HNWi

REAL ESTATE INVESTMENT SOLUTIONS FOR MANAGERS

ADVENTYS
PARTNERS ADVISORY

INTRODUCCIN

ADVENTYS PARTNERS ADVISORY

First of all Id like to welcome you here at Adventys Partners. A company was created with the intention to respond to different institutions and asset managers need for seeking out new investment opportunities aimed at satisfying the most rigorous demand for real-estate assets in a highly competitive and complex market context You can count on Adventys Partners professional services in order to achieve your real estate operations goals. Here you will find: A unique vision of the development and viability of the real estate investment assets, based on an in-depth knowledge of the sector characteristics in its constant evolution. Know How that is the result of personal and collective development efforts looking for the professional efficiency, the fact that over the years have been generated a differential value for which we are known and with which we are committed and identified. Last but not least, weve got sufficient ability and skills to extrapolate the most complex concepts of the real estate market and to project them towards investment management, aligning it with the principles of SUSTAINABILITY AND RESPONSIBILITY.

Hocinos Otoo VI Fernando Zobel (1983)

Jos M. Rueda Chief Executive Officer

REAL ESTATE WEALTH SOLUTIONS

STRATEGIC PARTNER

REAL ESTATE WEALTH SOLUTIONS

HNWI. THE VALUE OF REAL ESTATE ASSETS IN PORTFOLIO MANAGEMENT

Adventys Partners is a highly skilled real estate services provider, specialized in a specific CRE (Commercial Real Estate) market segment in Spain. It provides a set of differentiated solutions specially oriented to create added value at every stage of the investment. Adventys Partners working in the sector of the institutions specialized in Private Banking, Wealth Management and Family Office provides direct access to high-value real estate assets by extrapolating the concept of the investment service beyond the mere property acquisition and is projected in private portfolios management as a true asset class. Our aim is to seize opportunities in real estate investment for generating high added value while fulfilling your mandates, aligning it with your corporate activity guidelines through a very scrupulous information management and precise determination of the targets your clients pursue. INDEPENDENCE AS COMPROMISE

The real estate assets allocation while performing the management of investments in wealth portfolio will give you more efficient volatility control and at the same time will impact on the stability and solidity of income. Breakdown of HNWI Financial Assets, 2006-12(F)
Alternative Investments Cash / Deposits 10% 14% 24% 9% 17% 14% 7% 21% 18% Real Estate Fixed Income 6% 17% 5% 14% 19% 8% 11% 15% Equities

18%

29% 21% 27% 29% 31%

29%

31%

33%

25%

29%

33%

38%

2006

2007

2008

2009

2010

Here at Adventys we are aware of the value your clients demand including personal and differential approach, as well as direct and professional consultation services. With this mind we reinforce our independence and capacity. It gives us the ability to make objective risk assessments and to determine fair value of our expressed opinion and suggested solutions with any degree of subordination.

Forecast

2012

However, the direct access to this type of alternative products requires a high degree of specialization, not only to identify market opportunities, but rather to capture their full potential before incorporating them and once the results are acquired monitor them. How does Adventys Partners provide you with an added value in this area: Regarding the investment objectives of your clients, you will gain access to the most sound and suitable assets through our contacts. You will increase the capacity to promote necessary actions meant to develop the established purchase potential and objectives within timeframe horizon. The process of purchase is equally as important as the definition of the optimum exit strategy and its quantification. You will integrate assets to their portfolios management as one more asset class.

OUR BUSINESS MODEL THE BEST STRATEGY

The best investment always implies lower risk. The direct acquisition of a real estate asset carries implicit and explicit risks. They must be identified correctly in order to reduce their exposure as it is the essential part of the relevant investment strategy development and implementation. This is the starting point for our work.

That is why we incorporate a paradigm of work based on a personalized investment strategy totally adjusted to all customers requirements. CAPITAL PRESERVATION, PROFITABILITY AND TAX-EFFICIENT MANAGMENT remain three fundamental pillars upon which the development must be articulated.

REAL ESTATE INVESTMENT STRATEGY Risk / Return

Rendimiento Esperado

Opportunistics Development Deals Value Added Core Core Non Core

Class B Residential, Industrial, Office and Retail. Hotels, Land, Senior Living, Others,... Class A Residential, Industrial, Office and Retail.

Volatilidad Proyectada

STARTING POINT Prioritize objectives: Cash flow, Return on capital, Tax efficiency. Characterize the property type: Retail, Offices, Decision on the ownership management. Self management vs. outsourcing, to determine its effect on the portfolio. The determination of the optimal price based on the investment requirements, economic fundamentals and usefulness of assets. Sett risk tolerance, high or low. Appraise and quantify potential risks inherent to the operation. Compare and propose investment alternatives

OBJECTIVES Optimise Net Operating Income. Optimise the financial leverage. Determine the optimal investment term, long-term vs. short-term. Quantify the tax effect, before and after its implementation. Impact on clients portfolios, reducing total volatility or increasing its profitability.

ESTRATEGY - CRITERIA Rate of Return Criteria Cash on cash operating minimum. Property value appreciation rates. Operation IRR (Internal Rate of Return).

Risk Criteria Establish the maximum degree of volatility for IRR. Determine, if appropriate, an optimal breakeven point. Establish the Debt Coverage Ratio. Leverage. Rental occupancy history.

Risk and Return Criteria Rent multiplier. Maximum acquisition cost established on a comparable basis. Rental value on a comparable basis.

REAL ESTATE WEALTH SOLUTIONS

SERVICES AND SOLUTIONS

A NATURAL RESPONSE TO THE CHALLENGE

Adventysexpertise and resources will help you to: Design the strategy and identify the business opportunities best adapted to your risk profile that enable optimal use of resources. Identify the risks inherent in the real estate process and design intervention plan for reducing or eliminating exposure to these risks accordingly. Fulfil the functions of coordination, control and development in all the activities related to real estate process. Consulting The real estate assets such as Asset Class each time requires us to develop skills and in-depth knowledge necessary to determine how opportune and relevant decisions relating to these assets are taken. Adventys provides complete consulting service covering the whole life cycle and all the aspects of the investment. Due Diligence (Legal and Technical) Valuation. Operational Structuring (SPV) Feasibility and Risk Analisys

Development Lack of awareness and complexity can be insurmountable barriers for the normal development of the project and complicate the achievement of the proposed objectives. Adventys could resolve for you financial, administrative, commercial or cultural issues. That will allow you to take the most objective decision and implement it at any moment, according to your interest development. Brokerage Proyect Finance Market development SHARIA -compliant investments

Management Experience directed towards the creation of value The management is a fundamental tool for the proper development of the implemented strategy and the achievement of the proposed goals. Adventys promotes value enhancement strategy and proper control of assets classes in portfolio through result-oriented management. To achieve the set goals Adventys is made up of a multidisciplinary team which speeds up decision-making, contributes to fluid channelling and work schedule control. Property Management Urban Development Proyect Managment Investment Monitoring

SECTORIAL NOTES 2012

It is crucial to know whats happening in our environment in order to evaluate its impact and scope on the decision making process. We are fully aware of this fact here at Adventys, so much so that we reflect the sentiment in the following phrase Global Thinking, Local Presence . Therefore this information including some short notes is to let you know the current situation of the CRE market in Europe with particular reference to Spain. We present a snapshot of the financial institutions.

Jardn Seco Fernando Zobel (1969)

NOTES ON REAL ESTATE MARKET

SPAIN: OPPORTUNITY OF CAPITALIZATION

ACTUAL SITUATION

After a fairy slow beginning in the first and second quarter of the year 2011, the real estate sector in Europe renewed its optimism after the definitive year-end balance of investments in business assets was cleared. However, the first months of the current year do not bode well for the economic fundamentals in euro zone, including Germany and France. As different international agencies and institutions have warned this latest setback could increase volatility in the already hit financial debt and capital markets leading to a higher degree of containment of financial mechanisms needed for further activity development. There can appear more adverse effects in countries on periphery, such as Spain, taking into account their particular situation and fragility of a countrys financial sector hampered by overspending during the expansionary phase, influenced by distorted political risk aversion in real estate sector. This context of financial fragility and restriction currently gives to investor an access to opportunity capitalization in the Spanish real estate market and it means a substantial premium in property related value for further transactions. This can be verified in the following graph. The survey developed by Ernst&Young was carried out among executive heads of the European organizations who invest directly in real estate assets. European Real Estate Assets Investment Indicator 2012 reflects the expressed sentiment about different markets.

Local markets according real estate investment attractiveness in 2012

Very Attractive 36% 32% 21% 7% 35% 41% 25% 15% 30% 12% 12% 17% 68% 65% 57% 69% 53% 65% 71% 82% 53% 44% Attractive Less Attractive 61% 64% NR

Germany Sweden Austria Luxembuorg Russia Switzerlandt Spain Belgium Poland Netherlands France UK

In coincidence with reasons mentioned above, there is no surprise that real estate market in Spain result more attractive (as investing) than other stable and reliable markets such as France and United Kingdom, where we can see clear signs of market overheating. The opportunity to capitalize the discounted value of capitalized assets in medium and long term is better placed than one in emerging markets as Poland or Russia. Investors with more conservative profile are moving their assets to markets with macroeconomics profiles and less volatility in short term, as Germany o Sweden, where the stability of the assets is more important than the profit of precise reevaluation of actives.

NOTES ON REAL ESTATE MARKET

A BRIEF REFERENCE TO THE FINANCIAL SECTOR IN SPAIN

It is undoubtedly that a painful but also necessary adjustment process has been experienced in financial sector in Spain. It reshaped the new sector map in all the country and major restructuring is still pending. An impairment loss suffered is associated with collateral for loans in real estate activity which has reduced the margin of maneuver and produced an increase in linked specific provisions. To these should be added the increased requirement of Core Capital in order to ensure the soundness of entities. The distribution of Loan portfolio for the private sector The entities classified in declining order by specific severity of credit proposed for construction and real estate development in the total amount of credit for 2001.

At the crossroads of the financial sector, which has been contented itself with unambitious and little succeed solutions, deleveraging process should be promoted. Its a mechanism required by all the institutions and which seeks the true market value recognition of its real estate assets portfolio. This acknowledgement and following asset value implementation may enhance the securitization process. It can encourage various market players. Keynotes

The problematic exposure of the sector as a whole (doubtful assets, sub-standard loans, as well as foreclosed assets) amounted to EUR 151.000 million (9,7% of credit). This amount even exceeds 18% of total lending in some entities. More than 80% of credits have got guarantees in the sector of construction and real estate development. However, the main part of them consists in developments under construction and building plots with a higher depreciation and less liquid. The higher loan-to-value (LTV) means increased delinquency rate, more evident in case of saving banks. Some entities have covered the risk deriving from construction and real estate development (taking account of the value of guarantees) reaching 97% and 81% of doubtful assets and sub-standard loans respectively. The foreclosed assets amount to EUR 66.000 million gross have been covered by 25% on average.

Construction and Developers

Mortgage - Household

Others

100

80

60

40

20

Espaa+Duero Caja Tres Banco Base Catalunya Caixa Marenostrum NovaCaixaGalicia Unnim Bankia Caja Vital Banca Cvica Popular TOTAL Banesto La Caixa Banco Sabadell Ibercaja Santander Unicaja Kutxa BBK BBVA Bankinter

Global Vision Local Presence

ADVENTYS
PARTNERS ADVISORY

Adventys Partners Advisory C/. Crdoba, 8, 3E, Mlaga Phone: +34 952 978 332 Mobile: +34 649 830 911 Fax: +34952978334 info@adventys.es www.adventys.es