0 Crisis? What crisis? Supertramp, 1975 Peter de Haas September 2008

11 The ultimate truth….. We are just entering a cyclical downturn in the economy, accelerated by the Credit Crisis, (Sweder van Wijnbergen, Dutch Economist, ) We have to manage fear & greed (Roderick Munsters, CIO APG Group (ABP), )

22 Obvious European structural trends Ageing society Declining population A changing economic base A balanced market for traditional property sectors

3 Impact A substitute market A focus on existing stock Redevelopment Refurbishment Smart, niche product development

44 Investments environment - institutional investors; back to basics Traditional return expectations 8-10% IRR requirement 3-5 SD Cash return 60% of IRR LTV of investments < 65% Property as investment sector A preferred one (INREV survey) Short term investment restrictions

5 A few more observations Restructuring of Investment Bank sector Tighter risk management & DD process Higher volatility of property returns

6 Impact back to the basics Mean variance? Higher yields Traditional real interest rate levels Structural lower LTV’s More risk management instruments & derivatives products

7 Offices & financial markets Retail & the residential market as a key indicator Country% home ownership LTVInterest rate fixation Germany438080% 10y+ France57 (2005)65*90% 25y+ Holland567080% 5y+ Ireland75?45% L.T. * 0f disposable income Source: European Housing review 2008, RICS 2008 Property market fundamentals; fragmentised impact of the credit crisis

88 Business strategies I.Fight fear II.Accept fear III.Neglect Fear; “Crisis?, What crisis?”

9 How to position? No ultimate truth A Poll I II III

10 A discussion model “ A combination of fight & accept” Accept & anticipate a mean variance yields correction Sell the property investment case with Cash is king products A selection of strong fundamental markets Variety of new investment products &…

11 Last but not least Trust!!! Convincing strong management skills Transparency Integrity

12 Disclaimer Important information This document is issued by Protego Real Estate Investors. Protego Real Estate Investors is the trading name of Protego Real Estate Investors LLP & Protego Real Estate Investors Finance LLP, which is authorised & regulated by the UK Financial Services Authority (FSA) & Dutch Autoriteit Financiele Markten (AFM). This document neither constitutes an offer by Protego Real Estate Investors of shares or any other investment products or investment service, nor an invitation to the recipient to respond to the document by making an offer to purchase shares or to purchase any other investment product or investment service. Risk warning Past performance is not necessarily a guide to future performance & the value of shares or any other investment products & income from them may fall as well as rise.