Resolution Property Buys Galeria Pomorska

Second major Continental retail investment for Res III Fund in 2010

CB Richard Ellis advises Resolution on 20,000-sq-m centre purchase

Warsaw, 14th June 2010 - Resolution Property, the leading European real estate investor, has purchased Galeria Pomorska in Bydgoszcz, Poland for €50.75 million, on behalf of Resolution Real Estate Fund III. Resolution was advised by CB Richard Ellis.

The 20,000-sq-m Galeria Pomorska is one of the best-established shopping centres in Bydgoszcz, Poland’s 8th largest city, boasting a first-class line up of tenants including Euro Rtv Agd, Empik, Reserved, Smyk, H&M, Almi Décor, CCC and Carry. It adjoins a 9,890 sq m Carrefour hypermarket, not included in the purchase.

Resolution aims to capitalise on Galeria Pomorska’s established customer base and the strong economic growth potential of Bydgoszcz, via an active asset management strategy. This will include tenant re-engineering, remerchandising and the opportunity to expand the centre in line with a recently-approved masterplan that allows for a 12,000-sq-m extension to the existing mall.

Peter Todd, Director at Resolution Property, said: “Having monitored the Polish retail market for some time, our decision to acquire Galeria Pomorska was driven by its strong income stream coupled with the opportunity to unlock increased returns through Resolution’s long-established active management strategy. This is against the backdrop of Poland’s highly resilient economy and the recognised growth potential of the city of Bydgoszcz.”

Patrick O’Gorman, Head of Capital Markets Poland, CB Richard Ellis, said: "This transaction illustrates the significant latent value that is available in the Polish retail investment market when compared to other parts of Europe: buying strong real estate at attractive levels of return."

The purchase represents an initial yield of 10%.

Galeria Pomorska is Resolution’s second purchase in mainland Europe in recent weeks, following its acquisition of McArthurGlen Troyes from Henderson Global Investor’s European Outlet Mall Fund for €85.5 million. Resolution Real Estate Fund III currently has close to €1.5bn of spending power to invest across mainland Europe and the UK.

The vendors were Babcock & Brown, who were advised by Balmain Asset Management. Balmain will be retained by Resolution as its local asset management partner.

About Resolution Property

- Background - Resolution was founded in 1998 with the specific aim of investing in UK and European commercial real estate that offers scope for high returns through a combination of good initial stock selection, active management, refurbishment and redevelopment potential.

- First Capital Raising - £100m: Resolution’s investment team invested in retail, office and industrial assets, concluding landmark acquisitions in the UK such as the purchase of Greater London House, Camden, London, in 1998 and the Forge Shopping Centre in Glasgow

- Second Capital Raising - Resolution successfully closed its £332m second capital raising in February 2004. This is now fully invested in UK and European properties.

- Third Capital Raising – An €808m (£600m) capital raising (Resolution Real Estate Fund III L.P.) was completed in December 2007, with commitments from an enlarged investor base including some of the foremost US endowments and foundations, and leading European investors.