VALUATION REPORT. Office and retail property Address: Kohlmarkt 7 15; Schmiedestraße 24, 26 D Lübeck. Skt. Knuds Torv 3,3 DK-8000 Aarhus C

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1 Dipl. Betriebswirt Steffen Schroeder Immobiliensachverständiger / Büro Lüneburg: Margeritenweg 9, Vögelsen / Büro Hamburg: Zippelhaus 2, Hamburg Tel.: Mob.: Fax: st@schroeder-wert.de USt-IdNr.: DE DAB Bank AG BIC: DABBDEMMXXX IBAN: DE VALUATION REPORT Property: Office and retail property Address: Kohlmarkt 7 15; Schmiedestraße 24, 26 D Lübeck Prepared for: Purpose of valuation: Prime Office A/S Skt. Knuds Torv 3,3 DK-8000 Aarhus C Date of valuation: Date of inspection: Determination of the market value in accordance with Red Book standard for internal accounting purposes. This valuation is a desktop update of former reports. Copy 1 of 2

2 Table of Contents No. Section Page 1 Executive Summary 3 2 Short description Building construction Building structure Legal situation Valuation comments Market value and conclusion 11 3 Appendix 12 Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 2 of 43

3 1 Executive Summary Basic information Object: Owner: Date of inspection: Inspected units: Property Use class: Year of construction: Year of reconstruction: Year of refurbishment: Site area: Surrounding area use: Address: Kohlmarkt 7 15; Schmiedestraße 24, 26 D Lübeck Municipality distr.: Lübeck Federal state Schleswig-Holstein PO Kohlmarkt GmbH, Kiel office, 2 retail units office and retail property 1910, ,773 sq. m. office, retail, CBD Units areas Vacant units Vacant areas % Residential: % Office: 11 7, % Retail: % Storage: % Parking lots: 8 0 0% Garages: 0 0 0% Others: Gastronomy % Others: medical practice % Others: % Total 29 9, % Building materials: Roof: Windows: Facades: Basement: Staircases: Installations: Type of construction: timber and concrete construcution, saddleback roof wooden and aluminium framed insulating glazing brick walls with clinker, plaster, stucco elements complete basement, massive construction concrete construction, mostly with artificial stone medium modern standard, renewed in 2008 massive brick wall, steel concrete frame construction Authorities Building law: Environmental/contamination issues: Taxes: Preservation order: Encumbrances land register: Encumbrances public obligations: development pl: MK mixed core use; building land former industrial location, assumd as contamination free improvement charge Schmiedestraße 100,000 none entry of domination (use of the courtyard) 1 entry: assurance for the accessibility Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 3 of 43

4 State of maintenance (1) Very good condition - (4) Medium condition - (7) Very poor condition, in need of immediate repair State of maintenance roof: State of maintenance windows: State of maintenance facade: State of maintenance basement State of maintenance staircases State of maintenance technical installations: State of maintenance other relevant issues: Overall state of maintenance: Backlog: X X X X X X X X finish one office unit 84,000 Additional assessments Location quality Residential: Location quality Commercial: Rent ability residential units: Rent ability commercial units: Sale ability: Eligibility for collateral in the short run: Eligibility for collateral in the long run: Alternative use: Type of alternative use: Method for the valuation: X X X none Discounted cash flow X X X Special conditions Special conditions in the rental contracts: Special conditions in the purchase contract: Deutsche Bank with deduction of ancillary cost 12,000 p.a. n/a Other information Are there any interest between the tenants and the owner: Is the rent in the rental contracts specified for each category of use: Rental contracts including VAT Other/additional relevant information: 1) 1=best; 7 very poor no yes Main tenant, 67% of the income without VAT Value Date of purchase: Sales price within the last 2 years: Cap. Rate in 10 years: Discount rate: Market value: Value per square meter useable area: n/a n/a 5.75% 3.50% 25,200,000 2,720 /sq. m. Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 4 of 43

5 2 Short Description 2.1 Building construction Property type: Office and retail property Year of : construction: 1910, 1959 modernization: 2008 refurbishment: 2012/2013 Construction: Type of construction: massive, steel concrete frame Interior walls: massive, light weight construction Floor slabs: reinforced concrete Facade: brick walls with clinker, plaster, stucco elements Windows: wooden and aluminium framed insulating glazing Roof: timber and concrete construction, saddleback roof Staircase: concrete construction, mostly with artificial stone Balconies: none Installations: Heating: central gas heating from 1992 Warm water: local electric boilers Electrical: medium modern standard Lift: 6 person, 1 freight elevator Others: air-condition, sprinkler system fire protection in bank branch Fitting quality: Office: medium Retail: medium, good in bank branch Other special fittings: Condition of the building: Typical special fitting for the bank branch One unit is still in an unimproved (shell) condition and has to be finished for a user. Overall the property is well maintained and leaves a good impression. Latest modernization/ maintenance since Dec 2015: 2.2 Building structure Number of buildings: 25,000 for new windows in ,000 for tenant improvements/ development of 2 office units 3 building parts Building structure: Basement: part cellar, supermarket storage Ground floor: bank branch, retail units, gastro unit 1 st 4 th floor: bank branch, office Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 5 of 43

6 Units, areas and income: use rental units space vacancy current rent occup. vacant total occup. vacant total rate /sq. m. total (month) residential % office , , % , med. pract % retail % , hotel % gastro % , storage % , special % sub. comm , , % , subtotal , , % , parking out % parking in % other % total , , , total p.a. 1,447, Tenant quality: Deutsche Bank AG Deutsche Bank AG was founded in 1870 and is a global investment bank with a strong and successful private customer business. Deutsche Bank is a leading financial institution in Germany and Europe and one of the biggest companies in Germany listed in the important stock market index DAX. By now, Deutsche Bank has 2,900 subsidiaries worldwide and almost 100,000 employees. Bundesagentur für Arbeit (BA) BA has developed out of the former federal employment office and is the largest service provider on the employment market. It is a public body, which is responsible for the registration and coordination of unemployed people and the payment of unemployment benefit. Its business lies also in the procurement of jobs and apprenticeship training positions. Schum Euroshop Schum Euroshop GmbH is a dollar store/pound shop, which sells convenience and low-priced goods for predominantly 1 Euro. The company is a subsidiary of the company J.E. Schum GmbH & Co. KG. The chain has approx. 220 stores all over Germany and is further expanding. The company which is headquartered in Dettelbach was established in 2004 and their shops are mostly located in B-locations of pedestrian zones. BDO BDO Deutsche Warentreuhand AG is a national and, in partnership with the BDO international, an international accounting and tax consultant agency, which was founded in Hamburg in BDO has currently approx. 1,900 employees in 27 locations. Mecklenburgische Versicherung This is an insurance company with a long tradition. It was founded in 1797 and is Germany s oldest private insurance Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 6 of 43

7 2.3 Legal situation company with supra-regional business. The headquarters are situated in Hanover. With 800 employees and 810 sales agents Mecklenburgische generates an annual turnover of approx. 500m. Formerly the company was located in Lübeck in a neighbouring building. All other tenants are small local companies. The tenants are estimated to have a medium to good reliability. Building law: Zoning plan M - Mixed use area Development plan from 2000 MK mixed core use floor cover ratio 1.0 excl. amusement arcades etc. Building right according to development plan in combination with 30/34 BauGB. Special local constitutions: Land register: None Rights (no changes assumed): Entry of domination (easement to use the courtyard) in favour of the valuation plot. Encumbrances: None Register of public obligations: Register of contaminated sites: Preservation order: Status of taxes and contributions: Other not registered agreements: Building permission: One entry: assurance for the accessibility of the upper floors of the building Kohlmarkt 5 over the staircase of Kohlmarkt 7. (Without influence) None (no changes assumed) The building is not listed as an ancient monument. The former legal dispute is settled. Assumed to be free of taxes and contributions. None available The planning permission is not included in the available documentation. The material legality of the existing building development is assumed. Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 7 of 43

8 2.4 Valuation comments Valuation model: Comments on rent level: The analysis is based on a discounted cash flow analysis of the property with a 10 year view and a resale of the property at the end of year 10 (calculation see appendix). In this valuation model we use an equivalent yield for discount and resale that implicitly accounts for inflation and growth as well as the current property and the investment market including the particular characteristics of the property such as letting situation, location and building quality. Office Market rents for office space in Lübeck: Simple/ standard locations 6.00 to 7.50 /sq. m. Medium/ average locations 8.00 to 9.00 /sq. m. Good location 9.00 to /sq. m. Prime rents new construction up to /sq. m. Asking rents for office space in the surroundings: Radius 500m 5.00 to /sq. m. Radius 1km 5.00 to /sq. m. The office rents in the property vary between 8.25 /sq. m. and /sq. m., parking lots included. Mostly they are between 8.00 and /sq. m. Latest closed contracts of 2017 were at 9.50 /sq. m. Overall the office market has not really changed since the last valuation and is furthermore almost stagnating in medium locations. Therefore we estimate that the rent levels are within the market range of comparable office space. Retail Market rents for retail space in Lübeck: Simple/ standard locations 6.00 to /sq. m. Medium/ B-locations to /sq. m. Prime locations/ A-location to /sq. m. Asking rents for retail space in the surroundings: Radius 500m to /sq. m. Radius 1km 6.00 to /sq. m. The shop at the Kohlmarkt is part of the 1A/B location with high pedestrian frequency. The agreed rent levels are sustainable. Schmiedestraße is a completely different location, it is hidden and with low pedestrian frequency. The achievable rent level is comparable to office space in the building. The last leased gastro unit in Schmiedestraße has a comparably big size for a side road location and was agreed at 8.00 /sq. m. There is no market change for the retail part compared to last valuation. Storage: The storage room in the basement is difficult to let. The Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 8 of 43

9 current level is assessed as being on market level, because the basement rent level is typically 50% to 70% of the usual upper floor rent. Parking spaces: The lots are included in the lease with Deutsche Bank and are not displayed separately. Rents for outside parking lots in the city are estimated between and /lot p.m. So we estimate a sustainable rent level of /lot. Comments on the lease terms/ conditions: For an overview of the commercial contracts please see appendix. Additional information: All tenants pay all recoverable costs based on the law and are responsible for maintenance and repairs within the unit (partly a capped annual amount) In some contracts the management costs can also be apportioned to the tenants (up to 3.5% of the annual rent). Deutsche Bank has agreed a deduction of ancillary cost by 12,000 p.a. Tenant improvements: To re-let a unit the landlord has to improve the unit to meet the requirements of a new tenant. Tenant improvements of to /sq. m. are calculated for office and /sq. m. for storage areas at an estimated tenant change. Deferred maintenance/capital expenditures: Saleability: Lettability: Alternative use: Capitalisation rate (resale): None Positive are the big volume, which is sought after and the location as well as the long term secured main tenant. Disadvantages are the difficult office market and the gastro unit without any rent increase potential. Overall we estimate further a good saleability. The office and retail market in Lübeck is in hard competition, also in the city center. The location is not a high street location. We estimate a medium lettability. None - existing use is sustainable (retail, office) The chosen capitalisation rate is used to calculate the supposable resale value of the property in 10 years. Based on a market situation comparable to today and in consideration of the basic advantages and disadvantages of the property a cap rate of 6.00% was chosen. Discount rate: The yield is used to calculate the present value of the cash flows over a 10 year term. The used valuation model is based on an equivalent yield that implicitly accounts for inflation and growth. Based on the expected investment risk and the current market situation we assess a discount rate of 3.50%. Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 9 of 43

10 This yield leads to a gross multiplier of 17.5, which is in upper range of the market. The advantages of the property are the good location in the city centre, the good condition of the building and the long term contract of the bank branch. But the third party usability is restricted. Market trends: LOCATION GROSS YIELD TREND very good good average simple Purchasers cost: An asset deal is assumed. Cost for broker, legal and transfer tax have to be deducted from the capital value. Market value per sq. m. 2,720 /sq. m. Legal 1.00% Tax 6.50% Broker 2.50% Total 10.00% Comments on the sales price: n/a Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 10 of 43

11 2.5 Market value and conclusion Based on our calculations and in accordance with Red Book we estimate the market value of the property Kohlmarkt 7 15; Schmiedestraße 24, 26 in D Lübeck on the date November at 25,200, in words: twenty five million two hundred thousand Euros Conclusion: The property is an office and retail building in the city centre near the high street. It is a modernized building with a long term rental contract with the main tenant Deutsche Bank and a stable cash flow expectation. Therefore we estimate an average eligibility for collateral in the long term. Due to the very positive market trend and further good demand for sustainable commercial buildings in German B-cities we estimate a good eligibility for collateral in the short term. Hamburg, 01/12/17 Steffen Schroeder Immobiliensachverständiger No conflict of interest We confirm that we have no conflict of interest, either with the Borrower or with the properties in question. We also confirm that the valuer does not benefit (other than from receipt of the valuation fee) from this valuation instruction. Copyright The Client assures that all valuations, reports, plans, drafts, renderings, tables and calculations will only be used for those purposes specified in the contract and will not be published without the prior consent of the valuer in each individual case. The Client will only pass on the results of Advisor s work to third parties, even if directly connected with the Client, with the explicit prior written consent of the Advisor. Indemnity insurance The valuer assures that the amount of their professional indemnity insurance is limited to 2.5 million on a per case basis.. Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 11 of 43

12 3 Appendix Appendix 1 Appendix 2 Appendix 3 Appendix 4 Appendix 5 Appendix 6 Appendix 7 Appendix 8 Appendix 9 Appendix 10 Appendix 11 Appendix 12 Appendix 13 Appendix 14 Comparables Conditions of the rental contracts DCF Calculation Layout plan SWOT Analysis Macro - micro location analysis Market situation Cadastral map Copy of land register Statement of the Environmental Agency Register of public obligations Preservation order Status of taxes and contributions Photo documentation Layout plan Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 12 of 43

13 Comparables Appendix 1 Sales comparables # year type location YOC usable purchase price multiplier area price /m² office/ commercial St. Jürgen 1990/2015 1,409 2,849, , office/ commercial St. Lorenz-Nord 1955/1996 1,803 1, office/ commercial Travemünde ,550,000 3, office/ commercial St. Lorenz-Nord ,320 1,865, office/ commercial St. Lorenz-Nord ,003 54,500,000 2, office/ commercial Kücknitz 1971/2009 3,208 5,756, , shopping center Dänischburg , ,000,000 Now new transaction in last year 1,700 Asking office rents in neighbourhood Distance km sq.m. rent /m² Notes 0.2 km 400 3, old building 0.5 km old building 0.3 km city center 0.4 km 270 2, inner city old building 0.7 km Trave location Asking retail rents in in neighbourhood Distance km sq.m. rent /m² Notes 0.2 km 72 2, A location Breite Straße 0.3 km 90 2, B-location 0.3 km 156 2, B-Location, city center 0.4 km 135 2, B-Location, city center 2.2 km 208 3, B-location city center Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 13 of 43

14 Conditions of the rental contracts Appendix 2 parking other commercial # Tenant use kind units Interest betw. Start of End of Prolongation / Space sq. current current income tenant/ owner contract contract option m. /sqm month Rent adjustment 1 Schum Euroshop Gm retail 1 EURO - shop 1 no x 5 years , more than 10 % CPI change/ Schum Euroshop Gm storage 1 EURO - shop " % adjustment 2 Schum Euroshop Gm storage 1 EURO - shop " BDO Deutsche Warenoffice tax accountant 1 no x 5 years , % CPI change/ 100 % 4 BDO Deutsche Warenstorage tax accountant " adjustment 5 Deutsche Bank AG office Bank 3 no x 3 years 4, , step rent, +1.5% p.a. Deutsche Bank AG storage 6 Bank " , iperdi Holding Nord office employee leasing 1 no open-ended; 3 months notice period , adjustment of 100 % of CPIchange every second year iperdi Holding Nord storage employee leasing " Agentur für Arbeit office Job Agency 2 no yearly prolongation Mecklenburgische Veoffice Insurance 1 no x 5 years, yearly prolongation 1, , % CPI change/ negotiations , yearly adjustment of CPI change Ulrike M aiworm office lawyer 1 no n/a Planungsbüro Jahnkeoffice planning office 1 no x 4 years option Erste Schümann gastro indochina restaurant 1 no x 5 years; Grundstücksges. notice period of mbh & Co. 12 months , % CPI change/100% , adjustment of 100 % of CPIchange every year Deutsche Post office 2nd floor 1 no , n/a vacant storage basement outside occupied parking out Deutsche Bank outside vacant parking out Remarks 12,000 p.a. deduction on ancillary cost yearly prolongations sublease contract incude in main contract inside occupied parking in 0.00 inside vacant parking in 0.00 Total 29 9, , WALT (in years) 7.10 Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 14 of 43

15 DCF Calculation Appendix 3 Gross Rental Income U s e tenant No. units space sqm current rent /sqm sustain. rent /sqm Lease-up period in months Rent adjustment in years year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8 year 9 year 10 resale retail (Schum Euroshop GmbH) ,891 58,891 58,891 58,891 58,891 58,891 58,891 58,891 58,891 58,891 35,953 storage (Schum Euroshop GmbH) ,724 1,724 1,724 1,724 1,724 1,724 1,724 1,724 1,724 1,724 10,346 storage (Schum Euroshop GmbH) ,384 5,384 5,384 5,384 5,384 5,384 5,384 5,384 5,384 5,384 26,932 office (BDO Deutsche Warentreuh ,519 95, , , , , , , , , ,620 storage (BDO Deutsche Warentre ,676 6,243 6,653 6,653 6,653 6,653 6,653 6,653 6,653 6,653 6,653 office (Deutsche Bank AG) 3 4, , , , , , ,249 1,008,148 1,023,270 1,038, , ,865 storage (Deutsche Bank AG) ,573 25,957 26,346 26,741 27,143 27,550 27,963 28,382 28,808 27,667 25,171 office (iperdi Holding Nord) ,908 34,299 35,760 35,760 35,760 35,760 35,760 35,760 35,760 35,760 35,760 storage (iperdi Holding Nord) office (Agentur für Arbeit) 2 1, , , , , , , , , , , ,553 office (Mecklenburgische Vers.) ,599 43,470 43,470 43,470 43,470 43,470 43,470 43,470 43,470 43,470 43,470 office (Ulrike Maiworm) ,032 10,032 10,032 8,836 9,974 10,032 10,032 10,032 10,032 10,032 10,032 office (Planungsbüro Jahnke Gmb ,792 17,585 17,585 17,585 17,585 17,585 17,585 17,585 17,585 17,585 17,585 gastro (Erste Schümann Grundstü ,400 38,400 34,123 35,640 35,640 35,640 35,640 35,640 35,640 35,640 35,640 office (Deutsche Post) ,144 18,144 18,144 18,144 18,144 18,144 18,144 18,144 16,018 18,557 18,557 storage (vacant) ,646 3,646 3,646 3,646 3,646 3,646 3,646 3,646 3,646 3,646 parking out (outside occupied) ,461 3,840 parking out (outside vacant) parking in (inside occupied) parking in (inside vacant) Total 29 9, ,434,643 1,440,555 1,467,276 1,482,240 1,498,240 1,513,384 1,528,696 1,544,238 1,557,886 1,521,271 1,442,105 Non Recoverable Cost commercial parking management 1.00% -14,346-14,406-14,673-14,822-14,982-15,134-15,287-15,442-15,579-15,213-14,421 running maintenance 9.00 /sqm -83,389-83,389-83,389-83,389-83,389-83,389-83,389-83,389-83,389-83,389-83,389 cost of tenant fluctuation (vacancy) other NRC -12,000-12,000-12,000-12,000-12,000-12,000-12,000-12,000-12,000-12,000 Total of non recs 7.65% -109, , , , , , , , , ,602-97,810 Net Rental Income 1,324,908 1,330,760 1,357,214 1,372,029 1,387,868 1,402,861 1,418,020 1,433,406 1,446,918 1,410,669 1,344,294 Capital Expenditures deferred maintenance capex tenant improvements/ modernisation -8,689-67,861-4,950-2,200-4,296-56,984 Property resale Cap Rate 5.75 % 23,379,033 23,379,033 Net Cash Flow 1,316,219 1,262,899 1,352,264 1,372,029 1,385,668 1,402,861 1,418,020 1,433,406 1,442,623 24,732,717 Discount Rate 3.50 % 1,271,709 1,178,930 1,219,665 1,195,644 1,166,696 1,141,228 1,114,551 1,088,545 1,058,497 17,533,488 Net Present Value 27,968,953 Tansaction cost 10.00% -2,796,895 For Information Value 25,172,057 Multiplier on current rent Price per sqm 2,720 Market Value (rounded) 25,200,000 Multiplier on sustainable rent Resale multiplier Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 15 of 43

16 SWOT analysis Appendix 4 Strengths: Weaknesses: Opportunities: Threats A-location in the city centre is sustainable for retail and office use Long term lease with main tenant over 10 years (income WALT 7 years) and agreed fixed rent increase of 1.5% p.a. Modernized and partly newly constructed building quality and representative appearance (Kohlmarkt side) High demanded volume - bigger than 20m Completely occupied, one newly rented office unit in 2017 There is practically no parking in the property, which is negative for office use No direct connection to the near high street and additionally located on the wrong side (Kohlmarkt), away from the pedestrian path Schmiedestraße is more a C-location for retail with less pedestrian frequency Bank branch building with restricted third party usability Stagnating office and retail rental market in Lübeck Inhomogeneous building structure including 3 building parts of different ages Slightly increasing office rent level in the future due to less new office developments Increasing location quality due to new developments in the surrounding Growing service sector leads to higher demand for office space in the city Long term suitable location for the Deutsche Bank branch with a high chance of further prolongation of the contract Furthermore long-time secured cash flow New successful high class gastro concept as a sublease established Rent level reduction in case of a prolongation, as it was done for the new Deutsche Bank contract Purchase power of the inhabitants are further slightly decreasing Bank unit with special structure and barely usable for alternative tenants Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 16 of 43

17 Macro-location analysis on city level Appendix 5 Macro-location map: City: Socio-demographic facts: Key facts: Economic trends: Lübeck Inhabitants: Approx. 214,400 (0.5% increase each year) Unemployment rate: city 7.2%/ Germany 5.7% Purchase power: 91.0 (average = 100) Lübeck is situated in the south-east of the federal state of Schleswig-Holstein and is the second largest city in the federal state. The city has a long history as a trading city. Only 65km north-east of Hamburg, Lübeck domiciles the third biggest German universal harbour. Lübeck has the lowest German transit times to Sweden, Finland, Russia and the Baltic states. The university city has a high touristic attractiveness and a good living quality. With the biggest ferry port in Europe Lübeck is established as a trade and traffic hub in the north of Germany predominantly focused on Baltic sea connections. The city has a mixed economic structure with some specializations in medical technology (Drägerwerk), food production (Niederegger marzipan, Campbell s Germany, Erasco) and facility management (Bockholdt, approx. 4,300 employees). Touristic business is also an important economic sector. The index of the economic climate of Schleswig-Holstein, currently at 110, slightly decreased last year (Q ) but is still over average. Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 17 of 43

18 Micro location analysis on vicinity level Appendix 5 Micro-location map: Surroundings: Lübeck s inner city is an island surrounded by the Trave canal and the river Trave. In the inner city are the pedestrian zone with its prime shopping location and many old buildings of the Hanse-time. This district has many ancient monuments. The town center is registered as a world cultural heritage. In the north along the street Kohlmarkt the surrounding is dominated by the pedestrian zone, the south end of the high street Breite Straße, 100m across the street. Typical for the location are a retail use on ground level and office use on the upper floors. Across the street Kohlmarkt e.g. a large department store of Peek & Cloppenburg is located (a big national textile chain). On the west side of the property along Schmiedestrasse a completely different situation is prevalent with more residential use and simple retail and office. A parking garage and a church are located across from the valuation property. Here the pedestrian frequency is therefore definitely lower than in Kohlmarkt. Distance: Public transport: Main bus station in front of the building Motorway: A1 AS Lübeck-Zentrum in 3km Railway: Lübeck central station in 1km Airport: Lübeck-Blankensee regional airport about 8km Hamburg-Fuhlsbüttel in about 1 hour by car City centre: 100m Assessment of the location quality: The location Kohlmarkt is assessed as good for retail and office use (1b location ranking). Schmiedestraße is a simple to medium location for retail and is also less representative for office use compared to Kohlmarkt (1c location ranking). Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 18 of 43

19 Market situation Appendix 6 German investment market: The German real estate investment market is further prospering. After the 3rd quarter of 2017 the turnover is approx. 19% above last year s result. The dynamic is only restricted by the lack of supply of suitable properties. Basically the German real estate investment market is unimpressed by the political problems all over the world and benefits from the basically strong and stable economy. The country is still the sought after safe haven for international real estate investment capital, almost 50% of the turnover came from foreign investors. The market is prospering over all sections and is driven by the further very low interest rates and the lack of alternative investment possibilities on the financial market. After a short irritation about the economic influence of the Brexit the market is now back in a usual business mode. The majority of investors are expecting further low interest rates for the next two years before the EZB is likely to increase the rates. For 2017 the market participants are expecting a turnover of 50 to 55bn. Investment turnover - commercial real estate Germany Mrd Q forecast 2017 Main market trends: The most popular investment class is still the core segment, office properties (40% of the turnover) and retail properties (25% of the turnover) A further slight yield compression is recorded the yields of all risk classes gradually converge Due to a historically low yield level more investors follow the investment strategy ABBA investing in A-locations of B-cities and B-locations of A- cities big is beautiful, the demand increases in line with the volume of a transaction. Portfolio transactions have further increased Major players on the market are still institutional investors (>50% of turnover) The prime yields have again slightly declined and are now on a historically low level of 3.7% for office and 3.6% for retail in prime locations Berlin is the investment capital, responsible for 5.9bn. Lübeck Investment market: Prime gross yield office property: 6.5% Prime gross yield retail property: 5.5% Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 19 of 43

20 Cadastral map Appendix 7 Cadastral map not to scale, framed valuation property Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 20 of 43

21 Copy of Land Register Appendix 8 Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 21 of 43

22 Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 22 of 43

23 Statement of the Environmental Agency Appendix 9 Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 23 of 43

24 Register of public obligations Appendix 10 Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 24 of 43

25 Preservation order Appendix 11 Due to oral information from the local authorities the building is currently not listed as an ancient monument. But according to the public office for historic monuments the facade of Kohlmarkt no would probably be listed as an ancient monument, if there was the intention to modify the facade. The plot is located in an area with a valid preservation and design statute. Therefore any changes of the building facade require public authorization. But the buildings are not part of the UNESCO world cultural heritage area. Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 25 of 43

26 Status of taxes and contributions Appendix 12 Assumed as free of taxes and contributions. Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 26 of 43

27 Photo documentation Appendix 13 Kohlmarkt, front view Kohlmarkt surroundings Schmiedestraße, front facade Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 27 of 43

28 Rear facade Rear facade Entrance back yard Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 28 of 43

29 Staircase Staircase Schmiedestraße entrance Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 29 of 43

30 Office unit, BDO Office unit, BDO Office unit, BDO Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 30 of 43

31 Office unit, BDO Office unit Job Center Office unit Job Center Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 31 of 43

32 Rental unit Deutsche Bank Rental unit Deutsche Bank Rental unit Deutsche Bank Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 32 of 43

33 Rental unit Deutsche Bank Rental unit Deutsche Bank Office quality, new building Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 33 of 43

34 Office quality, new building Office quality, new building Rental unit EuroShop Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 34 of 43

35 Rental unit EuroShop Rental unit EuroShop, storage cellar Gastro unit Schmiedestraße (new concept in 2017) Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 35 of 43

36 Gastro unit, new developed by the tenant (new concept in 2017) Heating system Heating system Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 36 of 43

37 Ventilation system Sprinkler system, water tank Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 37 of 43

38 Layout plans Appendix 10 Ground floor First floor Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 38 of 43

39 Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 39 of 43

40 Second floor Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 40 of 43

41 Third floor Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 41 of 43

42 Fourth floor Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 42 of 43

43 Sectional view Margeritenweg 9 D Vögelsen Tel: +49 (0) 173/ page 43 of 43