Markaz – BBK US Retail Realty Investment Unit III...Markaz & BBK have identified and secured the acquisition of a portfolio of thirteen retail centers with a Gross LeasableArea (GLA)

US$ 50 million Offering toParticipate in the Investment in

2004

Markaz – BBKUS Retail Realty Investment Unit III

2

The Fund

US $ 50 Million Offering in

Markaz – BBK US Retail Realty Investment Unit IIIInvestment period of Seven years, extendable by Two additional years

Minimum Subscription

100 units @ US$10,200 per unit

Any lower subscriptions to be accepted at the discretion of the fund manager

Projected Annual Cash Yield of 8.5% Projected Internal Rate of Return of 9%

Fund Manager

Kuwait Financial Centre, S.A.K. (Markaz)

Mar-Gulf Management Company, Inc. ( a fully owned subsidiary of Markaz)

Property and Asset Manager

Developers Diversified Realty, Inc. (DDR)

Fund Co-Manager

Bank of Bahrain and Kuwait B.S.C.

3

Offering Snapshots

• The OfferingMarkaz-BBK US Retail Realty Investment Unit III (“Fund”) seeks to raise $ 50 mn to invest in predominantly grocer anchored retail properties in the US. The fund will benefit from the cash flow stability of retail properties and the attractive spread of over 250 basis points between the yield on properties (7.75%) and fixed financing cost (5.15%).

• Portfolio

Markaz & BBK have identified and secured the acquisition of a portfolio of thirteen retail centers with a Gross Leasable Area (GLA) of approximately 1.634 million SF and located in five states. The portfolio is 94% leased and anchor tenants occupy approximately 72% of GLA. The Portfolio, acquired at USD 208 mn, is financed by approximately USD 150 mn debt (72% of total value) at a fixed rate of 5.15% for seven years (Interest only). The 6% vacant space has been leased to DDR for a period of 2 years at market rent, resulting in an initial economic vacancy of 0%.

• Return Objective

To generate current income that would enable the Investment Unit to distribute and average of 8.5% per annum on the aggregate capital investment in the Investment Unit. The internal rate of return on an investment made in the Fund is expected to be 9% after taking into effect taxes and other annual fees but before taking into effect any placement fees to be paid to the sponsors.

• Management fee and Carried Interest

Management fee of 1.5% of the total investment and a carried interest of 10% after the investors have earned a return of 10% on their investments.

• Subordination of Asset management fee

The entire asset management fee payable to DDR (6.25% of NOI) has been subordinated to the venture achieving a IRR of 11.5%. If at liquidation, the venture achieves an IRR of less than 11.5%, DDR shall reimburse the venture an amount - up to the aggregate Asset Management Fee received – to make the IRR equal to 11.5%.

Investment Highlights

4

Performance of Other US real estate funds by Markaz & BBK

• Markaz and BBK raised approximately $ 43.3 million in equity and an additional $ 114 mn in debt in October 2002 to acquire a portfolio of distribution warehouses in the USA.

• The portfolio comprised of 12 distribution warehouses, located in 7 states, with a GLA of 4.3 mn SF and an occupancy of over 98%

• The portfolio was acquired at a capitalization rate of 9.55% and was expected to generate a cash yield of 9% and an IRR of over 12% during the life of the fund, which is 7 years starting October 2002.

• The investment performance has been at or above expectations, featuring monthly distributions to the investors

Markaz-BBK Industrial Realty Investment Unit I

Annualized yield on Principal investments

Actual Yields

Targetted yields

8.5%8.7%8.9%9.1%9.3%9.5%9.7%9.9%

10.1%10.3%10.5%

N-02

D-02

J-03

F-03

M-03

A-03

M-03

J-03

J-03

A-03

S-03

O-03

N-03

D-03

J-04

F-04

M-04

A-04

M-04

J-04

J-04

A-04

S-04

O-04

5

Performance of Other US real estate funds by Markaz & BBK

• Markaz and BBK raised approximately $ 50.25 million in equity and an additional $ 111 mn in debt in June 2003 to acquire a portfolio of Retail Properties in the USA.

• The portfolio comprised of 7 community/power centers, located in 5 states, with a GLA of 1.5 mn SF and an occupancy of over 99%

• The portfolio was acquired at a capitalization rate of 9.05% and was expected to generate a cash yield of 12% and an IRR of over 12% during the life of the fund, which is 5 years starting June 2003.

• The investment performance has been at or above expectations, featuring monthly distributions to the investors

Markaz-BBK Retail Realty Investment Unit II

Annualized yield on Principal investments

Annualized yields

Target Yield

11.0%

11.5%

12.0%

12.5%

13.0%

S-03 O-03 N-03 D-03 J-04 F-04 M-04 A-04 M-04 J-04 J-04 A-04 S-04 O-04

6

Investment OverviewInvestment Overview

7

Investment Overview

Fixed Mortgage Rates

Real EstateAttractive Cap Rates

Investors lock in an

attractive spread.

9% Return9% Return

Attractive return on Leveraged Real Estate

RetailRetail IndustryIndustry OfficeOfficeMultifamilyMultifamily

Grocery anchored

center

Grocery anchored

center

Other retail property

types

Other retail property

types

Stable cash flows,Longer leases

Stable cash flows,Longer leases

ExperiencedManager

ExperiencedManager

Largest beneficiary of the shift in consumer preferences

8

Investment Overview

The Structure

DDRDDR InvestorsInvestors

DebtUS$ 150 mn

PropertyUS$ 208 mn

PropertyUS$ 208 mn

20% Equity 80% Equity

Developers Diversified Realty, Inc. (DDR) will retain a 20% equity interest in the Portfolio and will manage it on behalf of the Fund.

Markaz and its subsidiary Mar-Gulf Management will manage the Fund and be responsible for the acquisition, disposition, and supervision of the real estate assets .

Equity 58 mn.

9

Investment Overview

The Opportunity

Spreads remain attractive, despite rising interest rates

Although interest rates have been on the rise, the spread between the capitalization rates and financing rates

remain extremely attractive for leveraged acquisitions.

Despite the narrowing of spreads from their peaks in early 2003, the current levels are at well above the

average spreads in the past.

3%

4%

5%

6%

7%

8%

9%

10%

Mar

-90

Dec

-90

Sep-

91Ju

n-92

Mar

-93

Dec

-93

Sep-

94Ju

n-95

Mar

-96

Dec

-96

Sep-

97Ju

n-98

Mar

-99

Dec

-99

Sep-

00Ju

n-01

Mar

-02

Dec

-02

Sep-

03Ju

n-04

Cap Rate 10-year Treasury (%)

-3%

-2%

-1%

0%1%

2%

3%

4%

5%

Mar

-90

Dec

-90

Sep-

91

Jun-

92

Mar

-93

Dec

-93

Sep-

94

Jun-

95M

ar-9

6

Dec

-96

Sep-

97

Jun-

98

Mar

-99

Dec

-99

Sep-

00

Jun-

01

Mar

-02

Dec

-02

Sep-

03

Jun-

04

Spread Average

Source : Markaz Estimates

10

Investment Overview

Real Estate

Superior risk adjusted returns

Real Estate offers a higher component of current income than other investments. On a risk adjusted basis, the real estate sectorhas outperformed other major equity indices .

For 9 months ending September 2004, NAREIT index gained 13.7% as compared to 0.2% returns on the S&P, and -1% returns on Russell 2000 index.

The Low level of correlation between real estate investment returns and other major asset classes makes it an ideal tool for diversification.

10 years 5 years 3 years 1 yearReturn Volatility Yield Return Volatility Yield Return Volatility Yield Return Volatility Yield

NAREIT 12.2% 12.9% 7.6% 15.3% 13.7% 8.0% 16.3% 14.5% 7.5% 21.0% 18.6% 6.8%NCREIF 10.4% 2.9% 8.6% 9.4% 2.4% 8.4% 8.0% 2.2% 8.2% 10.9% 1.7% 7.7%S&P 500 11.1% 15.7% 1.7% -2.2% 16.6% 1.5% -1.5% 16.4% 1.7% 13.2% 8.9% 1.6%ML Bond Index* 7.3% 4.4% N/A 7.4% 4.6% N/A 6.2% 5.5% N/A 4.6% 6.5% N/A

* Includes government and private bonds

Source : NAREIT

11

Investment Overview

Retail Real EstateAttractive Investment Attributes

• Historically, total returns on Retail Real Estate investments have been relatively stable compared to other property types.

• The Demand-Supply gap for retail Real Estate is under check due to minimal speculative developments; Anchor leases have to be in place for feasible development.

• Over the long term, “Same-store NOI” growth remained flat to positive for retail properties, whereas all other real estate sectors have recorded negative same-store NOI growth. For the quarter ending Sep 2004, Retail recorded the strongest NOI growth among all property types.

SS NoI Growth

-10%-8%-6%-4%-2%0%2%4%6%8%

10%

1Q98

3Q98

1Q99

3Q99

1Q00

3Q00

1Q01

3Q01

1Q02

3Q02

1Q03

3Q03

1Q04

3Q04

Multifamily Industrial Office Retail

3Q 2004 Results Multifamily (0.7%)Industrial 1.8% Office (1.9%)Retail1 3.0%

Multi-family Industrial Office Retail

Over 25 YearsIncome Volatility 0.8% 0.8% 1.0% 0.9%Capital Appreciation Volatility 5.7% 5.6% 8.3% 4.7%Total Return Volatility 6.2% 6.2% 9.0% 5.2%Last 10 YearsIncome Volatility 0.9% 0.5% 0.5% 0.3%Capital Appreciation Volatility 1.2% 3.0% 5.6% 3.9%Total Return Volatility 1.8% 3.3% 5.9% 4.4%

Source : MCP/Green Street Advisors Source : MCP/NCREIF

12

Investment Overview

Grocery anchored retail propertiesCycle resistant, generating significant consumer traffic

Average Sales PSFNecessity nature of the products sold in the community centers such as food, medicines, clothing etc minimizes impact of economic volatilities on store profitability; Food sales account for almost 9.6% of the GDP, more than any other retail sector.

Absolute occupancy cost is lower due to overhead costs and CAM costs being substantially lower due to minimal enclosed common area, lower construction and smaller areas and due to lower Real estate taxes.

Shopping Center fundamentals continue to be positive given consumer spending.

Effective rent growth up from 1.1% in 2002 to 2.3% in 2003.

Vacancy rates remained constant at 7% in 2003 from 2002 and have held at 7% through 2Q 2004.

Recession resilient; sector has experienced positive net absorption every quarter over the past 4 years.

Institutional investors rate grocery-anchored retail the most favorable investment opportunity among 10 sectors.

$277

$215

$160

$238

$0

$50

$100

$150

$200

$250

$300

SuperRegional

Malls

RegionalMalls

CommunityCenters

Grocery-AnchoredCenters

Source : Dollar & Cents, 2004

13

Investment Overview

Retail Real Estate Property Definition

Types Concept Sq Ft, Including anchors Acreage Anchor Primary

Number Type Ratio * Trade Area **Neighborhood

centersConvenience 30,000-150,000 3 to 15 1 or more Supermarket 30-50% 3 Miles

Community Center

General merchandise, Convenience

100,000-500,000 10 to 40 2 or more

Discount dept store, Supermarket, drug, home

improvement, large specialty/discount apparel

40-60% 3-6 miles

Regional center

General merchandise,

fashion (mall, typicall enclosed)

400,000-800,000 40 to 100 2 or moreFull-line dept store, Jr.

dept store, mass merchant, fashion apparel

50-70% 5-15 miles

Super Regional center

Similar to regional center, but has

more variety and asortment

800,000 plus 60 to 120 3 or more

Full-line dept store, Jr. dept store, mass

merchant, fashion apparel

50-70% 5-25 miles

Fashion / Specialty Center

higher-end, fashion oriented 80,000 - 250,000 5 to 25 N/A Fashion N/A 5-15 miles

Lifestyle Center

Upscale specialty stores; dining and etntertainment in outdoor setting

Typically 150,000-500,000, but can

vary10 to 40 0 to 2

Not usually anchored, but may include large format

book store, multiplex cinema, small

department(s) and other big boxes

0-50% 5-8 miles

Power CenterCategory dominant anchors, few small

tenants250,000 - 600,000 25 to 80 3 or more

Category killer, home improvement, discount dept. store, warehouse

club, off-price

75-90% 5-10 miles

Typical Anchor

* The share of a center's total square footage that is attributed to its anchors**The area from which 60-80% of the center's sales originate

Source : www.ICSC.org

14

The PortfolioThe Portfolio

15

Portfolio Overview

Quality PortfolioAttractive Asset Class

Comprises of 12 grocery anchored and a power center.

Properties are generally located in suburban areas with moderate to strong buying

power.

Average age of properties is 20 years.

High Qualityportfolio

Cash FlowStability

Properties leased to high-quality anchors, reducing risk of default, greatly enhancing ability of re- tenanting/releasing non-anchor space .

Properties leased to 180 tenants with no single lease accounting for more than 5% of portfolio GLA .

Average remaining lease term for key anchor space is approximately 11 years. Less than 45% of the tenant space lease (predominantly non-anchor space) is due for renewal within 7 years (life of the investment).

16

Portfolio Overview

Unique structuringEnhancing the investment value

The venture shall pay 6.25% of the NOI as annual asset management to DDR.

However, such fees shall be subordinated to the venture achieving a minimum

IRR of 11.5% over the 7 year period.

Any shortfall in the IRR shall be recovered from the asset management fee

payable to DDR.

Subordination of fees

Master lease structure

The entire physical vacancy of approximately 6% of GLA is “master-Leased”to DDR for a period of 2 to 5 years at Market rents, boosting the cash flows and enabling a stable distribution policy.

17

Qualified Asset Manager

• Based in Cleveland, Ohio, DDR is a Real Estate Investment Trust ("REIT") based in Cleveland, Ohio. DDR is a

fully integrated real estate firm, actively developing, acquiring, operating, managing and investing in income-

producing retail shopping centers nationwide with a market capitalization of over $ 8 bn.

• Subsequent to recent acquisitions of the JDN and Benderson portfolio’s, DDR currently owns and manages over

460 retail properties in 44 states totaling over 102 million square feet of real estate under management.

• DDR has strong relationship with most of the national retailers such as Wal-Mart, Kroger's, Jewel, Kohl’s and

have an impressive record in re-tenanting properties.

Portfolio Overview

18

Portfolio Overview

Geographical Locations

19

Portfolio Overview

Properties of the Fund

Center Name City State Year OpenedTotal GLA

(Sq Ft)Number of

Tenants Cap RateOccupancy Total Value

($'000)

Acquisition Price ($ per

SF) Key AnchorsMidway Plaza Loganville GA 1995 91,196 16 9.11% 99% $10,281 $113 KrogerOxford Place Oxford MS 2001 71,866 7 6.85% 97% $3,558 $50 KrogerNorthcreek Commons Goodlettsville TN 1987 84,441 12 8.15% 95% $7,279 $86 KrogerChillicothe Place Chillicothe OH 1974 105,512 6 10.75% 100% $8,330 $79 KrogerTops Robinson Amhers NY 1986 145,192 17 6.75% 100% $16,379 $113 TopsTops Jamestown Jamestown NY 1997 98,001 4 7.60% 90% $15,128 $154 TopsTops Leroy Leroy NY 1997 62,747 7 7.74% 100% $7,000 $112 TopsTops Ontario Ontario NY 1998 77,040 11 7.30% 100% $9,394 $122 TopsTops Warsaw Warsaw NY 1995 74,105 8 7.50% 94% $8,611 $116 TopsCulver Ridge Irondequoit NY 1981 226,382 29 8.10% 96% $28,330 $125 Regal CinemasCrossroads Centre Orchard Park NY 2001 167,805 15 7.35% 88% $24,555 $146 TopsPanorama Plaza Rochester NY 1959 278,241 40 7.20% 96% $45,711 $164 TopsTops Union Road Cheektowoga NY 1983 151,357 9 8.35% 78% $19,216 $127 TopsTotal / Weighted Average 1984 1,633,885 181 7.75% 94% $203,773 $125

Source : Markaz

20

Portfolio Overview

2004 Demographic profile for 3 mile radius

Population Household IncomeMidway Plaza 27,861 9,304 $81,736Northcreek Commons 21,828 8,857 $58,985Oxford Place 17,644 6,271 $43,770Tops - Jamestown 39,028 16,517 $39,242Tops Plaza - Leroy 6,875 2,735 $52,729Tops Plaza - Ontario 8,176 3,061 $64,251Tops - Robinson Rd. Plaza 65,328 25,359 $54,476Tops - Warsaw 4,795 1,868 $46,490Tops - Union Road 96,848 41,445 $45,918Chillicothe Place 28,066 10,285 $44,942Panorama Plaza 55,006 22,180 $84,564Culver Ridge 75,788 31,462 $54,179Crossroads 42,854 17,391 $65,792

21

Portfolio Overview

Lease Renewal Cycle

Annual Lease Expiration Schedule

1.8% 1.4%

4.1%

0.7%

5.1%5.8%2.5%

8.6% 5.7%

4.7%

4.8%

1.1%

1.6%1.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2005 2006 2007 2008 2009 2010 2011 2012

Anchor Non-Anchor

Approximately 66% of the GLA is leased to anchor tenants. The average remaining lease term for the key anchors is approximately 11 years and lease contracts equivalent to approximately 42% of the portfolio GLA is due to expire before the anticipated seven-year term of the investment unit.

Almost 67% of such expiring leases (approximately 28% of the Portfolio GLA) are occupied by non-anchor tenants, while the remaining 33% of the expiring leases (approximately 14% of the Portfolio GLA) are occupied by anchor tenants (i.e. tenants leasing space of over 10,000 SF).

22

Portfolio Overview

Tenant Profile

Lease expiration RentTenant Property Area Date Per Sq Ft

Tops Market Tops - Robinson 82,897 Dec-10 6.31Tops - Union 78,000 Dec-13 11.60Tops - Jamestown 77,000 Sep-18 11.74Panorama Plaza 74,000 May-14 12.84Crossroads Centre 57,000 Mar-22 10.75Tops - LeRoy 47,000 May-17 8.81Tops - Ontario 47,000 Aug-19 9.04Tops - Warsaw 45,533 Jun-15 8.58

508,430Kroger Midway Plaza 63,296 Jan-16 8.59

Chillicothe Plaza 60,425 Nov-25 9.22Northcreek Commons 59,134 Oct-12 7.12Oxford Place 58,666 Aug-20 2.59

241,521Regal Cinema Culver Ridge Plaza 58,012 Jun-22 6.95Dollar Tree Tops - Union 14,098 Nov-17 8.30

Panorama Plaza 9,000 Jun-11 10.50Culver Ridge Plaza 8,383 Sep-16 8.00Tops - Robinson 4,860 Apr-08 10.00Tops - LeRoy 4,000 Sep-07 8.50Tops - Ontario 4,000 Sep-07 9.10Tops - Warsaw 4,000 Jun-06 9.00

48,341Blockbuster Culver Ridge Plaza 6,650 Dec-08 13.50

Tops - Robinson 6,500 Oct-05 14.38Panorama Plaza 6,361 Feb-05 12.00Crossroads Centre 6,310 Oct-09 17.00Tops - Union 5,000 Mar-14 18.58Tops - LeRoy 4,692 Oct-10 14.18Tops - Ontario 3,000 Jun-05 12.00

38,513

23

Portfolio Overview

Top Five Tenants

Tops Market LLC is a fully owned subsidiary of Royal Ahold group, which is one of the largest

retailers in the world. Tops owns supermarkets under the name Tops Friendly Markets and

neighborhood food stores under the name Wilson Farms as well as supermarket franchisees

operating under the Tops Friendly Markets and Wilson Farms names. As of December 2003, Tops

Market had 365 stores in operation generating sales of over $ 3 bn in Fiscal 2003. Tops primary

markets are Buffalo and Rochester, both in New York State, as well as markets in Cleveland, Ohio,

and northern Pennsylvania. Tops is the largest grocer in Buffalo with a market share of over 50%,

while it is the second largest grocer in Rochester with a market share of around 19%.

Tops Markets

Tops Markets

KrogersKrogers The Kroger Co. is one of the nation’s largest grocery retailers and is ranked #19 on the Fortune 500

list. The company’s principal operating format is combination food and drug stores (combo stores).

In addition to combo stores, Kroger also operates multi-department stores, price-impact warehouses,

convenience stores, fuel centers, jewelry stores, and food processing plants. At the end of the second

quarter of fiscal 2004, the Company operated (either directly or through its subsidiaries) 2,530

supermarkets and multi-department stores in 32 states under two dozen banners including Kroger,

Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith’s, Fry’s, Fry’s Marketplace, Dillons, QFC and

City Market. Kroger also operated (directly or through subsidiaries, franchise agreements, or

operating agreements) 792 convenience stores, 439 fine jewelry stores, 502 supermarket fuel centers

and 42 food processing plants. Total sales for the second quarter of 2004 increased 5.1% to $13.0

billion. Identical food-store sales, including fuel, increased 2.1% and, excluding fuel, increased 0.6%.

24

Portfolio Overview

Top Five Tenants

Regal Cinemas (RCM) operates the largest and most geographically diverse theatre circuit in the

United States, consisting of 5,110 screens in 430 theatres in 37 states as of January 1, 2004, with

over 225 million annual attendees. In addition, Regal Cinemas operates 935 screens in 120 theatres

for United Artists Theatre Circuit, Inc., a subsidiary of REG. The Company's geographically diverse

circuit includes theatres in 9 of the top 10 and 43 of the top 50 U.S. designated market areas, which

includes locations in suburban growth areas. The Company primarily operates multi-screen theatres

and has an average of 11.9 screens per location, which is well above the 2003 average of 5.9

screens per location for the North American motion picture exhibition industry. The Company

develops, acquires and operates multi-screen theatres primarily in mid-sized metropolitan markets

Regal Cinema

Regal Cinema

and suburban growth areas of larger metropolitan markets throughout the U.S.

Dollar TreeDollar Tree Dollar Tree operates a chain of more than 2,500 discount variety stores in 47 states, offering a wide

assortment of everyday general merchandise at $1.00 or less. Its stores, designed to be the modern

day equivalent of traditional variety stores, offer a wide assortment of everyday general merchandise

in many traditional variety store categories, including consumables (candy and food, health and

beauty care, and households), seasonal goods, and variety merchandise (toys, durable house wares,

gifts, hardware and other items). At May 1, 2004, the company operated 2,579 stores, in 47 states,

under the names Dollar Tree, Dollar Express, Dollar Bills, Only One Dollar, Only $One, and

Greenbacks. In FY 04 (Jan.), DLTR opened 183 stores, acquired 100, closed 42, and expanded or

relocated 124. Retail selling square footage increased 28%, to 16.9 million sq. ft. The company aims

to continue to expand its store base by concentrating on strip center locations anchored by mass

merchandisers and selected mall-based locations. DLTR planned to boost square footage by about

20% in FY 05, supported by a capital spending budget of about $199 million.

25

Portfolio Overview

Top Five Tenants

Blockbuster Inc. is a leading global provider of in-home rental and retail movie and game

entertainment, with over 9,000 stores in the United States, its territories and 25 other countries as of

September 30, 2004. During the first nine months of 2004, the company added 278 company-

operated stores including the net addition of approximately 100 locations offering retail game sales

only, which are primarily Game Station and Rhino stores. They closed 180 company-operated stores

during this period. The continued weakness in the in-store rental industry was the primary driver in a

6.6% decline in worldwide same-store rental revenues in the first nine months of 2004. This decline

was partially offset by a 4.4% increase in worldwide same-store retail revenues, which were driven

primarily by strong growth in domestic retail game sales and international retail movie and game

sales. In October 2004, Viacom Inc. announced the successful completion of its divestiture of its

ownership interest in Blockbuster. To accomplish the divestiture of Blockbuster, on September 8,

2004, Viacom launched an offer to its stockholders to exchange, on a tax-free basis, some or all of

their shares of Viacom stock for shares of Blockbuster held by Viacom.

BlockbusterBlockbuster

26

WalMart’s food retailing business is growing at almost 15-17% per annum. On a National basis, market share of Wal Mart in food retailing is expected to increase from 14% to 28% by 2012, predominantly at the cost of the smaller local grocers.

WalMart risk is predominantly restricted to 10 of the 12 centers in the portfolio which are anchored by grocers, Tops and Kroger

We feel that there is a low probability of WalMart opening supercenters in Tops- Ontario and Tops-Leroy, which currently do not have a Wal-Mart in their vicinity.

Wal Mart risk assessment

WALMART RISK ASSESSMENT

1 mile 5 miles 10 miles

Kroger, Midway Plaza, Loganville, GA

0/1 0/1 0/1 Very strong sales PSF, strong demographics, Wal mart opened 6 months ago, marginal decline in market share of Kroger, likely to be recovered

Kroger, Oxford Place, Memphis

0/1 0 0Sparesly populated, but positive growth till 2008, Opening of Walmart impacted Kroger marginally; however market share

retainedKroger, Northcreek, Goodletsville, TN 0 1/0 1/0 No Super center, robust Kroger store sales, potential supercenter risk

Tops, Jamestown 0 1/0 0 Demographics may not support a new WalmartTops, Crossroads centre, Orchard Park, Buffalo

0 1/0 1/0 Strong Tops Sales, no visible impact of Wal Mart

Tops, Union Road, Cheektowoga, NY 1/0 0/1 1/0

Moderately high sales, strong demographics, Walmart within 1 mile radius, risk minimized

Tops, Panorama Place, NY 0 0/1 2/1

Seasoned centre, competitive markets, strong Wal Mart presence, further risk minimized

Tops, Warsaw, NY 1/0 0 0 Wal mart exists within a mile, no additional openings expectedTops, Ontario 0 0 0 Demographics may not support a new WalmartTops, Leroy 0 0 0 Demographics may not support a new WalmartTops, Robinson 1/0 0/1 1/0 Strong Tops Sales, no visible impact of Wal Mart

Krogers, Chillicothe 1/0 0 0 Strong same store sales for Kroger, Absorbed impact of Wal Mart

CommentsWalMart Store/ Wal mart

Supercenter

27

Other Key Risk Factors

• Increase in cap ratesIncrease in interest rates

Cap rates have declined from approximately 9% to around 7%-7.25% over the last 18 months. Despite the recent rise in interest rates, the cap rates have remained stable or in most instances declined further. This is largely on account of strong inflows from un-levered investors. Going forward, our IRR calculations are based on a 50 bps expansion of cap rates at the time of exit

Decline in fundamentals

Cap rates would increase if the market perceive that the fundamentals would weaken

• Retail : Historically retail sales have remained stable even during recessions; Volatility in revenue growth has been in the range of 0%-2% during the last 23 years over the various economic cycles

• Specific product class : Grocer anchored centre cater to the basic needs of value driven people, less sensitive to downward trends;

• Decrease in net incomeRents

Overall, potential market decline in rents will marginally impact the portfolio because of a

Longer average lease period

Mature properties, with settled tenants generating attractive sales in their occupied spaces ; thus unlikely to demand lower rents upon renewals

Vacancy

Emerges from the credit risk; credit worthy tenants

In case of any potential vacancies, properties can be re-leased in a timely and efficient due to management expertise of DDR

28

ManagementManagement

29

The Management

Kuwait Financial Centre (Markaz)

• One of the largest and most respected investment company in Kuwait, managing assets more than $2.3 bnin domestic and international markets

• Active in the US real estate market since 1978, and has actively managed real estate investments through various cycles.

• Domestic equities funds currently managed by Markaz are the best performing funds in Kuwait, consistently outperforming the index and other funds.

• Corporate team with a cumulative active experience of over 80 years in the US and Kuwait real estate markets.

• Markaz would offer liquidity on a limited basis to the investors by being a market maker

30

The Management

Diversification Providing Markaz Global Asset Allocation capability across five continents and

several asset classes.

23 funds under management

Multi funds – Multi managers

Sophistication Markaz’s multi manager concept is founded on the principle of picking the best

manager for each class, ensuring superior returns to its investors. Our concept is

applied across all of our equity and hedge funds.

Size Domestic Equities KD 435 million

International Equities UD$ 175 million

Private Equities US$ 203 million

Real Estate US$ 467 million

Over US 2.3 Billion

The Best Performing Domestic Funds

Mumtaz Fund: 442% return since inception in 1999.

Midaf Fund: 184% return since inception in 2001.

Performance

31

Superior Execution Capabilities: Through a team of Corporate Finance and Investment

professionals enabling Markaz to provide its clients with unique investment products and the means

to help them reach their business objectives. Some of our structuring achievements include.

Structuring the first Money Market Fund in Kuwait.

Issuing the largest bond issue [NIG].

Structuring the first tradable Islamic Fixed Income Paper (non sukouk) [A’ayan].

Structuring the first Bond Issue to be secured by BOT Projects in Kuwait [KCMCC].

Structuring and implementing the first Stock Options Market in MENA.

Structuring the 1st Hedge Fund ever in a market the size of Kuwait [Forsa].

Structured and successfully placed three US real estate focused sector specific funds.

Markaz’s Structured Product

32

The Management


Manaf A. Al-Hajeri- General Manager

Prior to joining Markaz, Mr. Al Hajeri was the Deputy Director of the Investment Department of the Kuwait Fund for Arab Economic Development (KFAED) where he was actively involved in the investment banking activities. He represented KFAED on project financing activities in Asia, Africa, Europe, Latin America and the Middle East. Mr. Alhajeri joined Markaz in March 2004 as General Manager.

Certified Financial Manager (CFM), Institute of Management Accountants, New Jersey, USA

Masters Degree in Civil Engineering, Kuwait University

Ali H. Khalil - Executive Vice President

Upon graduation from Texas University, Mr. Khalil worked as chief engineer for a steel structure firm in Kuwait and later worked as a Research Associate at INSEAD. Mr. Khalil, joined Markaz group in 1988 to hold positions until today in its affiliated companies in the US. In 1997, he moved to Kuwait to join Kuwait Financial Centre (Markaz) as its Executive VP – Finance and also heads the Corporate Finance Department. He is the president of an affiliate of Markaz, Gulf Pacific America, an investmentfund focused on US real estate, and President of Mar-Gulf Management.

Texas A&M – B.S. Industrial Engineering, M.S. Industrial Engineering

INSEAD - MBA

Gopal Menon - Executive Vice President – International Investments

Mr. Menon started his investment career with Kuwait International Finance Co., and later joined Kuwait Foreign Trading and Contracting Co. as Chief Securities Dealer and Portfolio Advisor, a position he maintained until 1985. In late 1985, he moved toLondon to work for Union Bank of Switzerland as Assistant Director and Head of Middle East Sales and in 1988, he became a Partner and Director of Newcrest Investment and Securities Ltd, London. In 1995, he joined Merrill Lynch International Bank as a private banker and in 1997, was appointed Executive Director and Head of London Operations of Taib Bank – Bahrain. Mr. Menon joined Kuwait Financial Centre (Markaz) in 2000 as Executive Vice President – Investments.

Kerala University, India – Masters of Economic

33

The Management


Maha Al-Kadi, Vice President – Fund Structuring & Private Equities

After obtaining her BA in Business Management in 1990, Ms. Al-Kadi joined Banque de la Méditerranée, Sal – Beirut, where she worked for

seven years, and became Junior Credit Officer in charge of Letters of Credit and Guarantee at the bank's branch in Sidon. In October 1997,

she joined Markaz as back office support for the private equity group. She later moved to perform review and due diligence on private

equity fund investments and was promoted to Assistant Vice President in 2000, and in December 2003 was promoted to Vice President.

Lebanese American University, Beirut - BA Business Management

Kumar Srinivasan, Vice President – Corporate Finance

After obtaining his MBA in 1994, Mr. Srinivasan worked as an Analyst (Equity Research) for J.M. Share and Stockbrokers Ltd. India and

subsequently as Analyst, Corporate Finance with J.M. Morgan Stanley Ltd., India. In November 1999, he joined as a Senior Analyst with

Gulf Investment Services in Muscat, Sultanate of Oman. In October 2001, he joined Kuwait Financial Centre S.A.K. (Markaz) as Assistant

Vice President in the Corporate Finance Department and in November 2002 was promoted as Vice President.

Poona University, India – B.S. Computer Science and MBA with specialization in Finance

Hadi Salame, Financial Analyst – Product Structuring

Mr. Salame received his Bachelors Degree in Business Administration from the American University of Beirut in 2001. Mr. Salame joined

Kuwait Financial Centre in September 2001 as Assistant Analyst and now is a Financial Analyst in the Product structuring department.

American University of Beirut – BBA Business Administration

34

The Management

Mar-Gulf Management Company, Inc

Mar-Gulf, a fully owned subsidiary of Markaz, was established in 1988 for the sole purpose of acting as the asset management arm of Markaz in the United States. MGM’s office is located in Los Angeles, California, each of its professional staff has over 12 years' experience in the acquisition, disposition, development and management of real estate properties in the US.

Advisory Services• Review of evaluation of real estate portfolio. • Rebalancing real estate portfolios• Valuation of properties. • Auditing existing operations, recommending

changes• to optimize returns. • Initiating, coordinating and managing

litigations.

Asset Management

• Acquisition and Disposition of Properties

• Coordination of property management, leasing and repositioning of properties to maximize value

• Renovation of properties

Corporate & Ownership matters

• Financial Management and Accounting

• Ownership structuring

• Tax planning and restructuring

• Financing and refinancing of debt

Property Development

• Entitlement and Zoning of properties

• Coordination of construction

• Pre-leasing and leasing of properties

35

The Management

Mar-Gulf Management Company, Inc

Ali Khalil - President

Sami Shabshab - Vice President

Mr. Sami Shabshab has been active in the real estate and construction field for 17 years. His experience ranges from structural engineering to general contracting and construction management. He has been involved in numerous renovation and rehabilitation projects as well as new construction. His real estate consulting firm, Shabcon, established in 1987, also provided services such as market analysis and research for real estate appraisers and investors. Mr. Shabshab joined Mar-Gulf Management in 1993 and now acts as Vice-President. He is responsible for operations, with special focus on turnaround situations and under-performing assets.Mr. Shabshab graduated from the American University of Beirut in 1984, where he majored in civil and structural engineering. In addition to his general contracting license and designation as a professional engineer (PE), Mr. Shabshab also holds a California real estate broker license.

Ani Soghomonian - Treasurer

Ms. Ani Soghomonian is the Treasurer of Mar-Gulf Management and responsible for all financial reporting. She is in charge of corporate affairs, preparing financial statements, tax planning and compliance, investor relations and reporting, financial reporting of projects, review and analysis of all financial reports and projections of properties and cash management of portfolio assets. Ms. Soghomonian has been working with Mar-Gulf since 1984. She has a bachelor’s degree in business administration and is a Certified Public Accountant licensed by the California Board of Accountancy.

36

The Management

Bank of Bahrain and Kuwait

• Founded in 1971, BBK is one of the largest commercial banks in Bahrain.

• BBK offers a wide range of banking services including retail, corporate, international and investment

services to an institutional and high net worth client base.

• With a large branch network in Bahrain, BBK also has a presence in Kuwait, Dubai, Mumbai and Hyderabad.

• The Investment Services Department has been active in providing investment opportunities and advice

ranging from conservative guaranteed funds to a high risk private equity funds.

• BBK aligns its interests with those of its clients by investing in the funds it provides.

37

The Management


Dr. Fareed Ahmed Al Mulla, General Manager & Chief Executive OfficerDr. Al Mulla joined BBK in 1990 as an Assistant General Manager of International Banking Division. In 1997, he was promoted to Deputy General Manager - Banking Group. In 2001, he assumed the responsibility of General Manager of BBK. Prior to joining BBK, Dr. Al Mulla was Vice President and Head of Specialized Financing Division at Gulf International Bank (GIB). Dr. Al Mulla has 21 years of banking experience.B.A. in European Studies, Master of Science in social science and PhD in Economic and International Relations, University of Sussex (UK).

Mr. Ahmed Ali Ahmed Al Banna, Deputy General Manager – Banking GroupMr. Al Banna joined BBK in 1987 to assume the position of Assistant General Manager – Human Resources. Between 1996 and 2001, he headed the Retail Banking Division and International Banking Division. In August 2001, he was promoted to Deputy General Manager – Banking Group. Prior to joining BBK, Mr. Al Banna was Director of Human Resources with Citibank –Bahrain. Mr. Al Banna has 20 years of banking experience.BSc from the University of Houston (USA).

Mr. Abdulrasool Mohamed Abdulmajeed Turki, Assistant General Manager –Treasury and Investment DivisionMr. Turki joined BBK in July 2004 as Assistant General Manager – Treasury and Investment Division. Mr. Turki has 26 years of banking experience around the region and in a number of business areas, including Treasury products, financial institutions and wealth management. His work experience includes the following organizations: Forsyth Partners, Merrill Lynch, Standard Chartered Bank, Bahrain International Bank, Gulf International Bank, Arab Asian Bank. Diploma in science from People’s College (Major in math, biology, physics and chemistry) Nottingham, England.

38

The Management


Mr. Suhail Mohamed Hajee, Senior Manager, Head of Representative Office – Dubai

Mr. Hajee joined BBK in 1996 as Manager of the Investment Services Department. In 1998, he was promoted to Senior Manager. Prior to joining BBK, Mr. Hajee was an Investment Advisor with Integrated Financial Concepts Inc., a specialized financial planning firm based in Vancouver, Canada from 1991 to 1996. He has also worked as a general equity analyst covering the U.S. market and as a portfolio manager for Gulf equities at Arab Insurance Group (ARIG) in 1990-1991. Mr. Hajee has 16 years of investment and banking experience.

B.Eng. from Concordia University – Montreal (Canada) and an MBA from McGill University, Montreal (Canada) and Executive Development Program from Darden Graduate School of Business Administration, University of Virginia.

Khulood Al Qattan, Head of Investment Services Department

Ms. Al Qattan has 17 years of banking experience, mainly in the investment field. She started her career as a trader in U.S. and European equities and has gained experience in Capital and Money Market Instruments in the local, regional and international markets. Currently, Ms. Al Qattan manages BBK’s proprietary investment portfolio and is also responsible for client's advisory services, structuring products for BBK’s clients, as well as being involved in various corporate finance deals.

B.Sc. in Accounting from the University of Ayn Shams – Egypt.

39

The Management

Developers Diversified Realty, Inc (DDR)

• Based in Cleveland, Ohio, DDR is a Real Estate Investment Trust ("REIT") based in Cleveland, Ohio. DDR is a fully integrated real estate firm, actively developing, acquiring, operating, managing and investing in income-producing retail shopping centers nationwide.

• DDR currently owns and manages over 460 retail properties in 44 states totaling over 102 million square feet of real estate under management.

• DDR’s business plan is to

– Focus on the ownership and management of high-quality market-dominant community shopping centers

– Cultivate premier relationships with the nation’s leading retailers

– Proactively replace underperforming tenants at significantly higher rents

– Maximize revenue generation from existing centers

• Expansion and redevelopment

• Ancillary income sources

– Recycle capital at positive spreads

• Opportunistic acquisitions

• Development of infill sites in major markets

– Engineer innovative JV structures with institutional capital partners

• Additional equity source

• Maximize returns on invested equity

40

The Management

Developers Diversified Realty, Inc

Scott A. WolsteinChief Executive Officer and Chairman of the BoardMr. Wolstein has been the Chief Executive Officer and a Director of Developers Diversified Realty since its organization in 1993. Mr. Wolstein has been Chairman of the Board of Directors of the Company since May 1997. Prior to the organization of the Company, Mr. Wolstein was a principal and executive officer of Developers Diversified Group ("DDG"), the Company's predecessor. He is currently a member of the Board of NAREIT, the International Council of Shopping Centers, The Real Estate Roundtable, the Zell-Lurie Wharton Real Estate Center, and Cleveland. Mr. Wolstein is also a member of the Urban Land Institute and PREA. He has also served as president of the Board of Trustees of the United Cerebral Palsy Association of Greater Cleveland and is a member of the Board of the Great Lakes Theater Festival, The Park Synagogue, and the Convention and Visitors Bureau of Greater Cleveland. Graduate of the Wharton School at the University of Pennsylvania and the University of Michigan Law School.

Joan U. AllgoodSenior Vice President and General CounselJoan Allgood has been Vice President and General Counsel of Developers Diversified Realty (DDR) since its organization as a public company and General Counsel of its predecessor entities since 1987. Mrs. Allgood practiced law with Thompson, Hine and Flory from 1983 to 1987.Graduate of Denison University and Case Western Reserve University School of Law.

William H. SchaferSenior Vice President and Chief Financial OfficerMr. Schafer has been Senior Vice President and Chief Financial Officer of Developers Diversified Realty (DDR) since May 1999 andVice President and Chief Financial Officer of DDR since the Company's IPO in 1993. Mr. Schafer joined the Company's predecessor entities as Chief Financial Officer in April 1992. Prior to his joining DDR, Mr. Schafer held various positions with the Cleveland, Ohio office of Price Waterhouse LLP beginning in 1983, serving as a Senior Manager from July 1990 until he joined DDR. Graduate from the University of Michigan in Ann Arbor with bachelor of arts degree in business administration.

41

The Management

Developers Diversified Realty, Inc

Richard E. BrownSenior Vice President of Real Estate OperationsMr. Brown, a twenty-year shopping center industry veteran, joined Developers Diversified Realty (DDR) in January 2000. Prior to joining DDR Mr. Brown served as Vice President of Asset Management for Philadelphia, Pennsylvania-based PREIT-RUBIN and had direct responsibility for a portfolio of 8.1 million square feet of retail space including regional malls, power centers and neighborhood strip centers. Prior to his tenure with PREIT-RUBIN, Mr. Brown served as Vice President of Retail Asset Management for The Balcor Company, a Chicago-based owner of a national portfolio of commercial and residential properties. Graduate of Carleton University in Ottawa, Canada and a chartered accountant (Canada), and member of ICSC.

Joseph G. PadanilamVice President of TransactionsMr. Padanilam, formerly Vice President of Investment and Planning at DDR, was promoted to Vice President of Transactions in 2001. Mr. Padanilam is actively involved in the analysis, negotiation and structuring of current and new transactions. Mr. Padanilam joined DDR from Price-Waterhouse, Coopers where he was Senior Tax Manager. Mr. Padanilam is a member of the National Association of Real Estate Investment Trusts (NAREIT), Tax Executives Institute, American Institute of Certified PublicAccountants (AICPA), Ohio Society of Certified Public Accountants (OSCPA), and the Notre Dame Monogram Club. 1988 bachelor of business administration, University of Notre Dame,1988 and Master's of business administration, at Washington University in St. Louis,1990

42

The PropertiesThe Properties

43

Portfolio Overview

Properties of the Fund

Center Name City State Year OpenedTotal GLA

(Sq Ft)Number of

Tenants Cap RateOccupancy Total Value

($'000)

Acquisition Price ($ per

SF) Key AnchorsMidway Plaza Loganville GA 1995 91,196 16 9.11% 99% $10,281 $113 KrogerOxford Place Oxford MS 2001 71,866 7 6.85% 97% $3,558 $50 KrogerNorthcreek Commons Goodlettsville TN 1987 84,441 12 8.15% 95% $7,279 $86 KrogerChillicothe Place Chillicothe OH 1974 105,512 6 10.75% 100% $8,330 $79 KrogerTops Robinson Amhers NY 1986 145,192 17 6.75% 100% $16,379 $113 TopsTops Jamestown Jamestown NY 1997 98,001 4 7.60% 90% $15,128 $154 TopsTops Leroy Leroy NY 1997 62,747 7 7.74% 100% $7,000 $112 TopsTops Ontario Ontario NY 1998 77,040 11 7.30% 100% $9,394 $122 TopsTops Warsaw Warsaw NY 1995 74,105 8 7.50% 94% $8,611 $116 TopsCulver Ridge Irondequoit NY 1981 226,382 29 8.10% 96% $28,330 $125 Regal CinemasCrossroads Centre Orchard Park NY 2001 167,805 15 7.35% 88% $24,555 $146 TopsPanorama Plaza Rochester NY 1959 278,241 40 7.20% 96% $45,711 $164 TopsTops Union Road Cheektowoga NY 1983 151,357 9 8.35% 78% $19,216 $127 TopsTotal / Weighted Average 1984 1,633,885 181 7.75% 94% $203,773 $125

44

The Properties

Midway PlazaLoganville, Georgia

63,296

63,29691,196

% of Total Owned GLA 69%

Major Tenants' GLATotal GLA

Store Type

Kroger National Grocer

Major Tenants GLA

45

The Properties

Oxford PlaceOxford, Mississippi

58,666

58,66671,866



Store Type


Major Tenants GLA

46

The Properties

Northcreek CommonsGoodlettsville, Tennessee

59,134

59,13484,441



Major Tenants GLA Store Type


47

The Properties

Chillicothe PlaceChillicothe, Ohio

60,42523,40410,069

5,500

99,398105,512



Book World BookstorePetland Petstore

Store Type

Kroger National GrocerCVS Pharmacy Drugstore

Major Tenants GLA

48

The Properties

Tops RobinsonAmherst, New York

82,89719,232

6,5006,288

114,917145,192



Blockbuster Video StoreBuffalo Wild Wings Restaurant

Store Type

Tops Market Regional GrocerShanor Lighting Center Home Imporvement

Major Tenants GLA

49

The Properties

Tops JamestownJamestown, New York

77,0008,000

85,00098,001



Store Type

Tops Market Regional GrocerHollywood Video Video Store

Major Tenants GLA

50

The Properties

Tops LeroyLeroy, New York

47,000

47,00062,747



Store Type

Tops Market Regional Grocer

Major Tenants GLA

51

The Properties

Tops OntarioOntario, New York

47,0008,0005,000

60,00077,040



Secor Lumber Lumber StoreNew York Sports Sports Shop



52

The Properties

Tops WarsawWarsaw, New York

45,5337,488

53,02174,105



Hollywood Video Video Store



53

The Properties

Culver RidgeIrondequoit, New York

58,01226,95915,27712,23711,100

123,585226,382



Factory Card Outlet Greeting Card StoreOld Country Buffet Restaurant

AJ Wright Brand MerchandisePetco Animal Supplies Petstore


Regal Cinema Movie Theatre

54

The Properties

Crossroads CentreOrchard Park, New York

57,00036,000

6,3105,4385,100

109,848167,805



Tim Horton's RestaurantTotal Tan Beauty Shop

Stein Mart General MerchandiseBlockbuster Video Store



55

The Properties

Panorama CentreRochester, New York

74,00023,11417,10013,20213,000

140,416278,241



Factory Card Outlet Greeting card storeFashion Bug Fashion Apparel

Linens 'N Things Home ImprovementEckerd Drugs Drugstore



56

The Properties

Tops UnionCheektowoga, New York

78,00014,09810,949

5,000

108,047151,357



Blockbuster Video Store

Dollar Tree Discount StoreAdvanced Auto Parts Auto Parts



Documents

Markaz – BBK US Retail Realty Investment Unit III...Markaz & BBK have identified and secured the acquisition of a portfolio of thirteen retail centers with a Gross LeasableArea (GLA)