MarketView Big Box Poland

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1 CB RICHARD ELLIS MrketView Big Box Polnd Q1 29 GENERAL OVERVIEW Quick Stts Totl Spce Demnd Vcncy Rte Hot Topics Sector In Q1 29 totl tke-up exceeded 2, sq m 55% decrese when compring with Q1 28. Totl modern stock mounts to over 5.6 million sq m with 16% vcncy rte. The number of new projects hnded over remined high, however the mount of spce under construction decresed. Developers, expecting lower demnd in the next few yers, hve limited the number of buildings plnned specultively nd re looking to build-to-suit projects Despite recession registered in mjority of globl economies, the Polish economy is still better positioned thn most Europen countries. The GDP growth for the first qurter of the yer is estimted t 1.4% with 1.6% forecsted for the whole yer. The Polish economy strted to slowdown in the second hlf of 28, when mny bnks tightened lon conditions nd mny exporters experienced decresed demnd from Western countries. Compnies hve been scling bck investments in response to flling orders. Mny of them chnged their expnsion strtegies, which hd negtive impct on the rel estte mrket. A slow recovery of the Polish currency lst month is however, first positive sign. Nevertheless we still register the demnd for modern wrehouse spce. In the first qurter it mounted to over 2, sq m, which is much lower when compring with Q1 28 (45, sq m). An nlysis of occupiers shows tht the demnd for wrehouse spce is now generted by compnies operting in the sectors less vulnerble to the mrket conjuncture (FMGC, phrmceuticls food, etc.). The verge del size remined stble nd oscillted round 1, sq m. The lrgest dels, exceeding 1, sq m, include Henkel in Pnttoni Prk II, Intermrche in Pnttoni Prk Myslowice nd Knuff Industries in Pnttoni Prk Wroclw II. There ws lso significnt shre of renegotitions closed. The totl stock of modern wrehouse spce, s of the end of Q1 29, mounted to 5.6 million sq m. The number of newly delivered projects still remined high, lthough the mount of wrehouse spce currently under construction hs diminished fter record level reched in Q3 28. In the first qurter, developers delivered over hlf million sq m of new wrehouse spce with the sme mount currently under construction in 23 projects cross the country. However the new constructions hve not been strted. The lrgest developers such s ProLogis, Pnttoni, Segro concentrte on mngement of existing projects. Others, new entrnts like Pinncle nd Vld or locl ones like MLP Group or BIK re competing for mrket shre. The supply of new spce hd significnt impct on the vcncy rte, which incresed this qurter from 1 to 16%. For the time being, rents remin stble, however the next months cn bring some decreses. Q1 29 Sector 1 Sector 2 Sector 3 Totl Stock (sq m) 1,133,5 1,211,3 3,327, Projects under construction (sq m) 62,1 115,2 349,1 Completion (sq m) 9, 113,2 396,2 Tke-up Q1 29 (sq m) 12, 56, 143, Vcncy Rte 11% 21% 16% Prime Rents (EUR/sq m/month) The bove sector segmenttion is of uthorship nd detiled overlef ,, Inc.

2 Q1 29 MrketView Polnd BIG BOX SECTOR I WAREHOUSES IN WARSAW These wrehouses nd wrehouse type business prks (A nd B Clss only specultive) re locted within rdius of 2 km from the centre of Wrsw. Totl wrehousing stock in this sector currently mounts to 1,133,5 sq m. Lst yer 13, sq m of modern wrehouse spce were delivered, while lst qurter it ws only 9, sq m. Currently there is 62, sq m under construction in five projects locted outside of the city borders such s Altmster Pecice, MLP Pruszkow II, Pnttoni Prk Ozrow. Since the beginning of the yer, 12, sq m of wrehouse spce hs been lesed. Despite incresed competition from wrehouse-logistic centres locted in Sector II, demnd for wrehouse spce in Wrsw is still significnt. Mjority of tennts from this re operte in the FMGC sector. Averge del size here does not exceed 1, 2, sq m. The vcncy rte in Q1 incresed to 11%. Rents hve reched EUR 4. in the fringe of the city, up to EUR 6. /sq m/month in the prime wrehouse loctions nd re the highest in comprison to other Sectors. SECTOR II LOGISTICS PARKS AROUND WARSAW These logistic prks re locted within the re from 2 to 8 km from the centre of Wrsw long min exit rods. The most populr loctions re Blonie, Ndrzyn, Mszczonow, Teresin. As t the end of Q1, the totl mount of wrehouse spce in logistics prks in Sector II exceeded 1,211,5 sq m including 113, sq m delivered in Q1 29 lone. For developers, this sector is ttrctive due to its close proximity to the Wrsw gglomertion nd vilbility of lrge green field sites with expnsion potentil of wrehouse prks. Currently there is round 115, sq m under construction in three prks. In Sector 2, tke up of modern spce is reltively constnt. Lst qurter it mounted to 56, sq m, while in 28 round 268, sq m of wrehouse spce ws lesed in 34 lese trnsctions. One of the lrgest trnsctions to dte in Polnd, (51, sq m) took plce lst yer in ProLogis Prk Blonie by Antlis. This yer we expect the demnd to decrese. The vcncy rte in Q1 29 incresed shrply to 21% nd is generted by newly delivered buildings. Currently there is pproximtely 25, sq m of spce offered for lese in Sector II. Hedline rentl levels hve remined reltively stble nd currently re quoted t EUR /sq m /month. Pge 2 29,, Inc. WAREHOUSE NEW COMPLETIONS ( sq m) Q1 29 WAREHOUSES UNDER CONSTRUCTION BY SECTOR (sq m) Q1 26Q1 27Q1 28Q1 29Q1 WAREHOUSE PRIME RENTS (EUR/sq m/month) Q1

3 WAREHOUSE STOCK BY LOCATION 17% 15% 13% 22% 13% 2% Wrsw I Wrsw II Centrl Polnd Other SECTOR III - LOGISTICS PARKS IN POLAND These logistic prks re locted in the regions nd mjor cities of Polnd excluding the Wrsw region. Sector III is the most ctive nd dynmiclly expnding wrehouse nd logistic mrket in Polnd. It is currently incorporting six key regions with new loctions lredy emerged on the Polish wrehouse mp. At the end of the qurter, totl stock mounted to 3.3 million sq m. Currently, the wrehouse construction ctivity hlved, with only 35, sq m under construction. In Q1 29, tke up mounted to 143, sq m with lmost 1 million sq m lesed in the whole 28. Tht mens decrese of over 2% in comprison to Q1 28. Mny logistic opertors look for cost svings, offering their spce for sub-lese. The vcncy rte witnessed shrp increse compred to lst qurter nd currently stnds t 16%. Rentl levels currently stnd t EUR /sq m/month. MrketView Polnd BIG BOX WAREHOUSE TAKE UP BY SECTORS Sector 1 Sector 2 Sector Q1 KEY INDICATORS BY REGIONS IN Q1 29 ( sq m) Existing Spce Spce Under Construction Plnned Tri-City Krkow Wroclw Centrl Region (Ktowice Conurbtion) is the lrgest regionl wrehouse mrket with 96, sq m of modern spce nd further 172, sq m currently under construction. Lst yer pproximtely 234, sq m of modern stock hs been lesed. The vcncy rte currently stnds t level of 11%. Centrl Polnd Region, conveniently locted t the A1 nd A2 crossrod, hs 852, sq m of existing modern stock with further 97, sq m currently under construction. Over the course of 28, totl of 316,5 sq m of wrehouse spce hs been lesed here. The vcncy rte currently stnds t 15%. Region houses 754, sq m of modern wrehouse spce with no spce currently under construction. The region, due to its excellent trnsporttion system nd well developed retil nd trde mrket, hs lwys been populr logistic destintion. Over the lst yer, 29,5 sq m of wrehouse spce hs been lesed. The vcncy rte currently stnds t 16%. Wroclw Region houses 564, sq m of modern wrehouse spce with further 5, sq m currently under construction. Lesing ctivity in 28 totlled 2, sq m. The vcncy rte in the Wroclw region currently stnds t 23%. Tri-City Region (Gdnsk nd Gdyni) is one of the newest mrkets in the Sector III with gret potentil once the A1 highwy is finished. There re only two existing prks for lese offering 12, sq m with no vcncy. There re over 1, sq m plnned. Krkow Region is locl mrket in the Sector III, serving mostly to the Krkow city, due to the proximity of n hub. Totl stock mounts to 52, sq m. Pge 3 29,, Inc. Q1 29

4 WAREHOUSE INVESTMENT VOLUME (EUR MILLION) Q1 Source:, 29 WAREHOUSE PRIME YIELDS (%) 14% 12% 1% 8% 6% 4% 2% % F Source:, 29 INDUSTRIAL INVESTMENT MARKET Industril investment mrket in Polnd is in very erly stge of development. In comprison to other sectors, the number of wrehouse trnsctions tking plce is low, mostly due to the lck of qulity products offered for sle. There re investors looking for products in the wrehouse mrket, however the mjority of new stock is owned by ProLogis nd Pnttoni, the leding developers. So fr they were rrely interested in sle. This my chnge, however, s some developers in light of globl economic downturn, my decide to improve their finncil sttus by disposing some of their ssets. Nevertheless, between 24 nd 28 we registered certin number trnsctions with totl vlue of EUR 144 million in 28. This ment n 8% increse in comprison to 27. The lrgest ever registered trnsction ws ProLogis tke-over of the Prkridge portfolio in 27 (not included in the officil investment volume). The lrgest trnsction tht took plce lst yer, ws the sle of Europ Distribution Prk locted in Mszczonow, ner Wrsw to Pinncle Rel Estte compny for round EUR 41 million. So fr in Q1 29 there ws no wrehouse trnsction registered. In generl, industril property sector is considered by investment funds s n ttrctive option to diversify their portfolio. Wrehouses become more populr prticulrly in the light of UEFA CUP in 212 with new highwys to be developed in mjor cities thorough Polnd. Until 27 logistic yields were decompressing. Along with the finncil turmoil, the trend chnged nd in the lst yer yields incresed. They re estimted to rech round % t the moment for prime products. The key fctors for investors re loction, technicl specifiction nd lese length of the vlid lese greements. There is not much difference in yields between best schemes in the secondry cities nd Wrsw. Mjority of top clss logistic prks re currently being developed in the regions, rrely in Wrsw. MrketView Polnd BIG BOX SELECTED INDUSTRIAL TRANSACTIONS IN 28 IN POLAND Project Loction Purchser Vendor Estimted Yield Vlue (million) Europ Prk Mszczonow Pincle Rel Estte EDC EUR 41 Rben Logistic Centres & Grodzisk Mz. TMW Rben Group c % EUR 4 Good Point Pulwsk Wrsw II IXIS Rel Mngement 7.% EUR 27.5 Pruszcz Gd. Logistics Center TriCity Gurdin AM BIK 7.5% EUR 7.2 Idel Ide Prk Wrsw Tritx c. 7.% Pge 4 29,, Inc. Q1 29

5 Q1 29 MrketView Wrsw Office SECTOR III IN Q1 29 Totl Stock (sq m) Under Construction (sq m) Tke Up Q1 29 (sq m) Completion Q1 29 (sq m) Vcncy Rte Disclimer 29 Informtion herein hs been obtined from sources believed to be relible. While we do not doubt its ccurcy, we hve not verified it nd mke no gurntee, wrrnty or representtion bout it. It is your responsibility to independently confirm its ccurcy nd completeness. Any projections, opinions, ssumptions or estimtes used re for exmple only nd do not represent the current or future performnce of the mrket. This informtion is designed exclusively for use by clients, nd cnnot be reproduced without prior written permission of. Copyright 28 is the mrket leding commercil rel estte dviser worldwide - n dviser strtegiclly dedicted to providing cross-border dvice to corportes nd investment clients immeditely nd t the highest level. We hve 4 offices in 58 countries cross the globe, nd employ 24, people worldwide. Our network of locl expertise, combined with our interntionl perspective, ensures tht we re ble to offer consistently high stndrd of service cross the world. For full list of offices nd detils of services, visit Pge 5 29,, Inc. 96, 173, 63, 8, 11% 754,5 18, 117, 16% Centrl 852, 97, 2,8 8, 15% Wroclw 564,5 5, 28, 66, 23% Tri-City 12, 6, % Krkow 53, 3, 7, 1% For More informtion regrding the Polnd Industril Mrket, plese contct: CBRE POLAND OFFICE Chrlie Wrdroper Mnging Director, -124 Wrszw tel: e: chrlie.wrdroper@cbre.com CBRE INDUSTRIAL AGENCY Tom Listowski Associte Director, Industril Agency -124 Wrszw tel: e: tom.listowski@cbre.com CBRE RESEARCH & CONSULTANCY Jonn Mroczek Associte Director, Reserch & Consultncy -124 Wrszw tel: e: jonn.mroczek@cbre.com