NMA Conference Real Estate Opportunities

Presenter: Chris Laxton13-14th January 2011

This document is for investment professionals only. The content is not approved for use with retail investors or pension scheme members.

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Where are the opportunities?

Over

Neutral

Under

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But…..important to remember

• Stock selection remains key

• There are multiple ways to access each market

• The market characteristics differ a lot

• On-the-ground presence is critical

Gable Lodge, 30 The Bishops Avenue, N2

Gracechurch Street, London EC3

Croft Industrial Estate Bentall Centre, Kingston

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UK

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The party’s over…

• The recovery in perspective

• The opportunities ahead

• The future performance prospects

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The recovery in perspective

-44%

+16%

Source: IPD UK Monthly Index as at August 2010 Past performance is not a guide to the future

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Opportunities – Central London

Exchequer Court, St Mary Axe, London

Gracechurch Street, LondonAviva Life and Pensions UK LimitedAviva Linked Property Fund

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Our view of the next five years

All Property 7.4%pa

Source: Aviva Investors November 2010Past performance is not a guide to the future.

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Table 1: England’s performance away and subsequent three year total return

Past performance is not a guide to the futue.

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Continental Europe

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Case for continental European RE; select carefully

Relatively low vacancy and future completion data for selected marketsRelatively low vacancy and future completion data for selected markets

Source: Property Market Analysis (Q2 2010 *Q1 2010)

Past performance is not a guide to the future.

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Case for continental European RE; select carefully

Rank Market Score Tier

1 Australia 1.22 1

3 United Kingdom 1.24 1

4 Sweden 1.25 1

8 France 1.28 1

10 Germany 1.38 1

11 Belgium 1.46 1

14 Spain 1.58 2

21 Italy 1.89 2

22 Poland 1.99 2

29 Greece 2.6 3

Jones Lang LaSalle Transparency Index 2010 PMA Liquidity Index 2009 (London City = 100)

Transparency and attractiveness for international investorsTransparency and attractiveness for international investors

Source: Jones Lang LaSalle, LaSalle Investment Management, as at 30 June 2010

Source: Property Market Analysis 2009

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Case for continental European RE; select carefully

Sample opportunities and recent market transactions*Sample opportunities and recent market transactions*

* Indicative recent transactions and current market opportunities.

Rue la Perouse, Paris CBD Paris 16eme Offices: 3,300 sqm Fully let Price: c. €32m Yield: 6.25%

Hoechst Pedestrian Zone, Frankfurt• Fachmarktzentrum• Retail: 6,490 sqm• Fully let and recently completed• Price: c. €21m• Yield: c. 6.2%

Paradiset 29, Stockholm• Date: H1 2010• Retail 13,000 sqm and offices

10,000 sqm• Price: c. €85m• Yield: c. 6%

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Case for continental European RE; select carefully

Focus on core continental European sectors shows better and consistent total return prospectsFocus on core continental European sectors shows better and consistent total return prospects

Source: Aviva Investors/PMA, August 2010. Past performance is not a guide to the future.

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North America

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Real estate – reason for improving optimism

Source: Moodys/Real CPPI, April 2010

Pas performance is not a guide to the future.

Source: NCREIF, Q1 2010

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Asia Pacific

JapanSouthKorea

Taiwan

Philippines

Australia

New Zealand

Indonesia

Singapore

Malaysia

Vietnam

Hong Kong

Thailand

China

India

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Big region but focus on core markets

Tokyo

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Growth coming through on the ground

Asia’s emerging wealthy go shopping Asia’s emerging wealthy go shopping

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Growth coming through on the ground

70% of China population – “Middle-class” in 10 years70% of China population – “Middle-class” in 10 years

*Source: UN World Population Prospects 2008

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Growth coming through on the ground

Singapore – the world’s second busiest port*Singapore – the world’s second busiest port*

*Source: Lloyds List as at August 2010

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Growth coming through on the ground

Source: PREI

Australia providing resources for Asia’s urbanisationAustralia providing resources for Asia’s urbanisation

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Growth coming through on the ground

2010 Global rank Financial centres

1 London

2 New York

3 Hong Kong

4 Singapore

5 Tokyo

6 Shanghai

7 Chicago

8 Zurich

9 Geneva

10 Sydney

Source: Z/Yen biannual Index of 75 international financial centres as of Sept 2010

Asia Pacific’s emerging financial centres…. moving towards a service economyAsia Pacific’s emerging financial centres…. moving towards a service economy

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Extent of market falls and recoveries

Source: Property Market Analysis, October 2010Past performance is not a guide to the future

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Why is Australia attractive?

12-14 Esplanade, Perth(Aviva Investors International Property Fund)

Proxy for China growth storyProxy for China growth story

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Why is Australia attractive?

Castlereagh Street, Sydney, Australia (Aviva Investors International Property Fund )

Diverse economy; quality retail & logisticsDiverse economy; quality retail & logistics

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Why Japan remains relevant

Large and liquid office market Large and liquid office market

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Emerging values in Japan

Location: Tokyo, Central 5 wards

Occupancy rate: 100%

NOI cap rate: 6.0%

Seller type: Lender foreclosure

Location: Tokyo, Central 5 wards

Occupancy rate: 100%

NOI cap rate: 6.0%

Seller type: Fund exit

Attractive yields available at presentAttractive yields available at present

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Singapore quick rebound

Office In the heart of Singapore CBD

Aviva Investors International Property Fund and Asia Pacific Property Fund hold adjoining assets

Commerce Point, No. 3 Philip Street,Singapore (currently Aviva Investors InternationalProperty Fund)

No. 1 Philip Street, Singapore (Asia Pacific Property Fund)

Market improvements + active asset management

Occupancy rate (%) as of June 2009 c.78%*

Occupancy rate (%) as of October 2010 100%

* Weighted average of 1 Phillip Street and Commerce Point

Office market has rebounded stronglyOffice market has rebounded strongly

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China and India

_________ ……. But not yet!_________ ……. But not yet!

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Risks

3232

Team

Fund Management

StrategyAsset Management

REMMListed Securities

Business Development

Significant team based in Singapore

9 languages and 6 dialects spoken

More than half a century of accumulated real estate experience

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Investment options

Direct

Listed (REITs)

Multi-manager

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Summary - opportunities

• Stock selection is key

• Early stages of recovery

• Core markets attractive

• Most attractive real estate market globally

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Important information

Except where stated as otherwise, the source of all information is Aviva Investors as at 30 September 2010.

Unless stated otherwise any opinions expressed are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature.

Where a Fund is invested in overseas markets or holds currencies other than sterling, then currency exchange rate movements may cause the value of your investment to fall as well as rise. The value of an investment in the fund and any income from it may go down as well as up, and the investor may not get back the original amount invested. Past performance is not a guide to the future. Funds that invest in property related securities (equities) can provide high returns over the medium to long-term, but such returns will be subject to greater rises and falls than investing in lower-risk assets.

Where funds are invested in real estate, investors may not be able to switch or cash in your investment when they want because real estate in the fund may not always be readily saleable. If this is the case we may defer a request to switch or cash in units. It should also be borne in mind that the valuation of real estate is generally a matter of valuers’ opinion rather than fact.

Aviva Investors is a business name of Aviva Investors UK Funds Services Limited, Registered in England No. 1973412. Authorised and regulated by the Financial Services Authority. FSA Registered No. 119310. Registered address: No. 1 Poultry, London EC2R 8EJ. An Aviva company. www.avivainvestors.co.uk

CI061503 01/2011