Kuwait Financial Centre K.P.S.C. " Markaz " Markaz Real Estate Fund (MREF) May 2014

1. Kuwait Financial Centre K.P.S.C. "Markaz"Markaz Real Estate Fund (MREF)May 2014 Asset Management | Investment Banking

2. Real Estate Investment Opportunity Table of Contents • Kuwait Market Overview 4 • Markaz Added Value 6 • MREF Terms 8 • MREF Asset Allocation 10 • MREF Operational Performance 12 • MREF Financial Performance 14 • MREF Performance VS Comparables 16

3. Real Estate Investment Opportunity Kuwait Market Overview

4. Real Estate Investment Opportunity Kuwait Market Overview The local real estate sector in Q1-2014 witnessed stability in terms of rents and value for all sectors. During 2013, Investment, industrial and commercial (retail) sectors increased by 5-10%, while the commercial office sector increased by 3-5% in value due to the increase in occupancy and rental rates. Investment sector properties values stabilized during Q1-2014, after increase in rents and values in 2013 by 7% and 10% respectively. In Salmiya and Hawalli cap rates for violation-free buildings range between 6.25 – 6.75% while it ranges between 6.75 – 7.25% in Mangaf and Mahboula. Industrial properties in Shuwaikh and Al Rai areas stabilized in terms of value and rent during Q1-2014, after an increase in terms of values by 8.5-10% during 2013. Prime location properties are currently offered at 8.5-9% cap rate while secondary street properties are being offered at 9-10% cap rate. Commercial office & Retail sector witnessed an increase in value from property evaluators in 2013, and currently yielding 6.25-7.25% cap rate depending on the location of the building.

5. Real Estate Investment Opportunity Markaz Added Value

6. Real Estate Investment Opportunity Markaz Added Value • Markaz has built an expertise in real estate and specifically in income generating real estate, having made for the past decade prudent quality investments and managed properties efficiently yielding stable income and generating above market returns to its investors. • Markaz added value lies in: • Acquiring valuable properties selecting sectors based on supply/demand, location based on market trends and appeal to end-users. • Managing Acquisition Risk carrying thorough legal, technical, operational and commercial due diligence on target properties. • Managing Investment Risk through balancing the fund exposure sectorial and geographical wise. • Efficiently managing acquired Properties through improving rent levels, improving collection rates, reducing vacancy, maintaining the properties, supervising operation expenses and creating value through value-added activities.

7. Real Estate Investment Opportunity Markaz Real Estate Fund “MREF” Terms

8. Real Estate Investment Opportunity Markaz Real Estate Fund “MREF” Terms MREF is an open ended fund, investing mainly in income generating properties with the aim of generating stable income and returns through prudent acquisition, management and disposal of properties in the most promising segments of the real estate marketin Kuwait. Term: Open ended, operational since 2003. Distribution:Monthly dividends equal to 7% pa on nominal unit value (one KD) Subscription:Monthly on NAV Redemption:Every 6 months from subscription date Leverage: 0% Fees: Placement fees: 2% Management fee: 10% of net income (equivalent to c. 0.4% of net assets in 2013) Carried interest: 20% of net realized income over 8% p.a. required return to unitholders NAV: KD 1.524 as of May 2014

9. Real Estate Investment Opportunity MREF Asset Allocation

10. Real Estate Investment Opportunity MREF Asset Allocation MREF invested in a diverse portfolio of real estate properties in low risk sectors and high concentration areas within the state of Kuwait. MREF holds a balanced portfolio of 43 properties. Properties are distributed across sectors and governorates. Fund Net Assets Value reached KD 116m as of May-2014.

11. Real Estate Investment Opportunity MREF Operational Performance

12. Real Estate Investment Opportunity MREF Operational Performance • Fund assets are managed efficiently: • Increased monthly gross income from KD 50K to 467.5K • Improved collection from 75% to 87% • Maintained high occupancy (85% to 94%)

13. Real Estate Investment Opportunity MREF Financial Performance

14. Real Estate Investment Opportunity MREF Financial Performance MREF’s prudent and systematic strategy allowed it to weather the downturn and yield a solid performance delivering above average return to its investors. Return Since Inception: +129.12% Average Annual Return: +9.31% As of May 14 *As of May-14

15. Real Estate Investment Opportunity MREF Performance VS Comparables

16. Real Estate Investment Opportunity MREF Performance VS Comparables The fund’s prudent investment strategy and the active management of assets allowed MREF to outperform other funds while MREF operates at zero % leverage.

17. Kuwait Financial Centre K.P.S.C. "Markaz"P.O. Box 23444, Safat 13095State of KuwaitTel: +965 2224 8000 Fax: +965 2242 5828 Email: info@markaz.commarkaz.com