Sept 211 Nov 211 Jan 212 Mar 212 May 212 July 212 Sept 212 Nov 212 Jan 213 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Indice Italy Retail, Q3 215 Investment still in slow motion, but interest in developments grows 6.5% 5.5% 85 Mq A 3 M Euro Chart 1: Italian consumer confidence index evolution *The arrows indicate a change on the previous quarter. 12 11 1 9 8 7 6 RETAILERS STILL VERY ACTIVE. LACK OF SPACE SLOWING DOWN EXPANSION AND REPOSITIONING OF THE RETAIL NETWORK, BUT INTEREST GROWS. Retail investments take a step backwards again in Q3, but pipeline volume remains high, giving hope for significant improvements during the final quarter of the year. Retail sales trend consolidates: in the first eight months of the year the CBRE sample of galleries shows a growth of between 3-4% annually. The internal demand component improves, supporting GDP growth. Consumer confidence also improves again in September. The signs of improvement seen in the previous quarter for development activity continued after the summer. Despite no completion of projects under construction, the pipeline is growing. Interest in the south of the country returns shyly. Demand from retailers continues to focus on major cities, with Milan at the head, and on dominant centres. Q3 215 CBRE Research 215 CBRE Spa, 1
Oct 211 Dec 211 Feb 212 Apr 212 June 212 Aug 212 Oct 212 Dec 212 Feb 213 Apr 213 June 213 Aug 213 Oct 213 Dec 213 Feb 214 Apr 214 June 214 Aug 214 Oct 214 Dec 214 Feb 215 Apr 215 June 215 Aug 215 May 212 July 212 Sept 212 Nov 212 Jan 213 Mar 213 May 213 July 213 Sept 213 Nov 213 Jan 214 Mar 214 May 214 July 214 Sept 214 Nov 214 Jan 215 April 215 June 215 Q2 211 Q3 211 Q4 211 Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Q2 213 Q3 213 Q4 213 Q1 214 Q2 214 Q3 214 Q4 214 Q1 215 ECONOMIC OUTLOOK Chart 2: Italy GDP evolution Change (%) 2 1 1-1 -1-2 -2-3 -3-4 Source: ISTAT, Q3 215. Chart 3: Italy index of retail trade sales Index 99 98 97 GDP 96 95 94 93 Source: ISTAT, Q3 215. RETAIL SALES Chart 4: Italy unemployment rate over time (%) 15 13 11 9 7 Source: ISTAT, Q3 215. Q3 215 CBRE Research 215 CBRE, Spa 2
GLA, sq m N units GLA sq m, RETAIL SUPPLY Chart 5: Retail stock by format type (GLA > 1, sq m), Q3 215 FOCs 4% Retail Park 9% Other types of format 1% Shopping Centres 86% Chart 6: Projects under construction as at September 215, by type (including extensions) Shopping Center Retail Park Other concept 3 25 2 15 1 5 215 216 217 218 Source : CBRE Research, Q3 215. Chart 7: New shopping centre development evolution (GLA > 1, sqm) in Italy and projects under construction 1.2 1. 8 6 4 2 27 28 29 21 GLA sqm (new stock) GLA sqm (UC) N units 211 212 213 214 215 216 217 218 45 4 35 3 25 2 15 1 5 Q3 215 CBRE Research 215 CBRE Spa, 3
Q3 25 Q1 26 Q3 26 Q1 27 Q3 27 Q1 28 Q3 28 Q1 29 Q3 29 Q1 21 Q3 21 Q1 211 Q3 211 Q1 212 Q3 212 Q1 213 Q3 213 Q1 214 Q3 214 Q1 215 Q3 215 Indice base Q1 25 = 1 DEMAND AND RENTS Chart 8: Evolution of prime high street rents, Rome and Milan 3, 25, Roma HS Milano HS 2, 15, 1, 5, Q3 215 CBRE Research 215 CBRE, Spa 4
Q1 7 Q2 7 Q3 7 Q4 7 Q1 8 Q2 8 Q3 8 Q4 8 Q1 9 Q2 9 Q3 9 Q4 9 Q1 1 Q2 1 Q3 1 Q4 1 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 NEGOTIATIONS TIMING CONTINUES TO GROW AND SLOWS DOWN INVESTMENT VOLUME Chart 9: Evolution of retail investments in Italy Million 1.4 1.2 1. 8 6 4 2 - Q3 215 CBRE Research 215 CBRE, Spa 5
Table 1: Prime Net yields in Italy, Retail Yields (%) Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 High Street Prime 4.8 4.5 4.25 4. 4. High Street Secondary 7. 6.75 6.5 5.75 5.75 Shopping Center Prime 6. 6. 5.75 5.5 5.5 SC Good Secondary 7.34 7. 7. 6.5 6.5 Retail Park Prime 7.9 7.75 7.75 7. 7. Table 2: Main retail real estate investments in Q3 215 Name Type Value M Purchaser Vendor Portfolio Deals Grosvenor Portfolio Retail boxes Appx. 2 HIG Grosvenor Single Asset Deals Zara Men (Milan) High Street 97.3 Gruppo Inditex na Settimo Cielo (Turin) RP Retail Park Appx. 45 UBS Real Estate GmbH Private CC La Cartiera (Pompei) Shopping Centre Appx. 13 ECE European Prime Shopping Centre Fund II Fondo Immobiliare Pompei (Sator Immobiliare sgr) Source: CBRE Research, Q3 215, RCA, various sources Q3 215 CBRE Research 215 CBRE, Spa 6
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