ROMANIA

RESEARCH & FORECAST REPORT

2012

Accelerating success.

2012 | RESEARCH & FORECAST REPORT | ROMANIA

TABLE OF CONTENTS

Foreword Major Deals Executive Summary Economic Overview Office Market Retail Market Industrial Market

3 4 6 7 8 9 12

Land Market
Investment Overview Residential Market Hotel Market Key Metric Definitions

13
15 16 18 20

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | FOREWORD

Dear Reader, The year 2011 was a mix of two totally different journeys, one full of hope, head straight up, during the joyful spring and another in a much slower pace, during the confusing and gloomy days of autumn. The debt crisis that extended throughout the second half of the year stalled the optimistic business plans started in Q1, and what seemed to be the return of the solid growth turned out to be the start of concerns regarding the real European economic crisis. Walking on thin ice, the real estate players have spent most of their time in 2011 negotiating with banks, but even if their doors were open for discussion, the safe deposits were locked and the key thrown in the hands of the mother banks. In order to keep the wheel spinning, they adopted the team work business style and some shook hands with equity partners. They also fought hard for prelease contracts, but few managed to secure one. Food retailers were particularly active and audacious in signing prelease agreements, since the retail figures outperformed those registered in 2010. In return, they got the best locations, prices and conditions ever seen on this market. While the few liquid players took advantage and secured very good deals, whether renting or buying, the indebt developers really struggled and some finally collapsed under the pressure of banks. As a result, the number of bankrupt projects exceeded the previous year. It was survival of the fittest and this mood unfortunately cannot lead to win -win situations, but, on the contrary, it carries along a series of consequences. Thus, we witnessed aggressiveness during the early development stages : land owners, bank representatives, project developers, real estate agents and tenants, met for negotiations that eventually fell apart. Driven by the fear of not losing their protection against each other, the parties failed to align their business objectives. The circle of trust who governed the real estate market seems now to be broken. Due to egocentric attitudes and the race for individual advantages negotiations take too long and opportunities are missed. In the global turmoil context, it is no wonder that local disputes only worsen the business course. Since the European debt crisis continues and Greek default still threatens our region, we expect a tough 2012 in terms of market conditions. IMF recently changed the GDP estimation for this year to 1.8%, so this means another year of slow activity, lack of liquidity and financing sources, hence potential losses. Therefore, once again we might find ourselves on the battlefield. I trust that in 2012 all parties active on the real estate market reconsider the values of the real estate business and work together for building a sustainable market with fairness, trust and professionalism. What we need to do is to work out creative solutions to make projects happen since the traditional pillars are no longer available. We need to anticipate the needs of the next generations in order to be competitive in rapidly changing times. I hope that through our research papers and our passion for knowledge and education, Colliers International continues to be the best source of information and analysis for you. I wish you a pleasant read and a thoughtful reflection on how we can turn the market around and be all winners. Sincerely yours, Ilinca Paun Managing Director Colliers International

3 | COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | MAJOR DEALS

OFFICE

PREMIA MED THE LARGEST LEASING TRANSACTION OF THE YEAR

PremiaQaMed, the largest hospital management company in Austria, leased 27,300 m2 in North Point building, located in the Northern part of Bucharest, where it will operate the biggest private Romanian hospital in Romania. The deal was mediated by the Office Division of Colliers International and ranked as the largest leasing transaction of 2011 in Romania.

LAND

INTERPRIME AT THEIR SECOND LAND ACQUISITION IN ROMANIA

The Land Division of Colliers International Romania represented Baduc S.A., one of the main local construction materials retailers, during the sale process of the 20,000 m2 land plot located in Basarab Overpass area, one of the areas in Bucharest that are under fast development. The purchaser, Interprime Properties, part of Inter IKEA Group, looked for a suitable office plot to accommodate their second project in Romania.

VALUATION & ADVISORY SERVICES

MCDONALDS PORTFOLIO APPRAISAL

The Valuation and Advisory Division completed the appraisal of the real estate portfolio of McDonalds Romania, the largest network of quick service restaurants in Romania. The project comprised the analysis of over 30 Drive-Through McDonalds units spread throughout the country, as well as the appraisal of fit-out and interior design arrangements for the leased units. Colliers International has been instructed to provide the valuation for financial reporting purposes.

INVESTMENT

VICTORIA CITY NEW JOINT-VENTURE RETAIL INVESTMENT

The South-African investment fund NEPI, together with the Canadian investors of CD Capital and Benevo, signed a partnership for the development of Victoria City Center, the 56,000 m2 shopping center in the Northern part of Bucharest. The transaction, mediated by Colliers International, represents a major landmark on the real estate market, as it is the first shopping center development joint venture to be signed in Bucharest in 4 years.

BUILDING SURVEYING

PFIZER AND ELECTRICA SOLUZIONA RELOCATIONS

After launching the Fit Out Project Management service, the Building Surveying division of Colliers succeeded in diversifying its technical products from Project Monitoring and Technical Due Diligence, to Fit-Out Project Management, Measurement Standards, Move Management, Portfolio Optimization, Architectural Design and Master Planning consultancy. Thus, the Building Surveying team managed to offer solid assistance in a wide range of construction challenges, contributing to the reduction of associated risks or undesirable possible cost overruns.
4 | COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | MAJOR DEALS

INDUSTRIAL

EMAG, ASESOFT AND FLANCO 14,000 M2 CONSOLIDATION

Colliers was assigned by the three major IT&C players to identify the best solution to accommodate their joint activities, as part of a larger consolidation process. With an innovative approach, Colliers industrial team relocated them to a 14,000 sqm in Europolis Logistic Park, structuring the deal to allow further expansions and a mixed use of office and warehouse

OFFICE

ING 14,000 M2 CONSOLIDATION IN CRYSTAL TOWER

Colliers International Office Agency team in Romania represented the tenant, ING Bank, in the process of setting their head-quarter in the Cristal Tower building located in Bucharests CBD. ING also leased 800 m of office space for a new branch in an adjacent building Metropolis. The deal is one of the largest office leasing deals in Romania in 2011 and it classifies Colliers Romanian Office Agency team as number 1 in terms of market share.

RETAIL

CORA LEASED 7,700 M2 IN CITY PARK CONSTANTA

Colliers International mediated the transaction through which Cora leased a space of 7,700 m2 in City Park Mall of Constanta, one of the major cities with over 300,000 inhabitants in Romania. Apart from Cora, Colliers International managed to attract, over the past year, tenants like: LC Waikiki, Stefanel, Stonecreek, Mirano, Noriel, Animax etc.

PROPERTY MANAGEMENT

GE CAPITAL REAL ESTATE AND ALLIANZ TIRIAC 50,600 M2

After launching the Property Management division last year, Colliers International succeeded in winning two major clients, a medium sized office building developed by Allianz Tiriac and the two properties owned by GE Capital Real Estate in partnership with Helios Phoenix, in Timisoara and Brasov respectively. In this role, Colliers is responsible for tenant management, sourcing, controlling the operational budget, maintaining and improving the overall performance of the assets, as well as financial services and reporting to the landlord. LAND

DEDEMAN 6 MLN. LAND ACQUISITION IN CONSTANTA

The Romanian retailer Dedeman, the leader of the local DIY market, bought a 3,5 ha plot in the Northern part of Constanta, in one of the citys dominant retails schemes. The Land Division of Colliers mediated the sale transaction through which Dedeman secured the location for its second store in Constanta, planned for opening in 2012.

5 | COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | EXECUTIVE SUMMARY

Executive Summary
RECENT TRENDS

Economy: Last year, Romanias strong performance in industrial production, as well

as its solid export performance helped to recover the countrys GDP.

Investment: 2011 investment figures reflected a mixed appetite for real estate
investments. Following a dynamic H1 where a number of new deals were generated, the market slowed down at the end of H2 as investors took a wait and see approach as the European sovereign debt crisis unfolded.

Industrial: The industrial market remained stable as only 10,000 m2 came on market
in Bucharest. Demand decreased by 10%, a level comparable with 2004s demand figures.

Offices: In continuation of the 2010 trend, an increasing number of companies

consolidated their offices into a single property.

Retail: The new supply in shopping centers was notable in terms of the size of projects
MARKET INDICATORS 2011*
GDP GROWTH UNEMPLOYMENT WAGES INFLATION OFFICE RENTS INDUSTRIAL RENTS RETAIL RENTS YIELDS

2012*

but also significant in terms of the ability of the developers to bring projects online with high occupancy rates of over 70%. Food retailers remained one of the most active segments in the market, followed by large fashion retailers

MARKET PROGNOSIS

Economy: In the near term, the increased CDS spread is expected to be reflected in
domestic interest rates which may hinder investment and consumption.

Investment: We are expecting a widening of the price gap between sellers and buyers
in the coming months with fewer deals initiated as a result.

Industrial: The growth of the industrial market in 2012 will be similar to the previous
year. Logistic operators will continue to be the most active players in terms of demand.

Offices: As new and existing developers revitalise their optimism toward developing in
the Bucharest market, demand will continue to be driven by companies seeking to optimise their space.

Retail: The number of preleasing deals in the best located shopping-centres (expected
openings in 2013-2014) will carry on from the positive trend seen last year.

* COMPARED TO THE PREVIOUS YEAR

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RESEARCH & FORECAST REPORT | 2012 | ROMANIA | ECONOMIC OVERVIEW

Economic Overview
Population

21,904,551
2,563,313 1,942,254 311,428 309,631 11.7% 8.9% 1.4% 1.4%

Top Three Cities Bucharest Timisoara Iasi

Economic Makeup
Agriculture
Source: IMF

GDP
12.2% 37.6% 50.2%

Labour
29.7% 23.2% 47.1%

Industry Services
Source: CIA World Book

SUMMARY

Despite having a reputation as one of the Balkan bad boys, according to the latest
IMF report published January 23rd, 2012, the Romanian government received praise for its monetary and fiscal discipline.

The IMF also upgraded the countrys GDP performance for 2011 due to its strong
agricultural output. 2012 GDP estimates were, however, revised downwards to reflect the externalities of the European crisis. While 2011 growth is expected to close at a growth rate of 2.0%, by the end of 2012 we will see a slight decrease in economic growth to 1.8%.

Source: IMF

Strong industrial production and exports has initiated a sustainable recovery in

Romanias GDP. Favourable economic conditions, including lower unemployment rates, kick-started a recovery in domestic demand and revealed that the slump in retail sales has bottomed out. The dips in all three trends are supported by the external impact of austerity measures in the Eurozone and by extension, the EU as a whole.

Romania currently has a Stand By Arrangement (SBA) with the IMF for a total of 3.4
billion. While not all of the money has been disbursed, as Romania continues to meet IMF criteria, funds will be made available. Despite the risk of disruptive fallout from the Eurozone it is felt that Romania will be able to meet its fiscal target through continued discipline rather than new policies.

Unfortunately despite this upturn in performance, the price of risk by association of

Source: IMF

both the EMU and EU periphery has meant that CDS spreads on Romanian debt have widened considerably. In the near term this is expected to be reflected in higher domestic interest rates which may hinder investment and consumption.

7 | COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | OFFICE MARKET

Office Market
Key Office Figures Total Stock Net take-up Vacancy rate 1,474,000 145,000 16.5% m2

SUPPLY

In 2011, the modern office stock of Bucharest reached approximately 1.5 million m2.
114,000 m2 of office space was completed last year and delivered in both central locations and in the outskirts of the city.

m2

The pace of new office completions continued to slow down and is expected to be
muted in the coming years. NEW SUPPLY & PIPELINE

DEMAND & VACANCY

400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0

In 2011, market activity increased slightly, following the trend started in 2010. Net take
up reached 145,000 m2 out of the 175,000 m2 of total occupational market activity. Some of the tenants that renegotiated their contractual terms, also expanded the leased area. In fact, office space expansions represented 8% of total net take up.

An increasing number of companies consolidated their operations into a single

property. For instance, three of the top ten financing institutions secured new, modern space. Companies who chose to consolidate were able to take advantage of landlords flexibility and current rental rate levels.

The most active companies of the year were financial institutions, medical and IT&C
segments, which together represented half of the 145,000 m2 net take up.
Area West Floreasca Barbu Vacarescu Charles de Gaulle Dimitrie Pompeiu Victoriei Baneasa East Pipera
Source: Colliers International

Vacancy 0% 2% 7% 8% 10% 18% 39% 46%

In terms of availability, 2011 is the first year since 2008 when office take up surpassed
new supply. Therefore, the average vacancy rate dropped to 16.5%. Taking out the Pipera area, the vacancy rate will sit at 12.5%. Availability throughout the city varies by area. For example, districts such as Floreasca and Barbu Vacarescu benefit from an almost 0% vacancy rate.

RENTS

Overall, headline rent levels did not record any significant change in comparison to
rental rates in 2010. Although asking rents remained stable, the majority of landlords offered rent-free months and other financial incentives, and hence lower effective rents, especially in buildings with high-vacancy.

PROGNOSIS

For 2012 and 2013 combined, we estimate that another 170,000 m2 will be
completed, out of which 65,000 m2 is already pre-leased. In 2011, new and existing developers rekindled their optimism regarding the Bucharest market and are seizing the opportunity to build. Taking into consideration prudent tenants, new delivered buildings will have higher technical specifications and be better designed, in attempts to address the needs of clients.

ASKING RENT LEVELS

Baneasa 13 - 16 Piata Presei 16 Dimitrie Pompeiu 10 13 Floreasca 14 17 West 10 - 13 CBD 16 - 20 East 10 14 South 12

Demand will continue to be driven by space optimization processes. Also, as lease

agreements come to an end tenants will have the opportunity to move into new office facilities. The lack of large spaces, above 3,000 m2 will lead to a comeback of preleased transactions. Therefore, take up will be of similar value or we might even expect a slight increase in demand.

As the market matures, overall asking rents will be stable and may increase on the
short term in areas with low vacancy rates.

In the last couple of years, local authorities initiated several infrastructure

projects, aiming to facilitate and improve the urban traffic situation and thereby enhancing access to several office areas, such us Dimitrie Pompeiu and Western Bucharest.

Source: Colliers International

8 | COLLIERS INTERNATIONAL

Contact: Maria.Florea@colliers.com

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | RETAIL MARKET

Retail Market Shopping Centers

SUPPLY
Area (m2) Shopping Centers Stock* Shopping Centers New Supply* Romania Bucharest Countryside

In 2011 we witnessed a total supply of shopping centres developments similar to the

level reached in 2009 and almost on par with the development levels recorded during the real estate boom. However, the main difference is that the proportion of food retailers (in m2) taking up space is the largest since 2002, reaching almost 30% of the GLA.

1,305,000

467,000

838,000

176,000

20,000

156,000

Although retail news in H1was quiet, H2 saw the total new supply measure 180,000 m2
of malls GLA, carried out in four new shopping centre projects and one extension.

*Starting with 2012 Colliers has changed the methodology of calculating retail stock. The new calculation of shopping centers stock includes any commercial scheme planned, built and managed as a single entity, comprising units with a minimum GLA of 5,000 m2.

In addition to the size of new retail supply in the market, the percentage of space that
was pre-leased was at its highest in comparison to previous years reaching over 70% for all retail projects.

Apart from the 20,000 m2 extension of Baneasa Shopping City, all the other projects
NEW SUPPLY - 2011
City Bucharest Shopping Center Baneasa Shopping City (extension) Maritimo Shopping Center Electroputere Parc Size (m2) 20,000

were delivered in the countryside.

DEMAND

The food segment remained one of the most active retail segments in the
market, followed by the large fashion retailers led by Germanic operators expanding in the market.

Constanta

51,000

Retailers who had previously put their expansion plans on-hold got their plans
Craiova 43,000

underway but the decision to expand has become a lengthier process as businesses are more cautious.

Arad

Galleria

32,000

Retail locations with the largest geographic appeal continued to be Bucharest as well
as large cities with inhabitants over 200,000 people.

Oradea

Oradea Shopping City

30,000

We also witnessed anchor tenants that opened shops in smaller cities (100,000 to
150,000 inhabitants) in order to address a segment of demand not covered yet.

* The figures are based on the official declarations of the developers

There were several new retailers who entered the Romanian market in 2011, such as
Brand H&M New Look Calzedonia Eponge Fashion Wienerwald No. of opened shops 11

H&M, who in less than one year opened 11 shops and agreed on several new locations for 2012.

RENTS
4 3

Rents remained stable in the top performing shopping centres that had limited
vacancy.

Different incentives such as free rent or fit-out contributions, as well as clauses that
13 3

secured the success of the project like certain anchor tenants remained a market practice for existing centres. Incentives were also found in projects that were required to achieve a high occupancy rate at the time of opening.

PROGNOSIS
City Bucharest Cities over 250,000 inhabitants Cities under 250,000 inhabitants Rent level * ( / m2 /month) 60-70

Currently there are 10 shopping centre projects under construction but the number of
projects that undergo the leasing process is much higher. The quantity of pre-leases in well-located shopping centres (2013-2014 completions) will continue to increase this year.

30-35**

170,000 m2 GLA is expected to be delivered in 2012, but given the leasing and
construction status, there could be discrepancies in the actual opening dates.

15-20

The Romanian retail market performed well in 2011, and as a result there is interest
among new brands to enter the market in 2012.

*These represent the highest rent levels that can be achieved in the well performing centers for units of 100 sq m, prime locations **This level represents a market average; there are big differences between cities based on the existing competition

In terms of financial conditions we do not expect to witness significant changes.

9 | COLLIERS INTERNATIONAL

Contact: Georgiana.Andrei@colliers.com

REAL ESTATE REVIEW | 2011 | ROMANIA | RETAIL MARKET

Retail Market Retail Parks

BIG BOX OPENINGS - 2011 DIY
Retail Brand BauMaxx Parent Company Opened Units

SUPPLY

The retail parks planned for H2 2011 were successfully opened, bringing another
98,500 m2 GLA on the market.

The big retail parks schemes planned to be secured by developers in 2011 were
postponed due to the complicated deal structures.

BauMaxx

Several stand alone units were secured by retailers in the food and DIY segments. Small retail schemes anchored by discount hypermarkets were developed continuing
the trend seen over previous years.

Bricostore

Bresson

Dedeman

Dedeman

DEMAND
Leroy Merlin Leroy Merlin 1

The main focus of hypermarkets was to secure the best locations in the top cities, a
trend that will continue.

FOOD OPERATORS*
Retail Brand Cora Parent Company Opened Units

Still, the focus of some retailers and developers grew also towards medium cities with
low modern stock of retail per capita.

Kaufland and Dedeman were the most aggressive in terms of opening and securing
locations.

Delhaize

1+2**

Apart from the leasing market, retailers also played an important role on the buying
market. Succes hypermarket, a local brand, opened their first hypermarket units last year replacing PIC in two of their locations

Kaufland

Lidl&Schwarz

11

Carrefour

Carrefour Group

Lidl confirmed its aggressive expansion strategy with the first opening and the
rebranding of the former Plus stores.

Auchan

MGV Distri-Hiper REWE Group & Co.

m2

2*

RENTS
Selgros 1

Rents remained stable for most big box segments. The evolution of rents for the
gallery operators followed the same trend as the shopping centres

* Total size of the box over 5,000 ** Hypermarkets opened in shopping centers.

Due to the high land prices we may witness structures of retail park transactions that
involve sale discussions of part of the boxes to end users.

GALLERY EXTENSIONS - 2011

PROGNOSIS
Project European Park (extension) Jupiter City Owner City

Due to economic situation and financing problems, risk minimization will be at the
forefront of retail expansion plans.

NEPI

Braila

The limited number of good retail park plots at reasonable prices increases
competition among retailers and developers in the good locations. Retailer sales are expected to remain at average levels in the short term, minimising the likelihood of higher rents.

Jupiter

Pitesti

RETAIL PARK OPENINGS - 2011

Retail Park Area (m2) City

The smaller strip mall format anchored by discounters of all sizes will continue to
represent development opportunities for experienced landlords and developers.

There is only one outlet modern shopping center in Bucharest and due to the lack of
new brands entry to the market we believe that the existing scheme is sufficient for Romania in the years to come.

Colosseum Botosani Shopping Center Cora Drobeta

37,500

Bucuresti

15,000

Botosani Drobeta Turnu Severin

The retail mix in big boxes will remain limited to hypermarkets and DIY operators as
the market awaits new brands to complete the mix of the parks.

29,000

Source: Colliers International

10 | COLLIERS INTERNATIONAL

Contact: Georgiana.Andrei@colliers.com

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | RETAIL MARKET

Retail Market High street

VACANCY LEVELS

SUPPLY

During the last year, a number of family businesses have experienced problems and
Area Centre Semi-centre Periphery Vacancy 6% 12% 15%

exited from their commercial leases. In addition, many major networks gave up the unprofitable units leading to slightly increased vacancy rates on high streets in comparison to vacancy rates in 2010.

After the opening of H&M in H1, along with the previously opened New Yorker and
Zara stores on the ground floor of Unirii Shopping Centre, the new, non-traditional high street area expanded in the second half of 2011 with the openings of Stradivarius and Bershka.

RENTS BUCHAREST
Area Centre Semi-centre Periphery
* 100 m2 locations

DEMAND
Rent level ( / m2 /month)* 50-75 20-35 7-25

In

2011, just like in the previous year, food operators (minimarkets, supermarkets, producers), were the most active segment for high street space.

The development of the old centre continued as an entertainment area, generally

bringing a mix of restaurants, clubs and coffee shops. Fashion retailers have expressed their interest in this area in 2011 but in the absence of an anchor tenant and the legal and structural issues of these buildings, there were no significant transactions. The Adidas store opening which took place in Q1 2011 was not followed by expansions from other international fashion operators.

RENTS COUNTRYSIDE
City Large Medium Small
* 100 m2, central locations

The requirements of luxury brands are still primarily directed to Calea Victoriei. Victoria
Men - the luxury multi-brand store was opened on the main luxury artery in 2011. Burberry has already secured a location which should be opened in H1 2012 and Max Mara will be relocated in a new location also on Calea Victoriei.

Rent level ( / m2 /month)* 25-40 20-30 10-15

The Commercial Gallery of Marriott Hotel increased its mix of luxury brands with the
opening of a Valentino store.

Calea Dorobantilor is increasingly becoming the preferred location for retailers, but due
to the lack of anchor tenants, similar to the situation in the old centre, it makes closing transactions difficult.

Lack of shopping centre supply in medium sized cities coupled with the potential
Source: Colliers International

demand these cities represent, has forced some retailers to open on high street locations instead of in malls.

RENTS

Rents were constant in the central and high traffic areas, as demand for high street
locations remained unchanged. The rest of Bucharest witnessed a slight decrease in rents of about 10%, similar with the situation in 2010.

PROGNOSIS

We estimate that the supply of retail space in the Old City Centre will increase both
through consolidation and redevelopment of older buildings and through new construction of existing plots or instead of demolishing buildings.

A higher percentage of classic shopping centre retailers will turn their attention towards
retail spaces on high streets in medium sized cities, once the first fashion anchor arrives in the area.

Restructuring and consolidation of large commercial networks will continue in 2012.

Also, most contracts signed in 2007 will expire this year, which will provide the basis for a new wave of renegotiations and relocations.

The luxury segment could witness several new entrants from the brands that have
been looking at the market for the past few years.
11 | COLLIERS INTERNATIONAL

Contact: Georgiana.Andrei@colliers.com

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | INDUSTRIAL MARKET

Industrial Market
Key Figures Total Stock Take-up Vacancy Prime Headline Rent 922,000 76,000 15% m2

SUPPLY

During 2011, the industrial market was characterized by stability as only 10,000 m2
was delivered in Bucharest, in a build-to suit facility. Thus, at the end of 2011, the industrial and logistic stock measured 922,000 m2 .

m2

4.2 m2/month

In the countryside, the modern stock increased by 95,000 m2 in both build-to-suit

facilities and speculative developments. Most developers started their projects only for specific tenants so the majority of new industrial space outside Bucharest was built-tosuit. A few projects started on a speculative basis including in Timisoara and Ploiesti.

INDUSTRIAL AND LOGISTIC SPACE DEMAND

Thousands m2 250 200 150 100 50 0

DEMAND & VACANCY

In 2011, demand reached 104,000 m2 in Bucharest, out of which one third represented
renewals and renegotiations.

Compared to 2010, demand for industrial and logistics space decreased by 10%. This
take-up level was comparable to 2004 levels. Out of the total demand, half was driven by logistic operators.

When selecting space, tenants had a propensity to seek out space that combined a
mix of quality and an appropriate rental rate as opposed to being purely driven by price.

Similar to previous years, most demand was located in the Western outskirts of
Bucharest. Demand also came from existing tenants that either relocated or extended their space.
Source: Colliers International

Outside Bucharest, over 50,000 m2 was leased and another 22,000 m2 was extended.
Out of the total activity, the automotive sector was most active in both new demand and renegotiations.

DEMAND & DELIVERIES IN THE COUNTRYSIDE

2011 was the first year when important companies relocated outside of Romania and it
is anticipated that the vacant space left behind will soon be occupied.

The vacancy rate for industrial space did not change in 2011.
RENTS

In Bucharest, rental levels have remained stable, maintaining the same values over
the past 12 months.

PROGNOSIS

As insecurity still looms over the economic circumstances in the European

Union, industrial market trends will not vary in 2012 from the previous year.

While Bucharest remains the most important logistic hub in Romania, in terms of
Source: Colliers International

production and manufacturing, cities such as Cluj, Timisoara, Oradea, Craiova, Pitesti, Brasov, will continue to attract new tenants.

Similar to 2011, logistic operators will be the most active players in terms of demand.
AREA (m2) < 3,000 3,000 10,000 >10,000 RENT ( / m 2) 4 4.5 3.75 4.2 3.5 4 Also, we expect that some of the outsourcing agreements will expire and hence we might see companies change their logistic operator.
FORECAST

As lease agreements approach their expiration date, landlords will work to maintain
their current tenants.

Stable Stable stable

Land transactions for industrial use will be limited as most of the large developers in
the market already have additional land capacity for further developments.

Source: Colliers International

12 | COLLIERS INTERNATIONAL

Contact: Viorel.Opait@colliers.com

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | LAND MARKET

Land Market
With the prospect of better economic conditions and more attractive prices, 2011
started as a year with increased investor appetite for land plot acquisition. However, a good beginning is only half the battle as towards the end of the year, macroeconomic turmoil generated by the sovereign debt crisis and euro zone worries slowed down the investors pace, who became extremely cautious when making the purchasing decision.

For 2012, we expect a moderate evolution and an activity volume comparable to the previous year

Nonetheless, numerous transactions were finalized during the past year (mostly for
retail lands) and several others (for both retail and office land) have advanced to final stage, their conclusion depending on building permit approvals.

We estimate that the total transaction volume on the land market in 2011 was
comparable to that registered in 2010, even though the number of deals was greater. 2010 comprised several big transactions amounting over 30 million, that were not repeated in 2011.

SUPPLY

A significant number of the developers that undertook aggressive land acquisition

campaigns between 2005 and 2008 and did not succeed in completing projects while the markets were in boom, tried to exit Romania and sell their portfolios. Companies in this situation were mostly of Spanish, Israeli or Greek origin and their portfolios consisted mainly of land plots for residential development only. REPRESENTATIVE LAND TRANSACTIONS - 2011

Vendors that did not want to sell their assets at a loss found themselves in the
situation of either holding the land plots while expecting a future market recovery, or finding alternatives like joint-venture partnerships for possible developments.

City Bucuresti Calea Plevnei Bucuresti Sf. Voievozi & Popa Petre

Area 2 ha

Value

Buyer

Overall the supply of distressed properties remained rather low. Most of the highly
discounted land plots were either plots situated at the periphery, or properties suitable for residential use only.

11 M* Interprime

2,400 m2

2.2 M

Private Investors

DEMAND

Bucuresti Drumul Taberei & 2.7 & 20 M* Giulesti 1.5 ha Constanta Bacau Bistrita 3.5 ha 1.9 ha 2 ha 6 M 4.5 M 2 M

In Bucharest, the structure of demand seems to have emerged during the last two
years and we have observed a segregation of three different layers:
Auchan

1. Big box retailers/developers continue to be the main players on the market, in

Dedeman Retail Developer Dedeman

search of consolidating their position and their future strategic locations. The highest interest was shown for semi-central areas, within high-density population neighborhoods, excellent infrastructure, accessibility and visibility. We noticed a new trend on the market, that traditional residential or office developers and investors saw the increased potential of the retail sector and reshaped their strategies accordingly.

2. Office developers This segment targeted very well located land plots in
Bucharest, in established office areas, with developed infrastructure and proximity to subway stations. They also pay close attention to the advanced status of the permitting process, which allows them to start construction, market and deliver the project ahead of the competition.

*Market estimation; no official information made public

3. Residential investors This category was the least active of all and interest was
expected mostly in partnerships. By acting this way, investors tried not to block liquidity in land plots and projects that were still difficult to sell in the current market. These investors target almost exclusively Prima Casa small scale developments (below 100 apartment units), and look for land plots within a price range lower than 100-120 /m2 of built area.

Source: Colliers International

13 | COLLIERS INTERNATIONAL

Contact: Sinziana.Oprea@colliers.com

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | LAND MARKET

Land Market
BUCHAREST AREAS WITH LAND PLOTS TRANSACTIONS - 2011

In addition to the above, a timid demand came from two other segments that continued
to expand in 2011: medical and hotel sectors.

One of the problems that slowed down transactions in 2011 (besides the increased
time frame caused by the authorization process), was the uncertainty of the legal ownership of some of the properties, as well as the events and rumors present in the economic environment, that at times resulted in the revision of already discussed conditions and agreements.

PRICES

Prices moved slowly compared to 2010, registering a decrease within the range of 5%
to 15%, on average.

In some areas in Bucharest where interest proved to be high, we estimate that the
prices reached their minimum, except for some specific cases. These categories take into account areas like Charles de Gaulle, Aviatorilor, Aviatiei, Barbu Vacarescu or Calea Plevnei. COUNTRYSIDE CITIES WITH LAND PLOTS TRANSACTIONS - 2011

Peripheral locations as well as those areas with limited development potential (lack or
poor infrastructure, residential use only) continued to experience decreasing prices, up to 35 - 40% compared to 2010.

FORECAST

For 2012, we expect a moderate evolution and a similar volume of activity as in the
recently closed year, since investors show a reserved approach, in many cases resulting in the renegotiation of land prices.

In this context, we expect average prices to continue on a downward trend, except for
those highly targeted areas which are perceived as having good development potential on the short and medium term.

Property financing remains a crucial element to the market and we are unlikely to see
an increase in demand for land until financing becomes readily available and demand for future developments picks up.

14 | COLLIERS INTERNATIONAL

Contact: Sinziana.Oprea@colliers.com

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | INVESTMENT MARKET

Investment Market
Key Figures Investment Turnover Prime Office Yields Prime Retail Yields Prime Industrial Yields 150 m 8% 8.5 - 8.75% 10%

2011 investment figures reflected a mixed appetite for real estate investments.
Following a dynamic H1 where a number of new deals were generated, the market slowed down at the end of H2, as investors took a wait and see approach as the European sovereign debt crisis unfolded.

TRANSACTIONS

In terms of closures, the year was mostly dominated by small sized transactions, of
CLASSIC INVESTMENT DEALS
Property Praktiker Craiova Astoria Center Louis Blanc Seller Omilos Nicholas Abaco Cefin Insolvency company Carpathian Buyer Bluehouse Bluehouse Augustin Constantin Oancea Ioannis Papalekas Local business man Price ( mln.) 10 10 6

under 20 million. This is a consequence of the low activity of Western investment funds (either private equity or institutional) in 2010. Therefore, the most active players in 2011 were the Greek Fund Bluehouse and private investors like Augustin Oancea and Ioannis Papalekas. The overall volume of transactions amounted to around 150 million, of which only 45 million were from classic investment deals.

Apart from the three classic investment transactions closed in H1 2011: Praktiker
Craiova, Astoria Center office building in Romana Square and Loius Blanc office building in Victoriei Square, the market saw two distressed sales of shopping center projects, namely City Mall in Bucharest and Macromall in Brasov.

The most notable transaction of the second half of the year was the joint venture
partnership between the Canadian developer CD Capital, represented by Colliers and the South African Fund NEPI, for the development of Victoria City Shopping Center in Bucurestii Noi area. NEPI came in as a 50% partner and will lead the development of the 56,000 m2 shopping center. This is the first Bucharest shopping center joint venture transaction to be closed on the market since the inception of the crisis and marks a growing trend among investors and developers who are not finding suitable existing projects or available land plots and are thus drawn to joint ventures that ensure good locations, good potential returns and a reduction of risk.

City Mall

17.3

MacroMall

Source: Colliers International

OTHER TRANSACTIONS
Property Victoria City Adama Company Raiffeisen Tower Iris Pitesti Shopping Gallery Type Seller Buyer

The lack of good existing opportunities on the market has also led investors who were
initially focusing on acquisitions to reorient their strategy towards development. NEPI is one prominent example - after the acquisition of European Retail Park Braila and Iris Pitesti retail parks they are now developing their own retail projects in Ploiesti and Brasov next to Carrefour hypermarkets.

Joint CD Capital NEPI Venture IntraAdama Immofinanz group Intragroup Raiffeisen Raiffeisen Property Evolution Intl. NEPI

INVESTORS AND DEAL PIPELINE

In H1 2011, in the context of the feeble but nonetheless positive economic growth of
the country, and the result of Floreasca 169A transaction (at an 8% yield), the market saw a slight yield compression. This brought the expectations of the sellers and the interested investment funds closer and sparked a heightened level of activity in terms of offers, negotiations and potential deals during this period. The main target of the investors remained class A office buildings in prime locations in Bucharest, followed by retail big boxes with good quality tenants and long term contracts.

exercised existing Avrig 3-5 option

Source: Colliers International

EVOLUTION OF YIELDS
14.00% 13.00% 12.00% 11.00% 10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 2006 Office 2007 2008 2009 2010 2011

The worsening of the European economic environment coupled with the tightening of
the financing markets led to a more cautious approach from investors, which reduced drastically their activity towards year end. Moreover, a number of ongoing deals that were generated in the first half of the year were stalled or even fell through. Nonetheless, the deal pipeline still remains strong, the volume of transactions in due diligence or advanced negotiation stages amounting to 150 - 200 million.

YIELDS

Whereas the first half of the year brought a yield compression trend for prime office
buildings to slightly below 8%, the trend was reversed towards the end of the year. The main cause of this development was the tightening of financing conditions. With lending scarce and expensive, investment funds have to be more reserved with the yields in order to reach their return targets.

Industrial

Retail

We expect to see a widening of the price gap between sellers and buyers in the
coming months and fewer deals initiated as a result.

Source: Colliers International

15 | COLLIERS INTERNATIONAL

Contact: Blake.Horsley@colliers.com

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | RESIDENTIAL MARKET OVERVIEW

Residential Market
Key Residential Figures New units stock* Available units* Sold Units Average Price 15,700 3,800 2-3 / project / month 1,000 /m2

The first half of 2008 saw the Romanian residential market at its t peak. Prices per built
square meter soared reaching an historical average high of 1,630 and demand accounted for around 60% of the announced stock. The aftermath of the international financial crisis was felt by all real estate segments, bringing the accelerated rhythm of growth of the local market to a complete standstill.

The first year of Romanian economic recovery saw the residential market in a
precarious position. Even though prices stabilized at an average of 1,000 built m2, and sales volumes were relatively constant over the last 36 months (2-3 apartments per month per project) consumer confidence still remained low. Investors have slowly returned to the market, although transactions continue to be few and far between.

* In projects with more than 200 units

SUPPLY VS. EXPECTED SUPPLY

8,000 6,000 4,000 2,000 0 2007 2008 Deliveries Source: Colliers International 2009 2010 2011 1600 4819 3386 1900 8134

Not surprisingly, for the third consecutive year since the economic crisis, the most
active segment of the market has been the one consisting of projects targeting the low income population.

SUPPLY
Expected Deliveries

Before 2005 one could hardly talk about a new apartment market in Romania. Most
new housing facilities were small scale developments located in traditional luxury areas designated for expats that occupied executive positions in Romanian HQ.

Between 2005 and 2008 the market heated up and developers confidently announced
PRIMA CASA DISTRIBUTION BY COUNTY the delivery of more than 35,000 units over the following years. However, by the end of 2008 the market conditions had changed for the worse. Most investors started pulling out and many end users could not follow through with their promissory agreements. The lack of interested buyers made developers postpone their projects or slow down the delivery rate of secondary phases. Currently, only 44% of the announced units have been completed.

30% 38%

Of the current stock of 15,700 apartments in compounds with more than 200
units, 64% were delivered in the first two post crisis years. 2011 saw a significantly reduced number of deliveries in similar projects (only 16% out of the average of the previous two years).

7% 5% 4% 4% 6% 6%

In the last three years the market also received a number of smaller
projects, addressing the low income population, located mainly on the outskirts of the traditional residential neighbourhoods. These developers have adapted to the new conditions of the residential sector and have renounced the generous surfaces, luxurious finishes and central locations, for small affordable units with prices similar to those of old apartments.

Bucuresti Constanta

Cluj Iasi

Ilfov Brasov

Timis Other

DEMAND
Source: FNGCIMM

Demand followed the upward trend of the local economy with virtually few to no
transactions before 2005, followed by an average of 25-30 units per project per month in the peak years. However these rates are a characteristic of emerging markets and are not sustainable in a mature, stable economic environment. Over the last three years the market has averaged around 2-3 apartment sales per project per month. The most dynamic sector of the residential market has been that targeting the low income buyers with 4-6 units/project/month.

Over the last three years the market has averaged

2-3
apartment sales per project per month
Source: Colliers International

An important factor in the apartment acquisition process is access to financing. The

transactional blockage of 2008 and the first half of 2009 reshaped the mortgage market when banks imposed more restrictive standards for their clients. Nevertheless, in order to encourage the local real estate segment, the Romanian Government reduced VAT to 5% for properties under RON 380,000 and put in place, in the second half of 2009 a special scheme for First Time Buyers. (Prima Casa)

16 | COLLIERS INTERNATIONAL

Contact: Annemarie.Fabian@colliers.com

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | RESIDENTIAL MARKET OVERVIEW

Residential Market
Asking price for residential units Low projects Middle projects Upper middle projects Average Price H1 2011 910 /m2 H2 2011 875 /m2

Access to cheap financing enabled clients to benefit from the state guaranteed
loan, 5% equity and the maximum interest margin imposed by the government. Already at its fourth edition, the Prima Casa programme accounts for 2.1 billion granted for 52,740 units.

1,172 /m2 1,500 /m2 1,050 /m2

1,150 /m2 1,450 /m2 1,000 /m2

Nevertheless the gap between developers expectations and end users actual
purchasing power continues to be wide, despite significant drops in prices (40% on average). With an average of 40.2 real estate transactions per 1,000 inhabitants, (third highest in the EU), Romanians were more willing to buy the communist cheaper apartments rather than new units. Only 25% of the granted loans through Prima Casa were destined for new residential units, the remaining buyers securing apartments in old blocks of flats.

Source: Colliers International

Residential investors were more active on the market than in previous years. As
PRICES BY PROJECT TYPE
1,700 1,300

projects went into default, they were able to buy apartment packages at preferential prices. However, actual transactions were difficult to come by.

1,200

1,072 1,000

PRICES

Between 2005 and 2008, the market, encouraged by the high demand and accessible
financing conditions, registered an asking price growth of 15% YOY. In the two years of economic recession, prices had a steep drop of around 20% per year, followed by a milder decrease of only 10% in 2011.

700

2009
low upper middle

2010
middle

2011

market average

The asking price per built m2 reached an average of 1,000 (VAT not included) at the
end of the year.

Source: Colliers International

FORECAST

2012 is expected to have a similar growth pattern to that of the previous year. Despite
PRICE VARIATION
1800 1600 1400 1200 1000 800 H2 05

the positive local economic outlook, the recent European public debt crisis has made both investors and developers sceptical about the recovery pace of the Romanian real estate segment.

1630 1150 1005

Demand

H2 06

H1 07

H2 07

H1 08

H2 08

H1 09

H2 09

H1 10

H2 10

H1 11

H2 11

will be directly dependent on financing conditions. As of January 31st 2012, the National Bank of Romania has imposed 25% equity criterion for euro contracted mortgages and a 15% down payment for those granted in RON. The Prima Casa programme will be in place in 2012 and is exempt from this new regulation. As it was the case in the previous semesters, demand from end users will most likely be focused on Low income projects and sales will remain at current levels.

It is improbable for prices to register any significant fluctuations in the next few months.
Source: Colliers International

The difficult financing conditions will avert both buyers and developers from making decisions in the next period. An upward trend is expected as the current stock is absorbed and end users and financial institutions regain their confidence in the local economy.

17 | COLLIERS INTERNATIONAL

Contact: Annemarie.Fabian@colliers.com

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | HOTEL MARKET OVERVIEW

Hotel Market
Key Figures Number of hotels Number of beds Tourist arrivals 1,308 (6.1%) 174,750 (-5.6%) 7,014,000 (15.5%)

SUPPLY

The number of hotels increased in Romania in 2011 by 6.1% to 1,308 properties.

Three star properties grew 34.2% while two and one star properties had a negative growth (-9.7%, respectively -47.0%). Growth also varied by location such that the highest increase in the number of hotels occurred in secondary cities (24.3%) while the number of hotels at the seaside registered a decrease of -19.4%.

The presence of international hotel chains is still limited. Only 7.8% of the room
HOTELS BY DESTINATION
Balneo Resorts, 11 .5%

Other 17.2%

inventory affiliated to a hotel chain is international. International chains are concentrated in Bucharest (4,173 rooms out of 10,573). The main hotel groups present in Romania are Wyndham Hotel Group (1,681 rooms), Accor (1,221 rooms) and Best Western (1,072).

In 2011, 75 hotels opened mainly through the renovation of existing hotels (Hotel
Grand Targu Mures, Hotel Sportul- Poiana Brasov, Hotel Roman- Roman) but also Seaside, 21 new built (Ramada Pitesti- Pitesti, Grand Hotel Italia- Cluj Napoca, Hotel MetropolisBistrita) and conversions (TulipInn Nerva Traian to DoubleTree Unirii). .7%

Secondary cities, 24.8 %

DEMAND
Mountains, 12.2% Bucharest, 11.1% Danube Delta, 1.4%

After low levels of demand in 2010, 2011 marked a strong revival in tourist arrivals
(15.5%), both in domestic arrivals (16.4%) and international arrivals (12.5%). Overnights increased also but at a slower pace (11.3%), which led to a decrease in average stay to 2.55 days (-4%).

Source: Trend Hospitality

The highest increase in tourist arrivals was registered in balneal resorts (+18%) and
secondary cities (+16%) out of which Craiova (+38%), Cluj (27%), Galati (+25) and Arad(+19%) registered highest increase .
4 stars, 14.8 %

HOTELS BY CATEGORY
1 star, 6.1% 5 stars, 1.8%

The main feeder market is from the European Union (59.4%), specifically from
countries such as Hungary (23.1%), Bulgaria (10.5%), Germany (5.3%), Italy (4.4%) and Turkey (3.5%).

2 stars, 30.7 %

BUCHAREST MARKET

The number of hotels remained constant (131 properties) but room inventory
decreased (-7.3%) mainly due to a change in size of one large property (Rin Grand Hotel from 1,450 to 580 rooms). This change occurred as part of a transformation process in which some of the rooms became residential units.

For the second year in row, Bucharest registered an increase in tourist arrivals
Source: Trend Hospitality

3 stars, 45.9 %

(14.3%), reaching two million overnight visitors, which is a level similar to 2008.

Occupancy posted an increase of 11.4% compared to 2010, reaching 56.5%. This

increase was not even across all categories, the highest increase was for 4 star hotels (17%) while the lowest increase was for 5 star hotels (7.4%). As the market is based on business travel, occupancy varies very much by season, with low numbers in January and August (35% to 40%) and high numbers in May June, October and November (65% to 70%).

TOURIST ARRIVAL
20.0% 15.0% 12.1% 12.4% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% Domestic
Source: Trend Hospitality

16.4% 12.5% 5.5%

4.4%

For the first time after 2 years, the average nightly rate also went up, with a 4.4%
increase to 65.5 per night. The highest increase was for 3 star hotels (6.7%) and lowest increase was for 5 star hotels (3.2%).
2011f

2007

2008 -5.5%

2009

2010 -2.9%

-14.0%

-13.0%

TRANSACTIONS

Altogether, there were approximately 350 properties for sale which represented a
International

decrease of 40.0% compared to the previous year.

18 | COLLIERS INTERNATIONAL

Contact: Lucian.Marinescu@trendhospitality.com

RESEARCH & FORECAST REPORT | 2012 | ROMANIA | HOTEL MARKET OVERVIEW

MAIN FEEDER MARKETS

# 1 2 3 4 5 Country Hungary Bulgaria Germany Italy Turkey Nights (thousands) 1,735 784 395 331 265

Hotel Market
The average price asked per room varied according to location, and category: a hotel
room in Bucharest had an average asking price of 141,000/room, for a secondary city hotel it was 130,000/room and for a leisure hotel (mountains and seaside) it cost 83,200/room.

The volume of transactions reached 35 million, three times more than last year. The
most important transactions included the acquisition of 30.0% of Continental Hotels by GED Capital for an estimated amount of 18 million and the acquisition of 16.2% of Intercontinental Bucharest by Astra Asigurari for 4.1 million.

Buyers are mainly companies or investment funds that are looking to consolidate their
presence on the local market, like GED Capital or Astra Asigurari, or individual business people with available money that are looking to acquire good assets at discounted prices, like Hotel Scandinavia in Mamaia or Hotel Moldova in Bacau.

OCCUPANCY, BUCHAREST
70% 60% 50% 40% 30% 20% 10% 0% 2008 2009 2010 2011

Also, some properties were liquidated by creditors, and sold mainly to local investors
for low prices, like Hotel Alutus in Ramnicu Valcea or Hotel Parc in Oradea.

PROGNOSIS

Not many projects were launched in the last few years, and with few openings
announced for 2012 (around 20), any increase in supply will remain marginal. Turnaround projects are also likely to appear as office or residential projects will look for a different use.

The presence of international brands in the Romanian market is expected to

Source: Trend Hospitality

increase, as affiliation will be seen as a good way to increase competitiveness and market share. Hilton Worldwide and Wyndham Hotel Group are expected to increase their presence, especially through their mid and economy level brands such as DoubleTree, Hilton Garden Inn and Hampton, Ramada and Days Hotels.

AVERAGE RATE, BUCHAREST

90 80 70 60 50 40 30 20 10 2008 2009 2010 2011

Generally, demand follows the same line as GDP (estimated at 1.8%, in 2012) and
airport passenger movements (estimated at 8%), therefore we have reasons to believe that demand also will increase in 2012.

Better management of European funds and increased investments in tourism and

infrastructure will help increase the attractiveness of some destinations, especially in leisure and resort areas.

A strategic marketing plan for Romania, for 2011 to 2015, was launched by creating a
country brand, the broadcasting of TV spots on dedicated international channels (Eurosport, CNN, Euronews), and the participation in major European travel and tourism fairs and exhibitions (London, Berlin, Madrid). We think that this strategy will start to show some results and will continue to promote Romania as a travel destination.

Source: Trend Hospitality

Hotel activity will continue its positive trend as tourist arrivals are expected to rise by
TRANSACTION VOLUME
60 Millions 50 40 30 20 10 0 2006 2007 2008 2009 2010 2011

approximately 5% to 6%. Rates will follow the same trend and will continue trending upward, but at a much slower pace, with an estimated increase of 2% to 3%.

A new wave of properties will be available for sale, as owners realize that prices will
not get any higher then current levels and lenders look to liquidate some of their assets.

Source: Trend Hospitality

19 | COLLIERS INTERNATIONAL

Contact: Lucian.Marinescu@trendhospitality.com

RESEARCH & FORECAST REPORT | 2012 | ROMANIA

COLLIERS RESEARCH

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United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117 $1.5 billion in annual revenue 978.6 million square feet under management Over 12,500 professionals

Colliers Research Services Group is recognized as a knowledge leader in the commercial real estate industry, providing clients with valuable market intelligence to support business decisions. Colliers research analysts provide multi-level support across all property types, ranging from data collection to comprehensive market analysis. Across the CEE-SEE-Russia region of EMEA, Colliers researchers regularly collect and update data on key real estate metrics, set to consistent definitions. This information is constantly managed using databases, enabling staff to readily produce analysis on key regional markets including supply, demand, absorption, pricing and transaction data on capital markets and the office, industrial and retail sector. In most CEE-SEE-Russian markets, the office definitions used are consistent with those set out by the CEE Research Forum an umbrella group, of which Colliers is a founding member established to ensure consistent research methodologies are used, bringing greater transparency and reliability to the analysis of real estate markets in the region. Definitions of the key metrics used in our regular reports are highlighted below.

KEY METRIC DEFINITIONS

ROMANIA: Colliers International Floreasca Business Park Calea Floreasca 169 A Building A, 7th floor Bucharest 1, 014459 Tel +40 21 319 77 77 FAX +40 21 319 77 78 EMAIL iuliana.tataru@colliers.com

Prime Headline Capital Value (derived): This is a calculation of market value derived
from the annual prime headline rent divided by the prime (net initial) yield.

Prime Net Initial Yield: The yield an investor is prepared to pay to buy a Grade A
building, fully-let to high quality tenants at an open market rental value in a prime location. Lease terms should be commensurate with the market. As a calculation Net initial yield = First years net income/purchase price (prior to deducting fees and taxes)

Prime Headline Rent: Represents the top open-market tier of rent that could be
expected for a unit of standard size commensurate with demand, of the highest quality and specification in the best location in the market at the survey date. This should reflect the level at which relevant transactions are being completed at the time but need not be exactly identical to any of them, particularly if deal flow is very limited or made up of unusual one-off deals. If there are no relevant transactions during the survey period, the quoted figure will be more hypothetical, based on expert opinion of market conditions, but the same criteria on building size and specification will apply.

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Prime Net Effective Rent: Prime Net Effective Rent is the lowest rent payable, based
on a calculation of the Prime Headline Rent, less the monetary equivalent of the highest of either the rent-free period or fit-out contribution available at the time of the survey date.

Average Headline Rent: Average Headline Rent represents the average open-market
tier of rent that could be expected for a unit of standard size commensurate with demand, based on a blend of Grade A & B space across a range of locations in the market at the survey date.

Total Competitive Stock: Includes the gross leasable floorspace in all A and B class
buildings.

Space Under Active Construction: Represents the total amount of gross leasable
floorspace of properties where construction has commenced on a new development or in existing properties where a major refurbishment/renovation is ongoing at the survey date.

Space Under Construction Inactive: Represents the total amount of gross

leasable floorspace of properties where construction had started/where a major refurbishment/renovation was ongoing, but activity has since stopped for a period of 3 months or longer.

Vacant Space: The total gross leasable floorspace in existing properties that meet the
Competitive Stock definition, which is physically vacant and being actively marketed at the survey date. Space should be available for immediate occupation.

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