Strictly Confidential For Addressee Only
VALDICHIANA OUTLET VILLAGE,
FOIANO DELLA CHIANA (AREZZO)
Report and Valuation for
GOLDMAN SACHS INTERNATIONAL
Valuation Date
31 MARCH 2014
RIF: GOLDMANSACHS-AR-VALDICHIANAFOC-REPORT-140331-03-SC.DOCX
GOLDMANSACHS-AR-VALDICHIANAFOC-REPORT-140331-03-SC.DOCX
TABLE OF CONTENTS
1. INSTRUCTIONS ...... 6 2. ASSUMPTIONS & SPECIAL ASSUMPTIONS ...... 7 3. DATE OF VALUATION ...... 7 4. INSPECTION ...... 7 5. INFORMATION SUPPLIED ...... 8 6. LOCATION ...... 9 7. CATCHMENT AREA ...... 10 8. DESCRIPTION ...... 13 9. GENERAL STATE OF REPAIR AND MAINTENANCE ...... 15 10. AREAS ...... 15 11. MERCHANDISING MIX ...... 15 12. SITE AND ENVIRONMENTAL CONSIDERATIONS ...... 17 13. TOWN PLANNING AND CADASTRAL USE ...... 17 14. COMMERCIAL REGULATIONS – TRADE LICENSES ...... 19 15. TENURE ...... 19 16. TENANCIES, EXPIRY PROFILE AND RENTAL INCOME ...... 19 17. CENTRE MANAGEMENT, SERVICE CHARGES AND MAINTENANCE COSTS ...... 28 18. PERFORMANCE ...... 30 19. RETAIL MARKET COMMENTARY ...... 35 20. COMPETITION ANALYSIS ...... 42 21. MARKET RENT ...... 46 22. VALUATION METHODOLOGY AND RATIONALE ...... 47 23. MARKET VALUE ...... 50 24. VALUATION CONSIDERATIONS AND FINAL COMMENTS ...... 50 25. CONFIDENTIALITY ...... 53 26. DISCLOSURE AND PUBLICATION ...... 53
ATTACHMENT I LOCATION MAPS ATTACHMENT II PHOTOGRAPHS ATTACHMENT III TENANCY SCHEDULE PROVIDED ATTACHMENT IV RENT ROLL ATTACHMENT V CALCULATIONS ATTACHMENT VI GENERAL VALUATION PRINCIPLES AND PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS ATTACHMENT VII INSTRUCTION AND CONFIRMATION LETTER ATTACHMENT VIII TEMPLATE RELIANCE LETTER
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EXECUTIVE SUMMARY
PROPERTY: VALDICHIANA OUTLET VILLAGE, FOIANO DELLA CHIANA (AREZZO)
VALUATION DATE: 31 March 2014.
PURPOSE OF This report has been prepared for financing purposes. VALUATION:
LOCATION: Valdichiana Outlet Village is located in the municipality of Foiano della Chiana, in the province of Arezzo, in the Tuscany region, in the centre of Italy. Foiano della Chiana is part of the Val di Chiana region and it is not far from some attractive tourist destinations located in Umbria and in the south of Tuscany. The factory outlet is about 4.6 km to the south-west of the town centre and is about 33 km to the south of Arezzo, 100 km to the south of Firenze and 52 km to the east of Siena. Thanks to its strategic position, the Property benefits from a very good road network. The scheme is easily accessible from A1 Milan – Naples motorway, from which it enjoys an excellent visibility. The area immediately surrounding the Property is mainly occupied by undeveloped land and light industrial warehouses. Close to the open-air car park of the Property, across Via Enzo Ferrari, is a retail warehouse accommodating a Mc Donald’s restaurant and some small retail units.
BRIEF DESCRIPTION: The subject Property consists of a factory outlet centre, with a total GLA (Gross Lettable Area) of approximately 30,797 sq m, accommodating 133 shops and restaurants, including a cash dispenser. The scheme has the typical characteristics of a factory outlet centre. Coloured houses hosting the retail units at the ground level are located along an open-air promenade, developed along three main streets (Via dei Portici, Viale Arti e Mestieri, Via del Ginnasio) on which some shops are directly facing. The streets depart from a circular piazza, known as Piazza Maggiore, and lead to the main open-air car park located to the west and facing the A1 motorway. The units located on the western façade of the scheme open only towards the car parking. Overall, the current layout allows good circulation, although it should be underlined that the centre has a few ‘cold’ areas, suffering from poorer pedestrian flow. The factory outlet is accessible via five entrances. Car parking facilities include 2,330 car parking spaces, providing a ratio of 1 space per 13.2 sq m GLA, which seems good for this type of retail scheme.
CATCHMENT AREA: We consider this factory outlet centre has a catchment population of about 1 million people. This is our estimate of the population within a drive time of
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60 minutes from Valdichiana Outlet Village. Please note that the estimated catchment population does not include the tourists that visit the tourist destinations located in Valdichiana region and in the south of Tuscany.
COMPETITION: We have not identified, in the estimated catchment area (0-60 minute-drive time), any real competitor for the subject Property. Barberino Designer Outlet exercises its attractiveness on a different area compared to the Property’s. The Mall factory outlet is characterized by a very high quality offer, entirely made up of luxury brands. The offer of The Mall may not be compared to Valdichiana’s both in terms of size and of quality. With reference to the future retail supply, we are not aware of any new potential competitor for the Property in the pipeline or under development.
TENURE: We have assumed the title is freehold.
TENANCIES: As at the valuation date, the Property has 17 vacant units, corresponding to approximately 8.6% of the total GLA. Four of these units are located at the first floor. One tenant exercised its break option and will vacate the unit in May 2015. Moreover, we have been informed that a legal procedure to regain possession of Unit C1-07 is currently underway.
CAVEAT – SUMMARY This executive summary is subject to the facts, terms and conditions, IS PART OF REPORT: caveats, assumptions and special assumptions contained in the main report of which it forms a part. It should not be read in isolation from the remainder of the report.
THIRD PARTY The valuation has been carried out for Goldman Sachs International and no LIABILITY: responsibility is accepted to any other party in respect of its contents without prior written consent from Cushman & Wakefield LLP. Only (i) the addressee of the report and (ii) the parties who sign a reliance letter will be permitted to rely on the report. No other party shall be permitted to do so
NO STRUCTURAL We have not carried out a structural survey of the Property. SURVEY:
NO ENVIRONMENTAL We have not investigated ground conditions or the presence of SURVEY: contamination.
SITE INSPECTION: The Property was inspected on 27 March 2014.
ASSUMPTIONS: As contained in this report and our General Valuation Principles at Attachment VI.
SPECIAL None. ASSUMPTIONS:
MARKET RENT: €10,317,000 (Ten million three hundred seventeen thousand Euro) per year Our opinion of Market Rent is intended to be the headline rent and it is exclusive of service charge contributions.
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This excludes rent for temporary lettings (precari – mall income). Moreover, any market rent has been assigned to the cash dispenser, as it is not income producing.
MARKET VALUE (NET €106,600,000 (One hundred six million six hundred thousand Euro) OF ACQUISITION COSTS): As required, the above Market Value assumes the sale of a direct interest in the property. Accordingly we have made an allowance for the purchaser’s liability for transfer tax (assumed at 4%) following the Bersani Visco law in 2006. In addition we have assumed a buyer will make allowance for acquisition costs at 1.0% of Market Value.
In reality, as you are aware, normal Italian market practice is to transfer the ownership of retail centres by selling the SPV that owns the asset. For that reason investment yields are analyzed on the basis of the value allocated to the asset for the purpose of establishing the price for the shares. That asset value then becomes part of a wider transaction which typically has regard to other issues, such as any inherent liability for gains tax within the company, the nature of any representations and warranties, adjustments for cash or liabilities, obligations towards staff and so on.
The primary advantage of this method of transfer is that all the approvals, licenses, and contracts which benefit the owning SPV remain undisturbed. For this reason it has been the preferred and conventional basis for such disposals. An additional benefit is that the SPV transfer does not attract the transfer tax which would be applicable to an asset sale (at 4%).
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Strictly Confidential – For Addressee Only
Cushman & Wakefield LLP Via Filippo Turati 16/18 20121 Milano
Tel. +39 02 63799.1 Fax +39 02 63799.250 www.cushmanwakefield.com
TO: GOLDMAN SACHS INTERNATIONAL
ATTENTION: MS ANTONELLA BIFULCO, MR ALESSANDRO LUCA
BORROWER: BLACKSTONE
PROPERTY: VALDICHIANA OUTLET VILLAGE, FOIANO DELLA CHIANA (AREZZO), ITALY
REPORT DATE: 15 APRIL 2014
VALUATION DATE: 31 MARCH 2014
1. INSTRUCTIONS
1.1 THE PROPERTY In this report we shall refer to “the Property” as the Valdichiana Outlet Village Factory Outlet Centre. The Property has a total GLA of 30,797 sq m and accommodates 133 units, including a cash dispenser.
1.2 PURPOSE OF VALUATION We have been instructed to prepare this valuation for financing purposes.
1.3 COMPLIANCE WITH RICS “RED BOOK” The valuation has been prepared in accordance with the RICS Valuation – Professional Standards current at the date of the Letter (the “Red Book”) by valuers conforming to its requirements, acting as external valuer.
1.4 DISCLOSURE OF PRIOR INVOLVEMENT We confirm that we have no conflict of interest in carrying out this assignment.
1.5 BASIS OF VALUATION The valuation has been prepared on the basis of Market Value and adopts the following definitions contained in the Red Book:
MARKET VALUE “The estimated amount for which an asset or a liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.
Iscritta nel ruolo degli agenti d’affari in mediazione al N. 14936 del 8/5/2008 C.C.I.A.A. di Milano – Registro Imprese di Milano N. 06159600961 - R.E.A. N. 1873621. Sede legale e amministrativa: Via Filippo Turati 16/18, 20121 Milano - Codice Fiscale e Partita IVA N. 06159600961. Cushman & Wakefield LLP è una società personale a responsabilità limitata (Limited Liability Partnership) registrata in Inghilterra e Galles con il N. OC328588. Il termine partnership può essere riferito ad un membro di Cushman & Wakefield LLP o ad un impiegato o consulente con ruolo e qualifiche equivalenti. La lista dei membri di Cushman & Wakefield LLP è disponibile presso la sede di Londra, W1A 3BG, 43/45 Portman Square
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MARKET RENT “The estimated amount for which a property would be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction, after proper marketing wherein the parties had acted knowledgeably, prudently and without compulsion”.
1.6 CONFIRMATION OF TERMS OF ENGAGEMENT A copy of our confirmation letter VAL/CLI/GoldmanSachs-Portfolio-ConfLett-140320-02-mcl dated 20 March 2014 is attached to this report.
1.7 THIRD PARTY LIABILITY The valuation has been carried out for Goldman Sachs International and no responsibility is accepted to any other party in respect of its contents without prior written consent from Cushman & Wakefield LLP. Only (i) the addressee of the report and (ii) the parties who sign a reliance letter will be permitted to rely on the report. No other party shall be permitted to do so.
1.8 VALUERS This valuation has been undertaken by Silvia Cantù MRICS and reviewed by Joachim Sandberg FRICS and Mariacristina Laria MRICS.
1.9 GENERAL COMMENT You will appreciate that a valuation is a prediction of price, and not a guarantee. By necessity it requires the valuer to make subjective judgments that, even if logical and appropriate, may differ from those made by a particular purchaser, or by another valuer. Historically it has been considered that valuers may quite properly conclude within a range of possible values.
Property values can change substantially, sometimes even over short periods, and so our opinion of value could differ if the date of valuation was to change. If you wish to rely on our valuation as being valid on any other date you should therefore consult us first.
You should not rely on this report unless any reference to tenure, tenancies and legal title has been verified as correct by your legal advisers.
2. ASSUMPTIONS & SPECIAL ASSUMPTIONS This valuation report and its contents are subject to the General Assumptions contained in our General Valuation Principles as listed under Attachment VI of this report.
This valuation is not subject to any Special Assumptions.
3. DATE OF VALUATION The date of valuation is 31 March 2014.
4. INSPECTION We inspected the Property on 27 March 2014.
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5. INFORMATION SUPPLIED The following information has been supplied to us by the Borrower and its advisors:
Tenancy Schedule updated as at December 2013 (Excel file ‘Lease contracts_VOV_122013.xls’), followed by a later tenancy schedule updated as at March 2014 ‘Vanguard Rent Roll_05042014.xlsx’), followed by e-mail updates.
Copy of the standard property lease and business lease contracts (‘Contratto Standard LOCAZIONE vov.doc’ and ‘Preliminare Standard VOV settembre 2011 (clean).doc’).
Copy of the Head of Terms (HOT) signed (various pdf files).
Details on the rental concessions granted in 2013 (various excel files).
Copy of the rental concessions requests (Pdf files ‘La Magi richiesta riduz 2014.pdf’, ‘Moda Project richiesta riduz 2014.pdf’ and ‘Sun Nails disdetta.pdf’).
Detail on capital contribution related to years 2011 and 2012 (Excel file ‘Capital contribution – Works 2011 – 2012.xls’).
Monthly turnover figures by tenant for 2009, 2010, 2011, 2012, 2013 and for the period March 2013 – February 2014 (Excel files ‘2009.xls’, ‘2010.xlsx’, ‘2011.xlsx’, ‘2012.xlsx’, ‘2013.xlsx’ and ‘Turnover Detail_Feb_2014.xlsx’).
Temporary lettings income generated in 2010, 2011, 2012 and in the period January – November 2013 (Excel file ‘Valdichiana temporary letting 2010 2013.xls’).
Data on IMU property tax and Insurance cost (various pdf files).
Copy of the asset property management agreement (pdf file ‘Asset and Property agreement.pdf’ and various attachments).
Amount of the lease registration tax (Excel file ‘Annual Lease registration tax valdichiana.xls’).
Footfall figures for 2010, 2011, 2012 and 2013 (pdf files ‘footfall 2010 – 2013.pdf’ and ‘footfall mese di dicembre 2013.pdf’)
Car affluence figures for 2012 and 2013 (pdf file ‘070KeyFiguresCentreVisitors.pdf’).
2013 budget service charges (Excel file ‘Budget 2013 Valdichiana Aberdeen.xls’).
Turnover figure billed in 2011, 2012 and 2013, with breakdown by tenant (Excel file ‘Turnover Rent 2010 2011 2012.xls’).
Details on rental arrears and litigations (Excel file ‘VOV Credit Collection DECEMBER 2013.xls’).
Copy of the Legal Due Diligence Report dated 8/04/2014 and draft by Studio Legale Chiomenti (pdf files ‘Project Vanguard_Legal Due Diligence Report (April 8 2014).pdf’, ‘Annex 1.3.1 Business Lease Agreements Outlet Valdichiana.pdf’ and ‘Annex 1.3.2 Property Lease Agreements Outlet Valdichiana.pdf’).
Copy of the Technical Due Diligence Report dated 14/01/2014 and draft by CBRE (pdf file ‘CBRE – Valdichiana Red Flag Agg 14 1 2014.pdf’).
Occupancy rates for 2011, 2012 and 2013 (via email).
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Copy of the Swap Agreement due to be signed between Sviluppo Valdichiana Srl, Stilo Immobiliare Finanziaria Srl and Degi Valdichiana Srl (pdf file ‘2152375_1_ITMATTERS(Exhibit 4 3(ix) to the QPA’.pdf)
We have relied on this information as being correct and complete and on there being no undisclosed matters which would affect our valuation.
6. LOCATION The Property is located in the municipality of Foiano della Chiana, in the province of Arezzo, in the Tuscany region, in the centre of Italy. Foiano della Chiana is part of the Val di Chiana region, which covers about 2,300 square kilometres, running north to south between Arezzo and Orvieto. Val di Chiana, which is located in the heart of Italy, near the border with the Umbria region, is famous for the renowned ‘Chianina’ (an Italian breed of cattle). Not far from Val di Chiana are some attractive tourist destinations located in Umbria and in the south of Tuscany, like Arezzo and Montepulciano which are positioned, respectively, about 30 km to the north and 20 km to the south of Foiano della Chiana.
The factory outlet is about 4.6 km to the south-west of the town centre and is about 33 km to the south of Arezzo, 100 km to the south of Firenze and 52 km to the east of Siena.
Thanks to its strategic position, the Property benefits from a very good road network. The scheme is easily accessible from A1 Milan – Naples motorway, whose exits ‘Monte San Savino’ (coming from Firenze, to the north) and ‘Valdichiana’ (coming from the south) are situated, respectively, only 17 km and 4 km away from the Property. Moreover, the centre is located at a very short distance from the motorway link known as Raccordo Autostradale 6 Bettole – Perugia, a road running to the south of Foiano della Chiana and linking Perugia to Siena. The ‘Bettole’ exit of the Raccordo Autostradale is circa 2 km from the Property.
The existing road network guarantees a quick and easy access to the factory outlet from the main surrounding municipalities. Directions to the factory outlet are very well indicated by numerous signs at every intersection.
The scheme, which is located to the east of the A1, enjoys an excellent visibility from the motorway.
Valdichiana Outlet Village is also accessible by public transport. The scheme is served by the bus line LF55, provided by the local transport company. The line provides a direct link with Arezzo railway station, located at some 32 km north.
The area immediately surrounding the Property is mainly occupied by undeveloped land and light industrial warehouses. Close to the open-air car park of the Property, across Via Enzo Ferrari, is a retail warehouse accommodating a Mc Donald’s restaurant and some small retail units.
According to the Legal Due Diligence provided to us, we understand that the promoter of Valdichiana Outlet Village (Stilo Retail Srl) has the opportunity to build nearby the Property – over plots of land partly owned by the owner of the Property – a retail park comprising 4 retail units having a gross area of 2,500 sq m and 2,192 car parking spaces. Based on the Due Diligence, it seems that the activities operating in the retail park shall be different from those included in a factory outlet of the same kind of Valdichiana.
Location maps identifying the Property, along with an aerial view, are provided under Attachment I.
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7. CATCHMENT AREA
7.1 DEMOGRAPHIC PROFILE A drive time based catchment area has been adopted for the purpose of this analysis. We have identified the catchment area on the basis of a max speed for motorway of 110 km/hour, with a reduced speed for local roads.
The following drive time bands (isochrones) have been examined:
- 1. 00 - 30 minute-drive time band
- 2. 30 - 45 minute-drive time band
- 3. 45 - 60 minute-drive time band
The estimated catchment area (illustrated in the map which follows) stretches over approximately 7,700 sq km. The population density is of some 133 inhabitants per sq km, below the Italian average (200 inhabitants per km2).
The table below summarises the results of this study, indicating a resident population of about 1 million inhabitants within 60 minute drive time, residing in 2 different regions (Tuscany and Umbria).
About 237,200 inhabitants live in the 30 minute isochrone, representing 23% of the whole catchment area population.
The 30-45 minute area comprises some 359,000 inhabitants, representing 36% of the total catchment population.
Some 427,200 inhabitants live within the 45-60 minute isochrones, equaling to 41% of the entire catchment area.
The following table summarises the isochrones analysed for the subject factory outlet centre:
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ISOCHRONE DRIVETIME RESIDENT % ON TOTAL POPULATION DENSITY (MINUTES) POPULATION POPULATION (INHABITANTS/SQ KM) 0-30 237,244 23% 145 30-45 359,020 36% 141 45-60 427,161 41% 122 TOTAL 1,023,425 100% 133 Source: Cushman & Wakefield on MB Research Data (2013)
7.2 CONSIDERATIONS Given its size and the lack of real competitors in the area (as better described at Paragraph 20), we are of the opinion that the subject factory outlet centre has the critical mass to attract visitors from a great distance (60 minutes drive time). The 0-60 minute-drive time catchment area has been estimated in the order of 1,000,000 inhabitants which, in any case, appears less than ideal for the size of the Property.
The estimated catchment population does not include the tourists that visit the tourist destinations of Valdichiana region and located in the south of Tuscany (see paragraph 7.4 below).
The area is well served, thanks to the proximity to the A1 motorway, which is one of the most trafficked motorways in Italy.
It is our opinion that the presence of more haute-couture and luxury goods retailers would increase the appealing of Valdichiana Outlet Village’s merchandising mix, and would make the Property able to attract visitors from locations up to 90 minutes away. In this case, the estimated catchment area (illustrated in the map below) would comprise a total of about 3.1 million inhabitants, over an area of 19,000 sq km having a population density of 163 inhabitants per sq km, below the national average equal to 200 inhabitants per sq km. The catchment area would comprise a large portion of centre Italy, extended on four regions (Tuscany, Marche, Umbria and Latium). The 60 – 90 minute-drive time band would comprise about 2.1 million inhabitants and would correspond to 67% of the overall catchment population.
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7.3 ECONOMIC PROFILE According to MB Research data, Purchasing Power per capita within the catchment area is of 17,681€ per year, which is 9% above the Italian average.
PURCHASING POWER PER CAPITA DRIVETIME PURCHASING INDEX NUMBER (MINUTES) POWER PER CAPITA (ITALY=100) (€/YEAR) 0-30 17,126 106 30-45 18,181 112 45-60 17,483 108 GRAND TOTAL 17,645 109 ITALY 16,230 100 Source: Cushman & Wakefield on MB Research Data (2013)
The table below lists the unemployment rate within the provinces included in the catchment area.
UNEMPLOYMENT RATE AREA UNEMPLOYMENT RATE (%) Arezzo 8.2% Siena 9.5% Firenze 8.1% Perugia 10.5% ITALY 12.2% Source: ISTAT data (2013)
7.4 TOURISM DATA As mentioned above, the Property is located in the Val di Chiana region and it is in the vicinity of some attractive tourist destinations located in the south of Tuscany, like Arezzo, Montepulciano and Siena.
According to the data published by the Province of Arezzo, in 2012 (latest available data), a total of approximately 38,000 people visited the tourist destinations located in the Val di Chiana region, showing a -5.6% decrease compared to the previous year. The tourists registered by the province of Arezzo were, in the same year, circa 382,000 (+2.9% compared to 2011). Based on the data communicated by the Province of Siena, in 2012, the tourist destinations of the province were visited by about 1.6 million of people, for an average stay of 3.1 days.
The table below shows the detail.
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TOURISM DATA AREA ARRIVALS (NO, % ON TOTAL OF PEOPLE) Val di Chiana region 37,932 1.8% Province of Arezzo 381,537 18.6% Province of Siena 1,634,288 79.6% TOTAL 2,053,757 100% TOTAL ITALY 98,813,845 Sources: Province of Arezzo web site, Province of Siena web site (2012)
Almost 17% of the whole tourism flow visiting Tuscany is concentrated in the provinces of Arezzo and Siena.
8. DESCRIPTION The subject Property consists of a factory outlet centre, with a total GLA (Gross Lettable Area) of approximately 30,797 sq m. The factory outlet is developed on a single aboveground level, except for the units located at the southern portion of the central piazza (Piazza Maggiore), which are developed on two aboveground levels. The Property accommodates 133 shops and restaurants, including a cash dispenser.
The centre was developed in three phases. The first one opened to the public in 2005, the second one in 2007 and the last one has been operating since 2008.
The scheme has the typical characteristics of a factory outlet centre. Coloured houses hosting the retail units at the ground level are located along an open-air promenade, developed along three main streets (Via dei Portici, Viale Arti e Mestieri, Via del Ginnasio) on which some shops are directly facing. The streets depart from a circular piazza, known as Piazza Maggiore, and lead to the main open-air car park located to the west and facing the A1 motorway. The units located on the western façade of the scheme open only towards the car parking. A children’s play area is located at the southern corner of the scheme.
The piazza is located at the centre of the scheme. The southern portion of the building facing on the piazza is developed on two aboveground levels. The first floor accommodates eight units (including a cash dispenser), for a total GLA of 1,353 sq m. The first floor is linked to the ground one by two escalators, two lifts and one staircase.
In some parts of the promenade there are porticos and suspended canopies, which run along the façade of the houses, protecting the sidewalk below and the entrances to the retail units. In many points of the scheme, covering structures have been realized along the streets in order to create a covered promenade.
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Overall, the current layout allows good circulation, although it should be underlined that the centre has a few ‘cold’ areas, suffering from poorer pedestrian flow, as demonstrated by the higher density of vacant units. Specifically, the units located at the first floor (corresponding to 4.4% of the total GLA) suffer from a lack of visibility. Likewise, along the Via del Ginnasio promenade comprised between Units H07 and H01 (Units 94 and 88 in the map above), are concentrated five of the 17 vacant units of the centre (as better indicated in the Paragraph 16.1), probably due to the fact that this portion of the promenade is not covered and the pedestrian flow along the scheme in not balanced. Finally, we would like to bring to your attention that, Unit 79 in the map (Unit E16a – Pizzeria del Drago, in the tenancy schedule provided), which also has an independent access on the open-air car park, suffers from little visibility from the promenade, due to its unappealing location within the centre.
The factory outlet is served by an open-air car parking facility, with most of the spaces located in front of the scheme, facing its western façade and the A1 motorway. Two additional small open-air car parks are situated to the north and to the south of the scheme.
The factory outlet is accessible via five entrances. Three of them provide access from the main open- air car park. Two of the entrances are located at either end of the promenade facing the car park, while the third one is in its centre, directly leading to the central piazza. Two more entrances are located to the northern and southern sides of the centre.
The flow pattern of the open-air car park tends to direct inward traffic towards the entrances located between Units 31 and 29 and between Units 5 and 106, which are the most used by customers. Consequently, the pedestrian inward flow from the entrances is not well balanced.
The Property has a modern and appealing design, with good-quality finishes and materials. Each unit’s interior is different, as required by each brand’s standard fittings and style, but with the same attention to quality and details. The structure is pleasant and during our inspection for valuation purposes, we observed that the centre appears to be in very good condition.
The scheme is served by 2,330 car parking spaces, providing a ratio of 1 space per 13.2 sq m GLA, which seems good for this type of retail scheme. Nevertheless, during our site inspection we were verbally informed that a further car park providing 1,500 car parking spaces is located in the proximity of the centre. Although this further car park is not paved, it is used by customers at peak times, when the parking provision of the Property could appear inadequate.
The factory outlet centre is allowed to open every Sunday.
A selection of internal and external photographs is appended to this report under Attachment II.
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9. GENERAL STATE OF REPAIR AND MAINTENANCE Based on our visual inspection, it appeared that the Property was generally in a very good state of repair.
We have not carried out technical surveys of the Property and our valuation is on the basis that there are no latent defects, wants of repair or other matters which would materially affect our valuation.
Similarly we assume that no hazardous or suspect materials and techniques were used in the construction and that there are no problems related to any previous industrial activities conducted on the site or any adverse considerations relating to aspects such as the water table level, seismic risks or other ground conditions.
10. AREAS For the purposes of this valuation, we have relied on the data provided to us.
Based on this information, the Property has a total GLA of about 30,797 sq m. We report hereunder the breakdown of the Property’s GLA:
GROSS LETTABLE AREA (GLA) TYPE OF UNIT GLA NO. OF
(SQ M) UNITS Small-sized Retail Units (GLA < 500 sq m) 24,880 119 Service Units 120 2 Bars & Restaurants 1,983 7 Medium-sized units (GLA between 500 sq m and 1,000 sq m) 3,794 6 Large-sized units (GLA > 1,000 sq m) - 6 Cash Dispenser 20 1 TOTAL GLA 30,797 133
With reference to the number of units, we would like to bring to your attention that the tenancy schedule provided to us indicated a total of 131 units. This discrepancy is due to the following:
Units B1-35a and B1-35b, located at the first floor and both let to La Sosta del Granducato, have been indicated as a sole unit in the tenancy schedule, as they are let under one lease contract.
Unit B1-36, of 98 sq m GLA, has been recently subdivided into two smaller units, of 20 sq m and 78 sq m GLA respectively. The smaller one (Unit B1-36A) has been let to a cash dispenser under a loan for use contract (which does not contemplate the payment of any rent), while the other unit (Unit B1-36) is currently vacant.
A breakdown of the above GLA by unit is provided in Attachment IV.
11. MERCHANDISING MIX For the units of the factory outlet centre, the merchandising mix can be viewed by reference to the totals for (i) GLA (excluding the cash dispenser) and (ii) Expected Headline Rent, as shown in the following charts.
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VACANT SERVICES 8,6% 0,4% LEGAL PROCEDURE OTHER GOODS 1,0% 1,1% BARS & RESTAURANTS 6,4% HOUSEHOLD GOODS 6,9%
HEALTHCARE & BEAUTY 2,7%
BOOKS & TOYS 1,1%
GIFTS & JEWELLERY 0,8%
FASHION, SHOES & ACCESSORIES 70,9%
MERCHANDISING MIX of the factory outlet centre (based on the GLA)
VACANT SERVICES 7,1% 0,4% LEGAL PROCEDURE OTHER GOODS 0,8% 1,4% BARS & RESTAURANTS HOUSEHOLD GOODS 4,2% 7,5%
HEALTHCARE & BEAUTY 3,2%
BOOKS & TOYS 1,3%
GIFTS & JEWELLERY 0,9%
FASHION, SHOES & ACCESSORIES 73,1%
MERCHANDISING MIX of the factory outlet centre (based on Expected Headline Rent)
The key points regarding the merchandising mix are as follows:
Valdichiana Outlet Village has the typical characteristics of a factory outlet centre, with a good provision of national and international fashion brands and few service units (tobacconist and nail centre). The merchandising mix shows a predominance of the Fashion, shoes & accessories sector, representing 70.9% of the overall GLA and 73.1% of the Expected Headline Rent.
Considering its retail formula, the centre offers a diversified and complete merchandising mix. The Fashion, shoes & accessories sector is followed by Household goods sector, with 6.9% of the total GLA and 7.5% of the Expected Headline Rent.
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The offer of Bars & Restaurant activities is quite good, comprising three self-service restaurants, one pizzeria restaurant, an ice cream parlour and two bars. The sector represents about 6.4% of the total GLA and 4.2% of the Expected Headline Rent. The bars & restaurants provision seems to be adequate for the area and the characteristics of the scheme. In this regard, we would like to bring to your attention that one of the two self-service restaurants located at the first floor, and let to La Sosta del Granducato, opens to the public only during the weekends.
Considering the scheme’s retail formula, the haute-couture and luxury goods retailers may be considered as the anchor units. With reference to this aspect, it should be noted that the presence of this kind of brands is limited to a few brands (e.g. Borbonese, Baldinini, VFG Store – Valentino, Missoni, Malboro). Wider is the presence of national and international brands normally found in shopping centres (e.g. Alcott, Guess, CK, Benetton, Nike, Golden Point, etc.). With reference to this aspect, it is worth underlying that Borbonese is one of the most recently opened stores in the centre. Moreover, we have been informed that Vestebene has recently upgraded its offer, introducing Kryzia and Diana Gallesi brands, which will replace the previous Motivi and Oltre brands.
According to the latest letting situation, about 87% of the let GLA is occupied by units that have been directly opened and managed by the mother companies of the brands. Only 13% of the let GLA is managed under franchising agreements and is occupied by franchisees.
As at the valuation date, the Property has 17 vacant units, representing about 8.6% of the total GLA. One of these units (Unit B1-34) is currently occupied by a temporary store of furniture. The lease contract in place was signed by the tenant and the management company – not by the Landlord. The relevant rent is part of the temporary lettings income, and the Landlord could re-let this unit to a permanent tenant. For this reason, we have considered the unit as vacant. Moreover, a legal procedure to regain possession of the unit is currently underway on Unit C1-07, occupied by Arfango (for further details, please refer to Paragraph 16.1).
12. SITE AND ENVIRONMENTAL CONSIDERATIONS Based on the Technical Due Diligence provided, no critical environmental issues have arisen with relation to the Property. However, we would bring to your attention that some minor issues (mainly related to water supply and wastewater discharge) have been identified and reported in the technical Due Diligence. In this regard, we would suggest further investigations with your consultants in order to have clarification.
We would also highlight that, on the basis of the Technical Due Diligence provided there are no issues related to ground conditions/stability or to the presence of pollution or contamination in the Property or any other land (including any ground water) and we have not been informed of any reason to suspect such contamination.
Our valuation is on the assumption that there are no such matters that would materially affect our valuation.
13. TOWN PLANNING AND CADASTRAL USE Based on the Legal Due Diligence provided to us, we understand that the construction of the outlet was carried out between 2002 and 2008, on the basis of the two following Town Planning Agreements, signed between the Municipality of Foiano della Chiana and Outlet Srl (now, Degi Valdichiana):
Town Planning Agreement (Convenzione per la realizzazione di un Factory Outlet Centre) executed on 31/08/2000, aimed at establishing conditions and limits for the building of the outlet.
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Town Planning Agreement (Convenzione per la realizzazione diretta delle opere di urbanizzazione del comparto Farniole), executed on 8/05/2011, which followed the approval (by means of the Municipal Town Council Resolution no. 11 dated 16/03/2011) of the Town Planning Detail Plan (the so-called Piano Particolareggiato) submitted by Outlet Srl to the Municipality of Foiano della Chiana in order to develop the outlet and the relevant area. Such Town Planning Agreement sets forth the conditions for the implementation of the primary town planning works (Opere di Urbanizzazione primaria) to be carried out by Outlet Srl.
We assume the Property is not affected by proposals for road widening or compulsory purchase and that it has been erected in accordance with a valid planning permission and is being occupied and used without any contravention.
According on the Legal Due Diligence provided to us, we understand that the Province of Arezzo is going to expropriate some areas (indicated in the following plan) owned by Degi Valdichiana and located on the rear of the Property, in order to carry out some urgent consolidation works of the stream banks of Esse di Foiano river.
In this regard, we have been informed by CBRE that: the areas involved in the expropriation activity are the ones identified at the Land Registry (Catasto Terreni) of the municipality of Foiano della Chiana as Sheet 31, Parcels 413 and 517 having, respectively, a size of 169.36 and 288.2 sq m. Moreover, the areas are not occupied by any constructions and their expropriation should not have any impact on the planning standards required for the operation of the centre.
Based on the Swap Agreement provided to us and that is due to be signed shortly, Degi Valdichiana Srl will transfer to Sviluppo Valdichiana Srl and Stilo Immobiliare Finanziaria Srl four plots of land having a total area of about 33,800 sq m (indentified at Sheet 36 Maps 413, 517, 521 and 494), located behind the Property and where Stilo intends to build 4 retail units. Stilo, in turn, will transfer to Degi Valdichiana the areas indentified at Sheet 36 Maps 57, 409, 411, 15, 420, 506, 550, 552, 555, 558, 560, having a total area of about 59,000 sq m, on which Stilo will build and deliver to Degi at least 1,000 additional car parking spaces.
We also understand that the swap agreement will include the following:
Obligation of Stilo not to carry out in the retail scheme that it intends to develop any activity in competition with those of Valdichiana FOC
Obligation of Stilo to cause any future owner of the retail scheme to undertake the non- competition covenant
Obligation of Stilo not to include in each retail unit more than 6 operators
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A right of first offer in favour of Degi Valdichiana to purchase the scheme in case of sale of it.
Finally, based on the Legal Due Diligence provided to us, we understand that the Property is identified at the Building Registry (Catasto Fabbricati) of the municipality of Foiano della Chiana as follows: Sheet 36, Maps 562, 620, 566, 624 and 66. The Property is identified at the Land Registry (Catasto Terreni) of the municipality of Foiano della Chiana as follows: Sheet 36, Maps 517, 521, 413, 477, 494, 143, 591, 511, 624 and 66.
14. COMMERCIAL REGULATIONS – TRADE LICENSES According to the Legal Due Diligence provided to us, we understand that the original trade authorization was issued by the Municipality of Foiano della Chiana to Outlet Srl (and subsequently transferred to Degi Valdichiana Srl) on 20/04/2002. The total authorized sales area is of 18,163 sq m.
The Municipality of Foiano della Chiana issued, on 29/07/2010, a further trade authorization No. 555, which granted to Degi Valdichiana the possibility to extend by further 1,778 sq m the sales area of the Property within two years. The extension specifies that the additional sales area is to be located at the first floor of the outlet. The expiry of the extension was postponed by the Municipality twice:
On 29 June 2012, following the requests of Degi Valdichiana, the Municipality set forth a new term to extend the sales area up to 29/07/2014.
On 24/12/2013, following a further request of Degi Valdichiana. Based on this further postponement, the extended authorization may be activated not just within two years, but until the completion of the related building works. In this regard, we would like to underline that, according to the Legal Due Diligence, Degi Valdichiana obtained, on 13/01/2014, a building permit related to the ‘renovation of the units at the first floor of the Outlet’. Based on the building permit, Degi Valdichiana is due start the relevant building works within 13/01/2015 and must complete them in three years from their beginning date.
We have not been provided with any further information concerning the trade licenses situation. Our valuation is on the assumption that the Landlord holds the required trade licenses.
15. TENURE According to the Legal Due Diligence provided to us, we understand that the Property is currently owned by Degi Valdichiana Srl. The right of ownership of Degi Valdichiana over the Property has been confirmed in the Notarial Report of Notary Busani of Milan, dated 30 March 2011.
Our valuation assumes the Property is effectively a freehold and free from any onerous restrictions, covenants or other encumbrances.
We have assumed that the Property has a good and marketable title.
16. TENANCIES, EXPIRY PROFILE AND RENTAL INCOME For the purposes of this valuation, we have relied on the information provided as being correct and complete and on there being no undisclosed matters which would affect our valuation.
Please note that we have not reviewed the lease contracts but, accordingly with your instructions, we have utilized the tenancy schedule provided summarizing heads of terms.
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16.1 LETTING STATUS As at the valuation date, the Property has 17 vacant units, corresponding to approximately 8.6% of the total GLA. Four of these units are located at the first floor. Based on the information provided and on our site inspection, we understand that:
Unit A1-10A: the unit was previously merged to the adjacent unit A1-10B, which has been occupied by Borbonese since October 2013. The unit is currently vacant and we do not have any further information concerning its re-letting.
Unit B1-34: the unit is located at the first floor and is currently occupied by the temporary store of a furniture shop. The lease contract in place was signed by the tenant and the management company – not by the Landlord. The relevant rent is part of the temporary lettings income, and the Landlord could re-let this unit to a permanent tenant. For this reason, we have considered the unit as vacant.
Unit B1-36: the unit is located at the first floor and it is the result of the subdivision of a larger unit. The other unit resulting from the split (Unit B1-36A) has been let under a loan for use contract to a cash dispenser, while this one remained vacant.
Unit B1-38: the unit is located at the first floor. We have not been provided with any information regarding its previous occupiers.
Unit B1-39: the unit is located at the first floor. We have not been provided with any information regarding its previous occupiers.
Unit C1-18A: the unit was previously occupied by Datch (fashion) that, due to bankruptcy issues, closed the store and vacated the unit in February 2014.
Unit E09: the unit was previously occupied by Boggi (fashion), which vacated it in August 2013.
Unit F04: the unit was previously occupied by Artista Spacciatore (household goods), which vacated it in September 2013.
Unit F07: the unit was previously occupied by a Reebok temporary store. According to the information provided, we understand that a Head of Terms (HOT) has been signed with Stickhouse (ice cream parlour) at a yearly rental level of €37,000. The definitive lease contract is due to be signed shortly.
Unit G01: the unit was previously occupied by Fornarina (fashion), which vacated it in February 2014.
Unit G06: the unit was previously occupied by Pull Love (fashion) that, due to bankruptcy issues, closed the store and vacated the unit in March 2014.
Unit G11: the unit was previously occupied by Frette (household goods), which vacated it in July 2013.
Unit H03: the unit was previously occupied by Gatti Moda (fashion), which vacated it in February 2013.
Unit H06: the unit was previously occupied by Tosca Blu (accessories), which vacated it in April 2014.
Unit H07: the unit was previously occupied by Kathy Van Zeeland (accessories) that, due to bankruptcy issues, closed the store and vacated the unit in September 2013.
Unit E21: the unit was previously occupied by Ivy Oxford, which moved to Unit H9 in May 2013.
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Unit H14: the unit was previously occupied by And (fashion), which vacated it in January 2014.
We have also been informed that the tenant of Unit B1-37 – Sun Nails, exercised its break option and will vacate the unit in May 2015.
Moreover, we have been informed that a legal procedure to regain possession of Unit C1-07 is currently underway. The relevant tenant (Arfango) closed to the public on 26/02/2014, due to bankruptcy issues. As at the valuation date, the Landlord has not formally regained possession of the unit yet and a legal procedure to rescind the lease contract is underway. For the purposes of this valuation, we have assumed this unit to be vacant.
Based on the information provided by the Borrower, we understand that the historical occupancy of the Property is the following:
HSTORICAL OCCUPANCY RATE
YEAR OCCUPANCY RATE 2013 (as at 31/12/2013) 93.7% 2012 (as at 31/12/2012) 97.2% 2011 (as at 31/12/2011) 96.3% According to the information provided, we are aware that the Head of Terms have already been signed for the following units, whose lease contracts will expire in 2014. We report hereunder the details:
SIGNED HEAD OF TERMS
UNIT TENANT LEASE EXPIRY NEW HEADLINE CURRENT VAR. DATE RENT (€/YR) MGR (€/YR) MGR %
A1-12/G12 Marina Militare 04/04/2014 117,088 121,980 -4.0% E02 Gattinoni 29/04/2014 82,742 (*) 88,729 -6.7% H13 Piquadro 18/07/2014 49,488 54,999 -10.0%
(*) Stepped-rent: Year 1 €73,008, Year 2 €77,875, from Year 3 onwards €82,742
As indicated above, a HOT has been signed on Unit F07, which is currently vacant. The new tenant should be Stickhouse (ice cream parlour), which is due to sign the definitive lease contract shortly. According to the agreement, the new rent will be equal to €37,000 per year.
Finally, we would like to draw your attention to the following situations:
Unit E08 – Sisley: the lease contract expired in 2013. The unit is open and operating and the negotiations for the renewal of the lease agreement are underway with the tenant which, in the meantime, is being invoiced for a rental indemnity.
Unit G09 – Enrico Coveri: the lease contract expired in 2013. The unit is open and operating and the negotiations for the renewal of the lease agreement are underway with the tenant which, in the meantime, is being invoiced for a rental indemnity.
16.2 LEASE TERMS The occupation leases for the Property are modelled on two different types of contracts. These are Business Leases (Affitto di ramo di Azienda) and Property Leases (Contratto di locazione).
Business Lease contracts are the most common type of lease for retail schemes and typically run for a period of 5 or 7 years. The format can only be used when the landlord holds the retail trade
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licences. It gives the owner more control, enables him to participate in rental growth (potentially after 5 not 12 years) and avoids the compensation that has to be paid to the tenant at the end of a Property Lease when the landlord does not renew the lease. The vast majority of units at the Property are let under this lease format.
Property Leases follow a statutory framework and are typically for 6 + 6 years, the effect being that the tenant may stay for 12 years or break the lease mid-term. At the end of a PL the tenant will have the right to compensation that could be 18 months or 36 months of the prior rent. This model is mandatory for the units occupied by services (such as banks, travel agents and dry cleaners).
Of the 114 leases currently in place, 111 are business leases, 2 are property leases and 1 (used for the cash dispenser) is a loan for use contract. Please note, that the number of leases in place also includes the lease contracts related to Units E08 – Sisley and G09 – Enrico Coveri, which expired in 2013 and whose tenants are paying a rental indemnity.
The duration of the business lease contracts varies from unit to unit and ranges from 5 to 12 years. In particular, the majority of the business leases have a 8-year duration. The duration for the property leases is of 6+6 years. We are not been provided with the duration of the loan for use contract.
Most of the leases in place reserve rents which are the greater of (i) MGR or (ii) a specified percentage of the tenant’s reported turnover, net of VAT; these mainly vary between 5.0% and 12.0%. 3 lease contracts do not contain a turnover rent element (Unit B1-36A – cash dispenser, Unit B1-16 – Tabaccheria Mencucci and Unit B1-37 – Sun Nails). Some tenants pay a percentage of the turnover that varies on the basis of the amount of the turnover reached by the tenant. The tenant of Unit B1-06/07 – Nike pays a turnover rent equal to 3.5% only in case of an annual turnover higher than €4,150,000.
The annual rent of business leases is indexed up to 100% of ISTAT every year, with the exception of Units C1-19/20 – Autogrill, G08 – John Ashfield and E13b+E14 – GAP, whose rents are indexed up to 75% of ISTAT). Property leases are indexed at 75% of ISTAT every year. The loan for use contract is not indexed, as it does not contemplate the payment of a rent. The rent of 49 business leases is indexed annually considering a minimum ISTAT index equal to 2.5% (with the exception of Unit E02 – Gattinoni, for which the minimum ISTAT index is equal to 2.0%). Moreover, for the lease contract of Unit C1-02 - Replay, ISTAT indexation does not start from the second lease year but at a later date. The tenant, therefore, benefits from a fixed rent for the initial years of the lease, as the rent is not annually indexed.
The lease contracts in place with the following tenants: Units A1-02 – Geox, A1-10B – Borbonese, Bi-20/21 – Guess, C1-03/04 – Calvin Klein, E10 – Skechers, F01 – Portobello Baby and E13b+E14 - GAP, have a ‘ratchet’ clause, according to which a percentage of the turnover rent paid by the tenant becomes the minimum guaranteed rent for the following years. This clause is quite typical for factory outlet centres. As this formula is based on an estimate of the turnover, for the purposes of this valuation, we have assumed the only MGR agreed in the lease contract and, in our cash flow, we have assumed to increase it in line with inflation.
A number of lease contracts contemplate the possibility, for the tenant, to exercise a break option. In most cases the break option can be exercised only if the turnover of the last 12 months has been lower than a certain amount. Based on the information provided, we understand that 39 tenants can still rescind their lease contracts. (For more details, please refer to paragraph 16.4).
In 12 cases the MGR in the lease contract is subject to rental discounts in the initial years of the leases, in the form of stepped rents. Please note that this number also include the new lease contract related to Unit E02 – Gattinoni, which is expected to be effective from 29/04/2014 and for which a HOT has been signed (For more details, please refer to paragraph 16.5).
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The Rent Roll Schedule is appended to this report under Attachment IV.
16.3 EXPIRY PROFILE The following chart reflects the termination dates assumed in our cash flow projection. As shown in the chart, lease contracts corresponding to about 20% of the let GLA and of the expected headline rent are expected to expire over the next three years (2014 – 2016). Please note that for Units A1- 12/G12 – Marina Militare and E02 – Gattinoni, whose lease contracts will expire in 2014 and for which a HOT has already been signed (as better indicated in Paragraph 16.1), we have taken into account the lease expiry year (2022) of the new lease contracts that are expected to been signed shortly. Moreover, the chart reflects the fact that the tenant of Unit B1-37 – Sun Nails will vacate the unit in May 2015, following the exercise of its break option. Finally, we would like to bring to your attention that, in consideration of their performance, in a prudential approach, we have assumed that the following tenants will exercise their break option: Units B1-09 – Dolomite (30/06/2016), B1-22 – Robe di Kappa (16/11/2014), B1-26 – Spitfire/T-Wear (07/12/2015), F06 – Bormioli Rocco (14/01/2017), G05 – Gant (30/05/2017), E19/20 – Industries Factory Store (28/02/2016) and H8 – Bagatelle (07/12/2014).
With regard to the renewal probability in the centre, in a prudential approach, we have assumed that all the new leases at lease expiry will be new lettings at our estimate of market rent.
30,0%
25,0%
20,0%
15,0%
10,0%
5,0%
0,0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
% GLA % HEADLINE RENT
16.4 BREAK OPTIONS According to the information provided, the following 39 tenants can still exercise their break options:
BREAK OPTIONS UNIT TENANT BREAK OPTION NOTICE NOTES A1-08 Artigli 12/10/2015 6 months A1-09 Lizalù 16/02/2017 6 months If turnover < 1,800€/sq m/yr A1-10B Borbonese 15/05/2018 6 months If turnover < 600,000€/yr A1-12/G12 Marina Militare 04/10/2018 (*) 6 months If turnover < 4,000€/sq m/yr B1-05 Crocs 30/04/2017 9 months If turnover < 3,000€/sq m/yr B1-06/07 Nike Rolling If turnover < 3,600,000€/yr
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BREAK OPTIONS UNIT TENANT BREAK OPTION NOTICE NOTES 30/06/2016 – B1-09 Dolomite 30/06/2018 – 6 months If turnover < 550,000€/yr 30/06/2019 At the end of 36th, B1-10 Timberland 48th, 60th and 72nd 6 months If turnover < 3,000€/sq m/yr month B1-20/21 Guess 27/03/2019 6 months If turnover < 3,000€/sq m/yr B1-22 Robe di Kappa 17/11/2014 6 months If turnover < 1,900€/sq m/yr B1-25 Melluso 22/12/2016 6 months If turnover < 2,500€/sq m/yr B1-26 Spitfire/T-Wear 08/12/2015 6 months If turnover < 2,500€/sq m/yr B1-29 Italian Factory 16/01/2017 6 months If turnover < 3,000€/sq m/yr B1-31/32 Puma Rolling 6 months C1-15 Cristina Gavioli 07/06/2015 6 months If turnover < 3,000€/sq m/yr C1-17 Campanile 24/06/2014 6 months If turnover < 2,500€/sq m/yr D1-03 Asics 13/08/2019 6 months D1-05 Malloy 12/06/2017 6 months If turnover < 2,500€/sq m/yr At the end of 36th and E01 Tommy Hilfiger 6 months If turnover < 3,500€/sq m/yr 72nd month E04 Conte of Florence 13/01/2017 6 months If turnover < 2,000€/sq m/yr E05 Calzedonia - Intimissimi Rolling E07 Baldinini 13/02/2017 6 months If turnover < 3,000€/sq m/yr E24 Marville 24/10/2018 12 months If turnover < 350,000€/yr E25 Gutteridge 01/01/2015 6 months If turnover < 2,000€/sq m/yr F01 Portobello Baby 05/01/2017 6 months If turnover < 2,500€/sq m/yr F02 Novità Home Store At any time 4 months F05 Yamamay 15/11/2016 6 months If turnover < 3,000€/sq m/yr F06 Bormioli Rocco 14/01/2017 6 months If turnover < 3,000€/sq m/yr F10 Corso Roma 31/08/2014 6 months If turnover < 2,500€/sq m/yr G05 Gant 31/05/2017 6 months If turnover < 4,000€/sq m/yr G08 John Ashfield Rolling H04 Navigare 23/05/2016 6 months If turnover < 2,000€/sq m/yr E13a Mash Junior 08/09/2015 6 months If turnover < 2,500€/sq m/yr At the end of 4th and E13b+E14 Gap 12 months 9th year E18a+E18b VFG Factory Store Between 18/01/2014 and 18/07/2014 with 6 months notice or from 19/07/2014 if turnover < 2,500€/sqm/yr E19/20 Industries Factory Store 29/02/2016 6 months If turnover < 2,000€/sq m/yr E23 Brums Rolling 6 months If turnover < 3,000€/sq m/yr H8 Bagatelle 08/12/2014 6 months If turnover < 2,000€/sq m/yr H11 Arena Rolling 3 months If turnover < 2,500€/sq m/yr
(*) According to the HOT signed
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In addition to the tenants above, we would like to underline that the tenant of Unit A01-03-04-05 – Levi’s may exercise the break option with a notice of 4 months if the company ‘Levi’s Strauss Italia Srl’ will not renew the franchise agreement in place between the same company and the Lessee, which, as a consequence will no longer have the right to use the brand Levi’s.
Finally, it is worth pointing out that the lease contract related to Unit E26 – Alcott is automatically renewable, after the initial term of 5 years, unless the tenant gives the notice to end the lease. The lease agreement, therefore, is potentially rescindable at the first lease expiry.
The inclusion of break option clause in business lease contracts is a very common market practice in Italy, especially for factory outlet centres.
As mentioned in Paragraph 16.3 above, we would like to bring to your attention that, in consideration of their performance, in a prudential approach, we have assumed that the following tenants will exercise their break option: Units B1-09 – Dolomite (30/06/2016), B1-22 – Robe di Kappa (16/11/2014), B1-26 – Spitfire/T-Wear (07/12/2015), F06 – Bormioli Rocco (14/01/2017), G05 – Gant (30/05/2017), E19/20 – Industries Factory Store (28/02/2016) and H8 – Bagatelle (07/12/2014). Concerning tenants with rolling break options, we would like to point out that, in light of their performance, we have assumed that none of them will withdraw in advance from the lease contracts. The only situation to be monitored is related to Unit H11 – Arena, which has an effort rate of 24.2%. In any case, the lease contract of the tenant is due to expire on 18/07/2014.
16.5 STEPPED RENT PROVISIONS From the information provided, we understand that the following leases are subject to rental discounts in the initial years of the leases, in the form of stepped rents:
STEPPED-RENT PROVISIONS
GLA LEASE START CURRENT MGR HEADLINE RENT UNIT TENANT (SQ M) DATE (€/YEAR) (€/YEAR) B1-09 Dolomite 226 16/07/2005 83,034 90,048 B1-10 Timberland 230 04/04/2013 68,865 80,343 C1-05/06 Kway/Superga 464 01/12/2012 139,110 148,384 C1-15 Cristina Gavioli 121 08/12/2012 42,434 48,496 D1-03 Asics 240 14/02/2014 76,781 86,378 D1-05 Malloy 217 13/12/2013 84,497 86,664 E02 Gattinoni (*) 243 30/04/2014 73,008 (*) 82,742 E04 Conte of Florence 244 14/07/2007 66,000 90,000 F01 Portobello Baby 216 06/07/2013 75,558 79,876 F05 Yamamay 183 16/05/2013 60,000 63,000 F11 Modus Beauty Store 232 14/07/2013 81,116 85,751 E12 Cotton & Silk 289 02/06/2013 87,235 92,946
(*) According to the HOT signed. Starting from 30/04/2014
For a number of lease contracts ISTAT indexation is not applied from the second lease year but at the end of the reduced-rent periods.
In 3 cases the rent will reach its maximum level within 2014, in 7 cases the headline rent will be reached in 2015, while in 2 cases there are two steps (years) before consolidation.
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16.6 RENTAL DISCOUNTS According to the information provided by the Borrower, we understand that no tenants were granted rental concessions for 2014. However, we have been informed that the tenants of Units H04 – Navigare and H12 – L’arcolaio asked for a rental discount. As at the valuation date, no reductions have been formally granted by the Landlord.
16.7 RENTAL INCOME MINIMUM GUARANTEED RENT The gross Minimum Guaranteed Rent (MGR) as at the valuation date amounts to €9,936,940 corresponding to an average of €357 per sq m of GLA per annum (excluding the cash dispenser, for which a loan for use contract – not contemplating the payment of a rent – is in place). This has been calculated based on the rents provided, including the stepped-rents agreed and ISTAT indexation. Based on the data contained in the Cushman & Wakefield database, in the table below, Valdichiana FOC has been compared to Franciacorta Outlet Village and to a third factory outlet centre (indicated as FOC C) having a similar size and offer. As for Valdichiana, also the FOC C may be considered as medium-market centre, as its offer is mainly characterised by a wide presence of brands normally found in shopping centres, while the provision of luxury goods retailers is lower. As shown in the table, the average rent of Valdichiana is lower than Franciacorta’s and slightly higher than the rents in place in FOC C.
AVERAGE RENTS VALDICHIANA FOC FRANCIACORTA FOC c €/SQM/YR €/SQM/YR €/SQM/YR Average Rent/sq m GLA ~357 ~366 ~350
According to the data available, rental levels in factory outlet centres comparable to the Property in terms of size, offer and market position, stand at approximately €370/sq m GLA. Therefore, we are of the opinion that the average rent of the Property is broadly in line with the rental levels presumable in a FOC having this size and offer. In the table below the rent paid by some tenants operating in Valdichiana has been compared with the rental level paid by the same brands in the other two factory outlet centres:
COMPARISON OF RENTS BRAND SECTOR VALDICHIANA FRANCIACORTA FOC C FOC FOC €/SQM/YR €/SQM/YR €/SQM/YR Livin De’ Loghi Household Goods 349 300 ~350 Camicissima Fashion, shoes & accessories 440 422 ~450 Artigli Fashion, shoes & accessories 401 431 n.a. Bialetti Industrie Household Goods 436 400 ~380 Timberland Fashion, shoes & accessories 300 379 n.a. H&B Junior Fashion, shoes & accessories 322 410 n.a. Home & Cook Household Goods 371 347 ~390 Golden Point Fashion, shoes & accessories 450 467 ~430 Bormioli Rocco Household Goods 386 415 ~400 Zuiki Fashion, shoes & accessories 372 432 ~420 Motorstore Other Goods 410 445 n.a.
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We would like to bring to your attention that rental values in factory outlet centres vary considerably, depending on the age of the scheme, its layout, its performance and location. Moreover, rents also vary depending on the size of the unit, the length of the lease, and the negotiation power of the tenant.
The gross Expected MGR in year 1 of our cash flow (1 April 2014 to 31 March 2015), which also includes the current vacancy, is equal to €10,223,096. The gross Expected Headline Rent, which takes into account the annual rent to be paid at the end of any rent-free or reduced-rent period and includes our estimated market rent for the units currently vacant, is equal to €10,877,767.
TURNOVER RENT According to the information provided to us, we understand that 12 tenants paid a turnover rent in 2013 (related to 2012 turnovers) for a total amount equal to €202,198. Hereunder, we report the details.
2012 TURNOVER RENT (PAID IN 2013) UNIT TENANT TURNOVER RENT PAID IN 2013 (€/YR)
A1-02 Geox 43,256 A1-12/G12 Marina Militare 18,766 B1-11 Vestebene 1,288 B1-17a Kiko 58,603 B1-23 Home&Cook 4,093 B1-29 Italian Factory 405 C1-15 Cristina Gavioli 548 D1-04 Profumeria Etrusca 10,165 E01 Tommy Hilfiger 10,562 E07 Baldinini 2,729 E25 Gutteridge 11,134 E26 Alcott 40,650 TOTAL 202,198
In the last three years, the trend of turnover rent was the following:
TURNOVER RENT 2010 2011 2012 Total amount € 375,874 269,465 202,198 Y/Y Var % -28.3% -24.9% 3-Y Var % -46.2%
The 2012 turnover rent is approximately 25% lower compared to 2011 and 46% lower compared to 2010.
Based on the turnover data provided for 2013, we have estimated a total turnover rent to be paid in 2014 equal to about €185,000 (-8.5% compared to 2013).
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TEMPORARY LETTINGS INCOME Based on the information provided, we understand that there are a number of temporary letting areas within the Property. The total amount of ‘precari’ or mall income estimated for 2014 is about €50,000 (net of VAT but gross of the fee of the company responsible for the management of the centre), representing about 1.2% of the MGR of Year 1.
In the last four years, the trend of temporary lettings income was the following.
TEMPORARY LETTINGS INCOME Jan – Nov 2010 2011 2012 2013 Total amount 68,163 90,113 58,090 41,342 Y/Y Var % +32.2% -35.5%
We would like to bring to your attention that the amount related to 2013 does not refer to the entire year, as we have been provided only with the income generated in the January – November period. Furthermore, the amount includes the rent related to Unit B1-34, which is occupied by a temporary store of furniture. As mentioned in paragraph 16.1, the lease contract in place was signed by the tenant and the management company – not by the Landlord – and the relevant rent is part of the temporary lettings income.
17. CENTRE MANAGEMENT, SERVICE CHARGES AND MAINTENANCE COSTS
17.1 PROPERTY MANAGEMENT The Property Manager is AVM and they have a resident centre manager.
17.2 SERVICE CHARGES The costs incurred in the running of the factory outlet centre are recovered from the tenants. The tenants pay fixed amounts ranging from €15 (Unit B1-35 a/b – La Sosta del Granducato) to €211 (Unit B1-17b - Parah) per sq m of GLA per annum (annually indexed with inflation) and not a pro- rata share of the costs proportional to the unit’s GLA. The average fix amount is equal to €146 per sq m. The figure charged to each tenant is indicated in the lease contracts. At the end of the year, there is no reconciliation between how much has been collected as service charge from the tenants and how much has been spent. The service charges that exceed the amount paid by the tenants are paid by the Landlord. Vice versa, if the sum spent is lower than that collected, the service charge surplus is an additional income for the Landlord.
According to the information provided, the service charges (including the marketing costs) for the factory outlet centre, estimated for 2013 amount to approximately €3,847,000.
Details on the total service charges budgeted for 2013 are summarised in the following table.
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SERVICE CHARGES
SERVICE CHARGES ITEMS 2012 BUDGET 2013 BUDGET VAR. % (€/YR) (€/YR)
Water 58,000 56,000 -3.4% Electricity 155,000 170,000 +9.7% Cleaning 292,000 292,000 - Snow and ice removal 12,000 15,000 +25% Green areas 80,000 80,000 - Maintenance 95,000 95,000 - Repairs 110,000 110,000 - Garbage 130,000 123,000 -5.4% Security 431,000 435,000 +0.9% Operating costs 38,000 38,000 - Reception 62,000 62,000 - Other expenses 111,000 111,000 - Administration 33,000 33,000 - SUB-TOTAL SERVICE COSTS 1,607,000 1,620,000 +0.8%
Marketing (Advertising) 1,650,000 1,650,000 - Marketing (Extra budget) 190,000 105,000 -44.7% SUB-TOTAL MARKETING COSTS 1,840,000 1,755,000 -4.6%
Management – General Fees Stilo Retail 430,875 421,875 -2.1%
Management – Fixed Fees Stilo Retail 50,000 50,000 - SUB-TOTAL MANAGEMENT COSTS 480,875 472,043 -1.8% GRAND TOTAL 3,927,875 3,846,875 -2.1%
The total expense budgeted for 2013 was about 2.1% lower compared to the previous twelve months. The difference is mainly due to the lower extra budget costs estimated for marketing (- 44.7%). The total costs related to 2013 correspond to about €125 per sq m of GLA. According to the information provided, we understand that the total annual service charges (including the marketing costs) collected in 2013 for the factory outlet centre were equal to €4,013,528, corresponding to a cost of approximately €136 per sq m of GLA.
The service charges per sq m GLA are in line with the level expected for a factory outlet centre of this size and quality. It must be considered that these also include the centre’s management costs. Moreover, 47% of the total costs are represented by marketing and promotional costs. For factory outlet centres, the marketing activity is very important and, usually, a substantial cost item. The amount of circa €1.755 million that has been budgeted for the marketing activities of Valdichiana appears appropriate for the size and the quality of the centre.
17.3 EXTRAORDINARY MAINTENANCE Based on the information provided, we understand that no extraordinary maintenance works are expected for the next three years.
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18. PERFORMANCE
18.1 FOOTFALL AND CAR AFFLUENCE The factory outlet is equipped with a car counting system that tracks the number of vehicles accessing the car park.
Based on the information provided, in 2013, 1,568,807 vehicles accessed the car park, approximately +1.9% compared to the previous year, with 1,540,087 vehicles. The trend in cars registered by the centre was positive in most of the months of 2013, with February and June being the months registering the highest peaks (respectively +9.2% and +11.8% compared to 2012). The steepest drop was recorded in January, when the flow of cars decreased by -5.9% compared to the same month of the previous year.
The Property is also equipped with a people counting system, which is installed at the main accesses of the centre. Based on the information provided to us, the system registered some 4,097,635 visitors in 2013, corresponding to a -1.8% decrease compared to the previous year, with its 4,172,785 visitors. As per the car flow, the most performing months of 2013 were February and June, when the centre showed an increase in visitors in the order of, respectively, +13.1% and +12.6%. The worst month was January, with a decrease in visitors of -20.2% compared to the same month of 2012. Analyzing the trend of visitors from 2010 to 2013, we understand that the overall annual footfall decreased in each year (-1.7% in 2011, -4.2% in 2012 and -1.8% in 2013), partly mirroring the challenging economic situation faced by Italy in the last years. In this regards, it is worth pointing out that, the result achieved by Valdichiana in 2013, is broadly in line with the trend that characterized retail schemes in Italy in the same period.
FOOTFALL 2010 2011 2012 2013 TOTAL 4,428,085 4,354,617 4,172,785 4,097,635 Y/Y Var % -1.7% -4.2% -1.8%
4-Y Var % -7.5%
600.000
500.000
400.000
300.000
200.000
100.000
0
2010 2011 2012 2013
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With reference to the monthly trend, we would comment that Valdichiana has the typical trend of a factory outlet centre, with July being the month registering the highest number of visitors, and January being the best performing month in terms of sales. We would like to draw your attention to the fact that the people counting system does not track the people only visiting the retail units open only towards the car parking. On the other hand, the figures resulting from the system could count two or more times the same person coming in and going out of the centre.
18.2 TURNOVER AND EFFORT RATES According to the information provided by the Borrower, the total net turnover generated by Valdichiana Outlet Village in 2013 amounted to €81,166,135. This amount includes the sales generated by all the tenants, including those who left the centre and those who did not operate during the entire year. Taking into account only those tenants operating during the entire 2013, the factory outlet registered a total turnover of €75,834,664 (on homogeneous data), corresponding to about €3,000 per sq m GLA, which is indicative of a fair performance, as the turnover on a per sq m basis is broadly in line with the turnover expected from a centre of this type, located in the centre of Italy and with its catchment area. The total turnover registered by the Property in 2013 showed a -3.2% decrease compared to 2012, mirroring the challenging economic situation faced by Italy in the last years, when weaker consumption resulted into a drop in sales, which remarkably affected the performances of the retail schemes throughout the whole country. Please note that this has been calculated on homogeneous data, thus taking into account only those tenants who reported turnovers for 12 months both in 2012 and in 2013, to eliminate incomplete data sets or tenants whose position in the centre is not yet fully established. Performance data which did not cover full year was excluded. For 2014 we have been provided with turnover data related to January and February. Comparing the data with the same months of 2013, we understand that, on homogeneous data, the Property registered a -1.6% decrease compared to the previous year. The table below provides a breakdown of the 2013 net turnover by sector, taking into account only those tenants operating during the entire 2013 and communicating their turnover data. The analysis has been carried out considering the information supplied by the Borrower. Please note that, in order to calculate the effort rates, we have considered the total turnover figures from January 2013 to December 2013, and the MGR provided for 2013.
2013 NET TURNOVER BY SECTOR 2013 2013 GLA 2013 EFFORT SECTOR TURNOVER TURNOVER TURNOVER/ RATES SQ M €/YR €/SQM/YR TOTAL (*) Fashion, shoes & accessories 19,343 58,210,365 3,009 76.8% 11.9% Healthcare & Beauty 844 4,095,604 4,852 5.4% 8.5% Household Goods 2,116 5,977,285 2,825 7.9% 13.5% Bars & Restaurants 1,983 3,641,554 1,836 4.8% 12.5% Other goods 339 1,301,508 3,838 1.7% 11.5% Gifts & Jewellery 246 768,195 3,121 1.0% 13.2% Services 120 1,416,937 11,852 1.9% 2.9% Books & Toys 126 423,216 3,369 0.6% 13.9% TOTAL 25.116 75,834,664 3,019 100.0% 11.7% (*) Calculated taking into account only the MGR (thus excluding the service charges)
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In 2013, some 76.8% of the total turnover for the factory outlet centre was generated by Fashion, shoes and accessories merchandise sector. The average rent-to-sales ratio (excluding the service charges) of the factory outlet is 11.7% (on homogeneous data), which is indicative of a fair performance. As mentioned above, the average turnover per sq m GLA registered by the Property is indicative of a fair performance. Based on the data contained in the Cushman & Wakefield database, in the table below, Valdichiana FOC has been compared to Franciacorta Outlet Village and to another factory outlet centre (indicated as FOC C) having a similar size and offer. As for Valdichiana, also the FOC C may be considered as medium-market centre, as its offer is mainly characterised by a wide presence of brands normally found in shopping centres, while the provision of luxury goods retailers is lower.
AVERAGE TURNOVER/SQM GLA VALDICHIANA FRANCIACORTA FOC C FOC FOC €/SQM/YR €/SQM/YR €/SQM/YR Average turnover/sq m GLA ~3,000 ~3,500 ~2,900
According to the data available, prime factory outlet centres, with a high provision of up-market and luxury brands, may reach an even higher average turnover per sq m GLA, ranging between €5,500 and €7,000. Based on the data contained in the Cushman & Wakefield database, in the following table the average net turnover by sector registered by Valdichiana has been compared to the averages recorded by the other two factory outlet centres.
AVERAGE TURNOVER/SQM GLA BY SECTOR VALDICHIANA FRANCIACORTA FOC C FOC FOC €/SQM/YR €/SQM/YR €/SQM/YR Fashion, shoes & accessories 3,009 3,629 ~3,000 Healthcare & Beauty 4,852 4,654 ~3,700 Household Goods 2,825 2,818 ~2,000 Bars & Restaurants 1,836 2,630 ~1,900 Other goods 3,838 3,643 ~3,100 Gifts & Jewellery 3,121 n.a. ~3,800 Services 11,852 n.a. n.a. Books & Toys 3,369 n.a. ~2,300
While the Fashion, shoes & accessories and the Bars & Restaurants categories are under performing compared to Franciacorta, they are in line with the average results showed by the FOC C. The Property features some categories that outperform the benchmark, as Healthcare & Beauty and Other goods, for which Valdichiana averages net sales higher than the other two FOCs. The results showed by the Household Goods category are in line with the performance registered by Franciacorta and higher compared to the average of FOC C.
In the table below the net turnover/sq m GLA registered by some tenants operating in Valdichiana has been compared with the sales figures recorded by the same brands in the other two factory
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outlet centres. Please, note that for the analysis we have taken into account only those tenants which have traded continuously for 12 months.
COMPARISON OF NET TURNOVER/SQM GLA BRAND SECTOR VALDICHIANA FRANCIACORTA FOC C FOC FOC €/SQM/YR €/SQM/YR €/SQM/Y R Livin De’ Longhi Household Goods 2,288 2,431 ~1,900 Levi’s Fashion, shoes & accessories 2,508 4,632 n.a. Camicissima Fashion, shoes & accessories 4,193 3,396 n.a. Richard Ginori Household Goods 1,761 2,166 n.a. Marina Militare Fashion, shoes & accessories 4,565 5,194 n.a. Loomier Household Goods 1,966 1,734 n.a. Bialetti Industrie Household Goods 3,748 5,082 ~3,200 Caporiccio Fashion, shoes & accessories 3,503 2,910 n.a. Timberland Fashion, shoes & accessories 4,837 9,833 n.a. H&B Junior Fashion, shoes & accessories 3,284 2,878 n.a. Parah Fashion, shoes & accessories 3,437 2,922 n.a. Home & Cook Household Goods 4,172 5,097 ~3,300 Italian Factory Household Goods 3,209 3,259 ~2,000 Golden Point Fashion, shoes & accessories 2,181 2,720 ~2,200 Alcott Fashion, shoes & accessories 5,570 5,288 n.a. Bormioli Rocco Household Goods 2,214 2,233 ~1,800 Zuiki Fashion, shoes & accessories 3,862 5,147 ~3,500
We have calculated the effort rate for each individual retailer communicating the turnover data and operating during the entire 2013. The analysis has been carried out considering the information supplied by the Borrower. Please note that in order to calculate the effort rates we have considered the total turnover figures from January 2013 to December 2013, the MGR and the Service Charges provided for 2013. The table below reports the details.
EFFORT RATES (INCLUDING SERVICE CHARGES) NO. OF % OF TOTAL UNITS MGR ER <10% (no risk) 6 6.9% 10%< ER <20% (low to medium risk) 53 51.6% 20%
About 6.9% of the MGR relates to tenants with an effort rate below 10%. The effort rate is sustainable, with an opportunity for growth in the base rent. Some 51.6% of the MGR has an effort
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rate in the low to medium risk category (between 10% and 20%). 25.1% of the total rent falls in the high risk category (between 20% and 25%). The tenants have an effort rate higher than we would like to see. Finally, 17 tenants, paying 16.4% of the total rent, have critical situations, with effort rates higher than 25%. In these cases, the effort rate is hardly sustainable. The tenants are likely to be struggling and potentially unlikely to continue trading at the centre. In this regards, we would like to bring to your attention the following situations:
12 tenants are trading below 2,000€/sq m GLA per annum and, therefore, greater attention should be given to them. Moreover, according to the turnover figures provided to us for 2014, five of these tenants registered, in the first two months of the year (January – February), steep drops in turnover, compared to the same period of 2013 (in details: Units A1-11 – Richard Ginori, B1-03 – Loomier, B1-22 – Robe di Kappa, E16 – Freddy and H8 – Bagatelle).
The poorest performing tenants’ category includes some tenants who are normally included in this category, such as Richard Ginori (Unit A1-11), Loomier (Unit B1-03), Robe di Kappa (Unit B1-22), Den Store (Unit E17).
In 2013 the tenants of Units B1-03 – Loomier and E17 – Den Store having, respectively, an effort rate of 29.2% and 31.1%, benefitted from a rental concession.
Based on the information provided, we are aware that the tenant of Unit H12 – L’Arcolaio (effort rate of 25.2%) asked for a rental discount for 2014. The same tenant, moreover, has outstanding arrears.
The tenant of Unit E02 – Gattinoni, having an effort rate of 25.0%, signed a HOT for the renewal of the lease contract expiring on 29/04/2014. As better indicated in Paragraph 16.1, the new HOT contemplates a stepped-rent which is lower compared to the current MGR (-17.7% in Year 1 and -6.7% on the headline rent).
The lease contracts of 6 of the tenants included in the poorest performing category are expected to expire in 2014 and 2015. Among these tenants is Sun Nails (Unit B1-37), which exercised the break option and is due to vacate the unit in 2015.
18.3 ARREARS According to the information provided, we understand that, as at the valuation date, only three tenants still operating in the centre have matured arrears equal to €32,458. We report hereunder the details:
RENTAL ARREARS UNIT TENANT RENTAL NOTES ARREARS (€) D1-02 St. Diego 5,863 Older than 90 days H12 L’Arcolaio 20,266 Older than 90 days E03 Rifle 6,328 Older than 90 days TOTAL ARREARS 32,458
The outstanding arrears represent about 0.5% of the MGR of Year 1. The overall situation at Valdichiana Outlet Village is better than average and the current delinquency does not pose any particular commercial risk.
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19. RETAIL MARKET COMMENTARY
19.1 RENTAL LEVELS The euro-area sovereign debt crisis has had a strong impact on the Italian market, with consumer confidence worsening nationwide, family spending cautious and weak consumption. This resulted into a sharp drop in sales, which remarkably affected the performances of the retail schemes and the trends of rental levels throughout the whole country. Nevertheless, it should be noted that trends registered in 2013 vary greatly depending on the quality of the schemes and on their catchment. Prime shopping centres with proven track records, good catchment areas and sustainable turnovers, have suffered from less pressure than secondary shopping centres, and have continued to show rental increases on new lettings, further supported by the limited offer of good quality schemes characterising the Italian market.
The situation is quite different for secondary poorly-performing schemes. Such schemes have felt more the general slowdown in consumer spending and their rental levels have been subject to a strong downward pressure, supported by an increase in rental concessions both for new leases and re-negotiations, with the most common form of discount being stepped-rents. In addition to this, the concession of early break options has also become a common practice.
The general trend reported in 2013 has characterised also the first quarter of 2014, with rent reviews applied both for existing shopping centres and pipeline schemes.
However, in general, in the first quarter of 2014 rental levels in established prime shopping centres have remained fairly stable at €850/sq m for units up to 250 sq m, and up to €1,300/sq m for the smaller units.
The following chart shows the trend of prime rents since 2007:
SHOPPING CENTRES - TREND OF PRIME RENTS 2007-2014 (*) €/sqm/year
900
850
800
750
700 2007 2008 2009 2010 2011 2012 2013 Q1 2014
Shopping Centres (*) Units with GLA up to 250 sq m
19.2 INVESTMENT FOCUS Despite ongoing political turmoil, the trend in underlying data is improved and sentiment indicators for consumers and businesses have brightened. The short term outlook is still relatively weak, with businesses cautions and high unemployment, declining real wages and fiscal austerity depressing household and corporate spending. Improving global confidence should however be a tonic for exports and this may be the key driver for Italy to leave recession. A pick up in business investment is forecast for 2014 as improved conditions lead to further gains in confidence.
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The Italian real estate investment market is at a turning point. After having been increasingly scarce and expensive, starting from the second half of 2013 finance has becoming more available. The pool of active and new investors is growing and a two tier market exists: (i) well located, trophy assets still attract core funds; (ii) good quality assets which have been repriced attract opportunistic players. Domestic players will remain focused on core assets (mainly office and high street investments) in established locations with good lease contracts in place. International investors will remain attracted by the larger lot size, value add / opportunistic assets which have been repriced.
In terms of investments, an upturn in volumes has been registered in retail investment transactions starting from the second half of 2013, after a challenging 2012 and first half of 2013, with no significant shopping centres transacted, lack of financing and perceived country risk.. In the second half of 2013, in fact, the Italian real estate market has been marked by a shift in investor sentiment, with many international investors, who have been absent from the Italian retail arena since the beginning of the economic recession, turning their interest to the country and becoming active players.
During the year retail investment volumes equal to circa €1.1 billion have been registered (excluding the Fondo Boccaccio shares transaction and the Auchan portfolio acquired by Morgan Stanley), against the €359 million recorded in 2012, corresponding to a +206% increase in volumes. Of the transacted amount, about €890 million are related to shopping centres, retail parks and FOCs. In this regard, the role played by opportunistic investors has been fundamental, though a few deals also suggest some investors’ will of having a longer-term involvement in Italy.
In 2013, nine deals concerned shopping centres and retail parks. The sale of Market Central Da Vinci Retail Park, Valecenter, Airone and Limbiate Shopping Centres (for a total volume of €415 million, better detailed in the table below) represents the first stage of increased activity.
With regard to the high street market, it has proved resilient, as demonstrated by several transactions occurred over the year, such as the acquisition of the Benetton Building located in Rome, Via del Corso, for €180 million. Prime high street locations remain the focus of private investors and owner occupiers.
ITALY SINGLE ASSET RETAIL TRANSACTIONS(1) 2003 - 2013
2500 46 50 41
40 2000 32 30
2.100 27 30 23 2.300 24 1500 21 19 17
1.800 20 10
1000 1.380 1.310 10 980 1.140 1.050 900
500 780 0 360 0 -10 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Retail Single Asset No. of Transactions
Excluding Auchan portfolio acquired by Morgan Stanley Source: Cushman&Wakefield
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Source: Cushman&Wakefield
The following table summarises the main retail transactions registered in 2013.
MAIN 2013 RETAIL INVESTMENT DEALS SCHEME LOCATION BUYER TOTAL GLA PRICE GROSS (SQM) (€ MLN) YIELD H&M + Vodafone (High Milan Beni Stabili Gestioni 1,900 67.6 n.a. street) SGR Ortona Centre SC Ortona (Chieti) Finiper 11,759 18.8 n.a. (hypermarket only) Mongolfiera SC (retail Molfetta (Bari) Blokker Holdings 38,000 68 n.a. gallery only) (*) NV (Private) Auchan Bergamo (retail Bergamo Foncière LFPI Italia 2,000 7,85 ~7.90% gallery only) Virgin Active Milan Goldwinds Asset 5,800 15 n.a. Management Metro Cash&Carry La Spezia Foncière LFPI Italia 4,616 8,18 ~7.80%
Il Parco Shopping Centre Camposampiero (Padua) Lombardini Group 23,600 29 n.a.
Market Central Da Vinci Fiumicino (Rome) GWM Group 56,600 130 n.a. RP Franciacorta FOC Brescia Blackstone 32,600 126 ~10%
Via XX Settembre 35 Genova Confidential 1,300 13 n.a.
Amex Building Rome Confidential 1,100 ~40 n.a.
Via del Corso (Benetton Rome H&M 6,000 180 n.a. Building) Via Montenapoleone 9 Milan Swatch n.a. 40 n.a.
Ipercity and Le Brentelle Padova Allianz 47,100 n.a. n.a. SC (part of SES Portfolio) Meraville RP Bologna Orion 35,500 80 n.a.
Carrefour Palestrina (Rome) Local buyer 2,300 2.3 ~8.73%
Valecenter and Airone SC Marcon (Venice) and Blackstone 60,000 (Valecenter) 144.5 n.a. Monselice (Padua) 16,000 (Airone) Carrefour di Limbiate SC Limbiate (Monza e Brianza) ING Insurance 21,000 140 ~7.10% (retail gallery only) (**)
The above information was gathered from both official and informal sources. (*) 50% stake (**) Net
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In addition to the deals indicated above, it must be underlined the acquisition, by a fund managed by Morgan Stanley SGR, of a portfolio comprising 13 shopping centre and 2 retail parks, for a total GLA of more than 200,000 sq m. The assets, sold by Gallerie Commerciali Italia (Auchan Group), have been bought for a total value of about €635 million. Morgan Stanley owns the majority stake in the fund owning the centres, while Immochan (the company controlled by Auchan) will maintain a minority stake in the fund and will provide property and leasing management services for the assets.
Positive signals, further hinting at Italy being on the way to recovery, have been registered also during the first quarter of 2014, with the following retail deals closed:
MAIN 2014 RETAIL INVESTMENT DEALS SCHEME LOCATION BUYER TOTAL PRICE GROSS GLA (SQM) (€ MLN) YIELD Fonti del Corallo SC (*) Livorno BNP Reim SGR 7,300 47 ~7.00%
Terminal Nord RP Udine Europa Risorse SGR 32,300 n.a. n.a. Carrefour Market Via Monti n.a. 1,800 5,4 ~6.08% (supermarket) (Milan) Carrefour Market Viale Fulvio n.a. 3,500 4,9 ~6.94% (hypermarket) Testi – Cinisello (Milan) Le Mura SC (retail gallery Ferrara Serenissima SGR 12,000 38 n.a. only) Coin portfolio (3 assets) Milan Sorgente SGR n.a. 77 n.a.
Vialarga SC (retail gallery Bologna Nordiconad Soc. 7,400 32,1 n.a. only) Coop.
(*) Master Lease
The following chart shows the trend registered by prime shopping centres yields since 2007. As a general trend, yields decreased steadily for several years up until 2007, when prime gross yields for prime shopping centres reached record-low levels, around 5.00%, reflecting the increasing interest for retail properties on the part of investors. When the global economic crisis hit, ignited by the credit crunch, yields started to rise again. A general stabilization has been registered in 2010 and 2011. A new increase in yields was registered starting from 2012, mainly reflecting the instability that has been affecting the Italian economic and political situation.
SHOPPING CENTRES - PRIME GROSS YIELDS 2007-2013
9,00%
8,00%
7,00%
6,00%
5,00%
4,00% 2007 2008 2009 2010 2011 2012 2013
Shopping Centres
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Low liquidity translated into a softening of prime yields in the retail warehouse and shopping centre sub-sectors. On an annual basis retail warehouse figures, in 2013, softened by 75-175 basis points, while shopping centres’ yields grew by 75-100 basis points, with the sharpest of these upward corrections occurring across Southern Italy, where a further future softening is still possible. Following the 2013 increased investment activity, market sentiment would suggest yields are likely to remain stable in the first half of 2014. The renewed interest of international investors in the Italian property market, and the growing investment volumes, seem to suggest that Italy is slowly entering a new market phase.
The following table summarizes the main retail transactions closed in the last seven years (2006 – 2012).
2006 – 2012 MAIN RETAIL INVESTMENT DEALS YEAR SCHEME LOCATION BUYER TOTAL GLA PRICE PRICE GROSS (SQM) (€ MLN) (€/SQM) YIELD 2012 Retail Galleries Gallarate (Varese) Carrefour 5,000 13 2,600 ~9.00% Gallarate and San and San Giuliano Property Italia Giuliano Milanese Milanese (Milan) 2011 Megalò SC Pescara (Abruzzo) ECE 48,500 140 2,900 ~7.25%
2011 Mongolfiera SC Molfetta (Bari) Orion 35,000 65 1,900 ~7.25% 2011 Fidenza RP Fidenza (Parma) Cordea Savills 26,000 40 1,500 ~7.50% 2011 Punta di Ferro SC Forlì COOP+Unipol 12,600 92 7,300 ~6.26% (retail gallery only) 2011 Casal Bertone SC Rome Union Investment 9,800 48 4,900 ~5.75% (retail gallery only) RE GmbH (**) 2010 Le Vele SC + Cagliari Corio 31,900 103.3 3,200 ~7.00% Millennium EC 2010 Mongolfiera SC Surbo (Lecce) Schroders 11,300 49 4,300 ~7.50% (retail gallery only) (Net 2010 Porta di Roma SC Rome Allianz + Corio 100,000 440 4,400 ~6.4%) Antegnate Axa Investment 2009 Antegnate SC 36,500 160 4,400 ~6.15% (Bergamo) Management 2009 Auchan SC (**) Monza Union Investment 28,000 141 5,000 ~6.00% Barberino Designer Henderson 2009 Firenze 21,000 125 6,000 ~6.50% Outlet Global Investors 2009 Vittuone SC Milan Klepierre 32,500 44.2 1,400 ~6.50% I Portali SC (retail 2009 Modena Eurocommercial 7,800 39 5,000 ~6.50% gallery only) 2008 Terminal Nord RP Udine British Land 33,000 100 3,000 ~5.70% Castelguelfo FOC – 2008 Bologna Neinver 13,000 53.1 4,100 ~6.60% Phase I 2008 La Fabbrica SC La Spezia Pradera 11,700 48.5 4,100 ~6.00% Leone di Lonato + 2008 Variuos locations Klepierre 46,200 129.5 2,800 ~6.50% Corti Venete SC Henderson 2008 Navile RP Bologna 11,000 45 4,100 ~6.50% Global Investors 2007 Città Fiera SC Udine Corio 27,400 87 3,200 ~6.05%
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2006 – 2012 MAIN RETAIL INVESTMENT DEALS Le Colonne SC 2007 Brindisi DEGI 12,000 70.4 5,900 ~5.35% (retail gallery only) Serravalle RP (Phase Serravalle 2007 Henderson 16,200 37 2,300 ~5.80% A) (Alessandria) ING Real Estate 2007 Fiumara Sc Genova 24,900 249 10,000 ~5.00% (today CBREGI) ING Real Estate 2007 I Petali sc Reggio Emilia 28,500 95 3,300 n.a. (today CBREGI) 2007 Le Masserie sc Ragusa TMW Pramerica 23,700 59.7 2,500 ~6.50% Credit Suisse 2007 Porto degli Ulivi sc Rizziconi Asset 13,000 53 4,100 ~6.50% Management 2007 Il Ducale sc Pavia IGD SIIQ SpA 16,000 40 2,500 ~5.80%
Carrefour Limbiate Limbiate (Monza ING Real Estate 2006 SC (retail gallery 21,000 130 (***) 6,200 ~5.50% e Brianza) (today CBREGI) only) Carrefour Siracusa ING Real Estate 2006 SC (retail gallery Siracusa 13,000 70 (***) 5,400 ~6.40% (today CBREGI) only) ING Real Estate 2006 8 Gallery SC Turin 21,500 92.1 4,300 ~6.00% (today CBREGI) Valdichiana Outlet Foiano della 2006 DEGI 17,500 86 5,000 ~6.40% Village FOC Chiana (Arezzo)
(*) Net (**) Master lease with Gallerie Commerciali Italia Spa (***) Package deal of Limbiate and Siracusa
We would like to underline that the amount of available data is limited, as only a few transactions occur in a year. Furthermore, the lack of transparency characterising the Italian market further reduces the amount of any comparable information available.
19.3 FACTORY OUTLET CENTRES Despite the cautious optimism within the outlet market in 2011, 2012 saw a marked cooling of demand from the new entrants, caused in part by the uncertainty surrounding the Eurozone crisis. 2013 commenced on a more positive note, with more entrants into the outlet market and smaller outlet players looking to expand on their portfolio with a noticeable uptick on transactions over the course of the year. However, generally those properties that have directly transacted are considered somewhat secondary and in some cases had been on the market for some time.
Those who already hold the prime assets in the European market, are reluctant to relinquish ownership as they still see further rental growth potential. Encouragingly though, the recent sale of Lakeside Village in Doncaster showed, that in the UK at least, the transaction time scale is becoming shorter, albeit where there is a depth of demand.
A number of transactions occurred at corporate and at an indirect level, suggesting appetite for the outlet product and recognition of its continued resilience at the prime end against falling national retail sales. Hammerson increased their stake in Value Retail by a further €78 million. Simon Properties also made their first venture into the European outlet market through an investment of €435 million in McArthurGlen, giving them joint ownership of 6 properties.
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The abrupt stalling in the European investment market in Q1 2012 stopped any chance of the increased market participation compressing yields. Before this the market for investment in factory outlets had become quite established with a number changing hands in recent years after attracting international institutional investors, with established centres commanding net initial yields of circa 7%.
We consider the best European centres would trade at circa 6.5% but the majority would sell for 7%+. Despite the presence of international investors, the outlet market has become more polarised. As a result of the Eurozone crisis and in the main, the perception of Southern European countries, yield profiles began to diverge, stabilising in Q1 2013.
Many transactions have not been straightforward being structured on a corporate basis and/or having provision for top-up payments based on achieving trading thresholds or with new units being developed. It is not uncommon for the original developer/operator to be retained in their management capacity, perhaps retaining an equity interest in the centre.
ESTIMATED YIELDS FOR PRIME FOCs IN EUROPE NET YIELDS France 6.75-7.00% Germany 6.50-7.00% Italy 7.00-7.50% Spain 7.00-7.50% Poland 7.00-7.50% Portugal 7.50-8.00% UK 6.00-6.75%
Between 2008-2011 there were a number of key European assets that transacted, including Castelguelfo in Italy, whose phase 1 was bought in 2008 by Neinver at a gross yield of 6.60%. Since then there has been a lack of prime quality outlets traded. There are a number of assets throughout Europe which have been actively marketed or have been available to buy over the last 24 months, including Phase III of the Premier Outlet in Budapest (Hungary), the re-launch of Palmanova Outlet Village, near Verona (Italy) and the more recent launch of Festival Park in Ebbw Vale (Wales). None of the assets available constitute prime stock and noting the complexities of the outlet market, some off market transactions are slow to progress. Nevertheless, some of the assets have specific asset management potential that may attract more interest as market sentiment improves
It appears that the market is maturing, both from an operational perspective with innovative asset management and also brands developing their experience in outlet centre retailing. A combination of both is enhancing its acceptance as an asset class.
However, given the difficulty in obtaining retail outlet centre consents, and the realisation that outlet centres have a real place in the hierarchy, performing well in good times and bad, we anticipate good investor demand from institutional investors and property companies based throughout Europe.
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20. COMPETITION ANALYSIS
20.1 THE EXISTING COMPETITION Given the retail format of the subject Property, the main competitors of Valdichiana Outlet Village are the schemes offering a similar retail concept, aiming to create a shopping experience and to emphasize prices strategy. Considering this aspect, we have not identified, in the estimated catchment area (0-60 minute-drive time), two factory outlet centres (better described below) which, in any case, in our opinion may not be considered as real competitors for the Property.
Considering a wider catchment area (0-90 minute-drive time band), we would identified also the McArthur Glen Barberino Designer Outlet, in Barberino di Mugello (Firenze).
The table below summarizes the key facts of each scheme.
EXISTING COMPETITION ISOCHRONE SCHEME TOTAL GLA YEAR OF NO. OF C&W VIEW DRIVETIME (SQ M) OPENING TENANTS (Minutes) Different offer and target 45-60 The Mall FOC 8,200 2003 24 of customers. Not a real competitor Different offer, high Fashion Valley 45-60 5,500 2011 25 vacancy rate. Not a real FOC threat 32,000 (27,000 2006 (Phase 130 (100 Different offer and Barberino 60-90 Phase I - 5,000 1) – 2014 Phase I – 30 different catchment area. Designer Outlet Phase II) (Phase II) Phase II) Not a real competitor
We report hereunder a brief description of each scheme.
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1. THE MALL FACTORY OUTLET CENTRE CITY Reggello (Frazione di Leccio) PROVINCE Firenze YEAR OF OPENING 2003 CAR PARKING SPACES (no.) 500 TOTAL GLA (sq m) 8,200 NO. OF SHOPS 24 Gucci, Yves Saint Laurent, Valentino, Armani, Dior, MAIN BRANDS Fendi, Bottega Veneta, Burberry
Located in Reggello (Firenze), about 70 km (50 minute- drive time) to the north of the Property and approximately 32 km to the south-east of Firenze, this FOC is characterized by a very high quality offer, entirely made up of luxury brands. Some exclusive retailers, such as Dior, Lanvin, Yves Saint Laurent and Balenciaga, have their sole Italian factory outlet store in The Mall, thus contributing to increasing the appeal of the FOC and making it unique for the market. The offer of The Mall may not be compared to Valdichiana’s both in terms of size and of quality. The two schemes attract different target of customers and, although it is possible that local residents would visit more than one structure, we are of the opinion that The Mall may not COMMENTS be considered as a real competitor for Valdichiana. In order to complete our analysis, we would like to bring to your attention that a new scheme, known as The Castle Fashion Outlet, is currently under construction in the vicinity of The Mall. The new scheme, whose opening is expected for May 2014, will have a total area of 3,300 sq m and will be developed on two aboveground levels. As at today, no further information about the potential tenants of the scheme is available. The Castle aims to complete the offer of The Mall, although it must be underlined that the new building will have a less appealing location, as it will be less visible from the main road network leading to the The Mall.
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2. FASHION VALLEY FACTORY OUTLET CENTRE CITY Reggello PROVINCE Firenze YEAR OF OPENING 2011 CAR PARKING SPACES (no.) 1,000 TOTAL GLA (sq m) 5,500 NO. OF SHOPS 25 Ermanno Scervino, Trussardi, Versace, Vivienne MAIN BRANDS Westwood
Located only 2.2 km to the south of The Mall, the scheme has been operating since 2011. The scheme aimed to complete the offer of The Mall, taking advantage from the vicinity to the centre. Although Fashion Valley accommodates some luxury brands (such as Trussardi, Ermanno Scervino and Versace), the COMMENTS target has been only partially achieved, as as at today 9 of the 25 units are vacant and some of them are let to a single retailer managing a multi-brands store. Considering the size of the scheme, its offer and its location, it is our opinion that Fashion Valley does not represent a real threat for the subject Property.
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3. BARBERINO DESIGNER OUTLET CITY Barberino di Mugello PROVINCE Firenze YEAR OF OPENING 2006 (Phase I) – 2014 (Phase II) CAR PARKING SPACES (no.) 2,000 TOTAL GLA (sq m) 32,000 NO. OF SHOPS 130 Class Roberto Cavalli, Dolce&Gabbana, Les Copains, MAIN BRANDS Trussardi
This factory outlet is located at the edges of the 90 minute-drive time catchment area of Valdichiana, about 130 km (circa 100 minute-drive time) to the north of the Property and approximately 37 km to the north of Firenze. The scheme is developed on about 32,000 sq m GLA and accommodates 130 retail units, 30 of which were added with the most recent phase, which was inaugurated in March 2014, increasing the total GLA by approximately 5,000 sq m. The centre has a pleasant and well-designed open-air structure and it is characterized by a high quality offer, with the presence of several haute-couture and luxury goods retailers, among which: Class Roberto Cavalli, Dolce&Gabbana, COMMENTS Les Copains, Prada, Pal Zileri, Trussardi and Polo Ralph Lauren. The FOC benefits from a good location, being positioned along the A1 Milan – Naples motorway, just few metres from the ‘Barberino’ exit. Moreover, the scheme is linked to Firenze by a shuttle service. Barberino Designer Outlet’s offer has a higher quality compared to Valdichiana’s and, therefore, we are of the opinion that the centre target and mainly attract customers different from those who normally shop at Valdichiana. Moreover, it is our opinion that the two FOCs exercise their attractiveness on different areas and therefore, they cannot be considered as real competitors.
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20.2 THE PIPELINE With reference to the future retail supply, we are not aware of any new potential competitor for the Property in the pipeline or under development.
The following Map highlights the location of the schemes described above.
21. MARKET RENT Our opinion of Market Rent (MR) reflects the existing tenancies and merchandising mix and is exclusive of service charges contributions.
We would like to underline that in our assessment of market rental values, we have carried out a unit-by-unit analysis and we have taken into account the performance registered by each tenants and the relevant effort rates. Moreover, we have also considered the rental values achieved by the most recent leases signed in the scheme.
Our opinion of Market Rent is intended to be the headline rent. This excludes rent for temporary lettings (precari – mall income). We would like to bring to your attention that any market rent has been assigned to the cash dispenser, as it is not income producing.
Subject to the contents of this Valuation Report, and based on values current as of 31 March 2014, it is our opinion that the annual Market Rent of the Property, may be fairly assessed at:
€10,320,000 (Ten million three hundred and twenty thousand Euro) per year
The composition of this total forms part of Attachment IV.
Considering only the currently let area, the annual gross Market Rent of the Property is equal to €9,457,878 (340€/sq m GLA, not including the cash dispenser, which is not income producing). The Market Rent is about 5.9% lower than the Headline Rent (€10,018,208). Please, consider that the
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Headline Rent takes into account the annual rent to be paid at the end of any rent-free or reduced- rent period but excludes our estimated market rent for the units currently vacant.
We would like to bring to your attention that rental values in retail schemes (including factory outlet centres) vary considerably, depending on the age of the scheme, its layout, its performance, and location. Moreover, rents also vary depending on the size of the unit, the length of the lease, and the negotiation power of the tenant. Furthermore, for factory outlet centres, we would comment that there is a ‘two-tier’ market: (i) prime centres with a high quality offer, characterised by a good provision of haute-couture and luxury goods retailers and (ii) medium-market centres, whose offer is characterised by the presence of few up-market retailers and a wider presence of national and international brands normally found in shopping centres. Considering its merchandising mix, Valdichiana Outlet Village may be considered as a scheme belonging to the second category.
The average rent and turnover of the Property are in line with those of similar schemes belonging to Category (ii).
22. VALUATION METHODOLOGY AND RATIONALE
22.1 METHODOLOGY The Property is multi-let with different types of contracts and with differing termination dates and MGR indexation regimes.
We have arrived at our valuation by using two complementary approaches, namely by reference to the initial yield profile, and by constructing a DCF over a 10 year holding period. We acknowledge that the DCF approach involves the selection of a large number of subjective inputs in addition to the estimates for Market Rent; these include the assumptions for rental growth, the exit rate and the discount rate. Our preference is to place higher importance to the initial yield selection, using the DCF analysis as support.
The main DCF inputs which we have adopted are summarised below.
22.2 INFLATION We have assumed a constant inflation rate of 2.0% p.a. (1.4% in 2014).
22.3 REVENUE
GROSS MINIMUM GUARANTEED RENT The gross Expected Minimum Guaranteed Rent in Year 1 of the cash flow (1 April 2014 to 31 March 2013) is €10,223,096. The amount takes into account the leases in place, the stepped rents agreed, and indexation. It also includes our estimate of market rent (or the agreed rent, if a HOT has already been signed) for the units whose leases will expire in 2014, where we have applied our estimated market rent for the period from the lease expiry until the end of the year. Finally, the amount also includes our estimate of market rent for the vacant units, which we have considered to re-let between 2014 and 2015.
TURNOVER RENT In addition to the minimum guaranteed rent, in our DCF, we have also taken into account the turnover rent, as per the information provided to us by the Borrower and taking into account our estimate calculated on the basis of the net turnover provided to us.
For our cash flow projections, we have assumed an annual amount of Turnover Rent equal to 1.2% of the Gross Minimum Guaranteed Rent.
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TEMPORARY LETTINGS INCOME We have also taken into account the temporary lettings income, as per the information provided to us by the Borrower.
On the basis of the track record provided, as reported in par. 16.7, we have estimated a Temporary Lettings Income for 2014 equal to €50,000 (gross of leasing commissions). In order to reflect the higher risk attributable to this slice of income, we have weighted the estimated amount at 85% and we have assumed this amount will increase annually in line with inflation. This means that, for Year 1 of the cash flow (April 2014 to March 2015), the amount taken into account is equal to €42,500.
RENTAL INDEXATION We have assumed a CPI rate equal to our inflation rate, and adopted the rent indexation clauses as indicated in the lease contracts in place. For the units currently vacant, we have assumed indexation at 100% of the inflation rate, with the exception of the units located at the first floor, for which we have taken into account indexation at 75% of the inflation rate, as we have assumed that property leases will be signed. For the business leases whose rent is indexed annually considering a minimum ISTAT index equal to 2.5%, at reversion we have assumed an indexation equal to 100% of the inflation rate.
RENTAL GROWTH AND REVERSIONS We have calculated the reversionary income by reference to our estimates for current market rental values, increased by 2.0% p.a. (1.4% in 2014) for rental growth. Therefore, in terms of real rental growth, we have assumed no growth above inflation over the period of the cash flow. We have assumed that all units will revert to our estimate of market rent at the termination of the current lease, whether in the case of a lease renewal or re-letting.
GENERAL VACANCY AND COLLECTION LOSS To deal with the risk of void periods at lease expiry, of rental arrears and of the rent-free and reduced-rent periods at lease renewals, and based on the arrears analysis reported in Paragraph 18.3, we have made an allowance, over the period of the cash flow, of 2.00% of total potential gross revenue for general vacancy and of 1.00% of total potential gross revenue for collection loss.
22.4 OPERATING EXPENSES The total operating expenses we have estimated represent on average approximately 7.8% of the total annual revenues. These costs include the following:
IMU PROPERTY TAX According to the data provided, we have considered an IMU Municipal Tax equal to €397,350 per annum.
INSURANCE According to the information provided, we have allowed costs for landlord’s insurance costs, equal to €54,358 per annum.
For the cash-flow projections, we have assumed to increase Property Tax/IMU and Insurance costs in line with inflation.
PROPERTY MANAGEMENT FEES We have assumed a non recoverable property management and rent collection expense of 2.0% on the gross Minimum Guaranteed Rent.
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MANAGEMENT FEE ON TURNOVER RENT We have assumed management fee on turnover rent equal to 2.00% of the gross annual receivable turnover rent.
LEASING COMMISSIONS ON TEMPORARY LETTINGS INCOME We have assumed leasing commissions on temporary lettings income equal to 15.00% of the gross annual receivable income.
SERVICE CHARGES NOT RECOVERABLE FROM THE ASSUMED VACANT UNITS They have been estimated at €136 per sq m of GLA per annum.
LEASE REGISTRATION TAX Based on the information provided by the Borrower, we have assumed 0.50% of the annual minimum guaranteed rent of the lease contracts related to the following units: B1-12 – Swatch, B1- 16 – Tabaccheria Mencucci, B1-37 – Sun Nails, D1-07/08 – Adidas, G08 – John Ashfield, E13b+E14 – GAP. Moreover, in a prudential approach, we have assumed 0.50% of our estimate of market rent for the vacant units.
CAPITAL RESERVES We have allowed an annual provision of 1.0% of the total annual market rent for capital reserves.
22.5 LEASING AND CAPITAL COSTS These costs include the following:
LEASING COMMISSIONS We have allowed 10% on the market rent, to take into account the agency fees required to re-let the units at lease expiry. This takes into account both renewals and new lettings.
CAPITAL EXPENDITURES We have not taken into account any capital expenditure over the period of the cash flow.
ACQUISITION COSTS We have assumed a buyer will make allowance for acquisition costs at 5.00% of Market Value (Bersani transfer tax at 4.0% and legal, agency fees at 1.0%).
22.6 EXIT YIELD AND DISCOUNT RATE The terminal value is based on the forecast net revenue in year 11 capitalised at a net exit yield of 8.25%. The result has then been reduced to reflect the selling costs (at 0.50%).
We have applied a discount rate of 10.75%, to reflect the specific features of the subject property and the market conditions as at the date of valuation.
This figure reflects our judgement for (i) the rate necessary to provide the investor with a risk free return and (ii) an appropriate risk premium. The product is measured against the rate applicable to a “prime” well performing, conventional centre with a proven track record.
22.7 RESULTING DISCOUNTED CASH FLOW This is provided under Attachment V of this report.
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23. MARKET VALUE Subject to the contents of this Report we consider that the Market Value of the Property (net of purchaser’s costs), as at the valuation date may fairly be estimated at:
€106,600,000 (One hundred six million six hundred thousand Euro)
As required, the above Market Value assumes the sale of a direct interest in the property. Accordingly we have made an allowance for the purchaser’s liability for transfer tax (assumed at 4%) following the Bersani Visco law in 2006. In addition we have assumed a buyer will make allowance for acquisition costs at 1.0% of Market Value.
In reality, as you are aware, normal Italian market practice is to transfer the ownership of retail centres by selling the SPV that owns the asset. For that reason investment yields are analyzed on the basis of the value allocated to the asset for the purpose of establishing the price for the shares. That asset value then becomes part of a wider transaction which typically has regard to other issues, such as any inherent liability for gains tax within the company, the nature of any representations and warranties, adjustments for cash or liabilities, obligations towards staff and so on.
The primary advantage of this method of transfer is that all the approvals, licenses, and contracts which benefit the owning SPV remain undisturbed. For this reason it has been the preferred and conventional basis for such disposals. An additional benefit is that the SPV transfer does not attract the transfer tax which would be applicable to an asset sale (at 4%).
24. VALUATION CONSIDERATIONS AND FINAL COMMENTS Our conclusion for the valuation of this investment takes account of the following:
STRENGTHS
The location is good, as the Property benefits from a very good road network, being easily accessible from A1 Milan – Naples motorway, whose exit ‘Valdichiana’ is situated only 4 km away from the scheme. Moreover, the centre is located at a very short distance from the motorway link known as Raccordo Autostradale 6 Bettole – Perugia, linking Perugia to Siena. The ‘Bettole’ exit of the Raccordo Autostradale is circa 2 km from the Property. A1 motorway is an arterial road connecting the north of the country to the south starting from Milan passing through Bologna, Firenze, Rome, up to Naples.
Thanks to its location, the Property may benefit from the tourist flows visiting the tourist destinations located in the Valdichiana region and in the south of Tuscany (such as Arezzo, Montepulciano and Siena).
We have not identified, in the estimated catchment area (0-60 minute-drive time), any real competitor for the subject Property. Barberino Designer Outlet exercises its attractiveness on a different area compared to the Property’s. The Mall factory outlet is characterized by a very high quality offer, entirely made up of luxury brands. Some exclusive retailers, such as Dior, Lanvin, Yves Saint Laurent and Balenciaga, have their sole Italian factory outlet store in The Mall, thus making it unique for the market. The offer of The Mall may not be compared to Valdichiana’s both in terms of size and of quality. With reference to the future retail supply, we are not aware of any new potential competitor for the Property in the pipeline or under development.
The outlet centre is well established in its catchment, as it has been operating since 2005, when the first phase opened to the public.
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The scheme is served by 2,330 car parking spaces, providing a ratio of 1 space per 13.2 sq m GLA, which seems good for this type of retail scheme. Nevertheless, during our site inspection we were informed that a further car park providing 1,500 car parking spaces is located in the proximity of the centre. Although this further car park is not paved, it is used by customers at peak times, when the parking provision of the Property could appear to be inadequate.
The factory outlet centre offers a diversified and complete merchandising mix, with a predominance of the Fashion, shoes & accessories sector, which is typical for this kind of retail scheme.
According to the latest letting situation, about 87% of the let GLA is occupied by units that have been directly opened and are directly managed by the mother companies of the relevant brands. Only 13% of the let GLA is managed under franchising agreements and is occupied by franchisees.
The average turnover registered by the Property is indicative of a fair performance, as it is broadly in line with the turnover expected from a centre of this type, located in the centre of Italy and with its catchment area.
The average rent-to-sales ratio (excluding the service charges) recorded by the centre in 2013 is equal to 11.7%, which is indicative of a fair performance. 6.9% of the total MGR is paid by tenants having a ratio lower than 10%.
The service charges (including the marketing costs) per sq m GLA are in line with the level expected for a factory outlet centre of this size and quality. About 47% of the total costs is represented by marketing and promotional costs. For factory outlet centres, the marketing activity is very important and, usually, a substantial cost item. The costs budgeted for the marketing and promotional activity of Valdichiana appears appropriate for the size of the centre.
The amount of the temporary lettings income that was reached in the past years is in line with what is normally expected from a factory outlet centre. The open-air structure of the Property, in fact, limits the availability of display areas suitable for temporary lettings. Nevertheless, we would like to point out that the amount reached in 2012 decreased by about 36% compared to 2011. This was partly due to the fact that in 2011 the Landlord used some vacant units for temporary lettings.
The factory outlet is equipped with a car counting system that tracks the number of vehicles accessing the car park. Based on the information provided, in 2013, 1,568,807 vehicles accessed the car park, approximately +1.9% compared to the previous year, with 1,540,087 vehicles. The centre is also equipped with a people counting system. Based on the information provided to us, the system registered some 4,097,635 visitors in 2013, corresponding to a -1.8% decrease compared to the previous year, with its 4,172,785 visitors. The result is good. With reference to the monthly trend, we would comment that Valdichiana has the typical trend of a factory outlet centre, with July being the month registering the highest number of visitors, and January being the best performing month in terms of sales.
Based on the information provided by the Borrower, we understand that only three of the tenants still operating in the centre (Units D1-02 – St. Diego, H12 – L’Arcolaio and E03 - Rifle) have rental arrears. The overall situation at Valdichiana Outlet Village is better than average and the current delinquency does not pose any particular commercial risk.
WEAKNESSESS
The location provides a catchment population which has been estimated in about 1 million inhabitants in 0-60 minute-drive time and that appears less than ideal for the size of the factory outlet centre.
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Overall, the layout of the centre allows good circulation, although it should be underlined that the centre has a few ‘cold’ areas, suffering from poorer pedestrian flow, as demonstrated by the higher density of vacant units. Specifically, the units located at the first floor (corresponding to 4.4% of the total GLA) suffer from a lack of visibility. Likewise, along the Via del Ginnasio promenade comprised between Units H07 and H01, are concentrated five of the 17 vacant units of the centre, likely due to the fact that this portion of the promenade is not covered and the pedestrian flow along the scheme in not well balanced. Finally, we would like to bring to your attention that Unit E16a – Pizzeria del Drago, which also has an independent access on the open- air car park, suffers from little visibility from the promenade, due to its unappealing location within the centre.
Considering the scheme’s retail formula, the haute-couture and luxury goods retailers may be considered as the anchor units. With reference to this aspect, it should be noted that the presence of this kind of brands is limited to a few brands (e.g. Borbonese, Baldinini, VFG Store – Valentino, Missoni, Malboro). Wider is the presence of national and international brands normally found in shopping centres (e.g. Alcott, Guess, CK, Benetton, Nike, Golden Point, etc.). With reference to this aspect, it is worth underlying that Borbonese is one of the most recently opened stores in the centre. Moreover, we have been informed that Vestebene has recently upgraded its offer, introducing Kryzia and Diana Gallesi brands, which will replace the previous Motivi and Oltre brands.
As at the valuation date, the Property has 17 vacant units, accounting for some 8.6% of the total GLA. Four of the subject units are located on the first floor, corresponding to 18% of the vacant GLA. Unit C1-07 – Arfango closed to the public without authorization in February 2014 and a legal procedure to terminate the lease contract and to regain possession of the unit is currently underway. The Units C1-18A – Datch, G01 – Fornarina, G06 – Pull Love and H14 – And were vacated in 2014. In this regards, it is worth pointing out that the closing of these units was strongly affected by the bankruptcy issues involving their relevant tenants, which due to such problems had to close other stores of their network.
A number of lease contracts contemplate the possibility, for the tenant, to exercise a break option. In most cases the break option can be exercised only if the turnover of the last 12 months was lower than a certain amount. Based on the information provided, we understand that 39 tenants can still rescind their lease contracts.
The average passing rent is in line with the rental level expected from a centre of this type and quality. Nevertheless, our estimate of Market Rent is 5.4% lower than the Expected Headline Rent.
17 tenants, paying 16.4% of the total rent, have critical situations, with effort rates (including the service charges) higher than 25%. Some of the tenants are normally included in this category, such as Richard Ginori (Unit A1-11), Loomier (Unit B1-03), Robe di Kappa (Unit B1-22), Den Store (Unit E17). The lease contracts of 6 tenants are expected to expire in 2014 and 2015
In 2012 the turnover rent was reached by a more restricted number of tenants, compared to the previous years. The amount paid in 2013 (and referred to the turnover registered in 2012) was approximately 25% lower compared to 2011 and 46% lower compared to 2010. Based on the turnover data provided for 2013, we have estimated the turnover rent payable in 2014. The estimated amount is about 38% lower with respect to 2013.
12 tenants are trading below 2,000€/sq m GLA per annum and, therefore, greater attention should be given to them. Moreover, according to the turnover figures provided to us for 2014, five of these tenants registered, in the first two months of the year (January – February), steep drops in turnover, compared to the same period of 2013 (in details: Units A1-11 – Richard Ginori, B1-03 – Loomier, B1-22 – Robe di Kappa, E16 – Freddy and H8 – Bagatelle).
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Attachments that form part of this report:
ATTACHMENT I LOCATION MAPS ATTACHMENT II PHOTOGRAPHS ATTACHMENT III TENANCY SCHEDULE PROVIDED ATTACHMENT IV RENT ROLL ATTACHMENT V CALCULATIONS ATTACHMENT VI GENERAL VALUATION PRINCIPLES AND PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS ATTACHMENT VII INSTRUCTION AND CONFIRMATION LETTER ATTACHMENT VIII TEMPLATE RELIANCE LETTER
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GOLDMANSACHS-AR-VALDICHIANAFOC-REPORT-140331-03-SC.DOCX
ATTACHMENT I
LOCATION MAPS
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
VALDICHIANA OUTLET VILLAGE, FOIANO DELLA CHIANA (AREZZO), ITALY General Location
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
VALDICHIANA OUTLET VILLAGE, FOIANO DELLA CHIANA (AREZZO), ITALY Detailed Location and Aerial View
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
GOLDMANSACHS-AR-VALDICHIANAFOC-REPORT-140331-03-SC.DOCX
ATTACHMENT II
PHOTOGRAPHS
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
Valdichiana Outlet Village Foiano della Chiana (Arezzo)
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
Valdichiana Outlet Village Foiano della Chiana (Arezzo)
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
Valdichiana Outlet Village Foiano della Chiana (Arezzo)
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
Valdichiana Outlet Village Foiano della Chiana (Arezzo)
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
Valdichiana Outlet Village Foiano della Chiana (Arezzo)
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
Valdichiana Outlet Village Foiano della Chiana (Arezzo)
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
GOLDMANSACHS-AR-VALDICHIANAFOC-REPORT-140331-03-SC.DOCX
ATTACHMENT III
TENANCY SCHEDULE PROVIDED
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
Project Vanguard Rent Roll ‐ Valdichiana Outlet Center 02‐Apr‐14 / 12:41
Lease Details MGR as of 31/03/2014 Service Charge as of 31/03/2014 ISTAT Rent Turnover Rent Guarantee Lease Registration Tax Lease # 1 Lease # 2 Unit # 1 Unit # 2 Company Brand BX Name Dealer GLA Start Expiry Comment on Break € € PSM p.a. € € PSM p.a. Indexation Start Review % % Hurdles Amount Type Deadline Notes Owed by % Charged‐back P4819 L128 1 A1‐01 ELLE SRL LIV'IN DE' LONGHI Liv'in De'Longhi Direct 200 dic‐10 30‐nov‐16 69.857 349 26.081 130 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 7,00% 50.000 bank guarantee n.281/7004401 31‐mag‐17 DEGI 100% P4819 L129 133 A1‐02 GEOX SPA GEOX Geox Direct 397 lug‐12 23‐lug‐18 104.305 263 20.480 52 ISTAT 01‐gen‐15 ISTAT 9,5% or 10% up to € 1.000.000 over €1.000.000 12.000 UNICREDITbank guaranteeN.46011460995 31‐dic‐18 DEGI 100% P4819 L30 2 A1‐03/04/05 LEVIS STRAUSS ITALIA SRL Levi's Levi's Direct 435 lug‐05 15‐lug‐19 157.078 361 64.294 148 ISTAT 01‐gen‐15 ISTAT 8,00% 73.876 credito bergamascobank guarant.N.437280 15‐gen‐20 Annualrenewal DEGI 100% P4819 L15 3 A1‐06 FENICIA SPA Camicissima Camicissima Direct 137 ott‐06 27‐ott‐20 60.148 440 22.397 164 ISTAT 01‐gen‐15 ISTAT 9,00% 36.390 bank gurant.N.460831300726 27‐apr‐21 DEGI 100% P4819 L29 4 A1‐07 MIROGLIO FASHION SRL Oltre Oltre Direct 168 lug‐05 15‐lug‐19 50.113 298 25.285 150 ISTAT 01‐gen‐15 ISTAT 9,00% 28.283 bank gurant.N.1594/13607 15‐gen‐20 DEGI 100% P4819 L107 5 A1‐08 CARILLO OUTLET SRL ARTIGLI Artigli Direct 284 set‐10 12‐set‐18 at the end of the 54th month from 13/10/10, one time tight, 114.113 401 42.125 148 2,5% or ISTAT 01‐gen‐15 2,5%or ISTAT 11,00% 63.147 bank guarant.03103/8200/01025347 31‐ott‐18 DEGI 100% tenant shall have the right to withdraw from agreement (notice 6 months) P4819 L125 6 A1‐09 CARILLO FASHION SPA LIZALU' Lizalu' Direct 237 feb‐12 16‐feb‐20 at the end of the 54th month from 17/02/12 , one time tight, 87.489 369 38.884 164 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 51.640 bank guarantee n.460011456886 18‐apr‐20 DEGI tenant shall have the right to withdraw from agreement (notice 6 months), n case the turnover is under Euro 1.800,00 /GLA/YRLY. 100% P4819 7 A1‐10A Vacant Unit from 15/09/2013 VACANT 198 ‐‐ ‐‐ P4819 L149 7B A1‐10B GALLERY HOLDING SRL Borbonese Borbonese Direct 180 ott‐13 18‐ott‐21 At the end of the 48th month from opening (19/10/13) the 65.000 362 25.150 140 ISTAT FROM 1/1/15 19‐ott‐14 ISTAT 8,00% 22.000 bank guarantee within 22/02/2013. Bank cheque DEGI tenant with registered letter, shall have the right to withdraw from agreement if the turnover will be lower than 600.000€.Notice within 30 days from the end of 48th month.Tenant can leave unit after 6months after notice letter 100% P4819 L72 8 A1‐11 NEGOZI RICHARD GINORI SRLin Richard Ginori 1785 Richard Ginori 1735 Direct 169 apr‐08 29‐apr‐14 withdraw with registered letter (3 months notice), one time 80.776 479 24.972 148 2,5%or ISTAT ‐ 2,5%or ISTAT 8,00% 41.508 bank guarant. 29‐ott‐14 Annual renewal DEGI tight, from 3° year, if the turnover is lower than €2500/sqm GLA. 100% P4819 L73‐74 9 ‐ 108 A1‐12/G12 ICCAB SRL Marina Militare Marina Militare Direct 286 apr‐08 04‐apr‐22 Withdraw with registered letter (6 months notice), one time 117.088 410 42.837 150 2,5%or ISTAT 2,5%or ISTAT 8,00% 64.249 bank guarant.N.33134/10 31‐mar‐14 Annual renewal DEGI tight, from 3° year. 100% P4819 L27 10 B1‐01/02 COMPAR SPA Bata Bata Direct 450 lug‐05 15‐lug‐19 withdraw with registered letter (6 months notice), one time 191.487 425 68.999 153 ISTAT 01‐gen‐15 ISTAT 9,00% 90.060 bank guarant.N.8/7020601 15‐gen‐20 AFFITTUARIO tight, at the end of 3rd year, if the turnover is lower than € 1.500.000 100% P4819 L26 11 B1‐03 O.D.C. SRL Loomier Loomier Direct 207 lug‐05 15‐lug‐19 91.211 441 29.739 144 2,5% or ISTAT 01‐gen‐15 2,5%or ISTAT 10,00% 42.062 uncredit bank guarantee n.460011433164 19‐gen‐20 DEGI 100% P4819 L25 12 B1‐04 BIALETTI STORE SRL Bialetti Industrie Bialetti Industrie Direct 253 nov‐05 15‐nov‐19 110.241 436 40.092 159 ISTAT 01‐gen‐15 ISTAT 10,00% 51.849 SECURITY DEPOSIT DEGI 100% P4819 L130 13 B1‐05 ARTCRAFTS INTERNATIONAL SPACrocs Crocs Direct 120 lug‐12 13‐lug‐20 withdrawal right only once upon expiry of the 48th month 54.492 453 19.259 160 ISTAT 01‐gen‐15 ISTAT 9,00% 32.771 bank guaranteeUNICREDIT 30‐giu‐20 DEGI (14/07/14),entro 30 gg successivi, in case the turnover is under Euro 3.000,00 /GLA/YRLY. 9 months notice 100% P4819 L23 14 B1‐06/07 NIKE RETAIL BV Nike Nike Direct 751 lug‐05 15‐lug‐17 starting from the 3° year withdrawal in case the turnover rent 224.128 298 65.881 88 ISTAT 01‐gen‐15 ISTAT premium 3,5% on turnover above € 4.150.000,00 not provided in the contract contratto ante 2006 is lower than euro 3,6 ml P4819 L22 15 B1‐08 RETAIL SHOP SRL Caporiccio Caporiccio Not direct 105 lug‐05 15‐lug‐19 47.852 455 17.785 169 2,5% or ISTAT 01‐gen‐15 2,5%or ISTAT 10,00% 22.067 bank guaranteeUNICREDIT 15‐gen‐20 Annual renewal (withdrawal 30days before every year) DEGI 100% P4819 L21 16 B1‐09 TECNICA GROUP SPA DOLOMITE Dolomite Direct 226 lug‐05 31‐dic‐20 withdrawal right only on 31/12/15 or 31/12/17 or 31/12/18, 76.020 336 33.938 150 ISTAT 01‐gen‐16 ISTAT 12,00% 54.479 VENETO BANCA 30‐giu‐21 DEGI in case the turnover is under Euro 550.000. Notice within 30 days from 31/12/15 or 31/12/17 or 31/12/18.Tenant can leave unit after 6months after notice letter 100% P4819 L139 17 B1‐10 SIMONS&SONS SRL TIMBERLAND Timberland Not direct 230 apr‐13 28‐feb‐21 At the end of the 36th/48th/60th/72th month from opening 80.343 350 32.908 143 ISTAT 01‐gen‐16 ISTAT 8,00% 41.500 UNICREDIT guarantee 460011476784 04‐giu‐21 DEGI (06/12/12) the tenant with registered letter, shall have the right to withdraw from agreement if the turnover will be lower than 3000€ slp yr/Sqm GLA .Notice within 30 days from the end of 24th month.Tenant can leave unit after 6months after notice letter 100% P4819 L31 18 B1‐11 MIROGLIO FASHION SRL VB Store VB Store Direct 190 lug‐05 15‐lug‐19 70.846 372 28.596 150 ISTAT 01‐gen‐15 ISTAT 9,00% 39.984 bank guarant.N.1595/13607 15‐gen‐20 DEGI 100% P4819 L42 19 B1‐12 THE SWATCH GROUP SPA Swatch Swatch Direct 71 mag‐07 31‐mag‐21 At the end of the 36th month from 01/06/2013 the tenant 27.061 381 9.688 137 ISTAT 01‐gen‐15 ISTAT 8,00% 16.248 INTESA SANPAOLO bank guarant.N.9885/8200/574125/500/2013 30‐nov‐21 DEGI with registered letter, shall have the right to withdraw from agreement if the turnover will be lower than 3000€ slp yr/Sqm GLA .Tenant can leave unit after 6months after notice letter 50% P4819 L137 20 B1‐13 A.G.B. COMPANY SRL H&B Junior H&B Junior Direct 86 dic‐12 20‐dic‐20 27.843 322 12.974 150 ISTAT 01‐gen‐15 ISTAT 8,00% 16.774 Banca Sellabank guarantee 20‐giu‐21 DEGI 100% P4819 L41 21 B1‐14/15 S.T. SPA Lindt Lindt Direct 204 lug‐05 15‐lug‐19 94.393 463 36.643 180 2,5% or ISTAT 01‐gen‐15 ISTAT 10% or 9% or 7% up to € 350.000 from €350000,01 to €500.000 over € 500.000 53.274 CREDITO VALTELLINESE ban guarant. 111971 15‐gen‐20 DEGI 100% P4819 L99 22 B1‐16 MENCUCCI ANDREA Tabaccheria Mencucci Tabaccheria Mencucci Direct 57 dic‐09 19‐dic‐15 27.329 478 9.673 169 75% ISTAT 01‐gen‐15 75% ISTAT 4.720 security deposit DEGI 50% P4819 L40 23 B1‐17a KIKO SRL Kiko Kiko Direct 81 lug‐05 05‐ago‐19 33.774 415 12.052 148 ISTAT 01‐gen‐15 ISTAT 8,00% 15.884 credito bergamascobank guarant.N.437279 05‐feb‐20 Annual renewal DEGI 100% P4819 L39 24 B1‐17b PARAH SPA Parah Parah Direct 104 lug‐05 15‐lug‐15 51.521 497 21.909 211 5% or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 20.720 bank guarant.N.944 31‐gen‐16 contratto ante 2006 P4819 L121 25 B1‐18 MORINI JEWELS SRL Morini Jewels Morini Jewels Direct 175 mag‐11 30‐apr‐19 76.223 435 28.403 162 2,5% or ISTAT 01‐gen‐15 2,5%or ISTAT 5,00% 42.180 bank guaranteemonte die paschi di siena 13‐gen‐20 Annual renewal DEGI 100% P4819 L38 26 B1‐19 VINCENZO ZUCCHI SRL C'è Bassetti C'è Bassetti Direct 169 lug‐05 31‐dic‐14 73.995 439 29.564 175 ISTAT 01‐gen‐15 ISTAT 9,00% 41.762 INTESA SAN PAOLO bank guarant.N.533148 30‐gen‐15 DEGI 100% P4819 L37 27 B1‐20/21 GUESS ITALIA SRL Guess Guess Direct 391 lug‐05 27‐set‐23 At the end of 60th month from 27/9/13, the tenant shall have 141.525 362 54.709 140 ISTAT 01‐gen‐15 ISTAT 8,00% 85.112 UNicredit guarant.N.460011496791 26‐mar‐24 DEGI the right to withdraw, if the turnover during the prevoius 12 months, will be lower than 3.000,00€ /GLA/YRLY. Notice within 30 days from the end of 60th month.Tenant can leave unit after 6months after notice letter 100% P4819 L104 28 B1‐22 BASICOUTLET SRL Robe di Kappa Robe di Kappa Direct 307 mag‐10 17‐mag‐20 withdrawal right only once upon expiry of the 4th year , in 110.497 360 42.923 140 ISTAT 01‐gen‐15 ISTAT 8,00% 61.200 bank guarant.460831377796 18‐mag‐20 Garanzia personale della basicitalia spa ad integrazione della bank guarantee DEGI case the turnover is under Euro 1.900,00 /sqm GLA/YRLY. 6 months notice 100% P4819 L36 29 B1‐23 CASA LAGOSTINA SRL Home&Cook Home & Cook Direct 176 lug‐05 15‐lug‐19 withdrawal right only once upon expiry of the 30th month , in 65.333 371 25.133 143 ISTAT 01‐gen‐15 ISTAT 9,00% 31.711 BNLN.140485/G 15‐gen‐20 RINNOVO ANNUALE TACITO DEGI case the turnover is under Euro 650.000 , 6 months notice 100% P4819 L35 30 B1‐24 BASILE TRADING SRL Basile Basile Direct 165 lug‐05 15‐lug‐19 76.945 466 26.187 159 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 10,00% 42.580 bank guarant.UNICREDIT 15‐gen‐20 DEGI 100% P4819 L69 31 B1‐25 Melluso Calzaturificio Sas Melluso Melluso Direct 189 nov‐13 21‐nov‐21 At the end of 48th month from 22/11/2013, the tenant shall 75.720 400 28.395 150 Istat 01‐gen‐15 ISTAT 7,00% 45.811 bank guaranteeBANCO DI Napolin.03096/8200/01031722 13‐mag‐22 DEGI have the right to withdraw, if the turnover during the prevoius 12 months, will be lower than 2.500,00€ /GLA/YRLY. Notice within 120 days from the end of 48th month.Tenant can leave unit after 6months after notice letter 100% P4819 L127 32 B1‐26 SPITFIRE CENTRO SRL Spitfire/ T‐Wear Spitfire/ T‐Wear Direct 227 giu‐12 08‐giu‐20 At the end of the 36th contractual month, the tenant shall 84.254 371 34.896 154 ISTAT 01‐gen‐15 ISTAT 9,00% 74.223 bank guaranteen.00381/8200/00012104banca cr firenze 30‐giu‐13 RINNOVO ANNUALE TACITO DEGI have the right to withdraw from agreement, if the turnover during the prevoius 12 months, will be lower than 2500,00€/yr/sqm/GLA. 6 months notice 100% P4819 L34 33 B1‐27 POMPEA SPA Pompea Pompea Direct 227 lug‐05 15‐lug‐19 104.511 460 38.451 169 2,5% or ISTAT 01‐gen‐15 2,5%or ISTAT 10,00% 57.834 bank guarant.N.24/35598 15‐gen‐20 DEGI 100% P4819 L33 34 B1‐28 Gabel Industria Tessile SpA Gabel Gabel Direct 174 nov‐05 11‐nov‐19 77.904 447 28.613 164 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 11,00% 37.074 banca popolare di sondrio guarant.N.190239/11 11‐mag‐20 DEGI 100% P4819 L32 35 B1‐29 KASALINGHI ITALIA SRL Italian Factory Italian Factory Direct 280 lug‐05 15‐lug‐21 At the end of 36th month from 16/7/13, the tenant shall have 88.742 317 44.854 160 ISTAT 01‐gen‐15 ISTAT 9,00% 53.369 Credito bergamasco bank guarant.N.442588 15‐gen‐24 DEGI the right to withdraw, if the turnover during the prevoius 12 months, will be lower than 3.000,00€ /GLA/YRLY. Notice within 30 days from the end of 36th month.Tenant can leave unit after 6months after notice letter 100% P4819 L123 36 B1‐30 F.G.R. S.r.l. Privilege‐Aff Privilege‐Aff Direct 72 ott‐11 02‐ott‐19 38.022 525 11.870 164 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 32.842 MONTE DEI PASCHI DI SIENA 03‐apr‐20 Annual renewal DEGI 100% P4819 L11 37 B1‐31/32 PUMA ITALIA SPA PUMA Puma Direct 453 dic‐05 17‐dic‐15 145.542 321 76.536 169 5% or ISTAT 01‐gen‐15 2,5%or ISTAT 9% or 8% up to € 1,359 ml over € 1,359 ml 31.162 bank guarant.N.8309 29‐feb‐16 contratto ante 2006 P4819 L10 38 B1‐33 TERRE DI MASACCIO SRL Terre di Masaccio Terre di Masaccio Direct 206 lug‐05 15‐lug‐15 89.701 435 37.105 180 5% or ISTAT 01‐gen‐14 2,5%or ISTAT 7,00% 36.075 BANCA ETRURIA bank guarant.N.2000016958 15‐gen‐16 contratto ante 2006 P4819 L120 39 B1‐34 Vacant Unit VACANT 333 ‐‐ ‐‐ P4819 L9 40 B1‐35 a/b CONSORZIO AGRARIO DI SIENA La Sosta Del Granducato La Sosta Del Granducato Direct 747 apr‐06 31‐mar‐16 58.111 78 11.553 15 ISTAT 01‐gen‐15 ISTAT 6,00% over € 1 ml 12.500 bank guarantee 30‐set‐16 contratto ante 2006 P4819 41 B1‐36 Vacant Unit from 01/04/13 VACANT 78 ‐‐ ‐‐ P4819 L97 65 B1‐37 SUN NAILS DI TONELLI ELISA Sun Nails VACANT Direct 62 ‐‐ ‐‐5% or ISTAT 01‐gen‐15 75% ISTAT 7.484 bank guarant.N.1600/09 15‐nov‐15 DEGI 50% P4819 66 B1‐38 vacant unit VACANT Direct 56 ‐‐ ‐‐ P4819 67 B1‐39 Vacant Unit VACANT 56 ‐‐ ‐‐ P4819 L14 42 C1‐01 FENI SRL Feni Uomo Feni Uomo Direct 239 gen‐07 10‐nov‐20 95.668 400 37.961 159 ISTAT 01‐gen‐15 ISTAT 9,00% 57.879 bank guarant. N.460620103675 10‐mag‐21 DEGI 100% P4819 L7 43 C1‐02 NEW MILLS SRL Replay Replay Not direct 242 lug‐11 15‐lug‐17 85.000 351 33.283 137 ISTAT 01‐gen‐16 ISTAT 8,00% 51.000 bank guaranteen.23960 15‐gen‐18 DEGI 100% P4819 L6 44 C1‐03/04 WARNACO ITALY SRL Calvin Klein Calvin Klein Direct 634 set‐10 28‐set‐20 221.053 349 87.897 139 ISTAT 01‐gen‐15 ISTAT 8,00% 102.028 bank guarant.N.8387/8200/00008911CR FIRENZE 28‐set‐20 DEGI 100% P4819 L134 45 C1‐05/06 BASICOUTLET SRL K‐WAY / Superga K‐WAY / Superga Direct 464 dic‐12 30‐nov‐20 148.384 320 60.281 130 2,5%or ISTAT 01‐gen‐16 2,5%or ISTAT 8,00% 89.772 UNICREDIT BANK GUARANTEE 31‐mag‐21 Annual renewal DEGI 100% P4819 L1 46 C1‐07 TWO FASHION SRL IN LIQUIDAZIArfango Arfango Direct 304 lug‐05 15‐lug‐19 132.225 435 51.429 169 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 10,00% DEGI 100% P4819 L2/L147 47‐48 C1‐08/09 VIRGINIA SRL Massimo Rebecchi / Sartoria LeoMassimo Rebecchi / Sartoria LeoDirect 488 ott‐13 09‐ott‐21 187.143 383 72.848 149 ISTAT 01‐gen‐15 ISTAT 9,00% 113.221 cheque DEGI 100% P4819 L3 49 C1‐10 GOLDEN LADY COMPANY SPA GoldenPoint GoldenPoint Direct 246 lug‐05 15‐lug‐19 113.445 461 41.667 169 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 10,00% 62.778 bank guarant.N.7512401 15‐gen‐20 DEGI 100% P4819 L4 50 C1‐11/12 BENCOM SRL Benetton Benetton Direct 607 lug‐05 15‐lug‐19 At the end of the 48th month with a six months notice, the 214.988 354 83.538 138 2,5% or ISTAT 01‐gen‐15 100% ISTAT 10,00% 122.347 banca popolare di vicenza atto 65491 15‐gen‐20 AFFITTUARIO tenant with registered letter, shall have the right to withdraw from agreement if the turnover will be lower than 1770€ slp yr/Sqm GLA . 100% P4819 L5 51 C1‐13 GUY SAND SRL Mc Kenzy Mc Kenzy Direct 196 lug‐05 15‐lug‐19 74.516 379 33.232 169 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 10,00% 41.236 CARIPARMAN.4085810 15‐gen‐20 AFFITTUARIO 100% P4819 L126 52 C1‐14 NYC Industry Srl NYC NYC Direct 179 mar‐12 19‐mar‐20 73.874 412 29.373 164 ISTAT 01‐gen‐15 ISTAT 9,00% 43.386 UNICREDITn.460011457332 16‐ott‐20 DEGI 100% P4819 L135 53 C1‐15 CRISTINA GAVIOLI SRL Cristina Gavioli Cristina Gavioli Direct 121 dic‐12 07‐dic‐20 At the end of the 24th month the tenant with registered 42.434 350 18.186 150 ISTAT 01‐gen‐16 ISTAT 9,00% 24.248 BANCA SELLA 06‐giu‐21 DEGI letter, shall have the right to withdraw from agreement if the turnover will be lower than 3000€ slp yr/Sqm GLA .Notice within 30 days from the end of 24th month.Tenant can leave unit after 6months after notice letter 100% P4819 L146 54 C1‐16 SERVICE SERVICE SRL Roncato Roncato Direct 116 lug‐13 17‐lug‐21 46.690 402 18.565 160 ISTAT 01‐gen‐15 ISTAT 9,00% 28.079 Cassa di risparmio del Veneto 17‐gen‐22 DEGI 100% P4819 L101 55 C1‐17 CRIS SRL Campanile Campanile Direct 130 dic‐09 30‐nov‐17 At the end of the 4th year , one time tight, tenant shall have 57.791 444 19.065 146 2,5%or ISTAT 01‐gen‐15 2,5% or ISTAT 9,00% 9.710 bank guarant.N.9219/1 31‐mag‐18 partially executed DEGI the right to withdraw from agreement if the turnover rent enchased in the previous 12 months will be lower than 2500,00 YR/Sqm GLA. 6 months notice. 100% P4819 L20 56 C1‐18A RUBRA SRL IN FALLIMENTO Datch Datch 199 set‐11 22‐set‐19 At the end of the 36th months, one time tight, tenant shall 76.356 384 30.542 154 2,5%or ISTAT 9,00% have the right to withdraw from agreement if the turnover rent enchased in the previous 12 months will be lower than 3000,00 YR/Sqm GLA. 6 months notice P4819 L118 135 C1‐18B Bottega del Sarto Group Srl Bottega Verde Bottega del Sarto Direct 195 dic‐13 06‐dic‐21 NEW LEASE ‐ 75,000 tenant incentives 72.432 371 28.000 144 ISTAT 01‐gen‐15 ISTAT 8,50% 54.000 bank guarantee BANCA DELL'ADRIATICO 02‐giu‐22 REVOLVING UNTIL 20/01/15 DEGI 100% P4819 L19 57 C1‐19/20 AUTOGRILL SPA Autogrill‐Spizzico Autogrill‐Spizzico Direct 538 lug‐05 15‐lug‐17 149.153 277 31.056 58 ISTAT 01‐gen‐15 75% ISTAT 5,00% 40.350 bank guarantee 16‐gen‐18 contratto ante 2006 P4819 L103 58 D1‐01 FRANCI SRL Ice Village Ice Village Direct 177 apr‐10 27‐apr‐18 72.482 410 27.941 158 2,5% or ISTAT 01‐gen‐15 2,5%or ISTAT 7,00% 48.915 bank guarantee 28‐ott‐18 DEGI 100% P4819 L18 59 D1‐01a BOTTEGA VERDE SRL Bottega Verde Bottega Verde Direct 184 lug‐05 15‐lug‐19 75.897 411 29.265 159 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 35.000 bank guaranteeBANCA SELLA 15‐gen‐20 DEGI 100% P4819 L95 132 D1‐02 NEW YORK UNO SRL St.Diego St.Diego Direct 252 giu‐09 19‐giu‐17 92.868 369 39.807 158 5% or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 51.392 bank guarant.N.3111/8200/00444999 31‐dic‐17 DEGI 100% P4819 L105 60 D1‐03 Asics Italia SpA Asics Asics Direct 240 feb‐14 13‐feb‐24 Asics moved in for Bottega del Sarto 76.781 320 33.592 140 ISTAT 01‐gen‐17 ISTAT 8,00% At the end of 60th month from 14/02/2014, the tenant shall have the righ 52.660 bank guaranteen.21192/10 €42.388,90+ Cash deposit € 2.000,00 on account 602 13‐ago‐24 DEGI 100% P4819 L17 61 D1‐04 BEAUTY & PARFUMS SRL Profumeria Etrusca Profumeria Etrusca Direct 216 lug‐05 15‐lug‐17 99.376 460 34.277 159 2,5% or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 54.993 monte dei paschi di siena 15‐gen‐18 DEGI 100% P4819 L16 62 D1‐05 MALLOY DISTRIBUTION SRL Malloy Malloy Direct 217 dic‐13 13‐dic‐21 84.497 390 34.666 160 ISTAT 01‐gen‐16 ISTAT 9,00% 28.888 Banca popolare di Sondrio 13‐giu‐22 DEGI 100% P4819 L117 63 D1‐06 PENTA SRL Valditaro Valditaro Direct 230 giu‐11 31‐mag‐19 100.969 439 34.477 150 2,5% or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 55.874 UNICREDITBANK GUARANTEEN.460011430678 01‐dic‐19 DEGI 100% P4819 L91 64 D1‐07/08 ADIDAS ITALY SPA Adidas Adidas Direct 575 apr‐09 28‐apr‐17 During the 3rd year,one time tight, tenant shall have the right 201.322 350 87.279 152 2,5% or ISTAT 01‐gen‐15 ISTAT 8,00% 184.000 ADIDAS AGN.744/09 15‐apr‐17 DEGI to withdraw from agreement if the turnover rent enchased in the previous 12 months will be lower than 2500,00 YR/Sqm GLA 50% P4819 L43 68 E01 HILFIGER STORE SRL Tommy Hilfiger Tommy Hilfiger Direct 266 giu‐12 13‐giu‐22 At the end of the 36th contractual month or at the end of the 96.087 361 36.313 137 ISTAT 01‐gen‐15 ISTAT 8,00% 56.376 deutsche bankn.020/fdf/19687 31‐dic‐22 DEGI 100% 72nd contractual month, the tenant shall have the right to withdraw from agreement, if the turnover during the prevoius 12 months, will be lower than 3500,00€/yr/sqm GLA, 6 months notice P4819 L75 110 E02 MDS25 S.r.l. Gattinoni Gattinoni Direct 243 apr‐08 29‐apr‐22 Starting from 3rd year, the tenant shall have the right to 73.008 300 36.039 148 2,5%or ISTAT 01‐gen‐15 2%or ISTAT 8,00% 40.154 bank guarantee 30‐ott‐14 DEGI 100% withdraw from the agreement, if the turnover rent will be lower than 2500,00€ yr/sqm GLA (the termination shall be effective after 3 months from notice.)
P4819 L44 69 E03 Rilfe Srl Unipersonale Rifle Rifle Direct 243 lug‐07 13‐lug‐15 During the 3rd year, the tenant shall have the right to 91.505 376 36.985 152 2,5%or ISTAT 2,5%or ISTAT 8,00% 40.164 bankguarantee 11‐gen‐16 DEGI 100% withdraw from the agreement, if the turnover rent will be lower than 2000,00€ yr/sqm GLA (6 months notice)
P4819 L45 70 E04 Conte Of Florence Distribution Conte of Florence Conte of Florence Direct 244 lug‐07 13‐lug‐21 At the end of 3rd year, one time tight the tenant shall have the 66.000 270 34.225 140 2,5%or ISTAT 2,5%or ISTAT 8,00% 23.044 security deposit DEGI 100% S.p.A. right to withdraw, if the turnover during the prevoius 12 (occupancy indemnity) months, will be lower than 2.000,00€ /GLA/YRLY. 6 months note P4819 L92 103 E05 CALZEDONIA SPA Calzedonia‐Intimissimi Calzedonia‐Intimissimi Direct 309 apr‐09 16‐apr‐17 At the thirtieth month of the contract, one time tight, the 119.843 387 44.705 144 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 8,00% 63.123 bank guarant.N.8384/8200/00434710 15‐giu‐17 DEGI 100% tenant shall have the right to withdraw from agreement if the turnover rent will be lower than 3000,00€Sqm GLA/yrl
P4819 L94 71 E06 MAVICA SRL Samsonite Samsonite Not Direct 177 lug‐09 03‐lug‐17 At the end of the 24th contractual month, one tme tight, the 63.574 359 24.972 141 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 8,00% 50.228 bank guarant.N.200012557 30‐lug‐17 DEGI 100% tenant shall have the right to withdraw from agreement, if the turnover during the prevoius 12 months, will be lower than 3000,00€/yr/sqm GLA P4819 L46 72 E07 BALDININI SRL Baldinini Baldinini Direct 177 lug‐07 13‐lug‐21 63.493 358 24.848 140 ISTAT 01‐gen‐15 ISTAT 8,00% 20.707 bank guarant.CASSA RISPARMIO CESENAN.3047455/512/1203125 13‐gen‐22 DEGI 100% P4819 L47 73 E08 MILANO REPORT SRL Sisley Sisley Not Direct 309 lug‐07 13‐lug‐20 During the 3rd year, the tenant shall have the right to 116.108 376 49.258 159 ISTAT 01‐gen‐14 ISTAT 10,00% 61.254 bank guarant.N.201/98761 14‐gen‐14 DEGI 100% (occupancy indemnity) withdraw from the agreement, if the turnover rent will be lower than 2000,00€ yr/sqm GLA (6 months notice)
P4819 74 E09 Vacant Unit from 08/08/2013 VACANT 245 ‐‐ ‐‐ Lease Details MGR as of 31/03/2014 Service Charge as of 31/03/2014 ISTAT Rent Turnover Rent Guarantee Lease Registration Tax Lease # 1 Lease # 2 Unit # 1 Unit # 2 Company Brand BX Name Dealer GLA Start Expiry Comment on Break € € PSM p.a. € € PSM p.a. Indexation Start Review % % Hurdles Amount Type Deadline Notes Owed by % Charged‐back P4819 L102 102 E10 SKECHERS USA ITALIA SRL SKECHERS Skechers Direct 244 lug‐10 01‐lug‐18 At the end of 3rd year the tenant shall have the right to 84.050 345 37.505 154 only 3% from 01/01/2012 02‐lug‐14 2,5% or ISTAT 8,00% 41.000 bank guarant.N.176997/10 31‐dic‐18 DEGI 100% withdraw, if the turnover during the prevoius 12 months, will be lower than 2.000,00€ /GLA/YRLY. 6 months note
P4819 L148 75 E24 C&D Srl Marville Marville Direct 237 ott‐13 24‐ott‐21 At the end of 48th month from commencement date, the 75.715 320 33.125 140 ISTAT 01‐gen‐15 ISTAT 9,00% 45.808 DELIBERY WITHIN 23/01/14 BANK CHEQUE DEGI 100% tenant shall have the right to withdraw, if the turnover during the prevoius 12 months, will be lower than 350.000€/YRLY. Notice within 30 days from the end of 48th month.Tenant can leave unit after 12months after notice letter
P4819 L114 76 E25 CAPRI SRL GUTTERIDGE Gutteridge Direct 275 lug‐11 01‐lug‐19 At the end of 36th month the tenant shall have the right to 103.286 376 37.298 136 ISTAT 01‐lug‐14 ISTAT 9,00% 59.396 bank guarantee MONTE DEII PASCHI 14‐ott‐19 Annualrenewal DEGI 100% withdraw, if the turnover will be lower than 2.000,00€ /GLA/YRLY. 6 months notice P4819 L109 134 E26 CAPRI SRL ALCOTT Alcott Direct 460 lug‐11 01‐lug‐16 At the ent of 5th year, automatic renewal,If not received 160.565 349 58.387 127 2,5% or ISTAT 01‐lug‐14 2,5% or ISTAT 8,50% 91.163 bank guarantee MONTE DEII PASCHI 14/010/2021 Annual renewal DEGI 100% notice letter within six months before expiry date
P4819 L144 104 F01 Portobello Baby Promotion Srl PORTOBELLO BABY Portobello Baby Not Direct 216 lug‐13 05‐lug‐21 At the end of 36th month from commencement date, the 75.558 350 32.382 150 ISTAT 01‐gen‐16 ISTAT 9,00% 39.938 unicredit n.460011496797 30‐gen‐22 DEGI 100% tenant shall have the right to withdraw, if the turnover during the prevoius 12 months, will be lower than 2.500,00€ /GLA/YRLY. Notice within 30 days from the end of 36th month.Tenant can leave unit after 6months after notice letter
P4819 L49 77 F02 NOVITA' IMPORT SRL Novità Home Store Novità Home Store Direct 206 lug‐07 13‐lug‐15 48.288 234 20.000 97 ISTAT 01‐gen‐15 ISTAT 8% un l 13/7/1310% from 14/7/13 29.000 bank guarantee 13‐gen‐16 DEGI 100% P4819 L50 78 F03 LOTTO SPORT SHOPS SRL Lotto Lotto Direct 293 lug‐07 13‐lug‐15 110.241 376 44.557 152 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 8,00% 58.065 bank guarant.N.16837 02‐lug‐15 Annual renewal DEGI 100% P4819 79 F04 Vacant from 15/09/2013 VACANT 110 ‐‐ ‐‐ P4819 L140 112 F05 Lady Bug Srl Yamamay Yamamay Not Direct 183 mag‐13 15‐mag‐21 At the end of 36th month from commencement date, one time 60.000 328 25.000 137 ISTAT 01‐gen‐16 ISTAT 7,50% 38.115 Bank guarantee n. 4724Banca Valdichiana credito coop. 31‐gen‐14 In december they will delivery a new bank guarantee DEGI 100% tight the tenant shall have the right to withdraw, if the turnover during the prevoius 12 months, will be lower than 3.000,00€ /GLA/YRLY. Notice within 30 days from the end of 36th month.Tenant can leave unit after 6months after notice letter
P4819 L52 80 F06 BORMIOLI ROCCO SPA Bormioli Rocco Bormioli Rocco Direct 141 lug‐07 13‐lug‐19 At the end of 36th month from14/7/13, if the turnover during 54.536 386 19.796 140 ISTAT 01‐gen‐15 ISTAT 9,00% 32.994 Banca popolare di Vicenza n.72164 13‐gen‐20 DEGI 100% the prevoius 12 months, will be lower than 3.000,00€ /GLA/YRLY. Notice within 30 days from the end of 36th month (14/8/16).Tenant can leave unit after 6months after notice letter P4819 L145 81 F07 Vacant Unit signed hot with Stickhouse com Stickhouse Direct 142 mar‐14 31‐mar‐20 37.000 261 19.839 140 P4819 L93 82 F08 BIBLIOPHILIA DI BELLICONI MARLibreria Gulliver Outlet Libreria Gulliver Outlet Not Direct 126 lug‐09 24‐lug‐17 60.106 478 19.546 156 2,5%orISTAT 01‐gen‐15 2,5%or ISTAT 7,00% 31.659 bank guarant.7219701 25‐lug‐17 Annual renewal DEGI 100% P4819 L68 106 F09 CALEFFI SPA Caleffi Caleffi Direct 140 feb‐08 31‐dic‐21 57.952 413 22.537 160 istat 01‐gen‐15 istat 9,00% 35.351 bank guarant.N.20020773 20‐giu‐22 DEGI 100% P4819 L111 83 F10 TBN SRL Corso Roma Corso Roma Direct 244 mar‐11 28‐feb‐19 At the end of the 36° month (28/02/2014) from the 92.746 379 33.608 138 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 51.324 bank guarant.Banca sella 30‐set‐19 DEGI 100% Commencement Date, one time tight, withdrawal right if turnover rent during the previous 12 months lower than € 2500/sqm/yr (6 months notice by register letter)
P4819 L61 84 F11 VALLESI SPA Modus Beauty Store Modus Beauty Store Direct 232 lug‐13 13‐lug‐21 81.116 350 37.082 160 istat 01‐gen‐16 istat 9,00% 52.308 intesa san paoloN.03026/8200/00591797 13‐gen‐22 DEGI 100% P4819 L53 85 G01 Vacant unit from 15/02/14 VACANT 263 ‐‐ ‐‐ P4819 L62 86 G02 ENNEPI SRL Zuiki Zuiki Direct 236 lug‐07 13‐lug‐21 87.803 372 30.666 130 2,5%or ISTAT 01‐gen‐15 ISTAT 9,00% 52.804 MONTE DIE PASCHI SIENA bank guarantee 13‐lug‐18 in 2018 we must require a new postponement DEGI 100% P4819 L54 87 G03 ZEIS EXCELSA SPA Docksteps Docksteps Direct 213 lug‐07 13‐lug‐15 At the end of 3rd year, one time tight the tenant shall have the 84.320 395 32.407 152 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 42.231 bank guarantee 13‐gen‐16 DEGI 100% right to withdraw, if the turnover during the prevoius 12 months, will be lower than 2.000,00€ /GLA/YRLY. 6 months note P4819 L96 88 G04 PICADA 5 SRL John Barrit John Barrit Not Direct 195 mag‐09 05‐mag‐17 At the end of 3rd year , one time tight, withdrawal right if 85.256 438 30.278 156 2,5% or ISTAT 01‐gen‐15 ISTAT 8,00% 46.706 bank guarant.N.460831353123 20‐apr‐14 DEGI 100% turnover rent during the previous 12 months lower than € 3000/sqm/yr (6 months notice by register letter)
P4819 L124 89 G05 NEWPORT SPA Gant Gant Not Direct 181 dic‐11 30‐nov‐19 Withdrawal right only once upon at the end of 24th or 60th 70.551 389 26.877 148 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 8,00% 40.627 bank guarantee intesa san paolo n.03031/8200/00526956 14‐dic‐19 DEGI 100% month, in case the turnover is under Euro 4.000,00 sqm GLA/YRLY. 6 months note P4819 L106 107 G06 Vacant Unit from 24/03/14 VACANT 128 ‐‐ ‐‐ P4819 L116 90 G07 HARMONT & BLAINE SPA Harmont&Blaine Harmont & Blaine Direct 243 mar‐11 01‐mar‐19 102.936 423 33.475 138 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 8,00% 56.963 bank guaranteeMONTE DEI PASCHI DEGI 100% P4819 L63 91 G08 LONG ISLAND DI A.CELLI SAS John Ashfield John Ashfield Direct 206 lug‐07 13‐lug‐17 withdrawal right from the end of third year 72.697 353 27.232 132 75%ISTAT 01‐gen‐15 75% ISTAT 8,00% 16.984 bank guarant.N.460011308165 14‐lug‐17 DEGI 50% P4819 L55 92 G09 MAN PROJECT SRL Enrico Coveri Enrico Coveri Not Direct 234 lug‐07 13‐lug‐20 93.177 397 35.626 152 2,5%or ISTAT 01‐gen‐14 2,5%or ISTAT 9,00% 39.861 bank guarant.N.460011307796 13‐gen‐14 DEGI 100% (occupancy indemnity) P4819 L64 93 G10 LIBERTY RETAIL SRL Sartoria Rossi Sartoria Rossi Direct 310 lug‐07 13‐lug‐21 At the end of 24th month from commencement date, the 105.322 340 43.368 140 ISTAT 01‐gen‐15 ISTAT 9,00% 54.210 bank guarant.N.006/6013 13‐gen‐14 in attesa di emendamento assegno a garanzia DEGI 100% tenant shall have the right to withdraw, if the turnover during the prevoius 12 months, will be lower than 3.000,00€ /GLA/YRLY. Notice within 30 days from the end of 24th month.Tenant can leave unit after 6months after notice letter
P4819 94 G11 Vacant from 13/07/2013 VACANT 160 ‐‐ ‐‐ P4819 L57 95 H01 STONEFLY SHOP SRL Stonefly Stonefly Direct 116 lug‐07 13‐lug‐15 46.436 399 19.057 164 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 8,00% 24.459 bank guarant.N.460831315416 14‐gen‐16 DEGI 100% P4819 L58 96 H02 CENTRO OTTICO MEGAVISION SCentro Ottico Megavision Centro Ottico Megavision Direct 130 lug‐07 13‐lug‐21 57.100 438 20.806 160 2,5%or ISTAT 01‐gen‐15 ISTAT 9,00% 34.339 Monte dei paschi di Sienan.2602/7013001 13‐gen‐22 DEGI 100% P4819 97 H03 Vacant Unit from 01/02/2013 VACANT Direct 116 ‐‐ ‐‐ P4819 L136 98 H04 MODA PROJECT SRL Navigare Navigare Direct 116 nov‐12 21‐nov‐20 At the end of 36th month from opening, the tenant shall have 40.703 352 16.184 140 ISTAT 01‐gen‐15 ISTAT 8,00% 16.319 CARISAPbank guarantee 23‐mag‐21 DEGI 100% the right to withdraw, if the turnover during the prevoius 12 months, will be lower than 2.000,00€ /GLA/YRLY. Notice within 90 days from the end of 36th month.Tenant can leave unit after 6months after notice letter
P4819 L59 99 H05 AGRESTI GLORIA(occupancy ind Fashion Cafè Fashion Cafè Direct 103 lug‐07 13‐lug‐21 42.246 412 16.899 165 istat 01‐gen‐15 istat 8,00% 25.617 bcc montepulciano n.1070778/01/2014 13‐ago‐21 DEGI 100% P4819 101 H06 Vacant Unit from 01/04/13 VACANT 116 ‐‐ ‐‐ P4819 100 H07 Vacant Unit from 01/09/2013 VACANT 146 ‐‐ ‐‐ P4819 L89 130 E11 GAUDI TRADE SPA Gaudì Gaudì 234 mar‐09 12‐mar‐19 94.046 401 33.869 144 2,5% or istat 01‐gen‐15 2,5% or ISTAT 9,00% 43.370 bank guarant.N.9016 ‐8 26‐feb‐19 DEGI 100% P4819 L142 113+114 E12 UCM SPORTWEAR SRL COTTON & SILK Cotton & Silk Direct 289 giu‐13 01‐giu‐21 87.235 302 37.577 130 ISTAT 01‐gen‐15 ISTAT 10,00% 46.248 Monte dei Paschi di Siena 08‐dic‐21 DEGI 100% P4819 L138 125 E13a ACON RETAIL SRL Mash Junior Mash Junior Direct 275 mar‐13 08‐mar‐21 withdrawal right at the end of 24° month from 95.503 347 38.789 141 ISTAT 01‐gen‐15 ISTAT 9,00% 47.751 banca popolareguarantee n.12648 20‐ago‐21 DEGI 100% commencement date , if the turnover will be lower than € 2.500,00 sqm GLA/YRLY, with 30 days notice by register letter. Closing after 6 months from notice. P4819 L122 120 E13b + E14 GAP ITALY SRL GAP GAP Direct 720 set‐11 21‐set‐21 withdrawal right at the end of 4° year and at the end of 9° 105.587 147 60.950 85 2,5% or ISTAT 01‐gen‐15 75% ISTAT 6,00% 50.000 GAP B.V. Guarantee 21‐ott‐21 DEGI 50% year , 12 months notice. P4819 L87 128 E16 FREDDY SPA Freddy Freddy Direct 266 nov‐08 26‐nov‐14 89.367 336 37.662 142 ISTAT 01‐gen‐15 ISTAT 8,00% 27.500 bank guarant.N.23008 30‐apr‐15 DEGI 100% P4819 L90 131 E16a AL BORGO SAS Pizzeria Del Borgo Pizzeria Del Borgo Direct 213 apr‐09 09‐apr‐17 50.789 239 28.396 133 2,5% or ISTAT 01‐gen‐14 2,5% or ISTAT 7,00% 37.474 bank guarant.N.133.652 31‐ott‐17 DEGI 100% P4819 L81 121 E17 UNISON SRL Den Store Den Store Direct 266 lug‐08 04‐lug‐14 97.857 368 38.321 144 ISTAT 01‐gen‐15 ISTAT 8,00% 52.611 bank guarant.N.4207904 05‐gen‐15 DEGI 100% P4819 L82 122 E18a + E18b MCS Distribuzione S.p.a VFG Factory Store VFG Factory Store Direct 462 lug‐08 31‐mag‐20 withdraw from agreement in these hypothesis: 175.347 379 66.646 144 ISTAT 01‐gen‐15 ISTAT 8,00% 102.981 bank guarant.N.460831337337 30‐nov‐20 DEGI 100% I) notice from 18/01/14 to 18/07/14, everytime, rescission after 6 months from notice. II) from 19/07/2014 in case the turnover will be lower €2.500,00, 6 months notice.
P4819 L133‐141 124‐111 E19/20 Industries Sportwear Company S‐Cerru '‐Marina Yach ng' ‐HenryCerruti Direct (Henry's C 507 set‐12 18‐lug‐20 withdrawal right at the end of 36th month from opening 192.714 380 73.998 146 ISTAT 01‐gen‐15 ISTAT 8,00% 113.180 intesa san paolo n.08389/8200/00547392 18‐gen‐21 DEGI 100% date,if the turnover will be lower than € 2.000,00 sqm GLA/YRLY, with 30 days notice by register letter. Closing after 6 months from notice. P4819 115 E21 Vacant Unit from 25/05/2013 VACANT 228 ‐‐ ‐‐ DEGI 100% P4819 L112 116 E22 COTONELLA SPA COTONELLA Cotonella Direct 227 gen‐11 20‐gen‐19 79.197 349 32.610 144 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 46.359 bank guarant.N.16/2668BANCA VALLE CAMONICA 22‐ago‐19 Annual renewal DEGI 100% P4819 L77 117 E23 PRECA BRUMMEL SPA Brums Brums Direct 246 mag‐08 22‐mag‐14 withdrawal right from the third year, in case the turnover is 90.281 367 33.650 137 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 8,00% 48.742 bank guarant.N.150106094 24‐nov‐14 DEGI 100% under Euro 3.000,00 sqm GLA/YRLY.Closing after 6 months from notice. P4819 L115 127 H8 BGT ONE SRL Bagatelle Bagatelle Direct 100 giu‐11 08‐giu‐19 withdrawal right, only one time, at the end of 36° month, in 39.405 396 14.746 148 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 32.709 BANCO DI NAPOLI03114/8200/01028280 08‐dic‐19 DEGI 100% case the turnover is under Euro 2.000,00 sqm GLA/YRLY, 6 months notice P4819 L143 126 H9 IVY OXFORD CO SRL Ivy Oxford Ivy Oxford Direct 123 mag‐13 24‐mag‐21 52.762 431 17.158 140 2,5% or ISTAT 01‐gen‐15 2,5% or ISTAT 9,00% 25.738 Banco Desio n.2130890 30‐nov‐21 Annual renewal DEGI 100% P4819 L113 119 H10 START SRL Motorstore Motorstore Direct 135 feb‐11 04‐feb‐19 56.868 420 20.040 148 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 8,00% 32.477 financial guaranteeDS11000240 04‐ago‐19 DEGI 100% P4819 L70 109 H11 ARENA OUTLET 2 Srl Arena Arena Direct 122 lug‐08 18‐lug‐14 withdrawal right from the third year, in case the turnover is 51.610 422 20.477 168 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 55.728 bank guarantee 24‐ott‐14 DEGI 100% under Euro 2.500,00 sqm GLA/YRLY.Closing after 3 months from notice. P4819 L88 129 H12 LA MAGI Distribution S.r.l. L'Arcolaio L'Arcolaio‐ Diambre Not direct 122 dic‐08 03‐dic‐18 52.754 433 17.607 144 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 9,00% 27.786 bank cheque DEGI 100% P4819 L78 118 H13 PIQUADRO SPA Piquadro Piquadro Direct 124 lug‐08 18‐lug‐14 54.999 445 18.322 148 2,5%or ISTAT 01‐gen‐15 2,5%or ISTAT 10,00% 29.693 bank guarant.317952 28‐ott‐14 DEGI 100% P4819 L67 105 H14 Vacant unit from 11/01/14 VACANT 80 ‐‐ ‐‐ 30.777 feb‐09 apr‐19 €10.162.520 €358 €3.941.762 €139 GOLDMANSACHS-AR-VALDICHIANAFOC-REPORT-140331-03-SC.DOCX
ATTACHMENT IV
RENT ROLL
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
Client: GOLDMAN SACHS Property: VALDICHIANA OUTLET VILLAGE Address: Foiano della Chiana (Arezzo), Italy Valuation Date: 31/03/2014
TENANCY SCHEDULE GROSS EFFORT RATE EFFORT RATE TYPE OF LEASE LEASE ASSUMED GROSS GROSS CW CW BREAK MGR April 2014 MGR as at TURNOVER EXPECTED STEPPE 2013 2013 SERVICE SERVICE including ON MR HR/MR LEVEL UNIT NO. TRADING NAME SECTOR GLA LEASE ISTAT DURATION START EXPIRY LEASE EXPIRY MGR 2014 ISTAT HEADLINE HEADLIN EFFORT RATE MARKET MARKET NOTES OPTION (PROVIDED) 31/03/2014 RENT HEADLINE D-RENT TURNOVER TURNOVER CHARGES CHARGES Service (Excluding Service (%) CONTRACT DATE DATE DATE RENT E RENT RENT 2014 RENT 2014 RENT Charges Charges) SQ M % €/YR €/YR €/SQM/YR % €/YR €/SQM/YR €/YR €/YR €/SQM/YR % €/SQM/YR €/YR €/SQM/YR €/YR LET UNITS Ground A1-01 LIV'IN DE' LONGHI Household goods 200,45 Business Lease 2,5%or ISTAT 6,00 01/12/2010 30/11/2016 30/11/2016 69.857 69.85 7 349 01/01/2015 7,0% 69.857 349 69.857 458.596 2.288 14,9% 130 26.081 20,5% 310 62.140 13,5% 12,42% Ground A1-02 GEOX Fashion, shoes & accessories 397,21 Business Lease ISTAT 6,00 24/07/2012 23/07/2018 23/07/2018 104.305 104.305 263 01/01/2015 9,5%10% 104.305 263 104.305 yes 1.347.264 3.392 7,7% 52 20.480 9,3% 270 107.24 7 8,0% -2,74% Ground A1-03/04/05 Levi's Fashion, shoes & accessories 434,57 Business Lease ISTAT 6+8 16/07/2005 15/07/2019 15/07/2019 157.078 157.078 361 01/01/2015 8,0% 157.078 361 157.078 1.090.110 2.508 14,3% 148 64.294 20,2% 290 126.025 11,6% 24,64% Ground A1-06 Camicissima Fashion, shoes & accessories 136,70 Business Lease ISTAT 6+8 28/10/2006 27/10/2020 27/10/2020 60.148 60.148 440 01/01/2015 9,0% 60.148 440 60.148 573.202 4.193 10,5% 164 22.39 7 14,4% 450 61.515 10,7% -2,22% Ground A1-07 Oltre Fashion, shoes & accessories 168,35 Business Lease ISTAT 6+8 16/07/2005 15/07/2019 15/07/2019 50.113 50.113 298 01/01/2015 9,0% 50.113 298 50.113 277.618 1.649 17,9% 150 25.285 27,1% 260 43.771 15,8% 14,49% Ground A1-08 ARTIGLI Fashion, shoes & accessories 284,45 Business Lease 2,5%or ISTAT 8,00 13/09/2010 12/09/2018 12/10/2015 12/09/2018 114.113 114.113 401 01/01/2015 11,0% 114.113 401 114.113 835.074 2.936 13,3% 148 42.125 18,4% 380 108.091 12,9% 5,57% Ground A1-09 LIZALU' Fashion, shoes & accessories 237,10 Business Lease 2,5%or ISTAT 8,00 17/02/2012 16/02/2020 16/02/2017 16/02/2020 87.489 87.489 369 01/01/2015 9,0% 87.489 369 87.489 634.149 2.675 13,5% 164 38.884 19,6% 350 82.985 13,1% 5,43% Ground A1-10B Borbonese Fashion, shoes & accessories 179,64 Business Lease ISTAT 8,00 19/10/2013 18/10/2021 15/05/2018 18/10/2021 65.000 65.000 362 19/10/2014 8,0% 65.000 362 65.000 - - 140 25.150 0,0% 360 64.670 0,51% Ground A1-11 Richard Ginori 1785 Household goods 168,73 Business Lease 2,5%or ISTAT 6,00 30/04/2008 29/04/2014 29/04/2014 80.776 80.776 479 00/01/1900 8,0% 80.776 479 80.776 297.204 1.761 26,5% 148 24.972 34,9% 340 57.368 19,3% 40,80% Ground A1-12/G12 Marina Militare Fashion, shoes & accessories 285,58 Business Lease 2,5%or ISTAT 6,00 05/04/2008 04/04/2022 04/10/2018 04/04/2022 117.088 121.980 427 00/01/1900 8,0% 121.980 427 121.980 1.303.651 4.565 9,1% 153 43.800 12,5% 410 117.088 9,0% HOT (Head of Terms) signed at 410€/sqm 4,18% Ground B1-01/02 Bata Fashion, shoes & accessories 450,30 Business Lease ISTAT 6+8 16/07/2005 15/07/2019 15/01/2009 15/07/2019 191.487 191.48 7 425 01/01/2015 9,0% 191.487 425 191.487 1.439.492 3.197 13,2% 153 68.999 18,0% 380 171.114 11,9% 11,91% Ground B1-03 Loomier Household goods 206,66 Business Lease 2,5%or ISTAT 6+8 16/07/2005 15/07/2019 15/07/2019 91.211 91.211 441 01/01/2015 10,0% 91.211 441 91.211 406.352 1.966 21,9% 144 29.739 29,2% 310 64.065 15,8% 42,37% Ground B1-04 Bialetti Industrie Household goods 252,92 Business Lease ISTAT 6+8 16/11/2005 15/11/2019 15/11/2019 110.241 110.241 436 01/01/2015 10,0% 110.241 436 110.241 947.999 3.748 11,6% 159 40.092 15,8% 390 98.639 10,4% 11,76% Ground B1-05 Crocs Fashion, shoes & accessories 120,37 Business Lease ISTAT 8,00 14/07/2012 13/07/2020 30/04/2017 13/07/2020 54.492 54.492 453 01/01/2015 9,0% 54.492 453 54.492 466.133 3.873 11,6% 160 19.259 15,8% 460 55.370 11,9% -1,59% Ground B1-06/07 Nike Fashion, shoes & accessories 751,05 Business Lease ISTAT 12,00 16/07/2005 15/07/2017 15/07/2008 15/07/2017 224.128 224.128 298 01/01/2015 0,0% 224.128 298 224.128 3.175.388 4.228 7,0% 88 65.881 9,1% 300 225.315 7,1% -0,53% Ground B1-08 Caporiccio Fashion, shoes & accessories 105,08 Business Lease 2,5%or ISTAT 6+8 16/07/2005 15/07/2019 15/07/2019 47.852 47.852 455 01/01/2015 10,0% 47.852 455 47.852 368.129 3.503 12,7% 169 17.785 17,5% 430 45.184 12,3% 5,90% Ground B1-09 DOLOMITE Fashion, shoes & accessories 226,25 Business Lease ISTAT 6+2,5 +7 16/07/2005 31/12/2020 30/06/2016 30/06/2016 76.020 83.034 367 01/01/2016 12,0% 90.048 398 90.048 yes 464.327 2.052 16,4% 150 33.938 23,7% 350 79.188 17,1% 13,71% Ground B1-10 TIMBERLAND Fashion, shoes & accessories 229,55 Business Lease ISTAT 8,00 04/04/2013 28/02/2021 06/06/2015 28/02/2021 80.343 68.865 300 01/01/2016 8,0% 80.343 350 80.343 yes 1.110.437 4.837 6,2% 143 32.908 9,2% 360 82.638 7,4% -2,78% Ground B1-11 Vestebene Fashion, shoes & accessories 190,40 Business Lease ISTAT 6+8 16/07/2005 15/07/2019 15/07/2019 70.846 70.846 372 01/01/2015 9,0% 70.846 372 70.846 753.832 3.959 9,3% 150 28.596 13,1% 390 74.256 9,9% -4,59% Ground B1-12 Swatch Gifts & jewellery 70,97 Business Lease ISTAT 6,00 31/05/2007 31/05/2021 30/11/2010 31/05/2021 27.061 27.061 381 01/01/2015 8,0% 27.061 381 27.061 293.326 4.133 9,2% 137 9.688 12,5% 410 29.098 9,9% -7,00% Ground B1-13 H&B Junior Fashion, shoes & accessories 86,49 Business Lease ISTAT 8,00 21/12/2012 20/12/2020 20/12/2020 27.843 27.843 322 01/01/2015 8,0% 27.843 322 27.843 284.040 3.284 9,7% 150 12.974 14,3% 400 34.596 12,2% -19,52% Ground B1-14/15 Lindt Other goods 203,77 Business Lease ISTAT 6+8 16/07/2005 15/07/2019 15/07/2019 94.393 94.393 463 01/01/2015 10%9%7% 94.393 463 94.393 971.427 4.767 9,7% 180 36.643 13,4% 470 95.772 9,9% -1,44% Ground B1-16 Tabaccheria Mencucci Services 57,18 Property Lease 75% ISTAT 6,00 20/12/2009 19/12/2015 19/12/2015 27.329 27.329 478 01/01/2015 0,0% 27.329 478 27.329 1.337.587 23.393 2,0% 169 9.673 2,8% 470 26.875 2,0% 1,69% Ground B1-17a Kiko Healthcare & Beauty 81,46 Business Lease ISTAT 6+8 16/07/2005 05/08/2019 05/08/2019 33.774 33.774 415 01/01/2015 8,0% 33.774 415 33.774 1.031.552 12.663 3,3% 148 12.052 4,4% 450 36.65 7 3,6% -7,87% Ground B1-17b Parah Fashion, shoes & accessories 103,60 Business Lease 2,5%or ISTAT 10,00 16/07/2005 15/07/2015 15/07/2015 51.521 51.521 497 01/01/2015 9,0% 51.521 497 51.521 356.044 3.437 14,1% 211 21.909 20,3% 440 45.584 12,8% 13,02% Ground B1-18 Morini Jewels Gifts & jewellery 175,14 Business Lease 2,5%or ISTAT 8,00 01/05/2011 30/04/2019 30/04/2019 76.223 76.223 435 01/01/2015 5,0% 76.223 435 76.223 474.869 2.711 15,7% 162 28.403 21,6% 380 66.553 14,0% 14,53% Ground B1-19 C'è Bassetti Household goods 168,61 Business Lease ISTAT 6+1+2,5 16/07/2005 31/12/2014 31/12/2014 73.995 73.995 439 01/01/2015 9,0% 73.995 439 73.995 353.646 2.097 20,8% 175 29.564 29,2% 360 60.700 17,2% 21,90% Ground B1-20/21 Guess Fashion, shoes & accessories 390,78 Business Lease ISTAT 6+7+5 16/07/2005 27/09/2023 27/03/2019 27/09/2023 141.525 141.525 362 01/01/2015 8,0% 141.525 362 141.525 1.780.815 4.557 7,9% 140 54.709 11,0% 370 144.589 8,1% -2,12% Ground B1-22 Robe di Kappa Fashion, shoes & accessories 306,61 Business Lease ISTAT 10,00 18/05/2010 17/05/2020 17/11/2014 17/11/2014 110.497 110.49 7 360 01/01/2015 8,0% 110.497 360 110.497 435.827 1.421 25,2% 140 42.923 35,1% 280 85.851 19,7% 28,71% Ground B1-23 Home&Cook Household goods 176,17 Business Lease ISTAT 6+8 16/07/2005 15/07/2019 15/07/2008 15/07/2019 65.333 65.333 371 01/01/2015 9,0% 65.333 371 65.333 735.064 4.172 8,8% 143 25.133 12,3% 390 68.706 9,3% -4,91% Ground B1-24 Basile Fashion, shoes & accessories 165,04 Business Lease 2,5%or ISTAT 6+8 16/07/2005 15/07/2019 15/07/2019 76.945 76.945 466 01/01/2015 10,0% 76.945 466 76.945 451.523 2.736 15,0% 159 26.18 7 22,4% 400 66.016 14,6% 16,56% Ground B1-25 Melluso Fashion, shoes & accessories 189,30 Business Lease ISTAT 8,00 22/11/2013 21/11/2021 22/12/2016 21/11/2021 75.720 75.720 400 01/01/2015 7,0% 75.720 400 75.720 - - 150 28.395 0,0% 400 75.720 0,00% Ground B1-26 Spitfire/ T-Wear Fashion, shoes & accessories 227,19 Business Lease ISTAT 8,00 09/06/2012 08/06/2020 08/12/2015 08/12/2015 84.254 84.254 371 01/01/2015 9,0% 84.254 371 84.254 537.585 2.366 15,6% 154 34.896 22,1% 310 70.429 13,1% 19,63% Ground B1-27 Pompea Fashion, shoes & accessories 227,19 Business Lease 2,5%or ISTAT 6+8 16/07/2005 15/07/2019 15/07/2019 104.511 104.511 460 01/01/2015 10,0% 104.511 460 104.511 587.747 2.587 17,3% 169 38.451 23,9% 430 97.692 16,6% 6,98% Ground B1-28 Gabel Household goods 174,47 Business Lease 2,5%or ISTAT 6+8 12/11/2005 11/11/2019 11/11/2019 77.904 77.904 447 01/01/2015 11,0% 77.904 447 77.904 519.696 2.979 14,6% 164 28.613 20,1% 400 69.788 13,4% 11,63% Ground B1-29 Italian Factory Household goods 280,00 Business Lease ISTAT 8+10 16/07/2005 15/07/2021 16/01/2017 15/07/2021 88.742 88.742 317 01/01/2015 9,0% 88.742 317 88.742 898.488 3.209 9,8% 160 44.854 14,8% 350 98.000 10,9% -9,45% Ground B1-30 Privilege-Aff Fashion, shoes & accessories 72,38 Business Lease 2,5%or ISTAT 8,00 03/10/2011 02/10/2019 02/10/2019 38.022 38.022 525 01/01/2015 9,0% 38.022 525 38.022 338.337 4.674 11,0% 164 11.870 14,5% 550 39.809 11,8% -4,49% Ground B1-31/32 PUMA Fashion, shoes & accessories 453,27 Business Lease 2,5%or ISTAT 10,00 18/12/2005 17/12/2015 18/06/2012 17/12/2015 145.542 145.542 321 01/01/2015 9%8% 145.542 321 145.542 1.096.447 2.419 13,0% 169 76.536 19,9% 300 135.981 12,4% 7,03% Ground B1-33 Terre di Masaccio Bars & Restaurants 206,14 Business Lease 2,5%or ISTAT 10,00 16/07/2005 15/07/2015 15/07/2015 89.701 89.701 435 01/01/2014 7,0% 89.701 435 89.701 663.161 3.217 13,2% 180 37.105 18,8% 410 84.51 7 12,7% 6,13% First B1-35 a/b La Sosta Del Granducato Bars & Restaurants 747,00 Business Lease ISTAT 10,00 01/04/2006 31/03/2016 31/03/2016 58.111 58.111 78 01/01/2015 6,0% 58.111 78 58.111 657.879 881 8,8% 15 11.553 10,5% 75 56.025 8,5% 3,72% First B1-37 Sun Nails Services 62,37 Property Lease 75% ISTAT 6,00 15/05/2009 14/05/2015 14/05/2015 - 13.348 214 01/01/2015 0,0% 13.348 214 13.348 79.350 1.272 16,7% 116 7.220 25,8% 180 11.22 7 14,1% 18,90% First B1-36A Cash Dispenser Cash Dispenser 20,00 Loan for use - - - 0 Ground C1-01 Feni Uomo Fashion, shoes & accessories 239,17 Business Lease ISTAT 6+8 01/01/2007 10/11/2020 10/11/2020 95.668 95.668 400 01/01/2015 9,0% 95.668 400 95.668 539.815 2.257 17,7% 159 37.961 24,8% 350 83.710 15,5% 14,29% Ground C1-02 Replay Fashion, shoes & accessories 242,27 Business Lease ISTAT 6,00 16/07/2011 15/07/2017 15/07/2017 85.000 85.000 351 01/01/2016 8,0% 85.000 351 85.000 1.011.917 4.177 8,4% 137 33.283 11,7% 380 92.063 9,1% -7,67% Ground C1-03/04 Calvin Klein Fashion, shoes & accessories 634,02 Business Lease ISTAT 10,00 29/09/2010 28/09/2020 28/09/2020 221.053 221.053 349 01/01/2015 8,0% 221.053 349 221.053 2.289.812 3.612 9,6% 139 87.89 7 13,4% 360 228.24 7 10,0% -3,15% Ground C1-05/06 K-WAY / Superga Fashion, shoes & accessories 463,70 Business Lease 2,5%or ISTAT 8,00 01/12/2012 30/11/2020 30/11/2020 148.384 139.110 300 01/01/2016 8,0% 148.384 320 148.384 yes 702.613 1.515 19,8% 130 60.281 28,4% 240 111.288 15,8% 33,33% Ground C1-08/09 Massimo Rebecchi / Sartoria Leoni Fashion, shoes & accessories 488,16 Business Lease ISTAT 8,00 10/10/2013 09/10/2021 09/10/2021 187.143 187.143 383 01/01/2015 9,0% 187.143 383 187.143 - - 149 72.848 0,0% 380 185.501 0,89% Ground C1-10 GoldenPoint Fashion, shoes & accessories 246,19 Business Lease 2,5%or ISTAT 6+8 16/07/2005 15/07/2019 15/07/2019 113.445 113.445 461 01/01/2015 10,0% 113.445 461 113.445 536.933 2.181 20,6% 169 41.66 7 28,4% 380 93.552 17,4% 21,26% Ground C1-11/12 Benetton Fashion, shoes & accessories 607,49 Business Lease 100% ISTAT 6+8 16/07/2005 15/07/2019 15/01/2010 15/07/2019 214.988 214.988 354 01/01/2015 10,0% 214.988 354 214.988 1.457.162 2.399 14,7% 138 83.538 20,4% 310 188.322 12,9% 14,16% Ground C1-13 Mc Kenzy Fashion, shoes & accessories 196,36 Business Lease 2,5%or ISTAT 6+8 16/07/2005 15/07/2019 15/07/2019 74.516 74.516 379 01/01/2015 10,0% 74.516 379 74.516 484.696 2.468 15,0% 169 33.232 21,9% 340 66.762 13,8% 11,61% Ground C1-14 NYC Fashion, shoes & accessories 179,28 Business Lease ISTAT 8,00 20/03/2012 19/03/2020 19/03/2020 73.874 73.874 412 01/01/2015 9,0% 73.874 412 73.874 619.887 3.458 11,8% 164 29.373 16,6% 430 77.090 12,4% -4,17% Ground C1-15 Cristina Gavioli Fashion, shoes & accessories 121,24 Business Lease ISTAT 8,00 08/12/2012 07/12/2020 07/06/2015 07/12/2020 42.434 42.434 350 01/01/2016 9,0% 48.496 400 48.496 yes 385.987 3.184 11,0% 150 18.186 15,7% 430 52.133 13,5% -6,98% Ground C1-16 Roncato Fashion, shoes & accessories 116,03 Business Lease ISTAT 8,00 18/07/2013 17/07/2021 17/07/2021 46.690 46.690 402 01/01/2015 9,0% 46.690 402 46.690 - - 160 18.565 0,0% 400 46.412 0,60% Ground C1-17 Campanile Fashion, shoes & accessories 130,25 Business Lease 2,5% or ISTAT 8,00 25/12/2009 30/11/2017 24/06/2014 30/11/2017 57.791 57.791 444 01/01/2015 9,0% 57.791 444 57.791 286.457 2.199 19,7% 146 19.065 26,3% 380 49.495 17,3% 16,76% Ground C1-18B Bottega del Sarto Fashion, shoes & accessories 195,08 Business Lease ISTAT 8,00 07/12/2013 06/12/2021 06/12/2021 72.432 72.432 371 01/01/2015 8,5% 72.432 371 72.432 - - 144 28.000 0,0% 370 72.180 0,35% Ground C1-19/20 Autogrill-Spizzico Bars & Restaurants 537,64 Business Lease 75% ISTAT 12,00 16/07/2005 15/07/2017 15/07/2017 149.153 148.931 277 01/01/2015 5,0% 148.931 277 148.931 1.005.928 1.871 14,7% 58 31.056 17,8% 250 134.410 13,4% 10,80% Ground D1-01 Ice Village Bars & Restaurants 176,68 Business Lease 2,5%or ISTAT 8,00 28/04/2010 27/04/2018 27/04/2018 72.482 72.482 410 01/01/2015 7,0% 72.482 410 72.482 630.859 3.571 11,2% 158 27.941 15,6% 410 72.439 11,5% 0,06% Ground D1-01a Bottega Verde Healthcare & Beauty 184,44 Business Lease 2,5%or ISTAT 6+8 16/07/2005 15/07/2019 15/07/2019 75.897 75.89 7 411 01/01/2015 9,0% 75.897 411 75.897 476.645 2.584 15,5% 159 29.265 21,7% 370 68.243 14,3% 11,22% Ground D1-02 St.Diego Fashion, shoes & accessories 251,92 Business Lease 2,5%or ISTAT 8,00 20/06/2009 19/06/2017 19/06/2017 92.868 92.868 369 01/01/2015 9,0% 92.868 369 92.868 590.025 2.342 15,4% 158 39.80 7 22,1% 300 75.576 12,8% 22,88% Ground D1-03 Asics Fashion, shoes & accessories 239,94 Business Lease ISTAT 10,00 14/02/2014 13/02/2024 13/08/2019 13/02/2024 76.781 76.781 320 01/01/2017 8,0% 86.378 360 86.378 yes 523.116 146 35.120 23,7% 360 86.378 0,00% Ground D1-04 Profumeria Etrusca Healthcare & Beauty 216,03 Business Lease 2,5%or ISTAT 6+6 16/07/2005 15/07/2017 15/07/2017 99.376 99.376 460 01/01/2015 9,0% 99.376 460 99.376 1.067.578 4.942 9,1% 159 34.27 7 12,3% 490 105.855 9,9% -6,12% Ground D1-05 Malloy Fashion, shoes & accessories 216,66 Business Lease ISTAT 8,00 13/12/2013 13/12/2021 12/06/2017 13/12/2021 84.497 84.49 7 390 01/01/2016 9,0% 86.664 400 86.664 yes 543.226 2.507 15,2% 160 34.666 21,5% 340 73.664 13,6% 17,65% Ground D1-06 Valditaro Fashion, shoes & accessories 229,83 Business Lease 2,5%or ISTAT 8,00 01/06/2011 31/05/2019 31/05/2019 100.969 100.969 439 01/01/2015 9,0% 100.969 439 100.969 768.561 3.344 12,8% 150 34.47 7 17,3% 440 101.125 13,2% -0,15% Ground D1-07/08 Adidas Fashion, shoes & accessories 575,00 Business Lease ISTAT 8,00 29/04/2009 28/04/2017 28/04/2017 201.322 201.322 350 01/01/2015 8,0% 201.322 350 201.322 2.226.323 3.872 9,0% 152 87.279 12,9% 350 201.250 9,0% 0,04% Ground E01 Tommy Hilfiger Fashion, shoes & accessories 265,86 Business Lease ISTAT 5+10 14/06/2012 13/06/2022 13/12/2018 13/06/2022 96.087 96.08 7 361 01/01/2015 8,0% 96.087 361 96.087 1.307.794 4.919 7,3% 137 36.313 10,1% 380 101.02 7 7,7% -4,89% Ground E02 Gattinoni Fashion, shoes & accessories 243,36 Business Lease 2%or ISTAT 6,00 30/04/2008 29/04/2022 29/04/2022 73.008 88.729 365 01/01/2015 8,0% 82.742 340 82.742 yes 491.845 2.021 17,7% 148 36.039 25,0% 320 77.875 15,8% HOT Signed at stepped-rent (1yr 300€/sqm, 2yr 320€/sqm, 3yr 340€/sqm) 6,25% Ground E03 Rifle Fashion, shoes & accessories 243,42 Business Lease 2,5%or ISTAT 8,00 14/07/2007 13/07/2015 13/07/2015 91.505 91.505 376 00/01/1900 8,0% 91.505 376 91.505 956.203 3.928 9,3% 152 36.985 13,2% 350 85.19 7 8,9% 7,40% Ground E04 Conte of Florence Fashion, shoes & accessories 244,03 Business Lease 2,5%or ISTAT 8,00 14/07/2007 13/07/2021 13/01/2017 13/07/2021 66.000 66.000 270 00/01/1900 8,0% 90.000 369 90.000 yes 523.190 2.144 17,1% 140 34.225 23,6% 330 80.530 15,4% HOT Signed at stepped-rent (1yr 66,000€, 2yr 81,000€, 3yr 90,000€) 11,76% Ground E05 Calzedonia-Intimissimi Fashion, shoes & accessories 309,43 Business Lease 2,5%or ISTAT 8,00 17/04/2009 16/04/2017 16/10/2011 16/04/2017 119.843 119.843 387 01/01/2015 8,0% 119.843 387 119.843 1.308.063 4.227 8,9% 144 44.705 12,4% 420 129.961 9,9% -7,79% Ground E06 Samsonite Fashion, shoes & accessories 177,17 Business Lease 2,5%or ISTAT 8,00 04/07/2009 03/07/2017 03/07/2017 63.574 63.574 359 01/01/2015 8,0% 63.574 359 63.574 666.718 3.763 9,3% 141 24.972 13,0% 380 67.325 10,1% -5,57% Ground E07 Baldinini Fashion, shoes & accessories 177,17 Business Lease ISTAT 8,00 14/07/2013 13/07/2021 13/02/2017 13/07/2021 63.493 63.493 358 01/01/2015 8,0% 63.493 358 63.493 811.121 4.578 7,7% 140 24.848 10,7% 350 62.010 7,6% 2,39% Ground E08 Sisley Fashion, shoes & accessories 309,12 Business Lease ISTAT 8,00 14/07/2007 13/07/2020 13/07/2020 116.108 116.108 376 01/01/2014 10,0% 116.108 376 116.108 808.898 2.617 14,4% 159 49.258 20,4% 340 105.101 13,0% 10,47% Ground E10 SKECHERS Fashion, shoes & accessories 243,81 Business Lease 2,5% or ISTAT 8,00 02/07/2010 01/07/2018 01/01/2014 01/07/2018 84.050 84.050 345 02/07/2014 8,0% 84.050 345 84.050 782.319 3.209 10,7% 154 37.505 15,5% 370 90.210 11,5% -6,83% Ground E24 Marville Fashion, shoes & accessories 236,61 Business Lease ISTAT 8,00 25/10/2013 24/10/2021 24/10/2018 24/10/2021 75.715 75.715 320 01/01/2015 9,0% 75.715 320 75.715 - - 140 33.125 0,0% 320 75.715 0,00% Ground E25 GUTTERIDGE Fashion, shoes & accessories 274,98 Business Lease ISTAT 8,00 02/07/2011 01/07/2019 01/01/2015 01/07/2019 103.286 103.286 376 01/07/2014 9,0% 103.286 376 103.286 1.221.652 4.443 8,5% 136 37.298 11,5% 400 109.992 9,0% -6,10% Ground E26 ALCOTT Fashion, shoes & accessories 460,42 Business Lease 2,5% or ISTAT 5+5 02/07/2011 01/07/2016 01/07/2016 01/07/2016 160.565 160.565 349 01/07/2014 8,5% 160.565 349 160.565 2.564.754 5.570 6,3% 127 58.38 7 8,5% 380 174.960 6,8% -8,23% Ground F01 PORTOBELLO BABY Books & Toys 215,88 Business Lease ISTAT 8,00 06/07/2013 05/07/2021 05/01/2017 05/07/2021 75.558 75.558 350 01/01/2016 9,0% 79.876 370 79.876 yes - - 150 32.382 0,0% 370 79.876 0,00% Ground F02 Novità Home Store Household goods 205,93 Business Lease ISTAT 6+2 14/07/2007 13/07/2015 13/07/2015 48.288 48.288 234 01/01/2015 8% until 13/7/ 48.288 234 48.288 431.806 2.097 11,1% 97 20.000 15,7% 240 49.423 11,4% -2,30% Ground F03 Lotto Fashion, shoes & accessories 293,26 Business Lease 2,5%or ISTAT 8,00 14/07/2007 13/07/2015 13/07/2015 110.241 110.241 376 01/01/2015 8,0% 110.241 376 110.241 515.734 1.759 20,9% 152 44.55 7 29,5% 300 87.978 17,1% 25,30% Ground F05 Yamamay Fashion, shoes & accessories 182,98 Business Lease ISTAT 8,00 16/05/2013 15/05/2021 15/11/2016 15/05/2021 60.000 60.000 328 01/01/2016 7,5% 63.000 344 63.000 yes - - 137 25.000 0,0% 340 62.213 1,26% Ground F06 Bormioli Rocco Household goods 141,40 Business Lease ISTAT 6+6 14/07/2007 13/07/2019 14/01/2017 14/01/2017 54.536 54.536 386 01/01/2015 9,0% 54.536 386 54.536 313.004 2.214 17,4% 140 19.796 23,7% 340 48.076 15,4% 13,44% Ground F08 Libreria Gulliver Outlet Books & Toys 125,63 Business Lease 2,5%or ISTAT 8,00 25/07/2009 24/07/2017 24/07/2017 60.106 60.106 478 01/01/2015 7,0% 60.106 478 60.106 423.216 3.369 13,9% 156 19.546 18,5% 460 57.790 13,7% 4,01% Ground F09 Caleffi Household goods 140,47 Business Lease istat 8,00 02/02/2008 31/12/2021 31/12/2021 57.952 57.952 413 01/01/2015 8,5% 57.952 413 57.952 615.432 4.381 9,4% 159 22.402 13,0% 420 58.99 7 9,6% -1,77% Ground F10 Corso Roma Fashion, shoes & accessories 244,40 Business Lease 2,5%or ISTAT 8,00 01/03/2011 28/02/2019 31/08/2014 28/02/2019 92.746 92.746 379 01/01/2015 9,0% 92.746 379 92.746 640.337 2.620 14,1% 138 33.608 19,4% 340 83.096 13,0% 11,61% Ground F11 Modus Beauty Store Healthcare & Beauty 231,76 Business Lease istat 8,00 14/07/2013 13/07/2021 13/07/2021 81.116 81.116 350 01/01/2016 9,0% 85.751 370 85.751 yes 751.176 3.241 11,3% 164 37.922 16,4% 370 85.751 11,4% HOT signed at stepped-rent (1yr 350€/sqm, 2yr 370€/sqm) 0,00% Ground G02 Zuiki Fashion, shoes & accessories 235,89 Business Lease ISTAT 6+8 14/07/2007 13/07/2021 13/07/2021 87.803 87.803 372 01/01/2015 9,0% 87.803 372 87.803 911.083 3.862 9,6% 130 30.666 12,9% 410 96.715 10,6% -9,21% Ground G03 Docksteps Fashion, shoes & accessories 213,29 Business Lease 2,5%or ISTAT 8,00 14/07/2007 13/07/2015 13/01/2011 13/07/2015 84.320 84.320 395 01/01/2015 9,0% 84.320 395 84.320 - - 152 32.40 7 0,0% 380 81.050 4,03% Ground G04 John Barrit Fashion, shoes & accessories 194,61 Business Lease ISTAT 8,00 06/05/2009 05/05/2017 05/11/2012 05/05/2017 85.256 85.256 438 01/01/2015 8,0% 85.256 438 85.256 755.096 3.880 11,2% 156 30.278 15,2% 450 87.575 11,6% -2,65% Ground G05 Gant Fashion, shoes & accessories 181,49 Business Lease 2,5%or ISTAT 8,00 01/12/2011 30/11/2019 31/05/2017 30/11/2019 70.551 70.551 389 01/01/2015 8,0% 70.551 389 70.551 507.731 2.798 13,6% 148 26.87 7 18,9% 320 58.07 7 11,4% 21,48% Ground G07 Harmont&Blaine Fashion, shoes & accessories 243,43 Business Lease 2,5%or ISTAT 8,00 02/03/2011 01/03/2019 01/03/2019 102.936 102.936 423 01/01/2015 8,0% 102.936 423 102.936 808.622 3.322 12,4% 138 33.475 16,6% 430 104.675 12,9% -1,66% Ground G08 John Ashfield Fashion, shoes & accessories 205,87 Business Lease 75% ISTAT 10,00 14/07/2007 13/07/2017 13/07/2010 13/07/2017 72.697 72.69 7 353 01/01/2015 8,0% 72.697 353 72.697 490.047 2.380 14,8% 132 27.232 20,3% 330 67.93 7 13,9% 7,01% Ground G09 Enrico Coveri Fashion, shoes & accessories 234,48 Business Lease 2,5%or ISTAT 8,00 14/07/2007 13/07/2020 13/07/2020 93.177 93.17 7 397 01/01/2014 9,0% 93.177 397 93.177 881.865 3.761 10,6% 152 35.626 14,6% 400 93.792 10,6% -0,66% Ground G10 Sartoria Rossi Fashion, shoes & accessories 309,77 Business Lease ISTAT 6+8 14/07/2007 13/07/2021 13/01/2010 13/07/2021 105.322 105.322 340 01/01/2015 9,0% 105.322 340 105.322 892.099 2.880 11,8% 140 43.368 16,7% 370 114.615 12,8% -8,11% Ground H01 Stonefly Fashion, shoes & accessories 116,47 Business Lease 2,5%or ISTAT 8,00 14/07/2007 13/07/2015 13/07/2015 46.436 46.436 399 01/01/2015 8,0% 46.436 399 46.436 412.814 3.544 11,0% 164 19.05 7 15,6% 410 47.753 11,6% -2,76% Ground H02 Centro Ottico Megavision Healthcare & Beauty 130,34 Business Lease ISTAT 6+8 14/07/2007 13/07/2021 13/07/2021 57.100 57.100 438 01/01/2015 9,0% 57.100 438 57.100 768.652 5.897 7,4% 160 20.806 10,1% 460 59.956 7,8% -4,76% Ground H04 Navigare Fashion, shoes & accessories 115,60 Business Lease ISTAT 8,00 24/11/2012 21/11/2020 23/05/2016 21/11/2020 40.703 40.703 352 01/01/2015 8,0% 40.703 352 40.703 351.898 3.044 11,5% 140 16.184 16,1% 330 38.148 10,8% 6,70% Ground H05 Fashion Cafè Bars & Restaurants 102,66 Business Lease istat 8,00 14/07/2007 13/07/2021 13/07/2021 42.246 42.246 412 01/01/2015 8,0% 42.246 412 42.246 251.981 2.455 16,7% 164 16.798 23,3% 400 41.064 16,3% 2,88% Ground E11 Gaudì Fashion, shoes & accessories 234,43 Business Lease 2,5% or ISTAT 10,00 13/03/2009 12/03/2019 12/03/2019 94.046 94.046 401 01/01/2015 9,0% 94.046 401 94.046 584.797 2.495 15,7% 144 33.869 21,5% 360 84.395 14,4% 11,44% Ground E12 COTTON & SILK Fashion, shoes & accessories 289,05 Business Lease ISTAT 8,00 02/06/2013 01/06/2021 01/06/2021 87.235 87.235 302 01/01/2015 10,0% 92.946 322 92.946 yes - - 130 37.57 7 0,0% 320 92.496 0,49% Ground E13a Mash Junior Fashion, shoes & accessories 275,20 Business Lease ISTAT 8,00 09/03/2013 08/03/2021 08/09/2015 08/03/2021 95.503 95.503 347 01/01/2015 9,0% 95.503 347 95.503 - - 141 38.789 0,0% 350 96.320 -0,85% Ground E13b + E14 GAP Fashion, shoes & accessories 720,25 Business Lease 75% ISTAT 10+5 22/09/2011 21/09/2021 21/09/2016 21/09/2021 105.587 105.58 7 147 01/01/2015 6,0% 105.587 147 105.587 1.398.100 1.941 7,5% 85 60.950 11,9% 145 104.436 7,5% 1,10% Ground E16 Freddy Fashion, shoes & accessories 266,11 Business Lease ISTAT 6,00 27/11/2008 26/11/2014 26/11/2014 89.367 89.36 7 336 01/01/2015 8,0% 89.367 336 89.367 488.943 1.837 18,2% 142 37.662 25,9% 280 74.511 15,2% 19,94% Ground E16a Pizzeria Del Borgo Bars & Restaurants 212,92 Business Lease 2,5% or ISTAT 8,00 10/04/2009 09/04/2017 09/04/2017 50.789 50.789 239 01/01/2014 7,0% 50.789 239 50.789 431.745 2.028 11,5% 133 28.396 18,1% 220 46.842 10,8% 8,42% Ground E17 Den Store Fashion, shoes & accessories 265,71 Business Lease ISTAT 6,00 05/07/2008 04/07/2014 04/07/2014 97.857 97.85 7 368 01/01/2015 8,0% 97.857 368 97.857 436.572 1.643 20,1% 144 38.321 31,1% 310 82.370 18,9% 18,80% Ground E18a + E18b VFG Factory Store Fashion, shoes & accessories 462,11 Business Lease ISTAT 6+5,5 19/07/2008 31/05/2020 me, rescission 31/05/2020 175.347 175.34 7 379 01/01/2015 8,0% 175.347 379 175.347 1.130.717 2.447 15,4% 144 66.646 21,3% 350 161.739 14,3% 8,41% Ground E19/20 -Cerruti'-Marina Yachting'-Henry's cottFashion, shoes & accessories 506,58 Business Lease ISTAT 8,00 01/09/2012 18/07/2020 29/02/2016 29/02/2016 192.714 192.714 380 01/01/2015 8,0% 192.714 380 192.714 765.521 1.511 25,0% 146 73.998 34,7% 270 136.77 7 17,9% 40,90% Ground E22 COTONELLA Fashion, shoes & accessories 227,25 Business Lease 2,5%or ISTAT 8,00 21/01/2011 20/01/2019 20/01/2019 79.197 79.19 7 349 01/01/2015 9,0% 79.197 349 79.197 328.459 1.445 23,5% 144 32.610 33,5% 280 63.630 19,4% 24,46% Ground E23 Brums Fashion, shoes & accessories 246,17 Business Lease 2,5%or ISTAT 6,00 23/05/2008 22/05/2014 22/11/2011 22/05/2014 90.281 90.281 367 01/01/2015 8,0% 90.281 367 90.281 636.842 2.587 13,8% 137 33.650 19,1% 340 83.698 13,1% 7,87% Ground H8 Bagatelle Fashion, shoes & accessories 99,57 Business Lease 2,5%or ISTAT 8,00 09/06/2011 08/06/2019 08/12/2014 08/12/2014 39.405 39.405 396 01/01/2015 9,0% 39.405 396 39.405 160.309 1.610 24,0% 148 14.746 33,2% 300 29.871 18,6% 31,92% Ground H9 Ivy Oxford Fashion, shoes & accessories 122,56 Business Lease 2,5% or ISTAT 8,00 25/05/2013 24/05/2021 24/05/2021 52.762 52.762 431 01/01/2015 9,0% 52.762 431 52.762 - - 140 17.158 0,0% 430 52.701 0,12% Ground H10 Motorstore Other goods 135,32 Business Lease 2,5%or ISTAT 8,00 05/02/2011 04/02/2019 04/02/2019 56.868 56.868 420 01/01/2015 8,0% 56.868 420 56.868 330.081 2.439 15,1% 148 20.040 22,9% 370 50.068 15,2% 13,58% Ground H11 Arena Fashion, shoes & accessories 122,21 Business Lease 2,5%or ISTAT 6,00 19/07/2008 18/07/2014 18/10/2011 18/07/2014 51.610 51.610 422 01/01/2015 9,0% 51.610 422 51.610 293.266 2.400 17,2% 168 20.47 7 24,2% 380 46.440 15,8% 11,13% Ground H12 L'Arcolaio- Diambre Fashion, shoes & accessories 121,87 Business Lease 2,5%or ISTAT 10,00 04/12/2008 03/12/2018 03/12/2018 52.754 52.754 433 01/01/2015 9,0% 52.754 433 52.754 273.733 2.246 18,8% 144 17.60 7 25,2% 370 45.092 16,5% 16,99% Ground H13 Piquadro Fashion, shoes & accessories 123,72 Business Lease 2,5%or ISTAT 6,00 19/07/2008 18/07/2014 18/07/2014 54.999 54.999 445 01/01/2015 10,0% 54.999 445 54.999 429.521 3.472 12,5% 148 18.322 16,8% 400 49.488 11,5% HOT signed at €400/sqm 11,14% SUBTOTAL LET ####### 9.916.939 9.936.940 357 10.018.208 360 10.018.208 138 3.850.266 340 9.457.878 5,92%
VACANT UNITS Ground A1-10A Vacant Vacant 198,43 100% 12 30/09/14 27/09/26 0 69.451 0 0 350 69.451 First B1-34 Vacant Vacant 333,07 75% 12 31/03/15 28/03/27 0 33.307 0 0 100 33.30 7 First B1-36 Vacant Vacant 78,00 75% 12 31/03/15 28/03/27 0 11.700 0 0 150 11.700 First B1-38 Vacant Vacant 56,24 75% 12 31/03/15 28/03/27 0 9.561 0 0 170 9.561 First B1-39 Vacant Vacant 56,47 75% 12 31/03/15 28/03/27 0 9.600 0 0 170 9.600 Ground C1-07 Vacant Legal Procedure 303,87 100% 12 31/01/15 28/01/27 132.225 85.084 169 51.429 280 85.084 Ground C1-18A Vacant Vacant 198,65 100% 12 30/09/14 27/09/26 76.356 69.528 154 30.542 350 69.528 Ground E09 Vacant Vacant 244,56 100% 12 30/11/14 27/11/26 0 73.368 0 0 300 73.368 Ground F04 Vacant Vacant 110,00 100% 12 30/11/14 27/11/26 0 38.500 0 0 350 38.500 Ground F07 Vacant Vacant 141,71 100% 12 30/04/14 27/04/26 37.000 36.845 60 8.503 260 36.845 Ground G01 Vacant Vacant 262,76 100% 12 30/09/14 27/09/26 0 78.828 152 39.923 300 78.828 Ground G06 Vacant Vacant 128,01 100% 12 31/01/15 28/01/27 0 44.804 157 20.125 350 44.804 Ground G11 Vacant Vacant 159,51 100% 12 30/11/14 27/11/26 0 59.019 0 0 370 59.019 Ground H03 Vacant Vacant 115,55 100% 12 31/01/15 28/01/27 0 40.443 0 0 350 40.443 Ground H06 Vacant Vacant 115,70 100% 12 31/01/15 28/01/27 0 40.495 0 0 350 40.495 Ground H07 Vacant Vacant 146,35 100% 12 30/11/14 27/11/26 0 54.150 0 0 370 54.150 Ground E21 Vacant Vacant 227,90 100% 12 30/11/14 27/11/26 0 72.928 0 0 320 72.928 Ground H14 Vacant Vacant 79,88 100% 12 30/09/14 27/09/26 0 31.952 159 12.739 400 31.952 SUBTOTAL VACANT UNITS 2.956,66 245.581 - 859.559 - 163.262 859.559
TOTAL ####### 10.162.520 330 10.018.208 326 10.877.767 - 4.013.528 335 ######## 5,43%
GoldmanSachs-AR-Foiano-ValdichianaFOC-Analysis-140331-02-DRAFT.xlsx GOLDMANSACHS-AR-VALDICHIANAFOC-REPORT-140331-03-SC.DOCX
ALLEGATO V
CALCULATIONS
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
Client: GOLDMAN SACHS Property: VALDICHIANA OUTLET VILLAGE Address: Foiano della Chiana (Arezzo), Italy Valuation Date: 31/03/2014
ASSUMPTIONS ISTAT uplifts (p.a.) 1,4% in 2014, 2.0% from 2015 Market rental growth (p.a.) 1,4% in 2014, 2.0% from 2015 Business lease indexation (p.a.) 100,00% Property lease indexation (p.a.) 75,00% Weighting Temporary Letting Income and Turnover Income 85,00% Turnover Income (€/yr) € 185.000 2014 Estimated Temporary Income (€/yr) € 50.000 2014
General Vacancy & Collection Loss 3,00% Management Fees 2,00% Management Fees on Turnover Income 2,00% Management Fees on Temporary Letting Income 2,00% IMU (€/yr) € 397.350 Insurance (€/yr) € 54.358 Lease Registration Tax (p.a.) 0,50% Service Charges on vacant units (€/sqm/yr) € 136 Leasing Commissions 10,00% Leasing Commissions on Temporary lettings 15,00% Capital Reserves 1,00%
Acquisition Costs 5,00% Sale Commissions 0,50%
Discount Rate / IRR 10,75% Net Exit Yield 8,25%
(Euro) CASH FLOW 1234567891011TOTAL For the Years Ending 31/03/2015 31/03/2016 31/03/2017 31/03/2018 31/03/2019 31/03/2020 31/03/2021 31/03/2022 31/03/2023 31/03/2024 31/03/2025
Turnover Rent as a % of MGR 1,20% 1,20% 1,20% 1,20% 1,20% 1,20% 1,20% 1,20% 1,20% 1,20% 1,20%
REVENUE Gross Minimum Guaranteed Rent (MGR) 10.223.096 10.908.940 11.044.731 11.230.815 11.429.322 11.437.688 11.527.201 11.724.151 11.945.459 12.183.991 12.428.408 Turnover Rent 1,20% 122.677 130.907 132.537 134.770 137.152 137.252 138.326 140.690 143.346 146.208 149.141 Temporary Lettings Income 0,42% 42.649 43.310 44.177 45.060 45.961 46.881 47.818 48.775 49.750 50.745 51.760
TOTAL POTENTIAL GROSS REVENUE 10.388.422 11.083.157 11.221.445 11.410.645 11.612.435 11.621.821 11.713.345 11.913.616 12.138.555 12.380.944 12.629.309
General Vacancy & Collection Loss 3,00% (311.652) (332.495) (336.643) (342.319) (348.373) (348.654) (351.400) (357.408) (364.157) (371.428) (378.879)
TOTAL EFFECTIVE GROSS REVENUE 10.076.770 10.750.662 10.884.802 11.068.326 11.264.062 11.273.167 11.361.945 11.556.208 11.774.398 12.009.516 12.250.430
OPERATING EXPENSES Management Fees 2,00% (204.462) (218.179) (220.895) (224.616) (228.586) (228.754) (230.544) (234.483) (238.909) (243.680) (248.568) Management Fees on Turnover Rent 2,00% (2.454) (2.618) (2.651) (2.695) (2.743) (2.745) (2.767) (2.814) (2.867) (2.924) (2.983) Leasing commissions on Temporary Lettings 15,00% (6.397) (6.496) (6.627) (6.759) (6.894) (7.032) (7.173) (7.316) (7.462) (7.612) (7.764) IMU 3,83% (398.741) (404.927) (413.026) (421.287) (429.712) (438.307) (447.073) (456.014) (465.134) (474.437) (483.926) Insurance 0,52% (54.548) (55.395) (56.502) (57.633) (58.785) (59.961) (61.160) (62.383) (63.631) (64.904) (66.202) Lease Registration Tax 0,50% (3.712) (6.609) (6.730) (6.837) (6.956) (7.088) (7.222) (7.372) (7.516) (7.658) (7.803) Service Charges on Vacant Units € 136 (43.266) (43.937) (44.816) (45.712) (46.627) (47.559) (48.510) (49.481) (50.470) (51.480) (52.509) Capital Reserves 1,00% (102.231) (109.089) (110.447) (112.308) (114.293) (114.377) (115.272) (117.242) (119.455) (121.840) (124.284)
TOTAL OPERATING EXPENSES 92% (815.811) (847.250) (861.694) (877.847) (894.596) (905.823) (919.721) (937.105) (955.444) (974.535) (994.039)
NET OPERATING INCOME (NOI) 9.260.959 9.903.412 10.023.108 10.190.479 10.369.466 10.367.344 10.442.224 10.619.103 10.818.954 11.034.981 11.256.391
LEASING AND CAPITAL COSTS Leasing Commissions 10,00% (148.665) (94.741) (43.580) (147.640) (67.222) (226.733) (133.086) (207.001) (20.838) (27.646) (71.894) Capex ------
TOTAL LEASING AND CAPITAL COSTS (148.665) (94.741) (43.580) (147.640) (67.222) (226.733) (133.086) (207.001) (20.838) (27.646) (71.894)
CASH FLOW Gross Proceeds from Sale 136.441.103 Sale Commissions 0,50% (682.206)
TOTAL NET CASH FLOW 9.112.294 9.808.671 9.979.528 10.042.839 10.302.244 10.140.611 10.309.138 10.412.102 10.798.116 11.007.335 135.758.897
Discount Rate 10,75% Period 0,50 1,50 2,50 3,50 4,50 5,50 6,50 7,50 8,50 9,50 10,00 Discount Factor 0,95 0,86 0,77 0,70 0,63 0,57 0,51 0,46 0,42 0,38 0,36
PRESENT VALUE 8.658.763 8.415.784 7.731.267 7.025.115 6.507.063 5.783.272 5.308.699 4.841.282 4.533.423 4.172.696 48.902.488 111.879.850
MARKET VALUE (Gross of acquisition costs) 111.879.850 Acquisition Costs (5.327.612)
MARKET VALUE (Net of acquisition costs) 106.552.239
Rounded MV 106.600.000 3.461
Net Initial Yield 8,55% Gross Initial Yield 9,75% Net Exit Yield 8,25% Gross Exit Yield 9,26% Triple Net Yield (Net Rent on Gross Price) 8,28%
Net Running Yield 8,55% 9,20% 9,36% 9,42% 9,66% 9,51% 9,67% 9,77% 10,13% 10,33%
Gross Running Yield 9,75% 10,40% 10,53% 10,70% 10,89% 10,90% 10,99% 11,18% 11,39% 11,61%
Source: Cushman & Wakefield LLP (Based on information supplied by the Client and analysed by Cushman & Wakefield LLP)
GoldmanSachs-AR-Foiano-ValdichianaFOC-Analysis-140331-02-DRAFT.xlsx GOLDMANSACHS-AR-VALDICHIANAFOC-REPORT-140331-03-SC.DOCX
ATTACHMENT VI
GENERAL VALUATION PRINCIPLES AND PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
GENERAL VALUATION PRINCIPLES September 2012 (Italian Version)
1. PRELIMINARY 1.1 These general valuation principles (the "Valuation Principles") shall apply to all valuation instructions, other than agency services and other forms of professional services (to which separate terms will apply), provided by Cushman & Wakefield LLP, a limited liability partnership under the Limited Liability Partnerships Act 2000 with registered number OC328588 and having its registered office at 43-45 Portman Square, London, W1A 3BG, acting through its Italian branch registered at Milan, Via Filippo Turati 16/18 (“C&W”, “we” or “us”) to the client to whom an instruction confirmation letter (the “Letter”) is sent (“you”). They shall apply separately to each service subsequently provided to you. 1.2 The Valuation Principles are to be read in conjunction with the relevant Letter and the Terms of Business attached hereto. In the event of any ambiguity or conflict between the relevant Letter, the Terms of Business and these Valuation Principles, the provisions in the relevant Letter shall prevail. These Valuation Principles may only be varied in writing by agreement between the parties. It is our practice to review and upgrade our Valuation Principles frequently and new versions will be sent to you and agreed with you.
2. VALUATION BASES 2.1 Unless we have said otherwise within the Letter, the valuation date will be the date of our inspection. 2.2 Unless we have said otherwise in the relevant Letter, the valuation will be prepared in accordance with the RICS Valuation – Professional Standards current at the date of the Letter (the “Red Book”) by valuers conforming to its requirements, acting as external valuer. 2.3 Each property will be valued on a basis appropriate to the purpose of the valuation, in accordance with the Red Book. The basis of valuation that we will adopt for each property is specified in the relevant Letter. The definitions are as follows: (i) Market Value Market Value is “the estimated amount for which an asset or a liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.” (ii) Market Rent Market Rent is “the estimated amount for which a property would be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction, after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.” (iii) Existing Use Value Existing Use Value is “the estimated amount for which an asset should exchange on the valuation date between a willing buyer and a willing seller in an arms length transaction, after proper marketing and where the parties had acted knowledgeably, prudently, and without compulsion, assuming that the buyer is granted vacant possession of all parts of the asset required by the business and disregarding potential alternative uses and any other characteristics of the asset that would cause its Market Value to differ from that needed to replace the remaining service potential at least cost.”. (iv) Fair Value The Red Book contains two alternative definitions of Fair Value as follows: 1. the definition adopted by the International Valuation Standards Committee (IVSC): “the estimated price for the transfer of an asset or liability between identified knowledgeable and willing parties that reflects the respective interests of those parties”. 2. the definition adopted by the International Accounting Standards Board (IASB): “the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date”. Unless we have said otherwise within the Letter, we will adopt the IASB definition of Fair Value.
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2.4 When assessing either Existing Use Value, Fair Value or Market Value for balance sheet purposes, we will not include directly attributable acquisition or disposal costs in our valuation. Where you have asked us to reflect costs (as required under FRS15), they will be stated separately. 2.5 In the case of specialised properties (where valuation methods such as market comparison or an income (profits) test cannot be reliably applied), we may use Depreciated Replacement Cost (“DRC”) as a method of estimating Value. The valuation using this method of a property in the private sector will include a statement that it is subject to the adequate profitability of the business, paying due regard to the value of the total assets employed. If the property is in the public sector, the valuation will include a statement that it is subject to the prospect and viability of the continued occupation and use. Any writing down of a valuation derived solely from the DRC method to reflect the profitability/viability of the entity in occupation is a matter for the occupier. If the valuation is being undertaken for inclusion in accounts prepared under International Financial Reporting Standards, our report will contain a statement that because of the specialised nature of the property, the value is estimated using a DRC method and is not based on the evidence of sales of similar assets in the market. If we consider that the value of the asset would be materially lower if the business ceased, the report will contain a statement to this effect.
3. GENERAL VALUATION ASSUMPTIONS 3.1 Unless otherwise agreed, we will provide the Services in relation to any property on the following assumptions: (i) the property and any existing buildings are free from any defect whatsoever; (ii) all buildings have been constructed having appropriate regard to existing ground conditions or that these would have no unusual effect on building costs, property values or viability of any development or existing buildings; (iii) all the building services (such as lifts, electrical, gas, plumbing, heating, drainage and air conditioning installations and security systems) and property services (such as incoming mains, waste, drains, utility supplies, etc) are in good working order without any defect whatsoever; (iv) roads and sewers serving the property have been adopted and that the property has all necessary rights of access over common estate roads, paths, corridors and stairways and to use common parking areas, loading areas and other facilities; (v) there are no environmental matters (including but not limited to actual or potential land, air or water contamination, or by asbestos or any other harmful or hazardous substance) that would affect the property, any development or any existing buildings on the property in respect of which the Services are provided or any adjoining property, and that we shall not be responsible for any investigations into the existence of the same and that you are responsible for making such investigations; (vi) any building, the building services and the property services comply with all applicable current regulations (including fire and health and safety regulations); (vii) the property and any existing building comply with all planning and building regulations, have the benefit of appropriate planning consents or other statutory authorisation for the current use and no adverse planning conditions or restrictions apply (which includes, but is not limited to, threat of or actual compulsory purchase order); (viii) appropriate insurance cover is, and will continue to be, available on commercially acceptable terms for any building incorporating types of construction or materials which may pose an increased fire or health and safety risk, or where there may be an increased risk of terrorism, flooding or a rising water table; (ix) items of plant and machinery that usually comprise part of the property on an assumed sale are included in the property but items of plant and machinery that are associated with the process being carried on in the property or tenants trade fixtures and fittings are excluded from the property; (x) in reflecting the development potential of any property, that all structures will be completed using good quality materials and first class workmanship;
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(xi) any occupational leases are on full repairing and insuring terms, with no unusually onerous provisions or covenants that would affect value; (xii) in respect of any lease renewals or rent reviews, all notices have been served validly within any time limits; (xiii) vacant possession can be given of all accommodation which is unlet or occupied by the entity/borrower or its employees on service tenancies; and (xiv) any mineral rights are excluded from the property.
4. VALUATION ASSUMPTIONS FOR PROPERTY VALUED HAVING REGARD TO TRADING POTENTIAL 4.1 Unless we have agreed otherwise, for trading related property (such as self storage properties, hotels and marinas) where the property is trading and is expected to continue, we will value on the basis and assumption of a fully equipped operational entity, having regard to trading potential. 4.2 Where we are instructed to value a property having regard to its trading potential, we will take account of any trading information that either the operator has supplied to us or that we have obtained from our own enquiries. We will rely on this being correct and complete and on there being no undisclosed matters that could affect our valuation. The valuation will be based on our opinion as to future trading potential and the level of fair maintainable turnover and net operating income likely to be achieved by a reasonably efficient operator. 4.3 Unless we have said otherwise in the relevant Letter: (i) the valuation will be made on the basis that each property will be sold as a whole including all fixtures, fittings, furnishings, equipment, stock and goodwill required to continue trading; (ii) we will assume that the new owner will normally engage the existing staff and the new management will have the benefit of existing and future bookings or occupational agreements (which may be an important feature of the continuing operation), together with all existing statutory consents, operational permits and licences; (iii) we will assume that all assets and equipment are fully owned by the operator and are not subject to separate finance leases or charges; (iv) we will exclude any consumable items, stock in trade and working capital; and (v) we will assume that all goodwill for the properties is tied to the land and buildings and does not represent personal goodwill to the operator.
5. STRUCTURE 5.1 We will not carry out a structural survey of any property nor will we test services. Further, no inspection will be made of the woodwork and other parts of the structures which are covered, unexposed or inaccessible. In the absence of information to the contrary, the valuation will be on the basis that the property is free from defect. However, the value will reflect the apparent general state of repair of the property noted during inspection, but we do not give any warranty as to the condition of the structure, foundations, soil and services. Our report should not be taken or interpreted as giving any opinion or warranty as to the structural condition or state of repair of the property, nor should such an opinion be implied. 5.2 If we give the age of a building in our report, this will be an estimate and for guidance only.
6. MEASUREMENTS 6.1 Where we are required to measure a property we will specify the basis of measurement. However, you should specifically note that the floor areas contained in any report we may publish are approximate and if measured by us will be within a 3% tolerance either way. In cases where the configuration of the floor plate is unusually irregular or is obstructed, this tolerance may be exceeded. 6.2 We will not be able to measure areas that we are unable to access. In these cases we may estimate floor areas from plans or by extrapolation. Where we are required to measure land or site areas, the
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areas will be approximate and will be measured from plans supplied. They will not be physically checked on site. 6.3 The areas we report will be appropriate for the valuation purpose, but should not be relied upon for any other purpose.
7. PLANNING AND STATUTORY REGULATIONS 7.1 Unless specifically instructed in writing to make formal searches with local planning authorities, we shall rely in the provision of our Services on the information provided informally by the local planning authority or its officers. We recommend that your lawyers be instructed to confirm the planning position relating to the property and review our comments on planning in the light of their findings. 7.2 We may consider the possibility of alternative uses being permitted. Unless otherwise notified by you in writing, we shall assume that the property and any existing buildings comply with all planning and building regulations existing uses have the benefit of appropriate planning consent or other statutory authorisation, and that no adverse planning conditions or restrictions apply.
8. VALUATION EXCLUSIONS 8.1 We will not inspect title deeds and we will therefore rely on the information supplied as being correct and complete. In the absence of information to the contrary, we will assume the absence of unusually onerous restrictions, covenants or other encumbrances and that the property has a good and marketable title. Where supplied with legal documentation, we will consider it but we will not take responsibility for the legal interpretation of it. Unless agreed, we will not obtain information from public offices. 8.2 You should confirm to us in writing if you require us to read leases and if so, provide all the relevant documentation within a reasonable time for consideration bearing in mind the date for receipt of our report. You should not rely upon our interpretation of the leases without first obtaining the advice of your lawyers. 8.3 We will take into account any information that you provide concerning any tenants’ improvements. Otherwise, if the extent of tenants’ alterations or improvements cannot be confirmed, we will assume that the property was let with all alterations and improvements evident during our inspection (or, in the case of valuation without inspection, as described within the information that you provide). 8.4 Our valuation will take into account potential purchasers’ likely opinion of the financial strength of tenants. However, we will not undertake any detailed investigations on the covenant strength of the tenants. Unless informed to the contrary by you, we will assume that there are no significant arrears and that the tenants are able to meet their obligations under their leases or agreements. 8.5 Any plans we provide to you indicating the site of a property are for identification only. We will rely on our inspection and information that you provide in outlining the extent of each property, but you should not rely upon our plans to define boundaries. 8.6 Where comparable evidence information is included in our report, this information is often based upon our oral enquiries and its accuracy cannot always be assured, or may be subject to undertakings as to confidentiality. However, such information would only be referred to where we had reason to believe its general accuracy or where it was in accordance with expectation. In addition, we have not inspected comparable properties. 8.7 For a recently completed development property, we will not take account of any retentions or outstanding development costs. For a property in the course of development, we will reflect your advice on the stage of construction, the costs already incurred and those still to be spent at the valuation date, and will have regard to any contractual liabilities. 8.8 We will not make any allowance in our Services for the existence of any mortgage or other financial encumbrance on or over the property nor take account of any leases between subsidiaries. 8.9 Any valuation figures provided will be exclusive of VAT whether or not the building has been elected. 8.10 We will not make any allowance in any valuation advice provided for the expenses of realisation or any taxation liability arising from the sale or development of the property.
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8.11 Unless we have said otherwise in the Letter, each property will be valued individually; in the case of a portfolio, we will assume that the properties would be marketed in an orderly way and not placed on the market at the same time. 8.12 The components of our valuation calculations (such as future rental values, cost allowances, or void periods) may only be appropriate as part of the valuation calculation. They should not be taken as a forecast or prediction of a future outcome. You should not rely on any component of the valuation calculation for any other purpose. 8.13 We will value in the local currency. If we are to report to you in another currency, unless we have agreed otherwise we will adopt a conversion rate equivalent to the closing rate (“spot rate”) on the valuation date. 8.14 Our valuation does not make allowance either for the cost of transferring sale proceeds to another state, or for any restrictions on doing so. 8.15 In instances where we are instructed to provide an indication of current reinstatement costs for insurance purposes, this will be given solely as a guide without warranty. Formal estimates for insurance purposes can only be given by a building surveyor or other person with sufficient current experience of replacement costs. The property will not be inspected by a building surveyor or qualified building cost estimator and the guide will be based on costs obtained from generic building cost tables. You should not rely on it as the basis for insurance cover.
9. REGULATED PURPOSE VALUATIONS AND MONITORING 9.1 In circumstances where a valuation, although provided for a client, may also be of use to third parties, for instance the shareholders in a company (otherwise defined as a “Regulated Purpose Valuation” by the Red Book), we are required to state our policy on the rotation of the surveyor who prepares the valuation and the quality control procedures that are in place. 9.2 Irrespective of the purpose of the valuation, we will select the most appropriate surveyor for the valuation having regard to his/her expertise and the possible perception that independence and objectivity could be compromised where a valuer has held the responsibility for a particular client for a number of years. This may result in us rotating the surveyor responsible for repeat valuations for the same client although we will not do so without prior discussion with the client. 9.3 For all Regulated Purpose Valuations we are required by the Red Book to state all of the following in our report: (i) the length of time the valuer continuously has been the signatory to valuations provided to you for the same purpose as the report, together with the length of time we have continuously been carrying out that valuation instruction for you; (ii) the extent and duration of the relationship between you and us; (iii) in relation to our preceding financial year the proportion of the total fees, if any, payable by you to our total fee income expressed as one of the following: less than 5%; or if more than 5%, an indication of the proportion within a range of 5 percentage points; (iv) where, since the end of the last financial year, it is anticipated that there will be a material increase in the proportion of the fees payable, or likely to be payable, we shall include a further statement to that effect in addition to (iii) above. 9.4 The valuation may be subject to monitoring under the RICS’s conduct and disciplinary regulations.
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PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS September 2012 (Italian Version)
1. PRELIMINARY 1.1 These terms and conditions (the "Terms of Business") shall apply to all valuation services (excluding agency services and other forms of professional services, to which separate terms will apply) provided by Cushman & Wakefield LLP, a limited liability partnership under the Limited Liability Partnerships Act 2000 with registered number OC328588 and having its registered office at 43-45 Portman Square, London, W1A 3BG, acting through its Italian branch registered at Milan, Via Filippo Turati 16/18 (“C&W”, “we” or “us”) to the client to whom an instruction confirmation letter (the “Letter”) is sent (“you”). They shall apply separately to each service subsequently provided to you. 1.2 The Terms of Business are to be read in conjunction with the relevant Letter and general valuation principles (“Valuation Principles”) attached thereto. In the event of any ambiguity or conflict between the relevant Letter, the Valuation Principles and these Terms of Business, the provisions in the relevant Letter shall prevail. These Terms of Business and the relevant Letter may only be varied in writing by agreement between the parties. It is our practice to review and upgrade our Terms of Business frequently and new versions will be sent to you and agreed with you.
2. PERFORMANCE OF THE SERVICES 2.1 We undertake to use all reasonable skill and care in providing the services and advice described in the relevant Letter, based on the instructions given by you (the "Services"). We will inform you if it becomes apparent that the Services need to be varied or external third party advice is required. Any variation is to be confirmed in writing and agreed between the parties. 2.2 We may need to appoint third party providers to perform all or part of the Services and we shall agree this with you in advance.
3. BASIS OF FEES 3.1 The basis of our fees for our Services is set out in the relevant Letter. 3.2 You shall pay all applicable VAT in addition to any fees and disbursements at the applicable rate. 3.3 You shall pay our fees on completion of our Services (whether or not additional work is still to be carried out by third parties) or, where the fees are in relation to an ongoing instruction or an instruction of a duration of more than three months, at least quarterly in arrears upon submission by us of quarterly invoices. Payment is due within 15 days of the invoice date. 3.4 Where valuations are undertaken for a lender for loan security purposes and it is agreed that a borrower will pay our fee, you shall remain primarily liable to pay our fee should such borrower fail to meet its liabilities to us in full. Payment of our fees is not conditional upon the loan being drawn down or any of the conditions of the loan being met. 3.5 If you do not dispute with us an invoice or any part thereof within 15 days of the date of such invoice, you shall be deemed to have accepted the invoice in its entirety. 3.6 If we are required by you to undertake any additional work in relation to an instruction, you shall pay additional fees based upon our usual rates. We will notify you of the amount of such additional fees. This also applies where we are asked to review a legal report or Certificate of Title provided to us more than 8 weeks after we have submitted our Report (either draft or final). 3.7 Where there is a change to the stated purpose for which our valuation is being commissioned and in our sole opinion we deem this to result in an increase in our liability (for example a valuation for annual accounts being used for loan security purposes), we reserve the right to charge an additional fee. 3.8 If you subsequently request our invoice to be re-addressed to a party other than that originally agreed, we reserve the right to make an administration charge of €100. Payment will still be due within 15 days of the original invoice date. 3.9 In the event that you withdraw our instructions prior to completion of a valuation, you shall be liable to pay us for a fair and reasonable proportion of our fees and any agreed disbursements ("the Termination Fee"). If we have sent you draft valuation figures, the Termination Fee shall be subject to
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PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS September 2012 (Italian Version)
a minimum of 50% of the fee originally agreed between us and if we have sent you a draft valuation report, such fees shall be subject to a minimum of 80% of the fee originally agreed between us. 3.10 We will advise you in advance if it is necessary or convenient to instruct a third party to provide advice or to act as an expert or arbitrator and provide an estimate of the likely cost. If you approve, either verbally or in writing, that the third party be instructed, we will instruct the party as agent on your behalf and request that all the third party's invoices be addressed to you care of us. If we are requested by you to advance payment of the third party invoices, you shall be obliged to reimburse the advance payment made and pay a handling charge. We may request that you put us in funds in respect of any third party’s costs before or at the time of formally instructing them on your behalf and you will comply with this request. 3.11 Where we are instructed to provide Services to one of your subsidiaries or associated / related entities or should you subsequently request that another entity be substituted for you at a later stage and we are unable to seek or obtain payment of any outstanding monies for whatever reason, you shall remain primarily liable to pay those outstanding monies if the subsidiary, associated / related or other entity does not meet its liabilities in relation to payment for the Services provided by us.
4. INTEREST You shall pay interest on the amount of any invoice for fees or other disbursements that remains unpaid for 15 days after the date of the invoice. Interest shall be payable at the rate of 4% above the base rate of Barclays Bank PLC from the date of the invoice until payment is made whether after or before judgement.
5. DISBURSEMENTS You shall pay all disbursements incurred by us in the provision of the Services at least quarterly in arrears from the date they were incurred. Disbursements include, but are not limited to: maps, plans, research, photography, copying of documents or plans, messenger delivery, costs of obtaining external information on companies, properties, demographic or other similar information, any reproduction, copying or other royalties incurred, additional bound copy reports, costs of external information / references obtained and key cutting, travel and subsistence expenses at their actual cost and car mileage at the standard ACI scales.
6. INFORMATION RECEIVED FROM THE CLIENT We will take all reasonable steps to ensure that property information is accurate where we are responsible for its preparation. Where you provide us with any information on a property that is necessary or convenient to enable us to provide the Services properly, you acknowledge that we will rely on the accuracy, completeness and consistency of any information supplied by you or on your behalf and, unless specifically instructed otherwise in writing, we will not carry out any investigation to verify such information. We accept no liability for any inaccuracy or omission contained in information disclosed by you or on your behalf, whether prepared directly by you or by a third party, and whether or not supplied directly to us by that third party and you shall indemnify us should any such liability arise. If our valuation is required for the purpose of purchase or loan security, you accept that full investigation of the legal title and any leases is the responsibility of your lawyers.
7. CONFLICTS OF INTEREST AND ANTI-CORRUPTION 7.1 We have conflict management procedures designed to prevent us acting for one client in a matter where there is or could be a conflict with the interest of another client for whom we are acting. If you are aware or become aware of a possible conflict of this type, please raise it immediately with us. If a conflict of this nature arises, then we will decide, taking account of legal constraints, relevant regulatory body rules and your and the other client’s interests and wishes, whether we can continue to act for both parties (e.g. through the use of separate teams with appropriate Chinese Walls), for one only or for neither. Where we do not believe that any potential or actual conflict of interest can be managed appropriately, we will inform you and consult with you as soon as reasonably practicable.
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PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS September 2012 (Italian Version)
7.2 You acknowledge that we may earn commissions, referral fees and may charge handling fees connected to the services that we perform and agree that we shall be entitled to retain them without specific disclosure to you. We will not accept any commissions or referral fees in circumstances where we are of the reasonable belief that they would compromise the independence of any advice that we provide to you. 7.3 We confirm that we will not, and will procure that our employees will not, knowingly engage in any activity which would constitute a breach of the Bribery Act 2010 and that we have in place a compliance programme designed to ensure compliance with the terms of the Bribery Act 2010.
8. MANAGEMENT OF THE PROPERTY We shall not be responsible for the management of the property nor have any other responsibility (such as maintenance or repair) in relation to the property. We shall not be liable for any damage that may occur while the property is unoccupied. The property shall be your sole responsibility.
9. TERMINATION BY NOTICE 9.1 Unless a fixed period has been agreed, either party may terminate the instruction by giving 14 days’ notice in writing to the other party. 9.2 In the event of termination by notice, you shall be obliged to pay forthwith all fees accrued in relation to the Services and work performed up to the date of termination (and any abort fee) plus any expenses or disbursements incurred by us or to which we are committed at the date of termination.
10. PROFESSIONAL LIABILITY 10.1 With the exclusion of our fraud and/or gross negligence, we shall not be liable to you in contract, tort (including negligence or breach of statutory duty), misrepresentation, restitution or otherwise, arising in connection with the performance or contemplated performance of the Services in respect of: (i) any direct loss of profit; (ii) any indirect, special or consequential loss whatsoever howsoever caused including without limitation (a) indirect loss of profit; (b) loss of business; (c) loss of goodwill; (d) loss of use of money; (e) loss of opportunity, and the parties agree that the sub-clauses of this clause shall be severable. 10.2 We shall not be liable to you in negligence for pure economic loss arising in connection with the performance or contemplated performance of the Services. 10.3 You acknowledge and agree that the exclusions contained in this clause 10 are reasonable in all the circumstances and that you have had the opportunity to take independent legal advice. 10.4 Where a third party has contributed to the losses, damages, costs, claims or expenses, we shall not be liable to make any contribution in respect of the liability of such third party. 10.5 Save in respect of third parties directly instructed by us and not on your behalf, we shall not be liable for the services or products provided by other third parties, nor shall we be required to inspect or supervise such third parties, irrespective of the third party services or products being incidental to or necessary for the provision of our Services to you. 10.6 With the exclusion of our fraud and/or gross negligence, our total aggregate liability (including that of our members and employees) to you in contract, tort (including negligence or breach of statutory duty), misrepresentation, restitution or otherwise, arising in connection with the performance or contemplated performance of the Services shall be limited to an aggregate sum not exceeding twenty times the fee paid. Nothing in these Terms of Business excludes or limits our liability: (i) for death or personal injury caused by our negligence; (ii) for any matter which it would be illegal for us to exclude or attempt to exclude our liability and (iii) for fraud or fraudulent misrepresentation. 10.7 We shall be released from our obligations to the extent that performance thereof is delayed, hindered or prevented by any circumstances beyond our reasonable control (examples being a strike, act of God or act of terrorism). On becoming aware of any circumstance which gives rise, or which is likely
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PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS September 2012 (Italian Version)
to give rise, to any failure or delay in the performance of our obligations, we will notify you by the most expeditious method then available. 10.8 To cover any liability that might be incurred by us, we confirm that we will maintain professional indemnity insurance through the Lloyds and company insurance market, so long as such insurance is available at commercially acceptable rates and terms, with insurers of good standing and repute of not less than £20 million on an each and every claim basis. 10.9 Responsibility for our valuation extends only to the party(ies) to whom it is addressed. However in the event of us being asked by you to readdress our report to another party or other parties or permit reliance upon it by another party or other parties, we will give consideration to doing so, to named parties, subject to the following minimum fees:
First Extended Party Second & Subsequent Extended Parties
For the first €1m of reported value 0.075% 0.025% per party Thereafter 0.035% 0.015% per party
These fees are exclusive of VAT and expenses (including the cost of readdressing the report) and are subject to a minimum fee of €750. Should additional work be involved, over and above that undertaken to provide the initial report, we may make a further charge although we will agree this with you before commencing the work. 10.10 Where we consent in writing to reliance on our report by another party or other parties, we do so on the basis that (i) the other party or parties agree in writing to be bound by the Letter and these Terms of Business as if it / they had been a party to the original Letter between us, with such written agreement being provided to us, (ii) such other party pay the fees demanded as set out in clause 10.9 above (unless agreed otherwise in writing) and (iii) where you act on behalf of a syndicate or in relation to a securitisation, you agree that you are not entitled to pursue any greater claim on behalf of any other party than you would have been entitled to pursue on your own behalf had there been no syndication or securitisation. 10.11 Where you provide a copy of and / or permit another party or parties to rely upon our valuation report without obtaining our express written consent and fail to provide us with the written consent of any other party or parties who have received our report to be bound by the Letter and Terms of Business (in accordance with clause 10.10 above), you agree to indemnify us for any and all liability which arises from the use of or reliance upon our report by such unauthorised party. 10.12 Notwithstanding clause 10.11, where a valuation report is prepared or where we consent to a valuation report being used for the purpose of a prospectus, offering (either directly or indirectly), or a circular to shareholders, you agree to indemnify us for any liability whatsoever that we may have to any parties that have not agreed with us in writing to be bound by these Terms of Business which exceeds our aggregate cap on liability (referred to at clause 10.6) arising from their use and / or reliance on the valuation report.
11. QUALITY OF SERVICE AND COMPLAINTS 11.1 Our UK valuation procedures are certified as ISO9001:2000 compliant. 11.2 All our valuation reports are signed by a Member of C&W whose responsibility it is to ensure that all relevant quality control procedures have been complied with. In particular, for valuations of properties with an individual value of €20m or over, the valuer is required to present and explain his methodology to another member of the Valuation Advisory Team unconnected with the instruction and who is a Member of C&W. 11.3 If you wish to complain about the level or our service to you, in accordance with the requirements of the Royal Institution of Chartered Surveyors, we have a standard complaints procedure, a copy of which is available on request.
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PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS September 2012 (Italian Version)
12. DATA PROTECTION 12.1 According to the Legislative Decree n. 196/2003 “Data Protection Code”, (“D.lgs. 196/2003”), We hereby inform you of the following: a) data processing purposes Your personal data provided under these Terms of Business shall be processed for purposes relating to: i. the collection of contractual or pre-contractual information, including financial and economic evaluation and the products/services; ii. the management and the performance of these Terms and Conditions, the Letter and management of the related obligations and services; iii. performance of our legal, accounting and fiscal duties, compliance with EU regulation and law as well as provisions provided by the relevant regulatory or governmental authority and any other kind of duties related to the previous subclauses (i) and (ii), including other clients/suppliers requests of related references; iv. statistical, commercial, marketing, customer services concerning the services of “CUSHMAN & WAKEFIELD LLP”. b) data processing modalities The data processing shall be carried out by means of collection, recording, organization, keeping, interrogation, elaboration, modification, selection, retrieval, comparison, utilization, interconnection, blocking, communication, dissemination, erasure and destruction of data, whether the latter are contained or not in a data bank. Such operations shall be carried out with or without the help of electronic or automated means by the data controller. c) the obligatory or voluntary nature of providing the requested data The personal data provision shall be necessary for performing the services listed under letter a). d) the consequences of failing to reply Your denial to provide personal data with reference to letter c) shall cause the impossibility to perform the activities listed under letter a). e) the entities or categories of entity to whom or which the data may be communicated The personal data provided shall be communicated, exclusively for the purposes listed under letter a), to any of our international partnerships, group companies and affiliated organisations. f) data transfer to foreign countries The personal data may be transferred in other EU Member States or in other foreign countries within exclusively the purposes listed under letter a). g) rights provided under article 7 of D.lgs. 196/2003 You are entitled to obtain confirmation as to whether or not personal data concerning you exists, regardless of whether it is already being recorded, and you shall be provided with such data in an intelligible form. Moreover, you shall have also the rights specifically provided for by article 7 of D.lgs. 196/2003 h) the identification of the data controller and the data processor The data controller is CUSHMAN & WAKEFIELD LLP acting through its Italian Branch, with its local registered office in Milan, Via Filippo Turati 16/18 and has appointed Mr. Joachim Sandberg. 12.2 Therefore, having acquired the necessary information with regards to the D.lgs. 196/2003, you assent to the processing of your personal data, also outside the EU, as well as to their diffusion and communication.
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PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS September 2012 (Italian Version)
13. MONEY LAUNDERING REGULATIONS In order to comply with all applicable money laundering legislation and regulation, we may be required to verify certain of your details and may ask you to assist us in complying with such requirements. Where such information is requested, you will provide such information promptly to enable us to provide our Services. We shall not be liable to you or any other parties for any delay in the performance or any failure to perform the Services which may be caused by our duty to comply with any such legal and regulatory requirements.
14. FREEDOM OF INFORMATION Where you are a public authority for the purposes of the Freedom of Information Act 2000 (the "Act"), you shall notify us within five business days of receiving a request pursuant to the Act requesting information which relates to the business arrangements between us and you and/or any information we have provided to you at any time. In recognition of the fact that we may be providing you with genuinely confidential or commercially sensitive information, you agree to consult us and seek our views on all such requests prior to making a decision on whether any information should be publicly disclosed.
15. ELECTRONIC COMMUNICATIONS We may communicate with each other by electronic mail, sometimes attaching electronic data. By consenting to this method of communication, we and you accept the inherent risks (including the security risks of interception of, or unauthorised access to, such communications, the risks of corruption of such communications and the risks of viruses or other harmful devices). In the event of a dispute, neither of us will challenge the legal evidential standing of an electronic document and our system shall be deemed to be the definitive record of electronic communications and documentation.
16. CONFIDENTIALITY 16.1 We owe you a duty of confidentiality. You agree that we may, when required by our insurers or other advisers, provide details to them of any engagement on which we act or have acted for you, and that we may also disclose confidential information relating to your affairs if required to do so for legal, regulatory or insurance purposes only. 16.2 Subject to clause 16.1, we both agree never to disclose sensitive details of transactions or our advice without the other’s consent. Unless we are expressly bound by a duty of confidentiality which otherwise overrides this, we both shall be entitled to mention to third parties (e.g. in the course of presentations, speeches or pitches) and/or publish (e.g. in brochures, marketing or other written material) that we provide our services to you. 16.3 We shall provide the Services to you only for your sole use and for the stated purpose. We shall not be liable to any third party in respect of our Services. You shall not mention nor refer to our advice, in whole or in part, to any third party orally or in annual accounts or other document, circular or statement without our prior written approval. The giving of an approval shall be at our sole discretion. 16.4 We will not approve any mention of our advice unless it contains sufficient reference to all the special assumptions and/or limitations (if any) to which our advice is subject. Our approval is required whether or not we are referred to by name and whether or not our advice is combined with others.
17. INTELLECTUAL PROPERTY All intellectual property rights (including copyrights) in the documents, materials, records, data and information in any form developed or provided to you by us or otherwise generated in the provision of our Services shall belong to us solely. You are granted an irrevocable, non-exclusive, royalty-free licence to use or copy such intellectual property rights for any purpose connected with the property.
18. ASSIGNMENT Neither party shall be entitled to assign this contract or any rights and obligations arising from it without the prior written consent of the other, such consent not to be unreasonably withheld.
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PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS September 2012 (Italian Version)
19. GENERAL 19.1 If any provision of these Terms of Business is found by any court, tribunal or administrative body of competent jurisdiction to be wholly or partly illegal, invalid, void, voidable, unenforceable or unreasonable it shall to the extent of such illegality, invalidity, voidness, voidability, unenforceability or unreasonableness be deemed severable and the remaining provisions of these Terms of Business and the remainder of such provision shall continue in full force and effect. 19.2 Failure or delay by us in enforcing or partially enforcing any provision of these Terms of Business shall not be construed as a waiver of any of our rights under these Terms of Business. 19.3 No term of the relevant Letter or these Terms of Business is intended to confer a benefit on or to be enforceable by any person who is not a party to the same. 19.4 All Letters and these Terms of Business shall be governed by and be construed in accordance with Italian law. Any dispute arising out of or in connection with the interpretation and/or enforcement of this contract, will be submitted to mediation in the first instance to be performed by Bridge Mediation Italia under its relevant proceedings and regulations. Mediation shall be performed in Milano. If the mediation is not successful within 4 months from its commencement, the matter will be submitted to the exclusive jurisdiction of the courts of Milan. 19.5 References to partners of Cushman & Wakefield LLP are used to refer to a member of Cushman & Wakefield LLP or an employee or consultant with equivalent standing and qualifications. A list of the members of Cushman & Wakefield LLP and of the non-members who are designated as “partners” is open to inspection at our registered office, 43-45 Portman Square, London, W1A 3BG.
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ATTACHMENT VII
INSTRUCTION AND CONFIRMATION LETTER
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
CONFIRMATION LETTER FOR VALUATION SERVICES PREPARED FOR GOLDMAN SACHS INTERNATIONAL
20 MARCH 2014
GOLDMANSACHS-PORTFOLIO-CONFLETT-140320-02-MCL.DOCX
GOLDMAN SACHS INTERNATIONAL Peterborough Court Cushman & Wakefield LLP Via Filippo Turati, 16/18 133 Fleet Street 20121 Milano London EC4A 2BB Tel. +39 02 63799.1 For the attention of Ms Antonella Bifulco, Mr Alessandro Luca Fax +39 02 63799.250 www.cushmanwakefield.com By e-mail: [email protected], [email protected], [email protected]
Milan, 20 March 2014
Our Ref: VAL/CLI/GoldmanSachs-Portfolio-ConfLett-140320-02-mcl.docx
Dear Sirs,
CONFIRMATION LETTER FOR PROPERTY VALUATION
VALDICHIANA OUTLET VILLAGE, FOIANO DELLA CHIANA (AR) LE COLONNE SHOPPING CENTRE, BRINDISI IL BORGOGIOIOSO SHOPPING CENTRE, CARPI (MO) LA SCAGLIA SHOPPING CENTRE, CIVITAVECCHIA (RM) (“THE PROPERTY”) GOLDMAN SACHS INTERNATIONAL (“THE CLIENT”)
Further to recent conversation, we confirm that we would be delighted to value the Properties on your behalf and set out below the basis upon which we will undertake this assignment.
I. THE CLIENT The valuation will be carried out on behalf of Goldman Sachs International in connection with its potential financing and subsequent securitisation related to the Properties (the “Financing”).
II. THE PROPERTIES The Properties consists of an outlet village and three shopping centre as below briefly described below:
Valdichiana Outlet Village, located in Foiano della Chiana (Arezzo), Tuscany, with a total GLA of 30,812 sq m; Le Colonne Shopping Centre, located in Brindisi, Apulia, with a total GLA of 12,099 sq m; Il Borgogioioso Shopping Centre, located in Carpi (Modena, Emilia Romagna, with a total GLA of 10,828 sq m; La Scaglia Shopping Centre, located in Civitavecchia (Rome), Lazio, with a total GLA of 15,853 sq m.
Iscritta nel ruolo degli agenti d’affari in mediazione al N. 14936 del 8/5/2008 C.C.I.A.A. di Milano – Registro Imprese di Milano N. 06159600961 - R.E.A. N. 1873621. Sede legale e amministrativa: Via Filippo Turati 16/18, 20121 Milano - Codice Fiscale e Partita IVA N. 06159600961. Cushman & Wakefield LLP è una società personale a responsabilità limitata (Limited Liability Partnership) registrata in Inghilterra e Galles con il N. OC328588. Il termine partnership può essere riferito ad un membro di Cushman & Wakefield LLP o ad un impiegato o consulente con ruolo e qualifiche equivalenti. La lista dei membri di Cushman & Wakefield LLP è disponibile presso la sede di Londra, W1A 3BG, 43/45 Portman Square
GOLDMANSACHS-PORTFOLIO-CONFLETT-140320-02-MCL.DOCX
III. TENURE AND TENANCIES We understand that the Properties are held freehold and are currently leased to multiple tenants on the basis of property and business leases.
IV. THE INTEREST TO BE VALUED The freehold interest in the Properties.
V. PURPOSE OF THE VALUATION The valuation is required for financing purposes in connection with the Financing.
VI. BASIS OF VALUATION The Properties will be valued on the basis of Market Value as defined by the RICS Valuation - Professional Standards current at the date of the Letter (the Red Book):
“The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.
VII. VALUATION SCENARIOS As required, we will provide the Market Value of the Properties in their current state as at the date of valuation.
VIII. VALUATION DATE The valuation date will be the date of the site inspection.
IX. THE STATUS OF THE VALUER AND DISCLOSURE OF ANY OTHER CURRENT INVOLVEMENT External Valuer.
As Valuation & Advisory, we do not have any current involvement with the Properties.
We confirm that we will act with independency and integrity.
X. THE CURRENCY TO BE ADOPTED Euros.
XI. GENERAL ASSUMPTIONS TO WHICH THE VALUATIONS ARE SUBJECT Please see our General Valuation Principles as attached to this letter at Attachment II. These principles outline the Assumptions on which any estimate of Market Value will be based, other than as agreed specifically and in writing.
They form an important part of this proposal document.
XII. ANY ASSUMPTIONS, SPECIAL ASSUMPTIONS, RESERVATIONS, ANY SPECIAL INSTRUCTIONS OR DEPARTURES No Special Assumptions are defined or known at this time.
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XIII. INFORMATION REQUIREMENTS AND THE NATURE AND SOURCE OF INFORMATION TO BE RELIED UPON BY THE VALUER In preparing our valuation, we will rely upon information provided to us. We attach, as Attachment I, the information which we would expect to receive from you or your client in respect of the Properties. This is very comprehensive but also serves as a check list.
Given the current volatility of the financial markets and uncertainty affecting the real estate sector, it is increasingly important that we are supplied with updated, detailed and accurate information on the Properties we shall value on your behalf.
Our instruction excludes any type of due diligence (i.e. legal, technical, environmental, etc). If any due diligence report is provided to us before commencing the work, we would read and rely on the executive summaries in these reports and include the conclusions in our analysis.
We would not make independent searches or checks and would rely on the information supplied as being correct and complete.
As concerns zoning, trade and building licenses, we shall not carry out independent searches but rely on the information you shall supply. In the absence of relevant information, our valuation will be on the basis that the Properties have been constructed in accordance with appropriate approvals and that they meet relevant planning and other regulations, including those relating to the issue of the retail trade licenses.
We shall rely on the areas supplied.
We will not measure floor areas on site or against Autocad plans. We have not allowed for this in our fee proposal or in the timeframe estimated to undertake this assignment.
XIV. EXTENT OF VALUER’S INVESTIGATIONS AND INSPECTIONS Please see our General Valuation Principles attached.
We shall inspect the Properties internally and externally.
XV. METHODOLOGY We shall arrive at our opinion of Market Value by using two complementary approaches, namely by reference to the initial and early year yield profile, and by constructing a DCF over a 10 year holding period. We acknowledge that the DCF approach is dependent on the selection of a large number of subjective inputs in addition to the estimates for Market Rent, including the assumptions for rental growth, the exit rate and the discount rate. For this reason our preference is to place higher importance on the initial and subsequent yield pattern, which we shall compare with recent transactions in the market, using the DCF analysis as support.
XVI. OUTLINE OF REPORT CONTENT We will provide you with a Full Valuation report for each Property, which will include the following sections:
Summary Instructions Assumptions & Special Assumptions Date of Valuation Inspection
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GOLDMANSACHS-PORTFOLIO-CONFLETT-140320-02-MCL.DOCX
Information Supplied Location Catchment Area Description General State of Repair and Maintenance Areas Merchandising Mix Site and Environmental Considerations Town Planning and Cadastral Use Commercial Regulations – Trade Licenses Tenure Tenancies, Expiry Profile and Rental Income Centre Management, Service Charges and Maintenance Costs Performance Market Commentary Competition Analysis Market Rent Valuation Methodology And Rationale Valuation Certainty Market Value Valuation Considerations and Final Comments Confidentiality Disclosure and Publication
The Report will also include: SWOT analysis
Commentary around affordability of leases
Comparisons of (i) sales per sqm and (ii) effort ratios within other relevant outlet villages
Comparable lettings (if available)
Comparable transactions (if available)
The Appendices will include: Location Plans, Representative Photographs, Floor Plans and Site Plan, Tenancy Schedule, Valuation calculations and the Instruction Letter or the Terms of Engagement.
XVII. TIMETABLE We will provide you with the draft values by Friday 4 April 2014 COB. The Draft Full Valuation Reports will be provided by 15 April 2014. We will submit our Final Reports upon your approval of the drafts.
The extent to which we are able to adhere to these deadlines is dependent upon the early receipt of the information requested.
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XVIII. FEES The fee agreed to undertake this assignment is as follows:
€80,000.00 (Euro Eighty Thousand/00);
Our fee is inclusive of all expenses, but exclusive of VAT (currently 22%) which will be charged at the prevailing rate when the invoice is issued.
Fee becomes payable upon receipt of our invoices.
XIX. PRINCIPAL TERMS AND CONDITIONS OF APPOINTMENT AS VALUERS We attach the Principal Terms and Conditions of Appointment as Valuers (September 2012) and the General Valuation Principles (September 2012) to which, together with this letter, our instruction will be subject (the “Terms of Engagement”), other than as agreed specifically in writing.
We have agreed to make the following amendments to our Principal Terms and Conditions of Appointment as Valuers:
Clause 3.3: the last sentence is deleted and replaced with the following ‘Payment is due within 30 days of the invoice date’.
Clause 4: the reference to 15 days shall be deleted and replaced with 45 days and the penalty interest rate shall be deleted and replaced with 1%.
Clause 8: the last sentence ‘The property shall be your sole responsibility.’ is deleted.
Clause 10.3: is deleted.
Clause 10.9: shall be deleted and replaced with the following:
“Responsibility for our valuation extends only to the party(ies) to whom it is addressed. However, in the event of us being asked by you to readdress our report to another party or other parties or permit reliance upon it by another party or other parties, we will do so provided that we are able to agree the terms on which such reliance is given. We shall not charge any additional fee for this, and it shall be inclusive in the price outlined in section XVIII headed “Fees” in the engagement letter.”
Clause 10.10: shall be deleted and replaced with the following:
“You have told us that you might syndicate or securitise the loan. Subject to the provisions relating to permitted disclosure to potential providers of finance, ratings agencies, issuers of commercial backed security and notes trustees as set out in clause 16.3 below, you may only make our report available to third parties participating in the syndication or securitisation on a reliance basis on the express condition and understanding that the report is provided by you in its entirety and any such party does so on the same basis as laid out in these Terms of Engagement (as defined below), unless otherwise agreed in writing, including, but not limited to, in any reliance letter which may be signed by an agent acting on behalf of such parties (provided that such agent is properly authorised to act on behalf of such party), with such party deemed to be the client. In the event that a reliance letter is either not agreed and duly executed, or , where it is signed by an agent, is found by law not to bind the underlying principals, reliance by a third party in such circumstances on the report shall be deemed acceptance of the Terms of Engagement. Our report will be addressed to you and will be for your exclusive use save to the extent that we have permitted third parties to rely on the report.”
Clause 10.11: shall be deleted.
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Clause 10.12: shall be deleted.
Clause 14: shall be deleted.
Clause 16.2: is deleted and replaced with the following ‘Subject to clause 16.1, we all agree never to disclose sensitive details of transactions or our advice without the others’ consent except that you may disclose the report prepared pursuant to this engagement (i) in accordance with applicable law, regulatory requirement or order of a court of competent jurisdiction and (ii) to your directors, officers, employees and professional advisors, your affiliates and their directors, officers, employees and professional advisors, any potential providers of finance, to rating agencies, any issuer of a commercial mortgage backed security in an issue related to the Financing (‘the Issue’) and any notes trustee related to the Issue in each case on a non-reliance basis and provided that they are bound by obligations of confidentiality.
Clause 16.3: shall be deleted and replaced with the following:
“You shall not mention nor refer to our advice, in whole or in part, in annual accounts, circular or statement or any other document (“Document”) without our prior written approval. We will not approve any mention of our advice in any such Document unless it contains sufficient reference to all the special assumptions and / or limitations (if any) to which our advice is subject. Our approval is required whether or not we are referred to by name and whether or not our advice is combined with others. The foregoing shall not apply to regulatory announcements. Notwithstanding the foregoing, we confirm that we consent to any issuer of a commercial mortgage backed security publishing our advice or the report prepared pursuant to this engagement in any offering document or related documentation for any securitisation in relation to the Financing (as defined in the engagement letter).”.
Clause 16.4 shall be deleted.
XX. PROFESSIONAL LIABILITY, LIMITS OR EXCLUSION OF LIABILITY TO PARTIES OTHER THAN THE CLIENT Please see paragraph 10 of our Principal Terms and Conditions of Appointment attached at Attachment II, as amended in this letter.
While our PT&C refer to a cap of 20 times the fee, for this instruction, we are prepared to increase this limit to €15 million.
In accordance with standard practice, the Valuation Report to be provided will be confidential to the Client and will be provided to the Client for the purposes stated in paragraph V above only and for the sole use of the Lender. To the extent that you ask us to permit third parties to rely on the valuation, we shall consider this provided that such third parties sign a reliance letter in which they agree to be bound by the Terms of Engagement, amongst other things.
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ATTACHMENT VIII
TEMPLATE RELIANCE LETTER
GOLDMAN SACHS INTERNATIONAL CUSHMAN & WAKEFIELD
Cushman & Wakefield LLP TO: Via Filippo Turati 16/18 20121 Milano CBRE Loan Servicing Limited as facility agent for itself and on behalf of the Finance Parties under and as defined in the Facility Agreement; Tel. +39 02 63799.1 Fax +39 02 63799.250 CBRE Loan Servicing Limited as security agent for itself and on behalf www.cushmanwakefield.com of the Finance Parties under and as defined in the Facility Agreement; the Finance Parties; any person to whom any Lender originally party to the Facility Agreement assigns any of its rights or benefits in relation to any participation in the Loan,
(“the Addressees”)
DATE
Dear Sirs
VANGUARD BIDCO S.À R.L. (“THE BORROWER”) VALDICHIANA OUTLET VILLAGE, FOIANO DELLA CHIANA (AR) LE COLONNE SHOPPING CENTRE, BRINDISI IL BORGOGIOIOSO SHOPPING CENTRE, CARPI (MO) LA SCAGLIA SHOPPING CENTRE, CIVITAVECCHIA (RM) (“PROPERTIES”) RELIANCE LETTER We refer to each of our valuations dated 31 March 2014 addressed to GOLDMAN SACHS INTERNATIONAL (“the Client”) in respect of the Properties (“Valuations”). Cushman & Wakefield LLP prepared the Valuations in connection with the acquisition by the Borrower of the entities which own the Properties and we understand that you, the Addressees, are otherwiseSAMPLE involved in the financing of this transaction and wish to rely on the Valuations for that purpose (“the Purpose”).
Definitions "Facility Agreement" means the EUR [120,250,000] facility agreement dated [] between, amongst others, Vanguard Pledgeco S.à r.l. as the company, Vanguard Bidco S.à r.l. as bidco, CBRE Loan Servicing Limited as the facility agent, CBRE Loan Servicing Limited as the security agent, Goldman Sachs International as mandated lead arranger and the Lenders (as defined therein).
"Finance Parties" means the Facility Agent (as defined in the Facility Agreement), the Mandated Lead Arranger (as defined in the Facility Agreement), the Security Agent (as defined in the Facility Agreement) and the Lenders.
Iscritta nel ruolo degli agenti d’affari in mediazione al N. 14936 del 8/5/2008 C.C.I.A.A. di Milano – Registro Imprese di Milano N. 06159600961 - R.E.A. N. 1873621. Sede legale e amministrativa: Via Filippo Turati 16/18, 20121 Milano - Codice Fiscale e Partita IVA N. 06159600961. Cushman & Wakefield LLP è una società personale a responsabilità limitata (Limited Liability Partnership) registrata in Inghilterra e Galles con il N. OC328588. Il termine partnership può essere riferito ad un membro di Cushman & Wakefield LLP o ad un impiegato o consulente con ruolo e qualifiche equivalenti. La lista dei membri di Cushman & Wakefield LLP è disponibile presso la sede di Londra, W1A 3BG, 43/45 Portman Square
PROJECTVANGUARD-RELIANCELETTER-140505-03-MCL-DRAFT.DOCX
"Lender" means any person which: (a) is a lender under the Facility Agreement as at the date of this letter; or (b) becomes a lender under the Facility Agreement in accordance with the procedures set out in the Facility Agreement from one of the lenders originally party to the Facility Agreement as part of the primary syndication of the transaction. "Loan" has the meaning given to it in the Facility Agreement.
Reliance We agree that the Addressees may rely upon the Valuations as if they were originally commissioned by the Addressees for the Purpose at the date when each Valuation was produced (subject to the terms contained herein). This is on the basis that each Addressee agrees and acknowledges the following:
a. the same terms and conditions of our appointment for the Valuations (as agreed with the Client) (the “Terms”) will apply to the Valuations. We have attached those terms and conditions for your convenience; b. the Valuations are produced as at the date of issue but that circumstances and conditions may change over time and affect the accuracy and reliability of the views and information contained therein; c. we will not have any duty, obligation or liability, whether in terms of amount, nature or scope, to the Addressees which is greater than that which we have to the Client if the Addressees had been the Client. For the avoidance of doubt, our aggregate liability to the Client, Addressees and any other party we permit to rely on the Valuations (with the prior written consent of the Addressees) is as specified in the Terms; d. the contents of the Valuations are intended to be confidential to the original Client and to the Addressees and for the purpose stated in this letter. Consequently, and in accordance with current practice, no responsibility is accepted to any other party in respect of the whole or any part of their contents; and e. that publication or disclosure of the Valuations or any part of their contents in any document, circular or statement will not be permitted unless, where relevant, it incorporates the special assumptions referred to in the Valuations.
Disclosure SAMPLE The Valuations are provided in connection with the Facility Agreement and are solely for the benefit of the Addressees and our Client in accordance with the terms of this letter and the Terms. They may not, without our prior written consent, be relied upon for any other purpose or be disclosed to or relied upon by any other person save that they may be disclosed without such consent to:
(i) any person to whom disclosure is required to be made by applicable law or court order or pursuant to the rules or regulations of any supervisory or regulatory body or in connection with any judicial proceedings; (ii) the directors, officers, employees, auditors and professional advisers of any Addressee; (iii) any affiliate of any Addressee and the directors, officers, employees, auditors and professional advisers of such affiliate; (iv) any Servicer (as defined in the Facility Agreement);
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(v) any person, not otherwise an addressee of this letter, who (i) becomes a lender in accordance with the Facility Agreement or (ii) is a potential transferee or assignee, or sub-participant, of any lender, and their respective professional advisers; (vi) any trustee with respect to any securities issued in connection with a securitisation of any of the Loans (as defined in the Facility Agreement); and (vii) each of Fitch Ratings Ltd., Moody's Investors Service, Inc. and Standard & Poors' Ratings Group, a division of McGraw Hill Companies, Inc., DBRS Ratings Limited and their respective professional advisers, on the basis that (i) such disclosure is made solely to enable any such person to be informed that a Valuation has been given and to be made aware of its terms but not for the purposes of reliance and (ii) (except in the case of any person referred to in (v) above which is an Addressee) we do not assume any duty or liability to any person to whom such disclosure is made and in preparing the Valuations we only had regard to the interests of our client(s).
In addition, the Valuations or a reference to and summary of them (and the methodologies and concepts on which it is based) may be included in any information memorandum, offering circular, registration statement or similar document as may be required to comply with any applicable laws, regulations or official guidelines relating to the issuance of or investment in any securitisation of the Loans in connection with the Facility Agreement.
If you agree to these terms, please sign below and return the signed copy to us at the above address. In any event, reliance by an Addressee on the Valuations is deemed acceptance of, agreement to, and acknowledgement of, the terms of this letter.
Yours faithfully
CUSHMAN & WAKEFIELD LLP
______Joachim Sandberg FRICS SAMPLE
______Francesca Prandi MRICS Mariacristina Laria MRICS
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On copy:
Acknowledged and agreed
______CBRE Loan Servicing Limited as facility agent and security agent for itself and on behalf of the Finance Parties under and as defined in the Facility Agreement
Date:______
SAMPLE
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