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Feri Wealth Management GmbH

Direct Investments in German Real Estate

Dr. Jürgen SchäferBerlin, October 27, 2006

- 2 - © Feri Wealth Management GmbHDr. Jürgen Schäfer

Real estate and real estate funds

Real estate locations

Feri Real Estate Services

• general investment strategy

• single investment strategy• portfolio (re-)development• management• portfolio disinvestments

Strategy development & consultancy

• portfolio and single investments

• funds, listed and other non-listed vehicles

• external service providers

• investment and disinvestment processes

• performance measurement and controlling

Selection, management & reporting

Rents and property prices

Market research, forecast & rating

Feri Real Estate Services for both private and institutional clients …


... while covering a variety of property investments ...

Indirect property investments

Properties

i.e. offices, hotels, multi-family,

retail

Direct property investments

Property developments

i.e. offices, hotels,

multi-family,retail

Funds

i.e. open/ closed-ended funds,

property equities- and REIT-fund, fund of funds

Property equities

i.e. property equities,

REITs

Derivates

i.e.index certificates, futures on REITs

Property investments


What happens in German Real Estate markets?

G-REITDemand ...

Supply ...

Further, ...

... for office, retail and residential property is increasing ... from foreign, private and institutional investors is high ... creates rising property prices and falling initial yields

... is driven by „adjustments“

... is often represented by portfolio offers

... comes from private and institutional investors as well as from the government

... banks are again financing property investments with low equity participation... a relatively low interest rate level can be expected for the near future


Total office stock

80,00

85,00

90,00

95,00

100,00

105,00

110,00

115,00

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Ind

exed

(20

00=

100)

Total return (Class A)

-4

-2

0

2

4

6

8

10

12

14

16

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

in p

er c

ent

Office rents (Class A)

11,00

11,50

12,00

12,50

13,00

13,50

14,00

14,50

15,00

15,50

16,00

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Euro pro m²

Office property market Germany

Source: Feri Rating & Research GmbH (3. quarter 2006)

Rental development Rental forecast Development Forecast

Rents and purchase prices (Class A)

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

in %

com

pare

d to

pre

viou

s ye

ar

Rents

Purchase prices

Development Forecast Development Forecast


Total residential stock

35.00036.00037.00038.00039.00040.00041.00042.00043.000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

in m

io. m

²year

Total return (Old building)

-2

0

2

4

6

8

10

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

in p

er c

ent

Rents and purchase prices (Old building)

-8

-6

-4

-2

0

2

4

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015in

% c

ompa

red

to p

revi

ous

year

Rents

Purchase prices

Residential Rents (Old building)

6,00

6,50

7,00

7,50

8,00

8,50

9,00

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Euro pro m²

Residential property market Germany


Rental development Rental forecast Development Forecast

Development Forecast Development Forecast


Total retail stock

80.000

85.000

90.000

95.000

100.000

105.000

110.000

115.000

120.000

125.000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Th

. m

²

Total return (Class A)

-6

-4

-2

0

2

4

6

8

10

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

in p

er

ce

nt

Rents and purchase prices (Class A)

-12

-10

-8

-6

-4

-2

0

2

4

6

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

in %

com

pare

d to

pre

viou

s ye

ar

Rents

Purchase prices

Retail rents (Class A)

65,00

70,00

75,00

80,00

85,00

90,00

95,00

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Euro pro m²

Retail property market Germany

Rental forecastDevelopment Forecast


Development ForecastDevelopment Forecast

Rental development


Which urban areas carry a high potential at low risks?


The German office property map shows ...

... in comparison with other European countries a good diversification of attractive property locations

and

... nevertheless a clear development of winning cities.


Which parts of Germany represent favourable residential investment opportunities?

The German residential property map shows ...

... that people do not move to places where apartments are empty

but

... inhabitate regions where they find a working place.



What are the best places for retail property investments?

The German retail property map shows ...

... that excellent retail space can be found inner-city and outer- city.



Conclusion

• property owners should check, whether a sale is profitable

• property investors should search for locations that are not in the focus of foreign, private and institutional investors

• property yields are still attractive in relation to many other countries

• intense competition between investors that target German property leads to a demand for expertise in investment selection

Contact details

Feri Wealth Management GmbH

Haus am Park

Rathausplatz 8-10

D-61348 Bad Homburg v.d.H.

Germany

These information are provided by the Feri Wealth Management GmbH. The data, analyses, forecasts and concepts containted in this presentation are for your information only and without responsibility. No responsibility is taken for the correctness of these information. The presentation must not be perceived as a fiscal, legal or other kind of consultancy and does not provide a basis for the administration of assets or the recommendation and consultancy concerning the disposition of assets. The performance in the past is not a guarantee for future performance. The share price as well as the generated return may rise or fall, which is not guaranteed. The presentation has to be kept in confidence. Without the prior sanction of Feri Wealth Management GmbH, this presentation may only be used for internal purposes.

Dr. Jürgen SchäferPartnerHead of Real Estate

Phone +49 (6 172) 9 16 - 3119Fax +49 (6 172) 9 16 - 1119E-Mail [email protected]

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