What do the investors need? Institutional Investors What will markets bring in 2017? Non-listed real estate Maurits Cammeraat 29 June 2017 Director of Professional Standards

Next 30 minutes… Who the investors are What investors need to know in order to spend Investment intentions in Central Europe

Example: Dutch pension funds Invested capital Billion € Real Estate 116 Indirect Real Estate - Non Listed 49 Indirect Real Estate – Listed 54 Direct Real Estate 13 Rest including stocks and bonds 1,168 Total 1,284 9% Source: DNB, 2017

All investor types increase allocation to real estate So, allocations to real estate are to increase and this can also be seen across every investor type. Other investors, which include sovereign wealth funds, government institutions, family offices, etc, on average have greates real estate allocations and planing to advance their real estate holiding even further. Pensions funds also have high allocations and are only very slightly under target while insurance companies have much lower current allocations compared to other invesro types which they plan to remedy in 2017. Note: Equally weighted allocations; excludes investors with 100% real estate allocations

Enthusiasm for real estate remains undimmed Diversification benefits continue to attract Real estate continues to draw in capital Real estate allocations have been increasing It’s been almost a decade since the global finance crisis and the enthusiasm for real estate investment remains undimmed. Investors are attracted to the diversification benefits that real estate brings, not only to a multi asset portfolio, but also a real estate portfolio itself, as well as geographical and sector diversify. As such capital continues to pour into the sector and capital raising activity was at a record high last year. As a result allocations to real estate continue to rise.

Allocations set to rise across the board As such, allocations to real estate are expected to increase everywhere regardless of investor domicile. The biggest increase is indicated by UK domicled investors, followed by investors based in the Republic of Korea and Japan, with their target allocations set for double digits. None of investors are planning to reduce their real estate allocations for 2017. Note: Equally weighted allocations; excludes investors with 100% real estate allocations

What investors need to know in order to spend

Key requirements are captured in INREV Guidelines

Real estate, investment vehicle and manager What are the assets / portfolio? How is the investment structured? Who is the manager?

Sustainability is important for most investors INREV Survey: How important are the ESG risk and performance aspects to you? If the header and / or sub-header take more than one line, please move down other elements so that nothing is overlapping.

There are clear preferences Regulated Closed end Discretionary Similar by co type Similar by domicile Small investor pool Blind pool GAV up to €500 million Single sector Single country Non-regulated Open end Non-discretionary Dissimilar by co type Dissimilar by domicile Large investor pool Seeded pool GAV above €500 million Multi sector Multi country So generally the preference is for ….

Value added has the most attractive prospects Wiht Europe maintaining its attractiveness, investors are looking for investment opportunities that add value. This is indicated by the most preferred investment style being value added, which is now ahead of core. The increase in preference in value added comes at the expense of opportunity, with the popularity of value addded widespread across all investor domiciles. Style preferences look similar to last year that resembles 2007 levels, though are not completely matched. There is a stronger desire for value added this year than there was last year, and no two years look identical in preference as the desire for core inreased by 140 bps. This shift comes at the expense of opportunity

Investment intentions in Central Europe ? Now that’s the backdrop to this year’s results – have we heard this all before?

314 Respondents 184 fund managers 119 investors 11 fund of funds managers 314 Respondents

Assets under management 2,100,000,000,000

How does CEE rank for investors? So, where can you find value? This year the rankins shift slightly with UK and France jointly occupying the top spot on the rankings. Germany is third, follwing the Netherlands and Spain, whith the latter seeing a notable jom from ninth place in 2016. Other countries that made it into the top ten are: Finland (41.4%) and Italy (37.9%) taking sixth and seventh places respectively and Belgium (36.2%) and Sweden (36.2%) in joint eighth place. Denmark (32.8%) concludes the top ten. If we take a look at preferences between domestic and non-domestic investors, broadly speaking they aare aligned. However, there is some indication of home bias in Spain, Italy and Belgium where the non-domestic investors are noticeably less keen on these markets than domestic investors are. CE is in top-10 as seen by investors

Similar ranking applies for all respondents So, where can you find value? This year the rankins shift slightly with UK and France jointly occupying the top spot on the rankings. Germany is third, follwing the Netherlands and Spain, whith the latter seeing a notable jom from ninth place in 2016. Other countries that made it into the top ten are: Finland (41.4%) and Italy (37.9%) taking sixth and seventh places respectively and Belgium (36.2%) and Sweden (36.2%) in joint eighth place. Denmark (32.8%) concludes the top ten. If we take a look at preferences between domestic and non-domestic investors, broadly speaking they aare aligned. However, there is some indication of home bias in Spain, Italy and Belgium where the non-domestic investors are noticeably less keen on these markets than domestic investors are. CE is between Finland and Denmark as seen by all respondents

Investors are confident about the region Note: 57 respondents indicated their preference for Central Europe; of those: 22 investors, 33 fund managers; 2 funds of funds managers

Anglo-Saxons are ahead of the queue

Industrial / logistics stands out from the crowd 1. Ind. / Logistics (77.3%) 2. Retail (59.1%) 3. Office (54.5%) 4. Residential (27.3%) 5. Student acc. (13.6%) Note: investor preferences

Thank you

Central Europe - Includes Czech Republic, Poland, Hungary, Slovakia, Slovenia Eastern Europe - Includes Romania, Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Kosovo, Macedonia, Albania, Bulgaria, Russia, Ukraine