1. European Real Estate Debt ERES 2010 24 th June 2010 Iryna Pylypchuk, Associate Director, EMEA Research & Consulting, CB Richard Ellis

2. Investment market turnover in Europe € Million Source: CB Richard Ellis, Property Data, KTI

3. The “Perfect Calm” Oct 97 Asian Debt Autumn 98 Russian Bonds Sept 01 9/11 Aug 02 Enron 2000/1 Dot Coms VIX (Daily Close) and CBRE EU-15 Office Yield Source: CBOE VIX (21st May 2010), CB Richard Ellis Sept/Oct 08 Lehmans & Banking Crisis VIXPrime Office Yield (%) 96979899000102070304050608091011 Mid 07 Sub-Prime

4. Lending drives values … drives lending … drives values! Source: CB Richard Ellis, De Montfort University New lending/refinancing, € billion Year of loan origination Capital Values (Index, 2001 = 100)

5. Bank Lending to UK Real Estate Source: Bank of England Only includes banks required to report to the Bank of England £ million

6. European CRE debt maturity profile €970 billion of debt maturing in the next 10 years Almost half in the next three years alone € million Source: CB Richard Ellis, De Montfort University

7. Total Size: €970 billion European Commercial Real Estate Debt Source: CB Richard Ellis

8. Outstanding European Commercial Real Estate Debt Source: CB Richard Ellis, De Montfort Study € Billion Year of Loan Issuance By Year of Issuance

9. Total Size: €970 billion Outstanding European Commercial Real Estate Debt Source: CB Richard Ellis

10. Segmentation of European Commercial Real Estate Debt € Million Source: CB Richard Ellis

11. European CRE debt maturity profile €970 billion of debt maturing in the next 10 years Almost half in the next three years alone € million Source: CB Richard Ellis, De Montfort University

12. Debt Market Outlook: Lengthy Workout Large backlog of un-refinanced debt Over €200 bn of the most troubling category High initial LTV, Poor quality property Support mechanisms will prevent a flood of distressed property, but… Unwinding of bank positions will result in a steady flow of secondary property on to the market

13. Question 6 – “Which of the following poses the greatest threat to the emerging European property market recovery?” Percent (n = 271) Source: CB Richard Ellis

14. European Real Estate Debt ERES 2010 24 th June 2010 Iryna Pylypchuk, Associate Director, EMEA Research & Consulting, CB Richard Ellis