NEW OFFICE SEARCH MEASURE THRICE CUT ONCE PREPARED

NEW OFFICE SEARCH. MEASURE THRICE & CUT ONCE PREPARED FOR NEKUSTAMAIS ĪPAŠUMS UN BŪVNIECĪBA OLGA KOZINA, MANAGING DIRECTOR, NEWSEC LATVIA 20. 04. 2012.

TENANTS’ MARKET. TENANTS’ HEAVEN? Domination in Leasing Tenants behavior 2006 -2007 2008 -2010 2011 Landlords' market Tenants' market Expanding. Increasing Shrinking. Relocations. demand Optimizing costs. Slight expansion Availability of space Lack of space High vacancy Improving occupancies Rents Growing Decreasing Stabilizing Lease structures Institutional. Long leases, minimum breaks, indexation, security mechanisms Weak. Short leases. Discounts. Improving Average tenants solvency Good Deteriorating. Low Slightly improving 2 9/30/2020 2012 ?

REASONS TO MOVE. UNSATISFACTION? • • • Location not suitable for the business profile Accessibility insufficient for clients or employees Obsolete premises Absence of necessary infrastructure Willingness to improve working environment for employees Inappropriate costs burden Expansion planned New office as a motivator for a longstanding company Current office was a temporary solution in terms of strict time constraints • Ownership change for existing premises • Lease contract close to expiring, new lease conditions • Centralization, merge 3 9/30/2020

DECISION TO MOVE. SET, READY, GO! • Target: 600 m² • - Who’s in charge: Shareholder, CFO, MD, secretary? In-house Facility Manager? RE professional? • Actions: - Checking web pages. - Calling. - Visiting. • Results: - Comparing apples with pears. 4 9/30/2020

PROCESS. PROBLEMS FACED. • Availability of space. • Timing. • Compliance of space to the needs. • Compliance of costs to the budget. 5 9/30/2020

PROBLEMS FACED. AVAILABILITY OF SPACE total office stock 0, 5 mio sq m ca 80 th sq m vacant criteria 1 criteria 2 - criteria n 1 -2 options

PROBLEMS FACED. TIMING DESIRED – YESTERDAY REALITY – UP TO FEW MONTHS AHEAD . zz y. y xx x x. y z y. z xx z z. . yy z . z y y. xx f g s es se es o i n n s t a i i i n o n le ti m io ties gn ci u f i t p e t i e o S r r i o n D p n g fi rior po f o e n i i p o D p ct iat fo e t & on l o i o e s t g S is d e s ra e y a N e l a n ep r An P n o i s 7 9/30/2020 . zz y. y xx n o M i ve

PROBLEMS FACED. COMPLIANCE OF SPACE TO THE NEEDS • Useful space vs paid areas (inefficient planning, corners, corridors, etc). • Floor layout - open space vs cabinet structure (depending on the business profile) • Size – sq m vs working stations • Availability of infrastructure (engineering and social, business infrastructure) • Technical requirements (availability, lack of capacities, etc) • Availability of parking • Availability of public transport access • Existing/possible internal finishing • Investments coverage 8 9/30/2020

PROBLEMS FACED. BUDGET Turnover/rent ratio Office Rent rates, Riga, EUR/sqm 25 20 15 A grade 10 B grade 5 0 2006 2007 2008 2009 2010 2011 2012 • • • 9 Accordance to financial capabilities (sales/rent) Not only rental costs but also property management, maintenance and utilities budget Maintenance costs allocation/calculations Clear rent review mechanisms Parking costs, any additional costs Guarantees asked by the Landlord 9/30/2020

RESULT. DO I REALLY NEED IT? ! • Wasted time • Wasted money and resources • Deadlock 10 9/30/2020

BACK TO BASICS. REAL ESTATE FOR OCCUPIERS An integral part of the overall Company’s business strategy 1. Clear reasons to move 2. Clear definition of needs & priorities 3. Setting up the plan 11 9/30/2020 should be planned thoroughly Þ avoid wasting your resources Þ Identification of both current and future bbusiness needs Þ realistic timetable, accountable milestones, clear targets

BACK TO BASICS. DEFINITION OF NEEDS & PRIORITIES • • • 12 Business profile – proximity to clients, resources, magistral roads, business infrastructure etc Number of working places / specifics of daily work – necessity for meeting areas, private and public areas, social areas, archives, server rooms, etc Layout - open space vs cabinet system Necessity for infrastructure/engineering – not only availability but also capacities Parking and public transport accessibility Requirements to working environment – global guidelines for international companies, local legislation, opening windows, healthy climat (moisturising system), daylight etc Budget – costs & investments Flexibility – major lease covenants Image Forecasted need for expansion 9/30/2020

BACK TO BASICS. LIAISING WITH PROFESSIONALS • Assistance in defining the needs and setting priorities (through interviews, employee surveys, etc. ) • Assistance in understanding the market • Ensuring the best solution (in-depth analysis of options, comparing apples with apples, incl. planned or theoretical vacancies) • Predicting underwater stones and assistance in mitigating risks • Assistance in negotiations • Saving money • Saving time 13 9/30/2020

BACK TO BASICS. CONCLUSIONS • No uniform solution - a tailored approach is necessary in each case • Get well prepared – most of problems faced are not about the Landlords or the market, but about structured approach • Riga office market is small – any solution is a synergy of compromises • Change from Tenants’ to Landlords’ market might happen very fast – same as it was vise-versa 14 9/30/2020

NEWSEC GROUP IN BRIEF • Newsec Advice – A leading property advisor in Northern Europe with 70 professionals and access to more information than any player – Valuation value over 50 MEUR last 12 months • Newsec Asset Management – The leading asset manager in Northern Europe with about 400 professionals and offices throughout the region – Manage over 1 000 properties representing over 7 million sq m • Newsec Transactions – Transaction team of 30 professionals specializing in investment and corporate finance – Offering tailor-made property-related financial and strategic advisory services – A leading advisor within wind power • Lease volume of over 350 000 sq m last 12 months 15 9/30/2020

TRACK RECORD - AGENCY Agency Team, Latvia – Major letting deals 2010 - 1011 Client / project: Type: Size (sq. m): Tieto Office 7 000 Transcom Office 1 700 Inspecta Office 900 Microsoft Office 900 Mepha Office 500 ERGO Office 2000 Karcher Retail 550 Agency Team, Latvia – Major clients 2010 - 1011 Selected reference projects, Latvia 16 9/30/2020

OLGA KOZINA MANAGING DIRECTOR, LATVIA Direct + 371 675 08405, Cell + 371 296 97989 O. Kozina@newsec. lv NEWSEC Latvia Zaļā iela 1 Rīga, LV-1010 Tel: +371 6750 8400 Fax: +371 6750 8401 17 9/30/2020