May 23, 2017 Fattal Properties (Europe) Ltd. 3 Azrieli Center Triangular Tower 35th Floor Tel Aviv Israel

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1 May 23, 2017 Fattal Properties (Europe) Ltd. 3 Azrieli Center Triangular Tower 35th Floor Tel Aviv Israel Valuation Report Dear Sirs, At your request, we the undersigned, hereby grant our consent to Fattal Properties (Europe) Ltd. (hereinafter: "the Company") to the inclusion of the Valuation Reports that will be carried out by our firm dated from Q1 to Q of the following property - Leonardo Hotel Overamstel, Willem Fenengastraat 29-35, Amsterdam (hereinafter: "the Valuation Report") - within the Company's interim reviewed financial reports, all to be published in The Valuation Report will only be published as a whole and not in separate parts. In addition, we hereby grant our consent to the inclusion of this letter within the Company's interim reviewed financial reports for the first, second, third and fourth quarter (financial year) Best Regards, Associate Director Valuations M. Hoogvorst MSRE MRICS RT

2 VALUATION UPDATE THE PROPERTY LEONARDO HOTEL OVERAMSTEL, Willem Fenengastraat 29-35, Amsterdam EXECUTED BY Colliers International Valuations B.V. Buitenveldertselaan VA AMSTERDAM VALUATION DATE 30 September 2017 FILE NUMBER NL-P CLIENT Fattal Hotels (Netherlands) B.V. Landsberger Allee 117 A BERLIN GERMANY DATE REPORT 14 November 2017 VALUER ing. B.W. Gaasbeek Janzen MRICS RT REVIEWING VALUER M.J. Turenhout MSc MRICS RT CIS HypZert (MLV) REV

3 VALUATION REPORT WILLEM FENENGASTRAAT 29-35, AMSTERDAM NL-P SEPTEMBER 2017 SUMMARY General Client Fattal Hotels (Netherlands) B.V. Valuation date 30 September 2017 Date of inspection 7 March 2017 Type / name 3 *** / Leonardo Hotel Overamstel Street Willem Fenengastraat Postal code / City District Province 1096 BL Amsterdam Overamstel/Amstelkwartier Noord Holland Plot Amsterdam AG 823, 824, 873,874,1470 and 1471 Plot size m 2 Tenure Leasehold Term of ground lease/ Expiration date Period based ground lease 30 September 2061 Ground rent: 100,227 per annum Tenancy details Property Owner / operator Valuation Gross floor area 20,587 m² Purpose Balance sheet Lettable floor area 18,528 m² Type of valuation Market update Parking spaces 173 spaces inside Special Assumption: Market value after completion and in use as a hotel per Year of construction 2018 Market value excl. P.C. 77,750,000,- State of repair Excellent Owner/occupier Location Good Market rent per year incl. vacancy 4,921,189,- Parking Good Market value as is 40,625,000,- Accessibility Marketability Functionality Particulars By car Good By public transportation Good Lettability Good Saleability Good Good None

4 VALUATION REPORT WILLEM FENENGASTRAAT 29-35, AMSTERDAM NL-P SEPTEMBER 2017 GENERAL AND VALUATION Client Client Attn. Address Postal code / City Fattal Hotels (Netherlands) B.V. Mr. N. Maher Landsberger Allee 117 A Berlin Germany Purpose of valuation As per your written instructions, Colliers International Valuations B.V. has carried out a market update on 30 September 2017, with the purpose of determining the market value, as is on the valuation date, with a view to a balance sheet valuation in, accordance with the International Financing Reporting Standards (IFRS) (VPGA 1). This valuation has been carried out in conformity with the agreements recorded in the engagement with reference number NL and the received from Client on 29 September 2017, confirming the assignment for revaluation. Principles and assumptions This valuation report is an integral part of the original valuation report, with valuation date 31 December 2016 and the first update valuations with valuation dates 31 March 2017 and 30 June All principles, applications, standards, liability and (special) assumption mentioned in this report, apply to this valuation report as well, unless stated otherwise. In addition, we stipulate that a lease agreement is in place between Fattal Hotels (Netherlands) B.V. as Lessor and Leonardo Opco Overamstel B.V. as Lessee. As the two firms are affiliated, the Market Value is based on the estimated Sustainable Market Rent and not the Rental Income as agreed in the Lease Agreement. Special assumptions This valuation is based on the following special assumptions: Value after completion and in use per , as the valuation concerns a parcel on which a building will be constructed with the specifications as written in the planlist and floorplans, drawn up by Neudahm on 24 February The effect on the valuation if the special assumption is not included is: 77,750,000 minus 32,450,000 = 45,300,000,- negative. Back testing The subject property subject to registration was previously valued by Colliers International B.V. on , and For an overview of the differences between the valuation on and we refer you to the Summary in the calculation sheet. Quantitative sensitivity analysis For the purpose of describing market risks, we performed a quantitative sensitivity analysis showing the effects of hypothetical changes, in relevant risk variables for the market value after completion. We have identified the market rent and the discounted cashflow as relevant risk variables and thus applied a risk surcharge or discount of +/-5%. The total market value after completion will have an impact in the project value, which is shown in the corresponding figures. market rent Discount rate 6,38% 6,07% 5,77% +5,00% ,00% ,00% COLLIERS INTERNATIONAL VALUATION & ADVISORY SERVICES COLLIERS INTERNATIONAL VALUATIONS BV This report exclusively intended for the client and purpose stated in this report. No responsibility is accepted by any other party than the client, without the written permission of Colliers International Valuations B.V.

5 VALUATION REPORT WILLEM FENENGASTRAAT 29-35, AMSTERDAM NL-P SEPTEMBER ,00% 0,00% -5,00% market rent Discount rate 6,07% Discount rate 6,38% Discount rate 5,77% By adopting a range in the market rent between 4,675,130 p.a. and 5,167,249 p.a. and a range for the discount rate between 5.77% and 6.37%, we arrive at a range for the project value between 35,075,000 and 46,575,000. This is a deviation of the Market Value of -13.7% and +14.6%. As we have used the residual valuation method to come to the project value, additional risk variables are identified as relevant. We have identified the construction costs as relevant risk variable and thus, applied a risk surcharge or discount of +/-5%. We also have identified the profit/risk for the project development as relevant risk variable, and thus applied an analyses of risk / profit at 4%, 7% and 10%. These analyses have been integrated with the previous sensitivity analyses of the Market Value after completion. The effect of the analyses is shown in the figures below. Sensitivity Analyses, based on construction costs construction costs 5,00% construction costs 0,00% construction costs -5,00% market rent +5% discount rate +5% market rent +5% discount rate 0% market rent +5% discount rate -5% market rent 0% discount rate +5% market rent 0% discount rate 0% market rent 0% discount rate -5% market rent -5% discount rate +5% market rent -5% discount rate 0% market rent -5% discount rate -5% By adopting a range in the construction costs between 30,741,759 and 34,446,462, we arrive at a range for the project value between 33,350,000 and 48,300,000 or a deviation to the Project Value of -17.9% or +18.9%. COLLIERS INTERNATIONAL VALUATION & ADVISORY SERVICES COLLIERS INTERNATIONAL VALUATIONS BV This report exclusively intended for the client and purpose stated in this report. No responsibility is accepted by any other party than the client, without the written permission of Colliers International Valuations B.V.

6 VALUATION REPORT WILLEM FENENGASTRAAT 29-35, AMSTERDAM NL-P SEPTEMBER 2017 Sensitivity Analyses, based on risk/profit Profit / risk project development 13,50% Profit / risk project development 9,00% Profit / risk project development 4,50% market rent +5% discount rate +5% market rent +5% discount rate 0% market rent +5% discount rate -5% market rent 0% discount rate +5% market rent 0% discount rate 0% market rent 0% discount rate -5% market rent -5% discount rate +5% market rent -5% discount rate 0% market rent -5% discount rate -5% By adopting a range in the risk / profit for the project development, we arrive at a range for the project value between 31,950,000 and 50,350,000 or a deviation to the Project Value of -21.4% or +23.9%. Valuation On the basis of the assumptions, circumstances and provisos described in this report and the previous reports, the undersigned declare that on 30 September 2017, they attribute to the property a value of: Market value with special assumption after completion and in use 77,750,000 P.C. (purchasing costs payable by the purchaser) In words: seventy-seven million five hundred and fifty thousand euros purchasing costs payable by the purchaser Market value as is 40,625,000 P.C. (purchasing costs payable by the purchaser) In words: forty million six hundred twenty five thousand euros purchasing costs payable by the purchaser The values does not include any payable VAT, transfer tax (6%), tenants fixtures and fittings in place, fixed company equipment, machinery in place or company-specific facilities. Thus carried out in good faith, to the best of our knowledge and ability, on behalf of Colliers International Valuations B.V Amsterdam, 14 November 2017 ing. B.W. Gaasbeek Janzen MRICS RT RRV RT COLLIERS INTERNATIONAL VALUATION & ADVISORY SERVICES COLLIERS INTERNATIONAL VALUATIONS BV This report exclusively intended for the client and purpose stated in this report. No responsibility is accepted by any other party than the client, without the written permission of Colliers International Valuations B.V.

7 VALUATION REPORT WILLEM FENENGASTRAAT 29-35, AMSTERDAM NL-P SEPTEMBER 2017 APPENDIX I: VALUATION MODELS Summary DCF real estate projections Residual value plausibility statement COLLIERS INTERNATIONAL VALUATION & ADVISORY SERVICES COLLIERS INTERNATIONAL VALUATIONS BV This report exclusively intended for the client and purpose stated in this report. No responsibility is accepted by any other party than the client, without the written permission of Colliers International Valuations B.V.

8 Summary Willem Fenengastraat BL, Amsterdam Client: Fattal Hotels (Netherlands) B.V. File no: NL-P Version: Final Entitled party: Fattal Hotels (Netherlands) B.V. Property name: Leonardo Hotel Overamstel Valuation date: Valuation type: Update Hotel type: 3 *** Inspection date: General information Sources consulted Type hotel 3 *** Total lettable area m² * land registry details municipality: Amsterdam Year of construction 2018 Total gross area m² section: AG Real right Ground Lease cadastral area: m² No. Rooms 490 number(s): 823, 824, 873,874,1470 and 1471 Assumptions Quality * Potential buyer is a owner/opertor Poor Moderate Reasonable Good Excellent * Market participants are competent operators State of repair Location Accessibility Special assumptions Lettability * as of the valuation date, the subject has already been completed and occupied Saleability * the intended use is permitted under existing zoning Functionality Photo Valuation Stablized year Total Per room Per sqm % of total turnover Total turnover % GOP % EBITDA % Conform market rent % Market value of Real Estate (excl. acq. costs) GIY (excl. acq.costs): 5,7% Year 1 Multiplier: 17,7 GIY (excl. acq.costs): 6,3% Stablized year Multiplier: 15,8 Indication sale price at forced sale under time limit #WAARDE! #WAARDE! #WAARDE! #WAARDE! #WAARDE! #DEEL/0! Year 1 #DEEL/0! #DEEL/0! Stablized year #DEEL/0! Backtesting (parameters) Backtesting (explanation) Direct Capitalizatio DCF Valuation date Difference in % Since the previous valuation, both inflation forecasts and the risk free premium have been altered. year Market rent in stabilized ,57% The calculation has been latered as well, as the total revenue and GOP levels of the stabilized e of Real Estate (excl. acq. costs) Total stabilized turnover ,81% year, are now discounted to valuation date. Therefore, the market rent is slightly lower. We have GOP in stabilized year ,81% made a slight alteration to the operational forecasts. Based on new benchmark figures from STR, weight 100,00% 0,00% the ADR has been increased to 105,-. The discount rate has decreased by 1 basis point, due to a GOP in 1st year ,00% lower risk free premium. The Market Value, with special assumption, increases by 380,000.- or Operating Expenses ,67% 0,49%. Net initial yield 4,93% 5,16% 0,23% 4,72% Turnover in year ,00% Real estate discount rate 6,08% 6,07% -0,01% -0,16% GIY (excl. acq.costs) 5,41% 5,65% 0,24% 4,49% Market value of Real Estate (excl. acq. costs) ,49% Project cost of construction excl. VAT ,77% Market Value project (excl. P.C.) ,18% The total construction costs are lower. This is caused by the fact that 3 additional construction invoices have been issued (10 payments remaining), and the additional costs have been lowered. We have been informed by the Client, the construction will be delayed by 6 months (completion estimated at ). This has an increasing affect on the construction costs. The considerations mentioned result in an increase of the Project Value by 2,000,000.- or 5.18%. Signatures ing. B.W. Gaasbeek Janzen MRICS RT RRV RT Valuer Notes to the valuation The subject valued comprises a building site on the former industrial area, locally known as Overamstel/Amstelkwartier (redevelopment area), located in the south of Amsterdam. This area is by public transport only 10 minutes away from the City Centre of Amsterdam. The immediate surrounding is slowly transformed to a mix of functions, such as residential, leisure, retail and hotels. According to data received by the client, a hotel will be developed on site with 490 hotelrooms, a restaurant/bar, meeting rooms and an upperground parking garage with 173 parking places. The designated use within the private law as been altered to a hotel and a integrated environmental permit has been applied for. The valuation is based in the special assumption that the hotel is finished, in use as descriped and no restrictions arise regarding any legal issues, on valuation date Valuers have made a 10-year P&L statement, on the basis of comparable hotels and data from STR, from which the market rent is derived.

9 DCF 10 years real estate Willem Fenengastraat BL, Amsterdam Client: Fattal Hotels (Netherlands) B.V. File no: NL-P Version: Final Entitled party: Fattal Hotels (Netherlands) B.V. Property name: Leonardo Hotel Overamstel Valuation date: Valuation type: Update Hotel type: 3 *** Inspection date: Market rent based on total turnover (25%) Market rent based on GOP (55%) Feasible rent (stablized year) % of total room turnover Sustainable market rent per room rooms Sustainable rent per sqm 266 STABLE T Total turnover totale omzet totale o GOP GOP GOP EBITDA EBITDA EBITDA Total costs Sustainable market rent per room No. Rooms Feasible rent Operating revenue attributable to property less: tenant inducements to be granted less: turnover vacancy less: initial vacancy less: start-up losses attributable to property Rental Income Operating Expenses/Lump sum adjustments Ground Lease Current ground rent Operating Expenses Cash flow Discount rate 6,1% PV factor: 0,97 0,92 0,86 0,81 0,77 0,72 0,68 0,64 0,61 0,57 Discounted Cash Flow Market Value (excl. acquisition's costs) Market value per room (excl. acquisition costs) Rental Income Operating Expenses/Lump sum adjustments Cash flow Exit yield 7,07% Market value per sqm (excl. acquisition costs) Cash flow year Exit value (excl. acquisition cost) Year 1 GIY (excl. acq.costs) 5,65% Multiplier 17,69 Total PV (incl. p.c.) Stablized year Transfer tax (on ground rent) - GIY on TRI 6,33% Transfer tax (on sales price) - net of purchaser's costs 15, Notary fee Market Value

10 Projections Willem Fenengastraat BL, Amsterdam Client: Fattal Hotels (Netherlands) B.V. File no: NL-P Version: Final Entitled party: Fattal Hotels (Netherlands) B.V. Property name: Leonardo Hotel Overamstel Valuation date: Valuation type: Update Hotel type: 3 *** Inspection date: Rooms available Rooms occupied Occupancy 69,0% 74,0% 77,0% 77,0% 77,0% 77,0% 77,0% 77,0% 77,0% 77,0% ADR 105,0 109,1 113,2 115,3 117,2 118,9 120,5 122,2 123,9 125,7 Revpar 72,5 80,7 87,2 88,8 90,3 91,5 92,8 94,1 95,4 96,8 Days per annum Occupancy growth n.a. 5,0% 3,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% Growth ADR n.a. 3,9% 1,8% 1,8% 1,7% 1,4% 1,4% 1,4% 1,4% 1,4% Growth RevPAR n.a. 11,4% 8,0% 1,8% 1,7% 1,4% 1,4% 1,4% 1,4% 1,4% Inflation 1,9% 1,8% 1,8% 1,7% 1,4% 1,4% 1,4% 1,4% 1,4% 1,4% Turnover other rooms ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% Turnover other F&B ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% Turnover other ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% Total turnover ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% Cost of sales rooms ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% Cost of sales F&B ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% Cost of sales other ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% Total cost of sales ,9% ,9% ,9% ,9% ,9% ,9% ,9% ,9% ,9% ,9% Payroll rooms ,2% ,2% ,2% ,2% ,2% ,2% ,2% ,2% ,2% ,2% Payroll F&B ,5% ,5% ,5% ,5% ,5% ,5% ,5% ,5% ,5% ,5% Payroll Mod/Other income ,5% ,5% ,5% ,5% ,5% ,5% ,5% ,5% ,5% ,5% Payroll Administrative & General ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% Payroll Marketing ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% Payroll Prop. Operations & Maintenance ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% Total payroll ,2% ,2% ,2% ,2% ,2% ,2% ,2% ,2% ,2% ,2% OPEX rooms ,8% ,8% ,8% ,8% ,8% ,8% ,8% ,8% ,8% ,8% OPEX F&B ,8% ,8% ,8% ,8% ,8% ,8% ,8% ,8% ,8% ,8% V OPEX Mod/Other income - 0,0% - 0,0% - 0,0% - 0,0% - 0,0% - 0,0% - 0,0% - 0,0% - 0,0% - 0,0% OPEX Administrative & General ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% OPEX Marketing ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% OPEX Prop. Operations & Maintenance ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% OPEX Utilities ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% OPEX Total undistributed ,5% ,5% ,5% ,5% ,5% ,5% ,5% ,5% ,5% ,5% GOP ,4% ,4% ,4% ,4% ,4% ,4% ,4% ,4% ,4% ,4% Income before fixed charges ,4% ,4% ,4% ,4% ,4% ,4% ,4% ,4% ,4% ,4% Property Taxes & Insurance (PTI) ,8% ,7% ,7% ,7% ,7% ,7% ,7% ,7% ,7% ,7% Reserve for replacement FF&E ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% ,0% Miscellaneous ,7% ,6% ,6% ,6% ,6% ,6% ,6% ,6% ,6% ,6% Total fixed charges ,5% ,4% ,3% ,3% ,3% ,3% ,3% ,3% ,3% ,3% EBITDA / NOI ,9% ,1% ,1% ,1% ,1% ,1% ,1% ,1% ,1% ,1%

11 foto Market Value (Residual Project Value) Willem Fenengastraat Amsterdam Leonardo *** Hotel Overamstel Principal / client: File number: Fattal Hotels (Netherlands) B.V. NL-P Colliers International Valuation date: Gross plot area 100% m2 Infrastructure 0% 0 m2 Allocable 100% m2 Developing Program aantal G.F.A. % gfa-lfa L.F.A. Rental Value Rental Value Gross Inital Yield construction costs Commercial number of rooms sqm sqm per room p.a. incl. purch.costs per room / laring place Hotel % ,33% Parking spaces inside ,33% Total Revenues per room per sqm per m2 G.F.A. uitgeefbaar Hotel Total revenues incl. acq. cost excl. VAT overall investment costs subgrade per sqm G.F.A. r m2 uitgeefbaar Profit / risk project development 9,00% Plan development costs 1,00% Direct construction costs 25,0% Fee architect/constructor/advice (12.6%-14.2%) 5,57% partially pre construction phase Administrative charges 1,11% payment terms remaining per valuation date General operating costs 1,39% payment terms remaining per valuation date Sales/brokers costs 0,00% Subtotal costs Unanticipated 3,50% Loss of interest overall investment costs 5,50% construction period 1,00 years project cost of construction excl. VAT PROJECT VALUE allocable ready for development ratio of project cost 58% Residual project value (project value at allocation minus add.costs and vacancy/incentives) (price level: present) buyers interest plot/construction at presell 5,50% 70% Planning year 1 year 2 year 3 year 4 year 5 year 6 year 7 allocation per year 0% 100% 0% 0% 0% 0% 0% 100% allocation on basis of GFA index profits ,00% overall investment costs ,00% ready for development/infrastructure ,00% vacancy/incentives interest payment buyers balance groundrevenues Discount rate 5,50% interest charges Total residual value (discounted value balance land revenues) excl. acq costs Acquisition charges 0,25% Total actual Residual project value excl. acq. costs Marketvalue (residual project value) excl. acq. costs rounded as per Indicatie Opbrengst bij gedwongen verkoop onder tijdslimiet 80% afgerond per COLLIERS INTERNATIONAL

12 Plausibility statement M.J. Turenhout MSc. MRICS RT CIS HypZert (MLV) REV, Company name: Colliers International Valuations B.V. Address: Buitenveldertselaan 5, 1082 VA City: Amsterdam Registred with the NRVT under registration number: further referred to as the undersigned, declares: The undersigned has assessed valuation report with number NL-P of the property Willem Fenengastraat in, Amsterdam, known in the land registry under: nummer 823, 824, 873,874,1470 and 1471, section AG, municipality Amsterdam, valued by ing. B.W. Gaasbeek Janzen MRICS RT assessed on plausibility of the value and underpinning of the value. The undersigned has assessed valuation report d.d The undesigned has performed geen inspectie of the property. The undersigned has reviewed all attachments in relation to the content of the valuation report. The undersigned does not give any guarantees on the completeness of the valuation report and its at Based on the assessed documents, the undersigned is of the opinion that the value mentioned in the report is plausible. Thus the undersigned, Amsterdam, Signature undersigned

13 Colliers Valuation GmbH Dachauer Straße München TEL FAX MAIL WEB Fattal Properties (Europe) Ltd. 3 Azrieli Center Triangular Tower 35th Floor Tel Aviv Israel St. Nr.: 143/125/50130 USt ID Nr.: DE Date: 14/11/2017 Berit Schumann Tel: Fax: Berit.schumann@colliers.com Re: Update Valuation Report for Leonardo Royal Munich Dear Sirs, At your request, we the undersigned, hereby grant our consent to Fattal Properties (Europe) Ltd. (hereinafter: "the Company"), of the Desktop Update Valuation Report carried out by our firm dated September 30th 2017 of the Leonardo Royal Hotel Munich (Valuation ref. no ) to be included in Fattal Properties (Europe) Ltd s interim consolidated financial reports for September 30th, 2017 which will be published and filed with the Israeli Securities Authority. Best Regards, COLLIERS VALUATION GMBH Berit Schumann Managing Director Geschäftsführer: Berit Schumann MRICS MBA / CIS HypZert (F) Amtsgericht München HRB HypoVereinsbank München BLZ Kto Colliers International ist der lizenzierte Markenname der Colliers International Valuation GmbH.

14 MARKET VALUATION REPORT Property address Leonardo Royal Hotel Munich Moosacher Straße Munich Germany Client Fattal Properties (Europe) LTD 3 Azrieli Center Triangular Tower 35th floor Tel Aviv Israel Effective dates Valuation date 30 September 2017 Valuation completion date 24 October 2017 Valuation ref. no / original copy 1 of 2 Managing Director: Berit Schumann MRICS; District Court for Munich HRB Colliers International Valuation GmbH is a subsidiary of Colliers Deutschland Holding GmbH and a legal independent affiliate of Colliers International Property Consultants.

15 Table of Contents 0 SUMMARY Property address Assessment of location Assessment of property Contractual rent Standard market rent Market Value SWOT Analysis GENERAL INFORMATION Client Purpose of valuation Instruction Definition of Fair Value On-site inspection Valuation date Quality fixing date Owner Valuer Editor Conflicts of interest Liability Use of the valuation Copyright Valuation assumptions Particular circumstances of the valuation Documentation LOCATION Macro Location Micro Location Location Assessment DESCRIPTION OF SITE Land registry information Register of Public Land Charges Contamination Planning Law Layout Listed building protection Building control Development status Servicing DESCRIPTION OF BUILDING Building design Building characteristics Building description State of repair Leonardo Munich Royal Update Q3 2017_NEU Page 2 of 49

16 4.5 Assessment of building Verification of areas MARKET INFORMATION Germany Market Report - Hotel Mid-year Sales Comparables Figures of the Leonardo Royal Hotel Munich Competition analysis ASSESSMENT OF THE CAPITALIZED INCOME VALUE Description of process Lease contracts/ current rent Hotel rents plausibility check Hotel benchmarks for ARR and RevPAR Operating costs Costs of purchase and taxation Investment yields MARKET VALUE Definition of Fair Value Market Value APPENDIX 1: SITE PLAN APPENDIX 2: HOTEL ROOM PRICES MUNICH AS AT 25/10/ APPENDIX 3: HOTEL PLAUSIBILITY CHECK APPENDIX 4: PHOTOGRAPHS APPENDIX 5: INVOLVEMENT IN PREVIOUS VALUATIONS APPENDIX 6: VALUER S CV Leonardo Munich Royal Update Q3 2017_NEU Page 3 of 49

17 0 SUMMARY 0.1 Property address Leonardo Royal Hotel Munich Moosacher Straße Munich 0.2 Assessment of location The property is situated in a good city district location of Munich-Milbertshofen, approx. 6 km north-west of the city center (Marienplatz) and about 30km south of Munich s International Airport. The local infrastructure can be assessed as good. The vicinity and the larger surroundings are mostly characterized by commercial developments and undeveloped land. The Olympic Park, a green recreation area, is located south of the subject property. The good traffic connection and the present infrastructure are favorable for the location and the subject property. Due to the location at the highly frequented Moosacher Straße, the site is clearly visible and very accessible. For the actual hotel use the location can be assessed as good (for detailed information see point 2). 0.3 Assessment of property The six-storey hotel comprises 424 rooms (12 suites and 412 double rooms) a large restaurant and bar area, nine meeting rooms, a ballroom, a lounge and a spa area. According to the present data, the total gross floor area (GFA) sums up to approx. 23,830 sq m and 145 parking places (134 underground parking places and 11 external parking places). The subject property is newly built (2011) and is mainly of a conventional massive construction with a flat roof. We formed the impression that the building is in a very good condition (for detailed information see point 4). 0.4 Contractual rent The property is fully let to a single tenant. According to information provided by the Client, the current annual contractual rent amounts to about 6,400,000 (excl. FF&E). However, according to the client ( from 18 September 2017 / Maher Nimer) we have applied an annual rent of 6.72 m EUR (actual rent passing end of 2016). 0.5 Standard market rent Based on the assumption of a full letting of the subject property at standard market terms and conditions, we have assessed an annual gross rental income of 6,300,000 (excl. FF&E). However, according to the client ( from 18 September 2017 / Maher Nimer) we have applied an annual rent of 6.72 m EUR (excl. FF&E; actual rent passing end of 2016) Leonardo Munich Royal Update Q3 2017_NEU Page 4 of 49

18 0.6 Market Value under special assumption The Market Value of the subject property, Moosacher Straße 90 in Munich, as at 30 September 2017 is assessed as: 132,700,000 (one hundred thirty-two million seven hundred thousand Euro) The Market Value under special assumption (excl. FF&E) equates to 311,500 per room or per square meter. 0.7 SWOT Analysis Strengths Good location and visibility Good building quality Vicinity to the Olympic Park Weaknesses Present competition Construction works in the vicinity Opportunities Improve the awareness of the brand Leonardo in the market Possibility of conversion to residential or office use of the subject property in the future Revitalization of undeveloped sites in the neighborhood Threats Growing competition by further hotel developments in the vicinity (BMW Hotel, the Harry s Home Hotel and the Super8 Hotel) Arising competition for the hospitality sector by hotel alternatives (Airbnb etc.) Leonardo Munich Royal Update Q3 2017_NEU Page 5 of 49

19 1 GENERAL INFORMATION 1.1 Client Fattal Properties (Europe) LTD 3 Azrieli Center Triangular Tower 35th floor Tel Aviv Israel Under the security Law regulations in Israel it may be required that (for very material properties - Leonardo Royal Berlin, Leonardo Hotel Munich Residence, Leonardo Royal Munich) the valuation report shall be annexed to the company s financial statements issued to the Securities Authority or (for material properties - Leonardo Hotel Heidelberg City Center, Leonardo Cologne and Leonardo Hotel Munich City West) that specific data from the valuation report will be included in the company s financial report issued to the Securities Authority. For the properties Leonardo Hotel Heidelberg City Center, Leonardo Cologne, Leonardo Royal Berlin, Leonardo Hotel Munich Residence, Leonardo Hotel Munich City West and Leonardo Royal Munich we grant the consent to the inclusion of the Appraisal report within the Fattal Properties (Europe) Ltd s Prospectus to be published in Israel in The intended users/addresses of the above mentioned material and very material appraisal reports will be Fattal Properties (Europe) Ltd., Fattal Hotels Ltd, Moody s and/or S&P and their affiliates, potential bondholders of Fattal Properties (Europe) Ltd., Ernst & Young Germany, Ernst & Young Israel and Israel Security Authorities. Use of the report is not intended by the Appraiser. 1.2 Purpose of valuation Assessment of Market Value for accounting purposes in accordance with IFRS 13 Fair Value. 1.3 Instruction Colliers International Valuation GmbH was instructed by Ofer Rafiah and Maher Nimer of Fattal Properties (Europe) LTD to undertake an update market valuation of the property Moosacher Straße 90, Munich. The instruction is based on our offer dated 19 April 2016 and the written instruction dated 21 April Definition of Fair Value Fair Value according to IFRS 13 The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market Value according to BauGB The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm s-length transaction after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion. For the subject asset the market value and fair value are equivalent. According to national practice the fair value will be determined by calculating the capitalized income value. 1.5 On-site inspection The subject property was inspected on 30 October 2015 during the course of the initial valuation as at 30 September 2015 by Ms Senta Funk and Ms Mariya Sohulova on behalf of Colliers International Valuation GmbH, accompanied by Mr Stephan Löwel on behalf of the Client. A random inspection was made on a cross section of all areas during the on-site inspection, without claim of completeness. Photographs attached to the valuation report were taken during the course of the on-site inspection Leonardo Munich Royal Update Q3 2017_NEU Page 6 of 49

20 As agreed with the client we have not re-inspected the subject property. The valuation was solely performed on a desktop basis. For valuation purposes we assume that there is no differ-ence in terms of building quality etc. between date of this valuation and the date of inspection. 1.6 Valuation date 30 September Quality fixing date 30 September Owner Fattal Leonardo Royal München Operation GmbH & Co. KG, Berlin 1.9 Valuer Colliers International Valuation GmbH Chartered Surveyors Dachauer Straße Munich 1.10 Editor Mr Robert Becker Director Tel Fax robert.becker@colliers.com 1.11 Conflicts of interest We provide our assurance that Colliers International Valuation GmbH Chartered Surveyors has undertaken this valuation as independent valuers and that there have been no conflicts of interest at any time Liability The Valuer shall be liable in the case of deliberate fault or gross negligence. This limitation of li-ability shall not apply to damages for death, personal injury or injury to health arising from a negligent breach of duty by us or to a deliberate or negligent breach of duty by one of our agents, or for liability under the Produkthaftungsgesetz [Product Liability Act]. In cases of mere negligence, we shall be liable only if a substantial contractual obligation has been breached. In cases of mere negligence, claims to damages against the Valuer shall always be limited to the typical possible consequences foreseeable in accordance with the contractual re-lationship on conclusion of the contract. Our liability for damage for this report caused through our mere negligence or that of our agents and for claims irrespective of fault is limited to a maximum of 10% of the respective Market Value and limited to a maximum of 5 million Euros. None of the limitations of liability apply to claims for death, personal injury or injury to health. The Valuer shall not be liable for losses caused by the fault of the Client through defective or poor information or missing its own deadlines. In addition, the Valuer shall not be liable for losses caused by incomplete provision by the Client of the documents for which it is responsi-ble pursuant to this contract, or because they are defective.use of the valuation This professional valuation report provided by Colliers International Valuation GmbH may be used only for the purpose agreed in the valuation contract. The passing on of the report to third parties is permitted only with the written consent of Colliers International Valuation GmbH Use of the valuation This professional valuation report provided by Colliers International Valuation GmbH may be used only for the purpose agreed in the valuation contract. The passing on of the report to third parties is permitted only with the written consent of Colliers International Valuation GmbH Leonardo Munich Royal Update Q3 2017_NEU Page 7 of 49

21 1.14 Copyright Copyright in the valuation report and all text, images, photographs, data and such like prepared by the Valuer (including copies stored on data storage media) belongs to the Valuer without limitation. The Client is entitled exclusively, and subject to payment in full for the Valuer s services, to use the valuation report for the purpose agreed in Point 1.2. The valuation report is intended exclusively for internal use by the Client, with the exception of the third parties expressly named in Point 1.1. Beyond the provisions of Points 1.1, the Client has no right to make the report available to third parties in any manner or form, or to allow them to inspect these documents. The Client has no right to make changes to the valuation report which is subject to copyright. The passing on of the report to third parties, reproduction and any other type of use or changes to or summarising of the text is permitted to the Client only with the Valuer s prior consent. Publication of the report is permitted exclusively with the Valuer s prior written consent Valuation assumptions All statements made by the Valuer in respect of the condition and actual characteristics of the improvements and of the soil and subsoil are wholly based on documentation supplied by the Client, which has been checked for plausibility, and on the findings of the on-site inspection. No measurements were taken and no tests made of building services or other such installations during the course of the on-site inspection. All statements made by the Valuer are based on the findings of the on-site inspection (visual investigations only). No destructive investigations took place and therefore information on non-visible building components and materials are based on statements made, documentation supplied or assumptions. No professional investigation of building defects/ damage took place. It has been assumed without further verification that no building materials and characteristics of the soil and subsoil exist which would restrict a sustained use of the property or pose a risk to the health of residents and users. No investigation was made of compliance with public-law provisions (including permissions, acceptances, conditions and similar) or any private-law provisions in respect to the existence and use of the soil and subsoil, and of the improvements. It has been assumed as at the valuation date and without further verification that all public-law charges, contributions, fees etc, which could affect value, have been raised and paid. It has been assumed as at the valuation date and without further verification that the subject property is fully insured in terms of the types of possible damage and for an appropriate insurance sum. Statements made by officials, particularly information supplied, may not be considered as legally binding according to court rulings. The Valuer is unable to provide any warranty for the use of such statements and information in the valuation report. For the purposes of the valuation and in accordance with instructions, it is assumed that the type and scope of operations as at the valuation date are sustainable for the duration of the assumed remaining useful lifespan of the improvements or that similar businesses exist which could be considered as potential users. Rights, charges and encumbrances have been considered only insofar as these have a recognized, particular influence on the income generated by the subject property. It has been assumed without further verification that no consideration must be made of potential damages related to Value Added Tax which have resulted from any lettings to tenants not subject to the deduction of input tax Leonardo Munich Royal Update Q3 2017_NEU Page 8 of 49

22 In the event that the area information supplied does not contain any specific reference to the applicable area definitions (DIN 277, gif MF-G, or GEA), it is assumed that this information has been based on the standard area definitions used in the local letting market. We have applied a Market Value under special assumption, due to the fact, that the subject is let excl. FF&E. Market Value according RICS is incl. FF&E Particular circumstances of the valuation This update valuation report is subject to the assumptions and limiting conditions stated in the Appraisal Report as at 30 September 2015 and no reliance should be placed on this document without a complete reading of the appraisal report ( ) previously submitted. As such, the reader is hereby advised that the opinions and conclusions contained herein may not be property understood without additional information contained in the referenced appraisal re-port. The prior appraisal report to which this letter is made part sets forth the most pertinent data gathered, the technique employed, and the reasoning leading to the opinion of value. The analysis, opinions and conclusions were developed based on, and this report has been pre-pared in conformance with, the guidelines and recommendations set forth in the RICS Valuation Standards and ImmoWertV. Please note that the previously submitted appraisal report, in its entirety, including all assump-tions and limiting conditions, is an integral part of, and inseparable form, this letter. As agreed with the client we have not re-inspected the subject property. The valuation was solely performed on a desktop basis. It has been assumed there are no changes regarding the actual legal situation and the actual characteristics of the subject property between the date of valuation and date of inspection. We have relied on the documents provided for the initial valuation as at September 30, 2015 and have not reviewed any other documents other than stated below. For valuation purposes we have assumed that this information is valid for market value update. It has been assumed there are no changes regarding the actual legal situation and the actual characteristics of the subject property between the date of valuation and date of inspection. No other particular circumstances of the valuation are considered Documentation Documentation provided by the Client During the initial valuation as at 30 September 2015 we were provided with the following doc-uments: CapEx overview , not dated Hotel figures , dated 2015 Turnover figures, 2015 Lease agreement Royal Munich Sunflower, dated 25/04/2014 Floor plans, dated 15/05/2009 Area calculation, dated 06/10/2008 Information on contamination, dated 05/11/2015 Information on monumental protection, dated 30/10/2015 Building description, dated 06/10/2008 Notification about environmental remediation of contaminated site, dated 23/02/2010 Information on public land charges, dated 19/11/2015 Cadastral map, dated 03/12/2013 Land registry excerpt, dated 22/10/2015 During the course of the last update (Q3 2016) valuation we were provided with the following documents: Leonardo Munich Royal Update Q3 2017_NEU Page 9 of 49

23 Hotel data Jan-August 2016 and Forecast 2016 Documentation obtained by the Valuer During our initial valuation we obtained the following documents: Munich Hotel Market Report 2016/2017 Sales Comparables from Colliers International data base During the course of this update valuation we additionally obtained the following documents: Information on local market conditions For this valuation Q we have been provided via by Maher Nimer with the rent passing of 6.72 m p.a. in end of For the purposes of this valuation, we have assumed without verification that the documentation and information supplied to us by the Client and which we have obtained ourselves as described above are fully applicable and relevant as at the valuation date. A rough check has been made of the area information provided to ensure that it is sufficiently accurate for valuation purposes. Colliers International Valuation GmbH has not checked the completeness and correctness of the documentation and information supplied by the Client for the intended purpose of this valuation Leonardo Munich Royal Update Q3 2017_NEU Page 10 of 49

24 2 LOCATION 2.1 Macro Location General figures: Population (at 2016): 1,429,584 (Source: muenchen.de) Purchasing power index (national average 100) (Source: Nexiga 2016) Unemployment rate (at 08/2016): 4.3% Munich (Germany: 6.3%); (Source: statistik.arbeitsagentur.de) Inhabitant development : 15.4% (Source: muenchen.de) The city of Munich is situated in the south-eastern part of Germany. It is the capital of the federal state of Bavaria. Following Berlin and Hamburg, it is the third-largest city in Germany. The Isar River runs directly through the city and several lakes, such as Ammersee, Starnbergersee and Wörthsee, surround the city. Moreover, the surrounding regions are strongly focused on the capital city Munich (monocentric physical structure). The city is linked to many important motorways and major roads. These include the federal motorways A8 (Karlsruhe Salzburg), A9 (Munich Berlin), A95 (Munich Garmisch Partenkirchen) and the A96 (Munich Lake of Constance) as well as A99 and A995. Source: Colliers International, TomTom, Nexiga The public transport system is also well developed and offers excellent bus, tram and metro services. Six different high-speed rail lines run through Munich on a daily basis linking to other European business centres. In addition three railway stations (Central Station, East railway Station and Pasing railway station) connect Munich with the European railway network. Furthermore, the Franz-Josef-Strauss International Airport, which is one of the main air traffic hub in Europe, is located approx. 30 km north-east of the city centre Leonardo Munich Royal Update Q3 2017_NEU Page 11 of 49

25 Munich currently has the strongest economy of all German cities. Due to the favorable location in Europe, the very good infrastructure as well as the vicinity to science and the existence of well-trained employees, Munich belongs to a preferred location for many national and international companies. The headquarters of national and international companies, such as Siemens AG (electronics), BMW (car manufacturer), MAN AG (truck manufacturer, engineering), the Linde Group (engineering company), Allianz (insurance provider) and Munich Re (reinsurance provider) are located here. Other companies with headquarters in Munich include the aircraft engine manufacturer MTU Aero Engines, the camera and lighting manufacturer Arri and the semiconductor firm Infineon Technologies. Munich is also a financial centre, home to Hypo-Vereinsbank and Bayerische Landesbank. The city of Munich is situated in the south-eastern part of Germany. It is the capital of the federal state of Bavaria. Following Berlin and Hamburg, it is the third-largest city in Germany. The Isar River runs directly through the city and several lakes, such as Ammersee, Starnbergersee and Wörthsee, surround the city. Moreover, the surrounding regions are strongly focused on the capital city Munich (monocentric physical structure). The city is linked to many important motorways and major roads. These include the federal motorways A8 (Karlsruhe Salzburg), A9 (Munich Berlin), A95 (Munich Garmisch Partenkirchen) and the A96 (Munich Lake of Constance) as well as A99 and A Micro Location Milbertshofen The 11 th district Milbertshofen is known for the Olympic Parc located in the center of the district. To the south the district is bordered by the federal road B2R and to the north by the federal highway A99. To the west Milbertshofen borders on the districts Moosach and Feldmoching-Hasenbergl and to the east on the district Schwabing-Freimann. Milbertshofen is connected to the public transport system by the underground lines U2 and U3. Generally, Milbertshofen is characterized by large residential complexes and industrial buildings Leonardo Munich Royal Update Q3 2017_NEU Page 12 of 49

26 Source: Colliers International, TomTom, Nexiga The Olympic Park was constructed for the 1972 Summer Olympics and is fully owned by the City of Munich. With its Olympic Stadium, Olympic Hall, Olympic Tower and the large green areas, the park still continues to serve as a venue for cultural and social events as well as a large recreation area. Furthermore, the head quarters, the Museum and production facilities of the BMW Group are located in this city district. The Olympic Village, originally built as a residential area for the athletes of the Olympic Games, represents one of the most favourable residential areas nowadays. In total Milbertshofen has about 74,700 inhabitants on an area of 1,341 hectare. Moosacher Straße The Moosacher Straße is a highly frequented street in the north of Munich, beginning at the middle ring road (B2R) and leading to the federal road B304. The federal road B304 links middle ring road to the federal highway A99. The ring road runs through every district of the city and links the city to six highways (A8, A9, A96, A94, A95, A995). The subject property is located in the Moosacher Straße 90 in Munich. To the west of the subject property a larger undeveloped land plot is located and south of the property, beyond the Moosacher Straße, the green areas of the Olympic Park. Two new developments are currently in progress in the direct vicinity. North of the subject plot a large residential complex called Olympic Residential Park comprising 366 apartments is announced to be finished by spring East of the subject property an office building is currently being developed Leonardo Munich Royal Update Q3 2017_NEU Page 13 of 49

27 Source: Colliers International, TomTom, Nexiga 2.3 Location Assessment The property is situated in a good city district location of Milbertshofen of Munich, approx. 6 km north-western of the city center (Marienplatz) and about 30km south of Munich s International Airport. The local infrastructure can be assessed as good. The vicinity and the larger surroundings are mostly characterized by commercial developments and undeveloped land. The Olympiapark, a green recreation area, is located south of the subject property. The good traffic connection and the present infrastructure are favorable for the location and the subject property. Due to the location at the highly frequented Moosacher Straße, the site is clearly visible and very accessible. For the actual hotel use the location can be assessed as good Leonardo Munich Royal Update Q3 2017_NEU Page 14 of 49

28 3 DESCRIPTION OF SITE 3.1 Land registry information Land registry, 22/10/2015 District Court of Munich Land Register of Moosach Sheet Registry index Serial No. Plot Parcel Description of use and location Area 2 576/12 Moosacher Straße 90, developed and undeveloped land 10,177 sq m 3 576/13 Vicinity of Moosacher Straße, developed and undeveloped land 449 sq m Total: 10,626 sq m Section I - Property owner Fattal Leonardo Royal München Operation GmbH & Co. KG, Berlin Section II - Rights and encumbrances Serial No. of the entry Serial No. of the subject parcel Encumbrances and restrictions 1 2 Right to build water-, gas-, and electricity pipelines in favor for the City of Munich 2 2 The obligation to tolerate a water pipe, a walkway and a driveway as well as a building prohibition in favor for the City of Munich 12 2 Easement regarding walking and driving right, as well as illumination right in favor for the respective owner of plot No. 576/ ,3 Limited personal easement concerning a building restriction of the floor coverage ratio in favor of the City of Munich 14 2,3 Limited personal easement concerning a right of walkway and driveway for rescue vehicles in favor of the City of Munich 15 2,3 Limited personal easement concerning a building restriction regarding the parking spaces in the underground car park in favor of the City of Munich 16 2 Limited personal easement concerning the right of driveway for fire trucks in favor of the City of Munich 17 2 Limited personal easement concerning the right of building and maintenance of a transformation station in favor of the Stadtwerke München 18 2 Right of walkway and driveway and the right of access for emergency vehicles in favor of the City of Munich 19 2 The right of access for emergency vehicles in favor of the owner of plot no. 576/ ,3 The right to build an underground construction in favor of the City of Munich Note: We were not provided with any deeds of grant. The entries regarding the service lines (No. 1, 2, 17 and 20) also serve the subject property. Usually the holder of the right is responsible for the maintenance and upkeep. Therefore we regard this entry as not value influencing Leonardo Munich Royal Update Q3 2017_NEU Page 15 of 49

29 Entry no. 12 in favor of the neighbor plot 576/14 affects traffic ways and service lines of the subject property. We assume that these ways and the illumination also serve the accessibility of the subject property and are therefore not regarded as value influencing. The right of ways for rescue vehicles and firetrucks (entries no. 14, 16, 18 and 19) are only used in case of emergencies and therefore not regarded as value influencing. Entries no. 13 and 15 are from the year 2009 and have been considered in the construction phase of the subject property. Thus, we regard this entries as not value influencing. In case of a redevelopment of the subject property these entries have to be reconsidered. Section III - Mortgages, land charges, rent charges Contractual obligations registered in Section III are not considered in this valuation. It is assumed that these will be deleted upon sale or considered appropriately. For the as-is-state of the subject property we regard these either as not value influencing. 3.2 Register of Public Land Charges No public easement registry is kept in Bavaria. It is still possible that existing easements are not entered into the land registry. According to information provided by the client, there are no public land charges. Also no suspected public land charges (Abstandsflächen) were identified during the inspection. For this valuation we therefore assume that no public easements exist. 3.3 Contamination According to written information from the Environmental Department of the City of Munich dated 05/11/2015 and provided by the Client, the subject site was listed as suspected contaminated area. According to this letter, in the course of construction of the subject property, the contaminated soil has been remediated almost completely. The remaining contamination was sealed. For the subject property in the as-is-state we see no value influence. In the event of further necessary remediation measurements, any costs due to contamination issues have to be considered additionally to the results of this valuation. 3.4 Planning Law According to information from the online platform of the City of Munich from 25/10/2016, the subject property is located within the scope of jurisdiction of the development plan with green space planning no. 1688a Moosacher Straße, Lerchenauer Straße und Schittgablerstraße Knorr Bremse effective since 20/07/1994. The main restrictions of this development plan are as follows: Zoning: core area (MK) Floor area (GF) of 40,000 sq m Site coverage ratio (GRZ) of 0.5 Maximum eaves height (TH) of 24 m According to the regulations development plan, only 40% of the mandatory parking spaces are to be built, the remaining 60 % of the mandatory parking spaces are to be compensated by a payment. The required parking spaces must be located in an underground parking garage. The green areas must equal to 40 % of the plot size. No substructures are allowed underneath the green areas. We assume that the as-is-state of the subject property aligns to the regulations of this development plan. The floor area of the subject property amounts to about 17,485 sq m Leonardo Munich Royal Update Q3 2017_NEU Page 16 of 49

30 3.5 Layout The subject site (marked in red) comprises the plots no. 576/12 and plot no. 576/13. According to the land register, the total size of the subject site sums up to 10,626 sq m. The subject site extends approx. 90 m along Moosacher Straße. (Source: Geoportal Bayern) 3.6 Listed building protection According to the written information from the Building Committee of the City of Munich dated 30/10/2015 and provided by the Client, the subject property is not listed. 3.7 Building control In accordance with our instructions, the valuation has been undertaken on the basis of the completed development. In this valuation therefore, the material legality of the improvements and uses is assumed. 3.8 Development status According to 5 ImmoWertV (Entwicklungszustand) the subject property is to be classified 5 ImmoWertV Section 4 as land ready for building (Baureifes Land). 3.9 Servicing Condition of road Pedestrian access Parking spaces Public utilities Sewerage Servicing charges Very good, Moosacher Straße is a broad inner city main road, asphalted with three lanes in each direction. The sidewalks are paved and partially greened. Direct access from Moosacher Straße. 134 underground and 11 external parking spaces. Regular connection to the common public utilities. Public canal system. According to the written information by the local planning authorities dated 19/11/2015, all fees, contributions and other public dues in relation to the Leonardo Munich Royal Update Q3 2017_NEU Page 17 of 49

31 servicing have been raised and paid. Therefore, no abatements are necessary in this respect. Superstructure Economic unit None. Yes Leonardo Munich Royal Update Q3 2017_NEU Page 18 of 49

32 4 DESCRIPTION OF BUILDING 4.1 Building design The Leonardo Royal Munich is a 4-Star-Superior hotel comprising 424 rooms, a large restaurant area with about 300 seats, a bar with 120 seats, seven function rooms and a ballroom with a capacity for up to 700 people, spa area and an underground parking garage with 134 parking spaces. The property was built in 2011 and offers a total of about 23,800 sq m gross floor area. The building comprises two underground floors and six floors above ground. The main hotel entrance leading to the reception is on street level located on the eastern side of the building. Four elevators and four stairwells are located on each floor. Further stairwells which are only used as emergency exits are located in the different parts of the building. The 200 Comfort Rooms provide a size of about 23 sq m. They are equipped with an air conditioning, minibar, working space and partially with a microwave. All bathrooms have showers. The 212 Deluxe Rooms offer a size of 33 sq m and provide a sitting area, a working space and a guest restroom. All bathrooms have showers and bathtubs. The 11 Suites with a size of sq m offer a separate living and sleeping area and partially a walk-in closet and parquet flooring. The bathroom is equipped with a bathtub and a separate shower. The Suite provides an additional guest toilet. The Royal Suite with a size of 77 sq m has a separate living and sleeping area as well as a dining and a meeting room. Features like a walk-in closet and a guest toilet are offered. The bathroom is equipped with a bathtub and a shower. There are seven function rooms and a ballroom available for meetings and conferences. The conference area sums up to 1,800 sq m with a capacity for up to 700 people. The function rooms with a ceiling height of 4.5 m are located on the ground floor. The ballroom is located on the underground floor and offers daylight by ceiling windows. It is directly accessible through the underground parking garage and equipped with eight suspension points at the ceiling for up to 1 t. The restaurant is located on the ground floor and offers 320 seats. In suitable weather conditions, the restaurant area can be extended by additional 200 on the terrace. The hotel bar is also located on the ground floor, next to the restaurant and can be used for breakfast in case of high occupancy. The spa area is located on basement floor and includes a sports lounge and a sauna. There are 134 parking spaces available in the underground parking garage. The entrance is located on the eastern side of the hotel. Building services and further storage areas are mainly located in the basement Leonardo Munich Royal Update Q3 2017_NEU Page 19 of 49

33 4.2 Building characteristics Property/ building type 4-Star-Superior-Hotel of six storeys above ground and two basement levels Brand Leonardo Year of construction 2011 Quality of building Very good fitting standard Function/ layout Functional, usage-based and variable Basement Basement with underground park, technical facilities, spa and storage areas 4.3 Building description Construction Roof Façade Internal walls Ceilings Windows Doors/ gates Floor coverings Thermal / sound insulation Stairs Lifts Sanitary facilities Heating Ventilation/ air-conditioning Electrical/ IT installations Additional fit out External appurtenances Reinforced concrete skeleton construction Flat roof with greening and gravel Plastered and painted Solid as well as lightweight construction Reinforced concrete ceilings, partly with suspended ceilings with integrated lighting Aluminum windows with insulation glazing External doors and entrance doors as metal doors with glazing, internal doors mostly as wooden doors with coating, fire-retardant doors where necessary Ceramic tiles in the bathrooms, carpet or parquet flooring in the rooms, coated concrete in the basement, entrance hall with the original stone tiles Normal standard, according to its use and requirement Concrete covered with stone tiles; steel handrails Four passenger lifts and one goods elevator Showers, tubs, toilets, washbasins District heating Each room with individual adjustable heating and cooling system Very good standard in the conference areas Fitness room, sauna Plants, paved area starting at Moosacher Straße and leading to the hotel entrance. 4.4 State of repair A structural survey was not carried out from Colliers International Valuation GmbH as this was out of the scope of our instruction. Nevertheless, we formed during the course of the initial valuation the impressions that the building appeared to be mainly in a very good condition. Apparently, the relevant maintenance was carried out satisfactorily. No major defects were noted during the site visit. Minor repairs are covered by regular repairs and maintenance. We assume that this is still the case. 4.5 Assessment of building The six-storey hotel comprises 424 rooms (412 double rooms and 12 suits), a restaurant, a bar, seven meeting rooms, a ballroom, a spa area and an underground parking garage. According to the provided information, the total rental area sums to approx. 23,830 sq m and 134 underground parking places and 11 external parking places. The subject property was built in 2011 and is mainly of a conventional massive construction with a flat roof. We formed the impression that the building is in a very good condition Leonardo Munich Royal Update Q3 2017_NEU Page 20 of 49

34 4.6 Verification of areas The Gross Floor Area (GFA) of the subject property, according to the provided area calculation dated 06/10/2008, is about 23,830 sq m excluding underground car park and 27,098 sq m including underground car park. The GFA above ground is about 17,485 sq m. We verified the areas by measuring the plans. The GFA is regarded to be plausible. The underground car park with a total of about 3,268 sq m GFA contains 134 parking lots, equaling about 24 sq m per parking lot. This ratio is regarding to be plausible due to the drive ways and ramp. The basement also comprises the ball room and the spa. We assume the usable area above ground to be about 80% of the GFA above ground. Assuming a ratio of 80% of usable area to GFA the usable area above ground amounts to 14,000 sq m. Thereof the area for hotel rooms (424 rooms with an average size of about 25 sq m (23 sq m to 77 sq m)) equals to 76% of the total usable area or 10,600 sq m. The remaining areas above ground comprise the restaurant including kitchen, the lobby, bar, stairs and corridors Leonardo Munich Royal Update Q3 2017_NEU Page 21 of 49

35 5 MARKET INFORMATION 5.1 Germany Market Report - Hotel Mid-year 2017 The German hotel investment market took a short breather in the wake of last year s record results, stabilizing at a high level. This trend attributes to the looming lack of supply. With a transaction volume of around 1.7bn, the hotel investment market recorded a year-on-year decrease of 19%, nevertheless still exceeding 2015 results. The ongoing drop in portfolio deals hints at increasingly scarce supply on the hotel investment market. While in the previous year almost half of transaction volume was generated by portfolio deals including some largescale transactions, this share has now dropped to 21%, or approximately 350m. Single deals remain popular, accounting for the lion s share of total transaction volume with just shy of 1.4bn or 79%. The largest single deal registered in Q2 was the sale of the Pullman 4-star hotel in Munich to a REIT based in Singapore Strong German investor presence German and foreign investors accounted for shares of buy-side activity similar to those of the previous year. German investors increased their share by 3 percentage points to around 950m, or 56% Leonardo Munich Royal Update Q3 2017_NEU Page 22 of 49

36 German investors also increased their share sell side by 3 percentage points, disposing of hotel assets valued at slightly more than 1bn (60%). 4-star hotels remain popular 4-star hotels continue to be a popular choice among investors, accounting for 55% or 940m and defending their top position with an increase of 1 percentage point. Similar to the previous year, 3-star hotels followed in the ranks, generating a transaction volume of around 380m, or 23% of total transaction volume. 2-star hotels came in third, gaining a spot in the ranks yoy with a 9% share in transaction volume. Boarding houses trailed closely with 130m, significantly exceeding the share of less than one percent posted a year ago and emerging as a viable investment alternative on the current market. 1- star hotels generated 30m, with 5-star hotels only accounting for around 10m in transaction volume. Although investors continued to primarily focus on stock properties in the first two quarters of 2017, the share generated by hotel stock fell 6 percentage points yoy to a current 66%. Property developments, assets under construction and new-builds continued to attract investment activity, collectively accounting for 26% of transaction volume. This result is a clear indication of ongoing growth in the German tourism sector. Asset/fund managers most active investor group Asset/fund managers poured roughly 510m into German hotel assets in H1 2017, taking the lead in terms of transaction volume with 30%, a yoy increase of 21 percentage points. Just like last year, open-ended real estate funds and special funds followed in the ranks with just under 300m, or 17% of transaction volume. Private investors and family offices claimed third place at around 290m. Property developers and development companies led the ranks sell side at just shy of 490m with corporates and owner-occupiers in pursuit at 420m. Opportunity funds and private equity funds trailed with roughly 260m. Outlook: End-of-year results similar to 2016 within reach despite short breather Despite the fact that activity on the German hotel investment market has quieted down somewhat Leonardo Munich Royal Update Q3 2017_NEU Page 23 of 49

37 following several record quarters, we can still expect transaction volume to come close to 2016 s record results due to the typically strong end-of-year rally and ongoing high demand for hotel assets 5.2 Sales Comparables We are aware of the following transactions of hotel properties in Munich, which are considered to be best comparable with the subject property: ZIP City Rooms Category YOC Mod. Signing Date Price Price per room München 290 4**** / 2.Q München 348 4**** / 2.Q München 396 5***** / 3.Q München 102 4**** 2015/ 4.Q The full details of the sales comparables are not published due to confidentiality reasons. Gross initial yields for all hotel categories were in the range between 4.75% and 5.56% be-tween Q and Q However, the GIY in 2016 was at about 5.10%. 5.3 Figures of the Leonardo Royal Hotel Munich Following revenue and forecast figures have been provided by the owner of the hotel. Year 2015 Year 2016 Year 2013 Year 2014 Jan - Sept Actual Jan - Aug Actual Oct - Dec Forecast Sep - Dec Forecast Occupancy Rate 76,5% Occupancy Rate 74,5% Occupancy Rate 74,3% Occupancy Rate 75,6% Average Room Rate 119,27 Average Room Rate 121,49 Average Room Rate 123,11 Average Room Rate 133,93 REVPAR 91,29 REVPAR 90,46 REVPAR 91,45 REVPAR 101,25 Revenues Revenues Revenues Revenues Rooms Rooms Rooms Rooms Food Food Food Food Beverage Beverage Beverage Beverage Other Other Other Other Total Revenue Total Revenue Total Revenue Total Revenue The hotel had overall a stable development in occupancy and an increase in revenues. In 2015, the revenue was at about 21.5 m and the occupancy at about 74%. The revenue forecast for 2016 is at about 23.2 m. We estimate the sustainable revenue to rise due to the positive development of the hotel market in Munich and the growing market presence of the brand Leonardo Leonardo Munich Royal Update Q3 2017_NEU Page 24 of 49

38 5.4 Competition analysis To develop a comparative overview of the average room rates of the existing competing hotels, we analyzed room offers of hotels declared as 4*hotels by the HRS Hotel Reserva-tion Service. The average room rate has been calculated by choosing randomly 3 dates in order research room prices of each competitive hotel. We choose for the over-night-stays the following dates: 20/12/ /12/2016; 14/03/ /03/2017 and 30/06/ /07/2017. In the following map the location of the competing hotels is shown. All hotels are in a range of 5.km of the subject property. The subject property is located in map center. Source: Colliers International On the following pages the competitive hotels with the average room rates as well as their further features are shown. The room rate is the average price for an overnight stay, including VAT and without breakfast. Room rates have been analyzed for double rooms (this includes double rooms occupied by one or by two guests). The results of the competitive analysis are as follows: Overall average double rooms: , room rates were in a range of to Leonardo Munich Royal Update Q3 2017_NEU Page 25 of 49

39 Nr. Hotel Location Rooms Stars HRS rating Distance to subject property Breakfast Single room price Double roomprice Remarks Vitalis hotel Kathi-Kobus-Straße 20-22, München Innside by Meliá Worldhotel The Rilano München Arcona living München Flemings Schwabing Munich Marriott Hotel Mies-van-der-Rohe- Straße 10, München Domagkstraße 26, München Nymphenburger Straße 136, München Leopoldstraße , München Berliner Straße 93, München 143 **** 7.6/ km excl **** 8.2/10 3.8km excl **** 8.1/10 3.8km 94 **** 8.6/10 3.9km Excl Excl **** 7.8/10 5.6km Incl ***** 7,7/10 3.9km Excl Wi-Fi (encharged), safe, meeting rooms, hotel, city hotel, business hotel, conference and congress hotel, appartement hotel Wi-Fi (encharged), sauna, gym, safe, air condition, minibar, hotel, city hotel, business hotel, art/design hotel, conference and congress hotel, non-smoking hotel, certified designhotel Wi-Fi, Pay TV, safe, minibar, meeting rooms, internet tv, hotel, city hotel, business hotel, conference and congress hotel, non-smoking hotel Wi-Fi, safe, gym, meeting rooms, garage, hotel, city hotel, business hotel, art/design hotel, boutique hotel, conference and congress hotle, appartment hotel, nonsmoking hotel Wi-Fi, minibar, safe, wellnes center, gym, meeting rooms, steam bath, hotle, city hotel, business hotel, conference and congress hotel Sauna, indoor pool, fitness center, air condition, safe, minibar, Pay-TV, hotel suitehotel, club hotel / resort hotel, golf hotel Leonardo Munich Royal Update Q3 2017_NEU Page 26 of 49

40 Europa hotel Dachauer Straße 115, München Erzgiesserei Europe Erzgießereistraße 15, München Pullmann Munich Theodor Dombart Straße 4, München New Orly La Maison 162 **** 8.3/10 4.0km Incl **** 8.3/10 4.1km Incl **** 8.5/10 4.1km Excl , Gabrielenstraße 6, München 78 **** 7.9/10 4.2km Incl Occamstraße 24, München 31 **** 7.6/10 4.4km Novotel München City Arnulfpark Arnulfstraße 7, München 185 **** k.a. 4.4km Excl excl Wi-Fi, safe, minibar, air condition, hotel, city hotel, business hotle, fair hotel, congress and conference hotel, Wi-Fi, Pay-TV, safe, meetin rooms, air condition, hotel, city hotel, business hotel, fair hotel, conference and congress hotel Wi-Fi, sauna, meeting rooms, safe, spa center, gym, hotel Wi-Fi, sauna, gym, safe, minibar, hotel, city hotel Wi-Fi, safe, meeting rooms, minibar, hotel,city hotel, art/design hotel, boutique hotel, congress and conference hotel Wi-Fi, sauna, gym, safe, hotel Nikolai Hotel Prinz Myshkin Parkhotel Nikolaistraße 9, München 25 **** 8.4/10 4.5km Incl Menzinger Straße 103, München 28 **** 7.9/10 4.7km Excl Wi-Fi, safe, hotel garni, city hotel, boutique hotel, Wi-Fi, minibar, hotel, boutique hotel, conference and congress hotel Citadines Munich Arnulfpark Arnulfstraße 51, München 146 **** 7.7/10 4.7km excl Eurostras Grand Central Arnulfstraße 35, München 247 **** 8.3/10 4.8km Incl Wi-Fi, safe, air condition, kitchen, gym, meeting room, hotel, city hotel, congress and conference hotel, appartment hotel, non-smoking hotel Wi-Fi, safe, minibar, sauna, gym, meeting rooms, air condition, hotel, city hotel, business hotel, Leonardo Munich Royal Update Q3 2017_NEU Page 27 of 49

41 Regent Hotel Seidlstraße 2, München 189 **** 5.6/10 5.0km Leonardo Boutique Munich Amalienstraße 25, München 74 **** 6.3/10 5.0km Kings First Class Dachauer Straße 13, München 86 **** 8.0/10 5.0km Excl Excl Excl art/design hotel, congress and conference hotel Wi-Fi, minibar, meeting rooms, safe, hotel, city hotel, station hotel, business hotel, fair hotel, conference and congress hotel Wi-Fi, safe, air condition, safe, air condition, hotel, city hotel, station hotel, business hotel, art/design hotel, boutique hotel, congress and conference hotel, certified design hotel Wi-Fi, safe, air condition, sauna, hotel, city hotel, business hotel, boutique hotel, conference and congress hotel Leonardo Munich Royal Update Q3 2017_NEU Page 28 of 49

42 6 ASSESSMENT OF THE CAPITALIZED INCOME VALUE 6.1 Description of process According to the International Valuation Standards, 2007 edition, GN 12, Specialized Trading Properties (STP) are considered as individual trading concerns and typically are valued on the basis of their potential Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), as adjusted to reflect the trading of a reasonably efficient operator and often on the basis of either DCF methodology or by use of a capitalization rate applied to the EBITDA. Valuation of STPs are usually based on assumptions that there will be a continuation of trading by a reasonably efficient operator, with the benefit of existing licenses, trade inventory, fixtures, fittings and equipment, and with adequate working capital. The value of the property including transferable goodwill is derived from an estimated maintainable level of trade. If the valuation is required on any other as assumption, the Valuer should make such assumptions explicit through disclosure. While the actual trading performance may be the starting point for the assessment of the fair maintainable level of trade, adjustments should be made for atypical revenues or costs so as to reflect the trade of a reasonably efficient operator. The principle of a reasonable efficient operator is the principle which is leading the valuation of a businessrelated property (trading property): A market based concept whereby a potential purchaser, and thus the Valuer, estimates the maintainable level of trade and future profitability that can be achieved by a competent operator of a business conducted on the premises, acting in an efficient manner. The concept involves the trading potential rather than the actual level of trade under the existing ownership so it excludes personal goodwill. When valuing hotels as fully equipped and operational entities, the appraiser will be reflecting the same methodology, or combination of methodologies, as adopted by prospective purchasers on the market. Such approaches will vary depending on the particular type of hotel and market conditions at the particular point in time. According to the RICS Standards, VPGA 4, paragraph 5.1, the valuation of a trade related property as a fully equipped operational entity necessarily assumes that the transaction will be either the letting or the sale of the property, together with the trade inventory, licenses, etc., required to continue trading. There may be tangible assets that are essential to the running of the operational entity but are either owned separately from the land and buildings, or are subject to separate finance leases or charges. In such cases, an assumption may need to be made that the owners or beneficiaries of any charge would consent to the transfer of the assets as part of the sale of the operational entity. The most suitable valuation approaches for trade related properties are based on the income generating potential of the assessed properties. Such assessments and analysis is generally from the viewpoint of a likely purchaser or operator of the business. In this context, it is important to note that current and past performance is no guarantee as to future potential. The task of the valuer is therefore to assess future trade on the basis of such a competent operator, rather than an existing operator. Regard should be had to the business mix and to risks and potential profit of the component elements, which will include accommodation income, food and beverage sales and other sundry income streams Leonardo Munich Royal Update Q3 2017_NEU Page 29 of 49

43 The valuer should be satisfied as to the accuracy and reliability of the trading information and/or projections supplied for the purpose of the valuation and should critically examine the details against his or her knowledge of other hotels operating in similar trading circumstances. Thus, in respect to the recommendations of both the International Valuation Standards and RICS Standards and to the terms of our engagement, we consider that the direct capitalisation approach is the most suitable approach in determining the Market Value of the subject property since we rely on a stable Market Rent. General Approach We regarded the DCF Method as adequate. This method requires the assumptions for income growth to be explicitly stated and therefore increases the transparency of the valuation and the effect on value of different hypotheses. The method relies on a number of projections for the future which could prove inaccurate if actual market conditions were to change unexpectedly. The net income flow is predicted over the length of the cash flow and assumes a notional sale at the end of the cash flow period. The cash flow is discounted at a market derived Discount Rate (reflecting a target Internal Rate of Return IRR) to arrive at the Net Present Value (NPV). 6.2 Lease contracts/ current rent The subject property is let as at the valuation date. We were provided with the lease contract between the owner (Lessor) and Sunflower Management (Lessee) regarding the Leonardo Royal Hotel Munich. The lease contract begins upon transfer of possession of the leased premises to the Lessee, which was planned for on the signing date of the lease agreement (25/04/2014). Lease term was agreed at 20 years. Additionally, the Lessee has the right to extend the lease contract by 5 years with a notification period of 18 months. At the beginning of the lease period, a fixed annual rent of 6,300,000 (excl. FF&E) was agreed plus a turnover-related rent. The turnover-related rent is calculated as follows: Source: Lease contract Sunflower Management We have been provided by Maher Nimer ( from 18 September 2017), that the rent passing is 6.72 m as at end of The agreed annual rent is subject of indexation. Indexation according to the contract is agreed as follows: if the Consumer Price Index for Germany (CPI), basis 2000=100, changes compared to 31 December 2013 or compared to the level at the last rent adjustment the rent shall be changed automatically by 80% of the index change. As of yet the rent has not been raised. The Lessee bears all operating and ancillary costs according to the Ordinance on Operating Costs (BetrKV). The Lessee shall keep all necessary contracts up on its expense and conclude new contracts, if necessary. Furthermore, the Lessee is liable for all necessary maintenance, repair and renewal measures excluding the measures for roof and structural elements of the property Leonardo Munich Royal Update Q3 2017_NEU Page 30 of 49

44 6.3 Hotel rents plausibility check Gross room prices of for double rooms (single and double occupancy) and for the Suites (all excluding breakfast and including VAT) are considered appropriate for the hotel operation on account of the good location of the hotel as well as the very good fit out of the hotel which is commensurate with comparable hotels in the same category. An occupancy rate of 75% is considered as achievable for the subject property. Actual occupancy is at about 75.6% according to information of the owner. Useable Area: 23,830 sq m Single rooms rooms Double rooms 412 rooms Junior Suites rooms Suites 12 rooms Number of rooms 424 pcs. Number of beds 848 pcs. Total useable area per room m² Lodging rate: gross net Single room 0.00 Double rooms (1 person) Double rooms (2 persons) Junior Suites 0.00 Suite max. room sale 154,760 pcs. max. bed sale 309,520 pcs. max. turnover net 18,795,794 Double bookings included Double bookings (Doppelbelegungsquote) 1.5 Operation days 365 Occupancy rate 75.0% Turnover hotelrooms 14,096,846 Average Room Rate Room Yield / RevPAR The Leonardo Royal operates the restaurant Vesuv with 320 seats inside (including the seats of the breakfast area) and further 200 seats on a terrace outside. In the calculation of the operating lease rent, an average no. of seats of 420 was considered and a turnover per seat of (excluding breakfast). Occupancy is indicated as 20%. Restaurant & Bar/Lounge Restaurant Seats 420 pcs. Operation days 365 net Turnover/seat per day Booking rate 20.0% Restaurant 772,941 Turnover Restaurant und Bar 772,941 The conference and ballroom areas have 700 seats on an area of about 1,800 sq m. The long term sustainable turnover is based on the fit out and ambience of the hotel and is estimated at per space per day. Occupancy of 40% has been assumed. According to information during the inspection the actual occupancy of the conference areas is higher. The conference areas are very well accepted on the market. The competition of hotels with conference areas of this size and ball rooms is very limited. For prudential reasons we considered an occupancy rate of 40% as sustainable Leonardo Munich Royal Update Q3 2017_NEU Page 31 of 49

45 Meetings and conferences Seats 700 pcs. Operation days 365 net Turnover / seat / day Booking rate 40% Turnover Meetings and conferences 4,294,444 For the breakfast a price of has been calculated according to information of the owner. A booking rate of 90% in addition to the occupancy rate of the hotel rooms has been adopted. Breakfast Price Booking rate (in addition to the room occupancy rate) 90% Turnover Breakfast 1,670,117 The turnover of other income (miscellaneous) has been selected based on the additional features bookable in the hotel (WiFi, mini-bar, Pay-TV) at a quote of 5% of the turnover of the hotel rooms. Miscellaneous Turnover miscellaneous (Newspaper, telephone, parking, others...) 5.00% 704,842 Considering revenue for hotel rooms, restaurant & bar, breakfast as well as other income the total achievable turnover is calculated at ca million. In the current year 2016 the revenue of the first 8 months plus the forecasted revenue until year end is expected to be above last year s results. The expected revenue at year end amounts to 23.2 m (thereof rooms , food , beverage , other ). Total turnover Hotel incl. FF&E 21,539,190 Rent interest Hotel 32.50% 7,000,237 Total rent 7,000,237 According to a survey for lodging properties published by HypZert the operating lease rental value of the hotel including inventory (FF&E Furniture, Fixtures & Equipment) is usually between 22%-30%. The market operating lease rent for hotels of this type and price category including inventory is in the range 450-1,200 per room and month. For the subject property we adopted a higher percentage share of 32.50% due to its location in Munich. Taking into account a market-based operational lease rent of 32.50% of total turnover, the appropriate annual operating lease rent for the fully equipped hotel (including inventory) amounts to around 7 million. Based on the 424 existing rooms, the monthly operating lease rent is around 1,376 per room (incl. FF&E) which is above the above-mentioned range but is regarded to be plausible considering the location and the building quality and fit-out. This equates to an average long-term market rent of per sq m per month (incl. FF&E). The calculation of the plausibility check is shown in Appendix 4. incl. FF&E 32.50% average interest incl. FF&E 1, /room p. month incl. FF&E 16, /room incl. FF&E /sq m According to information provided by the client all furniture and inventory is transferred to the Lessee. We therefore adopt a rent excluding FF&E in the valuation which we determined with the following method. The rent includes a portion for ground and building. According to a survey for lodging properties published by HypZert, the portion for the land is usually in the range between 15% and 35%. For the subject property, we adopted 30% taking into regard the future development of the surroundings and the share that is appropriate Leonardo Munich Royal Update Q3 2017_NEU Page 32 of 49

46 for Munich. Thus, the share of the rent for the building amounts to the remaining 70%. From this share, the proportion of the inventory is about 10-17% for a branded 4-star city hotel. A share of 15% is considered appropriate for the subject property. The resulting share of rent excluding FF&E to total revenue is 29.09%. Rent Interest excluding FF&E rent interest including FF&E 32.50% share of land on market value 30.00% share of building on market value 70.00% share of inventory on building 15.00% share of building on rent (position 1 * position 3) 22.75% share of FF&E on rent for building (position 4 * position 5) -3.41% rent excluding inventory (position 1 * position 6) 29.09% Taking into account a market-based operational lease rent of 29.09% of total turnover, the appropriate annual operating lease rent for the hotel (excluding inventory) amounts to around 6,265,212, which equals 1,231.37/room and 21.91/sq m GFA per month. Total turnover Hotel excl. FF&E 21,539,190 Rent interest Hotel 29.09% 6,265,212 Total rent 6,265,212 excl. FF&E 29.09% average interest excl. FF&E 1, /room p. month excl. FF&E 14, /room excl. FF&E /sq m We made a plausibility check for the hotel rent which is at 6.3 million per year. The difference between the fixed contractual rent and the estimated market rent is below 1% and thus the contractual rent seems plausible. We have been provided with an by Maher Nimer, that the rent passing is 6.72 m EUR as at end of We have adopted the rent passing of 6.72 million per year in the calculation. 6.4 Hotel benchmarks for ARR and RevPAR There are several key figures to measure the performance of a hotel. The most popular indicators of the hotel performance are the Average Room Rate (ARR) and the Revenue per Available Room (RevPAR). The following key figures indicate the value of the fully established hotel. The actual data of the hotel are also listed. The ARR is the average rate achieved per room per night over a certain period of time within all room types and guest groups. This figure can be used to benchmark the price structure of one hotel with the price structure of other hotels within the relevant market. The formula to calculate the ARR over the time period of one year is: Total room turnover per annum 14,096,846 ARR = = = per room Number of occupied rooms per annum 154,760 * 75% Average room rates for hotels of the corresponding category are in the range of per room. The actual ARR of the Leonardo Royal Munich is at per room for the current year 2016 incl. forecast Leonardo Munich Royal Update Q3 2017_NEU Page 33 of 49

47 The RevPAR is the best measurement of maximizing total room revenue because it identifies the hotel s ability to manage both occupancy and average rate in maximizing room revenues. The formula to calculate the RevPAR over the time period of one year is: Total room turnover per annum 14,096,846 RevPAR = = = per room Number of available rooms x ,760 The Revenue per available room is in the range of per room for comparable hotels (HypZert). The actual RevPAR for the subject property is at per room for the current year 2016 incl. forecast. For more information on the calculation of the Average Room Rate (ARR) and the Revenue per Available Room (RevPAR), please refer to appendix Operating costs Operating costs consist of the annual expenditure incurred for a proper management and permissible use, which are not recoverable or covered by other cost assumption rules. These include in particular, property management costs, maintenance costs, allowance for risk of rental loss and service charges. Property management costs Property management costs encompass all costs of staffing and equipment necessary for the management of the property, the costs of supervision, the value of the management services provided by the owner himself and the costs of the management board. From our experience of properties of similar use, costs of 0.5% of the ERV have been adopted as the necessary property management expenditure. Maintenance costs Maintenance costs are the costs which must be invested in the property as a result of wear and tear or aging, to maintain the rental income levels assumed in the valuation for the improvements over their remaining useful lifespan. In consideration of the age and physical quality of the subject property, and the regular maintenance programme, maintenance cost factors of 8.00 ( 8.35 per sqm blended figure incl. parking) per sqm for the gross floor area p.a., which is, based on an area ratio of 80% about per sqm lettable area. Taking into account that the lessor is only responsible for Dach und Fach but also the size and the category of the hotel, this is considered as adequate. For the parking spaces we adopted per parking lot in the underground garage and 15 per external parking space p.a. Vacancy costs In consideration of the location and the building characteristics we adopted vacancy costs of 15.00/sq m for the vacant areas during the vacancy period to account for costs which can usually be forwarded to a tenant. Service charges Service charges are costs which regularly accrue through the ownership or ground lease of the property or through the appropriate use of the building, ancillary buildings, appurtenances, installations and land. 6.6 Costs of purchase and taxation In respect of this valuation we have not deducted an allowance for the costs of sale to the vendor but have allowed in the normal way for purchaser s costs at a rate of 7.0% of the sales proceeds in arriving at our opinion of value. The costs allowance comprises 3.5% for land transfer tax and 2.0% for brokerage and notary fees Leonardo Munich Royal Update Q3 2017_NEU Page 34 of 49

48 6.7 Investment yields The applied yields reflect the individual location quality (macro and micro location) of the subject property, building structure, remaining lease terms, covenant strength and the relationship between contractual and market rent. We applied an equated yield approach in our cashflow model (growth explicit method), i.e. an-ticipation of (rental) growth, inflation and indexation is explicitly contained in the valuation. This has been derived from the analysis of other market transactions and reflects current market pricing for such assets. The discount rate and capitalisation rate for the subject property have been adopted based on recent investment sales evidence known to us together with our general knowledge. Discount Rate The calculated cash flows are discounted by the discount rate, resulting in Gross Capital Value of the cash flow as at the valuation date. The appropriate risk-adjusted discount rate equals the un-leveraged Internal Rate of Return of the cash-flow stream. The adopted discount rate considers the probability of default as well as the security of the forecast of the cash flow. Theoretically, the discount rate is composed of a Risk-Free Interest Rate, a Market Specific Risk and a property Related Risk. Overall the Discount Rate is equivalent to a yield, which would be expected by potential investors to compensate the capital lockup in consideration of the specific investment risk. The predominant factors affecting the discount rate are focused on the security of the cash flow and include: Strength of tenant covenants, weighted average unexpired lease term (WAULT), letting risk of the vacant areas, re-letting risk of terminated lease contracts, property market, quality and type of the building, alternative usability, location quality, and last but not least, the potential of the rental growth. Due to the long-lasting lease contract, most of the risk profile has been reflected within the market rent and operating expenses. For the subject property, we have applied a Discount Rate of 5.70%. Capitalisation Rate The cap or terminal cap rate adopted in the valuation is used to capitalise the stabilized net operating income in the final cash flow year into perpetuity. The cap rate, which is a growth implicit yield, is an appropriate market yield for the specific property, predominately reflecting the sustainability of the property, the location, use and quality of the buildings, depreciation due to wear and tear as well as the investment market environment. As it is assumed in the valuation that the net operating income will be capitalised in year 11, expectations for the development of the real estate market as well as for the development of the cash flow after the end of this ten-year period must also be reflected in the cap rate, hence the use of equivalent yields. For the subject property, we have applied a Capitalisation Rate of 5.00%. The subject property comprises a 4-star hotel building and 134 underground parking places. The building is situated in Munich within a good micro location with good public transport connection, local supply and good connection by car. The building complex benefits from a good building quality. The Market Value equates to 311,500 per room or per square meter. Reflecting the comparable transactions of 4-star hotels (on average approx. 288,000 per key; range of 230, ,000 per key), the subject asset can be considered in the upper half of this range, due to the good macro-location within Munich and the good condition of the subject property Leonardo Munich Royal Update Q3 2017_NEU Page 35 of 49

49 7 MARKET VALUE 7.1 Definition of Fair Value Fair Value according to IFRS 13 The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market Value according to RICS Where we have been instructed to value the property on the basis of Market Value, we have done so in accordance with VPS of the Professional Standards issued by The Royal Institution of Chartered Surveyors, which is defined as follows: The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion. The interpretative commentary on Market Value, as published by the International Valuation Standards Council (IVSC), has been applied Leonardo Munich Royal Update Q3 2017_NEU Page 36 of 49

50 Rental Income COLLIERS INTERNATIONAL VALUATION GMBH 7.2 Sensitivity Analyses For the purpose of describing market risks we performed a sensitivity analysis showing the effects of hypothetical changes in relevant risk variables. We identified the market rent and the property yield as relevant risk variables and thus applied a risk surcharge or discount of +/-5% on the corresponding figures. Property Yield Discount rate 5.9% 5.7% 5.5% Cap rate 5.2% 5.0% 4.8% 5.00% 134,000, ,500, ,400, % 127,500, ,700, ,300, % 120,900, ,800, ,100, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, % 5.7% 5.5% 5.00% 0.00% -5.00% Capitalisation Rate Discount Rate By adopting the yields in the range between 4.8% (cap rate) / 5.5% (discount rate) and 5.5% (cap rate) / 5.9% (discount rate) the market rent in the range between million and million, we arrived at hypothetical values in the range between 120,900,000 and 145,400,000 which is a change between 8.9 to 9.6% from the Market Value. 7.3 Market Value under special assumption According to standard practice in the real estate market, comparable properties are valued and traded on the basis of their income potential. Consequently, the Market Value has been derived from the Capitalized Income Value Approach Leonardo Munich Royal Update Q3 2017_NEU Page 37 of 49

51 The Market Value of the subject property, Moosacher Straße 90 in Munich, as at 30 September 2017 is assessed as: 132,700,000 (one hundred thirty-two million seven hundred thousand Euro) The Market Value under special assumption (excl. FF&E) equates to 311,500 per room or per square meter. Munich, 14 November 2017 Berit Schumann MRICS Managing Director Robert Becker MRICS Director Leonardo Munich Royal Update Q3 2017_NEU Page 38 of 49

52 Cash Flow (EUR) Running Yield COLLIERS INTERNATIONAL VALUATION GMBH Property address Leonardo Royal Munich Valuation date: Moosacher Straße 90, Munich Inspection date: n/ a Germany Prepared for: Fattal Hotels / Sunflower Management GmbH & Co. KG Cash Flow - Market Value (with assumtion of additional variable rent) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For The Year Ending Jun-2018 Jun-2019 Jun-2020 Jun-2021 Jun-2022 Jun-2023 Jun-2024 Jun-2025 Jun-2026 Jun-2027 Jun-2028 Potential Gross Revenue Potential Base Rent Absorption & Turnover Vacancy Free Rent CPI Total Potential Gross Revenue Operating Expenses Management Costs Maintenance Costs Vacancy Costs Total Operating Expenses Net Operating Income Leasing & Capital Costs Tenant Improvements Leasing Commissions Total Leasing & Capital Costs Cash Flow Before Debt Service Terminal Value NET CASH FLOW Running Yield 4,67% 4,74% 4,82% 4,89% 4,97% 5,05% 5,13% 5,21% 5,30% 5,38% For the P.V. of Analysis Period Year Cash Flow Annual Cash Flow Cash Flow % Year 1 Jul ,6% 0 Year 2 Jul Year 3 Jul ,00 0, ,11 0,00 5,38% 0,00 Year 4 Jul ,4% Year 5 Jul Year 6 Jul Year 7 Jul Year 8 Jul Year 9 Jul Year 10 Jul Cash Flow Terminal TOTAL CASH FLOW abzüglich Erwerbsnebenkosten GROSS CAPITAL VALUE (rounded) deduction of 5,50 % purchaser's costs MARKET VALUE (rounded); with assumtion variable rent of additional 5,13% 5,21% 5,30% 5,2% 4,97% 4,89% 5,0% 5,05% ,82% 4,74% 4,8% 4,67% 4,6% 4,4% ,2% Analysis 5 period 6 (years) Leonardo Munich Royal Update Q3 2017_NEU Page 39 of 49

53 APPENDIX 1: SIT E PLAN Leonardo Munich Royal Update Q3 2017_NEU Page 40 of 49

54 APPENDIX 2: HOT EL ROOM PRICES MUNICH AS AT 25 /10/20 16 Single room Double room Single room Double room Single room Double room Hotel price price price price price price Vitalis Hotel 80,10 84,60 129,00 129,00 99,00 99,00 Innside by Meliá 116,10 125,10 134,10 134,10 98,10 89,10 Worldhotel - The Rilano München 79,20 87,20 134,10 134,10 98,10 98,10 arcona Living München 105,30 118,80 138,60 138,60 125,10 125,10 Flemings Schw abing 84,15 114,75 157,25 157,25 123,25 123,25 Munich Marrtiott Hotel 103,00 103,00 189,00 189,00 127,00 127,00 Europa Hotel 85,50 107,10 116,10 116,10 125,10 125,10 Erzgiesserei Europe 99,00 119,00 109,00 109,00 109,00 109,00 Pullmann Munich 104,17 120,32 160,69 160,69 136,47 136,47 New Orly 114,00 133,00 110,00 110,00 105,00 105,00 La Maison 137,00 150,00 158,00 158,00 109,88 109,88 Novotel München City Arnulfpark 89,00 89,00 109,00 109,00 124,00 124,00 Nikolai Hotel 140,00 180,00 200,00 200,00 200,00 200,00 Prinz Myshkin Parkhotel - 112,00 106,40 112,00 106,40 112,00 Citadines Munich Arnulfpark 112,80 112,80 124,60 131,20 127,20 127,20 Eurostars Grand Central 89,10 89,10 139,00 139, Regent 54,00 72,00 84,00 84,00 114,00 114,00 Leonardo Boutique Munich 80,10-89,10 89,10 98,10 98,10 Kings First Class 130,01 140,93 140,93 140,93 140,93 140,93 Average Rates 100,14 114,37 133,10 133,74 120,37 120,18 The table shows the average room rates researched among competitive hotels within a radius of 5km around the subject property Leonardo Munich Royal Update Q3 2017_NEU Page 41 of 49

55 APPENDIX 3: HOT EL PLAU SIBIL ITY CHEC K Useable Area: sq m Single rooms rooms Double rooms 412 rooms Junior Suites rooms Suites 12 rooms Number of rooms 424 pcs. Number of beds 848 pcs. Total useable area per room 56,20 m² Lodging rate: gross net Single room 0,00 Double rooms (1 person) 125,00 116,82 Double rooms (2 persons) 125,00 116,82 Junior Suites 0,00 Suite 300,00 280,37 max. room sale pcs. max. bed sale pcs. max. turnover net Double bookings included Double bookings (Doppelbelegungsquote) 1,5 Operation days 365 Occupancy rate 75,0% Turnover hotelrooms Average Room Rate 121,45 Room Yield / RevPAR 91,09 Restaurant & Bar/Lounge Restaurant Seats 420 pcs. Operation days 365 net Turnover/seat per day 30,00 25,21 Booking rate 20,0% Restaurant Turnover Restaurant und Bar Meetings and conferences Seats 700 pcs. Operation days 365 net Turnover / seat / day 50,00 42,02 Booking rate 40% Turnover Meetings and conferences Breakfast Price 19,00 15,97 Booking rate (in addition to the room occupancy rate) 90% Turnover Breakfast Miscellaneous Turnover miscellaneous (Newspaper, telephone, parking, others...) 5,00% Total turnover Hotel incl. FF&E Rent interest Hotel 32,50% Total rent incl. FF&E 32,50% average interest incl. FF&E 1.375,83 /room p. month incl. FF&E ,99 /room incl. FF&E 24,48 /sq m Leonardo Munich Royal Update Q3 2017_NEU Page 42 of 49

56 APPENDIX 4: PHOTOGRAPHS Property view from south View towards the terrace Lobby area Bar Restaurant Function room Leonardo Munich Royal Update Q3 2017_NEU Page 43 of 49

57 Stairwell to the ballroom (underground floor) Foyer next to ballroom Ballroom on underground floor Recreational area on underground floor Underground garage Utility areas on underground floor Leonardo Munich Royal Update Q3 2017_NEU Page 44 of 49

58 Passenger lift Hallway Lounge on 6 th floor View at the courtyard Sleeping area in a suit Living area in a suit Leonardo Munich Royal Update Q3 2017_NEU Page 45 of 49

59 Working area in a suit Bathroom in a suit Sleeping area in the royal suit Living area in the royal suit Dining/meeting room in the royal suit View towards the Olympic Park Leonardo Munich Royal Update Q3 2017_NEU Page 46 of 49

60 APPENDIX 5: IN VOLVEMENT IN PR EVI OU S VALUATIONS For the hotel Leonardo Royal Munich, we performed, as part of a separate instruction, the valuation for the hotel as of 31/12/2014 (effective date). The market value was calculated retrospective for market statistic purposes for the client. We also performed a market valuation as of 30/09/2015 and update valuations as of 31/03/2016, 30/06/2016, 30/09/2016, 31/12/2016, 31/03/2017, 30/06/2017 and 30/09/2017. Effective date Market Value Purpose/Comments 31/12/ million Retrospective value, increase of property yield, weaker hotel performance than in 2015, difference to value as of 30/09/2015 is 12.5% 30/09/ million Assessment of Market Value for accounting purposes in accordance with IFRS 13 Fair Value 31/03/ million Update desktop valuation for accounting purposes in accordance with IFRS 13 Fair Value 30/06/ million Update desktop valuation for accounting purposes in accordance with IFRS 13 Fair Value 30/09/ million Update desktop valuation for accounting purposes in accordance with IFRS 13 Fair Value 31/12/ million Update desktop valuation for accounting purposes in accordance with IFRS 13 Fair Value 31/03/ million Update desktop valuation for accounting purposes in accordance with IFRS 13 Fair Value 30/06/ million Update desktop valuation for accounting purposes in accordance with IFRS 13 Fair Value 30/09/ million Update desktop valuation for accounting purposes in accordance with IFRS 13 Fair Value We arrived at a value of 132,700,000 as of 30/09/2017. Compared to the value as of 30/09/2016 with 121,800,000 this is a change of about approx %. This change is predominantly driven by the dynamic real estate market in Germany, especially in Munich within good locations. The asset category hotel has shown a high dynamic in the last 2-3 years with more national- and international investors, who are keen on prime assets in this field Leonardo Munich Royal Update Q3 2017_NEU Page 47 of 49

61 APPENDIX 6: Berit Schumann VALUER S CV MOB DIR berit.schumann@colliers.com EDUCATION AND QUALIFICATIONS Executive MBA Real Estate Immobilienökonom (IRE BS) Dipl.-Wirtsch.-Ing. der Wohnungs- und Immobilienwirtschaft (FH) CIS HypZert(F) Chartered Surveyors (RICS) Colliers International Valuation GmbH Dachauer Straße München Germany PROFILE More than 10 years of experience in valuations of commercial real estate Certified appraiser HypZert (F) since 2010 Member of the Royal Institution of Chartered Surveyors since 2009 AREA OF EXPERTISE Berit has a wide scope of experience and further a deep knowledge in real estate valuations in the past 12 years of her working experience. Based on her education, a wealth of large scale valuation projects and experience in all points of valuation services her focus is on a fully customer service-oriented approach for various and individual needs in valuation and related services of national and international clients. TRACK RECORD Valuation of an office tower in Frankfurt/Main, Germany, with a total volume of about 400 m Valuation of an department store in Munich, Germany, with a total volume of about 160 m Valuation of a shopping center near Frankfurt/Main, Germany, with a total volume of 280 m BUSINESS AND EDUCATIONAL BACKGROUND /2015 Colliers International Valuation GmbH, Managing Director /2015 Colliers International Valuation GmbH, Senior Director / Appraiser Jones Lang LaSalle GmbH, Valuation & Transaction Advisory, Associate Director Cushman & Wakefield LLP, Associate 2009 University of Regensburg / IREBS International Real Estate Business School Master of business administration Real Estate; MBA 2003 FH Zittau (University of Applied Sciences) Diploma in engineer; Dipl.-Wirtsch.-Ing. (FH) Leonardo Munich Royal Update Q3 2017_NEU Page 48 of 49

62 Robert Becker MOB DIR Colliers International Valuation GmbH EDUCATION AND QUALIFICATION Dipl. Betriebswirt (FH) / Immobilienwirtschaft CIS HypZert (F) Chartered Surveyors (RICS) AREA OF EXPERIENCE Robert Becker is working as Director of the division Valuation & Transaction Advisory in Munich. In his role, he is responsible for the operating business as e.g. monitoring, distribution of tasks as well as carrying out own valuation reports (including portfolios and individual properties; e.g. retail/office/logistics/industrial/healthcare/site areas) for internal decision-, finance-, accounting- and transaction purposes. His remit includes both internal and external coordination of review mandates as well as quality management, to ensure the high quality of our reviews and reports. Robert could always build to his clients many years of customer-relations and contribute his excellent knowledge of the German, in particular Munich real estate market to provide, inter alia, aforementioned clients with high quality valuation reports. Robert is within the department, primarily responsible to ensure the quality of the reports/reviews as well as the continuous development and training of younger consultants (Junior - Senior). PROFILE More than 10 years of experience in valuations of commercial and residential real estate Certified appraisers HypZert (F) since 2013 Member of the Royal Institution of Chartered Surveyors since 2015 BUSINESS AND EDUCATIONAL BACKGROUND Seit 2017 Colliers International Valuation GmbH Director / Prokura Colliers International Valuation GmbH Associate Director / Prokura JLL, München Principal Consultant (Prokura), Valuation & Transaction Advisory JLL, München Senior Consultant, Valuation & Transaction Advisory JLL, Frankfurt Senior Consultant, Valuation & Transaction Advisory JLL, Frankfurt Consultant, Valuation & Transaction Advisory TÜV SÜD ImmoWert GmbH Stuttgart, employee King Sturge LLP (London, Berlin and Zagreb), employee Study: Dipl. Betr. (FH) / Immobilienwirtschaft, University of Applied Sciences Geislingen- Nürtingen 2008 One year abroad at the London South Bank University (Valuation & Investment) Subject area: Real estate; valuation/appraisal & investment Graduation: Dipl. Betr. (FH) / Immobilienwirtschaft Leonardo Munich Royal Update Q3 2017_NEU Page 49 of 49