Valuations for Lenders –Our Specialist Area of Business

William Newsom – Head of Valuation, Savills Commercial Limited

Presentation Contents

• Savills’ Corporate Profile• Commercial Valuation Department – Areas of

Expertise• Why instruct Savills?

Savills’Corporate Profile

• July 1988 – Savills plc listed on the London Stock Exchange

• 2006 – Ranked number 1 (see over) • 98 offices in UK; 25 in Europe and 36 in Far

East and Australasia, etc.• Savills commercial UK turnover in 2006 was

£189.1M (56.4% of total UK company turnover)

No. 1 by turnover July 2006

No. 1 by turnover June 2006

No. 1 employer May 2006

Savills’ accolades:

• Voted Investment Agent of the Year 2005 (and 2003)

• Voted Residential Development Agent of the Year 2004

• Winners of Industrial and Retail Agency Teams of the Year 2007 -North West Property Awards

• Nominated as Professional Agency (Valuation) of the Year 2006

• Nominated as Scottish Professional Agency (Valuation) of the Year 2006 (winner to be announced in May 2007)

Savills Commercial Limited - UK Fee Income by Product Area 2006

47%

13%

7%

33%Investment

PropertyManagement

Agency

ProfessionalServices (inc.Valuation)

Commercial Valuation Department

• Total staff in London of 38• Total billing in 2005 of £10.5M• Plus commercial valuers in Edinburgh and

Manchester, soon to open in Birmingham• 11 Directors• Core Directors average 15+ years service

each• 18 new staff in London over 2005/2006• We specialise in larger commercial property

(above £5.0M). Often above £100M• Minimum fee £4,000 per instruction

Commercial Valuation Department

Analysis of Fee Income for year to 31 December 2006

0%

10%

20%

30%

40%

50%

60%

70%

80% Loan SecurityValuations

RecurringPortfolio/accountsvaluationsCanary Wharfvaluation

Valuations foracquisition anddisposalLitigation/expertwitness

Tax/compulsorypurchase/other

Note: Advised 58 lenders over the 18 months to 31 December 2006 (see over)

Commercial Valuation DepartmentClient List - Lenders

Top 20 Bigger Ticket Active Lenders

Aareal Bank AGAbbey National Treasury Services PlcAnglo Irish Bank CorporationBayerische LandesbankBristol & West plcEurohypo AGFortis Bank SA/NVHelabaHSH Nordbank AGHVB Real Estate CapitalKBC Bank NVMorgan Stanley Dean WitterNationwide Building SocietyRothschild & Sons Ltd, NMWürttemberger Hypo

NOTES: 1. There are 58 clients listed.

2. These are the lenders to whom Savills Commercial Ltd has provided valuation advice over the 18 months to 31 December 2006.

3. This list includes providers of mezzanine finance and equity participation, together with finance lessors and our clients for Stock Exchange and securitisation valuations.

4. Clients of our Hotels and Residential Valuation Departments are not included.

Other German Lenders

AHBRDeutsche Bank AG – Private Capital and Asset ManagementDeutsche HypoDZ BankRheinHypWestdeutsche Immobilien Bank

Other International Lenders

Alpha BankErste BankInvestec Bank (UK) LtdIsrael Discount Bank LtdSociete Generale

North American Lenders

Citibank Private Bank, TheCiticorp Alternative Investments –European Real Estate OfficeCredit Suisse Private BankingLehman Brothers International (Europe) Ltd

Bank of Scotland Plc

Business Banking – Specialist PropertyFinance, LondonSpecialist Property Finance (formerly Birmingham Midshires)Specialist Property Finance, EdinburghCorporate Banking – StructuredProperty Finance (formerly Halifax plc)Corporate Banking, EdinburghJoint VenturesCorporate Banking – InfrastructureFinance and Project FinanceLondon Banking Centre

The Royal Bank of Scotland plc

Infrastructure Finance GroupCorporate Banking London – Propertyand ConstructionProperty Finance GroupCorporate & Institutional Banking –Real Estate Finance GroupStructured Property Finance Group

Other Parts of UK Clearers

Ahli United Bank (UK) plcBarclays Bank plc – Specialist Property Finance TeamBarclays Private Banking LtdCooperative Bank plc Coutts & Co HSBC Bank plc – Corporate and Institutional Banking, Propertyand Construction FinanceHSBC Republic Bank (UK) LtdHSBC Bank plc – Corporate, Investment, Banking and Markets, Asset and Structured FinanceLloyds TSB plcLloyds TSB Corporate, Property FinanceSinger & Friedlander Ltd

Other Irish and Scottish Lenders

Allied Irish Bank (GB) plcBank of Ireland – Private BankingFirst Active plcIIB Bank LtdIrish Nationwide Building Society

Our Geographical Area of Practice- UK

• London and South East• Elsewhere in the UK – larger properties that

are traded in a national contextNote:

Savills has local commercial representation in Birmingham, Bristol, Cambridge, Chelmsford, Edinburgh, Glasgow, Leeds, Manchester, Norwich, Nottingham, Oxford, Southampton and Wimborne (13 locations outside London)

• Also Ireland – acquired Hamilton Osborne King in June 2006

Office Locations- UK and Ireland

Brechin

Perth

Edinburgh

Glasgow

Carnforth

York

Manchester

Lincoln

Nottingham

TelfordBirmingham

Stamford

Norwich

CambridgeIpswich

Bishop’s StortfordChelmsford

LONDON

SevenoaksCranbrook

Exeter

WinchesterWimborne

Salisbury

WindsorBath

Bristol

CirencesterOxford

BanburySouthill

Hereford

CanfordCliffs

Sunningdale

Savills Commercial Offices

Savills Land & Property Offices

Associate OfficesDublin

Micheldever

Southampton

Esher

Belfast

Beaconsfield

Farnham

Harpenden

Ayr

Solihull

Clifton

Newark

Summertown

Wilmslow

Leeds

Tavistock

Huntingdon

Henley

HorshamGuildford

Dublin

Cork

LimerickSavills Hamilton Osborne King

Areas of Expertise - 1

Offices• More than 50% of our turnover - not just

central London, but also Western Corridor, Greater M25 area, East Anglia, East and West Midlands, Manchester and over

• 20 European cities – all with published research reports

Retail • Retail warehouses and parks• Shopping centres and supermarkets• specialist advice on the entire process, i.e.

site purchase, town planning, development, lettings, investment, rent reviews

Commercial Valuation Department

Areas of Expertise - 2

Development Land• Approx. 1/3 of the fee income of the Commercial Valuation

Department• Commercial, residential and mixed use sites: the full range• Specialist development and planning consultancy

departments

Residential• Big into new buildASAP – Affordable and Student Accommodation Projects• National LeadersMixed Use• Market leaders in mixed use• We bridge the commercial/residential divide• Multi-disciplinary practice enables us to advise on large scale

projects, which invariably are mixed use – including urban regeneration

Commercial Valuation Department

Areas of Expertise - 3

Elsewhere in Savills – where we genuinely believe we are leaders in the field• Industrials – larger industrials and

warehouses• Hotels – agency and valuation teams• Commercial Leisure• Rural Leisure (and esoteric properties)• Social Housing – stock transfer valuations• Healthcare• Oil Industry/Petrol Stations/Linear Projects

Overseas….

Commercial Valuation Department

How can we help you?

• Introductions to deals through our brokers, Savills Private Finance

• Desktop valuations within 24 hours• Research publications and other market

information (sent by e-mail)• “Commercial approach” to valuation• But maintaining our independence and

objectivity throughout

Why instruct Savills? - 1

We are in the Market • Valuations are co-ordinated with other

departments (investment, agency, professional, research, etc)

Independent Valuations for Lenders• Our specialist area of business• We act for all the main lenders Emphasis on Relationship and Personal Service• Understanding our clients’ requirements

through dialogue• Advice for the risk assessment process

Why instruct Savills? - 2

Reputation• Our universal acceptance to lenders is helpful for

syndication purposes• Likewise to the rating agencies for securitisation

purposes Quality of Service • Our clients say “clear reports that focus on the

principal issues”• Quick turnaround, including initial advice/

desktops• Many repeat clients

We want to help our clients win the business• We see ourselves as facilitating transactions

Valuations are backed by the name

Savills’Valuation Services Summary

Savills Corporate Profile• Strong commercial practice• Investment Agent of the Year 2005 (and 2003) and

Residential Agent of the Year 2004• Nominated as Professional Agency (Valuation) of the Year

2006 in England and ScotlandCommercial Valuation Department Areas of Expertise • Offices and retail• Development property, including residential and mixed use• Generally large properties nationwide• Wide range of other specialisms

Why instruct Savills? • Quality of service – many repeat instructions• Valuations for lenders – our specialist area of business

•that’s why …

Areas of Expertise - 4

Experts in cashflow modelling for:• Investment acquisition• Complex valuations (e.g. Canary Wharf)• Limited partnership/JVs• PFI Projects• Strategic advice/forecasting• Securitisation

Commercial Valuation Department

Areas of Expertise - 5

Key Valuation Issues• The risk assessment process• Void risk/reletting prospects• Exit value• Vacant possession value/site value• Active management potential• Future growth in values/forecasting

Commercial Valuation Department