Belgium real estate trend indicator 2012

Trend indicator Real Estate Assets Investment Belgium 2012

Page 2 January 2012 Trend indicator: real estate assets investment Belgium 2012

Key findings for 2012

84% of the participants see Belgium as an attractive location.

The capital and transaction markets are viewed with moderate optimism

Prices in prime locations will stay stable

Strongest seller groups: Residential real estate companies, real estate corporations/REITs and banks

Strongest buyer groups: Real estate corporations/REITs

Office properties will have the highest focus for investors

Preferred regions: Brussels (offices), Leuven (retail) and Gent (residential)


Agenda

About the trend indicator 2012

Market outlook Belgium 2012

Investment strategy Belgium 2012

Trend Indicator real estate assets investment Belgium 2012

European outlook 2012

Trend indicator real estate assets investment

Belgium 2012

© euroluftbild.de


Our trend indicator covers a broad range of investor groups in Belgium…

Trend indicator: real estate assets investment

► Ernst & Young Real Estate has conducted this survey in Germany since 2006 and in Switzerland since 2010.

► This year it was extended to Belgium for the first time.

Background 1 Aims 2 ► The trend indicator is based on a survey

conducted by the Economist Intelligence Unit in November and December 2011.

► The feedback of the interviews forms the results of the trend indicator.

Method ► Assessment of the Belgian real estate

investment market in the year to come.

► Outlook on the strategy which Belgian investors will pursue in the coming year.

► Survey of about 25 companies and investors who have been active in the Belgian property market in recent years

► The survey looks at two topics:

► General assessment of the Belgian real estate investment market in 2012 by real estate investors

► Analysis of the strategy pursued by real estate investors in Belgium with respect to the development of the real estate market

3

Investor groups

Real estate services firm (30%)

Publicly listed company / REIT (14%)

Institutional investor / Pension fund (12%)

Other UK lending bank (8%)

Other debt provider (8%)

Private property company (8%)

Open-ended fund (8%)

Private equity / Opportunity / Hedge fund (4%)

Other, please specify (8%)


… the same survey was also executed in other European countries

► Austria

► Belgium

► France

► Germany

Participating Countries

► Spain

► Sweden

► Switzerland

► United Kingdom

► Luxembourg

► Netherlands

► Poland

► Russia

European trend indicator: real estate assets investment

► The survey includes for the first time 12 European countries

► All surveys took place in November and December 2011

► Across these countries, we have gathered feedback from a total of 550 companies who are active on the real estate market


84% of the participants see Belgium as an attractive location in 2012 …

Belgium’s attractiveness as a location for real estate investments Key messages

► A clear majority (84%) views Belgium as an attractive or very attractive real estate investment location in 2012

Original question – “How do you rate Belgium‟s overall attractiveness as a location for real estate investments in 2012?”

15%

69%

12%

4%0%

Very attractive Attractive Less attractive Neutral No response


… particularly compared with other European countries

Belgium’s attractiveness as a location for real estate investments compared to other countries

Original question – “How do you rate Belgium‟s overall attractiveness as a location for real estate investments in 2012 compared to other countries?”

Key messages

► The majority rated Belgium as attractive or very attractive compared to other countries (58%)

► 27% of the participants are neutral about the relative attractiveness of Belgium

15%

43%

15%

27%

0%



Original question – “Which of the following statements about the real estate financial/capital market in 2012 do you agree with?”

The capital markets in 2012 are viewed with moderate optimism …

"The Basel III regulation will make real estate loans less attractive for banks and will lead to greater restraint in

the mortgage business."

"There will be an increase in M&A activity in the real estate sector in 2012.”

"There will be increased transaction activity in 2012, as a result of real estate assets coming to market out of

restructuring of secured debt facilities."

"Banks will reduce their exposure to commercial real estate holdings over the next 12 months.”

Due to the Solvency II regulation, insurance companies could increasingly act as debt providers for real estate

investments in the future.”

"The euro-zone sovereign debt crisis will significantly reduce activity in European real estate markets. “

"Fears of high inflation in the medium term will drive investors towards the real estate market."

"The commercial mortgage backed securities market will revive in 2012."

"Capital markets will become more attractive for real estate IPOs and equity capital increases."

► High inflation will drive investors

towards real estate (69%)

► Euro crisis will reduce activities in

the real estate market (65%)

► Insurance companies to increasingly

act as debt providers (58%)

► Increase in transactions (54%)

► Banks will reduce commercial real

estate holdings (53%)

► Restraints in mortgage availability

due to Basel III (46%)

► Increase in M&A activities (42%)

► CMBS will revive in 2012 (38%)

► IPOs and equity issuance will

increase (36%)

Strongly agree Agree Disagree Strongly Ddsagree Neutral

8%

12%

8%

12%

15%

8%

8%

8%

61%

53%

58%

46%

41%

31%

34%

30%

28%

19%

23%

23%

23%

35%

19%

27%

31%

24%

4%

8%

8%

4%

8%

12%

12%

19%

23%

8%

27%

23%

27%

32%

"Fears of high inflation in the medium term will drive investors towards the real estate market."

"The euro-zone sovereign debt crisis will significantly reduce activity in European real estate markets."

“Due to the Solvency II regulation, insurance companies could increasingly act as debt providers for real estate investments in the future.”

"There will be increased transaction activity in 2012, as a result of real estate assets coming to market out of restructuring of secured debt

facilities."

"Banks will reduce their exposure to commercial real estate holdings over the next 12 months."

"The Basel III regulation will make real estate loans less attractive for banks and will lead to greater restraint in the mortgage business."

"There will be an increase in M&A activity in the real estate sector in 2012."

"The commercial mortgage backed securities market will revive in 2012."

"Capital markets will become more attractive for real estate IPOs and equity capital increases."

Strongly agree Agree Disagree Strongly disagree Neutral No response


… and the transaction market is expected to be also moderate in 2012

Original question – “Which of the following statements about the real estate transaction market in 2012 do you agree with?”

► Green building standards will play a

more important role in the future

(76%)

► More project developments in

2012 (65%)

► International financial investors

increasingly attracted (54%)

► More portfolio deals (53%)

► Increased deal size (50%)

► Increased transaction volume

compared to 2011 (19%)

“There will be more new project developments in 2012.”

"‟Green‟ building standards will play a more important role in the real estate investment market in the future, also with

respect to investments in existing real estate."

“Overall, the transaction volume will continue to recover in 2012 and exceed the level seen in 2011.”

“On average, the size of real estate deals will increase in 2012 compared to 2011.”

“International financial investors will be more attracted to the real estate market in 2012.”

“There will be more real estate portfolio deals in 2012.”

Strongly agree Agree Disagree Strongly disagree Neutral

38%

8%

12%

12%

4%

38%

65%

46%

41%

38%

15%

12%

19%

23%

8%

35%

54%

4%

4%

4%

4%

4%

8%

12%

19%

35%

15%

23%

"‟Green‟ building standards will play a more important role in the real estate investment …

“There will be more new project developments in 2012.”

“International financial investors will be more attracted to the real estate market in 2012.”

“There will be more real estate portfolio deals in 2012.”

“On average, the size of real estate deals will increase in 2012 compared to 2011.”

“Overall, the transaction volume will continue to recover in 2012 and exceed the level seen in …



Original question – “How do you expect purchase prices to develop in 2012 based on the type of use and location?”

Price trends will vary depending on location …

Key messages

► Prices for offices in prime locations will increase (35%) or stay stable (42%)

► Retail in prime locations will increase (38%) or stay stable (43%)

The figures on page 12,13,16,17,18,19 and 22 may not add up to 100% as the charts do not include cases of no response

Office Retail

Prime Secondary Periphery

35%

42%

23%

12%

35%

53%

19%

38%

43%

Increasing Stable Decreasing

38%

43%

19%

31%

38%

31%

35% 34%31%

Increasing Stable DecreasingIncreasing Stable Decreasing Increasing Stable Decreasing


… and type of use


Key messages

► The majority expects prices of residential properties to remain stable in all locations

► Many expect attractiveness of hotel investments, especially in prime locations to increase (43%), other locations are considered to be stable

Residential Hotel

Prime Secondary Periphery

Increasing Stable Decreasing Increasing Stable Decreasing

32%

48%

20%

12%

60%

28%28%

48%

24%


43%

19%

38%

12%

48%

40%

19%

43%38%



Who will be the most active seller groups in Belgium in 2012 …

Seller groups

Original question – “How active do you think the following seller groups will be in the Belgian real estate market in 2012?”

Key messages

► In addition to the residential real estate companies (88%), real estate corporations/REITs (85%) and banks (81%) will be the most active seller groups in 2012

► Banks in surrounding countries in top three sellers

► Open-ended funds and public sector will be slightly less active sellers groups

► Closed-ended funds and PE-funds are seen as the most moderate seller groups

Residential real estate companies

Real estate corporations/REITs

Banks

Open-ended funds

Public sector

Insurance companies

Corporates (non-property)

Other international funds

Closed-ended funds

Opportunity-/PE-funds

Active Moderately active Cautious No response

53%

19%

8%

27%

12%

19%

31%

12%

4%

35%

66%

73%

42%

57%

46%

34%

46%

54%

46%

12%

15%

19%

31%

31%

35%

35%

42%

38%

54%

4%



Banks

Open-ended Funds

Public sector

Insurance companies

Corporates (Non-Property)

Other international Funds

Opportunity-/PE-Funds

Closed-end Funds



… and who will be the buyers in Belgium?

Buyer groups

Original question – “How active do you think the following buyer groups will be in the Belgian real estate market in 2012?”

Key messages

► Real estate corporations/REITs (81%) will be the most active group of buyers

► All other types of buyers seem to be equally active on the market

► Only opportunity/PE-Funds are expected to be less active


Insurance companies


Open-ended funds


Banks

Closed-end funds

Private/Family office

Sovereign wealth funds

Opportunity-/PE-funds


31%

27%

19%

19%

8%

12%

34%

19%

15%

12%

50%

46%

54%

54%

61%

57%

35%

46%

50%

38%

19%

27%

27%

27%

31%

31%

31%

35%

31%

46%

4%

4%


Insurance companies


Open-ended Funds


Banks

Closed-end Funds

Private/Family Office

Sovereign wealth funds

Opportunity-/PE-Funds



The following use types will be popular …

Strong or moderate investment focus

Original question – “Compared to 2011, what kind of focus do you intend to give to the following real estate use types in your investment strategy for 2012?”

Key messages

► Office properties will have the highest focus for investors (27%)

► Generally all use types will have a more moderate investment focus

27%

53%

19%

42%

19%

43%

4%

31%

8%

53%

Strong Moderate

Office Retail Residential Logistics HotelOffice Retail Residential Logistics Hotel


… and not so popular with investors in 2012

Lower or no investment focus


Key messages

► Logistic investments are in a low investment focus

Office Retail Residential Logistics Hotel

12%

8%

12%

27%

15%

23%

42%

23%

12%

19%

Low No focus

Office Retail Residential Logistics Hotel


Investors prefer Brussels and Antwerpen for office investments, for retail investments Leuven-Gent-Antwerp are more in the focus …

Original question – “Which Top-City-Locations will you be focusing your investments on in 2012?”

Key messages

► Brussels (58%) and Antwerp (34%) will be the most attractive locations for offices

► Retail investments are expected to be stronger in Leuven (30%), Antwerp (27%) and Gent (27%)

Office and Retail focus

58%

15%

34%

27%

19%

27%

12%

30%

12% 12%

4%

12%8%

15%

Office Retail

Brussel Antwerpen Gent Leuven Namen Luik KortrijkBrussels Antwerp Gent Leuven Namen Luik Kortrijk


… residential investments are preferred in Flanders

Original question – “Which Top-City-Locations will you be focusing your investments on in 2012?”

Key messages

► For residential investments, investors prefer Flanders i.e. Gent (30%) and Leuven (23%)

Residential and no focus

Brussels Antwerpen Gent Leuven Namen Luik Kortrijk

19%

0%

4% 4%

30%

8%

23%

12%12%10%

19%

8%

19%

12%

Residential Other

Brussel Antwerpen Gent Leuven Namen Luik Kortrijk


The greatest impediments to deal flow in 2012 will be…

Original question – “Do you agree or disagree that the following will be impediments to deal flow in 2012?”

Key messages

► The availability of senior debt funds (72%) and availability of junior debt funding (50%) are the greatest impediments for deal flows

► Price mismatch between buyers & sellers is an additional hurdle (46%)

► Need for capital injection (42%) becomes important

Impediments to deal flow

Availability of senior debt funding

Availability of junior debt funding

Level of capital injection required

Price mismatch between buyers and sellers

12%

19%

8%

23%

60%

31%

38%

19%

12%

19%

23%

23%

4%

8%

4%

12%

12%

23%

27%

23%

Availability of senior debt funding

Availability of junior debt funding

Price mismatch between buyers and

sellers

Level of Capital Injection required

Strongly agree Agree Disagree



… and the following bank actions are expected for problem loans

Original question – “Please indicate whether you agree or disagree with the following statements.”

Key messages

► Extension of loan repayment period is considered to be the most effective action to handle problem loans (65%)

► Debt-for-equity swaps are increasing (58%)

Bank actions to handle problem loans

Banks will extend loan repayment period

Banks will increase debt-for-equity swaps

Banks will increase consensual restructuring deals

Banks will increasingly replace asset managers

Banks will increase enforcement of repayment terms and conditions

8%

8%

19%

12%

8%

57%

50%

27%

23%

23%

23%

15%

31%

34%

19%

8%

8%

4%

12%

4%

19%

19%

31%

38%

Banks will extend loan repayment period

Banks will increase debt-for-equity swaps

Banks will increase consensual restructuring

deals

Banks will increasingly replace asset managers

Banks will increase enforcement of

repayment terms and conditions

Strongly agree Agree Disagree Strongly Disagree Neutral No response



Which exit options will play a role?

Original question – “What exit strategies do you have planned?”

Key messages

► Mutual funds (46%) is the preferred exit option

► REOC/REIT (42%) and closed-ended funds (35%) will also play a large role

Planned exit strategies

42%

46%

27%

35%

23%

0%

REOC/REIT Mutual funds IPO Closed-end funds Trade Sale OtherREOC/REIT Mutual funds IPO Closed-end funds Trade sale Other


Trend indicator real estate assets investment

Europe 2012

© euroluftbild.de



The perceived attractiveness of property markets varies from country to country.

Attractiveness (absolute)

Original question – “How do you rate your attractiveness as a location for real estate investments in 2012? And compared to other locations worldwide?”

Key Message

► All countries were rated positively

► Economic stability makes Germany Sweden and Switzerland most attractive to investors who are active there

► Some other countries are viewed with caution. Reasons include a lack of transaction opportunities at attractive prices and uncertainty regarding economic stability


… compared to other locations Germany

Sweden

Luxembourg

Switzerland

Poland

Belgium

France

The Netherlands

UK

52%

21%

14%

18%

15%

50%

28%

15%

19%

22%

12%

31%

47%

57%

51%

54%

59%

38%

36%

43%

64%

48%

57%

30%

11%

14%

7%

13%

9%

9%

15%

13%

8%

10%

26%

7%

21%

21%

13%

25%

27%

4%

22%

21%

13%

1%

4%

3%

2%

Germany

Sweden

Austria

Luxembourg

Russia

Swiss

Spain

Belgium

Poland

Netherlands

France

UK

Very attractive Attractive Less attractive

Neutral No response

Austria

Russia

Spain

1%

6%

4%

4%

4%

4%

11%

6%

2%

15%

4%

4%

7%

8%

9%

15%

12%

6%

14%

21%

11%

61%

64%

71%

82%

53%

44%

60%

69%

53%

68%

65%

57%

38%

32%

21%

7%

35%

41%

25%

15%

30%

12%

12%

17%

Germany

Sweden

Austria

Luxembourg

Russia

Swiss

Spain

Belgium

Poland

Netherlands

France

UK

No response Neutral Less attractive

Attractive Very attractive


35%

24%

25%

8%

9%

20%

21%

15%

8%

7%

4%

9%

53%

64%

44%

61%

59%

46%

43%

48%

53%

50%

50%

43%

9%

12%

15%

19%

15%

22%

18%

17%

27%

25%

32%

26%

4%

2%

4%

7%

7%

4%

4%

7%

11%

12%

12%

15%

8%

11%

13%

8%

14%

7%

11%

3%Swiss

Germany

France

Belgium

UK

Russia

Luxembourg

Poland

Netherlands

Austria

Sweden

Spain


Fear of inflation in the medium term is driving more investors toward real estate …

Original question – “Do you agree with the following statement: „Fears of high inflation in the medium term will drive investors towards the real estate market.‟?”

Key Message

► In all countries surveyed, a majority of respondents agree that concern over inflation is fueling interest in real estate

► The majority is particularly overwhelming in Switzerland and Germany (88 % in each)

Fear inflation will drive real estate investment

Strongly Agree Agree Disagree Strongly Disagree No reponse Neutral

Germany

Sweden

Luxembourg

Austria

Switzerland

Poland

Belgium

Spain

France

The Netherlands

UK

Russia


… and the Euro crisis is linked with a decline in real estate activity in the European markets.

Original question: „Do you agree with the following statement: „The euro-zone sovereign debt crisis will significantly reduce activity in European real estate markets.‟?”

Key Message Key Message

► A majority in all countries surveyed associates the Euro crisis with a decline in real estate investment activity

► In Switzerland, Germany and Belgium, fear of inflation appears to be overriding skepticism toward the Euro

Perceptions of the Euro crisis

25%

17%

26%

22%

29%

14%

25%

15%

14%

12%

14%

12%

61%

66%

57%

57%

49%

61%

47%

56%

57%

53%

38%

38%

14%

11%

13%

13%

12%

18%

14%

23%

27%

23%

30%

38%

2%

2%

8%

7%

7%

2%

2%

18%

12%

6%

2%

6%

2%

7%

4%

12%

Schweden

Polen

Spanien

Großbritannien

Frankreich

Österreich

Luxemburg

Russland

Niederlande

Belgien

Deutschland

Schweiz

Strongly agree Agree Disagree Strongly disagree Neutral No responseStrongly Agree Agree Disagree Strongly Disagree No reponse Neutral

Germany

Sweden

Luxembourg

Austria

Switzerland

Russia

Poland

Belgium

France

The Netherlands

UK

Spain


Some respondents anticipate increased lending by insurance companies as a result of Solvency II …

Original question – “Do you agree: „Due to the Solvency II regulation, insurance companies could increasingly act as debt providers for real estate investments in the future.‟?”

Key Message

► Respondents in half the countries surveyed agree that insurance companies will become more active as lenders as a result of Solvency II

► Agreement is strongest in Germany (85%), while just over a third of respondents in Austria share this view

Opinion of insurance companies as debt providers

31%

14%

13%

11%

9%

21%

10%

18%

18%

13%

11%

54%

58%

41%

41%

43%

44%

30%

39%

29%

29%

29%

25%

14%

23%

18%

19%

25%

38%

17%

37%

18%

25%

12%

25%

1%

2%

6%

4%

4%

4%

7%

19%

19%

25%

21%

17%

32%

10%

31%

21%

39%

9%

Deutschland

Belgien

Niederlande

Großbritannien

Polen

Schweiz

Spanien

Russland

Schweden

Luxemburg

Frankreich

Österreich

Strongly agree Agree Disagree Strongly disagree Neutral No responseStrongly Agree Agree Disagree Strongly Disagree No reponse Neutral

Germany

Sweden

Luxembourg

Austria

Switzerland

Russia

Poland

Belgium

Spain

France

The Netherlands

UK


… and expectations of transaction volume in 2012 are generally lukewarm.

Expectations of transaction volume

Original question – “Do you agree with the following statement: „Overall, the transaction volume will continue to recover in 2012 and exceed the level seen in 2011‟?”

Key Message

► Germany and France are the only countries surveyed in which a majority of respondents (56% and 54%) expect higher transaction volume in 2012 than in 2011

► In most countries, respondents anticipate a stable or declining volume of transactions

8%

33%

11%

13%

3%

7%

8%

6%

12%

7%

4%

48%

21%

42%

33%

38%

34%

30%

27%

21%

18%

21%

15%

39%

17%

29%

30%

47%

22%

25%

24%

42%

25%

40%

54%

4%

6%

4%

15%

12%

11%

11%

16%

12%

11%

7%

4%

23%

14%

9%

26%

26%

27%

13%

39%

32%

23%

1%Deutschland

Frankreich

Luxemburg

Polen

Schweiz

Großbritannien

Spanien

Niederlande

Russland

Österreich

Schweden

Belgien

Ich stimme zu Ich stimme eher zu Ich stimme eher nicht zu Ich stimme nicht zu Neutral keine Angabe

Strongly Agree Agree Disagree Strongly Disagree No reponse Neutral

Germany

Sweden

Luxembourg

Austria

Switzerland

Russia

Poland

Belgium

Spain

France

The Netherlands

UK



Key Message

► In almost all countries surveyed, office property prices in prime (1a) locations are expected to remain stable or grow

► Growth potential is especially evident in those countries in which office property had been under price pressure

► Prices in peripheral locations are largely viewed as stable; Germany and Switzerland are the exceptions

Price trends for office property are expected to vary from country to country and according to location …

Increasing stable decreasing

Legend Prime Periphery

(percentage results) )

39

1150

19

44

37

UK

SP

F

RUS

SWE

PL

GER

AT

CH

NL

BEL

LUX

Price trends office property

39

50

11 19

3744

19

3843

35

42

23

8

46466025

15

5732

1136

32

32

6416

20 22

48

30

4728

25 26

44

30

6131

8

5428

18

7117

1232

38

30

39

47

14 14

47

39

5926

15 18

43

39

27

65

8 19

81

18

58

24 15

85


… as are price trends for retail property ...


Key Message

► In most countries, a majority of respondents expect prices for retail property in prime locations to remain stable or even climb

► Expectations of rising prices in top locations are strongest in Germany and Luxembourg




39

1150

19

44

37

Price trends retail property

UK

SP

F

RUS

SWE

PL

GER

AT

CH

NL

BEL

LUX

4749

4 1

4257

6

82

12 18

82

32

56

12 30

44

26

38

43

1935

34

31

38

45

17 33

52

15

4739

14 22

56

22

20

56

24 27

2944

42

28

30 35

44

21

18

64

18 21

66

13

8

73

19 25

46

29

4353

432

36

32

33

50

1730

28

42


… and residential property…


Key Message

► Throughout Europe, residential property prices are robust in top locations

► This is expecially true in Germany, Switzerland and Great Britain

► Even in peripheral locations, residential real estate prices are generally viewed as stable




39

1150

19

44

37

Price trends residential property

UK

SP

F

RUS

SWE

PL

AT

CH

NL

BEL

LUX

75

241 7

66

27

6

70

2465

323

GER

36

46

18 30

37

33

32

48

2028

48

24

4145

14 25

37

38

3947

14 25

54

21

43

35

22 20

46

34

37

35

28 22

3543

5231

1733

49

18

4530

2540

23

37

5439

7 25

54

21

6421

15 14

4046


… whereby the most active seller and buyer groups are identified as follows:

Original question – “How active do you think the following seller/buyer groups will be in the real estate market in 2012?”

Key Message

► Throughout Europe, banks and property companies /REITs are expected to be among the most active sellers in 2012

► In a majority of the countries surveyed, residential real estate companies will become more active as sellers

► On the buyer side, residential real estate companies are expected to be most active in 2012

TOP seller groups TOP buyer groups

Residential RE Corp. (88 %),

RE Corp./REITs (85 %), Banks (81 %)Belgium

RE Corp./REITs (81 %), Insurance Corp. (73 %),

Other intl. funds (73 %)

Open-ended funds (91 %),

Opportunity-/PE-Funds (89 %), Banks (88 %)Germany

Privat/Family Office (94 %), Insurance Corp. (92 %),

Other intl. funds (89 %)

RE Corp./REITs (92 %), Banks (92 %),

Residential RE Corp. (85 %)France


Open-ended funds (85 %), Banks (85 %)

Banks (89 %), Opportunity-/PE-Funds (83 %),

Residential RE Corp. (79 %)UK


Opportunity-/PE-Funds (79 %), Open-ended funds (78

%)RE Corp./REITs (88 %),

Residential RE Corp. (86 %), Banks (79 %)Luxembourg


Open-ended funds (82 %), Other intl. funds (80 %)

RE Corp./REITs (88 %), Banks (84 %),

Residential RE Corp. (75 %)The Netherlands


Banks (74 %), RE Corp./REITs (73 %)

RE Corp./REITs (79 %),

Open-ended funds (75 %), Banks (75 %)Austria

Sovereign wealth funds (75 %),

Open-ended funds (75 %), Banks (64 %)

Banks (80 %), Residential RE Corp. (79 %),

RE Corp./REITs (78 %)Poland


Open-ended funds (74 %)

RE Corp./REITs (87 %), Open-ended funds (86 %),

Opportunity-/PE-Funds (84 %)Russia


RE Corp./REITs (83 %)

Open-ended funds (89 %), RE Corp./REITs (86 %),

Residential RE Corp. (82 %)Sweden


Open-ended funds (82 %), Other intl. funds (80 %)

Opportunity-/PE-Funds (75 %),

Corporates (Non-Property) (74 %), Banks (73 %)Swiss

Real estate funds (100 %),

Privat/Family Office (97 %), Insurance Corp. (91 %)

Banks (91 %), RE Corp./REITs (81 %),

Opportunity-/PE-Funds (77 %)Spain


Banks (83 %), Open-ended funds (76 %)


Investment focus on office property, in comparison with other uses, is anticipated as follows:


Key Message

► Investors in countries where office property prices are expected to rise have office property at the top of their shopping lists

► Investors in France and Russia report the strongest focus on office property for 2012

strong moderate low

Legend

(percentage results)

21

4421

14no focus

Investment focus office property

UK

SP

F

RUS

SWE

PL GER

AT

CH

NL

BEL

LUX

21

4421

14

27

53

128

5731

12

36

39

1114

5129

128

28

40

1715

5638

4 2

38

42

911

32

47

147

40

40

911

14

5121

14

17

61

22


Focus on retail properties will also vary in 2012 …


Investment focus retail property

UK

SP

F

RUS

SWE

PL GER

AT

CH

NL

BEL

LUX

29

2514

32

19

4212

27

4625

1910

4332

1411

20

1833

29

36

2621

17

33

35

2210

31

2628

15

25

2136

18

17

3826

19

5124

817

336

58

3

Key Message

► Most investors focus to some extent also on retail property (exception: Switzerland)

► Investors in Germany, France, Luxembourg and Poland favor the retail sector most strongly

strong moderate low

Legend


21

4421

14no focus


… while investor focus on European residential property is expected to vary as follows :


Key Message

► As an asset class, residential property is in demand in most of the countries surveyed (exception: Switzerland)

► In Germany, it appears that the massive demand for residential real estate will be sustained in 2012

Investment focus residential property

UK

SP

F

RUS

SWE

PL GER

AT

CH

NL

BEL

LUX

18

3518

29

19

4315

23

21

53

1313

4332

1114

33

2518

24

24

3024

22

29

44

234

27

3720

16

14

4021

25

25

2817

30

6910615

14

80

6

strong moderate low

Legend


21

4421

14no focus


Summary


This is how the survey participants see the Belgian real estate market …

Outlook Belgium Attractiveness

► A clear majority (84%) views Belgium as an attractive or very attractive real estate investment location in 2012

► The majority rated Belgium as attractive or very attractive compared to other countries (58%)

Real estate financial/capital market

► High inflation will drive investors towards real estate (69%)

► Euro crisis will reduce activities in the real estate market

(65%)

Real estate transaction market

► International financial investors increasingly attracted (54%)

► More project developments in 2012 (65%)

Purchase price expectations

► Prices for offices in prime locations will increase (35%) or stay stable (42%)

► Retail in prime locations will increase (38%) or stay stable (43%)

► The majority expects prices of residential properties to remain stable in all locations

Seller/buyer groups

► In addition to the residential real estate companies (88%), real estate corporations/REITs (85%) and banks (81%) will be the most active seller groups in 2012

► Real estate corporations/REITs (81%) will be the most active group of buyers

► All other types of buyers seem to be equally active on the market

Real estate use types

► Office properties will have the highest focus for investors (27%)

► Residential investments are in a low investment focus

Preferred regions

► Brussels (58%) and Antwerpen (34%) will be the most attractive locations for offices

► For residential investments, investors prefer Gent (30%) and Leuven (23%)


This is how the survey participants see the Belgian real estate market …

Outlook Belgium Greatest impediments for deals

► The availability of senior debt funds (72%) and availability of junior debt funding (50%) are the greatest impediments for deal flows

► Price mismatch between buyers & sellers is an additional hurdle (46%)

Bank actions to handle problem loans

► Extension of loan repayment period is considered to be the most effective action to handle problem loans (65%)

► Debt-for-equity swaps are increasing (58%)

Exit strategies

► Mutual funds (46%) is the preferred exit option


… while investors throughout Europe express the following views:

Outlook Europe Attractiveness ► All countries were rated positively ► Economic stability makes Germany, Sweden and

Switzerland most attractive to investors who are active there

► Some other countries are viewed with caution. Reasons include a lack of transaction opportunities at attractive prices and uncertainty regarding economic stability

Real estate capital market ► In all countries surveyed, a majority of respondents

agrees that concern over inflation is fueling interest in real estate

► A majority in all countries surveyed associates the Euro crisis with a decline in real estate investment activity

► Respondents in half the countries surveyed agree that insurance companies will become more active as lenders as a result of Solvency II

Real estate transaction market ► Germany and France are the only countries surveyed in

which a majority of respondents (56% and 54%) expect higher transaction volume in 2012 than in 2011

► In most countries, respondents anticipate a stable or declining volume of transactions

Purchase price expectations ► In almost all countries surveyed, office and retail prices in

prime (1a) locations are expected to remain stable or grow ► Throughout Europe, residential prices are robust in top

locations Seller and buyer groups ► Banks and real estate companies/ REITs are expected to be

among the most active sellers in 2012 ► On the buyer side, residential real estate companies are

expected to be most active in 2012 Regional focus ► Investors in countries where office prices are expected to

rise have office property at the top of their shopping lists ► Most investors focus to some extent also on retail property ► As an asset class, residential property is in demand in most

of the countries surveyed

Marc Guns Tel.: +32 2 774 94 19 Mobile: +32 476 324 035 Email: [email protected]

Ernst & Young

Assurance | Tax | Transactions | Advisory

2012 Ernst & Young Transaction Advisory Services- all rights reserved.

About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 152,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit www.ey.com. This news release has been issued by EYGM Limited, a member of the global Ernst & Young organization that also does not provide any services to clients.

Tristan Dhondt Tel.: +32 2 774 60 17 Mobile: +32 497 480 486 Email: [email protected]

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Belgium real estate trend indicator 2012