Hammering Home the CBRE Auction MessageWednesday 30th January 2013

Commercial Property Auction Update

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Contents

� Auction market overview – what happened in 2012?

� What’s selling well?

� What’s not selling well?

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� The Good, The Bad and The Ugly

� Predictions for 2013

� Conclusion

Size of the Commercial Auction Market

2012 £1,024,000,000

(Average lot size £221,000)

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2011 £1,077,000,000

(Average lot size £223,000)

Source: Essential Information Group

The Top 3 Auctioneers

2012 £575,748,850 raised

2011 £528,330,550 raised

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2012 78.4% success rate

2011 79.5% success rate

Source: Essential Information Group

The Top 3 Auctioneers - Lots Offered/Sold

2012 1,312 lots offered under the hammer

(17 Auctions)

2011 1,056 lots offered under the hammer

(11 Auctions)

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(11 Auctions)

2012 1,028 lots sold under Auction Contract

2011 840 lots sold under Auction Contract

Source: Essential Information Group

The Top 3 Auctioneers - Lot Size

2012 Average lot size £566,125

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2011 Average lot size £628,965

Source: Essential Information Group

The Top 3 Auctioneers - 2012 vs 2011

Properties offered

Success rates

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Amount raised

Average lot size

Sector Favourites

2011 % Sold 2012 % Sold 2012Value

Commercial Ground Rents 76.3% 88.5% (+12.2%) £9.2m

Banks 74.5% 75.2% (+0.7%) £76.9m

Retail 71.7% 71.8% (+0.1%) £343.9m

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Industrial 68.7% 68.6% (-0.1%) £130.4m

Offices 70.1% 68.1% (-2%) £103.9m

Public House 78.5% 66.1% (-12.4%) £41.7m

Leisure 64.1% 63.1% (-1%) £92.1m

Source: Essential Information Group

Average Yield (Top 3 Auctioneers)

2011 2012

Retail 8.49% 8.64%

Office 14.34% 15.51%

Industrial 11.65% 12.38%

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Leisure 9.42% 10.46%

Source: Essential Information Group

Regional Hotspots

Region Raised % Sold

North-West Home Counties £123,681,200 84.6%

London £152,615,496 82.8%

South-West £92,878,720 82.0%

East Anglia £27,210,300 75.8%

South-East Home Counties £201,946,652 75.6%

West Midlands £77,232,920 74.6%

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West Midlands £77,232,920 74.6%

Wales £41,441,361 74.0%

Yorkshire and The Humber £70,283,299 72.4%

East Midlands £67,954,550 71.6%

North-West £124,178,631 71.1%

North-East £24,734,605 70.9%

Northern Ireland £2,025,750 60.3%

Scotland £24,002,949 52.0%

What’s Selling Well?

� Defensive Properties

� Correctly priced High Yielding Asset Management Properties

� Committed Vendors

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� Committed Vendors

� Good Locations

� Smaller lot sizes

What’s Not Selling Well?

� Poor locations

� Over rented

� Weak re-letting potential

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� Weak re-letting potential

� Little or no alternative use potential

� Un-motivated vendors

The Good

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The Good

Classic Location

Guide Price £700,000/£750,000

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Sale Price £920,000 (4.9%)

186 Earl’s Court Road, London, SW5

Classic Bank Investment

Guide Price £500,000/£550,000

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Sale Price £640,000 (4.4%)

23 High Street, Teddington, Middlesex

Classic Trophy Building

Guide Price £3,600,000/£3,800,000

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Sale Price £4,310,000 (4.4%)

29/30 High Street, Windsor, Berkshire

Classic Asset Management Potential

Guide Price £1,200,000

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Sale Price £1,540,000 (6.15%)

Waterside Business Centre, Isleworth, Middlesex

Classic Alternative Use Potential

Guide Price£1,200,000 (£70 psf CV)

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Sale Price £3,760,000 (£200 psf CV)

272/276 Bath Road, Heathrow

Classic Ground Rent

Guide Price£1,000,000 +

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Sale Price £1,195,000 (4.72%)

Wedgewood Way, Pin Green Industrial Estate,

Stevenage

The Bad

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The Bad

Vacant Properties

Sold £1,260,000

34,700 sq ft

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34,700 sq ft

£36 psf CV

Tolpits Lane, Rickmansworth

Vacant Properties

Sold £705,000

46,565 sq ft

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46,565 sq ft

£15 psf CV

235 Ampthill Road, Bedford

Vacant Properties

Sold £355,000

41,870 sq ft

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41,870 sq ft

£8.50 psf CV

Northshore House, Dundee

Vacant Properties

Sold £137,500

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Sold £137,500

33 Bridge Street, Evesham

Properties let to “?” covenants

� LA Leisure Ltd (t/a LA Fitness)

� 35 years from June 2006 (no breaks)

� RPI linked rent reviews

Hove

Leeds

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� RPI linked rent reviews

� Lot sizes £650,000 - £1,700,000

� All Sold Average Yield 13.08%Lincoln

Guildford

Properties in Difficult Locations

Guide Price£2,000,000 (18.5%)

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Sale Price £2,430,000 (15.2%)

Sherborne Square Shopping Centre, Huyton,

Liverpool

“High Risk” Properties

Guide Price: £800,000/£900,000

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Sale Price £920,000 (43%) (£27.50 psf CV)

35-37 Colston Avenue, Bristol

“High Risk” Properties

Guide Price: £1,350,000/£1,400,000

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Sale Price £1,200,000 (14.96%) (£12.40 psf CV)

15 Windover Road, Huntingdon

Challenging Locations

Sold 2004 - £1,680,000 (4.95%)Sold 2006 - £1,940,000 (4.29%)

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Unsold 2012 - £820,000 (10.1%)

Sold 2013 - £790,000 (10.5%)

Oxford Street, Bolton

The Ugly

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The Ugly

Challenging Locations

Unsold £545,000

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(14%)

58/68 Channel Street, Galashiels

Challenging Locations

Unsold £675,000

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(7.2%)

Centre Court, Brookfield, Middlesbrough

Sector Issues!

Unsold £650,000

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(9.5%)

Stanley Medical Centre, Stanley, Liverpool

Mixed Issues!

Unsold £1,700,000

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(14.1%)

Olympia House, Beeston, Leeds

Mixed Issues!

Unsold £850,000

21,000 sq ft

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21,000 sq ft

(11.4% / £40 psf)

Shaw Lane Industrial Estate, Doncaster

Mixed Issues!

Unsold £1,200,000

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(19.5%)

Glydegate Square, Bradford

Increasing Risk Aversion & Polarisation

Predictions for 2013

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Polarisation

Further Valuation Adjustments for Secondary and Tertiary Stock

Predictions for 2013

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Secondary and Tertiary Stock

Lenders to be more Proactive about Property Lending

Predictions for 2013

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about Property Lending

Continuing Good Demand for Prime Properties

Predictions for 2013

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Prime Properties

Excellent Buying Opportunities for those with Knowledge & Skill

Predictions for 2013

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those with Knowledge & Skill

Conclusion

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Conclusion

Prime end of market doing well

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Increased momentum for correctly priced asset management stock

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priced asset management stock

Receivership Sales up 50% in 2012

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Receivership Sales up 50% in 2012

Private Property Company sales up 25% in 2012

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up 25% in 2012

Private Individual sales down 10% in 2012

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in 2012

30% of our buyers have never bought before at Auction

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bought before at Auction

75% of our buyers are cash buyers; 25% have funding in

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buyers; 25% have funding in place

Increasing number of long established investors returning

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established investors returning to the market

Historic Valuations are just that –HISTORIC!

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HISTORIC!

PRICING IS ABSOLUTELY KEY!

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PRICING IS ABSOLUTELY KEY!

Key CBRE Auction Dates

Auction Date

Wednesday 27th February 2013

Wednesday 22nd May 2013

Monday 8th July 2013

Deadline for Entries

Books Closed

Friday 19th April 2013

Friday 31st May 2013

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Monday 8th July 2013

Tuesday 15th October 2013

Wednesday 4th December 2013

Friday 31st May 2013

Friday 13th September 2013

Friday 1st November 2013