M A R K E T B E AT Industrial Q1 2020

YoY 12-Mo. Chg Forecast ECONOMY The situation of the global economy is highly uncertain, due to the Covid-19 emergency and the outcomes are hard to predict. The ongoing crisis has been 300,000 described as unprecedented and the worst since WW2. As all the European economies are expected to fall into recession in 2020, Italian GDP will probably fall by Take-Up,sqm 6% to 9%, depending on the scenario. increase in unemployment is expected to be moderate, reducing the intensity of the shock on the demand and consumption sides. The construction sector is part of the lockdown ongoing through the whole country, but less affected than other industries. A gradual relaunching of the activities has been planned for early May - with high uncertainty. €56.00 Prime Rent €/sqm/yr, OCCUPIER AND INVESTMENT FOCUS The continuous growth of the logistics market in recent years led to great expectations for 2020: the first quarter of 2020, not yet affected by the Covid-19 emergency, recorded the same take up volume of the same period in the previous two years (approx.300,000 sqm). continues to be the region with the €55.00 highest absorption and mainly big transactions representing 62% of the total take-up; the region is confirmed as a strategic logistic hub for national distribution by Prime Rent €/sqm/yr, Rome many major international companies. The 3PLs continue to be the most active players in terms of number of transactions, while Retailers have recorded the largest transactions and most BTS products. In the last month, the COVID-19 emergency has generated a significant increase in online shopping, especially for food and other essential goods: in this context e-commerce has confirmed its importance in the country system and this situation is expected to further accelerate the growth of this sector. To date, the development market remains strong, with more than 400,000sqm of speculative developments under construction expected to be completed by 2020; some of these projects may be delayed due to the interruption of construction works but it is still early to forecast tangible consequences due of this particular circumstance. Logistics and Industrial investment market continued to perform well in the first quarter of the year with a volume of approx € 270 Mln, more than twice the volume of Q1 2019. The quarter was characterized by a number of portfolios deals (including a portion of pan-European portfolio) and by developments opportunities with ITALIAN ECONOMIC INDICATORS BTS projects. Q4 2019 YoY 12-Mo. OUTLOOK Chg Forecast The market demand will push many Retailers to accelerate the reorganization of their supply-chain in order to improve the online sales channel with the consequence of an increased demand from these players (especially in food and beverage) and a short-term increase in demand for temporary spaces. In this context, the recent growing demand for last mile logistics space will accelerate development and consequently the investor's interest for Last Mile Portfolios will -4.1% remain high. On the contrary, the interest recorded in the last period for secondary locations could slow down. On the Investments side, the possible effects of GDP Growth COVID-19 on logistics real estate will be mitigated by the greater solidity of the fundamentals of the sector, such as the need for additional space required by e- commerce, retail and pharmaceutical sector and the consequent investor's demand for those assets that will also develop directly. 10.4% PRIME RENTS PRIME YIELDS Unemployment Rate 10,00% 65 9,00% 15.7% 60 E-Commerce Sales 55 8,00% Growth * 50 7,00% 45 3.5% €/sqm/yr 6,00% Retail Sales Growth * 40 5,00% 35 Sources: ISTAT, Oxford Economics 4,00% Note: with the exception for Unemployment Rate, data refers 30 to Q1 2020 variations with respect to the previous year. * e-commerce and retail sales only refer to January-February Milan Rome Bologna Turin Milan Rome Bologna Turin Genoa Verona Piacenza Novara Genoa Verona Piacenza Novara M A R K E T B E AT ITALY Industrial Q1 2020

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

 +39 02 63799210 Milan 56   5.00 %  [email protected]  Rome 55   5.50 %  ANNA STRAZZA

 Senior Consultant, Research

Bologna 52   5.50 %  +39 02 63799278 

Turin 45   6.25 %  [email protected]

Genoa 60   6.50 %  

Verona 46   6.00 % 

 (*) NOTES:

Piacenza    45 5.75 % (1) Prime Rent and Yield figures illustrated in the table above refer to logistics

 properties. Prime rents for freight warehouses tend to be significantly higher. Novara 42   5.75 %  (*) Yields are calculated on a net basis as reported below: Net Yield = NOI (1) / PP (2) 1. Net Operating Income - after deducting all non-recoverable expenditure 2. Purchasing Price – excluding transfer costs, tax and legal fees With respect to the yield data provided, in light of the changing nature of the 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 KEY LEASE TRANSACTIONS Q1 2020 property or transaction without regard to the specifics of the property. REGION CITY (PROVINCE) TENANT SECTOR AREA (SQM) TYPE

Lombardy (BG) Retailer 92,000 BTO

Veneto Vescovana (PD) Retailer 34,000 Pre-Lease (BTS)

Lombardy Brembate (BG) Courier 27,000 Pre-Lease (BTS)

Veneto Oppeano (VR) 3PL 25,000 New Lease

Veneto Colognola ai Colli (VR) 3PL 8,000 New Lease cushmanwakefield.com

KEY SALES TRANSACTIONS Q1 2020 (OVER €15MLN) A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION Cushman & Wakefield (NYSE: CWK) is a leading global real PROPERTY REGION CITY SELLER / BUYER AREA (SQM) estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among Chiari Warehouse Lombardy Chiari Private / Nuveen Real Estate c. 60,000 the largest real estate services firms with approximately 51,000 employees in 400 offices and 70 countries. In 2018, Ares Management – Part of Pan European the firm had revenue of $8.2 billion across core services of Lombardy South Milan Ares Management / Confidential c. 80,000 Portfolio property, facilities and project management, leasing, capital markets, valuation and other services. c. 40,000 warehouse + 190,000 Logistics Portfolio Lombardy Turate / Castrezzato Techbau / CBRE Global Investors ©2019 Cushman & Wakefield. All rights reserved. The information Land contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is Vigasio Logistics BTS Veneto Vigasio Ecodem Developer / Nuveen Real Estate c. 23,600 presented without any warranty or representations as to its accuracy.