Presentation office market Prague, Brno & Ostrava Prepared for: - - PowerPoint PPT Presentation

Presentation office market Prague, Brno & Ostrava

Prepared for: Confidential Client 9th August 2012

CBRE | Page 2

Q2 2012 Figures TOTAL Stock (sq m) 2.86 mln Existing vacant space (sq m) 344,900 Vacancy rate 11.52% Total leasing activity (sq m) 71,100 Net absorption (sq m) 59,400 New completions (sq m) 60,100 Space U/C (sq m) 135,200 Prime rents (EUR/sq m/month) 20 - 21 21.00 17.50 14.75 17.50 14.50 16.75 15.00 City Centre Pankrac Budejovicka Chodov Opatov Smichov Andel Butovice Stodulky Karlin Dejvice Evropska Holesovice 14.25 14.25 Vysocany

Prague Office Market Summary

Source: CBRE, PRF, data as of Q2 2012

Prime Office Rents in Prague Office Hubs (EUR/ sq m/ month)

CBRE | Page 3

Prague Office Hubs

Vysocany

• Prosek-

Letnany Holesovice Karlin City Centre Dejvice - Evropska Andel - Smichov Nove Butovice - Stodulky Pankrac - Budejovicka Chodov - Opatov

Source: CBRE

CBRE | Page 4

Future growth of Prague office stock

Source: CBRE, PRF Source: CBRE, PRF, data as of Q2 2012

500 1 000 1 500 2 000 2 500 3 000 3 500 50 100 150 200 250 300 350 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (f) 2013 (f) Total stock in thousand sq m thousand sq m

New supply 15Y new supply average Total stock

CBRE | Page 5

Prague Office Market Trend

Net absorption is: total occupied stock at time = 0 minus total occupied stock at time minus 1 Source: CBRE, PRF, data as of Q2 2012 2 4 6 8 10 12 14 16 18

• 50

50 100 150 200 250 300 350 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 H1 2012 vacancy rate (%) in thousand sq m Total Leasing Activity New Supply Net Absorption Vacancy Rate

CBRE | Page 6

Headline Rents on Prime Property by Hub

Source: CB Richard Ellis.

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 City Centre Smichov - Andel Karlin Dejvice - Evropska Pankrac - Budejovicka Chodov - Opatov Butovice - Stodulky Holesovice Vysocany €/sqm/month

CBRE | Page 7

Map of sample properties and SSC´s locations

Buildings:

1. BB Centrum Beta 2. The Park 3. Budějovická 3 4. Kavčí Hory 5. Office Park Nové Butovice 6. City West – Finep 7. City West – CPI 8. Argo Alpha 9. Marina Office Centre 10. Classic 7 11. River Garden 12. Futurama 13. Harfa Office Park 14. Prosek Point 15. Balabenka

1 2 3 6 14 10 13 12 11 8 7 15 9 4 5

SSC´s locations:

1- Siemens, Accenture, SAP, CSC, JNJ Global Business Services 2- Telefonica, DHL, Microsoft, Honeywell, Barclays 3- Deutsche Boerse

2 1

3

CBRE | Page 8

Fit out works

The calculation includes:

• Internal construction
• Power distribution
• Structured cabling
• Cooling (including server)
• Carpets
• Project plan
• MaR
• Electrical security system
• Fire protection system
• Entrance system

Standard 100% 80%:20% 50%:50% 20%:80% (office) (celluar : open space) (celluar : open space) (celluar : open space) High 300/m2 280/m2 230/m2 180/m2 Middle 210/m2 195/m2 160/m2 130/m2 Low 150/m2 140/m2 120/m2 100/m2

Prices are quoted in EUR

Office Furniture EUR per work station High level EUR 2200 Mid level EUR 1200 Basic level EUR 560 Moving w/o furniture EUR 90 / 50 Dilapidation costs EUR 100 – 150/m2 Reception EUR 5000 Kitchen EUR 3000

The calculation includes:

• Basic desk sized 1600*800mm
• Mobile container
• Low cabinet
• Basic chair
• Reception made of laminated materials
• Kitchen made of laminated materials,

both upper and lower section including basic appliances

CBRE | Page 9

2011 year-end data Stock (sq m) 354,600 Space U/C (sq m) 46,800 Take-up (sq m) 33,000 New Supply (sq m) 2,700 Vacancy Rate 11.02% Prime Rent 12.00 EUR/ sq m/ month

Brno office market

Office Stock

Total modern office space in Brno at the end of 2011 amounted to 354,600 sq m of which 79% was of Class A quality.

New Supply

In 2011 only one fully pre-leased office project, totalling 2,700 sq m, was delivered to the market – Administrativni budova Brno Nove Sady.

Lease Transactions

In 2011 TLA stood 7.4% above the three year average. However, the 33,000 sq m leased in 2011 represented a y-o-y decrease of 31.4%. The largest deals were CB&I (5,500 sq m) in Spielberk Office Centre, the expansion of a current tenant (2,300 sq m) in The Forum Business Park, the renegotiation of ANF Data (2,300 sq m) in Brno Businesss Park and KBC (2,000 sq m) in Campus Science Park.

Vacancy Rate

As at 2011 year-end, the vacancy rate stood at 11.02% (a drop of 0.18% y-o-y). It was the lowest level since our record began in 2005.

Space Under Construction

At the end of 2011, approximately 46,800 sq m of office space was under construction of which 36,400 sq m is planned to be delivered in 2012. The largest office scheme under construction is Spielberk Tower comprising 16,600 sq m.

Rents

We feel that the achievable prime rent stands at 12 EUR/ sq m/ month

CBRE | Page 10

Brno general leasing information

• LEASE LENGTH

Lease term is typically 5 years, sometimes up to ten years, with fixed rentals and predetermined annual

• indexations. The option for renewal is negotiable.
• OCCUPANCY COSTS

Rent is quoted in EUR / sq m / month, occasionally in Czech koruna (CZK / sq m / month), payable quarterly / monthly in advance (annual indexation based on HICP). 20% VAT is charged on top of rent. Free Rent is typically up to one month free for each year of the lease term.

• OPERATING COSTS

Service charge typically include operating, maintaining, cleaning and repairs, Property / Real Estate Tax, and finally building / property insurance. VAT of 20% or 10% is charged on top of service charges.

• UTILITIES

Utilities include for example electricity and air-conditioning in leased area, for which tenant pays actual, metered consumption.

• LANDLORD / TENANT WORKS (FIT-OUT)

The landlord usually provides open plan layout, raised floors, suspended ceilings, ceiling lighting, A/C units. Tenant’s fit out works Cost for Class A buildings normally range from 250–500 EUR / sq m including construction, cabling, design fees, etc. Fit out cost to be partially off-set by Landlord‘s fit-out contribution (as incentive).

CBRE | Page 11

Area Map Brno and sample buildings

2 1 3

Brno Airport Brno Main Train Station Direction Prague Direction Bratislava/Vien na

5 4

1. Spielberk 2. Campus 3. Brno Business Park 4. Vienna Point II. 5. Titanium

CBRE | Page 12

Office Stock

At the end of Q4 2011, modern office stock in Ostrava stood at ca. 115,000 sq m. Approximately 74% of total office space was of class A quality.

New Supply

In 2011 three new projects with a total of 5,700 sq m were delivered to the market; Administrativni budova Biskupska (3,400 sq m), Intoza Building (1,300 sq m) and Administrativní budova Revirni bratrske pokladny, zdravotni pojistovny (1,000 sq m).

Lease Transactions

2011 total leasing activity (TLA) in Ostrava was driven by Class A, new built office premises in which 94% of transactions took place. TLA in 2011 reached 24,500 sq m, representing an increase of 83% y-o-y. The largest deals were a new lease of approximately 16,600 sq m in IQ Buildings signed by Tieto Czech; 3,377 sq m newly leased in Administrativni budova Biskupska by Dalkia and 1,432 sq m leased by Autocont in Orchard Building

Vacancy Rate

As of Q4 2011, 21,100 sq m of modern office space, representing a vacancy rate of 18% was immediately available in Ostrava. The vacancy rate of Class A buildings stood at 21% unlike only 10% of Class B office space was immediately available at the end of 2011.

Space under construction

There are currently two large projects under construction with completion scheduled for 2012; Nova Karolina Park (24,600 sq m), which is being built on a speculative basis and Tieto Tower (IQ Buildings – 22,600 sq m), with 73% pre leases in place.

Rents

We feel that achievable prime rent in Ostrava stands at 11.50 EUR/ sq m/ month

Ostrava Office Market

2011year-end data Stock (sq m) 114,800 sq m Space U/C (sq m) 48,400 sq m Take-up in 2011 (sq m) 24,500 sq m New Supply (sq m) 5,700 sq m Vacancy Rate 18% Prime Rent 11.50 EUR/ sq m/ month

CBRE | Page 13

Ostrava general leasing information

• LEASE LENGTH

Lease term is typically 5 years, sometimes up to ten years, with fixed rentals and predetermined annual

• indexations. The option for renewal is negotiable.
• OCCUPANCY COSTS

Rent is quoted in EUR / sq m / month, occasionally in Czech koruna (CZK / sq m / month), payable quarterly / monthly in advance (annual indexation based on HICP). 20% VAT is charged on top of rent. Free Rent is typically up to one month free for each year of the lease term.

• OPERATING COSTS

Service charge typically include operating, maintaining, cleaning and repairs, Property / Real Estate Tax, and finally building / property insurance. VAT of 20% or 10% is charged on top of service charges.

• UTILITIES

Utilities include for example electricity and air-conditioning in leased area, for which tenant pays actual, metered consumption.

• LANDLORD / TENANT WORKS (FIT-OUT)

The landlord usually provides open plan layout, raised floors, suspended ceilings, ceiling lighting, A/C units. Tenant’s fit out works Cost for Class A buildings normally range from 250–500 EUR / sq m including construction, cabling, design fees, etc. Fit out cost to be partially off-set by Landlord‘s fit-out contribution (as incentive).

CB Richard Ellis | Page 14

Area Map Ostrava and sample buildings

Direction Bratislava/Vien na

1 2 3

Ostrava Main Train Station Direction Prague Ostrava Airport

1. Nordica 2. The Orchard 3. Nova Karolina

CB Richard Ellis | Page 15

Contact details

Richard Curran Managing Director richard.curran@cbre.com +420 602 662 131 Katarína Wojtusiak Director Head of Tenant Representation and Global Corporate Services katarina.wojtusiak@cbre.com +420 602 271 243 Jan Kratochvíl Associate Director Tenant Representation and Global Corporate Services Jan.kratochvil@cbre.com +420 602 658 621