
Starnberg (Index: 147.9) took over the top position from Hochtaunuskreis (Index: 146.3).
The two districts have swapped the top two positions before, with Starnberg ahead of Hochtaunuskreis in 2008. Munich and Erlangen are the only urban districts in the top ten ranking, which indicates that the wealthiest people still live in exurban areas.
Hamburg as a city-state is the second most populous urban district and, as mentioned before, is at the top of the federal states ranking. However, Hamburg ranks 54th in the overall urban and rural district comparison. In a comparison of urban districts Hamburg ranks 18th.
Compared to previous years, there are changes at the bottom of the ranking as well.
The main reason for this is the restructuring of urban and rural districts in Mecklenburg-West Pomerania. Some of the weaker districts were combined and restructured.
The rural district Görlitz in Saxony is last this year, whereas, in previous years, north-eastern districts had the lowest figures.
Next to Görlitz, the Elbe-Elster district in Brandburg (Index:77.3) and the Kyffhäuser district in Thuringia (Index: 77.4) showed the weakest results.
Gap between rich and poor
People in Görlitz have an average €15,687 per capita to spend (Index 77.4), which is almost half of the average sum that a resident in Starnberg has on hand.
The gap between rich and poor spreads from almost 50% above average in Starnberg to 24% below the national average in Görlitz.
Strong districts are often located near weak ones. For example, the difference in euros per capita between the urban districts of Düsseldorf and Duisburg (30 km apart) is € 7,100, a 29% difference.
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Purchasing Power in Germany 2013
Source: GfK Regional Statistics
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DEMOGRAPHIC CHANGE Population development in the coming years can be described with three key terms: fewer, older, and more multicultural. In addition to this, the population structure will change significantly.
The effect of this demographic change on the economy and competitiveness as well as on the future of the social welfare system (old age, unemployment and health insurances) continues to cause debates.
It is evident that Germany’s population has been dropping since 2003. This decrease will continue and intensify.
At the end of October 2012, approximately 82 million people were living in Germany, which is 0.2% more than at the end of 2011. The figure was approx. 81.5 million at the end of 2010.
In 2060, the population will drop to between 65 million (annual immigration rate of 100,000 – lower end of “average” population) and 70 million (annual immigration rate of 200,000 – upper end of “average” population). Even with the upper-end estimates for the total population – which assumes a rise in the birth rate, a significant increase in life expectancy and an annual balance of migration of 200,000 people – only about 77 million people would be living in Germany in 2060, significantly less than today.
A Germany-wide census took place recently (census 2011), which was designed to provide up-to-date information about the numbers, demographics, socio-economic data and housing of the population. The publication of the detailed assessment is planned for May 2013.
Forecast of population development in Germany (2009 – 2060) “medium” variant
Source: Federal Statistical Office
2.2 Retail Investment Market
Retail Investment Market: Review of 2012
Stability of the German economy as well an upward trend during 2012 kept Germany in the focus of real estate investors throughout Europe. Following a recovery in 2010, the economy as well as employment rates and income rose significantly, but this increase slowed down during 2011. This caused a ripple effect in the retail sector. In 2012, retail investments totalled approximately € 7.9 billion compared to € 10.7 billion in 2011. Hence, it accounted for 45% (2011) and 31% (2012) respectively. Whereas the total investments in retail properties in 2011
60,000
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2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
in thousands
lower limit medium higher limit
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clearly exceeded the 2010 figure and reached the level of 2007, 2012 marked the first drop after three years of consecutive growth.
Figure 1: Retail Transaction Volume Germany
Source: Jones Lang LaSalle, January 2013
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011 and 2012. In the last year the shares of shopping centres and high street properties/department stores were nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks now have the third largest share with 15% (2011: 8%) and are followed by retail warehousing solus units, which accounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 and stood at 2% in 2012. Transactions involving other retail properties and a portfolio of kiosks took up a 1% share in 2012, respectively.
In 2011 some large transactions drove up the amount of investments in shopping centres, high street properties and department stores. In 2012, however, large transactions included the sale of KaDeWe and 17 Karstadt properties from Highstreet (Whitehall, RREEF and others) to Signa Holding; the sale of Europa Galerie in Saarbrücken from Credit Suisse to Union Investment (CS Eureal) for approximately € 170 million; the sale of a 45% share of the Europa Passage in Hamburg for € 184 million; shares of five shopping centres from Perella Weinberg to Unibail-Rodamco for approximately € 500 million; and 78% of the Milaneo shopping centre in Stuttgart for approx. € 400 million. Furthermore, the Rathaus-Center in Monheim has been sold at a so far unpublished price by Vald and ZIAG to Phoenix; Sahle-Gruppe bought Karstadt on Zeil in Frankfurt (€ 115m) and 11 Toom DIYs have been bought by a joint venture of Morgan Stanley and Redos Real Estate for approximately € 100 million; a joint venture of Matrix and Investors from Munich bought the Saturn store in Hamburg for an estimated € 80-90 million.
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Figure 2: Transaction Volume Germany divided by Retail Asset Class
Source: Jones Lang LaSalle, January 2013
Yields in the Retail Market decrease
As mentioned above, shares of retail assets in the real estate investment market went down from 45% in 2011 to 31% in 2012. Furthermore, in most retail property classes, the gap between sellers and buyers has decreased, but a clear lack of product remains. However, supermarkets and discounters are the exception; the demand is higher than the supply. Particularly with respect to core properties, a gap between sellers and buyers can be observed. A yield compression could be observed from 2009 until H1 2011, then came to a halt and continued in H2 2012 with respect to retail parks, shopping centres and retail high street unit shops/department stores. However, the yield compression as well as the stabilisation applies to core properties rather than secondary assets. Prime yields for shopping centres, for instance, were close to 5% throughout 2012, but went down in Q4 and now equal those for prime offices. Net initial yields for prime retail parks went down to approximately 6% at the end of 2011, remained stable until the Q3 2012 and then decreased.
Figure 3: Development of Prime Yields
Source: Jones Lang LaSalle, January 2013
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Retail Investment Market: Outlook
Especially as a result of the fact that Germany’s economy has been very stable in the past years and showed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in 2013. Particularly those investors who seek a core investment with upward potential find the best fit in retail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered. However, building condition as well as location quality remain among the most important requirements. This development is partly due to a certain pressure to invest and partly because of a limited supply of core properties. Furthermore, in 2013 an increasing transaction volume of distressed properties and non-performing loans respectively can be expected. With respect to retail properties, we expect a progressively stable trend with the highest investment share anticipated for shopping centres and high street properties. Furthermore, we predict that the German real estate market will remain the focus of foreign investors. In 2012, Asset/Fund Managers as well as public quoted property companies/REITS were the most active participants of the retail investment market. We expect this to continue, but see developers and insurances to become more active again in 2013.
2.3 German Retail Warehouses and Retail Parks
The following section presents a more detailed overview of retail warehouses with a specific focus on “Do-It-Yourself” (DIY) stores, furniture stores, electronic goods stores, hypermarkets and cash & carry markets as well as retail parks and retail agglomerations. The subject matter will concentrate on the classification of these types of retail establishments, providing information on the special characteristics, the most well-known tenants, the deciding regional factors and information regarding the present situation in the German real estate market in view of the current rental level and the investment market.
Retail Warehouses
Definition
Retail warehouses are large-scale forms of retailers. They offer a broad and often very deep range of different products for different requirements and for specific target groups. Retail warehouses usually operate using a self-service format with a self-explanatory product selection, which is clearly presented to the customer. The need for good presentation and the broad and deep product range contribute to large sales areas. On the other hand, fewer sales staff is needed due to the self-service character. In combination with a good area performance and efficient stock keeping, the costs for retail warehouses are easily managed. Additionally, the majority of retail warehouses are chain stores with a basic concept. The construction of such concepts entails economic advantages, with products that can be and mostly are offered at lower to medium price levels.
Among retail warehouses, different types and branches can be distinguished. Retail warehouses can differ in service orientation and price level. There are more service-oriented warehouses (higher prices, more services) and more discount-oriented warehouses (lower price, less services). Plus, even though retail warehouses are usually large-scale, they can be distinguished based on their size and location.
Small retail warehouses have an area of approx. 200 to 1,200 m² and are located within a suburban location with good traffic connections. Tenants are usually hardware stores, office supply stores or drugstores. Medium retail warehouses comprise stores with an area of up to 3,500 m² and are located both in suburban areas and in the outskirts of towns and cities. Typical tenants include sporting goods stores, toy stores, electronic goods stores, large shoe stores, large hardware stores and auto supply stores. Large retail warehouses have an area of more than 3,500 m² up to 18,000 m² and are usually located in peripheral locations. However, these stores are increasingly being developed in more integrated locations. Typical tenants are large fashion retailers, toy stores, electronic goods stores and DIY stores. The biggest retail warehouses reach a size of up to 30,000 m². Due to their size, these stores are normally found exclusively in peripheral locations or on Greenfield sites. This size is
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usually only occupied by furniture stores. The branches and tenants for retail warehouses are diverse and depend on the strategy and orientation of the subject property.
Locational Factors
Since the time they originated in the mid-1980s, retail warehouses are typically situated in peripheral locations in cities (e.g. commercial areas). This distinguishes a retail warehouse from conventional specialist stores, which traditionally prefer city centre locations. The motivation to move to Greenfield sites results mainly from the lower rental rates compared to the city centre, the fact that expansion is easier in the periphery (especially for large-scale retail warehouses), as well as the possibility to use simple building methods to affordably construct on a large scale (with regard to sales area and parking spaces). Together with more efficient organisation, this allowed products to be offered at lower prices than in traditional retail formats. Retail warehouses and their concepts are thus posing an ever greater threat of competition for the city centres. This means that continuous adjustment and development of concepts is necessary to remain competitive for both city centres and retail areas in the periphery.
Location factors can be differentiated by the macro-location and micro-location. The most important factor on a macro-level is the population and all factors directly and indirectly associated therewith. The first is the population of the locality and the number of people living in the catchment area of the respective property. In this context, future population development is another important factor given the long-term use of such real estate. Another factor concerning the population is the purchasing power. The more specialized retail warehouses are, the more purchasing power matters. This is because the costs associated with food, for example, do not depend on purchasing power as much as the costs associated with electronics or DIY-store goods. Factors like tourism potential and commuter balance play a less significant role. Given the increasing difference concerning the mentioned macro-location factors in Germany, these factors are continually gaining importance in the valuation of real estate.
On a micro-location level an important factor is the traffic infrastructure. As retail warehouses mostly rely on customers travelling by car, sufficient parking spaces as well as a good traffic infrastructure are very important. Thus, retail warehouses are often found along major arterial roads in commercial or industrial zones. Public transportation plays a less significant role but is important as well. Another important factor is the development in the vicinity. Further retailers in the vicinity can produce benefits from synergy effects or if retailers have a similar product range they can form competition. A residential population in the vicinity can also be beneficial, as people living in the surrounding area of a retail warehouse can significantly increase the customer frequency.
Rental Market
There is no homogeneous rental level for retail warehouses throughout Germany. Nevertheless, the spread between the rental levels is not as big as in high street locations. The maximum rents are determined by a percentage of the turnover expectancy as is common in the retail sector. The turnover again is most dependent on the above-mentioned macro- and micro-location factors of the retail warehouses plus the characteristics of the property like quality and concept of the store, architecture and visibility from the adjacent streets.
The economic difference throughout Germany has led to differences in rental levels throughout the country. Rents in Bavaria, Baden Wuerttemberg and the metropolitan regions around Hamburg, Frankfurt or Berlin, lie above the average rent in Germany due to the high population density, the positive population forecast and the strong economy. Rental levels in eastern German towns are generally slightly lower than their western counterparts, as these areas have a lower purchasing power, higher unemployment rates, most often a negative population development and therefore generate on average lower revenues.
Depending on the size of the retail unit and the branch of the tenant, rents for retail warehouses in Germany usually range from € 5.00 and € 14.00/m²/month. However, there are exceptions in both directions. The highest rents are not paid in peripheral locations but in locations in or near the city centre of larger cities with more than 100,000 inhabitants. Usually these prime rents are paid by well-known and attractive tenants, which occupy
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buildings in very good conditions. The rents for retail warehouses in general in Germany have been relatively stable in the past 10 years. However, the future rental development of retail warehouse will be mainly determined by the growing regional differences. The rental levels will remain stable in sustainable locations and in absolute top locations there is the probability of small increases. But, locations in economically weak regions with negative population development were and are going through difficult development. Therefore, less sales area is needed there due to the migrating population. This leads to an oversupply of rental areas, which again leads to falling rental levels.
Investment Market Specifics
In 2006, retail warehouses and hypermarkets gained importance in the international retail markets and developed from a niche product into an autonomous asset group. However, during the financial crisis in 2008 and the beginning of 2009, as in all other market segments, yields for retail properties rose. As expected, this change affected secondary and tertiary locations more strongly than core properties. Within the retail asset branch, the retail warehouse sector showed the strongest imbalance between product offer and demand during this time. From the beginning of 2011, yields began to fall again due to the increasing demand and the economic upturn after the crises. Especially core properties and properties in sustainable locations with stable characteristics became the focus of investors. Since the second half of 2011, the prime yield for retail warehouses has stabilized at around 6.50%. This is still 90 bps higher that the all-time low of 5.60%. Purchase price multipliers for sustainably lettable retail warehouses in good locations range from 10.5-fold to 14.0-fold the net annual rent.
The following figure shows the prime yield development for retail warehouses since the first quarter of 2007:
Figure 4: Prime Yield Development in %
Source: Jones Lang LaSalle analysis
Prime yields for retail parks and retail warehouses relate to properties with the following characteristics:
Modern concept
Good-looking interior and exterior with an overall attractive appearance
Long lease contracts with the anchor tenants (preferably > 10 years)
A good mix of tenants and branches as well as well-known retail chains
Sufficient parking spaces
0
1
2
3
4
5
6
7
8
Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Q1 12
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Well-positioned in the local market
Prime retail parks may also be situated in peripheral locations but with excellent connections to major traffic arteries
Based on research of all commercial property classes, the prime yield development is expected to remain at approximately this level, though if investors’ preference remains as high as it is, a further decline of prime yields seems possible. Additionally, all estimates have to be seen in light of the current economic crises in the European Union. Furthermore, investors still distinguish between assets situated in western and eastern Germany. Thus, yields for prime properties in eastern Germany are usually traded with a premium of approx. 50 bps. Exceptions can be noted in the large metropolitan areas around Berlin, Dresden and Leipzig.
Another major factor concerning the future yield development is similar to the rental levels the current growing regional difference within Germany. Metropolises and mid-sized cities in good macro locations considered to be winners, while stores in secondary and tertiary locations with poor macroeconomic data are the losers. At present, investors are placing greater focus on location factors than was the case two years ago, which is expected considering the current developments in Germany with regard to population, among other factors. Thus, very weak demand exists for locations with low purchasing power and a negative population growth forecast.
Transaction Evidence
The price decreases which were observed in 2008 and partly 2009 are over. The transactions in 2010 and 2011 indicated an increase in investor’s interest in retail properties in Germany. In 2012 the market seems to stabilize. The total transaction volume for commercial properties in Germany for the first two quarters of 2012 stands at approx. € 9.4 billion. For the first two quarters of 2011 this value stood at € 11.2 billion. Retail properties account for a share of the transaction volume in 2012 of approx. 30%. However, for retail warehouses the transaction volume in 2012 stands at € 83 million which is far below the volume for the whole of 2011 (approx. € 1.3 billion). But, the second half of the year is usually the stronger. Thus, a relatively high increase in the volume for retail warehouses can be expected.
Please find some transactions from 2010 until 2012 in the table below.
Table 1: Transaction Evidence
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Source: Jones Lang LaSalle research
Retail Parks
Definition
Retail parks are planned retail warehouse agglomerations. A retail park generally consists of at least three large-scale retailers with a combined retail area of at least 3,000 m². Similar to large retail warehouses, they usually are situated in locations reachable by car, close to traffic arteries or federal highways. In contrast to unplanned retail warehouse agglomerations, retail parks are built in order to effectively benefit from synergy effects and cultivate a collective corporate identity as well as a visual and spatial appearance. They usually have a shared, central car park and advertise their tenants through traffic cones at the access points. Although distinguished by their plain and functional architecture, retail parks have many similarities to shopping centres. One similarity is the central planning and management of the retail park. Instead of letting random tenants into the property, it is the retail park manager’s task to optimise the tenant mix in order to maximise synergy effects. The manager is further responsible for organising the retail park’s external appearance through shared marketing measures and also functions as a contact for clients, tenants and the landlord.
Retail Agglomerations
In comparison to retail parks, agglomerations of retail warehouses have also often been developed in order to take advantage of synergy effects with other retailers. However, these developments are not strategically planned. Agglomerations are created with the successive settlement of retail warehouses. This usually develops over an extended period of time without central planning, management or operation. Similar to retail parks, the joint usage of infrastructural components and joint marketing are synergy effects arising from such an agglomeration, resulting in an extension of the catchment area and an increase of the competitiveness relative to other retail agglomerations. Two common forms can be distinguished: retail warehouse strips and clusters. While
Date LocationFederal
stateType NIY Multiplier Area Comment
Q2 2012 Jever Lower Saxony Furniture Store 6.40% 13.8-fold 13,000 m² WALT: 9.26 years
Q2 2012 KrefeldNorth Rhine-
WestphaliaDIY store 6.40% 13.7-fold 4,320 m² WALT: 13.6 years
Q2 2011 -North Rhine-
WestphaliaDIY store 6.40% 15.7-fold 11,500 m² WALT: 15 years
Q2 2011 AachenNorth Rhine-
WestphaliaDIY store - 13.3-fold - Obi; WALT: 15 years
Q1 2011 Michendorf Berlin Cash&Carry - 12.92-fold 15,500 m² WALT: ca. 9 years
Q4 2010 CologneNorth Rhine-
WestphaliaEletronic store - 9.5-fold - WALT:< 5 years
Q2 2010 -Baden-
WuerttembergHypermarket - 14,00-fold 5,300 m² WALT 18 yrs.
Q2 2010 -Baden-
WuerttembergHypermarket - 13,25-fold 4,000 m² WALT 18 yrs.
Q2 2010 WuppertalNorth Rhine-
WestphaliaHypermarket 8.00% - 8,500 m² Real, until 2026
Q1 2010 -North Rhine-
WestphaliaDIY - 13,3-fold 10,850 m² Obi, WALT 14 yrs.
Q1 2010 Taunus area Hesse DIY-Store 7.15% 12.4-fold 11,000 m²15 years WALT with tenant
OBI; construction year: 1998
Q1 2010 Ruhr areaNorth Rhine-
WestphaliaDIY-Store 6.90% 12.85-fold 9,735 m²
15 years WALT with tenant
OBI; construction year: 2006
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retail warehouse strips develop through the successive construction of retail warehouses on a linear axis along a single road, clusters develop through the construction of further retail warehouses around a centrally situated store. Often such developments evolve chaotically and seldom benefit from shared parking lots.
The concept of “one-stop shopping”, which is offered by retail parks and retail agglomerations, will play an increasingly important role in the future when shopping for provisions, because time is becoming more and more important to individuals. As a result, individual or sparsely clustered discounters and supermarkets will become increasingly unappealing.
Rental Market and Tenant Mix
The tenant mix of a retail agglomeration or retail park is very important for the overall quality and success of the property. The rental rate for such properties – as is common in the retail sector – is tied to the turnover expectancy (normally as a percentage). A good tenant mix and combination of brands and offers is able to satisfy several consumer requirements and guarantees a good customer flow. In order to increase the overall quality of a retail park or retail agglomeration, tenants selling daily convenience goods and tenants with a periodic or leisure component should be combined within the property. The combination of goods and services supports the consumers’ time management and therefore, appeals to the customer and offers an advantage compared to a stand-alone supermarket, for example.
The opportunity to link purchases with different store characters (periodic and irregular, impulse and target purchases, etc.) varies depending on the main range of goods. In particular, branches with a very high leisure character are easily linked to each other, for example fashion and shoes, leatherwear, toys and jewellery. Purely supply-orientated tenants (for example supermarkets, discounters, bakeries and drugstores) have similar linkage potential. Target-oriented purchases like furniture purchases or DIY-purchases have a lower potential for linkage as they are very sporadic and usually require higher investment. Therefore, the information and the time requirement are higher and these purchases are normally not combined with other purchases.
If in the case of a retail park, the management succeeds in establishing good anchor tenants, which increases the customer frequency, then the turnover expectancy of secondary tenants tends to be higher. As a consequence, their overall rental level can be higher as well. Therefore, some anchor tenants are able to negotiate lower rents, because their existence in a property increases the rental level of the others, thereby compensating for the higher rents. Thus, the rental level of a large anchor store within retail parks, like a supermarket or hypermarket, tends to be lower than if it was a stand-alone store. In contrast, smaller retail warehouses within retail parks, which benefit from large anchor tenants, tend to pay higher rents than if they were stand-alone stores. Overall, retail parks have the potential to generate higher rents than stand-alone retail warehouses due to the higher customer frequency.
The discrepancy between the average and prime rents is usually between € 5.00 and € 6.00/m²/month. Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in western German locations generally range between € 5.00 and € 15.00/m²/month. However, there are exceptions in both directions. The current prime rent for retail warehouses ranges from € 10.50 to € 18.50/m²/month. The prime rent of € 18.50/m²/month is usually not paid in peripheral locations but in locations in or near the city centre of larger metropolitan areas (> 100,000 inhabitants) by well-known and attractive tenants occupying buildings in very good condition. The prime rent for retail warehouses in Germany has been virtually stable in the past 10 years. In the first quarter of 2002, the prime rent ranged from € 9.79 from 18.60/m²/month.
The overall potential for rental growth of retail warehouses in Germany is best summed up as mediocre. Depending on the tenant branch, rental rates for discounters, department stores and DIY stores remain stable due to the high competition in the market, but the rents for fashion stores have uplift potential simply due to the fact that these stores are increasing their presence in retail parks and are prepared to pay high rents.
Investment Market Specifics
Retail parks are a very interesting investment for investors. This is due to the fact that there is still a great deal of demand for retail areas within the centres and very often the security of cash flow is supported by contract
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lengths of up to 15 years. Tenants are willing to sign long contracts, because the restrictive town planning in Germany makes new developments difficult and thereby decreases the risk that new properties will be constructed nearby in the near future and will avert the customer flow. Furthermore, retail parks offer risk diversification due to the multi-tenant structure in comparison to single-tenant retail warehouses. Thus, retail parks on average offer a more secure cash flow. For that reason, the yields for retail parks are lower than for retail warehouses.
The following shows the prime yield development for retail parks from the first quarter of 2007 until the second quarter of 2012.
Figure 5: Prime Yield Development in %
Source: Jones Lang LaSalle analysis
Prime yields usually remain relatively stable because prime properties are less affected by developments than non-prime properties. The prime yields started to increase with the appearance of the financial crises in 2007 and peaked at the beginning of 2009 at 6.75%. From the fourth quarter of 2009, prime yields have fallen quite considerably by 0.85% to as low as 5.90% in the second quarter of 2011. Since then, the prime yield has remained stable. Top multipliers are currently reaching 14.25 to 15.00, at the most.
Given the present-day perspective, we expect yields for core products to remain stable, provided that the overall economic situation and the situation in the retail market (particularly for specialist retail properties) will not deteriorate. However, if investor’s preference for retail parks remains as high as it is, a further decline of prime yields seems possible. Additionally, all estimates have to be seen in light of the development of the current economic crisis in the European Union.
Furthermore, within the individual retail park segment, investors are currently increasingly searching for properties with refurbishment potential. The result is a clear focus on redeveloping single large-scale retail warehouses into retail parks in order to fully capitalise on the investor demand for these products. Large self-service department stores (> 10,000 m²) in need of modernisation show the greatest potential in this regard due to their area dimensions and typically favourable building law regulations.
Transaction Evidence
The transaction volume of retail parks stand at € 464 million for the first two quarters of 2012. This is more of half the investment volume of retail parks in 2011 which stood at € 823 million. This shows the currently strong
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demand of investors for retail parks. This demand will probably increase in the future due to the above mentioned facts.
Please find some transactions from 2010, 2011 and 2012 in the table below.
Table 2: Transaction Evidence
Source: Jones Lang LaSalle research
Date LocationFederal
stateType NIY Multiplier Area Comment
Q3 2011 Freital Saxony Retail Park n.a. 11.2-fold 20,000 m² WALT:> 10 years
2012 n.a.Baden-
WuerttembergRetail Park 7.55% n.a. 27,955 m² -
Q2 2012 KarlsruheBaden-
WuerttembergRetail Park ca. 6.00% 14.5-fold 27,500 m² Saturn, real; WALT: ca. 9 years
Q3 2011 DortmundNorth Rhine-
WestphaliaRetail Park - 14.16-fold 31,131 m² Hornbach, REWE, Lidl, Tedox; WALT: 8 years
Q1 2011 Castrop-RauxelNorth Rhine-
WestphaliaRetail Park - 11.05-fold 9,715 m² Media Markt, Tedox, Dänisches Bettenlager
Q1 2011 Hesse Hesse Retail Park - Around 15-fold 4,500 m² WALT 20 yrs.
Q1 2010 Salzgitter Bad Lower Saxony Retail Park - 12,75-fold -WALT 10 yrs., new retail park, main tenants
Rossmann and Penny
Q2 2010 Gernsheim Hesse Retail Park - 12.00--fold 9,900 m² Edeka,, WALT over 10.0 years
Q1 2010 Berlin Berlin Retail Park - 13,51-fold 21,500 m²Main tenants Obi, Burger King, Kaisers, Dänisches
Bettenlager
Q1 2010 -North Rhine-
WestphaliaRetail Park - Around 13.75-fold 8,400 m²
Main tenants Rewe, Dänisches Bettenlager, dm, etc.;
WALT between 10 and 15 years
Q1 2010 Landshut Bavaria Retail Park GIY 6.9% 14.53-fold 23,000 m²
Main tenants Kaufland, Aldi, Saturn, C&A,
Deichmann, Das Depot, Mister * Lady; purchase price
€ 53.5 Mio; construction year 2010
Q1 2010 Gießen Hesse Retail Park approx. 7.5% 11.75-fold 18,000 m² Main tenants real, Saturn, WALT: > 10 years
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3 Valuation
3.1 Valuation Methodology
Our valuation provides an estimate of Market Value. The definition by the ‘Royal Institution of Chartered Surveyors’ outlined below applies to the underlying values quoted in the valuation.
The Market Value of the property has been assessed using the Discounted Cash Flow (DCF) calculation method. This takes into account the agreed rent for the signed leases, the market rent for currently vacant space and estimated rents for re-letting of the space after lease term expiry.
Cash flows for the relevant year are calculated as follows: the Rental Income at full occupancy (Base Rental Revenue) is reduced by the loss of rent due to rent–free periods (Base Rent Abatements) and vacancy (Absorption and Turnover Vacancy). Besides income from indexation clauses (CPI and Other Adjustment Revenues) and step rents (Base Rental Step Revenue), reimbursable expenses (Vacancy Costs) have been added to obtain the Total Potential Gross Revenue. While rents are calculated according their particular adjustment clause, costs have been adjusted according to the change in the Consumer Price Index (CPI) on a yearly basis.
After deduction of the non-recoverable costs (i.e. Management and Maintenance Costs) and reimbursable expenses (Vacancy Costs), the Net Operating Income (NOI) is determined. In case of vacancy, the reimbursable costs the landlord receives are lower than the amount he has to pay, so that only in this event do Vacancy Costs have an influence on the NOI.
Subtracting the non-operating costs (such as Leasing Commissions, Tenant Improvements and Capital Expenditures) from the NOI results in the Cash Flow before Tax and Debt Service.
After the DCF period of 10 years, we have considered a stabilised rental income in year 11. The capitalised value after year 10 takes this stabilised rental income and subtracts the stabilised expenses, resulting in the Stabilised Net Operating Income. This result is capitalised into perpetuity applying an equated (growth implicit) yield and produces the Terminal Value Indication. The resulting value is then discounted to the valuation date using the discount rate from term year 1-10.
Discounting the remaining Cash Flows for years 1 to 10 and the Terminal Value for year 11 to the valuation date (i.e. the Net Present Value) produces the Gross Capital Value. We have assessed monthly rents as this conforms to the timing of rental payments. Subsequently, the Cash Flows calculated across the valuation period are discounted to the valuation date monthly in advance using the market derived discount rate. The discount rate adopted considers the probability of default as well as the security of the forecast for the Cash Flow. Therefore, factors which influence the discount rate include existing terms and conditions of lease contracts, the individual location quality, the building structure and building stock, the strengths of tenant covenants, the prevailing over- or underrent and the resale value calculated. After deductions for Purchaser’s Costs, the Market Value is obtained.
3.2 Valuation Assumptions
Definition Market Value
The Market Value is defined in the ‘Royal Institution of Chartered Surveyors (RICS) Appraisal and Valuation Manual’. This is incorporated into the Jones Lang LaSalle “General Principles Adopted in the Preparation of Valuations and Reports” attached as Appendix 2.
The “Market Value” is an appraisal of the price for which a property transaction would take place on the appointed valuation date and may be defined as:
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“The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”
Rental Income
The current rental income for the portfolio amounts to € 14,044,730/year, which equals a rent of € 7.95/m²/month on occupied areas.
Estimated Market Rental Value
In the scope of the valuation, an achievable market rent was derived for each rental unit of the buildings within the portfolio.
The estimate of market rents is made on the basis of comprehensive research and our turnover analysis. As a result, the Estimated Rental Value for the portfolio amounts to € 14,983,605/year. This represents € 8.48/m²/month.
No TownContractual
Rental IncomeContract Rent
€ p.a. €/m²/month
1 Aschersleben 1,531,257 8.79
2 Augsburg 1,325,019 7.98
3 Bad Aibling 644,624 7.62
4 Biberach 1,265,410 9.79
5 Borken 1,089,001 9.53
6 Erlangen 1,216,050 7.56
7 Geislingen 654,010 5.80
8 Glauchau 1,301,918 8.50
9 Ludwigsburg 1,033,067 6.09
10 Ludwigsfelde 1,138,683 7.51
11 Neckarsulm 1,415,752 11.49
12 Vilshofen 815,611 6.64
13 Wittenberge 614,328 5.89
14,044,730 7.95
Property Rental Income
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Costs
We have been provided with an updated cost schedule concerning ground tax and insurance costs. As for the other non-recoverable costs, we assume that these costs remain unchanged in the current valuation. The previous owner did not recover all costs, which could be recovered according to the lease contracts. We understand that the lawyers of BCRE see that in the future these costs will be reduced and a higher portion will be recovered. We assumed that if the tenants would be provided with an accurate cost schedule they will pay these (recoverable) costs.
Vacancy Costs
In periods of vacancy, all fixed ancillary costs are borne by the owner. This fact has been taken into account within the valuation and in the case of projected vacancy during re-letting or successive rental; furthermore, we have applied a non-recoverable surcharge for vacant space. The vacancy costs are assessed to amount to € 10.00/m²/year.
Renewal Probability
Following the lease contract periods, we have considered assumptions appropriate to the local market environment regarding use type, location, quality of rental areas and property condition. Rent-free periods were
No Town Market Rental Value Market Rent
€ p.a. €/m²/month
1 Aschersleben 1,591,511 9.13
2 Augsburg 1,499,573 9.03
3 Bad Aibling 696,866 8.23
4 Biberach 1,275,518 9.87
5 Borken 1,206,904 10.56
6 Erlangen 1,566,081 9.74
7 Geislingen 838,192 7.44
8 Glauchau 1,246,923 8.14
9 Ludwigsburg 1,332,535 7.85
10 Ludwigsfelde 1,042,279 6.88
11 Neckarsulm 1,278,184 10.37
12 Vilshofen 817,158 6.66
13 Wittenberge 591,881 5.68
14,983,605 8.48
Property Rental Income
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not assumed for the re-letting/initial letting of any units. Void periods have been applied for re-lettings/initial lettings and leasing commissions were taken into account to secure new tenants. Depending on the respective area, we have incorporated tenant improvements after lease term expiry. We have predominantly assumed that the existing leases will be extended with a renewal probability of 75% (at market rental level) and leases will be agreed with new tenants with a corresponding probability of 25% (also at market level). Therefore, costs in the cash flow related to re-letting and the void period are weighted with the aforementioned likelihood of 25%.
Void Periods
The period of vacancy before re-letting depends on the location, building quality and demand. For the rental units, a specific vacancy period between 3 and 24 months was assumed. Given that marketing to identify new tenants can commence as soon as an existing tenant has submitted notice, the usual notice period for the tenant is taken into account (i.e. deducted) when determining the void period. However, the period of vacancy may not amount to less than three months due to renovation and refurbishment that may be required within the rental area.
Please refer to the individual property templates in Appendix 1 for further information.
Tenant Improvements
Tenant improvements are costs for fixtures and building works incurred when a new rental contract is signed. In the valuation, these costs were fixed for each individual rental area according to the exterior and interior appearance. For the rental units, we have taken tenant improvements of € 25/m² to € 100/m² into account in our valuation.
Please refer to the individual property templates in Appendix 1 for further information.
Agent’s Fees
Letting fees usually include agent’s fees borne by the owner and are incorporated into the estimated cash flow. For the Matrix Portfolio we assumed three monthly rental payments for commercial units.
Contractual Terms
Rental terms are estimated by drawing upon standard rental contracts, giving consideration to building use and the current real estate market. A contractual period of 10 years is assumed for large units and 5 years for smaller units. Contract extension options in the new lease contracts are disregarded. The rent for new lease contracts reflects the market rent for the building. The contractual rent used in the calculation of future cash flows is shown in the individual valuation templates in the Appendix 1 of this report.
Investment Yields
The yields applied reflect the individual location quality (macro- and micro-location) of the properties, building structure, letting situation, covenant strength and the relationship between contractual and market rent. In the current investment market, covenant strength and lease term play a major role in the purchase of such properties. The cap and discount rates used for each property to calculate Market Value are disclosed in the individual valuation reports.
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Rental Growth Forecasts
For rents we assume a rental growth in line with the development of the inflation.
Table 3: Inflation forecast Germany
Source: Global Insight 2013
3.3 Valuation Results
Market Value
The valuation is carried out on the basis of Market Value as defined in the ‘Royal Institution of Chartered Surveyors' (RICS) Appraisal and Valuation Manual. This is incorporated into the Jones Lang LaSalle “General Principles for Valuations and Standard Terms of Business”, which is attached as Appendix 2.
The “Market Value” is an appraisal of the price for which a property transaction would take place on the appointed valuation date and may be defined as:
“The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”
We are of the opinion that the Market Value of the subject portfolio is as at 31st March 2013:
€ 176,800,000 (net)
(ONE HUNDRED SEVENTY-SIX MILLION, EIGHT HUNDRED THOUSAND EUROS) reflecting € 1,201 /m² of lettable area
The above valuation figure represents a net figure, i.e. a deduction has been made for land transfer tax and legal costs and agent’s fees normally incurred by the purchaser. No allowance has been made for any expenses of realisation or for taxation, which might arise in the event of a disposal. The properties are considered as if free and clear of all mortgages or other charges, which may be secured thereon.
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Year after 2021
Inflation 1.6%
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3.4 Sensitivity Matrix
Below we present a matrix per property showing the Market Value sensitivity to changes of the Discount Rate.
3.4.1 Aschersleben
3.4.2 Augsburg
3.4.3 Bad Aibling
3.4.4 Biberach
3.4.5 Borken
3.4.6 Erlangen
- 50 bp - 25 bp 7.35% + 25 bp + 50 bp
€ 20,700,000 € 20,400,000 € 20,000,000 € 19,700,000 € 19,400,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
- 50 bp - 25 bp 6.90% + 25 bp + 50 bp
€ 17,700,000 € 17,400,000 € 17,100,000 € 16,800,000 € 16,500,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
- 50 bp - 25 bp 6.90% + 25 bp + 50 bp
€ 8,800,000 € 8,600,000 € 8,500,000 € 8,300,000 € 8,200,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
- 50 bp - 25 bp 7.10% + 25 bp + 50 bp
€ 16,800,000 € 16,500,000 € 16,200,000 € 16,000,000 € 15,700,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
- 50 bp - 25 bp 6.90% + 25 bp + 50 bp
€ 15,600,000 € 15,300,000 € 15,000,000 € 14,800,000 € 14,500,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
- 50 bp - 25 bp 6.80% + 25 bp + 50 bp
€ 13,200,000 € 13,000,000 € 12,700,000 € 12,500,000 € 12,300,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
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3.4.7 Geislingen
3.4.8 Glauchau
3.4.9 Ludwigsburg
3.4.10 Ludwigsfelde
3.4.11 Neckarsulm
3.4.12 Vilshofen
3.4.13 Wittenburg
- 50 bp - 25 bp 7.25% + 25 bp + 50 bp
€ 9,500,000 € 9,300,000 € 9,100,000 € 9,000,000 € 8,800,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
- 50 bp - 25 bp 7.25% + 25 bp + 50 bp
€ 16,900,000 € 16,600,000 € 16,300,000 € 16,100,000 € 15,800,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
- 50 bp - 25 bp 7.00% + 25 bp + 50 bp
€ 13,100,000 € 12,900,000 € 12,700,000 € 12,500,000 € 12,200,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
- 50 bp - 25 bp 6.65% + 25 bp + 50 bp
€ 14,700,000 € 14,400,000 € 14,200,000 € 13,900,000 € 13,700,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
- 50 bp - 25 bp 7.30% + 25 bp + 50 bp
€ 17,800,000 € 17,500,000 € 17,200,000 € 16,900,000 € 16,700,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
- 50 bp - 25 bp 6.75% + 25 bp + 50 bp
€ 10,400,000 € 10,300,000 € 10,100,000 € 9,900,000 € 9,700,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
- 50 bp - 25 bp 6.70% + 25 bp + 50 bp
€ 8,000,000 € 7,900,000 € 7,700,000 € 7,600,000 € 7,500,000
Sensitivity Matrix as at 31st March 2013
Discount Rate Variation
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3.5 Market Value Disclaimer
Our valuations are carried out on the basis of market value as defined in the ‘Royal Institution of Chartered Surveyors' (RICS) Appraisal and Valuation Manual. The “Market Value” according to the RICS Appraisal and Valuation manual contains an appraisal of the price at which a property transaction would take place at the appointed valuation date and may be defined as: “The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”
According to information given by Brack Capital Properties N.V., we understand that the Matrix portfolio was offered in a distressed loan situation. Thus, the subject transaction can be considered a forced sale, so that the underlying purchase price (of whom we are not aware of) is not necessarily comparable to the above-mentioned market value definition. Furthermore, our valuation is based on market parameters, in particular concerning service charges, which potentially deviate from the actual situation of the portfolio on the purchase date.
After discussions with Brack Capital Properties N.V. we now understand that the purchase price is lower than the estimated market value. However, we are not in the position to comment on this deviance as we are not aware of the exact conditions of the final purchase contract, nor of any side letters or supplementary agreements that potentially deviate from the valuation basis. We assume that the distressed vendor might have accepted Brack Capital Properties N.V.’s lower bid in order to quickly close a deal with a trusted, recognised purchaser with a proven track record. In this regard, our calculated market value could be above the agreed purchase price; nonetheless, we are comfortable with this level and consider it to reflect the market value (according to the above RICS definition) for the portfolio at the respective valuation date.
Prior to this valuation round, we have conducted a valuation in June 2012 for the financial statements of Brack Capital Properties N.V. Compared to the previous valuation in June 2012, the market value in March 2013 has increased by approx. 4.4%. This is mainly due to a reduction of capital expenditures scheduled in the upcoming year. This sum has dropped from approx. € 3 million in 2012 to zero in 2013. The biggest influence on this development came from the properties in Augsburg, Biberach, Erlangen and Neckarsulm where e.g. the refurbishment of the parking decks has much advanced since the last valuation.
Please find below the results (Market Values) of our prior valuations:
No. Property 2011 20121 Aschersleben 20,700,000 € 20,100,000 €2 Augsburg 12,100,000 € 15,500,000 €3 Bad Aibling 7,700,000 € 8,400,000 €4 Biberach 12,900,000 € 14,700,000 €5 Borken 14,700,000 € 14,500,000 €6 Erlangen 10,700,000 € 10,700,000 €7 Geislingen 9,200,000 € 8,700,000 €8 Glauchau 15,400,000 € 16,300,000 €9 Ludwigsburg 12,500,000 € 12,200,000 €
10 Ludwigsfelde 13,800,000 € 14,000,000 €11 Neckarsulm 17,300,000 € 16,500,000 €12 Vilshofen 10,000,000 € 10,000,000 €13 Wittenberge 7,800,000 € 7,800,000 €
Total 164,800,000 € 169,400,000 €
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4 Confidentiality & Publication
In preparing this valuation report, we have relied upon information provided by you and your representatives relating to tenure, tenancies, building and site areas, and building description. If this information proves to be incorrect or additional information is made available to us, the accuracy of the valuation could be affected. In such case, we reserve the right to amend our opinion of value accordingly.
In accordance with our standard practice, we must state that the content of this report, including the valuation, has been prepared exclusively for Brack Capital Properties N.V. (BCP) for the purposes of assisting BCP to value its assets as at 31st March 2013 for its financial statement reporting and for no other purpose.
In addition, the results of the work executed by Jones Lang LaSalle shall remain confidential and are intended exclusively for BCP and only for the purposes specified in the contract. Any other use and, in particular, disclosure to third parties or other publications (disclosure to third parties) – including extracts – without the express prior written consent of Jones Lang shall be prohibited. We consent to the disclosure of the valuation report to a third party only within the scope of the publication of the financial statement reporting. However, BCP agrees to notify the respective third parties in writing and to underline that Jones Lang LaSalle generally assumes no liability towards third parties for the work and services provided and that third parties may make no claims whatsoever against Jones Lang LaSalle on the basis of the work and services provided. BCP also agrees to indemnify Jones Lang LaSalle against any third party claims and associated costs asserted by third parties against Jones Lang LaSalle as a result of unauthorized disclosure or publication of the results of the work and services provided.
Jones Lang LaSalle GmbH’s liability for any loss or damage caused by negligence on our part, irrespective of the legal reason, in relation to the valuation services provided is limited to a maximum of 10% of the respective and reported Market Value per property, and may not exceed a maximum liability cap of € 7.5 million (euros) for any case.
Finally, to the fullest extent permitted by law, we do not accept or assume responsibility or liability in respect of the whole or any part of the report or valuation for any other purpose than stated above nor to any other person or entity to whom the report or valuation is shown or disclosed or into whose hands it may come, whether published with our consent or otherwise, except where expressly agreed by our prior consent in writing.
ppa. Andrew M. Groom MRICS Frank Rambow MRICS ppa. Georg Charlier
International Director National Director Principal Consultant
Head of Valuation & Transaction Advisory Valuation & Transaction Advisory Valuation & Transaction Advisory
Appendix
(Copy)
Property address Property no. 1 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 2 16 to 25 years Macrolocation 2 Below average location and catchment areaLettable Area 4 Between 12,500 and 15,000 m² Microlocation 3 Average micro locationProperty condition 2 Below average building condition Commercial activity 4 Average commercial activity nearbyGeneral impression 2 Below average general impression Competition 3 Average competition level
Investment Quality
WALT 4 WALT seven to ten years Investment market 2 Under developed property marketOver- / underrent 3 Rack rented (-5% to 5%) Investment volume 4 Good lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 12.57
Page 1 of 12 abc
SWOT Analysis
Slight under-rent of Kaufland premises
31.03.2013
Brack Capital Properties N.V.
Key Figures
Hoymer Chaussee 108
n.a.
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
6.89%
Discount Rate
6.89%
excluding capital
expenditures7.10%
6.61%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
7.4 years
0
Good tenant mix
Sufficient parking areas on site
Synergies due to adjacent furniture store
Market rental value € 1,591,511
€ 8.09
1993
Weighted average lease term
06449 Aschersleben
Property Summary
Retail Park
Germany
31.01.2011
Property type
Current vacancy rate
Marktkauf Holding GmbH
14,522 m²Total parking units
8.5%
Main tenant
Total lettable area700 units
4.5%
€ 1,531,257
€ 1,408,935
€ 8.79Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
Good accessibility by car
Low purchasing power and centrality index
Re-letting or prolongation of existing contracts may result in worse conditionsReletting of the former areas of dm and Quelle Significant negative population growth
Below-average purchasing power
0
€ 9.13 / m² / p.m.€ 20,000,000
7.35%
The site encompasses the subject retail park, a petrol station as well as some food stalls located in front of the main entrance. The property was constructed in 1993 and contains a self-service department store(Kaufland) and a DIY discount store (B1) as large-scale retail units as well as some mid-sized and small-sized retail units. The building has a rectangular shape and for the most part is a single storey structure, witha small second storey located over the main entrance area in the south serving as an administrative area. The property is constructed of concrete columns, precast concrete beams and concrete floor slabs. The flat roof has trapezoid metal panels as bearing structure and several skylights integrated. The facade is madefrom multilayer concrete panels. Main entrance, office windows and shop displays have coated aluminium frames and the entrance is equipped with automatic sliding doors.
0
6.61%
Market Rental Value
13.06
€ 1,591,511 p.a.
Located on the outskirts of AscherslebenWeaknesses
Matrix Portfolio
Difficulty to let former Quelle unit due to its location within the property
€ 1,377 per m²
Prolongation of lease contracts after expiry
0
The walls within the public areas are plastered and painted. The ceiling inside the mall is suspended with a grid system still allowing the technical installations above to be seen. The smaller shop units usually havea suspended ceiling while the large retail units of B1 and Kaufland do not have a suspended ceiling with all technical installations viewable. The floor is mainly covered with ceramic tiles, while the fit out of the smaller shop units depends on the tenant’s preferences. In terms of HVAC, the property does not offer air conditioning, only oil-fueled heating andventilation. The parking area is made of asphalt on driveways and paving stones in the parking areas.
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 122,322
Year of refurbishment
Property Description
Limited investor focus on properties in eastern Germany
€ 0.70
00
(Copy)
Property address Property no. 1 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
153.97
There are also connections to the public transport network via the local bus system within the city andthe train, regional or national bus network for out-of-town travel. The train station of Aschersleben offersservice to Halle (Saale), Dessau and Magdeburg.The closest international airports are located in Magdeburg (approx. 49 km) and Leipzig-Halle (approx.80 km).The economy traditionally has been based on the printing industry, machine tool building and vehicleconstruction. Highly specialised machines and printing products have been produced in Ascherslebensince the 19th century. The production of non-woven cotton has been firmly established in Ascherslebensince the 1990s. Also medical equipment companies, which have established their operations in the cityin recent years, are economically important.
Micro Location
The city of Aschersleben is located in the federal state of Saxony-Anhalt. Aschersleben is situatedbetween the region of the Harz Mountains and the Magdeburger Boerde. Aschersleben is rich in manycultural and leisure activities, and has a healthy small- and medium-sized business structure. There aremany historic churches and other buildings, which are worth visiting. The cultural activities of the townare well known in the whole region and attract many visitors. The closest larger cities are Magdeburg,(approx. 50 km to the north), Halle (Saale) (approx. 67 km to the south-west) and Braunschweig(approx. 107 km to the north-west).The transport connections from Aschersleben to the German motorway system as well as to the majorroads are quite good. Aschersleben is located close to the motorway A14. The main federal roads,which run through Aschersleben are B6, B180 and B185.
0
Location
Brack Capital Properties N.V.
31.03.2013
06449 Aschersleben 31.01.2011
Salzlandkreis (Rural District)
Germany
Saxony-Anhalt
Macroeconomic Indicators
Federal StateDistrict
11.8%
3,320
Aschersleben Macro Location
5.0
Micro Location
400
The property is located at Hoymer Chaussee 108, approx. 3 km west from Aschersleben's historic citycentre on the outskirts of the city by an arterial road, connecting to the major federal road (B6). Theproperty shares its parking lot with a furniture discount store to the east. To the south, there is theaforementioned arterial road with plots on the other side of the road. Similarly, to the north of theproperty more plots can be found. The land to the west of the property is used for agricultural purposes.The property has its own bus stop on Hoymer Chaussee called "Aschersleben Kaufland", whichconnects the premises with the remainder of Aschersleben including its train station.The property offers good visibility and can be accessed directly from the arterial road by which it islocated. It benefits from the adjacent discount furniture store and the petrol station on its plot.
Local Tax Information
-7.6%
83.4287.32
-20.9%
465
11.6%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
28,706
06449
184145
2,356,219206,784
Aschersleben
-5.4%
14,699
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Hoymer Chaussee 108
City
(Copy)
Property address Property no. 1 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Land register extract, dated 2nd December 2010
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Hoymer Chaussee 108 31.03.2013
31.01.2011
Germany
No Suspicion
According to information from the local planning authority's website, a legally binding development planexists, entitled "Hoymer Chaussee Nr. 1" with the following regulations: the subject site is located in aspecial retail zone (Sondergebiet Einkaufszentrum). It sets the following restrictions, among others: amaximum of 16,600 m² of retail space is permissible, of which non-food retail space is not permitted toexceed 4,300 m² and DIY may not exceed 3,600 m² (we assume that an additional agreement is inplace for B1 to operate a larger scheme).
Section 2 (Restrictions)
TPL Aschersleben S.á.r.l., Luxembourg
Land Register
8878 19/2174
Owner
n.a.
Site Information
Site area 36,735 m²thereof surplus land
NoGround lease
Site layout
Site Plan
Surplus land value (net) n.a.
Source: Cadastral plan on a 1 to 2,000 scale, dated 28.12.2010
Matrix Portfolio
06449 Aschersleben
SO (special zone)
n.a.
19
Sheet Plot Parcel
n.a.
Tenure
Site servicing
Ground lease expiry€ 0
0 m²
n.a.
Town Planning
Fully serviced
Building encumbrances Yes
Irregular
The site consists of two plots: 174 and 19/2. The site has an even topography and an irregular shape.The site is not listed in the register of contaminated land ("Altlastenkataster").There is an encumbrances registered on plot 19/2. However, since it containes an obligation in case aproperty is built on the plot we assume that this obligation has been fulfilled by the owner. Furthermore,there are a couple of easements registered on the plots. However, we do not regard these to have animpact on the market value. For the purposes of this valuation, we have assumed that the subjectproperty is free of any soil or building contamination.
Several limited personal easements and personal easements: right-of-way and parking for the respective owner of the parcels 171, 172 and 173 (plot 19); the right to freshwater, wastewater, energy and water for firefighting for the respective owner of the parcels; respective owner of the plot registered on sheet 8879 no. 1, 2, 3 prohibited to operate furniture stores, casinos, sex-shops, peep-shows, etc.; right to operate a self-service department store including essential adjacent areas, parking areas, etc. for Kaufland Dienstleistungs GmbH & Co. KG, Neckarsulm; the right to build, operate and maintain a transformer station with cable, equipment, service and information lines for Stadtwerke Aschersleben GmbH.
Brack Capital Properties N.V.
Land charges in the total amount of € 24,229,108 in favour of Bank of Scotland (Frankfurt branch), Frankfurt am Main; entered on 18.02.2007.
Local Court of Achersleben, land register of Aschersleben
abcPage 3 of 12
(Copy)
Property address Property no. 1 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
153.97
-20.9%
abc
Population forecast for the district (2007 - 2025)
06449 Aschersleben
Name06449 Aschersleben, Seegraben 5
Competitor Overview
Competitor Map
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
1.80 km3,500 m²Hypermarket
10,692
Medium
00
Low2.10 km
Inhabitants in secondary catchment area
Retail Centrality Index (District)
Inhabitants per hypermarket in secondary catchment area
16,902
14,699
E-center
50,705 Inhabitants per hypermarket in tertiary catchment area
06449 Aschersleben, Hecklinger Str. 43-450Rewe Hypermarket 1,500 m²
m² 0
22,679
87.32
32,076
00
0
Inhabitants in primary catchment area 7,560
0
Competiton Indicators
Hoymer Chaussee 108
31.01.2011
Germany Brack Capital Properties N.V.
31.03.2013
00
0
0
0
0
Matrix Portfolio
(Copy)
Property address Property no. 1 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
31.01.2011
31.03.2013
Matrix Portfolio
Turnover analysis
This retail park is located close to the city centre of Aschersleben and comprises an E-Center (Edeka), medimax (consumer electronics), and a Zoo & Co (pet shop) as well as some smaller tenants such as a bakery. Furthermore, a discounter is located in the vicinity. This competitor is approx. 1.8 km away from the subject property.
Main competitors
06449 Aschersleben
Hoymer Chaussee 108
In terms of DIY competition, there are two other DIY stores in Aschersleben. These two are located next to each other at an arterial road in the north-eastern outskirts of the city. Among these two, Hellweg is clearly in the better position in terms of visibility, accessibility, as well as size. In terms of level of competition, the catchment area, for the most part shared by two competitors, is quite small. However, toom as well as Hellweg target customers not driven solely by price but rather by quality of goods and customer service. This is quite contrary to the discount strategy used by B1. Therefore, we assess the level of competition to be moderate.
The rents in functional retail agglomeration are linked to turnover. The percentage rate that a retail tenant can use for rental payments depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective industry. The productivity varies between approx. € 1,000/m² up to more than € 10,000/m².Taking into consideration the tenant mix in the subject property, the space productivity should be in the range of € 2,250 and € 6,000/m². Generally most tenants have a below average space productivity, i.e. turnover, compared to similar retail parks. For Kaufland, we have also been provided with turnover figures. We have analysed the figures and have found the area productivity of Kaufland to be in a healthy range.
abc
Competition Comment
Concerning food competitors, the aforementioned E-Center as the only larger scale food retailing scheme and some smaller supermarkets. Nevertheless, Kaufland has by far the largest sales area, so that at least supermarkets can be considered to be only indirect competitors. Kaufland offers a very deep and broad product range with more than 50,000 products, while discounters and supermarkets offer a limited product range with only 7,000 to 11,000 (supermarkets) or 400-2,500 (discounters) articles. Therefore, these retailing forms address different customers or customer needs. While supermarkets and discounters cater to the daily needs of customers, Kaufland offers a larger variety for products that are bought on a non-daily basis.Based on this, the primary and secondary catchment area of the Kaufland is sufficient to operate successfully in this location.
The strongest competitor for Kaufland is the small retail park anchored by E-Center located at Seegraben 5 close to the city centre. The E-Center is somewhat smaller than the Kaufland, has a significantly lower share of non-food items and focuses on a good presentation of the goods sold. Thus, Edeka-branded stores are usually perceived as quality-focused rather than cut-price focused as Kaufland usually is. Additionally, the tenant mix in the retail park with consumer electronics and a pet shop differs from the subject property; thus, we do not see direct competition. Hence, we assess the competition level to be medium.
With a turnover-to-rent ratio of less than 2% it lies below the range of 2% to 4%, which is acceptable for a self-service department store. Hence, we believe that a higher market rent is achievable after the end of the lease contract. Please also refer to the rent/turnover analysis on page 8. We have not been provided with turnover figures of B1. The rent of B1 would result in a productivity of approx. € 1,800/m². However, toom (incl. B1) has an average productivity of only € 1,000/m². Additionally, the lease comparable for DIY in Aschersleben indicate that the market rent and turnover expectations of DIY tenants are lower than € 1,800/m². Thus, we reduced the market rent accordingly. Nevertheless, apart from B1, the lower turnover is already reflected in below average contractual rents and in the market rents used in the valuation. Thus, we assess the rents paid all in all to be sustainable on the current level.
The tenants within the property, apart from the food stands, suffer from below-average turnover, likely because of the low purchasing power in the region. Nevertheless, based on the turnover data made available to us, we believe that the total rental income is sustainable. The smaller tenants benefit from the fact that all customers of Kaufland pass by their premises with the exception of one shop unit. The vacancy rate within the property is low (8.5%) with only two units being unoccupied. The unoccupied unit is not part of the mall, but has a separate entrance close to the main entrance. Nonetheless, the entrance situation is quite problematic not catching the attention of customers. Therefore, we believe this unit to be difficult to let.The average rent paid is € 8.76/m²/month and the weighted average lease term is 8.3 years. The non-recoverable costs of the property are above average due to the fact that Kaufland agreed in its lease to not pay for costs such as ground tax, insurance fees or management costs.All in all, the property offers an attractive tenant mix with regards to the economic situation of the region with two strong anchor tenants.
The subject property is a retail park located in the outskirts of Aschersleben at an arterial road. It offers good visibility and accessibility by car. The property is anchored by a B1 DIY discount store and a Kaufland self-service department store. Additionally, smaller units are let to Deichmann, AWG, among others. Furthermore, a petrol station advertising low petrol prices is situated on site as well.The retail park predominantly focuses on price-conscious customers with a discount DIY store and Kaufland with plenty of non-food bargains and a wide range of own brand food products. Tenants such as AWG and Deichmann fit into this strategy; thus, the tenant mix within the subject property is assessed to be good. Moreover, a discount furniture store shares the parking area with the subject property, which is a combination fitting combination. Therefore, it is likely that the retail park is able to attract a number of customers who usually would not be in this catchment area. Due to this positioning of the property in the market, the level of competition is assessed to be only medium though there is a better located smaller retail park in Aschersleben's city centre.
Germany Brack Capital Properties N.V.
This competitor is a Hellweg DIY store at the other end of town, next to toom DIY. The Hellweg DIY store is larger than B1 in the subject property and comprises a garden centre as opposed to the B1. Due to the different market positioning of Hellweg and B1, these two are not direct competitors. The Hellweg is approx. 3.2 km away from the subject property.
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 1 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
7 Hang Bui
11.16
€ 30,296
Retail10 NKD Vertriebs GmbH
11 Reiseland GmbH & Co. KG
Let
Page 6 of 12
PM
28.02.2017
62
Retail
5 Metzgerei Carsten Kneusel
3 BRL Center GmbH
124
350.00
5.48
Retail 53.26
27.68
2 Allg. Warenvertriebs GmbH Retail
pays VAT
31.07.2028
28.02.2022
75%
75%
Start
75%
31.03.2013Hoymer Chaussee 108
Tenant
Matrix Portfolio
31.01.2011
Status m² / unitLet
TenantLeaseArea
Let
Let
30.09.2026Yes
01.03.2002
Yes
Rent / m² RenewalLeaseLetting
1 Kaufland Warenhandel Brandenburg GmbH & Co. KG Retail 5,533
/ month Probability
313
9 Blochwitz Other Units
Let
Retail
8 Thurländer Hähnchen Grill GmbH
14 Convenience Concept GmbH
6 Ihr Bäcker GmbH & Co. KG
01.10.2007
01.08.2008
Yes
GT I PM
75%
Retail
Yes
€ 700
PM
4 Metzgerei Carsten Kneusel
Retail 151
1,345
Let
Other Units
2
01.09.2007
680.00
€ 15,000
€ 4,179
Let
Let
06449 Aschersleben
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Retail
€ 125,320
73
Let
Let
1Let
€ 3,253 31.08.2014
€ 5,500
31.03.2014
01.01.2011
30.09.2014
01.10.2004 30.09.2016
€ 1,419 09.08.1993
31.12.2014
01.01.1996
75%
75%
31.12.2015
75%
01.12.2002
GT I PM
75%
75%
0%
GT I PM
Yes
Yes
GT I PM
PM
abc
PM
75%
75%
75%
75%
14,901 m²
0%
75%
75%
75%
75%
75%
31.03.2014
75%
31.08.2015
GT I 30.06.2019
GT I PM31.10.2014
PM28.02.2022
01.04.2006
16.04.2012
15.09.2010
04.08.1993
75%
31.03.2014
75%
75%Yes
10.38
75.34
1000.00
Yes
Yes
19.30
22.92
Yes
Yes
GT I PM
1 € 938
€ 1,0001
937.55
31.08.2014
€ 6,604
M GT I PM75%
Total
72Let
Let
€ 680
LetOther Units
13 Frisör Klier GmbH Retail
15 Marktkauf Holding GmbH
GT I PM12 Erdmann / Focke Retail 54 € 1,050 Yes
GT I PM32.42 28.02.2018
GT I PM41 € 1,346 Yes 01.09.200732.89 31.08.2014
€ 2,335
Retail 4,880 € 38,399 Yes 01.07.1999Let 7.87
16 Vacant Retail 478 € 0Vacant 0.00
17 Deichmann SE Retail 443 € 9,353 Yes 02.08.1993Let 21.10
18 Allg. Warenvertriebs GmbH Storage 129 € 0 Yes 01.03.2002Let 0.00
19 KSK Aschersleben-Straßfurt Other Units 1 € 273 Yes 01.09.1993Let 273.18
20 Schwarz Außenwerbung GmbH Other Units 1 € 433 Yes 01.01.2010Let 433.33
PM21 Marktkauf Holding GmbH Other Units 1 € 424 Yes 01.07.1999Let 424.00 30.06.2019
M GT I PM22 TOTAL Deutschland GmbH Petrol Station 1,200 € 1,570 Yes 01.04.2003Let 1.31 31.03.2018
M GT I PM23 Warenautomaten H. Bögershausen Other Units 1 € 10 01.06.2007Let 10.00 31.03.2014
M GT I PM24 Aaldering Other Units 1 € 333 01.01.2010Let 333.33 31.03.2014
0%25 Mall Income Other Units 1 € 224 00.01.1900Let 223.90 30.09.2026
26 Parking External parking 700 € 0 No 00.01.1900Let 0.00 00.01.1900
(Copy)
Property address Property no. 1 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
31.01.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis6
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 250
abc
0 0 0 0%0 0 26 Parking External parking 700 € 0.00 € 0 € 0
0 0 0 0%0 0 25 Mall Income Other Units 1 € 0.00 € 0 € 0
0 0 5 75%0 0 24 Aaldering Other Units 1 € 0.00 € 0 € 0
€ 0 0 3 5 75%0 0
3 10 75%0 0
23 Warenautomaten H. Bögershausen Other Units 1 € 10.00 € 10
Petrol Station 1,200 € 1.31 € 1,570 € 0 0
0 3 5 75%0 0
3 5 75%0 0
21 Marktkauf Holding GmbH Other Units 1 € 424.00 € 424
75%3 3
20 Schwarz Außenwerbung GmbH Other Units 1 € 433.33 € 433 € 0 0
5
19 KSK Aschersleben-Straßfurt Other Units 1 € 273.18 € 273 0 3 5
€ 8.00 75%
0 3 5 75%15
0 3 15 15
€ 15.00 € 6,650 € 100
6 6
€ 100
15
75%
12 12 0 3 5 75%
0 3 10
75%
0 3 5 75%
0 3 5
0 9
0 3 59
50
75%
€ 0
75%
75%
5 75%6
0
6
9 9
€ 100
75%
3
0
5
3
5
6
0 6
12
75%
9
6 5
3 6
3
3
75%
0
3
5
75%
75%
3
0
75%
5
75%
3 10
5
75%
3
6€ 100 6
6 53
0 5
€ 0
€ 0
Total
22 TOTAL Deutschland GmbH
13 Frisör Klier GmbH
€ 0
€ 100
€ 100
€ 100
72
€ 0
€ 50
9 14 Convenience Concept GmbH Retail
16 Vacant
Retail15 Marktkauf Holding GmbH
Retail
Page 7 of 12
€ 126,15114,901 sqm
Term**
Matrix Portfolio
Re-letting
€ 1,000
€ 4,745
€ 20.00
€ 1,032129
313
41
4,880
€ 0
443
Other Units
€ 30.00
€ 2,160
6 Ihr Bäcker GmbH & Co. KG
€ 30.00
18 Allg. Warenvertriebs GmbH
7 Hang Bui
Retail
Retail
Retail
Retail
8 Thurländer Hähnchen Grill GmbH Other Units
5,533
3 BRL Center GmbH Retail
Other Units
2 Allg. Warenvertriebs GmbH
1 Kaufland Warenhandel Brandenburg GmbH & Co. KG
1
9 Blochwitz
12 Erdmann / Focke
Storage
17 Deichmann SE
10 NKD Vertriebs GmbH
11 Reiseland GmbH & Co. KG
Retail
Retail
1,345 € 10.00
Market
6
15 0
0
3
6 0
Rent /month€ 35,967
€ 65.00
€ 4,530
€ 8,060
1
€ 6.50
151
Rent
€ 125.00
€ 100
€ 31,720
9
€ 0
€ 1,224
€ 5,258
€ 1,000
€ 800
€ 11.00
€ 6.50
€ 1,238
€ 10.00
€ 22.50
€ 800.00
54
478
4 Metzgerei Carsten Kneusel Retail 124
5 Metzgerei Carsten Kneusel 2 Retail
73
62
€ 13,446
6
€ 100
€ 1000.00
€ 30.00
€ 3,133
6
12
€ 65.00
€ 1000.00
9
Market
€ 100
06449 Aschersleben
Retail
sqm/unitTenant Name
Retail € 50
€ 50
Hoymer Chaussee 108
Area Category
1
€ 1,227
Germany Brack Capital Properties N.V.
15
6
6
31.03.2013
(Copy)
Property address Property no. 1 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
7,000
Usual market % - levels6,500
Market rent
6,000 Contractual Rent
5,500 Rents %
Contractual5,000
Market
4,500 4% of turnover
3% of turnover4,000
2% of turnover
3,500 Turnover potential(net)
Sales Area3,000
Total Areain € / m² p.a.
based on sales area
5AA277
This report is only to be read in conjunctionwith the valuation report provided.
0.00
1.31
9.13
0.000.000.00
1,660,347
8.00
0.00%
Rented€/year
00
0.0%
0.0%
0.00
€/month €/year0
0.00
13,294
18,8400
0
0
0
0
0
0.00%0.00%0.00%
0.00%%
Vacancy Rate
0
13,165
06449 Aschersleben
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
5.5%1,513,0010.00
0
014,393
Market
01,589,723
€/month
DIY
Office
0
0
0
0126,083
8.46%
8.76
0
0€/m²/month
1,909External parking
Rent
700
ContractualRent
€/year
0.00%9
0.00%
0.00%0
1,228129
0.00%
Matrix Portfolio
Hoymer Chaussee 108 31.03.2013
1,200
00Commercial
0
Contractual
0
00
Potential
Area Vacant
700
€/m²/monthRent
0.00%700
Rent
00.00%
Brack Capital Properties N.V.
Use Category
Germany
31.01.2011
Capital indicator
€ 7,800,000
Assessment of Kaufland market rent
Comment
WALTPayment Index 79
18,397,517 €
The main tenant is a corporation belonging ultimately to Edeka Group, which purchased Marktkauf in2005. Marktkauf operates self-service department stores and used to operate DIY stores until 2007,when they sold off about 150 stores to Rewe (toom DIY) and closed the remaining ones. The EdekaGroup is the largest German supermarket corporation, currently holding a market share of 26% in foodretailing.According to Dun & Bradstreet (D&B) Rating as of 06.02.2011 Marktkauf Holding GmbH has a low credit risk. The risk of insolvency (D&B Score) within the next 12 months compared with other Germancompanies is assessed to be quite low, i.e. 77% of businesses on the German database have the sameor higher risk of failure.
Rent p.a.
4,880 m²
Self-service department stores usually can afford to pay a rent in the range of 2% to 4% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 4,000 to € 6,000 per m²sales area. The two graphics above indicate, how the contract rent of the main tenant Kaufland as well as the assumed market rental level, can be assessed on the basis of usual market ranges. This analysis isbased on the turnover potential figures prepared by Trade Dimension.
2.5%
2.1%
7.87
6.50
abc
Risk indicatorScore
Page 8 of 12
Credit limit
0
9.5%5.1%
47,2863,941132,626
437.831,591,511
0.0%0.0%0
0.0%
0
1,570
0
0.0%0-100.0%
0
12.57
9.42
0
30%
0
Marktkauf Holding GmbH
6.2 years
~ 4,582 m²
0 00
Share of total income
Main tenant
€ 460,782
D&B Rating of Main Tenant
Tenant name
6.28
Storage1,570
0Petrol Station 1.31
0.00Internal parking 0.00
9.60479.48
0ResidentialCommercial
00
18,840 18,8401,032
0 0.0%00
00
12,384
m²
0
Property Analysis
0 0.0%0.00 0
121,71900.00
9.25
Warehouse
Warehouse
Area Let
14,522
Other Units
01,228
Residential129
0
0
0
8.53%
Contractual
m²Area Analysis Lettable Area
1,200
1,460,634
Retail
0.00
Total areaPetrol Station
09
Income Analysis
Internal parking
Office
DIYRetail
Storage
127,60551,783
1,531,257
0 0
51,783
0
4,315
0.00
0.000.00
Other UnitsTotal area
External parking
Total parking
€ / m²
7.87
6.286.50
9.42
12.57
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
4,015
(Copy)
Property address Property no. 1 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The main tenant, Marktkauf Holding, has a lease expiring in 2019 with the option to prolong its lease by five years two times. The rent is indexed and will be adapted by 60% of the CPI change whenever the changeexceeds 10 percent in relation to CPI basis. The tenant does not contribute to costs concerning maintenance work for the roof and structure of the property. Furthermore, the tenant does not pay for managementcosts. However, the share of ground tax and insurance fees are borne by the tenant. The second largest tenant, Kaufland, has a lease expiring in 2026 with the option to prolong its lease by five years three times.The rent is indexed and will be adapted by 50% of the CPI change whenever the change exceeds 10 percent in relation to CPI basis. Kaufland does not contribute to any costs in association with maintenance costsfor roof and the building structure, ground tax, insurance fees, and management costs. The remaining tenants usually do not pay for maintenance costs for roof and building structure and pay a fixed amount eachmonth for management costs (usually around € 100). However, insurance fees and ground tax are paid by these tenants. The rent is mostly indexed with 100% adjustment of the rent whenever the German CPIchanges by 10% or more. The WALT amounts to 7.4 years.
0 €
0 €
€ 5,459€ 16,157
€ 5,547
Breakdown of Non-Recoverable Costs
€ 0
7.8%
5.22%
% of Gross
€ 10.00 /m²/p.a.
€ 657.8%
0 €
€ 5,289 0 €0 €€ 5,206
0 €€ 5,117
8.8%€ 12,321
€ 15,118 7.7%8.1%€ 3,866
€ 14,670
€ 94
0 €
€ 0.00 /m²
Management costs
Other non-recoverable costs
€ 8.42 /m²
€ 23,853€ 5,028
€ 14,875
5.02%
Total non-recoverable expenses
Maintenance costs € 79,870
€ 129,587€ 127,607€ 128,784
€ 217
€ 1.58 /m²
% of Gross
0.00%
€ 22,969
€ 23,873
€ 5.50 /m² € 79,870Contract Rent
per year
Lease Contract Commentary
€ 5.50 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 7.35%
7.10%
Brack Capital Properties N.V.
Hoymer Chaussee 108
Assumptions
There have been some changes in the tenancy schedule. The following tenants have prolonged their lease contracts: KSK Aschersleben-Straßfurt (open ended), Hang Bui (open ended) and Blochwitz (openended). In these cases, we assume a remaining lease term of one year.
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yield profile is aligned with the market/other transactions. We have taken intoaccount such facts as the remaining lease term with the well-known anchor tenant, the tenant mix thevacancy rate as well as the location within the federal state Saxony-Anhalt.
31.01.201106449 Aschersleben
Germany
31.03.2013
€ 0.33 /m²€ 0
0.32%€ 14,621€ 1.01 /m²
€ 0.00 /m²€ 4,862
per year
Year 8
€ 15,388€ 24,797
€ 89,661€ 88,244
€ 25,315
€ 82,570Year 3
€ 24,935
% of Total
Year 7
€ 4,879€ 23,056
€ 131,855
€ 135,047
€ 190
Total
€ 86,868 € 25,482
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 07.74%
€ 0.33 /m² € 4,862
Insurance
Other non-recoverable costs
0.92%
Market Rent
0.00%7.99%
1.50%€ 1.64 /m²€ 1.01 /m² € 14,621
€ 122,322
per year
€ 8.49 /m²
Total Non-recoverable Costs
€ 123,226
€ 4,947
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 24,863 € 16,939 0 €€ 25,640€ 93,885 € 17,190
Year 10€ 141
0.95%1.50%
Market Value
€ 91,102
Year 4
Year 6
€ 5,717
€ 22,886
Year 11€ 92,514
€ 16,681Year 9
GroundManagementTax
Maintanance
€ 24,823
CostsCosts
€ 84,042
Year 1Year 2
€ 80,121€ 81,243
€ 16,417
€ 85,491 € 15,653€ 15,905
Year 5
€ 25,108
8.3%
0 €€ 5,373
€ 142,5738.7%8.4%
0.31%
0 €
€ 4,387€ 5,633
€ 15,066
€ 1,654€ 144,336
€ 147,7268.3%
0 €
7.9%
€ 140,092
Year after 2021
€ 133,609
abc
€ 1,341 € 137,8139.7%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
8.8%
8.1%7.7% 7.8% 7.8% 7.9%
9.7%
8.3% 8.4%8.7%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 1 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
6.50%
Market Value (rounded)
€ 1,186,272-€ 6,436
-€ 85,199
-€ 3,248
-€ 144,336
Gross Capital Value (rounded)
€ 21,300,000€ 1,531,257
€ 1,377
Page 10 of 12
7.66%
€ 1,552,770
€ 8.79 Total
Total € 20,000,000
6.61%
For our risk evaluation, we primarily considered the covenant strength as well as the lease duration of the existing contracts. The main tenant, Marktkauf Holding GmbH, has good covenant strength and is asubsidiary of Edeka Group. However, the premises are occupied by a subsidiary of REWE (B1). It could not be clearified whether the premises are sublet with consent of the landlord or were taken over by REWE.For the purpose of this valuation, we assumed that the lease with Marktkauf is still in place and was sublet to REWE with consent of the landlord.We consider the covenant strength all in all to be adequate to ensure the income stream at least until the lease expiry in 2019. The same applies for the tenant Kaufland, which has very good covenant strength;thus, we consider the cash flow until lease expiry in 2026 to be secured. In terms of a resale, we took into account such facts as visibility, demographic factors, appearance, condition and building age, third-partyusability, competition situation and location.
-€ 5,088
abc
Valuation Comment
€ 1,591,511 per m²
4.49%
For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in our valuation. Other costs have remained unchangedand have been applied according to information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective gross rent.We have been provided with information regarding necessary capital expenditures. All Capital expenditures for repairs in the first year as well as in the periods of year 2 to 5 and year 6 to 10 are considered to becovered by the maintenance costs of € 5.50/m² per annum.Regarding comparable rents we have had recourse to evidence of similar areas situated in the comparable regions and locations. Furthermore, we have analysed comparable transactions. Please refer to thesection "Investment Comparables". 0
6.89%
Year 10 € 1,657,523€ 1,673,886
€ 0
€ 1,710,373Year 9
-€ 133,609
TIs and
-€ 128,784
Brack Capital Properties N.V.
€ 1,653,147 -€ 1,400
-€ 13,939-€ 114,606
€ 1,524,488
€ 1,565,202 -€ 1,950 € 1,561,487
Income
-€ 1,194
-€ 46,618-€ 1,747 € 1,522,393
€ 1,515,570
Net
31.03.2013
7.35%Commissions Cash FlowCapital
€ 1,402,053€ 1,198,092€ 1,357,385
Year 6Year 7
-€ 26,343
€ 1,555,830
-€ 135,047Vacancy
Year 5
€ 1,688,644 € 1,662,301Year 8
Year 4
Year 2-€ 4,649
Gross
€ 1,692,942
Market Value
Rental recoverable Operating
Hoymer Chaussee 108
€ 1,533,794
€ 1,217,960
7.96%per m²
€ 1,525,715
-€ 140,092-€ 137,813€ 0 -€ 6,665
Gross Value of Surplus Land
€ 22,129,680
€ 1,467
€ 21,346,377-€ 142,573 -€ 2,109€ 1,709,339
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 21,346,377
-€ 1,912Total Cashflow (incl. Terminal Value @ 7.10 %)
per m²/month
€ 1,566,766
€ 1,060,340
€ 0
-€ 2,350 € 0
Expenditures€ 0
-€ 127,607 € 1,525,540
Costs
€ 1,279,043
€ 1,513,187
Abatements
€ 1,329,583
-€ 13,920
-€ 147,726€ 1,503,884
-€ 45,423€ 0 € 1,377,989
€ 1,522,373
Year 3 € 1,657,796
€ 1,474,095€ 836,350-€ 3,578
-€ 131,855
€ 770,059
€ 1,590,184
Revenue€ 1,537,100
Turnover
Germany
€ 1,461,400
Revenue
€ 1,656,320 € 0
€ 0 € 1,687,685
Rent
€ 0
€ 1,664,397-€ 66,136-€ 127,297 € 0Year 1
€ 1,672,234
€ 1,680,803
Year 11 € 1,714,427
€ 1,698,811
€ 9.13
€ 0-€ 17,393
€ 1,711,349 -€ 53,826 € 0
€ 1,654,841-€ 5,257
-€ 155,088
€ 752,877
Yield Overview
€ 1,402,053
€ 1,525,254-€ 129,587
€ 1,701,161
06449 Aschersleben
Cash Flow
Non-Total
-€ 1,765-€ 1,866
€ 0
€ 10,888,164
-€ 36,487 € 0-€ 25,172
Present
€ 885,801
€ 1,131,994
-€ 7,843
Leasing
31.01.2011
Matrix Portfolio
Value @
6.6% 6.8%7.1% 7.1%
7.3% 7.3%
6.5%
7.1% 7.2% 7.1%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
€ .0
€ 200000.0
€ 400000.0
€ 600000.0
€ 800000.0
€ 1000000.0
€ 1200000.0
€ 1400000.0
€ 1600000.0
€ 1800000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 1 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Hoymer Chaussee 108
31.01.2011
abcPage 11 of 12
View of discount furniture store next to the subject property
Sales area of Kaufland
Matrix Portfolio
View of the mall area
06449 Aschersleben
Photos
View of the petrol station on site
View of the delivery zone
Germany Brack Capital Properties N.V.
31.03.2013
Indoor view of the main entrance and butcher and bakery shops
(Copy)
Property address Property no. 1 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
Self-Service Department Store 4,435 m²Self-Service Department StoreDIY
3,141 m²
9,441 m²DIY11,566 m²
5,430 m²5,434 m²DIY
real NordhornRödermark
HalberstadtDIY
Praktiker
StaßfurtHellweg
OBI AG
toom
Magdeburg
Slightly worse purchasing power
Slightly better purchasing power
€ 32,526
€ 5.59 /m²€ 61,367
€ 5.99 /m²
Total Rent p.m.
€ 36,408 € 6.70 /m² Slightly better purchasing power€ 6.50 /m²
Other federal state ,better purchasing powerSlightly better purchasing power
€ 64,654
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Significantly better purchasing power€ 6.65 /m²
€ 27,408 € 6.18 /m²€ 20,888
€ 5.99 /m²€ 32,526
CommentWorse purchasing power
Rent p. sqm€ 21,441 € 4.60 /m²
Same federal state; similar purchasing power
06449 Aschersleben
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
4,661 m²
Leasing Market
Kaufland
Tenant Property TypeSelf-Service Department StoreKauflandSelf-Service Department Store
31.03.2013Hoymer Chaussee 108
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
MaulburgKaufland
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
5,430 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
StaßfurtCrimmitschau
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
31.01.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
Property address Property no. 2 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 2 16 to 25 years Macrolocation 4 Good location and catchment areaLettable Area 4 Between 12,500 and 15,000 m² Microlocation 4 Good micro locationProperty condition 3 Average building condition Commercial activity 4 Average commercial activity nearbyGeneral impression 3 Average general impression Competition 3 Average competition level
Investment Quality
WALT 3 WALT three to seven years Investment market 4 Well developed property marketOver- / underrent 4 Slightly underrented (-5% to -15%) Investment volume 4 Good lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 11.40
Page 1 of 12 abc
SWOT Analysis
Medium to high level of competition
31.03.2013
Brack Capital Properties N.V.
Key Figures
Gögginger Straße 119
1995
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
7.42%
Discount Rate
7.42%
excluding capital
expenditures6.75%
6.47%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
7.0 years
0
Good tenant mix
Sufficient parking spaces
Good location within the city district
Market rental value € 1,499,573
€ 7.01
1969
Weighted average lease term
86199 Augsburg
Property Summary
Retail Park
Germany
31.01.2011
Property type
Current vacancy rate
Kaufland Vertrieb GAMMA GmbH & Co. KG
13,840 m²Total parking units
0.0%
Main tenant
Total lettable area549 units
-11.6%
€ 1,325,019
€ 1,164,091
€ 7.98Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
Good accessibility by car & public transport
0
Re-letting or negotiations concerning the prolongation of existing contracts may result in worse Prolognation of the lease contracts after expiry Difficult relettability of the fitness studio on 2nd floor
0
0
€ 9.03 / m² / p.m.€ 17,100,000
6.90%
The site is L-shaped and comprises a three-storey split levelled main building (in addition to a lettable basement level), an adjacent three-storey car park, offering approx. 550 parking spaces, as well as a petrolstation and a car wash. The construction of the main building started in 1969 along with the petrol station and the car park. A major modification took place in 1995 and the building in its existing form was finallycompleted in 1997. The building structure is made of concrete columns, pre-cast concrete beams and concrete slab ceilings. It has a flat roof.There are two main entrances; one from Gögginger Straße and one from Peter-Dörfler-Straße with access from the parking lot. The fitness centre has an additional separate entrance used after 8 p.m from Peter-Dörfler-Straße.
0
6.47%
Market Rental Value
12.91
€ 1,499,573 p.a.
The retail unit let to Kaufland is strongly underrentedWeaknesses
Matrix Portfolio
Limited third party use of space let to Kaufland
€ 1,236 per m²
Synergies from other wholesalers in the vicinity
0
Kaufland comprises the basement and the ground floor. Other smaller retailers, such as a bakery, pharmacy, hairdresser, and discount clothier, occupy the remaining area along the mall on the ground floor. Twoescalators provide access to the basement, where produce can be found. This area could be divided into three parts with separate entrances. A fitness centre occupies the second floor. The third floor is amezzanine floor with plant rooms. The upper floors can be reached via escalators and lifts. The petrol station is located on Peter-Dörfler-Straße with two levels of parking overhead. Next to the petrol station is awaiting zone for trucks.
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 160,928
Year of refurbishment
Property Description
0
€ 0.97
00
(Copy)
Property address Property no. 2 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
132.15
Augsburg lies on the Lech and Wertach rivers and is situated near the motorway A8, connecting Munichand Stuttgart. The federal roads through Augsburg are the B2, B10, B17 and B300. The main trainstation offers regional connections as well as Intercity Express (ICE) connections to cities such as vonMunich, Berlin, Dortmund, Frankfurt am Main, Hamburg und Stuttgart. Direct express trains (EC) arealso offered to Vienna, Amsterdam, and Paris. Augsburg is a university town, as well as one of the mostsignificant industrial locations in southern Germany. It is home to the University of Augsburg and two“Hochschulen”, as well as major research institutes. The service sector has been growing in the pastyears and accounts for approx. 20% of employment. Many well-known companies are located in the city,e.g. MAN Diesel, Walter Bau, Osram, Fujitsu Siemens Computers, EADS and MT Aerospace.
Micro Location
Augsburg is one of the oldest German cities, along with Trier and Kempten. Today it is the third largestcity in the federal state of Bavaria, following Munich and Nuremberg. It lies in the south west part ofBavaria within the metropolitan area of Munich and is home to approx. 265,000 inhabitants. Due to itsaffordability, Augsburg has become a sought-after residence for commuters working in Munich, which isa little more than an hour away by car. The number of commuters and housing rent have beenincreasing.
A high school is also located at just a 5 minutes walk to the south on Gögginger Straße.
Location
Brack Capital Properties N.V.
31.03.2013
86199 Augsburg 31.01.2011
Augsburg (Urban District)
Germany
Bavaria
Macroeconomic Indicators
Federal StateDistrict
3.9%
5,469
Augsburg Macro Location
3.5
Micro Location
485
The property is located within the city district of Augsburg on the corner of Gögginger Straße, a majorarterial road, and Peter-Dörfler-Straße, approx. 4 km south of the city centre. Major roadways B17 andB300 intersect with Gögginger Straße, just south of the property. The retail building is easily accessiblefrom city by car in approx. 15 minutes. Sufficient parking at the property is provided by a multi-storey carpark. The retail park is also easily accessible via public transport, as bus and tram stops are locateddirectly in front of the building. The surrounding area is mostly residential and commercial area. Otherlarge retail warehouses are located in close vicinity, such as Promarkt (electronics), Media Markt(electronics), Lidl and Aldi (discount supermarkets), and a Netto Marken Discount (discount store). Ahagebaumarkt (DIY store) can be found just 5 minutes in the direction of the city centre.
Local Tax Information
1.5%
108.3499.80
4.4%
5,469
7.2%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
266,647
86199
18161,816
12,510,331266,647
Augsburg
1.1%
140,347
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Gögginger Straße 119
City
(Copy)
Property address Property no. 2 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Extract from the land register dated 08.01.2008
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Gögginger Straße 119 31.03.2013
31.01.2011
Germany
No Suspicion
According to information from the local planning authority, no legally binding development plan exists.Town planning issues are governed by § 34 of the German Federal Building Code. This paragraphstipulates that new developments and their designated uses are required to blend in with theirimmediate surroundings, so as to show consideration of nearby types of uses. According to the localplanning authority, the site could be characterized as (SO) special zone with mixed-use includingcommercial.
Section 2 (Restrictions)
TPL Biberach S.á.r.l., Luxembourg
Land Register
10640 421/10415/28415/29 415/30 415/31
421
Owner
n.a.
Site Information
Site area 20,862 m²thereof surplus land
NoGround lease
Site layout
Site Plan
Surplus land value (net) n.a.
Source: Cadastral plan dated 30.06.2008
Matrix Portfolio
86199 Augsburg
SO (special zone)
n.a.
0
Sheet Plot Parcel
n.a.
Tenure
Site servicing
Ground lease expiry€ 0
0 m²
n.a.
Town Planning
Fully serviced
Building encumbrances Yes
Irregular
The site consists of six plots: 421/10, 415/28, 415/29, 415/30, 415/31, 421. The site has an eventopography and an irregular shape. It is surrounded by a road to the west and to the north and a smallpaved road to the east. According to the environmental due diligence dated July 2007, the site is notregistered in the “Altlastenkataster” (contaminated land cadastre). The general risk of subsoilcontamination at the Kaufland site without petrol station and car wash is considered to be low tomoderate. This risk is moderate to high for the site with the petrol station and car wash. For thepurposes of this valuation, we have assumed that the subject property is free of any soil or buildingcontamination.
There are several limited personal easement: Right of fuel service station in favour of CONOCO Mineraloel GmbH, plot 421; Right of transformer station and pipeline in favour of Lech Elektrizitätwerke, plot 421; Right of way on sidewalk in favour of the municipality of Augsburg, plots 415/28, 415/29, 415/31; Right of noise barrier in favour of the municipality of Augsburg, plots 415/29, 415/31; Right of gas & water pipeline in favour of the municipality of Augsburg; plots 415/28, 415/29, 415/30, 415/31; Right to hold and operate a self-service department store in favour of Kaufland Dienstleistung GmbH & Co. KG, plots 421/10, 415/28, 415/29, 415/30, 415/31, 421. Easement (right of access) in favour of the owner of plot 421/24.
Brack Capital Properties N.V.
Land charges in the total amount of € 13,143,373 in favour of Bank of Scotland (Frankfurt branch), Frankfurt am Main; entered on 09.10.2007.
Local Court of Augsburg, land register of Göggingen
abcPage 3 of 12
(Copy)
Property address Property no. 2 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
132.15
4.4%
abc
Population forecast for the district (2007 - 2025)
86199 Augsburg
Name86199 Augsburg, Bergiusstr. 1
Competitor Overview
Competitor Map
Hypermarket
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Hypermarket
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
0.90 km5,494 m²Self-service dep. store
13,591
High
MediumLow
1,600 m²
Low2.20 km
Inhabitants in secondary catchment area
Retail Centrality Index (District)
86179 Augsburg, Haunstetter Str. 239-241Rewe
Inhabitants per hypermarket in secondary catchment area
20,929
140,347
Marktkauf
Real
Rewe
334,866
2,200 m²2,000 m²
Inhabitants per hypermarket in tertiary catchment area
3.70 kmHypermarketHypermarket
3.80 km3.90 km
86153 Augsburg, Böheimstr. 6A86161 Augsburg, Wilhelm-Hauff-Str. 34 Hypermarket
86150 Augsburg, Viktoriastr. 2
86391 Stadtbergen, Hagenmähderstr. 47
E-centerRewe Gesell
86153 Augsburg, Willy-Brandt-Platz 1
Marktkauf
Rewe
86153 Augsburg, Jakoberwallstr. 9
Hypermarket 2,807 m²3,498 m² 2.90 km Low
3.40 kmHypermarket 2,300 m²
E-center
Rewe Seidler
51,903
Hüdaverdi Süpermarket
99.80
86167 Augsburg, Neuburger Str. 174-184
86161 Augsburg, Reichenberger Str. 59
176,688
Hypermarket4.00 kmHypermarket86391 Stadtbergen, Benzstr. 7
E-centerRewe
86156 Augsburg, Kriegshaberstr. 4 4.00 km
4.70 km
Hypermarket 3,475 m²
5.40 km10,000 m²
Self-service dep. store 4.30 km
3.60 km
1,650 m²3,200 m²
86154 Augsburg, Donauwörther Str. 11086169 Augsburg, Schillstr. 111
1,600 m²6,900 m²
Edeka HypermarketLow1,600 m²
Self-service dep. store Medium
Low
Inhabitants in primary catchment area
5.10 km
1,800 m²
Hypermarket
17,301
Low
Competiton Indicators
Kaufland 86165 Augsburg, Meraner Str. 65.50 km
Gögginger Straße 119
31.01.2011
Germany Brack Capital Properties N.V.
31.03.2013
LowLow
Low
Low
Low
Low
Matrix Portfolio
(Copy)
Property address Property no. 2 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
31.01.2011
31.03.2013
Matrix Portfolio
Turnover analysis
This competitor is a Marktkauf (self-service department store), located less than 1km from the subject property. It is similar in size and condition and offers a similar product assortment. It is laid out in a retail park with a shared open parking lot. There is also a petrol station on the site. This is a direct competitor.
Main competitors
86199 Augsburg
Gögginger Straße 119
Another Kaufland can be found north-east of the city centre in the district of Lechhausen. It is somewhat larger with retail spread out over two floors (ground floor and 1st floor).This Kaufland offers a similar shopping experience to the consumer, yet based on the distance from the subject property, we consider it to pose only a medium-level of competition, as it mostly draws customers living north-east of the city centre. There are a substantial number of competitors within the primary and secondary catchment areas; however, when considering the number of potential consumers, the market cannot be described as oversaturated. Furthermore, the population growth for the county (“Landkreis”) is forecasted to grow by 4.4% between years 2007 and 2025; and according to the “Wirtschaftsförderung” of Augsburg, there are currently no self-service department stores in planning. Accordingly, the overall competitive environment can be described as medium to high.
For the purpose of this valuation, we have used the average turnover rents for the years 2008 and 2009 until the end of the respective lease agreement. The rents in functional retail agglomerations are linked to turnover. The percentage that a retail tenant can use for rental payments depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective branch. Kaufland is a strong anchor, we believe that there will continue to be demand for such ancillary tenants. For Kaufland, we have also been provided with turnover figures. We have analysed the figures and have found the area productivity of Kaufland to be in a healthy range. With a turnover-to-rent ratio of less than 2% it lies below the range of 2% to 4%, which is acceptable for a self-service department store. Hence, we believe that a higher market rent is achievable after the end of the lease contract. Please also refer to the rent/turnover analysis on page 8.
abc
Competition Comment
Catchment area is divided into 3 categories: primary (0-5 min drive time); secondary (5-10 min) and tertiary (10-15 min). Approximately 52,000 inhabitants live in the primary catchment area and three self-service department stores are present. This correlates to approx. 17,000 inhabitants, i.e. potential customers, per store. Within the broader secondary catchment area there are 175,000 inhabitants and a total of thirteen self-service department stores, equalling about 13,500 potential customers per store. We consider there to be 3 main competitors for the subject property: a Marktkauf, a real,- and another Kaufland.
The most direct competitor is a Marktkauf, located less than 1km away. Situated directly off the main arterial roads B17 and B300, it has very good accessibility and visibility. It is laid out in a retail park with a shared open parking lot, different to that of Kaufland. The neighbouring stores, as well as a petrol station and car wash, offer a wide variety of options to the consumer and are mostly well-known retailers. This is a strong competitor due to its close proximity and the similar tenant mix. A real,- is located about 4km from the subject off of the federal road B2 in a commercial area east of the city centre. There is an OBI (DIY store) and a Norma (discount supermarket) nearby. It is laid out over only floor, which is preferable, and the building itself is newer, but since it will draw mainly residents from the eastern part of Augsburg, we believe it poses only a medium-level of competition.
0
Kaufland splits its retail area between the ground floor and the basement, which is less preferable to a one-floor building, making it difficult to let if Kaufland were to leave. It would be difficult to envision another use; the best use would remain to be a self-service department store. Therefore, if Kaufland were to leave, a major competitor, such as real,- Marktkauf or Edeka would be a likely replacement. The fitness centre on the 2nd floor may be difficult to re-let in the future if McFit were to leave. Foreseeable future use of the upper floors could be a furniture store or electronics store. It is highly probable that the fitness centre will continue to let the space on the 2nd floor, due to the good micro-location close to a large residential area. Kaufland’s lease does not expire until 2022 and it has options to extend until 2037. On the basis of our projection of likely productivity per m² and turnover, we have calculated the market rent at € 7.60 /m²/month. The tenant currently pays a contractual rent of € 5.50/m²/month. Hence, we expect Kaufland to stay until 2037 (based on its below-market rental level), as long as it continues to generate adequate turnover.
The property is currently used as a self-service department store (Kaufland), making up 67% of lettable area, a fitness centre (McFit) also takes up close to 20% of the total lettable area, and the rest is divided between smaller retailers with the indoor mall area. A car park offers plentiful parking, and a petrol station and car wash are also located on the property. The micro-location is good for it is easily accessible by car and public transport. Despite a high level of competition, the property should compete strongly due its good location and the synergies effects created through other large retailers (Media Markt and Hagebau) in the immediate area. The catchment area should suffice, despite the significant number of competitors. Furthermore, the population growth for the district (“Landkreis”) is forecasted to grow by 4.4% between years 2007 and 2025 and there is no evidence of self-service department stores in planning according to the “Wirtschaftsförderung” of the city of Augsburg.
Germany Brack Capital Properties N.V.
This competitor is a real,- (self-service department store). It is located approx. 4km from the subject off of the main road B2 in a commercial area east of the city centre. It is somewhat larger in size and comprised of only one floor with high ceilings. A bakery, flower shop, delicatessen and beverage store are on the site, as well as an open parking lot and a parking garage. This competitor poses a medium level of competition.
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 2 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
7 Bucan
23.43
€ 42,763
Retail10 Landbäckerei Ihle GmbH
11 Neckermann Urlaubswelten GmbH & Co. KG
Let
Page 6 of 12
GT I PM
31.05.2015
55
Retail
5 Friedberger Landbrot Brez´n Baur GmbH
3 Solak
461
78.56
5.50
Retail 8.84
38.15
2 Frisör Thonet GmbH Retail
pays VAT
31.03.2016
24.10.2020
75%
75%
Start
75%
31.03.2013Gögginger Straße 119
Tenant
Matrix Portfolio
31.01.2011
Status m² / unitLet
TenantLeaseArea
Let
Let
30.09.2022Yes
25.10.2005
Yes
Rent / m² RenewalLeaseLetting
1 Kaufland Vertrieb GAMMA GmbH & Co. KG Retail 7,775
/ month Probability
107
9 McFit GmbH Retail
Let
Retail
8 Vincent Murr Vertriebs GmbH
14 Askarzada
6 BRL Center GmbH
01.10.2007
01.04.2011
Yes
GT I PM
75%
Retail
Yes
€ 707
GT I PM
4 KiK Textilien und Non-Food GmbH
Retail 18
72
Let
Retail
9
01.08.2008
5.00
€ 1,677
€ 702
Let
Let Yes
86199 Augsburg
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Retail
€ 110,418
144
Let
Let
2,220Let
€ 4,850 30.04.2016
€ 4,057
30.06.2015
01.06.2010
12.05.2016
01.04.2003 31.03.2023
€ 1,327 01.10.2010
15.05.2016
31.12.2015
75%
01.08.2010
75%
75%
30.03.2016
75%
31.03.2006
GT I PM
75%
75%
75%
GT I PM
Yes
Yes
GT I PM
GT I PM
abc
GT I PM
75%
75%
100%
75%
75%
14,240 m²
75%
75%
75%
0%
75%
75%
31.12.2015
75%
30.09.2013
GT I PM31.07.2016
GT I PM
30.11.2013
02.08.2014
17.10.2002
07.10.2010
01.11.2006
02.01.2004
75%
16.10.2014
75%
75%Yes
45.33
28.27
33.99
Yes
Yes
27.43
24.13
Yes
Yes
GT I PM
80 € 3,372
€ 1,39441
42.15
31.07.2028
€ 4,075
GT I PM75%
Total
26Let
Let
€ 11,105
LetRetail
13 Glanzer Retail
15 Thi Dung
GT I PM12 Altin Retail 34 € 927 Yes
GT I PM36.33 24.10.2015
GT I PM127 € 905 Yes 01.12.20107.15 30.11.2013
€ 948
Retail 39 € 1,058 Yes 17.05.2006Let 26.86
16 Thi Dung Storage 28 € 108 Yes 01.10.2006Let 3.85
17 FOTOFIX Schnellphotoautomaten GmbH Other Units 1 € 44 Yes 01.06.2007Let 43.90
18 Deutsche Plakat-Werbung GmbH & Co. KG Other Units 11 € 486 Yes 03.08.2009Let 44.17
19 ConocoPhillips Germany GmbH Petrol Station 200 € 3,593 Yes 01.03.1978Let 17.96
20 ConocoPhillips Germany GmbH Petrol Station 200 € 6,739 Yes 01.03.1978Let 33.70
21 Kurzzeitmieter Other Units 1 € 5 Yes 16.01.2012Let 5.25 30.09.2022
0%22 Mall Income Other Units 1 € 84 00.01.1900Let 84.48 30.09.2022
M GT I PM23 AB Möbel und Immobilien GmbH Retail 2,604 € 9,270 n.a. 01.01.2012Let 3.56 31.12.2021
24 ConocoPhillips Germany GmbH Other Units 1 € 88 YesLet 88.00 31.03.2014
M GT I PM25 Hosokawa Alpnie Aktiengesellschaft Other Units 1 € 1,750 n.a. 16.01.2012Let 1750.00 30.06.2013
M GT I PM26 transact Elektronische Zahlungssysteme GmbH Other Units 1 € 51 n.a. 01.01.2007Let 51.13 31.12.2013
0%27 Internal Parking Internal parking 549 € 8,333 No 01.10.2007Let 15.18 30.09.2022
(Copy)
Property address Property no. 2 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
31.01.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis0
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 540
abc
0 0 0 100%0 0 27 Internal Parking Internal parking 549 € 15.18 € 8,333 € 0
0 3 5 75%0 6 26 transact Elektronische Zahlungssysteme GmbH Other Units 1 € 51.13 € 51 € 100
0 3 5 75%0 6 25 Hosokawa Alpnie Aktiengesellschaft Other Units 1 € 1750.00 € 1,750 € 100
0 3 5 75%0 6 24 ConocoPhillips Germany GmbH Other Units 1 € 88.00 € 88 € 100
€ 100 0 3 5 75%12 12
0 0 0%0 0
23 AB Möbel und Immobilien GmbH Retail 2,604 € 4.75 € 12,370
Other Units 1 € 0.00 € 0 € 0 0
0 3 5 75%0 6
3 5 75%0 12
21 Kurzzeitmieter Other Units 1 € 0.00 € 0
75%0 12
20 ConocoPhillips Germany GmbH Petrol Station 200 € 33.70 € 6,739 € 100 0
5
19 ConocoPhillips Germany GmbH Petrol Station 200 € 17.96 € 3,593 0 3 5
€ 485.83 75%
0 3 5 75%0
0 3 0 6
€ 43.90 € 44 € 100
0 12
€ 100
6
75%
0 12 0 3 5 75%
0 3 5
75%
0 3 5 75%
0 3 5
0 12
0 3 512
50
75%
€ 100
75%
75%
5 75%0
0
12
0 12
€ 100
75%
3
0
5
3
5
0
0 0
12
75%
0
12 5
3 12
3
3
75%
0
3
5
75%
75%
3
0
75%
5
75%
3 10
5
75%
3
0€ 100 12
12 53
0 5
€ 100
€ 100
Total
22 Mall Income
13 Glanzer
€ 100
€ 100
€ 100
€ 100
26
€ 100
€ 100
12 14 Askarzada Retail
16 Thi Dung
Retail15 Thi Dung
Other Units
Page 7 of 12
€ 129,82314,240 sqm
Term**
Matrix Portfolio
Re-letting
€ 1,025
€ 3,588
€ 22.00
€ 5,34411
107
127
39
€ 100
1
Retail
€ 22.00
€ 653
6 BRL Center GmbH
€ 25.00
18 Deutsche Plakat-Werbung GmbH & Co. KG
7 Bucan
Retail
Retail
Retail
Retail
8 Vincent Murr Vertriebs GmbH Retail
7,775
3 Solak Retail
Retail
2 Frisör Thonet GmbH
1 Kaufland Vertrieb GAMMA GmbH & Co. KG
41
9 McFit GmbH
12 Altin
Other Units
17 FOTOFIX Schnellphotoautomaten GmbH
10 Landbäckerei Ihle GmbH
11 Neckermann Urlaubswelten GmbH & Co. KG
Retail
Storage
72 € 15.00
Market
12
12 0
0
3
12 0
Rent /month€ 59,091
€ 7.00
€ 460
€ 3,227
80
€ 7.60
18
Rent
€ 60.00
€ 100
€ 985
0
€ 100
€ 845
€ 0
€ 1,760
€ 9,990
€ 0.00
€ 25.00
€ 1,210
€ 40.00
€ 25.00
€ 4.50
34
28
4 KiK Textilien und Non-Food GmbH Retail 461
5 Friedberger Landbrot Brez´n Baur GmbH 9 Retail
144
55
€ 1,074
0
€ 100
€ 22.00
€ 25.00
€ 4,280
0
0
€ 25.00
€ 25.00
0
Market
€ 100
86199 Augsburg
Retail
sqm/unitTenant Name
Retail € 100
€ 50
Gögginger Straße 119
Area Category
2,220
€ 2,783
Germany Brack Capital Properties N.V.
0
0
12
31.03.2013
(Copy)
Property address Property no. 2 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
7,000
Usual market % - levels6,500
Market rent
6,000 Contractual Rent
5,500 Rents %
Contractual5,000
Market
4,500 4% of turnover
3% of turnover4,000
2% of turnover
3,500 Turnover potential(net)
Sales Area3,000
Total Areain € / m² p.a.
based on sales area
O3332
This report is only to be read in conjunctionwith the valuation report provided.
15.18
25.83
8.43
0.000.000.00
1,225,019
0.00
0.00%
Rented€/year
00
0.0%
0.0%
0.00
€/month €/year0
0.00
13,840
123,9831,294
0
0
0
0
0
0.00%0.00%0.00%
0.00%%
Vacancy Rate
0
13,812
86199 Augsburg
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
-14.2%1,246,5640.00
0
013,812
Market
01,069,640
€/month
DIY
Office
0
0
0
0103,880
0.00%
7.52
0
0€/m²/month
966External parking
Rent
0
ContractualRent
€/year
0.00%17
0.00%
0.00%00
28
0.00%
Matrix Portfolio
Gögginger Straße 119 31.03.2013
400
00Commercial
0
Contractual
0
0549
Potential
Area Vacant
549
€/m²/monthRent
0.00%0
Rent
00.00%
Brack Capital Properties N.V.
Use Category
Germany
31.01.2011
Capital indicator
€ 12,500 (single) € 84,000 (total)
Assessment of Kaufland market rent
Comment
WALTPayment Index n.a.
21,884,417 €
The main tenant is a corporation belonging to the Kaufland Group, which in turn belongs to the Lidl &Schwarz Group, one of the biggest grocer groups in Europe. Kaufland is the self-service departmentstore division of Lidl & Schwarz with more than 500 locations across Europe. Kaufland’s core businessarea is food retailing with branded goods and own-brands specially produced for Kaufland. The risk ofinsolvency (D&B Score) is high, i.e. 32% of businesses on the German database have the same orhigher risk. According to section 19 of the main lease agreement entered into by the landlord andKaufland Dienstleistung GmbH & Co. KG (Rating = 2AA 1), an assignment of the main lease agreementby the tenant to another entity of the Kaufland group requires that the landlord's credit risk rating maynot deteriorate due to such assignment of the lease.
Rent p.a.
7,775 m²
Self-service department stores usually can afford to pay a rent in the range of 2% to 4% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 4,000 to € 6,000 per m²sales area. The two graphics above indicate, how the contract rent of the main tenant Kaufland as well as the assumed market rental level, can be assessed on the basis of usual market ranges. This analysis isbased on the turnover potential figures prepared by Trade Dimension.
2.3%
3.2%
5.50
7.60
abc
Risk indicatorScore
Page 8 of 12
Credit limit
0
3.7%-12.5%
29,0262,419116,631
142.291,399,573
0.0%0.0%100,000
0.0%
0
10,332
8,333
0.0%00.0%
0
9.38
7.04
0
39%
0
Kaufland Vertrieb GAMMA GmbH & Co. KG
9.5 years
~ 4,980 m²
8,333 100,0000
Share of total income
Main tenant
€ 513,155
D&B Rating of Main Tenant
Tenant name
4.69
Storage10,332
108Petrol Station 25.83
0.00Internal parking 15.18
7.38147.56
0ResidentialCommercial
00
123,983 123,9830
0 0.0%00
00
0
m²
0
Property Analysis
0 0.0%0.00 0
89,13700.00
6.45
Warehouse
Warehouse
Area Let
13,840
Other Units
00
Residential280
0
100,000
0.00%
Contractual
m²Area Analysis Lettable Area
400
1,069,640
Retail
0.00
Total areaPetrol Station
54917
Income Analysis
Internal parking
Office
DIYRetail
Storage
102,08530,103
1,225,019
0 0
30,103
1,294
2,509
3.85
0.000.00
Other UnitsTotal area
External parking
Total parking
€ / m²
5.50
4.69
7.60
7.04
9.38
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
4,394
(Copy)
Property address Property no. 2 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The property is let to fifteen retail tenants, a fitness studio, a petrol station and car wash. There is no vacancy at the moment. The WALT amounts to 7.0 years. The main tenant is Kaufland with a share of approx.39% of the rental income. The property is currently strongly under-rented mainly due to the low rental level of Kaufland. The lease is valid until 2022 with options until 2037; therefore, we do not believe that therental level will be adjusted before 2037. Kaufland’s rent is indexed and is adapted by 50% of the CPI change, when the change exceeds 10% in relation to the CPI basis. Indexation started on 01.04.2009. Groundtax, maintenance costs for structural repairs, management and insurance costs are not borne by Kaufland. The rest can be apportioned to the tenant in accordance with the German Regulation on Operating Costs.The following tenants have extended their lease contracts: FOTOFIX until 11/2013, Kik until 03/2023 and Altin until 09/2013.
0 €
0 €
€ 4,737€ 67,096
€ 4,813
Breakdown of Non-Recoverable Costs
€ 0
12.9%
5.74%
% of Gross
€ 10.00 /m²/p.a.
€ 20912.8%
0 €
€ 4,589 0 €0 €€ 4,517
0 €€ 4,440
12.2%€ 404
€ 62,781 12.3%12.8%€ 5,654
€ 60,919
€ 196
0 €
€ 0.00 /m²
Management costs
Other non-recoverable costs
€ 11.63 /m²
€ 19,885€ 4,362
€ 61,773
5.08%
Total non-recoverable expenses
Maintenance costs € 76,118
€ 168,857€ 166,350€ 169,047
€ 786
€ 1.44 /m²
% of Gross
0.00%
€ 19,875
€ 22,494
€ 5.50 /m² € 76,118Contract Rent
per year
Lease Contract Commentary
€ 5.50 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 6.90%
6.75%
Brack Capital Properties N.V.
Gögginger Straße 119
Assumptions
Repair work on the parking garage has been finalized. This results in an increase of parking fees from €85,000 to €100,000 p.a.
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yields profile is aligned with the market/other transactions. We have taken intoaccount such facts as the remaining lease term with the well-known anchor tenant, the tenant mix thevacancy rate as well as the location within the federal state Bavaria.
31.01.201186199 Augsburg
Germany
31.03.2013
€ 0.30 /m²€ 0
0.32%€ 60,716€ 4.39 /m²
€ 0.00 /m²€ 4,219
per year
Year 8
€ 63,900€ 20,304
€ 85,466€ 84,116
€ 20,028
€ 78,707Year 3
€ 20,074
% of Total
Year 7
€ 4,233€ 19,978
€ 171,039
€ 161,907
€ 0
Total
€ 82,804 € 19,965
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 010.91%
€ 0.30 /m² € 4,219
Insurance
Other non-recoverable costs
4.05%
Market Rent
0.00%12.15%
1.50%€ 1.63 /m²€ 4.39 /m² € 60,716
€ 160,928
per year
€ 11.82 /m²
Total Non-recoverable Costs
€ 163,546
€ 4,292
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 21,235 € 70,342 0 €€ 21,820€ 89,493 € 71,385
Year 10€ 1,351
4.58%1.50%
Market Value
€ 86,840
Year 4
Year 6
€ 4,960
€ 19,760
Year 11€ 88,186
€ 69,269Year 9
GroundManagementTax
Maintanance
€ 19,621
CostsCosts
€ 80,110
Year 1Year 2
€ 76,373€ 77,443
€ 68,173
€ 81,492 € 65,002€ 66,049
Year 5
€ 19,940
13.0%
0 €€ 4,662
€ 189,00913.6%14.2%
0.28%
0 €
€ 7,479€ 4,888
€ 4,369
€ 8,392€ 192,130
€ 180,00313.5%
0 €
13.0%
€ 189,254
Year after 2021
€ 173,616
abc
€ 2,459 € 180,90913.7%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
12.2%12.8%
12.3%12.9% 12.8% 13.0%
13.7% 13.5%14.2%
13.6%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 2 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
5.00%
Market Value (rounded)
€ 892,444-€ 6,905
-€ 57,132
-€ 7,854
-€ 192,130
Gross Capital Value (rounded)
€ 18,000,000€ 1,325,019
€ 1,236
Page 10 of 12
7.75%
€ 1,164,143
€ 7.98 Total
Total € 17,100,000
6.47%
In terms of risk, we considered the covenant strength as well as the lease duration for the existing contracts. As at 01.01.2011, the main tenant Kaufland Vertrieb GAMMA GmbH & Co. KG has below averagecovenant strength and a high credit risk. According to section 19 of the main lease agreement entered into by the landlord and Kaufland Dienstleistung GmbH & Co. KG (D&B Rating = 2AA 1), an assignment of themain lease agreement by the tenant to another entity of the Kaufland group requires that the landlord's credit risk rating may not deteriorate due to such assignment of the lease. Section 1 of the first amendment tothe main lease agreement provides for the assignment of the main lease agreement to Kaufland Vertrieb GAMMA GmbH & Co. KG, which has a worse D&B Rating (O3). Accordingly, pursuant to section 2 of thefirst amendment to the main lease agreement, the former tenant remains jointly and severally liable for the landlord's payment claims. Hence, the former tenant is a guarantor for the lease payments of the currenttenant. Upon resale we took into account visibility, demographic factors, appearance, condition and building age, third party usability, competition and location.
-€ 11,396
abc
Valuation Comment
€ 1,499,573 per m²
-11.64%
For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in our valuation. Other costs have remained unchangedand have been applied according to information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective gross rent. Regarding comparable rents, we haveevidence of similar areas situated in comparable regions and locations. Furthermore, we have analysed comparable transactions. Please refer to the section "Investment Comparables". We have been providedwith updated information regarding necessary capital expenditures. As the repair work on the parking garage has been finalized, the relevantCapital expenditures are no longer taken into account. For the period until year 10 further costs have been included in the technical due diligence; however, these are covered by the sinking fund budget of €5.50/m² p.a. for on-going maintenance measures.For some tenants, we have been provided with the turnover figures and have applied there figures in our valuation. Based on provided information from Brack Capital, we have additionally considered parkingincome of approx. € 100,000 p.a.
7.42%
Year 10 € 1,415,694€ 1,329,355
€ 0
€ 1,402,948Year 9
-€ 173,616
TIs and
-€ 169,047
Brack Capital Properties N.V.
€ 1,353,633 -€ 1,971
-€ 65,516-€ 4,411
€ 1,157,384
€ 1,157,399 € 0 € 1,157,399
Income
€ 0
-€ 7,724-€ 1,738 € 1,183,574
€ 1,124,450
Net
31.03.2013
6.90%Commissions Cash FlowCapital
€ 1,163,158€ 992,814
€ 1,128,458
Year 6Year 7
-€ 21,679
€ 1,164,143
-€ 161,907Vacancy
Year 5
€ 1,359,972 € 1,338,293Year 8
Year 4
Year 2-€ 6,929
Gross
€ 1,335,182
Market Value
Rental recoverable Operating
Gögginger Straße 119
€ 1,140,101
€ 1,129,909
8.77%per m²
€ 1,317,336
-€ 189,254-€ 180,909€ 0 -€ 10,675
Gross Value of Surplus Land
€ 18,891,447
€ 1,301
€ 17,983,801-€ 189,009 -€ 13,501€ 1,454,658
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 17,983,801
-€ 2,856Total Cashflow (incl. Terminal Value @ 6.75 %)
per m²/month
€ 1,265,649
€ 804,350
-€ 2,763
-€ 5,865 € 0
Expenditures-€ 4,061
-€ 166,350 € 1,187,283
Costs
€ 1,004,736
€ 1,223,564
Abatements
€ 1,091,779
-€ 25,553
-€ 180,003€ 1,081,193
-€ 3,013€ 0 € 1,137,333
€ 1,122,753
Year 3 € 1,360,562
€ 1,077,992€ 639,145-€ 9,278
-€ 171,039
€ 734,700
€ 1,325,682
Revenue€ 1,331,889
Turnover
Germany
€ 1,156,635
Revenue
€ 1,356,493 € 0
€ 0 € 1,335,182
Rent
€ 0
€ 1,342,913-€ 30,811-€ 11,024 € 0Year 1
€ 1,335,607
€ 1,345,879
Year 11 € 1,466,054
€ 1,331,015
€ 9.03
€ 0-€ 27,541
€ 1,484,660 -€ 68,966 € 0
€ 1,308,066€ 0
-€ 28,543
€ 572,450
Yield Overview
€ 1,169,982
€ 1,139,209-€ 168,857
€ 1,336,880
86199 Augsburg
Cash Flow
Non-Total
€ 0€ 0
€ 0
€ 9,693,669
-€ 73,593 € 0-€ 120,019
Present
€ 656,267
€ 864,768
-€ 8,070
Leasing
31.01.2011
Matrix Portfolio
Value @
6.5%
6.4%6.6%
6.3%6.5% 6.4% 6.3% 6.4% 6.3%
6.8%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
€ .0
€ 200000.0
€ 400000.0
€ 600000.0
€ 800000.0
€ 1000000.0
€ 1200000.0
€ 1400000.0
€ 1600000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 2 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Gögginger Straße 119
31.01.2011
abcPage 11 of 12
View of the car park and petrol station
Main entrance to Kaufland
Matrix Portfolio
View of the mall
86199 Augsburg
Photos
Internal view of McFit fitness studio (2nd floor)
View of retail area
Germany Brack Capital Properties N.V.
31.03.2013
Internal view of sales area of Kaufland
(Copy)
Property address Property no. 2 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
Fitness Studio 1,600 m²Discount FashionDiscount Fashion
657 m²
140 m²Pharmacy500 m²
0 m²467 m²Shoe store
KiK StraubingHeilsbronn
Karlstadt0
Pharmacy
0Deichmann
KiK
0
Nürnberg
0
Similar purchasing power
€ 0
€ 8.18 /m²€ 3,885
€ 0.00 /m²
Total Rent p.m.
€ 4,553 € 9.75 /m² Similar purchasing power€ 27.75 /m²
Similar purchasing powerSimilar purchasing power
€ 4,090
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Other federal state; slightly lower purchasing power€ 7.46 /m²
€ 7,840 € 4.90 /m²€ 4,901
€ 7.75 /m²€ 65,705
CommentOther federal state
Rent p. sqm€ 42,353 € 7.73 /m²
Other federal state; similar purchasing power
86199 Augsburg
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
5,479 m²
Leasing Market
Kaufland
Tenant Property TypeSelf-Service Department StoreMarktkaufSelf-Service Department Store
31.03.2013Gögginger Straße 119
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
BochumMcFit
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
8,478 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
GeldernLübbenau
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
31.01.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
Property address Property no. 3 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 3 11 to 15 years Macrolocation 3 Average location and catchment areaLettable Area 1 Smaller than 7,500 m² Microlocation 3 Average micro locationProperty condition 3 Average building condition Commercial activity 3 Limited commercial activity nearbyGeneral impression 3 Average general impression Competition 3 Average competition level
Investment Quality
WALT 3 WALT three to seven years Investment market 3 Average property marketOver- / underrent 4 Slightly underrented (-5% to -15%) Investment volume 3 Reasonable lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 12.20
Page 1 of 12 abc
SWOT Analysis
Low visibility from the main road
31.03.2013
Brack Capital Properties N.V.
Key Figures
Grassingerstraße 16
n.a.
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
6.99%
Discount Rate
6.99%
excluding capital
expenditures6.75%
6.41%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
6.5 years
0
Long remaining lease term of the anchor tenant
Sufficient parking
0
Market rental value € 696,866
€ 6.75
2000
Weighted average lease term
83043 Bad Aibling
Property Summary
Retail Park
Germany
31.01.2011
Property type
Current vacancy rate
Handelshof SB Warenhaus GmbH & Co. KG
7,053 m²Total parking units
0.0%
Main tenant
Total lettable area300 units
-7.5%
€ 644,624
€ 570,848
€ 7.62Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
Good building condition
0
Re-letting or negotiations concerning the prolongation of existing contracts may result in worse Positive population growth forecast for the district (Rosenheim) Termination of short term lease contracts with subsequent void periods
0
0
€ 8.23 / m² / p.m.€ 8,500,000
6.90%
The site comprises a single storey U-shaped retail park, separated into 3 wings which are called the west, east and north wing. The north wing is a 2-storey building (main building) with no basement. An openparking lot with approx. 300 parking spaces is provided to the front of the main building and on the left- and right-hand side of the U-shaped building. Construction of the property began in 1999 and was completedin 2000. The buildings are rectangular in shape and constructed with concrete columns, pre-cast concrete beams and concrete slab ceilings. The building has a flat roof covered by folio.
0
6.41%
Market Rental Value
13.19
€ 696,866 p.a.
The retail unit let to Kaufland is strongly underrentedWeaknesses
Matrix Portfolio
0
€ 1,205 per m²
Prolongation of lease contracts after expiry
Low unemployment rate
Kaufland is the anchor tenant occupying retail space on the ground floor of the main building. Office space and some storage and personnel rooms are located on the 1st floor. The entrance to the north wing is inthe front of the building facing the parking lot. The other retail units, which include a drugstore, textile stores, shoe store, etc., have separate entries from the parking lot. The property includes space to the backsideof the northern building for delivery and removal.
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 73,776
Year of refurbishment
Property Description
0
€ 0.87
00
(Copy)
Property address Property no. 3 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
97.57
The economic focus of Bad Aibling is on the health care and wellness sector. There are several curehospitals and rehabilitation centres. Companies in the pharmaceutical sector, textiles, electronicindustry, and milk processing industry can be found in the city. The unemployment rate for the districtlies at 3.8%, well below the national average (7.9%).
Micro Location
Bad Aibling is a spa town in the south of the federal state Bavaria with approx. 18,000 inhabitants. It lieson the river Mangfall, in the administrative district of Rosenheim, approx. 50 km southeast of Munich. Ithas become a sought-after residence for commuters working in Munich.
Bad Aibling has good accessibility through federal motorways and major roads. It is located near themotorway A8 (Munich-Salzburg). The major road which runs through the city is the state road St 2078(Munich-Rosenheim). The city is considering building another bypass (bypass road north), to lead thetraffic flowing north, towards Großkarolinenfeld and Tuntenhausen around the city. The train stationoffers regional connections.
0
Location
Brack Capital Properties N.V.
31.03.2013
83043 Bad Aibling 31.01.2011
Rosenheim (Rural District)
Germany
Bavaria
Macroeconomic Indicators
Federal StateDistrict
3.9%
5,545
Bad Aibling Macro Location
3.5
Micro Location
330
The property is located in a small commercial area at the city’s western periphery, on Grassingerstraße.Accessibility is good as Grassingerstraße is just off the main arterial road Münchenerstraße. However,the property cannot be seen from the main road and therefore has poor visibility. A bus stop is located at about 2 minutes walking distance. The property is approx. 5 minutes by car and 10 minutes walkingdistance from the city centre. The surrounding area is mostly residential and undeveloped land. A policestation, car dealership, a sporting goods store, as well as an Aldi (discount supermarket) can be found inclose vicinity.
Local Tax Information
2.2%
108.34103.28
9.6%
398
3.0%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
18,405
83043
444174
12,510,331251,105
Bad Aibling
1.1%
8,536
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Grassingerstraße 16
City
(Copy)
Property address Property no. 3 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Extract from the land register dated 18.01.2008
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Grassingerstraße 16 31.03.2013
31.01.2011
Germany
No Suspicion
According to the local planning authority, a legally binding development plan exists, entitled"Bebauungsplan 51 Nördlich der Grassingerstraße", dated 3 August 1992, date of last amendment 23May 2003, with the following regulations: subject site is located in a special zone retail (SO). The plotratio (GFZ) is 0.6 and the site coverage ratio (GRZ) is not specified.
Section 2 (Restrictions)
TPL Biberach S.á.r.l., Luxembourg
Land Register
7174 7630
1131 1072
Owner
n.a.
Site Information
Site area 19,222 m²thereof surplus land
NoGround lease
Site layout
Site Plan
Surplus land value (net) n.a.
Source: Cadastral plan on a 1 to 1000 scale, dated 27.12.2010
Matrix Portfolio
83043 Bad Aibling
SO (special zone)
n.a.
0
Sheet Plot Parcel
n.a.
Tenure
Site servicing
Ground lease expiry€ 0
0 m²
0.6
Town Planning
Fully serviced
Building encumbrances Yes
Irregular
The site consists of plots 1131 and 1072. It has an even topography and an irregular shape. It issurrounded by a road to the east and a small paved delivery access road around the site to the south,west and north. According to the environmental due diligence dated July 2007, plots 1072 and 1131 arenot registered in the “Altlastenkataster” (contaminated land cadastre). For the purposes of this valuation,we have assumed that the subject property is free of any soil or building contamination.
Limited personal easement (right to operate a self-service department store) in favour of Kaufland Dienstleistung GmbH & Co. KG, Neckarsulm.
Brack Capital Properties N.V.
Land charges in the total amount of € 9,590,419 in favour of Bank of Scotland (Frankfurt branch), Frankfurt am Main; folio 7630 & 7174; entered on 08.10.2007.
Local Court of Rosenheim, land register of Bad Aibling
abcPage 3 of 12
(Copy)
Property address Property no. 3 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
97.57
9.6%
abc
Population forecast for the district (2007 - 2025)
83043 Bad Aibling
Name83043 Bad Aibling, Ebersberger Str. 1
Competitor Overview
Competitor Map
Hypermarket
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
0.40 km2,305 m²Hypermarket
13,162
High
00
m²
Medium5.10 km
Inhabitants in secondary catchment area
Retail Centrality Index (District)
0
Inhabitants per hypermarket in secondary catchment area
10,612
8,536
Prechtl Frischecenter
84,900
1,500 m²6,500 m²
Inhabitants per hypermarket in tertiary catchment area
9.20 kmSelf-service dep. store 9.90 km83026 Rosenheim, Kufsteiner Str. 124
83024 Rosenheim, Hofmillerstr. 1 Hypermarket
83059 Kolbermoor, An der Alten Spinnerei 4
83026 Rosenheim, Grubholzer Str. 2a
E-centerKaufland
83059 Kolbermoor, Carl-Jordan-Str. 18
E-center
Rewe
83026 Rosenheim, Äußere Münchener Str. 100
Hypermarket 2,000 m²2,750 m² 5.80 km Medium
7.50 kmSelf-service dep. store 5,200 m²
Rewe
15,691
Real
103.28
52,647
Hypermarket 2,800 m² 7.50 km
00
0
Inhabitants in primary catchment area 7,846
0
Competiton Indicators
Grassingerstraße 16
31.01.2011
Germany Brack Capital Properties N.V.
31.03.2013
LowLow
Low
0
Low
0
Matrix Portfolio
(Copy)
Property address Property no. 3 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
31.01.2011
31.03.2013
Matrix Portfolio
Turnover analysis
This competitor is an Edeka Frischemarkt. It is much smaller in size and offers a more limited product assortment than the anchor tenant of the subject property. It has, however, greater visibility as it lies on the main road and needs to be passed in order to reach the subject property, which is just around the corner. The building is newer. Furthermore, a Müller (drugstore) is located on the site. This competitor poses a medium level of competition.
Main competitors
83043 Bad Aibling
Grassingerstraße 16
According to the local planning authority, because of a change in the traffic routes within the city centre of Bad Aibling, residents from the west have to bypass the city centre and drive through southern Bad Aibling to get to Kaufland. Accordingly, a new supermarket has been discussed. Given the relatively few competitors within the catchment area and the forecasted population growth for the county (“Landkreis”) of 9.6% between years 2007 and 2025, we rate the overall current competitive environment as medium.
For the purpose of this valuation, we have used the average turnover rents for the years 2008 and 2009 until the end of the respective lease agreement. The rents in functional retail agglomerations are linked to turnover. The percentage that a retail tenant can use for rental payments depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective branch. Kaufland is a very strong anchor, we believe that there will continue to be demand for ancillary tenants. For Kaufland, we have been provided with turnover figures. We have analysed the figures and have found the area productivity of Kaufland to be in a healthy range. With a turnover-to-rent ratio of less than 2% it lies below the range of 2% to 4%, which is acceptable for a self-service department store. Hence, we believe that a higher market rent is achievable after the end of the lease contract. Please also refer to the rent/turnover analysis on page 8.”
abc
Competition Comment
Catchment area is divided into 3 categories: primary (0-5 min drive time); secondary (5-10 min) and tertiary (10-15 min). Approximately 15,700 inhabitants live in the primary catchment area. There are two self-service department stores/hypermarkets, including the subject property, present in this area, which is approx. 8,000 inhabitants per store. Within the broader secondary catchment area of approx. 53,000 inhabitants, there are 3 main competitors: an Edeka Frischemarkt, an Edeka E-Center, and a Rewe. The Edeka Frischemarkt is about 1,000 m² smaller and offers a more limited product assortment than Kaufland. It does have, however, greater visibility as it lies on the main road and needs to be passed in order to reach the subject property, just around the corner. The building is significantly newer.Furthermore, a Müller (drugstore) is located on the site, which is comparable to the dm-markt (drugstore) next to the subject property. Despite its smaller size, we consider it to be a strong competitor based on its close proximity and preferred location.A bit farther away, approx. 6 km, in the town of Kolbermoor, an Edeka E-Center and a Rewe can be found. They are surrounded by a mostly residential area and located off of the state road St 2078 between Bad Aibling and the city of Rosenheim. Both hypermarkets are set within retail parks with outdoor parking. They will mainly draw inhabitants of Kolbermoor and possibly those from the eastern part of Bad Aibling and those who commute to Rosenheim for work. Therefore, they pose a medium level of competition.
The lease of the anchor tenant (Kaufland) does not expire until 2022 and it has options to extend until 2037. On the basis of our projection of likely productivity per m² and turnovers, we have calculated the market rent at a level of € 6.50 /m²/month. The tenant currently pays a contractual rent of € 5.25 /m²/month. Therefore, we expect that Kaufland will stay until 2037 (based on its below-market rental level), as long as it continues to generate adequate turnover. Potential future uses for the property would be difficult to envision. The best use for the property is its current use as a self-service department store. The next self-service department store is located in the next town, approx. 6km away. If Kaufland were to leave, another self-service department store, such as a real,- or Marktkauf, would be likely to take its place.
The property is currently mainly used as a self-service department store (Kaufland), which makes up 52% of lettable area. AWG (discount fashion) makes up 20% of the total lettable area, a dm-markt (drugstore) makes up close to 15% and the rest is divided between smaller retailers within the retail park. An outside parking lot offers sufficient parking. The property is also easily accessible via public transport. Despite the relatively small primary catchment area, because there are few direct competitors and the population growth for the county (“Landkreis”) is forecasted to grow by 9.6% between years 2007 and 2025, we anticipate that there will be enough customers to sustain the property. At the time, there is no vacancy. Kaufland, being a consumer magnet, provides a healthy retail environment for the remaining tenants.
Germany Brack Capital Properties N.V.
This competitor is an Edeka E-Center. It is similar in size and is located approx. 6km east of the subject property in the town of Kolbermoor. The E-Center has retail on the ground floor and a fitness studio on the 1st floor. It is located in a retail park surrounded by smaller retail shops, such as a shoe store, optician, jewellery shop, dry cleaner, and two discount fashion stores, among others. This competitor poses a medium level of competition.
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 3 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
7 Fressnapf Immobilien-Vermögensverwaltung GmbH
15.78
€ 10,558
Other Units10 Deutsche Plakat-Werbung GmbH & Co. KG
11 Fechtel
Let
Page 6 of 12
31.12.2014
78
5 dm-drogerie markt GmbH + Co. KG
3 Pham
224
10.85
10.57
Retail 5.10
11.43
2 Telko GmbH Retail
pays VAT
30.06.2016
30.03.2016
75%
75%
Start
75%
31.03.2013Grassingerstraße 16
Tenant
Matrix Portfolio
31.01.2011
Status m² / unitLet
TenantLeaseArea
Let
Let
30.06.2015Yes
15.03.2005
Yes
Rent / m² RenewalLeaseLetting
1 AWG Allgemeine Warenvertriebs-GmbH Retail 998
/ month Probability
6
9 Handelshof SB Warenhaus GmbH & Co. KG Retail
Let
Retail
8 KiK Textilien und Non-Food GmbH
6 Heinrich Deichmann Schuhe GmbH & Co. KG
24.02.2000
01.07.2011
Yes
GT I PM
75%
Retail
n.a.
€ 7,694
GT I PM
4 Reno Sportswear GmbH
Retail 84
77
Let
Retail
709
21.02.2000
5.25
€ 1,208
€ 955
Let
Let Yes
83043 Bad Aibling
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Retail
€ 53,719
498
Let
3,634Let
€ 265 02.08.2014
€ 5,158
10.02.2015
10.02.2000
30.11.2016
01.01.2012 31.12.2016
€ 575 01.12.2011
11.02.2000
75%
28.02.2015
75%
01.03.2000
0%
75%
n.a.
Yes
abc
75%
7,053 m²
0%
75%
30.09.2027
01.10.2007
00.01.1900
03.08.2009
01.10.2007
30.09.2027
75%
100%No
44.17
10.35
6.25
Yes
Yes
747.17
7.35
Yes
Yes
M GT I PM
404 € 4,168
€ 2,164346
10.30
20.02.2015
€ 1,141
75%
Total
300Let
Let
€ 19,086
LetRetail
13 External Parking External parking
0%12 Kurzzeitmieter Other Units 1 € 747
0%0.00 30.09.2022€ 0
(Copy)
Property address Property no. 3 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
31.01.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis0
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 7,090
abc
0 0 0 100%
0 12
0 0 00
50
75%
€ 50
75%
75%
10 75%0
0
12
0 0
€ 100
0%
3
0
5
3
5
0
0 0
6
75%
0
12 5
3 12
3
0
75%
0
3
5
75%
75%
3
0
75%
5
75%
3 5
5
75%
3
0€ 100 12
12 53
0 5
Total
13 External Parking
€ 100
€ 100
€ 0
€ 0
300
€ 100
Page 7 of 12
€ 59,3977,053 sqm
Term**
Matrix Portfolio
Re-letting
€ 2,252
€ 4,981
€ 11.00
6
€ 100
Retail
€ 0
6 Heinrich Deichmann Schuhe GmbH & Co. KG
€ 0.00
7 Fressnapf Immobilien-Vermögensverwaltung GmbH
Other Units
Retail
Other Units
Retail
8 KiK Textilien und Non-Food GmbH Retail
998
3 Pham Retail
Retail
2 Telko GmbH
1 AWG Allgemeine Warenvertriebs-GmbH
346
9 Handelshof SB Warenhaus GmbH & Co. KG
12 Kurzzeitmieter
10 Deutsche Plakat-Werbung GmbH & Co. KG
11 Fechtel
External parking
77 € 11.00
Market
12
12 0
0
3
12 0
Rent /month€ 9,984
€ 11.00
€ 919
€ 2,460
404
€ 10.00
84
Rent
€ 10.00
€ 750
€ 4,045
€ 23,622
€ 861
€ 265.00
€ 750.00
€ 6.50
1
4 Reno Sportswear GmbH Retail 224
5 dm-drogerie markt GmbH + Co. KG 709 Retail
498
78
€ 842
0
€ 0
€ 10.00
€ 11.00
€ 1,590
0
0
€ 10.00
€ 6.50
12
Market
€ 100
83043 Bad Aibling
Retail
sqm/unitTenant Name
Retail € 100
€ 50
Grassingerstraße 16
Area Category
3,634
Germany Brack Capital Properties N.V.
0
0
12
31.03.2013
(Copy)
Property address Property no. 3 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
7,000
Usual market % - levels6,500
Market rent
6,000 Contractual Rent
5,500 Rents %
Contractual5,000
Market
4,500 4% of turnover
3% of turnover4,000
2% of turnover
3,500 Turnover potential(net)
Sales Area3,000
Total Areain € / m² p.a.
based on sales area
5AA2284
This report is only to be read in conjunctionwith the valuation report provided.
0.00
0.00
8.23
0.000.000.00
644,624
0.00
0.00%
Rented€/year
00
0.0%
0.0%
0.00
€/month €/year0
0.00
7,053
00
0
0
0
0
0
0.00%0.00%0.00%
0.00%%
Vacancy Rate
0
7,053
83043 Bad Aibling
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
-7.6%684,6860.00
0
07,053
Market
0632,478
€/month
DIY
Office
0
0
0
057,057
0.00%
8.09
0
0€/m²/month
307External parking
Rent
300
ContractualRent
€/year
0.00%7
0.00%
0.00%00
0
0.00%
Matrix Portfolio
Grassingerstraße 16 31.03.2013
0
00Commercial
0
Contractual
0
00
Potential
Area Vacant
300
€/m²/monthRent
0.00%300
Rent
00.00%
Brack Capital Properties N.V.
Use Category
Germany
31.01.2011
Capital indicator
€ 560,000 (single) € 39,000,000 (total)
Assessment of Kaufland market rent
Comment
WALTPayment Index 75
8,118,378 €
The main tenant is a corporation belonging to the Kaufland Group, which in turn belongs to the Lidl &Schwarz Group, one of the biggest grocer groups in Europe. Kaufland is the self-service departmentstore division of Lidl & Schwarz with more than 500 locations across Europe. Kaufland’s core businessarea is food retailing with branded goods and own-brands specially produced for Kaufland. According toDun & Bradstreet (D&B) rating as at 02.02.2011 Handelshof SB-Warenhaus GmbH & Co. KG has abelow-average credit risk. The risk of insolvency (D&B Score) within the next 12 months compared withother German companies is assessed to be low, i.e. 84% of businesses on the German database havethe same or higher risk of failure.
Rent p.a.
3,634 m²
Self-service department stores usually can afford to pay a rent in the range of 2% to 4% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 4,000 to € 6,000 per m²sales area. The two graphics above indicate, how the contract rent of the main tenant Kaufland as well as the assumed market rental level, can be assessed on the basis of usual market ranges. This analysis isbased on the turnover potential figures prepared by Trade Dimension.
2.8%
3.5%
5.25
6.50
abc
Risk indicatorScore
Page 8 of 12
Credit limit
0
-0.3%-7.5%
12,1801,01558,072
145.00696,866
0.0%0.0%0
0.0%
0
0
0
0.0%00.0%
0
7.45
5.58
0
36%
0
Handelshof SB Warenhaus GmbH & Co. KG
14.5 years
~ 2,500 m²
0 00
Share of total income
Main tenant
€ 229,028
D&B Rating of Main Tenant
Tenant name
3.72
Storage00
Petrol Station 0.00
0.00Internal parking 0.00
7.62144.60
0ResidentialCommercial
00
0 00
0 0.0%00
00
0
m²
0
Property Analysis
0 0.0%0.00 0
52,70600.00
7.47
Warehouse
Warehouse
Area Let
7,053
Other Units
00
Residential00
0
0
0.00%
Contractual
m²Area Analysis Lettable Area
0
632,478
Retail
0.00
Total areaPetrol Station
07
Income Analysis
Internal parking
Office
DIYRetail
Storage
53,71912,146
644,624
0 0
12,146
0
1,012
0.00
0.000.00
Other UnitsTotal area
External parking
Total parking
€ / m²
5.25
3.72
6.50
5.58
7.45
2.00
3.00
4.00
5.00
6.00
7.00
8.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
3,247
(Copy)
Property address Property no. 3 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The property is let to ten retail tenants. There is no vacancy at the moment. The WALT amounts to 6.5 years. The main tenant is Kaufland with a share of approx. 36% of the rental income. The property is currentlyunder-rented mainly due to a very low rental level of the main tenant Kaufland. As the lease contract is valid until 2027 and the tenant has two five-year extention options until 2037, we do not believe that the rentallevel can be adjusted before 2037. The rent of Kaufland is indexed and will be adapted by 50% of the CPI change, whenever the change exceeds 10 % in relation to the CPI basis. Indexation started on 01.08.2008.Ground tax, maintenance costs for structural repairs, management and insurance costs are not borne by Kaufland. The rest can be apportioned to the tenant in accordance with the German Regulation onOperating Costs.
0 €
0 €
€ 2,257€ 25,756
€ 2,293
Breakdown of Non-Recoverable Costs
€ 0
12.2%
6.02%
% of Gross
€ 10.00 /m²/p.a.
€ 011.7%
0 €
€ 2,186 0 €0 €€ 2,152
0 €€ 2,115
11.5%€ 0
€ 24,100 13.3%12.5%€ 2,896
€ 23,385
€ 4,712
0 €
€ 0.00 /m²
Management costs
Other non-recoverable costs
€ 10.46 /m²
€ 9,327€ 2,078
€ 23,713
5.57%
Total non-recoverable expenses
Maintenance costs € 38,790
€ 78,304€ 80,010€ 77,446
€ 1,223
€ 1.37 /m²
% of Gross
0.00%
€ 9,669
€ 10,453
€ 5.50 /m² € 38,790Contract Rent
per year
Lease Contract Commentary
€ 5.50 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 6.90%
6.75%
Brack Capital Properties N.V.
Grassingerstraße 16
Assumptions
We are not aware of any other tenants planning to terminate their leases in the subject property, nor have we received any information regarding a prolongation of their leases.
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yields profile is aligned with the market/other transactions. We have taken intoaccount such facts as the remaining lease term with the well-known anchor tenant, the tenant mix thevacancy rate as well as the location within the federal state Bavaria.
31.01.201183043 Bad Aibling
Germany
31.03.2013
€ 0.28 /m²€ 0
0.31%€ 23,307€ 3.30 /m²
€ 0.00 /m²€ 2,010
per year
Year 8
€ 24,529€ 9,011
€ 43,554€ 42,866
€ 10,101
€ 40,109Year 3
€ 9,187
% of Total
Year 7
€ 2,017€ 9,669
€ 78,733
€ 73,991
€ 0
Total
€ 42,197 € 10,101
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 010.70%
€ 0.28 /m² € 2,010
Insurance
Other non-recoverable costs
3.34%
Market Rent
0.00%11.44%
1.50%€ 1.48 /m²€ 3.30 /m² € 23,307
€ 73,776
per year
€ 10.57 /m²
Total Non-recoverable Costs
€ 74,560
€ 2,045
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 10,728 € 27,002 0 €€ 10,887€ 45,606 € 27,402
Year 10€ 0
3.62%1.50%
Market Value
€ 44,254
Year 4
Year 6
€ 2,363
€ 10,101
Year 11€ 44,940
€ 26,590Year 9
GroundManagementTax
Maintanance
€ 9,613
CostsCosts
€ 40,824
Year 1Year 2
€ 38,920€ 39,465
€ 26,169
€ 41,528 € 24,952€ 25,354
Year 5
€ 10,715
11.9%
0 €€ 2,221
€ 86,25812.0%11.8%
0.29%
0 €
€ 796€ 2,329
€ 0
€ 531€ 85,795
€ 80,94414.6%
0 €
11.9%
€ 84,383
Year after 2021
€ 79,838
abc
€ 8,266 € 89,43312.0%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
11.5%
12.5%13.3%
12.2%11.7% 11.9% 12.0%
14.6%
11.8% 12.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 3 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
5.25%
Market Value (rounded)
€ 440,710-€ 1,393
€ 0
-€ 6,282
-€ 85,795
Gross Capital Value (rounded)
€ 8,900,000€ 644,624
€ 1,205
Page 10 of 12
7.58%
€ 587,405
€ 7.62 Total
Total € 8,500,000
6.41%
In terms of risk, we considered the covenant strength as well as the lease duration for the existing contracts. As at 02.02.2011, the main tenant Handelshof SB-Warenhaus GmbH & Co. KG has good covenantstrength, which ensures a secure cash flow for the remainder of the lease term until at least 2027. Upon resale we took into account such facts as visibility, demographic factors, appearance, condition and buildingage, third party usability, competition and location. For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in ourvaluation. Other costs have remained unchanged and have been applied according to information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective grossrent.
€ 0
abc
Valuation Comment
€ 696,866 per m²
-7.50%
Regarding comparable rents, we have evidence of similar areas situated in comparable regions and locations. Furthermore, we have analysed comparable transactions. Please refer to the section "InvestmentComparables".We have been provided with updated information regarding necessary capital expenditures. All Capital expenditures for repairs in the first year as well as in the periods of year 2 to 5 and year 6 to 10are considered to be covered by the maintenance costs of € 5.50 /m² p.a. Upon resale we took into account such facts as visibility, demographic factors, appearance, condition and building age, third party usability,competition and location.
0
6.99%
Year 10 € 715,200€ 714,354
€ 0
€ 721,422Year 9
-€ 79,838
TIs and
-€ 77,446
Brack Capital Properties N.V.
€ 600,703 -€ 63,239
-€ 68,925€ 0
€ 523,016
€ 593,578 € 0 € 593,578
Income
-€ 1,316
€ 0-€ 14,716 € 442,738
€ 554,907
Net
31.03.2013
6.90%Commissions Cash FlowCapital
€ 570,634€ 494,725€ 553,554
Year 6Year 7
-€ 96,003
€ 594,683
-€ 73,991Vacancy
Year 5
€ 708,452 € 612,449Year 8
Year 4
Year 2-€ 54,494
Gross
€ 673,416
Market Value
Rental recoverable Operating
Grassingerstraße 16
€ 629,971
€ 592,472
8.20%per m²
€ 673,416
-€ 84,383-€ 89,433€ 0 -€ 16,037
Gross Value of Surplus Land
€ 9,474,444
€ 1,262
€ 8,908,058-€ 86,258 € 0€ 725,783
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 8,908,058
€ 0Total Cashflow (incl. Terminal Value @ 6.75 %)
per m²/month
€ 639,525
€ 412,471
€ 0
€ 0 € 0
Expenditures€ 0
-€ 80,010 € 520,693
Costs
€ 373,857
€ 629,405
Abatements
€ 544,322
-€ 1,930
-€ 80,944€ 438,054
€ 0€ 0 € 592,472
€ 624,370
Year 3 € 655,197
€ 618,762€ 355,208-€ 4,587
-€ 78,733
€ 385,128
€ 621,768
Revenue€ 644,625
Turnover
Germany
€ 544,322
Revenue
€ 655,340 € 0
€ 0 € 673,416
Rent
€ 0
€ 644,625-€ 33,572
€ 0 € 0Year 1
€ 657,104
€ 673,416
Year 11 € 725,783
€ 673,416
€ 8.23
€ 0-€ 16,218
€ 725,758 -€ 10,558 € 0
€ 640,886€ 0
€ 0
€ 329,011
Yield Overview
€ 570,634
€ 562,582-€ 78,304
€ 673,416
83043 Bad Aibling
Cash Flow
Non-Total
€ 0-€ 5,962
€ 0
€ 4,861,572
-€ 7,068 € 0-€ 8,713
Present
€ 265,644
€ 436,178
-€ 1,014
Leasing
31.01.2011
Matrix Portfolio
Value @
6.4%
6.1%5.8%
6.3%
6.7% 6.7% 6.7%
5.9%
7.1% 7.1%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
€ .0
€ 100000.0
€ 200000.0
€ 300000.0
€ 400000.0
€ 500000.0
€ 600000.0
€ 700000.0
€ 800000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 3 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Grassingerstraße 16
31.01.2011
abcPage 11 of 12
View of parking lot and retail park
Internal view of entrance area of Kaufland
Matrix Portfolio
Internal view of sales area of Kaufland
83043 Bad Aibling
Photos
View of vacant area
View of bakery in entrance area to Kaufland
Germany Brack Capital Properties N.V.
31.03.2013
Internal view of sales area of Kaufland
(Copy)
Property address Property no. 3 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
Self-Service Department Store 8,000 m²DrugstoreDrugstore
831 m²
467 m²Shoe store531 m²
0 m²525 m²Discount Fashion
dm-drogerie markt Landsberg am LechTreuchtlingen
Bad Kissingen0
Deichmann
0KiK
Rossmann
0
Karlstadt
0
Similar purchasing power
€ 0
€ 9.78 /m²€ 4,651
€ 0.00 /m²
Total Rent p.m.
€ 5,119 € 9.75 /m² Similar purchasing power€ 9.96 /m²
Similar purchasing powerSimilar purchasing power
€ 5,193
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Other federal state; slightly lower purchasing power€ 7.75 /m²
€ 62,000 € 7.75 /m²€ 6,440
€ 7.41 /m²€ 7,410
CommentSlightly lower purchasing power
Rent p. sqm€ 71,114 € 6.57 /m²
Other federal state
83043 Bad Aibling
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
10,824 m²
Leasing Market
Real
Tenant Property TypeSelf-Service Department StoreRealSelf-Service Department Store
31.03.2013Grassingerstraße 16
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
FreitalKaufland
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
1,000 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
ZschornewitzAmberg
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
31.01.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
Property address Property no. 4 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 2 16 to 25 years Macrolocation 3 Average location and catchment areaLettable Area 3 Between 10,000 and 12,500 m² Microlocation 3 Average micro locationProperty condition 3 Average building condition Commercial activity 3 Limited commercial activity nearbyGeneral impression 3 Average general impression Competition 3 Average competition level
Investment Quality
WALT 3 WALT three to seven years Investment market 3 Average property marketOver- / underrent 3 Rack rented (-5% to 5%) Investment volume 4 Good lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 12.47
Page 1 of 12 abc
SWOT Analysis
Building almost 20 years old
31.03.2013
Brack Capital Properties N.V.
Key Figures
Obere Stegwiesen 10
n.a.
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
6.89%
Discount Rate
7.02%
excluding capital
expenditures6.75%
6.96%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
6.6 years
0
Sufficient parking spaces
Good tenant mix
Good connections to the major roads B 465 and L 267
Market rental value € 1,275,518
€ 9.16
1994
Weighted average lease term
88400 Biberach
Property Summary
Retail Park
Germany
28.01.2011
Property type
Current vacancy rate
Handelshof SB Warenhaus GmbH & Co. KG
10,769 m²Total parking units
0.4%
Main tenant
Total lettable area606 units
0.2%
€ 1,265,410
€ 1,183,256
€ 9.79Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
Long remaining lease term of the anchor tenant
0
Increasing maintenance required due to the building age Finding new strong and attractive tenants Drop out of tenants before expiry of the contracts
0
0
€ 9.87 / m² / p.m.€ 16,200,000
7.10%
The property is a one-storey retail building with parking facilities on the roof. The petrol station and some undeveloped areas are located on separate plots. The ground level of the retail building is occupied byseveral retail tenants.The main tenant is Handelshof. The main entrances are accessible from the parking areas and located on the south side of the building. Another entrance to the retail areas is on the roofbeside the parking facilities. Access to the parking areas on the roof is made possible via a ramp along the west facade. The property can be easily reached from Obere Stegwiesen. Structurally, the buildingconsists of a steel-beton construction. The main entrance is equipped with glazed elements and the entrance is provided by automatic sliding doors.
0
6.83%
Market Rental Value
12.57
€ 1,275,518 p.a.
Limited third party usability of the large-scale retail area without refurbishmentWeaknesses
Matrix Portfolio
0
€ 1,476 per m²
Extension of the lease contracts of the smaller tenants
Prolognation of the lease contract after expiry
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 82,154
Year of refurbishment
Property Description
0
€ 0.64
00
(Copy)
Property address Property no. 4 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
133.48
Biberach has a train station, which connects Biberach to the cities of Stuttgart and Munich via regionaltrains. The nearest airport offering connections to national and international destinations isFriedrichshafen, located approx. 67 km from the city centre of Biberach an der Riß. Furthermore, theStuttgart Airport is located approx. 136 km away and the Munich Airport is situated approx. 151 kmaway. Biberach an der Riß is a strong business location. The city has both known and globally-operated largecorporations, as well as many mid-size industrial and trading companies. Well-known companies inBiberach an der Riß are Liebherr, Boehringer Ingelheim, Handtmann, EnBW and KaVo. Furthermore,Biberach is also known for its university, Biberach University of Applied Sciences.
Micro Location
Biberach an der Riß is located in the south-east of the federal state Baden-Wurttemberg. The closestmajor cities are Memmingen (approx. 43 km south-east; 41,085 inhabitants) and Ulm (approx. 47 kmnorth-east; 122,000 inhabitants).The closest motorway is the A7, connecting to Flensburg (near the Danish border) in the north and toFüssen (close to the Austrian border) in the south, can be reached in a distance of approx. 33 km.Furthermore, the A8, connecting to Munich and farther on, Austria in the south-east and to Perl near theFrench border in the north-west, can be reached in a distance of approx. 47 km.
0
Location
Brack Capital Properties N.V.
31.03.2013
88400 Biberach 28.01.2011
Biberach (Rural District)
Germany
Baden-Wurttemberg
Macroeconomic Indicators
Federal StateDistrict
4.2%
4,164
Biberach Macro Location
5.0
Micro Location
300
The property is located in the north-east of the city and is less than 4 km from Biberach city centre. Theproperty itself is located on a side road near the B 465, L 251 and L 267; it is bordered by industrial andtrading companies.
Local Tax Information
1.1%
106.68109.26
2.9%
784
2.9%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
32,360
88400
448134
10,744,921189,523
Biberach
0.8%
15,040
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Obere Stegwiesen 10
City
(Copy)
Property address Property no. 4 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Extract from the land register dated 03.12.2010
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Obere Stegwiesen 10 31.03.2013
28.01.2011
Germany
No Suspicion
According to information from the local planning authority, a development plan exists, entitled "ObereStegwiese 332" and dated 11.11.1995, with the following regulations: the subject site is located inspecial zone ("Sondergebiet"). The plot ratio (Geschossflächenzahl, GFZ) is 2.4 and the site coverageratio (Grundflächenzahl, GRZ) is 0.8.
Section 2 (Restrictions)
TPL Biberach S.á.r.l., Luxembourg
Land Register
12876 3003/2, 3002, 3002/1
Owner
n.a.
Site Information
Site area 29,632 m²thereof surplus land
NoGround lease
Site layout
Site Plan
Surplus land value (net) € 56 /sqm
Source: Cadastral plan on a 1 to 2500 scale, dated 29.12.2010
Matrix Portfolio
88400 Biberach
SO (special zone)
n.a.
SO 3849, SO 3849 (VN
2008/71), SO 3849 (VN 2008/71)
Sheet Plot Parcel
2.4
Tenure
Site servicing
Ground lease expiry€ 313,312
5,588 m²
0,8
Town Planning
Fully serviced
Building encumbrances Yes
3003/2: trapezoidal, 3002: trinagular, 3002/1: square
The site consists of three separate pl. 3003/2, 3002 and 3002/1: all have an even topogr. It can beaccessed fr. the western side by foot or fr. the eastern side by car. According to the Environmental DueDiligence report, dated July 2007, the site is not registered in the register of contaminated sites.According to the land charges register of Biberach (page 2500 nr.1) one building encumbrance existsreg. t. limited sales areas (max. 9500m²) a. t. product ranges. Furthermore, areas for admin. a. parkingspaces must be built. For purposes of this valuation, we assume that the building encumbrances haveno effect on t. valuation. For t. purposes of this valuation, we have assumed that t. subject property isfree of any soil or building conta. For purpose of this valuation, we assumed t. land value pursuant to thecommittee of experts of Biberach.
2 easements. 1. for t. owner o. t. prop. parc. 49 Bahnhofstr. 2 a. parc. 55 Bahnhofstr. 1 with 49,50a (reg. t. rig. o. water pipe). 2. i. favr. o. t. owner o. t. parc. 775, Eisenbahn EB 1 a. parcel 2997, 2998, 2999, 3000, 3001, 3025, 3026, 3027, 3028 a. 3029 (reg. t. rig. o. wayleave). Limited personal easements. 1. (reg. o. t. clamping station, power line a. access) in favr. o. t. Energie-Versorgung Schwaben AG, 2. (reg. o. t. retain a. operate o. a hypermar.) i. favr. o. Kaufland Dienstl. GmbH Co. KG Neckarsulm. Rig. o. acquisition i. favr. o. alb-elektric OHG located i. Biberach. Restrictive covenant, 1.i. favour of t. particular owner for t. parcel 3003/2, 2. favour o. Kaufland Dienstl. GmbH Co. KG Neckarsulm (reg. t. durable omission reg. operate o. f. exa. discoun., supermar. o. eating house)
Brack Capital Properties N.V.
Land charges in the total amount of € 19,584,384 in favour of Bank of Scotland (branch Frankfurt)
Local Court of Biberach an der Riß, land register of Biberach an der Riß
abcPage 3 of 12
(Copy)
Property address Property no. 4 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
133.48
2.9%
abc
Population forecast for the district (2007 - 2025)
88400 Biberach
Name88400 Biberach, Sandgrabenstr. 52
Competitor Overview
Competitor Map
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
1.90 km2,965 m²Hypermarket
15,437
Medium
00
Medium1.50km
Inhabitants in secondary catchment area
Retail Centrality Index (District)
Inhabitants per hypermarket in secondary catchment area
25,739
15,040
Marktkauf
77,216 Inhabitants per hypermarket in tertiary catchment area
88400 Biberach, Hubertus Liebrecht-Str. 44Obi DIY n.a.0
6,628
109.26
46,311
00
0
Inhabitants in primary catchment area 2,209
0
Competiton Indicators
Obere Stegwiesen 10
28.01.2011
Germany Brack Capital Properties N.V.
31.03.2013
00
0
0
0
0
Matrix Portfolio
(Copy)
Property address Property no. 4 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
28.01.2011
31.03.2013
Matrix Portfolio
Turnover analysis
This competitor is a retail park located in the north-east of Biberach. The main tenant is OBI. Other tenants for example are Lidl, a drinks cash-and-carry and Euronics. The retail park "Biber Center" is well located directly on the main road L 267. The property is a serious competitor.
Main competitors
88400 Biberach
Obere Stegwiesen 10
While the Kaufland is primarily reachable by car, the competitor can also be reached by foot from the adjacent residential area. The Marktkauf probably has similar construction date as the valued property and offers a similar assortment. The competitor does not offer as many parking facilities as the valued property. The valuation property offers a wide range of products due to the various tenants, while the competitor has just some minor tenants like a bakery and a hairdresser. Even though the properties may attract different customers and have slightly different primary catchment areas, the catchment areas strongly overlap and two hypermarket stores for a city of only 32,000 inhabitants can be problematic. Overall, it can be said that the competition level in Biberach is medium to high, especially due to the existence of a similar Marktkauf nearby.
The rents in functional retail agglomerations are linked to turnover. The percentage rate that a retail tenant can use for rental payments depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective branch. The productivity varies between approx. € 1,000/m² and up to more than € 10,000/m². Kaufland is represents a very strong anchor, we believe that there will always be demand for such ancillary tenants. We have not been provided with any turnover figures for Kaufland. For Kaufland, we have also been provided with turnover figures. We have analysed the figures and have found the area productivity of Kaufland to be in a healthy range. With a turnover-to-rent ratio of less than 2% it lies below the range of 2% to 4%, which is acceptable for a self-service department store. Hence, we believe that a higher market rent is achievable after the end of the lease contract. Please also refer to the rent/turnover analysis on page 8.
abc
Competition Comment
The catchment area can be differentiated into primary (0 – 5 min driving distance), secondary (5 – 10 min) and tertiary (10 – 15 min) catchment areas. Approximately 6,630 inhabitants live in the primary catchment area. While the density of hypermarkets is relatively high in the primary catchment area, the competition eases in the secondary and tertiary catchment area. Even though there are several discounters and small-sized supermarkets located in Biberach, it can be said that these present only indirect competition to the property. Kaufland offers a very deep and broad product range with more than 50,000 products, while discounter and supermarkets offer a limited product range with only 7,000 to 11,000 (supermarkets) or 400-2,500 (discounters) articles. Therefore, these retailing forms address different customers or customer needs. While supermarkets and discounters cater to the daily needs of customers, Kaufland offers a larger variety of products that are bought on a non-daily basis. There are two direct competitors within 2 km.
The first competitor, a retail park called “Biber Center” is located in a distance of 1.5 km directly on the main road L 267. The location of this centre compared to our centre is better, as it is can be accessed directly from the L 267 and is therefore very visible. The Biber Center seems to be newer and has a good mix of tenants. The main tenant is an OBI market; other tenants include Lidl, a drinks cash-and-carry, Burger King and Euronics. The Biber Center has no supermarket, just a Lidl discounter, which offers another product range. In addition, the significant difference in size and product range also differentiates the properties, especially the DIY stores. The OBI market offers a wider range and is more upscale than the discount DIY at the subject property. Therefore, it can be said that the Biber Center represents only medium competition. Another direct competitor is Marktkauf, which is 1.9 km away. The Marktkauf is directly located on the main road L 267 and is very visible. However, it can not be directly accessed from the main road; instead, it is necessary to drive first through a residential area to reach the store.
0
0
The property in Biberach is located in the direct vicinity of several serious competitors. The property is currently used for retail use; regarding third-party use, retail is the best option, because of the structural conditions like the very good parking facilities, the allocation and the equipment of the areas of the value property. The strengths of the property include that is almost fully let, the well-known status of the main tenant, the length of the lease contract of the main tenant and the very good parking facilities. In contrast, some weaknesses include the limited third-party usability, the limited visibility and the secluded location as a whole. The leasing capacity is for this property medium because of the building age and the existing density of competitors.
Germany Brack Capital Properties N.V.
This competitor is a medium-sized Marktkauf. The location of Marktkauf is very good. It is located between the main road, L 267, and a residential area. The Marktkauf is a serious competitor.
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 4 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
7 Cetin
10.20
€ 10,863
Other Units10 FOTOFIX Schnellphotoautomaten GmbH
11 Deutsche Plakat-Werbung GmbH & Co. KG
Let
Page 6 of 12
M GT I PM
05.04.2015
3
Other Units
5 Yilmaz
3 Vacant
47
38.71
9.50
Retail 57.92
0.00
2 Marktkauf Autonom BM Vermietungs GmbH & Co. KG Retail
pays VAT
30.06.2019
75%
75%
Start
31.03.2013Obere Stegwiesen 10
Tenant
Matrix Portfolio
28.01.2011
Status m² / unitLet
TenantLeaseArea
Let
Vacant
03.11.2019Yes
01.07.1999
Rent / m² RenewalLeaseLetting
1 AWG Allgemeine Warenvertriebs GmbH Retail 1,144
/ month Probability
1
9 Handelshof SB Warenhaus GmbH & Co. KG Retail
Let
Other Units
8 Essanelle Hair Group AG
14 Mall Income
6 Bäckerei Mäschle OHG
03.11.1994
Yes
75%
Retail
Yes
€ 1,684
GT I
4 Walser + Schwaderer GmbH
Retail 42
4,150
Let
Retail
44
01.10.2004
5.50
€ 42,337
€ 0
Let
Let Yes
I
88400 Biberach
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Retail
€ 104,294
53
Let
Let
5,216Let
€ 70 30.11.2013
€ 7,117
30.06.2015
06.04.2005
02.08.2014
01.11.2004 31.10.2014
€ 133 03.08.2009
01.07.2007
75%
05.11.2016
75%
06.11.2006
M GT I PM
75%
GT I PM
Yes
Yes
M GT I PM
GT I PM
abc
100%
12,872 m²
0%
75%
31.08.2015
01.10.2007
01.09.2005
01.06.2007
01.08.2012
0%
30.09.2022
100%
0%
69.95
133.28
34.54
Yes
Yes
3.43
44.17
Yes
n.a.
GT I PM
31 € 1,914
€ 1,45142
61.42
30.09.2019
€ 2,722
GT I PM75%
Total
1Let
Let
€ 28,688
LetRetail
13 Schussenrieder Brauerei Other Units
M GT I 12 HPV Hanseatic Petrol Vertriebs GmbH Petrol Station 2,103 € 7,215 Yes
0%30.00 31.07.2017
0%1 € 71 00.01.190071.14 30.09.2022
€ 30
(Copy)
Property address Property no. 4 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
28.01.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis0
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 1,088
abc
0%
0 0 0 0%
0 0 0
0 12
0 0 00
50
75%
€ 50
100%
100%
10 75%0
0
12
0 0
€ 0
0%
0
0
5
3
5
0
0 0
12
75%
0
15 5
3 15
3
0
75%
0
3
5
75%
75%
3
0
75%
10
75%
3 10
5
75%
3
0€ 100 15
15 53
0 5
Total
13 Schussenrieder Brauerei
€ 100
€ 100
€ 0
€ 0
1
€ 100
0 14 Mall Income Other Units
Page 7 of 12
€ 106,29312,872 sqm
Term**
Matrix Portfolio
Re-letting
€ 1,050
€ 6,942
€ 44.17
1
1
€ 100
Retail
€ 0.00
€ 30
6 Bäckerei Mäschle OHG
€ 30.00
7 Cetin
Other Units
Other Units
Petrol Station
Retail
8 Essanelle Hair Group AG Retail
1,144
3 Vacant Retail
Retail
2 Marktkauf Autonom BM Vermietungs GmbH & Co. KG
1 AWG Allgemeine Warenvertriebs GmbH
42
9 Handelshof SB Warenhaus GmbH & Co. KG
12 HPV Hanseatic Petrol Vertriebs GmbH
10 FOTOFIX Schnellphotoautomaten GmbH
11 Deutsche Plakat-Werbung GmbH & Co. KG
Other Units
4,150 € 9.50
Market
12
12 0
0
3
15 0
Rent /month€ 10,863
€ 50.00
€ 1,057
€ 2,350
31
€ 9.50
42
Rent
€ 25.00
€ 0 0
€ 0
€ 1,559
€ 41,727
€ 133
€ 69.95
€ 0.00
€ 8.00
2,103
4 Walser + Schwaderer GmbH Retail 47
5 Yilmaz 44 Retail
53
3
€ 39,425
0
€ 0
€ 50.00
€ 25.00
€ 70
0
0
€ 130.00
€ 25.00
0
Market
€ 100
88400 Biberach
Retail
sqm/unitTenant Name
Retail € 50
€ 50
Obere Stegwiesen 10
Area Category
5,216
€ 0
Germany Brack Capital Properties N.V.
0
0
15
31.03.2013
(Copy)
Property address Property no. 4 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
7,000
Usual market % - levels6,500
Market rent
6,000 Contractual Rent
5,500 Rents %
Contractual5,000
Market
4,500 4% of turnover
3% of turnover4,000
2% of turnover
3,500 Turnover potential(net)
Sales Area3,000
Total Areain € / m² p.a.
based on sales area
5AA2284
This report is only to be read in conjunctionwith the valuation report provided.
0.00
0.00
9.87
0.000.000.00
1,270,407
0.00
0.00%
Rented€/year
00
0.0%
0.0%
0.00
€/month €/year0
0.00
10,727
86,5740
0
0
0
0
0
0.00%0.00%0.00%
0.00%%
Vacancy Rate
0
10,727
88400 Biberach
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
-8.4%1,272,7280.00
0
010,769
Market
01,166,308
€/month
DIY
Office
0
0
0
0106,061
0.39%
9.85
0
0€/m²/month
2,716External parking
Rent
606
ContractualRent
€/year
0.00%7
0.00%
0.00%0
420
0.00%
Matrix Portfolio
Obere Stegwiesen 10 31.03.2013
2,103
00Commercial
0
Contractual
0
00
Potential
Area Vacant
606
€/m²/monthRent
0.00%606
Rent
00.00%
Brack Capital Properties N.V.
Use Category
Germany
28.01.2011
Capital indicator
€ 560,000 (single) € 39,000,000 (total)
Assessment of Kaufland market rent
Comment
WALTPayment Index 75
20,089,294 €
The main tenant is a corporation belonging to the Kaufland Group, which in turn belongs to the Lidl &Schwarz Group, one of the biggest grocer groups in Europe. Kaufland is the self-service departmentstore division of Lidl & Schwarz with more than 500 locations across Europe. Kaufland’s core businessarea is food retailing with branded goods and own-brands specially produced for Kaufland. According toDun & Bradstreet (D&B) rating as at 02.02.2011 Handelshof SB-Warenhaus GmbH & Co. KG has abelow-average credit risk. The risk of insolvency (D&B Score) within the next 12 months compared withother German companies is assessed to be low, i.e. 84% of businesses on the German database havethe same or higher risk of failure.
Rent p.a.
4,150 m²
Self-service department stores usually can afford to pay a rent in the range of 2% to 4% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 4,000 to € 6,000 per m²sales area. The two graphics above indicate, how the contract rent of the main tenant Kaufland as well as the assumed market rental level, can be assessed on the basis of usual market ranges. This analysis isbased on the turnover potential figures prepared by Trade Dimension.
2.5%
2.4%
10.20
9.50
abc
Risk indicatorScore
Page 8 of 12
Credit limit
0
528.3%-0.4%
2,789232106,293
33.211,275,518
0.0%0.0%0
0.0%
0
0
0
0.0%00.0%
0
16.14
12.10
0
40%
0
Handelshof SB Warenhaus GmbH & Co. KG
6.2 years
~ 3,800 m²
0 00
Share of total income
Main tenant
€ 508,038
D&B Rating of Main Tenant
Tenant name
8.07
Storage7,215
0Petrol Station 3.43
0.00Internal parking 0.00
9.83208.63
0ResidentialCommercial
00
86,574 00
0 0.0%00
00
0
m²
0
Property Analysis
0 0.0%0.00 0
96,77600.00
9.02
Warehouse
Warehouse
Area Let
10,769
Other Units
042
Residential00
0
0
0.39%
Contractual
m²Area Analysis Lettable Area
2,103
1,161,311
Retail
0.00
Total areaPetrol Station
07
Income Analysis
Internal parking
Office
DIYRetail
Storage
105,45117,525
1,265,410
0 0
17,525
0
1,460
0.00
0.000.00
Other UnitsTotal area
External parking
Total parking
€ / m²
10.20
8.07
9.50
12.10
16.14
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
15.00
16.00
17.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
5,287
(Copy)
Property address Property no. 4 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The property is let to nine retail tenants and a petrol station. At the moment one retail unit of 42 m² is vacant. The WALT of the property amounts to 6.6 years. The property is currently rack rented. This figureincludes the turnover rents of the tenants Bäckerei Mäschle, Cetin, HPV Hanseatic, Walser and Yilmaz, which we belive to be sustainable until the end of the respective lease contracts. The property is nearly let atmarket rental level. The lease contract of the main tenant expires in 2022. Kaufland’s rent is indexed and will be adapted by 50% of the CPI change, whenever the change exceeds 10 percent in relation to the CPIbasis. Indexation started on 01.04.2009. The majority of the tenants pay all costs (including ground tax, insurance costs and management costs) except for maintenance costs for structural repairs.
0 €
0 €
€ 4,339€ 11,989
€ 4,408
Breakdown of Non-Recoverable Costs
€ 0
7.0%
3.83%
% of Gross
€ 10.00 /m²/p.a.
€ 07.0%
0 €
€ 4,204 0 €0 €€ 4,137
0 €€ 4,067
6.5%€ 425
€ 11,218 6.9%6.6%€ 267
€ 10,885
€ 293
0 €
€ 0.00 /m²
Management costs
Other non-recoverable costs
€ 7.63 /m²
€ 18,954€ 3,996
€ 11,038
3.80%
Total non-recoverable expenses
Maintenance costs € 48,460
€ 84,671€ 83,992€ 83,493
€ 110
€ 1.76 /m²
% of Gross
0.00%
€ 18,981
€ 19,133
€ 4.50 /m² € 48,460Contract Rent
per year
Lease Contract Commentary
€ 4.50 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 7.10%
6.75%
Brack Capital Properties N.V.
Obere Stegwiesen 10
Assumptions
The rest can be apportioned to the tenants in accordance with the German Regulation on Operating Costs. Furthermore, some rental increases due to indexations have taken place.
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yields profile is aligned with the market/other transactions. We have taken intoaccount such facts as the short remaining lease term and the lasting condition of the subject property.
28.01.201188400 Biberach
Germany
31.03.2013
€ 0.36 /m²€ 0
0.31%€ 10,849€ 1.01 /m²
€ 0.00 /m²€ 3,864
per year
Year 8
€ 11,418€ 18,377
€ 54,411€ 53,551
€ 18,608
€ 50,108Year 3
€ 18,564
% of Total
Year 7
€ 3,877€ 18,976
€ 86,241
€ 82,785
€ 0
Total
€ 52,716 € 18,608
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 06.45%
€ 0.36 /m² € 3,864
Insurance
Other non-recoverable costs
0.85%
Market Rent
0.00%6.49%
1.50%€ 1.78 /m²€ 1.01 /m² € 10,849
€ 82,154
per year
€ 7.64 /m²
Total Non-recoverable Costs
€ 82,305
€ 3,931
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 18,531 € 12,569 0 €€ 19,200€ 56,975 € 12,755
Year 10€ 0
0.86%1.50%
Market Value
€ 55,286
Year 4
Year 6
€ 4,543
€ 15,452
Year 11€ 56,142
€ 12,377Year 9
GroundManagementTax
Maintanance
€ 18,075
CostsCosts
€ 51,001
Year 1Year 2
€ 48,622€ 49,303
€ 12,181
€ 51,881 € 11,615€ 11,802
Year 5
€ 18,871
7.3%
0 €€ 4,270
€ 93,4737.8%7.2%
0.30%
0 €
€ 5,017€ 4,477
€ 14,951
€ 0€ 96,736
€ 100,2137.2%
0 €
7.0%
€ 90,942
Year after 2021
€ 87,330
abc
€ 0 € 89,4959.7%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
6.5% 6.6% 6.9% 7.0% 7.0% 7.0%
9.7%
7.2% 7.2%7.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 4 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
6.50%
Market Value (rounded)
€ 884,079€ 0
-€ 5,438
€ 0
-€ 96,736
Gross Capital Value (rounded)
€ 17,300,000€ 1,265,410
€ 1,476
Page 10 of 12
7.96%
€ 1,152,185
€ 9.79 Total
Total € 16,200,000
6.96%
In terms of risk, we considered the covenant strength of the tenants as well as the lease duration of the existing contracts.As at 02.02.2011 the main tenant Handelshof SB-Warenhaus GmbH & Co. KG has goodcovenant strength, which ensures a secure cash flow for the remainder of the lease term until at least 2022. In terms of a resale, we took into account such facts as visibility, demographic factors, appearance,condition and building age, third-party usability, competition situation and location. For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in our valuation. Other costs have remained unchangedand have been applied according to information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective gross rent. We have been provided with updatedinformation regarding necessary capital expenditures. As the repair work has been finalized, the relevant Capital expenditures are no longer taken into account.
€ 0
abc
Valuation Comment
€ 1,275,518 per m²
0.20%
The main tenant, Marktkauf Holding GmbH, has good covenant strength and is a subsidiary of Edeka Group. However, the premises are occupied by a subsidiary of REWE (B1). It could not be clearified whetherthe premises are sublet with consent of the landlord or were taken over by REWE. For the purpose of this valuation, we assumed that the lease with Marktkauf is still in place and was sublet to REWE with consentof the landlord. The restrictions of Division II, have no effect on the value of the property, except for the land value of parcel 3002/1. For this land value, we have assumed a lower value because of the restrictiveeasement. Furthermore, for the purpose of this valuation, we assumed the land value pursuant to the committee of experts in Biberach. Regarding comparable rents we have had recourse to evidence of similarareas situated in the comparable regions and locations.
Furthermore, we have analysed comparable transactions. Please refer to the section "Investment Comparables".
7.02%
Year 10 € 1,235,378€ 1,258,046
€ 0
€ 1,258,046Year 9
-€ 87,330
TIs and
-€ 83,493
Brack Capital Properties N.V.
€ 1,225,162 -€ 2,200
€ 0-€ 75,737
€ 1,148,087
€ 1,153,205 € 0 € 1,153,205
Income
-€ 1,251
-€ 5,059-€ 1,673 € 1,137,297
€ 1,120,361
Net
31.03.2013
7.10%Commissions Cash FlowCapital
€ 1,182,253€ 1,058,547€ 1,145,892
Year 6Year 7
€ 0
€ 1,154,267
-€ 82,785Vacancy
Year 5
€ 1,237,582 € 1,237,582Year 8
Year 4
Year 2-€ 8,887
Gross
€ 1,240,508
Market Value
Rental recoverable Operating
Obere Stegwiesen 10
€ 1,167,104
€ 805,428
8.02%per m²
€ 1,030,163
-€ 90,942-€ 89,495€ 0 € 0
Gross Value of Surplus Land
€ 17,578,533
€ 1,579
€ 16,979,306-€ 93,473 € 0€ 1,280,025
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 17,312,983
€ 0Total Cashflow (incl. Terminal Value @ 6.75 %)
per m²/month
€ 1,186,552
€ 793,219
€ 0
€ 0 € 0
Expenditures€ 0
-€ 83,992 € 1,141,170
Costs
€ 961,476
€ 1,138,642
Abatements
€ 1,169,579
-€ 10,005
-€ 100,213€ 1,148,087
-€ 48,785€ 0 € 929,950
€ 1,167,104
Year 3 € 1,234,049
€ 1,098,535€ 653,461€ 0
-€ 86,241
€ 518,058
€ 1,263,569
Revenue€ 1,265,038
Turnover
Germany
€ 1,180,076
Revenue
€ 1,276,470 € 0
€ 0 € 1,240,508
Rent
€ 0
€ 1,277,843-€ 12,901-€ 12,805 € 0Year 1
€ 1,211,683
€ 1,233,692
Year 11 € 1,280,025
€ 1,240,535
€ 9.87
€ 0-€ 6,651
€ 1,284,079 -€ 48,701 € 0
€ 1,205,032€ 0
-€ 203,529
€ 574,464
Yield Overview
€ 1,182,253
€ 1,120,361-€ 84,671
€ 1,240,535
88400 Biberach
Cash Flow
Non-Total
€ 0-€ 831
€ 333,677
€ 8,852,948
€ 0 € 0-€ 30,102
Present
€ 688,426
€ 848,736
€ 0
Leasing
28.01.2011
Matrix Portfolio
Value @
6.8%
6.8%6.6% 6.5%
6.7% 6.7%
5.4%
6.6% 6.7% 6.6%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
€ .0
€ 200000.0
€ 400000.0
€ 600000.0
€ 800000.0
€ 1000000.0
€ 1200000.0
€ 1400000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 4 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Obere Stegwiesen 10
28.01.2011
abcPage 11 of 12
Internal view of the Kaufland
Western front view of the property
Matrix Portfolio
Access to the parking areas on the roof
88400 Biberach
Photos
Internal view of the mall
View of the DIY market
Germany Brack Capital Properties N.V.
31.03.2013
View of the petrol station
(Copy)
Property address Property no. 4 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
DIY 5,278 m²Self-Service Department StoreSelf-Service Department Store
4,165 m²
4,425 m²Self-Service Department Store8,000 m²
0 m²5,850 m²Self-Service Department Store
Kaufland MoosburgFreital
Schwäbisch Hall0
Kaufland
0Kaufland
Kaufland
0
Hameln
0
Worse purchasing power
€ 0
€ 7.75 /m²€ 29,692
€ 0.00 /m²
Total Rent p.m.
€ 55,283 € 9.45 /m² Similar purchasing power€ 6.71 /m²
Other federal state; slightly lower purchasing powerBetter purchasing power
€ 62,000
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Worse purchasing power€ 10.10 /m²
€ 26,284 € 4.98 /m²€ 42,067
€ 4.72 /m²€ 28,320
CommentOther federal state, slightly lower purchasing power
Rent p. sqm€ 31,023 € 5.79 /m²
Other federal state
88400 Biberach
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
5,358 m²
Leasing Market
OBI AG
Tenant Property TypeDIYOBI AGDIY
31.03.2013Obere Stegwiesen 10
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
HillesheimPraktiker
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
6,000 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
Ottendorf-OttkrillaRudolstadt
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
28.01.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
Property address Property no. 5 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 3 11 to 15 years Macrolocation 3 Average location and catchment areaLettable Area 2 Between 7,500 and 10,000 m² Microlocation 4 Good micro locationProperty condition 4 Good building condition Commercial activity 4 Average commercial activity nearbyGeneral impression 4 Good general impression Competition 4 Low competition level
Investment Quality
WALT 3 WALT three to seven years Investment market 3 Average property marketOver- / underrent 4 Slightly underrented (-5% to -15%) Investment volume 4 Good lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 12.43
Page 1 of 12 abc
SWOT Analysis
0
31.03.2013
Brack Capital Properties N.V.
Key Figures
Heidenerstraße 32
n.a.
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
6.97%
Discount Rate
6.97%
excluding capital
expenditures6.50%
6.25%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
6.8 years
Strong anchor tenant Kaufland with long term lease contract
Very good accessibility - sufficient parking spaces
City centre location
Modern retail park with good tenant mix
Market rental value € 1,206,904
€ 8.75
2003
Weighted average lease term
46325 Borken
Property Summary
Retail Park
Germany
28.01.2011
Property type
Current vacancy rate
ALPHA Warenhandel GmbH & Co. KG
9,524 m²Total parking units
0.0%
Main tenant
Total lettable area400 units
-9.8%
€ 1,089,001
€ 999,625
€ 9.53Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
All retail areas on ground floor level
0
Termination of short term lease contracts with subsequent void periodsPositive future population growth prospects for Borken 0
0
0
€ 10.56 / m² / p.m.€ 15,000,000
6.90%
The property (completion date 2003) consists of a single-storey L-shaped retail building; on its ground floor, it has several retail units as well as parking areas and substructures on the roof. Main access is providedfrom the south side of the building alongside a roofed passageway in front of the building. Approximately 400 parking spaces (470 spaces acc. to the building permit) are located on the inner courtyard to the southof the building as well as on the roof. Access to the parking facilities on the roof is provided via a ramp along the west facade. The delivery zone is located at the northern side of the building complex. The mainentrance provides access to the large Kaufland unit (approx. 5,500 m²), two medium sized units (Kramer Schuhe 675m² and C&A 350 m²) and a shopping mall with small shops (between 20 - 80 m²). Threeadditional shopping units can directly be accessed from outside the building. An escalator connects the ground floor with the parking deck on the roof.
Extension of lease contracts with short remaining term
6.25%
Market Rental Value
13.77
€ 1,206,904 p.a.
No further extension possibleWeaknesses
Matrix Portfolio
0
€ 1,575 per m²
Limited number of competitors in Borken
Low unemployment rate
The structure of the building consists of concrete columns in regular grids, pre-cast concrete beams and concrete floor slab. Staircases are of pre-cast concrete elements. The flat roof is constructed as a parkingarea with prefabricated slabs on layer insulation. The facades to the east and to the south are constructed as rear ventilated facades with a facing of exposed brickwork. The upper half of the porch is equipped witha cover of industrial glass. Partitions within the administration and staff areas are from plasterboard. Corridors are equipped with PVC flooring, painted walls and grid ceilings with external lights. The standard officeshows carpet flooring, painted walls and a suspended grid ceiling with external lights. The complex has a gas-powered heating system with ventilation systems, air heaters and standard heaters.
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 89,376
Year of refurbishment
Property Description
0
€ 0.78
0Underrent of Kaufland lease, however, difficult to realise potential as extension options are in place
(Copy)
Property address Property no. 5 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
107.65
The closest passenger airport, Düsseldorf International, can be reached in a distance of approx. 80 kmsouth or Münster-Osnabrück International in 80 km north. The economy of Borken (within the ruralregion Münsterland) is primarily characterised by small- and medium-sized companies active in varioussectors, as well as handcraft sector. Historically, the textile industry was – and still is – an importantfactor in the region. Borken also somewhat benefits from the strategic location between the Netherlands,Münster and the Ruhrgebiet. Thus, the region is also attractive for logistics companies and relatedservice providers.
Micro Location
Borken is situated in the federal state of North Rhine-Westphalia in the region of Münsterland close tothe Dutch border and has a population (city) of approx. 41,000. It is located about 30 km north of thelarge agglomeration area 'Ruhrgebiet', which has approx. 10 million inhabitants (nearby cities includeDuisburg, Oberhausen, Essen Gelsenkirchen and Dortmund). The A3 and A31 federal motorways canbe accessed within a distance of 5 - 10 km from Borken. Immediate access is possible to the B67 andB70 federal roads.
The city’s train station is linked to the regional railway network. The nearest station connected to the ICEhigh-speed train network is located in, for example, Duisburg about 40 km away.
0
Location
Brack Capital Properties N.V.
31.03.2013
46325 Borken 28.01.2011
Borken (Rural District)
Germany
North Rhine-Westphalia
Macroeconomic Indicators
Federal StateDistrict
8.4%
7,091
Borken Macro Location
5.0
Micro Location
445
The property is located on the boundary of the city centre of Borken on a highly frequented through-road, Heidener Strasse, and can directly be accessed from a traffic circle. The surrounding area ischaracterised by a mixture of retail, office, industrial and residential buildings. To the east, the buildingadjoins Heidener Strasse; to the north, an access road for fire fighting vehicles can be found; and to thewest, the complex is bordered by a public walkway open for pedestrians and bicycles.
Local Tax Information
1.5%
101.2198.49
2.7%
823
4.5%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
40,968
46325
268260
17,872,763369,107
Borken
-0.4%
17,293
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Heidenerstraße 32
City
(Copy)
Property address Property no. 5 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Extract from the land register dated 02.12.2010
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Heidenerstraße 32 31.03.2013
28.01.2011
Germany
Suspicion of contamination
According to information from the local planning authority, a legally binding development plan exists,entitled "Am Kuhn - No. BO58,2" and dated 31.05.1976, with the following regulations: the subject site isdesignated as core area - "MK - Kerngebiet". The maximum height of the buildings is limited to two fullstoreys - 60m above sea level. The permissible site coverage ratio amounts to 1.0.
Section 2 (Restrictions)
TPL Borken S.a.r.l., Luxemburg
Land Register
15495 472
Owner
n.a.
Site Information
Site area 17,337 m²thereof surplus land
NoGround lease
Site layout
Site Plan
Surplus land value (net) n.a.
Source: Cadastral plan on a 1 to 1,000 scale, dated 27.12.2010
Matrix Portfolio
46325 Borken
MK (core zone)
n.a.
007
Sheet Plot Parcel
n.a.
Tenure
Site servicing
Ground lease expiry€ 0
0 m²
1.0
Town Planning
Fully serviced
Building encumbrances No
Irregular
The site has an even topography and is accessible from the east, south and west (pedestrians only).According to the Environmental DD Report from Mace GmbH, dated July 2007, the risk of subsoil /ground water contamination is considered moderate to high. Land use risk for present use of the site,however, is low, if good operation practices can be observed. Furthermore, it is stated that theenvironmental setting risk is low to moderate with regards the surroundings of the site and high withregards to the aquifer and the brook. Overall, Mace estimates the environmental risk to e moderate tohigh. No cost estimates for potential decontamination measures were provided to us. For the purposesof this valuation, we have assumed that the subject property is free of any soil or building contamination.
Several limited personal easements (regarding wayleave and pipeline easements, use of parking areas, commercial limitation) in favour of the city of Borken
Several limited personal easements (regarding pipeline easements and operation of a electrical substation) in favour of the Stadtwerke Borken/Westf. GmbH, Borken
Limited personal easement to operate a hypermarket / self-service department store on the plot, including right of use for all technical installations and pipelines in favour of Kaufland Dienstleistungs GmbH & Co. KG, Neckarsulm.
Brack Capital Properties N.V.
Land charge in the total amount of € 16,103,535 in favour of Bank of Scotland, branch Frankfurt/Main, Germany
Local Court of Borken, land register of Borken
abcPage 3 of 12
(Copy)
Property address Property no. 5 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
107.65
2.7%
abc
Population forecast for the district (2007 - 2025)
46325 Borken
Name46325 Borken, Nordring 70-74
Competitor Overview
Competitor Map
Hypermarket
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
0.80 km1,990 m²Hypermarket
12,739
Medium to low
00
Medium to low1.10 km
Inhabitants in secondary catchment area
Retail Centrality Index (District)
Inhabitants per hypermarket in secondary catchment area
22,856
17,293
K+K Markt
68,568 Inhabitants per hypermarket in tertiary catchment area
46325 Borken, Otto-Hahn-Str. 8E-center Wilger0
46325 Borken, Boumannstr. 6E-center Wilger
0
Hypermarket 2,200 m²3,000 m² 1.20 km Medium to low
0.00 km m²
26,723
98.49
38,216
00
0
Inhabitants in primary catchment area 8,908
0
Competiton Indicators
Heidenerstraße 32
28.01.2011
Germany Brack Capital Properties N.V.
31.03.2013
00
0
0
0
0
Matrix Portfolio
(Copy)
Property address Property no. 5 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
28.01.2011
31.03.2013
Matrix Portfolio
Turnover analysis
This competitor is a K+K hypermarket with a sales area of 1,990 m² and some additional small ancillary shops, e.g. Ernsting's family (textile) or Ebbing (bakery). The building is situated approximately 800 m north-west of the Kaufland asset. Although the asset is highly visible and located on the main road, Nordring, this property appeared to be less frequented during the inspection.
Main competitors
46325 Borken
Heidenerstraße 32
The main competitors for the Kaufland store in Borken are the K+K Markt as well as two E-center Wilger hypermarkets, all within the primary catchment area. However, due to the smaller size, retail concept and partly weaker micro-location, the competition potential of these markets is fairly limited. No other large scale hypermarket is situated in a 15 minute driving distance. For the other retailers in the subject retail park such as textile and shoe shops, the retail area in the city centre of Borken (only in walking distance) can be regarded as the main competitor.
The rents in functional retail agglomerations are linked to turnover. The percentage rate that a retail tenant can use for rental payments depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective industry. The productivity varies between approx. € 1,000/m² up to more than € 10,000/m². For the shoe and clothing segment, the rent amounts to approx. 6.0 to 12.0% of the respective turnover – a substantial amount. For Kaufland, we have been provided with turnover figures. We have analysed the figures and have found the area productivity of Kaufland to be in a healthy range. With a turnover-to-rent ratio of less than 2% it lies below the range of 2% to 4%, which is acceptable for a self-service department store. Hence, we believe that a higher market rent is achievable after the end of the lease contract. Please also refer to the rent/turnover analysis on page 8.
abc
Competition Comment
The catchment area can be differentiated into primary (0 - 5min driving time); secondary (5 - 10min) and tertiary (10 - 15min) catchment areas. Approximately 26,723 inhabitants live in the primary catchment area. This results in approx. 8,900 inhabitants per large-scale hypermarket in the primary catchment area. The total catchment area (15 minute driving distance) amounts to approx. 133,500 inhabitants (i.e. 44,500 per large scale hypermarket).
Even though there are several discounters and small-scale supermarkets located nearby (4 in primary catchment area), it can be said that these represent only indirect competition for the property. Kaufland offers a very deep and broad product range with more than 50,000 products, while supermarkets and discounters generally offer a limited product range with only 7,000 to 11,000 (supermarkets) or 400-2,500 (discounters) items. Therefore, these retailing forms address different customers or customer needs. While supermarkets and discounters cater to the daily needs of customers, Kaufland offers a larger variety of products that are bought on a non-daily basis.
0
The anchor tenant, Kaufland, has a lease contract until 2022 with three options each for five years, bringing the earliest possible termination date for the landlord to 2037. On the basis of our projection of likely productivity per m² and turnovers, we have calculated the market rent at a level of € 7.75/m²/month (please refer to page 8). The tenant currently pays a contractual rent of € 5.47/m²/ month. Therefore, the retail unit is currently heavily under-rented. Due to the margins realizable and under the assumption of good turnover figures, we believe that Kaufland will remain in the property until 2037.In the unlikely case that Kaufland should vacate the premises, the property could be relet to other self-service department stores, which are currently not present in the Borken real estate market, such as real or Marktkauf. Reletting the unit as a DIY store would be difficult, because of the relatively small size of the lettable area and the parking spaces not being on ground level.
The subject property is a modern self-service department store with a small mall and some additional medium sized tenant units. As Kaufland is a strong customer magnet, we believe that it is possible to re-let the small retail units on the ground floor without longer void periods. The tenant mix shows a reasonable structure. Furthermore, the property offers sufficient parking spaces in a city centre location. The rental area of Kaufland itself can be regarded as relatively unproblematic. First of all, the location is suitable for the tenant. It can be reached by foot from the surrounding residential area as well as by car or public transport. The density of self-service department stores in the primary catchment area is low and there are no other direct competitors within 5 to 15 minutes distance. We believe that Kaufland will be able to compete with these other hypermarkets, especially because it can operate on a very low contractual rent for a long time.
Germany Brack Capital Properties N.V.
This competitor is an E-center Wilger hypermarket with a sales area of 3,000 m² and some additional small ancillary shops. The building is situated approximately 1.2 km to the north-west of the Kaufland asset. Upon inspection, this property was highly frequented. The property is slightly set back from the main road Nordring and accessible via Burloer/ Boumannstrasse, but has a modern, attractive appearance.
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 5 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
7 Sparkasse Westmünsterland
5.47
€ 6,471
Retail10 Nyguen - Nail Studio
11 Adler Mode GmbH
Let
Page 6 of 12
GT I PM
30.06.2013
1,602
Retail
5 Nguyen - Asian Food
3 Kramer Schuhe GmbH & Co. KG
30
29.63
80.42
Retail 24.86
13.83
2 ALPHA Warenhandel GmbH & Co. KG Retail
pays VAT
31.12.2018
30.09.2022
75%
75%
Start
75%
31.03.2013Heidenerstraße 32
Tenant
Matrix Portfolio
28.01.2011
Status m² / unitLet
TenantLeaseArea
Let
Let
07.10.2013Yes
01.10.2007
Yes
Rent / m² RenewalLeaseLetting
1 Büsch GmbH Retail 80
/ month Probability
36
9 Almaz Mode & Mehr Retail
Let
Retail
8 Takko Holding GmbH
14 Convenience Concept GmbH
6 Reisecenter alltours GmbH
08.10.2003
25.09.2003
Yes
GT I PM
75%
Retail
Yes
€ 1,867
4 PM Service GmbH
Retail 676
5,495
Let
Retail
63
01.11.2004
36.26
€ 30,068
€ 9,341
Let
Let Yes
GT I PM
46325 Borken
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Retail
€ 90,750
49
Let
Let
62Let
€ 690 30.10.2014
€ 653
30.09.2013
01.08.2010
30.11.2021
01.03.2004 31.08.2014
€ 13,735 01.12.2011
31.07.2013
02.08.2014
75%
01.10.2003
75%
75%
22.09.2023
75%
23.09.2003
GT I PM
75%
75%
100%
GT I PM
Yes
Yes
GT I PM
GT I PM
abc
GT I PM
100%
100%
100%
75%
9,524 m²
100%
75%
0%
75%
75%
30.11.2013
75%
15.08.2015
GT I PM31.10.2013
GT I PM
GT I PM31.12.2017
GT I PM31.12.2017
01.03.2013
28.10.2003
01.11.2011
01.02.2012
75%
28.02.2015
75%
75%Yes
19.17
13.22
27.99
Yes
Yes
12.92
8.57
Yes
Yes
GT I PM
621 € 7,803
€ 77128
12.57
21.10.2015
€ 744
GT I PM75%
Total
81Let
Let
€ 2,248
LetRetail
13 Friseur Klier GmbH Retail
15 Dogan
12 C&A Mode KG Retail 359 € 4,645 Yes
GT I PM33.63 31.01.2021
GT I PM36 € 1,070 Yes 08.10.200329.72 07.10.2015
€ 2,738
Retail 50 € 1,151 Yes 01.11.2005Let 23.01
16 Dogan Retail 46 € 1,006 Yes 27.02.2004Let 22.07
17 Ernsting´s family GmbH & Co. KG Retail 144 € 2,860 Yes 25.09.2003Let 19.84
18 Ernsting´s family GmbH & Co. KG Retail 35 € 400 Yes 15.09.2004Let 11.42
19 FOTOFIX Schnellphotoautomaten GmbH Other Units 1 € 84 Yes 01.06.2007Let 83.57
20 Deutsche Plakat-Werbung GmbH & Co. KG Other Units 2 € 88 Yes 03.08.2009Let 44.17
21 Kurzzeitmieter Other Units 1 € 1,104 Yes 01.11.2008Let 1103.74 30.09.2022
0%22 Mall Income Other Units 1 € 86 00.01.1900Let 85.51 30.09.2022
GT I PM23 Bott Retail 31 € 630 Yes 01.03.2011Let 20.13 28.02.2014
24 Le Thahn Ha Other Units 1 € 500 Yes 01.04.2011Let 500.00 31.03.2014
25 External Parking External parking 400 € 0 No 01.02.2010Let 0.00 30.09.2022
(Copy)
Property address Property no. 5 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
28.01.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis9
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 1,575
abc
0 0 5 100%0 0 25 External Parking External parking 400 € 0.00 € 0 € 0
0 0 1 100%0 0 24 Le Thahn Ha Other Units 1 € 500.00 € 500 € 0
€ 50 0 3 5 75%12 9
0 0 0%0 0
23 Bott Retail 31 € 25.00 € 783
Other Units 1 € 0.00 € 0 € 0 0
0 0 1 100%0 0
0 1 100%0 0
21 Kurzzeitmieter Other Units 1 € 0.00 € 0
100%0 0
20 Deutsche Plakat-Werbung GmbH & Co. KG Other Units 2 € 44.17 € 88 € 0 0
5
19 FOTOFIX Schnellphotoautomaten GmbH Other Units 1 € 83.57 € 84 0 0 1
€ 13.00 75%
0 3 5 75%12
0 3 12 12
€ 13.00 € 1,874 € 50
9 9
€ 50
12
75%
9 9 0 3 5 75%
0 3 5
75%
0 3 5 75%
0 3 5
0 12
0 3 512
50
75%
€ 50
75%
75%
5 75%9
0
9
9 9
€ 50
75%
3
0
5
3
5
9
0 9
9
75%
12
9 5
3 9
3
3
75%
0
3
5
75%
75%
3
0
75%
10
75%
3 5
5
75%
3
9€ 50 9
9 53
0 5
€ 50
€ 0
Total
22 Mall Income
13 Friseur Klier GmbH
€ 50
€ 50
€ 50
€ 50
81
€ 50
€ 50
9 14 Convenience Concept GmbH Retail
16 Dogan
Retail15 Dogan
Retail
Page 7 of 12
€ 100,5759,524 sqm
Term**
Matrix Portfolio
Re-letting
€ 688
€ 642
€ 9.25
€ 45535
36
36
50
€ 50
144
Retail
€ 25.00
€ 2,035
6 Reisecenter alltours GmbH
€ 25.00
18 Ernsting´s family GmbH & Co. KG
7 Sparkasse Westmünsterland
Retail
Retail
Retail
Retail
8 Takko Holding GmbH Retail
80
3 Kramer Schuhe GmbH & Co. KG Retail
Retail
2 ALPHA Warenhandel GmbH & Co. KG
1 Büsch GmbH
28
9 Almaz Mode & Mehr
12 C&A Mode KG
Retail
17 Ernsting´s family GmbH & Co. KG
10 Nyguen - Nail Studio
11 Adler Mode GmbH
Retail
Retail
5,495 € 7.75
Market
9
12 0
0
3
9 0
Rent /month€ 6,437
€ 25.00
€ 8,782
€ 748
621
€ 80.00
676
Rent
€ 25.00
€ 50
€ 1,250
9
€ 0
€ 4,672
€ 1,140
€ 8,067
€ 1,550
€ 25.00
€ 25.00
€ 14,820
€ 25.00
€ 13.00
€ 25.00
359
46
4 PM Service GmbH Retail 30
5 Nguyen - Asian Food 63 Retail
49
1,602
€ 42,585
9
€ 50
€ 13.00
€ 13.00
€ 900
9
9
€ 13.00
€ 25.00
12
Market
€ 50
46325 Borken
Retail
sqm/unitTenant Name
Retail € 50
€ 50
Heidenerstraße 32
Area Category
62
€ 900
Germany Brack Capital Properties N.V.
12
9
9
31.03.2013
(Copy)
Property address Property no. 5 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
7,000
Usual market % - levels6,500
Market rent
6,000 Contractual Rent
5,500 Rents %
Contractual5,000
Market
4,500 4% of turnover
3% of turnover4,000
2% of turnover
3,500 Turnover potential(net)
Sales Area3,000
Total Areain € / m² p.a.
based on sales area
DD 2266
This report is only to be read in conjunctionwith the valuation report provided.
0.00
0.00
10.56
0.000.000.00
1,089,001
0.00
0.00%
Rented€/year
00
0.0%
0.0%
0.00
€/month €/year0
0.00
9,524
00
0
0
0
0
0
0.00%0.00%0.00%
0.00%%
Vacancy Rate
0
9,524
46325 Borken
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
-11.0%1,198,8410.00
0
09,524
Market
01,066,667
€/month
DIY
Office
0
0
0
099,903
0.00%
10.49
0
0€/m²/month
406External parking
Rent
400
ContractualRent
€/year
0.00%6
0.00%
0.00%00
0
0.00%
Matrix Portfolio
Heidenerstraße 32 31.03.2013
0
00Commercial
0
Contractual
0
00
Potential
Area Vacant
400
€/m²/monthRent
0.00%400
Rent
00.00%
Brack Capital Properties N.V.
Use Category
Germany
28.01.2011
Capital indicator
€ 6,200 (single) € 27,000 (total)
Assessment of Kaufland market rent
Comment
WALTPayment Index n.a.
17,156,874 €
The main tenant is a corporation belonging to the ALPHA Warenhandel GmbH & Co. KG, which in turnbelongs to the Lidl & Schwarz Group, one of the biggest grocer groups in Europe. According to Dun &Bradstreet (D&B) rating as at 01.01.2011 ALPHA Warenhandel GmbH & Co. KG has a below-averagecredit risk. The risk of insolvency (D&B Score) within the next 12 months compared with other Germancompanies is assessed to be low, i.e. 66% of businesses on the German database have the same orhigher risk of failure. According to section 19 of the main lease agreement entered into by the landlordand Kaufland Dienstleistung GmbH & Co. KG (D&B Rating = 2AA 1), an assignment of the main leaseagreement by the tenant to another entity of the Kaufland group requires that the landlord's credit riskrating may not deteriorate due to such assignment of the lease.
Rent p.a.
5,495 m²
Self-service department stores usually can afford to pay a rent in the range of 2% to 4% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 4,000 to € 6,000 per m²sales area. The two graphics above indicate, how the contract rent of the main tenant Kaufland as well as the assumed market rental level, can be assessed on the basis of usual market ranges. This analysis isbased on the turnover potential figures prepared by Trade Dimension.
2.1%
3.0%
5.47
7.75
abc
Risk indicatorScore
Page 8 of 12
Credit limit
0
177.0%-9.8%
8,063672100,575
111.981,206,904
0.0%0.0%0
0.0%
0
0
0
0.0%00.0%
0
10.41
7.81
0
33%
0
ALPHA Warenhandel GmbH & Co. KG
9.5 years
~ 4,300 m²
0 00
Share of total income
Main tenant
€ 360,815
D&B Rating of Main Tenant
Tenant name
5.20
Storage00
Petrol Station 0.00
0.00Internal parking 0.00
9.53310.19
0ResidentialCommercial
00
0 00
0 0.0%00
00
0
m²
0
Property Analysis
0 0.0%0.00 0
88,88900.00
9.33
Warehouse
Warehouse
Area Let
9,524
Other Units
00
Residential00
0
0
0.00%
Contractual
m²Area Analysis Lettable Area
0
1,066,667
Retail
0.00
Total areaPetrol Station
06
Income Analysis
Internal parking
Office
DIYRetail
Storage
90,75022,334
1,089,001
0 0
22,334
0
1,861
0.00
0.000.00
Other UnitsTotal area
External parking
Total parking
€ / m²
5.475.20
7.757.81
10.41
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
3,990
(Copy)
Property address Property no. 5 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The property is fully let to twenty retail tenants. The WALT of the property amounts to 6.8 years. The main tenant is Kaufland with a share of approx. 33% of the rental income. The property is currently under-rented,due to a very low rental level of the main tenant Kaufland. As the lease contract is valid until 2022 and the tenant has options until 2037, we do not believe that the rental level can be adjusted before 2037. The rentof Kaufland is indexed and will be adapted by 50% of the CPI change, whenever the change exceeds 10 percent in relation to the CPI basis. Indexation started on 01.04.2009. The majority of the tenants pay allcosts (including ground tax, insurance costs and management costs) except for maintenance costs for structural repairs. Ground tax, maintenance costs for structural repairs, management and insurance costs willnot be borne by Kaufland, C&A and some smaller other units. The rest can be apportioned to the tenants in accordance with the German Regulation on Operating Costs.
0 €
0 €
€ 4,647€ 18,255
€ 4,721
Breakdown of Non-Recoverable Costs
€ 0
8.3%
4.81%
% of Gross
€ 10.00 /m²/p.a.
€ 2,4688.6%
0 €
€ 4,502 0 €0 €€ 4,431
0 €€ 4,356
8.5%€ 694
€ 17,081 8.5%8.3%€ 274
€ 16,574
€ 1,252
0 €
€ 0.00 /m²
Management costs
Other non-recoverable costs
€ 9.38 /m²
€ 16,510€ 4,279
€ 16,806
4.34%
Total non-recoverable expenses
Maintenance costs € 52,384
€ 93,738€ 93,305€ 91,094
€ 0
€ 1.72 /m²
% of Gross
0.00%
€ 16,335
€ 18,104
€ 5.50 /m² € 52,384Contract Rent
per year
Lease Contract Commentary
€ 5.50 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 6.90%
6.50%
Brack Capital Properties N.V.
Heidenerstraße 32
Assumptions
The following tenants have extended their lease contracts: Kramer Schuhe GmbH & Co. KG until 12/2018, Takko Holding GmbH until 9/2023, C & A Mode GmbH & Co. KG until 8/15, Dogan until 10/2013,Ernsting´s family GmbH & Co. KG until 12/2017. Furthermore, the rent of Nguyen - Asian Food has increased due to indexation.
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yields profile is aligned with the market/other transactions. We have taken intoaccount such facts as the stable Cash Flow, the long lease contract with the tenant Kaufland, the goodlocation, full occupancy and the good condition of the subject property.
28.01.201146325 Borken
Germany
31.03.2013
€ 0.43 /m²€ 0
0.38%€ 16,519€ 1.73 /m²
€ 0.00 /m²€ 4,138
per year
Year 8
€ 17,385€ 16,528
€ 58,816€ 57,887
€ 16,709
€ 54,165Year 3
€ 16,788
% of Total
Year 7
€ 4,152€ 15,807
€ 95,391
€ 89,785
€ 485
Total
€ 56,984 € 15,919
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 07.55%
€ 0.43 /m² € 4,138
Insurance
Other non-recoverable costs
1.37%
Market Rent
0.00%8.21%
1.50%€ 1.90 /m²€ 1.73 /m² € 16,519
€ 89,376
per year
€ 9.57 /m²
Total Non-recoverable Costs
€ 91,145
€ 4,210
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 17,538 € 19,138 0 €€ 17,625€ 61,587 € 19,422
Year 10€ 2,620
1.52%1.50%
Market Value
€ 59,761
Year 4
Year 6
€ 4,866
€ 16,839
Year 11€ 60,687
€ 18,846Year 9
GroundManagementTax
Maintanance
€ 16,867
CostsCosts
€ 55,130
Year 1Year 2
€ 52,558€ 53,294
€ 18,548
€ 56,081 € 17,685€ 17,970
Year 5
€ 16,820
9.0%
0 €€ 4,573
€ 106,1209.2%9.4%
0.34%
0 €
€ 5,286€ 4,795
€ 356
€ 4,757€ 107,444
€ 97,9109.0%
0 €
9.2%
€ 104,905
Year after 2021
€ 97,843
abc
€ 1,538 € 100,3378.7%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
8.5%8.3% 8.5% 8.3% 8.6%
9.2%8.7%
9.0%9.4% 9.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 5 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
6.50%
Market Value (rounded)
€ 818,507€ 0
-€ 2,477
€ 0
-€ 107,444
Gross Capital Value (rounded)
€ 16,000,000€ 1,089,001
€ 1,575
Page 10 of 12
7.26%
€ 1,018,526
€ 9.53 Total
Total € 15,000,000
6.25%
In terms of risk, we considered the covenant strength as well as the lease duration for the existing contracts. As at 01.01.2011, the main tenant, ALPHA Warenhandel GmbH & Co. KG, has good covenant strength,which ensures a secure cash flow for the remainder of the lease term until at least 2022. Furthermore, according to section 19 of the main lease agreement entered into by the landlord and Kaufland DienstleistungGmbH & Co. KG (D&B Rating = 2AA 1), an assignment of the main lease agreement by the tenant to another entity of the Kaufland group requires that the landlord's credit risk rating will not deteriorate due to suchan assignment of the lease. Section 1 of the first amendment to the main lease agreement provides for the assignment of the main lease agreement to ALPHA Warenhandel GmbH & Co. KG, which has a worseD&B Rating (DD 2). Pursuant to section 2 of the first amendment to the main lease agreement, the former tenant remains jointly and severally liable for the landlord's payment claims. Hence, the former tenant is aguarantor for the lease payments of the current tenant. In terms of a resale, we considered such facts as visibility, condition and building age, competition situation and location.
-€ 45,261
abc
Valuation Comment
€ 1,206,904 per m²
-9.77%
For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in our valuation. Other costs have remained unchangedand have been applied according to information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective gross rent. Regarding comparable rents, we have hadrecourse to evidence of similar areas situated in the comparable regions and locations. Furthermore, we have analysed comparable transactions. Please refer to the section "Investment Comparables". Theturnover and space productivity analysis shows that the main tenant Kaufland has a very low rental level. We have assumed that it is relatively unlikely to adjust the contract rent to the higher market rent after 2022(as 3x 5-year extension options are in place), which on the other hand further improves the cash-flow security and stability. We have been provided with updated information regarding necessary capitalexpenditures. All Capital expenditures for repairs in the first year as well as in the periods of year 2 to 5 and year 6 to 10 are considered to be covered by the maintenance costs of € 5.50/m² p.a.0
6.97%
Year 10 € 1,169,190€ 1,121,334
€ 0
€ 1,176,723Year 9
-€ 97,843
TIs and
-€ 91,094
Brack Capital Properties N.V.
€ 1,101,879 -€ 13,077
-€ 12,950-€ 24,634
€ 1,018,854
€ 963,439 -€ 7,843 € 951,454
Income
€ 0
-€ 1,872-€ 6,082 € 989,415
€ 1,030,750
Net
31.03.2013
6.90%Commissions Cash FlowCapital
€ 948,854€ 912,123€ 921,024
Year 6Year 7
-€ 30,316
€ 1,018,526
-€ 89,785Vacancy
Year 5
€ 1,149,507 € 1,119,191Year 8
Year 4
Year 2-€ 22,655
Gross
€ 1,121,499
Market Value
Rental recoverable Operating
Heidenerstraße 32
€ 1,016,429
€ 984,543
8.05%per m²
€ 1,122,596
-€ 104,905-€ 100,337€ 0 -€ 6,066
Gross Value of Surplus Land
€ 17,062,922
€ 1,680
€ 15,997,631-€ 106,120 -€ 23,687€ 1,175,032
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 15,997,631
-€ 9,253Total Cashflow (incl. Terminal Value @ 6.50 %)
per m²/month
€ 1,068,912
€ 661,949
-€ 8,431
-€ 57,215 € 0
Expenditures-€ 6,717
-€ 93,305 € 1,008,574
Costs
€ 840,080
€ 1,061,746
Abatements
€ 1,005,203
-€ 10,446
-€ 97,910€ 999,838
-€ 15,509€ 0 € 1,024,686
€ 949,545
Year 3 € 1,124,534
€ 1,019,588€ 541,455-€ 50,963
-€ 95,391
€ 639,170
€ 1,100,646
Revenue€ 1,053,787
Turnover
Germany
€ 1,009,552
Revenue
€ 1,108,915 € 0
€ 0 € 1,113,917
Rent
€ 0
€ 1,088,226-€ 8,269
-€ 34,439 € 0Year 1
€ 1,124,488
€ 1,138,220
Year 11 € 1,220,293
€ 1,061,282
€ 10.56
€ 0€ 0
€ 1,218,892 -€ 49,702 € 0
€ 1,124,488-€ 7,582
-€ 15,624
€ 542,708
Yield Overview
€ 964,002
€ 1,030,750-€ 93,738
€ 1,118,497
46325 Borken
Cash Flow
Non-Total
-€ 4,142€ 0
€ 0
€ 8,755,407
-€ 55,389 € 0-€ 31,712
Present
€ 608,412
€ 756,796
-€ 15,921
Leasing
28.01.2011
Matrix Portfolio
Value @
6.0% 6.3% 6.3%6.4% 6.4%
6.0%
6.4% 6.4% 6.4%
6.6%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
€ .0
€ 200000.0
€ 400000.0
€ 600000.0
€ 800000.0
€ 1000000.0
€ 1200000.0
€ 1400000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 5 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Heidenerstraße 32
28.01.2011
abcPage 11 of 12
Internal shopping mall
View towards main Kaufland entrance
Matrix Portfolio
View from Heidener Strasse towards rear side of the complex
46325 Borken
Photos
External porch - facade to the south
Escalator from the park deck on top of the building to the ground floor level
Germany Brack Capital Properties N.V.
31.03.2013
Delivery zone to the north side of the building
(Copy)
Property address Property no. 5 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
Self-Service Department Store 7,887 m²Self-Service Department StoreSelf-Service Department Store
6,388 m²
5,479 m²Self-Service Department Store8,170 m²
1,085 m²1,622 m²Fashion Store
Kaufland BochumRhede
HerneFashion Store
Marktkauf
RecklinghausenWehmeyer
real,-
Strauss Innovation
Lübbenau
Comparable location < 50 km distance
Comparable purchasing power - distance 24.0 km
€ 10,329
€ 7.09 /m²€ 42,353
€ 9.52 /m²
Total Rent p.m.
€ 13,382 € 8.25 /m² Comparable location < 50 km distance€ 7.73 /m²
Comparable purchasing power - distance 9.0 kmComparable location < 50 km distance
€ 57,925
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Comparable location < 50 km distance€ 8.80 /m²
€ 71,298 € 9.04 /m²€ 56,214
€ 7.75 /m²€ 67,805
CommentOther federal state; slightly lower purchasing power
Rent p. sqm€ 62,000 € 7.75 /m²
Comparable location < 50 km distance
46325 Borken
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
8,000 m²
Leasing Market
Kaufland
Tenant Property TypeSelf-Service Department StoreKauflandSelf-Service Department Store
31.03.2013Heidenerstraße 32
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
LübbenauKaufland
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
8,749 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
GeldernFreital
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
28.01.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
Property address Property no. 6 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 4 6 to 10 years Macrolocation 4 Good location and catchment areaLettable Area 4 Between 12,500 and 15,000 m² Microlocation 4 Good micro locationProperty condition 3 Average building condition Commercial activity 4 Average commercial activity nearbyGeneral impression 2 Below average general impression Competition 3 Average competition level
Investment Quality
WALT 5 WALT longer than ten years Investment market 4 Well developed property marketOver- / underrent 5 Significantly underrented (more than -15%) Investment volume 4 Good lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 8.11
Page 1 of 12 abc
SWOT Analysis
Leasehold on car park
31.03.2013
Brack Capital Properties N.V.
Key Figures
Westliche Stadtmauerstraße 27
2004
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
8.86%
Discount Rate
8.86%
excluding capital
expenditures6.50%
6.29%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
10.6 years
0
Good branch and tenant mix
Sufficient parking spaces
Established location, pedestrian zone of Erlangen in immediate vicinity
Market rental value € 1,566,081
€ 5.24
1975
Weighted average lease term
91054 Erlangen
Property Summary
Retail Park
Germany
01.02.2011
Property type
Current vacancy rate
Kaufland Vertrieb SIGMA GmbH & Co. KG
13,398 m²Total parking units
4.0%
Main tenant
Total lettable area499 units
-19.2%
€ 1,216,050
€ 842,379
€ 7.56Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
Very good accessibility from Fuchsengarten to the parking area
Low visibility from "Altstadtmarkt-Passage" and Hauptstraße
Strong dependancy from the main tenant KauflandProlongation of the main lease contract, Kaufland exercises its options until 2037 Other tenants along pedestrain passage could also terminate their contracts
Long-term vacancies possible
Three vacant retail areas
€ 9.74 / m² / p.m.€ 12,700,000
6.80%
The property has 4 buildings: a car park, a self-service department store, some units along an uncovered pedestrian passage and a commercial building. The 4-storey car park, accessible via Fuchsengraben, wascompleted in 1993. The upper parking area is roofless, and accessible via a staircase and 2 elevators. It is built as an open steel construction with reinforced concrete floor slabs. The outer boundaries have steelrailings. The three-storey self-service department store was completed in 1975 and refurbished in 2004. The drinks cash-and-carry is on the ground floor. The store access is adjacent to the parking area orinternally via escalators. Kaufland’s sales area, the cash area as well as several smaller shops are on the first floor. The main entrance to Kaufland is from the pedestrian passage “Altstadtmarktpassage”. Thesecond floor is connected by escalators. The delivery zone is located south of the subject site. The delivery area for the drinks cash-and-carry and other goods are separate.
0
6.29%
Market Rental Value
10.44
€ 1,566,081 p.a.
Multi-storey self-service department storeWeaknesses
Matrix Portfolio
Confusing route marking through the parking area to the sales area
€ 948 per m²
Property is currently let below market rental level (under-rented)
Re-letting of the vacant units
However, access to both zones is via Fuchsengraben. The self-service department store is a frame construction. The façade mostly has plastered prefabricated concrete panels, with some sandwich panels. Thesingle-storey related units are built on the first floor level of the tenant “Kaufland”. The units were built at the same time as the self-service department store. Both buildings have a flat roof. The pedestrian passageentrance is from “Kaufland” as well as from Hauptstraße. The 3-storey commercial building is located on Hauptstraße and was completed in 1975. The pedestrian passage is on the ground floor level. The façade ofthe commercial building is listed. The building is made of brickwork and has a gable roof.
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 373,671
Year of refurbishment
Property Description
0
€ 2.32
00
(Copy)
Property address Property no. 6 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
123.52
Erlangen is well connected to the German railway network. The city is directly connected to the A73federal motorway and to the A3 federal motorway. The A9 federal motorway is located about 20 kmaway and can be reached in less than 20 minutes. It runs from Berlin to Munich. The city’s traffic networkis further supplemented by the B4 federal road. Erlangen Central Station is a stopping point for ICEtrains. The nearest airport is Nuremberg Airport approx. 15 km from Erlangen. It can be reached in lessthan 12 minutes.
Micro Location
Erlangen is located in the Middle Franconia region in the federal state of Bavaria, approx. 25 km north ofNuremberg. With the cities of Nuremberg and Fuerth, approx. 18 km south of Erlangen, it forms themetropolitan region Nuremberg. The city has approx. 105,000 inhabitants. The economic structure ispredominantly affected by Siemens AG. The city of Erlangen is the second largest Siemens AG locationworldwide. Different divisions of Siemens AG are operated from Erlangen. Furthermore, some facultiesof the Friedrich-Alexander-Universität Erlangen-Nürnberg are located in Erlangen. The university is thesecond largest in the state of Bavaria.
Location
Brack Capital Properties N.V.
31.03.2013
91054 Erlangen 01.02.2011
Erlangen (Urban District)
Germany
Bavaria
Macroeconomic Indicators
Federal StateDistrict
3.9%
2,744
Erlangen Macro Location
3.5
Micro Location
500
The self-service department store is located along Westliche Stadtmauerstraße, whereas the buildingparts at the Altstadtmarktpassage extend to the east along Hauptstraße. The high street of Erlangen islocated south of the property just 200 m away. The subject property is accessible via Fuchsengraben bycar and from Hauptstraße by foot. A bus stop is located directly in front of the three-storey commercialbuilding along Hauptstraße. Due to the city centre location of the property, the surrounding ischaracterised by a relatively high density of retail and residential use. The central station is locatedapproximately 250 m south of the property. The B4 federal road can be accessed in about 3.2 km. TheA74 federal motorway is located around 850 m away.
Local Tax Information
2.4%
108.34114.12
2.4%
2,744
4.5%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
106,326
91054
13821,382
12,510,331106,326
Erlangen
1.1%
53,081
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Westliche Stadtmauerstraße 27
City
(Copy)
Property address Property no. 6 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Extract from the land register dated 02.12.2010
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Westliche Stadtmauerstraße 27 31.03.2013
01.02.2011
Germany
No Suspicion
According to information from the local authority in Erlangen, a legally binding development plan exists,entitled no. 253 “Fuchsenwiese” and dated 31.03.1994. The non-food sales area is maximized to5,000m². The maximum number of full storeys is limited to two, with some areas permitted only to haveone storey.
Section 2 (Restrictions)
TPL Erlangen S.à.r.l., Luxembourg
Land Register
1301216991
27710 (leasehold)28698
Sheet 13012972, 972/1,
1587/1, 1587/2
Sheet 1699114 (75/100 co-
ownership)
Sheet 277101583/7
Owner
30.06.2017, but 30 years options
Site Information
Site area 17,609 m²thereof surplus land
YesGround lease
Site layout
Site Plan
Surplus land value (net) n.a.
Source: Cadastral plan on a 1 to 2000 scale, dated 28.12.2010
Matrix Portfolio
91054 Erlangen
MK (core zone)
n.a.
0
Sheet Plot Parcel
n.a.
Tenure
Site servicing
Ground lease expiry€ 0
0 m²
n.a.
Town Planning
Fully serviced
Building encumbrances No
Irregular
The site is built on different levels. The parking area and the drinks cash-and-carry are constructed atthe same level as Fuchsengraben, whereas the main entrance of the self-service-department store andthe pedestrian passage is constructed at the same level of Hauptstraße. The part of the site with the carpark is bordered by the railway line to the west. To the east, Fuchsengraben runs in an S-curve alongWestliche Stadtmauerstraße, where it is tangent to the street along the railway line. The S-curve is thewestern border of the part of the site with the pedestrian passage. This part of the site is bordered byHauptstraße to the east.For the purposes of this valuation, we have assumed that the subject property is free of any soil orbuilding contamination.
Sheet 13012 / 16691 / 27710Limited personal easement (right to operate a self-service department store) in favour of Kaufland Dienstleistungs GmbH & Co. KG
Sheet 27710Leasehold of € 350,000 per year in favour of the landlord of parcel 1583/7, registered until 30.06.2017, currently in Sheet 28698
Sheet 28698Reservation of right to prolongate the leasehold (first option for further 20 years, second option for further 10 years) in favour of the leaseholderFurther rights in 13012 / 16991 / 27710 / 28698
Brack Capital Properties N.V.
Sheet 13012 / 16991Land charges in the total amount of € 11,950,000 in favour of Bank of Scotland (branch Frankfurt), registered on 19.10.2007
Sheet 27710Land charges in the total amount of € 2,800,000 in favour of Bank of Scotland (branch Frankfurt), registered on 19.10.2007
Local Court of Erlangen, land register of Erlangen
abcPage 3 of 12
(Copy)
Property address Property no. 6 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
123.52
2.4%
abc
Population forecast for the district (2007 - 2025)
91054 Erlangen
Name91052 Erlangen, Carl-Thiersch-Str. 4
Competitor Overview
Competitor Map
Hypermarket
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
1.90 km5,353 m²Self-service dep. store
19,962
Medium to low
0Low
1,650 m²
Low1.30 km
Inhabitants in secondary catchment area
Retail Centrality Index (District)
91083 Baiersdorf, Forchheimer Str. 49Rewe Zwingel
Inhabitants per hypermarket in secondary catchment area
41,882
53,081
Kaufland
0
460,706
1,600 m²1,650 m²
Inhabitants per hypermarket in tertiary catchment area
3.10 kmHypermarketHypermarket
4.30 km8.20 km
91058 Erlangen, Weidenweg 1-391088 Bubenreuth, Frankenstr. 75 Hypermarket
91052 Erlangen, Michael-Vogel-Str. 1a
91058 Erlangen, Cumianastr. 4
Rewe PlankE-center Bächmann
91052 Erlangen, Karl-Zucker-Str. 10
Rewe
E-center
91056 Erlangen, Neumühle 4
Hypermarket 2,500 m²1,773 m² 1.90 km Low
2.30 kmHypermarket 2,600 m²
Edeka Neugebauer
101,202
Edeka
114.12
179,655
Hypermarket8.90 kmHypermarket91074 Herzogenaurach, Ohmstr. 12
Rewe WittmannHandelshof
91077 Neunkirchen, Zum Neuntagwerk 9 8.80 km
Hypermarket 2,374 m²
0
2.70 km
1,716 m²2,300 m²
m²
00
0
Inhabitants in primary catchment area 14,457
0
Competiton Indicators
Westliche Stadtmauerstraße 27
01.02.2011
Germany Brack Capital Properties N.V.
31.03.2013
LowLow
Low
Low
Low
Low
Matrix Portfolio
(Copy)
Property address Property no. 6 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
01.02.2011
31.03.2013
Matrix Portfolio
Turnover analysis
A self-service department store, Kaufland, is located in a distance of approximately 1.9 km south-east of the subject property. It comprises 5,350m² of sales area. Parking facilities are available directly in front of the competitor as well as in an adjacent car park. The surrounding area is characterised by modern office use, medical services and residential use. The competitor is built on former military areas.
Main competitors
91054 Erlangen
Westliche Stadtmauerstraße 27
The multi-storey sales area of the subject property is no disadvantage. Generally, development within the city centre has a higher density and is characterised by higher land use type. However, further smaller shopping facilities for everyday commodities are located within the city centre. Considering all mentioned factors, the competition level can be described as medium.
The rents in functional a retail agglomeration are linked to turnover. The percentage rate that a retail tenant can use for rental payments (turnover-to-rent ratio) depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective branch. The productivity varies between approx. € 1,000/m² and up to more than € 10,000/m². For Kaufland, we have also been provided with turnover figures. We have analysed the figures and have found the area productivity of Kaufland to be in a healthy range. With a turnover-to-rent ratio of less than 2% it lies below the range of 2% to 4%, which is acceptable for a self-service department store. Considering the location factors and the competition level within Erlangen, we assumed that a higher turnover-to-rent ratio regarding a similar branch and turnover is realistic. Hence, a higher market rent is achievable after the end of the lease contract. Please also refer to the rent/turnover analysis on page 8.
abc
Competition Comment
The catchment area can be differentiated into primary (0 - 5min driving time); secondary (5 - 10min) and tertiary (10 - 15min) catchment areas. More than 100,000 inhabitants live in the primary catchment area. The competitor Kaufland is located in the secondary catchment area approx. 1.9 km away or less than 10 min driving distance. Thus, the vicinity to the city centre is attractive for the customers. The competing property is a one-storey structure. As both properties offer a full product range, the branch related assortment is generally problematic. In the current valuation, we assumed that the significantly larger sales area of the subject property is combined with a larger depth of product range. Furthermore, the subject location is in close proximity to Erlangen’s pedestrian zone.
As one-storey self-service department stores generally enjoy a higher degree of acceptance than multi-storey departments, we assumed that there is no immediate competition for the purchasing power of the customer. There is no direct competition between a city centre self-service department store and a location close to the city centre. Hence, we are of the opinion that both department stores can co-exist in the long term. The second competitor E-Center is located in the primary catchment area. However, with a sales area of approx. 2,500 m², the store offers a lower depth and breadth of product range. The assortment is not branch related. The second competitor is therefore also not a direct competitor of the subject property. An important advantage of the subject property over other competitors is that the close proximity of Erlangen’s pedestrian zone holds additional benefits. Thus, the parking area of the subject property is also used for shopping in the high street of Erlangen. Afterwards, the weekly shopping for every day commodities can be done.
0
The rental area of Kaufland can be regarded as relatively unproblematic. In the unlikely case that Kaufland vacates the premises, the property could be re-let to other self-service department stores as real, Marktkauf or E-Center. However, the third-party usability of the area is limited. The lettable area is not suitable for large-scale retail purposes such as a DIY store or furniture store. Both branches are not as strong as a self-service department store. The numbers of passersby also cannot be increased in the long term. According to the turnover analysis, the turnover rent is at the lower end of the range and a higher turnover-to-rent-ratio is achievable. Therefore, the retail unit is currently heavily under-rented. We assumed that the tenant Kaufland will exercise its three options, each for five years, by 2037. During this time, there will be steady demand for ancillary lettable spaces within the property. There is no direct competition within the vicinity.
The subject property is a self-service department store situated in a very good location within Erlangen. The depth and breadth of the product range is very good. However, the property is not easily accessible by foot due to the confusing route marked from the parking area to the tenant Kaufland. The property is also less visible from the street Fuchsengraben and Hauptstraße. Furthermore, we are of the opinion that the tenant and branch mix within the one-storey units along the pedestrian passage are critical. Currently, there are five vacant units. We assumed that access from the parking area is used more frequently by customers as opposed to the access road from Hauptstraße. As the pedestrian passage can be defined as a secondary location, the frequency of passersby is rather low. Furthermore, the tenant and branch mix is not comparable with that of the pedestrian zone. The profit of the tenants within the passage is very dependent on Kaufland.
Germany Brack Capital Properties N.V.
A supermarket “E-Center” is located in close proximity to the railway tracks. It comprises 2,500 m² of sales area. The supermarket is located approx. 1.3 km south of the subject property. Parking facilities are available in front of the competitor as well as in the underground car park. Some smaller rather regional retailers are located near the Edeka.
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 6 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
7 Deutscher Hausfrauen-Bund e.V.
5.27
€ 950
30 Oberbank Erlangen
Retail10 Stadt Erlangen
11 Schmidl
Let
Page 6 of 12
GT I PM
30.09.2013
37
Internal Parking
Retail
5 Amorim-Kneisl
3 Tran Thi
116
10.34
13.01
Retail 26.72
8.75
2 Kaufland Vertrieb SIGMA GmbH & Co. KG Retail
pays VAT
31.07.2013
30.09.2022
75%
75%
Start
75%
31.03.2013Westliche Stadtmauerstraße 27
Tenant
Matrix Portfolio
01.02.2011
Status m² / unitLet
TenantLeaseArea
Let
Let
30.05.2017Yes
01.10.2007
Yes
Rent / m² RenewalLeaseLetting
1 Kraus Retail 73
/ month Probability
75%
161
9 Stadt- und Kreissparkasse Erlangen Retail
vacant
Retail
8 Hauswirtschaftliches Serviceteam GmbH
14 Orientteppich-Galerie
6 vacant
30.06.2007
01.06.2007
No
GT I PM
75%
Retail
Yes
€ 910
4 Frisör Klier GmbH
Retail 160
10,737
Let
Office
88
12.99
€ 56,598
€ 1,400
Let
Let Yes
GT I PM
91054 Erlangen
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Retail
€ 101,338
85
Let
Let
34Let
€ 805 30.09.2013
€ 0
05.12.2016
01.10.2010
31.03.2013
22.06.2007 21.06.2013
€ 452 01.04.2007
01.06.2009
30.09.2013
31.12.2013
02.08.2014
0%
30.09.2022
75%
06.12.2006
30.06.2013
31.12.2013
31.12.2013
31.12.2013
31.12.2013
31.12.2013
31.12.2013
75%
75%
31.12.2013
75%
75%
31.12.2013
75%
75%
01.08.2010
31.12.2013
75%
30.11.2017
75%
75%
01.01.2008
75%
75%
75%
75%
GT I PM
75%
75%
31.03.2014
75%
75%
Yes
GT I PM
GT I PM
abc
GT I
75%
75%
75%
75%
75%
75%
0%
13,398 m²
31.12.2013
75%
75%
75%
75%
75%
75%
GT I PM31.07.2013
75%
31.08.2014
GT I PM31.12.2015
GT I PM
GT I PM31.12.2013
GT I PM31.12.2013
06.02.2007
01.09.2004
15.09.2011
02.07.2007
75%
31.07.2013
75%
75%Yes
5.00
0.00
6.13
Yes
Yes
25.68
12.06
No
Yes
GT I PM
80 € 494
€ 1,718280
6.18
€ 3,100
GT I PM75%
Total
47Let
29 Vacant
Let
Internal Parking 1
31 Oberbank Erlangen
Let
€ 445
LetRetail
13 Endres Retail
€ 0
15 Apotheke Bernd Nürmberger
GT I PM12 Topuz Retail 41 € 1,042 Yes
GT I PM48.45 01.07.2017
GT I PM137 € 1,047 Yes 01.12.20107.65 30.11.2013
€ 2,277
Retail 87 € 3,067 Yes 01.01.2001Let 35.25
16 Rüffer Retail 112 € 1,368 Yes 01.10.2010Let 12.22
17 Linus Schade + Julian Wening Residential 102 € 746 Yes 01.08.2007Let 7.33
18 Müller Residential 139 € 734 Yes 01.10.2009Let 5.28
19 Tran Thi Storage 60 € 100 Yes 01.06.2007Let 1.67
20 Deutsche Plakat-Werbung GmbH & Co. KG Other Units 12 € 530 No 03.08.2009Let 44.17
21 Hauswirtschaftliches Serviceteam GmbH Internal Parking 1 € 29 Yes 01.07.2008Let 29.41 31.12.2013
22 Vacant Internal Parking 1 € 0vacant 0.00
23 Schmidl Internal Parking 1 € 29 Yes 01.07.2008Let 29.41 31.12.2013
24 Bätz Internal Parking 1 € 29 Yes 01.10.2010Let 29.41 31.12.2013
25 Metzgerei Ludwig Walk GmbH Internal Parking 1 € 29 Yes 01.08.2008Let 29.41 31.12.2013
26 Metzgerei Ludwig Walk GmbH Internal Parking 1 € 29 Yes 01.08.2008Let 29.41 31.12.2013
27 Metzgerei Ludwig Walk GmbH Internal Parking 1 € 29 Yes 01.08.2008Let 29.41 31.12.2013
28 Vacant Internal Parking 1 € 0vacant 0.00
vacant 0.00
1 € 29 Yes 01.06.2009Let 29.41
Internal Parking 1 € 29 YesLet 29.41
32 Oberbank Erlangen Internal Parking 1 € 29 Yes 01.06.2009Let 29.41
33 Fuchs Internal Parking 1 € 29 Yes 18.06.2009Let 29.41
34 Gottschling Internal Parking 1 € 29 Yes 11.11.2010Let 29.41 75%
35 Meyer Internal Parking 1 € 29 Yes 01.04.2010Let 29.41 75%
36 Denslinger Richardson Internal Parking 1 € 29 Yes 15.08.2009Let 29.41 75%
37 Haas-Eberhard Internal Parking 1 € 29 Yes 01.08.2010Let 29.41 75%
38 Haas-Eberhard Internal Parking 1 € 29 Yes 01.08.2010Let 29.41 75%
39 Haas-Eberhard Internal Parking 1 € 29 Yes29.41 75%30.06.2013
40 Rüffer Internal Parking 1 € 29 Yes 01.10.2010Let 29.41 75%
GT I 41 Gemeinnützige Wohnungsbaugesellschaft Other Units 1 € 0 Yes 01.01.2007Let 0.00 31.12.2013
GT I 42 Parking Garage Internal Parking 470 € 20,000 Yes 01.11.2008Let 42.55 31.07.2037
43 VACANT Retail 366 € 0Vacant 0.00
GT I 44 Stadt Erlangen Office 144 € 722 Yes 01.06.2011Let 5.03 31.05.2016
GT I 45 Stadt Erlangen Office 92 € 463 Yes 01.06.2011Let 5.03 31.05.2016
0%46 Orientteppich-Galerie Internal Parking 1 € 29 Yes 01.02.2011Let 29.41 31.12.2013
0%47 Orientteppich-Galerie Internal Parking 1 € 29 Yes 01.02.2011Let 29.41 31.12.2013
0%48 Mönius Internal Parking 1 € 29 Yes 15.02.2011Let 29.41 31.12.2013
0%49 Knauer Internal Parking 1 € 29 Yes 15.04.2011Let 29.41 75%
0%50 Thiem-Hofmann Internal Parking 1 € 0 Yes 10.03.2011Let 0.00 75%
0%51 Stadt Erlangen Internal Parking 1 € 35 YesLet 35.00 01.06.2011 31.05.2016
0%52 Stadt Erlangen Internal Parking 1 € 35 Yes 01.06.2011Let 35.00 31.05.2016
0%53 Stadt Erlangen Internal Parking 1 € 35 Yes 01.06.2011Let 35.00 31.05.2016
0%54 Stadt Erlangen Internal Parking 1 € 35 Yes 01.06.2011Let 35.00 31.05.2016
GT I PM55 Kolasinac GbR, Thiem-Hofmann Retail 90 € 500 Yes 01.10.2012let 5.56 31.12.2013
56 VACANT Retail 81 € 0Vacant 0.00
GT I PM57 Deminer Imbiss Retail 50 € 530 Yes 01.10.2012Let 10.60 75%
0%58 Mall Income Other Units 1 € 3 00.01.1900Let 2.93 30.09.2022
0%59 Kurzzeitmieter Other Units 1 € 579 Yes 00.01.1900Let 579.17 100%
(Copy)
Property address Property no. 6 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
01.02.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis0
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 1,012
€ 0
€ 750
abc
0 0 5 100%€ 0 0 0 59 Kurzzeitmieter Other Units 1 € 0.00 € 0
0 58 Mall Income Other Units 1 € 0.00 0 0 0%€ 0 0 0
3 5 75%€ 100 0 15
Retail 81 € 11.50
0
15
57 Deminer Imbiss Retail 50
€ 93256 VACANT
75%€ 100 15 15
3 5 75%0 € 100 15
54 Stadt Erlangen Internal Parking 1 € 30.00
55 Kolasinac GbR, Thiem-Hofmann Retail 90 € 11.50
0 5
0 3
€ 0 0
5
75%€ 0 0 0
0 5 75%0 0
0 53 Stadt Erlangen Internal Parking 1 € 30.00 € 30
0 52 Stadt Erlangen Internal Parking 1 € 30.00 0 5 75%€ 0 0 0
0
€ 30
0 5 75%€ 0 0 0
75%€ 0
51 Stadt Erlangen Internal Parking 1 € 30.00 € 30
0 50 Thiem-Hofmann Internal Parking 1 € 30.00 0 0 0 5
Internal Parking 1 € 30.00 € 30 0
0
75%€ 0 0 0 0 549 Knauer
0
75%€ 0 0 0
0 5 75%
0
47 Orientteppich-Galerie Internal Parking 1 € 30.00 € 30
548 Mönius Internal Parking 1 € 30.00
75%
3
0 0
€ 0 0
€ 30.0046 Orientteppich-Galerie
€ 100 0 15
0
3
5
€ 0
75%
5
45 Stadt Erlangen Office 92 € 6.00 € 552
1
75%€ 0 0 0
5
0
5 75%
3
75%3 0
€ 42.55 5
€ 862 € 100 0
€ 100 15
3
43 VACANT Retail 366 € 9.00 € 3,294
0
42 Parking Garage Internal Parking
41 Gemeinnützige Wohnungsbaugesellschaft
470
44 Stadt Erlangen Office 144 € 6.00
0
40 Rüffer Internal Parking 1 € 30.00 0
Other Units
0 € 20,000
5 75%€ 0 0
0
75%€ 0 0 0 5
€ 30 5 75%€ 0 0
0
0 0
6
39 Haas-Eberhard Internal Parking 1 € 30.00 € 30
5 75%€ 0 0 6
0 5
0
0 6 75%€ 0
37 Haas-Eberhard Internal Parking 1 € 30.00 € 30
0 € 30
0
38 Haas-Eberhard Internal Parking
0 36 Denslinger Richardson Internal Parking 1 € 30.00
1 € 30.00
0 € 30 5 75%€ 0 0 6
5 75%€ 0 0
0 0 5 75%€ 30.00
0
€ 0 0 6
0
0 6
35 Meyer Internal Parking 1 € 30.00 € 30
34 Gottschling Internal Parking 1
33 Fuchs Internal Parking 1 € 30.00 € 30 € 0 0
0 0 5 75%0 6
0 5 75%
32 Oberbank Erlangen Internal Parking 1 € 30.00 € 30 € 0
0 0 5 75%0 6 31 Oberbank Erlangen Internal Parking 1 € 30.00 € 30 € 0
0 0 5 75%0 6 30 Oberbank Erlangen Internal Parking 1 € 30.00 € 30 € 0
0 0 5 75%6 6 29 Vacant Internal Parking 1 € 30.00 € 30 € 0
0 0 5 75%0 6 28 Vacant Internal Parking 1 € 30.00 € 30 € 0
0 0 5 75%0 6 27 Metzgerei Ludwig Walk GmbH Internal Parking 1 € 30.00 € 30 € 0
0 0 5 75%0 6 26 Metzgerei Ludwig Walk GmbH Internal Parking 1 € 30.00 € 30 € 0
0 0 5 75%0 6 25 Metzgerei Ludwig Walk GmbH Internal Parking 1 € 30.00 € 30 € 0
0 0 5 75%0 6 24 Bätz Internal Parking 1 € 30.00 € 30 € 0
€ 0 0 0 5 75%0 6
0 5 75%0 6
23 Schmidl Internal Parking 1 € 30.00 € 30
Internal Parking 1 € 30.00 € 30 € 0 0
0 0 5 75%0 6
0 5 75%0 15
21 Hauswirtschaftliches Serviceteam GmbH Internal Parking 1 € 30.00 € 30
75%0 15
20 Deutsche Plakat-Werbung GmbH & Co. KG Other Units 12 € 44.17 € 530 € 0 0
5
19 Tran Thi Storage 60 € 0.00 € 0 0 3 5
€ 6.50 75%
0 3 5 75%0
0 3 0 6
€ 6.50 € 661 € 25
0 15
€ 100
6
75%
0 15 0 3 5 75%
0 3 5
75%
0 3 5 75%
0 3 5
0 15
0 3 515
50
75%
€ 100
75%
75%
5 75%0
0
15
0 15
€ 100
75%
3
0
5
3
5
0
0 0
15
75%
0
15 5
3 15
3
3
75%
0
3
5
75%
75%
3
0
75%
10
75%
3 5
5
75%
3
0€ 100 15
15 53
0 5
€ 25
€ 0
Total
22 Vacant
13 Endres
€ 100
€ 100
€ 100
€ 100
47
€ 100
€ 100
15 14 Orientteppich-Galerie Retail
16 Rüffer
Retail15 Apotheke Bernd Nürmberger
Residential
Page 7 of 12
€ 130,50713,398 sqm
Term**
Matrix Portfolio
Re-letting
€ 1,680
€ 850
€ 12.00
€ 904
€ 1,035
€ 0
139
161
137
87
€ 100
102
Retail
€ 9.00
€ 705
6 vacant
€ 15.00
18 Müller
7 Deutscher Hausfrauen-Bund e.V.
Retail
Retail
Retail
€ 30
1 € 0.00
€ 30Internal Parking
€ 15.00
Retail
8 Hauswirtschaftliches Serviceteam GmbH Retail
73
3 Tran Thi Retail
Office
2 Kaufland Vertrieb SIGMA GmbH & Co. KG
1 Kraus
280
9 Stadt- und Kreissparkasse Erlangen
12 Topuz
Residential
17 Linus Schade + Julian Wening
10 Stadt Erlangen
11 Schmidl
Retail
Retail
10,737 € 7.90
Market
15
12 3
0
3
15 0
Rent /month€ 840
€ 11.50
€ 1,600
€ 1,334
80
€ 11.50
160
Rent
€ 11.50
6
6
15
0
15
€ 100
€ 30
€ 30
€ 30
€ 1,001
0
€ 0
€ 487
€ 1,287
€ 800
€ 411
€ 11.50
€ 11.50
€ 450
€ 10.00
€ 12.00
€ 12.00
41
112
4 Frisör Klier GmbH Retail 116
5 Amorim-Kneisl 88 Retail
85
37
€ 84,819
0
€ 100
€ 10.00
€ 10.00
€ 1,610
0
0
€ 10.00
€ 6.00
0
Market
€ 100
91054 Erlangen
Retail
sqm/unitTenant Name
Retail € 50
€ 100
Westliche Stadtmauerstraße 27
Area Category
34
€ 1,233
Germany Brack Capital Properties N.V.
0
0
15
31.03.2013
(Copy)
Property address Property no. 6 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
7,000
Usual market % - levels6,500
Market rent
6,000 Contractual Rent
5,500 Rents %
Contractual5,000
Market
4,500 4% of turnover
3% of turnover4,000
2% of turnover
3,500 Turnover potential(net)
Sales Area3,000
Total Areain € / m² p.a.
based on sales area
On.a.n.a.
This report is only to be read in conjunctionwith the valuation report provided.
41.82
0.00
8.18
6.500.000.00
1,019,956
0.00
0.00%
Rented€/year
00
-6.2%
0.0%
0.00
€/month €/year2,903
0.00
12,866
01,200
0
34,833
241
0
0
0.00%0.00%0.00%
0.00%%
Vacancy Rate
0
12,050
91054 Erlangen
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
-25.0%1,253,3736.00
0
012,582
Market
34,833952,819
€/month
DIY
Office
0
516
0
3,094104,448
3.97%
8.30
0
37,128€/m²/month
514External parking
Rent
0
ContractualRent
€/year
0.60%15
0.00%
0.00%0
53260
0.00%
Matrix Portfolio
Westliche Stadtmauerstraße 27 31.03.2013
0
00Commercial
516
Contractual
3
0496
Potential
Area Vacant
496
€/m²/monthRent
0.58%0
Rent
30.00%
Brack Capital Properties N.V.
Use Category
Germany
01.02.2011
Capital indicator
n.a.
Assessment of Kaufland market rent
Comment
WALTPayment Index n.a.
36,582,177 €
According to section 19 of the main lease agreement entered into by the landlord and KauflandDienstleistung GmbH & Co. KG (D&B Rating = 2AA 1), an assignment of the main lease agreement bythe tenant to another entity of the Kaufland group requires that the landlord's credit risk rating may notdeteriorate due to such assignment of the lease. Section 1 of the first amendment to the main leaseagreement provides for the assignment of the main lease agreement to Kaufland Vertrieb SIGMA GmbH& Co. KG. For this tenant, no financial information was available. Accordingly, pursuant to section 2 ofthe first amendment to the main lease agreement, the former tenant remains jointly and severally liablefor the landlord's payment claims. Hence, the former tenant is a guarantor for the lease payments of thecurrent tenant.
Rent p.a.
10,737 m²
Self-service department stores usually can afford to pay a rent in the range of 2% to 4% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 4,000 to € 6,000 per m²sales area. The two graphics above indicate, how the contract rent of the main tenant Kaufland as well as the assumed market rental level, can be assessed on the basis of usual market ranges. This analysis isbased on the turnover potential figures prepared by Trade Dimension.
1.9%
2.8%
5.27
7.90
abc
Risk indicatorScore
Page 8 of 12
Credit limit
0
109.8%-23.5%
6,360530109,637
35.331,315,641
0.0%0.1%250,440
0.0%
1,565
0
20,870
-5.4%18,7790.0%
0
11.36
8.52
0
56%
0
Kaufland Vertrieb SIGMA GmbH & Co. KG
9.5 years
~ 8,439 m²
20,758 250,5970
Share of total income
Main tenant
€ 679,175
D&B Rating of Main Tenant
Tenant name
5.68
Storage0
100Petrol Station 0.00
0.00Internal parking 41.85
6.2674.14
0ResidentialCommercial
1,4800
0 00
0 0.0%00
00
0
m²
0
Property Analysis
0 0.0%0.00 0
74,98500.00
6.22
Warehouse
Warehouse
Area Let
13,398
Other Units
0532
Residential60241
0
249,091
4.23%
Contractual
m²Area Analysis Lettable Area
0
899,822
Retail
5.63
Total areaPetrol Station
49915
Income Analysis
Internal parking
Office
DIYRetail
Storage
80,58013,345
966,959
17,758 17,758
13,345
1,200
1,112
1.67
0.006.15
Other UnitsTotal area
External parking
Total parking
€ / m²
5.275.68
7.90
8.52
11.36
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
4,335
(Copy)
Property address Property no. 6 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The property is let to 16 retail tenants, three office tenants and two residential tenants . Furthermore, 30 parking spaces are let for permanent use. Currently, three retail units are vacant. The WALT amounts to 10.6years. The main tenant is Kaufland with a share of more than 55% of the rental income. The property is currently significantly under-rented due to the very low rental level of the main tenant, Kaufland. As the leasecontract is valid until 2022 and the tenant has options until 2037, we do not believe that the rental level can be adjusted before 2037. Kaufland’s rent is indexed and will be adapted by 50% of the CPI change,whenever the change exceeds 10 percent in relation to the CPI basis. Indexation started on 01.10.2009. The majority of the tenants pay all costs (including ground tax, insurance costs and management costs)except for maintenance costs for structural repairs. Ground tax, maintenance costs for structural repairs, management and insurance costs will not be borne by Kaufland. We are aware of Deminer Imbiss takingover a vacant retail unit. The following tenants have extended their lease contracts: Kraus until 05/2017, Deutscher Hausfrauen-Bund e.V. until 12/2016 , Hauswirtschaftliches Serviceteam GmbH until 11/2017,Linus Schade + Julian Wening until 12/2013, Müller until 12/2013 and Kolasinac GbR, Thiem-Hofmann until 12/2013.
224,552 €
238,906 €
€ 4,138€ 67,915
€ 4,205
Breakdown of Non-Recoverable Costs
€ 0
30.9%
7.16%
% of Gross
€ 10.00 /m²/p.a.
€ 2,15331.6%
206,736 €
€ 4,009 221,048 €217,546 €€ 3,946
210,113 €€ 3,879
32.8%€ 8,802
€ 63,548 29.9%30.4%€ 1,732
€ 61,663
€ 230
203,881 €
€ 15.17 /m²
Management costs
Other non-recoverable costs
€ 27.89 /m²
€ 18,878€ 3,811
€ 62,527
5.56%
Total non-recoverable expenses
Maintenance costs € 87,088
€ 394,881€ 387,166€ 382,228
€ 1,648
€ 1.36 /m²
% of Gross
12.98%
€ 18,241
€ 23,491
€ 6.50 /m² € 87,088Contract Rent
per year
Lease Contract Commentary
€ 6.50 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 6.80%
6.50%
Brack Capital Properties N.V.
Westliche Stadtmauerstraße 27
Assumptions
Tenant Stadt Erlangen used the options and its leases lost their rent-free status. Furthermore, the rent of Nguyen - Asian Food and that of Deutscher Hausfrauen-Bund have increased due to indexation. Theworking hours and tariff for parking have been raised. This results in an increase of parking fees from €123,544 to €240,000 p.a.
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yields profile is aligned with the market/other transactions. We have taken intoaccount such facts as the stable Cash Flow, the long lease contract with the tenant Kaufland, the goodlocation, the low vacancy rate and the good condition of the subject property.
01.02.201191054 Erlangen
Germany
31.03.2013
€ 0.28 /m²€ 203,200
0.30%€ 61,457€ 4.59 /m²
€ 15.17 /m²€ 3,686
per year
Year 8
€ 64,680€ 19,412
€ 97,785€ 96,241
€ 19,021
€ 90,052Year 3
€ 19,477
% of Total
Year 7
€ 3,698€ 17,492
€ 400,512
€ 382,917
€ 965
Total
€ 94,739 € 18,791
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 203,20024.20%
€ 0.28 /m² € 3,686
Insurance
Other non-recoverable costs
3.92%
Market Rent
16.71%30.73%
1.50%€ 1.75 /m²€ 4.59 /m² € 61,457
€ 373,671
per year
€ 28.28 /m²
Total Non-recoverable Costs
€ 378,922
€ 3,750
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 19,847 € 71,201 235,416 €€ 20,015€ 102,393 € 72,256
Year 10€ 541
5.05%1.50%
Market Value
€ 99,357
Year 4
Year 6
€ 4,333
€ 18,720
Year 11€ 100,897
€ 70,114Year 9
GroundManagementTax
Maintanance
€ 19,159
CostsCosts
€ 91,657
Year 1Year 2
€ 87,381€ 88,605
€ 69,005
€ 93,238 € 65,796€ 66,855
Year 5
€ 19,815
32.9%
228,156 €€ 4,073
€ 438,44432.7%32.3%
0.24%
213,858 €
€ 1,545€ 4,270
€ 3,966
€ 1,228€ 433,176
€ 415,46732.2%
231,823 €
32.5%
€ 426,542
Year after 2021
€ 407,595
abc
€ 40 € 418,60133.3%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
32.8%
30.4% 29.9%30.9% 31.6%
32.5% 33.3%32.2% 32.3% 32.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 6 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
5.00%
Market Value (rounded)
€ 694,596-€ 2,013
-€ 61,263
-€ 8,453
-€ 433,176
Gross Capital Value (rounded)
€ 13,400,000€ 1,216,050
€ 948
Page 10 of 12
9.58%
€ 854,302
€ 7.56 Total
Total € 12,700,000
6.29%
In terms of risk, we considered the covenant strength as well as the lease duration for the existing contracts. As at 4.2.2011, the tenant Kaufland Dienstleistung GmbH & Co. KG is the former tenant of the mainlease contract and has good covenant strength. According to the second amendment of the lease contract, the former tenant remains jointly and severally liable for the landlord's payment claims. However, thelease contract ensures a secure cash flow for the remainder of the lease term until at least 2022. In terms of a resale, we took into account such facts as visibility, demographic factors, appearance, condition andbuilding age, third-party usability, competition situation and location. Regarding the leasehold, we have assumed that the leaseholder will exercise its options for in total another 30 years. This is due to the fact thatthe leasehold is on the car park site, which is in our opinion essential for the operation of the self-service department store. Otherwise, there are insufficient parking spaces available. The right to prolong theleasehold is registered in Sheet 28698 in the land register of Erlangen.
-€ 7,318
abc
Valuation Comment
€ 1,566,081 per m²
-19.15%
For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in our valuation. Other costs have remained unchangedand have been applied according to information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective gross rent. We have been provided with updatedinformation regarding necessary capital expenditures. All Capital expenditures for repairs in the first year as well as in the periods of year 2 to 5 and year 6 to 10 are considered to be covered by the maintenancecosts of € 6.50/m² per annum. Regarding comparable rents we have had recourse to evidence of similar areas situated in the comparable regions and locations. Furthermore, we have analysed comparabletransactions. Please refer to the section "Investment Comparables".
0
8.86%
Year 10 € 1,323,112€ 1,321,008
€ 0
€ 1,333,605Year 9
-€ 407,595
TIs and
-€ 382,228
Brack Capital Properties N.V.
€ 1,294,137 € 0
-€ 1,135-€ 37,748
€ 879,858
€ 845,160 -€ 6,390 € 836,517
Income
-€ 2,602
-€ 18,235€ 0 € 906,971
€ 871,891
Net
31.03.2013
6.80%Commissions Cash FlowCapital
€ 757,640€ 722,626€ 736,128
Year 6Year 7
-€ 547
€ 867,567
-€ 382,917Vacancy
Year 5
€ 1,299,006 € 1,298,459Year 8
Year 4
Year 2-€ 3,150
Gross
€ 1,281,352
Market Value
Rental recoverable Operating
Westliche Stadtmauerstraße 27
€ 894,466
€ 781,316
12.33%per m²
€ 1,248,008
-€ 426,542-€ 418,601€ 0 -€ 411
Gross Value of Surplus Land
€ 13,883,097
€ 1,000
€ 13,363,274-€ 438,444 -€ 3,719€ 1,334,340
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 13,363,274
-€ 1,466Total Cashflow (incl. Terminal Value @ 6.50 %)
per m²/month
€ 895,896
€ 584,742
-€ 7,552
-€ 28,041 € 0
Expenditures-€ 18,029
-€ 387,166 € 906,971
Costs
€ 771,722
€ 889,936
Abatements
€ 796,803
-€ 2,207
-€ 415,467€ 878,312
-€ 13,477€ 0 € 832,541
€ 883,002
Year 3 € 1,297,287
€ 877,511€ 506,348-€ 9,273
-€ 400,512
€ 510,289
€ 1,258,529
Revenue€ 1,166,138
Turnover
Germany
€ 876,301
Revenue
€ 1,280,151 € 0
-€ 1,351 € 1,268,079
Rent
€ 0
€ 1,271,965-€ 21,622-€ 105,827 € 0Year 1
€ 1,291,033
€ 1,296,638
Year 11 € 1,341,658
€ 1,252,755
€ 9.74
-€ 1,126-€ 12,669
€ 1,339,621 -€ 15,040 -€ 1,469
€ 1,277,238-€ 11,922
-€ 48,630
€ 471,102
Yield Overview
€ 783,221
€ 882,357-€ 394,881
€ 1,280,796
91054 Erlangen
Cash Flow
Non-Total
-€ 2,253-€ 10,663
€ 0
€ 7,190,744
-€ 11,372 -€ 1,225-€ 10,218
Present
€ 537,805
€ 637,172
-€ 2,191
Leasing
01.02.2011
Matrix Portfolio
Value @
5.9%
6.6%6.8%
6.6% 6.5%6.3% 6.2%
6.6% 6.7% 6.7%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
€ .0
€ 200000.0
€ 400000.0
€ 600000.0
€ 800000.0
€ 1000000.0
€ 1200000.0
€ 1400000.0
€ 1600000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 6 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Westliche Stadtmauerstraße 27
01.02.2011
abcPage 11 of 12
View of the entrance to the car park
View of the car park (leasehold)
Matrix Portfolio
View of the Kaufland and the adjacent parking level from the car park
91054 Erlangen
Photos
View of a vacant retail unit at the pedestrian passage
View of the commercial building from Hauptstraße
Germany Brack Capital Properties N.V.
31.03.2013
View towards the pedestrian passage ("Altstadtmarktpassage")
(Copy)
Property address Property no. 6 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
Self-Service Department Store 8,478 m²Self-Service Department StoreHairdresser
8,450 m²
128 m²Pharmacy124 m²
0 m²80 m²Pharmacy
Real WürzburgLandshut
Halle0
Pharmacy
0Pharmacy
Hairdresser
0
Langgöns
0
0
€ 0
€ 13.48 /m²€ 1,453
€ 0.00 /m²
Total Rent p.m.
€ 720 € 9.00 /m² Other federal state€ 11.35 /m²
Slightly lower purchasing powerLocation is farther away from the city centre; lower purchasin
€ 1,672
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Other federal state; slightly lower purchasing power€ 7.30 /m²
€ 65,705 € 7.75 /m²€ 61,685
€ 7.75 /m²€ 62,000
CommentSimilar purchasing power
Rent p. sqm€ 76,808 € 10.50 /m²
Other federal state; slightly lower purchasing power
91054 Erlangen
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
7,315 m²
Leasing Market
Kaufland
Tenant Property TypeSelf-Service Department StoreKauflandSelf-Service Department Store
31.03.2013Westliche Stadtmauerstraße 27
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
GeldernKaufland
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
8,000 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
FreitalStraubing
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
01.02.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
Property address Property no. 7 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 3 11 to 15 years Macrolocation 3 Average location and catchment areaLettable Area 2 Between 7,500 and 10,000 m² Microlocation 4 Good micro locationProperty condition 4 Good building condition Commercial activity 3 Limited commercial activity nearbyGeneral impression 4 Good general impression Competition 2 High competition level
Investment Quality
WALT 4 WALT seven to ten years Investment market 3 Average property marketOver- / underrent 5 Significantly underrented (more than -15%) Investment volume 4 Good lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 10.86
Page 1 of 12 abc
SWOT Analysis
Limited third party usability of the large-scale retail area without refurbishment
31.03.2013
Brack Capital Properties N.V.
Key Figures
Gartenstraße 30
n.a.
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
7.70%
Discount Rate
7.70%
excluding capital
expenditures6.50%
5.83%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
7.6 years
0
Strong and well-known anchor tenant
Located near the city center adjacent to the pedestrian area
Long remaining lease term of the anchor tenant
Market rental value € 838,192
€ 5.02
2002
Weighted average lease term
73312 Geislingen
Property Summary
Retail Park
Germany
03.02.2011
Property type
Current vacancy rate
Kaufland Warenhandel Südwest GmbH & Co. KG
9,390 m²Total parking units
0.5%
Main tenant
Total lettable area451 units
-20.2%
€ 654,010
€ 565,281
€ 5.80Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
Sufficient parking spaces
One vacant retail area
Difficult relettability of the fitness studioReletting of the main retail area on market level Increased vacancy of ancilliary areas due to low turnovers of these tenants
0
0
€ 7.44 / m² / p.m.€ 9,100,000
7.25%
The property has four storeys. The ground level is occupied by several retail tenants, the largest being Kaufland. The first floor is a parking level, while the second floor is partly used for parking and accommodatespart of the fitness studio. The third floor is used by the fitness studio as well as a playground. The property has an elongated shape, with the long side facing the B10 federal road ("Gartenstraße"). The property is a steel-reinforced concrete construction with precast elements. The facade is partly made of brick facing and partly of galvanised steel sheets. In the entrance areas, there are curtain walls with metalframes. The roof is flat with hard covering.
0
5.83%
Market Rental Value
13.91
€ 838,192 p.a.
High level of competition (another Kaufland nearby)Weaknesses
Matrix Portfolio
The retail unit let to Kaufland is strongly underrented
€ 969 per m²
Extension of the lease contracts of the smaller tenants
Kaufland exercises its options until 2037
The property can be accessed on the ground floor from Gartenstraße as well as from the parking levels via several elevators.
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 88,729
Year of refurbishment
Property Description
0
€ 0.79
00
(Copy)
Property address Property no. 7 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
172.52
The nearest airport offering connections to national and international destinations is Stuttgart Airport,located in a distance of approx. 56 km from the city centre of Geislingen an der Steige.
Geislingen an der Steige is characterized by an industry that has evolved over time. The economy ismainly based on the processing of steel and metal as well as the automotive supply industry andtraditional beer brewing. Furthermore, Geislingen is also known for its university "Hochschule fürWirtschaft und Umwelt Nürtingen-Geislingen", offering business and real estate courses. Well-knowncompanies based in Geislingen include Württembergische Metallwarenfabrik (WMF), ULOFahrzeugleuchten (Odelo GmbH), Adlerbrauerei Karl Götz and Schlötter Galvanotechnik.
Micro Location
Geislingen an der Steige is located in the east of Baden-Wuerttemberg, approx. 25 km from the borderto the federal state Bavaria. The city is a minor secondary centre with approx. 27,000 inhabitants. Theclosest major cities are Ulm (approx. 25 km south-east; 122,000 inhabitants) and Stuttgart (approx. 50km west; 602,000 inhabitants).The closest motorways are the A8 (Perl - Bad Reichenhall), connecting to Salzburg (Austria) in thesouth-east, and the A7 (Flensburg - Füssen), leading to Denmark in the north and Austria in the south.The motorways can be reached within 18 km and 25 km, respectively.Geislingen has a train station, which connects Geislingen to the cities of Stuttgart and Ulm via regionaltrains. The closest train station offering connections to the high-speed ICE train network is Ulm in adistance of approx. 25 km.
0
Location
Brack Capital Properties N.V.
31.03.2013
73312 Geislingen 03.02.2011
Göppingen (Rural District)
Germany
Baden-Wurttemberg
Macroeconomic Indicators
Federal StateDistrict
4.2%
5,473
Geislingen Macro Location
5.0
Micro Location
395
The self-service department store is located in the southern part of Geislingen an der Steige, near thecity centre. The subject property is situated adjacent to the pedestrian zone of Geislingen along a highlyfrequented traffic axis (federal road B10 "Gartenstraße"). The property is bordered by Römerstraße tothe south, Bleichstraße to the west and Bismarckstraße to the north. The surrounding area ischaracterized by residential housing with some commercial usage.
Local Tax Information
-1.1%
106.6897.19
-2.9%
522
4.6%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
26,823
73312
354392
10,744,921252,002
Geislingen
0.8%
11,532
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Gartenstraße 30
City
(Copy)
Property address Property no. 7 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Extract from the land register dated 03.12.2010
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Gartenstraße 30 31.03.2013
03.02.2011
Germany
Suspicion of contamination
According to information from the local planning authority, a legally binding project and developmentplan exists, entitled "20/1/2 Marktgalerie" and dated 01.04.1999, with the following regulations: thesubject site is located in core zone (limitations regarding the use) - "Kerngebiet mit Einschränkung". Theplot ratio (Geschossflächenzahl, GFZ) is 2.0 and the site coverage ratio (Grundflächenzahl, GRZ) is 1.0.
Section 2 (Restrictions)
TPL Geislingen S.á.r.l., Luxembourg
Land Register
10534 341
Owner
n.a.
Site Information
Site area 10,909 m²thereof surplus land
NoGround lease
Site layout
Site Plan
Surplus land value (net) n.a.
Source: Cadastral plan on a 1 to 1000 scale, dated 27.12.2010
Matrix Portfolio
73312 Geislingen
MK (core zone)
n.a.
NO 1051
Sheet Plot Parcel
2.0
Tenure
Site servicing
Ground lease expiry€ 0
0 m²
1.0
Town Planning
Fully serviced
Building encumbrances No
Irregular
According to the Environmental Due Diligence Report, dated July 2007, the site has been industriallyused since 1850 by "Maschinenfabrik Geislingen (MAG)", whose activities included chemical andmechanical metal working and foundries. From this use stems severe subsoil and ground watercontamination caused by petrol, oil, lubricants and further chemicals. The site has been graduallyremediated from 1989 until 1999 and the soil remediation is considered as finished according to theLandratsamt Göppingen. However, other sources suggest that there is still contaminated soil beneaththe property and it is likely that the site is listed in the contaminated land cadastre as remediated withresidual contamination. For the purposes of this valuation, we have assumed that the subject property isfree of any soil or building contamination.
Two land charges concerning the payment of a money amount payable to the respective owner of parcel no 489/11 and several limited personal easements, among other things regarding the construction, operation and maintenance of a transformer station, pipline easement, wayleave in favor of the city Geislingen an der Steige and Albwerk GmbH & Co. KG, Geislingen. Furthermore, there is a limited personal easement (the right to operate and maintain a hypermarket) in favor of Kaufland Dienstleistungs GmbH & Co. KG, Neckarsulm.
Brack Capital Properties N.V.
Land charges in the total amount of € 11,052,658 in favour of Bank of Scotland (branch Frankfurt)
Local Court of Geislingen an der Steige, land register of Geislingen an der Steige
abcPage 3 of 12
(Copy)
Property address Property no. 7 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
172.52
-2.9%
abc
Population forecast for the district (2007 - 2025)
73312 Geislingen
Name73312 Geislingen, Heidenheimer Str. 139
Competitor Overview
Competitor Map
Hypermarket
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
1.70 km2,900 m²Hypermarket
12,515
Medium
00
High2.40 km
Inhabitants in secondary catchment area
Retail Centrality Index (District)
Inhabitants per hypermarket in secondary catchment area
18,010
11,532
E-aktiv Markt Gebauer's
72,039 Inhabitants per hypermarket in tertiary catchment area
73312 Geislingen, Neuwiesenstr. 25
73079 Süßen, Bühlstr. 23
E-aktiv Markt StaufersRewe
73072 Donzdorf, Wagnerstr. 3
E-aktiv Markt Gebauer's
Kaufland
73072 Donzdorf, Mozartstr. 35
Self-service dep. store 7,500 m²1,590 m² 8.30 km Low
8.60 kmHypermarket 1,850 m²
18,626
97.19
37,545
Hypermarket 1,900 m² 9.00 km
00
0
Inhabitants in primary catchment area 6,209
0
Competiton Indicators
Gartenstraße 30
03.02.2011
Germany Brack Capital Properties N.V.
31.03.2013
LowLow
0
0
0
0
Matrix Portfolio
(Copy)
Property address Property no. 7 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
03.02.2011
31.03.2013
Matrix Portfolio
Turnover analysis
This competitor is a smaller-sized Edeka hypermarket. Furthermore, Dänisches Bettenlager and Fressnapf are also located on the site. It is built as a retail warehouse agglomeration instead of a retail park with a mall and offers a different product and service variety than the subject property and therefore caters to different needs. It represents medium competition.
Main competitors
73312 Geislingen
Gartenstraße 30
and IMO (carwash). Nearby retailers in the commercial zone are OBI, Aldi and Lidl. The tenant mix within the property is very similar to the tenant mix in the subject property and therefore the property presents high competition potential. Even though the properties may attract different customers and have slightly different primary catchment areas, the catchment areas strongly overlap; two Kaufland self-service department stores for a city of only 27,000 inhabitants can be problematic. Another potential competitor is the small retail park with 13,000 m², that is currently being build in the city centre on the former sports field. Part of the area is let to REWE and Lidl. However, it remains to be seen whether it will have an effect on the turnover of Kaufland, because they usually address different customers.
The rents in a functional retail agglomeration are linked to turnover. The percentage rate that a retail tenant can use for rental payments (turnover-to-rent ratio) depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective branch. The productivity varies between approx. € 1,000/m² and up to more than € 10,000/m².Kaufland is represents a very strong anchor, we believe that there will always be demand for such ancillary tenants. For Kaufland, we have also been provided with turnover figures. We have analysed the figures and have found the area productivity of Kaufland to be in a healthy range. With a turnover-to-rent ratio of less than 2% it lies below the range of 2% to 4%, which is acceptable for a self-service department store. Considering the location factors and the competition level within Geislingen, we assume that a higher turnover-to-rent ratio regarding a similar branch and turnover is realistic. Hence, the market rent after the termination of the current rental contract has been chosen in a range of 2.2%. Please also refer to the rent/turnover analysis on page 8. Even though turnover rents have been negotiated with some of the tenants,
abc
Competition Comment
The catchment area can be differentiated into primary (0 - 5min driving time); secondary (5 - 10min) and tertiary (10 - 15min) catchment area. Approximately 18,626 inhabitants live in the primary catchment area. While the density of hypermarkets is relatively high in the primary catchment area, the competition eases in the secondary and tertiary catchment area.Even though there are several discounters and small-size supermarkets located nearby, it can be said that these present only indirect competition to the property. Kaufland offers a very deep and broad product range with more than 50,000 products, while supermarkets and discounters generally offer a limited product range with only 7,000 to 11,000 (supermarkets) or 400-2,500 (discounters) articles. Therefore, these retailing forms address different customers or customer needs. While supermarkets and discounters cater to the daily needs of customers, Kaufland offers more variety for products that are bought on a non-daily basis. The first competitor is a small retail warehouse agglomeration located on Heidenheimer Straße in a distance of approx. 1.7 km. The main tenant is a Edeka hypermarket. Other tenants on the site a Fressnapf and Dänisches Bettenlager. Furthermore, Edeka offers a small mall with additional businesses such as the bakery “K&U”, a newspaper agent and a cash machine. The location of the property within a commercial agglomeration is inferior to the location of the subject property near the city centre along a highly frequented street. While the competitor is solely reachable by car, the subject property can also be reached by foot from the adjacent residential area. Furthermore, the tenant mix is different. While both offer the typical service providers, the Edeka-Center also has Fressnapf and a Dänisches Bettenlager, both tenants that are prone to returning customers, whereas Kaufland is bound to receive more impulse buyers due to its location in the city centre. In addition, the large difference in size and product range also differentiates both properties. Therefore, it can be said that the Edeka market only represents medium competition. A second Kaufland was opened in January 2010 after the take-over of the former Schlekkerland (self-service department store) is in an industrial zone on the south-western outskirts of Geislingen. Other tenants in the property include a Kik, Tedi, Klier, Quickschuh, a tobacco shop
the necessary turnovers for the turnover rents to become effective have not been reached in the past few years. The tenants only pay the minimum rent. We therefore haven't included any additional turnover rents.
Even though the competition is quite strong and the density of self-service department store is very high for a town this size, we have not been informed of severe turnover decreases after the second Kaufland on Neuwiesenstraße was launched. We believe that the tenant will be able to compete with this property, especially because it can operate on a very low contractual rent for a long time. The anchor tenant Kaufland has a lease contract until 2022 with three options, each for five years, bringing the earliest possible termination date for the landlord to 2037. On the basis of our projection of likely productivity per m² and turnovers, we have calculated the market rent at € 8.25/m²/month. The tenant currently pays a contractual rent of € 5.47/m²/p.m. Therefore, the retail unit is currently strongly underrented. Due to the margins realizable and under the assumption of good turnover figures, we believe that Kaufland will remain in the property until 2037. In the unlikely case that Kaufland should vacate the premises, the property could be relet to other self-service department stores which are currently not present in Geislingen an der Steige such as real or Marktkauf.
The subject property is a modern self-service department store with a small mall accommodating additional businesses, such as a hair dresser, locksmith and newspaper kiosk. The property has sufficient parking spaces and is highly visible and easily accessible by foot and by car. The location of the property close to the city centre entails additional benefits.As Kaufland is a strong customer magnet, we believe that there will always be sufficient demand for the minor retail areas in the mall. The letting of the current fitness studio, however, is assessed to be more difficult. Even though the location of the property near the city centre and near a residential area is very good for the current use, the third-party usability of the areas is limited. One alternative use would be the letting of the space as office space. However, this would involve extensive refurbishment and restructuring measures. Furthermore, the location is not a traditional office location and the demand for such an area is limited. However, we believe that it is very probable that the fitness studio will remain within the property on an adequate market rental level. The rental area of Kaufland can be regarded as relatively unproblematic. First of all, the location is very good for such a tenant, as it can be reached both by foot and by car. Furthermore, the property is highly visible and easily accessible.
Germany Brack Capital Properties N.V.
This competitor is a small retail park located on the south-western outskirts of Geislingen. The main tenant is a Kaufland. Other tenants include a Kik, Tedi and Quickschuh. This building is well-located in a small industrial zone. Nearby retailers include Obi, Aldi and Lidl. The property is a serious competitor.
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 7 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
7 Vacant
44.48
€ 6,000
Other Units10 ING-DiBa AG Niederlassung Hannover
11 Deutsche Plakat-Werbung GmbH & Co. KG
vacant
Page 6 of 12
30.09.2022
6
External parking
5 Kaufland Warenhandel Südwest GmbH & Co. KG
3 In Shape-Sports Club GmbH
57
5.47
5.42
Retail 14.02
1.69
2 Bäckerei Staib GmbH & Co. KG Retail
pays VAT
02.09.2018
31.12.2013
0%
75%
Start
75%
31.03.2013Gartenstraße 30
Tenant
Matrix Portfolio
03.02.2011
Status m² / unitLet
TenantLeaseArea
Let
Let
31.08.2022Yes
03.04.2002
Yes
Rent / m² RenewalLeaseLetting
1 ROFU Kinderland Spielhandels GmbH Retail 1,107
/ month Probability
1
9 Frisör Klier GmbH Retail
Let
Other Units
8 Deichmann SE
14 Vacant
6 Mutlu
15.08.2012
03.09.2008
Yes
GT I PM
75%
Retail
Yes
€ 27,687
GT I PM
4 Metzgerei Chiacci/Reinhard
Retail 2,487
60
Let
Retail
5,065
10.04.2007
26.27
€ 2,669
€ 4,200
Let
Let Yes
GT I PM
73312 Geislingen
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Retail
€ 54,501
12
Let
Vacant
73Let
€ 205 02.04.2013
€ 715
01.10.2007
02.08.2014
15.10.2012 31.08.2013
€ 265 03.08.2009
30.09.2022 0%
75%
02.04.201703.04.2002
GT I PM
75%
GT I PM
Yes
Yes
GT I PM
GT I PM
abc
GT I PM
75%
9,390 m²
75%
75%
GT I PM30.09.2022
03.04.2002
03.04.2008
28.02.2017
75%
205.00
58.77
0.00
Yes
Yes
0.00
44.17
Yes
GT I PM
479 € 5,955
€ 050
12.44
31.03.2013
€ 800
75%
Total
1Vacant
vacant
€ 1,924
LetRetail
13 Vacant External parking
15 Mall Income
12 Vacant External parking 1 € 0
0.00
1 € 0 0.00
€ 0
Other Units 1 € 81 Yes 00.01.1900Let 81.11
16 Parking Internal Parking 448 € 4,000Let 8.93
(Copy)
Property address Property no. 7 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
03.02.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis15
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 41,786
abc
15 0
€ 0
75%
12 0 0 0 0 0%
0 0 10
75%
0 0 3 75%
0 0 3
0 0
0 0 39
100
75%
€ 100
75%
75%
10 75%12
0
9
12 9
€ 0
75%
0
0
10
3
10
12
0 12
0
75%
12
6 10
3 6
3
0
75%
0
3
10
75%
75%
3
0
75%
10
75%
3 10
10
75%
3
12€ 100 9
12 103
0 10
Total
13 Vacant
€ 100
€ 100
€ 0
€ 0
1
€ 100
€ 0
9 14 Vacant External parking
16 Parking
Other Units15 Mall Income
Page 7 of 12
€ 69,8499,390 sqm
Term**
Matrix Portfolio
Re-letting
€ 1,500
€ 487
€ 44.17
1
1
1
€ 50
Retail
€ 30.00
€ 30
6 Mutlu
€ 30.00
7 Vacant
Other Units
Other Units
External parking
Retail
8 Deichmann SE Retail
1,107
3 In Shape-Sports Club GmbH Retail
Retail
2 Bäckerei Staib GmbH & Co. KG
1 ROFU Kinderland Spielhandels GmbH
50
9 Frisör Klier GmbH
12 Vacant
10 ING-DiBa AG Niederlassung Hannover
11 Deutsche Plakat-Werbung GmbH & Co. KG
External parking
Internal Parking
60 € 65.00
Market
12
6 0
0
3
15 0
Rent /month€ 8,026
€ 25.00
€ 4,353
€ 1,427
479
€ 7.25
2,487
Rent
€ 8.25
€ 0
€ 0
12
€ 30
€ 0
€ 5,981
€ 1,831
€ 0.00
€ 0.00
€ 265
€ 205.00
€ 30.00
€ 25.00
1
448
4 Metzgerei Chiacci/Reinhard Retail 57
5 Kaufland Warenhandel Südwest GmbH & Co. KG 5,065 Retail
12
6
€ 3,900
15
€ 0
€ 12.50
€ 1.75
€ 205
12
12
€ 40.00
€ 30.00
0
Market
€ 100
73312 Geislingen
Retail
sqm/unitTenant Name
Retail € 100
€ 50
Gartenstraße 30
Area Category
73
€ 30
Germany Brack Capital Properties N.V.
12
15
12
31.03.2013
(Copy)
Property address Property no. 7 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
7,000
Usual market % - levels6,500
Market rent
6,000 Contractual Rent
5,500 Rents %
Contractual5,000
Market
4,500 4% of turnover
3% of turnover4,000
2% of turnover
3,500 Turnover potential(net)
Sales Area3,000
Total Areain € / m² p.a.
based on sales area
2AA284
This report is only to be read in conjunctionwith the valuation report provided.
0.00
0.00
7.43
0.000.000.00
610,436
0.00
0.00%
Rented€/year
00
0.0%
0.0%
30.00
€/month €/year0
0.00
9,340
00
0
0
0
0
0
0.00%0.00%0.00%
0.00%%
Vacancy Rate
0
9,340
73312 Geislingen
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
-27.5%831,4720.00
0
09,390
Market
0603,823
€/month
DIY
Office
0
0
0
069,289
0.53%
7.38
3
0€/m²/month
459External parking
Rent
3
ContractualRent
€/year
0.00%8
0.00%
0.00%0
500
0.00%
Matrix Portfolio
Gartenstraße 30 31.03.2013
0
00Commercial
0
Contractual
3
0448
Potential
Area Vacant
448
€/m²/monthRent
0.65%0
Rent
0100.00%
Brack Capital Properties N.V.
Use Category
Germany
03.02.2011
Capital indicator
€ 145.000 (single); €4,150,000 (total)
Assessment of Kaufland market rent
Comment
WALTPayment Index 82
21,116,431 €
The main tenant is a corporation belonging to the Kaufland Group, which in turn belongs to the Lidl &Schwarz Group, one of the biggest grocer groups in Europe. Kaufland is the self-service departmentstore division of Lidl & Schwarz with more than 500 locations across Europe. Kaufland’s core businessarea is food retailing with branded goods and own-brands specially produced for Kaufland. According toDun & Bradstreet (D&B) Rating as at 01.01.2011 Kaufland Warenhandel Südwest GmbH & Co. KG hasan below-average credit risk. The risk of insolvency (D&B Score) within the next 12 months comparedwith other German companies is assessed to be low, i.e. 84% of businesses on the German databasehave the same or higher risk of failure.
Rent p.a.
5,065 m²
Self-service department stores usually can afford to pay a rent in the range of 2% to 4% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 4,000 to € 6,000 per m²sales area. The two graphics above indicate, how the contract rent of the main tenant Kaufland as well as the assumed market rental level, can be assessed on the basis of usual market ranges. This analysis isbased on the turnover potential figures prepared by Trade Dimension.
1.6%
2.4%
5.47
8.25
abc
Risk indicatorScore
Page 8 of 12
Credit limit
1,080
17.3%-27.2%
5,64047069,759
58.75837,112
-100.0%0.0%0
0.0%
0
0
0
0.0%00.0%
90
13.90
10.42
1,080
51%
0
Kaufland Warenhandel Südwest GmbH & Co. KG
9.5 years
~ 4,200 m²
4,000 48,0000
Share of total income
Main tenant
€ 332,243
D&B Rating of Main Tenant
Tenant name
6.95
Storage00
Petrol Station 0.00
0.00Internal parking 8.93
5.4168.89
0ResidentialCommercial
00
0 00
0 0.0%00
00
0
m²
0
Property Analysis
0 0.0%0.00 0
49,95000.00
5.35
Warehouse
Warehouse
Area Let
9,390
Other Units
050
Residential00
0
48,000
0.53%
Contractual
m²Area Analysis Lettable Area
0
599,397
Retail
0.00
Total areaPetrol Station
4488
Income Analysis
Internal parking
Office
DIYRetail
Storage
50,5016,613
606,010
0 0
6,613
0
551
0.00
0.000.00
Other UnitsTotal area
External parking
Total parking
€ / m²
5.47
6.95
8.25
10.42
13.90
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
15.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
5,028
(Copy)
Property address Property no. 7 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The property is let to seven retail tenants and a fitness studio. The WALT of the property amounts to 7.6 years. The main tenant is Kaufland with a share of approx. 51% of the rental income. The property iscurrently heavily underrented due to the very low rental level of the main tenant, Kaufland. As the lease contract is valid until 2022 and the tenant has options until 2037, we do not believe that the rental level can beadjusted before 2037. Kaufland’s rent is indexed and will be adapted by 50% of the CPI change, whenever the change exceeds 10 percent in relation to the CPI basis. Indexation started on 01.04.2009. Themajority of the tenants pay all costs (including ground tax, insurance costs and management costs) except for maintenance costs for structural repairs. Ground tax, maintenance costs for structural repairs,management and insurance costs will not be borne by Kaufland. The rest can be apportioned to the tenant in accordance with the German Regulation on Operating Costs.
0 €
0 €
€ 4,339€ 36,245
€ 4,408
Breakdown of Non-Recoverable Costs
€ 0
13.1%
6.46%
% of Gross
€ 10.00 /m²/p.a.
€ 9,07313.8%
0 €
€ 4,203 0 €0 €€ 4,137
0 €€ 4,067
13.5%€ 467
€ 33,915 12.9%12.9%€ 0
€ 32,909
€ 0
0 €
€ 0.00 /m²
Management costs
Other non-recoverable costs
€ 9.45 /m²
€ 10,525€ 3,995
€ 33,370
5.04%
Total non-recoverable expenses
Maintenance costs € 42,256
€ 93,872€ 92,357€ 90,817
€ 65
€ 1.04 /m²
% of Gross
0.00%
€ 9,810
€ 12,573
€ 4.50 /m² € 42,256Contract Rent
per year
Lease Contract Commentary
€ 4.50 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 7.25%
6.50%
Brack Capital Properties N.V.
Gartenstraße 30
Assumptions
Even though the average area productivity is very low for the ancillary tenants, we are not aware of any tenants planning to terminate their leases in the subject property, nor have we received any informationregarding a prolongation of their leases. Furthermore, some rental increases due to indexations have taken place. The working hours and tariff for parking have been raised. This results in an increase of parkingfees from €13,081 to €48,000 p.a.
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yields profile is aligned with the market/other transactions. We have taken intoaccount such facts as the stable Cash Flow, the long lease contract with the tenant Kaufland, the newcontract with ROFU, the increase in vacancy, the reported turnover figures, the good location and thegood condition of the subject property.
03.02.201173312 Geislingen
Germany
31.03.2013
€ 0.41 /m²€ 0
0.59%€ 32,799€ 3.49 /m²
€ 0.00 /m²€ 3,864
per year
Year 8
€ 34,519€ 10,754
€ 47,445€ 46,696
€ 10,427
€ 43,693Year 3
€ 11,002
% of Total
Year 7
€ 3,877€ 9,958
€ 96,259
€ 89,608
€ 1,341
Total
€ 45,967 € 10,434
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 010.92%
€ 0.41 /m² € 3,864
Insurance
Other non-recoverable costs
3.91%
Market Rent
0.00%13.57%
1.50%€ 1.34 /m²€ 3.49 /m² € 32,799
€ 88,729
per year
€ 9.74 /m²
Total Non-recoverable Costs
€ 91,492
€ 3,931
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 10,862 € 37,999 0 €€ 12,138€ 49,681 € 38,562
Year 10€ 195
5.02%1.50%
Market Value
€ 48,208
Year 4
Year 6
€ 4,543
€ 10,919
Year 11€ 48,955
€ 37,419Year 9
GroundManagementTax
Maintanance
€ 10,749
CostsCosts
€ 44,472
Year 1Year 2
€ 42,397€ 42,991
€ 36,827
€ 45,239 € 35,115€ 35,680
Year 5
€ 11,249
13.0%
0 €€ 4,270
€ 105,11915.2%13.5%
0.46%
0 €
€ 8,066€ 4,477
€ 0
€ 0€ 110,359
€ 98,13013.6%
0 €
15.1%
€ 101,284
Year after 2021
€ 105,357
abc
€ 0 € 99,61313.5%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
13.5%12.9% 12.9% 13.1%
13.8%
15.1%
13.5% 13.6% 13.5%
15.2%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 7 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
6.75%
Market Value (rounded)
€ 488,984€ 0
€ 0
€ 0
-€ 110,359
Gross Capital Value (rounded)
€ 9,700,000€ 654,010
€ 969
Page 10 of 12
7.19%
€ 577,871
€ 5.80 Total
Total € 9,100,000
5.83%
In terms of risk, we considered the covenant strength as well as the lease duration for the existing contracts. As at 01.01.2011, the main tenant, Kaufland Warenhandel Südwest GmbH & Co. KG, has goodcovenant strength, which ensures a secure cash flow for the remainder of the lease term until at least 2022. In terms of a resale, we took into account such facts as visibility, demographic factors, appearance,condition and building age, third-party usability, competition situation and location.
-€ 9,503
abc
Valuation Comment
€ 838,192 per m²
-20.16%
For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in our valuation. Other costs have remained unchangedand have been applied according to information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective gross rent. We have been provided with updatedinformation regarding necessary capital expenditures. All Capital expenditures for repairs in the first year as well as in the periods of year 2 to 5 and year 6 to 10 are considered to be covered by the maintenancecosts of € 4.50/m² per annum. Regarding comparable rents we have had recourse to evidence of similar areas situated in the comparable regions and locations. Furthermore, we have analysed comparabletransactions. Please refer to the section "Investment Comparables".
0
7.70%
Year 10 € 724,107€ 749,933
€ 0
€ 749,933Year 9
-€ 105,357
TIs and
-€ 90,817
Brack Capital Properties N.V.
€ 716,946 € 0
€ 0€ 0
€ 633,885
€ 590,242 -€ 69,795 € 515,618
Income
-€ 6,294
€ 0€ 0 € 624,589
€ 622,704
Net
31.03.2013
7.25%Commissions Cash FlowCapital
€ 557,024€ 551,719€ 539,538
Year 6Year 7
-€ 306
€ 598,872
-€ 89,608Vacancy
Year 5
€ 733,804 € 733,498Year 8
Year 4
Year 2€ 0
Gross
€ 716,615
Market Value
Rental recoverable Operating
Gartenstraße 30
€ 648,649
€ 629,835
9.21%per m²
€ 727,965
-€ 101,284-€ 99,613€ 0 € 0
Gross Value of Surplus Land
€ 10,964,911
€ 1,033
€ 9,747,876-€ 105,119 -€ 2,051€ 809,197
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 9,747,876
-€ 1,704Total Cashflow (incl. Terminal Value @ 6.50 %)
per m²/month
€ 704,078
€ 353,125
-€ 8,966
-€ 22,392 -€ 3,593
Expenditures-€ 8,250
-€ 92,357 € 624,589
Costs
€ 525,935
€ 613,748
Abatements
€ 610,876
-€ 16,752
-€ 98,130€ 633,885
€ 0€ 0 € 629,835
€ 648,649
Year 3 € 716,946
€ 551,793€ 358,917€ 0
-€ 96,259
€ 400,846
€ 701,693
Revenue€ 663,848
Turnover
Germany
€ 610,876
Revenue
€ 701,693 € 0
€ 0 € 695,131
Rent
€ 0
€ 685,758€ 0
-€ 21,910 € 0Year 1
€ 718,533
€ 727,965
Year 11 € 818,700
€ 695,599
€ 7.44
€ 0-€ 1,957
€ 800,977 -€ 76,870 € 0
€ 716,576-€ 21,484
€ 0
€ 284,872
Yield Overview
€ 574,240
€ 622,704-€ 93,872
€ 721,584
73312 Geislingen
Cash Flow
Non-Total
-€ 4,829-€ 14,707
€ 0
€ 5,445,429
€ 0 € 0-€ 45,203
Present
€ 376,146
€ 422,365
€ 0
Leasing
03.02.2011
Matrix Portfolio
Value @
5.9% 6.3%6.4% 6.4%
6.1% 6.1%
6.5% 6.5%6.7%
6.3%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
€ .0
€ 100000.0
€ 200000.0
€ 300000.0
€ 400000.0
€ 500000.0
€ 600000.0
€ 700000.0
€ 800000.0
€ 900000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 7 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Gartenstraße 30
03.02.2011
abcPage 11 of 12
View of the parking level
Front view of the property
Matrix Portfolio
Internal view of the sales areas of the tenant Kaufland
73312 Geislingen
Photos
Entrance to the fitness studio from parking level 2
Internal view of the sales area of the tenant Deichmann
Germany Brack Capital Properties N.V.
31.03.2013
View of the mall
(Copy)
Property address Property no. 7 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
Self-Service Department Store 5,956 m²Shoe StoreShoe Store
449 m²
66 m²Bakery495 m²
2,430 m²50 m²Bakery
Deichmann WiesbadenRödermark
BerlinFitness Studio
Bäckerei
BremenBäckerei
Deichmann
Fitness Company
Aschaffenburg
Worse location
Comparable purchasing power; worse location
€ 3,013
€ 10.83 /m²€ 3,854
€ 1.24 /m²
Total Rent p.m.
€ 3,000 € 60.00 /m² Lower purchasing power€ 58.40 /m²
Other federal stateHigher purchasing power; smaller retail area
€ 5,361
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Bigger retail area; lower purchasing power€ 13.31 /m²
€ 44,730 € 7.51 /m²€ 5,972
€ 7.75 /m²€ 35,732
CommentOther federal state; slightly lower purchasing power
Rent p. sqm€ 62,000 € 7.75 /m²
Lower purchasing power; worse location
73312 Geislingen
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
8,000 m²
Leasing Market
Kaufland
Tenant Property TypeSelf-Service Department StoreKauflandSelf-Service Department Store
31.03.2013Gartenstraße 30
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
BergkamenKaufland
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
4,611 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
LüneburgFreital
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
03.02.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
Property address Property no. 8 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 2 16 to 25 years Macrolocation 2 Below average location and catchment areaLettable Area 4 Between 12,500 and 15,000 m² Microlocation 3 Average micro locationProperty condition 2 Below average building condition Commercial activity 3 Limited commercial activity nearbyGeneral impression 3 Average general impression Competition 2 High competition level
Investment Quality
WALT 4 WALT seven to ten years Investment market 2 Under developed property marketOver- / underrent 3 Rack rented (-5% to 5%) Investment volume 4 Good lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 13.07
Page 1 of 12 abc
SWOT Analysis
Limited third party usability of the large-scale retail area without refurbishment
31.03.2013
Brack Capital Properties N.V.
Key Figures
Waldenburger Straße F175
n.a.
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
6.62%
Discount Rate
6.62%
excluding capital
expenditures7.25%
6.94%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
7.6 years
0
Good tenant mix
Sufficient parking
Located next to a motorway exit and a federal road
Market rental value € 1,246,923
€ 7.74
1992
Weighted average lease term
08371 Glauchau
Property Summary
Retail Park
Germany
01.02.2011
Property type
Current vacancy rate
Kaufland Warenhandel Mittel-Sachsen GmbH & Co. KG
12,764 m²Total parking units
0.1%
Main tenant
Total lettable area450 units
4.5%
€ 1,301,918
€ 1,186,091
€ 8.50Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
Good accessibility by car
0
Re-letting or negotiations concerning the prolongation of existing contracts may result in worse 0 Significant negative population growth
Below-average purchasing power
0
€ 8.14 / m² / p.m.€ 16,300,000
7.25%
The site encompasses the subject retail park, a petrol station as well as some food stalls located in front of the main entrance. The property was constructed in 1992 and encompasses a self-service departmentstore (Kaufland), an Aldi food discounter, a medimax (consumer electronics) and various smaller retailers. The property is rectangular-shaped with the north-western corner being cut out. The property mostly has asingle storey; however, on the eastern side, there is second storey accommodating offices of the main tenant. The unit let by the tenant Aldi has its own entrance located at the south-east of the subject property withno access to the mall.The property is built out of prefabricated columns and beams on a reinforced concrete slab. The supporting structure of the flat roof consists of trapezoidal metal panels.
0
6.94%
Market Rental Value
12.52
€ 1,246,923 p.a.
High level of competition (another Kaufland nearby)Weaknesses
Matrix Portfolio
0
€ 1,277 per m²
Prolongation of lease contracts after expiry
0
The facade of the property is made from multi-layer concrete panels. Main entrance, office windows and shop displays have coated aluminium frames. The walls within the public areas are plastered and painted.The ceiling inside the mall is suspended with a grid system still allowing the technical installations above to be seen. The smaller shop units usually have a suspended ceiling while the large retail unit of Kaufland alltechnical installations are viewable. The floor is mainly covered with ceramic tiles, while the fit out of the smaller shop units depends on the tenant’s preferences. In terms of HVAC, the property offers gas-operatedheating and ventilation, but only partial air conditioning. The parking area is made of asphalt in the driveways and paving stones for the parking areas.
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 115,828
Year of refurbishment
Property Description
Limited investor focus on properties in eastern Germany
€ 0.76
Property is currently let sligthly over market rental level (over-rented)0
(Copy)
Property address Property no. 8 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
140.79
The closest airport is Leipzig-Altenburg, which is situated 20 km north of Glachau. Destinations to bereached from Leipzig airport are nationally, larger German cities in the west and south of Germany andinternationally, Brussels, Prague, Paris and Vienna. Furthermore, Leipzig offers service to plenty oftourist destinations, such as Spain, Greece and North Africa. Glauchau is home to severalmanufacturing companies in the field of textiles and car parts. Particularly the latter sector benefits fromthe manufacturing site of Volkswagen in Zwickau-Mosel only a couple of kilometres away. Additionally,Glauchau benefits from its location next to a motorway.
Micro Location
The city of Glauchau is located in the federal state of Saxony. Glauchau is situated between the citiesGera to the west (approx. 35 km) and Chemnitz to the east (approx. 30 km). Glauchau is located next tothe motorway A4, which runs from the east of Hesse to the Polish border, passing by cities such asErfurt, Chemnitz and Dresden. Furthermore, the federal roads B175 and B93 cross Glauchau,connecting the city from north and south.
Glauchau has a railway station with service to Dresden, Hof, Nuremberg and Zwickau, connecting thecity to the long-distance network of Deutsche Bahn.
Location
Brack Capital Properties N.V.
31.03.2013
08371 Glauchau 01.02.2011
Zwickau (Rural District)
Germany
Saxony
Macroeconomic Indicators
Federal StateDistrict
10.8%
5,738
Glauchau Macro Location
3.5
Micro Location
490
The property is situated approx. 2.5 km north of the city centre of Glauchau in the sub-district of Jerisau.The property is located very close to a motorway exit (A4) and the federal road B175, connecting the cityin all directions. The property is visible from both roads. It can be accessed from Ludwig-Erhard-Straßein the north and Waldenburger Straße in the east, surrounding the property to the west, north, and east.To the south of the property, there is a Greenfield site. The neighbourhood of the property ispredominantly characterised by commercial buildings, such as car dealerships, a fast food restaurant,and fields. Furthermore, there is a petrol station on the site.There is a bus stop in front of the site with frequent service from Glauchau to a couple of villages andtown to the north and east of the property.
Local Tax Information
-4.9%
83.6088.41
-15.0%
399
8.4%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
24,234
08371
471356
4,168,732338,272
Glauchau
-3.0%
12,631
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Waldenburger Straße F175
City
(Copy)
Property address Property no. 8 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Land register extracts, dated 2nd December 2010
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Waldenburger Straße F175 31.03.2013
01.02.2011
Germany
No Suspicion
According to information from the local planning authority's website, a legally binding development planexists, entitled "Einkaufszentrum Glauchau Waldenburgerstr." with the following regulations: the subjectsite is located in a special retail zone (Sondergebiet Einkaufszentrum). It imposes the followingrestrictions, among others: approx. 13,000 m² of retail space is permissible, of which a maximum of5,500 m² can be used for food retailing, 6,400 m² for non-food retailing, and 3,200 m² for ancillaryrooms. Additionally, up to 2,000 m² of office space is permissible.
Section 2 (Restrictions)
TPL Glauchau S.á.r.l, Luxembourg
Land Register
517785994303
Sheet 5177: 220/3, 217/4, 213/3, 213/4, 232/9, 220/5,
220/6, 219/11; Sheet 8599:
219/6; Sheet 4303: 219/7
Owner
n.a.
Site Information
Site area 47,878 m²thereof surplus land
NoGround lease
Site layout
Site Plan
Surplus land value (net) n.a.
Source: Cadastral plan on a 1 to 1,500 scale, dated 30.12.2010
Matrix Portfolio
08371 Glauchau
SO (special zone)
n.a.
n.a.
n.a.n.a.
Sheet Plot Parcel
n.a.
Tenure
Site servicing
Ground lease expiry€ 0
0 m²
n.a.
Town Planning
Fully serviced
Building encumbrances No
Irregular
The site consists of ten different plots and encompasses a total of 47,878 m². The site is not listed in theregister of contaminated land ("Altlastenkataster") and the environmental DD, dated 2nd May 1991prepared by Institut Fresenius GmbH, did not identify any contamination of the site. In terms of easements, all plots have an easement registered in favour of Kaufland to operate its store.This represents a common practice so that we do not attribute any effect on value to it. Furthermore,three other easements secure the right to build an underground water pipe on some of the plots. Again,we do not believe that this will influence the market value of the property.For the purposes of this valuation, we have assumed that the subject property is free of any soil orbuilding contamination.
Sheet 5177:Easement (pipeline installation and use as storage space) for the respective owner of the parcels 220, 219/4 and 219/5 (Jerisau district);Comprehensive right of use to operate a supermarket/self-service department for Kaufland Dienstleistung GmbH & Co. KG, Neckarsulm; Freshwater pipeline easement for Regionaler Zweckverband Wasserversorgung Bereich Lugau-Glauchau, Glauchau; Sheet 8599 and 4303:Comprehensive right to operate a supermarket/self-service department for Kaufland Dienstleistung GmbH & Co. KG, Neckarsulm
Brack Capital Properties N.V.
Joint liability of the plots entered in sheet 5177, 8599 and 4303: Land charge in the amount of € 19,884,802 in favour of Bank of Scotland, branch in Frankfurt, Frankfurt am MainSheet 8599:
Local Court of Hohenstein-Ernstthal, land register of Glauchau
abcPage 3 of 12
(Copy)
Property address Property no. 8 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
140.79
-15.0%
abc
Population forecast for the district (2007 - 2025)
08371 Glauchau
Name08371 Glauchau, Rudolf-Breitscheid-Str. 10-14
Competitor Overview
Competitor Map
Hypermarket
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
2.10 km2,300 m²Hypermarket
11,051
Medium
00
High3.00 km
Inhabitants in secondary catchment area
Retail Centrality Index (District)
Inhabitants per hypermarket in secondary catchment area
19,794
12,631
Simmel
138,555
3,525 m² m²
Inhabitants per hypermarket in tertiary catchment area
9.70 km08451 Crimmitschau, Harthauer Weg 1 Hypermarket
08371 Glauchau, Grenayer Str. 10
09350 Lichtenstein, Platanenstr. 4
SimmelKaufland
08393 Meerane, August-Bebel-Str. 65
Simmel
Kaufland
08393 Meerane, Seiferitzer Allee 1
Hypermarket 4,200 m²1,600 m² 5.30 km Low
6.70 kmHypermarket 4,847 m²
Kaufland
26,058
0
88.41
55,254
Hypermarket 2,000 m² 9.30 km
00
0
Inhabitants in primary catchment area 26,058
0
Competiton Indicators
Waldenburger Straße F175
01.02.2011
Germany Brack Capital Properties N.V.
31.03.2013
LowLow
0
0
Low
0
Matrix Portfolio
(Copy)
Property address Property no. 8 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
01.02.2011
31.03.2013
Matrix Portfolio
Turnover analysis
This competitor is a retail park located at the western outskirts of Glauchau, only 3 km away from the subject property. It comprises a Kaufland, a toom DIY, a large-scale drinks cash-and-carry, a Reno shoe market, a tedi, a petrol station and various smaller retailers. Due to the proximity and similarity of the tenant mix, we assess the competition level to be high.
Main competitors
08371 Glauchau
Waldenburger Straße F175
Moreover, Kaufland II does not have a food discounter, which usually attracts many customers who go shopping in hypermarkets for the goods they cannot buy in food discounters. Furthermore, when considering the inner and outer appearance of the shops, they are both almost on the same level as the subject property. Taking the catchment area into account, Kaufland has no competition in its primary catchment area, though it overlaps with other competitors. Considering the total catchment area (up to 15 min driving distance) and the number of competitors in this area, nearly 20,000 inhabitants are allotted per store, which is a very good figure. Particularly to the north of the property, there are no competitors and this area is connected via a major federal road. Therefore, we believe that there is enough customer potential for Kaufland.
The rents in a functional retail agglomeration are linked to turnover. The percentage rate that a retail tenant can use for rental payments depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective industry. The productivity varies between approx. € 1,000/m² and up to more than € 10,000/m².For the previous valuation we have been provided with turnover figures from the tenant Kaufland. We have analysed the figures and have found the area productivity of Kaufland to be in a healthy range. With a turnover-to-rent ratio of less than 2% it lies below the range of 2% to 4%, which is acceptable for a self-service department store.
abc
Competition Comment
Concerning food competitors, there is the aforementioned retail park anchored by Kaufland (named Kaufland II in the following) and toom DIY at the western outskirts of Glauchau and the E-Center Simmel located within Glauchau. Of these two and the Kaufland in the subject property, the latter one has the largest sales area with more than 7,000 m². Its competitors only have approx. 4,200 m² (Kaufland II) and 2,300 m² (E-Center) of space. On the other hand, the Kaufland II is part of a larger retail agglomeration with a toom DIY, a large-scale drinks cash-and-carry, a Reno shoe market, a tedi, a petrol station and various smaller retailers. Furthermore, a petrol station is next to the agglomeration. The E-Center is part of a smaller retail agglomeration with a couple of smaller retailers, predominantly from the region. Generally, shop units are smaller within this agglomeration compared to the properties in which the Kauflands are located in.
However, the E-Center is only an indirect competitor to Kaufland, since the sales area is significantly smaller. Furthermore, Kaufland offers a very deep and broad product range with more than 50,000 products, while discounters and supermarkets offer a limited product range with only 7,000 to 11,000 (supermarkets) or 400-2,500 (discounters) articles. Therefore, these retailing forms address different customers or customer needs. While supermarkets and discounters cater to the daily needs of customers, Kaufland offers a larger variety of products that are bought on a non-daily basis.Thus, the only very strong competitor is Kaufland II. In terms of location, Kaufland II benefits from its location next to the B175, which leads out of Glauchau to Zwickau and to the Volkswagen manufacturing site close by. However, the accessibility of the site is below average and the visibility from the road from a distance is below average. Additionally, the different larger shops are not connected to each other via a mall as in the subject property. This means that customers have to walk through the parking lot to get to the next shop.
Hence, we believe that a higher market rent is achievable after the end of the lease contract. Though turnover is low, the turnover-rent ratio is in an acceptable range. Nevertheless, we consider the rents paid in the property to be at the upper end of the range of acceptable ratios. On the other hand, the rents paid are considered to be generally sustainable.With regards to the turnover rents, apart from some exceptions, we believe that there will be no significant and sustainable increases in turnover. Thus, in the valuation we considered only turnover rents when the level of turnover was sustainable over a long period of time.
The tenants within the property, apart from the food stalls, suffer from below average turnover, likely because of the low purchasing power in the region. Nevertheless, based on the turnover data made available to us, we believe that the total rental income is sustainable. The property is nearly fully let and achieves an average contractual rent of € 8.68/m² for the retail areas. Furthermore, the weighted average lease term is 8.1 years with the anchor tenant having a remaining lease term of more than 10 years.
All in all, the property has an adequate tenant mix and is let on a sustainable level. Nevertheless, the strong competition and economic situation in the region does not leave much room for rental growth potential.
The subject property is a retail park located in the northern outskirts of Glauchau at an arterial road, close to a motorway exit. It offers good visibility and accessibility by car. The property is anchored by a Kaufland and comprises other nation-wide operating retailers such as Aldi, medimax, Deichmann, Apollo Optik, AWG, mister+lady and some local retailers. The tenant mix within the property predominantly focuses on price-conscious customers and offers products ranging from daily needs to fashion and services, such as a dry cleaner, a locksmith, and jeweller. This tenant mix fits into the general economic environment of the region.On the other hand, the tenant mix is quite similar to that of the strongest competitor (Kaufland II). Nevertheless, the subject property benefits from the villages to the north, which act as additional customer potential and help sustain the market. Furthermore, the subject property benefits of the presence of Aldi within the property since food discounters usually attract a large number of people who could be potential customers at the other shops as well.
Germany Brack Capital Properties N.V.
This medium-sized Edeka store is located within a small retail park with several small retailers such as NKD, a local shoe store and Pfennigpfeiffer (a discount store for non-food items, for example stationery and houseware).
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 8 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
7 Röhner
44.37
€ 4,788
30 Vacant
Retail10 Deichmann SE
11 Fleischerei Richter GmbH
Let
Page 6 of 12
GT I PM
31.01.2013
82
Retail
Retail
5 Reiseland GmbH & Co. KG
3 mister*lady GmbH
78
27.61
27.36
Retail 31.21
6.36
2 Friedrich Retail
pays VAT
31.07.2016
30.09.2017
75%
75%
Start
75%
31.03.2013Waldenburger Straße F175
Tenant
Matrix Portfolio
01.02.2011
Status m² / unitLet
TenantLeaseArea
Let
Let
31.07.2028Yes
06.09.2007
Yes
Rent / m² RenewalLeaseLetting
1 BRL Center GmbH Retail 175
/ month Probability
435
9 Reiseland GmbH & Co. KG Retail
Let
Retail
8 Valora Retail Kiosk GmbH
14 Flora Passionata
6 Reiseland GmbH & Co. KG
01.08.2008
25.07.2000
Yes
GT I PM
75%
Retail
Yes
€ 815
GT I PM
4 Frisör Klier GmbH
Retail 336
13
Let
Retail
30
01.04.2008
24.50
€ 595
€ 2,136
Let
Let Yes
GT I PM
08371 Glauchau
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Storage
€ 108,493
29
Let
Let
67Let
€ 7,786 31.10.2014
€ 105
31.03.2015
01.04.2008
30.06.2022
01.03.2009 28.02.2019
€ 3,300 21.06.2008
01.10.2007
31.05.2016
30.09.2026
75%
01.04.2005
30.09.2026
00.01.1900
30.04.2013
31.01.2017
75%
0%
0%
75%
31.07.2016
75%
31.12.2016
75%
01.12.2010
GT I PM
75%
75%
75%
GT I PM
Yes
Yes
GT I PM
GT I PM
abc
GT I PM
75%
75%
75%
75%
75%
75%
13,903 m²
GT I PM
30.09.2026
0%
75%
75%
75%
75%
14.03.2016
75%
75%
75%
GT I PM30.09.2015
75%
01.11.2015
30.09.2026
GT I PM
GT I 28.02.2017
GT I PM07.05.2014
15.12.2012
02.11.2005
13.10.1992
01.05.2008
75%
31.12.2017
75%
75%No
17.90
3.58
13.67
Yes
Yes
12.47
40.34
Yes
Yes
GT I PM
29 € 732
€ 99173
25.30
31.01.2013
€ 2,440
GT I PM75%
Total
660Let
29 Apache-Jeans Retail 150
31 Kurzzeitmieter
Let
€ 1,635
LetRetail
13 Aldi GmbH & Co. KG Retail
€ 2,027
15 Kaufland Warenhandel Mittel-Sachsen GmbH & Co. KG
GT I PM12 Apollo Optik GmbH Retail 125 € 1,558 Yes
10.06 30.04.2014
GT I PM58 € 1,354 Yes 01.04.200923.35 31.03.2014
€ 6,645
Retail 7,140 € 39,268 Yes 01.10.2007Let 5.50
16 Wiener Feinbäckerei Heberer GmbH Weimar Retail 79 € 4,419 Yes 01.06.2001Let 56.29
17 AWG Allgemeine Warenvertriebs-GmbH Retail 890 € 8,277 Yes 01.03.2002Let 9.30
18 MediMax Zentrale Electronic GmbH Retail 1,546 € 10,027 Yes 01.12.2004Let 6.49
19 Ziesche Retail 80 € 750 Yes 01.10.1998Let 9.38
20 Kaufland Warenhandel Mittel-Sachsen GmbH & Co. KG Storage 442 € 2,210 Yes 01.10.2007Let 5.00
21 Kaufland Warenhandel Mittel-Sachsen GmbH & Co. KG Office 55 € 275 Yes 01.10.2007Let 5.00 30.09.2026
22 Aldi GmbH & Co. KG Storage 135 € 0 No 01.05.2008Let 0.00 30.04.2014
23 Aldi GmbH & Co. KG Storage 41 € 0 No 01.05.2008Let 0.00 30.04.2014
24 Sparkasse Chemnitz Abt. Verwaltung Other Units 4 € 273 Yes 26.04.1993Let 68.22 31.03.2014
25 Schwarz Außenwerbung GmbH Other Units 1 € 433 Yes 01.01.2010Let 433.33 31.12.2014
26 Cakir Other Units 24 € 607 Yes 01.04.2006Let 25.31 31.03.2016
27 Dung Tran Other Units 24 € 750 Yes 01.11.2005Let 31.25 30.06.2014
M GT I PM28 TOTAL Deutschland GmbH Petrol Station 1,139 € 2,586 Yes 01.04.2003Let 2.27 31.03.2018
Yes 15.03.2011Let 13.50
17 € 0Vacant 0.00
Other Units 1 € 1,171 YesLet 1170.79
32 Mall Income Other Units 1 € 124 00.01.1900Let 124.39
33 Parking External parking 450 € 0 Yes 00.01.1900Let 0.00
M GT I PM34 Fleischerei Richter GmbH Other Units 8 € 100 n.a. 01.01.2009Let 13.33 75%
M GT I PM35 Gottmann Kay Other Units 1 € 15 01.10.2009Let 15.00 0%
M GT I PM36 Geiser Roland GmbH Other Units 1 € 300 n.a. 01.08.2011Let 300.00 75%
(Copy)
Property address Property no. 8 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
01.02.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis6
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 738
abc
0 36 Geiser Roland GmbH Other Units 1 € 300.00 3 € 300 5 75%€ 100 0 0
0 0%€ 0 0
0 3 5 75%€ 30.00
0
€ 100 6 6
0
0 0
35 Gottmann Kay Other Units 1 € 0.00 € 0
34 Fleischerei Richter GmbH Other Units 8
33 Parking External parking 450 € 0.00 € 0 € 0 0
0 0 0 0%0 0
0 0 0%
32 Mall Income Other Units 1 € 0.00 € 0 € 0
0 3 5 75%0 0 31 Kurzzeitmieter Other Units 1 € 0.00 € 0 € 0
0 3 5 75%0 0 30 Vacant Retail 17 € 5.50 € 94 € 0
0 3 5 75%12 12 29 Apache-Jeans Retail 150 € 15.00 € 2,252 € 100
0 3 10 75%0 0 28 TOTAL Deutschland GmbH Petrol Station 1,139 € 2.27 € 2,586 € 0
0 3 5 75%6 6 27 Dung Tran Other Units 24 € 30.00 € 720 € 0
0 3 5 75%6 6 26 Cakir Other Units 24 € 30.00 € 720 € 0
0 3 5 75%0 0 25 Schwarz Außenwerbung GmbH Other Units 1 € 433.33 € 433 € 0
0 3 5 75%3 3 24 Sparkasse Chemnitz Abt. Verwaltung Other Units 4 € 68.22 € 273 € 0
€ 0 0 3 10 75%12 12
3 10 75%12 12
23 Aldi GmbH & Co. KG Storage 41 € 0.00 € 0
Storage 135 € 0.00 € 0 € 0 0
0 3 5 75%6 6
3 5 75%6 6
21 Kaufland Warenhandel Mittel-Sachsen GmbH & Co. KG Office 55 € 5.00 € 275
75%9 9
20 Kaufland Warenhandel Mittel-Sachsen GmbH & Co. KG Storage 442 € 5.00 € 2,210 € 100 0
10
19 Ziesche Retail 80 € 8.00 € 640 0 3 5
€ 6.00 75%
0 3 5 75%12
0 3 6 6
€ 11.00 € 9,795 € 100
6 6
€ 100
12
75%
6 6 0 3 5 75%
0 3 5
75%
0 3 10 75%
0 3 5
0 6
0 3 59
50
75%
€ 100
75%
75%
5 75%6
0
6
12 12
€ 100
75%
3
0
5
3
5
9
0 6
12
75%
9
6 5
3 9
3
3
75%
0
3
5
75%
75%
3
0
75%
5
75%
3 5
5
75%
3
6€ 100 6
6 53
0 5
€ 50
€ 100
Total
22 Aldi GmbH & Co. KG
13 Aldi GmbH & Co. KG
€ 100
€ 100
€ 100
€ 100
660
€ 100
€ 50
6 14 Flora Passionata Retail
16 Wiener Feinbäckerei Heberer GmbH Weimar
Retail15 Kaufland Warenhandel Mittel-Sachsen GmbH & Co. KG
Retail
Page 7 of 12
€ 103,91013,903 sqm
Term**
Matrix Portfolio
Re-letting
€ 1,269
€ 733
€ 30.00
€ 9,2741,546
435
58
7,140
€ 100
890
Retail
€ 30.00
€ 6,604
6 Reiseland GmbH & Co. KG
€ 10.00
18 MediMax Zentrale Electronic GmbH
7 Röhner
Retail
Retail
Retail
Storage
8 Valora Retail Kiosk GmbH Retail
175
3 mister*lady GmbH Retail
Retail
2 Friedrich
1 BRL Center GmbH
73
9 Reiseland GmbH & Co. KG
12 Apollo Optik GmbH
Retail
17 AWG Allgemeine Warenvertriebs-GmbH
10 Deichmann SE
11 Fleischerei Richter GmbH
Retail
Retail
13 € 30.00
Market
6
6 0
0
3
12 0
Rent /month€ 4,375
€ 25.00
€ 2,352
€ 1,955
29
€ 25.00
336
Rent
€ 25.00
0
€ 100
€ 225
€ 39,268
6
€ 100
€ 1,562
€ 2,355
€ 869
€ 2,003
€ 30.00
€ 5.50
€ 2,454
€ 12.50
€ 12.50
€ 30.00
125
79
4 Frisör Klier GmbH Retail 78
5 Reiseland GmbH & Co. KG 30 Retail
29
82
€ 402
6
€ 100
€ 30.00
€ 7.00
€ 5,438
6
12
€ 25.00
€ 17.50
6
Market
€ 100
08371 Glauchau
Retail
sqm/unitTenant Name
Retail € 100
€ 100
Waldenburger Straße F175
Area Category
67
€ 1,740
Germany Brack Capital Properties N.V.
6
12
6
31.03.2013
(Copy)
Property address Property no. 8 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
7,000
Usual market % - levels6,500
Market rent
6,000 Contractual Rent
5,500 Rents %
Contractual5,000
Market
4,500 4% of turnover
3% of turnover4,000
2% of turnover
3,500 Turnover potential(net)
Sales Area3,000
Total Areain € / m² p.a.
based on sales area
2AA193
This report is only to be read in conjunctionwith the valuation report provided.
0.00
2.27
8.14
0.000.000.00
1,303,532
4.55
0.00%
Rented€/year
00
0.0%
0.0%
0.00
€/month €/year275
0.00
12,747
31,03227,780
0
3,300
0
0
0
0.00%0.00%0.00%
0.00%%
Vacancy Rate
0
12,045
08371 Glauchau
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
4.5%1,145,2215.00
0
012,062
Market
3,3001,196,135
€/month
DIY
Office
0
55
0
27595,435
0.13%
7.91
0
3,300€/m²/month
1,654External parking
Rent
450
ContractualRent
€/year
0.00%65
0.00%
0.00%0
17647
0.00%
Matrix Portfolio
Waldenburger Straße F175 31.03.2013
1,139
00Commercial
55
Contractual
0
00
Potential
Area Vacant
450
€/m²/monthRent
0.00%450
Rent
00.00%
Brack Capital Properties N.V.
Use Category
Germany
01.02.2011
Capital indicator
n.a.
Assessment of Kaufland market rent
Comment
WALTPayment Index n.a.
25,359,998 €
The main tenant is a corporation belonging to the Kaufland Group, which in turn belongs to the Lidl &Schwarz Group, one of the biggest grocer groups in Europe. Kaufland is the self-service departmentstore division of Lidl & Schwarz with more than 500 locations across Europe. Kaufland’s core businessarea is food retailing with branded goods and own-brands specially produced for Kaufland.According to Dun & Bradstreet (D&B) Rating as of 05.01.2011 Kaufland Warenhandel Mittel-SachsenGmbH & Co. KG has a very low credit risk. The risk of insolvency (D&B Score) within the next 12 months compared with other German companies is assessed to be low, i.e. 93% of businesses on the Germandatabase have the same or higher risk of failure.
Rent p.a.
7,140 m²
Self-service department stores usually can afford to pay a rent in the range of 2% to 4% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 4,000 to € 6,000 per m²sales area. The two graphics above indicate, how the contract rent of the main tenant Kaufland as well as the assumed market rental level, can be assessed on the basis of usual market ranges. This analysis isbased on the turnover potential figures prepared by Trade Dimension.
1.9%
1.9%
5.50
5.50
abc
Risk indicatorScore
Page 8 of 12
Credit limit
0
41.3%4.5%
32,0542,671103,910
41.411,246,923
0.0%0.0%0
0.0%
0
2,586
0
0.0%0-21.3%
0
11.84
8.88
0
36%
0
Kaufland Warenhandel Mittel-Sachsen GmbH & Co. KG
13.5 years
~ 6,000 m²
0 00
Share of total income
Main tenant
€ 471,214
D&B Rating of Main Tenant
Tenant name
5.92
Storage2,5862,315
Petrol Station 2.27
0.00Internal parking 0.00
8.5158.51
0ResidentialCommercial
00
31,032 31,0322,943
0 0.0%00
00
35,316
m²
0
Property Analysis
0 0.0%0.00 0
99,54300.00
8.26
Warehouse
Warehouse
Area Let
12,764
Other Units
017
Residential647
0
0
0
0.14%
Contractual
m²Area Analysis Lettable Area
1,139
1,194,521
Retail
5.00
Total areaPetrol Station
065
Income Analysis
Internal parking
Office
DIYRetail
Storage
108,49345,285
1,301,918
0 0
45,285
27,780
3,774
3.58
0.000.00
Other UnitsTotal area
External parking
Total parking
€ / m²
5.505.92
5.50
8.88
11.84
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
4,227
(Copy)
Property address Property no. 8 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The main tenant, Kaufland, has a lease expiring in 2026 with the option to prolong its lease. The rent is indexed and will be adapted by 50% of the CPI change, whenever the change exceeds 10 percent in relationto CPI basis. Kaufland does not contribute to any costs in association with maintenance costs for roof and the building structure, ground tax, insurance fees, and management costs. The remaining tenants usuallydo not pay for maintenance costs for roof and building structure and pay a fixed amount each month for management costs (usually around € 100). However, most tenants pay for ground tax and insurance fees.The rent is mostly indexed with 75% to 100% adjustment of the rent whenever the German CPI changes by 10% or more. Some of the tenants have an option to prolong their leases by five years.
0 €
0 €
€ 4,206€ 24,700
€ 4,273
Breakdown of Non-Recoverable Costs
€ 0
9.6%
5.39%
% of Gross
€ 10.00 /m²/p.a.
€ 2919.5%
0 €
€ 4,075 0 €0 €€ 4,010
0 €€ 3,942
8.9%€ 259
€ 23,111 9.1%9.8%€ 6,011
€ 22,426
€ 555
0 €
€ 0.00 /m²
Management costs
Other non-recoverable costs
€ 9.07 /m²
€ 18,725€ 3,873
€ 22,740
5.63%
Total non-recoverable expenses
Maintenance costs € 70,202
€ 122,949€ 119,917€ 122,753
€ 2,332
€ 1.53 /m²
% of Gross
0.00%
€ 19,529
€ 18,704
€ 5.50 /m² € 70,202Contract Rent
per year
Lease Contract Commentary
€ 5.50 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 7.25%
7.25%
Brack Capital Properties N.V.
Waldenburger Straße F175
Assumptions
The space of Andres Weber has been relet to Reiseland GmbH & Co. KG for a lower rent p.m. One new contract was negotiated with Gottmann Kay. Some indexation adjustments took place.
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yields profile is aligned with the market/other transactions. We have taken intoaccount such facts as the stable Cash Flow, the long lease contract with the tenant Kaufland, theaverage location within the federal state Saxony and the low vacancy rate.
01.02.201108371 Glauchau
Germany
31.03.2013
€ 0.29 /m²€ 0
0.29%€ 22,351€ 1.75 /m²
€ 0.00 /m²€ 3,746
per year
Year 8
€ 23,523€ 19,745
€ 78,871€ 77,625
€ 19,611
€ 72,633Year 3
€ 20,282
% of Total
Year 7
€ 3,758€ 19,652
€ 124,560
€ 116,574
€ 1,807
Total
€ 76,413 € 20,023
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 09.22%
€ 0.29 /m² € 3,746
Insurance
Other non-recoverable costs
1.79%
Market Rent
0.00%8.90%
1.50%€ 1.47 /m²€ 1.75 /m² € 22,351
€ 115,828
per year
€ 9.01 /m²
Total Non-recoverable Costs
€ 115,003
€ 3,811
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 20,437 € 25,895 0 €€ 21,056€ 82,587 € 26,278
Year 10€ 269
1.72%1.50%
Market Value
€ 80,138
Year 4
Year 6
€ 4,404
€ 19,902
Year 11€ 81,380
€ 25,499Year 9
GroundManagementTax
Maintanance
€ 19,224
CostsCosts
€ 73,928
Year 1Year 2
€ 70,479€ 71,466
€ 25,096
€ 75,203 € 23,929€ 24,314
Year 5
€ 20,645
9.6%
0 €€ 4,139
€ 134,5949.9%9.6%
0.30%
0 €
€ 2,933€ 4,339
€ 1,072
€ 1,648€ 134,984
€ 127,4389.6%
0 €
9.4%
€ 132,203
Year after 2021
€ 125,116
abc
€ 1,012 € 129,4679.6%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
8.9%
9.8%
9.1%9.6% 9.5% 9.4% 9.6% 9.6% 9.6%
9.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 8 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
5.00%
Market Value (rounded)
€ 892,292-€ 6,796
-€ 48,976
-€ 15,563
-€ 134,984
Gross Capital Value (rounded)
€ 17,100,000€ 1,301,918
€ 1,277
Page 10 of 12
7.99%
€ 1,146,923
€ 8.50 Total
Total € 16,300,000
6.94%
In terms of risk, we considered the covenant strength as well as the lease duration for the existing contracts. The main tenant, Kaufland Warenhandel Südwest GmbH & Co. KG, has good covenant strength, whichensures a secure cash flow for the remainder of the lease term until at least 2026. In terms of a resale, we took into account such facts as visibility, demographic factors, appearance, condition and building age,third-party usability, competition situation and location. In terms of the market rent of Kaufland, our analysis shows that Kaufland could afford to pay a higher rent of approx. € 6.40/m²/month. However, taking the highly negative population growth forecast for the comingyears into account as well as the strong competition, we decreased the market rent accordingly to € 5.50/m²/month.
-€ 5,835
abc
Valuation Comment
€ 1,246,923 per m²
4.50%
For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in our valuation. Other costs have remained unchangedand have been applied according to the information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective gross rent. For the periods of year 1 to 10, allbudgeted costs (capital expenditures) are covered by our maintenance cost approach of € 5.50/m² p.a.Regarding comparable rents, we have had recourse to evidence of similar areas situated in the comparable regions and locations. Furthermore, we have analysed comparable transactions. Please refer to thesection "Investment Comparables". Compared to our last valuation, some changes in the rent roll have been made as well as an adjustment of the non-recoverable costs.0
6.62%
Year 10 € 1,362,457€ 1,376,322
€ 0
€ 1,400,261Year 9
-€ 125,116
TIs and
-€ 122,753
Brack Capital Properties N.V.
€ 1,316,366 -€ 7,198
-€ 16,461-€ 3,747
€ 1,222,659
€ 1,209,737 -€ 1,823 € 1,206,629
Income
-€ 10,024
-€ 18,267-€ 2,718 € 1,186,533
€ 1,136,312
Net
31.03.2013
7.25%Commissions Cash FlowCapital
€ 1,190,959€ 955,325
€ 1,153,445
Year 6Year 7
-€ 13,975
€ 1,182,848
-€ 116,574Vacancy
Year 5
€ 1,366,101 € 1,352,126Year 8
Year 4
Year 2-€ 7,233
Gross
€ 1,333,604
Market Value
Rental recoverable Operating
Waldenburger Straße F175
€ 1,244,119
€ 1,191,947
7.65%per m²
€ 1,326,806
-€ 132,203-€ 129,467€ 0 -€ 6,205
Gross Value of Surplus Land
€ 17,573,259
€ 1,340
€ 17,145,235-€ 134,594 -€ 3,678€ 1,403,732
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 17,145,235
-€ 3,076Total Cashflow (incl. Terminal Value @ 7.25 %)
per m²/month
€ 1,269,138
€ 823,641
-€ 1,110
-€ 5,576 € 0
Expenditures-€ 1,471
-€ 119,917 € 1,196,449
Costs
€ 999,194
€ 1,227,473
Abatements
€ 1,058,339
-€ 12,014
-€ 127,438€ 1,199,993
-€ 3,674€ 0 € 1,199,368
€ 1,216,411
Year 3 € 1,323,599
€ 1,186,178€ 673,153-€ 19,741
-€ 124,560
€ 758,679
€ 1,248,335
Revenue€ 1,310,114
Turnover
Germany
€ 1,125,582
Revenue
€ 1,309,262 € 0
€ 0 € 1,307,408
Rent
€ 0
€ 1,313,633-€ 60,927-€ 3,519 € 0Year 1
€ 1,315,518
€ 1,346,613
Year 11 € 1,409,567
€ 1,334,853
€ 8.14
€ 0-€ 33,898
€ 1,407,156 -€ 44,699 € 0
€ 1,281,620-€ 26,196
-€ 19,807
€ 611,629
Yield Overview
€ 1,193,540
€ 1,158,671-€ 122,949
€ 1,340,429
08371 Glauchau
Cash Flow
Non-Total
-€ 1,285-€ 25,901
€ 0
€ 8,727,288
-€ 23,939 € 0-€ 29,281
Present
€ 711,733
€ 838,856
-€ 7,967
Leasing
01.02.2011
Matrix Portfolio
Value @
7.0%
6.6%
7.0%6.8%
6.9%7.1% 7.0%
7.1% 7.3% 7.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
€ .0
€ 200000.0
€ 400000.0
€ 600000.0
€ 800000.0
€ 1000000.0
€ 1200000.0
€ 1400000.0
€ 1600000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 8 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Waldenburger Straße F175
01.02.2011
abcPage 11 of 12
View of the delivery zone
View from main entrance to the mall
Matrix Portfolio
Sales area of Kaufland
08371 Glauchau
Photos
View of the petrol station on site
View of Aldi with separate entrance
Germany Brack Capital Properties N.V.
31.03.2013
View of the mall
(Copy)
Property address Property no. 8 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
Self-Service Department Store 6,250 m²Self-Service Department StoreShoes
16,866 m²
1,435 m²Fashion504 m²
0 m²88 m²Haircutter
Real BitterfeldGörlitz
Großpösna0
AWG
0Frisör Klier
Deichmann
0
Großpösna
0
Slightly better purchasing power
€ 0
€ 11.25 /m²€ 16,373
€ 0.00 /m²
Total Rent p.m.
€ 2,236 € 25.41 /m² Slightly better purchasing power€ 11.41 /m²
Slightly worse purchasing powerRental income includes sub tenants with higher rents
€ 5,670
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Better purchasing power€ 6.85 /m²
€ 38,750 € 6.20 /m²€ 115,532
€ 5.29 /m²€ 104,150
CommentOther federal state
Rent p. sqm€ 8,136 € 4.52 /m²
Significantly better purchasing power
08371 Glauchau
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
1,800 m²
Leasing Market
Real
Tenant Property TypeSelf-Service Department StoreMarktkaufSelf-Service Department Store
31.03.2013Waldenburger Straße F175
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
SalzgitterWal Mart
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
19,688 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
BraunschweigMühlhausen
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
01.02.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
Property address Property no. 9 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 2 16 to 25 years Macrolocation 3 Average location and catchment areaLettable Area 4 Between 12,500 and 15,000 m² Microlocation 3 Average micro locationProperty condition 3 Average building condition Commercial activity 2 No commercial activity nearbyGeneral impression 3 Average general impression Competition 3 Average competition level
Investment Quality
WALT 4 WALT seven to ten years Investment market 3 Average property marketOver- / underrent 5 Significantly underrented (more than -15%) Investment volume 4 Good lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 9.53
Page 1 of 12 abc
SWOT Analysis
The retail unit let to Kaufland is strongly underrented
31.03.2013
Brack Capital Properties N.V.
Key Figures
Friedrichstraße 124
n.a.
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
8.84%
Discount Rate
8.84%
excluding capital
expenditures6.75%
6.66%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
7.7 years
Low vacancy rate
Strong and well-known anchor tenant with long remaining lease term
Located along a major through road
Good tenant mix
Market rental value € 1,332,535
€ 5.30
1997
Weighted average lease term
71638 Ludwigsburg
Property Summary
Retail Park
Germany
03.02.2011
Property type
Current vacancy rate
Kaufland Vertrieb ALPHA GmbH & Co. KG
14,144 m²Total parking units
0.0%
Main tenant
Total lettable area299 units
-22.5%
€ 1,033,067
€ 898,931
€ 6.09Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
Sufficient parking spaces
0
Difficult relettability of the fitness studio/health centerExtension of the lease contracts of the smaller tenants 0
0
0
€ 7.85 / m² / p.m.€ 12,700,000
7.00%
The property consists of two buildings. The main building was built in 1997 and is a multifunctional building complex with two underground levels and one to five storeys. The main tenant, Kaufland, is located in themain building, as is the health centre and some minor office areas. The building comprises four connected building parts, which extend from west to east: Part A is a five-storey building with one basement, whichhas a triangular shape and is the location of the main entrance to the mall. This building part is mainly let to medical practices. Part B is an L-shaped one- to two-storey building with a basement level and in parts, asecond basement level. The main part of the mall is located here. Building part C has two storeys, one basement level and a rectangular shape. The ground level is occupied by the shopping mall, while the firstfloor is let to the fitness studio. Building part D is rectangular, has four-storeys and comprises residential units.
0
6.66%
Market Rental Value
12.29
€ 1,332,535 p.a.
Limited third party usability of the large-scale retail area without refurbishmentWeaknesses
Matrix Portfolio
High level of competition (another Kaufland nearby)
€ 898 per m²
Reletting of the main retail area on market level
0
The main building is a skeleton construction with columns and beams in varying grids. On the upper floors, there are reinforced concrete slabs and a ripped ceiling over the basement. The inner and outer walls aremade of reinforced brickwork or concrete, and are partly constructed as a multi-layer construction or covered with plaster. The annex was completed in 2007. It has three storeys and a rectangular shape. Theannex is let to medical practices and office tenants on the first floor. There are three retail units on the ground floor and several residential units on the other floors. There are two parking levels under the mainbuilding accessible from Friedrichstraße. Some additional parking is provided in front of the annex and is accessible from Danziger Straße.
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 134,136
Year of refurbishment
Property Description
0
€ 0.79
00
(Copy)
Property address Property no. 9 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
167.47
The nearest airport offering connections to national and international destinations is the Stuttgart Airport,located approx. 22 km from the subject property.
The economy of Ludwigsburg is based on five sectors: automotive suppliers, mechanical engineering,financial services, software development, and communication media. Additionally, a new field iscurrently establishing itself in Ludwigsburg, namely companies with future-oriented businesses such asenergy efficiency, eco-design and green industry. Well-known companies based in Ludwigsburg includeBeru Ag, Gleason-Pfauter GmbH, Wüstenrot Bausparkasse AG and Mann+Hummel GmbH.
Micro Location
Ludwigsburg is located in the centre of Baden-Wuerttemberg, only 12 km north from the state capital,Stuttgart (602,000 inhabitants). It is the district capital of the Ludwigsburg District and the second biggest secondary centre in the federal state.The closest motorways are the A81 (Würzburg - Gottmadingen) and A8 (Perl - Bad Reichenhall), whichconnect the region to Salzburg, Austria to the south-east. The motorways can be reached within 5 kmand 20 km, respectively.Ludwigsburg has a railway station, which is located approx. 2 km from the subject property and offersconnections to regional destinations such as Stuttgart. The closest railway station offering connectionsto the high-speed ICE train network is in Stuttgart, approx. 13 km away.
0
Location
Brack Capital Properties N.V.
31.03.2013
71638 Ludwigsburg 03.02.2011
Ludwigsburg (Rural District)
Germany
Baden-Wurttemberg
Macroeconomic Indicators
Federal StateDistrict
4.2%
12,725
Ludwigsburg Macro Location
5.0
Micro Location
375
The property is less than 2 km from Ludwigburg's city centre. It is located at the intersection of DanzigerStraße and Friedrichstraße (L1140), a well-frequented east-west axis. The property is highly visible fromboth Friedrichstraße and Danziger Straße due to its corner location. The surrounding are ischaracterized by residential use with minor commercial use on the ground floor level.
Local Tax Information
1.6%
106.68106.74
7.5%
2,044
4.1%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
88,673
71638
2046759
10,744,921521,014
Ludwigsburg
0.8%
40,594
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Friedrichstraße 124
City
(Copy)
Property address Property no. 9 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Extract from the land register dated 03.12.2010
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Friedrichstraße 124 31.03.2013
03.02.2011
Germany
Suspicion of contamination
According to information from the local planning authority, a legally binding development plan exists,entitled "048/01" and dated 30.09.1995, with the following regulations: the subject site is listed as aspecial area (SO-Sondergebiet "Einkaufszentrum"), which permits large-scale retail trade. The sitecoverage ratio (Grundflächenzahl, GRZ) is 0.9. The maximum height of the buildings is limited to 27.5 mfor the corner building and 17.5 m for the middle part of the building and 15 m for the annex.
Section 2 (Restrictions)
TPL Ludwigsburg S.á.r.l., Luxembourg
Land Register
25568 1330/21330/89
Owner
n.a.
Site Information
Site area 10,911 m²thereof surplus land
NoGround lease
Site layout
Site Plan
Surplus land value (net) n.a.
Source: Cadastral plan on a 1 to 1,000 scale, dated 28.12.2010
Matrix Portfolio
71638 Ludwigsburg
SO (special zone)
n.a.
NO 3611 (VN 1998/2)
NO 3611 (VN 1993/71)
Sheet Plot Parcel
n.a.
Tenure
Site servicing
Ground lease expiry€ 0
0 m²
0,9
Town Planning
Fully serviced
Building encumbrances Yes
Irregular
According to the Environmental Due Diligence Report, dated July 2007, both sites are listed in thecontaminated land register, "Atlas altlastverdächtiger Flächen des Landratsamtes Ludwigsburg". Thesites were formerly used by the US military as a military base. It is not clear whether the grounds werecontaminated, as neither subsoil investigation reports nor remediation reports were available. Kauflandhas stated that there is no subsoil contamination up to 10 m below ground level; however, it is not clearwhether there is contamination below this point. For the purposes of this valuation, we have assumedthat the subject property is free of any soil or building contamination.
Several limited personal easements (regarding temporary restrictive covenant, right of wayleave, restrictive covenant, pipeline easement, building restrictions concerning antennas and combustion installations, right to maintain a sidewalk on part of the property, right to operate and maintain a central heating system) in favor of the city of Ludwigsburg. Further limited personal easements (regarding the installation/operation of a transformer station, pipeline easement, the installation and operation of a distribution plant) are in favour of Neckarwerke Elektrizitätsversorgungs-AG, Esslingen and Deutsche Telekom AG, Stuttgart. One limited personal easement (the right to operate and maintain a hypermarket) in favor of Kaufland Dienstleistungs GmbH&Co. KG, Neckarsulm.
Brack Capital Properties N.V.
Land charges in the total amount of € 14,136,476 in favour of Bank of Scotland (branch Frankfurt)
Local Court of Ludwigsburg, land register of Ludwigsburg
abcPage 3 of 12
(Copy)
Property address Property no. 9 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
167.47
7.5%
abc
Population forecast for the district (2007 - 2025)
71638 Ludwigsburg
Name70806 Kornwestheim, Arkansasstr. 2
Competitor Overview
Competitor Map
Hypermarket
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Hypermarket
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
1.60 km1,500 m²Hypermarket
15,498
Low
LowLow
1,500 m²
Low1.90 km
Inhabitants in secondary catchment area
Retail Centrality Index (District)
71679 Asperg, Eglosheimer Str. 72Rewe Burkhardt
Inhabitants per hypermarket in secondary catchment area
19,692
40,594
Rewe
Handelshof
Handelshof
295,384
3,400 m²2,746 m²
Inhabitants per hypermarket in tertiary catchment area
4.50 kmHypermarketHypermarket
4.50 km5.20 km
71679 Asperg, Ruhrstr. 671686 Remseck, Neckaraue 2 Hypermarket
71638 Ludwigsburg, Wilhelmstr. 24
70806 Kornwestheim, Bahnhofsplatz 2-4
ReweKaufland
70806 Kornwestheim, Neckarstr. 1
E-center
Rewe
71636 Ludwigsburg, Schwieberdinger Str. 94
Hypermarket 1,500 m²1,724 m² 2.90 km Low
3.00 kmSelf-service dep. store 5,073 m²
E-center
Handelshof
37,677
Marktkauf
106.74
74321 Bietigheim-Bissingen, Prinz-Eugen-Str. 10
71672 Marbach, Rielingshäuser Str. 15
139,480
Hypermarket6.40 kmHypermarket70736 Fellbach, Daimlerstr. 18
KauflandRewe Aupperle
70378 Stuttgart, Aldinger Str. 70 5.50 km
7.50 km
Hypermarket 1,500 m²
8.50 km6,000 m²
Hypermarket 7.30 km
3.60 km
2,800 m²4,800 m²
71732 Tamm, Bissinger Str. 1070825 Korntal-Münchingen, Schwieberdinger Str. 100
2,400 m²2,000 m²
E-neukauf HypermarketLow2,361 m²
Self-service dep. store Low
Medium
Inhabitants in primary catchment area
7.60 km
2,864 m²
Hypermarket
12,559
Low
Competiton Indicators
Kaufland 70736 Fellbach, Merowingerstr. 58.60 km
Friedrichstraße 124
03.02.2011
Germany Brack Capital Properties N.V.
31.03.2013
HighLow
Medium
Medium
Medium
Low
Matrix Portfolio
(Copy)
Property address Property no. 9 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
03.02.2011
31.03.2013
Matrix Portfolio
Turnover analysis
This competitor is a large-scale retail property let to the tenant Kaufland. The property is located in a commercial area at the western periphery of Ludwigsburg. A Küchenstudio and an Aral petrol station are located next to the property.
Main competitors
71638 Ludwigsburg
Friedrichstraße 124
0
The rents in a functional retail agglomeration are linked to turnover. The percentage rate that a retail tenant can use for rental payments depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective branch. The productivity varies between approx. € 1,000/m² up to more than € 10,000/m². In the subject property, there are only four retail areas: the retail areas of Kaufland, Corongiu, Sardovino and Aro Heimtextilien GmbH. No turnover rents have been agreed with the tenants Corongiu and Sardovino; we have therefore not been provided with any turnover figures.
abc
Competition Comment
The catchment area can be differentiated into primary (0 - 5min driving time); secondary (5 - 10min) and tertiary (10 - 15min) catchment area. Approximately 37,677 inhabitants live in the primary catchment area. This results in 12,559 inhabitants per large-scale hypermarket in the primary catchment area.Even though there are several discounters and small-scale supermarkets located nearby, it can be said that these present only indirect competition to the property. Kaufland offers a very deep and broad product range with more than 50,000 products, while supermarkets and discounters generally offer a limited product range with only 7,000 to 11,000 (supermarkets) or 400-2,500 (discounters) articles. Therefore, these retailing forms address different customers or customer needs. While supermarkets and discounters cater to the daily needs of customers, Kaufland offers more variety for products that are bought on a non-daily basis.Several additional tenants complement the offer. These include Kreissparkasse Ludwigsburg (bank), Klier (hairdresser), several restaurants and cafés, a butcher’s shop and a bakery, a travel agency, a photography store, a car rental service, a pharmacy, a newspaper kiosk, a locksmith, a Quick-Schuh and a fashion jewellery store. The mix of the ancillary tenants is comparable to the sublets of Kaufland in the subject property (pharmacy, newspaper kiosk, bakery, butcher’s shop, hairdresser, drycleaner). The property was refurbished in 2009/2010. The split of the retail area over two storeys is a bit problematic, as it forces consumers to walk longer distances. Other than that, the proximity of this competitor to the subject property and the superior location along a commuter road make this retail property a serious competitor with high competition potential. There are three more Rewe hypermarkets in a radius of 3 km. However, as these have barely half the sales area of the subject property and offer a different product mix, they only represent indirect competition.
For Kaufland, we have been provided with turnover figures. We have analysed the figures and have found the area productivity of Kaufland to be in a healthy range. With a turnover-to-rent ratio of less than 2% it lies below the range of 2% to 4%, which is acceptable for a self-service department store. Considering the location factors and the competition level within Ludwigsburg, we have assumed that a higher turnover-to-rent ratio regarding a similar branch and turnover is realistic. Hence, the market rent after the termination of the current rental contract has been chosen in a range of 3%. Please also refer to the rent/turnover analysis on page 8.
The location is suitable for the tenant and can be reached by foot from the surrounding residential area as well as by car. Even though the competition from the Kaufland located nearby is strong, the density of self-service department stores is moderate for a city this size. We believe that the tenant will be able to compete, especially because it can operate on a very low contractual rent for a long time. The anchor tenant, Kaufland, has a lease contract until 2022 with three options each for five years, bringing the earliest possible termination date for the landlord to 2037. On the basis of our projection of likely productivity per m² and turnovers, we have calculated the market rent at a level of € 8.50/m²/month. The tenant currently pays a contractual rent of € 4.91/m²/p.m. Therefore, the retail unit is currently heavily underrented. Due to the margins realizable and under the assumption of good turnover figures, we believe that Kaufland will remain in the property until 2037. In the unlikely case that Kaufland should vacate the premises, the property could be relet to other self-service department stores, which are currently not present in the Ludwigsburg real estate market.
The subject property is a modern self-service department store with a small mall in the basement as well as some additional tenants on the ground floor. The tenant mix of the sublet areas is service oriented and includes a hairdresser, pharmacy, newspaper kiosk, bakery, butcher’s shop, deli and drycleaner. The property offers sufficient parking spaces on two levels and is easily accessible as well as highly visible from both Danziger Straße and Friedrichstraße. As Kaufland is a strong customer magnet, we believe that it will have no trouble letting the small retail units in the basement and on the ground floor. The retail units in the annex, however, are difficult to let. This is partly due to the fact that in the location of the subject property, there is no demand for additional retail space. The current use as a restaurant/wine store are fine, however, they do not benefit greatly from their location next to the Kaufland and therefore, it will be difficult to find new tenants if the current tenants do not prolong their lease terms. In contrast to this, the location has established itself as a medical centre: several of the office units in both the main building and annex have been let to medical practices and a health centre complements this offer. The letting of the office units assuming an adequate rental level can therefore be rated as relatively unproblematic.The rental area of Kaufland can be regarded as relatively unproblematic.
Germany Brack Capital Properties N.V.
The location of the property is very good and it benefits from being next to a highly-frequented road leading to the A81 motorway. The property is comparable to the subject property and therefore, has a high competition potential.
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 9 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
7 Jacobi-Haumer
12.35
€ 36,743
30 PROPERTY MANAGER
Office10 Schwarzenberger
11 Praxisgemeinschaft
Let
Page 6 of 12
GT I PM
15.05.2016
205
Internal Parking
Residential
5 Life GmbH
3 Corongiu
165
4.65
4.91
Office 8.96
11.58
2 SardoVino GmbH Alexander & Carolin Corongiu Retail
pays VAT
13.09.2017
13.09.2017
75%
75%
Start
75%
31.03.2013Friedrichstraße 124
Tenant
Matrix Portfolio
03.02.2011
Status m² / unitLet
TenantLeaseArea
Let
Let
30.09.2027No
14.09.2007
Yes
Rent / m² RenewalLeaseLetting
1 Kaufland Vertrieb ALPHA GmbH & Co. KG Retail 7,491
/ month Probability
177
9 Praxisgem. Office
Let
Office
8 Beyer
14 Derr
6 Life GmbH
01.10.2007
14.09.2007
Yes
GT I PM
75%
Office
Yes
€ 10,041
GT I PM
4 Land BW vertr. Landesbetrieb Vermögen BW
Retail 260
90
Let
Office
2,161
16.05.2006
11.14
€ 1,111
€ 3,010
Let
Let Yes
71638 Ludwigsburg
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Office
€ 86,089
595
Let
Let
457Let
€ 1,874 31.08.2013
€ 0
30.10.2017
16.05.2006
31.07.2013
26.09.2007 30.10.2017
€ 2,134 01.04.2007
31.10.2007
31.12.2013
30.06.2014
31.07.2013
75%
31.10.2007
30.10.2017
31.07.2013
31.12.2013
31.07.2013
31.07.2013
75%
75%
31.07.2013
75%
75%
100%
75%
31.07.2013
75%
75%
75%
01.05.2010
31.07.2013
75%
30.09.2013
75%
75%
01.04.2007
GT I PM
75%
75%
75%
GT I
No
Yes
GT I PM
GT I PM
abc
GT I PM
75%
75%
75%
75%
75%
75%
75%
75%
14,144 m²
GT I PM
30.10.2017
75%
75%
75%
75%
31.07.2013
75%
75%
75%
GT I 31.07.2013
GT I
75%
31.07.2013
GT I 31.07.2013
GT I
GT I 31.07.2013
GT I 31.07.2013
01.04.2007
01.07.2011
01.09.2010
01.12.2007
75%
31.03.2017
75%
75%Yes
10.59
0.00
5.00
Yes
Yes
7.19
10.41
Yes
Yes
GT I PM
252 € 2,848
€ 1,199240
11.30
15.05.2016
€ 1,479
GT I 75%
Total
75Let
29 Deutsche Post Real Estate Germany GmbH
Let
Other Units 7
31 Jacobi-Haumer
Let
€ 5,089
LetOffice
13 Izmaku Residential
€ 125
15 Ekaterina und Alexander Erik
GT I 12 Doris Roth Residential 75 € 539 Yes
GT I 7.67 31.07.2013
GT I 65 € 450 Yes 26.06.20066.92 31.07.2013
€ 575
Residential 65 € 432 Yes 01.02.2003Let 6.65
16 Keiner Residential 65 € 408 Yes 01.02.2010Let 6.28
17 Meder Residential 63 € 450 Yes 01.12.2006Let 7.14
18 Modnikov Residential 82 € 464 Yes 26.11.2007Let 5.66
19 Bondar Residential 65 € 408 Yes 01.04.2010Let 6.28
20 Izmaku Residential 65 € 450 Yes 01.02.2007Let 6.92
GT I 21 Roth Residential 65 € 432 Yes 01.09.1997Let 6.65 31.07.2013
GT I 22 PROPERTY MANAGER Residential 87 € 0 Yes 01.07.2011Let 0.00 30.06.2014
GT I 23 Tahiri Residential 87 € 602 Yes 01.02.2010Let 6.92 31.07.2013
GT I 24 Jacobi-Haumer Residential 83 € 600 Yes 01.08.2009Let 7.23 31.07.2013
GT I 25 Pump Schmelzer Residential 85 € 600 Yes 01.04.2010Let 7.06 01.08.2013
GT I 26 Tarasov Residential 87 € 616 Yes 01.02.2010Let 7.08 31.07.2013
GT I 27 Török Residential 86 € 602 Yes 01.02.2010Let 7.00 31.07.2013
GT I 28 Schneider Residential 65 € 408 Yes 01.02.2010Let 6.28 31.07.2013
Yes 27.07.2007Let 17.86
1 € 0 Yes 01.07.2011Let 0.00
Internal Parking 1 € 35 YesLet 35.00
32 Jacobi-Haumer Internal Parking 1 € 35 Yes 31.10.2007Let 35.00
33 Tittes Internal Parking 1 € 29 Yes 01.08.2009Let 29.41
34 Modnikov Internal Parking 1 € 35 Yes 26.11.2007Let 35.00 75%
35 Török Internal Parking 1 € 29 Yes 01.02.2010Let 29.41 75%
36 Roth, Doris Internal Parking 1 € 35 Yes 01.04.2010Let 35.29 75%
37 Roth, Alexander Internal Parking 1 € 0 Yes 01.09.1997Let 0.00 75%
38 Pump schmelzer Internal Parking 1 € 0 Yes 01.04.2010Let 0.00 75%
39 Török Internal Parking 1 € 29 Yes29.41 75%31.07.2013
40 Tahiri Internal Parking 1 € 35 Yes 01.09.2010Let 35.29 75%
41 Modnikov Internal Parking 1 € 35 Yes 01.05.2010Let 35.29 30.09.2013
42 Izmaku Internal Parking 1 € 35 Yes 01.12.2007Let 35.00 31.07.2013
43 Bondar Internal Parking 1 € 35 Yes 01.08.2010Let 35.29 31.07.2013
GT I PM44 Aro Heimtextilien GmbH Retail 460 € 3,680 Yes 01.09.2011Let 8.00 31.08.2021
GT I PM45 Yamadi Yamadi Yoga Zentrum Office 262 € 1,202 Yes 01.02.2013Let 4.59 31.01.2018
46 Internal Parking Internal Parking 285 € 7,083 No 00.01.1900Let 24.85 00.01.1900
GT I 47 Wisag Residential 65 € 65 Yes 01.01.2013Let 1.00 31.12.2018
(Copy)
Property address Property no. 9 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
03.02.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis12
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 7,023
abc
0 3 5 75%47 Wisag Residential 65 € 6.75 € 439
75%
0
12 9
€ 25 6
€ 24.8546 Internal Parking
€ 100 12 9
3
3
10
€ 100
75%
10
45 Yamadi Yamadi Yoga Zentrum Office 262 € 8.75 € 2,293
285
75%€ 0 12 12
5
0
10 75%
3
75%0 0
€ 32.50 5
€ 3,220 € 75 15
€ 0 12
0
43 Bondar Internal Parking 1 € 32.50 € 33
0
42 Izmaku Internal Parking
41 Modnikov
1
44 Aro Heimtextilien GmbH Retail 460 € 7.00
0
40 Tahiri Internal Parking 1 € 32.50 0
Internal Parking
0 € 33
5 75%€ 0 12
0
75%€ 0 12 12 5
€ 33 5 75%€ 0 12
0
0 0
12
39 Török Internal Parking 1 € 32.50 € 33
5 75%€ 0 12 12
0 5
0
12 12 75%€ 0
37 Roth, Alexander Internal Parking 1 € 32.50 € 33
0 € 33
0
38 Pump schmelzer Internal Parking
0 36 Roth, Doris Internal Parking 1 € 32.50
1 € 32.50
0 € 33 5 75%€ 0 12 12
5 75%€ 0 12
0 0 5 75%€ 32.50
0
€ 0 12 12
0
12 12
35 Török Internal Parking 1 € 32.50 € 33
34 Modnikov Internal Parking 1
33 Tittes Internal Parking 1 € 32.50 € 33 € 0 0
0 0 5 75%12 12
0 5 75%
32 Jacobi-Haumer Internal Parking 1 € 32.50 € 33 € 0
0 0 5 75%12 12 31 Jacobi-Haumer Internal Parking 1 € 32.50 € 33 € 0
0 0 5 0%12 12 30 PROPERTY MANAGER Internal Parking 1 € 32.50 € 33 € 0
0 0 10 100%15 0 29 Deutsche Post Real Estate Germany GmbH Other Units 7 € 17.86 € 125 € 0
0 3 5 75%6 6 28 Schneider Residential 65 € 6.75 € 439 € 25
0 3 5 75%6 6 27 Török Residential 86 € 7.00 € 602 € 25
0 3 5 75%6 6 26 Tarasov Residential 87 € 7.00 € 609 € 25
0 3 5 75%6 6 25 Pump Schmelzer Residential 85 € 7.00 € 595 € 25
0 3 5 75%6 6 24 Jacobi-Haumer Residential 83 € 7.00 € 581 € 25
€ 25 0 3 5 75%6 6
3 5 0%6 6
23 Tahiri Residential 87 € 7.00 € 609
Residential 87 € 7.00 € 609 € 25 0
0 3 5 75%6 6
3 5 75%6 6
21 Roth Residential 65 € 6.75 € 439
75%6 6
20 Izmaku Residential 65 € 6.75 € 439 € 25 0
5
19 Bondar Residential 65 € 6.75 € 439 0 3 5
€ 7.00 75%
0 3 5 75%6
0 3 6 6
€ 6.75 € 425 € 25
6 6
€ 25
6
75%
6 6 0 3 5 75%
0 3 5
75%
0 3 5 75%
0 3 5
3 9
0 3 56
103
75%
€ 100
75%
75%
10 75%12
3
9
6 6
€ 100
75%
3
3
10
3
10
12
3 12
9
75%
6
9 10
3 9
3
3
75%
3
3
10
75%
75%
3
3
75%
10
75%
3 10
10
75%
3
12€ 100 9
9 103
3 10
€ 25
€ 25
Total
22 PROPERTY MANAGER
13 Izmaku
€ 100
€ 100
€ 25
€ 25
75
€ 100
€ 25
6 14 Derr Residential
16 Keiner
Residential15 Ekaterina und Alexander Erik
Residential
Page 7 of 12
€ 111,04514,144 sqm
Term**
Matrix Portfolio
Re-letting
€ 2,097
€ 1,934
€ 8.75
€ 574
€ 33
82
177
65
65
€ 100
63
Office
€ 6.75
€ 525
6 Life GmbH
€ 7.00
18 Modnikov
7 Jacobi-Haumer
Office
Office
Residential
1 € 32.50
€ 7,082Internal Parking
Office
8 Beyer Office
7,491
3 Corongiu Retail
Office
2 SardoVino GmbH Alexander & Carolin Corongiu
1 Kaufland Vertrieb ALPHA GmbH & Co. KG
240
9 Praxisgem.
12 Doris Roth
Residential
17 Meder
10 Schwarzenberger
11 Praxisgemeinschaft
Residential
Residential
90 € 9.00
Market
12
9 0
0
3
9 0
Rent /month€ 63,670
€ 9.00
€ 2,210
€ 1,485
252
€ 8.50
260
Rent
€ 3.25
12
12
12
6
9
€ 25
€ 33
€ 439
6
€ 25
€ 525
€ 439
€ 2,205
€ 3,885
€ 6.75
€ 6.75
€ 1,794
€ 9.00
€ 7.00
€ 8.50
75
65
4 Land BW vertr. Landesbetrieb Vermögen BW Office 165
5 Life GmbH 2,161 Office
595
205
€ 810
12
€ 100
€ 8.75
€ 8.50
€ 1,593
12
12
€ 3.25
€ 8.75
12
Market
€ 100
71638 Ludwigsburg
Retail
sqm/unitTenant Name
Retail € 100
€ 50
Friedrichstraße 124
Area Category
457
€ 439
Germany Brack Capital Properties N.V.
15
15
9
31.03.2013
(Copy)
Property address Property no. 9 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
7,000
Usual market % - levels6,500
Market rent
6,000 Contractual Rent
5,500 Rents %
Contractual5,000
Market
4,500 4% of turnover
3% of turnover4,000
2% of turnover
3,500 Turnover potential(net)
Sales Area3,000
Total Areain € / m² p.a.
based on sales area
O186
This report is only to be read in conjunctionwith the valuation report provided.
25.21
0.00
7.32
6.890.000.00
943,634
0.00
0.00%
Rented€/year
00
6.4%
0.0%
0.00
€/month €/year25,865
0.00
14,144
00
0
310,383
1,330
0
0
0.00%0.00%0.00%
0.00%%
Vacancy Rate
0
8,301
71638 Ludwigsburg
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
-36.3%838,9215.39
0
08,301
Market
310,383534,535
€/month
DIY
Office
0
4,514
0
24,30869,910
0.00%
8.42
0
291,696€/m²/month
306External parking
Rent
0
ContractualRent
€/year
0.00%7
0.00%
0.00%00
0
0.00%
Matrix Portfolio
Friedrichstraße 124 31.03.2013
0
00Commercial
4,514
Contractual
0
0299
Potential
Area Vacant
299
€/m²/monthRent
0.00%0
Rent
00.00%
Brack Capital Properties N.V.
Use Category
Germany
03.02.2011
Capital indicator
n.a.
Assessment of Kaufland market rent
Comment
WALTPayment Index n.a.
23,216,057 €
The main tenant is a corporation belonging to the Kaufland Group, which in turn belongs to the Lidl &Schwarz Group, one of the biggest grocer groups in Europe. According to Dun & Bradstreet (D&B)Rating as at 01.01.2011 Kaufland Vertrieb ALPHA GmbH & Co. KG has a very low credit risk. The riskof insolvency (D&B Score) within the next 12 months compared with other German companies isassessed to be low, i.e. 86% of businesses on the German database have the same or higher risk offailure. According to section 19 of the main lease agreement entered into by the landlord and KauflandDienstleistung GmbH & Co. KG (D&B Rating = 2AA 1), an assignment of the main lease agreement bythe tenant to another entity of the Kaufland group requires that the landlord's credit risk rating may notdeteriorate due to such assignment of the lease.
Rent p.a.
7,491 m²
Self-service department stores usually can afford to pay a rent in the range of 2% to 4% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 4,000 to € 6,000 per m²sales area. The two graphics above indicate, how the contract rent of the main tenant Kaufland as well as the assumed market rental level, can be assessed on the basis of usual market ranges. This analysis isbased on the turnover potential figures prepared by Trade Dimension.
1.9%
3.3%
4.91
8.50
abc
Risk indicatorScore
Page 8 of 12
Credit limit
0
0.0%-24.0%
1,500125103,507
17.861,242,088
0.0%-1.1%90,447
0.0%
9,164
0
7,537
-11.6%109,9710.0%
0
10.33
7.75
0
43%
0
Kaufland Vertrieb ALPHA GmbH & Co. KG
14.5 years
~ 5,618 m²
7,453 89,4330
Share of total income
Main tenant
€ 440,920
D&B Rating of Main Tenant
Tenant name
5.17
Storage00
Petrol Station 0.00
0.00Internal parking 24.93
5.5617.86
0ResidentialCommercial
8,1010
0 00
0 0.0%00
00
0
m²
0
Property Analysis
0 0.0%0.00 0
44,54500.00
5.37
Warehouse
Warehouse
Area Let
14,144
Other Units
00
Residential0
1,330
0
89,433
0.00%
Contractual
m²Area Analysis Lettable Area
0
534,535
Retail
5.73
Total areaPetrol Station
2997
Income Analysis
Internal parking
Office
DIYRetail
Storage
78,6361,500
943,634
97,215 97,215
1,500
0
125
0.00
0.006.09
Other UnitsTotal area
External parking
Total parking
€ / m²
4.915.17
8.50
7.75
10.33
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
4,132
(Copy)
Property address Property no. 9 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The property is fully let to four retail tenants, one health centre, 5 office tenants and several residential tenants. The WALT of the property amounts to 7.7 years. The main tenant is Kaufland with a share of approx.43% of the rental income. The property is currently strongly under-rented, due to a very low rental level of the main tenant Kaufland. As the lease contract is valid until 2027 and the tenant has options until 2037, wedo not believe that the rental level can be adjusted before 2037. The rent of Kaufland is indexed and will be adapted by 50% of the CPI change, whenever the change exceeds 10 percent in relation to the CPIbasis. Indexation started on 01.04.2009. The majority of the tenants pay all costs (including ground tax, insurance costs and management costs) except for maintenance costs for structural repairs. The residentialtenants and the tenant Life GmbH (health centre) do not pay management costs. Ground tax, maintenance costs for structural repairs, management and insurance costs will not be borne by Kaufland. The rest canbe apportioned to the tenants in accordance with the German Regulation on Operating Costs.
0 €
0 €
€ 5,924€ 51,031
€ 6,019
Breakdown of Non-Recoverable Costs
€ 0
15.3%
6.50%
% of Gross
€ 10.00 /m²/p.a.
€ 1,66114.8%
0 €
€ 5,739 0 €0 €€ 5,648
0 €€ 5,552
13.5%€ 1,057
€ 47,750 13.2%13.3%€ 147
€ 46,334
€ 0
0 €
€ 0.00 /m²
Management costs
Other non-recoverable costs
€ 9.48 /m²
€ 15,355€ 5,455
€ 46,983
5.04%
Total non-recoverable expenses
Maintenance costs € 67,185
€ 149,180€ 138,418€ 136,241
€ 9,626
€ 1.10 /m²
% of Gross
0.00%
€ 15,496
€ 19,988
€ 4.75 /m² € 67,185Contract Rent
per year
Lease Contract Commentary
€ 4.75 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 7.00%
6.75%
Brack Capital Properties N.V.
Friedrichstraße 124
Assumptions
Compared to the previous valuation, two residential units and two office units have been newly let. Furthermore, some leases have been subject to an indexation adjustment.
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yields profile is aligned with the market/other transactions. We have taken intoaccount such facts as the remaining lease term with the well-known anchor tenant, the reduction ofvacancy and consequently low vacancy rate, the good turnover figures, the good location within thefederal state Baden-Wuerttemberg and the good condition of the subject property.
03.02.201171638 Ludwigsburg
Germany
31.03.2013
€ 0.37 /m²€ 0
0.51%€ 46,179€ 3.26 /m²
€ 0.00 /m²€ 5,276
per year
Year 8
€ 48,601€ 15,708
€ 75,474€ 74,282
€ 14,674
€ 69,505Year 3
€ 16,169
% of Total
Year 7
€ 5,293€ 14,957
€ 144,837
€ 135,085
€ 3,112
Total
€ 73,123 € 15,653
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 010.40%
€ 0.37 /m² € 5,276
Insurance
Other non-recoverable costs
3.47%
Market Rent
0.00%12.98%
1.50%€ 1.41 /m²€ 3.26 /m² € 46,179
€ 134,136
per year
€ 9.80 /m²
Total Non-recoverable Costs
€ 138,628
€ 5,368
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 16,496 € 53,500 0 €€ 16,018€ 79,030 € 54,293
Year 10€ 3,562
4.47%1.50%
Market Value
€ 76,687
Year 4
Year 6
€ 6,203
€ 16,070
Year 11€ 77,875
€ 52,684Year 9
GroundManagementTax
Maintanance
€ 14,657
CostsCosts
€ 70,744
Year 1Year 2
€ 67,444€ 68,388
€ 51,850
€ 71,964 € 49,439€ 50,235
Year 5
€ 16,296
14.9%
0 €€ 5,830
€ 159,10614.0%14.1%
0.40%
0 €
€ 0€ 6,112
€ 159
€ 1,307€ 153,983
€ 147,37213.9%
0 €
14.0%
€ 152,993
Year after 2021
€ 146,411
abc
€ 0 € 149,41713.8%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
13.5% 13.3% 13.2%
15.3%14.8%
14.0% 13.8% 13.9% 14.1% 14.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 9 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
6.50%
Market Value (rounded)
€ 591,129-€ 8,915
-€ 551
-€ 72,195
-€ 153,983
Gross Capital Value (rounded)
€ 13,500,000€ 1,033,067
€ 898
Page 10 of 12
8.13%
€ 762,210
€ 6.09 Total
Total € 12,700,000
6.66%
In terms of risk, we have considered the covenant strength as well as the lease duration for the existing contracts. The main tenant, Kaufland Vertrieb ALPHA GmbH & Co. KG, as at 1.1.2011 has good covenantstrength, which ensures a secure cash flow for the remainder of the lease term until at least 2027. Furthermore, according to section 19 of the main lease agreement entered into by the landlord and KauflandDienstleistung GmbH & Co. KG (D&B Rating = 2AA 1), an assignment of the main lease agreement by the tenant to another entity of the Kaufland group requires that the landlord's credit risk rating will notdeteriorate due to such an assignment of the lease. Section 1 of the first amendment to the main lease agreement provides for the assignment of the main lease agreement to ALPHA Warenhandel GmbH & Co.KG, which has a worse D&B Rating (O 1). Pursuant to section 2 of the first amendment to the main lease agreement, the former tenant remains jointly and severally liable for the landlord's payment claims. Hence,the former tenant is a guarantor for the lease payments of the current tenant. In terms of a resale, we considered such facts as visibility, appearance, condition, third-party usability and location.
-€ 34,175
abc
Valuation Comment
€ 1,332,535 per m²
-22.47%
For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in our valuation. Other costs have remained unchangedand have been applied according to information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective gross rent. We have been provided with updatedinformation regarding necessary capital expenditures. All Capital expenditures for repairs in the first year as well as in the periods of year 2 to 5 and year 6 to 10 are considered to be covered by the maintenancecosts of € 4.50/m² per annum. The encumbrances and the public easements are considered to be common practice and do not affect the Market Value of the property. For comparable rents we have had recourseto evidence of similar areas situated in the comparable regions and locations. Furthermore, we have analysed comparable transactions.
0
8.84%
Year 10 € 1,099,711€ 1,086,398
-€ 17,316
€ 1,097,617Year 9
-€ 146,411
TIs and
-€ 136,241
Brack Capital Properties N.V.
€ 1,047,205 € 0
€ 0-€ 598
€ 928,487
€ 897,105 -€ 13,326 € 874,920
Income
-€ 10,619
-€ 585€ 0 € 908,787
€ 746,825
Net
31.03.2013
7.00%Commissions Cash FlowCapital
€ 840,890€ 803,096€ 815,919
Year 6Year 7
€ 0
€ 833,449
-€ 135,085Vacancy
Year 5
€ 1,077,904 € 1,077,904Year 8
Year 4
Year 2€ 0
Gross
€ 1,035,287
Market Value
Rental recoverable Operating
Friedrichstraße 124
€ 933,405
€ 922,703
10.49%per m²
€ 1,071,310
-€ 152,993-€ 149,417€ 0 € 0
Gross Value of Surplus Land
€ 14,148,654
€ 954
€ 13,492,024-€ 159,106 -€ 27,376€ 1,067,840
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 13,492,024
-€ 15,351Total Cashflow (incl. Terminal Value @ 6.75 %)
per m²/month
€ 908,734
€ 604,039
-€ 5,302
-€ 15,045 -€ 7,481
Expenditures-€ 15,850
-€ 138,418 € 908,787
Costs
€ 769,641
€ 945,728
Abatements
€ 886,267
€ 0
-€ 147,372€ 928,487
-€ 637€ 0 € 923,938
€ 877,651
Year 3 € 1,047,205
€ 945,728€ 495,784-€ 52,274
-€ 144,837
€ 596,152
€ 1,023,644
Revenue€ 997,127
Turnover
Germany
€ 887,403
Revenue
€ 1,024,989 € 0
-€ 24,171 € 978,286
Rent
€ 0
€ 1,025,380-€ 1,345
-€ 11,290 -€ 16,963Year 1
€ 1,043,642
€ 1,072,775
Year 11 € 1,119,331
€ 1,043,516
€ 7.85
-€ 28,526-€ 38,001
€ 1,099,863 -€ 152 € 0
€ 977,115-€ 32,830
-€ 1,465
€ 498,775
Yield Overview
€ 862,042
€ 827,935-€ 149,180
€ 1,066,042
71638 Ludwigsburg
Cash Flow
Non-Total
-€ 8,859-€ 60,620
€ 0
€ 7,192,458
-€ 11,219 € 0€ 0
Present
€ 560,638
€ 564,393
-€ 3,480
Leasing
03.02.2011
Matrix Portfolio
Value @
6.4%6.6%
6.7%
6.1% 6.2%
6.6%6.8% 6.9% 6.9%
7.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
€ .0
€ 200000.0
€ 400000.0
€ 600000.0
€ 800000.0
€ 1000000.0
€ 1200000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 9 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Friedrichstraße 124
03.02.2011
abcPage 11 of 12
View of the parking garage
Southern facade of Kaufland
Matrix Portfolio
View of the annex building from Danziger Straße
71638 Ludwigsburg
Photos
View of the vacant retail unit in the annex building
View of the mall
Germany Brack Capital Properties N.V.
31.03.2013
Internal view of the sales areas of the tenant Kaufland
(Copy)
Property address Property no. 9 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
Self-Service Department Store 7,940 m²Self-Service Department StoreSelf-Service Department Store
9,506 m²
52 m²Appartment6,388 m²
0 m²452 m²Office
Marktkauf LauchhammerBochum
Ludwigsburg0
Residential
0Office
Kaufland
0
Ludwigsburg
0
Offer
€ 0
€ 8.80 /m²€ 395
€ 0.00 /m²
Total Rent p.m.
€ 3,842 € 8.50 /m² Offer€ 7.59 /m²
Smaller retail area, slightly lower purchasing powerBigger retail area; lower purchasing power
€ 56,214
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Bigger retail area; lower purchasing power€ 7.79 /m²
€ 61,538 € 7.75 /m²€ 74,052
€ 7.75 /m²€ 35,732
CommentComparable purchasing power, better location
Rent p. sqm€ 56,032 € 8.99 /m²
Lower purchasing power; worse location
71638 Ludwigsburg
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
6,233 m²
Leasing Market
Kaufland
Tenant Property TypeSelf-Service Department StoreMarktkaufSelf-Service Department Store
31.03.2013Friedrichstraße 124
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
FreitalKaufland
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
4,611 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
LüneburgUlm
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
03.02.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
Property address Property no. 10 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 2 16 to 25 years Macrolocation 3 Average location and catchment areaLettable Area 4 Between 12,500 and 15,000 m² Microlocation 4 Good micro locationProperty condition 3 Average building condition Commercial activity 4 Average commercial activity nearbyGeneral impression 3 Average general impression Competition 4 Low competition level
Investment Quality
WALT 4 WALT seven to ten years Investment market 3 Average property marketOver- / underrent 2 Slightly overrented (5% to 15%) Investment volume 4 Good lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 13.62
Page 1 of 12 abc
SWOT Analysis
Sales area spread over several floors
31.03.2013
Brack Capital Properties N.V.
Key Figures
Potsdamer Straße 51
n.a.
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
6.19%
Discount Rate
6.19%
excluding capital
expenditures7.00%
6.82%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
7.5 years
Long remaining lease term of the anchor tenant
Well maintained
Located in city centre location
Good tenant mix
Market rental value € 1,042,279
€ 6.79
1997
Weighted average lease term
14974 Ludwigsfelde
Property Summary
Retail Park
Germany
01.02.2011
Property type
Current vacancy rate
Kaufland Dienstleistung GmbH & Co. KG
12,631 m²Total parking units
0.4%
Main tenant
Total lettable area0 units
9.6%
€ 1,138,683
€ 1,029,320
€ 7.51Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
Located close to other retailers on an arterial road
0
Strong dependency on the main tenant Kaufland0 Difficult relettability of the fitness studio
0
0
€ 6.88 / m² / p.m.€ 14,200,000
6.65%
The subject property is a three storey department store complex, furnished with escalators. The property was built in 1997 and faces Potsdamer Straße, Karl-Liebknecht-Straße and Bruno-Taut-Straße. The propertyhas one main entrance from Potsdamer Straße and can also be accessed from the underground parking garage. The buildings have an irregular shape and are made of a steel reinforced concrete construction.The facade consists in parts of plastered or with facing bricks and in the entrance area of glass. It has a flat roof with hard covering.
0
6.82%
Market Rental Value
12.47
€ 1,042,279 p.a.
Sufficient parking spaces but located undergroundWeaknesses
Matrix Portfolio
0
€ 1,124 per m²
Extension of the lease contracts of smaller tenants
0
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 109,362
Year of refurbishment
Property Description
0
€ 0.72
00
(Copy)
Property address Property no. 10 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
76.23
The economy of Ludwigsfelde is primarily focussed on logistics and production facilities. Ludwigsfeldehas an industrial park with an area of over 256 ha, where more than 70 companies operate. Additionally,there are three commercial parks with over 618 ha, where more than 900 companies are located. Thedistrict Teltow-Fläming is economically one of the strongest districts in the former East German states.
Micro Location
Ludwigsfelde is situated in the federal state of Brandenburg in the administrative region of Teltow-Fläming. The city covers an area of 109.3 sq km. Nearby cities include Berlin (30 km) and Potsdam (20km). The A10 federal motorway is located directly next to Ludwigsfelde, offering a direct connection tothe motorway network. Thus, Ludwigsfelde is an interesting logistics location. The city’s railway station islinked to the regional railway network, offering connections to Berlin and Potsdam. The closest passenger airport is located in Berlin, which can be reached within 30 km.
0
Location
Brack Capital Properties N.V.
31.03.2013
14974 Ludwigsfelde 01.02.2011
Teltow-Fläming (Rural District)
Germany
Brandenburg
Macroeconomic Indicators
Federal StateDistrict
10.3%
3,019
Ludwigsfelde Macro Location
5.0
Micro Location
380
The property is located at the residential and office street, Potsdamer Straße, close to the A10 motorwayand the city centre in the western part of the city. The town hall is located only 500 m from the property.The property is highly visible and dominates the area to some extent. The property is surrounded byresidential buildings, but there are also retail warehouses, for example operated by Rossmann, directlynext to Potsdamer Straße. Thanks to the underground garage, many visitors of the local market locatedin front of the town hall, use the property for parking purposes, increasing the footfall of the property.However, the market takes place only twice a week.
Local Tax Information
1.0%
89.4495.39
3.6%
459
8.1%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
24,150
14974
22177
2,511,525161,546
Ludwigsfelde
-1.8%
11,310
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Potsdamer Straße 51
City
(Copy)
Property address Property no. 10 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Land register extract, dated 2nd December 2010
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Potsdamer Straße 51 31.03.2013
01.02.2011
Germany
No Suspicion
According to information from the local planning authority, a legally binding development plan exists,entitled "Nr. 2 Sport- und Einkaufszentrum Ludwigsfelde" and dated 10.10.1994, with the followingregulations: the subject site is located in a special zone (SO). The site coverage ratio is limited to 1.0.
Section 2 (Restrictions)
TPL Ludwigsfelde S.aá.r.l., Luxemburg
Land Register
4807 150, 152159, 161
15/130, 15/13215/133, 41154, 155
157
Owner
n.a.
Site Information
Site area 10,340 m²thereof surplus land
NoGround lease
Site layout
Site Plan
Surplus land value (net) n.a.
Source: Cadastral plan on a 1 to 1,500 scale, dated 27th December 2010
Matrix Portfolio
14974 Ludwigsfelde
SO (special zone)
n.a.
3 a/b
Sheet Plot Parcel
n.a.
Tenure
Site servicing
Ground lease expiry€ 0
0 m²
1.0
Town Planning
Fully serviced
Building encumbrances No
Irregular
The property has an even topography and irregular shape. It is accessible from the north-east, south-east and north-west. According to information provided by the city of Ludwigsfelde, the site is notregistered in the register of contaminated sites.In Brandenburg, there are no building encumbrances. Instead the muncipalities obtain personaleasments, which are registered in the land register in divison 2. Thus, we assumed the subject propertyto be free of any building encumbrances.
Limited personal easement in favour of the city of Ludwigsfelde prohibiting that certain parts of the property may be built on.Limited personal easement right of way in favour the owner of the plot 15/132.Limited personal easement to operate a self-service department store on the plot in favour of Kaufland Stiftung & Co. KG, Neckarsulm.
Brack Capital Properties N.V.
Land charge in the amount of € 16,798,646.00 in favour of Bank of Scotland.
Local Court of Zossen, land register of Ludwigsfelde
abcPage 3 of 12
(Copy)
Property address Property no. 10 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
76.23
3.6%
abc
Population forecast for the district (2007 - 2025)
14974 Ludwigsfelde
Name14513 Teltow, Oderstr. 29
Competitor Overview
Competitor Map
Self-service dep. store
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
11.10 km7,829 m²Self-service dep. store
15,179
Low
00
Low11.20 km
Inhabitants in secondary catchment area
Retail Centrality Index (District)
Inhabitants per hypermarket in secondary catchment area
29,524
11,310
Real
59,047 Inhabitants per hypermarket in tertiary catchment area
14480 Potsdam, Zum Kirchsteigfeld 2Real0
15834 Rangsdorf, Klein Kienitzer Str. 2Real Self-service dep. store 6,525 m²
10,767 m² 13.90 km Low0
11,169
95.39
15,179
00
0
Inhabitants in primary catchment area 11,169
0
Competiton Indicators
Potsdamer Straße 51
01.02.2011
Germany Brack Capital Properties N.V.
31.03.2013
00
0
0
0
0
Matrix Portfolio
(Copy)
Property address Property no. 10 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
01.02.2011
31.03.2013
Matrix Portfolio
Turnover analysis
There is no direct competitor within Ludwigsfelde or the primary or secondary catchment area. The neighbouring property next door has a bank and a retail use on the ground floor, but is not considered to be real competition. However, the property is considering incorporating the same product range as the subject property.
Main competitors
14974 Ludwigsfelde
Potsdamer Straße 51
0
The rents in retail agglomerations are linked to the achievable turnover. The percentage rate that a retail tenant can use for rental payments depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective industry. The productivity varies between approx. € 1,000/m² up to more than € 10,000/m². We have been provided with turnover figures from tenants such as s.m.s. shopping macht Spaß GmbH, Deichmann, Floristik´99, among others. For Kaufland, we have also been provided with turnover figures. We have analysed the figures and have found the area productivity of Kaufland to be in a healthy range. With a turnover-to-rent ratio of less than 2% it lies below the range of 2% to 4%, which is acceptable for a self-service department store. Hence, we believe that a market rent on contractual level is achievable after the end of the lease contract. Please also refer to the rent/turnover analysis on page 8.
abc
Competition Comment
Approximately 15,000 inhabitants live in the secondary catchment area. This area is dominated by the subject property as there is no other self-service department store. Within the broader tertiary catchment area, there are 59,000 inhabitants and still only one competitor, which increases the customer potential to 24,500 potential customers per self-service department store.
However, we think that the property will mainly attract customers from the primary and secondary catchment area, but this is sufficient for this property. Thus, there are no direct competitors.
Only small supermarkets or discounters compete for the non-food customers. Consequently, we assess the level of competition to be below average and that the customer potential is sufficient.
With regards to turnover rents, we considered the current turnover rents to be sustainable in the long run for the property’s income.
0
The subject property is a self-service department store situated in a city centre location of Ludwigsfelde. The depth and breadth of the product range is very good. The property dominates the primary and secondary catchment areas, which should be sufficient for operating a self-service department store. Thus, the rental area of Kaufland can be regarded as relatively unproblematic. In the unlikely case that Kaufland should vacate the site, the property could be re-let to other self-service department store chains such as real or Marktkauf. We assumed that the tenant Kaufland will exercise its three options, each for five years, until 2037 due to the low contractual rental level. We therefore think that this location should be sustainable.
Germany Brack Capital Properties N.V.
The property, which can be considered a largest competitor within Ludwigsfelde, is shown above. It comprises six retail units including a Penny discounter and a large drugstore operated by Rossmann. The overall size is however significantly smaller than the subject property.
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 10 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
7 AWG Allgemeine Warenvertriebs-GmbH
1.80
€ 2,687
30 transact Elektronische Zahlungssysteme GmbH
Retail10 HAARMEX.DE Elduran Meryem
11 Vodafone D2 GmbH
Let
Page 6 of 12
GT I PM
20.10.2014
52
Other Units
Retail
5 Kaufmann
3 Vacant
5,940
17.00
39.89
Retail 5.49
0.00
2 Stadt Ludwigsfelde Retail
pays VAT
21.09.2017
75%
100%
Start
31.03.2013Potsdamer Straße 51
Tenant
Matrix Portfolio
01.02.2011
Status m² / unitLet
TenantLeaseArea
Let
Vacant
31.07.2014Yes
22.09.1997
Rent / m² RenewalLeaseLetting
1 Johae Fleischprodukte GmbH & Co. KG Retail 67
/ month Probability
125
9 Deichmann SE Retail
Let
Retail
8 Apollo Optik GmbH
14 s.m.s. shopping macht Spaß GmbH - Jürgen Menzel
6 Kaufmann
01.08.2008
No
75%
Retail
Yes
€ 864
GT I PM
4 Kaufland Warenhandel
Office 51
2,031
Let
Retail
51
19.10.2005
12.78
€ 3,666
€ 0
Let
Let Yes
GT I PM
14974 Ludwigsfelde
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Retail
€ 94,890
102
Let
Let
407Let
€ 1,635 09.10.2015
€ 1,374
30.09.2017
21.10.2005
31.12.2015
01.10.2007 30.09.2027
€ 1,402 02.04.2009
01.01.2010
12.10.2017
31.12.2013
31.07.2013
75%
01.10.1997
31.03.2014
30.09.2027
30.06.2014
30.09.2027
75%
100%
100%
0%
75%
75%
31.05.2019
75%
01.06.2004
GT I PM
75%
75%
75%
GT I PM
Yes
Yes
GT I PM
GT I PM
abc
GT I PM
75%
75%
75%
75%
75%
75%
12,631 m²
GT I PM
31.12.2014
GT I PM
0%
75%
75%
75%
75%
13.06.2019
GT I PM
100%
75%
75%
GT I PM30.09.2017
GT I PM
75%
12.10.2013
GT I PM07.09.2017
GT I PM
GT I PM14.10.2017
GT I PM09.10.2016
14.06.2004
13.10.2007
10.01.2005
01.04.2012
75%
13.06.2019
75%
75%n.a.
13.08
13.49
9.00
Yes
Yes
16.55
27.14
Yes
Yes
117 € 2,617
€ 4,820536
22.40
18.10.2014
€ 32,586
GT I PM75%
Total
36Let
29 Deichmann SE Storage 39
31 Schwarz Außenwerbung GmbH
Let
€ 5,205
LetRetail
13 Ms. + Mr. Cetinkaya & Mr. Özyurt Retail
€ 137
15 Wendorff
GT I 12 Naser Retail 65 € 1,069 Yes
M GT I PM23.16 31.03.2022
GT I 131 € 1,835 Yes 01.10.200713.96 30.09.2017
€ 825
Retail 173 € 5,434 Yes 08.09.1997Let 31.37
16 Wohnungsgesellschaft Ludwigsfelde mbH Retail 131 € 551 Yes 13.10.1997Let 4.22
17 Zebra Gastronomie und Automaten GmbH Retail 167 € 1,539 Yes 01.09.2003Let 9.21
18 tabacon Franchise GmbH & Co. KG Retail 45 € 1,293 Yes 10.10.2006Let 28.69
19 Floristik´99 Retail 63 € 2,181 Yes 01.10.2007Let 34.82
20 Takke Commercial 833 € 1,028 Yes 01.08.2006Let 1.23
GT I PM21 Takke Commercial 162 € 179 Yes 01.08.2006Let 1.10 31.07.2013
GT I PM22 TEDI GmbH & Co. KG Retail 266 € 2,452 Yes 21.04.2004Let 9.22 20.04.2016
GT I PM23 Anh Nguyet Tran Retail 55 € 651 Yes 14.09.2012Let 11.76 30.09.2017
GT I PM24 AWG Allgemeine Warenvertriebs-GmbH Retail 533 € 4,796 Yes 01.10.1997Let 9.00 30.09.2017
GT I PM25 Steinecke´s Heidebrot Backstube GmbH & Co. KG Retail 72 € 5,100 Yes 01.10.2007Let 70.47 30.09.2014
GT I PM26 Frisör Klier GmbH Retail 64 € 1,950 Yes 01.10.2007Let 30.57 30.09.2017
GT I PM27 Gürkan Retail 44 € 1,058 Yes 01.09.2004Let 23.81 30.11.2016
M GT I PM28 Deutsche Bank Retail 196 € 3,082 n.a. 30.08.2012Let 15.72 30.06.2017
Yes 14.06.2004Let 3.50
1 € 56 No 01.01.2007Let 56.26
Other Units 1 € 596 NoLet 595.83
32 FOTOFIX Schnellphotoautomaten GmbH Other Units 1 € 0 Yes 01.01.2011Let 0.00
33 Kurzzeitmieter Other Units 1 € 664 00.01.1900Let 664.42
0%34 Mall Income Other Units 1 € 60 00.01.1900Let 59.90 0%
M GT I PM35 Döbelin Retail 78 € 1,499 n.a. 01.04.2012Let 19.31 75%
(Copy)
Property address Property no. 10 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
01.02.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis9
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 1,017
abc
5 75%€ 100 18
0 0 0 0%€ 0.00
0
€ 0 0 0
3
0 0
35 Döbelin Retail 78 € 15.00 € 1,164
34 Mall Income Other Units 1
33 Kurzzeitmieter Other Units 1 € 0.00 € 0 € 0 0
0 0 0 100%0 0
0 0 0%
32 FOTOFIX Schnellphotoautomaten GmbH Other Units 1 € 0.00 € 0 € 0
0 3 5 100%12 6 31 Schwarz Außenwerbung GmbH Other Units 1 € 595.83 € 596 € 100
0 3 5 100%12 6 30 transact Elektronische Zahlungssysteme GmbH Other Units 1 € 56.26 € 56 € 100
0 3 5 75%18 12 29 Deichmann SE Storage 39 € 3.50 € 137 € 0
0 3 5 75%18 12 28 Deutsche Bank Retail 196 € 10.00 € 1,960 € 100
0 3 5 75%12 6 27 Gürkan Retail 44 € 25.00 € 1,111 € 100
0 3 5 75%12 6 26 Frisör Klier GmbH Retail 64 € 25.00 € 1,595 € 100
0 3 5 75%9 3 25 Steinecke´s Heidebrot Backstube GmbH & Co. KG Retail 72 € 60.00 € 4,342 € 100
0 3 5 75%18 12 24 AWG Allgemeine Warenvertriebs-GmbH Retail 533 € 8.00 € 4,264 € 100
€ 100 0 3 5 75%18 12
3 5 75%18 12
23 Anh Nguyet Tran Retail 55 € 9.00 € 498
Retail 266 € 9.00 € 2,395 € 100 0
0 3 5 75%24 18
3 5 75%24 18
21 Takke Commercial 162 € 1.00 € 162
75%12 6
20 Takke Commercial 833 € 1.00 € 833 € 25 0
5
19 Floristik´99 Retail 63 € 27.50 € 1,723 0 3 5
€ 25.00 75%
0 3 5 75%18
0 3 12 6
€ 8.00 € 1,337 € 100
12 6
€ 100
12
75%
18 12 0 3 5 75%
0 3 5
75%
0 3 5 75%
0 3 5
0 6
0 3 512
50
75%
€ 100
75%
75%
5 75%18
0
12
12 6
€ 100
75%
3
0
5
3
5
18
0 18
12
75%
18
12 5
3 12
3
3
75%
0
3
5
75%
75%
3
0
75%
5
75%
3 5
5
100%
3
18€ 50 12
6 53
0 10
€ 100
€ 100
Total
22 TEDI GmbH & Co. KG
13 Ms. + Mr. Cetinkaya & Mr. Özyurt
€ 100
€ 100
€ 100
€ 100
36
€ 100
€ 100
12 14 s.m.s. shopping macht Spaß GmbH - Jürgen Menzel Retail
16 Wohnungsgesellschaft Ludwigsfelde mbH
Retail15 Wendorff
Retail
Page 7 of 12
€ 86,85712,631 sqm
Term**
Matrix Portfolio
Re-letting
€ 4,284
€ 1,019
€ 25.00
€ 1,12745
125
131
173
€ 100
167
Retail
€ 10.00
€ 712
6 Kaufmann
€ 20.00
18 tabacon Franchise GmbH & Co. KG
7 AWG Allgemeine Warenvertriebs-GmbH
Retail
Retail
Retail
Retail
8 Apollo Optik GmbH Retail
67
3 Vacant Office
Retail
2 Stadt Ludwigsfelde
1 Johae Fleischprodukte GmbH & Co. KG
536
9 Deichmann SE
12 Naser
Retail
17 Zebra Gastronomie und Automaten GmbH
10 HAARMEX.DE Elduran Meryem
11 Vodafone D2 GmbH
Retail
Retail
2,031 € 1.80
Market
3
0 0
0
3
9 0
Rent /month€ 2,526
€ 5.50
€ 255
€ 32,669
117
€ 37.50
51
Rent
€ 20.00
12
€ 100
€ 0
€ 5,197
18
€ 25
€ 646
€ 551
€ 3,213
€ 4,073
€ 4.22
€ 30.00
€ 1,291
€ 9.00
€ 10.00
€ 10.00
65
131
4 Kaufland Warenhandel Retail 5,940
5 Kaufmann 51 Retail
102
52
€ 3,666
12
€ 100
€ 27.50
€ 5.00
€ 1,125
12
18
€ 10.00
€ 8.00
12
Market
€ 100
14974 Ludwigsfelde
Retail
sqm/unitTenant Name
Retail € 25
€ 100
Potsdamer Straße 51
Area Category
407
€ 1,314
Germany Brack Capital Properties N.V.
0
15
6
31.03.2013
(Copy)
Property address Property no. 10 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
7,000
Usual market % - levels6,500
Market rent
6,000 Contractual Rent
5,500 Rents %
Contractual5,000
Market
4,500 4% of turnover
3% of turnover4,000
2% of turnover
3,500 Turnover potential(net)
Sales Area3,000
Total Areain € / m² p.a.
based on sales area
2AA 1197
This report is only to be read in conjunctionwith the valuation report provided.
0.00
0.00
6.88
0.001.000.00
1,141,742
3.50
0.00%
Rented€/year
00
-100.0%
0.0%
0.00
€/month €/year0
0.00
12,580
01,642
0
3,059
0
0
0
0.00%0.00%0.00%
100.00%%
Vacancy Rate
0
11,546
14974 Ludwigsfelde
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
8.7%1,017,8095.00
0
5111,546
Market
01,106,035
€/month
DIY
Office
0
51
0
25584,817
0.40%
7.35
0
3,059€/m²/month
5External parking
Rent
0
ContractualRent
€/year
0.00%5
0.00%
0.00%0
5139
0.00%
Matrix Portfolio
Potsdamer Straße 51 31.03.2013
0
0995Commercial
0
Contractual
0
00
Potential
Area Vacant
0
€/m²/monthRent
0.00%0
Rent
00.00%
Brack Capital Properties N.V.
Use Category
Germany
01.02.2011
Capital indicator
n.a.
Assessment of Kaufland market rent
Comment
WALTPayment Index 70
15,796,730 €
The main tenant is a corporation belonging to the Kaufland Group, which in turn belongs to the Lidl &Schwarz Group, one of the biggest grocer groups in Europe. Kaufland is the self-service departmentstore division of Lidl & Schwarz with more than 500 locations across Europe. Kaufland’s core businessarea is food retailing with branded goods and own-brands specially produced for Kaufland. According toDun & Bradstreet (D&B) Rating as at 01.01.2011 Kaufland Diensleistungs GmbH & Co. KG has a verylow credit risk. The risk of insolvency (D&B Score) within the next 12 months compared with otherGerman companies is assessed to be low, i.e. 97% of businesses on the German database have thesame or higher risk of failure.
Rent p.a.
5,940 m²
Self-service department stores usually can afford to pay a rent in the range of 2% to 4% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 4,000 to € 6,000 per m²sales area. The two graphics above indicate, how the contract rent of the main tenant Kaufland as well as the assumed market rental level, can be assessed on the basis of usual market ranges. This analysis isbased on the turnover potential figures prepared by Trade Dimension.
2.5%
2.5%
5.49
5.50
abc
Risk indicatorScore
Page 8 of 12
Credit limit
0
111.1%9.7%
7,82565286,857
130.421,042,279
0.0%0.0%0
0.0%
0
0
0
0.0%00.0%
0
8.87
6.65
0
34%
0
Kaufland Dienstleistung GmbH & Co. KG
14.5 years
~ 4,200 m²
0 00
Share of total income
Main tenant
€ 391,032
D&B Rating of Main Tenant
Tenant name
4.43
Storage0
137Petrol Station 0.00
0.00Internal parking 0.00
7.54275.28
995ResidentialCommercial
01,207
0 0137
11,943 21.3%0
14,4890
14,489
1,642
m²
995
Property Analysis
0 0.0%0.00 0
92,17000.00
7.98
Warehouse
Warehouse
Area Let
12,631
Other Units
00
Residential390
0
0
0.00%
Contractual
m²Area Analysis Lettable Area
0
1,106,035
Retail
0.00
Total areaPetrol Station
05
Income Analysis
Internal parking
Office
DIYRetail
Storage
94,89016,517
1,138,683
0 0
16,517
1,642
1,376
3.50
1.210.00
Other UnitsTotal area
External parking
Total parking
€ / m²
5.49
4.43
5.50
6.65
8.87
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
3,761
(Copy)
Property address Property no. 10 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The property is almost fully let to 26 retail tenants with Kaufland as the anchor tenant. The WALT of the property amounts to 7.5 years. The main tenant Kaufland has a share of approx. 34% of the rental income.The rent of Kaufland is indexed and will be adapted by 50% of the CPI change, whenever the change exceeds 10 percent in relation to the CPI basis. Kaufland does not pay ground tax, insurance costs,maintenance, or property management. Smaller tenants usually cover these costs with the exception of maintenance costs. Some smaller tenants also do not pay property management but these are the minority.The following tenant's has just extended the lease contract: Kaufland until 09/2027, Apollo Optik until 05/2019, Floristik´99 until 09/2017 and Döbelin until 06/2014. Furthermore, there are three new tenants:Deutsche Bank has singed a lease contract over 160 m² until 06/2017. Cetinkaya & Özyurt have singed a lease contract over 36 m² until 03/2022. Anh Nguyet Tran has singed a lease contract over 55 m² until09/2017.
0 €
0 €
€ 5,688€ 19,607
€ 5,780
Breakdown of Non-Recoverable Costs
€ 0
10.1%
6.10%
% of Gross
€ 10.00 /m²/p.a.
€ 12911.4%
0 €
€ 5,511 0 €0 €€ 5,424
0 €€ 5,332
9.7%€ 684
€ 18,347 10.0%10.3%€ 4,916
€ 17,802
€ 424
0 €
€ 0.00 /m²
Management costs
Other non-recoverable costs
€ 8.66 /m²
€ 16,799€ 5,238
€ 18,052
6.67%
Total non-recoverable expenses
Maintenance costs € 69,473
€ 115,156€ 112,837€ 115,609
€ 864
€ 1.35 /m²
% of Gross
0.00%
€ 17,080
€ 15,634
€ 5.50 /m² € 69,473Contract Rent
per year
Lease Contract Commentary
€ 5.50 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 6.65%
7.00%
Brack Capital Properties N.V.
Potsdamer Straße 51
Assumptions
0
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yields profile is aligned with the market/other transactions. We have taken intoaccount such facts as the remaining lease term with the well-known anchor tenant, the good location,the low vacancy rate and the good condition of the subject property in Ludwigsfelde.
01.02.201114974 Ludwigsfelde
Germany
31.03.2013
€ 0.40 /m²€ 0
0.44%€ 17,743€ 1.40 /m²
€ 0.00 /m²€ 5,066
per year
Year 8
€ 18,674€ 16,986
€ 78,011€ 76,779
€ 15,815
€ 71,842Year 3
€ 17,139
% of Total
Year 7
€ 5,083€ 17,150
€ 120,040
€ 110,430
€ 5,421
Total
€ 75,581 € 16,664
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 010.35%
€ 0.40 /m² € 5,066
Insurance
Other non-recoverable costs
1.70%
Market Rent
0.00%9.60%
1.50%€ 1.24 /m²€ 1.40 /m² € 17,743
€ 109,362
per year
€ 8.54 /m²
Total Non-recoverable Costs
€ 107,916
€ 5,154
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 16,291 € 20,556 0 €€ 17,708€ 81,687 € 20,861
Year 10€ 303
1.56%1.50%
Market Value
€ 79,265
Year 4
Year 6
€ 5,956
€ 16,551
Year 11€ 80,494
€ 20,242Year 9
GroundManagementTax
Maintanance
€ 17,163
CostsCosts
€ 73,123
Year 1Year 2
€ 69,711€ 70,688
€ 19,922
€ 74,384 € 18,996€ 19,301
Year 5
€ 17,094
10.7%
0 €€ 5,598
€ 126,51511.9%10.8%
0.49%
0 €
€ 5,753€ 5,869
€ 5,016
€ 1,107€ 128,963
€ 123,55110.8%
0 €
10.5%
€ 123,488
Year after 2021
€ 117,186
abc
€ 2,294 € 123,05411.2%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
9.7%10.3%
10.0% 10.1%
11.4%
10.5%11.2%
10.8% 10.8%
11.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 10 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
6.50%
Market Value (rounded)
€ 813,311-€ 3,692
-€ 15,840
-€ 9,356
-€ 128,963
Gross Capital Value (rounded)
€ 15,100,000€ 1,138,683
€ 1,124
Page 10 of 12
8.02%
€ 860,460
€ 7.51 Total
Total € 14,200,000
6.82%
In terms of risk, we considered the covenant strength as well as the lease duration for the existing contracts. As at 01.01.2011, the main tenant, Kaufland Dienstleistung GmbH & Co. KG, has good covenantstrength, which ensures a secure cash flow for the remainder of the lease term until at least 2027. In terms of a resale, we took into account such facts as visibility, demographic factors, appearance, condition andbuilding age, third-party usability, competition situation and location. For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in our valuation. Other costs have remained unchangedand have been applied according to information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective gross rent.
-€ 2,220
abc
Valuation Comment
€ 1,042,279 per m²
9.57%
We have been provided with updated information regarding necessary capital expenditures. Capital expenditures for repairs in the amount € 1,027 have been taken into account in Year 1. For the periods Year1,Year 2-5 and Year 6-10, these are covered by our maintenance costs. Regarding comparable rents, we have had recourse to evidence of similar areas situated in the comparable regions and locations.Furthermore, we have analysed comparable transactions. Please refer to the section "Investment Comparables". Taking into account the very good micro-location in a small city in eastern Germany but still close toBerlin, we have the opinion that this property should be transacted at a multiplier slightly lower than the middle of the range of the observed comparables.
6.19%
Year 10 € 1,086,080€ 1,139,567
€ 0
€ 1,155,743Year 9
-€ 117,186
TIs and
-€ 115,609
Brack Capital Properties N.V.
€ 1,132,388 -€ 4,627
-€ 11,225-€ 23,616
€ 1,019,524
€ 993,733 € 0 € 993,733
Income
-€ 18,460
-€ 9,300-€ 1,903 € 1,013,021
€ 1,016,028
Net
31.03.2013
6.65%Commissions Cash FlowCapital
€ 995,906€ 892,031€ 966,226
Year 6Year 7
-€ 8,556
€ 934,309
-€ 110,430Vacancy
Year 5
€ 1,151,134 € 1,142,578Year 8
Year 4
Year 2-€ 6,238
Gross
€ 1,126,134
Market Value
Rental recoverable Operating
Potsdamer Straße 51
€ 1,016,079
€ 942,547
7.34%per m²
€ 1,103,380
-€ 123,488-€ 123,054€ 0 -€ 2,557
Gross Value of Surplus Land
€ 15,017,364
€ 1,195
€ 15,108,152-€ 126,515 -€ 52,425€ 1,180,510
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 15,108,152
-€ 16,791Total Cashflow (incl. Terminal Value @ 7.00 %)
per m²/month
€ 1,053,995
€ 699,262
-€ 12,212
-€ 1,424 € 0
Expenditures-€ 24,796
-€ 112,837 € 1,019,551
Costs
€ 865,110
€ 957,117
Abatements
€ 979,194
-€ 4,823
-€ 123,551€ 1,005,742
-€ 13,666€ 0 € 979,829
€ 997,086
Year 3 € 1,138,626
€ 942,410€ 578,485-€ 13,877
-€ 120,040
€ 622,092
€ 1,119,943
Revenue€ 1,143,344
Turnover
Germany
€ 1,004,334
Revenue
€ 1,141,934 € 0
€ 0 € 1,054,349
Rent
€ 0
€ 1,148,394-€ 21,991-€ 5,050 € 0Year 1
€ 1,156,580
€ 1,145,271
Year 11 € 1,182,730
€ 1,110,919
€ 6.88
€ 0-€ 12,348
€ 1,164,245 -€ 78,165 € 0
€ 1,144,232-€ 71,785
-€ 41,891
€ 513,622
Yield Overview
€ 1,032,914
€ 1,029,076-€ 115,156
€ 1,112,343
14974 Ludwigsfelde
Cash Flow
Non-Total
€ 0-€ 55,389
€ 0
€ 7,888,331
-€ 16,176 € 0-€ 9,884
Present
€ 622,109
€ 647,573
-€ 5,116
Leasing
01.02.2011
Matrix Portfolio
Value @
6.8%
6.6% 6.7% 6.8%
6.2%
6.6% 6.5%6.7% 6.7%
6.3%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
€ .0
€ 200000.0
€ 400000.0
€ 600000.0
€ 800000.0
€ 1000000.0
€ 1200000.0
€ 1400000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 10 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Potsdamer Straße 51
01.02.2011
abcPage 11 of 12
View of the underground garage
View of the main entrance
Matrix Portfolio
External view
14974 Ludwigsfelde
Photos
Internal view of the mall
Internal view of the mall
Germany Brack Capital Properties N.V.
31.03.2013
External view
(Copy)
Property address Property no. 10 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
Self-Service Department Store 6,250 m²Self-Service Department StoreFlower store
16,866 m²
123 m²Optician62 m²
0 m²74 m²Haircutter
Real BitterfeldSchönebeck (Elbe)
Halle0
Local chain
0Frisör Klier
Floristik '99
0
Freital
0
Purchasing power of 83.6
€ 0
€ 22.67 /m²€ 2,743
€ 0.00 /m²
Total Rent p.m.
€ 2,211 € 29.88 /m² Similar purchasing power, other federal state€ 22.30 /m²
Purchasing power of 75.8Rental income includes sub tenants with higher rents
€ 1,406
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Purchasing power of 93.5€ 6.85 /m²
€ 38,750 € 6.20 /m²€ 115,532
€ 5.29 /m²€ 104,150
CommentSimilar purchasing power, other federal state
Rent p. sqm€ 8,136 € 4.52 /m²
Purchasing power of 105.5
14974 Ludwigsfelde
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
1,800 m²
Leasing Market
Real
Tenant Property TypeSelf-Service Department StoreKauflandSelf-Service Department Store
31.03.2013Potsdamer Straße 51
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
SalzgitterWal Mart
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
19,688 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
BraunschweigCrimmitschau
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
01.02.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
Property address Property no. 11 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 3 11 to 15 years Macrolocation 3 Average location and catchment areaLettable Area 3 Between 10,000 and 12,500 m² Microlocation 3 Average micro locationProperty condition 2 Below average building condition Commercial activity 3 Limited commercial activity nearbyGeneral impression 2 Below average general impression Competition 2 High competition level
Investment Quality
WALT 3 WALT three to seven years Investment market 3 Average property marketOver- / underrent 2 Slightly overrented (5% to 15%) Investment volume 4 Good lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 13.14
Page 1 of 12 abc
SWOT Analysis
Limited third party usability of the large-scale retail area without refurbishment
31.03.2013
Brack Capital Properties N.V.
Key Figures
Hohenloher Straße 2
2001
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
6.38%
Discount Rate
6.54%
excluding capital
expenditures6.85%
7.29%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
4.3 years
0
Well-known anchor tenant
Good tenant mix
Good connections to the motorway network via the A 6
Market rental value € 1,278,184
€ 10.59
1974
Weighted average lease term
74172 Neckarsulm
Property Summary
Retail Park
Germany
28.01.2011
Property type
Current vacancy rate
Adler Modemärkte GmbH
10,267 m²Total parking units
1.2%
Main tenant
Total lettable area550 units
11.0%
€ 1,415,752
€ 1,305,298
€ 11.49Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
Sufficient parking spaces
Some vacant areas
Increasing maintenance required due to the building age Prolognation of the lease contract after expiry Drop out of tenants before expiry of the contracts
0
Basement area in the Adler unit
€ 10.37 / m² / p.m.€ 17,200,000
7.30%
The property, which consists of three parts, was built in 1973 and was completed in 1974. In the west of the property, there is a 1 to 2-storey building with a basement level. Retail stores and shops are located in thefirst floor. In the ground level are administration and stockrooms. Furthermore there are some vacant areas in this property. This main building has two entrances: one is located near the parking area and anotherone is located by the street corner "Hohenloher Straße" and "Heilbronner Straße". Adjacent to this building, a small 1-storey building is located with some small retail stores. These small retail stores have their ownentrances. In the east, there is another small 1-storey building with the use carwash and offices. This is currently rented by TÜV and Ümit Ebem. The external area offers a large parking area. The property is opento all sides and includes a ramp to the basement level for deliveries. The roofs are mainly flat. The panels consist of prefabricated multi-layer concrete panels with thermal insulation.
0
7.12%
Market Rental Value
11.87
€ 1,278,184 p.a.
High level of competition (Rewe, Aldi and Kaufland nearby)Weaknesses
Matrix Portfolio
Building almost 40years old (without refurbishment)
€ 1,636 per m²
Extension of the lease contracts of the smaller tenants
0
The carwash and TÜV building is designed with simple brickwork walls. The main tenants are Adler and Lidl.
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 110,454
Year of refurbishment
Property Description
0
€ 0.90
00
(Copy)
Property address Property no. 11 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
197.82
Efficient industrial companies, innovative service providers and medium-sized companies are located inNeckarsulm and are known internationally. Well-known companies located in Neckarsulm include Audi,Lidl and Kolbenschmidt-Pierburg. Furthermore, Neckarsulm is also recognized as very good site for theIT branch.
Micro Location
Neckarsulm is located in the north-east of the federal state Baden-Wurttemberg. The state capital,Stuttgart (population 602,000), is only 59 km away and Mannheim (population 311,969) is only 77 kmaway. The closest motorway is the A6, connecting to Amberg in the federal state Bavaria to the east and toSaarbrücken near the French border to the west. The motorway can be accessed in less than 2 km.Furthermore, the A81, connecting to Würzburg to the north-east to Singen (close to the Swiss border) tothe south-west, can be reached within a 7 km distance. Neckarsulm has a train station, which connectsNeckarsulm to the cities of Stuttgart and Munich via regional trains. The nearest airport offering connections to national and international destinations is Stuttgart, about 59km away. Furthermore, the Karlsurhe airport is located in a distance of approx. 91 km.
0
Location
Brack Capital Properties N.V.
31.03.2013
74172 Neckarsulm 28.01.2011
Heilbronn (Rural District)
Germany
Baden-Wurttemberg
Macroeconomic Indicators
Federal StateDistrict
4.2%
7,381
Neckarsulm Macro Location
5.0
Micro Location
280
The property is located in the south of Neckarsulm near the motorway A 6. The surrounding area ischaracterised by discounters like Aldi, Rewe and Zeeman. The property is located along the HohenloherStraße and is very good visible. A small bus station is situated next to the western side of the property.The property itself is located beside a residential area.
Local Tax Information
1.2%
106.68101.64
6.5%
561
3.9%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
26,598
74172
1066299
10,744,921328,731
Neckarsulm
0.8%
12,410
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Hohenloher Straße 2
City
(Copy)
Property address Property no. 11 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Extract from the land register dated 03.12.2010
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Hohenloher Straße 2 31.03.2013
28.01.2011
Germany
Suspicion of contamination
According to information from the local planning authority, a development plan exists, entitled "SüdstadtNr. 14.01/5" and dated 30.07.2004, with the following regulations: the subject site is located in specialzone ("Sondergebiet"). The cubic density (Baumassenzahl, BMZ) is 4.0 and the site coverage ratio(Grundflächenzahl, GRZ) is 0.8.
Section 2 (Restrictions)
TPL Neckarsulm S.á.r.l., Luxembourg
Land Register
4771 1900
Owner
n.a.
Site Information
Site area 32,520 m²thereof surplus land
NoGround lease
Site layout
Site Plan
Surplus land value (net) € 92 /sqm
Source: Cadastral plan on a 1 to 1,000 scale, dated 28.12.2010
Matrix Portfolio
74172 Neckarsulm
SO (special zone)
4.0
NO 6512
Sheet Plot Parcel
n.a.
Tenure
Site servicing
Ground lease expiry€ 441,600
4,800 m²
0.8
Town Planning
Fully serviced
Building encumbrances No
Almost square
The site consists of one plot 1900: The site has an even topography. The site is accessible from thenorth by car and the east by foot. The site has a trapezoidal shape. According to the Environmental DueDiligence Report, dated July 2007, a filling station was installed east of the mall in 1974. Because of thisuse, a suspicion of contamination exists. Operation of the filling station ceased in 1995. Later, thislocation was used as vacuum cleaner area, car repair shop and carwash. At the moment, a part of thisspace is rented by the TÜV and Ümit EbemFor the purposes of this valuation, we have assumed that the subject property is free of any soil orbuilding contamination. Furthermore, for purpose of this valuation, we assumed the land value pursuantto the committee of experts of Neckarsulm.
Limited personal easements (regarding the omission of the food offer on an area of more than 1200sqm sales area) in favour of Kaufland Stiftung & Co. KG, Neckarsulm.
Brack Capital Properties N.V.
Land charges in the total amount of 20,235,731 in favour of Bank of Scotland (branch Frankfurt),
Local Court of Heilbronn, land register of Neckarsulm
abcPage 3 of 12
(Copy)
Property address Property no. 11 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
197.82
6.5%
abc
Population forecast for the district (2007 - 2025)
74172 Neckarsulm
Name74172 Neckarsulm, Rötelstr. 35
Competitor Overview
Competitor Map
Hypermarket
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
1.30 km10,732 m²Self-service dep. store
12,563
Medium
Highlow
2,631 m²
low3.60 km
Inhabitants in secondary catchment area
Retail Centrality Index (District)
74074 Heilbronn, Stuttgarter Str. 85Handelshof
Inhabitants per hypermarket in secondary catchment area
19,669
12,410
Kaufland
Rewe
236,025
1,900 m²3,000 m²
Inhabitants per hypermarket in tertiary catchment area
5.90 kmHypermarketHypermarket
6.50 km6.60 km
74189 Weinsberg, Haller Str. 5974074 Heilbronn, Schmollerstr. 42 Hypermarket
74076 Heilbronn, Etzelstr. 38-44
74072 Heilbronn, Olgastr. 57-75
HandelshofHandelshof
74080 Heilbronn, Neckargartacher Str. 111
Handelshof
Rewe
74177 Bad Friedrichshall, Industriestr. 12
Hypermarket 1,991 m²2,900 m² 4.40 km low
5.20 kmHypermarket 3,000 m²
Rewe
35,234
Handelshof
101.64
74172 Neckarsulm, Hohenloher Straße 10
138,194
Hypermarket7.40 kmHypermarket74248 Ellhofen, Bahnhofstr. 44
E-aktiv Markt ÜltzhöferE-neukauf
74081 Heilbronn, Mauerstr. 78-90 7.00 km
0.30km
Hypermarket 3,400 m²
Hypermarket 0.10km
5.30 km
2,500 m²2,400 m²
74172 Neckarsulm, Am Wildacker n.a.n.a.
Aldi/Kik Hypermarket00
High
Inhabitants in primary catchment area 11,745
0
Competiton Indicators
Hohenloher Straße 2
28.01.2011
Germany Brack Capital Properties N.V.
31.03.2013
lowlow
low
low
low
low
Matrix Portfolio
(Copy)
Property address Property no. 11 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
28.01.2011
31.03.2013
Matrix Portfolio
Turnover analysis
This competitor is a hypermarket located east of the subject property. The main tenant is REWE. The property is a serious competitor.
Main competitors
74172 Neckarsulm
Hohenloher Straße 2
0
The rents in a functional retail agglomeration are linked to turnover. The percentage rate that a retail tenant can use for rental payments depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective branch. The productivity varies between approx. 1,000 €/m² up to more than 10,000 €/m².For the evaluation object there are turnover rents for several tenants. We have been provided with the turnover rents for the tenants dm Drogerie and Härdtner. For the purposes of this valuation, we have assumed that the turnover rent are sustainable and have included until the end of the respective lease agreement. We have not been provided with any turnover figures for Adler. For the purpose of this valuation, we have assumed that the area productivity of Adler is in a healthy range and that the rent-to-turnover ratio is in the region of 12,3%, which is slightly above the range of 6-12% for fashion stores.
abc
Competition Comment
The catchment area can be differentiated into primary (0 – 5 min driving distance); secondary (5 – 10 min) and tertiary (10 – 15 min) catchment areas. Approximately 35,230 inhabitants live in the primary catchment area. The density of hypermarkets is relatively high in the primary and secondary areas, the competition eases in the tertiary catchment areas. In a spatial environment of less than 1.5 km, there are three competitors.There are two competitors in the vicinity. As the main tenants of the valued property include Adler, Takko Fashion and Lidl, the neighbouring discounters, such as Aldi, Rewe and Kik pose as direct competitors. The discounter Rewe and the small retail park are apparently newer than the valued shopping centre. They also target the same customer segment with the specific range of products. In contrast to its competitors, the strengths of the valued property include the mall’s better visibility from the street, the higher number of parking spaces and the concentration of the existing tenant mix. Another competitor is1.3 km away. This is a big retail park with the main tenant Kaufland. A shopping mall connects directly to this property, with tenants such as Saturn, C & A, Toom, Deichmann, Walmart and various other restaurants and shops. The competing property has signposts on the motorway, and offers very good and ample parking. It is clearly also in very good condition. The valued property has a much smaller size and appeals to a slightly different audience, because there are some shops from the low-price segment.Even though the properties may attract different customers and have slightly different primary catchment areas, the catchment areas strongly overlap, resulting in a high number of retail hypermarkets for a city with only 27,000 inhabitants, which can be problematic. Overall, it can be said that the competition level in Neckarsulm is high, especially due to the existence of an relative hight retail density.
Due to the rent-to turnover ratio above the general range and the internal layout of the Adler unit with a share of rather substandard areas in the lower storey, we have aplied a market rental value which is lower that the contractual rent. (The precisely figures regarding the productivity and rent-to-turnover ration an page 8)
0
The property in Neckarsulm is located in the direct vicinity of several serious competitors. The subject property currently has a retail use. Advantageous for this property are the high number of parking spaces and the centrality of the tenant mix. The problems, however, are the age of the property, the vacant space and the high density of competitors. Regarding the third-party use, the current use is considered the best option.The leasing capacity is for this property medium because of the building age and the high density of competitors. Excluding the area of the Adler. The leasing capacity for this area is not very good. Because this area extends over two floors and one of them is the enlarged basement area.
Germany Brack Capital Properties N.V.
This competitor is an small retail park located east of the subject property. The property is a serious competitor.
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 11 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
7 mister*lady GmbH
16.70
€ 1,685
30 Lidl Vertriebs-GmbH & Co.KG
Other Units10 dm-drogerie markt GmbH + Co. KG
11 Takko Holding GmbH
Let
Page 6 of 12
GT I PM
30.09.2016
1,282
Storage
Other Units
5 Meister Rapid e.K. Inh. Geviye Taber
3 Lidl Vertriebs-GmbH & Co.KG
181
35.79
28.36
Retail 5.51
8.61
2 Mustafa Kabayel Retail
pays VAT
23.03.2023
30.11.2015
75%
75%
Start
75%
31.03.2013Hohenloher Straße 2
Tenant
Matrix Portfolio
28.01.2011
Status m² / unitLet
TenantLeaseArea
Let
Let
24.07.2014Yes
01.12.2010
Yes
Rent / m² RenewalLeaseLetting
1 Gabriel Retail 59
/ month Probability
100%
1
9 dm-drogerie markt GmbH + Co. KG Retail
Let
Retail
8 Convenience Concept GmbH
14 Härdtner GmbH
6 Schwaderer
25.08.2007
24.03.1997
Yes
GT I PM
75%
Retail
n.a.
€ 833
GT I PM
4 P&M Trends
Retail 1,200
73
Let
Retail
23
21.09.2007
13.41
€ 1,226
€ 10,341
Let
Let Yes
GT I PM
74172 Neckarsulm
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Retail
€ 117,979
99
Let
Let
712Let
€ 4,211 27.04.2016
€ 2,396
14.06.2017
01.10.2006
30.09.2017
01.12.2012 01.12.2013
€ 11,598 01.10.2002
01.06.2007
20.09.2017
23.03.2023
31.03.2017
0%
01.06.2007
30.09.2013
31.12.2013
31.12.2013
30.09.2013
31.12.2020
02.08.2014
31.12.2016
31.12.2020
0%
75%
75%
14.10.2020
75%
75%
75%
01.11.2011
30.06.2014
75%
30.08.2014
75%
31.08.2007
0%
GT I PM
75%
75%
75%
0%
GT I PM
Yes
Yes
GT I PM
abc
GT I PM
75%
75%
75%
75%
75%
100%
0%
0%
10,267 m²
GT I PM
GT I PM27.04.2016
GT I PM
GT I PM
75%
75%
0%
75%
14.06.2017
GT I PM
75%
75%
75%
GT I PM31.03.2014
GT I PM
75%
31.12.2016
GT I PM20.09.2017
GT I PM22.09.2017
22.09.2017
01.06.2007
06.09.2007
00.01.1900
21.09.2007
0%
27.04.2016
75%
75%Yes
4210.56
24.19
10.99
Yes
Yes
12.97
9.04
Yes
Yes
M GT I PM
54 € 1,210
€ 5,492500
22.46
31.12.2013
€ 1,000
GT I PM75%
Total
116Let
29 mister*lady GmbH
Let
Storage 24
31 dm-drogerie markt GmbH + Co. KG
Let
€ 9,548
LetRetail
13 Härdtner GmbH Retail
€ 64
15 Essanelle Hair Group AG
GT I PM12 Ernsting's family Gmbh & Co. KG Retail 164 € 2,123 Yes
GT I PM48.38 20.09.2017
1 € 1,560 Yes 00.01.19001560.04 20.09.2017
€ 5,600
Retail 61 € 1,900 Yes 21.09.2007Let 31.09
16 Essanelle Hair Group AG Other Units 1 € 138 Yes 00.01.1900Let 138.18
17 Schwäbische Wurst Spezialität. Retail 119 € 2,250 Yes 21.09.2007Let 18.94
18 Schwäbische Wurst Spezialität. Other Units 1 € 1,149 Yes 00.01.1900Let 1149.39
19 Serbetcioglu Retail 64 € 851 Yes 01.04.2011Let 13.35
20 Adler Modemärkte GmbH Retail 3,359 € 35,732 Yes 27.03.1997Let 10.64
GT I PM21 Cosgun Retail 50 € 1,171 Yes 01.05.2010Let 23.32 30.04.2013
GT I PM22 Reno Schuhcentrum GmbH Retail 708 € 8,501 Yes 24.03.2007Let 12.00 23.03.2017
GT I PM23 Reno Schuhcentrum GmbH Storage 121 € 477 Yes 24.03.2007Let 3.95 23.03.2017
GT I PM24 Stuck Storage 47 € 162 Yes 27.06.2005Let 3.47 30.09.2013
GT I PM25 P&M Trends Storage 42 € 91 Yes 01.08.2010Let 2.15 30.09.2013
GT I PM26 Siemens Building Technologiers Storage 68 € 510 Yes 01.12.2002Let 7.53 30.11.2013
GT I PM27 Siemens Building Technologiers Storage 45 € 0 Yes 01.12.2002Let 0.00 30.11.2013
GT I PM28 Siemens Building Technologiers Storage 21 € 0 Yes 01.12.2002Let 0.00 30.11.2013
Yes 01.06.2007Let 2.68
294 € 0 Yes 24.03.1997Let 0.00
Storage 46 € 136 YesLet 2.99
32 Schwaderer Storage 38 € 97 Yes 01.07.2008Let 2.52
33 Pura GmbH Storage 11 € 56 Yes 01.03.2003Let 5.01
34 KSK Heilbronn Other Units 5 € 285 Yes 10.12.2006Let 63.33 100%
M GT I PM35 Deutsche Plakat-Werbung GmbH & Co. KG Other Units 1 € 221 n.a. 03.08.2009Let 220.83 100%
36 Stadt Neckarsulm Other Units 10 € 1 Yes 01.07.1987Let 0.09 100%
GT I PM37 TÜV SÜD Auto Service GmbH Retail 197 € 906 Yes 15.10.2010Let 4.61 0%
38 Ümit Ebem Other Units 480 € 504 Yes 01.11.2011Let 1.05 100%
39 Ümit Ebem Office 58 € 311 Yes5.36 100%31.12.2020
40 Ümit Ebem Commercial 291 € 1,557 Yes 01.11.2011Let 5.35 100%
41 Kurzzeitmieter Other Units 1 € 918 Yes 01.11.2008Let 917.80 31.03.2017
0%42 Mall Income Other Units 1 € 92 00.01.1900Let 91.81 31.03.2017
M GT I PM43 Vacant Other Units 2,150 € 0 n.a. 00.01.1900Let 0.00 00.01.1900
44 VACANT Storage 18 € 0Vacant 0.00
45 VACANT Storage 35 € 0Vacant 0.00
46 VACANT Storage 29 € 0Vacant 0.00
47 VACANT Storage 26 € 0Vacant 0.00
48 VACANT Storage 17 € 0Vacant 0.00
GT I PM49 P&M Trends Storage 15 € 20 Yes 01.01.2013Let 1.36 0%
50 Schmidt Other Units 572 € 651 Yes 01.01.2011Let 1.14 0%
51 Schmidt Other Units 307 € 349 YesLet 1.14 01.01.2011 31.12.2013
52 VACANT Other Units 0 € 0Vacant 0.00
0%53 Parkplatzanzahl External parking 550 € 0 00.01.1900Let 0.00 00.01.1900
0%54 FOTOFIX Schnellphotoautomaten GmbH Other Units 1 € 57 Yes 01.06.2007Let 57.09 30.11.2013
(Copy)
Property address Property no. 11 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
28.01.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis0
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 640
abc
54 FOTOFIX Schnellphotoautomaten GmbH Other Units 1 € 57.09
0 0
€ 0 0
0%€ 0 0 0
0 1 100%0 0
0 53 Parkplatzanzahl External parking 550 € 0.00 € 0
0 52 VACANT Other Units € 0.00 0 0 0%€ 0 0 0
0
€ 858
0 0 0%€ 0 0 0
0%€ 0
51 Schmidt Other Units 307 € 1.50 € 461
0 50 Schmidt Other Units 572 € 1.50 0 0 0 0
Storage 15 € 1.80 € 26 0
3
75%€ 0 24 15 3 549 P&M Trends
0
75%€ 0 24 12
3 5 75%
0
47 VACANT Storage 26 € 1.80 € 48
548 VACANT Storage 17 € 1.80
75%
0
15 12
€ 0 21
€ 1.8046 VACANT
€ 0 12 15
3
3
5
€ 0
75%
5
45 VACANT Storage 35 € 1.80 € 63
29
0%€ 0 0 0
5
0
5 75%
3
75%3 0
€ 0.00 0
€ 32 € 0 12
€ 0 3
0
43 Vacant Other Units 2,150 € 0.20 € 430
0
42 Mall Income Other Units
41 Kurzzeitmieter
1
44 VACANT Storage 18 € 1.80
0
40 Ümit Ebem Commercial 291 € 4.25 0
Other Units
0 € 0
5 100%€ 25 0
0
100%€ 0 0 0 0
€ 1,236 5 100%€ 25 0
0
0 0
18
39 Ümit Ebem Office 58 € 4.25 € 247
0 0%€ 25 0 18
0 5
0
0 18 100%€ 0
37 TÜV SÜD Auto Service GmbH Retail 197 € 4.25 € 836
0 € 480
0
38 Ümit Ebem Other Units
0 36 Stadt Neckarsulm Other Units 10 € 0.09
480 € 1.00
0 € 1 5 100%€ 0 0 18
5 100%€ 0 0
0 0 5 100%€ 63.33
0
€ 0 0 0
0
0 15
35 Deutsche Plakat-Werbung GmbH & Co. KG Other Units 1 € 220.83 € 221
34 KSK Heilbronn Other Units 5
33 Pura GmbH Storage 11 € 2.25 € 25 € 0 0
0 3 5 75%0 15
3 5 75%
32 Schwaderer Storage 38 € 2.25 € 86 € 0
0 3 5 75%0 12 31 dm-drogerie markt GmbH + Co. KG Storage 46 € 2.25 € 102 € 0
0 3 10 75%0 15 30 Lidl Vertriebs-GmbH & Co.KG Storage 294 € 2.25 € 662 € 0
0 3 5 75%0 12 29 mister*lady GmbH Storage 24 € 2.25 € 54 € 0
0 3 5 75%0 15 28 Siemens Building Technologiers Storage 21 € 2.25 € 48 € 0
0 3 5 75%0 12 27 Siemens Building Technologiers Storage 45 € 2.25 € 102 € 0
0 3 5 75%0 15 26 Siemens Building Technologiers Storage 68 € 2.25 € 152 € 0
0 3 5 75%0 12 25 P&M Trends Storage 42 € 2.25 € 95 € 0
0 3 5 75%0 15 24 Stuck Storage 47 € 2.25 € 105 € 0
€ 0 0 3 5 75%0 12
3 5 75%0 12
23 Reno Schuhcentrum GmbH Storage 121 € 2.25 € 272
Retail 708 € 12.00 € 8,501 € 100 0
0 3 5 75%0 15
3 10 75%0 12
21 Cosgun Retail 50 € 20.00 € 1,004
75%0 15
20 Adler Modemärkte GmbH Retail 3,359 € 8.50 € 28,548 € 50 0
0
19 Serbetcioglu Retail 64 € 12.50 € 797 0 3 5
€ 0.00 0%
0 3 5 75%0
0 0 0 0
€ 20.00 € 2,375 € 100
0 15
€ 0
15
75%
0 0 0 0 0 0%
0 3 5
0%
0 3 5 75%
0 0 0
0 12
0 3 515
50
75%
€ 100
75%
0%
5 75%0
0
15
0 15
€ 50
75%
3
0
0
3
10
0
0 0
0
75%
0
15 5
3 15
3
0
75%
0
3
5
75%
75%
3
0
75%
5
75%
3 5
10
75%
3
0€ 100 15
15 53
0 5
€ 0
€ 100
Total
22 Reno Schuhcentrum GmbH
13 Härdtner GmbH
€ 100
€ 100
€ 100
€ 100
116
€ 100
€ 100
0 14 Härdtner GmbH Other Units
16 Essanelle Hair Group AG
Retail15 Essanelle Hair Group AG
Retail
Page 7 of 12
€ 106,51510,267 sqm
Term**
Matrix Portfolio
Re-letting
€ 5,995
€ 1,981
€ 9.50
€ 0
€ 0
1
1
1
61
€ 100
119
Retail
€ 0.00
€ 5,787
6 Schwaderer
€ 50.00
18 Schwäbische Wurst Spezialität.
7 mister*lady GmbH
Other Units
Retail
Retail
€ 57
1 € 0.00
€ 52Storage
Retail
8 Convenience Concept GmbH Retail
59
3 Lidl Vertriebs-GmbH & Co.KG Retail
Retail
2 Mustafa Kabayel
1 Gabriel
500
9 dm-drogerie markt GmbH + Co. KG
12 Ernsting's family Gmbh & Co. KG
Other Units
17 Schwäbische Wurst Spezialität.
10 dm-drogerie markt GmbH + Co. KG
11 Takko Holding GmbH
Retail
Other Units
73 € 20.00
Market
15
15 0
0
3
12 0
Rent /month€ 1,188
€ 20.00
€ 12,004
€ 3,629
54
€ 20.00
1,200
Rent
€ 27.50
15
18
12
15
12
€ 0
€ 285
€ 0
€ 30
€ 1,681
0
€ 100
€ 2,046
€ 0
€ 1,078
€ 8,544
€ 0.00
€ 27.50
€ 12,183
€ 0.00
€ 12.50
€ 12.00
164
1
4 P&M Trends Retail 181
5 Meister Rapid e.K. Inh. Geviye Taber 23 Retail
99
1,282
€ 1,468
0
€ 0
€ 20.00
€ 10.00
€ 0
0
0
€ 20.00
€ 12.00
0
Market
€ 50
74172 Neckarsulm
Retail
sqm/unitTenant Name
Retail € 100
€ 100
Hohenloher Straße 2
Area Category
712
€ 0
Germany Brack Capital Properties N.V.
0
0
15
31.03.2013
(Copy)
Property address Property no. 11 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
2,000
Usual market % - levels1,800
Market rent
1,600 Contractual Rent
1,400 Rents %
Contractual1,200
Market
1,000 4% of turnover
3% of turnover800
2% of turnover
600 Turnover potential(net)
Sales Area400
Total Areain € / m² p.a.
based on sales area
5 A 2282
This report is only to be read in conjunctionwith the valuation report provided.
0.00
0.00
10.37
0.004.250.00
1,419,008
2.18
0.00%
Rented€/year
00
26.1%
0.0%
0.00
€/month €/year311
0.00
10,143
022,611
0
3,732
0
0
124
0.00%0.00%0.00%
0.00%%
Vacancy Rate
0
9,022
74172 Neckarsulm
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
4.1%1,203,4274.25
0
09,022
Market
3,7321,252,354
€/month
DIY
Office
0
58
0
247100,286
1.21%
11.12
0
2,959€/m²/month
4,082External parking
Rent
550
ContractualRent
€/year
0.00%3,532
13.88%
0.00%0
124772
0.00%
Matrix Portfolio
Hohenloher Straße 2 31.03.2013
0
0291Commercial
58
Contractual
0
00
Potential
Area Vacant
550
€/m²/monthRent
0.00%550
Rent
00.00%
Brack Capital Properties N.V.
Use Category
Germany
28.01.2011
Capital indicator
120.000.000 (total)
Assessment of Adler market rent
Comment
WALTPayment Index 72
3,240,000 €
The main tenant is Adler Modemärkte GmbH. The Adler fashion stores carry a broad assortment,adaptable fashion for the whole family. Adler is one of the major textile retailers in Germany. Accordingto Dun & Bradstreet (D&B) Rating as at 07.02.2011 Adler Modemärkte GmbH has an small credit risk.The risk of insolvency (D&B Score) within the next 12 months compared with other German companiesis assessed to be low, i.e. 82% of businesses on the German database have the same or higher risk offailure.
Rent p.a.
3,359 m²
Textile stores usually can afford to pay a rent in the range of 6-12% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 800 to € 1,600 (in shopping centers up to €3,000) per m² sales area. The graphic above indicates, how the contract rent of the main tenant 'Adler' and the assumed market rental level can be assessed on usual market ranges and an assumed averagespace productivity of € 1,200 (net).
13.2%
10.6%
10.64
8.50
abc
Risk indicatorScore
Page 8 of 12
Credit limit
0
262.9%12.1%
33,5132,793106,515
0.791,278,184
0.0%0.0%0
0.0%
0
0
0
0.0%0-4.2%
0
9.65
7.24
0
30%
0
Adler Modemärkte GmbH
4 years
~ 2,700 m²
0 00
Share of total income
Main tenant
€ 428,783
D&B Rating of Main Tenant
Tenant name
4.82
Storage0
1,613Petrol Station 0.00
0.00Internal parking 0.00
11.632.87
1,236ResidentialCommercial
01,557
0 01,955
14,829 26.0%0
18,6840
18,684
23,457
m²
291
Property Analysis
0 0.0%0.00 0
104,36300.00
11.57
Warehouse
Warehouse
Area Let
10,267
Other Units
00
Residential897
0
0
0
0.00%
Contractual
m²Area Analysis Lettable Area
0
1,252,354
Retail
5.36
Total areaPetrol Station
03,532
Income Analysis
Internal parking
Office
DIYRetail
Storage
117,979121,627
1,415,752
0 0
121,627
19,355
10,136
2.09
5.350.00
Other UnitsTotal area
External parking
Total parking
€ / m²
4.82
8.50
7.24
9.65
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
1.0% 3.0% 5.0% 7.0% 9.0% 11.0% 13.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
1,200
(Copy)
Property address Property no. 11 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The property is not fully let. There is some area vacant and the remaining area is let to 32 tenants. The WALT of the property amounts to 4.3 years. The main tenant is Adler with a share of approx. 30% of the rentalincome. The property is currently over-rented. This figure included the turnover rents of the tenants dm Drogerie, Takko Fashion, mister Lady, Reno and Härdtner, which we belive to be sustainable until the end ofthe respective lease contracts. Without these turnover rents the property is nearly let at market level. The majority of the tenants pay all costs (including ground tax, insurance costs and management costs) exceptfor maintenance costs for structural repairs. The rest can be apportioned to the tenant in accordance with the German Regulation on Operating Costs. Furthermore, some rental increases due to indexations havetaken place.
0 €
0 €
€ 4,724€ 20,193
€ 4,800
Breakdown of Non-Recoverable Costs
€ 0
8.5%
4.71%
% of Gross
€ 10.00 /m²/p.a.
€ 40912.0%
0 €
€ 4,577 0 €0 €€ 4,504
0 €€ 4,428
8.2%€ 2,693
€ 18,895 7.9%8.1%€ 1,469
€ 18,334
€ 265
0 €
€ 0.00 /m²
Management costs
Other non-recoverable costs
€ 10.76 /m²
€ 21,093€ 4,350
€ 18,591
5.22%
Total non-recoverable expenses
Maintenance costs € 66,738
€ 117,733€ 114,132€ 113,339
€ 3,135
€ 2.07 /m²
% of Gross
0.00%
€ 21,236
€ 19,173
€ 6.50 /m² € 66,738Contract Rent
per year
Lease Contract Commentary
€ 6.50 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 7.30%
6.85%
Brack Capital Properties N.V.
Hohenloher Straße 2
Assumptions
0
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yields profile is aligned with the market/other transactions. We have taken into account such facts as the uncertainty of the main tenant Adler and the period of hislease contract, the worse condition and location (referring to the competitor situation), and the shortWALT.
28.01.201174172 Neckarsulm
Germany
31.03.2013
€ 0.41 /m²€ 0
0.30%€ 18,273€ 1.78 /m²
€ 0.00 /m²€ 4,207
per year
Year 8
€ 19,231€ 21,607
€ 74,941€ 73,757
€ 16,306
€ 69,015Year 3
€ 19,960
% of Total
Year 7
€ 4,221€ 20,577
€ 130,091
€ 112,793
€ 18,262
Total
€ 72,606 € 19,917
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 08.48%
€ 0.41 /m² € 4,207
Insurance
Other non-recoverable costs
1.43%
Market Rent
0.00%7.80%
1.50%€ 1.87 /m²€ 1.78 /m² € 18,273
€ 110,454
per year
€ 10.56 /m²
Total Non-recoverable Costs
€ 108,390
€ 4,280
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 19,041 € 21,170 0 €€ 20,700€ 78,472 € 21,484
Year 10€ 4,966
1.29%1.50%
Market Value
€ 76,146
Year 4
Year 6
€ 4,946
€ 19,394
Year 11€ 77,326
€ 20,847Year 9
GroundManagementTax
Maintanance
€ 20,694
CostsCosts
€ 70,245
Year 1Year 2
€ 66,968€ 67,906
€ 20,517
€ 71,456 € 19,563€ 19,878
Year 5
€ 19,434
9.5%
0 €€ 4,649
€ 130,56810.1%9.7%
0.33%
0 €
€ 6,343€ 4,874
€ 2,566
€ 3,821€ 128,754
€ 120,5599.2%
0 €
8.8%
€ 125,048
Year after 2021
€ 117,387
abc
€ 2,049 € 122,1919.3%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
8.2% 8.1% 7.9%8.5%
12.0%
8.8%9.3% 9.2%
9.7%10.1%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 11 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
6.50%
Market Value (rounded)
€ 965,595-€ 8,546
-€ 12,885
-€ 21,196
-€ 128,754
Gross Capital Value (rounded)
€ 18,400,000€ 1,415,752
€ 1,636
Page 10 of 12
8.43%
€ 795,696
€ 11.49 Total
Total € 17,200,000
7.29%
In terms of risk, we considered the covenant strength of the tenants as well as the lease duration for the existing contracts. As at 01.01.2011 the main tenant Adler Modemärkte GmbH has good covenant strength,which ensures a secure cash flow. In terms of a resale, we took into account such facts as visibility, demographic factors, appearance, condition and building age, third-party usability, competition and location. For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in our valuation. Other costs have remained unchangedand have been applied according to information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective gross rent. All Capital expenditures for repairs in the firstyear as well as in the periods of year 2 to 5 and year 6 to 10 are considered to be covered by the maintenance costs. The restrictions of Division II, have no effect on the value of the property.
-€ 67,887
abc
Valuation Comment
€ 1,278,184 per m²
11.00%
Regarding comparable rents we have had recourse to evidence of similar areas situated in the comparable regions and locations. Furthermore, we have analysed comparable transactions. Please refer to thesection "Investment Comparables". Furthermore, we have taken into account surplus land in the amount of 4,800m² and have reduced the land value for this space by 50%, due to the inferior location of the surplusland behind the main building.
0
6.54%
Year 10 € 1,269,425€ 1,295,621
€ 0
€ 1,347,966Year 9
-€ 117,387
TIs and
-€ 113,339
Brack Capital Properties N.V.
€ 1,440,458 € 0
-€ 3,167-€ 10,877
€ 1,208,496
€ 1,210,432 € 0 € 1,210,432
Income
-€ 54,553
-€ 9,105-€ 93 € 1,326,233
€ 1,232,158
Net
31.03.2013
7.30%Commissions Cash FlowCapital
€ 1,258,599€ 1,146,280€ 1,219,288
Year 6Year 7
-€ 12,814
€ 956,957
-€ 112,793Vacancy
Year 5
€ 1,343,501 € 1,330,687Year 8
Year 4
Year 2-€ 6,157
Gross
€ 1,326,477
Market Value
Rental recoverable Operating
Hohenloher Straße 2
€ 1,170,573
€ 1,153,553
7.61%per m²
€ 1,292,932
-€ 125,048-€ 122,191€ 0 -€ 1,975
Gross Value of Surplus Land
€ 19,116,465
€ 1,743
€ 17,925,535-€ 130,568 -€ 26,235€ 1,379,970
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 18,395,839
-€ 19,909Total Cashflow (incl. Terminal Value @ 6.85 %)
per m²/month
€ 1,249,402
€ 824,170
-€ 402
-€ 1,077 € 0
Expenditures€ 0
-€ 114,132 € 1,326,326
Costs
€ 1,115,493
€ 1,140,671
Abatements
€ 1,270,860
-€ 15,372
-€ 120,559€ 1,203,354
-€ 7,943€ 0 € 1,172,373
€ 1,132,924
Year 3 € 1,446,615
€ 1,084,830€ 624,570-€ 26,505
-€ 130,091
€ 731,743
€ 1,406,189
Revenue€ 1,371,794
Turnover
Germany
€ 1,292,850
Revenue
€ 1,441,390 -€ 11,860
€ 0 € 1,087,048
Rent
€ 0
€ 1,426,014-€ 23,341-€ 25,756 -€ 28,464Year 1
€ 1,425,333
€ 1,340,943
Year 11 € 1,447,857
€ 1,327,819
€ 10.37
€ 0-€ 45,700
€ 1,372,396 -€ 102,971 € 0
€ 1,379,633-€ 239,429
-€ 48,011
€ 558,151
Yield Overview
€ 1,259,001
€ 1,261,900-€ 117,733
€ 1,328,896
74172 Neckarsulm
Cash Flow
Non-Total
€ 0-€ 106,708
€ 470,304
€ 9,449,533
-€ 52,345 € 0-€ 40,469
Present
€ 711,728
€ 578,984
-€ 11,144
Leasing
28.01.2011
Matrix Portfolio
Value @
6.8%7.0%
7.2%
6.9%
5.2%
6.6%6.4%
6.6%6.4% 6.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
€ .0
€ 200000.0
€ 400000.0
€ 600000.0
€ 800000.0
€ 1000000.0
€ 1200000.0
€ 1400000.0
€ 1600000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 11 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Hohenloher Straße 2
28.01.2011
abcPage 11 of 12
Internal view of the mall
Front view of the western property part
Matrix Portfolio
External view of the TÜV
74172 Neckarsulm
Photos
Internal view of the mall
View of bakery in main building
Germany Brack Capital Properties N.V.
31.03.2013
Front view of the eastern property part
(Copy)
Property address Property no. 11 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
Discounter 1,103 m²DiscounterFashion
1,099 m²
2,807 m²Fashion2,862 m²
0 m²1,000 m²Fashion
Lidl WurzenNürnberg
Volkach0
Adler
0AWG Textil
Adler
0
Krefeld
0
Other federal state, worse purchasing power
€ 0
€ 12.00 /m²€ 24,533
€ 0.00 /m²
Total Rent p.m.
€ 8,900 € 8.90 /m² Worse purchasing power€ 8.74 /m²
Better purchasing powerWorse purchasing power
€ 34,344
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Better purchasing power€ 8.80 /m²
€ 12,354 € 11.20 /m²€ 9,671
€ 11.25 /m²€ 11,183
CommentWorse purchasing power
Rent p. sqm€ 10,798 € 8.18 /m²
Better purchasing power
74172 Neckarsulm
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
1,320 m²
Leasing Market
Lidl
Tenant Property TypeDiscounterLidlDiscounter
31.03.2013Hohenloher Straße 2
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
KerkenLidl
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
994 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
BraunschweigRenchen
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
28.01.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
Property address Property no. 12 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 4 6 to 10 years Macrolocation 3 Average location and catchment areaLettable Area 3 Between 10,000 and 12,500 m² Microlocation 3 Average micro locationProperty condition 3 Average building condition Commercial activity 3 Limited commercial activity nearbyGeneral impression 3 Average general impression Competition 3 Average competition level
Investment Quality
WALT 4 WALT seven to ten years Investment market 3 Average property marketOver- / underrent 3 Rack rented (-5% to 5%) Investment volume 4 Good lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 12.36
Page 1 of 12 abc
SWOT Analysis
0
31.03.2013
Brack Capital Properties N.V.
Key Figures
Hösamer Feld 7
2007
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
6.87%
Discount Rate
6.87%
excluding capital
expenditures6.75%
6.86%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
7.2 years
Established location, no further self-service department stores in immediate vicinity
Very good accessibility to the parking area
Sufficient parking spaces on site
Good branch and tenant mix
Market rental value € 817,158
€ 5.92
1999
Weighted average lease term
94474 Vilshofen
Property Summary
Retail Park
Germany
01.02.2011
Property type
Current vacancy rate
Handelshof SB Warenhaus GmbH & Co. KG
10,230 m²Total parking units
2.8%
Main tenant
Total lettable area500 units
1.9%
€ 815,611
€ 726,812
€ 6.64Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
Very good visibility from Aidenbacher Straße
0
Strong dependency on the main tenant KauflandLocation could be strengthened by further completions in the surrounding area Long-term vacancy if Kaufland vacates the property
Property is currently let sligthly over market rental level (over-rented)
0
€ 6.66 / m² / p.m.€ 10,100,000
6.75%
The property consists of two buildings on two parcels of land, which are separated by an access road. The buildings were constructed in 1999. On the south-western side of the property (land parcel 1552), apredominately one-storey self-service department store can be found, which has an L-shaped layout. The sales areas are situated in the longer section of the building on the ground floor; in the shorter section ofthe building, the warehouse as well as the receiving department can be found. The social rooms on the first floor can be reached through the entrance hall. The goods delivery area can be accessed via a loadingramp. The building itself is a reinforced concrete construction with a flat roof. The façade has sandwich elements made from prefabricated concrete components. The façade and the roof of the social rooms are cladwith trapezoidal sheet metal. The parking facilities are situated in front of the covered entrance area of the self-service department store and extend up to the access road.
0
6.86%
Market Rental Value
12.38
€ 817,158 p.a.
Since completion one retail unit is still in shell conditionWeaknesses
Matrix Portfolio
0
€ 987 per m²
Extension of the KiK by the adjacent vacant retail unit
0
A U-shaped building can be found on the north-western section of the property (parcel 1552/7). The building is a single-storey construction. Parking areas can be found in front of the structure. The rental units areeach accessible from the parking areas. The goods delivery zones are situated in the rear building section and stretch around the building. The building is equipped with a flat roof. The façade is clad with aluminium elements in the form of trapezoidal sheet metal. An awning covering the entrance areas optically connects the individual rental units with one another. A petrol station is located on the western end of the property(parcel 1552/7). This section of the property is leased to the petrol station operator.
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 88,799
Year of refurbishment
Property Description
0
€ 0.72
00
(Copy)
Property address Property no. 12 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
127.32
The connection to the national motorway network can be described as good. The motorway A3 can beaccessed in approx. 15 minutes via the junction 113. The federal road B8 runs from Passau toStraubing and connects Vilshofen with a variety of communities, including Künzing, Windor and theregional centre Plattling in the Danube-Forest (Donau-Wald) region. Furthermore, the railway stationconnects Vilshofen with the cities Regenburg, Passau and Munich. The closest railway station offeringlong-distance services can be found in Passau and Plattling. The nearest airports are located in Munich(approx. 140 km distance) as well as in Linz, Austria (approx. 130 km distance).
Micro Location
Vilshofen an der Donau is a secondary centre in the Passau administrative district and the largest city inthe respective district. The city borders the southern Bavarian forest and is located approx. 20 km westfrom Passau and around 30 km west from Austria. The regional centre, Regensburg, is situated about100 km north-west of Vilshofen. As a secondary centre, Vilshofen functions as an economic hub for thesurrounding communities and supplies the area with periodic services. Small and medium-sizedbusinesses are predominantly established in the city, with the majority operating in the service sector aswell as the retail sector. The establishment of larger retail chains in the city makes Vilshofen a keyshopping location for the surrounding sub-centres. Having the largest number of schools in the Passauadministrative district, the education sector is equally economically important for the city.
Furthermore, a bus stop is located by the subject property. The railway station is located approx. 2.4 kmaway. The junction “Garham-Vilshofen”, which connects the city with the federal motorway A3, is about12.5 km north of the property. The federal road B8 is almost 4.6 km away.
Location
Brack Capital Properties N.V.
31.03.2013
94474 Vilshofen 01.02.2011
Passau (Rural District)
Germany
Bavaria
Macroeconomic Indicators
Federal StateDistrict
3.9%
3,544
Vilshofen Macro Location
3.5
Micro Location
330
The subject property is located in Hösamer Feld in the Linda commercial zone, in the southern peripheryof Vilsohofen. It can be accessed via the arterial road, Aidenbacher Straße. The city centre is around 3km north-east of the property and can be reached via Aidenbacher Straße. A Huber, a buildingmaterials store which offers a wide range of building materials, tools, piping and metal sheeting, bordersthe subject property to the north-east. To the south, the site is adjacent to the fashion and shoe retailwarehouse, Lipp. The wider surrounding area is characterised by agricultural use. According toinformation from the City of Vilshofen, there are still around 27,000 m² of land available in thecommercial zone for development. This land is located south-west of a self-service department andsouth-east of the retail warehouse assessed in the present valuation.
Local Tax Information
-1.8%
108.3497.28
-5.8%
316
3.5%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
16,179
94474
187123
12,510,331187,610
Vilshofen
1.1%
7,290
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Hösamer Feld 7
City
(Copy)
Property address Property no. 12 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Extract from the land register dated 02.12.2010
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Hösamer Feld 7 31.03.2013
01.02.2011
Germany
No Suspicion
According to information from the building authority of Vilshofen, a legally binding land-use plan, named“Gewerbegebiet Linda II” exists since 25 October 1993. The area in question is identified as a specialzone and the use must have an open coverage type. The total sales area is limited to 7,300 m², with non-city centre relevant product ranges being restricted to a maximum of 300 m². Other designations includea sales area for groceries for a maximum of 1,700 m², textile goods from 1,400 m² and for electronicgoods of max 700 m², etc.
Section 2 (Restrictions)
TPL Vilshofen S.à.r.l. Luxembourg
Land Register
2007 15521552/7
Owner
n.a.
Site Information
Site area 37,515 m²thereof surplus land
NoGround lease
Site layout
Site Plan
Surplus land value (net) n.a.
Source: Cadastral plan on a 1 to 1000 scale, dated 27.12.2010
Matrix Portfolio
94474 Vilshofen
SO (special zone)
n.a.
0
Sheet Plot Parcel
1.6
Tenure
Site servicing
Ground lease expiry€ 0
0 m²
0.8
Town Planning
Fully serviced
Building encumbrances No
Rectangular
The property is constructed on a slight slope. Thus, the retail warehouses on parcel 1552/7 are on ahigher level than the self-service department store on the parcel 1552. The parcels are bordered byAidenbacher Straße on the north-west and Hösamer Feld on the south-east. The building materialsstore, Huber, neighbours the parcel 1552/7 on the north-east; developable land is situated south-west ofthe parcel 1552. Both parcels are separated by an access road.There is no suspicion of contamination due to previous uses on the site. However, a section of parcel1552/7 is currently leased to a petrol station.For the purposes of this valuation, we have assumed that the subject property is free of any soil orbuilding contamination.
Limited personal easement in favour of Conoco Mineralöl GmbH, Hamburg, registered until 30.09.2023 (right to sell fuel and vehicle lubricant, right to operate a petrol station)
Limited personal easement (right to operate a self-service department store) in favour of Kaufland Dienstleistungs GmbH & Co. KG, registered on 22.08.2007
Brack Capital Properties N.V.
Land charges in the total amount of € 12,786,165 in favour of Bank of Scotland (branch Frankfurt), registered on 08.10.2007
Local Court of Passau, land register of Aunkirchen
abcPage 3 of 12
(Copy)
Property address Property no. 12 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
127.32
-5.8%
abc
Population forecast for the district (2007 - 2025)
94474 Vilshofen
Name94474 Vilshofen, Aidenbacher Straße 74
Competitor Overview
Competitor Map
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
1.00 kmn.a.Retail Park
8,336
Medium to low
00
Low3.00 km
Inhabitants in secondary catchment area
Retail Centrality Index (District)
Inhabitants per hypermarket in secondary catchment area
14,517
7,290
Retail Park
43,551 Inhabitants per hypermarket in tertiary catchment area
94474 Vilshofen, Passauer Str. 290Rewe Hypermarket 1,950 m²
m² 0
8,768
97.28
25,007
00
0
Inhabitants in primary catchment area 4,384
0
Competiton Indicators
Hösamer Feld 7
01.02.2011
Germany Brack Capital Properties N.V.
31.03.2013
00
0
0
0
0
Matrix Portfolio
(Copy)
Property address Property no. 12 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
01.02.2011
31.03.2013
Matrix Portfolio
Turnover analysis
A retail agglomeration with the tenants expert (electronics store), Rossmann (drugstore), Takko (textiler), Aldi (food discounter) und Penny (food discounter), a beverage store and a sport fashion store is located along the Aidenbacher Straße in a distance of approx. 1 km north to the subject property. A hagebaumarkt (DIY store) is located opposite to the retail agglomeration.
Main competitors
94474 Vilshofen
Hösamer Feld 7
0
The rents in functional retail agglomerations are linked to the achievable turnover. The percentage rate that a retail tenant can use for rental payments depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective industry. The productivity varies between approx. € 1,000/m² and up to more than € 10,000/m².
abc
Competition Comment
The retail warehouse agglomeration is situated in close proximity, within a 1 km distance from the valued property. The location of this competitor is however closer to the city centre. With a drugstore, two discounters, a drinks cash-and-carry, a sporting goods store as well as a DIY store, the agglomeration overall offers a similar product range as the subject property. The majority of tenants are well-known retail chains. The competing site is additionally strengthened by an electronics superstore. As a whole, the competing property offers also a different range of goods. While both the discounters offer lower-priced goods for daily use, the Kaufland at the subject property in contrast presents a full range of goods. The retail warehouses at the valued site therefore strengthens the attractiveness level of the property. Additionally, the fashion and shoe retail warehouse, which borders the subject site, indirectly benefits the subject property.
Thus, it can be assumed that despite the generally similar tenant mix, direct competition for the purchasing power of the consumers does not exist. The second competitor, Rewe, is also unable to pose as direct competition to the subject property. For one, the city centre with smaller shopping facilities is situated between the subject site and the second competitor, Rewe. For another, the Rewe only offers a fraction of the full range of goods available at Kaufland, thereby indicating a significant difference in the product ranges. Furthermore, no other retail establishments adjoin or border the Rewe, which could boost the quality of the competing property over the subject property. Thus, the competition level as a whole can be described as medium.
For Kaufland, we have also been provided with turnover figures for the previous valuation. We have analysed the figures and have found the area productivity of Kaufland to be in a healthy range. With a turnover-to-rent ratio of less than 2% it lies below the range of 2% to 4%, which is acceptable for a self-service department store. Taking into consideration location features and the competition situation within Vilshofen, a higher rental level and turnovers for similar sectors is certainly realistic. Thus, we assume in the valuation that higher market rents for the self-service department store can be achieved after the expiry of lease agreements.
If the tenant Kaufland were to vacate the unit, the self-service department store could be let in the future to other tenants, such as real, Marktkauf or an E-Center. However, a subsequent use of the unit as a DIY store or furniture store would not be suitable. Huber (building materials store) as well as hagebaumarkt (DIY store) are already established in the vicinity and more than sufficiently meet the needs of the catchment area. Furthermore, a furniture retailer also is not a strong enough anchor tenant and lacks the drawing power for consumers. According to the turnover analysis, the turnover rent stands on the lower end of the range; in fact, a higher turnover-to-rent ratio is achievable in the market. Therefore, we assume that the tenant, Kaufland, will exercise its lease agreement extension options and will remain in the property until 2037. Thereby, it can be assumed that over this period of time, demand for the other units will also exist.
The tenant and market sector mix is very good for the current type of use. The size of the property is sufficient to meet the needs of the community of Vilshofen and its catchment area. The accessibility and visibility of both building sections can also be described as being very good. The only feature of the property that could be looked at critically is the small rental unit (284 m² in size), which is in shell condition and has remained vacant since being constructed. A fusion between this unit and one of the adjacent rental units is therefore highly advisable. Overall, the property can be expanded with the available building areas bordering the site. A tenant mix with an electronics retail warehouse could further boost the subject site above the competition. The establishment of a similar type self-service department store is however considered problematic. Protection against competition is currently not available. Furthermore, the property is highly dependent on the self-service department store, Kaufland, and also on the tenant, Vögele, who is the main tenant in the retail warehouse centre.
Germany Brack Capital Properties N.V.
A Rewe supermarket with approx. 1,900 m² sales area is located shortly behind the federal road B8. The supermarket is located in a distance of approx. 3 km away within the secondary catchment area. The Passauer Straße runs along the railway line until the Aidenbacher Straße begins. The competitor is standalone.
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 12 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
7 Dänisches Bettenlager GmbH & Co. KG
0.00
€ 2,057
Other Units10 Deutsche Plakat-Werbung GmbH & Co. KG
11 ConocoPhillips Germany GmbH
Vacant
Page 6 of 12
26.07.2015
1,400
5 KiK Textilien und Non-Food GmbH
3 Charles Vögele Deutschland GmbH
5,187
6.66
6.65
Retail 5.22
10.64
2 Dänisches Bettenlager GmbH & Co. KG Retail
pays VAT
28.02.2014
31.12.2014
75%
75%
Start
75%
31.03.2013Hösamer Feld 7
Tenant
Matrix Portfolio
01.02.2011
Status m² / unitLet
TenantLeaseArea
Let
Let
10.02.2014Yes
04.12.2000
Yes
Rent / m² RenewalLeaseLetting
1 Fressnapf Immobilien-Vermögensverwaltung GmbH Retail 309
/ month Probability
6
9 Deichmann SE Retail
Let
Petrol Station
8 TEDI GmbH & Co. KG
6 dm-drogerie markt GmbH + Co. KG
11.03.1999
01.03.1999
Yes
75%
Retail
Yes
€ 5,225
4 Handelshof SB Warenhaus GmbH & Co. KG
Retail 1,008
335
Let
Retail
785
01.03.1999
9.77
€ 0
€ 10,729
Let
Let Yes
94474 Vilshofen
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Retail
€ 67,968
704
Let
452Let
€ 265 02.08.2014
€ 7,680
31.12.2014
27.07.2005
30.09.2013
01.10.2007 30.09.2027
€ 2,813 13.01.1999
04.12.2000
75%
04.03.2019
75%
05.03.1999
GT I PM
75%
Yes
Yes
GT I PM
abc
75%
11,630 m²
75%
01.03.1999
03.08.2009
01.10.2007
28.02.2014
75%
100%No
44.17
10.91
4.81
Yes
Yes
0.00
2.01
Yes
Yes
348 € 3,777
€ 3,933818
10.85
28.02.2018
€ 27,069
GT I PM75%
Total
500Let
Let
€ 4,419
LetRetail
13 External Parking External parking
12 VACANT Retail 284 € 0
0%0.00 30.09.2022€ 0
(Copy)
Property address Property no. 12 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
01.02.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis0
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 3,924
abc
0 0 0 100%
0 24
0 3 512
50
75%
€ 100
75%
75%
5 75%0
0
12
0 0
€ 0
75%
3
0
5
3
5
0
0 0
0
75%
36
12 5
3 12
3
0
75%
0
3
5
75%
75%
3
0
75%
5
75%
3 5
5
75%
3
0€ 50 15
12 53
3 10
Total
13 External Parking
€ 100
€ 100
€ 0
€ 100
500
€ 100
Page 7 of 12
€ 68,09711,630 sqm
Term**
Matrix Portfolio
Re-letting
€ 4,090
€ 6,336
€ 2.01
6
€ 100
Retail
€ 0
6 dm-drogerie markt GmbH + Co. KG
€ 0.00
7 Dänisches Bettenlager GmbH & Co. KG
Other Units
Petrol Station
Retail
Retail
8 TEDI GmbH & Co. KG Retail
309
3 Charles Vögele Deutschland GmbH Retail
Retail
2 Dänisches Bettenlager GmbH & Co. KG
1 Fressnapf Immobilien-Vermögensverwaltung GmbH
818
9 Deichmann SE
12 VACANT
10 Deutsche Plakat-Werbung GmbH & Co. KG
11 ConocoPhillips Germany GmbH
External parking
335 € 0.00
Market
12
12 0
0
3
12 0
Rent /month€ 1,856
€ 6.00
€ 9,072
€ 31,119
348
€ 6.00
1,008
Rent
€ 5.00
€ 1,420
€ 3,133
€ 4,069
€ 2,813
€ 44.17
€ 5.00
€ 9.00
284
4 Handelshof SB Warenhaus GmbH & Co. KG Retail 5,187
5 KiK Textilien und Non-Food GmbH 785 Retail
704
1,400
€ 0
0
€ 0
€ 9.00
€ 9.00
€ 265
0
0
€ 9.00
€ 5.00
0
Market
€ 100
94474 Vilshofen
Retail
sqm/unitTenant Name
Retail € 100
€ 100
Hösamer Feld 7
Area Category
452
Germany Brack Capital Properties N.V.
0
0
12
31.03.2013
(Copy)
Property address Property no. 12 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
7,000
Usual market % - levels6,500
Market rent
6,000 Contractual Rent
5,500 Rents %
Contractual5,000
Market
4,500 4% of turnover
3% of turnover4,000
2% of turnover
3,500 Turnover potential(net)
Sales Area3,000
Total Areain € / m² p.a.
based on sales area
5AA 2284
This report is only to be read in conjunctionwith the valuation report provided.
0.00
2.01
6.66
0.000.000.00
837,271
0.00
0.00%
Rented€/year
00
0.0%
0.0%
0.00
€/month €/year0
0.00
9,946
33,7610
0
0
0
0
0
0.00%0.00%0.00%
0.00%%
Vacancy Rate
0
9,946
94474 Vilshofen
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
2.7%780,2170.00
0
010,230
Market
0800,330
€/month
DIY
Office
0
0
0
065,018
2.78%
6.36
0
0€/m²/month
1,906External parking
Rent
500
ContractualRent
€/year
0.00%6
0.00%
0.00%0
2840
0.00%
Matrix Portfolio
Hösamer Feld 7 31.03.2013
1,400
00Commercial
0
Contractual
0
00
Potential
Area Vacant
500
€/m²/monthRent
0.00%500
Rent
00.00%
Brack Capital Properties N.V.
Use Category
Germany
01.02.2011
Capital indicator
39.000.000 (total)
Assessment of Kaufland market rent
Comment
WALTPayment Index 75
14,050,009 €
The main tenant is a corporation belonging to the Kaufland Group, which in turn belongs to the Lidl &Schwarz Group, one of the biggest grocer groups in Europe. Kaufland is the self-service departmentstore division of Lidl & Schwarz with more than 500 locations across Europe. Kaufland’s core businessarea is food retailing with branded goods and own-brands specially produced for Kaufland. According toDun & Bradstreet (D&B) Rating as at 01.01.2011 Handelshof SB Warenhaus GmbH & Co. KG has anbelow-average credit risk. The risk of insolvency (D&B Score) within the next 12 months compared withother German companies is assessed to be low, i.e. 84% of businesses on the German database havethe same or higher risk of failure.
Rent p.a.
5,187 m²
Self-service department stores usually can afford to pay a rent in the range of 2% to 4% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 4,000 to € 6,000 per m²sales area. The two graphics above indicate, how the contract rent of the main tenant Kaufland as well as the assumed market rental level, can be assessed on the basis of usual market ranges. This analysis isbased on the turnover potential figures prepared by Trade Dimension.
2.3%
2.7%
5.22
6.00
abc
Risk indicatorScore
Page 8 of 12
Credit limit
0
0.0%2.7%
3,18026568,097
44.17817,158
0.0%0.0%0
0.0%
0
2,813
0
0.0%00.0%
0
9.03
6.77
0
40%
0
Handelshof SB Warenhaus GmbH & Co. KG
14.5 years
~ 3,861 m²
0 00
Share of total income
Main tenant
€ 324,823
D&B Rating of Main Tenant
Tenant name
4.51
Storage2,813
0Petrol Station 2.01
0.00Internal parking 0.00
6.8344.17
0ResidentialCommercial
00
33,761 33,7610
0 0.0%00
00
0
m²
0
Property Analysis
0 0.0%0.00 0
64,88900.00
6.52
Warehouse
Warehouse
Area Let
10,230
Other Units
0284
Residential00
0
0
2.78%
Contractual
m²Area Analysis Lettable Area
1,400
778,670
Retail
0.00
Total areaPetrol Station
06
Income Analysis
Internal parking
Office
DIYRetail
Storage
67,9683,180
815,611
0 0
3,180
0
265
0.00
0.000.00
Other UnitsTotal area
External parking
Total parking
€ / m²
5.22
4.51
6.00
6.77
9.03
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
3,639
(Copy)
Property address Property no. 12 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The property is let to nine retail units and a petrol station. Currently, one retail unit is vacant. The WALT of the property amounts to 7.2 years. The main tenant is Kaufland with a share of approx. 40% of the rentalincome. The property is currently almost let at market rental level. The main tenant Kaufland is almost let at market rental level. As the lease contract is valid until 2027 and the tenant has options until 2037, we donot believe that the rental level can be adjusted before 2037. Kaufland’s rent is indexed and will be adapted by 50% of the CPI change, whenever the change exceeds 10 percent in relation to the CPI basis.Indexation started on 01.04.2009. The majority of the tenants does not pay costs for ground tax, insurance and for management. Except of the tenant KiK and the petrol station these costs will not be borne by thetenants. Maintenance costs for structural repairs are borne by the landlord. The lease of TEDI has been prolonged until 03/2019.
0 €
0 €
€ 3,209€ 30,579
€ 3,261
Breakdown of Non-Recoverable Costs
€ 0
11.5%
5.64%
% of Gross
€ 10.00 /m²/p.a.
€ 1,27211.9%
0 €
€ 3,109 0 €0 €€ 3,060
0 €€ 3,008
11.7%€ 4,344
€ 28,612 11.7%12.2%€ 5,094
€ 27,764
€ 2,019
0 €
€ 0.00 /m²
Management costs
Other non-recoverable costs
€ 8.68 /m²
€ 11,616€ 2,955
€ 28,153
5.63%
Total non-recoverable expenses
Maintenance costs € 46,035
€ 92,673€ 93,163€ 94,607
€ 0
€ 1.20 /m²
% of Gross
0.00%
€ 12,234
€ 12,257
€ 4.50 /m² € 46,035Contract Rent
per year
Lease Contract Commentary
€ 4.50 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 6.75%
6.75%
Brack Capital Properties N.V.
Hösamer Feld 7
Assumptions
0
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yields profile is aligned with the market/other transactions. We have taken into account such facts as the stable Cash Flow, the good location, the short WALT, thelow vacancy rate and the good condition of the subject property in Vilshofen.
01.02.201194474 Vilshofen
Germany
31.03.2013
€ 0.28 /m²€ 0
0.35%€ 27,671€ 2.70 /m²
€ 0.00 /m²€ 2,858
per year
Year 8
€ 29,122€ 11,976
€ 51,689€ 50,872
€ 11,970
€ 47,601Year 3
€ 12,022
% of Total
Year 7
€ 2,868€ 11,976
€ 94,576
€ 93,141
€ 636
Total
€ 50,079 € 11,717
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 010.87%
€ 0.28 /m² € 2,858
Insurance
Other non-recoverable costs
3.39%
Market Rent
0.00%10.89%
1.50%€ 1.20 /m²€ 2.70 /m² € 27,671
€ 88,799
per year
€ 8.68 /m²
Total Non-recoverable Costs
€ 88,822
€ 2,908
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 12,469 € 32,058 0 €€ 11,951€ 54,124 € 32,533
Year 10€ 2,061
3.39%1.50%
Market Value
€ 52,520
Year 4
Year 6
€ 3,360
€ 11,376
Year 11€ 53,334
€ 31,569Year 9
GroundManagementTax
Maintanance
€ 12,093
CostsCosts
€ 48,450
Year 1Year 2
€ 46,189€ 46,836
€ 31,069
€ 49,285 € 29,625€ 30,101
Year 5
€ 12,469
13.1%
0 €€ 3,159
€ 104,02912.2%12.0%
0.35%
0 €
€ 0€ 3,311
€ 5,827
€ 0€ 101,172
€ 101,81312.8%
0 €
12.3%
€ 99,819
Year after 2021
€ 96,278
abc
€ 4,493 € 102,48213.4%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
11.7%12.2%
11.7% 11.5% 11.9%12.3%
13.4%12.8%
12.0% 12.2%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 12 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
5.00%
Market Value (rounded)
€ 569,341€ 0
-€ 44,829
€ 0
-€ 101,172
Gross Capital Value (rounded)
€ 10,600,000€ 815,611
€ 987
Page 10 of 12
8.08%
€ 703,414
€ 6.64 Total
Total € 10,100,000
6.86%
In terms of risk, we considered the covenant strength as well as the lease duration for the existing contracts. As at 01.01.2011, the main tenant, Handelshof SB Warenhaus GmbH & Co. KG, has good covenantstrength, which ensures a secure cash flow for the remainder of the lease term until at least 2027. In terms of a resale, we took into account such facts as visibility, demographic factors, appearance, condition andbuilding age, third-party usability, competition situation and location.
-€ 42,482
abc
Valuation Comment
€ 817,158 per m²
1.94%
For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in our valuation. Other costs have remained unchangedand have been applied according to the information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective gross rent. For the periods of year 1 to 10, all budgeted costs (capital expenditures) are covered by our maintenance cost approach of € 4.50/m² p.a.Regarding comparable rents, we have had recourse to evidence of similar areas situated in the comparable regions and locations. Furthermore, we have analysed comparable transactions. Please refer to thesection "Investment Comparables". Compared to our last valuation, some changes in the rent roll have been made as well as an adjustment of the non-recoverable costs.0
6.87%
Year 10 € 831,265€ 831,265
€ 0
€ 831,265Year 9
-€ 96,278
TIs and
-€ 94,607
Brack Capital Properties N.V.
€ 798,383 -€ 41,247
-€ 45,164-€ 58,267
€ 698,998
€ 684,857 -€ 19,069 € 660,606
Income
€ 0
-€ 14,361-€ 6,246 € 657,727
€ 713,503
Net
31.03.2013
6.75%Commissions Cash FlowCapital
€ 705,266€ 562,726€ 685,123
Year 6Year 7
-€ 27,154
€ 703,414
-€ 93,141Vacancy
Year 5
€ 828,634 € 801,480Year 8
Year 4
Year 2-€ 12,261
Gross
€ 804,873
Market Value
Rental recoverable Operating
Hösamer Feld 7
€ 731,446
€ 583,178
8.09%per m²
€ 758,377
-€ 99,819-€ 102,482€ 0 -€ 6,806
Gross Value of Surplus Land
€ 10,822,778
€ 1,036
€ 10,590,838-€ 104,029 -€ 20,616€ 796,724
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 10,590,838
-€ 5,620Total Cashflow (incl. Terminal Value @ 6.75 %)
per m²/month
€ 692,695
€ 461,897
€ 0
-€ 13,793 € 0
Expenditures€ 0
-€ 93,163 € 705,220
Costs
€ 559,853
€ 730,093
Abatements
€ 620,606
€ 0
-€ 101,813€ 647,028
-€ 15,119€ 0 € 656,564
€ 731,446
Year 3 € 810,644
€ 730,093€ 421,035€ 0
-€ 94,576
€ 381,607
€ 774,403
Revenue€ 798,407
Turnover
Germany
€ 679,796
Revenue
€ 817,589 € 0
€ 0 € 797,990
Rent
€ 0
€ 830,846-€ 43,186-€ 32,439 € 0Year 1
€ 806,176
€ 818,689
Year 11 € 839,206
€ 781,135
€ 6.66
€ 0€ 0
€ 831,265 € 0 € 0
€ 806,176-€ 6,883
-€ 60,312
€ 393,683
Yield Overview
€ 705,266
€ 713,503-€ 92,673
€ 794,928
94474 Vilshofen
Cash Flow
Non-Total
-€ 5,182€ 0
€ 0
€ 5,631,965
€ 0 € 0€ 0
Present
€ 397,617
€ 525,991
€ 0
Leasing
01.02.2011
Matrix Portfolio
Value @
6.7%
6.4%6.7% 6.7% 6.6%
6.5%6.2%
6.6%6.9% 6.9%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
€ .0
€ 100000.0
€ 200000.0
€ 300000.0
€ 400000.0
€ 500000.0
€ 600000.0
€ 700000.0
€ 800000.0
€ 900000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 12 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Hösamer Feld 7
01.02.2011
abcPage 11 of 12
View of the delivery zone
View of the retail warehouses
Matrix Portfolio
View of the petrol station
94474 Vilshofen
Photos
Internal view of the vacant unit
Internal view of the tenant Charles Vögele
Germany Brack Capital Properties N.V.
31.03.2013
Internal view of the tenant Kaufland
(Copy)
Property address Property no. 12 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
Self-Service Department Store 8,450 m²DrugstoreFashion
790 m²
1,000 m²Fashion910 m²
0 m²467 m²Shoe store
dm-drogerie markt BentwischTraunreut
Karlstadt0
AWG Mode
0Deichmann
Charles Vögele
0
Volkach
0
Similar purchasing power
€ 0
€ 8.44 /m²€ 8,900
€ 0.00 /m²
Total Rent p.m.
€ 4,651 € 9.96 /m² Similar purchasing power€ 8.90 /m²
Similar purchasing powerSimilar purchasing power, other federal state
€ 7,680
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Better location, similar purchasing power€ 9.61 /m²
€ 61,685 € 7.30 /m²€ 7,592
€ 6.71 /m²€ 29,698
CommentHigher purchasing power
Rent p. sqm€ 71,114 € 6.57 /m²
Similar out-of-town location, similar purchasing power
94474 Vilshofen
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
10,824 m²
Leasing Market
Kaufland
Tenant Property TypeSelf-Service Department StoreRealSelf-Service Department Store
31.03.2013Hösamer Feld 7
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
WürzburgReal
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
4,426 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
HamelnAmberg
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
01.02.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
Property address Property no. 13 Portfolio:
Valuation date:
Inspection date:
Prepared for:
total p.a.per m² / month
total p.a.per m² / month
total p.a.per m² / month
total p.a.
Opportunities Threats
Building age 2 16 to 25 years Macrolocation 2 Below average location and catchment areaLettable Area 2 Between 7,500 and 10,000 m² Microlocation 2 Below average micro locationProperty condition 3 Average building condition Commercial activity 3 Limited commercial activity nearbyGeneral impression 3 Average general impression Competition 2 High competition level
Investment Quality
WALT 5 WALT longer than ten years Investment market 2 Under developed property marketOver- / underrent 3 Rack rented (-5% to 5%) Investment volume 3 Reasonable lot sizeQuality of tenants 4 Tenants with very good credit rating Saleability 4 Good saleability within 6 months
This report is only to be read in conjunctionwith the valuation report provided.
Multiplier (based on MRV) 13.01
Page 1 of 12 abc
SWOT Analysis
Strong competition
31.03.2013
Brack Capital Properties N.V.
Key Figures
Wahrenberger Straße 69
n.a.
Property Rating (1 = very negative, 5 = very positive)
Building
Liquidity
Valuation Results
Location
Multiplier (initial)
6.30%
Discount Rate
6.30%
excluding capital
expenditures7.00%
6.57%Net Initial Yield
Capitalisation Rate Net Reversionary Yield
10.7 years
Long term lease contract of the main tenant Kaufland
Petrol station on site
Sufficient parking spaces
Well maintained
Market rental value € 591,881
€ 5.17
1996
Weighted average lease term
19322 Wittenberge
Property Summary
Retail Park
Germany
31.01.2011
Property type
Current vacancy rate
Kaufland Dienstleistung GmbH & Co. KG
8,691 m²Total parking units
0.0%
Main tenant
Total lettable area400 units
3.8%
€ 614,328
€ 538,719
€ 5.89Contractual gross rental income (month 1 x 12)
Over-/Underrent based on occupied areas
Strengths
Located close to a DIY store generating synergies
0
Strong dependency on the main tenant Kaufland0 Long-term vacancy if Kaufland vacates the property
Property is currently let sligthly over market rental level (over-rented)
0
€ 5.68 / m² / p.m.€ 7,700,000
6.70%
The subject property is a one- to two-storey department store. The property was built in 1996 and faces Wahrenberger Straße and Cumloser Straße. The property has one main entrance from the parking space infront of the building and a separate entrance to the unit rented by the tenant Hammer, as well as from the parking area. The building has an L-shape and is made of a steel reinforced concrete construction withprecast parts. The property has got a flat roof with galvanised steel sheets.
0
6.57%
Market Rental Value
12.53
€ 591,881 p.a.
Outdated architectural designWeaknesses
Matrix Portfolio
0
€ 886 per m²
0
0
equals toequals to
Market Value
Year of construction
Net operating income (month 1 x 12)
Total non-recoverable expenses (month 1 x 12) € 75,608
Year of refurbishment
Property Description
0
€ 0.72
00
(Copy)
Property address Property no. 13 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Population Federal State absolutePopulation District absolutePopulation City absoluteNumber of Households City absolutePopulation Density District per km²Population Density City per km²Population Forecast (2007 - 2025) District in %Population Growth (2002 - 2007) Federal State in %Population Growth (2002 - 2007) District in %Unemployment Rate (4/2013) Federal State in %Unemployment Rate (9/2012) District in %
Purchasing Power District in m €Purchasing Power City in m €Purchasing Power Index Federal State indexRetail Purchasing Power Index District indexRetail Centrality Index District index
Real Estate Tax Rate (Typ B) City in %Land Transfer Tax City in %
This report is only to be read in conjunctionwith the valuation report provided.
(Source: GfK, BBE, BBSR/Inkar 2012/2013)
153.67
The economy of Wittenberge is primarily characterised by small- and mid-sized companies. Moreover,agriculture is a major part of Wittenberge’s economy.
Micro Location
Wittenberge is situated in the federal state of Brandenburg in the administrative region of Prignitz. Thecity covers an area of 50.44 km². Nearby cities include Berlin (120 km), Potsdam (100 km) andLüneburg (80 km). The A24 federal motorway is located 35 km to the north and the B89 offers a directconnection to the motorway.
The city’s train station is linked to the ICE network. Wittenberge is a stop on the route from Hamburg toBerlin. International connections to Prague and Kopenhagen are also available.
The closest passenger airport is located in Berlin, which can be reached within 120 km.
0
Location
Brack Capital Properties N.V.
31.03.2013
19322 Wittenberge 31.01.2011
Prignitz (Rural District)
Germany
Brandenburg
Macroeconomic Indicators
Federal StateDistrict
10.3%
1,351
Wittenberge Macro Location
5.0
Micro Location
340
The property is located slightly outside of the western outskirts of Wittenberge, very close to the federalroad B189, which connects Wittenberege with the motorway system. The property is located along anaterial road connecting western Wittenberge with the B189. Next to the subject property, there is a DIYstore operated by OBI and apart from that, there are only few residential dwellings to the north-east aswell as agricultural land in the surrounding area.
Local Tax Information
-7.5%
89.4486.95
-21.8%
291
13.0%
Structual Data
abc
(Source: GfK and BBE 2012/2013)
18,278
19322
36238
2,511,52580,872
Wittenberge
-1.8%
10,526
Postcode
Page 2 of 12
Matrix Portfolio
Germany
Wahrenberger Straße 69
City
(Copy)
Property address Property no. 13 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Comment
Use class Comment
Site coverage ratio (GRZ)
Plot ratio (GFZ)
Cubic index (BMZ)
Source: Land register extract, dated 2nd December 2010
This report is only to be read in conjunctionwith the valuation report provided.
Soil contamination
Section 3 (Loans)
Wahrenberger Straße 69 31.03.2013
31.01.2011
Germany
No Suspicion
According to information from the local planning authority, a legally binding development plan exists,entitled "Nr. 2 Geschäftshauskomplex Wahrenberger Straße / B 189" and dated 04.03.1993, with thefollowing regulations: the subject site is located in a special zone (SO). The site coverage ratio is limitedto 0.8 and the plot ratio to 0.5.
Section 2 (Restrictions)
TPL Wittenberge S.á.r.l., Luxembourg
Land Register
5509 155/4159/9
Owner
n.a.
Site Information
Site area 39,690 m²thereof surplus land
NoGround lease
Site layout
Site Plan
Surplus land value (net) n.a.
Source: Cadastral plan on a 1 to 1,000 scale, dated 29th December 2010
Matrix Portfolio
19322 Wittenberge
SO (special zone)
n.a.
28
Sheet Plot Parcel
0.5
Tenure
Site servicing
Ground lease expiry€ 0
0 m²
0.8
Town Planning
Fully serviced
Building encumbrances No
Irregular
The property has an even topography and irregular shape. It is accessible from the east. According toinformation provided by the city of Wittenberge, the site is not registered in the register of contaminatedsites.In Brandenburg, there are no building encumbrances. Instead the muncipalities obtain personaleasments, which are registered in the land register in divison 2. Thus, we assumed the subject propertyto be free of any building encumbrances.For the purposes of this valuation, we have assumed that the subject property is free of any soil orbuilding contamination.
Limited personal easement to operate a self-service department store on the plot in favour of Kaufland Stiftung & Co. KG, Neckarsulm.
Brack Capital Properties N.V.
Land charge in the amount of € 9,204,703.00 in favour of Bank of Scotland
Local Court of Perleberg, land register of Wittenberge
abcPage 3 of 12
(Copy)
Property address Property no. 13 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Inhabitants in tertiary catchment area
This report is only to be read in conjunctionwith the valuation report provided.
153.67
-21.8%
abc
Population forecast for the district (2007 - 2025)
19322 Wittenberge
Name19322 Wittenberge, Lenzener Chaussee 21
Competitor Overview
Competitor Map
DistanceType Sales area
Source: Jones Lang LaSalle Research
PotentialAddress
Inhabitants per hypermarket in primary catchment area
Retail Purchasing Power Index (District)
Page 4 of 12
Number of households in the district
1.20 km3,500 m²Hypermarket
18,858
High
00
0
Inhabitants in secondary catchment area
Retail Centrality Index (District)
Inhabitants per hypermarket in secondary catchment area
27,247
10,526
E-Center
27,247 Inhabitants per hypermarket in tertiary catchment area
00 m²
m² 0
14,353
86.95
18,858
00
0
Inhabitants in primary catchment area 14,353
0
Competiton Indicators
Wahrenberger Straße 69
31.01.2011
Germany Brack Capital Properties N.V.
31.03.2013
00
0
0
0
0
Matrix Portfolio
(Copy)
Property address Property no. 13 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
31.01.2011
31.03.2013
Matrix Portfolio
Turnover analysis
This competitor is a new retail park with a large EDEKA centre as anchor tenant. The sales area of Edeka is about 3,500 m². Within this retail park, there are several well-known tenants such as ALDI, Charles Vögele, and even a toom DIY store, which is another anchor tenant. This centre is newer and has a slightly better location also near the B189.
Main competitors
19322 Wittenberge
Wahrenberger Straße 69
0
The rents in functional retail agglomerations are linked to the achievable turnover. The percentage rate that a retail tenant can use for rental payments depends on the margins achievable in the various market sectors. This rate normally ranges between 2% and 15% depending on the respective industry. The productivity varies between approx. € 1,000/m² and up to more than € 10,000/m².For Kaufland, we have also been provided with turnover figures for the previous valuation. We have analysed the figures and have found the area productivity of Kaufland to be in a healthy range. With a turnover-to-rent ratio of less than 2% it lies below the range of 2% to 4%, which is acceptable for a self-service department store. However, we believe that a slightly lower market rent is achievable after the end of the lease contract.
abc
Competition Comment
Approximately 19,000 inhabitants live in the secondary catchment area. Two self-service department stores are present within this area, which correlates to approx. 9,500 inhabitants (i.e. potential customers per self-service department store). Within the broader tertiary catchment area, there is still only one competitor for the 27,000 inhabitants, which increases the customer potential in this rural area to 13,500 potential customers per self-service department store. We consider the EDEKA centre located close by in a retail park to be the main competitor and superior to the subject property. Located only 1.2 km from the subject property also at the B189, they share almost exactly the same catchment area. As both properties need to be accessed by car, we think that most customers will prefer the retail park to the subject property due to its newer construction date and good tenant mix. Apart from the EDEKA centre, only small supermarkets or discounters compete for the non-food customers. However, we still assess the level of competition to be rather high and that the EDEKA centre will draw more than average customer potential from the subject property.
According to Trade Dimension, the turnover potential of the Kaufland is € 16,200,000 p.a. (net basis) . This results in a space productivity of approx. € 4,050 m². The rents hypermarkets usually pay are in the range of 2% to 4%, depending on location and quality of the building. Kaufland’s turnover-rent ratio generally lies above the threshold of 2% but below 4%. Therefore, we consider the rent paid to be sustainable in the long run.
Since Hammer prologed his contract for further 4 years the risk for vacancies has been reduced.
The subject property is a self-service department store situated in an average location within Wittenberge. The depth and breadth of the product range is very good. However, the property faces tough competition from a newer retail park with EDEKA as anchor tenant. The rental area of Kaufland can be regarded as relatively unproblematic. In the unlikely case that Kaufland should vacate the premises, the property could be re-let to an other self-service department stores as real or Marktkauf. We assumed that the tenant Kaufland will prolong the contract until 2037 due to the low contractual rental level. However, the market rental level is similar. More problematic would be Hammer vacating the property, as there are only few potential tenants for such rental unit. The most probable alternative use tenant for this unit would be a furniture store. Although this property will face some problems due to the competition, we believe the location to be sustainable on the low rental level, which is currently paid at the property.
Germany Brack Capital Properties N.V.
Charles Vögele contributes to the tenant mix surrounding the EDEKA centre. Luckily, this is the only large competitor, which has a similar tenant mix and size compared to the subject property, and is considered superior when compared to the subject site.
Page 5 of 12
Conclusion
(Copy)
Property address Property no. 13 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* M = Maintenance, GT = Ground Tax, I = Insurance Costs, PM = Property Management
This report is only to be read in conjunctionwith the valuation report provided.
/ month
5.27
€ 15,830
Page 6 of 12
00.01.19005 Parking Spaces
3 Schwarz Außenwerbung GmbH
1
0.00
6.15
Other Units 503.33
54.17
2 Kaufland Warenhandel Brandenburg GmbH & Co. KG Retail
pays VAT
31.12.2014
30.09.2026
75%
75%
Start
100%
31.03.2013Wahrenberger Straße 69
Tenant
Matrix Portfolio
31.01.2011
Status m² / unitLet
TenantLeaseArea
Let
Let
28.02.2019Yes
01.10.2007
No
Rent / m² RenewalLeaseLetting
1 Hammer Fachmärkte für Heimausstattung GmbH & Co. KG Retail 2,574
/ month Probability
Let6 TOTAL Deutschland GmbH
01.06.2007
01.01.2010
Yes
100%
External parking
Yes
€ 0
4 Kurzzeitmieter
Other Units 9
6,117
400
07.04.2003
€ 32,208
€ 488
Let
Let
19322 Wittenberge
Germany
Area CategoryEnd
Rent
Brack Capital Properties N.V.
Rent Roll
pays *Tenant Name
Petrol Station
€ 51,194
1,020 € 2,164
00.01.1900
00.01.1900 30.09.2026
100% M GT I Yes
abc
9,711 m²
2.12 06.04.2018
€ 503
0%0%
Total
(Copy)
Property address Property no. 13 Portfolio:
Valuation date:
Inspection date:
Prepared for:
* months ** years ***structural vacancy
This report is only to be read in conjunctionwith the valuation report provided.
.
Renewal
31.01.2011
LeaseRe-letting Initial
Valuation Assumptions
Tis24
ProbabilityArea Rent Agency
Fees*Void VPV* Abatem.*Void*
€ 0
abc
100%0 12 6 5
0
3 100%
0%
3
75%
10
100%
3 10
5
75%
3
12€ 0 6
0 00
0 10
Total
€ 0
Page 7 of 12
€ 49,3239,711 sqm
Term**
Matrix Portfolio
Re-letting
€ 2,164
€ 0
6 TOTAL Deutschland GmbH Petrol Station
2,574
3 Schwarz Außenwerbung GmbH Other Units
2 Kaufland Warenhandel Brandenburg GmbH & Co. KG
1 Hammer Fachmärkte für Heimausstattung GmbH & Co. KG
6,117 € 5.00
Market
18
12 0
0
3
6 0
Rent /month€ 16,086
€ 0.00
€ 488
€ 0
€ 6.25
9
Rent
€ 0.00
4 Kurzzeitmieter Other Units 1
5 Parking Spaces 400 External parking
1,020
€ 30,585
€ 54.17
0
€ 2.12
Market
€ 0
19322 Wittenberge
Retail
sqm/unitTenant Name
Retail € 50
€ 50
Wahrenberger Straße 69
Area Category
Germany Brack Capital Properties N.V.
18
12
31.03.2013
(Copy)
Property address Property no. 13 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Space productivity Turnover to rent ratio Explanation
7,000
Usual market % - levels6,500
Market rent
6,000 Contractual Rent
5,500 Rents %
Contractual5,000
Market
4,500 4% of turnover
3% of turnover4,000
2% of turnover
3,500 Turnover potential(net)
Sales Area3,000
Total Areain € / m² p.a.
based on sales area
2AA 1197
This report is only to be read in conjunctionwith the valuation report provided.
0.00
2.12
5.68
0.000.000.00
614,328
0.00
0.00%
Rented€/year
00
0.0%
0.0%
0.00
€/month €/year0
0.00
8,691
25,9720
0
0
0
0
0
0.00%0.00%0.00%
0.00%%
Vacancy Rate
0
8,691
19322 Wittenberge
00
m²Use Category
Rent RentMarketRent
Market Over-/ Under-
2.9%560,0590.00
0
08,691
Market
0576,466
€/month
DIY
Office
0
0
0
046,672
0.00%
5.37
0
0€/m²/month
1,430External parking
Rent
400
ContractualRent
€/year
0.00%10
0.00%
0.00%00
0
0.00%
Matrix Portfolio
Wahrenberger Straße 69 31.03.2013
1,020
00Commercial
0
Contractual
0
00
Potential
Area Vacant
400
€/m²/monthRent
0.00%400
Rent
00.00%
Brack Capital Properties N.V.
Use Category
Germany
31.01.2011
Capital indicator
n.a.
Assessment of Kaufland market rent
Comment
WALTPayment Index 70
16,157,982 €
The main tenant is a corporation belonging to the Kaufland Group, which in turn belongs to the Lidl &Schwarz Group, one of the biggest grocer groups in Europe. Kaufland is the self-service departmentstore division of Lidl & Schwarz with more than 500 locations across Europe. Kaufland’s core businessarea is food retailing with branded goods and own-brands specially produced for Kaufland. According toDun & Bradstreet (D&B) Rating as at 01.01.2011 Kaufland Diensleistungs GmbH & Co. KG has a verylow credit risk. The risk of insolvency (D&B Score) within the next 12 months compared with otherGerman companies is assessed to be low, i.e. 97% of businesses on the German database have thesame or higher risk of failure.
Rent p.a.
6,117 m²
Self-service department stores usually can afford to pay a rent in the range of 2% to 4% of their net turnover (economically sustainable rent burden) and have a space productivity of about € 4,000 to € 6,000 per m²sales area. The two graphics above indicate, how the contract rent of the main tenant Kaufland as well as the assumed market rental level, can be assessed on the basis of usual market ranges. This analysis isbased on the turnover potential figures prepared by Trade Dimension.
2.4%
2.3%
5.27
5.00
abc
Risk indicatorScore
Page 8 of 12
Credit limit
0
103.2%3.8%
5,85048849,323
48.75591,881
0.0%0.0%0
0.0%
0
2,164
0
0.0%00.0%
0
8.80
6.60
0
63%
0
Kaufland Dienstleistung GmbH & Co. KG
13.5 years
~ 3,987 m²
0 00
Share of total income
Main tenant
€ 386,501
D&B Rating of Main Tenant
Tenant name
4.40
Storage2,164
0Petrol Station 2.12
0.00Internal parking 0.00
5.8999.08
0ResidentialCommercial
00
25,972 25,9720
0 0.0%00
00
0
m²
0
Property Analysis
0 0.0%0.00 0
48,03900.00
5.53
Warehouse
Warehouse
Area Let
8,691
Other Units
00
Residential00
0
0
0.00%
Contractual
m²Area Analysis Lettable Area
1,020
576,466
Retail
0.00
Total areaPetrol Station
010
Income Analysis
Internal parking
Office
DIYRetail
Storage
51,19411,890
614,328
0 0
11,890
0
991
0.00
0.000.00
Other UnitsTotal area
External parking
Total parking
€ / m²
5.27
4.40
5.00
6.60
8.80
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
Re
nt
/ m
² / m
on
th
Turnover-rent-ratio
Office Retail DIY
Warehouse Commercial Residential
Storage
4,053
(Copy)
Property address Property no. 13 Portfolio:
Valuation date:
Inspection date:
Prepared for:
General Property Assumptions Discount Rate Comment
Capital expenditures*
Vacancy costs* on the basis of cost estimates provided by Brack Capital Real Estate, dated April 2013
Contract** Inflation(month 1 x 12)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market Rental Growth
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021** JLL analysis 1.0% 1.5% 1.5% 1.5% 1.4% 1.3% 1.4% 1.4% 1.4% 1.4%
Market(assuming full occupancy)
This report is only to be read in conjunctionwith the valuation report provided.
The property is fully let to two retail tenants and a gas station. The WALT of the property amounts to 10.7 years. The main tenant is Kaufland with a share of approx. 63% of the rental income. The property iscurrently slightly overrented due to the property age and location. The rent of Kaufland is indexed and will be adapted by 50% of the CPI change, whenever the change exceeds 10 percent in relation to the CPIbasis. The tenants do not pay ground tax, insurance costs, maintenance, or property management with the exception of the petrol station, where the tenant pays everything with the exception of propertymanagement.
0 €
0 €
€ 2,840€ 17,752
€ 2,886
Breakdown of Non-Recoverable Costs
€ 0
12.7%
7.78%
% of Gross
€ 10.00 /m²/p.a.
€ 2,36112.9%
0 €
€ 2,752 0 €0 €€ 2,708
0 €€ 2,662
12.3%€ 0
€ 16,610 12.6%12.5%€ 0
€ 16,118
€ 0
0 €
€ 0.00 /m²
Management costs
Other non-recoverable costs
€ 8.70 /m²
€ 9,215€ 2,616
€ 16,344
8.08%
Total non-recoverable expenses
Maintenance costs € 47,800
€ 79,262€ 77,896€ 76,765
€ 0
€ 1.06 /m²
% of Gross
0.00%
€ 9,215
€ 8,878
€ 5.50 /m² € 47,800Contract Rent
per year
Lease Contract Commentary
€ 5.50 /m²
per year
Ground taxInsurance costs
Maintenance costs
Matrix Portfolio
Capitalisation rate
Discount rate 6.70%
7.00%
Brack Capital Properties N.V.
Wahrenberger Straße 69
Assumptions
The rent for the tenant TOTAL Deutschland GmbH has increased slightly.
The yields applied reflect the individual location quality (macro- and micro-location) of the properties,building structure, letting situation, covenant strength and the relationship between contractual andmarket rent. We derive the discount rate from market transactions. The discount rate reflects the rate ofreturn expected by investors and is determined based on the risk associated with a property. Asreinsurance, the initial yields profile is aligned with the market/other transactions. We have taken intoaccount such facts as the stable Cash Flow, the long lease contract with the tenant Kaufland, the fulloccupancy and the good condition of the subject property in Wittenberge.
31.01.201119322 Wittenberge
Germany
31.03.2013
€ 0.29 /m²€ 0
0.41%€ 16,064€ 1.85 /m²
€ 0.00 /m²€ 2,530
per year
Year 8
€ 16,907€ 9,244
€ 53,670€ 52,822
€ 9,386
€ 49,426Year 3
€ 9,877
% of Total
Year 7
€ 2,538€ 9,215
€ 80,466
€ 75,831
€ 0
Total
€ 51,998 € 9,208
Total non-recoverable expenses
Ground taxInsurance costs
Other Non-
€ 012.72%
€ 0.29 /m² € 2,530
Insurance
Other non-recoverable costs
2.71%
Market Rent
0.00%12.31%
1.50%€ 1.02 /m²€ 1.85 /m² € 16,064
€ 75,608
per year
€ 8.66 /m²
Total Non-recoverable Costs
€ 75,272
€ 2,574
Costs per yearrecoverable Costs CostsVacancy
Gross Revenue
€ 9,880 € 18,611 0 €€ 9,880€ 56,199 € 18,887
Year 10€ 0
2.61%1.50%
Market Value
€ 54,533
Year 4
Year 6
€ 2,974
€ 8,803
Year 11€ 55,378
€ 18,327Year 9
GroundManagementTax
Maintanance
€ 9,386
CostsCosts
€ 50,307
Year 1Year 2
€ 47,960€ 48,632
€ 18,037
€ 51,174 € 17,198€ 17,475
Year 5
€ 9,880
13.4%
0 €€ 2,796
€ 87,94013.2%13.0%
0.43%
0 €
€ 0€ 2,931
€ 9,443
€ 0€ 86,800
€ 91,61612.8%
0 €
13.7%
€ 85,626
Year after 2021
€ 83,794
abc
€ 0 € 84,42415.6%
Page 9 of 12
Inflation
after 2021
1.6%Management costs
1.6%Rental GrowthYear
Market
12.3% 12.5% 12.6% 12.7% 12.9%13.7%
15.6%
12.8% 13.0% 13.2%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%Non-Recoverable Costs as a percentage of Total Gross Revenue
Maintenance costs
Management costs
Ground tax
Insurance costs
Other non-recoverable costs
Contract
(Copy)
Property address Property no. 13 Portfolio:
Valuation date:
Inspection date:
Prepared for:
Contractual gross rental income (month 1 x 12) total p.a.per m²/month
Market rental value total p.a.
Over-/Underrent Purchaser's costs
Net Initial YieldNet Reversionary Yield
Gross Initial YieldGross Reversionary Yield
This report is only to be read in conjunctionwith the valuation report provided.
6.75%
Market Value (rounded)
€ 436,789€ 0
€ 0
€ 0
-€ 86,800
Gross Capital Value (rounded)
€ 8,200,000€ 614,328
€ 886
Page 10 of 12
7.98%
€ 545,299
€ 5.89 Total
Total € 7,700,000
6.57%
In terms of risk, we considered the covenant strength as well as the lease duration for the existing contracts. As at 01.01.2011, the main tenant, Kaufland Dienstleistung GmbH & Co. KG, has good covenantstrength, which ensures a secure cash flow for the remainder of the lease term. The rent of the petrol station tenant has slightly increased, due to higher revenues of the last period on which the rent is based. Interms of a resale, we took into account such facts as visibility, demographic factors, appearance, condition and building age, third-party usability, competition situation and location.
€ 0
abc
Valuation Comment
€ 591,881 per m²
3.79%
For the purpose of the valuation on 31.03.2013, we have been provided with updated insurance costs as well as updated ground tax and have applied them in our valuation. Other costs have remained unchangedand have been applied according to the information received during the previous valuation cycle. For management costs, we have applied 1.5% of the effective gross rent. For the periods of year 1 to 10, all budgeted costs (capital expenditures) are covered by our maintenance cost approach of € 5.50/m² p.a. Regarding comparable rents, we have had recourse to evidence of similar areas situated in the comparable regions and locations. Furthermore, we have analysed comparable transactions. Please refer to thesection "Investment Comparables".
0
6.30%
Year 10 € 658,691€ 658,691
€ 0
€ 658,691Year 9
-€ 83,794
TIs and
-€ 76,765
Brack Capital Properties N.V.
€ 616,234 € 0
€ 0-€ 35,411
€ 574,061
€ 530,070 € 0 € 530,070
Income
€ 0
€ 0€ 0 € 538,338
€ 546,503
Net
31.03.2013
6.70%Commissions Cash FlowCapital
€ 538,497€ 489,144€ 522,823
Year 6Year 7
€ 0
€ 545,299
-€ 75,831Vacancy
Year 5
€ 658,485 € 658,485Year 8
Year 4
Year 2€ 0
Gross
€ 625,765
Market Value
Rental recoverable Operating
Wahrenberger Straße 69
€ 573,065
€ 446,425
7.69%per m²
€ 586,855
-€ 85,626-€ 84,424€ 0 € 0
Gross Value of Surplus Land
€ 8,153,586
€ 944
€ 8,238,815-€ 87,940 € 0€ 658,691
Rent Overview
Gross Capital Value incl. Surplus Land
Market ValueValuation Results
€ 8,238,815
€ 0Total Cashflow (incl. Terminal Value @ 7.00 %)
per m²/month
€ 570,751
€ 372,430
€ 0
-€ 17,753 € 0
Expenditures€ 0
-€ 77,896 € 538,338
Costs
€ 459,048
€ 571,891
Abatements
€ 537,563
€ 0
-€ 91,616€ 574,061
-€ 13,403€ 0 € 495,239
€ 573,065
Year 3 € 616,234
€ 571,891€ 331,178€ 0
-€ 80,466
€ 292,326
€ 614,328
Revenue€ 614,328
Turnover
Germany
€ 537,563
Revenue
€ 614,328 € 0
€ 0 € 625,765
Rent
€ 0
€ 614,328€ 0€ 0 € 0Year 1
€ 625,765
€ 658,101
Year 11 € 658,691
€ 613,864
€ 5.68
€ 0€ 0
€ 658,691 € 0 € 0
€ 625,765€ 0
-€ 71,246
€ 309,746
Yield Overview
€ 538,497
€ 546,503-€ 79,262
€ 631,617
19322 Wittenberge
Cash Flow
Non-Total
€ 0€ 0
€ 0
€ 4,262,893
€ 0 € 0€ 0
Present
€ 353,978
€ 408,460
€ 0
Leasing
31.01.2011
Matrix Portfolio
Value @
6.5%
6.5% 6.5% 6.6% 6.6%6.4%
6.0%
7.0% 7.0% 6.9%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
€ .0
€ 100000.0
€ 200000.0
€ 300000.0
€ 400000.0
€ 500000.0
€ 600000.0
€ 700000.0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Ru
nn
ing
yie
ld
Re
nta
l in
co
me
Total Gross Revenue versus Net Operating Income
(Copy)
Property address Property no. 13 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Wahrenberger Straße 69
31.01.2011
abcPage 11 of 12
View of the petrol station
View of the main entrance of Kaufland
Matrix Portfolio
View of the main entrance of Hammer
19322 Wittenberge
Photos
Internal view of the mall
Internal view of Kaufland
Germany Brack Capital Properties N.V.
31.03.2013
View of the parking space
(Copy)
Property address Property no. 13 Portfolio:
Valuation date:
Inspection date:
Prepared for:
This report is only to be read in conjunctionwith the valuation report provided.
Property TypeYear of
ConstructionArea
Gross Multiplier
HypermarketHypermarket
Hypermarket
Hypermarket
n.a.
n.a.
Hypermarketn.a.n.a.n.a. 22,926 m²
10.1-fold
13,000 m²
10,031 m²8.0-fold
15.3-fold15.5-fold
14.7-fold
Self-Service Department Store 19,688 m²Self-Service Department StoreSelf-Service Department Store
4,661 m²
2,600 m²Large scale sport store1,300 m²
0 m²3,800 m²Furniture Store
Kaufland CrimmitschauZwickau
Leipzig0
Sport Store
0Local chain
EDEKA
0
Leipzig
0
Purchasing power of 84.6
€ 0
€ 6.12 /m²€ 17,004
€ 0.00 /m²
Total Rent p.m.
€ 21,546 € 5.67 /m² Other federal state; similar purchasing power€ 6.54 /m²
Purchasing power of 84.9Purchasing power of 77.1
€ 7,956
Especially as a result of the fact that Germany’s economy has been very stable in the past years andshowed signs of growth in the recent past, we see retail to remain amongst the largest asset classes in2013. Particularly those investors who seek a core investment with upward potential find the best fit inretail. Unlike before, their focus is not only on core properties. Alternative options like, for instance, value-add assets, assets with shorter rental lease contracts or vacancies are increasingly considered.However, building condition as well as location quality remain among the most important requirements.
Area
Purchasing power of 105.5€ 4.60 /m²
€ 104,150 € 5.29 /m²€ 21,441
€ 4.77 /m²€ 13,118
CommentSame federal state; similar purchasing power
Rent p. sqm€ 8,136 € 4.52 /m²
Purchasing power of 103.5
19322 Wittenberge
City
There is no homogeneous rental level for retail space in retail warehouses or retail parks throughoutGermany. However, the spread between the average and the absolute prime rent is not as big as inhigh street locations. The overall potential for rental growth in retail parks in Germany is bestsummed up as mediocre. Depending on the tenant branch, rental rates for discounters, departmentstores and DIY stores remain stable due to the high competition on the market, but the rents forfashion stores have uplift potential simply due to the fact that these stores are increasing theirpresence in retail parks and are prepared to pay high rents.
Leasing Comparables
1,800 m²
Leasing Market
Real
Tenant Property TypeSelf-Service Department StoreRealSelf-Service Department Store
31.03.2013Wahrenberger Straße 69
Matrix Portfolio
13,000 m²Hypermarket
8,513 m²
6,200 m²
n.a.n.a.n.a.
Hypermarket
Hypermarket
Investment Comparables
11,200 m²
BraunschweigReal
The rents within the different branches vary. This is due to the diverging location assessment andturnover expectancy of the different tenants. If in the case of a retail park the management succeedsin establishing good anchor tenants, which guarantee a high visitor frequency, then the turnoverexpectancy of secondary tenants tends to be higher. Therefore, some anchor tenants are able tonegotiate lower rents because their existence in a property increases the rental level of the others.Depending on the size of the retail unit and the branch of the tenants, rents in retail parks in westernGerman locations generally range between € 5.00 and € 13.00 /m²/month.
2,750 m²
Furthermore, in most retail property classes, there is still a clear lack of product remaining. A yieldcompression could be observed from 2009 until H1 2011, came to a halt and continued in H2 2012 withrespect to retail parks, shopping centres and retail high street unit shops/department stores. However,the yield compression as well as the stabilisation applies to core properties rather than secondaryassets. Net initial yields for prime retail parks went down to approx. 6% at the end of 2011, remainedstable until the Q3 2012 and then decreased.
Verden (Aller)Lübbenau
Depending on the size of the retail unit and the retail format of the store, rents for supermarkets aregenerally slightly higher than the rents for discounters. Rents for supermarkets in western Germanlocations generally range between € 7.00 and € 13.00 /m²/month. Rents for discounters in westernGermany generally range between € 6.00 and € 12.00 /m²/month, while discounters located ineastern Germany generally achieve slightly lower rental rates ranging between € 5.00 and € 11.00/m²/month. Drugstores, textile, shoe and electronics branches generally achieve rental rates rangingfrom € 7.50 to € 12.00 /m²/month for rental areas with a size between 500 and 750 m². DIY storesneed extensive space due to their broad product range with rental prices ranging between € 6.00and € 10.00 /m²/month.
The rental level of retail warehouses and retail parks is the result of their location in urban centres orrural areas, and the resulting quality of the location in terms of catchment area, competition,accessibility and visibility. While rental levels in Bavaria generally lie slightly above the averagewestern German rent levels due to the state’s strong economy, rental levels in eastern Germantowns are generally slightly lower than their western counterparts, as these areas have a lowerpurchasing power and generate on average lower revenues. In the retail warehouse and retail parksegment, the maximum rents are determined by a percentage of the turnover expectancy.
Investment Market
Investors continued to focus on the office property asset class in the first quarter of 2013. This assetclass had a share of around 40% of the transaction volume (corresponding to almost €2.9 billion), andwas therefore well ahead of property used for retail (24% share and €1.7 billion). The sale of a specialiststore portfolio consisting of 45 properties for €135 million represented the second-largest individualtransaction after Kö-Bogen. Mixed-use properties accounted for a 14% share, while distributionwarehouses and hotels each had an 8% share of the volume (around €570 million).
Germany Brack Capital Properties N.V.
WALT 15.7 years, good location, main tenant Kaufland, partly leasehold
Date of Transaction
Leasing and Investment Market
In the retail investment market, the shares of some of the asset classes shifted slightly between 2011and 2012. In the last year the shares of shopping centres and high street properties/department storeswere nearly equal at 38% (2011: 32%) and 39% (2011: 45%); both shifted slightly. Retail parks nowhave the 3rd largest share with 15% (2011: 8%) and are followed by retail warehousing units, whichaccounted for 5% (2011: 12%). Investments in supermarkets/discounters represented 3% in 2011 andstood at 2% in 2012. Shares of retail assets went down from 45% in 2011 to 31% in 2012.
31.01.2011
In spite of the year-end rally in 2012, it was not actually possible to complete all transactions in the finaldays of December. As a result, the first quarter benefited from this backlog with a transaction volumethat was more than a third higher than the year-ago level. The transaction volume for commercially usedproperty reached around €7.1bn and was therefore 35% higher than the volume in the first quarter of2012. Of the €4.6bn that was invested in the Big 7, €1.3bn related to properties in portfolio purchases.
20122,269 m² 2012
Comment
Q2 20112012
Anchor tenant Kaufland & Toom, WALT below 5 years, portfolio transactionAnchor tenant Marktkauf, WALT 17.5 years, very strong location in southern Germany
2012Anchor tenant real, WALT 15 years, portfolio transaction
Page 12 of 12
Q3 201113.1-foldAnchor tenant Famila, WALT 9.2 years, strong location in northern GermanyAnchor tenant Marktkauf, WALT 5 years, located in southern Germany
abc
Q2 201213.8-fold
Q2 2011 Anchor tenant real, located in Bavaria, WALT 9 years13.7-fold
Anchor tenant Real, very underented, stron location in southern Germany, WALT 5 years
(Copy)
abc
No Town Address UseYear of
Construction / Modernisation
Plot SizeLettable
AreaVacancy
RateWeigted Average
Lease TermContractual
Rental IncomeContract Rent
Net Operating Income
Market Rental ValueMarket Rent
Maintenance Costs
Management Costs
Ground TaxInsurance
CostsOther Costs* Total non-recs Total non-recs Total non-recs
Surplus Land Value
Capital Expenditures
(year 1)
Capitali-sationRate
Dis-countRate
Multi-plier
Multi-plier
Gross Initial Yield
NetInitialYield
NetInitialYield
Net Reversionary
Yield
NetReversionary
Yield
Gross CapitalValue
Purchaser's Costs
Market Value after Capex
Market Value
absolute ex Cap Ex ex Cap Ex ex Cap Ex
m² m² % years € p.a. €/m²/month € p.a. € p.a. €/m²/month % €/m² % €/m² €/m² €/m² €/year €/m²/year % of income € € % % % % % % % € % € €/m²
1 1 Aschersleben Hoymer Chaussee 108 Retail Park 1993 / n.a. 36,735 14,522 8.46% 7.4 1,531,257 8.79 1,408,935 1,591,511 9.13 -3.79 5.50 1.50 1.01 0.33 0.00 122,322 8.42 8% 0 0 7.10 7.35 13.06 13.06 7.66% 6.61% 6.61% 6.89% 6.89% 21,300,000 6.50% 20,000,000 1,377
2 2 Augsburg Gögginger Straße 119 Retail Park 1969 / 1995 20,862 13,840 0.00% 7.0 1,325,019 7.98 1,164,091 1,499,573 9.03 -11.64 5.50 1.50 4.39 0.30 0.00 160,928 11.63 12% 0 0 6.75 6.90 12.91 12.91 7.75% 6.47% 6.47% 7.42% 7.42% 18,000,000 5.00% 17,100,000 1,236
3 3 Bad Aibling Grassingerstraße 16 Retail Park 2000 / n.a. 19,222 7,053 0.00% 6.5 644,624 7.62 570,848 696,866 8.23 -7.50 5.50 1.50 3.30 0.28 0.00 73,776 10.46 11% 0 0 6.75 6.90 13.19 13.19 7.58% 6.41% 6.41% 6.99% 6.99% 8,900,000 5.25% 8,500,000 1,205
4 4 Biberach Obere Stegwiesen 10 Retail Park 1994 / n.a. 29,632 10,769 0.39% 6.6 1,265,410 9.79 1,183,256 1,275,518 9.87 -0.79 4.50 1.50 1.01 0.36 0.00 82,154 7.63 6% 313,312 0 6.75 7.10 12.57 13.03 7.96% 6.96% 6.72% 7.02% 6.89% 17,300,000 6.50% 16,200,000 1,476
5 5 Borken Heidenerstraße 32 Retail Park 2003 / n.a. 17,337 9,524 0.00% 6.8 1,089,001 9.53 999,625 1,206,904 10.56 -9.77 5.50 1.50 1.73 0.43 0.00 89,376 9.38 8% 0 0 6.50 6.90 13.77 13.77 7.26% 6.25% 6.25% 6.97% 6.97% 16,000,000 6.50% 15,000,000 1,575
6 6 Erlangen Westliche Stadtmauerstraße 27 Retail Park 1975 / 2004 17,609 13,398 3.97% 10.6 1,216,050 7.56 842,379 1,566,081 9.74 -22.35 6.50 1.50 4.59 0.28 15.17 373,671 27.89 31% 0 0 6.50 6.80 10.44 10.44 9.58% 6.29% 6.29% 8.86% 8.86% 13,400,000 5.00% 12,700,000 948
7 7 Geislingen Gartenstraße 30 Retail Park 2002 / n.a. 10,909 9,390 0.53% 7.6 654,010 5.80 565,281 838,192 7.44 -21.97 4.50 1.50 3.49 0.41 0.00 88,729 9.45 14% 0 0 6.50 7.25 13.91 13.91 7.19% 5.83% 5.83% 7.70% 7.70% 9,700,000 6.75% 9,100,000 969
8 8 Glauchau Waldenburger Straße F175 Retail Park 1992 / n.a. 47,878 12,764 0.13% 7.6 1,301,918 8.50 1,186,091 1,246,923 8.14 4.41 5.50 1.50 1.75 0.29 0.00 115,828 9.07 9% 0 0 7.25 7.25 12.52 12.52 7.99% 6.94% 6.94% 6.62% 6.62% 17,100,000 5.00% 16,300,000 1,277
9 9 Ludwigsburg Friedrichstraße 124 Retail Park 1997 / n.a. 10,911 14,144 0.00% 7.7 1,033,067 6.09 898,931 1,332,535 7.85 -22.47 4.75 1.50 3.26 0.37 0.00 134,136 9.48 13% 0 0 6.75 7.00 12.29 12.29 8.13% 6.66% 6.66% 8.84% 8.84% 13,500,000 6.50% 12,700,000 898
10 10 Ludwigsfelde Potsdamer Straße 51 Retail Park 1997 / n.a. 10,340 12,631 0.40% 7.5 1,138,683 7.51 1,029,320 1,042,279 6.88 9.25 5.50 1.50 1.40 0.40 0.00 109,362 8.66 10% 0 0 7.00 6.65 12.47 12.47 8.02% 6.82% 6.82% 6.19% 6.19% 15,100,000 6.50% 14,200,000 1,124
11 11 Neckarsulm Hohenloher Straße 2 Retail Park 1974 / 2001 32,520 10,267 1.21% 4.3 1,415,752 11.49 1,305,298 1,278,184 10.37 10.76 6.50 1.50 1.78 0.41 0.00 110,454 10.76 8% 441,600 0 6.85 7.30 11.87 12.44 8.43% 7.29% 6.93% 6.54% 6.38% 18,400,000 6.50% 17,200,000 1,636
12 12 Vilshofen Hösamer Feld 7 Retail Park 1999 / 2007 37,515 10,230 2.78% 7.2 815,611 6.64 726,812 817,158 6.66 -0.19 4.50 1.50 2.70 0.28 0.00 88,799 8.68 11% 0 0 6.75 6.75 12.38 12.38 8.08% 6.86% 6.86% 6.87% 6.87% 10,600,000 5.00% 10,100,000 987
13 13 Wittenberge Wahrenberger Straße 69 Retail Park 1996 / n.a. 39,690 8,691 0.00% 10.7 614,328 5.89 538,719 591,881 5.68 3.79 5.50 1.50 1.85 0.29 0.00 75,608 8.70 12% 0 0 7.00 6.70 12.53 12.53 7.98% 6.57% 6.57% 6.30% 6.30% 8,200,000 6.75% 7,700,000 886
*based upon market benchmarks
Valuation Date 31.3.2013 331,160 147,224 1.58% 7.4 14,044,730 7.95 12,419,586 14,983,605 8.48 -6.27% 5.38 1.50 2.50 0.34 1.38 1,625,144 11.04 12% 0 12.59 12.59 7.9% 6.62% 6.62% 7.12% 7.12% 187,500,000 6.10% 176,800,000 1,201
Over-/under-rent
Yields / Multiplier Values
Matrix Portfolio - Valuation Overview
Property Information General Data Rental Income Non-recoverable Costs
08.05.2013 abc(Copy)
Appendix III – General Principles for Valuation
Appendix III –General Principles for
Valuation
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General Principles Adopted in the Preparation of Valuations and Reports
These are the general principles upon which our Valuations and Reports are normally prepared; they apply unless we have specifically mentioned otherwise in the body of the report. Where appropriate, we will be pleased to discuss variations to suit any particular circumstances, or to arrange for the execution of structural or site surveys, or any other more detailed enquiries.
1 Guidelines
a) RICS Appraisal and Valuation Manual
All work is carried out in accordance with the Practice Statements contained in the RICS Appraisal and Valuation Manual published by the Royal Institution of Chartered Surveyors, by valuers who conform to the requirements thereof.
b) International Valuation Standards (IVS)
The standards of the International Valuation Standards Council (IVSC) are in accordance with the definition and interpretation of the Market Value as defined by the RICS and consistent with the concept of Fair Value as defined in the International Financial Reporting Standards.
c) Directive for Derivation of Market Value (German Immobilienwertermittlungsverordnung, “ImmoWertV“)
Appraisals of German Market Value (“Verkehrswert”) are prepared on the basis of the current version of the ImmoWertV. They are conducted by RICS-approved personnel.
d) Directive for Derivation of Mortgage Lending Value (German Beleihungswertermittlungsverordnung, “BelWertV“)
Appraisals of German Mortgage Lending Value (“Beleihungswert”) are prepared on the basis of the current version of the BelWertV. They are conducted by personnel approved by the HypZert GmbH.
2 Valuation Basis
Our reports state the purpose of the valuation and the basis adopted. The following definitions are usually the basis of our valuation:
a) Market Value (MV, RICS)
The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.
b) Market Rent (RICS)
The estimated amount for which a property would be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction, after proper marketing and where the parties had acted knowledgeably, prudently and without compulsion.
c) Depreciated replacement cost (DRC, RICS)
The current cost of replacing an asset with its modern equivalent asset, less deductions for physical deterioration and all relevant forms of obsolescence and optimisation.
d) Fair Value (RICS)
The estimated price for the transfer of an asset or liability between identified knowledgeable and willing parties that reflects the respective interest of those parties (the definition adopted by the IVSC).
The price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (the definition adopted by the IASB).
e) German Market Value (“Verkehrswert“ according to § 194 BauGB)
The Market Value (Verkehrswert) is determined by the price which could be achieved at the date of valuation in an arm’s length transaction reflecting the legal and physical situation, location and other character of the property or other subject of valuation, without consideration of unusual or personal interest.
f) Mortgage Lending Value (“Beleihungswert” according to § 16 PfandBG)
The mortgage lending value (Beleihungswert) must not exceed the value resulting from a prudent assessment of the future marketability of a property by taking into account the long-term sustainable aspects of the property, the normal regional market condition as well as the current and possible alternative uses. Speculative elements must not be taken into consideration. The mortgage lending value must not exceed a market value calculated in a transparent manner and in accordance with a recognized valuation method.
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g) Plant & Machinery
An opinion of the price at which an interest in the Plant & Machinery utilized in a business would have been transferred at the date of valuation assuming:
fa) that the Plant & Machinery will continue in its present use in the business; fb) adequate potential profitability of the business, or continuing viability of the undertaking, both having due regard to the value of
the total assets employed and the nature of the operation; fc) that the transfer is part of an arm’s length sale of the business wherein both parties acted knowledgeably, prudently and without
compulsion.
h) Financial Statements Valuations for Financial Statements shall be in accordance with the IVSC International Valuation Application 1 (IVA 1).
i) Lending
Valuations for lending purposes shall be in accordance with IVSC International Valuation Application 2 (IVA 2).
3 Source of Information
We have relied upon the information provided to us by yourselves as to details of tenure, tenancies, planning consents, site area, accommodation, documents of title, cadastral plans, restrictions on title, and other relevant matters, as summarised in our report. We do not accept any liability for either the accuracy or the completeness of this information. We are neither obliged to confirm the completeness and correctness of the information provided nor to examine any original documentation for the same purpose.
4 Documentation
a) We do not normally read leases or documents of title and, where these have been provided to us, we recommend that reliance should not be placed on our interpretation thereof without verification by your lawyers.
b) We assume, unless informed to the contrary, that each property has a good and marketable title, that all documentation is satisfactorily drawn and that there are no encumbrances, restrictions, easements or other outgoings of an onerous nature, which would have an effect on the value of the interest under consideration, nor material litigation pending.
5 Tenants
Although we reflect our general understanding of a tenant's status in our valuations, enquiries as to the financial standing of actual or prospective tenants are not normally made unless specifically requested. Where properties are valued with the benefit of lettings, it is therefore assumed, unless we are informed otherwise, that the tenants are capable of meeting their financial obligations under the lease and that there are no arrears of rent or undisclosed breaches of covenant.
6 Town Planning and Other Statutory Regulations
a) Unless informed to the contrary, our valuations are prepared on the basis that the premises (and any works thereto) comply with all relevant statutory regulations, including enactments relating to fire regulations.
b) Information on Town Planning is often obtained verbally from the Local Planning Authority and, if reassurance is required, we recommend that legally binding written confirmation of the same is obtained.
7 Other Defects and Damages
a) We normally assume that:
aa) the building and its technical facilities are free of damages and other defects.
bb) the building was constructed or altered without using deleterious materials or techniques (including, by way of example, high alumina cement concrete, wood wool as permanent shuttering, calcium chloride or asbestos).
cc) the ground conditions are suitable and that, where development is contemplated, no extraordinary expenses or delays will be incurred during the construction period due to these, or to archaeological or ecological matters.
dd) the land is not contaminated.
b) Unless expressly instructed, we do not carry out a structural survey, nor do we test the services. Whilst any readily apparent defects or items of disrepair, which we note during the course of our inspection, will be reflected in our valuations, we are not able to give any assurance that any property is free from defect. We recommend the necessary surveys to be taken out in order to confirm our assumptions in this respect.
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c) Unless expressly instructed we do not carry out technical surveys to ascertain whether those defects and damages exist, or have occurred in the past. We are therefore not able to give any assurance that any property is free from damages or other defects. Any readily apparent defects or items of disrepair, which we note during the course of our inspection, will be reflected in our valuation.
d) Provided that we are informed about:
other defects and damages of the building and its technical facilities
the application of any such materials, as listed in lit. ab) above
unsuitable ground conditions as set out in lit. ac) above
any contamination of land as listed in lit. ad) above by the client or any other party involved, such information will be reflected in our valuation, only if we are provided with reliable estimates of costs for their replacement or compensation.
8 Value Added Tax (VAT)
Valuations are prepared and expressed exclusive of VAT payments, unless otherwise stated.
9 Outstanding Debts
In the case of buildings where works are in hand or have recently been completed, we do not normally make allowance for any liability already incurred, but not yet discharged, in respect of completed works, or obligations in favour of contractors, sub-contractors or any members of the professional or design team.
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Standard Terms of Business for Advisory Services
1 Scope
a) These Standard Terms of Business are applicable for contracts regarding general advisory, valuation and/or market research services between Jones Lang LaSalle GmbH (hereinafter also referred to as "Jones Lang LaSalle" or the "Advisor") and the client (hereinafter also referred to as the "Client").
b) The results of the work of the Advisor on the basis of this Agreement are intended exclusively for the Client and may only be used for the purpose specified in the Agreement. The disclosure of the results of this work to third parties is generally prohibited.
2 Limitation and Execution of Contract
a) Jones Lang LaSalle shall provide the agreed services, but shall not guarantee a particular economic result. Jones Lang LaSalle’s services will be deemed as complete once the agreed analyses and the corresponding conclusions and, where applicable, recommendations have been produced and presented to the Client or, in the event of an agreed expert-report or an agreed other written statement, these have been handed over to the Client. Jones Lang LaSalle’s services shall not include any legal or tax-related advice. The written report on the agreed services shall be deemed applicable. Verbal statements and information provided by Jones Lang LaSalle staff outside the terms of the agreed contract should be deemed non-binding, unless confirmed in writing.
b) Jones Lang LaSalle will fulfil the contract to the best of their knowledge and skill with due care and diligence, and in the case of a valuation, in accordance with the principles of the Royal Institution of Chartered Surveyors (RICS), an extract of which has been supplied to the Client.
c) Jones Lang LaSalle has the right to instruct specialist third parties (i.e. vicarious agents, or “Erfüllungsgehilfen”) to fulfil its contractual obligations.
d) Jones Lang LaSalle will only verify the information, especially numbers, provided by the Client for obvious inconsistencies and faults. In all other cases, Jones Lang LaSalle will assume the information provided by the Client is correct and complete. Furthermore, Jones Lang LaSalle accepts no responsibility for the accuracy or completeness of the documents and information provided by the client, whether it is in verbal, written or electronic format.
e) The Client does not have the right to demand that the contract be carried out by a specific employee of Jones Lang LaSalle.
f) Jones Lang LaSalle is under no obligation to inform the Client about any alterations or their implications resulting from a change in the conditions underlying the conclusions and recommendations of the contract specified above after the execution of the contract.
g) All changes and extensions to the contract must be made in writing. The same holds true for the waiver of this written contract agreement. Jones Lang LaSalle shall perform additional services required by the Client that are not specified in the original contract only on the basis of a separate agreement with a separate remuneration and liability. Should Jones Lang LaSalle render these services without both parties being able to agree to an appropriate remuneration for such additional services, the Advisor’s fee will increase according to the additional time and money required by the Advisor. Otherwise, the provisions and conditions of this Agreement remain applicable.
3 Deadline for Delivering Services
Any agreed deadline for delivering services shall be reasonably extended in case of force majeure or any reason for which the Advisor is not responsible but which may temporarily impair them from carrying out their work. Jones Lang LaSalle shall notify the Client without undue delay of any impediment to the performance of these services and the expected duration of the delay.
4 Information and Documentation supplied by the Client
a) The Client is obliged to assist Jones Lang LaSalle in the execution of the agreed contract as required, especially by supplying the necessary information and documentation properly, fully and on time. This also applies to documentation and information, which only become known or available during the course of the instruction of Jones Lang LaSalle. Should the Client fail to meet any of the aforementioned obligations to support Jones Lang LaSalle, Jones Lang LaSalle, notwithstanding their claims for compensation for additional expenses and damages, reserves the right to extraordinarily terminate the contract without notice.
b) Upon Jones Lang LaSalle's request, the Client shall confirm in writing the accuracy and completeness of all written documentation and information supplied as well as all verbal statements, if such a confirmation is possible through a necessary factual review without incurring additional costs or effort.
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5 Guarantee
a) The Client has the right to demand that any deficiencies be corrected by Jones Lang LaSalle, to the extent that this is possible and reasonable for Jones Lang LaSalle. Should Jones Lang LaSalle not be able to or fail to correct the deficiency, the Client reserves the right to cancel the contract or reduce the fees. If the contract has been awarded by a merchant within the scope of its commercial activities, by a public-law legal entity or by a public-law fund, the Client can only cancel the contract if Jones Lang LaSalle’s work is of no further interest to the Client, because of the failure of Jones Lang LaSalle to correct the deficiency. All further damage claims are governed by section 6 below.
b) The Client is required to report any obvious shortcomings in writing within two weeks of the completion of services. Should the Client be a merchant, patent defects shall be notified without undue delay and latent defects shall be notified without undue delay and in writing upon discovery. In any case, claims because of defects must be notified no later than six months after completion of services. If the Client fails to report errors in due time, any claim for correction of these deficiencies and all other claims because of the defect is excluded.
c) Obvious errors, such as typing and arithmetical errors and deficiencies of form may be corrected by Jones Lang LaSalle at any time also with effect against third parties. Errors which are apt to question the results contained in Jones Lang LaSalle’s written report entitle Jones Lang LaSalle to withdraw such statements also with effect against any third party. In such cases Jones Lang LaSalle will first give the Client an opportunity to comment.
6 Liability and Disclosure of Information to Third Parties
a) Jones Lang LaSalle only assumes unlimited liability – irrespective of the legal reason – for damage resulting from wilful or grossly negligent conduct caused by a legal representative, employee or vicarious agent (“Erfüllungsgehilfe”) of Jones Lang LaSalle. Otherwise, Jones Lang LaSalle’s liability for damage caused by Jones Lang LaSalle, its legal representatives, employees and vicarious agents – irrespective of the legal reason – shall be limited to a maximum total amount of € 7.5 million (in words: seven point five million euros), unless agreed otherwise by the Advisor and the Client.
b) Any liability for lost profits shall be excluded.
c) The aforementioned maximum liability amount shall also apply if the damage is based on various or several similar professional errors or an error that has resulted in different types of damage and/or if there is more than one claimant.
d) If compensatory damage claims against Jones Lang LaSalle are excluded or limited, this shall also apply with regard to the personal liability of Jones Lang LaSalle's legal representatives and employees.
e) The aforementioned exclusions and limitations of liability shall not apply to damages arising from injury to life, limb or health.
f) The contractual remuneration has been determined on the basis of the performance and obligations specified in this Agreement. Jones Lang LaSalle's responsibilities under this Agreement and its performance shall be towards the Client exclusively. The results of the work executed by Jones Lang LaSalle shall remain confidential and are intended exclusively for the Client and only for the purposes specified in this Agreement. Any other use and, in particular, disclosure to third parties or other publications (disclosure to third parties) – including extracts – without Jones Lang LaSalle's prior written consent shall be prohibited. In the event of consent to disclosure to a third party, the Client agrees to notify the respective third parties in writing and to underline that Jones Lang LaSalle generally assumes no liability towards third parties for the work and services provided and that third parties may make no claims whatsoever against Jones Lang LaSalle on the basis of the work and services provided. The Client also agrees to indemnify Jones Lang LaSalle against any third party claims and associated costs asserted by third parties against Jones Lang LaSalle as a result of unauthorised disclosure or publication of the results of the work and services provided. "Third parties" in this context shall also include the Client's Affiliates.
g) Jones Lang LaSalle may assume liability towards third parties for its valuation only if the relevant third party has accepted the limitation of liability set forth in section 6 and has accounted for the respective additional remuneration for the joint and several liability.
h) Should Jones Lang LaSalle have assumed liability as against third parties for its valuation pursuant to section 6f) and 6g), this shall be done only on the basis of the following minimum fee rates per contract volume:
The percentage rates set forth above shall be applied to the determined market value respectively fair value of the real estate, which is defined in § 2 of Jones Lang LaSalle's "General Principles for Preparing Valuations and Reports". The above-mentioned rates do not include value added tax and shall be no less than € 500 per designated additional party.
Market value resp. Fair Value
First party Second and subsequent parties
For the first ten million euros
0.05% 0.02% per party
For the following ninety million euros
0.025% 0.01% per party
Thereafter 0.0125% 0.005% per party
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7 Restriction on Use and Copyright Protection
a) The Client guarantees that the valuations, reports, plans, drafts, sketches, tables and calculations prepared by Jones Lang LaSalle as part of the contract shall be used only for the contractually agreed purposes and may not be published in individual cases without Jones Lang LaSalle's express consent.
b) Should the work produced qualify for copyright protection, Jones Lang LaSalle shall remain the author. In such cases, the Client shall be granted a limited, irrevocable, exclusive and non-transferable licence to use the work produced.
8 Return of Documents
After settlement of all conditions agreed in the advisory, valuation or market research contract, Jones Lang LaSalle, on request of the Client, shall return all documents obtained from the Client in order to carry out the instruction. This does not apply to correspondence between the contractual parties and for copies made of the valuations, reports, plans, drafts, sketches, tables and calculations prepared as part of the contract as well as other documents, which Jones Lang LaSalle is legally bound to store or entitled to. The Advisor also has the right to make copies of these released documents for its files.
9 Confidentiality
Jones Lang LaSalle will treat all business and operational secrets of which it becomes aware in the context of the contract and that are recognisable as such and all information indicated to be confidential as confidential, as long as this information is not required by law or public authority. The Advisor will only divulge reports, valuations and other results containing such information to third parties with the consent of the Client, unless required by law or public authority.
10 Payment Conditions
a) The agreed remuneration will be payable immediately upon issue of invoice without any deductions.
b) If there is more than one client, they shall be jointly and severally liable.
c) A set-off of claims of the Advisor for fees and payment of costs is only possible with an uncontested and legally recognised claim.
11 Miscellaneous
a) Rights under the contractual relationship with the Advisor may be only assigned subject to its prior consent.
b) The laws of the Federal Republic of Germany shall apply to the execution of all contracts relating to general advisory, valuation and/or market research services and all claims resulting thereof.
c) If the contract has been awarded by a registered trader (“Vollkaufmann”), public-law legal entity or public-law fund, the place of jurisdiction is Frankfurt am Main.
d) Should any individual clause of these Standard Terms of Business be deemed void, this will not affect the validity of any other parts of these Standard Terms of Business. The invalid provisions shall be replaced by that which lawfully most closely reflects the desired purpose.
e) All amounts mentioned above are in euros and shall be subject to the legally valid Value Added Tax at the time of the work was executed, unless explicitly excluded.
f) A copy of the internal complaints handling procedure can be made available on request.
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Andrew m. Groom MRICS International Director Wilhelm-Leuschner-Straße 78 60329 Frankfurt/M. + 49 (0) 69 2003 1241 [email protected]
Frank Rambow MRICS National Director Wilhelm-Leuschner-Straße 78 60329 Frankfurt/M. + 49 (0) 69 2003 1186 [email protected]
Georg Charlier Principal Consultant Wilhelm-Leuschner-Straße 78 60329 Frankfurt/M. + 49 (0) 69 2003 1284 [email protected]
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