Independent valuer’s report
Wüest & Partner

The valuers hereby confirm that the valuations have been performed in accordance with national and international standards and guidelines as set out in the International Valuation Standards (IVSC) and the standards of the Royal Chartered Surveyors (Red Book). The market values determined for the investment properties represent “fair value” as defined in the International Financial Reporting Standards (IFRS) on the basis of revised IAS 40 (Investment Property), paragraphs 33–55.

“Fair value” is defined as the amount for which a property could be exchanged on the open market at the valuation date between two willing and knowledgeable parties in an arm’s length transaction, where the parties are motivated, but not compelled, to buy or sell, and with due allowance made for a reasonable marketing period. In compliance with IAS 40 paragraph 51, no allowance is made in the determination of fair value for future value-enhancing investments or for any associated additional income. Nor is any account taken of Züblin’s liabilities in respect of taxation (apart from regular property taxes) and financing costs.

In valuing properties of the Züblin Group, the valuers applied the discounted cash flow (DCF) method, under which the market value of a property is determined by discounting the total of projected future net earning over the next 100 years to the valuation date. The discount calculation is carried out separately for each property, taking account of its property-specific risks and opportunities, in line with market conditions and on a risk-adjusted basis. In order to comply with the French valuation regulations (issued by Afrexim, the French association of valuation firms), BNP Paribas Real Estate Valuation France applied three different methods:

• direct income capitalisation, where the passing and potential revenue of each property is capitalised before deduction of exceptional capital expenditure;
• DCF approach on a 10-year period;
• market comparison approach, based on prices per sq m observed in comparable transactions.

The market value is finally determined by comparing the results obtained by the three different methods.

In order for the market value of the properties composing the French portfolio to be comparable with the rest of the Züblin portfolio, Wüest & Partner subsequently used plausible valuation assumptions, which enabled them to arrive at the value determined by BNP Paribas Real Estate Valuation France using the methodology described above.

Wüest & Partner, BNP Paribas Real Estate Valuation France and Troostwijk are familiar with all the properties in their respective regions on the basis of inspections and provided to them. The properties have been analysed in detail with respect to their quality and risk profiles (attractiveness and lettability of rented properties, construction type and condition, micro- and macro-location etc.). Currently vacant premises are valued with due allowance made for a reasonable marketing period. The valuers will inspect the properties a minimum of every three years as well as following the purchase of properties and upon completion of larger refurbishments projects.

Within the review period from 1 April 2012 to 31 March 2013 the following properties have been visited:

Switzerland

No site visits

France

No site visits

Germany

4 properties
visited by W&P Immobilienberatung GmbH

Netherlands

No site visits

A total of 51 investment properties and properties were valued as at 31 March 2013. The fair value of these properties, in accordance with revised IAS 40, as determined by the valuers on the valuation date is:

Switzerland

8 properties with a total value of CHF 321 260 000

France

7 properties with a total value of EUR 357 980 000

Germany

23 properties with a total value of EUR 191 591 795

The Netherlands

13 properties with a total value of EUR 66 850 000

9 investment properties were sold during the reporting period 1 April 2012 to 31 March 2013.

In line with their company policies, Wüest & Partner, BNP Paribas Real Estate Valuation France and Troostwijk have valued the properties of the Züblin Group independently and impartially. The valuation was carried out solely for the purposes specified above; Wüest & Partner, BNP Paribas Real Estate Valuation France and Troostwijk accept no liability in respect of third parties.

Zurich, 15 May 2013
Wüest & Partner

Dr. Christoph Zaborowski
Chartered Surveyor MRICS, economist, Partner

Pascal Marazzi
Director

Amsterdam, 15 May 2013
Troostwijk Taxaties

Ir. Jordy Kleemans
Consultant & Taxateur van onroerende zaken

Paris, 15 May 2013
BNP Paribas Real Estate Valuation France

Jean-Claude Dubois MRICS
Chartered Surveyor MRICS, Chairman, Member of the I.F.E.I

Investment properties

The following nominal discount rates were applied to the property valuation:

* Average of discount rates for individual valuations, weighted by market value

The investment property valuations are based on the following general assumptions:

• The rent rolls from Züblin Group used in the valuation are dated 31 March 2013.
• A one-phase DCF model was used. 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. This rate is determined individually for each property on the basis of appropriate benchmarks derived from arm’s-length transactions. If sufficient benchmark transactions are not available, the discount rate is determined as follows: risk-free interest rate (government bond) + 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.

Nominal discount rates range between 4.28% and 18.70% depending on the property, use and location (see Table 1).

• Unless otherwise stated, the valuations are based on the following assumptions for inflation (nominal discount rates are adjusted accordingly):

  – Switzerland: 1.0%
  – France: 2.0%
  – Germany: 2.0%
  – Netherlands: 2.0
• Credit risks posed by specific tenants are not explicitly factored into the valuation.
• Specific indexation of existing rental agreements is accounted for on an individual basis. After expiry of the contracts, an indexation factor of 40% to 100% (based on a local average for each country and usage type) and an average contract term of 5 years are assumed.
• 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, for residential use monthly in advance.
• In terms of running costs, entirely separate service charge accounts are assumed, with no tenancy-related ancillary costs to be borne by the owner.
• The maintenance costs for repair and upkeep were calculated using a building analysis tool. This tool is used to estimate the remaining lifespan of individual building components based on their present condition, to model periodic refurbishments and to calculate the associated annual renewal fund allowances. The calculated values are plausibility tested using cost benchmarks derived from
  Wüest & Partner surveys.
• Additional assumptions were applied to the valuation of the non-strategic properties (Dutch portfolio and retail properties in Germany) as a result of the planned sales. Within the permitted range for the estimation of fair value the following additional value-reducing factors were assumed for these properties:
• Relatively quick sale (< 6 months)
• Difficult to let the properties (no further measures will be taken to increase the attractiveness of the properties)
• Limited tradability of the properties (retail properties with short leases and vacancies are only of interest to a small number of investors. If no such buyer is found during the proposed marketing period, the property will usually have to be sold at a significant discount).