MEDIA RELEASE

August 6, 2012

Slowdown in CEE investment market activity in Q2

(Virtual Press Office)


• Total real estate investment activity in CEE markets declined to €327 in Q2 2012, down from €834m in Q1
• Czech Republic and Poland continued to dominate the CEE investment market in Q2, with the resilience of Czech and Polish banks assisting domestic investment
• Offices became the preferred asset class among investors, while retail registered a strong decline predominantly due to limited retail asset opportunities
• Sovereign crisis continues to impact negatively on economic outlook in the Eurozone as well as CEE. Poland and Romania least impacted
• Romanian investment volumes are expected to reach €250 / €300m for the whole year, a decrease from DTZ's original €400 - €450m estimation for 2012.

London: DTZ, part of UGL Services, a division of UGL Limited (ASX: UGL), today released its CEE Investment Market Update. The new report from DTZ Research, shows total direct commercial real estate investment declined to €327m in Q2 2012, a 60% decline quarter-on-quarter. Total investment in H1 2012 now stands at €1.2bn, markedly below the H1 average (since 2001) of €1.6bn.

Magali Marton, Head of DTZ CEMEA Research, said: "After two years of steady growth between 2010 and 2011, investment volumes in CEE declined by 47% in H1 2012. The decline was particularly marked in Q2. However, there was some disparity between different markets in the region. The Czech Republic actually recorded an increase in investment volumes reaching €159m in Q2 following a low level (€20m) in Q1. In contrast, Poland, which usually dominates CEE market activity, registered a strong decline from €717m invested in Q1 to only €122m in Q2. These two countries represent 90% of market share in H1 2012."

Domestic investors came back in Q2 2012 with €100m of sales in the Czech Republic and in Poland. Intra-regional investors - those located in Europe but investing outside their home markets – were less active in Q2 with volumes declining from €587m in Q1 to €156m in Q2.

Offices continue to be the preferred asset class among investors in CEE markets and accounted for 60% of the investment volume in Q2. The lack of retail assets opportunities appeared to constrain Q2 market activity. Investment in retail accounted for €106m in Q2, far below the historical quarterly average of €471m since 2010. By contrast, investment in office appeared to be more resilient with €207m of acquisitions in Q2, below the historical average at €389m.

Magali Marton continued: "Looking forward, uncertainty surrounding the European sovereign debt crisis and weak economic growth is likely to impact investor sentiment. Furthermore, the impact of banks deleveraging is yet to be seen in the CEE countries. For the time being, local banks have proven to be resilient. However, the impact of new regulations have prompted a withdrawal of funds by foreign banks and as a result, investment is expected to contract further."

"In Romania, the retail sector continued to be attractive for potential investors sustained by the increase of retail consumption registered in H1 2012. Romania holds the third place in retail consumption growth across UE with a 5.9% increase.

Prime assets in Bucharest are expected to attract foreign investors in the near future. In this respect, we expect a moderate increase in the transaction volume for the rest of 2012. Investment volume for the whole year is expected to reach €250 / €300m, a decrease from our original €400 / €450m estimation for 2012. This estimation is based on the assumption that banks will bring to the market the assets of non-performing loans as part of their process to deleverage." says Cristian Ustinescu, Investments Director, DTZ Echinox

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For further information please contact:

Evelina Necula
Head of Marketing Department

Mobile: +40 741 020 220
Email: evelina.necula@dtz.ro

About DTZ and UGL Services
DTZ is now combined with UGL Services. UGL Services is a division of UGL Limited. The combined business of DTZ and UGL Services is now one of the largest property services companies in the world. It provides corporate/occupier clients with a global, integrated, end-to-end service offering and best-in-class investor services capabilities in investment agency, leasing agency, property and facilities management, project and building consultancy, valuation, and investment and asset management. The organisation has 27,000 permanent employees and 43,000 personnel including contractors, operating across 225 offices in 45 countries. For further information, visit: http://www.dtz.com and http://www.dtz-ugl.com

In November 2002, after 9 years of successful operations on the Romanian real estate market, Echinox Consulting entered a partnership agreement with the multinational company DTZ, one of the leading global real estate services companies. Therefore Echinox Consulting became the local DTZ representative office, operating under the trade name of DTZ Echinox.
DTZ Echinox provides a full range of services to investors, occupiers and owners across all sectors of the real estate market. http://www.dtz.com/ro

About UGL Limited
UGL Limited (ASX: UGL) is a global leader in engineering, property services and asset management and maintenance operating in the water, power, transport, resources and property sectors. It consists of four divisions – UGL Infrastructure, UGL Rail, UGL Resources and UGL Services. Headquartered in Sydney, Australia, UGL Limited operates worldwide across 45 countries employing approximately 56,000 people. For more information, visit: http://www.ugllimited.com