The Belgian business center market is estimated at around 120 centers with 10,000 workstations. Three-quarters are located in Brussels, Antwerp, and Ghent. The market has grown slowly at around 3.5% annually, except for 2006-2008 when growth exceeded 15%. The financial profiles of international, private, and semi-public business centers differ substantially. International centers have the highest turnover but rely on renting buildings. Private centers invest heavily in property but have declining profitability. Semi-public centers own most of their property but do not generate consistent operational profits. Around half of all centers operate at a loss.

1. De power of professional financial management DRAFT VERSION – FOR DISCUSSION PURPOSES ONLY BUSINESS CENTER MARKET IN BELGIUM MARKET ANALYSIS 2010 Presentation BOBCA, 5/10/2011 fin POWER

3. See list in annex

4. Research by a maximum of means

5. Growing market  if you know new centers, please let me now.

6. What is a business center ?

7. Uses this as name of his business

8. Including ‘bedrijvencentra’, excluding ‘innovation centers’/incubation centers

9. !! Serviced offices = full time reception services

10. Used figures :

11. Published financial data

13. 29 ‘BC’s’, bedrijvencentra

14. 9 Regus

15. 5 NCI/Multiburo

16. 7 groups with 2-4 centers

17. 56 ‘individual business center owners

18. First estimate of the market (appr. 90 % reliability)

19. 3500 individual offices, 10.000 workstations ?

20. 200-250 meeting rooms

21. Appr. 3 - 5000 virtual offices

22. Listing is not ‘clear-cut’

23. No innovation/incubation-centers

24. No ‘co-working-spaces

25. Not included : incubation/innovation centres, > 30 in Belgium – mainly in the Walloon region.We have in Belgiumappr. 120 business centers, of whichappr. 50 % are individualcenters.

27. 95 % of the internationally owned

28. 85 % of the privatly owned

29. 30 % of the semi-public-initiatives

30. The penetration in other cities is very low, mainly private and semi-public initiatives3/4th of all business centers are located in the three main cities of our country.

32. Only 1 on 3 business centers is located in the centre of the cities

33. Appr. 20 business centers are located in industrial site

34. Airway and motorways only attract a minority of business centers Nearly 50 % of the business centers are located at the suburban office-area’s of the cities.

35. Market appr. 50 Mio € International BC 45 % of market Private national BC 35 % Public BC ca. 20 % Growth rhythm YAGR ca. 3.5 % =/= inflation ! Private BC > 6 % and stable growth rhythm, higher then inflation Semi-public BC, 2 %, lower then inflation International BC, 3.5 % but concentrated in 2006-2008. The market growth is very low for a ‘new en dynamic’ market II. FINANCIAL DATA OF BUSINESS CENTER MARKET2.1. Turnover estimation

36. More correct then turnover (estimated) Figures of 2010 representative, except for ‘international’ (Regus 2010 still not available) Growth rhythm remains low 2001-2010 : 3-4 % 2006 – 2008 : > 15 % 2009/2010 : no growth ! International players have relatively lower added value (less ‘own’ building, see further) The market growth was only substanial in 2006-2008, 2009 and 2010 were years without market growth ! II. FINANCIAL DATA OF BUSINESS CENTER MARKET2.1. Added value

37. Semi public BC nearly always own their property Private BC are the main investors in property from 2006-07 on. International BC do not own the buildings they operate in. The three different market types have different ‘business models’ II. FINANCIAL DATA OF BUSINESS CENTER MARKET2.3. Fixed assets (Material fixed assets)

38. The market ‘owns’ more equity then it has turnover … The ‘semi-public’ market has four times more equity then it makes turnover The private market realizes 1.5 € turnover for every € equity The international players realize the highest turnover with a maximum of leverage The financing structure of the different players in the market is very different. II. FINANCIAL DATA OF BUSINESS CENTER MARKET2.4. Equity

39. The three ‘business segments’ have a different financing structure : The ‘semi-public’ market mainly (80 %) finances itself with equity The private market has a gearing of appr. 200 % (2 € loan financing for 1 € equity) This indicates that appr. 70-80 % of the investments are financed The international players limit their financing and equity by renting their buildings. The financing structure of the different players in the market is very different. II. FINANCIAL DATA OF BUSINESS CENTER MARKET2.5. Financial debt

40. The number of personal active in this market is appr. 225 people Excluding the appr. 50 – 100 ‘fee-earning managers/owners’ The number of personnel is growing at the same rhythm as the turnover does (3.5 %/year) International owners have relatively more personnel then the semi-public owners The semi-public initiatives have relatively less personal then the private and international business centers II. FINANCIAL DATA OF BUSINESS CENTER MARKET2.6. Personel

41. The different segments of the market present totally different operational profitability : International BC are (very) profitable the last years Private players have a declining profitability the last years The semi-public market do not generate operational profits as a whole. 58 out of 122 business center lose money, this 50 % is relatively stable during the last 10 years. 1 out of 2 business centers do not make an operational profit ! II. FINANCIAL DATA OF BUSINESS CENTER MARKET2.6. Operational profit

42. The international BC do make profit after taxes The private BC are also making losses, due to the limited operational profitability and the substantial financial costs The semi-public business centers make net profit due to positive financial revenues and extra-ordinary income (sale of property). 40 – 45 % of the business centers have a negative net result. II. FINANCIAL DATA OF BUSINESS CENTER MARKET2.6. Net profit after taxes

43. Conclusions The business center market has not grown in 2009 and 2010 After double digit growth in 2007 and 2008 The ‘business models’ of the different kind of shareholders differ substantially : International players are profitable, without investing in fixed assets Private investors are operationally profitable, and focus mainly on the long-time value of the owned building Semi-public owners are making losses but are very solvent and liquid, and they can survive through financial and extra-ordinary income