Office Market Report MUNICH 2010/2011

PREFACE.

The trend in the Munich office real estate market, which emerged in 2010, has been confirmed and can
now be shown in figures.

Ellwanger & Geiger calculated office space rentals of approximately 590,000 m² in 2010 (including around
12,000 m² owner occupiered) , which shows an increase of approx. 12%, compared to 2009. This is espe-
cially a result of brisk rental activities in downtown Munich (approx. 47%) as well as the 2,000 m² rentals
(approx. 50%).The strongest sectors were consulting agencies and law firms with approx. 17.8% of the
rental activities of up to 2,000 m². There were a few major lettings (> 5.000 m²) in 2010. However expecta-
tions for 2011 quite positive because of rising demand and the already existing applications.

The weighted average office space rent remains stable compared to 2010 and is around € 14.20 /m². The
weighted prime rent is almost unaffected by the market activity in 2010 and is constant at € 28.00 /m².

A vacancy of about 1.8 million m² (8,3 %) was determined at the end of 2010. That means a vacancy rate of
8.3%. It is not expected that the vacancy rate will continue to increase significantly because new office
building constructions keeps decreasing noticeably.

A stable demand situation will thus support the upward movement of the Munich office rental market and
is expected to bring a consolidation over the next few months, a slight reduction at best. Generally, due to
the positive economic trend in Germany, an increasing positive development in the office rental market
can also be expected in 2011. This could mean office space rentals beyond 600,000 m².

KEY FIGURES.

ECONOMIC DATA OFFICE MARKET DATA 2010

Area 310.4 km² Take-up 590,000 m²

Population ca. 1,370,000 Prime rent 28.00 €/m²
Purchasing power/resident 25,237 € Average rent 14.20 €/m²
GDP/resident 56,655 € Prime yield 4.8 %
Employment rate 74.5 % Space inventory ca. 21.8 Mio. m²
Trade tax multiplier 490 % Vacancy rate 8.3 %

Source: LHSt. München, Referat für Arbeit und Wirtschaft Source: Research Bankhaus Ellwanger & Geiger KG , 12/31/2010

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DEVELOPMENT OFFICE MARKET.

OFFICE SPACE TAKE-UP AND VACANCY RATE RUNNING DEALS

Take-up (m²) Vacancy rate

Aufbau West Innovati-
1.200.000 12,0%
onspark GmbH
ca. 15,000 m²
1.000.000 10,0% Munich-Sendling
_________
800.000 8,0%
Franzis Verlag GmbH
ca. 11,400 m²
600.000 6,0%
Haar near Munich
_________
400.000 4,0%
Rodenstock GmbH
200.000 2,0% ca. 11,000 m²
Munich-Westend
_________
- 0,0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 GlaxoSmithKline GmbH &
Co.KG
ca. 11,000 m²
Munich-Bogenhausen
PRIME RENT- AND AVERAGE RENT in €/m² _________

Average rent (€/m²) Prime rent (€/m²) Amazon.de

ca. 8,800 m²
35,00
Muc.-Parkstadt-Schwabing
_________
30,00
Heye Group
25,00
ca. 8,600 m²
Munich-City
20,00
_________
15,00
VBG Verwaltungsberufs-
10,00 genossenschaft
ca. 7,500 m²
5,00 Munich-Westend

-
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

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DEMAND DISTRIBUTION.

TAKE-UP BY RENT LEVEL SECTOR DISTRIBUTION IN %

300.000

250.000
13% 7%
8%
200.000
7%
8%
150.000
7%
100.000

7% 18%
50.000
7%
0 5% 13%
< 10 €/m² 10-15 €/m² 15-20 €/m² 20-25 €/m² >25 €/m²

TAKE-UP BY SIZE Pharma/Health Care

Banks, insurance, financial services
140.000 Construction, property
120.000 Consultants, attorneys, auditors
100.000
Computer, IT, telecommunications
80.000
Leisure, education
60.000
Trade and distribution
40.000
Industry
20.000
Media, publisher
0
Public administration
< 500 m² 500 - 999 1.000 - 2.000 - > 5.000 m²
m² 1.999 m² 4.999 m² Other services

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OFFICE SUBMARKETS IN COMPARISON.

SUBMARKET RATIO

LOCATION TAKE-UP (m²) RENT AL PRICE VACANCYRATE

RANGE(€/m²)
City Centre 68,100 13.0 – 33.0 3.1%
City north 20,500 11.5 – 24.5 4.1%
City east 55,700 8.5 – 26.0 8.8%
City south 49,300 8.0 – 18.0 6.5%
City west 91,800 10.0 – 25.0 8.5%
Urban area north 44,200 8.0 – 22.0 10.9%
Urban area east 35,400 8.0 – 17.0 6.4%
Urban area south 18,700 7.5 – 14.0 24.0%
Urban area west 63,300 8.5 – 15.0 6.9%
Periphery 143,000 7.5 – 14.0 11.8%

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CONTACTS.

BANKHAUS ELLWANGER & GEIGER KG

Herzog-Rudolf-Str. 1
80539 Munich
Phone 089/179598-0, Fax 089-179598-55
www.privatbank.de

Alexander Zigan
Björn Holzwarth Head of office letting and retail letting
Head of commercial real estate Munich
Phone 0711-2148-192 Phone 089-179594-20
bjoern.holzwarth@privatbank.de alexander.zigan@privatbank.de

Dieter Mendl Yvonne Strelow

Senior Consultant Office Letting Senior Consultant Office Letting
Phone 089-179594-22 Phone 089-179594-25
dieter.mendl@privatbank.de yvonne.strelow@privatbank.de

Stephan Schörnig
Senior Consultant Office Letting, Tobias Wäscher
contact person Research Consultant Office Letting
Phone 089-179594-26 Phone 089-179594-24
stephan.schoernig@privatbank.de tobias.waescher@privatbank.de

Thomas Blessing Markus Laermann

Consultant Retail Letting Senior Consultant Investment
Phone 089-179594-23 Phone 089-179594-10
thomas.blessing@privatbank.de markus.laermann@privatbank.de

DISCLAIMER:
The preparation of this study was conducted with great care. Nevertheless ELLWANGER & GEIGER Privatbankiers
has not verified the accuracy of the estimates. Therefore we make no guarantee about it. We ask for
understanding.