Why Invest in Milan

WHY INVEST IN MILAN

INVEST IN LOMBARDY VALUING THE EXCELLENCE

Listed within the top 10 cities for investment project in Western Europe in the period 2003 - 2014 and mentioned as one of the preferred destination for investing in the real estate sector*, Milan is an excellent business environment and a dynamic city.

A city that attracts business value: the Milan Metropolitan area accounts for nearly one third of all foreign-invested ﬁrms in Italy, more than 30% of their employees and 34% of their turnover.

A strong specialization in the service sector: the Universal Exposition Milan Expo Milano 2015 has confirmed the role of the city as a capital of business and finance, and a magnet in attracting flows of tourism from the world.

A hub for talent: with its 8 universities and 2 international schools, Milan area stands out for the quality of its human capital and education system at all levels.

Milan area can be An international city: Milan hosts over 100 consulates and foreign considered the commercial oces and is in a central position in northern Italy. The city has cornerstone of the national economy, with three international airports and primary transport infrastructures. more than 40% of the total ﬁrms of Lombardy *Source: ICE-Agenzia on FDI Intelligence, Financial Times Ltd based in the city and its province. p. 1 WHY INVEST IN MILAN

Sectoral Expertise Technology

In the Milan area it is possible to ﬁnd a high Milan area hosts seven advanced research percentage of companies specialized in oering centres, among Life Sciences and highly unique products and services, Biotechnology, that are specialised in various particularly in ﬁve key sectors: ICT & Media, Life sectors and acknowledged as an excellence Science & Biotechnology, Creative Industry, within the European research landscape. Financial & Consultancy Services, Retail & More than 340 organizations in the area of Commerce. Milan are part of at least one technological cluster.

Human Capital Location Cost

Milan stands out for the quality of its human Milan is the capital of the real estate in Italy capital and education system. Milan is home to especially regarding investments and recent eight universities, with more than 10% of the developments in the existing buildings. In the Italian university population. Globally Milan area, cost for oce rent varies from from renowned academic institutions and 50 €/sqm up to to 150 €/sqm. distinguished fashion & design institutes are based here.

p. 2 Sectors’ portfolio SECTORAL EXPERTISE composition

Milan area is the main MAIN FACTS & FIGURES ﬁnancial, commercial and industrial center in Italy, Companies by sector continuously attracting investments and new business. Milan is a dynamic and creative environment for new venture

development. It is known nationally as the Italian economic Sector Milan (%) capital city, and is very attractive even compared to many other European ﬁnancial areas. Services 144,020 49%

Trading 73,356 25% The value chain in this area is made of both traditional

manufacturing companies as well as advanced service Construction 40,129 14% ventures. Manufacturing 29,698 10%

Milan area Lombardy Italy Agriculture 3,562 1%

Companies 292,708 815,830 5,154,119 Utilities 1,548 1%

Total 292,708 100%

Milan area counts for 35.8% of total active companies in Services count for 49% of total Lombardy, and its GDP is 10% of total Italian GDP. active companies in Milan area

Source: Promos, U . Studi Camera di Commercio Milano, based on data “Infocamere”. Data updated on third Trimester, 2015 p. 3 Active workforce SECTORAL EXPERTISE operating by sector

Service sector employs MAIN FACTS & FIGURES 54% of total active Employment and added value workforce in Milan area.

Sector Milan (%) Milan has a dynamic job market with a signiﬁcantly lower unemployment rate (8.4%) compared to the national (12.7%) Services 989,312 54% and Eurozone (11.6%) average. The city has the highest employment in ﬁnancial and business Manufacturing 335,538 18% services as a percentage of total employment. Construction 98,400 5%

Water and sewers 10,542 <1%

Electricity and gas 7,324 <1%

Milan area Lombardy Italy Agriculture 7,054 <1%

Workforce 1,822,808 3,576,883 22,497,000 Mining 587 <1%

Other 373 20%

Milan area counts for 8% of total active workforce in Italy Total 1,822,808 100%

Milan area counts for 51% of Source: Promos, U . Studi Camera di Commercio Milano, based on data “Infocamere”. Data total total workforce active in updated on second Trimester, 2015 Lombardy

p. 4 KEY SECTORS IN MILAN

FINANCIAL & CONSULTANCY SERVICES

ICT & MEDIA

RETAIL & COMMERCE CREATIVE INDUSTRY (FASHION & DESIGN)

LIFE SCIENCE & BIOTECHNOLOGY

p. 5 SECTORAL EXPERTISE ICT & MEDIA

Lombardy has a long One of the most Nowaday, Milan ranks as the best tradition in the ICT "cabled" cities in (%) and Media industry. Europe, Milan has an Italian city for the Milan area is the advanced Internet quality of ICT point of reference network ensuring clusters. of the Italian ICT eective information industry. ﬂow within and Moreover, the main between businesses. industry Milan area is an ICT associations pioneer, home to Milan is also (Assinform and around 1,200 renowned as a Assintel) are based industry companies multimedia and in Milan. including leading publishing capital European and the perfect High qualiﬁed multinationals who location for creative human resources have set up oces and technological (e.g. engineers, DO YOU KNOW? and research development in skilled workers, etc.) centres. these areas. have competitive Milan ranks as the best salaries compared Italian city for the to other EU quality of ICT clusters. Compared with other Countries. Italian cities (Rome, Turin, Naples and Florence), Milan oers the best cluster infrastructures, labour availability and quality.

Source: fDi Benchmark, Financial Times Ltd p. 6 SECTORAL EXPERTISE LIFE SCIENCE & BIOTECHNOLOGY

Milan area boasts some Among the excellence Research and innovation of the most advanced of the Italian research are very dynamic in this scientific (pure and centers there is the IEO field: 22% of Italian clinical) research - European Institute of patents are registered in centres in Europe, which Oncology, the Milan area. specialise in dierent internationally Furthermore, 26% of all areas. recognized for its Italian biotechnology excellence in cancer firms are based in the prevention, early city. This brings in a total diagnosis and eective of €3.4 billion (45% of treatment. the national and 70% of the regional industry turnover).

Biotech Sector: quality overview

Milan (Region) Labour availability & quality Compared with other international cities, Greater London Milan ranks ﬁrst in the Industry cluster cost/competitiveness index, in the quality Barcelona (Region) General business environment overview and in the attractiveness index Paris (Region) (quality-cost score) Infrastructure & Accessibility

Munich (Region) Source: fDi Benchmark, The Living Environment Financial Times Ltd. 0 50 100 150 p. 7 SECTORAL EXPERTISE CREATIVE INDUSTRY (FASHION & DESIGN)

Milan is synonymous with Every year the city hosts fashion and design. thousands of industry events. Milan has shaped the history of The city is the undisputed capital design: the International of Italian and European fashion, Furniture Fair is the most home to the most important important event of its kind in fashion district in the world the world. With its exhibition alongside Paris and New York. area of 207,000 square meters, more than 2,300 exhibitors and 13,000 companies and 84,000 about 30% foreign designers, professionals in the fashion the event is a great forum of industry are based in Milan. It is ideas, creativity, innovation and the #1 city in Italy in terms of technology. employees. The Milan-based fashion DO YOU KNOW? industry brings in €70 billion and exports €3 billion of Milan alone goods alone (half of all concentrates more than Lombard exports). 15% of Italian creative companies. The Milan Metropolitan area Source: ISTAT data produces 61% of the Italian turnover for design and the fashion industry.

p. 8 SECTORAL EXPERTISE FINANCIAL & CONSULTANCY SERVICES

Milan is a financial The city is home to percentage of total centre and the Italian more than 170 banks employment), Milan is gateway to (49 non-Italian) and the ideal choice to international capital about 10,000 oer SMEs top class markets. financial service financial and companies consultancy services. The Italian Stock (employing 70,000 Exchange is based in people). Source: JLL Report “Why Milan. It manages 353 Invest in Milan” listed companies with With the highest €557 billion market employment in capitalization overall. financial and business It is also part of the services (as a London Stock Exchange.

p. 9 SECTORAL EXPERTISE RETAIL & COMMERCE

Milan is an important ambience, setting and with national leaders, centre for the service background. developing new (%) sector and a world synergies. shopping capital: Via Montenapoleone, every year, it attracts a the street famous for The Universal large number of high luxury shopping, is in Exposition Expo potential consumers. the top 10 destinations Milano 2015 has This is due to the with the highest rental confirmed the role of prominence of the value in the world; and the city as a capital of fashion industry, a long every year, Fiera business and finance, tradition of national Milano (leading and a magnet in and international trade exhibition Group in attracting flows of and the growing Italy) attracts 500,000 tourism, enhancing the number of shopping internationals visitors. vocation of centres in the area. Lombardy for The Expo 2015 eect international tourism Looking at the list of and visibility, with 34 mln. tourists the retail new combined with older visiting Lombardy DO YOU KNOW? openings in Milan, it is development (57% from foreign clear that the city is initiatives, have Countries). In 2015 H&M Duomo, Primark, creating a new retail enhanced the Victoria’s Secrets, Dudalina, scene, through a mix attractivity for Mango, just to name a few, between good deals, international retailers opened in Milan. Tourism-related inimitable and brands, that are commerce is also on the rise, especially from Russia and Asia. landing in Milan alone The sector brings in €1 billion or partnering per year.

p. 10 TECHNOLOGY RESEARCH & INNOVATION

With its 7 research centers, one technological park and several spin-os, Milan ranks #2 in Europe in terms of the number of organisations that support innovation and for the relationship between scientiﬁc research and production. Milan area, with 11% of the total national innovative ﬁrms, is the leader for innovative entrepreneurship in Italy.

Main research & innovation topics addressed in the Milan area: RESEARCH AT A GLANCE ● 15,611 researchers 153 Electronics, IT and TLC ● 3,875 non-university researchers 120 Biological sciences ● 89 private PhD scholarships ● 37.54% turnover from R&TT (Research and 116 Industrial production, materials and transports Technology Transfer) and support to TT activities 72 Energy

66 Human and environmental protection Milan area Lombardy 57 Physics and hard sciences

56 Social and economic ﬁeld

47 Other industrial technologies

41 Measurement and standard

34 Agroindustry

23 Agricultural and marine resources 88% 57% 55%

Source: Questio database (www.questio.it) Res. No-un. PhD p. 11 Res. schol. TECHNOLOGY CLUSTERS AND PATENTS

The Technological Clusters - groups of companies, universities, research centers, technology districts with a strong leadership in speciﬁc technology areas - are eective tools to accelerate the (%) economic innovation, promoting the cooperation between companies, the research sector and the territorial agencies.

341 subjects in the area of Milan and province belong to a cluster DO YOU KNOW?

In 2014, in the Milan area have been 96 Lombardy Energy Cleantech Cluster (LE2C) registered 2,300 national patents (the 85% of the patents registered in the 68 Cluster Technology for Smart Cities and Communities overall Lombardy) and 600 European patents. 65 Lombardy Association Intelligent Factory

40 Lombardy Cluster High Agrofood Technology Milan area also leads the national ranking of European green patents. In 2000-2013, 35 Lombardy Cluster Life Sciences 399 European green patents have been registered in Milan (701 in Lombardy). 33 Lombardy Cluster Technologies for the living environments The relevant sectors are waste 30 Lombardy Green Chemistry Association management, renewable energy and energy e ciency - energy recovery. 29 Lombardy Aerospace Cluster Source: Camera di Commercio di 7 Lombardy Mobility Cluster Milano on data from Ministero dello Sviluppo Economico – U cio Italiano Brevetti e Marchi, Osservatorio Unioncamere Brevetti Source: Questio database (www.questio.it) Marchi e Design on EPO data p. 12 TECHNOLOGY CENTERS OF EXCELLENCE

A qualiﬁed network of research centers, companies and entities providing research and technology-transfer services to the market, sharing competencies and promoting the innovation ecosystem.

RESEARCH CENTERS PORTFOLIO

The European Institute of Oncology (IEO) is internationally recognized for excellence in cancer prevention, early diagnosis and eective treatment. It is a comprehensive cancer center, 19.6% operating in 3 areas: clinical, research and education. 27%

The IFOM-IEO Campus is a new biomedical research center, created by the joint eorts of the FIRC Institute of Molecular Oncology Foundation (IFOM) and the Department of 7.8% Experimental Oncology of the European Institute of Oncology 31.4% 5.7% (IEO). 8.1% The Salvatore Maugeri Foundation is a scientiﬁc hospital, operating in the areas of health protection at the workplace and Departments, research centers, academic/interuniversity centers in the ﬁeld of Rehabilitation Medicine. Other academic structures Fondazione Filarete was born in 2008 as a public-private Business R&D centers partnership to play a leading role in innovation, entrepreneurship Medical centers

and technology transfer in the ﬁelds of Life Sciences, Public research centers Biotechnology and Health. Knowledge intensive business services p. 13 Productive activities HUMAN CAPITAL ACADEMIC EXCELLENCE

Milan stands out for the quality of its human capital and education system at all levels. Milan area is home to 8 UNIVERSITIES IN MILAN universities (3 public, 5 private) and 2 International Schools, with more than 10% of the Italian university population. 1 Università Commerciale Luigi Bocconi One of the most important aspects of the university system is Politecnico di Milano its degree of internationalisation. Milan area has a university 2 hub of excellence, attracting 20% of the foreign students in Italy. 3 The University of Milan

4 The University of Milano-Bicocca Università Commerciale Luigi Bocconi and the Politecnico di Milano School of Management are in the top 100 in the world Università Cattolica del Sacro Cuore for Master courses in Business Administration. 5

6 IULM - International University Politecnico di Milano is the 1st University in Italy in the field of of Languages and Media Engineering and Technology, with more than 700 patents and 23 spin-o in the field of energy eciency and sustainable 7 Humanitas University building. 8 Università Vita-Salute San Raffaele IED - Istituto Europeo di Design is the most important design and multimedia school in Italy, Spain, Brazil and Japan. 9 IED - Istituto Europeo di Design

Istituto Marangoni is the world's leading fashion institute 10 Istituto Marangoni (according to the Financial Times, Forbes and the Economist). Source: MIUR p. 14 DO YOU KNOW? LOCATION COST Milan is the largest metropolitan area in Italy and the 5th biggest in Europe for LOCATION COST population and results as the Italian Rents & Purchasing Prime city by rental value. Milan is ranked as the top global Milan is the capital of real estate in the North of Italy, and high-street locations by the asking rental perhaps in the entire country, especially as regards values. Via Monte Napoleone in Milan has the highest Rental Value 8,000 investments and recent developments in the existing €/sqm/year. building portfolio. Regarding the o ce sector, Milan is in the top 20 cities by rental values from an What makes Milan area attractive is its ability to combine the international point of view (same as San two ends of the chain: ﬁnance and construction, by Francisco). activating professionalism and linked micro-economies Lombardy has the 19.5% warehouse stock. (design, legal advice, mediation, services demand and supply). Source: Invest in Lombardy - World Capital, "Lombardy Real Estate Report 2015"

Rents (Milan city) Price (€ / sqm/year) Purchasing (Milan City) Price (€ / sqm)

OFFICES from 50 to 150 OFFICES from 1,601 to 4,956

BUSINESS CENTER from 105 to 265 BUSINESS CENTER from 2,063 to 5,506

RETAIL from 55 to 440 RETAIL from 1,561 to 8,311

RETAIL (high streets) from 120 to 975 NEW OR REFURBISHED WAREHOUSES from 914 to 1,060

WAREHOUSES from 35 to 45 OLD WAREHOUSES from 657 to 792

Source: Collection of the prices of Milan and Province, II semester 2015, TeMA - Territori, Mercati e Ambiente in collaboration with FIMAA Milano Monza & Brianza p. 15 LOCATION COST

HOSPITALITY DO YOU KNOW?

Sectoral Focus In Lombardy, the 57.2% of tourists have international provenience. Italy continues to be one of the hotel developer's darlings. The greatest part of these ﬂows are destined to Milan, which is This may simply be due to its “Growth” is the stable and strong tourism market. one of the favorite shopping keyword for all hotel brands and Italy has the potential, as more than 50% of all destinations for tourists from all Italian hotels are unbranded and privately run. over the world because of its importance in the fashion Traditionally, the Italian banking landscape insists on lease contracts to be in industry. Hotels, Agritourism and place for the ﬁnancing of a new hotel project, even if over the last few years the Leisure (Golf Clubs-Stadiums) market has seen hybrid contracts evolve as acceptable. compose the hospitality sector in Italy. Most hotel developer’s plan to sell the asset to an investor, with an international brand attached. This is where franchise agreements come into play!

Milan Province - Hotel Investment Appeal Index - 2015 HOSPITALITY SECTOR In the calculation of the “Hotel Appeal Index” MIDSCALE UPSCALE UPPER UPSCALE (developed by World Capital), hotels located in the same market and classiﬁed in the same chain scale segment are grouped into seven market scale groups: luxury, upper upscale, upscale, upper midscale, midscale, economy and independent. In the analysis these scales are collapsed into three groups: upper upscale (includes luxury and upper upscale), upscale and midscale (includes upper midscale and midscale). Division Appeal Index Division Appeal Index Division Appeal Index Min - Max Min - Max Min - Max

Historical Center 0,20 - 0,28 Historical Center 0,40 - 0,46 Historical Center 0,61 - 0,68 (Cerchia dei Bastioni) (Cerchia dei Bastioni) (Cerchia dei Bastioni) Central Train Station 0,28 - 0,34 Central Train Station 0,51 - 0,59 Central Train Station 0,59 - 0,64 Third Ring 0,55 - 0,66 Third Ring 0,45 - 0,50 Third Ring 0,35 - 0,48

Source: World Capital Real Estate Group Source: World Capital Real Estate Group Source: World Capital Real Estate Group Benchmarking Data: AICA Observatory - Survey by Benchmarking Data: AICA Observatory - Survey by Benchmarking Data: AICA Observatory - Survey by STR Global, Milan Chamber of Commerce STR Global, Milan Chamber of Commerce STR Global, Milan Chamber of Commerce

Appeal Index Range

1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 Source: Invest in Lombardy - World Capital, "Lombardy Real Estate Report 2015" p. 16 Find out more

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