EUROPE Office Snapshots Fourth quarter | 2017 Table of Contents

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Austria The Netherlands

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About & Contacts AUSTRIA Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The Austrian economy continued to grow in 2017 due to Prime Rents: Due to strong supply office rental growth is forecast stronger consumer demand and dynamic foreign trade. The to be weak. gross domestic product rose by 3 percent against the previous Prime Yields: Healthy investment market is keeping yields well year. Again, growth was supported by strong consumption as

below their long-term trends. well as investment growth and accelerated activity in the Supply: Strong new supply is expected in 2018/19, albeit production, trade, construction and tourism sectors. primarily located outside the central office district. Demand: Take-up is currently low, possibly due to postponed decision making in view of many new upcoming Occupier focus projects. Take-up is expected to rise in 2018. Vienna is the focal market of occupational activity in the office Prime Office rents – December 2017 sector in Austria and tenant requirements indicate a continued LOCATION € € US$ GROWTH % preference for office clusters (Austria Campus, Donau-City, SQ.M SQ.M SQ.FT 1YR 5YR Main Railway Station, Viertel Zwei as well as Europlaza), MTH YR YR CAGR because of the good accessibility of the locations and also the Vienna (Central) 26.00 312 34.8 4.0 1.2 amenities in place. After long scarcity in availability of space in Vienna (within Gürtel) 16.00 192 21.4 16.4 4.2 excess of 5,000 sq.m various large flexible projects are getting Graz 11.25 135 15.1 0.0 1.4 finalized in the popular office clusters. Occupier activity was Linz 11.00 132 14.7 0.0 0.0 higher than in previous periods and marked at around 144,100 Salzburg 11.00 132 14.7 0.0 0.9 sq.m in Q4 year to date figures. Innsbruck 11.25 135 15.1 0.0 0.5

Prime Office yields – December 2017 Investment focus LOCATION CURRENT LAST LAST 10 YEAR 2017 saw strong trading activity with about €4.8bn invested (FIGURES ARE GROSS, %) Q Q Y HIGH LOW into the Austrian real estate market, in total, out of that about Vienna (Central) 2.90 2.90 3.00 5.50 2.90 60% (€3bn) in the office sector – deals closed were mainly in Vienna (within Gürtel) 4.75 4.75 4.75 6.80 4.75 Vienna. The most significant deals were the acquisition of The Graz 6.25 6.25 6.25 7.80 6.25 Icon Vienna by Allianz and Galcap for €500m, Austria Campus Linz 6.30 6.30 6.30 7.80 6.30 offices by PGIM for €417m and Millenium Tower for €116 m by Salzburg 5.75 5.75 5.75 7.60 5.75 Art Invest and Rheinische Versorgungskassen. Healthy Innsbruck 6.30 6.30 6.30 7.60 6.30 investment market is keeping yields well below their long-term With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in trends. any transaction, such as financing, these are very much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. Outlook Recent performance The previous imbalance between low supply and high demand Yield - Country Average Yield - Prime is expected to change soon with a lot more space coming to Rental Growth - Prime Rental Growth - Country Average the market. Therefore pressure is expected on rental values.

7.00% 15.0% ( growth Rental Investors will continue to look for opportunities and activity will 6.00% 10.0% be driven by domestic as well as international investors. 5.00% 5.0% Yields 4.00% 0.0% y / y

3.00% -5.0% ) Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17

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AUSTRIA Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Vienna (CBD) 33.270 12.050 30.310 12.000

Vienna (Overall) 10.970 281.020 2.6 58.710 144.100 407.100 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE 1030, Thomas Klestil Platz 12-13 Erdberg - St. Marx 8900 New lease

1100, Gertrude Fröhlich Sandtner Straße 2 Suburban 6080 Pre lease

1010, Schwarzenbergplatz 3 Central 5285 New lease

1010, Hohenstaufengasse 6 Central 2810 New lease

1110, Leopold Böhm Straße 12 Erdberg - St. Marx 2200 New lease Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS The Icon Vienna Hauptbahnhof Signa / Allianz RE Germany, GalCap Europe 500

Austria Campus offices Donaucity Signa / PGIM Real Estate 417 Donau City - Millennium Tower Morgan Stanley, CC Real / Rhein. VK, Art Invest 116 Lassallestraße Porr Tower Suburban HPM Privatstiftung / JR AMC, PEMA Group 60 Donau City - Big Biz C 52 Lassallestraße Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Cornelia Kluger property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Executive Director Leopold-Moses-Gasse 4, A-1020 Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Wien, Austria completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +43 01 205 215 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cushmanwakefield.com / bar.at Wakefield LLP. All rights reserved. BRUSSELS Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook GDP in 2017 grew at its fastest pace since 2011 at 1.7%. Prime Rents: Prime rents experience strong upward movement Upbeat economic, consumer and business confidence suggest recently and further slight increases is still expected. that robust economic momentum is set to continue in 2018 Prime Yields: Prime yields are still at historically low and further with a GDP growth at 1.6%. Unemployment continues to slight compressions are forecasted before stabilisation in the second half of 2018. decrease, reaching 7.2%, its lowest level since 2008. Furthermore, the monetary policy should remain Supply: Important pipeline awaited in the future, both accommodative with no interest rate uptick before 2019. committed and speculative. Relocations could increase the supply in less qualitative office spaces. Occupier focus Demand: Demand is expected to increase in 2018, especially from the public sector. Demand will be oriented Activity in 2017 reached 393,000 sq m, a 15% decrease

towards the CBD and qualitative office spaces. compared to 2016, due to the relatively low level of large

demand and a decrease in the number of transactions (-14% Prime Office rents – December 2017 compared to 2016 and the lowest level since 2011). We have LOCATION € US$ GROWTH % SQ.M SQ.FT 1YR 5YR not seen any positive impact from Brexit so far. YR YR CAGR Brussels (Leopold) 305 34.0 10.9 1.4 The vacancy rate is still on the decrease, reaching 9.1%, its Brussels (Centre) 260 29.0 10.6 4.9 lowest level since mid-2007, with important disparities between Brussels (Decentralised) 190 21.2 -2.6 1.1 districts. The central districts perform the best with a vacancy Brussels (Periphery) 185 20.6 5.7 2.3 rate around 6.1% while the Decentralised districts and the Periphery stands respectively at 13.7% and 15%. Prime Office yields – December 2017 LOCATION CURRENT LAST LAST 10 YEAR Competition between occupiers for the most modern and (FIGURES ARE NET, %) Q Q Y HIGH LOW flexible office spaces available pushed the prime rent up to Brussels (Leopold) 4.40 4.40 4.50 6.30 4.40 305€/sq m/year in 2017, its highest level ever while the Brussels (Centre) 4.80 4.80 5.00 6.50 4.80 available spaces in grade A buildings are at a low 40,000 sq Brussels (Decentralised) 7.40 7.40 7.50 8.10 5.85 m. Brussels (Periphery) 7.25 7.25 7.25 8.25 6.00 NOTE: The above yields are for typical 6/9 leases. Investment focus With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and Investment activity has been dynamic all over 2017 with direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. investors’ appetite for every asset class, from long-term core to value-add. More than EUR 1.4bn has been recorded in 2017 Recent performance with significant transactions such as the purchase of the Engie Yield - Country Average Yield - Prime HQ in Q4 by a Korean investor. Rental Growth - Prime Rental Growth - Country Average

8.00% 15.0% ( growth Rental Prime yields remain at a historically low level (4.4%) and even 7.00% 10.0% 6.00% at 3.65% for long-term prime office yields. 5.0%

Yields 5.00% 0.0%

4.00% y Outlook / y 3.00% -5.0% ) On the letting market, 2018 should be a dynamic year with the Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 return of large public demands in Brussels. We also expect a flow of private activity in 2018 and 2019 as big occupiers will have to move.

On the investment market, 2018 should follow the strong performances of 2016 and 2017 with intense appetite from international investors and significant transactions in the pipeline. We could therefore witness a slight yield compression before a stabilisation in the second part of the year and in 2019.

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BRUSSELS Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE 2017 CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Brussels (Leopold) 3,303,067 177,120 5.4% 32,857 83,153 96,837

Brussels (Centre) 2,465,688 153,060 6.2% 21,160 52,339 172,938

Brussels (North) 1,484,703 74,792 5.0% 8,000 44,026 67,305

Brussels (Louise) 861,498 70,336 8.2% 14,599 25,095 3,500

Brussels (Midi) 575,598 55,424 9.6% 8,000 8,000 8,620

Brussels (Decentralised) 2,773,083 380,153 13.7% 10,719 69,068 8,579

Brussels (Periphery) 2,033,190 305,343 15.0% 19,857 111,500 55,948

Brussels (Overall) 13,496,827 1,216,228 9.0% 115,192 393,181 413,727 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Cantersteen Centre STIB 11.380 Letting

Da Vinci Leopold Representation of Romania 7,400 Letting

Belliard 40 Leopold CEFIC & Plastics Europe 7,000 Letting

VLM Building Louise SLRB 6,030 Purchase

Belliard 40 Leopold Spaces 4,300 Letting

Manhattan Center North Covington & Burling 3,750 Letting Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS Engie Headquarters North AG real Estate & Belfius / Hyundai & La Française +/- 4.15% +/- 400 (240 in Q4 17)

Cours Saint-Michel Leopold ING / Immobel & Besix +/- 95

Louise 250 Louise Cordea Savills / Eaglestone 22

Arts 20 Leopold HIH / Blue Colibri 20

Science 37 Leopold DMI / Eaglestone 20 Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Cédric Van Meerbeeck property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Research Belgium & Luxembourg Avenue des Arts 56, 1000 Brussels Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Tel: +32 477 98 11 83 completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any [email protected] reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our cushmanwakefield.com prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & Wakefield LLP. All rights reserved. BULGARIA Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The Bulgarian office market registered a record breaking year in Prime Rents: Although the attempts for increase, prime rents in terms of a leasing activity, supported by strong GDP growth and Sofia remain stable at €13.5/sq. m solid economic fundamentals. Despite the completion of a Prime Yields: Yields are expected to slightly decrease, currently at number of large projects in 2017, the supply of modern stock in 7.75 per cent Sofia still lags behind the demand. Supply: About 181,000 sqm are scheduled for completion in 2018 which will strengthen the supply of high- standard office space Occupier focus Demand: Tenant inquiries mostly from the IT and BPO The last quarter of 2017 witnessed strong tenant activity and industries accounted for a large portion of the annual take-up. Due to few Prime Office rents – December 2017 transactions, the total rented space in Q4 reached 64,109 sq. m. LOCATION € € US$ GROWTH % The annual take-up rose by more than 46% compared to the SQ.M SQ.M SQ.FT 1YR 5YR MTH YR YR CAGR previous year, totaling 198,348 sq. m – the best result ever. The Sofia 13.50 162 18.1 3.8 1.6 market remained driven by preleases and expansions, Plovdiv 8.00 96 10.7 0.0 7.8 accounting for 61% of the aggregate volume. The large share of those group of deals reflects the business’ appetite to grow and Prime Office yields – December 2017 improve its working conditions. Due to the strong prelease LOCATION CURRENT LAST LAST 10 YEAR (FIGURES ARE NET, %) Q Q Y HIGH LOW activity the net absorption stood low, accounting for 45% of the Sofia 7.75 8.00 8.00 11.00 7.50 annual take-up. The availability of Class A office space on the Plovdiv* 12.50 12.75 13.00 13.00 8.75 main roads and in suburban areas concentrated there the largest With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in part of the leasing activity throughout the year. However, the any transaction, such as financing, these are very much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used as a comparable for any particular property or completion of two large office buildings in CBD drew the transaction without regard to the specifics of the property. attention to this area, as well. The market in 2017 remained Recent performance dominated by IT companies and shared services centers which Yield - Country Average Yield - Prime continued to expand at a fast pace. Large consolidations in the Rental Growth - Prime Rental Growth - Country Average financial sector were the other source of leasing activity. During

13.00% 10.0% ( growth Rental the whole year, new completions amounted at 117,000 sq. m 11.00% 0.0% with most of the notable projects opening almost fully let. In line 9.00% -10.0% with this trend, Polygraphia Office Center was delivered in Q4

Yields 7.00% with near 100% occupancy rate. The project of BLD Office Park 5.00% -20.0% y / y was the most notable completion for the period, adding 10,000 3.00% -30.0% ) Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 sq. m to the office supply in the central city area. Currently, 291,000 sq. m of Class A and B offices are under construction in Sofia, scheduled for delivery by the end of 2020. Development activity is rising in response to the strong demand and is expected to rebalance the market in a medium term. After the slight growth in H1, prime rents in Sofia were stable in the second half of 2017, standing at €13.5 /sq. m. Average vacancy rate remained 9.6% with slight increase in the Class B segment to 10.1%. The rising level mirrors the tenants’ migration to higher class offices. In the most preferred buildings alongside main roads and in CBD the occupancy level draws near 100%.

Investment focus The stable rents and strong performance of prime office projects in Sofia draws the investors’ attention. The office segment is forecasted to be main driver of the investment market in 2018. Yields remain under pressure.

Outlook Office market enjoys high tenant activity, stable rents and low vacancy with prospects to perform strong in the next quarters.

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BULGARIA Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Sofia 1,728,233 166,332 9.6% 64,109 198,348 290,939

Sofia (Overall) 1,728,233 166,332 9.6% 64,109 198,348 290,939 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE BSR Offices – Phase 2 Sofia Sutherland 2,978 expansion

ETC Sofia Experian 2,570 expansion Source: Cushman & Wakefield

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Radostina Markova property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Research Analyst 47A Tsarigradsko Shose Blvd., Sofia 1124, Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Bulgaria completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +359 (883) 260 333 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cushmanwakefield.com / forton.bg Wakefield LLP. All rights reserved. CZECH REPUBLIC Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook GDP growth in the Czech Republic is still seen at 4.5% in 2017 and the 2018 forecast has been raised to 3.6%. All the sectors Prime Rents: Prime rents will remain stable, but there is still some space for growth. demanding office space are growing, while unemployment Prime Yields: Prime yields are stable in Prague but have rates reach record lows. Landlords need to offer offices in sharpened in the regions. better locations, with higher quality of fit-out and better Supply: Several large projects are expected to be delivered services for the employees. on the market in 2018. Demand: Companies are interested in office space mainly in prime locations. Occupier focus Prime Office rents – December 2017 The vacancy rate decreased to 7.5% at the end of 2017. While in the city centre and some inner city locations (Prague 8 – LOCATION € € US$ GROWTH % SQ.M SQ.M SQ.FT 1YR 5YR Karlín or Prague 5 – Anděl) there is almost no available space, MTH YR YR CAGR in the outer city, supply exceeds the demand. Overall, Prague 21.00 252 28.1 0.0 0.0 absorption of the market is very high. Usually, even projects in Brno 13.50 162 18.1 0.0 3.3 the pipeline are partially pre-leased. IT companies and the Prime Office yields – December 2017 professional services sector mainly drove demand during the LOCATION CURRENT LAST LAST 10 YEAR last quarter. (FIGURES ARE NET, %) Q Q Y HIGH LOW Prague 4.60 4.60 4.60 7.00 4.60 With the lack of premises in prime office locations, there is still Brno 6.50 6.50 7.75 9.50 6.25 some space for rental growth, both in Prague and suburban With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and regions. At the same time, landlords strengthen their position direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. on the market. Recent performance

Yield - Country Average Yield - Prime More than 300,000 sq m of new office space was under Rental Growth - Prime Rental Growth - Country Average construction at the end of the year, about half of which should

8.00% 20.0% ( growth Rental be completed in 2018. The new projects have high standards 7.00% 15.0% with modern fit-out solutions. 10.0% 6.00% 5.0%

Yields 5.00% 0.0% Investment focus

4.00% y

-5.0% /

y The end of the year recorded a high investment activity on the ) 3.00% -10.0% office market. Several large office buildings were sold in Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 Prague with fierce competition between local and pan- European global capital firms. The office market should remain the primary focus of investors in 2018, but with diminishing opportunities, the interest will concentrate also on alternative commercial real estate products.

Outlook Further market growth will be supported by robust household consumption, supportive fiscal policies, recovery in investment and supportive external demand. Moreover, good living standards and quality public services make the Czech office market very attractive to both domestic and international companies.

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CZECH REPUBLIC Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Prague (CC) 572,413 44,821 7.8% 18,480 59,043 14,990

Prague (IC) 1,783,462 102,056 5.7% 90,893 338,979 197,431

Prague (OC) 986,263 102,670 10.4% 60,395 136,169 96,224

Prague (Overall) 3,342,138 249,547 7.5% 169,768 534,190 308,645 Source: Prague Research Forum, Cushman & Wakefield, Q4 2017

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Churchill I Prague(IC) Deloitte 13,100 Pre-lease

Beethoven Prague (OC) Undisclosed 12,400 Pre-lease

Beethoven Prague (OC) Undisclosed 11,500 Pre-lease

Vlněna Office Park Brno Undisclosed 8,500 Pre-lease

The Park – Building 2 Prague (OC) IBM Česká Republika 6,900 Renegotiation Source: Prague Research Forum, Cushman & Wakefield, Q4 2017

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS Škodův Palác Prague Guyana Holding / GLL n/a n/a

Five Prague Skanska Property / TRIUVA n/a 50.00

Corso IIa Prague Duke House Asset Managers / Invesco Real Estate n/a n/a

City West A2 Prague Finep / Komerční banka n/a 30.50

Centrum Vinice Prague Immofinanz / GES Real n/a 30.00 Source: Cushman & Wakefield, Q4 2017

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Marie Baláčová property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Research CZ & SK Quadrio Offices Wakefiel d LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Purkyňova 3, 110 00 Praha 1, Czech Republic completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +420 234 603 740 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cushmanwakefield.cz Wakefield LLP. All rights reserved. DENMARK Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook In 2017, the total transaction volume in the office segment Prime Rents: Expected to increase in some areas in Copenhagen. reached a record high volume of DKK 17.8 bn., which is 24% of the total transaction volume. Danish investors were the most Prime Yields: Yields are expected to remain at the current low active investors in 2017 amounting to 59% of the volume in office

levels for prime assets in the CBD. investment. Real estate and property funds were the most active Supply: Lack of available space in the CBD areas are investor type. For the first time in recent years, we see a larger currently not offset by development in the peripheral areas. amount of transitions outside of the Copenhagen area. In 2017, Demand: Demand anticipated to gain momentum as 36% of office transactions were outside of Copenhagen area, competition for CBD space remains fierce. while 2015 and 2016 was 16% and 14% respectively. Prime Office rents – December 2017 LOCATION DKR € US$ GROWTH % SQ.M SQ.M SQ.FT 1YR 5YR Occupier focus YR YR YR CAGR Open plan offices with common facilities are still trending. The Copenhagen (Harbour Area) 1,850 248 27.7 0.0 0.5 concept is becoming more popular as the concept offers flexible Copenhagen (City) 1,800 242 27.0 2.9 1.8 leases in attractive surroundings. Property owners need to be Copenhagen (Ørestaden) 1,450 195 21.7 7.4 3.9 aware of this when refurbishing and re-letting their properties as Aarhus 1,325 178 19.8 6.0 2.0 we see this trend continuing in 2018. Odense 1,000 134 15.0 11.1 2.7 Prime Office yields – December 2017 The unemployment rate in the Copenhagen Area has been stable over the course of 2017. The vacancy rate for LOCATION CURRENT LAST LAST 10 YEAR (FIGURES ARE NET, %) Q Q Y HIGH LOW Copenhagen City has decreased throughout 2017, reflecting Copenhagen (Harbour Area) 3.75 3.75 4.10 5.75 3.75 stronger demand for office space. Copenhagen (City) 3.75 3.75 4.10 6.00 3.75 Copenhagen (Ørestaden*) 5.50 5.50 5.50 6.75 5.50 Investment focus Aarhus 4.50 4.50 5.00 6.25 4.50 Q4 had the lowest activity in terms of office transaction volume in Odense 6.50 6.50 6.50 6.75 6.00 2017, reaching approx. DKK 2.3 bn, with Danish investors NOTE: * 8 yr record contributing to 48% of the transaction volume. Real estate With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and companies were the most active buyers in Q4 constituting 58% direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. of the transaction volume with their focus being on prime office properties. Recent performance

Yield - Country Average Yield - Prime The transaction activity in Q4 was propped by Klövern’s Rental Growth - Prime Rental Growth - Country Average acquisition of Porcelænshaven in Frederiksberg, which consists

7.00% 10.0% ( growth Rental of 19,300 sqm on a long-term lease with Copenhagen Business 6.00% 5.0% School. The acquisition is estimated to a price of DKK 620 M 5.00% 0.0% Yields 4.00% -5.0%

y Outlook / y 3.00% -10.0% ) There is no office space scheduled to be delivered in CBD, Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 hence competition for CBD space is expected to remain fierce and will force companies to look towards areas outside the CBD.

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DENMARK Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M) Copenhagen (Greater Copenhagen 12,034,500 938,691 7.8% 339,530 737,970 391,200 incl. centre) Copenhagen (Centre) 5,946,000 338,922 5.7% 90,130 254,910 0

Copenhagen (Overall) 12,034,500 938,691 7.8% 177,465 737,970 391,200 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Tuborg Boulevard 12 CPH Area Ascendis Pharma 7,339 New lease

Rådhuspladsen 45 CPH V Gallup A/S 2,276 New lease

Rued Langgaardsvej 6-8 CPH S EXERP A/S 2,078 New lease

Lersø Parkallé 112. CPH Ø OK-Fonden 1,300 New lease

Adelgade 12, 4 CBD AndCo A/S 1,204 New lease Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS Kalvebod Brygge 32 CPH V DSB / Genesta N/A 70

Office Portfolio, 4 properties CBD Thylander / Jeudan N/A 61

Porcælenshaven 16-28 CPH Area Niam / Klövern N/A 83

Skovbrynet 2 Lyngby Statens Ejendomssalg A/S / N/A N/A 27

Teknikerbyen 15-45 Virum SEB / PensionDanmark N/A Est. 60 Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Lior Koren property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Partner, Chief Analyst Amaliegade 3, 5. sal, Copenhagen, 1256, Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Denmark completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +45 33 13 13 99 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cushmanwakefield.com / red.dk Wakefield LLP. All rights reserved. FINLAND Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook During Q4 2017 the GDP growth estimate for 2017 was further revised up by 50 bps to 3.0% compared to the estimate made Prime Rents: In Q4 2017 prime rents increased in multiple locations. Positive rental development in the in Q3. The growth derives principally from strong and solid Helsinki CBD is visible in 2018. domestic demand, significant investment growth, and an Prime Yields: Prime yields are expected to further decrease in the short term. upturn in the international trade. Investor demand towards Supply: Although the supply has slightly picked up, all in all office sector increased in Q4, which led to compression of the supply is seen to be stable during 2018. yields in multiple locations in Finland. Minor rental growth was Demand: We see strengthening of demand in the short term. seen in the key office locations in the Helsinki area and in Tampere. Prime Office rents – December 2017 LOCATION € € US$ GROWTH % Occupier focus SQ.M SQ.M SQ.FT 1YR 5YR MTH YR YR CAGR The overall vacancy slightly increased in the fourth quarter, Helsinki (City Centre) 36.00 432 48.2 2.9 3.0 however the demand for modern building with good locations Helsinki (Out of Town) 22.00 264 29.4 2.3 2.4 continued to grow. Hence, the vacancy increased mostly in the Turku 17.50 210 23.4 2.9 3.1 older office stock. In Q4 total of 48,500 sq.m were completed Tampere 21.75 261 29.1 1.2 2.7 in the HMA. There are currently under construction a total of Oulu 15.00 180 20.1 0.0 1.4 115,000 sq.m in the HMA due to be completed in 2018-2019. The current market conditions will support positive rental Prime Office yields – December 2017 growth at the prime end of the market. For secondary LOCATION CURRENT LAST LAST 10 YEAR (FIGURES ARE NET, %) Q Q Y HIGH LOW properties, the rental levels are estimated to remain stable. Helsinki (City Centre) 3.80 4.00 4.30 6.00 3.80 Helsinki (Out of Town) 4.80 5.10 5.50 6.95 4.80 Investment focus Turku 6.75 7.00 7.20 8.00 5.80 Total amount of published office deals in Q4 was some Tampere 6.25 6.50 6.50 7.75 5.80 €910m. The most notable single deal was Deutsche Asset Oulu 7.50 7.50 7.50 n/a n/a Management acquiring the remaining parts of the Microsoft With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in Building from Exilion for €164m (NIY 4.65%). The investor any transaction, such as financing, these are very much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used as a comparable for any particular property or base in Q4 consisted mostly of private property vehicles transaction without regard to the specifics of the property. (67%). The share of international investors accounted for Recent performance around 61% of office deals in Q4. Investor demand focus has Yield - Country Average Yield - Prime shifted also towards secondary office properties, as there has Rental Growth - Prime Rental Growth - Country Average been major activity in HMA sub-regions and regional growth

8.00% 15.0% ( growth Rental centers. 7.00% 10.0% 6.00% 5.0% Outlook

Yields 5.00% 0.0% 4.00% -5.0% In the later part of 2017 the investment activity towards office y / y

3.00% -10.0% ) sector clearly improved. This is expected to continue into Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 2018. The occupational market showed good signs in 2017 and is expected to further improve since the economy is forecasted to continue building good momentum.

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FINLAND Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY NET NET UNDER LOCATION AVAILABILITY STOCK RATE ABSORPTION ABSORPTION (YTD) CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Helsinki (CBD) 420,000 24,200 5.8% -2,100 10,500 0

Helsinki (Ruoholahti) 406,000 38,600 9.5% 400 -2,800 7,900

Helsinki (Pasila/Vallila) 593,000 62,200 10.5% -1,800 -9,500 8,700

Helsinki (Pitäjänmäki) 475,000 89,900 19.0% 14,700 26,100 7,900

Espoo (Keilaniemi/Otaniemi) 302,000 46,100 15.3% -12,100 5,400 0

Espoo (Leppävaara) 231,000 39,800 17.3% 1,600 1,800 15,000

Vantaa (Aviapolis) 268,000 18,800 7.0% 1,600 2,700 13,000 Helsinki Metropolitan Area 8,690,000 1,190,000 13.7% 115,000 (Overall) Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Helsinki Salmisaarenranta, Q3 2017 Wärtsilä (move in date in Q2 2018) 10,800 Lease (Salmisaari) Aku Korhosen tie (former Tieto HQ), Q3 Helsinki (Pohjois- Veikkaus (move in date 1.10.2017) n.a. Lease 2017 Haaga) Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS Fennia Mutual Insurance Company / Varma Mutual Eteläesplanadi 8 Helsinki (CBD) n.a. 41 Pension Insurance Company Helsinki Office property in Sörnäinen NREP / M&G Real Estate n.a. 28 (Sörnäinen) Fortum HQ Espoo (Keilaniemi) Fortum / Regenero Oy n.a. 74

Microsoft building (old Nokia HQ) Espoo (Keilaniemi Exilion / Deutsche Asset Management 4.65 164

9 office buildings Helsinki NIAM / Schroder Nordic Real Estate Fund n.a. 150 Source: Cushman & Wakefield

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Ville Suominen property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Associate Director, Valuation & Research Keskuskatu 1 A, Helsinki, 00100, Finland Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Tel: +358 10 836 8455 completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any [email protected] reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our cushmanwakefield.com / cushmanwakefield.fi prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & Wakefield LLP. All rights reserved. FRANCE Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The year 2017 ended with 2018 financial laws adopted, Prime Rents: Mainly stable, but areas with very tight supply have another new step achieved in the government’s reform started to see sustained upward pressure on rents. agenda. Both household and business sentiment increased Prime Yields: Down, but further hardening of yields may occur for and reached a level close to 2007’s. Driven by a robust global super prime properties in core locations. economic recovery, French GDP growth should now account Supply: Stable due to high absorption levels but growing on its own key drivers that are consumption, boosted by labour amount of large speculative development. market, and investments always supported by low interest Demand: Still high, with companies showing good appetite for core and value-added investments. rates. 2017 anticipated growth was revised upward to 1.9%, a level not seen since 2011 (2.1 %). In one year, unemployment Prime Office rents – December 2017 rate decreased by 47 basis points and now stands at 9.6%. It LOCATION € US$ GROWTH % SQ.M SQ.FT 1YR 5YR reflects the steady rhythm of net job creations (+68,000 for H2 YR YR CAGR 2017) and a decrease of category A’s unemployment. Paris (CBD) 810 90.3 2.5 -0.2 Paris (La Défense) 540 60.2 0.0 -0.7 Occupier focus Lyon 300 33.5 1.7 2.9 Q4 take-up stood at 854,000 sq. m, its best ever performance Marseille 260 29.0 0.0 -0.8 ever for a fourth quarter. Thus, total 2017 take-up - at 2.6 Bordeaux 180 20.1 0.0 0.0 million sq. m – was 8% compared with 2016. The market Strasbourg 190 21.2 0.0 0.0 dynamic is led by a significant number of large transactions Lille 190 21.2 0.0 0.0 (5,000 sq. m +): 88, up from 65 in 2016. Their volume Toulouse 190 21.2 0.0 0.5 represents 1.1 million sq. m (43% of total volume), a 27% y-o-y Nice 195 21.7 0.0 0.0 growth. The most dynamic submarkets were the Western Crescent (660,400 sq. m, up by 40% year on year) and the Prime Office yields – December 2017 Inner Suburbs (413,100 sq. m, +52% in one year). LOCATION CURRENT LAST LAST 10 YEAR (FIGURES ARE NET, %) Q Q Y HIGH LOW Acceleration in leasing transactions in Paris (348,000 sq. m in Paris (CBD) 3.00 3.00 3.00 6.00 3.00 Q4) raised annual take-up to 1.1 million sq. m, its 2016’s level. Paris (La Défense) 4.00 4.25 4.25 6.50 4.00 With an annual take-up reaching 179,600 sq. m, La Defense Lyon 3.90 3.95 4.50 7.30 3.90 didn’t manage to repeat its 2016 exceptional performance (- Provinces other 4.90 5.00 5.00 7.25 4.90 36% year on year) but ends 2017 in line with its 10 year With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in average. any transaction, such as financing, these are very much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. Investment focus Recent performance In the French office sector, €18.8 billion were invested in 2017 Yield - Country Average Yield - Prime Rental Growth - Prime Rental Growth - Country Average as a whole, down from the €19.1 billion recorded last year. Q4 dynamic activity seen on deals over €200 m boosted the 7.00% 20.0% ( growth Rental investment volume to €7.4 billion (+21% in volume year on 6.00% 10.0% 0.0% year) an exceptional level comparable to 2007’s (€7.5 billion). 5.00% Mega deals benefitted the Greater Paris Region which Yields -10.0% 4.00%

-20.0% y concentrates 87% of annual investment volume. Yield / y 3.00% -30.0% ) compression led investors to seek for new opportunities Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 outside Paris or to focus on ‘value-add’ opportunities. After an impressive 2016 volume, Paris CBD reconnect with its 10 year average level (€2.5 billion invested in 2017, -41% year on year).

Outlook Prospects for the French economy and the office sector improved and both occupiers and investors demand is expected to strengthen further in 2018.

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FRANCE Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP TAKE-UP UNDER LOCATION AVAILABILITY STOCK RATE Q4 2017 YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Paris city 16,988,271 486,000 2.9% 348,000 1,095,000 1,067,336

La Défense 3,576,817 260,000 7.9% 79,000 179,600 18,035

Western Crescent 8 387 604 880,000 11.1% 150,700 660,400 367,332

Inner suburbs 6,642,813 676,000 8.6% 173,800 413,100 276,686

Outer suburbs 19,708,506 1,087,000 5.8% 102,500 284,400 155,358

Greater Paris Region (Overall) 55,218,355 3,389,000 6.2% 854,000 2,632,500 1,884,747 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE CAMPUS SFR Northern Inner Suburbs SNCF 43,000 NEW LEASE

KOSMO Neuilly Levallois PARFUMS CHRISTIAN DIOR 23,901 NEW LEASE

JAVA Paris Centre West AXA 23,128 NEW LEASE

TOUR B BUILDING – T2 La Défense OBERTHUR TECHNOLOGIES 18,931 SUB LEASE

GRAND CENTRAL Paris CBD PERNOD 18,000 NEW LEASE Source: Cushman & Wakefield, Immostat for transactions in the Greater Paris Region

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER

COEUR DEFENSE La Défense LONE STAR FUND / AMUNDI IMMOBILIER – ACM – PRIMONIAL

ECOWEST Western Crescent ADIA / AGC EQUITY PARTNERS

HEKLA La Défense HINES – AG REAL ESTATE / AMUNDI IMMOBILIER – PRIMONIAL

EDF ASSETS PORTFOLIO France EDF / TIKEHAU CAPITAL

SO OUEST PLAZA Western Crescent UNIBAIL RODAMCO / VESTAS INVESTMENT MANAGEMENT Source: Cushman & Wakefield, Real Capital Analytics, Immostat for transactions of assets located in the Greater Paris Region

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Magali Marton property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Research – France 21 rue Balzac, 75008 Paris, France Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Tel: +33 (0)1 86 46 10 95 completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any [email protected] reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our cushmanwakefield.com prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & Wakefield LLP. All rights reserved. GERMANY Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook In 2017 the German economy grew by 2.5%, the fastest rate since 2011, and ended the year on a strong footing. The ifo Prime Rents: Expected to increase due to shortage of modern space in central locations and stable demand. business climate index also ended strongly at 117.2 points in Prime Yields: Stable with some potential for compression for super December. Companies assessed their current business prime properties in core locations. situation and business expectations positively: Both indicators Supply: Supply for pre-leases increases, modern supply in were significantly above their long term average. The positive stock will remain limited sentiment is also due to excellent conditions on the labour Demand: Lively demand is expected to be sustained in all major office markets. market: Increasing employment figures and a new record level for available positions underlined the favourable developments Prime Office rents – December 2017 in the economy. The unemployment rate declined to 5.3% by LOCATION € € US$ GROWTH % SQ.M SQ.M SQ.FT 1YR 5YR the end of the year. Positive economic conditions were also MTH YR YR CAGR reflected in the market in the form of strong take-up and Berlin (CBD) 29.00 348 38.8 11.5 5.4 investment appetite. Berlin (Decentralised) 14.00 168 18.7 5.7 5.9 Frankfurt (CBD) 42.00 504 56.2 13.5 4.3 Occupier focus Frankfurt (Decentralised) 16.50 198 22.1 6.5 4.9 Office leasing was very strong in the German top-5 cities’ Hamburg (CBD) 26.00 312 34.8 4.0 1.6 throughout 2017 with full-year take-up volume of 3,657,600 Hamburg (Decentralised) 15.50 186 20.7 6.9 6.2 sq.m of which 32% was in Q4. The outstanding finish to the Munich (CBD) 36.00 432 48.2 4.3 2.7 year boosted the result to 18% higher than last year’s excellent Munich (Decentralised) 19.00 228 25.4 10.1 5.6 performance. All of the top-5 markets exceeded the previous Dusseldorf (CBD) 27.00 324 36.1 1.9 1.6 year’s result in 2017. Munich (997,200 sq.m) and Berlin Dusseldorf (Decentralised) 12.75 153 17.1 4.1 4.0 (939,500 sq.m) saw particularly strong demand, contributing more than 50% to cumulative take-up while falling availability Prime Office yields – December 2017 was seen in all major markets. At the end of the year LOCATION CURRENT LAST LAST 10 YEAR (FIGURES ARE NET, %) Q Q Y HIGH LOW 3,479,200 sq.m was available at short notice. The aggregated Berlin 3.10 3.10 3.80 5.50 3.10 vacancy rate in the top-5 declined to 4.7% (Q4 2016: 5.6%) Frankfurt 3.40 3.50 4.00 5.20 3.40 with an acute shortage of large-scale modern office spaces in Hamburg 3.30 3.40 3.80 5.20 3.30 central urban locations. Considering the vigorous market activity, completions remained at a low level: Some 696,200 Munich 2.80 3.00 3.00 5.10 2.80 sq.m of new office space was added to stock in the top-5 Dusseldorf 3.50 3.75 4.15 5.20 3.50 With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in markets in 2017. In 2018 completion volumes are expected to any transaction, such as financing, these are very much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used as a comparable for any particular property or surpass last year’s levels significantly. transaction without regard to the specifics of the property. Recent performance Investment focus Yield - Country Average Yield - Prime Appetite for office assets remained strong in Q4 with investors Rental Growth - Prime Rental Growth - Country Average focusing on the major economic hubs, especially large-scale

6.50% 15.0% ( growth Rental 6.00% 10.0% single-asset transactions. The largest office deal of the quarter 5.50% 5.0% took place in Frankfurt where Deka Immobilien bought Tower 5.00% 0.0% 4.50% 185 for €775 million. Total German office transaction volume Yields 4.00% -5.0% in Q4 amounted to €7.8 bn, bringing the annual result to y /

3.50% -10.0% y

) €25.45 bn, the highest for 10 years. The top-5 markets 3.00% -15.0% Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 contributed almost 70% to the result. Yields compressed again in Q4 reflecting strong demand.

Outlook GDP growth in 2018 is forecast at 2.4% year-on-year according to Oxford Economics. Occupier markets and investment markets will profit from these conditions and are expected to remain at a high level.

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GERMANY Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Berlin 18,510,200 403,300 2.2% 235,500 939,500 746,600

Frankfurt 11,956,800 902,800 7.6% 299,000 729,600 260,500

Hamburg 14,675,200 709,600 4.8% 160,300 613,300 288,400

Munich 20,554,400 753,700 3.7% 387,100 997,200 734,300

Dusseldorf 8,977,600 709,800 7.9% 88,600 378,000 241,000

Germany Top 5 Markets (Overall) 74,674,200 3,479,200 4.7% 1,170,500 3,657,600 2,270,800 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Atrium Tower Berlin WeWork 13,300 Pre-Lease

Pressehaus Berlin Wayfair GmbH 10,300 Pre-Lease

FBC Frankfurt Deutsche Bundesbank 44,400 New Lease

Deutsche Bahn Office Tower Frankfurt Deutsche Bahn AG 29,700 Pre-Lease

Jungheinrich HQ Hamburg Jungheinrich 15,400 Owner Occupation

FIZ Future Munich BMW 100,000 Owner Occupation

BMW Center III Munich BMW 60,000 Owner Occupation Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS CA Immo JV WPI Fonds SCS-Fis and others / Tower 185 Frankfurt n/a 775 Deka Immobilien Japan Center Frankfurt Commerz Real /GEG German Real Estate Group n/a 280

Vodafone Campus Dusseldorf AGC Equity Partners/ Mirae Asset Global n/a 280

MAC Main Airport Center Frankfurt Och-Ziff JV Finch Properties / Capitaland 5.50% 245 Blackstone / Quantum on behalf of Korean MIK Dusseldorf n/a 240 investors Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Ursula-Beate Neißer property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Research, Germany Rathenauplatz 1, 60313 Frankfurt am Main, Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Germany completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +49 (0) 69 5060 73 140 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018Cushman & cushmanwakefield.com Wakefield LLP. All rights reserved. GREECE Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook After a decade of recession, Greece is eyeing an exit from its Prime Rents: Shortages of quality supply allied with higher third EU bailout programme. Recovery is set to be driven by demand expected are likely to fuel rent hikes tourism, with a record number of arrivals in 2017 and strong Prime Yields: Room for slight yield compression, as investor early bookings for 2018, along with increased domestic interest intensifies for quality schemes consumption. Occupiers remain cautious leading to low levels Supply: Supply under development expected to of demand with prime rents unchanged over the quarter. increase in the long term. Overall investment activity remained low over the quarter and Demand: There is occupiers trend for demand increase focused on prime locations and quality assets development activity is still subdued. Prime Office rents – December 2017 LOCATION € € US$ GROWTH % Occupier focus SQ.M SQ.M SQ.FT 1YR 5YR Office space demand registered reductions in take-up in 2017 MTH YR YR CAGR compared to 2016 due to absence of large deals. There is a Athens (Syntagma Square) 17.00 204 22.8 0.0 -5.0 shortage of available offices apt to satisfy corporate demand Athens (Kifissias Avenue) 15.00 180 20.1 0.0 -0.7 while quality remains a driver for demand with very limited Athens (Piraeus) 12.00 144 16.1 33.3 4.8 development activity and dated stock. CBD and Kifisias Ave Prime Office yields – December 2017 have been the most active submarkets, with the financial LOCATION CURRENT LAST LAST 10 YEAR services and pharma the most aggressive sectors. The market (FIGURES ARE GROSS, %) Q Q Y HIGH LOW continues to be characterized by small-size transactions. Athens (Syntagma Square) 8.00 8.00 8.00 9.80 6.20 Athens (Kifissias Avenue) 8.00 8.00 8.00 9.80 6.20 Investment focus Athens (Piraeus) 8.20 8.20 8.20 10.20 7.00 Following a very active Q3, Investment activity in the sector With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and across the last three months has remained very weak. Core direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. investment assets are the most attractive for investors; Recent performance however, due to limited availability of quality products, there is an increasing demand for value-added opportunities in core Yield - Country Average Yield - Prime Rental Growth - Prime Rental Growth - Country Average locations. High competition for prime assets is generating a

11.00% 20.0% ( growth Rental compression of prime yields in major submarkets. 9.00% 10.0%

7.00% 0.0% Outlook Yields The office sector is expected to drive investments interest 5.00% -10.0% y

/ throughout the year with the distance between prime and y 3.00% -20.0% ) secondary yields increasing further. As a consequence of the Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 increasing competition for the best products, and lack of such product on offer, compression of prime yields is expected in 2018. Activity expansion and space renovation is expected to be the main drivers for new letting contracts this year.

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GREECE Office Market Snapshot Fourth Quarter | 2017

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Athens Syngrou Ave Financial 3.350 New lease

Athens Kifisias Ave Travel agency 574 New lease

Athens Neo Psyhico IT company 2.500 Renewal Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS Agiou Andrea 3 Agia Paraskevi KTISTOR/TRASTOR REIT na 2.1 Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Nicky Simbouras property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Managing Director 154A, Sevastoupoleos street, Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or 11526 Athens, Greece completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +30 210 7480852 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cushmanwakefield.com / cwproprius.com Wakefield LLP. All rights reserved. HUNGARY Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The Hungarian economy continues to improve. Falling Prime Rents: Headline rents continue to harden and increase for unemployment and strong GDP growth are supporting a Grade A product as availability continues to diminish. healthy performance in the office market during 2017. Tenants Prime Yields: The interest from regional and local funds remains committed to nearly 475,000 sq m of office space, reflecting a strong. It is likely that prime yields are to strengthen over the following quarters. slight gain on 2016’s already record strong performance. Supply: Vacancy to fall slightly as new space in the 2017 Vacancy continued to fall further to a record low of 7.5%. pipeline is circa 60% absorbed. Demand: Investor and occupier demand are anticipated to remain healthy over 2017. Occupier focus In Q4 2017, occupier demand reached around 144,000 sq m Prime Office rents – December 2017 in Budapest. Net take-up represented a share of 64% of the LOCATION € € US$ GROWTH % total demand and renewals accounted for a share of 32%. The SQ.M SQ.M SQ.FT 1YR 5YR Váci Corridor continued to dominate the figures enjoying the MTH YR YR CAGR Budapest (CBD) 24.00 288 32.1 9.1 2.7 highest share of take-up with 42,000 sq m of office space transacted. Budapest (Central Buda) 16.00 192 21.4 0.0 1.3 Budapest (Váci Corridor) 15.25 183 20.4 0.0 1.4 Four new developments including one BTS scheme for Budapest (Periphery) 10.00 120 13.4 0.0 0.0 Ericsson were delivered in Q4 2017. Completions extended to Prime Office yields – December 2017 79,900 sq m in 2017, the second highest level since 2011, LOCATION CURRENT LAST LAST 10 YEAR (FIGURES ARE GROSS, %) Q Q Y HIGH LOW demonstrating developers’ trust in the Budapest office market. Budapest (CBD) 6.00 6.15 6.50 7.75 6.00 Budapest (Central Buda) 6.50 6.75 7.00 8.00 5.75 Headline rents increased further this quarter, with tenant Budapest (Váci Corridor) 6.50 6.75 6.75 8.50 6.25 incentives continuing to shorten, which in turn is increasing net effective rents. The market is still Landlord favourable. Budapest (Periphery) 8.50 8.50 8.75 9.50 7.00 With respect to the yield data provided, in light of the changing nature of the 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 initial yield levels and should not be used as a comparable for any particular property or Investment focus transaction without regard to the specifics of the property. The fourth quarter of 2017 saw €145m invested into the office sector, with Budapest being the focus. The largest deal was Recent performance OTP RE Fund’s purchase of BSR Center from GLL RE. Yield - Country Average Yield - Prime Furthermore, MCAP Global Finance (UK) LLP, the London Rental Growth - Prime Rental Growth - Country Average subsidiary of the New York-based global investment manager

9.00% 10.0% ( growth Rental 8.00% Marathon Asset Management entered the Budapest office 5.0% 7.00% market with a purchase of the Népliget Center from GLL RE. 6.00% 0.0%

Yields 5.00% -5.0% Yields hardened slightly over the quarter, with the benchmark 4.00% y / y

3.00% -10.0% ) standing at 6.0% for prime CBD office schemes. As both Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 investor appetite for prime assets and the pipeline of deals remains healthy, prospects are for an active 2018.

Outlook The outlook for the office market is positive with 253,000 sq m of new office space in the pipeline for 2018. Whilst 60% of this is linked to pre-leases; speculative development shows improvement from last year. Labour shortages and increasing construction costs, however, are putting pressure on the development market.

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HUNGARY Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Budapest (CBD) 353 853 19 535 5.5% 8 829 42 896 12 500

Budapest (Central Pest) 586 230 43 876 7.5% 10 155 45 453 65 700

Budapest (Central Buda) 404 646 16 821 4.2% 32 732 71 150 40 900

Budapest (Non-Central Pest) 423 584 28 099 6.6% 36 507 68 698 65 700

Budapest (North Buda) 317 627 26 718 8.4% 5 201 33 720 18 900

Budapest (South Buda) 383 545 12 740 3.3% 5 957 90 374 53 500

Budapest (Váci Corridor) 828 425 71 254 8.6% 42 210 114 453 150 400

Budapest (Periphery) 117 638 37 825 32.2% 2 773 8 325 15 000 Budapest (Overall) 3 415 548 256 868 7.5% 144 364 475 069 422 600 Source: Cushman & Wakefield

Key Occupier Transactions SIZE TRANSACTION PROPERTY SUBMARKET TENANT (SQ.M) TYPE HillSide Offices Central Buda Fundamenta 10 234 Pre-lease Promenade Gardens Váci Corridor Financial sector 8 000 Pre-lease Kinnarps Váci Corridor Rail Cargo 8 000 Renewal Twin Office Center Non Central Pest Public sector 7 214 Renewal

Skylight City Non Central Pest Electronics sector 5 978 New

Skylight City Non Central Pest Alza.hu 5 225 New

Krisztina Palace Central Buda SSC sector 4 338 Renewal

Népliget Center A Non Central Pest Ericsson 3 352 Renewal

Advance Tower Phase I Váci Corridor KPMG 3 185 Pre-lease

Advance Tower Phase II Váci Corridor KPMG 2 976 Pre-lease

East-West Business Center CBD Financial institution 2 932 Renewal Source: Cushman & Wakefield

Key Investment Transactions PRICE PROPERTY SUBMARKET SELLER / BUYER YIELD € MILLIONS BSR Center Váci Corridor GLL RE / OTP RE Fund n/a 40.0

The Quadrum Periphery White Star RE / OTP RE Fund n/a 5.0 * Népliget Center Non Central Pest GLL RE / Marathon n/a 32.0 Ausztria Ház CBD List Group / Private GRB n/a 4.9 Ex K&H building Vigadó CBD BIF/Private ISR n/a 20.0 Source: Cushman & Wakefield, Real Capital Analytics, * E, portfolio deal

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Orsolya Hegedűs MRICS property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Research & Consultancy Deák Ferenc u. 15., Budapest, 1052, Hungary Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Tel: +36 (06) 1 484 1357 completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any [email protected] reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our cushmanwakefield.com prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & Wakefield LLP. All rights reserved. IRELAND Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The Dublin office leasing market has returned to record Prime Rents: Prime rents are expected to increase marginally over highs, with leasing activity in 2017 on par with the pre-crisis the coming quarter, however will remain at this level peak of 2007. Demand from both domestic and international in the short-term. occupiers for office space remains very robust and is Prime Yields: Prime yields are expected to remain at 4.00% for the reflective of a buoyant economy, continued expansion in the

medium term. Irish labour market, combined with the uplift in office Supply: Increasing supply due to the release of second hand development activity to facilitate growth. stock and refurbishments, and newly completed stock being made available. Occupier focus Demand: IT/Comm and professional services sector continues to drive activity. Increased demand from international Activity in the office market was particularly strong in Q4, with occupiers. international occupiers from the IT/Communications, Finance Prime Office rents – December 2017 and Professional sector dominating the market, while many LOCATION € US$ GROWTH % existing occupiers are expanding their operations. SQ.M SQ.FT 1YR 5YR YR YR CAGR Dublin (2/4 District) 619 69.0 0.0 14.7 Demand remains focused in the CBD, however, suburban Dublin (Suburban) 324 36.1 9.5 17.9 demand has also increased. There have been Brexit related enquiries over the past year, however to a certain extent, Cork 325 36.2 12.1 11.3 demand has been overstated. While small to medium sized Galway 295 36.0 29.2 13.4 lettings were most active, 2017 saw a number of very large 325 36.2 67.5 22.5 Limerick lettings take place, with more pre-lets in properties nearing Prime Office yields – December 2017 completion. Another feature in 2017 was some large LOCATION CURRENT LAST LAST 10 YEAR occupiers signing more accommodation than required, with (FIGURES ARE NET, %) Q Q Y HIGH LOW the excess space being sub-let until it is required. 4.00 4.25 4.25 7.50 4.00 Dublin (2/4 District) Dublin (Suburban) 5.75 6.00 6.00 8.90 5.50 Tenants are now very aware of flexible working trends and Cork 5.75 5.75 6.50 8.50 4.50 we expect to see increased demand for flexible office/co- Galway* 6.25 6.25 6.25 9.50 6.25 working accommodation in 2018 and beyond. Some Limerick* 6.50 6.75 7.00 10.00 6.50 companies are taking both traditional leases as well as Note: *5yr record flexible office accommodation for certain projects or teams. With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and City centre occupiers are continuing to review the Dublin direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. suburbs for expansion opportunities, particularly the south Recent performance suburbs, as a result of increasing prime city centre rents. Yield - Country Average Yield - Prime Rental Growth - Prime Rental Growth - Country Average Investment focus

9.00% 60.0% ( growth Rental Robust demand in Dublin’s occupier office market in 2017 8.00% 40.0% 7.00% resulted in the office sector dominating investor focus in 20.0% 6.00% Ireland. Approximately 40% of the year’s investment market

Yields 0.0% 5.00% turnover sought an office asset. The CBD continues to

4.00% -20.0% y /

y attract a large proportion of Dublin office investment, 3.00% -40.0% ) Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 however, investment volumes in the suburban and wider county Dublin market increased.

Outlook New office developments will continue to be built in the city and suburbs for the short-medium term. We anticipate pre- lets will become more prominent in 2018 and lettings mid- construction will increase, making development funding easier. Flexible office space and co-working accommodation is expected to continue in 2018.

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IRELAND Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Overall Dublin 3,547,500 499,000 14.1% 91,300 287,250 342,100 CBD 1,841,700 217,250 11.8% 30,900 144,550 276,850 Source: Cushman & Wakefield Research

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE South County Business Park, Sandyford, Dublin 18 Suburban Microsoft 34,550 Taken Up

The Beckett, East Road Secondary Facebook 17,500 Taken Up

Part - Vertium (Former Burlington House) Suburban Amazon 5,450 Taken Up

Miesian Plaza - Block A Building 1 (new floor) Traditional Core State 3,900 Taken Up

Liberty Building Suburban State 2,850 Taken Up Source: Cushman & Wakefield Research

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS

Off Market Dublin Business Park Suburban Confidential/Confidential Confidential €145.00

76 Lower Baggot Street Traditional Core Bord Na Mona/Credit Suisse 5.39% €35.90

Chancery Building, Chancery Lane, Secondary Hibernia REIT/Equity Fund 5.90% €23.80

94 St. Stephen’s Green Traditional Core SW3 Capital/International Fund 4.88% €19.75

Joyce’s Court, Talbot Street Dublin 1 Fringe CBD EY/Corum AM 6.37% €13.75 Source: Cushman & Wakefield Research

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Marian Finnegan property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Chief Economist, Director 164 Shelbourne Road, Ballsbridge, Dublin 4, Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Ireland completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +353 1 237 6341 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cushmanwakefield.com / sherryfitz.ie Wakefield LLP. All rights reserved. ITALY Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The Italian office market continues to be active. Milan remains Prime Rents: Upward trend for new or refurbished properties in the most dynamic location, from an occupational and investment prime locations. market standpoint, though Rome has gained growing attention Prime Yields: Compression of prime yields expected both in Milan and begins to represent a valid alternative for national and

and Rome. international investors. Supply: Dynamic development market in Milan. In Rome, speculative pipeline is limited by less demand. Demand: More tenants looking for not only efficient but also Occupier focus iconic spaces that identify their brands The occupier market in Milan is recording even higher levels of absorption compared to last year. In particular, the positive Prime Office rents – December 2017 market trend appears linked to a revival of development activity LOCATION € US$ GROWTH % SQ.M SQ.FT 1YR 5YR and the return of certain sectors on the market, such as financial, YR YR CAGR legal and fashion, which had either remained cautious in the past Rome (CBD) 400 44.6 0.0 -2.3 or were unable to find suitable products. This is particularly Rome (Centre) 350 39.0 -5.4 n/a evident in the CBD and Centre submarkets, where take up is Rome (Semi Centre) 300 33.5 0.0 -2.5 high, mainly due to the number of developments in the pipeline Rome (Greater Eur) 340 37.9 6.3 0.9 and to tenants’ preference for central locations, which grant their Rome (Periphery) 150 16.7 0.0 -1.3 brand more visibility; this trend is expected to continue in 2018. Milan (CBD) 540 60.2 8.0 1.6 The Rome market has also experienced a gradual increase in Milan (Centre-out of CBD) 420 46.8 5.0 n/a the level of absorption in recent years. In general, demand is Milan (Semi Centre) 320 35.7 6.7 3.5 mainly driven by companies in need of repositioning to more Milan (Periphery) 240 26.8 4.3 1.8 efficient offices, which allow for greater flexibility and contribute Milan (Hinterland) 220 24.5 4.8 n/a to the creation of a new brand image. The evolution and transformation of working patterns is also generating an increase Prime Office yields – December 2017 in demand from co-working office space companies, with new LOCATION CURRENT LAST LAST 10 YEAR (FIGURES ARE NET, %) Q Q Y HIGH LOW players expected to arrive in Italy, in particular, in the Milan and Rome (CBD) 4.00 4.00 4.00 5.25 4.00 Rome markets. Rome (Centre) 4.75 5.00 5.00 5.00 4.75 Rome (Semi Centre) 6.25 6.25 6.50 6.50 6.25 Investment focus Rome (Greater Eur) 5.00 5.25 5.50 5.75 5.00 Offices remain the preferred sector in the investment market, Rome (Periphery) 8.00 8.00 8.00 8.00 8.00 with volumes growing further compared to the previous years. Milan continues to attract the interest of domestic and Milan (CBD) 3.50 3.50 3.75 5.25 3.50 international investors, though Rome is also gaining growing Milan (Centre-out of CBD) 4.00 4.00 4.50 5.75 4.00 attention. In addition to these cities, there has been an increase Milan (Semi Centre) 5.00 5.25 5.25 6.75 5.00 in investments in secondary locations, following a number of Milan (Periphery) 5.25 5.50 5.75 7.50 5.25 portfolio deals. Milan (Hinterland) 5.50 5.50 5.75 7.25 5.50

(*) Yields are calculated on a net basis as reported below: Net Yield = NOI (1) / PP (2) Outlook 1. Net Operating Income - after deducting all non-recoverable expenditure 2. Purchasing Price – excluding transfer costs, tax and legal fees The office sector is expected to remain active next year. Core With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and assets will be the most requested, although the combination of direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. scarce availability, rising prices and decreasing yields will lead

investors to look for alternative opportunities as well, with the

possibility of achieving higher returns.

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Claudia Buccini property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Research Italy Via Turati 16/18, 20121 Milan, Italy Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Tel: +39 02 63 799210 completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any [email protected] reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our cushmanwakefield.com prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & Wakefield LLP. All rights reserved. LUXEMBOURG Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook Economic fundamentals have been extremely robust in 2017, Prime Rents: Prime rents increased in the CBD, Station and namely with a GDP growth at 3.5% in Luxembourg and an Kirchberg in 2017. A stabilisation is rather expected unemployment rate at 5.8%, its lowest level over the last five- in the coming months. years. 2018 is set to outperform 2017 with a GDP growth Prime Yields: Prime yields reached their historically low levels in forecasted at 4.5% and further decrease of the unemployment 2017 and further slight compression is still expected in 2018 before a stabilisation in 2019. rate. Furthermore, consumer confidence continues to set record highs due to further tightening of the strong labour Supply: Important developments are in the pipeline for 2018 market. Finally, monetary policy should remain and 2019. However, the majority of them is pre-let, the speculative pipeline is thus limited. accommodative with no interest rate uptick before 2019.

Demand: Activity is expected to remain robust as Luxembourg economy posts strong performances and should Occupier focus

benefit from the Brexit in 2018. Take-up in Q4 reached 36,000 sq m. For the whole 2017, a

high 210,000 sq m of take-up has been recorded, a level Prime Office rents – December 2017 similar to 2016 and above the 200,000 sq m cap for the fourth LOCATION € € US$ GROWTH % SQ.M SQ.M SQ.FT 1YR 5YR consecutive year, confirming the strong dynamic of the MTH YR YR CAGR Luxembourg office market. Luxembourg City (CBD) 50.00 600 66.9 8.7 4.6 Luxembourg City (Station) 36.00 432 48.2 2.9 n/a The vacancy rate is to be found around 4.5%, still amongst the Luxembourg City (Kirchberg) 35.00 456 50.9 8.6 2.9 lowest levels in Europe. This level should remain stable in the Prime Office yields – December 2017 coming months as most of the speculative developments LOCATION CURRENT LAST LAST 10 YEAR should be filled thanks to the imbalance between demand and (FIGURES ARE NET, %) Q Q Y HIGH LOW supply. The lack of available spaces, combined with the strong Luxembourg City (CBD) 4.30 4.30 4.50 6.15 4.20 activity recorded over the last months, contributed to push Luxembourg City (Station) 4.50 4.50 5.00 5.20 4.30 rents higher, and are now at €50/sq m/month in the CBD. Luxembourg City (Kirchberg) 4.50 4.80 5.25 6.50 4.60 Prime rents also increased in the Station district in 2017. NOTE: The above yields are for typical 3/6/9 leases but with almost no liquidity for such product; for 6/9 leases there is demand and yields approx. 30-40 bp sharper.

With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and Investment focus direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. Globally for 2017, the investment volumes in the office sector stand to a high €920m. Activity in Q4 was intense with around Recent performance €180m invested. The most significant transaction is the

Yield - Prime Rental Growth - Prime acquisition of the Infinity in the Kirchberg for €80m by the German investor Real IS.

6.50% 15.0% ( growth Rental 6.00% 10.0% 5.50% The prime yield recorded consecutive compression in 2017 to 5.00% 5.0% 4.50% stand at 4.3% at the end of the year.

Yields 0.0% 4.00% -5.0%

3.50% y / y

3.00% -10.0% ) Outlook Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 Luxembourg should continue to post robust performances on the office market in 2018, helped by its strong economy. On the letting market, the Brexit is expected to attract new companies headquartered in London while the strong labour market could boost the take-up.

On the investment market, activity is forecasted to be intense as Luxembourg offers strong alternatives to other core European cities. As a result, prime yields could witness further slight compression in 2018.

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LUXEMBOURG Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP TAKE-UP UNDER LOCATION AVAILABILITY STOCK RATE Q4 2017 CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

CBD 839,000 8,000 1.0% 6,840 31,226 21,300

Kirchberg 1,095,000 19,500 1.8% 3,361 45,636 201,800

Station 403,000 17,500 4.3% 5,695 53,578 7,000

Cloche d’Or 418,000 23,000 5.5% 4,135 16,909 54,000

Other inner districts 219,000 17,800 8.1% 1,551 8,975 95,000

Decentralised districts 404,000 35,700 8.8% 6,453 25,486 25,000

Periphery 470,000 29,500 6.3% 7,614 27,571 157,000

Luxembourg (Overall) 3,850,000 151,000 3.9% 35,650 209,380 561,000 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Triologie Leudelange 3C Payments 2,356 Letting

Helios (Building E) Cloche d’Or European Commission 1,863 Letting

Domaine de Livange Periphery Regus 1,332 Letting

Dyapason Cloche d’Or SAIC Luxembourg 1,257 Letting

Rose des Vents Kirchberg DER 16 SA 1,192 Letting

Southlane Tower III Esch-Belval Confidential 1,045 Subletting

Fifty Two CBD Inowai 1,015 Letting Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS Infinity Kirchberg Immobel / Real lS 80

Stena CBD Stena / Baltisse 38

COREC CBD Private / Baltisse 28

Printz Cloche d’Or Private / ICN Development 14

Route d’Arlon 23-25 Strassen Swiss Life / BPI 11.5 Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Sebastien Bequet property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Luxembourg 287/289 Route d’Arlon, 1150 Luxembourg Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Tel: +352 27 21 33 07 completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any [email protected] reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our cushmanwakefield.com prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & Wakefield LLP. All rights reserved. THE NETHERLANDS Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The office market registered a positive year, due to the Prime Rents: Prime rents will increase further due to shortages on increased number of office jobs, decline in vacancy, growth of the office market, while incentives evaporate in the the average rental level to EUR 134 per sq.m per year and the best locations. large investment volume. Due to the positive economic Prime Yields: Prime yields are expected to compress further, even in secondary emerging locations. developments, a large amount of organizations anticipates Supply: Supply will further decline, especially in the core once again on growth, they tend to move more and invest cities of the country. more in their housing. However, these businesses are faced Demand: Demand for office space continues to grow, with scarcity of high-quality office space at the most popular focussing on multimodal office locations with a high level of amenities. locations. This latent demand is not optimally facilitated, which Prime Office rents – December 2017 resulted in a dampening effect on the uptake in 2017, that had LOCATION € US$ GROWTH % been forecast higher with 1.4 million sqm. SQ.M SQ.FT 1YR 5YR YR YR CAGR Occupier focus Amsterdam (South Axis) 450 50.2 5.9 3.4 The take-up of office space in 2017 registered 1.26 million Amsterdam (Central) 425 47.4 13.3 4.0 sq.m and remained at almost the same level as in 2016. Of Amsterdam (South-East) 240 26.8 23.1 4.2 this take-up, approximately 32% is realized in Amsterdam. Rotterdam 235 26.2 4.4 3.3 Vacancy fell by 17% compared to previous year to 5.7 million The Hague 210 23.4 0.0 0.0 sq.m of office space or 11.7%. This is the lowest vacancy rate Utrecht 245 27.3 22.5 4.7 since 2007. It is striking that the sharp decline in most core Eindhoven 170 19.0 6.3 0.0 cities leads to a vacancy rate that comes close to a healthy Prime Office yields – December 2017 vacancy level of around 5-7%, which in many cases does not LOCATION CURRENT LAST LAST 10 YEAR apply to the peripheral municipalities. (FIGURES ARE GROSS, %) Q Q Y HIGH LOW Amsterdam (South Axis) 4.00 4.00 4.00 6.75 4.00 Investment focus Amsterdam (Central) 3.75 3.90 4.00 7.00 3.75 In 2017, offices were the largest investment category with 33% Amsterdam (South-East) 5.75 6.00 6.15 8.25 5.50 of the total investment volume in the Netherlands, or EUR 6.7 Rotterdam 5.25 5.50 5.50 7.00 5.25 billion. Compared to previous year this is a growth of 11%. The The Hague 6.00 6.00 6.00 7.00 5.75 prime yield for office space showed a strong decline of 50 bps Utrecht 5.75 5.75 5.75 7.25 5.75 to 3.5%. Within the office segment the interest of foreign Eindhoven 6.75 6.75 6.75 7.75 6.25 investors remained high, as they realized 70% of the total With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and office investment volume. Furthermore, investors also pay direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. attention for cities such as Utrecht or Eindhoven. Not only Recent performance prime yields tightened, also yields at the top of the bandwidth Yield - Country Average Yield - Prime compressed, partially due to the shift of the investment focus. Rental Growth - Prime Rental Growth - Country Average

9,00% 8,0% ( growthRental Outlook 8,00% 6,0% Vacancy will drop further in 2018, while the demand will 7,00% 4,0% 2,0% 6,00% continue to focus on office space at multimodal locations with 0,0% Yields 5,00% -2,0% a high level of amenities. A further growth is expected in the y

4,00% -4,0% / y serviced office segment. Interest of investors in offices will ) 3,00% -6,0% remain, because of the difference between the gross initial dec-07 dec-09 dec-11 dec-13 dec-15 dec-17 yield and interest rate which is with 375 bps still considerable. It is to be expected in several cases that real estate which was sold 2-3 years ago will be put back on the market. At the same time, quality of supply remains scarce.

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THE NETHERLANDS Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Amsterdam 5,853,000 580,000 7.9% 398,000 - 152,219

Rotterdam 3,376,000 504,000 13.9% 83,000 - 0

The Hague 3,882,000 338,000 8.7% 52,000 - 0

Utrecht 2,709,000 322,000 8.1% 97,000 - 71,000

Eindhoven 1,477,000 188,000 12.4% 45,000 - 32,000

Arnhem 1,036,000 189,000 12.0% 15,000 - 0

Groningen 894,000 78,000 7.5% 16,000 - 0

Netherlands (overall) 48,612,000 6,454,000 11.7% 1,260,000 N/A 255,219 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Amsterdam Zuidas European Medicines Agency 38,500 Huur

Amsterdam Sloterdijk Alliander Energie 25,000 Huur

Eindhoven Stationsgebied Belastingdienst 20,000 Huur

Wageningen Bronland Unilever 18,000 Huur

Utrecht Stationsomgeving VodafoneZiggo 17,000 Huur Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS

Atrium - Amsterdam Zuidas Icon / Amundi 4.0% 500

Liv Portfolio Landelijk Deka / Fortress Investment Group 301

Orange Portfolio Landelijk Victory Advisors / TGP Capital 175

The Cloud Amstel Amundi / Cairn Real Estate 165

Artemis Portfolio Landelijk SEB / Goldman Sachs 7.6% 116 Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Frank van der Sluys MSc property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Associate Director, Head of Research, The Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is Netherlands accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or UN Studio 20th floor, Gustav Mahlerlaan 362- completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any 364, 1082 ME, Amsterdam, The Netherlands reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our Tel: +31 (0) 20 8407 201 prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & [email protected] Wakefield LLP. All rights reserved. cushmanwakefield.com

NORWAY Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook 2018 GDP growth is forecast to be 2.3%, up from 1% in 2017. Growth is domestically driven, with increased consumption and Prime Rents: Increasing rents for city centre while fringe areas in east and west have been stable. mainland investment the main sources. Housing prices have increased rapidly over recent years, mainly due to lower Prime Yields: Sustained investor demand and shortage of assets keep prime yields under pressure while secondary interest rates, but since Q2 2017 and the implementation of locations and asset yields are converging. tighter mortgage regulations, prices have been under Supply: Limited supply in the short term but net new stock pressure. However, the general economic outlook is healthy as will pick up once we get beyond 2018. unemployment is low and decreasing and businesses are Demand: Generally healthy demand, most pronounced, as positive in their own assessment of the economy. expected, for quality stock CBD locations Prime Office rents – December 2017 Occupier focus LOCATION NKR € US$ GROWTH % The letting market currently favours lessors and there is SQ.M SQ.M SQ.FT 1YR 5YR general agreement it will remain strong over the next couple of YR YR YR CAGR years. We have seen a drop in vacancy levels, in part because Oslo (CBD) 4,300 437 48.7 7.5 1.5 of strong demand for office space, but mainly due to a lack of office projects under construction. With a high rate of Oslo (Centre) 3,000 305 34.0 11.1 0.0 conversion from office to residential, the net new office stock in Oslo (West) 3,000 305 34.0 11.1 1.4 Oslo in 2017 has been negative, and we expect only a Oslo (North) 2,250 229 25.5 2.3 0.9 marginal increase in 2018. In sum, the supply and demand Oslo (East) 2,150 218 24.4 0.0 2.5 balance suggests continued upwards pressure on rent levels Bergen 2,700 274 30.6 3.8 4.2 in the short and medium term.

Stavanger 2,350 239 26.6 0.0 -0.4 Investment focus Prime Office yields – December 2017 This cycle continues to see an extraordinary level of capital LOCATION CURRENT LAST LAST 10 YEAR targeting real estate, both from international and domestic (FIGURES ARE NET, %) Q Q Y HIGH LOW investors. Foreign investors accounted for more than 20% of Oslo (CBD) 3.60 3.75 3.75 6.75 3.60 recorded transactions in 2017 measured by deal volume, with Oslo (Centre)* 4.00 4.00 4.50 5.00 4.00 Swedish investors accounting for about half. While most non- Oslo (West) 4.00 4.25 4.50 7.25 4.00 domestic buyers tend to limit their investment criteria to Oslo, in 2017 we also saw both domestic and non-domestic Oslo (North)* 5.00 5.00 5.00 5.00 5.00 investors had an increased appetite for both secondary assets Oslo (East) 5.00 5.50 5.50 7.50 5.00 and tier 2 cities. Bergen 4.75 5.00 5.25 8.25 4.75 Stavanger 5.50 5.75 5.75 6.25 5.50 Outlook Note: *1yr record Interest rates and yields have now probably bottomed out and With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and value gains are now expected to be derived from a strong and direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. strengthening letting market, which is predicted to continue Recent performance throughout 2018. Beyond 2018, we might experience returns Yield - Country Average Yield - Prime driven by rent increases being offset by an increase in yields Rental Growth - Prime Rental Growth - Country Average as interest rates slowly start to rise.

8.00% 80.0% ( growth Rental 7.00% 60.0% 40.0% 6.00% 20.0%

Yields 5.00% 0.0%

4.00% y -20.0% / y 3.00% -40.0% ) Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17

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NORWAY Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Oslo (Overall) 9,462,562 740,000 7.8% 202,380 671,670 291,359 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Fyrstikkalléen 1 Helsfyr Labor and Welfare Directorate 20,600 New

Fyrstikkalléen 1 Helsfyr Norwegian State Educational Loan Fund 4,200 New

Diagonale Bjørvika Ræder Advokatfirmae 3,500 New

Schweigaardsgate 33 Bjørvika Bane Nor 18,000 New

Grenseveien 78 Helsfyr Omsorgsbygg 8,000 New

Ruseløkkveien 26 CBD Thommessen 8,000 New

Parkveien 61 Vika Eika 6,900 Lease extension Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS Middelthuns gate 29 Majorstuen Entra/NRP 4.3% 141

Storebrand HQ Lysaker Storebrand/Arctic 4.75% 247

Akersveien 26 City Centre Clarksons/Canica 4.25% 91

Christian Krohgs gate 32 City Centre Obos and Anthon B Nielsen/Arctic 5.1% 73

Nydalsveien 30C Nydalen Avantor/Ragde Eiendom 4.25% 104 Source: Cushman & Wakefield, Realkapital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Håvard Bjorå property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Research Nordics Munkedamsveien 35, 2.etg. Oslo, N-0125, Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Norway completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +47 23 11 68 68 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cwrealkapital.no Wakefield LLP. All rights reserved. POLAND Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook Poland’s strong GDP growth continued in 2017 with 4.4% Prime Rents: A slight rise is possible in central locations with the reported for the year. Occupier demand remains strong.

remainder forecasted to remain at current levels. Supply in Warsaw was in line with the average from recent Prime Yields: Both prime and secondary yields under pressure. years. Supply in regional cities was up. While prime rents

remained generally unchanged, prime yields remain under Supply: 2018 will see a slowdown in development activity, as downward pressure. most of new projects will be delivered in the next two years. Demand: Positive economic forecast suggests stability of demand levels. Occupier focus National take-up will hit a record high in 2017. In Warsaw over Prime Office rents – December 2017 235,000 sq m of deals were concluded in the last quarter taking LOCATION € € US$ GROWTH % the annual total to 620,000 sq m. The Służewiec, CBD and City SQ.M SQ.M SQ.FT 1YR 5YR MTH YR YR CAGR Centre West saw the most activity with ca 20%, 19% and 15% Warsaw 23.75 285 31.8 0.0 -2.2 of total volume respectively. Warsaw, all-locations, vacancy fell Krakow 14.50 174 19.4 0.0 -0.7 to 11.6% with that in Central locations falling to 9.2% whilst that Wroclaw 14.00 168 18.7 0.0 -2.0 in non-central locations rose to 13.2%. In major regional cities Gdansk 14.50 174 19.4 3.6 0.7 vacancy is likely to be lower with the notable exception of Wroclaw where high supply despite strong demand looks set to Katowice 13.50 162 18.1 0.0 -0.7 edge vacancy upwards. Prime rents in Warsaw central Poznan 14.00 168 18.7 0.0 -1.4 locations and regional cities remain unchanged. However the Lodz 13.50 162 18.1 3.8 0.8 highest prime rent in Warsaw non-central locations shrank Szczecin 13.50 162 18.1 3.8 -0.7 slightly to €14.75 /sqm/month. Prime Office yields – December 2017 LOCATION CURRENT LAST LAST 10 YEAR (FIGURES ARE GROSS, %) Q Q Y HIGH LOW Investment focus Warsaw 5.25 5.25 5.25 7.00 5.25 €703m of office transactions closed in Q4 taking the total for Krakow 6.00 6.00 6.50 8.50 6.00 the year to EUR1.36bn. The office markets share of the total annual investment volume was 31%. The largest office deal in Wroclaw 6.25 6.25 6.50 8.50 6.25 Q4 was Griffin Premium RE’s purchase of a portfolio three Gdansk 7.00 7.00 7.00 8.50 6.75 assets; West Gate in Wroclaw, A4 Business Park in Katowice Katowice 7.50 7.50 7.50 8.80 6.50 and Tryton Business House in Gdansk, from Echo Prime Poznan 7.00 7.00 7.25 8.50 6.25 Properties. 2017 also marked the first Polish acquisitions of Lodz 7.25 7.25 7.75 8.50 6.50 new investors such as Reico, LCN and Globalworth. Szczecin 8.50 8.50 9.00 9.25 6.75 With respect to the yield data provided, in light of the changing nature of the 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 initial yield levels and should not be used as a comparable for any particular property or Outlook transaction without regard to the specifics of the property. Supply in Warsaw will tighten in 2018 which may lighten Recent performance downward pressure on effective rents in central locations. Yield - Country Average Yield - Prime Rental Growth - Prime Rental Growth - Country Average Supply will loosen again from 2019 with the pipeline showing record high of planned development. Trends such as the 9.00% 40.0% ( growth Rental 8.00% revitalization of older stock and the emergence of co-working 20.0% 7.00% space as a major occupier category are expected to continue. 6.00% 0.0%

Yields The impact of the new value based ‘minimum income tax’ on 5.00% -20.0% 4.00% y commercial properties remains to be seen but may depress / y 3.00% -40.0% ) investor activity in the short term. Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17

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POLAND Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Warsaw 5,290,150 615,700 11.6% 235,100 826,000 768,100

Kraków (f) 1,101,100 111,000 10% 46,000 174,450 157,900

Wrocław (f) 879,600 105,000 12% 40,000 164,500 147,350

Tricity (f) 696,700 60,000 9% 18,000 113,050 149,600

Katowice (f) 460,600 50,000 11% 8,000 33,950 35,520

Poznań (f) 455,100 40,000 9% 38,000 78,550 84,500

Łódź (f) 442,300 47,000 11% 20,000 56,050 99,900

Poland (Overall) 9,325,550 1,028,700 11% 405,100 1,446,550 1,442,900 Source: Cushman & Wakefield, PORF (f) - forecast

Key Occupier Transactions* PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Warsaw Generation Park X Citi Bank (Citi Service Center) 18,550 New + Expansion City Centre Warsaw Harmony Office Centre A Millenium Bank 18,350 Renewal Mokotów Warsaw Atrium Garden JP Morgan 15,550 New CBD Warsaw Łopuszańska Business Park B Alior Bank 13,450 Renewal + Expansion Jerozolimskie corridor Warsaw Postępu 14 AstraZeneca 13,200 Renewal + Expansion Mokotów Source: Cushman & Wakefield, PORF *Transactions only from Warsaw

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS

EPP portfolio – West Gate, A4 Business Wrocław, Katowice, Echo Prime Properties / Griffin Premium Real n/a 160+ Park, Tryton Business House Gdańsk Estate

Project Artemis (7 assets) Warsaw, Gdańsk, Łódź Savills IM / Cromwell n/a 130+

Dot Office Kraków Buma Group / Golden Star n/a 90+ Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Maciej Rostropowicz property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Junior Consultant, Consulting & Research Metropolitan, Pl. Piłsudskiego 1, 00-078 Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Warsaw, Poland completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +48 22 820 20 65 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cushmanwakefield.com Wakefield LLP. All rights reserved. PORTUGAL Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The Portuguese economy continues to show signs of Prime Rents: With demand strengthening and quality supply improvement. GDP growth in Q3 2017 stood at 2.5% and

increasingly scarce, rents should rise by year end. Oxford Economics' forecast for year end points out to 2.7% Prime Yields: Prime yield posted a new all-time end-of-year low, at year-on-year growth in 2017 followed by 2.2% in 2018. In 4.5%. This value is expected to remain stable. October, unemployment rate stood at 8.4%, reflecting a Supply: Currently, 34.000 sq.m are under construction and expected to be delivered by year end. downward revision of 10 b.p. compared with the prospects released one month earlier. Oxford Economics also reduced Demand: Demand is likely to continue at high levels in Portugal’s main cities, Lisbon and Porto. its full year unemployment rate forecast to 9.1%.

Occupier focus Prime Office rents – December 2017 The fourth quarter of 2017 was the most dynamic in Greater LOCATION € € US$ GROWTH % SQ.M SQ.M SQ.FT 1YR 5YR Lisbon’s office market, where 51,700 sq.m were transacted, MTH YR YR CAGR 12% more than in the same period of 2016. Driven by the Lisbon (Zone 1) 20.00 240 26.8 5.3 1.6 completion of VdA Headquarters, the Consulting & Legal Lisbon (Zone 2) 17.00 204 22.8 6.3 0.6 sector alone accounted for 30% of take-up, followed by Lisbon (Zone 5) 17.50 210 23.4 6.1 3.1 company services with 22% of total demand. The annual take- Lisbon (Zone 6) 14.00 168 18.7 7.7 4.0 up for office space in 2017 stood at 165,000 sq.m, which Prime Office yields – December 2017 represents a 15% year-on-year increase. LOCATION CURRENT LAST LAST 10 YEAR (FIGURES ARE GROSS, %) Q Q Y HIGH LOW The lack of quality supply for large occupiers is the main Lisbon (Zone 1) 4.50 4.75 4.90 7.75 4.50 reason for the stability in vacancy rate in recent quarters. By Lisbon (Zone 2) 5.50 5.50 5.75 8.50 5.50 the end of the year 8.7% of the total supply in Greater Lisbon Lisbon (Zone 5) 5.25 5.50 5.75 8.50 5.25 was available. The Western Corridor (Zone 6) posted the Lisbon (Zone 6) 7.00 7.00 7.25 10.25 6.25 highest vacancy rate, at 15.6%, followed by the New Office NOTES: Lisbon Zone 1: Avenida da Liberdade (Prime CBD) Zones (Zone 3), at 12.6%. Lisbon Zone 2: Avenidas Novas (CBD) Lisbon Zone 5: Parque das Nacoes Lisbon Zone 6: Western Corridor (Decentralised) The upturn in development activity was once again witnessed With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and in Q4 2017, with the completion of two buildings adding circa direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. 22.000 sq.m to Greater Lisbon’s stock. Currently, there are Recent performance 33,400 sq.m under construction expected to be completed in Yield - Country Average Yield - Prime 2018, 60% of which comprise pre-let agreements. Rental Growth - Prime Rental Growth - Country Average

11.00% 10.0% ( growth Rental Investment focus 9.00% 5.0% Office Sector accounted for 37% of the capital invested in 7.00% 0.0%

Yields Portugal in 2017, representing a new all-time high of €635 5.00% -5.0%

y million. The increasingly good performance on the occupier / y 3.00% -10.0% ) side allied with the economic growth in recent quarters Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 ensures the capital flow towards the Portuguese market from both national and international investors. This quarter witnessed eight investment deals, accounting for €120 million.

Outlook Growth in demand for office space is likely to continue during 2018, although subject to the scarcity of quality supply for large occupiers in the country’s two main cities. Greater development activity, either in the form of new construction or refurbishment of existing supply, should be motivated by pre- lets agreements and rental growth.

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PORTUGAL Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Zone 1 (Prime CBD) 564,649 37,187 6.6% 3,828 35,063 28,878

Zone 2 (CBD) 1,104,037 92,842 8.4% 6,238 20,919 4,479

Zone 3 (New Office Areas) 529,953 66,819 12.6% 5,391 22,315 58,908

Zone 4 (Secondary Office Locations) 438,159 7,247 1.7% 21,178 36,033 0

Zone 5 (Parque das Nações) 354,642 11,671 3.3% 216 6,908 0

Zone 6 (Western Corridor) 907,419 141,231 15.6% 14,830 41,886 0

Zone 7 (Non-Consolidated Areas) 740,780 48,065 6.5% 0 2,028 0

Lisbon (Overall) 4,639,639 405,061 8.7% 51,681 113,471 92,265 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Sorel Building Zone 4 (Secondary Office Locations) Vieira de Almeida 12,000 Lease

24 de Julho, 62-64 Zone 4 (Secondary Office Locations) WPP Group 9,178 Lease

Quinta da Fonte Zone 6 (Western Corridor) Dia Minipreço 2,861 Lease

Parque Suécia Zone 6 (Western Corridor) José de Mello saúde 1,764 Lease

Amoreiras – Torre 3 Zone 2 (CBD) BAI 1,225 Lease Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS Mar Vermelho Zone 5 (Parque das Nações) Internos / SGFPBP 5.00 – 6.00% 20 – 25

Malhoa 25 Zone 3 (New Office Areas) Square Asset Managment / Finsolutia 19 – 20 Marconi & Santa Maria Buildings Zone 2 (CBD) CGD / Marathon 50 – 55 Barbosa do Bocage 54 Zone 2 (CBD) CGD / Explorer Investments 13 – 15 Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Marta Esteves Costa property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Research Avenida da Liberdade 131-5º, 1250-140 Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Lisboa, Portugal completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +351 213 224 757 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cushmanwakefield.com Wakefield LLP. All rights reserved. ROMANIA Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook Throughout Q4 2017, almost 70,000 sq. m of office space was Prime Rents: With multiple options available to occupiers, prime completed, which led to an increase of the total modern stock rents will remain stable. in Bucharest of 28%, to 2.68 million sq. m. Demand continued Prime Yields: A slight compression is forecasted as investor to be strong, with the vacancy rate dropping below 8%. interest increases. Supply: Given the high number of projects under construction, new supply will increase going forward. Occupier focus Demand: Since a series of large office occupiers are assessing In the final quarter of 2017, demand for modern office space in the market, pre-letting activity is projected to be Bucharest was of approximately 95,000 sq. m. Net take-up consistent. represented 87% and consisted mainly of new operations, Prime Office rents – December 2017 followed by pre-leases. The Central North area was the most LOCATION € € US$ GROWTH % sought-after location as it recorded more than half of the total SQ.M SQ.M SQ.FT 1YR 5YR MTH YR YR CAGR demand transacted in Q4 2017. Compared with the previous Bucharest (Centre) 18.50 222 24.8 0.0 -1.0 quarter, companies in the Financial sector were the most Timisoara 14.00 168 18.7 0.0 0.7 active, accounting for 32% of total take-up in Q4. Cluj-Napoca 14.00 168 18.7 0.0 -2.6 Brasov 12.50 150 16.7 0.0 3.5 Investment focus Prime Office yields – December 2017 In Q4, One United, a leading real estate developer of premium LOCATION CURRENT LAST LAST 10 YEAR residential compounds in Bucharest, purchased North Gate, a (FIGURES ARE GROSS, %) Q Q Y HIGH LOW 20,700-sq. m office project located in Pipera submarket, for Bucharest (Centre) 7.25 7.25 7.25 10.00 5.60 approximately €17 million. Timisoara 8.00 8.00 8.00 11.00 7.50 Cluj-Napoca 8.00 8.00 8.00 10.50 8.00 Taking into consideration that a quite large number of office Brasov 8.00 8.00 8.00 11.00 7.50 projects are currently on the market for sale and investors With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and interest increases, a slight compression in prime yields is direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. expected in 2018. Recent performance Yield - Country Average Yield - Prime Outlook Rental Growth - Prime Rental Growth - Country Average Currently, there are more than 300,000 sq. m of office space

11.00% 20.0% ( growth Rental under construction, which are expected to be finalized by the 10.0% 9.00% end of 2018. Due to the high number of office projects under 0.0% 7.00% development, rental levels are forecasted to remain stable.

Yields -10.0% 5.00% Going forward, leasing activity will continue to be strong,

-20.0% y / y following the same positive trend. 3.00% -30.0% ) Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17

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ROMANIA Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Bucharest (CBD) 331,900 14,500 4.4% 7,900 49,800 24,000

Bucharest (Central North) 624,500 17,600 3% 47,400 101,400 44,000

Bucharest (North) 264,000 24,800 9.3% 1,800 44,800 42,000

Bucharest (Pipera) 632,500 74,900 11.8% 5,500 40,700 28,000

Bucharest (West) 361,200 19,700 5.4% 21,400 54,600 260,500

Bucharest (Central) 302,500 20,200 6.7% 8,700 37,200 63,000

Bucharest (South) 43,000 17,800 41% - 1,100 -

Bucharest (East) 122,000 13,000 10.6% 300 2,500 -

Bucharest (Overall) 2,681,600 202,500 7.6% 93,000 332,100 461,500 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Blure Rose Office Park Central North ING 19,000 Pre-lease

Ana Tower Central North PwC 8,000 Pre-lease

Campus 6 West NXP 7,600 Pre-lease

Campus 6 West Regus 3,200 New lease

Timpuri Noi Square Central Leaseplan 3,000 New lease Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS North Gate Pipera Creativ / One United N/A 17 Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Mihaela Galatanu property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Research Floreasca II Business Center, 3rd Floor, 40-44 Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Banu Antonache Street, Bucharest, 011665 | completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Romania reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our Tel: +4 021 310 3100 prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & [email protected] Wakefield LLP. All rights reserved. cushmanwakefield.com / cwechinox.com

RUSSIA Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The market remained stable during the fourth quarter. Although new construction in Q4 was double the Q3 figure, the Prime Rents: Rental rates keep stable, but in Q4 was seen slight decrease in OOT. total figure for 2017 was the lowest for the last ten years. In Q4 Prime Yields: Yields are slightly decreased due to the market four buildings were delivered into the market. Although stabilization. construction volume exceeded that of first three quarters and Supply: In Q4 new construction has doubled the indicator of vacancy rate keeps stable, absorption increased threefold Q3, but the sum of new construction in 2017 remains the minimum for last 10 years. compared to Q3. Overall, the market shows signs of a slow- paced improvement. Demand: Overall take-up in 2017 is 1.84 mln sq.m leased and purchased. Take-up of 2017 is the highest for the last 5 years. Occupier focus Prime Office rents – December 2017 Overall take-up in 2017 is 1.91 m sq. m for lease and owner LOCATION US$ € US$ GROWTH % occupation. Demand for vacant office premises returned to SQ.M SQ.M SQ.FT 1YR 5YR pre-crisis levels of 2012. After a record high in 2017 we expect YR YR YR CAGR a slight decrease in take-up in 2018 and maintaining stability in Moscow (Downtown) 700 583 65.0 0.0 -10.2 2019. Moscow (Central) 500 416 46.5 -9.1 -9.6 Moscow (OOT) 280 233 26.0 -30.0 -10.9 Although new construction in 2017 is relatively high at 408,000 Prime Office yields – December 2017 sq. m, we expect this to decrease in 2018 before stabilisation LOCATION CURRENT LAST LAST 10 YEAR in 2019. Over 2018 - 2020 we expect lower levels of (FIGURES ARE GROSS, %) Q Q Y HIGH LOW Moscow (Downtown) 10.00 10.50 10.50 13.00 7.00 construction activity with about 1m sq.m of new office space to be delivered, and supporting lower vacancy levels. Moscow (Central) 10.00 10.50 10.50 13.00 7.25 Moscow (OOT) 10.00 10.50 10.50 13.50 8.00 With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in Investment focus any transaction, such as financing, these are very much a guide only to indicate the approximate trend and direction of prime initial yield levels and should not be used as a comparable for any particular property or Offices remain the main focus for the investors. Activity is transaction without regard to the specifics of the property. mostly locally driven – about 80% of investors are Russian Recent performance Yield - Country Average Yield - Prime companies. As occupational markets stabilise this year we Rental Growth - Prime Rental Growth - Country Average expect a slight increase if investment activity and yield

15.00% 60.0% ( growth Rental compression over 2018. 13.00% 40.0% 11.00% 20.0% 9.00% 0.0% Outlook

Yields 7.00% -20.0% Uncertainty ahead of the presidential elections in March 2018 y

5.00% -40.0% /

y is leading to reduced business activity. However we expect 3.00% -60.0% ) this to pick up after the elections and move to a more positive Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 track later this year and into 2019.

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RUSSIA Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Moscow (Downtown) 2,559,832 270,566 10.0% 102,610 247,646 219,387

Moscow (Central) 8,507,216 834,400 11.1% 330,480 982,737 667,195

Moscow (OTA) 6,397,052 987,129 15.4% 139,270 693,354 1,274,925

Moscow (Overall) 16,856,352 2,107,553 12.5% 534,347 1,887,947 2,161,507 Source: Cushman & Wakefield Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Poklonka Place Moscow, Central Auction LLC 38,317 Lease (New deal)

Bolshevik (phase II) Moscow, Downtown VimpelCom 17,004 Lease (New deal)

Oasis BC Moscow, Central Gazprombank 11,665 Lease (New deal)

Krasnaya Roza (Demidov) Moscow, Central MSD Pharmaceuticals 4,315 Lease (New deal) Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS

Aquamarine III Building 4 Moscow, Downtown AFI Group / Gazprombank n/a 66.87

Aquamarine III Building 2 Moscow, Downtown AFI Group / Gazprombank n/a 49.56

Nevsky Prospekt 38 St. Petersburg Aktiv C / Imperia Holding n/a 29.51

Oriental Business Centre St. Petersburg YIT Rakennus Oy / Confidential n/a 16.0

Gruzinka 30 Moscow, Downtown Stone Hedge Fund / White Sphere n/a 14.76 Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Tatyana Divina property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Associate Director, Research Gasheka Street, 6, Moscow, 125047, Russia Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Tel: +7 495 797 9600 completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any [email protected] reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our cushmanwakefield.com prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & Wakefield LLP. All rights reserved. SLOVAKIA Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The Slovakian economy continues its positive trend Prime Rents: Mild rental growth is likely to continue in 2018. contributing to a strong expansion in all market sectors. GDP growth for the year 2017 is forecasted to reach 3.4%, Prime Yields: Current yield level is stable, however, in prime office while the unemployment rate is expected to fall to 7.8% at the locations, we foresee further yield compression. end of 2017. Supply: Several larger projects will be delivered to the office market in the first half of 2018. Occupier focus Demand: Solid economic fundamentals contribute to the Strong demand and a declining vacancy rate paves the way market activity and keep the office demand strong. for rental growth. Prime rents are currently stable at Prime Office rents – December 2017 16.00 EUR/sq. m/month, while the most common rate for an LOCATION US$ € US$ GROWTH % Abuilding is around 13.50–14.50 EUR/sq. m/month. SQ.M SQ.M SQ.FT 1YR 5YR YR YR YR CAGR Bratislava – City Centre 16.00 192 21.4 3.2 0.6 About 85,000 sq. m of new office stock was completed in Bratislava – Inner City 13.00 156 17.2 0.0 0.8 2017, which represents a 15% Y/Y growth. An additional Bratislava – Outer City 11.00 132 14.5 0.0 1.9 138,000 sq. m should be added to the market during the next Prime Office yields – December 2017 year. Positive economic activity in the information technology LOCATION CURRENT LAST LAST 10 YEAR industry and the professional services sectors will continue to (FIGURES ARE GROSS, %) Q Q Y HIGH LOW be a key source of demand in the Slovak office market. Bratislava 6.25 6.25 6.60 8.00 5.75 With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and Investment focus direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. Institutional investors are strongly interested in occupied, Recent performance sustainable and environmentally friendly office buildings in

Yield - Prime Rental Growth - Prime prime locations in Bratislava. The current yield levels represent the existing prime products in Bratislava. Nonetheless, in case

9.00% 20.0% ( growth Rental 8.00% 15.0% of a new sustainable office building with strong covenants, we 7.00% 10.0% would envisage a further yield compression in the middle term. 5.0% 6.00% 0.0% Yields 5.00% -5.0% Outlook y

4.00% -10.0% / y 3.00% -15.0% ) The Slovak economy is expected to continue to remain one of Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 the fastest growing economies in the Eurozone with healthy domestic and international demand. Supportive financial conditions together with a positive labour market will drive further demand for office space.

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SLOVAKIA Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Bratislava (CC) 570,983 40,780 7.1% 17,521 43,251 167,300

Bratislava (IC) 735,207 32,524 4.4% 62,549 129,588 53,500

Bratislava (OC) 414,234 32,937 8.0% 4,349 11,139 33,040

Bratislava (Overall) 1,720,424 106,241 6.2% 84,419 183,978 253,840 Source: Bratislava Research Forum, Cushman & Wakefield, Q4 2017

Key Occupier Transactions PROPERTY SUBMARKET BUSINESS SECTOR SIZE (SQ.M) TYPE OF LEASE

Stein 2 Offices City Centre IT 6,880 New lease

Aupark Tower Inner City Telecoms 5,210 Renegotiation

Green Point Offices Inner City IT 4,860 Renegotiation

Digital Park Inner City Other 4,100 Renegotiation

City Business Center III Inner City Financial Services 3,960 New lease Source: Bratislava Research Forum, Cushman & Wakefield, Q4 2017

SOURCE: BRATISLAVA RESEARCH FORUM, CUSHMAN & WAKEFIELD, Q4 2017

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Marie Baláčová property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Research CZ & SK Quadrio Offices Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Purkyňova 3, 110 00 Praha 1, Czech Republic completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +420 234 603 740 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cushmanwakefield.cz Wakefield LLP. All rights reserved. SPAIN Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook Corporates are actively absorbing office space in Madrid and Prime Rents: Rental growth is expected outside CBD in Madrid Barcelona supported by a strong economic drive and office and Barcelona due to the lack of supply. employment generation. 2017 ended with a 10 year record in Prime Yields: Minimum value seems to be reached for the prime space take-up in Madrid and good performance in space segment of the market absorption in Barcelona despite local political instability. Supply: Deliveries of new stock are swinging from Space demand has pushed down vacancy rates, impelling refurbishments to brand new office schemes rental values to increase. Demand: The number of occupier deals will continue the trend and some large deals are expected Prime Office rents – December 2017 Occupier focus A 10 year record in office space take-up (543.000 sq. m.) has LOCATION € € US$ GROWTH % SQ.M SQ.M SQ.FT 1YR 5YR been achieved in Madrid with an active corporate demand as MTH YR YR CAGR well as a contribution of the public sector that remained Madrid (CBD) 32.75 393 43.8 9.2 6.0 inactive since 2008. Office market in Barcelona has increased Madrid (Decentralised) 17.00 204 22.8 3.0 1.9 space absorption in 2017 in response to healthy demand Barcelona (CBD) 23.00 276 30.8 7.0 5.0 where corporates from IT, media and industrial business Barcelona (Decentralised) 20.00 240 26.8 11.1 7.8 sectors stood up. This activity has derived in occupied space Prime Office yields – December 2017 increases in both cities with vacancy rates contracting LOCATION CURRENT LAST LAST 10 YEAR notwithstanding the mild reactivation of new speculative (FIGURES ARE GROSS, %) Q Q Y HIGH LOW projects. As a result rental values are increasing in the main Madrid (CBD) 3.50 3.50 3.75 6.00 3.50 office districts. Madrid (Decentralised) 4.75 5.00 5.25 7.25 4.75 Barcelona (CBD) 3.50 3.50 3.80 6.25 3.50 Investment focus Barcelona (Decentralised) 4.25 4.50 5.00 7.75 4.25 During 2017 investors’ appetite and liquidity kept on sound, With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and resembling the conditions of the last three years and backed- direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. up by an occupier market with improving momentum. Recent performance However, office investment volumes decreased in Madrid in Yield - Country Average Yield - Prime response to a strong activity between 2014 and 2016 that Rental Growth - Prime Rental Growth - Country Average yielded acute scarcity of quality product in the market. On the

8.00% 30.0% ( growth Rental other hand Barcelona saw higher investment volumes due to 7.00% 20.0% less activity in the last three years. International investors 10.0% 6.00% 0.0% were dominant (75% of the volume) with Core+ and Value-add

Yields 5.00% -10.0% as main strategies. Yields compressed further on an annual

4.00% y

-20.0% / basis but stabilised in the second half of 2017. y 3.00% -30.0% ) Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 Outlook Good economic performance is expected to persist in 2018, but political uncertainty may subtract some momentum to the economy. We forecast space demand to keep its progressive trend and positive net absorption to keep-on pushing vacant spaces downwards. This will be done on the back of a development pipeline that has not yet attained full momentum. Capital markets will remain active and investors, both national and from abroad, will target assets outside CBD and Central districts.

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SPAIN Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

CBD 3,280,779 296,777 9.05% 67,224 216,042 29,390

City Centre 2,172,719 133,266 6.13% 49,585 79,729 27,392

Decentralised (M-30 & M-40) 3,823,520 588,406 15.39% 75,609 172,507 142,170

Out of Town 3,881,139 566,633 14.60% 28,602 75,062 13,706 Madrid (Overall) 13,158,157 1,585,081 12.05% 67,224 548,601 212,660

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

CBD (Diagonal/Pg. Gracia) 900,330 20,300 2.25% 5,423 35,078 0

City Centre 2,730,257 67,570 2,47% 15,738 80,267 0

Decentralised (New Business Areas) 1,280,667 169,340 13.22% 49,447 171,064 218,590

Out of Town 974,771 175,000 17.95% 8,008 56,723 25,195 Barcelona (Overall) 5,886,025 432,218 7.34% 78,616 343,132 243,785

Key Occupier Transactions SIZE TRANSACTION PROPERTY SUBMARKET TENANT (SQ.M) TYPE Confidential Madrid (Decentralised) Madrid city council 19,700 Neutral relocation

Confidential Madrid (City Centre) Ministry of Finance 17,500 Neutral relocation

Confidential Barcelona (Decentralised) Laboratorios Esteve 11,800 Neutral relocation

Confidential Barcelona (Decentralised) Ferrovial 2,400 Expansion Source: Cushman & Wakefield

Key Investment Transactions PRICE PROPERTY SUBMARKET BUYER SELLER € MILLIONS Zambal Office portfolio Madrid (City Centre) Zambal Socimi 70 Edificio Los Cubos Henderson Park JV Therus Madrid (Decentralised) Realia 52 Calle de Albacete 5 Invest Gran Vía 4 Madrid (City Centre) Riberas Autonomy Spain 43

Albarracín 25 Madrid (Decentralised) Zambal Socimi Real IS AG 38 Source: Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Ramiro Rodríguez property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Associate Director Jose Ortega y Gasset, 29 - 6º Planta – 28006 Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Madrid, Spain completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +34 91 781 0010 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cushmanwakefield.com Wakefield LLP. All rights reserved. SWEDEN Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The job markets of the major Swedish cities remain strong with Prime Rents: Stockholm growth abating after 10%+ in 2017 but Q3 2017 employment growth for the Stockholm region reported

remains above inflation. Growth in Gothenburg and at 2.7 percent y/y, while Gothenburg and Malmö growth came in Malmö concentrated to new supply. Prime Yields: Rent reversionary potential and lack of assets for at historically strong levels, above 4 percent and 3 percent

sale keep pressure on yields but per sq. m. capital respectively. On the national level, employment growth numbers values are becoming challenging in Stockholm have continued to rise during the year. Market sentiment Supply: Supply growth picking up in 2018 as conversions are expected to be fewer. continues to lean towards lower vacancies and growing rents in Demand: Healthy occupational demand expected to remain the major cities. With a strong rebound on the continent Swedish across the major cities, backed by strong growth is expected to continue in 2018 with an additional boost employment growth from an expansive fiscal policy ahead of elections in 2018. Prime Office rents – December 2017 LOCATION SKR € US$ GROWTH % SQ.M SQ.M SQ.FT 1YR 5YR Occupier focus YR YR YR CAGR The growth in the office stock has slowed during 2017 and in Stockholm (CBD - 7,000 712 79.4 12.0 8.8 the fourth quarter the change from the previous quarter was a Norrmalmstorg) negative 0.3%. The annual change also slowed from 1.4% at Stockholm (City Centre) 5,500 559 62.4 25.0 n/a the beginning of 2017 to 0.7% in the fourth quarter. Stockholm (Decentralised) 3,550 361 40.3 4.4 9.5 Conversion of office space to residential space is the main Gothenburg 3,000 305 34.0 5.3 4.1 reason behind the shrinking supply. In 2018 Cushman & Malmö 2,450 249 27.8 2.1 2.6 Wakefield expects the growth in office supply to revert to Prime Office yields – December 2017 between 1.5 and 2.0%. Stockholm vacancies have continued LOCATION CURRENT LAST LAST 10 YEAR to decline but are expected to remain stable in 2018 at the (FIGURES ARE NET, %) Q Q Y HIGH LOW current levels of around 3% in the CBD. Stockholm prime Stockholm (CBD - 3.50 3.50 3.60 5.75 3.50 rents grew more than 10% in 2017 to an average of 7,000 Norrmalmstorg) SEK per sq. m per year. The strongest rental growth in Malmö Stockholm (City Centre*) 4.00 4.00 4.25 5.00 4.00 and Gothenburg was not in the traditional CBD locations but Stockholm (Decentralised) 4.25 4.25 4.50 7.50 4.25 instead new office locations in both cities with a strong Gothenburg 3.90 3.90 3.90 6.50 3.90 pipeline of high quality products in recent years saw rental Malmö 4.25 4.25 4.25 6.50 4.25 growth of more than 10% each during the year. Note: *2yr record

With respect to the yield data provided, in light of the changing nature of the 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 initial yield levels and should not be used as a comparable for any particular property or Investment focus transaction without regard to the specifics of the property. Deal activity was down 40% in the fourth quarter compared to Recent performance last year but the full year deal volume of SEK 32 billion was Yield - Country Average Yield - Prime only 5% behind 2016 excluding the SEK 21 billion Norrporten Rental Growth - Prime Rental Growth - Country Average

7.00% 20.0% ( growth Rental acquisition by Castellum in Q2 2016. Yields have been stable 6.00% 10.0% across markets. Domestic investors have been the dominant 5.00% 0.0% players on the buy-side with 88% of total acquisitions –

Yields 4.00% -10.0% significantly more than the all property-average of 74%. The

3.00% -20.0% y handful of international investors included Triuva, Union, M&G / y Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 ) and CBRE and all involved Stockholm office assets.

Outlook After four years of strong rental growth the pace is expected to slow in 2018. The reversionary yield potential has weakened and capital values are becoming challenging on some submarkets as yields have remain around all-time lows. In 2018 demand will continue to outstrip supply on most core markets but opportunities exist for example in suburban markets where rental growth has trailed the strong performance of the prime submarkets in 2016 and 2017.

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SWEDEN Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION AVAILABILITY TAKE-UP STOCK RATE YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M)

Stockholm (CBD) 1,777,000 51,500 2.9% - - 6,000

Stockholm (City Centre) 3,640,000 218,400 6.0% - - 0

Stockholm (Decentralised) 6,345,000 634,500 10.0% - - 170,000

Stockholm (Overall) 11,762,000 904,400 7.7% 200,000 625,000 176,000 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Stockholm City Nattugglan 14 Tyréns Group 12,000 New lease centre Fräsaren 12 Decentralised Swedish National Agency for Education 13,800 New lease

Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS Uppfinnaren 1 Stockholm CBD Oscar Properties/Fastpartner 3.5% 98 Stockholm City Gladan 5-7 Tobin Properties/Kungsleden 4.25% 51 Centre Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Daniel Anderbring property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Partner, Head of Research Regeringsgatan 59, Box 3637, SE-103 59 Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Stockholm, Sweden completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +46 (0) 8 671 34 31 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cushmanwakefield.com Wakefield LLP. All rights reserved. TURKEY Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The Turkish economy grew by 11.1% y-o-y in the third quarter Prime Rents: Rents are expected to soften further in line with of 2017. The real sector confidence index recorded 106.26 currency volatility and increasing supply. points and consumer confidence index 65.10 points in Prime Yields: Expected to be stable in the short term. December 2017. These outcomes provide an optimistic

atmosphere in terms of leasing activities and office investment Supply: Increasing in line with existing supply pipeline. transactions; yet, high inflation, where CPI reached 11.2 in October 2017 and unemployment, which was 10.2% by Demand: Expected to continue recovery in line with economic October 2017 and currency volatility still remain as risks that growth. are impacting rent levels in the office market. Prime Office rents – December 2017 LOCATION US$ € US$ GROWTH % Occupier focus SQ.M SQ.M SQ.FT 1YR 5YR 331,616 sq.m of new office space was completed and entered MTH YR YR CAGR the market, taking the overall supply to 5.79 million sq.m. Take- Istanbul (Levent) 35.0 350 39.0 -14.6 -4.5 up in Q4 reached 74,052 sq.m taking the total for 2017 to 300,651 Istanbul (Esentepe- 22.0 220 24.5 -18.5 -8.3 Gayrettepe) sq.m which is a decrease by 13% q-o-q, however an increase by Istanbul (Maslak) 28.0 280 31.2 0.0 -1.4 68% y-o-y. Istanbul (Asian side) 25.0 250 27.9 -3.8 0.8 Izmir 14.0 140 15.6 -6.7 -3.8 On a sq.m basis, 54% of all deals occurred outside the CBD on the Asian side, 40% in the CBD and 6% outside the CBD on the Ankara 15.0 150 16.7 -11.8 -8.2 European side in Q4 2017. The largest new leases in Q4 were Prime Office yields – December 2017 Bahcesehir University (10,850 sq.m, Altunizade), Setur (7,406 LOCATION CURRENT LAST LAST 10 YEAR sq.m, Bengi Plaza) and Schindler (3,500 sq.m, My Newwork, (FIGURES ARE GROSS, %) Q Q Y HIGH LOW Istanbul (Levent) 7.25 7.25 7.15 8.75 6.80 Atasehir). Overall, the vacancy rate increased to 24.03% in Q4 2017. Istanbul (Esentepe- 7.50 7.50 7.30 9.00 7.25 Gayrettepe) Istanbul (Maslak) 7.50 7.50 7.25 10.00 7.25 Investment focus Istanbul (Asian side) 7.50 7.50 7.30 10.50 7.25 Investment activity in Q4 was limited mostly to strata sales and Izmir 9.50 9.50 9.50 10.50 9.00 included an acquisition of 3,737 sq.m of office floors by Ak Ankara 9.25 9.25 9.25 10.50 9.00 Asset Management’s real estate investment fund at AND Plaza. With respect to the yield data provided, in light of the changing nature of the 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 initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. Outlook Due to rapid increase in supply and high vacancy, prime and Recent performance secondary rents are expected to soften further in line with Yield - Country Average Yield - Prime Rental Growth - Prime Rental Growth - Country Average currency volatility. The office market is expected to remain tenant friendly for the short to medium term. 11.00% 100.0% ( growth Rental 80.0% 9.00% 60.0% 40.0% 7.00% 20.0% Yields 5.00% 0.0% y

-20.0% / y 3.00% -40.0% ) Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17

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TURKEY Office Market Snapshot Fourth Quarter | 2017

TAKE-UP UNDER LOCATION SUPPLY AVAILABILITY VACANCY TAKE-UP Q4 YTD CONSTRUCTION (SQ.M) (SQ.M) (%) (SQ.M) (SQ.M) (SQ.M) CBD (Levent-Maslak-Gayrettepe- 1,897,443 380,438 20.05% 26,206 110,136 321,045 Zincirlikuyu-Esentepe) Mecidiyekoy-Sisli 313,486 124,937 39.85% 817 3,128 159,950

Umraniye 716,193 100,971 14.10% 10,995 88,056 20,000 Atasehir-Kozyatagi-Goztepe- 688,994 287,928 41.79% 13,251 39,226 1,285,926 Icerenkoy Kavacik 130,876 24,954 19.07% 0 1,689 0

Kagithane 259,364 68,036 26.23% 4,333 18,549 66,000

Cendere 284,603 223,045 78.37% 0 0 65,000

Rest of Istanbul 1,500,936 181,462 12.09% 18,450 39,867 430,981

Istanbul (Overall) 5,791,895 1,391,771 24,03% 74,052 300,651 2,348,902 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.M) TYPE Kusbakisi Cad./Oymaci Sok. Altunizade Bahcesehir College 10,850 New lease

Bengi Plaza Umraniye Setur 7,406 New Lease

My Newwork Atasehir Schindler 3,500 New Lease Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE US$ MILLIONS approx AND Plaza (3,737 sq.m of office floors) Kozyatagi Ak Portfolio - 7% Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Cigdem Isozen property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Consultant, Research Buyukdere Cd. 13, River Plaza, 15, Levent Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or 34394, Istanbul/Turkey completene ss of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Tel: +90-212-334 7815 reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our [email protected] prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & cushmanwakefield.com.tr Wakefield LLP. All rights reserved. KYIV, UKRAINE Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The year 2017 was largely stable for Ukraine’s economy: Prime Rents: Low development activity combined with relatively whereas country’s growth remained sluggish with GDP growth strong occupier demand has put upward pressure projected at 2% at the year-end, domestic consumption and on rents. During Q4 2017 prime office rent increased by 4% and reached USD 27 per sq m per month at investment demand significantly improved, and the currency the year end. In the short term prime rents are exchange rate demonstrated reduced volatility. expected to be subject of further increase.

Prime Yields: Prime yields for office properties in Kyiv are projected to further compress during 2018 and reach During Q4 2017, primary vacancy in the office property sector in around 12% towards the year end. Kyiv decreased by additional 3% and reached around 8.9% in Supply: During 2017 overall development activity on the December 2017, compared to 15.6% at the end of 2016. office property market in Kyiv remained very low with new supply reaching around 43,300 sq m GLA during the year. Additional 85,000 sq m GLA of Despite the increased rate of absorption and developing offices are planned for delivery in 2018. shortage of available office space in central areas, in the short Demand: Demand for office space in Kyiv remains relatively term pipeline office delivery remains at low levels with strong, largely driven by relocations and expansions of fast growing IT companies, as well as companies approximately 85,000 sq m GLA planned for delivery in 2018. providing business services. Additionally, there are several frozen office projects totaling to Prime Office Rents – December 2017 around 181,000 sq m GLA. LOCATION SKR € US$ GROWTH % SQ.M SQ.M SQ.FT 1YR 5YR YR YR YR CAGR Occupier focus Kyiv (CBD) 27.00 270 30.10 8.0 -7.1 In 2017, total take-up in the office property sector in Kyiv Prime Office Yields – December 2017 amounted to around 205,000 sq m GLA, which is 16% and 18% LOCATION CURRENT LAST LAST 10 YEAR higher than in 2016 and 2015 respectively. Approximately 40% (FIGURES ARE GROSS, %) Q Q Y HIGH LOW of the annual take-up was recorded during Q4 2017. Kyiv (CBD) 12.25 12.50 13.00 17.00 9.50 With respect to the yield data provided, in light of the changing nature of the market and the costs implicit in any transaction, such as financing, these are very much a guide only to indicate the approximate trend and Net absorption reached almost 83,000 sq m in October- direction of prime initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. December 2017, bringing total net absorption for the year to Recent performance around 161,000 sq m, which is 30% higher than in 2016 and Yield - Prime Rental Growth - Prime almost double the amount of 2015.

18.00% 100.0% ( growth Rental 50.0% Investment focus 13.00% Driven by improved market dynamics and in intention of a 0.0%

Yields 8.00% number of banks to dispose of foreclosed assets, 2017 saw a -50.0% material increase in the sale/purchase transactions on the office y

3.00% -100.0% / y

Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 ) property market in Kyiv with total secondary investment volume estimated at around USD 89 million. Major investment transactions included acquisition of the business centres ‘Prime’ and ‘Eurasia’ by Dragon Capital Investments Limited.

Outlook The latest forecasts of Oxford Economics suggest around 3% annual GDP growth in both 2018 and 2019. Occupier demand is expected to remain at current levels with vacancy potentially decreasing in 2018 with upward pressure on effective occupational costs for quality space. Total volume of secondary investment transactions in the office property market in Kyiv in 2018 may exceed USD 130 million.

This report has been produced by Cushman & Wakefield in Ukraine for use by those with an interest in commercial Marta Kostiuk property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Research and Development Consultancy Wakefield believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or completeness of any Maxim BC, 33v Antonovycha Str., Kyiv 01033, of the information contained herein and Cushman & Wakefield shall not be liable to any reader of this report or any Ukraine third party in any way whatsoever. All expressions of opinion are subject to change. Our prior written consent is Tel: +38 (044) 220 30 60 required before this report can be reproduced in whole or in part. [email protected] ©2018 Cushman & Wakefield in Ukraine. All rights reserved. cushmanwakefield.com.ua

KYIV, UKRAINE Office Market Snapshot Third Quarter | 2017

BUILT VACANCY TAKE-UP UNDER LOCATION STOCK RATE YTD CONSTRUCTION (%) (%) (SQ.M) (SQ.M)

Kyiv (CBD) 27.60% 7.00% 23,300 5,700 (5,000 frozen)

Kyiv (Podil) 9.50% 11.00% 22,700 46,200 (29,000 frozen)

Kyiv (Pechersk outside CBD) 10.20% 16.00% 11,750 0

Kyiv (central outside CBD) 10.60% 11.00% 4 200 5,000 (136,300 frozen)

Kyiv (NC-WB) 34.80% 11.00% 35 760 77,000 (10,900 frozen)

Kyiv (NC-EB) 7.20% 21.00% 2 990 4,100 138,000 SQ.M Kyiv (Overall) 1,818,900 SQ.M 12% 100,700 (plus 181,200 SQ.M frozen Source: Cushman & Wakefield

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Marta Kostiuk property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of Research and Development Consultancy Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Maxim BC, 33v Antonovycha Str., Kyiv 01033, completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any Ukraine reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our Tel: +38 (044) 220 30 60 prior written consent is required before this report can be reproduced in whole or in part. ©2017 Cushman & [email protected] Wakefield LLP. All rights reserved. cushmanwakefield.com.ua

UNITED KINGDOM Office Market Snapshot Fourth Quarter | 2017

MARKET INDICATORS Overview Market Outlook The UK economy is estimated to have grown by around 1.5% over 2017, and has arguably performed better than expected. Prime Rents: Rental growth anticipated in the regional markets, but downward pressure forecast in the short term Growth is forecast to remain subdued in the coming months. across Central London. The latest PMI Services index (Dec) recovered to its second Prime Yields: Stable for core assets, but softer yields anticipated elsewhere as investors re-evaluate pricing and risk. highest monthly reading since April, but uncertainty impacted Supply: A lack of stock, particularly in the SE and regional spending and job creation was low. Nevertheless, business cities will keep vacancy levels in check optimism for the year ahead picked up to a 7-month high as Demand: Relatively positive sentiment should support occupier global growth boosts expectation of increased demand. demand, but flexibility will remain a key driver Prime Office rents – December 2017 Occupier focus LOCATION GB£ € US$ GROWTH % The Central London leasing market posted another strong SQ.FT SQ.M SQ.FT 1YR 5YR YR YR YR CAGR quarter. The annual volume reached over 11.7 million sq ft, London (City) 67.50 818 91.2 -1.5 4.2 which is 15% ahead of 2016. Flexible workplace providers were London (West End) 110.00 1,333 148.7 -8.3 1.7 responsible for an unprecendented level of transactions across Manchester 33.50 406 45.3 3.1 3.3 Central London with just under 1 million sq ft let to the sector in Birmingham 33.00 400 44.6 3.1 3.7 Q4. The sector has accounted for more than 21% of all leasing volumes in the full year, with WeWork’s acquisitive stance a key Bristol 32.50 394 43.9 14.0 3.4 driver. Supply contracted marginally quarter on quarter, with Leeds 30.00 364 40.6 11.1 4.1 year-end vacancy rate of 5.2%. Newcastle 23.50 285 31.8 2.2 3.3 Reading 35.00 424 47.3 0.0 3.1 In the regions, take-up levels continued to tick upwards, while Cardiff 25.00 303 33.8 0.0 2.6 supply generally contracted quarter on quarter. As with London, Edinburgh 33.50 406 45.3 1.5 4.0 the flexible workplace sector was a key taker of space in the 29.50 358 39.9 0.0 0.7 Glasgow year, particularly in Birmingham, the Thames Valley and Prime Office yields – December 2017 Manchester. A shortage of speculative development is LOCATION CURRENT LAST LAST 10 YEAR supporting rental levels and further rental growth was evident (FIGURES ARE NET, %) Q Q Y HIGH LOW over the quarter in some of the key city centre markets. London (City) 4.00 4.00 4.25 6.75 4.00 London (West End) 3.25 3.25 3.25 6.00 3.25 Investment focus Manchester 5.00 5.00 5.00 7.25 5.00 UK office investment moderated in the final quarter but year on Birmingham 5.00 5.00 5.00 7.00 5.00 year was robust- up marginally to £22,165m. London offices Bristol 5.25 5.25 5.25 7.25 5.15 dominated volume, accounting for two-thirds by value. The 5.25 5.25 5.25 7.50 5.00 Leeds strength of underlying long-term drivers for key markets has Newcastle 5.75 5.75 5.75 7.50 5.50 meant demand from foreign investors, particularly from Asia, Reading 5.25 5.25 5.25 7.50 4.90 looking for high quality, long term hold investment opportunities Cardiff 5.75 5.75 5.75 8.00 5.50 has held up. Domestic investors continue to be net seller given Edinburgh 5.50 5.50 5.50 7.25 5.25 the mature state of the cycle. Yields across the main CBD Glasgow 5.50 5.50 5.50 7.50 5.50 markets remained relatively stable. With respect to the yield data provided, in light of the changing nature of the 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 initial yield levels and should not be used as a comparable for any particular property or transaction without regard to the specifics of the property. Outlook Recent performance The UK occupier market is anticipated to hold up over the short Yield - Country Average Yield - Prime to medium term. Flexibility will be a key driver of leasing activity, Rental Growth - Prime Rental Growth - Country Average with occupiers seeking overflow space while the flexible

7.50% 30.0% ( growth Rental workplace sector will continue to expand. With a slowing of new 6.50% 20.0% speculative development, particularly in the regional cities, 10.0% 5.50% 0.0% vacancy rates are not expected to see any major uplift in the

Yields 4.50% -10.0% short term and pockets of rental growth will be evident. London 3.50% -20.0% y

/ is the exception, with a further softening in headline rents y

2.50% -30.0% ) expected. Yields should remain stable in the short term. Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17

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UNITED KINGDOM Office Market Snapshot Fourth Quarter | 2017

BUILT VACANCY TAKE-UP TAKE-UP TOTAL UNDER LOCATION AVAILABILITY STOCK RATE Q4 YTD CONSTRUCTION (SQ.FT) (SQ.FT) (%) (SQ.FT) (SQ.FT) (SQ.FT) Central London (City) 137,943,000 6,978,225 5.06 1,884,761 6,629,658 8,605,852 Central London (West End) 105,440,000 4,864,077 4.65 949,006 4,349,010 2,762,448 Central London (East) 21,754,000 1,951,724 8.97 407,433 725,543 2,055,788 Central London (Overall) 265,137,000 14,181,252 5.20 3,241,200 11,704,211 11,704,211 Birmingham City Centre 18,660,000 1,352,873 7.2 354,530 1,005,072 1,546,988 Bristol City Centre 13,506,000 472,617 3.5 172,927 612,690 195,000 Cardiff City Centre 9,509,000 597,432 6.3 103,915 587,932 570,976 Edinburgh City Centre 11,913,000 580,510 4.9 160,610 703,503 404,000 Glasgow City Centre 13,849,000 1,887,775 13.6 330,061 627,314 153,614 Leeds City Centre 12,449,000 1,260,129 10.1 216,788 1,014,510 107,000 Manchester City Centre 20,140,000 2,839,521 14.1 278,073 1,208,984 857,390 Newcastle City Centre 8,093,000 650,000 8.0 38,022 183,870 143,000 Regional Centres (Overall) 108,119,000 9,640,857 8.92 1,654,926 5,943,875 3,977,968 Source: Cushman & Wakefield

Key Occupier Transactions PROPERTY SUBMARKET TENANT SIZE TRANSACTION (SQ.FT) TYPE Prelet under M7 Site, Westfield London Stratford HMRC 238,000 construction Prelet under The Hewett, 30 Curtain Road London Shoreditch WeWork 178,000 construction The Crossway, Great Charles Birmingham CBD Regus Street 76,000 No.1 Paradise, Chamberlain Birmingham CBD PWC Square 58,631 One Canal Parade Cardiff CBD Cardiff & Vale College Ltd 54,000 Source: Cushman & Wakefield

Key Investment Transactions PROPERTY SUBMARKET SELLER / BUYER YIELD PRICE € MILLIONS Said Holdings 5 Churchill Place London Canary Wharf 306.30 /Cheung Kei Group Great Portland Estate & BP Pension

240 Blackfriars London Southbank Fund/ Al Gurg 303.28 No 1 Spinningfields Manchester Allied London/Schroders plc 226.76 Lloyds Bank/

25 Gresham Street London City Core Dalian Wanda Group 181.70 Legal & General Property/Million

99 Gresham Street London City Core Cities 158.59 Source: Cushman & Wakefield, Real Capital Analytics

This report has been produced by Cushman & Wakefield LLP for use by those with an interest in commercial Elaine Rossall property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Head of UK Offices Research & Insight 125 Old Broad Street, London, EC2N 1AR Wakefield LLP believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or Tel: +44 (0) 203 296 4297 completeness of any of the information contained herein and Cushman & Wakefield LLP shall not be liable to any [email protected] reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. Our cushmanwakefield.com prior written consent is required before this report can be reproduced in whole or in part. ©2018 Cushman & Wakefield LLP. All rights reserved.

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