The Current State of the Office Market in

The Current State of the Office Market in the CEE Region Presented by: Adam Sherriff-Scott +420. 221. 451. 518 October 5, 2006

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Colliers International A Global Partnership üEstablished in 1898, Colliers is one of the leading commercial real estate organizations in the world. Our partners bring strong, stable local ownership and entrepreneurial and creative solutions together throughout the world. üOver 9, 000 employees worldwide in 241 offices in 54 countries on 6 continents (130 in the Americas, 65 in Europe, Middle East and Africa (EMEA) and 46 in Greater Asia) üColliers completed 31, 394 leasing transactions in 2005 with a value of $18 billion. üColliers completed 8, 685 sales transactions in 2005 with a value of $37 billion. üColliers has 595, 725, 580 square feet under management. üAnnual revenues exceeding $1. 4 billion

COLLIERS INTERNATIONAL CENTRAL AND EASTERN EUROPE (CEE) § Established in 1991 – Budapest § Established in 1994 - Czech Republic § Leading real estate services provider in the region § Services We Provide: - Investment Sales - Office Leasing - Industrial Leasing - Valuation & Consulting § 250 employees § 14 regional offices

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COLLIERS INTERNATIONAL- CEE REGION SELECTED CLIENT LIST Providing service to satisfied clients in the Czech Republic for over ten years

ECONOMIC OVERVEW

…growing economies = declining unemployment UNEMPLOYMENT FIGURES FOR CEE REGION Country: 2002 2003 2004 2005 2006 Czech Republic 7. 3% 8. 1% 8. 2% 7. 8% 7. 9% Hungary 5. 8% 5. 9% 6. 0% 7. 1% 7. 6% Poland 19. 7% 19. 9% 19. 6% 18. 2% 17. 6% Romania 10. 2% 7. 6% 6. 8% 6. 5% 6. 8% Slovakia 17. 8% 15. 2% 14. 3% 11. 6% 11% AVERAGE 12. 2% 11. 3% 10. 9% 10. 2% 10. 0% Source: Experian

…GDP growth in the Czech Republic & the CEE Region GDP GROWTH IN THE CEE REGION 2004 2005 2006* 2007* 2008* Czech Republic: 4. 0% 6. 0% 5. 0% 4. 3% 4. 5% Poland 5. 3% 3. 2% 4. 5% 4. 8% 4. 6% Hungary 4. 0% 4. 1% 4. 3% 3. 8% 3. 9% Romania 8. 3% 4. 1% 5. 0% 4. 8% 5. 0% Bulgaria 5. 7% 5. 5% 5. 1% 4. 3% *Figures are forecasted Source: Experian

…. positive economic fundamentals= A STRONG INVESTMENT CLIMATE Investment Risk Ratings in the CEE Region are Strong Across the Board Country Standard & Poor’s Moody’s Fitch-IBCA Czech Republic A- A 1 A Hungary A- A 1 BBB+ Poland BBB+ A 2 BBB+ Romania BBB- Ba 1 BBB- Slovakia A A 2 A *Source: Czech National Bank, December 2005

CZECH REPUBLIC MARKET SUMMARY

CZECH REPUBLIC – LOCATION MAP BERLIN 340 km WARSAW 750 km PRAHA MUNICH 385 km VIENNA 250 km BUDAPEST 450 km Czech Republic: Located in the heart of Central Europe!!

PRAGUE - GENERAL LOCATION OVERVIEW NOTABLE STATISTICS § Prague= 10% of CZ population and 20% of GDP § 3. 5% unemployment compared to 7. 9% overall in Czech Republic § Average monthly wages of 18, 29720, 036 CZK compared to 14 500 CZK nationwide LARGEST CITIES POPULATION • Prague: 1 200 000 • Brno: 400 000 • Ostrava: 320 000 • Plzen: 164 000 • Olomouc: 106 000 • Hradec Kralove: 100 000 Snapshot of the ten districts that make up Prague • Ceske Budejovice: 98 000

OFFICE MARKET OVERVEW

2 Q 2006 Office Market Snapshot Prague Key 2 Q 2006 Stats – Prague Office Market Submarket Office Stock (m²) (m² Vacancy 1 Q 2006 Take-Up (m²) 2 Q 2006 Take-Up (m²) Mid-Year Subtotal Take-Up (m²) City Center 406, 938 9. 3% 31, 712 8, 998 40, 710 Inner City 942, 278 13. 3% 18, 672 64, 502 83, 174 Outer City 547, 139 8. 4% 18, 461 16, 502 34, 963 TOTAL 1, 896, 355 11. 0% 68, 845 90, 002 158, 847 *Source: Prague Research Forum

2 Q 2006 Office Market Snapshot Czech Republic Office Market - Average Rent (€/m²/month) Location Class A § The Office market has stabilized in Czech Republic, especially in Prague. § Declining vacancy rates solidify strong demand from both new foreign demand organic growth of existing companies, even with many new developments. § Strong office construction activity in Prague could lead to a temporary flattening in vacancy rates for the immediate future due to increased demand. Class B Prague City Center Inner City Outer City 18. 0 -19. 0 14. 5 -15. 5 13. 0 -14. 5 14. 0 -15. 0 11. 0 -12. 0 10. 0 -11. 5 Brno 12. 0 -14. 0 10. 5 -11. 5 Plzen 9. 0 -12. 0 6. 0 -8. 0 Ostrava 9. 0 -11. 0 5. 0 -9. 0 Sources: CBRE, Prague Research Forum

Major Office Deals in Prague - 2006 PROJECT LOCATION SIZE (m²) TENANT CLIENT AGENCY CTPark Slapanice Brno 16, 600 CSAD CTP Invest N/A CEZ Building Prague 1 23, 100 Prague City Hall N/A Katerinksa Business Centre Prague 2 7, 800 PWC Merrion Property N/A The Park Prague 4 1, 487 Inbev AIG Lincoln DTZ Palac Krizik Prague 5 2, 600 Seznam. cz Smichov Terrasse s. r. o. Colliers International Office Park Nove Butovice Prague 5 2, 118 Lease Plan N/A Nile House Prague 8 1, 230 Ford Europolis Cushman & Wakefield Palac Karlin Prague 8 1, 500 Panasonic CEE Property Invest Knight Frank Zirkon Office Center Prague 8 2, 804 ABB BACA N/A Vysocanksa Point Prague 9 9, 335 Ministry of Labour N/A Podebradska 55 Prague 9 4, 377 Autocont N/A CTPark Plzen 2, 000 Bodycote CTP Invest Colliers International TOTAL 74, 951 Source: Ci. J – September 2006 Larger leases are being signed: overall average leased space in Prague for 2 Q 2006 increased to 1, 168 m², from 734 m² in 2005.

Office development…on the rise Major Projects in Prague - 2006 Project Name District Office Space (m²) (m² Status Developer Diamond Point Prague 8 18, 231 Completed Karimpol Luxembourg Plaza Prague 3 23, 949 Completed Orco Property Group Carrefour Eden Prague 10 6, 488 Completed Carrefour Korunni Dvur Prague 10 4, 153 Completed Africa Israel Investment Novodvorska Plaza Prague 4 5, 000 Completed Plaza Centers The Park Building 8 Prague 4 8, 000 Completed AIG Lincoln Andel City Phase II Prague 5 9, 400 Completed UBM The Smichov Gate Prague 5 10, 000 Completed (opening 3 Q 2006) Immoconsult Palac Krizik Prague 5 14, 000 Completed Cecopra E Point Prague 6 7, 150 Under Construction Viterra Rokytka Prague 8 4, 000 Under Construction Skanska “Nestle” Centrum Prague 4 15, 000 Under Construction SEKYRA Group, a. s. BB Centrum Gama Prague 4 26, 650 Under Construction Passerinvest South Point Prague 4 6, 447 Planned AMA Development s. r. o. Office Park Nove Butovice/C Prague 5 6, 873 Planned (2008) PDP TOTAL m² m² 165, 341

Key Market Trends 1. Regional secondary office market growth due to higher demand, lower rental rates, ample labor supply and lower wages 2. Institutional investors and developers looking to negotiate longer-term lease contracts, while National and International companies are looking for more flexible opportunities 3. Larger-sized leases being signed in 2006 4. Development of brownfields in Prague is gradually changing the face of the city

12 -Month Forecast • Increased office supply across the Prague region could potentially create a slight increase in vacancy rates. • Foreign investment money will continue pouring into the CEE Region for the foreseeable future • Strong absorption, continued economic growth and job creation will add to demand for new construction in growing secondary markets like Brno and Plzen. • Adoption of the Euro will likely be delayed until 2012 or 2013, which could benefit the Czech economy and lead to further strengthening of the Czech crown.

For Additional Information, contact: Adam Sherriff-Scott Director, Office Leasing & Tenant Representation adam. sherriff-scott@colliers. cz Tomas Fencl Senior Consultant, Office Leasing & Tenant Representation tomas. fencl@colliers. cz Mark Forward Senior Consultant, Tenant Representation mark. forward@colliers. cz Meagan Caldwell Marketing meagan. caldwell@colliers. cz Filip Rerko Research filip. rerko@colliers. cz