Property report

PROPERTY REPORT

Income Generating Fund 2

Updated 19.12.2012

PROPFUND 2 – DECEMBER 2012 UPDATE

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Since the launch of the “Propfund 2 – Residential Fund” earlier this year over 40 investors have so far joined the fund allowing us to complete over €4,314,500 of property acquisitions.

The portfolio currently includes over 62 apartments in 4 separate apartment blocks which are fully rented generating a combined rental income of €352,779 which is a very attractive rental yield of 8.18%. Yet again income is clearly a priority for many investors, so our Residential property funds continue to attract a wide range of investors looking for a safe income generating investment.

Propfund 2 has secured over 80% loan-to-value financing from German banks with interest rates as low as 3.3% fixed for the next 10 years. All projects have been purchased below the current market

value and the fund managers expect a steady increase in the rental income and the value of the portfolio in the next few years.

Market conditions in Germany are still very strong and the outlook for 2013 is very positive. Property prices and rents continue to increase and interest rates are at an all time low making for excellent buying conditions. Propfund 2 will continue to purchase similar properties into the fund during the first few months of 2013 and is inviting new investors to share in the success of this fast growing property portfolio.

Propfund Germany 2 is open for subscription: Invest from €30,000

SOLID RETURNS FORECAST FROM EXCELLENT ACQUISITIONS MADE SO FAR THIS YEAR!

PROPERTY UPDATE – THE STORY SO FAR… DECEMBER 2012

No. of units 62

Purchase price €4,314,500

Current value* €4,586,127

Rental income €352,779

Rental yield 8.18%

* Based on a market resale factor of 13

APARTMENT BLOCKS 4

As an investor in Propfund Germany you will benefit from a forecasted dividend of 7-10% PER YEAR. Over a period of 10 years, investors can expect to earn up to 170% RETURN over and above their initial investment.

PROPFUND 2 ACQUIRED PROPERTIES AND PERFORMANCE DATA

TOTAL Freiberg Schönefeld Neukölln Treptow-KöpenickPurchase Price 12.23 4,314,500 € 536,500 € 1,698,000 € 1,280,000 € 800,000 € Rental income 6.35 352,779 € 68,868 € 128,456 € 93,535 € 61,920 € Area 4,627 qm 1,084 qm 1,611 qm 1,173 qm 759 qmnotary fee 1.37% 59,131 € 6,706 € 21,225 € 19,200 € 12,000 € stamp duty 4.81% 207,678 € 18,778 € 84,900 € 64,000 € 40,000 € due dilligence 0.28% 12,000 € 3,000 € 3,000 € 3,000 € 3,000 € refurbishment 3.24% 140,000 € 140,000 € - € - € - € Bank fee 0.59% 25,600 € 5,500 € 5,000 € 9,100 € 6,000 € Commission 4.44% 191,548 € 31,922 € 60,619 € 60,928 € 38,080 €

Total 14.03 1069.97 4,950,457 € 742,406 € 1,872,744 € 1,436,228 € 899,080 € Total interest repaymentFinance 1a 3.33% 1.95% 3,410,000 € 550,000 € 1,350,000 € 910,000 € 600,000 € Finance 1b - € - € - € - € - €

Equity 1,540,457 € 192,406 € 522,744 € 526,228 € 299,080 € Rent 8.18% 352,779 € 68,868 € 128,456 € 93,535 € 61,920 € property management 4.50% -16,652 € -3,099 € -5,781 € -4,677 € -3,096 € interest rate 3.33% -113,695 € -22,165 € -43,200 € -30,030 € -18,300 € management 4.00% -14,111 € -2,755 € -5,138 € -3,741 € -2,477 € administration 4.10% -14,464 € -2,824 € -5,267 € -3,835 € -2,539 €

Costs -158,922 € -30,842 € -59,385 € -42,283 € -26,412 € Return before capital and reserve 193,857 € 38,026 € 69,071 € 51,252 € 35,509 € Gross Yield on equity 12.58% 19.76% 13.21% 9.74% 11.87%Sinking fund 3 €/qm 0.80% -12,269 € -3,252 € -3,222 € -3,518 € -2,277 € Repayment 1.95% -66,380 € -11,000 € -27,000 € -16,380 € -12,000 €

Return after capital and reserve 115,208 € 23,774 € 38,848 € 31,354 € 21,232 € Payout based on this investment 7.48% 12.36% 7.43% 5.96% 7.10%

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Units 24

Purchase price €1,698,000

Rental yield 7.56 %

Rental Income €128,456

Units 11

Purchase price €536,500

Rental yield 12.8 %

Rental Income €68,868

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Freiberg, Germany

A beautiful classical building in the centre of Freiberg consisting of only 11 apartments which are fully rented. The inside of the building was completed renovated in 2012 and €140,000 will be spent on renovating the exterior in 2013. The project was purchased from a local bank at well below market value. With a rental yield of 12.8% .

Berlin, Schönefeld

Residential complex in Berlin-Schönefeld, consists of 24 apartments located right beside the new BBI International Airport of Berlin. Propfund 2 acquired each house for 1.054 €/sqm and no refurbishment is required. The average of the net rent is 6,51 €/sqm whereas new tenants will pay up to 7,76 €/sqm, allowing a lot of potential for future growth.

Units 19

Purchase price €1,280,000

Rental yield 7.31%

Rental Income €93,535

Units 8

Purchase price €800,000

Rental yield 7.74%

Rental Income €61,920

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Berlin, Neukölln

Residential apartment block consisting of19 apartments in a popular residential area in Berlin. Rental yield of 7.31% is higher than average and 71% LTV financing has also been agreed with fixed interest rates of 3.0 %. All apartments are in very good condition and with no refurbishment required.

Berlin, Treptow-Köpenick

Property is located very close to the river Spree, in a densely populated district which is in the catchment area of the city centre and Berlin’s new international airport. All 8 apartments are rented by long term tenants. The building is in great condition and was fully refurbished in 2008 making each apartment an attractive family home.

INVEST W30,000

FINANCIAL BREAKDOWN

FINANCIAL BREAKDOWN

FINANCIAL BREAKDOWN

FINANCIAL BREAKDOWN

INVEST W100,000

INVEST W50,000

INVEST W250,000

Resale forecast 13 €108,793

Plus Cash Reserve incl. 50% sinking fund 22,495

Less Balance of the Mortgage - 248,037

Profit from the resale after paying back Mortgage 263,251

Less Initial equity repaid to Investors - 230,000

Net Profit for Distribution 233,251

Fund Manager profit share 10% - 23,325

Investor profit share 99,75% 229,926

Anual Payouts over term 84.75% 225,425

Total Investor profit before tax 255,351

184.50%

Resale forecast 13 €362,644

Plus Cash Reserve incl. 50% sinking fund 28,316

Less Balance of the Mortgage - 2160,123

Profit from the resale after paying back Mortgage 2210,837

Less Initial equity repaid to Investors - 2100,000

Net Profit for Distribution 2110,837

Fund Manager profit share 10% - 211,084

Investor profit share 99.75% 299,753

Anual Payouts over term 84.75% 284,750

Total Investor profit before tax 2184,503

184.50%

Resale forecast 13 €181,322

Plus Cash Reserve incl. 50% sinking fund 24,158

Less Balance of the Mortgage - 780,061

Profit from the resale after paying back Mortgage 2105,418

Less Initial equity repaid to Investors - 250,000

Net Profit for Distribution 255,418

Fund Manager profit share 10% - 25,542

Investor profit share 99.75% 249,877

Anual Payouts over term 84.75% 242,375

Total Investor profit before tax 292,252

184.50%

Resale forecast 13 €906,610

Plus Cash Reserve incl. 50% sinking fund 220,789

Less Balance of the Mortgage - 7400,307

Profit from the resale after paying back Mortgage 2527,092

Less Initial equity repaid to Investors - 2250,000

Net Profit for Distribution 2277,092

Fund Manager profit share 10% - 227,709

Investor profit share 99.75% 2249,383

Anual Payouts over term 84.75% 2211,875

Total Investor profit before tax 2461,258

184.50%

Based on a forecast rental increase of 2.5% per annum and a resale factor of 13 times the annual rent, Propfund Germany 2 can generate significant profits for its shareholders. Please see below the latest 10 Year forecast based on investments ranging from €30,000 – €250,000

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Total annual payments over 10 years holding period 69.1% €20,725

Plus lump sum after 10 years 100% €29,926

Plus your initial investment back 100% €30,000

That’s a total return of: 269% (€80,651)

Total annual payments over 10 years holding period 68.2% €34,083

Plus lump sum after 10 years 100% €49,877

Plus your initial investment back 100% €50,000

That’s a total return of: 268% (€133,960)

Total annual payments over 10 years holding period 67.5% €67,479

Plus lump sum after 10 years 100% €99,753

Plus your initial investment back 100% €100,000

That’s a total return of: 267% (€267,232)

Total annual payments over 10 years holding period 67.1% €167,667

Plus lump sum after 10 years 100% €249,383

Plus your initial investment back 100% €250,000

That’s a total return of: 267% (€677,050)

Propfund Germany 2 GmbH & Co. KGFriedrichstraße 82,10117 Berlin-Mitte

T: +49 (30) 499 05 09 50E: [email protected]

www.propfund.com