M A R K E T B E AT Industrial Q2 2020

YoY 12-Mo. ECONOMY Chg Forecast Despite the partial slowdown of the Covid-19 pandemic, the level of uncertainty is still high and the economic forecasts are likely to change during the year. As the current economic crisis is unprecedented, Italian GDP recorded a record fall in Q2, but it is likely to rebound in the remaining quarters performing 780,000 between -9% and -10% in 2020, slightly below the Eurozone average (-7,9%). The government managed to control the rise of infections after the gradual Take-Up,sqm re-opening, but the risk of a new outbreak is making consumers cautious and more inclined to save rather than expend. So far, the impact of Covid-19 on unemployment appears to be limited, but official data underestimate the real situation. Inflation rate has decreased and is expected to remain set around €56.00 zero, potentially sustaining private consumption. Prime Rent €/sqm/yr, OCCUPIER AND INVESTMENT FOCUS The Italian logistics market remained most resilient compared to other sectors, during the first half of 2020. Absorption figures have decreased by 18%, €55.00 totaling ca. 780,000 sqm, compared to H1 2019. continues to be the driving market comprising of 45% of the total, followed by Piedmont, Emilia Prime Rent €/sqm/yr, Rome Romagna and Veneto. BTS is still the preferred type of development, accounting for 73% of the total area. The Covid-19 pandemic caused a significant increase in online shopping, asserting the importance of e-commerce, which represents approx. 60% of take- up in Q2; pharma and GDO also performed well. Other sectors such as manufacturing, automotive and fashion are awaiting to restart. Landlord incentives are expected to increase, in order to keep prime rents stable, while repricing is expected on secondary locations for Grade B and C buildings. On the investment side Industrial & Logistics remains the most liquid asset class – despite the continued mismatch between vendor and buyer expectations – with a performance in line with 2019 figures, totaling over €300 million and a strong investor commitment for the second part of the year. One of the consequences of Covid-19 pandemic is linked, primarily, to financing hitches. ITALIAN ECONOMIC INDICATORS Q2 2020 OUTLOOK YoY 12-Mo. The medium-long term outlook continues to be positive, as the demand for logistics spaces, in general, remains to be active above all, especially in the Chg Forecast main clusters. Data centers are emerging as a new asset class, with both operators and investors focusing on opportunities in well-connected area on which to develop this new product. -17.5% GDP Growth

8.3% PRIME RENTS PRIME YIELDS Unemployment Rate 10,00% 65 9,00% 41.7% 60 E-Commerce Sales 8,00% Growth * 55 50 7,00% 45

-10.5% €/sqm/yr 6,00% Retail Sales Growth * 40 5,00% 35 Sources: ISTAT, Oxford Economics 4,00% Note: with the exception for Unemployment Rate, data refers 30 to Q1 2020 variations with respect to the previous year.

* e-commerce and retail sales only refer to May only.

Q12015 Q22015 Q32015 Q42015 Q12016 Q22016 Q32016 Q42016 Q12017 Q22017 Q32017 Q42017 Q12018 Q22018 Q32018 Q42018 Q12019 Q22019 Q32019 Q42019 Q12020 Q22020

Q22015 Q32015 Q42015 Q12016 Q22016 Q32016 Q42016 Q12017 Q22017 Q32017 Q42017 Q12018 Q22018 Q32018 Q42018 Q12019 Q22019 Q32019 Q42019 Q12020 Q22020 Q12015 Milan Rome Bologna Turin Milan Rome Bologna Turin Genoa Verona Piacenza Novara Genoa Verona Piacenza Novara M A R K E T B E AT ITALY Industrial Q2 2020

MARKET VALUES (*) CLAUDIA BUCCINI PRIME RENT PRIME YIELD SUBMARKET Q/Q Y/Y Q/Q Y/Y €/Sqm/Yr (NET*) Partner, Head of Research

➔ +39 02 63799210

Milan 56 ➔ ➔ 5.00 % ➔ [email protected] ➔

Rome 55 ➔ ➔ 5.50 % ➔

➔ ➔

Bologna 52 ➔ ➔ 5.25 % MARIA CRISTINA MAESTRI ➔ ➔ Data Analyst, Research

Turin 45 ➔ ➔ 6.00 %

+39 02 63799214 ➔

Genoa 60 ➔ ➔ 6.50 % ➔ [email protected] ➔

Verona 46 ➔ ➔ 6.00 % ➔ ➔

Piacenza 45 ➔ ➔ 5.75 % ➔ ➔ Novara 42 ➔ ➔ 5.75 % ➔

(*) NOTES: (1) Prime Rent and Yield figures illustrated in the table above refer to logistics KEY LEASE TRANSACTIONS H1 2020 properties. Prime rents for freight warehouses tend to be significantly higher. (*) Yields are calculated on a net basis as reported below: REGION CITY (PROVINCE) TENANT SECTOR AREA (SQM) TYPE Net Yield = NOI (1) / PP (2) 1. Net Operating Income - after deducting all non-recoverable expenditure Lombardy (BG) Retailer 92,000 BTO 2. Purchasing Price – excluding transfer costs, tax and legal fees With respect to the yield data provided, in light of the changing nature of the Veneto Vescovana (PD) Retailer 34,000 Pre-Lease (BTS) market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and direction of prime Castel San Giovanni Emilia Romagna 3PL 30,000 Pre-Lease (BTS) initial yield levels and should not be used as a comparable for any particular (PC) property or transaction without regard to the specifics of the property. Lombardy Binasco (MI) Courier 27,000 Pre-Lease (BTS)

Lombardy Brembate (BG) 3PL 27,000 BTO cushmanwakefield.com

KEY SALES TRANSACTIONS H1 2020 (OVER €15MLN) A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION Cushman & Wakefield (NYSE: CWK) is a leading global real PROPERTY REGION CITY SELLER / BUYER AREA (SQM) estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among Chiari Warehouse Lombardy Chiari Private / Nuveen Real Estate c. 60,000 the largest real estate services firms with approximately 51,000 employees in 400 offices and 70 countries. In 2018, Ares Management – Part of Pan European Ares Management / Investec Property the firm had revenue of $8.2 billion across core services of Lombardy East Milan c. 80,000 Portfolio Fund property, facilities and project management, leasing, capital markets, valuation and other services. c. 40,000 warehouse + 190,000 Logistics Portfolio Lombardy Turate / Castrezzato Techbau / CBRE Global Investors ©2019 Cushman & Wakefield. All rights reserved. The information Land contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is Portfolio Last Mile Tuscany Florence / Pisa Private / Kryalos Sgr c. 58,000 presented without any warranty or representations as to its accuracy.