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UPDATE VALUATION

REPORT WITH VISIT

« ATRIUM 1 », 50 Allée de Safed, 59777 EURALILLE,

France

Valuation Report: 02 August 2016

Date of Valuation: 30 June 2016

On behalf of

A.D.N GLOBAL EQUITY

Sasson Hogi Towers:12 Abba Hillel Silver P.O Box 3669

RAMAT GAN

5213606

ISRAEL

D2016-0xxxx FTRU/ALPE/SDEN/PAST

TABLE OF CONTENTS

1 EXECUTIVE SUMMARY

2 VALUATION REPORT

3 PROPERTY REPORT

PROPERTY DETAILS

LEGAL CONSIDERATIONS

MARKET COMMENTARY

VALUATION CONSIDERATIONS

OPINION OF MARKET VALUE (FAIR VALUE)

4 APPENDICES

A LOCATION PLANS

B CADASTRAL PLAN

C PHOTOGRAPHS

D FLOOR PLANS

E LIST OF DOCUMENTS REQUESTED AND RECEIVED

F GENERAL PRINCIPLES

G VALUATION CALCULATION

« ATRIUM 1 » 50, ALLÉE DE SAFED – 59777, EURALILLE


1

1 EXECUTIVE

SUMMARY



2

EXECUTIVE SUMMARY

The Property

Address: « ATRIUM 1 », 50 Allée de Safed, 59777 EURALILLE, France

Main Use: Office

Site area: 60,941 sq m

Lettable area: 5,502 sq m

Tenure

According to the title deed dated 21st April 2005, the property consists of co-ownership

lots forming an office building held in flying freehold by SCI du 50 ATRIUM.

The property is registered section TX n°11, for a total area of 60,941 sq m

Tenancies and Covenant Strengths

Detailed financial investigations of the tenant are outside the scope of this report.

The subject property is 100% let to 4 tenants (except 5 car parking places) and two of

them being part of EDF group.

The weighted average break option is 3.07 years as at 31 December 2015, which

means that the rental income is secured for this period of time.

We believe that the property investment market would view the tenants in place as

providing good financial security.



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Gross Current Income

€907,989 per annum

(€165 per rented sq m per annum, pkgs and staff

canteen included)

Gross Market Rent

€890,773 per annum

(€162 per sq m per annum, pkgs and staff canteen

included)

Market Value (Fair Value)

Upon the assumption that there are no onerous restrictions or unusual outgoings of

which we have no knowledge and the specific comments and assumptions, which are

set out in this valuation statement, we are of the opinion that the total market value of

the subject property, as at 30 June 2016, is:

12,740,000 EUR

(Twelve Million Seven Hundred and Forty Thousand Euros)

Excluding transfer costs and duties

The gross market value is €13,622,186 including €878,262 purchaser’s costs

(6.90%).

Our opinion of Market Value reflects the following yield profile:

Equivalent Yield 6.35%

Reversionary Yield 6.41%

Net Initial Yield 5.55%

Capital Value in EUR / sq m €2.315 /sq m

For further information, please refer to the Appendix G “Valuation Calculation”.



4

Comments

STRENGTHS

1. Very good location, in the heart of

Lille’s central business district (“Euralille”)

2. Excellent access by road and by public transport,

3. Property fully rented, with a WABO of 3.07 years and a WALT of 4.91 years (according to the assumptions)

4. The main tenants present excellent covenant.

5. good quality of the fixtures and fittings

6. Property benefitting from a staff restaurant,

7. Building classified as a Category 2 ERP (building suitable for public admission)

8. Adapted number of interior car spaces regarding the very central location of the property.

WEAKNESSES

1. Property held under a volume division

2. High level of charges and taxes: €90/sqm/a split as follows: - service charges = €67/sqm/a, - land tax = €23/sqm/a

OPPORTUNITIES

1. Property easy to subdivide for multi-tenant occupancy.

2. The vacancy rate in Lille region is only around 5% at the valuation date. Moreover the demand for office spaces in Euralille 1 is still very strong.

3. Potential reconversion use for the premises located on the ground floors: retail premises (food court / leisure) or services.

THREATS

1. Competition from recent office

properties in the North-East periphery of Lille.

2. Building aging even though well-maintained.

3. 550 sqm will be vacated by EDF on 31/03/2017.



5

Attraction of the Property:

As at the valuation date, the property is fully rented to 4 tenants (except 5 car parking

places). The 2 major tenants of the property have excellent covenant strength. The

leases are drawn on terms which are as close as possible to triple net. The landlord’s

liability in terms of Art 606 of the French Civil Code (repairs to roof and structure). The

tenant undertakes to maintain the property in each case.

We have assumed that there is no risk related to construction, state of repair,

environment or any legal issues.

Risks and Mitigating Factors:

The subject property presents some disadvantages: the age and state of repair of the

building (19 years old balanced well-maintained building), the high level of rental

charges, the reduced natural brightness in a part of the building.

These points are also balanced by the fact that the property is well-maintained and the

major tenant present excellent covenant.

According to the information we have been provided by our client, EDF has notified the

return of 550 sqm on 31/03/2017, i.e. circa 10% of the areas will be vacant at that

date. As at the valuation date there are 9 remaining months which is reasonable to find

a new tenant.

Concerning investment market at this stage we consider the property having an

average liquidity. One consequence of the constant search for quality and security is

that secondary products are not very much in demand. Investors continued to be

averse to risk, focussing on very good quality secure assets. Good quality well located

properties, with strong tenants, were the most sought after type of asset, with sometimes

investors giving priority to one criterion or the other. There is therefore an ever-growing

theoretical gap between yields for prime products and yields for secondary products.

This trend applies to all types of assets, but is difficult to measure exactly because there

is no real market for secondary products at the moment.



6

2 VALUATION REPORT

« ATRIUM 1 » 50, ALLEE DE SAFED – 59777, EURALILLE


7

CBRE Valuation France 145-151 rue de Courcelle

75017 Paris

T: +33 1 53 64 00 00 F: +33 1 53 64 34 34

VALUATION REPORT

Report Date 05/08/2016

Addressee A.D.N GLOBAL EQUITY Ltd

Dganit Grinberg,

Avremi Rapoport,

Sasson Hogi Towers:12 Abba Hillel Silver

P.O Box 3669

RAMAT GAN

5213606

ISRAEL

The Property « ATRIUM 1 », 50 Allée de Safed,

59777 EURALILLE,

France

Property Description The property is built on a plot of land totalling 60,941

sqm and registered under the cadastral reference TX n°

11.

The subject property accommodates 5,502 sqm of

office, training and retail spaces. It also benefits from

72 underground car parking units and from a corporate

restaurant.

Ownership Purpose Investment



8

Instruction In accordance with your instructions confirmed in July

2016, we have valued an office property, located 50

Allée de Safed, 59777 EURALILLE, France, and where

possible, made all appropriate enquiries in order to

advise you as to our opinion of the property’s:

Estimated rental value,

Market Value (Fair Value) in its current state at the

date of valuation, as defined in the basis of

valuation herewith and under the various

assumptions set out in greater detail below.

Purpose and date of valuation

This report is intended to estimate the fair value of

the property interest subject to all leasehold

interests, as determined by IAS 40, at 30 June

2016.

The Valuation is to be provided to you for use by

you (financial publication) and any bank or other

financial institution (collectively, the "Lenders") that

provide funds directly or indirectly in connection to

the Loan Facility by any means including

syndication, sub-participation, assignment, transfer

and/or securitisation.

The reports is a valuation report that we made to

determine the fair value of the properties as at 30

June 2016 in accordance with the IAS/IFRS

Standards and the regulations of the Israel

Securities Authority

We confirm that the valuation date is: 30 June

2016.



9

Addressee and reliance

This Valuation report is addressed to and may be relied

upon by A.D.N GLOBAL EQUITY and to further

assignees or transferees of any of those parties for the

purposes of a syndication and/or securitisation of the

Loan Facility. It may be disclosed to (but not relied upon

by) any rating agency, any manager and any investor or

potential investor and their advisers but otherwise may

not be disclosed to or relied upon by any other person

without our prior written consent.

Moreover we confirm that we have given our consent to

the inclusion of the full report within the financial

statements as of 30 June 2016 of A.D.N GLOBAL

EQUITY LTD which is intended to be published in

September 2016.

Should the Addressee want to include a reference to the

Valuation in any other publication, our prior written

approval will be sought, such approval not to be

unreasonably withheld.

Compliance with Valuation Standards

The valuation has been prepared in accordance with

The RICS Valuation Standards (Jan 2014). The property

details on which each valuation is based are as set out

in this report.

We confirm that we have sufficient current local and

national knowledge of the particular property market

involved, and have the skills and understanding to

undertake the valuation competently.

Status of Valuer The Valuers are independent Valuers as defined by the

RICS Valuation Standards.

Experience of the Valuers

The property has been valued by a valuer who is

qualified for the purpose of the valuation in accordance

with the RICS Valuation Standards.

Report format This report details all the considerations that we have

taken into account in order to provide both the

estimated rental value and the fair value of the subject

property.

The “General Principles” attached as Appendix of this

report detail our treatment of various aspects relevant to

the valuation of the property, incorporating further

general assumptions and definitions. We specifically

draw your attention to these.



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Currency The reporting currency is Euro.

Special Assumptions None

Assumptions We have made various assumptions as to tenure,

letting, town planning, and the condition and repair of

buildings and sites – including ground and groundwater

contamination – as set out below.

If any of the information or assumptions on which the

valuation is based are subsequently found to be

incorrect, the valuation figures may also be incorrect

and should be reconsidered.

Variation from Standard Assumptions

Other than mentioned, none.

Verification We recommend that before any financial transaction is

entered into based upon this valuation, you obtain

verification of the information contained within our

report and the validity of the assumptions we have

adopted.

As a general condition, we would advise you that whilst

we have valued the Property reflecting current market

conditions, there are certain risks, which may be or may

become uninsurable. Before undertaking any financial

transaction based upon this valuation, you should

satisfy yourselves as to the current insurance cover and

the risks that may be involved should an uninsured loss

occur.

Independence The total fees, including the fee for this assignment,

earned by CBRE Valuation S.A.S. (or other companies

forming part of the same group of companies within

France) from the Addressees and the Borrower (or other

companies forming part of the same groups of

companies) are less than 5.0% of the total France

revenues.

Information We have relied upon information provided by our

client.



11

Conflict of Interest There is no conflict of interest between our company

and the client or property.

Please not that CBRE Valuation was instructed in

December 2015 to carry-out the Market Value

valuation for the intention of the lender, namely Saar

LandesBank.

Insurance and Liability The liability of CBRE, of a legal representative or an

agent is restricted to gross negligence and wilful intent.

The liability restriction referred to in the first paragraph

shall not apply, if and as far as product liability claims

are present, if the existence of a defect has been

maliciously concealed, if a guarantee has been

assumed and/or in case of a personal injury, death or

damage to personal health.

The liability restriction referred to in the first paragraph

shall not be applicable in cases of negligence, if

essential Contractual obligations (so-called “cardinal

duties”, the satisfaction of which enables the proper

execution of the Contract at all and on which the Client

relies and may as a rule rely on its compliance) have

been violated. However, the liability for essential

Contractual obligations is limited to the reimbursement

of the foreseeable, typically occurring damages.

The Client will be sole responsible for the information

and documents sent to the valuer. The Valuer’s

responsibility will not be sought should the Client

provide inexact or incomplete information or

documents. The contractual responsibility of the Valuer,

criminal or of any other nature resulting from or linked

to the execution of the present contract or provided for

in another form in the instruction letter, is limited to:

A hundred times the amount of fees received excluding

VAT if the value of the assets, as mentioned in our

valuation report, does not exceed ten million euros.

Four million euros if the value of the assets, as

mentioned in our valuation report, is superior to ten

million euros.

The capped amount to our responsibility is global (no

matter the amount of claims) and applies to the entire

assets concerned in the engagement letter.



12

Limitation Warranty claims based on slight negligence shall

become time-barred one year after the termination of

the year in which the acceptance took place. Exceptions

hereto are the cases as referenced in Para 1 Sentence 2

(a) and (b) of “Insurance and Liability”.

Yours faithfully

Yours faithfully

Yours faithfully

Yours faithfully

Alexandre Petitpré

Senior Surveyor

Valuation & Advisory

Sylvain Denizot, MRICS

Regional Director


Franck Truong, MRICS,

Director


Pierrick Astier

Analyst


For and on behalf of CBRE

Valuation France


Valuation France

For and on behalf of CBRE Valuation

France


Valuation France

T: +33 1 53 64 34 61 T: +33 3 20 21 88 66 T: +33 1 53 64 34 38 T: +33 3 20 21 99 02

E: [email protected] E: [email protected] E: [email protected] E: [email protected]



13

SCOPE OF WORK & SOURCES OF

INFORMATION

Sources of Information

We have carried out our work based upon information

supplied by our client, listed below:

Copy of the different leases,

Rent Roll dated June 2016,

Breakdown of areas per plot number and per storey

carried out in April 2007 by MOREL & MOREL,

land surveyor;

Copy of the asbestos reports (suspended ceilings,

flocking and insulation) dated 9 July 1998 and 30

October 2001 which concluded that no asbestos

was present,

Copy of the documents concerning pollution and

listed facilities,

Copies of the building permit application dated 9

February 1994, of the PCM application dated 3

November 1994, of the PC decrees dated 30

March 1995 and of its appendices dated 16 July

1992 and 3 December 1991.

Breakdown of land tax and co-ownership charges

per property and per type of area (office / pkg).

Copy of the recent leases and their amendments.

Please refer to Appendix “List of documents requested

and received”.

All conclusions made by CBRE as regards the condition

and the actual characteristics of the land and buildings

have been based exclusively on our inspection of the

subject property and on the documents and information

provided.

CBRE has assumed that it was provided with all

information and documents that were relevant to CBRE

in carrying out this appraisal report. We have assumed

that the information and documentation had unrestricted

validity and relevance as at the date of valuation. We

have not checked the relevant documents and

information with respect to the above-mentioned issues.

The Property Our report contains a summary of the property details

on which our valuation has been based.



14

Inspection The Property was inspected internally and externally on

27th January 2016 by Pierrick Astier, representing CBRE

Valuation France.

The inspection took place in the morning and the sky

was cloudy.

CBRE had access to the subject property in order to

carry out the inspection. We have not carried out any

building surveys. The property has not been measured

as part of CBRE’s inspection nor have the services or

other installations been tested. All of CBRE’s

conclusions resulting from the inspection are based

purely on visual investigations without any assertion as

to their completeness.

Investigations that might cause damage to the subject

property have not been carried out. Statements about

parts of the structure or materials that are covered or

otherwise inaccessible are based on the information or

documents provided or on assumptions. In particular,

structural surveys and technical investigations of any

defects or damage of the property, which may exist,

have not been carried out.

Areas We have not measured the Property but have relied

upon the floor areas provided.

Environmental Matters

We have been provided with several environmental

reports, whose conclusions are listed below

(“Environmental considerations”)

We have not carried out any investigation into the past

or present uses of the Property, nor of any neighbouring

land, in order to establish whether there is any potential

for contamination and have therefore assumed that

none exists.



15

Repair and Condition We have not carried out building surveys, tested

services, made independent site investigations,

inspected woodwork, exposed parts of the structure

which were covered, unexposed or inaccessible, nor

arranged for any investigations to be carried out to

determine whether or not any deleterious or hazardous

materials or techniques have been used, or are present,

in any part of the property. We are unable, therefore, to

give any assurance that the property is free from defect.

Town Planning We are not planning experts and we have provided

general information only. If the Addressee requires

additional information in this regard, they should have

the documentation reviewed by a specialised firm of

planning consultants.

Titles, Tenures and Lettings

Details of title/tenure under which the property is held

and of lettings to which it is subject are as supplied to

us. We have not generally examined nor had access to

all the deeds, leases or other documents relating

thereto. Where information from deeds, leases or other

documents is recorded in this report, it represents our

understanding of the relevant documents. We should

emphasise, however, that the interpretation of the

documents of title (including relevant deeds, leases and

planning consents) is the responsibility of your legal

adviser.

We have not conducted credit enquiries on the financial

status of any tenants. We have, however, reflected our

general understanding of purchasers’ likely perceptions

of the financial status of tenants.



16

VALUATION ASSUMPTIONS

Fair value We confirm that the "Fair Value" reported in the

portfolio report, for the purpose of financial reporting

under International Financial Reporting Standards, is

effectively the same as "Market Value".

Our opinion of “Fair Value” is based upon the Scope of

Work and Valuation Assumptions attached, and has

been primarily derived using comparable recent market

transactions on arm’s length terms.

Please note that the definition of market value is the

estimated amount for which an asset or liability should

exchange on the valuation date between a willing buyer

and a willing seller in an arm’s-length transaction after

proper marketing wherein the parties had each acted

knowledgeably, prudently and without compulsion.

Please note that the market value stated in each

property report as to be considered as fair value.

Capital Values Acquisition costs have been included in our valuation.

No allowances have been made for any extraordinary

expenses of realisation, nor for taxation which might

arise in the event of a disposal.

No account has been taken of any inter-company

leases or arrangements, nor of any mortgages,

debentures or other charges.

No account has been taken of the availability or

otherwise of capital based Government or European

Community grants and Capital Gains Tax.

Rental Values Rental values indicated in our report are those which

have been adopted by us as appropriate in assessing

the capital value and are not necessarily appropriate for

other purposes nor do they necessarily accord with the

definition of Market Rent.



17

The Property Where appropriate we have regarded the shop fronts of

retail and showroom accommodation as forming an

integral part of the building.

Landlord’s fixtures such as lifts, escalators, central

heating and other normal service installations have

been treated as an integral part of the building and are

included within our valuations.

Process plant and machinery, tenants’ fixtures and

specialist trade fittings have been excluded from our

valuations.

All measurements, areas and ages quoted in our report

are approximate.

Environmental Matters

We have not conducted any environmental analysis to

determine the current condition of the soil and water

table of the site and therefore we have assumed that:

(a) the property is not contaminated and is not

adversely affected by any existing or proposed

environmental law;

(b) any processes which are carried out on the property

which are regulated by environmental legislation are

properly licensed by the appropriate authorities.

Site Conditions We did not carry out investigations on site in order to

determine the suitability of ground conditions and

services, nor did we undertake environmental,

archaeological, or geotechnical surveys. Unless notified

to the contrary, our valuations were carried out on the

basis that these aspects are satisfactory and also that

the site is clear of underground mineral or other

workings, methane gas, or other noxious substances.

In the case of a property which may have

redevelopment potential, we have assumed that the site

has load bearing capacity suitable for the anticipated

form of redevelopment without the need for additional

and expensive foundations or drainage systems.

Furthermore, we have assumed in such circumstances

that no unusual costs will be incurring in the demolition

and removal of any existing structure on the property.



18

Legal Requirements / Consents and Authorisation for the Use of the property

An investigation of the compliance of the property with

legal requirements (including /permanent/ planning

consent, building permit, acceptance, restrictions,

building, fire, health and safety regulations etc.) or with

any existing private-law provisions or agreements

relating to the existence and use of the site and building

has not been carried out.

In preparing our valuations, we have assumed that all

necessary consents and authorisations for the use of the

property and the processes carried out at the property

are in existence, will continue to subsist and are not

subject to any onerous conditions.

Taxes, Contributions, Charges

Since no information to the contrary has been brought

to our attention, we have assumed that all public taxes,

contributions, charges etc. which could have an effect

on value will have been levied and paid as at the date

of valuation.

Insurance Policy Since no information to the contrary has been brought

to our attention, we have assumed that the subject

property is covered by a valid insurance policy that is

adequate both in terms of the sum assured and the

types of potential loss covered.

Statements by Public Officials

In accordance with established legal practice, we have

not regarded statements by public officials, particularly

regarding factual information, as binding. We do not

assume any liability for the application of any such

statements or information in the subject appraisal

report.

Assumptions regarding the Future

For the purpose of determining the market value of the

subject property, we have assumed that the existing

business will continue (as regards both manner and

extent of usage of the subject property) for the

remainder of the useful life determined for the

buildings, or that comparable businesses would be

available to take over the use of the subject property.

Where there is high voltage electricity supply apparatus

within close proximity to the property, unless, otherwise

stated, we have not taken into account any likely effect

on future marketability and value due to any change in

public perception of the health implications.



19

Tenants No investigations have been carried out concerning

either the status of payments of any contractually

agreed rent or ground rent at the date of valuation, or

of the creditworthiness of any tenant(s). Since no

information to the contrary has been brought to our

attention, we have assumed that there are no

outstanding rental payments and that there are no

reservations concerning the creditworthiness of any of

the tenants.

Pending Litigation, Legal Restrictions (Easements on Real Estate, Rent Regulation etc.)

Since no information to the contrary has been brought

to our attention, we have assumed that the property is

free from any pending litigation, that the ownership is

unencumbered and that there are no other legal

restrictions such as easements on real estate other than

those referred to our valuation assumptions, rent

regulations, restrictive covenants in leases or other

outgoings which might adversely affect value.

Repair and Condition In the absence of any recent information, we have

assumed that:

(a) there are no abnormal ground conditions, nor

archaeological remains, present which might adversely

affect the current or future occupation, development or

value of the property;

(b) the property is free from rot, infestation, structural or

latent defect; and

(c) no currently known deleterious or hazardous

materials or suspect techniques, including but not

limited to Composite Panelling, have been used in the

construction of, or subsequent alterations or additions

to, the property; and

(d) the services, and any associated controls or

software, are in working order and free from defect.

We have otherwise had regard to the age and apparent

general condition of the property. Comments made in

the property details do not purport to express an

opinion about, or advise upon, the condition of

uninspected parts and should not be taken as making

an implied representation or statement about such

parts.



20

Subsidies Since no information to the contrary has been brought

to our attention, we have assumed that there are no

circumstances related to subsidies or grants that might

influence the value of the property.

Title, Tenure, Planning and Lettings

Unless stated otherwise within this report, and in the

absence of any information to the contrary, we have

assumed that:

(a) the property possesses a good and marketable title

free from any onerous or hampering restrictions or

conditions;

(b) all buildings have been erected either prior to

planning control, or in accordance with planning

permissions, and have the benefit of permanent

planning consents or existing use rights for their current

use;

(c) the property is not adversely affected by town

planning or road proposals;

(d) all buildings comply with all statutory and local

authority requirements including building, fire and

health and safety regulations;

(e) there are no tenant’s improvements that will

materially affect our opinion of the rent that would be

obtained on review or renewal;

(f) tenants will meet their obligations under their leases;

(g) there are no user restrictions or other restrictive

covenants in leases which would adversely affect value;

(h) where appropriate, permission to assign the interest

being valued herein would not be withheld by the

landlord where required; and

(i) vacant possession can be given of all

accommodation which is unlet or is let on a service

occupancy.

VAT All rents and capital values stated in this report are

exclusive of VAT.



21

3 PROPERTY REPORT



22

PROPERTY DETAILS

Location

The subject property is located in the city of Lille, the county town of the French region

of “Nord-Pas-de-Calais”.

With an excellent geographical location in the centre of the Paris-London-Brussels

triangle, Lille Métropole has had a successful post-industrial conversion. The major

Channel tunnel, high speed train (TGV) and Euralille construction sites were the driving

forces of the transformation of this cross-border 1.2 million inhabitant’s city.

The property is located more specifically in the EURALILLE area, considered as the

central business district of Lille. The Euralille area is located in the city centre, on over

120 ha fully managed by SAEM Euralille in charge of developing the whole

programme and selling the building rights.

More precisely the property, subject to valuation, is situated at the northern end of the

Euralille area and does not benefit from a good visibility from the street, apart from the

premises facing passageway towards the Lille train station which enjoys higher

pedestrian traffic.

Location plans of the property are attached in Appendix.



23

Road and railway access

Public transport:

Located between two railway stations (Lille Europe / Lille Flandres), the property

benefits from an excellent access by public transport:

The train stations (TGV) Lille-Europe and Lille-Flandres are connected with the high speed railway service Eurostar (UK), the Thalys network (Belgium), the national and local railway networks;

Two Tramway lines, two subway lines and several bus lines serve the railway stations “Lille-Europe” and “Lille-Flandres”.

Moreover the Lille-Lesquin airport is located less than 15 km away.

Road access:

The subject property benefits from a direct access to motorways A1 (Paris), A25

(Eurotunnel) and A27 (Brussels).

Comment

In summary, the property is located in the heart of the central business district of Lille

and benefits from a very good access by road and by public transport. However, it

does not benefit from a good visibility.



24

Site

The subject property is part of a larger real estate complex described by two documents

[Etat Descriptif de Division volumétrique] known as the “Triangle des Gares” and the

“Cité des Affaires”.

The plots consist specifically of volume 12 from the volume division known as the

“Triangle des Gares” and of volumes 11, 12 and 14 from the volume division known

as the “Cité des Affaires”. Some co-ownership lots currently used as the canteen have

been classified as indivisible for the co-owners.

The property complex (offices and shopping centre) is built on a plot covering 60,941

sq.m, registered in the land registry section TX n° 11.

The land is not fenced. The building occupies the entire the plot and is connected with

the shopping centre Euralille.

A cadastral plan of the property is attached in Appendix.



25

Description

Constructions

The property, mainly used as an office building, is arranged over 3 basement levels, a

ground floor and 4 floors used for offices.

It was constructed in 1995 and was designed to seem as a glass and aluminium prism

with four parts (A, B, C and D) stretching out around an atrium.

The building frame is of reinforced concrete.

Roofing consists of light steel sheeting posed on a horizontal structure with a metal roof

support. The atrium is covered by glass (skeleton in anodised natural aluminium

covered with double glazing).

Walls façades feature outside framework in aluminium and double glazing.

The building is classified as a Category 2 ERP (building suitable for public admission).

The property is also equipped with 72 internal car spaces located in the “Euralille”

Vinci Park.

Layout

Upper Ground Floor

The ground floor (building D) is divided into two parts separated by a central core:

- Central core: comprises a hall which can be accessed directly from the

square and the atrium. The hall ensures access to the two parts on this level,

via an elevator and a stairwell.

- Left part: a large area of some 137 m² with access from the central hall and

also directly from the atrium. These premises have been let to “ENVIE DE

SAISONS” since 1st October 2013, and used as a salad bar.

- Right part: set of partitioned or open-space offices with a central corridor

that can be accessed from the central hall. An emergency exit to the atrium

has been refurbished as an office. These offices, let to EDF, are decorated

in a classical manner.

On this level, the atrium is accessible to the north from the square by two accesses,

one in the middle of part A, the other between parts A and D.



26

Floors 1 to 4

Upper floors are for offices and conference rooms. They are allocated along three

buildings sections on two, three and four floors.

The overall configuration for each level is as follows:

- Partitioned offices with natural daylight and conference rooms accessed via

a central corridor

- A central building section containing WC facilities, a stairwell and two

elevators. It should be noted that building sections B and C do not have an

elevator.

- Level 4 of the building sections A and D can be accessed only via the

stairwell from the lower floor.

The property also includes 72 parking spaces located in the basement of the building

atrium shared with the shopping centre. Only markings on the pillars make it possible

to make a distinction but there is no access restriction to these spaces.



27

Fixtures and fittings

The premises are fitted with the following materials:

Entrance Hall:

- Flooring in remoulded flagstones

- Ceiling in staff.

Corridors:

- Floor carpeting

- Partitions

- Suspended ceiling with recessed lighting.

Passageways:

- Parquet flooring

Offices:

Considering the fact that the internal fixtures and fittings depend on the tenant’s

choice, it has been observed that, in general terms, the premises present a good state

of repair and are fitted with the following materials:

- Floor carpeting

- Removable glazed partitions

- Suspended ceilings with metallic micro-perforated casements, solid ceiling in

the last level.

Sanitary:

- Tiled flooring

- Tiled walls.



28

Services and Amenities

The building was constructed in 1995 and benefits from the following technical

equipment:

Vertical circulations (for the whole ATRIUM building)

- Four lifts

- Four staircases for access to the various levels in the building

- Emergency access

- One escalator for access to the canteen

- One escalator for access to the exterior from the Atrium.

Heating / Air conditioning

- Reversible heating/refreshing system (individual heat pump type on a water

circuit).

- The individual pumps and the water circuit located in the individual sectors are

privately owned by each proprietor. The water circuit located in the common

areas is owned by the joint property.

Air stations:

- Air treatment stations (“full air replenishing”) including a hot water supply (no

cold water supply) replenish the office air.

Security

- Remote surveillance

- Access control

- Alarm

Fire safety

- Fire detection system,

- Alarm,

- Extinguishers,

- Smoke hatches,

- Sprinklers.



29

Comment:

In summary, we are of the opinion that the subject property is well maintained and

offers a good layout and that the offices are fit-out to modern market standards.

Moreover, given its configuration, the building can be divided to be occupied by

various tenants.

Photographs of the property are attached in Appendix.



30

Areas

We have not measured the property, but as instructed, we have relied upon floor areas

provided to us by our client (Géomètre-Expert Morel & Morel dated April 2007). Our

inspection allowed us to conclude that the measurements transmitted seem correct.

In summary, the net internal floor areas are as follows:

Floor Areas

NOTA BENE:

- In the frame of this study, the surface area mentioned comes from the

breakdown of areas per plot number and per storey provided by L’Etoile

Properties, cross-checked with the plans per level carried out in April 2007 by

MOREL& MOREL, land surveyor, and confirmed by the different leases and by

the tenancy schedule dated

- The subject property benefits from a global lettable area of 5,502 sq m, and

from 72 internal parking spaces. Therefore the number of parking spaces

results in a ratio of 1 space per 75 sq m usable area. This ratio could ordinary

be thought as slightly insufficient, but considering the high quality access to the

property by public transport, this ratio can be considered as convenient.

Floor Plans of the property are attached in Appendix.



31

State of Repair

The property was completed in 1995. At the valuation date, the property presents a

good state of repair and is not subject to any immediate repairs. We have however

considered that the property will be subject to maintenance works on a regular basis

(art 606 of the French Civil Code). We have retained an amount of 2.00% of the

rental value per annum, in perpetuity in the frame of our valuation.

CBRE have not undertaken a structural survey, nor tested the services. We have not

been supplied with a survey report prepared by any other firm. We have undertaken

only a limited inspection for valuation purposes.

General Condition

The property presents an adequate state of repair that is confirmed by the site

inspection and by the document mentioned above. It has to be pointed out that the

layouts together with the arrangement depend on the tenant consideration.

Capex deduction

Works related to the 606 article of the Civil Code are to be supported by the owner.

However, we are not qualified to estimate the amount of work. Therefore, we have

integrated those future works in the yield appreciation and we have also retained an

amount of 2.00% of the rental value per annum for recurrent maintenance works.

Conclusion:

Our site inspection allows us confirm our opinion of the current state of repair of the

premises. They are currently in a good state of repair.



32

Environmental Considerations

We were not instructed, nor have we carried out; structural surveys, tested services,

made independent site investigations, inspected woodwork, exposed parts of the

structure which were covered, unexposed or inaccessible, nor arranged for any

investigation to be carried out to determine whether or not any deleterious or

hazardous materials or techniques have been used or are present in any part of the

properties. We are unable, therefore, to give any assurance that the property is free

from defect.

Soil pollution

In the frame of this study, we have not been provided with any diagnostic report

regarding the existence of soil pollution on site. As a consequence, we have considered

that the property is not, or likely to be, affected by land contamination and that there

are no abnormal ground conditions, nor archaeological remains, nor hazardous nor

deleterious materials present which might adversely affect the present or future

occupation, development or value of the property.

Asbestos

The asbestos survey provided by dated 9 July 1998 and 30 October 2001 concluded

that no asbestos is present within the property.

Termites

The town of Lille is not located within a zone contaminated by termites according to the

French Ministry of Environment.

Legionella

In the frame of this study, we have not been provided with any diagnostic report

regarding the existence of legionella on site. As a consequence, we have assumed that

there is no legionella on site.

Lead

The property, being not allocated to residential use, it is not subject to the provisions

relative to the article 123 of the law n°98-567 dated 29th July 1998.

Natural and technological risks

The property is not included in a zone affected by natural or technological risks

(flooding, etc.).

Conclusion

Based on the findings or statements mentioned above, we have not identified any

environmental risk factors which, in our opinion, would affect value. However, CBRE

give no warranty as to the absence of such environmental risk factors.



33

Town Planning

Planning regulation

The land use plan of the Métropole Européenne de Lille (MEL) (plan local d'urbanisme

- PLU) was approved on 8 October 2004 and modified in April 2011. The plot of

land, subject to our study, is included in the UL1a area of the PLU.

The UL1a area corresponds to the first part of Eurallille and also includes the shopping

centre.

It is affected by the following public easements:

The land is subject to a pre-emptive right benefiting to the town hall [Droit de

préemption urbain]

The land is located within the protected perimeter of an historic monument

Archaeological site

Waste water drains

Metro subsoil easement

Electromagnetic waves.

In summary, we are not aware of any issues which would adversely impact upon the

value of the property. The subject property has been constructed in compliance with the

town planning regulation.

Planning History / Construction Documentation

In the frame of this study, we have not been provided with the history of the planning

permissions and the certificates of compliance concerning the subject property.

We have assumed that the property is fully authorised in terms of town and country

planning. We reserve the right to alter our valuation, should any information contradict

our assumptions.

From the documentation we have viewed and from our inspection, there is nothing that

has come to our attention that in our opinion would give rise to any contravention of

statutory requirements. However, we cannot be certain that we have seen all

documentation or physical acts or processes that would give rise to any contravention.

Therefore, we reserve the right to amend our valuation accordingly if any further

information comes to light. In summary, we are not aware of any issues which would

adversely impact upon the value of the property.



34

Monument Protection

The property, subject to our study is not subject to monument protection. This is

confirmed by the PLU (plan local d’urbanisme).

VAT

We understand from the lease that the property is elected for VAT.

All rents and capital values stated in this report are exclusive of VAT.



35

LEGAL CONSIDERATIONS

Tenure

According to the title deed dated 21st April 2005, the property consists of co-ownership

lots forming an office building held in flying freehold by “SCI du 50 ATRIUM”

represented by SAS Yizoom France.

Cadastral Information

The land is registered as parcels of land under the following cadastral references:

Section TX n° 11: 60,941 sq m.

We have not been provided with any encumbrances, restrictions, easements in the land

register. Furthermore, the deed of sale transmitted by the client does not mention any.

Thus, we have assumed that the subject property is free from any encumbrances or

restrictions.

We provided a copy of the Cadastral Register Extract attached in Appendix.

Administrative authorization

From the documentation we have been provided with and our inspection, we

understand that the subject property has been constructed in accordance to the town

planning regulation and the building permit.

According to the building permit, the building was constructed to be used primarily as

offices.

Infrastructure Provisions

The site of the property is fully developed and no recoupment charge for local public

infrastructure has to be paid. According to our understanding, there are no outstanding

local infrastructure charges or any planned developments for the subject property.

Easements & Restrictions

The land, subject to our study, is located in a sector dedicated to mixed economic

activities such as office use, service, craft, trade, non-polluting light industrial and

public facilities uses.

There are no further easements and restrictions that were brought to our attention.

We have thus considered that there is no financial impact on the valuation (market

value).



36

Tenancy

At the valuation date (30 December 2016), the tenancy schedule is as follows:

TenantStart

dateLease type

Break

option

Expiry

dateUse Lettable Area

Interior

Parking

units

Global rent Rent /sqm/a

Land

tax to

be

paid

by

Proper

ty tax

to be

paid

by

Manage

ment

fees to

be paid

by

Art.

606

Works

to be

paid by

ERDF 01/04/14Commercial

6/931/03/20 31/03/23 Offices 593,0 sq m 16 u 101 599 € 171 €/sq m tenant tenant tenant landlord

EDF 01/04/11Commercial

6/931/12/18 31/03/20 Offices 2 158,0 sq m 51 u

EDF

(regularization)01/04/11

Commercial

6/931/12/18 31/03/20 Offices 44,0 sq m 0 u

EDF returned

premises01/04/11

Commercial

6/931/03/17 31/03/17 Offices 550,0 sq m 0 u 78 681 € 143 €/sq m

ENVIE DE

SAISONS01/10/13

Commercial

6/930/09/19 30/09/22 Retail 163,8 sq m 0 u 21 320 € 130 €/sq m tenant tenant tenant landlord

MAESTRIS -

front premises1 190,4 sq m 0 u

MAESTRIS -

back premises803,0 sq m 0 u

VacancyCar park

spaces5 u - - - - - -

TOTAL 5 502,2 sq m 72 u 774 430 € 141 €/ sq m

vacancy rate 0%

headline net rent = 903 975 € 164 €/ sq m

by retaining headline net rents for Envie de Saison and Maestris

pkgs and staff canteen included

pkgs and staff canteen included

379 623 € 172 €/sq m tenant tenant

tenant tenant tenant landlord

Annual Rent excl. taxes

and charges

at 30 June 2016

tenant landlord

01/07/14Commercial

6,75/9,7531/03/21 31/03/24 School 193 207 € 97 €/sq m



37

Nota Bene: the global annual rent mentioned in the tenancy schedule provided by the

asset manager amounts to € 907,988 (‘net annual rent after tenant incentives’). The

diffiference with the above document comes from several reasons:

- leases recently indexed,

- The rent of MAESTRIS has several steps and includes rental charges (€67

/sqm/a). We have retreated it to reflect the net current rent excluding taxes and

charges.

- The rent of Envie de Saison is assorted with several steps.

Lease Summaries

ERDF

ERDF

Start date: lease renewed on 01/04/2014

End of lease: 31/03/2023

6/9 years lease

Premises: 3rd and 4th floors (i.e. 593 sqm) + 16 parking spaces

Current rent : €101,599 pa excluding taxes and charges,

7 months of rent free split between the first 6 years of the lease (2 during the first

year then 1 months per year);

Additional 3 months of free rent if the tenant does not exercise the break option

after the first 6 years (assumption retained in our valuation).

Guarantee deposit : none

Annual indexation based on ILAT index (without possibility for the rent to fall

under the initial rent)

Taxes and charges: paid by the tenant

Art 606 of the French Civil Code: paid by the landlord.



38

EDF

(Please note that EDF also rents 132 sqm in the LILLE ATRIUM 2 property)

Comments:

Since 01/04/2014, EDF has been renting an extra area of 44 sqm vacated by

ERDF on 31/03/2014. Indeed these are technical premises (computer rooms)

necessary for the activity of EDF. The lease are has been regularized by an

amendment dated January 2016.

An amendment has been recently agreed between ADN and EDF: EDF cancels

its 31/03/2017 break option and extends its lease until 30/6/2020. In

counterpart the landlord grants an extra rent free period of 3 months.

According a lease amendment date January 2016, EDF had the opportunity to

return 550 sqm on 31/03/2017 in counterpart EDF:

o Has to deliver a leave notice before 30/06/2016,

o The 2-month of rent incentive schedule on Q2 2018 is cancelled.

We have been informed by our client that EDF has notified him that they will

return 550 sqm on 31/03/2017. Therefore we have taken that departure into

account, following a 9-month void period along with 3 months of rent free.

Key points of the lease:

Let areas: 2,708 sqm + 44 sqm = 2,752 sqm / 51 interior parking places

Start date: 01/04/2011

End of lease: 30/06/2020

Next break option: 31/12/2018 under the following conditions: return of the

whole premises, with a 12-month notice, a 6-month of rent compensation, the

refund of 1-month rent free in Q2-2016 and the cancel of a 2-month rent free

period in Q2-2018.

9.25 firm years

Current rent: €458,304 pa excluding taxes and charges. This includes the 44

sqm extra premises recently let.

Rent indexed annually on 1st April

Rent free:

The initial lease was assorted with a 6-month rent free period.

Another rent free period of 3 months has been agreed recently in

counterpart of a cancellation of the 31/03/2017 break option and of an

extension of the lease until 30/06/2020.

The rent free period agreed is split as follows:

1 month in May 2016 and 2 month in April-May 2018.


Art 606 of the French Civil Code: paid by the landlord



39

ENVIE DE SAISONS

Premises : 164 sqm located on the upper ground floor;

Use of the premises: snack / salad bar

6/9 firm year lease started on 01/10/2013

Step rent fixed at :

o €18,860 the first year

o €19,680 the second year

o €21,320 from the third year

6 months of rent free period split as follows:

o 3 months on Q4 2013

o 3 months on Q3 2016

Annual indexation based on ICC index Q1 2013 (1646);

Guarantee deposit : 3 months of rent;



Layout works: supported by the tenant.

MAESTRIS

(Please note that MAESTRIS also rents 712 sqm and 680 sqm in the LILLE ATRIUM 2

property)

Premises : 1,993.4 sqm split as follows:

o 1st floor facing Place de Rotterdam: 594.90 sqm

o 2nd floor facing Place de Rotterdam: 595.50 sqm

o 2nd floor rear building: 803 sqm

Use of the premises: graduate school

The lease is based on a total of 9.75 years:

o 9-month renovation period

o +6 year fixed period

o +3 year option period

Start date: 01/07/2014

Break option: 31/03/2021

Expiry date: 31/03/2024

Step rent / rent free:

o 9 months of rent free period at lease start corresponding to the

renovation period. The rent free includes the service charges (estimated



40

at €67/sqm/a) but excludes the land taxes (estimated at €23/sqm/a).

The tenant must pay back the whole rent free in case of departure

before lease end.

More precisely, during the renovation period the tenant has to pay the

service and co-ownership charges (€99,650) but if the 9-year option is

exercised this is returned to him in the 7th year (we retained such an

assumption in the valuation).

o Apr 2015-March 2016: €266,975 pa excluding taxes BUT including

service charges (estimated at €67/sqm/a)


service charges


service charges


service charges

o From Apr 2019: €486,205 pa excluding taxes BUT including service

charges

First indexation of the rent on 01/04/2019, based on ICC index Q1 2018.

Then rent indexed annually on 1st April.

Guarantee deposit : 3 months of rent;

Land Taxes : paid by the tenant.

Service charges and co-ownership costs: already included in the rent and

therefore non rechargeable to the tenant.


Layout works: supported by the tenant.



41

MARKET COMMENTARY

Office Market Overview in France – H1 2015



42



43



44

Office Market Overview in Lille (Q2 2016)

During the first semester 90,600 sqm have been transacted representing 198 deals.

This is a 52% increase regarding the 2015 1st semester. The average area amounts to

400 sqm.

The market was boosted by 3 major deals >5,000 sqm accounting for 20,000 sqm in

total: BNP took premises in a fully refurbished buildings and 2 turnkeyoperation for

Mobivia and Movitex.

The immediately available supply for office space in Lille’s agglomeration amounts to

230,000 sq m and mainly composed by second hand assets (82%).

The vacancy rate decrease slightly regarding the end of 2015 and is now established

at 5.2%

The supply of new or recent buildings remains very low encouraging turnkey

operations.

Then, 19,600 sqm under construction will be available before the end of 2016 in

second ranked offices areas (in Roubaix, Lesquin or Villeneuve d’Ascq), 17,100 sqm in

2017 (“Le 101” and “Le Conex” in Euralille) and and 14,800 sqm in 2018 (“Ekla” in

Eurallile).

The take-up demand is mainly composed by new premises (45%).

KEY FIGURES

Geographical distribution of the office

transactions :

The most demanded sector remains Lille and

Villeneuve d’Ascq (including Eurasanté and

Euratechnologies) which hosted 30% of the

transacted office space in S1 2016.

Occupiers are mainly IT, advising or finance

firms.

Secondly comes Eurallile and the “Grands

Boulevards” (11%).



45

Price levels (Rental and Sales markets) :

“Prime” Values remain stable, whereas Values for second hand premises tend to decrease

Facial rents in the most demanded sectors (Euralille 1 + vicinity of the railway stations) remained stable in

H1 2016, with a « prime » level of rent amounting to €220 /sqm/a excl. taxes and charges.

On the contrary, a decrease by 5% to 10% is observed for second hand peripheral properties, for which

rent free periods can reach 2 months per year of engagement.

Rental prices Sales prices

The subject property is located in EURALILLE submarket which can be considered as Lille’s Central Business District. In this sector, the average rents for second premises have globally remained stable since the end of 2014.



46

Estimated Rental Values / Sale Prices

On one hand the facial market rents for new, refurbished or recent properties,

remained globally stagnant during the year 2016 at €220/sqm pa as for commercial

incentives (rent free periods, layout works). On the other hand, for second hand

properties, and principally in secondary sectors, we observed a slight fall in the market

rents this year (-5% to -10%).

On the whole, estimated rental values for second hand tertiary premises currently

range between €80 and €160/sqm/a excl. taxes and charges. As for selling prices,

they are comprised between €900 and €1,600/sqm excl. Transfer costs.

Concerning new or refurbished office premises, rental values range between €110 and

€220 /sqm/a excl. taxes and charges. As for selling prices, they amount to

€2,400/sqm excl. transfer costs for the best programs.



47

Rental Comparable Evidences

We have listed below few comparable evidences occurred in the surroundings of the

subject property.

71 rue de Paris - 59800 Lille Date: 01/06/2016 Area: 400 sqm Rent: € 130/sqm pa State of repair: Second hand Comment: Second hand premises located in the very centre of Lille close to the Grand Place and to the train stations. “Opera Faidherbe” – 2 rue Anatole France - 59800 Lille Date: 11/05/2016 Area: 259 sqm Rent: € 220/sqm pa State of repair: Renovated Comment: Fully renovated office premises located in the very centre of Lille, on top of the Apple Store, in front of the Lille’s Opera. This transaction confirmed the Prime Rent.

2 rue Jean Roisin - 59800 Lille Date: 10/05/2016 Area: 415 sqm Rent: € 150/sqm pa State of repair: Second hand Comment: Second hand premises located close to the Grand Place and to the subway station “Rihour”. 6/9-year lease.

2 rue Nationale - 59800 Lille Date: 14/03/2016 Area: 526 sqm Rent: € 165/sqm pa State of repair: Renovated Comment: Renovated premises located in the very centre of Lille in front of the Grand Place. 3/6/9-year lease with 10 car parking spaces rent at € 1,300 pa per place.

“Arboretum” – Bv Paul Pain Levé - 59000 Lille Date: 01/02/2016 Area: 303 sqm and 606 sqm Rent: € 170/sqm pa State of repair: New Comment: Immeuble completed in 2013 located in the business district “Euralille 2”. 2 leases 3/6/9-year have been signed to I REVE and NFID.



48

Opinion of Market Rent

To determine the market rent, we have taken into account:

- The location of the property: very good location in the heart of Lille’s central

business district,

- the age of the property and the characteristics of the premises:

o advantages:

the property is nearly twenty years old (built in 1995) but is well

maintained and benefits from a good level of equipment (air-cooling

system, partitioning walls, globally renovated premises).

o disadvantages:

One part of the premises suffers from a lack of natural luminosity.

Moreover the level of charges+taxes is high (€90 /sqm/annum)

compared to the ratio applied in the other office buildings available on

the market.

Headline prime rents as at the half of 2016 are estimated at a level of circa €220 per

sq m per annum excluding taxes and charges, and excluding parking units.

In the heart of Euralille (buildings located in Euralille 1, close to the railway station),

recent transactions for second hand buildings show headline rental values at a level of

€185 per sq m per annum. Considering its age and state of repair, the subject

property falls into this category. However, the darkness of a small part of the premises,

the high level of rental charges and the fact that the building is one of the eldest

properties in Euralille, are also to be considered.

Therefore, based on comparable transactions, the competing supply and the property’s

features, we are of the opinion the subject property could command a market rent of:

- Offices located in the front building and facing the Parvis de Rotterdam

(benefitting from a good natural brightness) : €140 per sq m

- Offices located in the rear building (on the 2nd floor, suffering from a weak

natural brightness but suitable for an office use) : €125 per sqm

- Retail premises located on the ground floor (Envie de Saisons): €140 per sqm

- Staff canteen: €8.50 per office sq m, which equals to an ERV of €125per staff

canteen sq m (770sqm).

- Parking units : €1,200 per unit.

All rents are per annum excl. taxes and charges.



49

At the valuation date, the total estimated rental value amounts to € 890,772 rounded as detailed below:

%

global

areas

TenantStart

dateLease type

Break

option

Expiry

dateUse Lettable Area

Interior

Parking

units

Global rent Rent /sqm/a Global ERV

ERV Offices

/sqm /a

Staff Canteen

ratio

/office sqm/a

ERV

Parking

units

/unit /a

Passing

rent /

ERV

Headline

rent / ERV

11% ERDF 01/04/14Commercial

6/931/03/20 31/03/23 Offices 593,0 sq m 16 u 101 599 € 171 €/sq m 107 261 € 140 €/sq m 8,50 €/sq m 1 200 € -5%

39% EDF 01/04/11Commercial

6/931/12/18 31/03/20 Offices 2 158,0 sq m 51 u 381 663 € 140 €/sq m 8,50 €/ sq m 1 200 €

1%EDF

(regularization)01/04/11

Commercial

6/931/12/18 31/03/20 Offices 44,0 sq m 0 u 5 874 € 125 €/sq m 8,50 €/ sq m

EDF returned

premises01/04/11

Commercial

6/931/03/17 31/03/17 Offices 550,0 sq m 0 u 78 681 € 143 €/sq m 81 675 € 140 €/sq m 8,50 €/ sq m

3%ENVIE DE

SAISONS01/10/13

Commercial

6/930/09/19 30/09/22 Retail 163,8 sq m 0 u 21 320 € 130 €/sq m 24 324 € 140 €/sq m 8,50 €/ sq m -12%

22%MAESTRIS -

front premises1 190,4 sq m 0 u 176 774 € 140 €/sq m 8,50 €/ sq m

15%MAESTRIS -

back premises803,0 sq m 0 u 107 201 € 125 €/sq m 8,50 €/ sq m

0% VacancyCar park

spaces5 u - - 6 000 € 1 200 € -

TOTAL 5 502,2 sq m 72 u 774 430 € 141 €/ sq m 890 772 € 162 €/ sq m -13%

14%

379 623 € 172 €/sq m

pkgs and staff

canteen included

-2%

Annual Rent excl. taxes

and charges

at 30 June 2016

ERV excl. taxes and charges

at 30 June 2016

01/07/14Commercial

6,75/9,7531/03/21 31/03/24 School -32%193 207 € 97 €/sq m



50

French Investment Market Commentary



51



52



53



54

The investment market in the greater Lille area

€ 243 M have been invested during the past six months, mainly in retail premises

(69%). The major transaction is the sale of the “Mac Arthur Glen” factory retail park in

Roubaix for € 160 M. Regarding offices, € 47 M have been invested.

The prime equivalent yield remains stable at 5.40%. For second hand premises and for

new or redeveloped assets which are not “prime” (average location, unsecure leases),

net equivalent yields are more likely situated between 6.50% and 9.00% in the Lille

region.

Nevertheless, the global pressure in yield observed in France, and the huge amount of

liquidity held by the investors, seem to indicate a future decrease in yield which is not

illustrated yet with transaction in Lille.



55

Yield Evidence

69, rue du Luxembourg - 59777 EURALILLEQ3 2015

Net Equivalent Yield 5.8%

Net Initial Yield 5.23% 5,23%

Net Value 14.15 m€ Excl. Taxes

Offices ERV 216 €/ sq m pa

Seller AEW

Buyer Roquette

Comments:

Fully renovated in 2009, this building is located in Euralille 1 and accommodates

underground parking spaces.

It is fully rented to EDF.

The Net Initial Yield reflects an over-rented situation by circa 13%.

"EUROSUD" EURALILLE (59)Q4 2014

Net initial Yield 6.30%Net Value 23.4 m€ Excl. Taxes


Current Rent 226 €/ sq m pa

Seller Unofi

Buyer AXA Real Estate

Comments:

Prime location in the core of Euralille 1, in front of the studied property.

Property delivered in 2006 accomodating 6,950 sq m of offices premises.

Strong tenants covenants (SNCF, BNP, Sofinco, Vinci).

Rue du Vieux Faubourg - LILLE (59)2014



Seller Deutsche Bank

Buyer Swiss Life REIM

Comments:

92% of the premises are rent with strong tenant covenants.

This net initial yield is currently the lowest yield observed in Lille.

This property is a former Private Hostel fully redeveloped in offices premises in

2001.

Prime location regarding is proximity with the two main train station "Lille

Flandres" and "Lille Europe".



56

"Les Arcuriales" - Rue de Tournai - LILLE (59)2014



Seller Foncières des Régions

Buyer SPPICAV Villiers Immobilier

Comments:

Prime location regarding is proximity with the two main train station "Lille

Flandres" and "Lille Europe".

Property build in the 90's, composed with 5 buildings accomodating 15,240 sq m

of offices premises.

Strong tenant covenant.

Immeuble EUROCENTRE - EURALILLE (59)2013



Seller SEB Real Estate

Buyer AXA Real Estate

Comments:

Prime location in the core of Euralille 1, in front of the studied property.

Immeuble ONIX - EURALILLE (59)2012

Net initial Yield 5.8%Net Value 60 m€ Excl. Taxes


Seller AXA Real Estate

Buyer BNP REIM

Comments:

Prime location in the core of Euralille 1, close to the studied property.

Avenue de la République - LA MADELEINE (59)2012

Net initial Yield 7.6%Net Value NC


Seller Foncières des Régions

Buyer Skipper Immobilier

Comments:

Fully redeveloped property accomodating 4,200 sq m.

Property delivered in 2006 accomodating 7,500 sq m of offices premises.

83% of the premises are currently rent by BNP.

Property delivered in August 2010 accomodating 15,400 sq m of offices premises.

Very strong tenants covenants : firms leases with quality tenants (PwC, Natixis,

Nacarat…).

Second hand property located less than 800 meter from Euralille.

The property is fully let to EDF.

"ONIX" - EURALILLE (59)2012

Net initial Yield 5.8%Net Value 60 m€ Excl. Taxes


Seller AXA Real Estate

Buyer BNP REIM

Comments:

Prime location in the core of Euralille 1, close to the studied property.

Property delivered in August 2010 accomodating 15,400 sq m of offices premises.

Very strong tenants covenants : firms leases with quality tenants (PwC, Natixis,

Nacarat…).


Opinion of Valuation Yields

To determine the yield of the property, we would therefore retain as basis of our calculation the

current estimated prime yield in Lille for brand new office properties (5.40%). Then, we have

applied for the “hardcore” method different risk premiums depending on the premises:

- Leases recently signed or recently amended, with good quality tenants and with firm

periods (ERDF, MAESTRIS, ENVIE DE SAISONS, EDF):

Risk premium of 90 basis points leading to an equivalent yield of 6.30%.

- EDF premises going to be vacant on 31/03/2017: risk premium of 50 basis points

compare to recent leases leading to an equivalent yield of 6.80%

- Vacant car spaces

Risk premium of 190 basis points leading to an equivalent yield of 7.30%.

Thus, taking into consideration the characteristics of the subject property and the current economic

environment we are of the opinion that an equivalent yield of 6.35% is appropriate for the whole

subject property.


VALUATION CONSIDERATIONS

The Property

We have relied upon the information supplied to us and have assumed that it is correct. There are

several comments and assumptions with regards to the valuation that we listed below:

Key Valuation Factors

STRENGTHS

1. Very good location, in the heart of

Lille’s central business district (“Euralille”)

2. Excellent access by road and by public transport,

3. Property fully rented, with a WABO of 3.07 years and a WALT of 4.91 years (according to the assumptions)

4. The main tenants present excellent covenant.

5. good quality of the fixtures and fittings

6. Property benefitting from a staff restaurant,

7. Building classified as a Category 2 ERP (building suitable for public admission)

8. Adapted number of interior car spaces regarding the very central location of the property.

WEAKNESSES

1. Property held under a volume division

2. High level of charges and taxes: €90/sqm/a split as follows: - service charges = €67/sqm/a, - land tax = €23/sqm/a

OPPORTUNITIES

1. Property easy to subdivide for multi-tenant occupancy.

2. The vacancy rate in Lille region is only around 5% at the valuation date. Moreover the demand for office spaces in Euralille 1 is still very strong.

3. Potential reconversion use for the premises located on the ground floors: retail premises (food court / leisure) or services.

THREATS

1. Competition from recent office properties in the North-East periphery of Lille.

2. Building aging even though well-maintained.

3. 550 sqm will be vacated by EDF on 31/03/2017.


Valuation Methodology

In the frame of our study, we have retained the following assumptions:

- The tenants will remain in occupation at the lease end date, - The renewal will be done at the Market Rental Value, without any rent free period, - The charges mentioned in the French Civil Code at the 606 article ( structural repairs and

maintenance) will be paid by the landlord, based on 2.00% of the rental market value per annum, in perpetuity,

- Non recovered charges and land tax on vacant premises: €90/sq m/annum.

Capital expenditure

According to the information provided, no capital expenditures are planned in the near future.

We have not retained any capex budget.

Non Recoverable costs

- Provision for the landlord’s external and structural maintenance and repairing obligations

has been made at 2.00% of the rental value per annum in perpetuity (corresponding to

article 606 of the French Civil Code) from the date of valuation.

- Considering the vacant spaces, we retain an amount of €90 /sq.m per annum for the non-

recovered charges and taxes. This includes charges on void, land tax, building insurance,

office tax, maintenance costs and property management fees.

Current voids

At the valuation date the property is 100 % let, except 5 car parking spaces.

Considering the vacant spaces, we have retained in our valuation the following assumptions:

- Considering the vacant car parking spaces, we have retained in our valuation a 9 months

void period.

- Re-letting assumptions: letting fees budgeted at 15% of the rental value on lease

start/renewal with void.

Considering the premises that EDF are going to return on 31/03/2017, we have retained in our

valuation the following assumptions:

- Considering the vacant car parking spaces, we have retained in our valuation a 9 months

void period, along with a 3 month rent free period.

- Re-letting assumptions: letting fees budgeted at 15% of the rental value on lease

start/renewal with void.

Furthermore, we have assumed that the other tenants will renew their lease at the leases end date.

Thus, no void period has been retained for the let areas in our valuation (except for 550 sqm

currently occupied by EDF).

Tenant Departures and Renewals

We have considered tenants would renew at ERV with no commercial incentives.


DCF Approach

We have used a Discounted Cash Flow (DCF) model on the basis of a 10-year hold period and a

subsequent sale. We summarise our approach as follows:

Rental income is based on the existing rents, indexed annually at an appropriate rate.

The rental income at full occupancy is reduced by the loss of rent due to rent abatements and

vacancy (if any).

The Net Operating Income (NOI) is determined after deduction of the non-recoverable costs.

At the end of year 10 we have assumed a sale of the property. Deductions have been made for

transfer duties and other typical costs of sale, equivalent to 6.90% of the gross sale price, to arrive

at the projected net sale proceeds.

Annual cash flows and the net sale proceeds have been discounted and added to give our estimate

of Gross Value. We have then made the normal industry-standard deductions for transfer duties

and other costs to arrive at our Net Value.

Revenues

There are no other revenues for this property aside from the rental income.

Annual expenses

Service charges and taxes are generally recoverable from the tenant according to the leases

received. All charges are recoverable by the landlord excluding costs defined in the article 606 of

the French Civil Code.

Specific assumptions for discounted-Cash-Flow

Rental Growth Forecasts.

For the purpose of our valuation we have included rental indexation (ICC) as well as market

growth in our DCF model only. In this approach with growth explicit consideration of inflation, the

rental income changes depending on the rental growth expectations, i.e. through the contractually

secured stable value clause in the rent contract or through a market rent adjusted for increase in

the case of re-letting.

We have considered due to economic context that the rental market value will remain stable the

first 12 months, and then increase at 0.5 % for 12 months, then increase at 1.5% for 12 months

before resuming a 2.0% growth for the following years. (CBRE Valuation indexation standard for

4Q 2015 valuations).

We have considered the rental indexation income will increase by:

- ICC: 0.0% the first year; 0.50% the second year; 1.50% the third year and 2.40% until the end of

the cash flow.

- ILAT: 0.75% the first year; 1.25% the second year and 2.0% until the end of the cash flow.


Lettability and saleability

Lettability

We believe that the subject property benefit from a good lettability for the following reasons:

o Excellent location in the heart of Lille central business district, with an easy access

by car, foot, or public transport,

o Convenient configuration and good natural brightness of the premises. Moreover

the tenants Maestris and EDF have recently carried out huge renovation works in

their private premises.

o Building classified as a Category 2 ERP (building suitable for public admission,

allowing the property to attract several types of users (offices, school, training

centres, services, staff canteens…).

o Building benefitting from a corporate restaurant (located in Atrium 2)

o Very low level of available supply in the heart of Euralille business district.

However the previous points are balanced by several weaknesses that make the lettability of the property not optimum even if good:

o the high level of rental charges (€90/sqm/a)

o the age of the building (all the structural elements are original and date from

1995), creating competition from more recent properties in the surrounding.

Should the property fall vacant, we estimate that it could be re-let at Market Rent in a time frame of approximately 6-12 months.


Alternative Potential Use

Considering the location and configuration of the property, we consider that the premises located

on the ground floor of the property offer a real potential of revalorization in other uses as standard

offices, for the following reasons:

a) These premises are directly and internally accessible from the nearby shopping centre

EURALILLE managed by Unibail-Rodamco.

This regional-sized shopping centre located between the two railway stations of Lille and

managed by Unibail-Rodamco offers around 67,000 sq m of gross lettable area on 3

levels, together with 2,900 parking spaces. It is one of the most attractive commercial

zones of Lille agglomeration (footfall of 1.2M persons), anchored by a 15,000 sq m

Carrefour hypermarket and several international brands such as New Yorker, H&M, Zara,

Go Sport, Sephora. It totalizes some 120 retail shops and services and attracts a wide

scope of consumers thanks to its very convenient access by car, bus, subway and tramway.

b) These premises also represent a natural connection between

o On one part, the Euralille shopping centre, the railway station Lille Flandres and

then the town center of Lille,

o On the other part, the Lille-Europe railway station, the Euralille 1 tertiary zone, the

Casino Barrière property and in a second rank the Euralille 2 tertiary zone to the

South.

Subsequently, one could imagine that private management schools / engineer schools /research centres could be interested in letting plates in the property. Secondly, the site could also be attractive for a private entities looking to establish it training centre with accommodation and restaurant facilities.


This strategic location is illustrated in the map below:


Saleability

Equivalent yields in regional markets and more specifically in Lille are currently at a historically low

level.

However this trend only concerns prime assets, with excellent location, good architectural quality

and secured occupational conditions.

The subject property does not directly fall into this category because of its age (20 years old,

without any major refurbishment since the delivery).

However we believe that it presents a good saleability on the local investment market, considering

several strong advantages:

o Property fully let at a good level of rent (close to ERV), to strong tenants and with a

secured level of WABO (3.07 years) and WALT (4.91 years),

o Excellent location in the heart of Lille central business district,

o Multi-tenants asset (EDF/ERDF representing 61% and MAESTRIS representing 36%

of the global areas), which reduces the vacancy risk,

o Good quality of the fittings. Moreover the tenants Maestris and EDF have recently

carried out huge renovation works in their private premises.

We therefore consider that a period of 9 months should be sufficient to achieve a sale of the

property.


VALUATION ANALYSIS

Income Forecast

In our valuation we have assumed that the let premises will be re-let without any void period or

rent free period.

Moreover, we have assumed that for most of the lease renewals all charges will be recoverable

excluding art 606.

Furthermore, given the departure notification is at least 6 months, the management on the assets

occupancy has to be performed 6 months before.


Sensitivity analysis

We have considered in this sensitivity analysis the sensitivity of the portfolio to the two major points

in real estate investment: the estimated rental value and the yield (in these cases we have analysed

the equivalent yield).

This is done by holding all other assumptions fixed and then calculating the present value to each

different economic assumption. It will highlight the impact of changes in ERV or yield and the issue

of the impact.

Sensitivity analysis: ERV / Yield.

The table above demonstrates that the property is more sensible to yield (in relative terms)

than to ERV. Beyond this first analysis, we can provide the following comments. The

property is more sensitive to investment trends, and to national investment trends. Yields

were more correlated to global trends than ERV, which are more closely correlated to Lille

trends but also to the economic context. We have seen in most of the Office market in

France region a stabilisation of ERV including the Lille Office market. ERV should continue

to be stabilised for prime property, for the second hand premises the range of estimated

rental value should stabilised as well.


The global yield trend shows that equivalent yields in office regional markets are currently

decreasing for prime assets. This trend only concerns prime assets: excellent location, new

building, firm term lease and tenant with strong covenant. For the other assets on the

market equivalent yield seem to remain stable. Therefore only the core assets have a real

liquidity, especially at a time when investors are particularly shy of taking risks. But on the

other hand, the cash raised by investors is increasing since the past two years and the

credit rate in France has never been that low therefore the environment is very favourable

to investment operations.


As we consider that the equivalent yield is more sensitive, we can show a graphic projection analysing the potential of the value of the property.

The graphics shows the sensitivity of the portfolio compare to the Equivalent yield and the value obtains compare to an increase or an increase of the

yield (5.50% to 8.50 %):


OPINION OF VALUE

Valuation Conclusions

Based on assumptions and a discounted rate of 6.50% and an exit yield of 6.63%, the

DCF approach produces a value of:

Gross Value € 13,330,076

Net Value: € 12,380,000 (rounded)

Assuming deductions of 6.90 % for purchaser’s costs.

Based on an equivalent yield 6.35%, the capitalisation approach therefore produces a

value of:

Gross Value € 13,622,186

Net Value € 12,740,000 (rounded)

Assuming deductions of 6.90 % for purchaser’s costs.


Market Value (Fair Value)

We have valued the property under two calculation methods: a Discounted cash-Flow

and a Hardcore method (traditional method). The major Investment fund in Europe used

the Hardcore method for their valuation, considering that this type of investors will be the

most interesting investors for this type of property we have retained the Hardcore method

for the final value.

Upon the assumption that there are no onerous restrictions or unusual outgoings of

which we have no knowledge and the specific comments and assumptions which are set

out in this valuation statement, we are of the opinion that the total market value of the

subject property, as at 30 June 2016, is:

12,740,000 EUR

(Twelve Million Seven Hundred and Forty Thousand Euros)

Excluding transfer costs and duties

The gross market value is €13,622,186 including €879,262 purchaser’s costs (6.90%).

Our opinion of Market Value reflects the following yield profile:

Equivalent Yield 6.35%

Reversionary Yield 6.41%

Net Initial Yield 5.55%

Capital Value in EUR / sq m €2.315 /sq m

Yours faithfully

Yours faithfully

Yours faithfully

Yours faithfully

Alexandre Petitpré

Senior Surveyor Valuation & Advisory

Sylvain Denizot, MRICS

Regional Director Valuation & Advisory

Jérôme de Laboulaye, MRICS, CIS HYPZERT

Director International Department Valuation & Advisory

Pierrick Astier

Surveyor Valuation & Advisory

For further information, please refer to the Appendix “Valuation Calculation”.

APPENDICES


71

5 APPENDICES


D2016-0xxxx /ALPE/SDEN/PAST

72

A LOCATION PLANS



73

LOCATION PLANS



74



75

B CADASTRAL PLAN



76

CADASTRAL PLAN


APPENDICES


77

C PHOTOGRAPHS


APPENDICES


78

PHOTOGRAPHS


APPENDICES


79


APPENDICES


80


APPENDICES


81


APPENDICES


82


APPENDICES


83


APPENDICES


84

D FLOOR PLANS


APPENDICES


85

P lot Level Type Lettable area notes / occupier

12017 upper ground floor retail 163,80 sq m ENVIE DE SAISONS

12029 & 12030 1st floor offices/school (front) 594,90 sq m

12037 & 12038 2nd floor offices/school (front) 595,50 sq m

12045 (partially) 2nd floor offices/school (back) 224,60 sq m

12041 2nd floor offices/school (back) 331,10 sq m

12039 / 12040 2nd floor offices/school (back) 247,30 sq m

12050 - 12051 3rd & 4th floors offices (front) 593,00 sq m ERDF renewed lease

12018 upper ground floor offices (front) 130,00 sq m

12027 - 12028 1st floor offices (front)

12033 - 12034 -

12035 - 12036 -

12046

2nd floor offices (front)

12047 - 12048 -

120493rd & 4th floors offices (front)

12045 (partially) 2nd floor offices (back) 44,00 sq m EDF (regularization)

TOTAL 5 502,20 sq m

NC BasementInternal Parking

spaces72 units

EDF: 51 u

ERDF: 16 u

Vacant: 5 u

MAESTRIS

EDF2 578,00 sq m


APPENDICES

D2016-0xxxx FTRU/JLAB/ALPE/SDEN/PAST

86


APPENDICES


87


APPENDICES


88


APPENDICES


89


APPENDICES


90


APPENDICES


91

« ATRIUM 1 » 50, ALLEE DE SAFED – 59777, EURALILLE - APPENDICES


92

E LIST OF

DOCUMENTS

REQUESTED AND

RECEIVED



93

Type of information (1) Requested Provided Observations

Property/tenure:

Title deed or attestation, or property leasing contract, or bilateral agreement to

sell

Commonhold regulations

Minutes of the last general assembly of the commonhold

Easements

Legal proof of use of premises

Land register/zoning:

Cadastral survey

Plot plan

Zoning certificate

Other permits (CDEC, listed activities, etc.)

Operating permit for storage premises with capacity of over 50,000 cubic metres

Construction:

Planning permission

Declaration of completion and certificate of compliance

Any disputes that may exist

Description, list of general and technical facilities

Plans/areas :

Floor plans by level – site plan

Detailed schedule of areas by level and by type

Tenancy:

Detailed letting schedule in force – latest rents charged

Leases and amendments

Sub-letting agreement

Any disputes that may be underway

Amount of building service charges recoverable and not recoverable by the

Lessor, broken down by item

Amount of land tax, tax on offices and other taxes, building insurance, and management expenses, both recoverable and not recoverable by the Lessor,

broken down by item

Works:

List of works carried out recently (major works, routine maintenance) and cost

List of projected works (major works, routine maintenance) and cost



94

Environment/Energy performance:

Technical document and/or document concerning the environment and/or energy

performance:

Diagnoses of asbestos, termites, radon, lead, etc.

Energy performance diagnosis (DPE), label or certificate (targets chosen: HQE, LEED, BREEAM, etc.)

Soil pollution

Miscellaneous:

Contact details of managers and/or people to contact for conducting inspections

Detailed operating statements over 3 years -

Operating income – Occupancy rate – Prices charged.

Other:



95

F GENERAL

PRINCIPLES



96

We list below the general principles upon which valuations and reports are normally prepared and

they shall apply unless expressly stated otherwise:

1. RICS Valuation Standards:

The valuations have been prepared in accordance with The RICS Valuation - Professional

Standards (8th Edition, 2012). The property details on which each valuation is based are as set out

in this report.

We confirm that we have sufficient current local and national knowledge of the particular property

market involved and have the skills and understanding to undertake the valuations competently.

2. Valuation Basis:

All valuations are made on the appropriate basis as agreed with the client in accordance with the

provisions and definitions of the Valuation Standards unless otherwise specifically agreed and

stated.

The specific basis of valuation adopted in relation to a particular instruction and the definition

thereof is detailed below.

No allowances are made in our valuations for any expenses of realisation, or to reflect the balance

of any outstanding mortgages, either in respect of capital or interest accrued thereon.

It should be noted that our valuations are based upon the facts and evidence available at the date

of valuation. It is therefore recommended that valuations be periodically reviewed.

3. Capital Values:

The valuation has been prepared on the basis of “Market Value” which is defined as:

“The estimated amount for which a property should exchange on the date of valuation between a

willing buyer and a willing seller in an arm's-length transaction after proper marketing wherein the

parties had each acted knowledgeably, prudently and without compulsion".

No allowances have been made for any expenses of realisation nor for taxation which might arise

in the event of a disposal. Acquisition costs have not been included in our valuation.

No account has been taken of any inter-company leases or arrangements, nor of any mortgages,

debentures or other charges.

No account has been taken of the availability or otherwise of capital based Government or

European Community grants.

4. Rental Value:

Rental values indicated in our report are those which have been adopted by us as appropriate in

assessing the capital value and are not necessarily appropriate for other purposes nor do they

necessarily accord with the definition of Market Rent.



97

5. Information Supplied:

We accept as being complete and correct the information provided to us by the sources detailed in

our report, relating to items such as tenure, tenancies, tenants' improvements and other relevant

matters

6. Verification:

We recommend that before any financial transaction is entered into based upon these valuations,

you obtain verification of the information contained within our report and the validity of the

assumptions we have adopted.

We would advise you that whilst we have valued the Properties reflecting current market conditions,

there are certain risks which may be, or may become, uninsurable. Before undertaking any

financial transaction based upon this valuation, you should satisfy yourselves as to the current

insurance cover and the risks that may be involved should an uninsured loss occur.

The Property has been valued by a valuer who is qualified for the purpose of the valuation in

accordance with the RICS Valuation Standards.

7. Documentation and Title:

Where title documentation or leases are provided to us, we recommend that reliance should not be

placed on our interpretation thereof without prior verification by your legal advisors.

Unless notified to the contrary, we assume that each property has a good and marketable

title and is free from any pending litigation. We further assume that all documentation is

satisfactorily drawn and that there are no unusual or onerous restrictions, easements,

covenants or other outgoings that would adversely affect the value of the relevant

interest(s).

8. Tenancies:

It is assumed that, except where otherwise stated, all properties are subject to normal outgoings

and that tenants are responsible for all repairs, the cost of insurance and payment of rates and

other unusual outgoings, either directly or by means of service charge provisions.

Unless otherwise stated, it is further assumed that leases are standard French 3-6-9 year leases

with a tenant's option to break every 3 years and reviewable to market value only at expiration.

9. Tenants' Covenant Strength:

Unless specifically requested, we do not make detailed inquiries into the covenant strength of

occupational tenants but rely on our judgement of the market's perception of them. Any comments

on covenant strength should therefore be read in this context. Furthermore, we assume, unless

otherwise advised, that the tenant is capable of meeting its financial obligations under the lease

and that there are no arrears of rent or undisclosed breaches of covenant.



98

10. Inspections:

We undertake such inspections and conduct investigations as are, in our opinion, correct in our

professional judgement, appropriate and possible in the particular circumstances.

11. Measurements:

Surface Hors Oeuvre Brute (SHOB) – Gross External Area:

The SHOB is equal to the sum of the floor areas of each floor of a building calculated from the

bare exterior of the walls at the level of the finished floors. It comprises the basements and the

attics whether these can be used or not, as well as balconies, loggias and accessible flat-roof

terraces (excluding exterior terraces at ground level).

Surface Hors Oeuvre Nette (SHON) – Gross Internal Area:

The SHON is calculated from the bare exterior of the walls. It is equal to the SHOB after

deduction for: the attics and basements that cannot be inhabited for residential or used for

professional activities, (N.B. roof space where the headroom is inferior to 1.80 metres is

considered as attic and is therefore deductible), flat-roof terraces, balconies, loggias and non

enclosed areas on the ground floor. Parking areas for vehicles floor areas of buildings assigned for

storing harvests, keeping animals, or agricultural materials as well as greenhouses.

Surface Utile Brute or surface locative (SUB) – Net Lettable Area:

The SUB is equal to the sum of: office floor areas and common areas, corridors, washrooms,

premises for society purposes, landings.

12. Town Planning and Other Statutory Regulations:

Wherever possible, we undertake direct inquiries to obtain town planning and highway information

from the relevant Local Authority. If written confirmation of these matters is required, we

recommend that verification of the position, as stated in our Report, is obtained through your legal

advisors.

Our Valuations are prepared on the assumption that the premises comply with all relevant statutory

enactments and building regulations and that a valid and up-to-date Fire Certificate has been

issued. We also assume that all necessary consents and authorisations for the use of the property

and the process carried out therein have been obtained and will continue to subsist and are not

subject to any onerous conditions.

13. Structural Surveys:

Unless expressly instructed, we do not undertake structural surveys, or test any of the electrical,

heating, or other services. Any readily apparent defects or items of disrepair noted during our

inspection will be reflected in our Valuations, but no assurance is given that any property is free

from defect. We assume that those parts which have not been inspected would not reveal material

defects which would cause us to alter our Report and Valuations.



99

14. Site Conditions:

Unless specifically requested, we do not carry out investigations on site in order to determine the

suitability of ground conditions and services, nor do we undertake environmental, archaeological,

or geo-technical surveys. Unless notified to the contrary, our Valuations are on the basis that these

aspects are satisfactory and also that the site is clear of underground mineral or other workings,

methane gas, or other noxious substances.

In the case of properties that may have redevelopment potential, we assume that the site has load-

bearing capacity suitable for the anticipated form of redevelopment without the need for additional

and expensive foundations or drainage systems.

15. Environmental Contamination:

In preparing our Valuations we have assumed that no contaminative or potentially contaminative

use is, or has ever been, carried out at the property. Unless specifically instructed, we do not

undertake any investigation into the past or present uses of either the property or any adjoining

property or nearby land, to establish whether there is any contamination or potential for

contamination from these uses or sites and assume that none exists.

Should it, however, be subsequently established that such contamination exists at any of the

properties or on any adjoining land or that any premises have been or are being put to

contaminative use, this may be found to have a detrimental effect on the value reported.

In preparing our Valuations, we have assumed that all necessary consents and authorisations for

the use of the property and the processes carried out at the property are in existence, will continue

to subsist and are not subject to any onerous conditions.

16. Plant and Machinery:

Our Valuations include items usually regarded as forming part of the building and comprising

landlord's fixtures, such as boilers, heating, lighting, sprinklers and ventilation systems but generally

exclude operational plant and machinery and those fixtures and fittings normally considered to be

the property of the tenant.

17. Taxation:

In preparing our Valuations, no allowances are made for any liability which may arise for payment

of corporation taxes or capital gains tax, or any other property related tax, whether existing or

which may arise on development or disposal, deemed or otherwise. We also specifically draw your

attention to the fact that our Valuations are exclusive of any VAT liability that may be incurred.

18. Government Grants:

All Valuations are given without any adjustment for capital based Government grants received or

potentially receivable at the date of the valuation.



100

19. Special Purchaser Value:

Unless otherwise stated, our Valuations do not reflect any element of marriage value or special

purchaser value which could possibly be realised by a merger of interests or by a sale to an owner

or occupier of an adjoining property, other than in so far as this would be reflected in offers made

in the open market by prospective purchasers apart from the purchaser with a special interest.

20. Aggregation:

Unless otherwise stated, in the valuation of portfolios, each property is valued separately and not

as part of the portfolio. Accordingly, no allowance, either positive or negative, is made in the

aggregate value reported to reflect the possibility of the whole or part of the property being put on

the market at any one time.

21. Confidentiality:

Our Valuations and Reports are strictly confidential to the party to whom they are addressed, or

their other professional advisors, for the specific purpose to which they refer and no responsibility

whatsoever is accepted to any third parties for the whole or part of their contents.

22. Publication:

Neither the whole nor any part of our Reports, nor any reference thereto, may be included in any

published document, circular or statement, nor published in any way nor disclosed orally to a third

party, without our written approval of the form and context of such publication. Such approval is

required whether or not CBRE Valuation are referred to by name and whether or not the Reports

are combined with others.

23. Insurance:

We maintain professional indemnity insurance.

For the current services, the professional civil liability of CBRE Valuation is limited to:

€2,000,000 on an aggregate claims basis.



101

G CALCULATIONS



102

HARDCORE METHOD:



103

DISCOUNTED CASH-FLOW METHOD:

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