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Real Estate Market - 1st Semester 2013 -

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VARESE PROVINCE Real Estate Market - 1st Semester 2013 Lombardy - Italy

Index:

Introduction

Office real estate market Province and Lease Trend - Across the Globe

Retail real estate market Retail High-street market

Industrial real estate market Province Europe prime industrial cities - lease rate

Hotel real estate market Hotel & tourism attractions Tourism flows Hotel investment “Appeal” Index Switzerland Slovenia France

ITALY

1 Maggiore lake lake lake

Varese Idro lake lake

Garda lake

LOMBARDY REGION

2 LOMBARDY Real Estate REPORT LOMBARDY Real Estate REPORT

Lombardy’s GDP

Year GDP 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 GDP 247.051,8 259.431,0 270.653,3 279.450,4 289.471,2 297.600,4 307.717,7 320.843,8 323.973,3 310.952,0 330.997 337.285,9 327.167,3 Millions of euro GDP 27.488,1 28.765,6 29.836,9 30.448,8 31.059,5 31.545,2 32.356,3 33.442,5 33.424,8 31.743,1 33.500 33.624,2 32.615,5 per capita-Euro

Source: ISTAT, Italian National Institute of Statistics

Provinces of Lombardy

Area Province Population (km²) (n°)

Bergamo 1.098.740 2.723 244

Brescia 1.256.025 4.783 206

Como 594.988 1.288 160

Cremona 363.606 1.772 115

Lecco 340.167 816 90

Lodi 227.655 782 61

Mantua 415.442 2.339 70

Milan 3.156.694 1.575 134

Monza & Brianza 849.636 405 55

Pavia 548.307 2.965 190

Sondrio 183.169 3.212 78

Varese 883.285 1.199 141 Lombardy 9.917.714 23.860,62 Italy 60.626.442 301.340

Source: ISTAT, Italian National Institute of Statistics

3 LOMBARDY Real Estate REPORT LOMBARDY Real Estate REPORT

A51

A9

Lugano Maggiore lake Como lake lake A26 A22

Varese Idro lake PEDE lake MONTANA

Garda lake

BREBEMI A4 A4

A21

Borni- Mortara

A1 A7

Regional Road Transport System

4 Varese Province

Diversification and business acumen are the buzzwords to use when describing Varese's economy. Some 65,000 companies employing 272,000 workers are distributed across the secondary and tertiary sectors, offering a vast array of products and services. Varese's extensive entrepreneurial history is reflected by its successful multinationals (Agusta, , Whirl- pool, Novartis, Conforama and Alenia ) and its thriving network of small and medium-sized businesses and craft workshops. A total of 53 businesses per sq km (an average of 34 in Lombardy and a national average of 18) of which 37% are craft workshops (an average of 32% in Lombardy and a national average of 28%) are just a couple of Varese's key economic statistics. LOMBARDY Real Estate REPORT LOMBARDY Real Estate REPORT

Foreign companies percentage by sector

2,20% Other professional services 2,20% Metal products 1,60% Retail Precision mechanics equipment 3,31% Pharamaceutical products 3,31%

Plastic Products 4,91%

39,08% Wholesale trading Transport & logistics 6,01%

Basic Chemicals 6,01%

Machinery and mechanical equipment 8,82%

22,55% Other

Source: ISTAT, Italian National Institute of Statistics

Philippines El Salvador Foreign Citizens Population Tunisia 5% 4% First 10 Nationalities 6% China Source: ISTAT, Italian National Institute of Statistics 6% 37% Albania

Peru 7%

7% Morocco 9% 10% 9% Sri Lanka Ukraine Romania

Varese’s GDP Trend

YEAR 2003 2004 2005 2006 2007 2008 2009 2010 2011 GDP 22.609,90 23.296,40 23.763,50 24.856,60 26.709,90 27.507,40 27.345,30 28.066,20 22.132,30 per capita-Euro

Sources: ISTAT, Italian National Institute of Statistics - Unioncamere - G. Tagliacarne Institute

6 LOMBARDY Real Estate REPORT OFFICE real estate market

Varese Province - Office Real Estate Value €/m²/year

Varese’s businesses can always rely on comprehensive support in terms of promotional activity, development and assistance and they can benefit from a system that encompasses both public and private sectors. Diversification and business acumen are the buzzwords to use when describing Varese's economy. 65,000 are the number of companies employing 272,000 workers which are distributed across the secondary and tertiary sectors and offering a vast array of products and services. Hi-tech sector has brought international prestige to Varese’s economy, accounting for 63% of its whole share of production. Due to this fact, Varese, in the regional ranking for hi-tech, is on the top production(47% being the national average).

LEGEND

LOGISTIC HUB MALPENSA AIRPORT

ACTUAL INFRASTRUCTURE A8 HIGHWAY VARESE A9 HIGHWAY

E62 HIGHWAY RAILWAY LINE

Average annual lease price

150 €/mq 130 €/mq 110 €/mq 90 €/mq 70 €/mq

No/local market

Varese Municipality - Office Real Estate Value €/m²/year

110 €/mq 160 €/mq

105 €/mq 150 €/mq

100 €/mq 140 €/mq

95 €/mq 130 €/mq

90 €/mq 120 €/mq

85 €/mq 110 €/mq

80 €/mq 100 €/mq

75 €/mq 90 €/mq

70 €/mq 80 €/mq

No o ce market Streets

Streets Highway

Highway A4 Highway A4 Highway Min annual lease rate Max annual lease rate

7 1st semester - 2013 Varese Province

Lease Trend - Across The Globe

Lease rate €/sq.m/year

€ 1400

1200

1000

800

600

400

200 Sao Paulo Rio de Janeiro San Francisco Bogota Vancouver Lima London Brussels Moscow Paris Frankfurt Warsaw Madrid Prague Budapest Varese Hong Kong Tokyo Beijing Delhi Singapore Shanghai Mumbai Kuala Lumpur Seoul Sydney Melbourne 0 America- America-Canada Europe Asia Australia

Growth rates %

Beijing

20 Sao Paulo

15

10 Stockholm

5 New York Shanghai London Dubai Frankfurt Rome Varese 0

-5 Moscow Barcelona Brussels Madrid Paris -10

Hong Kong -15

Vacancy rate %

31%

20

15

10

5 San Francisco Sao Paulo Rio de Janeiro Vancouver Bogota Lima Hong Kong Tokyo Beijing Delhi Singapore Shanghai Mumbai Kuala Lumpur Seoul Sydney Melbourne 0 Budapest Varese Prague Frankfurt Brussels Warsaw Moscow Madrid Paris London Latin America- America-Canada Europe Asia Australia

8 LOMBARDY Real Estate REPORT RETAIL real estate market Varese city- Retail High streets

Via Vittorio Veneto - Corso Aldo Moro

Lease: 190-280 €/m²/year Examples of existing brands: Coin - Sisley Benetton - Lacoste Original Marins- ZARA Adidas - Bershka

Historical Centre Zone

Pedestrian zone

Corso Matteotti

Lease: 200-420 €/m²/year Examples of existing brands: Sisley OVS - Promod STEFANEL- HERMES MaxMara

9 1st semester - 2013 Varese Province

Lease Rate - Varese City €/m²/year 100 130 160 1 2 2 270 300 330 360 390 420 450 480 510 530 Country City Prime street 90 1 0 40

Via Vittorio Veneto Italy Varese - Corso Aldo Moro Corso Matteotti

Lease Trend - Across The Globe €/m²/year

Country City Prime Street 2011 2012 2013 China Hong Kong Causeway Bay 12,644 22,307 22,764 U.S.A New York Fifth Avenue 18,003 22,047 22,340 U.K London Oxford Street - West 9,353 13,406 13,103 France Paris Avenue des Champs-Elysées 7,310 10,375 11,229 Switzerland Zurich Bahnhofstrasse 7,997 8,164 8,216 Italy Varese Corso Matteotti 418 415 420 Australia Sydney Pitt Street Mall 7,544 7,243 7,141 Belgium Brussels Rue Neuve 7,800 7,409 7,115 Russia Moscow Tverskaya 5,769 5,669 5,718 Japan Tokyo Ginza (Chuo Street ) 5,108 5,116 4,965 Germany Munich Kaufingerstraße 4,346 4,103 4,083 Germany Frankfurt Zeil 3,550 3,609 3,620 Germany Hamburg Spitalerstraße 3,157 3,483 3,470 Germany Berlin Tauentzienstraße 2,889 2,738 3,100 China Shanghai Nanjing Road West 2,730 2,772 2,851 China Beijing Wangfujing 2,152 2,495 3,324 S.Corea Seoul Myeongdong 2,085 2,090 2,062 Spain Madrid Puerta del Sol Preciados 2,303 2,487 2,343 India Delhi Khan Market 2,319 2,169 2,174 Brazil Rio de Janeiro Garcia D`Avila 1,340 1,532 1,570 U.A.E Dubai Sheikh Zayed Road 151 327 361

BRIC countries

Lease €/sqm/year 25,000 2011 2012 2013 20,000

15,000

10,000

5,000

0,000 i i l i t y k s s e e n h n h o o d g g r g w l i a i a h u i r r r l l y e r i c c r o n u n e r o i i h o b i o d m f u k n j a r e d o d s i c e n e g k o b o d u n P D e Y a s n e s u n B S n D u y K R o T a Z u R i o o w m B a Varese a M r S M g r L J h M n B F S N e H a H o

10 LOMBARDY Real Estate REPORT INDUSTRIAL real estate market

Industrial Key Sectors Aerospace Tourism and Sport International trade 2012

Energy Transport and Logistics Home appliances

Varese shortens the distance. The province is at the heart of Europe, at the foot of the Alps, and is a stepping stone to the north of the continent. The area is also an important strategic base for logistics firms (more than 2000 companies operate from here) as a result of the first-class infrastructure (Malpensa intercontinental airport, the Alp Transit rail project and an extensive road network). Varese exports globally. Varese’s trade surplus adds up to nearly €9 billion a year, while more than 30% of the manufacturing revenue comes from exports alone.

/m²/year Varese province - industrial zones € Lugano Switzerland

VARESE LEGEND

LOGISTIC HUB Como MALPENSA AIRPORT

ACTUAL INFRASTRUCTURE

A8 HIGHWAY

A9 HIGHWAY

E62 HIGHWAY Como RAILWAY LINE Turin Average annual lease price

70 €/mq

50 €/mq BUSTARSIZIO 40 €/mq 35 €/mq LONATE 30 €/mq POZZOLO 25 €/mq No/local market

All values are expressed in € / sq m / year and may be increased or decreased up to 25% in relation to the characteristics and location of the property, the law, and the state of conserv -ation. In particular, the analyzed sample took into account property from 5,000 to 20,000 square meters for logistics. It must be considered that for properties with the courier / transport use values can vary from a minimum of 10% to a maximum of +40%.

11 1st semester - 2013 Varese Province

EXPORT 9,314 Millions of € International trade 2012 IMPORT 6,459 Million of €

Europe prime industrial cities - lease rate €/m²/year

€ 140,00

€ 120,00

€ 100,00

€ 80,00

€ 60,00

€ 40,00

€ 20,00 l t t r v v s s e e a a a h n n n o o r g d i w i w w u i i l s i m m m e r l l r e n l u n n r c u g c t v o i r s a i b o o i e m f u a a b e a n r r g s o d o a d A s e n c K g l k o b d R d

O u r h u e P e h a a n l a n r r i s s t a n e B s r R k t Z h h D e r o e e o V a o c A a Varese M P t t l s c c c r r T e t L I W a t s M M Brussels n u o a F G o t e a m B B R S P

A M . t S

12 LOMBARDY Real Estate REPORT HOTEL real estate market

Varese Province - Hotel & touristic attractions

Varese has branched out into the hospitality industry over the years and tourism to the area (conference, business, leisure and sports) is on the up. The region's proximity to Milan, the new Milan Rho-Pero Exhibition Centre and Malpensa airport, coupled with its thriving business environment, make Varese the ideal destination for all kinds of tourism.

Touristic attractions: LEGEND Golf club Horse riding club Spa Malpensa airport

Hotel concentration Maggiore Lake number/municipality

Low High

VARESE Varese lake

Campo dei Fiori Park Palude Brabbia Nature Reserve

Estensi Gardens - Varese

Palude Brabbia Nature Reserve

Varese Lake

13 1st semester - 2013 Varese Province

Varese Province - Tourist flows

Touristic places Italians Foreigners Total Arrivals Night spent Arrivals Night spent Arrivals Night spent Varese 56.168 111.062 61.290 129.337 117.458 240.399 Maggiore Lake 16.159 50.106 25.247 85.607 41.406 135.713 Other Municipalities 371.782 530.797 379.128 570.977 750.910 1.101.774 TOTAL 444.109 691.965 465.665 785.921 909.774 1.477.886

Varese City Centre - Hotel investment appeal index

A tool for evaluation of different investment options is highly essential for a safe investment. Due to this fact it is provided an appeal index for Hotel real estate investments in Italy. This Index indicates the appeal of invest- ment and initiation of a hotel business in a specific zone of the city. In calculation process of investment appeal Index many important parameters has been taken in to considera- tion among those we can mention: location in a city, annual occupational rate depending on the hotel stars, annual lease price, annual rooms revenue, room numbers, hotel services and so on.

Min Annual Lease price*3 Room revenue Room lease Hotel investment room revenue occupation rate*2 €/m2/year €/per year €/year appeal index /night*1 3 Stars 50-65 61,20% 110-160 11169,00-14519,70 2.750,00 -4.000,00 0,72-0,75 Hotel 4 Stars 58,35% Hotel 65-95 110-160 13843,54-20232,86 3.520,00 -5.120,00 0,75-0,77

Primary Sources *1- Booking.com™ *2- Istat, Italian National Institute Of Statistics - Federturismo Confindustria - Italian Hotel Monitor - Trademark Italy *3- World Capital

14

Phase 1 Our Expertise Identifying needs: - Location for your business - Type of property - Budget - Timing

Phase 2 RESEARCH AND SELECTION: A network of local real estate consultants, according to a speci c search criteria, individualize a series of real estate oppor- tunities in order to propose the best solutions to customers.

Phase 3 EVALUATION AND CONCLUSION OF THE CONTRACT: The client consider the best market opportunities to choose the one suits his needs and then formulate the lease or purchase proposal. The customer will be companied until the conclusion of the nal contract.

Phase 4 REAL ESTATE INVESTMENT: Completed the contractual de nition, World Capital individualizes, in the case of lease, the investor (private, company,

® real estate found etc) that is interested in purchasing the asset.

A G E N C Y - C O N S U LT IN G - P R O P E R T Y - IN V E S T M E N T Phase 5 EQUIPMENT, PLANNING, REALIZATION Piazza Maestri del Lavoro, 7 - 20063 Cernusco sul Naviglio (MI) AND COMPLEMENTARY SERVICES: Tel. +39 02 95305886 Based on the customer request, World www.worldcapital.it - [email protected] Capital provides technical advice about the property. VARESE PROVINCE

Via Restelli, 3/7 (MI) 20124 Milan Tel. +39 02 87365130 Fax. +39 0 2 95305209

Neda Aghabegloo Research Department [email protected]

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