Annual Italian Real Estate Market Report ITALY REAL-INVEST · Poland 185.2 215.6 198.2 230.6 29.3...

ITALY REAL-INVEST

ITALY REAL-INVEST 2014 Copyright © 2014 World Capital. All Rights Reserved.

Annual Italian Real Estate Market Report

Con il patrocinio dell'ICE - Agenzia per la promozione all'estero e l'internazionalizzazione delle imprese italiane

ITALY REAL-INVEST

Italy In European Context

Annual In�ation Rate

Population Density - Europe

Gross Fixed Investment

Foreign Direct Investment Stocks

Foreign Direct Investment Flows as a percentage of GDP

Gross Domestic Product

Italian Regions Population Density

Italian Regions by GDP Per Capita

GENERAL OVERVIEW OF ITALIAN REAL ESTATE

Italian Real Estate Segments

Residential Sector

European Residential Market

Residential Sector Performance - Europe Prime Markets

Net Yield Of Urban Residential Properties By Region

Italian Household Wealth And Its Components

Tenancy Status -Italy

Number of Constructed Dwellings - Italy

Building's long Life span

O�ce Sector

Annual Rent - Prime locations by Continental Ranking

Annual Rent - Prime Global locations

Rental Variation Rate - Prime Global locations

Vacancy Rate- Prime Global locations

Main Italian O�ce Markets-Annual Rent -Annual Yield

Investments in the O�ce Sector - Italy

Retail Sector

Italian High Streets

Annual Rent - Worldwide High Streets

Prime Retail Markets - Italy

Retail Property Supply- Italian Market

Annual Rent - Italian High-Streets

Yield Trends- Milan and Rome

Consumer con�dence

Consumption Trends - Italy

Industrial Sector

European 3PL Warehouse Map

Lease Trends - Europe Prime Logistic Locations

Market Dynamics - Italian Prime Logistic Locations

Lease Ranges - Italian Prime Logistic Locations

Italian Publicly Subsidised Freight Villages (Interports)

Lease Ranges - Italian Publicly Subsidised Freight

Villages

Hospitality Sector

Tourists Presence In Hospitality Facilities- Europe

Hotel Supply and Occupancy Rates - Europe

Hotel Demand Dynamics - Italy

Hotel Supply Dynamics - Italy

Hotel Supply - Italy

Hotel Revenues - top 10 locations by revenue per night and tourism �ows

Hotel Revenues -top 10 locations by revenue per night - Italy

Tourism Flows - Italy

2

3

3

4

4

5

5

6

6

8

9

10

12

13

13

14

14

15

15

16

17

18

19

20

21

21

22

24

25

26

26

27

28

30

31

32

34

35

36

37

38

39

40

42

43

44

46

46

47

48

48

Index

Annual Italian Real Estate Market Report - 2013

1

Con il patrocinio dell'ICE - Agenzia per la promozione all'estero e l'internazionalizzazione delle imprese italiane

ITALYRegionsProvincesMunicipalitiesPopulationForeign residentsNumber of familiesAverage family members

20110

8.09260.626.442

4.570.31725.175.793

2,4

ITALY REAL-INVEST2

Population Density - Europe Year 2013

Inhabitants per square kilometreSource: Eurostat

Annual In�ation RateYear 2013 Consumer Price IndexSource: Eurostat

0.00-0.850.9-1.71.7-2.62.6-3.4

3-1717-3030-4343-56

2-2727-5252-77

77-102102-4,080

4,080-8,0608k-12k

12k-16k

ITALY REAL-INVEST 3

2012 2009 2010 2011 2012 Europe

Italy 364.5 328.1 339.2 - 486.4 489.7 520.0 - Italy Poland 185.2 215.6 198.2 230.6 29.3 44.4 49.7 57.5 Poland Spain 632.3 628.3 622.1 634.5 625.8 653.2 642.4 627.1 Spain Sweden 332.1 347.2 344.1 376.2 353.4 373.0 376.7 406.9 Sweden Switzerland 499.6 617.7 644.9 665.6 864.9 1 032.8 1 063.1 1 129.4 Switzerland Turkey 143.7 187.0 140.0 181.1 22.3 22.5 26.4 30.5 Turkey

Czech Republic 125.8 128.5 120.6 136.4 14.8 14.9 13.2 15.2 Czech Republic Denmark 154.1 139.9 140.3 - 213.1 218.9 229.0 - DenmarkEstonia 16.2 16.5 16.7 18.8 6.4 5.7 4.7 5.8 EstoniaFinland 85.2 86.7 88.9 90.0 130.2 137.7 133.6 142.3 Finland France 985.2 948.4 953.2 - 1 492.6 1 536.1 1 581.4 - France Germany 969.6 943.8 927.5 980.7 1 359.2 1 365.6 1 385.5 1 463.2 Germany Greece 42.1 35.0 29.2 37.8 39.5 42.6 43.7 43.7 Greece

Memo items: Memo items:

EUROPEAN UNION 7 642.0 7 526.7 7 568.9 - 8 965.1 9 215.1 9 463.5 - EUROPEAN UNION TOTAL WORLD 18 203.1 19 859.9 20 730.4 - 19 083.9 20 539.1 21 673.9 - TOTAL WORLD

G-20 countries 10 270.1 11 381.5 12 043.7 - 12 083.2 12 965.5 13 719.9 - G-20 countries OECD G-20 countries 7 551.0 7 962.3 8 304.0 - 10 858.3 11 483.5 12 172.9 - OECD G-20 countries Other G-20 countries 2 719.1 3 419.2 3 739.7 - 1 224.9 1 481.9 1 547.0 - Other G-20 countries Argentina 79.9 87.6 94.9 - 29.4 30.3 31.9 - Argentina

Brazil 400.8 674.8 669.7 696.0 164.5 188.6 202.6 232.8 Brazil China 1 314.8 1 476.4 1 804.2 - 245.8 310.8 364.2 - China India 171.4 205.6 206.5 226.4 80.9 96.9 109.5 118.2 India Indonesia 108.8 160.7 185.8 - 3.9 6.7 6.2 - Indonesia Russia 378.8 490.6 457.5 - 302.5 366.3 362.1 - Russia Saudi Arabia - - - - - - - - Saudi Arabia South Africa 117.4 153.1 134.4 - 72.6 89.5 78.5 - South Africa

Europe 2009 2010 2011

13-1515-1717-1818-2020-2626-3131-3737-42

Gross Fixed InvestmentYear 2013

Percentage of GDP Source: Eurostat

Foreign Direct Investment StocksYear 2013 Source: OECD International direct investment database

INWARD OUTWARDUnits: USD billion Units: USD billion

ITALY REAL-INVEST4

2012 2009 2010 2011 2012 Europe

Italy Italy Poland Poland Spain Spain Sweden Sweden Switzerland Switzerland Turkey Turkey

Czech Republic Czech Republic Denmark DenmarkEstonia EstoniaFinland Finland France France Germany Germany Greece Greece

1.5% 3.1% 1.1% 5.4% 0.5% 0.6% - 0.7%1.3% - 3.8% 0.3% 2.0% - 4.0% 1.7%9.6% 8.4% 1.2% 6.7% 8.1% 0.7% - 4.0%0.3% 2.8% 1.0% - 2.4% 4.3% 1.9% 1.8%0.9% 1.2% 1.5% 2.4% 4.1% 3.0% 3.3% 2.4%0.7% 1.7% 1.4% 0.2% 2.1% 3.7% 1.4% 2.0%0.8% 0.1% 0.4% 1.2% 0.6% 0.5% 0.6% -1.0% 0.4% 1.3% 0.4% 1.0% 1.6% 2.2% 1.5%3.0% 3.0% 3.7% 0.7% 1.1% 1.5% 1.4% -0.7% 2.9% 1.8% 2.1% 0.9% 2.7% 2.5% -2.5% - 1.7% 2.6% 6.4% 4.4% 5.2% 6.4%5.7% 5.9% 1.8% 0.6% 5.2% 14.4% 7.2% 7.1%1.4% 1.2% 2.1% 1.6% 0.3% 0.2% 0.3% 0.5%

2.4% 2.4% 2.7% 2.0% 2.6% 3.4% 3.4% 2.5%1.5% 1.7% 1.9% 1.6% 1.8% 1.9% 2.0% 1.7%1.2% 1.3% 1.5% 1.2% 2.1% 2.2% 2.5% 2.2%2.5% 2.6% 2.7% 2.5% 0.9% 1.0% 0.8% 0.7%1.3% 1.9% 2.0% 2.3% 0.2% 0.3% 0.3% 0.2%1.6% 2.3% 2.7% 2.7% - 0.5% - -2.3% 3.1% 3.1% 3.1% 0.9% 1.0% 0.6% 0.8%2.6% 1.7% 2.0% 1.3% 1.2% 0.9% 0.7% 0.4%0.9% 1.9% 2.3% 2.2% 0.4% 0.4% 0.9% 0.6%3.0% 2.1% 2.0% 1.6% 3.6% 2.8% 2.6% 1.6%9.7% 6.4% 2.7% 2.1% 0.6% 0.9% 0.6% 0.5%2.0% 0.3% 1.5% 1.2% 0.4% - 0.7% 1.1%

Memo items: Memo items:

EUROPEAN UNION EUROPEAN UNION G-20 countries G-20 countries

OECD G-20 countries OECD G-20 countries Other G-20 countries Other G-20 countries Argentina Argentina

Brazil Brazil China China India India Indonesia Indonesia Russia Russia Saudi Arabia Saudi Arabia South Africa South Africa

Europe 2009 2010 2011

1-4747-9292-138138-184184-962962-1,7401,740-2,5182,518-3,296

Gross Domestic ProductYear 2013 Source: Eurostat

Foreign Direct Investment Flows as a percentage of GDPYear 2013 Source: OECD International direct investment database

INFLOWS OUTFLOWSUnits: % Units: %

ITALY REAL-INVEST 5

ITALY REAL-INVEST6

Italy Land of Beauty

ITALY REAL-INVEST

Italian Regions Population DensityYear 2013 Inhabitants per square kilometreSource: ISTAT (Italian National Institute of Statistics)

< 100

101 - 200

201 - 300

300 <

Italian Regions by GDP Per CapitaYear 2013

Italy annual Index number=100Source: ISTAT (Italian National Institute of Statistics)

<75,0

75,1 - 95,0

95,1 - 115,0

115,1<

7

GENERAL OVERVIEW OF

ITALIAN REAL ESTATE

<1.5%

1.5% - 3%

3% - 4.5%

4.5% - 6%

6% - 8%

8% <

19562013

Italian Regions Land ConsumptionSource: ISPRA

ITALY REAL-INVEST8

ITALY REAL-INVEST

Residential

Italian Real Estate Segments

LuxuryMid rangeVacation house

OfficesBusiness DistrictsMiscellaneous

RetailHigh streetsRetail parksCommercial centresOutlets

IndustrialProduction plantsLogistic

HospitalityHotelsAgritourismsLeisure (Golf Clubs-Stadiums)

9

Residential Sectore

In Italy buildings are made with a very high quality of standards objective to last for a long period of time;

historical context of Italy makes it one of the prestigious real estate markets with high and everlasting values;

constant domestic demand for residential real estate;

recent acceleration in external demand for residential property from international clien-tele, especially from those requesting the Italian residence permit;

growth of new development potentials with high pro�tability such as the university residence, residences for the elderly and etc..

Why invest in Italian residential sector?

ITALY REAL-INVEST10

1. Luxury Penthouses In Historical Centers

Villas In periferies

ITALY REAL-INVEST

2. Vacation house Mountainside Seaside Lakeside

In Italy, the term “holiday home” is also known as “second home”. In this category we �nd homes bought in tourist destinations or close to the buyers’ hometowns. This last one is especially the case of southern Italian migrant workers who have left their places of origin to �nd employment in the north-ern Italy or abroad. The riches they were able to gather through hard work have been subsequently reinvested on the basis of personal and emotional factors rather than economic, investment-oriented ones. In recent years though, the �nancial crisis and the necessity to cut down on management costs have pushed many owners to put their holiday homes up for sale. This has resulted in property price �uctuations in various Italian locations.

3. Mid rangeIn Historical Centers

Apartments In Peripheries

Apartments Villas

11

A home to live in is something that Italians cannot do without. It is not by chance that starting from the post WWII years onward, housing is what has absorbed the largest part of Italians’ private capital. Investing in ‘the brick’ quickly became a national priority. On the other hand it is necessary to mention that the residential as well as the so-called “holiday home” sub sectors of real estate, have been hit the hardest by the on-going world �nancial crisis. In Italy, the number of transactions has severely shrunk and property values have considerably decreased, although not as steeply as in Spain and other euro-zone countries. A major factor in�uencing the depre-ciation of property has been the surplus of unsold buildings that had been built thanks to a strong leverage and that were, as a consequence, put on the market at lower prices.

European Residential Market€/sq mYear 2013 Source: World Capital and Global Property Guide

9651151123217411831206520812156223822392244237123732573274828072905309431083124330633303536363037503758393342344567

566961886220

699111229

1222712610

2425239273

0 5000 10000 15000 20000 25000 30000 35000 40000

MoldovaBulgariaMacedoniaPortugalHungaryEstoniaCroatiaLatviaCyprusSerbiaSlovak RepublicRomaniaLithuaniaSloveniaMaltaUkraineTurkeyMontenegroPolandBelgiumGermanyAndorraGreeceSpainIrelandCzech RepublicDenmarkNetherlandsAustriaLuxembourgItalyFinlandSwedenFranceRussiaSwitzerlandUnited KingdomMonaco

ITALY REAL-INVEST12

Piem

onte

Ligu

ria

Lom

bard

ia

Vene

to

Friu

li V.

Giu

lia

Emili

a Ro

mag

na

Tosc

ana

Mar

che

Umbr

ia

Lazio

Abru

zzo

Mol

ise

Cam

pani

a

Pugl

ia

Cala

bria

Basil

icat

a

Sard

egna

Sici

lia

Valle

D’A

osta

5,0%

4,0%

3,0%

2,0%

1,0%

0,0%

Net Yield Of Urban Residential Properties By RegionYear 2013Source: Elaboration by World Capital on data from Banca of Italy - Agenzia del Territorio - ISTAT

70

90

110

130

150

170

190

210

230

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Germany France Italy UK Spain Irland Euro area

Residential Sector Performance - Europe Prime MarketsPrice index (31/12/2000 = 100)2000 - 2013Source: Elaboration by World Capital on data from OECD - Bank of Italy - Agenzia del Territorio

ITALY REAL-INVEST 13

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

100%

80%

60%

40%

20%

0%

Rent

Social Housing

Owner

Tenancy Status -ItalyPercentage Year 2013 Source: Bank of Italy

Prediction

10.000

9.000

8.000

7.000

6.000

5.000

4.000

3.000

2.000

1.000

0

-1.0001995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Phisical asset Financial assest Financial liabilities Residential Property Italian household wealth

Italian Household Wealth And Its Components1995-2011Billions of euro at current pricesSource: Bank of Italy

ITALY REAL-INVEST14

Number of Constructed Dwellings - ItalyYear 2013Source: Euroconstruct

In recent years, the construction of new residential buildings has decreased by 40,4%. This implies that the number of houses completed has therefore almost halved.Under such circumstances, only investments aimed at the requali�cation of properties have maintained their edge (+0,5%) in the past twelve months. This positive trend is the result of �nancial subsidize for the renovation of residential property in Italy. In light of this, it is safe to say that this policy is a key factor in further developments in the construction market.

In Italy, the lifespan of real estate products is guaranteed by speci�c �scal regulations that subsidize proper maintenance and/or renovation. Since 2012, the conservation and rehabilitation of existing real estate assets have become key directives of the country’s �scal policies. Thanks to these favora-ble �scal premises, not only maintenance interventions on buildings, but also improvement and modernization operations are eligible for up to 55% subsidize of the total cost. Such �scal policies are paired with state of the art construction materials which ensure a property lifespan of over 50 years, thereby adding to the already high quality level of Italian real estate assets. Renovation subsidies are aimed at coping with:

- Changes in demand

- Increased attention to environmental and energetic sustainability

- The need to redevelop degraded urban areas

- The need to increase the productivity and pro�tability of properties

- Exert greater control over land use consumption

Elevated Building LifespanBuilding Renovation Subsidize up to 55% of the total costsSource: www.agenziaentrate.gov.it

350

300

250

200

150

100

502005 2006 2007 2008 2009 2010 2011 2012 2013 2014

PREDICTION


Office SectorBusiness DistrictMiscellaneous

ITALY REAL-INVEST16

The Italian O�ce real estate will be a�ected by interventions renewal and redevelopment;

The change in the socio-economic structure is transforming the Italian enterprises with the emergence of new service companies;

Policies to support youth entrepreneurship has made Italy a prime incubator for start-ups;

Italian tourism enterprise together with "Made in Italy", with their remarkable service com-panies, have generate strong attractions for foreign Investors;

Milan Expo 2015, will be an important moment for the entire Italian system including foreign companies interested in opening o�ces in Italy.

Why invest in Italian o�ce sector?

Annual Rent - Prime locations by Continental Ranking€/sq m paII semester 2013 Source: World Capital

Asi

a - P

aci�

cEu

rope

Am

eric

as

0 200 400 600 800 1000 1200 1400

SeoulKuala LumpurMelbourneMumbaiDubaiSydneySingaporeNew DelhiBeijingShanghaiTokyoHong KongBudapestBarcelonaPragueWarsawBrusselsMadridSt. PetersburgRomeIstanbulFrankfurtMilanOsloStockholmParisZurichMoscowLondon west endLimaVancouverBogotaSan FranciscoSao PauloRio de Janeiro

Milan

Rome


Annual Rent - Prime Global locations €/sq m pa II semester 2013 Source: World Capital

Milan

Rome

0 200 400 600 800 1000 1200 1400

0 200 400 600 800 1000 1200 1400

LimaSeoul

BudapestBarcelona

Kuala LumpurPrague

WarsawBrusselsMadrid

VancouverSt. Petersburg

BogotaMelbourne

RomeIstanbul

FrankfurtSan Francisco

MumbaiMilanDubai

OsloStockholmSao Paulo

SydneySingaporeNew Delhi

BeijingShanghai

ParisZurich

Rio de JaneiroMoscow

TokyoHong Kong

London west end

ITALY REAL-INVEST18

Rental Variation Rate - Prime Global locations % 1st / 2nd semester 2013 Source: World Capital

Milan

Rome

-10% -5% 0% 5% 10%

-10% -5% 0% 5% 10%

St. PetersburgSao PauloParisBarcelonaBeijingSydneySeoulWarsawRio de JaneiroBudapestKuala LumpurMadridVancouverRomeOsloNew DelhiZurichHong KongBrusselsMoscowMilanStockholmMumbaiIstanbulPragueSingaporeLondon west endTokyoFrankfurtMelbourneLimaShanghaiSan FranciscoDubaiBogota


Vacancy Rate- Prime Global locations % II semester 2013 Source: World Capital

0 5 10 15 20 25 30 35

LimaVancouverBogotaHong KongTokyoRio di JaneiroRomeZurichShanghaiParisOsloLondon West EndBeijingSingaporeMelbourneSeoulIstanbulSydneyMadridWarsawSan FranciscoStockholmMilanSao PauloSt. PetersburgBrussellesMoscowFrankfurtPragueMumbaiBarcelonaNew DehliKuala LumpurBudapestDubai

Rome

Milan

ITALY REAL-INVEST20

150100500

200250300350400450500

Main Italian O�ce Markets Annual Rent€/sq m pa II semester 2013 Source: World Capital

Annual Yield% II semester 2013Source: World Capital

45,4%Office Markert

Other Markerts

54,6%In the second semester of 2013, more than 45% of total investments in Italian real estate market is regis-tered for o�ce sector which shows its appetability of this sector for investors.

Investments in the O�ce Sector - ItalySource: Bank of Italy

City

Cen

ter -

CBD

City

Cen

ter

City

Perip

hery

CBD

(Eur

)

City

City

Cen

ter

Perip

hery

City

Cen

ter

Perip

hery

City

Cen

ter

Perip

hery

City

Cen

ter

Perip

hery

City

Cen

ter

Perip

hery

Perip

hery

City

Cen

ter -

CBD

City

Cen

ter

City

Perip

hery

CBD

(Eur

)

City

City

Cen

ter

Perip

hery

City

Cen

ter

Perip

hery

City

Cen

ter

Perip

hery

City

Cen

ter

Perip

hery

City

Cen

ter

Perip

hery

Perip

hery

Milan Torino Padua Bologna Rome Florence Naples

5,5

5,0

6,0

6,5

7,0

7,5

8,0

8,5

Milan Torino Padua Bologna Rome Florence Naples


ITALY REAL-INVEST

Retail Sector

22

Italy is the home of fashion, design, art, food and etc... regarding to the importance of "Made in Italy" each retail brand for establishing itself in the world needs to have its roots also in Italy; Strong Domestic consumption is accompanied by a structured and consistent external demand generated by tourism �ows; Increasing attractiveness of commercial structures known as outlets and shopping malls; In Italy every city and town has its own High street, which is characterized by having vacancy rates equal to zero; know a days In many Italian High Streets demand does not meet the request which makes it even more desirable.

Why invest in Italian hospitality sector?

High StreetsRetail ParksCommercial CentersOutlets

ITALY REAL-INVEST

Types of Retail spaces in Italy

23

Nowadays there are four main commercial property categories in Italy: outlets, malls, high streets and shop-ping centres, that is to say clusters of large retail establishments, each with their independent entrance and visible brand identity . Outlets are already evenly distributed across the Italian territory although there still is potential for new outlet developments in certain areas.

Because of the availability and bargain prices of designer clothes and accessories to be found in outlets, these establishments �gure among the most popular spots for domestic and international tourists. Malls have reached their full potential and can guarantee investors constant ROIs.

Regarding shopping centres, the increasing presence of food courts contributes to attracting large numbers of visitors. These di�erent commercial real estate typologies represent interesting investment opportunities for all kinds of investors. In conclusion, the above mentioned high streets enjoy good maintenance and are constantly involved in interventions of commercial as well as structural improvement.

ITALY REAL-INVEST

Italian high streets

Every Italian town has at least a shopping street. This statement is built on the assump-tion that retail activities are everywhere to be found in Italy. For instance, they abound in the historical centers of main cities and towns as well as in the well-known bucolic villages that dot the peninsula’s countryside and holiday destinations. The architectural legacy of traditional high streets extends its stylistic in�uence to modern shopping meccas such as malls and outlets. It is indeed no coincidence that these new retail spaces boast features that are typical of the traditional architecture found in city centers. While numerous newly built malls and outlets copy the style of traditional high streets, the latter are something irreplaceable that devel-oped over time and that is therefore available in limited supply. This acknowledgement is helpful in under-standing why property in such locations retain high values and yields, keeping investment risks at bay.

24

ITALY REAL-INVEST

Annual Rent - Worldwide High Streets €/sq m paII semester 2013 Source: World Capital

CITTÀ HIGH-STREET

310

1145

1700

1730

2040

2100

2170

2210

2350

2400

2460

2480

2660

3360

3700

3840

3960

3950

4100

4800

4930

5430

6100

6390

6700

7400

8100

10150

13400

21340

22050

22320

0 5000 10000 15000 20000 25000

Sheikh Zayed Road

Linking Road

Garcia d`Avila

Rue Neuve

Na Příkopě

Myeongdong

Grafton Street

Khan Market

Kalverstraat

Karl Johan Gate

Baghdat

Puerta del Sol Preciados

Nevskij Prtospekt

Spitalerstraße

Wangfujing

Zeil

Tauentzienstraße

Nanjing Road West

Kaufingerstraße

Goldene U

Rue du Rhone

Ginza (Chuo Street )

Tverskaya

Via Condotti

Via Montenapoleone

Pitt Street Mall

Bahnhofstrasse

Avenue des Champs-Elysées

Oxford Street - West

Russell street

Fifth Avenue

Causeway BayHong Kong

New York

Hong Kong

London

Paris

Zurich

Sydney

Milan

Rome

Moscow

Tokyo

Geneva

Vienna

Munich

Shanghai

Berlin

Frankfurt

Beijing

Hamburg

Saint Petersburg

Madrid

Istanbul

Oslo

Amsterdam

Delhi

Dublin

Seoul

Prague

Brussels

Rio de Janeiro

Mumbai

Dubai

25

The major part of the retail supply in Italy is concentrated in Northern part of the country with 41.1% of the whole retail supply. This percentage includes cities such as Milan, Turin, Genoa, Venice, Cortina and Verona. High-streets in these cities are also ranked as the top lease prices, national wide.You can find their ranking in the graphic demonstrated on the next page together with other high-streets in center and south of Italy.

ITALY REAL-INVEST

Islands 10.8%

South 23.1%

Center 25%

North West 24.80%

North East 16.3%

North 41.1%

Prime Retail Markets - ItalySource: World Capital

Retail Property Supply- Italian Market%2013 Source: The National Institute for Statistics (ISTAT) - Bank Of Italy

Milan Cortina

VeniceVerona

Florence

Rome

Naples

Bari

Palermo

Porto Cervo

Bologna

Turin

26

ITALY REAL-INVEST

Annual Rent - Italian High-Streets €/sq m paII semester 2013 Source: World Capital

0 1000 2000 3000 4000 5000 6000 7000

MilanoRomaRomaMilanoRomaMilanoVeneziaVeneziaMilanoVeneziaFirenzeVeronaFirenzeVeronaCortinaRomaFirenzePortofinoMilanoFirenzeFirenzeRomaPorto CervoVeronaPortofinoFirenzeTorinoTorinoVeneziaRomaTorinoPorto CervoPalermoBolognaBariPalermoMilano

Via Monte Napoleone Via Dei CondottiVia Del CorsoVia Della SpigaPiazza Di SpagnaCorso Vittorio EmanuelePiazza San MarcoVia MerceriaVia DanteVia Xxii MarzoVia CalzaiuoliVia MazziniVia RomaVia CappelloCorso ItaliaVia Del BabuinoVia StrozziPiazza Martiri Dell'olivettaVia TorinoVia TornabuoniPiazza Degli AntinoriVia BorgognonaPiazzettaCorso Porta BorsariVia Calata MarconiVia CalimalaVia RomaVia La GrangeVia FrezzeriaVia Cola Di RienzoP. San CarloVia La PasseggiataVia LibertàGalleria CavourVia SparanoVia Ruggero SettimoCorso Buenos Aires

High-StreetCity

27

ITALY REAL-INVEST

3,000

5,000

6,000

7,000

8,000

9,000

I SEM2011

II SEM2011

I SEM2012

II SEM2012

I SEM2013

II SEM2013

Milan and Rome’s high streets are without doubt some of the most renowned worldwide. Milan reaches the 8th and Rome the 11th place in the world ranking of commercial property rent prices. Via Montenapoleone in Milan and Via Condotti in Rome have transcended the mere street status to become actual ‘brands’ that enhance the shops and the buildings located there. It is therefore clear to see why properties in such sought-after locations guaran-tee some of the world’s most constant and stable revenues.Italian property values are some of the world’s highest. This is due to a combination of high occupancy rates and historical and architectural prestige characterizing many buildings in city centers. Even in these unstable times, Italian high street revenues have maintained their competi-tive edge. Investing in such areas has therefore become a must for international operators.

Yiled- Milan and Rome%2013 Source: World Capital

28

ITALY REAL-INVEST

8,20

- 8,00

-26,00

-27

-24,00

-8

-18,1

48,50

26

44,30

50,70

76,23

59,70

49,8

83,51

91,40

108,20

99,00

110,54

104,00

113,00

114,30

121,00

-12,00

-11,00

-7,00

-5,00

- 4,00

-1,00

2,70

8,20

17,00

40,50

71,00

72,36

81,20

84,60

85,81

98,00

102,30

105,00

107,62

109,00

110,00

113,90

115,00

-30,00 -10,00 10,00 30,00 50,00 70,00 90,00 110,00 130,00

India

Brazil

United Arab Emirates

South Korea

Australia

Hong kong

China

Italy

France

Irland

United States

Turkey

Spain

Japan

Norway

Germany

Switzerland

Austria

Belgium

Czech Republic

United Kingdom

Russia

Netherlands

Consumer con�dence I semester 2013 - II semester 2013 Source: ISAE - ISTAT (Italian National Institute of Statistics)

30

ITALY REAL-INVEST

Consumer Expenditure

Consumer Con�dence

202000

202500

203000

203500

214000

204500

Jan/08 Jan/09 Jan/10 Jan/11 Jan/12 Jan/13 Jan/14 2015

85

90

95

100

105

115

110

Jan/08 Jan/09 Jan/10 Jan/11 Jan/12 Jan/13 Jan/14 2015

Consumption Trends - Italy€II semester 2013 Source: ISTAT (Italian National Institute of Statistics)

After two years strongly affected by the economic crisis, in this new edition was intended to pay particular attention to initiatives and guidelines that Italian families are developing in order to achieve a new balance in managing their budget a spending.Certainly these could still be accounted, for good measures, as the negative signs characterizing what happened in the last period, but it is equally true that the most acute phase of the crisis is exceeded and now Italians tend to deal with an unprecedented scenario, a scenario which tests different methods and opportunities. especially those that were previously not been taken into account or seemed less necessary.In 2015, two to the international event of EXPO, it has been seen a big boom in consumer confidence and as a Conse-quence in consumer expenditure. this event will be attended by more than 120 countries, Which will drive a huge amount of tourist flow in Italy and especially in Milan.

31

Industrial Sector

Italy by its very geographical nature is a strategic hub for the distribution of goods in Europe and its basin;

construction of new infrastructures thanks to the policies will make Italy even more strate-gic for the distribution of goods;

change in the Italian socio-economic structure has led to a new and growing demand for logistics;

logistics real estate products in Italy are designed with the same logic of traditional build-ing products to last for a long period of time while keeping �exibility in design;

quality of real estate Product, strategic position and domestic and foreign demand (import and export) make Italian logistics real estate very attractive from a revenue point of view;

Why invest in Italian Industrial sector?

ITALY REAL-INVEST32

The nature of manufacturing practices has always influenced logistics in Italy. Traditionally, manufactur-ers have always produced and taken charge of the delivery of their goods. It was only in the past 20 years that we have started to see logistics outsourcing. This new trend generated a climb in the demand of logistic property, which is now an important sub sector of real estate. Policy changes, together with the relocation of many manufacturing plants abroad, have created the necessity of efficient logistic services, with the consequent flourishing of the logistics real estate sector. There are four main strategic settings in logistics: harbours, ports, freight villages and logistic hubs. Geographically speaking, Italy is Europe’s ideal gateway to the Mediterranean Sea. For this reason Italian commercial harbours can become a development/investment priority for the main global shipping companies.

Types of industrial and logistic spaces in ItalyProduction plantsLogistic

Ports / AirportsFreight villageslogistic hubsLogistic location


< 15,000

15,000 - 50,000

50,000 - 100,000

100,000 - 250,000

250,000 - 1,000,000

1,000,000 <

European 3PL Warehouse Mapm2 Warehouse Capacity Listed2013 Source: World Capital elaboration on data from Eye For Transport

ITALY REAL-INVEST34

Il fenomeno di ripresa dalla crisi globale di cui ultimamente sentiamo parlare, lo si può ritrovare nei dati ottenuti riguardanti le principali capitali europee della logistica che hanno risentito di una stabilizzazione e, in alcuni casi leggero aumento dei valori. Nonostante la logistica sia strettamente legata ai numeri dell’attività produttiva e più in generale all’andamento del mercato, risulta un settore che ha retto meglio di altri agli avvenimenti di questi ultimi mesi.

Il mercato italiano, senza però evidenziare situazioni di vera e propria recessione, presenta una generale riduzione dei prezzi medi di locazione. Il mercato a Milano (50 €/mq anno) e a Roma (48 €/mq anno) rimane stabile, sebbene gli affari continuino a crescere a ritmi rallentati.

€ 20,00 40,00 60,00 80,00 100,00 120,00 140,00 160,00

OsloZurichLondonMoscowStockholmSt. PetersburgAmsterdamMonacoTel AvivParisFrankfurtGlasgowBarcelonaIstanbulManchesterDublinMadridKievRotterdamBerlinWarsawViennalineAthensBrusselesMilanRomePragueBucharest

Lease Trends - Europe Prime Logistic Locations €/m2 pa

II semester 2013 Source: World Capital


DYNAMIC

MODERATE

STABLE

STAGNANT

Rivalta ScriviaGenova

Torino

NovaraMilan

Bergamo

Verona

Trento

PadovaVenezia

Rovigo

Udine

Bologna

RiminiPrato

Firenze

Perugia

PescaraCivitavecchia

Rome

CasertaNola

PotenzaNaples

Bari

Cagliari

Olbia

Sassari

Gioia Tauro

Lecce

CataniaPalermo

Livorno

ParmaPiacenza

Market Dynamics - Italian Prime Logistic Locations Source: World Capital

ITALY REAL-INVEST36

25 30 35 40 45 50 55 60 65MIN MAX Location

NOVARATORINOMILANO

PIACENZAPADOVAVERONAPARMA

BOLOGNAGENOVA

RIMINIBERGAMO

TRENTOVENEZIA

UDINELIVORNO

RIVALTA SCRIVIAROVIGO

FIRENZE

PERUGIA

PESCARA

ROMA

CIVITAVECCHIA

PRATO

BARI

NAPOLI

CATANIA

NOLA

CASERTA

POTENZA

GIOIA TAURO

SASSARI

OLBIA

CAGLIARI

LECCE

PALERMO

35 4136 4643 5332 4042 5238 4638 4240 5053 6338 4638 4840 5044 5640 4641 5037 4636 41

50 60

38 45

36 43

40 51

37 50

45 53

32 40

38 45

37 46

39 47

35 45

39 47

36 45

37 48

42 48

42 50

36 46

36 44

Lease Ranges - Italian Prime Logistic Locations €/m2 pa



Nowadays the Italian commercial harbour network still lags behind the main North European ports. In terms of real estate, this is a positive situation that offers ripe opportunities for invest-ment. In the same fashion, airports are also attracting investments, such as those involved in the development of the cargo area of Milan Malpensa airport in view of EXPO 2015.

On the other hand, freight villages are a typically Italian phenomenon. Established by orders of the government, these logistic platforms base their strength on the links between various modes of transport. One of the most valuable links is that between road and railway, a combination that has considerably contributed to shaping the country’s infrastructure policies in the last 30 years.

Nowadays freight villages generate interesting ROIs while keeping the risk ratio low. Last but not least, logistic hubs are structures located alongside the main transportation routes but in differ-ent areas from those already mentioned here. They are mostly characterized by mono-tenancy and share with freight villages a strong investment appeal.

Vado Ligure

Rivalta Scrivia

Orbassano

Novara

Mortara

Verona

Trento

Padova

Venezia

Rovigo

Cervignano

Portogruaro

Bologna

PratoLesi

Pescara

Frosinone

Civitavecchia

Marcianise

NolaBari

Taranto

Cagliari

Olbia

Gioa Tauro

Brindisi

Catania

Livorno

Parma

SITo di Torino

CePIM - Interporto di Parma

Interporto della Toscana Centrale

Interporto di Rivalta Scrivia

Interporto di Civitavecchia

Interporto Sud Europa

CIM Novara

Interporto Amerigo Vespucci

Polo Logistico di Mortara

Interporto Quadrante Europa

Interporto di Trento

Interporto di Padova

Interporto di Cervignano del Friuli

Portogruaro Interporto

Interporto di Venezia

Interporto di Rovigo

Interporto di Bologna

Interporto delle Marche

Interporto d’Abruzzo

Interporto Campano

Interporto Regionale della Puglia

Interporto di Vado

Italian Publicly Subsidised Freight Villages2013 Source: World Capital elaboration on data from Unione Interporti riuniti (UIR)

ITALY REAL-INVEST38

Lease Ranges - Italian Publicly Subsidised Freight Villages€/m2 pa


MIN MAX

Interporto Quadrante Europa 41 48

Interporto di Trento 40 50

Interporto Padova 39 53

Interporto di Rovigo 36 41

Interporto di Bologna 42 50

Interporto delle Marche 38 42

Interporto d’Abruzzo 40 46

Interporto Campano 50 80

CePIM Interporto Di Parma 38 40

CIM Novara 35 41

SITo Torino 38 48

Interporto Amerigo Vespucci 54 60

Interporto della Toscana Centrale 56 60

Interporto Di Rivalta Scrivia 39 45

Interporto Di Vado Ligure 50 63

48 55Interporto Sud Europa

Verona

Trento

Padova

Rovigo

Bologna

Lesi

Pescara

Nola

Parma

Novara

Torino

Livorno

Prato

Rivalta Scrivia

Vado Ligure

Marcianise

Lease €/sq m/yearFreight VillageCity

Bologna Interport


ITALY REAL-INVEST40

Italy is one of the World’s prime tourist destinations and it ranks at number 1 among tourists from emerging economies.

Tourist as well as business travel �ows do not cease to increase, and so does the RevPAR (Revenue Per Available Room).

The presence of international, management-focused hotel companies in Italy is increasing.

Hotel properties are often prestigious and well-kept historical buildings.

The current economic situation has contributed to a very favourable investment/revenue ratio and competitive GOP (Gross Operating Pro�t) performances.

Why invest in Italian Hospitality sector?

Hospitality typologies in ItalyHotelsAgritourismLeisure (Golf Clubs - Stadiums)


Italy is a historically renowned tourist destination. Nowadays the tourist industry is crucial to the country’s GDP and all political and civil institutions agree on one thing: tourism has to be treated as one of the nation’s development priorities so that it can become a full-�edged economy booster. This implies great, high quality opportunities in real estate investment. The Italian hotel sector is indeed facing a major shift in its way of operating, especially considering the way it is moving from a family-run to a complete corporate-like management attitude. Such changes are leading to common business goals and di�erent methods. This also implies a general revision of the structures that are suitable for hospitality purposes. The productive, operational, and functional specialization that characterizes recent developments in business practices, is also a�ecting the hotel sector. In the last decades Italian hospitality sector is becoming more and more specialized not only in Hotel sector but also in new realities such as B&Bs and agritourisms. For instance, the leisure sector is attracting more and more investors who aim to develop new wellness hotels including spaces such as golf clubs and stadiums . The Italian government is also working on new policies that will transform sport stadiums into multifunctional leisure locations where visitors will be able to enjoy themselves.The transition from a family-based to a business-oriented management paradigm has had remarkable consequences in the hotel business environment. Establishments rating 3 stars or lower have become less and less common, whereas 4 and 5 star hotels have increased their presence. This phenomenon can be ascribed to the growing degree of specialization that is currently pervading all business sectors.

0 100.000 200.000 300.000 400.000

LuxembourgLithuaniaLatviaEstoniaMaltaSloveniaSlovakiaCyprusRomaniaBulgariaHungaryFinlandDenmarkIrelandBelgiumczech republicPortugalSwedenPolandGreeceNetherlandsAustriaUnited KingdomGermanyItalySpainFrance2,3

6,93,04,2

-1,61,30,6

n.d.2,41,14,03,63,6

n.d.3,93,82,1

15,612,0

3,51,75,21,6

14,916,217,0n.d.

Var. % 12/10

Tourists Presence In Hospitality Facilities- Europe2012 Source: Eurostat - ISTAT

Genoa bay (Liguria, Italy)

ITALY REAL-INVEST42

Hotel Supply and Occupancy Rates - Europe2012 Source : Eurostat - ISTAT

Country Hotels% on tot.UE

% on tot.UE

% on tot.Occupancy

Beds(thousand)

Beds occupied(thousand)tot. UE

Belgium

Bulgaria

Czech Republic

Denmark

Germany

Estonia

Ireland

Greece

Spain

France

Italy

Cyprus

Latvia

Lithuania

Luxembourg

Hungary

Malta

Netherlands

Austria

Poland

Portugal

Romania

Slovenia

Slovakia

Finland

Sweden

United State

European Union


90,0

95,0

100,0

105,0

110,0

115,0

120,0

125,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Italians International Total

2001 1,6 3,2 2,3

2010 -0,2 4,4 1,8 2011 0,3 7,6 3,5

Italians

International

Total

- By Tourist NationalityIndex Number 2000=1002011 Source: ISTAT

- By Hospitality Sector2012Source: ISTAT

Tourist Arrivals By Location Nights Spent By Location

34%

23%

12%

11%

5%3%

12%

46%

17%

9%

8%

4%3%

13%

Art cities

Seaside resorts

Lakeside resorts

Mountain resorts

Countryside resorts

Thermal spas

Other

0

100

200

300

400

500

600

700

Arrivals Bed Night Forecast

Arrival(thousand) (thousand)

Bed Night AVG Bed night

1953 17.219 49.456 2,9

2000 66.760 233.613 3,5

2011 83.056 259.911 3,1

2012 83.200 260.354 3,1

Hotel Demand Dynamics - Italy- By Tourist Arrival and PresenceIndex Number 1953=1002012 Source: ISTAT and Federalberghi

1953 1960 1970 1980 1990 2000 2011 2012 2015

ITALY REAL-INVEST44

* Because of roundings total values may differ from the sum of single values.** Tourist residence-hotel (Residenze turistico-alberghiere)

CategoriesArrivals*

(Thousand)Var. % 12/00

Bed night* (migliaia)

Var. % 12/00

AVG bed night2012 2000

% non-italians bed night2012 2000

Hotel Demand Dynamics - Italy- By Hotel Category2000 - 2012 Source: ISTAT

Tourist residence-hotel is kind of hospitality facility that is provided with accommodation in at least 7 rooms or apartments with or without kitchen facilities and other extras, including bar and restaurant services.


0,0

100,0

200,0

300,0

400,0

500,0

600,0

700,0

1950 1960 1970 1980 1990 2000 2011 2012

Esercizi

Camere

Letti

Hotel Rooms Beds

1950 20.074 215.986 365.470

2012 33.728 1.295.916 2.202.820

Hotel Supply Dynamics - ItalyIndex Number 1950=1002012 Source: World Capital elaboration on data from ISTAT and Federalberghi

Hotel Supply - ItalyBy category2012 Source: World Capital elaboration on data from ISTAT

33.728TOTAL +1%

393

5.354

18.034

6.509

3.438

+140%

+76%

+19%

-26%

-44%1 Stars Hotels

2 Stars Hotels

3 Stars Hotels

4 Stars Hotels

5 Stars Hotels

Category Number Of Hotels Variation In % 2002/2012

ITALY REAL-INVEST46

Venice € 196,00 € 196,00 0%

Milan € 145,00 € 151,00 -4%

Florence € 135,00 € 134,00 1%

Rome € 130,00 € 135,00 -4%

Verona € 123,00 € 124,00 -1%

Bologna € 103,00 € 106,00 -3%

turin € 101,00 € 104,00 -3%

Bari € 99,00 € 103,00 -4%

Naples € 89,00 € 93,00 -4%

Palermo € 84,00 € 89,00 -6%

10 most expensive Average return 2013 Average return 2012 Variation 2012-2013

Hotel Revenues - ItalyTop 10 Locations by hotel revenue/night and Tourism �ows2012 Source: World Capital elaboration on data from Istat

Colosseum (Rome, Italy)


Hotel Revenues - ItalyTop 10 locations by hotel revenue/night2013 Source: TRIVAGO

10 most expensive Average revenue/night

Forte dei Marmi € 203,00

Cortina d'Ampezzo € 199,00

Venice € 196,00

Santa Margherita Ligure € 179,00

Capiri € 178,00

Positano € 178,00

Madonna di Campiglio € 177,00

Merano € 171,00

Taormina € 170,00

Amalfi € 166,00

Tourism Flows - ItalyTop 10 Cities Values in thousand2007-2012Source: National observatory of tourism (ONT)

City 2007 2008 2009 2010 2011 2012

Rome 8554 8324 8145 8464 8723 8423 -1,5 -3,4

Milan 5217 5147 4969 5125 5901 5770 10,6 -2,2

Venice 4577 4419 4394 4402 4920 5024 9,8 2,1

Florence 3911 3690 3582 3521 3959 4104 4,9 3,7

Verona 1408 1345 1378 1405 1458 1779 26,4 22,0

turin 1249 1279 1175 1330 1322 1457 16,7 10,2

Bologna 1009 1101 1115 1346 1356 1262 25,0 -7,0

Naples 1165 1103 1285 1282 1051 1134 -2,7 7,8

Padua 651 573 638 652 713 918 40,8 28,7

Como 550 647 757 578 723 750 36,3 3,7

Variation %2012/2007

Variation %2012/2011

ITALY REAL-INVEST48

A G E N C Y - C O N S U L T IN G - P R O P E R T Y - IN V E S T M E N T

®

Our Expertise for your business

Step 1Identifying needs:- Location- Type of property- Budget- Deadline

Step 2

Step 3

Step 4

Step 5

Product search and selection:

Our network of real estate consult-ants points out a selection of real estate assets the client can choose from.

Product evaluation and contract:

The client chooses a product and submits an o�er. Our team follows the negotiation until a deal is reached.

Real state invstmentAfter signing the contract, World Capital searches tenants interested in renting or managing the property.

COMPLEMENTARY SERVICES

Based on the client's requests, World Capital provides technical assistance regarding the property

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