valuation bau- und gartenmarkt hornbach biel, switzerlandvaluation bau- und gartenmarkt hornbach...

Aspen Real Estate Ltd. Tel Aviv – Israel

Valuation Bau- und Gartenmarkt Hornbach Biel, Switzerland Valuation Report as per 31st December 2010 WP_100_mm.jpg

Project no. 33043 Client Aspen Real Estate Ltd

Lincoln Street 20 Rubinstein House 20 floor Tel Aviv, Israel

Contact Shahar Kohavi

[email protected] Drafted by Wüest & Partner AG

Gotthardstrasse 6 CH-8002 Zürich Tel. +41 44 289 90 00 Fax +41 44 289 90 01 [email protected] www.wuestundpartner.com

Project manager Jan Bärthel MRICS

[email protected] Team Robert A. Varley

[email protected] Period January 2011 Wüest & Partner is an international consultancy firm for

real estate. It focuses on the property and construction sectors, urban development and locational trends. Its multidisciplinary team counsels institutional owners, banks and insurers, construction and real estate compa-nies, public authorities and private clients. With a comprehensive range of services, innovative prod-ucts and unrivalled databases, the company develops and, in many cases, helps to implement tailored solutions. Since its foundation in 1985, Wüest & Partner has – not least by virtue of its independence – established an impeccable reputation for quality. By concentrating exclu-sively on consultancy services, it can deliver fully profes-sional and at the same time neutral solutions. Staffed with over 80 specialists from a variety of fields – including architecture, economics, IT, engineering, natural and social sciences – the company has an excellent multi-disciplinary knowledge base on which to build. It also has an unrivalled real estate pool of data on all regions and market segments, enabling it to provide in-depth consultancy throughout Switzerland and furnish information to make the real estate markets more trans-parent. For specific projects, Wüest & Partner’s team, based in Zurich, in Geneva, in Frankfurt and in Berlin can rely on support from a network of international business partners and local experts. Wüest & Partner AG is owned and managed by twelve partners, who vouch for the continuity, independence, and sustainable performance of the company. They are Martin Hofer, Urs Hausmann, Matthias Haag, Matthias Arioli, Andreas Ammann, Marcel Scherrer, Christoph Zaborowski, Marco Feusi, Andreas Bleisch, Jan Bärthel, Nabil Aziz and Patrick Schnorf.

Aspen Real Estate Ltd. Bau- und Gartenmarkt Hornbach Biel

Wüest & Partner

Contents

1 Introduction 1

1.1 Addressee 1

1.2 Reference and commission 1

1.3 Valuation Standard 1

1.4 General conditions and declarations 1

1.5 Positioning of Wüest & Partner and the responsible valuers 2

1.6 Documents and Data 2

1.7 DCF-Method 2

1.8 General valuation assumptions 3

1.9 Disclaimer 4

2 Market Information 6

2.1 Swiss Economy 6

2.2 National Real Estate Markets 7

2.3 Transaction & Market Volatility 7

2.4 Local Real Estate Market – Asking Prices 8

2.5 Comparables – Recent lettings 8

2.6 Business Competitors 9

2.7 Percentage of business surfaces 9

3 Valuation 11

3.1 Macro-location 11

3.2 Micro-location 11

3.3 Site / Building 12

3.4 Building Law 13

3.5 Fabric / Condition 13

3.6 Use 13

3.7 Current Income / Vacancy 14

3.8 Market Rent / Vacancy 15

3.9 Running and maintenance costs 15

3.10 Repair & Upkeep Costs 16

3.11 Risk / Return Profile 16

3.12 Change in Value since initial valuation 16

4 Result 17

5 Appendices 18

5.1 Definition of percentiles 18

5.2 Valuation Report 19


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1 Introduction

1.1 Addressee To the Directors Aspen Real Estate Ltd. 20 Lincoln Street Rubinstein House 20 floor Tel Aviv, Israel

1.2 Reference and commission This appraisal report has been prepared by Wüest & Partner in connection with the properties known as the “Bau- und Gartenmarkt Hornbach Biel”, as per Dec 31st 2010 (“the Report”). In addition to the analyses, assumptions, opinions and conclusions set forth in the report, we hereby represent and confirm as follows: Aspen Real Estate Ltd. owns an investment property known as the “Bau- und Gartenmarkt Hornbach Biel”. We were contacted and requested by Aspen Real Estate Ltd., on behalf Aspen Real Estate Switzerland GmbH to prepare the report. The valuation is required for accounting purposes and is addressed to Aspen Real Estate Ltd, the owner of the Swiss real estate corporation mentioned above. The goal of the valuation is to evaluate the current market value for the property.

1.3 Valuation Standard The valuation of the properties is carried out according to the accounting stan-dards of IFRS as well as the definition of market value from the «International Valuation Standards Committee» (IVSC), which reads as follows: «Market Value is 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 knowl-edgeably, prudently and without compulsion.» The appraisal of the property is consistent with the definition of «fair value» as defined by the guideline «investment properties» within IAS 40.

1.4 General conditions and declarations Wüest & Partner AG is independent of the mandating companies or any company controlled by the mandating entity. We herewith confirm that we do not have any personal interests in the assessed assets and/or in its owners; that the appraisals of these assets hereunder have been prepared by us in accordance with our best and professional knowledge, skills and consideration. We hereby agree that our reports, including this document, may be included in the financial statements to be published by Aspen Real Estate Ltd. We however stipu-late that all reports should be included in their entirety, to avoid incomplete read-ing, which may in turn lead to misunderstandings.


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1.5 Positioning of Wüest & Partner and the responsible valuers Wüest & Partner AG is a real estate consultancy in Switzerland. It is an independ-ent company, directed and owned by its twelve partners. Furthermore, it under-takes no brokerage or asset management. Wüest & Partner is the leading valuation expert in the Swiss Real Estate market. Annually, Wüest & Partner values real estate with a value in the range of approxi-mately 40 to 50 billion CHF for accounting purposes. The company has also acted as real estate valuation expert on behalf of its clients in foreign markets in Europe, North and South America as well as Asia. Wüest & Partner’s activity abroad is sup-ported by long-term relationships with local experts. The following team was responsible for the valuation of the property: Project Manager: Jan Bärthel, Partner 14 years experience in construction & real estate, 8 years valuation experience Chartered Surveyor MRICS (Member-Nr. 1230123), CIS HypZert (F), dipl. Bauing. TU, MSc Real Estate Valuer: Robert A. Varley, Senior Consultant 7 years experience in real estate, 3 years valuation experience Chartered Surveyor MRICS, B.A. (Hons) Economics, Master of Business Admini-stration (MBA), MSc Real Estate Investment & Finance We herewith explicitly confirm that we have established our opinion on the value of the property to our best knowledge according to the general principles of our business. We are not conflicted by any side interests with regard to the appraisal and valuation of the portfolio or any involved party – namely the owner of the portfolio. In addition, we confirm that we have undertaken the presented valuation for Aspen Real Estate Ltd. solely for strategic planning purposes and in accor-dance with IFRS.

1.6 Documents and Data Please refer to the document list in Annex 1 (chapter 11, page 12)

1.7 DCF-Method The valuation uses the discounted cash-flow (DCF) method. With this method, the current market value of a property is determined as the total of all projected future net earnings (before interest, taxes, depreciation and amortization) discounted to present-day equivalents. These net earnings are discounted individually for each property with due allowance for specific opportunities and threats, and with ad-justments in line with market conditions and risks.


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1.8 General valuation assumptions The valuations are based on the following general assumptions: – The property has been appraised as continuation scenario. That means, that no

change of use scenarios have been calculated, even if these would result to a higher value.

– A one-period DCF model was adopted. The valuation period extends for 100 years from the valuation date, with an implicit residual value in the 11th period.

– Discounting is based on a risk-adjusted interest rate. Rates are determined indi-vidually for each property on the basis of appropriate benchmarks derived from arm's-length transactions. They may be broken down as follows: risk-free inter-est rate + property risk (immobility of capital) + premium for macro-location + premium for micro-location depending on use + premium for property quality and income risk + any other specific premiums.

– Unless otherwise stated, the valuations assume 1.0% annual inflation (previ-ously 1.2%) for income and all expenditure. Where a nominal discount rate is applied, this is adjusted accordingly.

– Credit risks posed by specific tenants are not explicitly factored into the valua-tion.

– Allowance is made for the specific indexing provisions in existing leases. An indexing factor of 80% (Swiss average) is assumed for the period following lease expiry.

– For existing tenancies, the timing of individual payments is assumed to comply with the terms of the lease. Following lease expiry, cash flows for commercial premises are taken to be quarterly in advance.

– In terms of running costs, entirely separate service charge accounts are as-sumed, with no tenancy-related ancillary costs to be borne by the owner.

– The maintenance (repair and upkeep) costs were calculated by means of a life-cycle analysis of the individual building elements. The building structure's re-maining lifespan was estimated and periodic refurbishments modelled on the basis of the general condition of the fabric as determined during the property inspection. Appropriate annual reserves were calculated accordingly and plau-sibility tested using comparables and Wüest & Partner's own benchmarks. The calculation factors in 100% of repair costs in the first 10 years; the proportion applied from year 11 onwards is limited to the value-preserving investments (recoverable share).


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1.9 Disclaimer The commissioned valuation and, in particular, the forecasts presented therein were prepared by Wüest & Partner to the best of its knowledge and with due obser-vation of current professional standards. The valuation is based on: – Informal and unguided site inspection undertaken on 3rd March 2010. This site

inspection only permitted access to public areas. No access was provided to technical, storage or administrative areas.

– The property was not revisited for the purposes of the valuation update. – The documentation provided by the client, of which the absolute correctness is

assumed. – The relevant experience of Wüest & Partner AG in this field. The rental details and conditions (start/end, options, index, responsibility for running costs/update costs, etc) are based on the proposed “ leaseback” rental contract as supplied by Aspen Group (dated 24th February 2010). The supplied rental contract proposal is as yet unsigned. For the purposes of the valuation it is assumed that the actual contract will follow the draft as provided. Wüest & Partner did not investigate any legal issues surrounding the property. Nor did it examine any rental law or rent control issues; in particular the landlord as-sures Wüest & Partner that no federal, cantonal or municipal restrictions apply. In the documentation provided by Aspen Real Estate a summary of the floor areas was provided (dated 9th June 2008). These floor areas were verified during the brief informal site visit and deemed to be acceptable by Wüest & Partner. No formal measurement of the areas provided was undertaken and no areas plans were pro-vided. Consequently, Wüest & Partner cannot guarantee the accuracy of square-metre data. The valuation was performed with reference to the specific valuation date and may be affected by subsequent events for which no allowance can be made at the pre-sent time. A revaluation shall become necessary should any such event occur. Value and price may diverge. No allowance can be made in this valuation for any circumstances affecting the price. Wüest & Partner AG performed the valuation independently, neutrally and follow-ing its published business policies. No conflicts of interest of any kind exist. The valuation was carried out solely for those purposes specified above; Wüest & Partner shall accept no liability in respect of third parties other than that men-tioned above. This report and, in particular, the assessment and valuation of the property rest on suppositions, expectations and forecasts about the future that are inherently sub-ject to uncertainties and risks. Their accuracy and/or effective impact may diverge from the assumptions underlying the valuation. These assumptions are based on the present state of knowledge and interpretation of trends in the regional, na-tional and global economies and markets. Key factors that are capable of shaping actual events include: economic and market trends, changes in legislation or ju-


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dicial rulings, interest and exchange rates etc. Although Wüest & Partner considers the forecasts about future developments to be based on rational assumptions, no guarantee can be given for their accuracy.


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2 Market Information

2.1 Swiss Economy The Swiss economy has rebounded well in 2010 and this has helped the real es-tate markets maintain their robust performance and strength. Nevertheless, the economic recovery, which already started towards the end of 2009 and continued in to 2010, is now threatened by slowing exports and a general global economic stagnation. In the third quarter economic of 2010 GDP grew in Switzerland by 0.7% in real terms. Year on year the growth was 3.0% showing how well the economy had re-covered from the depths of the economic recession. Such strong results have led the State Secretariat for Economic Affairs (SECO) in September to leave its eco-nomic forecast for 2010 unchanged at 2.7%. Overall, the economic revival is de-scribed as “brisk”. Over the same period demand from exports has, as was predicted, started to sof-ten. The Swiss Franc has continued to strength against the Euro and the Dollar currencies and is now starting to produce a “significant drag” on overall economic performance. Consequently the economic growth outlook for 2011 has remained modest, current forecast to reach 1.5% (previously 1.2%).

GDP Growth (real)

Rate of

Inflation

Rate of

Unemployment

Consumer Confidence

index*

2007 3.7% 0.7% 2.8% +15 2008 1.9% 2.4% 2.6% -27% 2009 -1.5% -0.5% 3.7% -14% 2010 (Forecast) 2.7% 0.7% 3.8% +7% 2011 (Forecast) 1.5% 0.7% 3.4% n.a.

*Consumer Confidence Index, October 2010

In September 2010, the forecast unemployment rate remained unchanged at 3.8% and no significant improvement is expected during 2011. Expectations for infla-tion, represented by the consumer price index, remain very modest and have are now expected to remain at or around 0.7% for 2010 and 2011. Throughout 2010 the current consumer confidence index has continued to re-cover much of the ground lost during the 2008 and 2009. Although, now standing at +7 the index has actually fallen from +16 since the summer months, indication a tangible uncertainty about future economic development.

Table: Summary of Key Economic Data & Forecasts, December 2010; Source: National Bank of Switzer-land, State Secretariat for Economic Affairs (SECO), Statistical Bureau (BFS).


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2.2 National Real Estate Markets The analysis of the general developments within in the national real estate markets in Switzerland will look at the developments in, and outlook for, the retail real estate market sector, in line with the profile of the property covered in this report.

Retail Market

The resilience of the market for retail space in Switzerland has continued through-out 2010. Despite the overall economic challenges rental levels have remained robust, driven mainly by sustained levels of private consumption. Indeed, the stable asking rents for retail remises during 2010 have resulted in a year-on-year growth since the third quarter of 2009. The outlook for the remainder of 2010 and 2011 therefore remains optimistic. Even if asking prices are no longer expected to strength, the overall stability of the market is not expected to be challenged.

The general demand from international retail houses for properties on the main retail high streets in the largest centres such as Zurich and Geneva remains un-changed since the previous memorandum. Retail properties located in “B” or “C” locations in the larger cities or in peripheral regions and municipalities continue to struggle with falling demand and weakening prices. Shopping centres remain protected from the weakening market by their long-term rental contracts; however pressure upon rents is likely to increase for the negotiation of new rental posi-tions. The supply rates have fallen throughout 2010 and now lie below the levels regis-tered at the end of 2009 and 2008. Interestingly, asking prices have continued to rise in Zurich (Median, Q3 2010, CHF 380/m2) but have recently started to soften in Geneva (CHF 420/m2) and on a national level (CHF 220/m2). In the major cen-tres the year-on-year vacancy rates have remained low and now lie at levels lower than in 2009 and 2008.

Zurich Geneva Switzerland

2010 2009 2008 2010 2009 2008 2010 2009 2008

Vacancy Rate (%) 0.2 0.3 0.4 1.9 2.2 1.9 n.a. n.a. n.a. Supply Rate (%) 1.3 1.5 1.6 2.2 3.8 3.7 1.1 1.4 1.3 Asking Price Index * 134.5 127.5 109.5 164.4 177.8 138.4 97.7 102.0 93.7 Prime Rents ** 8’000 6’700 6’400 6’500 6’000 6’100 n.a. n.a. n.a. Prime Yields ** 3.7% 3.9% 3.9% 43.8% 4.0% 4.3% n.a. n.a. n.a.

* Asking Price Index: First Half 1996 = 100, Figures shown are for the 2nd half year of each period only. ** The Prime Rents shown for 2008 and 2009 are for the forth quarter only.

2.3 Transaction & Market Volatility Market conditions in the investment property markets in Switzerland have re-mained stable in the third quarter of 2010. As in the previous quarters, the third quarter of 2010 has seen largely stable investment activity at modest overall levels with national institutional investors leading demand and private investors still actively searching for appropriate investment opportunities.

Table: Summary of real estate market indicators for the retail market segment, 2008,2009 & 2010 (Q3) Source: Various publicly available sources, Wüest & Partner.


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The slowly falling unemployment and stable inflation have enabled the Swiss national bank to continue its expansionary monetary policy throughout 2010. As previously, commented the target range for interest rates has remained low and is expected to remain largely unchanged in the coming months. Financing for real estate investments had continued at moderately improved levels, favouring low or lower risk «AAA» properties and investors and a widening yield spread between «better» and «poorer» investment opportunities.

2.4 Local Real Estate Market – Asking Prices Since the initial valuation median asking prices for retail stock in Biel have re-mained stable and now lie level with the national levels, which have weakened by 8% over the same period. Since the end of 2009 lower percentile asking prices in Biel have strengthened whilst upper percentile offerings have fallen, resulting in a significant compression over the whole price range. Whilst regional asking prices have strengthened across all percentiles, national asking prices have weakened for all upper percentile segments.

RETAIL 1 10th

percentile 30th

percentile

Median 70th

percentile 90th

percentile

2009, Q4 130 170 220 300 470

2010, Q3 150 180 220 310 440

Municipality Biel

Change % 15% 6% 0% 3% -6%

2009, Q4 120 160 200 260 390

2010, Q3 130 170 210 290 430

MS-Region Biel

Change % 8% 6% 5% 12% 10%

2009, Q4 130 180 240 350 480

2010, Q3 130 180 220 300 430 Switzerland

Change % 0% 0% -8% -14% -10%

2.5 Comparables – Recent lettings As previously, an analysis of the Wüest & Partner property database has been un-dertaken for the periods 2009 and 2010. The analysis has produced the following table of recent lettings of retail space as comparables. The comparables below do not differentiate between retail type (e.g. city centre, shopping centre or outlet stores). In addition, our analysis shows no examples for local lettings of outlet retail parks could be found in this region and period and no examples were avail-able for the postal code closest to the Hornbach property (postal code 2504). The results of the analysis show a slight narrowing between the highest and lowest rents and modest shorting of the contract duration.

1 See Annex 1 for explanation of percentile values

Table: Comparison of rental asking prices in CHF per sqm for retail space, 4Q 2009 vs 3Q 2010; Source: Wüest & Partner.


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Location Postal Code Const. Year Area (m2) Rent

(CHF/m²) Lease start Duration

Years

Biel 2500 1961 453 140 2009 5

Biel 2501 1928 610 250 2009 2

Biel 2502 1930 166 581 2009 5

Biel 2502 1930 100 362 2009 10

Biel 2502 1995 300 320 2010 5

Biel 2502 1995 127 260 2010 6

Biel 2502 1930 166 584 2010 4

Biel 2502 1930 238 424 2010 5

Biel 2503 1966 235 107 2010 5

Max. 610 584 10

Min. 100 107 2

Average 266 336 5

2.6 Business Competitors The immediate area can be described as a mixed business and industrial area with a good access to private traffic and public transport. Consequently, a wide range of uses and companies are located at this place. Towards the city the neighbour-ing plots are occupied by light-industry and distribution services such as Gass-mann Druck und Verlag (printer and publisher), The Swatch Distribution AG and Prodega Cash & Carry outlet. The northern side of the motorway is occupied by the Centre Boujean shopping development with various shopping outlets including Coop supermarket and more importantly a “Jumbo” Do-it-yourself and garden store, a direct competitor for the Hornbach development. The local business envi-ronment is assumed to have remained stable since the initial valuation.

2.7 Percentage of business surfaces Biel is a major city, with an independent retail centre, which is not directly chal-lenged by nearby towns and other cities. The proportion of retail stock in the city there slightly exceeds that of the region, canton and national statistics. The re-gion’s focus on industrial and light-industrial manufacturing (e.g. the watch in-dustry) means that the regional proportion of industrial stock is also moderately higher than the cantonal and national average. The share of business surfaces has not been amended since the initial valuation.

Table: Recent lettings: Retail Space 2009/2010, City of Biel/Bienne, Ground Floor; Source: Wüest & Partner.


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Graph: Summary of com-mercial real estate stock in Biel, the surrounding re-gions and Switzerland. Source: Commercial Insur-ance institutions and Wüest & Partner.


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3 Valuation

3.1 Macro-location

General locational factors With a population of 50,455 (up by 3.5% between 2005 and 2009), the munici-pality of Biel (BE) stands at the centre of a medium-sized conurbation. High-income households (executive grades and senior management) account for 6% of Biel's population, compared to the Swiss average of 10%. 61,000 people live within a 10-minute and 149,000 within a 20-minute drive of Biel (the correspond-ing figures for the city of Zurich being around 369,000 and 511,000). The number of people working in sectors other than agriculture stood at 28,101 in 2008, 68.2% of these being employed in the service sector (nationwide figure: 70.5%). Since 2001, the employment figure for Biel has risen by 1.3%, though the number of jobs in industry has declined. Between 2009 and 2010, the region of Biel/Bienne has witnessed practically zero net corporate migration, i.e. the num-ber of companies arriving from and leaving for other regions was roughly the same.

Retail premises Overall, the conurbation Biel/Bienne provides some 354,000 m2 of retail space (including 285,000 m2 in Biel itself). This is equivalent to some 3.8 m2 retail space per inhabitant of conurbation, a figure more or less in line with the Swiss average (4.1 m2 per head population). The volume of new-build retail develop-ment (in relation to the existing stock) over the last few years in the conurbation Biel/Bienne has been par for Switzerland. The average rental for new retail lettings in Biel is CHF 220 per m2 p.a. This value is on a par with the Swiss average of CHF 220 per m2 p.a. On Wüest & Partner AG's location and market rating, which is used to quantify the attractiveness of a specific municipality as a retail location on the basis of about 300 factors, Biel ranks as a municipality with excellent location quality (1.3 points on a scale from 1 [municipality with excellent location quality] to 5 [mu-nicipality with extremely poor location quality]).

3.2 Micro-location The Hornbach property is located in a compact industrial district in the eastern suburbs of the city of Biel. To the east the district marks the natural border of the city, characterised by open, undeveloped land. Immediately to the north is the recently extended A5 motorway, which connects Biel with Solothurn, followed by an extension of the industrial zone. The main Solothurn-Biel-Neuenburg railway line marks the southern border of the property. Further to the southwest the lies the Mett district of Biel, with its mix of commercial and residential areas. The in-dustrial area is well connected to the local main road network and the nearby na-tional motorway links. Vehicle access to the A5 motorway can be gained to the southwest within a short five-minute drive. Public transport connections are pro-vided by the “Gassmann” bus stop, which is situated in the immediate vicinity of the property. The stop provides regular services (every 15 minutes at peak times) to


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Biel city centre railway station (journey time approx. 20 minutes) and the nearer Biel-Mett railway station (journey time approx. 5 minutes). The property offers a significant number of parking spaces (according to the area summary 170, accord-ing to the signage at location 170 plus 300) both in front of the property and on an upper deck public parking facility over the centre. The parking is charged at CHF 0.5 per hour and the income retained by the tenant.

3.3 Site / Building The property, located at “Längfeldweg 140”. It is constructed on land register plot no.10253, which has a total land area of 35'399 m2. No land register excerpt was provided for the purposes of the initial valuation or the valuation update and con-sequently no further analysis of the land register details was undertaken. The plot appears to be triangular in shape and largely flat. Access to the site is only pro-vided via the “Längfeldweg” at the western end of the plot.

The property consists of four elements running from west to east along the north-ern side of the plot. The main building forms the construction market outlet and takes the form of a single storey rectangular concrete pillar and slab retail hall, with raised roof height and a parking deck on the roof / upper level. The second and third buildings are single storey are steel-framed and wooden-roofed garden and plant areas, the latter with additional outside retail areas. The three buildings are built adjacent to each other allowing customers access to all areas without having to leave the individual buildings. The forth and final element is an open-air con-

Graphic: Arial Photo of the property’s approximate micro location. The property position is noted by the red shaded triangle. Source: www.mapsearch.ch.


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struction materials depot at the eastern end of the plot. Parking is provided in front of each of these elements along the southern side of the plot as well as on an addi-tion parking deck on the upper floor of the main building. Delivery access is pro-vided by a circular service road that runs around the rear of the first three build-ings.

3.4 Building Law Construction regulations detail that the plot, and surrounding industrial park, lies in the “zone regulated by the approved plot and development regulation” (Festlegung in rechtsgültigen Teilgrund- und Überbauungsordnungen) and as such lies outside the classic building zones noted in the regulation. No further investigation of this element was undertaken.

3.5 Fabric / Condition The complex was constructed and opened in 2008. The main building is con-structed with a concrete pillar and slab roof with insulated corrugated steel façade elements. The fit-out standard is simple, with the basic infrastructural elements added and maintained by the tenants. The rental areas provide extensive room height and are open-plan and flexible to partition. Service and storage areas are partitioned–off to the area of the building. No natural light is provided in the main retail hall.

The remaining garden and plant centres are similarly open plan and flexible, with lower roof heights. The wooden framed roofs are glazed and fitted with partial sunblind systems. The main wall areas are also glazed, with service areas once again partitioned-off to the rear. The open-air sales areas are fenced in to provide regulated access and security.

The properties showed evidence of a common ventilation/heating system and a sprinkler system was noted throughout the property. The outside areas are used for retail, storage, parking and access roads. These areas are all paved or prepared for the corresponding use.

Overall, the unit appears to be in a good overall state of repair. No details regarding the quality and conditions of the technical installations were provided or avail-able for the purposes of the valuation.

3.6 Use An analysis of the provided summary of the rental areas is contained in the valua-tion rent roll and estimates the total lettable area provided in the centre at 18’600 m2. The unit is split into the following four main rental categories: Retail (12’921 m2), Outdoor Areas (4’387 m2), Ancillary Areas (834 m2) and Storage (459 m2). The parking spaces are not numbered but in line with the information provided and the site visit have been estimated to total 170 spaces on the ground floor and 300 on the parking deck. No changes to the rental area and usage profile were undertaken during the valuation update process.


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For future development, the property is flexibility constructed and provides op-portunity for a wide range of retail, light-industrial and service uses. If required the buildings can be easily partitioned to allow a multi-tenant letting structure.

3.7 Current Income / Vacancy In line with the proposed rental contract the assumed current income or passing rent of the property totals CHF 3’125’000 p.a. generated by Hornbach as a single tenant. This passing rent equates to approximately CHF 168 / m2 for all areas. The property is currently 100% let and therefore exhibits no vacancy losses. These assumptions remain unchanged since the initial valuation.

Indexation: The rental contract is 60% indexed to the consumer price index with the following significant restrictions:

• No indexation in the first three years of tenancy • Indexation only possible after an index increase/decrease of +/- 10% from the

beginning of the tenancy or the last rental adjustment

The valuation has incorporated an estimated scenario for both the rental indexa-tion and contract extensions. Due to the complex nature of the agreement regard-ing the indexation of the rental contract, additional cashflows representing the assumed indexation scenario have been included in the separate account "Other Income" which is detailed in the "Project Account Summary". In the update valua-tion the assumed inflation has been reduced to 1.0% p.a. from 1.2% Correspond-ingly indexation will now be possible in Year 10 with an indexation rate 60% of 10% = +6.0%.

The regulation of further rental indexations remains – in Wüest & Partner’s opinion – not clearly defined in the draft contact. As noted above, the valuation assumes that no further indexations, after period 10, will take place. This assumption is based on the understanding that the reduction of the rental income at the time of the three contract extensions (see below for further details) will count as a rental adjustment as described above. As such, the assumed inflation rate no longer exceeds +/- 10% in each of the remaining option periods. Should the above-mentioned restriction only refer to rental adjustments due to indexation, a further indexation in period 21 of the valuation would be required.

Extension Options: The rental contract foresees three, five-year, tenant-side ex-tension options. Significantly, the proposed extension options are also linked to the following downward adjustment in rent:

• 1st Option: 90.0% of latest actual rent • 2nd Option: 92.5% of latest actual rent • 3rd Option: 95.0% of latest actual rent Similar as for the indexation issue, the account "Other Income Losses" contains the negative cashflows representing the reductions in the base rental income un-dertaken upon the three extensions of the rental contract in line with the condi-


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tions above. The adjustments have been based upon the initial rental amount or, where applicable, the indexed rental amount.

3.8 Market Rent / Vacancy No adjustment to the estimated market rents has been included in the update valuation. Despite a general improvement in the local asking rents for lower per-centile areas, median asking rents have remained stable. After taking into account the overall weakening of national asking price levels it was decided to leave these levels in the valuation unchanged. In line with this analysis the estimated rental values have been set as follows:

• Main Indoor Retail Areas (heated): CHF 210 / m2 p.a. • Secondary Indoor Retail Areas (heated): CHF 150 / m2 p.a. • Indoor Storage Areas (heated): CHF 100 / m2 p.a. • Ancillary Areas (office, changing rooms, etc; heated): CHF 120 / m2 p.a. • Main Outdoor Retail Areas: CHF 60 / m2 p.a. • Other Outdoor Retail Areas: CHF 40 / m2 p.a. • Parking Spaces (Net of Costs): CHF 20 per space per month, CHF 240 p.a. Wüest & Partner has therefore estimated the market rent of the property to be un-changed at about CHF 2’996’650 p.a. or about 4.1% lower than the current in-come assuming 100% occupancy. The structural market vacancy for the property was also left unchanged at 5% for all rental areas. Re-letting is assumed to take place with a linear progression over a 24-month period.

It should be noted that given the complex nature of the proposed rental agreement – with it’s atypical conditions regarding indexation, options and running / main-tenance costs – a direct comparison between the market and actual rent is not recommended and may prove misleading.

3.9 Running and maintenance costs Since the initial valuation now additional property accounts or property budget information was received. The update valuation therefore relies fully on the infor-mation and assumptions of the initial valuation, which have been left unchanged. In line with the proposed rental contract, the valuation assumes that all ancillary costs will transferred to the tenants. The estimated running costs are therefore limited to the following individual cost positions: • Building Insurance: CHF 26’500 p.a. annuity: 0.9% of market rent. • Management Fees: CHF 50’000 p.a. Rental contract: 1.7% of market rent. • Management Fees: CHF 100’000 p.a. Post contract: 3.3% of market rent. • Property Taxes: CHF 65’000 p.a. annuity: 2.2% of market rent. • Other expenditures: CHF 15’000 p.a. Post contract only: 0.5% of market rent. The forecast annuity of the running costs total approximately CHF 157’500 p.a. (previously CHF 157’000), equivalent to a low CHF 8.5 per m2 p.a.


16 Wüest & Partner

3.10 Repair & Upkeep Costs The property, with its four main elements was constructed and opened in 2008 and as such is in good condition overall condition. Consequently, no for refur-bishment or major investments are foreseen for the coming periods. The proposed rental agreement foresees that the tenant will undertake all neces-sary regular and irregular investment measures during the rental contract period. In line with this proposal no such repair and upkeep costs have been included in the valuation for the first 30 years (15 years rental contract, 3 x 5 years extension op-tion). The rental agreement also specifies that no delayed repair and upkeep will be tolerated at the end of the rental contract period. Thereafter this initial period, regular repair and irregular upkeep investment meas-ures have been planned in line with the completed life-cycle analysis of the vari-ous building elements. These assumptions have been left unchanged since the initial valuation. In the update valuation the general age depreciation of the build-ing has been amended (+1 year, as per life cycle-analysis). The annual reserve for upkeep therefore now stands at around CHF 45’700 p.a. (previously CHF 44’000) and for repairs at about CHF 194’000 p.a. (CHF 186’000) equivalent to a total of CHF 10.4 per m2 p.a. Wüest & Partner has noted the regulation of the allocation of the repair and upkeep measures to the tenant as detailed in paragraph 8 of the draft rental contract does not include any financial framework for such steps. The contract simply details the agreement in general written terms. To Wüest & Partner’s knowledge this approach contradicts common market practise, which stipulate the financial qualification and limitation of any such agreements. For the purposes of the valuation Wüest & Partner has assumed that regulation will nevertheless take place as described and recommends that Aspen Real Estate investigate this issue further.

3.11 Risk / Return Profile Overall, risk/return profile of the property is measured in terms of its location and in terms of its property-specific features. Located in an attractive but nevertheless peripheral location, the property currently benefits from an excellent tenancy situation. Taking into account these and all other relevant issues, Wüest & Partner has applied an unchanged net, real-term, and risk-adjusted discount rate of 4.80% to the valuation of the property.

3.12 Change in Value since initial valuation As a result of the valuation update the estimated value of the property has fallen from CHF 54.780 million to CHF 54.700 million or by a modest CHF 80’000. This fall is the net result of the following effects:

• Time effects for both the income and cost positions (i.e. higher costs and lower income moving closer to the valuation date).

• The valuation has also been marginally reduced by the change in assump-tions regarding expected inflation rates (i.e. lower and later indexation of rents).


17 Wüest & Partner

4 Result With due consideration to all factors and assumptions presented in this report, Wüest & Partner estimates the value of the property on the valuation date of 1st January 2011 at CHF 54’700’000

(Fifty-four million, seven hundred thousand Swiss Francs)

Declaration We hereby confirm that we carried out the valuation for the specified property as an independent consultant and that the performance of the valuation for presenta-tion to Aspen Real Estate Ltd. entailed no conflicts of interest on the part of the consultant. Zurich, 22nd February 2011 …………………………………………………… ………………………………………………………… Jan Bärthel, Partner, MRICS Robert A. Varley, Senior Consultant, MRICS


18 Wüest & Partner

5 Appendices

5.1 Definition of percentiles A percentile breakdown of the band within which most real estate prices lie al-lows subtler positioning of a particular property. Percentiles are indicators that subdivide an array of values into equal parts and characterize the statistical spread. The 50th percentile, also termed the median, marks the threshold be-tween the expensive and low-price halves of the market. The 10th percentile simi-larly divides the least expensive 10% from the remaining higher values and the 90th percentile the most expensive 10% from the remaining lower values.


19 Wüest & Partner

5.2 Valuation Report • Valuation report Commercial property Längfeldweg 140, 2504 Biel (DCF

method, as per 1st January 2011)

ANNEX 1part of Valuation Reportas per 1st Januray 2011

2504 BielLängfeldweg 140Commercial property

Robert VarleyJan Bärthel

Account Purposes31.12.2010

AppraiserProject managerProject number

ClientValuation date Valuation reportValuation purpose

33043

Aspen Real Estate Switzerland GmbH

Page 1 of 16Längfeldweg 140, 2504 Biel Valuation no. 46072.223.12.2010Created on

Wüest & Partner 1 Summary

* Yield: Annuity in % of market value

CHF

5.65

Volume (GVA)

NPV repair costs 1-10

%

Land Reg. Sheet no.Volume (SIA 116)

Plot utilisation ratio

Ann. 11

Vacant

Ann. 1-10

Potential

Floor Area (SIA 416)

Project manager

Post code, Town/City

Construction Year

Discount rate (nominal) %

Ownership form

Vacant

Canton

Quality profile coefficient

Current

Property accounts Annuity

Construction Year 2

Building insurance value

%

InspectionGround lessee

Potential

Costs

Street 1

NFA Ann. (%)

Rep. c. 1-10/m³ to GVA

Perc.

Street 2

Net present value

Rep. c. 1-10/GVA value %

Ownership Share %

Current

Rep. c. 1-10/m³ to SIA 116

Planning zone

Project name

%

Discount rate (real) %

Annuity

Total

Market value

%

Current

Total refurbishment

Rental IncomeCurrent

Values

Owner

% projected

Cadastral no.

Imprint

Construction type

Percentile

% MV

%

%

Property no.

p. m³

Site area Partial refurbishment

Annuity

%

Current

Yield (*)

% GVA

Potential

Property type

current %

p. m³

Market value (MV)

Client

Produced by

Proj. income ground lease

Reference value

Yield (Y)

Inflation p.a. %

Annuity

Potential

Property name

Appraiser

Book value

Rental Area

Contact

Valuation date

Projected

160.7

Steel Skeleton, Concrete Slab

2'547'050

Repair costs

100.0

[email protected]

18'601 m²

20 Lincoln Street

CHF

3'125'000

5.4

0

Others 0

Repair costs

168

2.1

0.0

45'664

106.2CHF

2'170'7500

0.0

Trade / Industry

100.0

Income losses

Upkeep costs

954'250

0

6.3

[email protected]

8002 Zürich

4.74

3'320'879

Gotthardstrasse 6

00

0.0

168

Upkeep costs

0.0

5.00.29

Längfeldweg 140

Bau- und Gartenmarkt Hornbach Biel

59

962'562

CHF

2008

0.0

0

100.0

00.0

Total net income

Ground lease (costs)194'099

54'700'000

[email protected]

2504 Biel

Repair costs

157'544

CHF

Shahar Kohavi

37

CHF p. m² NFA

167'030

+41 44 289 90 00

10.4

Office

BE

45'664

100.0

8.5

Total additional costs4'091'418

CHF

197

5.65

CHF/m²

31.12.2010

Tel-Aviv

0

0

0 3'090'532

35'399 m²

0.0Year End Valuations 2010

CHF/m²

13 0.081.5

89.8Running costs

5

Jan Bärthel

0

Commercial property

03.03.2010

84.0

Running costs

0

157'544

155

194'099

2'595'205

160.7

Wüest & Partner

Projected rental income

Retail

Sole ownership

0.0

4.80

54'700'000

CHF

30.5

Robert Varley5.1

6.2Upkeep costs

69.50.0

168

5.85

2'996'650

Aspen Real Estate Switzerland GmbH

5.65

54'704'380

100.02'941

3'520'837

Special use

1.00

1.5

0.31Running costs

449'600

Residential

65'145'385

52.5

0.0

CHF/m²

www.wuestundpartner.com

0.35


Wüest & Partner 2 Summary II

in real terms

in real terms

31.12.2020

31.12.2015

CHF

CHF

04700.00.00.0

00

4700

Parking space (bike/bicycle)Outdoor parkingIndoor parking

0000000

Total6 Room +5 Room4 Room3 Room2 Room1 Room

Total

%UnitsParking TypeVacantPercentileUnitsApartment Type

%

Parking Spaces - DetailsApartment Mix

%Vacant p. Mt. p. Mt.CHF

Current

171.0171.0171.0

MthsLatestWeighted Av.Earliest

IndexationContract Length

3722

% m²Potenzial

%Current

Percentile Classification

2061381098564445307223184146215181162137105

Trade / IndustryRetailOffice

22519417515990%70%50%30%

13810%

p. m²CHF

Price Ranges Municipality

Residential%

Vacant

Current Weighted Av.Mths Mths %

Current

Locational quality

Properties with handicaps

Problem properties

Prime propertiesQuestion marks

III II I

VI V IV

IX VIII VII

poor good

Period1 2 3 4 5 6 7 111098

90.992.093.194.195.196.096.997.798.599.3100.0Market value

98.2100.0100.0100.0100.0100.0100.0100.0100.0100.0100.0Projected rental income

93.2100.0100.0100.0100.0100.0100.0100.0100.0100.0100.0Total income

118.2100.0100.0100.0100.0100.0100.0100.0100.0100.0100.0Running costs

5.44.54.54.54.54.54.54.54.54.54.5 in % of projected rental income

390.5100.0100.0100.0100.0100.0100.0100.0100.0100.0100.0Total costs

79.1100.0100.0100.0100.0100.0100.0100.0100.0100.0100.0Total net income

76.995.595.595.595.595.595.595.595.595.595.5 in % of projected rental income

6.176.216.146.076.015.955.905.855.805.755.71Gross yield %

4.745.935.865.805.745.685.635.585.545.495.45Net yield %

0

0.0

5.43

6.12

% Building insurance value

per m³ SIA 116

Exit

Exit

Repair costsTotal Period 1-10

Various Indicators

per m²

per m³ GVA

per m³ SIA 416

Internal Rate of Return

per Apartment

Development: Value, Revenue, Costs & YieldsMarket matrix and Quality profile

2.11.4

Market CoefficientProperty quality

2.3Locational quality

5.0

Condition Micro location

Standard Usability

Macro-location

Quality profile property

4.0

3.0

2.0

1.0

1=very good; ... 5=very poor

%


Wüest & Partner 3 Contents

1 Summary

2 Summary II

3 Contents

4 Indicators

5 Income summary

6 Projected income summary

7 Rent roll

8 Projected rent roll

9 Projected account summary

10 Results

11 Quality profile (extended)

12 Document List

13 Photographic Documentation

14 Maps


Wüest & Partner 4 Indicators

Values (in CHF )

(100.0%)(100.0%)

Market value 54'700'00054'700'000

NoNo

Single tenant

2504Biel

Commercial property

Switzerland

Biel/Bienne

Bau- und Gartenmarkt Hornbach Biel

Retail Outlet Store

Längfeldweg 140

Sole ownership100.0

Steel Skeleton, Concrete Slab

35'399 m²

1

No

2008

Plot areaComments

LR remarksCadastral No.LR sheet No.LR plan No.LR No.LR municipalityLand registryLand register (LR)

Ownership

Market value

Tax value

Reference valueBook value

VAT impositionOwner-occupationLetting typeLetting

Comments

Co-ownershipPlot No.Co-ownership Share

Condominium ownership

Comments

without fit-outwithout fit-out

Storeys

Construction year

Ground lease Dimension and construction

Building insurance (GVA)Planing law

Plot utilisation ratio

Identification

Total gross floor area (GFA)Site areaBuilding Volume (SIA 416)Building Volume (SIA 116)

with fit-outwith fit-out

Penthouse/attic storeysBasement storeysMain storeys

Total refurbishmentConstruction Year 2

Partial refurbishment

Construction Year 1

CommentsNumber of buildingsConstruction type

Ownership SharePlot No.

Ground lesseeGround lessorPlot No.Granted

Official numberProperty type

Building NameProperty No.

Comments on ownerOwnerOwnership interestForm of ownership

Comments on acquisition

Building type

Building Volume (GVA)

CommentsReferenceValuation date

Insurance value

CommentsPotential site contaminationListed/Protected Property

Planning zone

Street 2Street 1MunicipalityTown/CityPost codeCountry


Rental Income

CHFCHF

Wüest & Partner Income summary

%AnnuityPercentileper m²% Currentmin/m²max/m²Percentileper m²ShareIncomeAreaUnits

CHFUse

Potential in real terms

5

ActualVacant %Projected 69.52'170'750 22168

111.5

117.3 371975.0

2'419'698

2'547'050

2'229'9491.4

2'261'2651681680.0

2'170'750

12'9216Retail

ActualVacant %Projected 2.577'113 168

56.5

59.5 1005.0

43'605

45'900

68'8020.8

69'3661681680.0

77'113

4591Warehousing / Archiving


67.9

71.4 1205.0

95'076

100'080

128'9090.9

130'1391681680.0

140'114

8342Ancillary commercial use

ActualVacant %Projected 0.00

5.0107'160

112'800

26'3515.0

27'738

0

470Outdoor parking


24.6

25.9 435.0

181'279

190'820

599'6770.4

602'0241681680.0

737'023

4'3875Outdoor area

ActualVacant %Projected 155

5.02'996'650168

91.1

95.9

3'053'6871.2

3'090'532100.00.0

2'846'818

3'125'000

3'125'000

484 18'601Total


Rental incomeCHFCHFCHF

Wüest & Partner

-31.12.2014 -31.12.2015

01.01.202111

-31.12.2110

01.01.202010

-31.12.2020

01.01.20199

-31.12.2019

01.01.20188

-31.12.2018

01.01.20177

-31.12.2017

01.01.20166

-31.12.2016

01.01.20155

01.01.20144

01.01.20133

-31.12.2013

01.01.20122

-31.12.2012

01.01.2011

-31.12.2011

1

AnnuityPotentialIncome

Period

Use


6 Projected income summary

ActualVacant %Projected 2'316'214

2'265'8862.2

2'170'750

2'170'7500.0

2'170'750

2'170'7500.0

2'170'750

2'170'7500.0

2'170'750

2'170'7500.0

2'170'750

2'170'7500.0

2'170'750

2'170'7500.0

2'170'750

2'170'7500.0

2'170'750

2'170'7500.0

2'170'750

2'170'7500.0

2'170'7500.0

2'170'7502'170'7505.0

2'419'698

2'547'050

2'229'9491.4

2'261'2650.0

2'170'750

Retail

ActualVacant %Projected 64'663

63'7561.4

77'113

77'1130.0

77'113

77'1130.0

77'113

77'1130.0

77'113

77'1130.0

77'113

77'1130.0

77'113

77'1130.0

77'113

77'1130.0

77'113

77'1130.0

77'113

77'1130.0

77'1130.0

77'11377'1135.0

43'605

45'900

68'8020.8

69'3660.0

77'113

Warehousing / Archiving


122'1061.6

140'114

140'1140.0

140'114

140'1140.0

140'114

140'1140.0

140'114

140'1140.0

140'114

140'1140.0

140'114

140'1140.0

140'114

140'1140.0

140'114

140'1140.0

140'114

140'1140.0

140'1140.0

140'114140'1145.0

95'076

100'080

128'9090.9

130'1390.0

140'114

Ancillary commercial use


42'3485.0

000000000005.0

107'160

112'800

26'3515.0

27'738

0

Outdoor parking


516'3000.7

737'023

737'0230.0

737'023

737'0230.0

737'023

737'0230.0

737'023

737'0230.0

737'023

737'0230.0

737'023

737'0230.0

737'023

737'0230.0

737'023

737'0230.0

737'023

737'0230.0

737'0230.0

737'023737'0235.0

181'279

190'820

599'6770.4

602'0240.0

737'023

Outdoor area

ActualVacant %Projected 3'069'608

3'125'000

3'125'0000.0

3'125'0000.0

3'125'000

3'125'0000.0

3'125'000

3'125'0000.0

3'125'000

3'125'0000.0

3'125'0000.0

3'125'000

3'125'0000.0

3'125'000

3'125'0000.0

3'125'000

3'125'0000.0

3'125'000

3'125'0000.0

3'125'000

3'125'0001.9

3'010'3965.0

2'996'650

3'053'6871.2

3'090'5320.0

2'846'818

3'125'000

3'125'000

Total


Wüest & Partner

LeaseSC %Area Perc. Vacantper m²Perc.per m²OptionsIndex %EndStartUnitsRoomsVacant

IncomeRental UnitsCHFCHFUseStoreyTenantNo.


7 Rent roll

Baumarkt Heated 3 x 5 38200 5.01'749'000221680.031.03.202501.04.20108'7451 1'469'175RT0Hornbach Baumarkt (Schweiz) AGGartenmarket heated 3 x 5 38200 5.0510'800221680.031.03.202501.04.20102'5541 429'076RT0Hornbach Baumarkt (Schweiz) AGGlashaus heated 3 x 5 38200 5.0175'800221680.031.03.202501.04.20108791 147'674RT0Hornbach Baumarkt (Schweiz) AGGartenmarkt Covered 3 x 5 12150 5.055'500221680.031.03.202501.04.20103701 62'161RT0Hornbach Baumarkt (Schweiz) AGBaumarkt unheated 3 x 5 12150 5.019'650221680.031.03.202501.04.20101311 22'008RT0Hornbach Baumarkt (Schweiz) AGWindfang 3 x 5 12150 5.036'300221680.031.03.202501.04.20102421 40'656RT0Hornbach Baumarkt (Schweiz) AGGartenmarkt Open Areas 3 x 5 40 5.041'6001680.031.03.202501.04.20101'0401 174'722OA0Hornbach Baumarkt (Schweiz) AGBaumarkt Open areas 3 x 5 40 5.0100'8801680.031.03.202501.04.20102'5221 423'700OA0Hornbach Baumarkt (Schweiz) AGBaumarkt Heated 3 x 5 100 5.045'9001680.031.03.202501.04.20104591 77'113W0Hornbach Baumarkt (Schweiz) AGVordach 3 x 5 60 5.09'6601680.031.03.202501.04.20101611 27'048OA0Hornbach Baumarkt (Schweiz) AGGartenmarkt Open Areas 3 x 5 40 5.02'3201680.031.03.202501.04.2010581 9'744OA0Hornbach Baumarkt (Schweiz) AGBaumarkt Heated 3 x 5 5120 5.050'040221680.031.03.202501.04.20104171 70'057AC0Hornbach Baumarkt (Schweiz) AGBaumarkt Heated 3 x 5 5120 5.050'040221680.031.03.202501.04.20104171 70'057AC1Hornbach Baumarkt (Schweiz) AGBaumarkt Heated 3 x 5 5.040'800031.03.202501.04.2010170 0OP0Hornbach Baumarkt (Schweiz) AGVordach 3 x 5 60 5.036'3601680.031.03.202501.04.20106061 101'809OA0Hornbach Baumarkt (Schweiz) AGBaumarkt Heated 3 x 5 5.072'000031.03.202501.04.2010300 0OP0Hornbach Baumarkt (Schweiz) AG

149'833 5.0

% proj.% proj.

168 100.0 155 100.0

95.00.00

100.03'125'000 2'846'818

18'601 3'125'000484

Total actual rental incomeTotal vacant

2'996'650Total projected rental income

Indexation of rental contract: Due to the complex nature of the agreement regarding the indexation of the rental contract, additional cashflows representing the assumed indexation scenario have been included in the separate account "Other Income" which is detailed in the "Project Account Summary"


Wüest & Partner

1101.01.2021

-31.12.2110

1001.01.2020

-31.12.2020

901.01.2019

-31.12.2019

801.01.2018

-31.12.2018

701.01.2017

-31.12.2017

601.01.2016

-31.12.2016

501.01.2015

-31.12.2015

401.01.2014

-31.12.2014

301.01.2013

-31.12.2013

201.01.2012

-31.12.2012PotentialIncomeRental Units

CHFCHFUseStoreyTenantNo.


8 Projected rent roll

Period1

-31.12.2011

01.01.2011

Baumarkt Heated 1'469'175 1'469'175 1'469'175 1'469'175 1'469'175 1'469'175 1'577'5621'469'1751'469'1751'469'1751'749'0001'469'175RT0Hornbach Baumarkt (Schweiz) AG 1'469'175Gartenmarket heated 429'076 429'076 429'076 429'076 429'076 429'076 460'731429'076429'076429'076510'800429'076RT0Hornbach Baumarkt (Schweiz) AG 429'076Glashaus heated 147'674 147'674 147'674 147'674 147'674 147'674 158'568147'674147'674147'674175'800147'674RT0Hornbach Baumarkt (Schweiz) AG 147'674Gartenmarkt Covered 62'161 62'161 62'161 62'161 62'161 62'161 59'43662'16162'16162'16155'50062'161RT0Hornbach Baumarkt (Schweiz) AG 62'161Baumarkt unheated 22'008 22'008 22'008 22'008 22'008 22'008 21'04322'00822'00822'00819'65022'008RT0Hornbach Baumarkt (Schweiz) AG 22'008Windfang 40'656 40'656 40'656 40'656 40'656 40'656 38'87440'65640'65640'65636'30040'656RT0Hornbach Baumarkt (Schweiz) AG 40'656Gartenmarkt Open Areas 174'722 174'722 174'722 174'722 174'722 174'722 121'853174'722174'722174'72241'600174'722OA0Hornbach Baumarkt (Schweiz) AG 174'722Baumarkt Open areas 423'700 423'700 423'700 423'700 423'700 423'700 295'493423'700423'700423'700100'880423'700OA0Hornbach Baumarkt (Schweiz) AG 423'700Baumarkt Heated 77'113 77'113 77'113 77'113 77'113 77'113 64'66377'11377'11377'11345'90077'113W0Hornbach Baumarkt (Schweiz) AG 77'113Vordach 27'048 27'048 27'048 27'048 27'048 27'048 20'13627'04827'04827'0489'66027'048OA0Hornbach Baumarkt (Schweiz) AG 27'048Gartenmarkt Open Areas 9'744 9'744 9'744 9'744 9'744 9'744 6'7969'7449'7449'7442'3209'744OA0Hornbach Baumarkt (Schweiz) AG 9'744Baumarkt Heated 70'057 70'057 70'057 70'057 70'057 70'057 62'04270'05770'05770'05750'04070'057AC0Hornbach Baumarkt (Schweiz) AG 70'057Baumarkt Heated 70'057 70'057 70'057 70'057 70'057 70'057 62'04270'05770'05770'05750'04070'057AC1Hornbach Baumarkt (Schweiz) AG 70'057Baumarkt Heated 0 0 0 0 0 0 16'12400040'8000OP0Hornbach Baumarkt (Schweiz) AG 0Vordach 101'809 101'809 101'809 101'809 101'809 101'809 75'792101'809101'809101'80936'360101'809OA0Hornbach Baumarkt (Schweiz) AG 101'809Baumarkt Heated 0 0 0 0 0 0 28'45300072'0000OP0Hornbach Baumarkt (Schweiz) AG 0

3'069'6083'125'0003'125'0003'125'0003'125'0003'125'0003'125'0003'125'0003'125'0003'125'0002'996'6503'125'000Total 3'125'000


CHF -31.12.2110

1101.01.2021

-31.12.2020

1001.01.2020

-31.12.2019

901.01.2019

-31.12.2018

801.01.2018

-31.12.2017

701.01.2017

-31.12.2016

601.01.2016Potential

Annuity

% Proj.

Account % Proj. -31.12.2014-31.12.2013-31.12.2012-31.12.2011

01.01.201401.01.201301.01.201201.01.2011

Accounts 1 2 3 4

-31.12.2015

01.01.20155

Period


9 Projected account summaryWüest & Partner

3'069'6083'125'0003'125'0003'125'0003'125'0003'125'0003'125'000 3'125'000 3'125'000 3'125'000 3'125'000100.0 3'090'5322'996'6500 0.0Projected rental income59'211000000 0 0 0 05.0 36'845149'8320 0.0Vacant

209'216000000 0 0 0 00.0 130'18600 0.0Other income losses268'428000000 0 0 0 05.0 167'030149'8320 0.0Income losses110'905000000 0 0 0 00.0 69'01100 0.0Other income

2'912'0853'125'0003'125'0003'125'0003'125'0003'125'0003'125'000 3'125'000 3'125'000 3'125'000 3'125'00095.0 2'992'5132'846'8180 0.0Total income0000000 0 0 0 00.0 000 0.0Caretaking

26'50026'50026'50026'50026'50026'50026'500 26'500 26'500 26'500 26'5000.9 26'50026'5000 0.0Insurance0000000 0 0 0 00.0 000 0.0Utilities

69'83450'00050'00050'00050'00050'00050'000 50'000 50'000 50'000 50'0003.3 62'342100'0000 0.0Property Management65'00065'00065'00065'00065'00065'00065'000 65'000 65'000 65'000 65'0002.2 65'00065'0000 0.0Property taxes5'950000000 0 0 0 00.5 3'70315'0000 0.0Other expenditure

167'284141'500141'500141'500141'500141'500141'500 141'500 141'500 141'500 141'5006.9 157'544206'5000 0.0Running costs73'386000000 0 0 0 00.0 45'66400 0.0Upkeep costs

311'929000000 0 0 0 00.0 194'09900 0.0Repair costs552'598141'500141'500141'500141'500141'500141'500 141'500 141'500 141'500 141'5006.9 397'308206'5000 0.0Total running and maint. costs552'598141'500141'500141'500141'500141'500141'500 141'500 141'500 141'500 141'5006.9 397'308206'5000 0.0Total costs

2'359'4872'983'5002'983'5002'983'5002'983'5002'983'5002'983'500 2'983'500 2'983'500 2'983'500 2'983'50088.1 2'595'2052'640'3180 0.0Total net income

Other Income Losses - Contains negative cashflows representing the reductions in the base rental income undertaken upon the extension of the rental contract (Option 1: 90% of previous rent, Option 2: 92.5% of previous rent, Option 3: 95% of previous rent)

Other Income - Includes cashflows representing the assumed rental income indexation scenario (Inflation assumption = 1.2% p.a., Indexation in Year 9, Year 18 and Year 27, Indexation rate 60% of 10.8% = +6.48%)


Market value in CHF

CHF

CHF

CHF

CHF

CHF

00.0

110'9053'180'513

268'4288.4

2'912'085

03'125'000

00.0

3'125'000

03'125'000

00.0

3'125'000

03'125'000

00.0

3'125'000

03'125'000

00.0

3'125'000

03'125'000

00.0

3'125'000

03'125'000

00.0

3'125'000

03'125'000

00.0

3'125'000

03'125'000

00.0

3'125'000

03'125'000

00.0

3'125'000

03'125'000

00.0

3'125'000Total income Income losses %Income losses

CurrentIncome

Results

01.01.2011 01.01.2012 01.01.2013 01.01.2014 01.01.2015 01.01.2016 01.01.2017 01.01.2018 01.01.2019 01.01.2020 01.01.2021

100.0 99.3 98.5 97.7 96.9 96.0 95.1 94.1 93.1 92.0 90.954'700'000 54'310'000 53'890'000 53'450'000 52'990'000 52'510'000 52'010'000 51'480'000 50'920'000 50'340'000 49'740'000

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 79.12'983'500 2'983'500 2'983'500 2'983'500 2'983'500 2'983'500 2'983'500 2'983'500 2'983'500 2'359'487

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 390.54.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 18.0

141'500 141'500 141'500 141'500 141'500 141'500 141'500 141'500 141'500 141'500 552'598

552'598141'500 141'500 141'500 141'500 141'500 141'500 141'500 141'500 141'500 141'5000 0 0 0 0 0 0 0 0 0 311'9290 0 0 0 0 0 0 0 0 0 73'386

141'500 141'500 141'500 141'500 141'500 141'500 141'500 141'500 141'500 141'500 167'284

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 93.2

3'125'000 3'125'000 3'125'000 3'125'000 3'125'000 3'125'000 3'125'000 3'125'000 3'125'000 3'125'000 3'069'608

5.10 51'900'000 6.02

54'700'000

5.00 52'800'000 5.92

4.60 5.51

4.90 53'730'000 5.824.80

55'710'0005.71

4.7056'750'000

5.61

57'840'0004.50 5.40Current GY %

Discount Rate/Yields %4.80

5.85

5.65

1.00Discount rate in real terms

Gross yield (GY) annuity

Discount rate in nominal terms54'700'00054'700'000

100.0 %

SensitivityDiscount rate %

Assumed inflation p.a.Ownership interestTotal market value

Market Value

DevelopmentMarket valueExtrapolation of market value

Development

Total net incomeTotal net income

% projected incomeDevelopment

Total additional costs

2'983'500

Repair costsUpkeep costs

Total running and maint. costs

Running costs

Total costs

Accounts

0

0

00

0.0

3'125'000

0

Costs

Development

Total income before income lossesAdditional incomeProjected rental income

-31.12.2012

01.01.2012

-31.12.2013

01.01.2013

-31.12.2014

01.01.2014

-31.12.2015

01.01.2015

-31.12.2016

01.01.2016

-31.12.2017

01.01.2017

-31.12.2018

01.01.2018

-31.12.2019

01.01.2019

-31.12.2020

01.01.2020

-31.12.2110

01.01.2021

-31.12.2011

01.01.20111110987654321

Period


10Wüest & Partner


11 Quality profile extended

++-- - +/- +12345RatingWeighting

Wüest & Partner

2.1100Commercial very poor poor good very goodaverage

average very goodgoodpoorvery poorMicro location 50 2.9

3.53.02.5

203050Commercial location in municipality

Public transport linksPedestrian thoroughfare

very goodgoodaveragepoorvery poorvery goodgoodaveragepoorvery poorvery goodgoodaveragepoorvery poor

1.5 average very highhighlowvery lowUsability 201.51.51.5

503020 very poor poor average good very good

very low low average high very highvery low low average high very highLayout quality

Access/ParkingFlexibility

1.8 average very highhighlowvery lowStandard 10

2.51.5

1.5333333

Space provisionBuilding fabricBuilding services very low low average high very high

very low low average high very highvery limited limited standard large very large

1.020 averageCondition very poor poor good very good1.01.01.030

5020Building envelope

InteriorBuilding services very poor poor average good very good

very poor poor average good very goodvery poor poor average good very good

1.5

1.01.8

2.92.1

average

TotalMicro locationUsabilityStandardCondition

very poorvery poorvery poorvery poor

very poor

poorpoorpoorpoorpoor

goodgoodgoodgoodgood

very goodvery goodvery goodvery goodvery good

averageaverageaverageaverage


CommentsAuthorProvided byDateAppendixAvailableDocument

12 Document ListWüest & Partner

24.02.2010 Aspen Group Ltd. Hornbach Baumarkt (Schweiz) A Draft, unsigned

Aspen Group Ltd. Hornbach Baumarkt (Schweiz) AG09.06.2008

03.03.2010 Wüest & Partner From site Visit

Wüest & Partner Local authorities01.03.2010

03.03.2010 Wüest & Partner

Wüest & Partner Hornbach Baumarkt (Schweiz) AG01.03.2010 Annual Report

20.9 Maintenance planning

30.11 Building Volume (GVA)

Rent roll20.1

Approval and certificates30.1

Building insurance (GVA) certificate

30.230.330.430.530.630.730.830.930.10

Building surveyMaintenance/refurbishment track recordInvestment appraisalKey building services dataKey Area and Volume DataConstruction yearProject specificationProperty plans

20.220.320.420.520.620.720.8 Budgets

Property accountsRetail turnoverCommercial leasesNet lettable areasService chargesNet rents

Site inspection

Land register excerptGround lease documentationCadastral mapPlanning and Zoning RegulationsArchitectural/heritage conservationEnvironment, site contaminationDescriptionPhotographic documentation

10.910.810.710.610.510.410.310.210.1

Construction30

Management20

Basic Information10

Diverses4029.06.2007 Kanton Bern Hornbach Baumarkt (Schweiz) AGTeilabschlussmutation B5 Bözingen40.1

Kaufvertrag 18.02.2010 Aspen Group Ltd. Hornbach Baumarkt (Schweiz) AG Draft, unsigned40.2


Wüest & Partner

Parking RampCar EntranceEast Aspect from Main Building

Rear AspectSteet View


Main Entrance


Wüest & Partner

Langfeldweg (view West)HothouseOutside Sales Areas

Garden Centre EntranceDelivery Area


Parking Deck


Micro LocationMacro Location

14 MapsWüest & Partner
