Real Estate Market Overview

Real Estate Market Overview Italy 2017 www.pwc.com/it

01 Italian Macroeconomic Indicators 02 Italian Real Estate Market Overview Market of residential mortgages Real estate market trends Market of residential rental trends Investments in construction Real estate leasing Investment trends in the real estate market Real estate funds p.5 p.11 p.12 p.27 p.46 p.44 p.61 p.63 p.70 03 Milan p.73 Residential market Investment trends in the real estate market Office market 04 Rome Residential market Investment trends in the real estate market Office market 05 Contacts p.74 p.78 p.79 p.89 p.90 p.94 p.95 p.98

4 Italian Real Estate Market Overview

Italian Macroeconomic Indicators 01 5

Key data In Q2 2017, the Gross Domestic Product (GDP), with 2010 as the base year (adjusted for calendar effects and seasonality), has increased by 0.3% compared to the previous quarter and by 1.5% when compared to Q2 2016. Gross Domestic Product National demand 2011 0.6% -0.6% 2012-2.8% -5.6% 2013-1.7% -2.5% 2014-0.4% -0.7% 2015 0.8% 0.5% 2016 0.9% 1.4% 2017 I 0.4% 0.1% 2017 II 0.3% 0.3% Macroeconomic environment in Italy In Q2 2017, GDP increased by 0.3% on a quarterly basis, after the acceleration recorded in the first. National demand, excluding stock, contributed o.3% to growth. The increase in investment (0.9% compared to the previous quarter) was most significant in the transportation equipment component (8.9%), with fewer investments in machinery and equipment; there was a moderate drop in activity in construction, though it remained above the levels recorded a year earlier. Spending by households and non-profit institutions slowed slightly from 0.4% to 0.1% as a result of the drop in purchases of semidurable goods and the stagnation in purchases of non-durable goods. Bank of Italy, Economic Bulletin October 2017 Imports have recorded a strong growth (+1.2%) while exports remained stable; The contribution of foreign trade to GDP was negative by 0.3%. Value added grew by 0.8% in industry excluding construction and by 0.3% in services. In the agricultural sector value added fell by 2.4%. In the first three months of the year inflation, as measured by the twelve month change in the harmonized index of consumer prices (HICP), reached its highest levels since 2013; Inflation fell slightly in September reaching 1.3% (from 1.4% in August), and continue to be low due to the slowdown in the prices of energy commodities and services. +0.3% GDP change Q2 2017 vs Q1 2017 +1.5% GDP change Q2 2017 vs Q2 2016 Gross Domestic Product trend 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% +1.5% -4.0% 01/12/2009 01/02/2010 01/04/2010 01/06/2010 01/08/2010 01/10/2010 01/12/2010 01/02/2011 01/04/2011 01/06/2011 01/08/2011 01/10/2011 01/12/2011 01/02/2012 01/04/2012 01/06/2012 01/08/2012 01/10/2012 01/12/2012 01/02/2013 01/04/2013 01/06/2013 01/08/2013 01/10/2013 01/12/2013 01/02/2014 01/04/2014 01/06/2014 01/08/2014 01/10/2014 01/12/2014 01/02/2015 01/04/2015 01/06/2015 01/08/2015 01/10/2015 01/12/2015 01/02/2016 01/04/2016 01/06/2016 01/08/2016 01/10/2016 01/12/2016 01/02/2017 01/04/2017 01/06/2017 Source: PwC based on data from Italian National Statistical Institute (INSI) 6 Italian Real Estate Market Overview

Key data 1.3% Inflation September 2017 1.1% Core inflation September 2017 +0.3% Employment rate growth Q2 2017 vs Q1 2017 11.2% Unemployment rate September 2017 Changing prices Consumer price inflation, sustained by the change in its most volatile components (energy and unprocessed food products), has risen since last autumn, reaching, in the first quarter of 2017, its highest levels since early 2013. In September consumer price inflation stood at 1.3%, compared with 1.4% of the previous month, continues to be low, owning in part to persistently weak wage growth. Households, firms and the leading analysts have revised downward their expectations for average inflation in 2017. The producer prices of industrial products sold on the domestic market continue to accelerate in August (1.6% over twelve months, from 0.9% in July), driven mainly by the energy component and other intermediate goods. The change in the prices of non-food final consumption products recorded a modest increase, rising to 0.3% from 0.1%. The producers revised their expectations of consumer price inflation slightly downward, though still well above the lows recorded at the end of 2016. According to INSI survey, in the summer months the balance between the share of manufacturing firms expecting to raise their prices and those planning to reduce them expanded very slightly compared with the previous period. The percentage of consumers expecting prices to remain unchanged or to decline over the next twelve months rose slightly (from 60.1% in the first quarter to 61.5%). The analysts polled in October by Consensus Economics were revised downward, to 1.3% on average in 2017, below that forecast for the euro area as a whole. Labour market In Q4 2016, the number of employed persons and hours worked both rose. Fixed-term payroll jobs increased and open ended employment contracts stabilized. The number of persons employed almost returned to pre-crisis levels, while the number of hours worked is still low, indicating the general underutilization of the labour force. The latest cyclical data indicate that employment continued to expand in July and August 2017 despite the termination of social contribution relief at the end of 2016. Growth in labour costs remained very modest. The number of hours worked and the number of employed persons, as reported in the national accounts, continued to grow in Q2 (an increase of 0.5% and 0.3%, respectively, on the previous period). The growth in employment in the second quarter is due to a 4.8% rise in the number of fixed-term payroll contracts. The number of permanent contracts also increased by 0.2% in line with the previous quarter. Since 2015, fixedterm payroll employment has grown by 366,000 jobs (+15.8%), permanent contracts by 437,000 (+3.0%). In Q2, the unemployment rate fell by 0.4% to 11.2%, reflecting an increase in the participation rate. In the 15-24 age group unemployment remained stable at 35.4% ( equal to 9.2% of this population segment). According to Istat s provisional data, the average overall unemployment rate for the months of July and August remained unchanged at 11.2% while the youth unemployment rate fell to 35.2%. Source: Bank of Italy, Economic Bulletin April - October 2017 7

Key data +0.2% Change in consumption Q2 2017 vs Q1 2017 61.3% Italian household debt as a percentage of disposable income Q2 2017 Italian households In Q2 2017, household spending, continued to increase, especially purchases of services, while the propensity to save declined. Household consumption continued to expand in the spring (+0.2% compared to the first quarter). Growth in expenditure on services more than offset the contraction in goods purchases, with those of durable and semi-durable goods hardest hit. New car registration turned upward again, reaching 3.5%, following the decline of 1.8% recorded during the spring. The consumer confidence indicator improved sharply over the third quarter as a whole, thanks above all to assessments of the general economic situation and future expectations. In Q2 2017, Italian household debt in relation to disposable income declined to 61.3%, still well below the euro area average of 94.3% recorded at the end of September. Interest rates on new mortgage loans remained stable in the quarter at extremely low levels by historical standards. Source: Bank of Italy, Economic Bulletin October 2017 Expediture on total expense Current prices Constant prices 2000 2015 Var. % 2015/2014 Var. % 2015/2000 Var. % 2015/2014 Var. % 2015/2000 Groceries and non-alcoholic beverages 15% 14% 1.3% 25.0% 0.2% -11.0% Spirits and tobacco 4% 4% 2.1% 31.0% -0.2% 1.0% Clothing and footwear 8% 6% 1.5% 9.0% 1.4% -7.0% Residences and users 18% 24% -0.1% 72.0% 0.3% 7.0% Furniture and eletrical appliances 8% 6% 0.9% 9.0% 0.5% -16.0% Healthcare 3% 3% 2.9% 34.0% 1.9% -2.0% Transportation 14% 12% 2.4% 16.0% 5.5% -20.0% Communications 3% 2% -1.7% 6.0% 0.0% 83.0% Entertainment and culture 7% 7% 2.6% 21.0% 2.4% 13.0% Education 1% 1% 4.4% 45.0% 2.7% -5.0% Hotel and restaurants 9% 10% 2.4% 51.0% 1.1% 5.0% Other goods and services 10% 10% -1.0% 29.0% -1.5% 5.0% f e e fi e ce Source: PwC based on data from COOP Report 2016 8 Italian Real Estate Market Overview

Consumer confidence of manufacturing firms (indexed base 2005=100) 115 110 105 100 95 90 85 Jan-2011 Feb-2011 Mar-2011 Apr-2011 May-2011 Jun-2011 Jul-2011 Aug-2011 Sep-2011 Oct-2011 Nov-2011 Dec-2011 Jan-2012 Feb-2012 Mar-2012 Apr-2012 May-2012 Jun-2012 Jul-2012 Aug-2012 Sep-2012 Oct-2012 Nov-2012 Dec-2012 Jan-2013 Feb-2013 Mar-2013 Apr-2013 May-2013 Jun-2013 Jul-2013 Aug-2013 Sep-2013 Oct-2013 Nov-2013 Dec-2013 Jan-2014 Feb-2014 Mar-2014 Apr-2014 May-2014 Jun-2014 Jul-2014 Aug-2014 Sep-2014 Oct-2014 Nov-2014 Dec-2014 Jan-2015 Feb-2015 Mar-2015 Apr-2015 May-2015 Jun-2015 Jul-2015 Aug-2015 Sep-2015 Oct-2015 Nov-2015 Dec-2015 Jan-2016 Feb-2016 Mar-2016 Apr-2016 May-2016 Jun-2016 Jul-2016 Aug-2016 Sep-2016 Oct-2016 Nov-2016 Dec-2016 Jan-2017 Feb-2017 Mar-2017 Apr-2017 May-2017 Jun-2017 Jul-2017 Aug-2017 Sep-2017 Source: PwC based on data from Italian National Statistical Institute (INSI) 9

10 Italian Real Estate Market Overview

Italian Real Estate Market Overview 02 11

Market of residential mortgages Mortgage distribution by contract type H1 2017 19.4% New contracts efi c 1.4% 79.2% Transfers (surroghe) Mortgage volume trend in Italy 2007-2017 The cash amount supplied by banks to households from 2007-2016 according to NAB has been recovering since 2013, although it has not returned to its historical peak. 2014 was the start of recovery for mortgages to households: the number of mortgages signed to purchase a house in 2014 was 13% higher compared to 2013, while 2015 recorded a substantial increase of 70.6% over 2014. In 2016, mortgages for houses are up to 20.5% over 2015. The growth rate during Q1 2017 continue to show positive signs with +11.5%, even though the pace of growth seems to slow down compared to the growth rates of the last quarters. These trends are important signs that show a renewed interest of the financing industry in the real estate sector, although an important share is represented by transfer loans (surroghe) and loan refinancing. The Bank of Italy provides data on new mortgages, transfer loans and refinancing starting from the third quarter of 2014. In the first six months of 2017, 89.2% of the new supply actually covered new mortgage contracts, while transfers (surroghe) loans accounted 19.4% of the market, and refinancing accounted for only 1.4%. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q12017 Var. % 2016/2007 62,758 56,980 51,047 55,592 49,120 24,757 21,393 24,183 41,247 49,704 12,304 % change from the same period of the previous year -0.2-9.2-10.4 8.9-11.6-49.6-13.6 13.0 70.6 20.5 11.5-20.8% Source: PwC based on data provided by NAB 12 Italian Real Estate Market Overview

Cash amount supplied by banks to households 2007 - Q1 2017 ( million) 70,000 62,758 60,000 56,980 55,592 50,000 51,047 49,120 49,704 40,000 41,247 30,000 20,000 24,757 21,393 24,183 12,304 10,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 2017 Source: PwC based on data provided by NAB Quarterly cash amount supplied by banks to households 2014 - Q1 2017 ( million) 16,000 14,000 12,000 10,000 13,973 13,183 13,223 12,304 11,455 10,223 10,768 11,053 8,000 6,000 5,238 6,280 5,746 7,077 7,073 4,000 2,000 0 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Source: PwC based on data provided by NAB 13

NNT Mo share 2016 Mortgages 2016 Italy 14% 22% North West South 7% 21% North East Islands 37% Center In 2016, the transactions regarding residential units covered by mortgages (NNT Mo) are equal to 246,182 units, which is a 27.3% increase over 2015. The growth was consistent at more than 25% in each macro territory of Italy. The performances registered in the province capitals and in rest of the provinces were similar, with growth of 27.2% and 27.4%, respectively. The best performance was registered in the North-Eastern province capitals with an increase of 32.4% compared to 2015. The largest share of transactions of residential units covered by a mortgage was registered in the North-Western area with 36.7% of the total residential transactions, followed by the Center with almost 22%. In 2016, the share of transactions covered by a mortgage compared to the total purchases is 3 percentage points higher, reaching 48.5% (nearly 5 percentage points were recovered in 2015), and over 50% in the North and Center areas. The share approaches 40% in the South and Islands. Compared to 2015, the shares are more pronounced in the South (+3.5%) and Islands (+3.3%) than the other territories. The province capitals of the Center of Italy registered the maximum share of mortgages used to purchase a residence by persons at 54%; the rest of province of the Islands have the lowest share, just under 35% of purchases. 21.0% NNT Mo 2016 North East 36.7% NNT Mo 2016 North West NNT Mo 2016 Var. % NNT Mo 2015/2016 Share NNT Mo per area Share on total NNT 2016 21.7% NNT Mo 2016 Center 6.9% NNT Mo 2016 Islands 13.7% NNT Mo 2016 South North West 90.354 28.5% 36.7% 52.4% North East 51.733 28.9% 21.0% 53.2% Center 53.317 25.1% 21.7% 50.5% South 33.775 26.5% 13.7% 38.6% Islands 17.003 25.4% 6.9% 38.2% Total 246.182 27.3% 100.0% 48.5% Province capitals North West 28.018 29.7% 31.7% 51.1% North East 16.373 32.4% 18.5% 52.7% Center 26.829 22.7% 30.3% 53.9% South 10.324 27.7% 11.7% 46.0% Islands 6.896 23.3% 7.8% 45.0% Total 88.440 27.2% 100.0% 51.0% Rest of provinces North West 62.336 27.9% 39.5% 53.1% North East 35.360 27.3% 22.4% 53.4% Center 26.488 27.6% 16.8% 47.5% South 23.451 26.0% 14.9% 36.0% Islands 10.108 27.0% 6.4% 34.6% Total 157.742 27.4% 100.0% 47.2% Source: PwC analysis on data provided by Italian IRS 14 Italian Real Estate Market Overview

Share NNT Mo 2016 - Province capitals Share NNT Mo 2016 Rest of province 8% 6% 12% 32% 15% 40% 30% 17% 19% 22% North West North East Center North West North East Center South Islands South Islands Source: PwC analysis on data provided by Italian IRS 15

Key data 57.8% NNT Mo share on total NNT in 2016 for medium-sized houses NNT Mo (n ) Studio Apartment Var. % NNT Mo 2015/2016 Share on total NNT 2016 NNT Mo (n ) Small Var. % NNT IP 2015/2016 Share on total NNT 2016 Mortgages 2016 Volume In 2016, 89,726 medium-sized houses were purchased using a mortgage, which is the most common apartment type by NNT Mo, followed by smallmedium (50,325 NNT Mo), and small (47,902 NNT Mo). The highest growth rates in 2016 for house transactions with mortgages by asset size have been registered for large houses (+28.3%), followed by medium (+22.6%). The only decrease of NNT Mo over the previous year was recorded for studio apartments in the province capitals of the Southern territory (-0.8%). The percentage of transactions regarding residential units covered by mortgages exceeds 55% for medium and large houses (57.8% for medium and 56.8% for large). The share for small medium houses is at 51.7%. North West 3,124 25.2% 26.3% 20.654 22,9% 44.5% North East 1,205 22.8% 26.4% 8.490 19,6% 42.3% Center 2,241 20.7% 30.7% 11.127 12,4% 45.9% South 881 8.0% 8.9% 5.042 20,6% 29.7% Islands 553 46.2% 12.3% 2.588 18,5% 28.9% Total 8,004 22.6% 21.0% 47.902 19,3% 41.1% Provinces capitals North West 1,286 24.9% 27.9% 7.391 22,5% 44.7% North East 480 22.1% 25.9% 2.713 26,5% 43.1% Center 1,375 19.2% 38.4% 6.176 11,1% 50.4% South 217-0.8% 10.8% 1.543 20,1% 37.7% Islands 197 73.0% 14.3% 807 7,9% 32.1% Total 3,554 22.2% 26.5% 18.630 18,1% 44.6% Rest of provinces North West 1,839 25.4% 25.2% 13.263 23,2% 44.4% North East 726 23.2% 26.7% 5.777 16,7% 41.9% Center 865 23.2% 23.3% 4.951 14,2% 41.4% South 664 11.3% 8.5% 3.499 20,9% 27.2% Islands 356 34.7% 11.5% 1.782 24,0% 28.0% Total 4,450 22.9% 18.0% 29.272 20,0% 39.1% Dimensional classes: Studio apartment: up to 45 sqm (2.5 cadastral units); Small: between 45 and 60 sqm (2.5-4 cadastral units); Small-Medium: between 60 and 90 sqm (4 5.5 cadastral units); Medium: between 90 to 120 sqm (5.5-7 cadastral units); Large: 120 sqm and above (more than 7 cadastral units) Source: PwC analysis on data provided by Italian IRS 16 Italian Real Estate Market Overview

NNT Mo (n ) Small medium Medium Large Total Var. % NNT Mo 2015/2016 Share on total NNT 2016 NNT Mo (n ) Var. % NNT Mo 2015/2016 Share on total NNT 2016 NNT Mo (n ) Var. % NNT Mo 2015/2016 Share on total NNT 2016 NNT Mo (n ) Var. % NNT Mo 2015/2016 Share on total NNT 2016 19,792 25.4% 55.8% 31,689 24.6% 61.3% 11,121 31.2% 59.5% 90,354 28.5% 52.4% 10,013 21.6% 54.1% 19,973 26.4% 61.0% 8,872 33.7% 60.5% 51,733 28.9% 53.2% 10,588 18.8% 53.2% 17,402 19.2% 57.2% 6,056 22.7% 53.8% 53,317 25.1% 50.5% 7,007 18.8% 43.4% 13,756 19.9% 51.3% 4,107 24.3% 52.4% 33,775 26.5% 38.6% 2,926 17.9% 39.9% 6,906 17.3% 50.3% 2,425 18.8% 49.6% 17,003 25.4% 38.2% 50,325 21.8% 51.7% 89,726 22.6% 57.8% 32,580 28.3% 56.8% 246,182 27.3% 48.5% 6,498 30.5% 55.0% 8,905 21.1% 60.0% 2,682 38.9% 58.3% 28,018 29.7% 51.1% 3,529 24.2% 54.1% 6,640 29.7% 60.6% 2,050 29.9% 59.4% 16,373 32.4% 52.7% 5,268 14.9% 55.4% 8,585 17.0% 59.4% 2,793 22.1% 56.7% 26,829 22.7% 53.9% 2,167 21.0% 49.7% 4,180 20.3% 55.5% 1,419 30.5% 59.1% 10,324 27.7% 46.0% 1,091 11.4% 43.9% 3,086 16.3% 57.1% 1,009 18.5% 57.2% 6,896 23.3% 45.0% 18,552 22.3% 53.5% 31,397 21.1% 59.0% 9,953 28.7% 58.1% 88,440 27.2% 51.0% 13,294 23.1% 56.2% 22,784 26.0% 61.9% 8,439 29.0% 60.0% 62,336 27.9% 53.1% 6,484 20.2% 54.1% 13,333 24.8% 61.2% 6,822 34.8% 60.9% 35,360 27.3% 53.4% 5,320 22.9% 51.2% 8,817 21.4% 55.3% 3,263 23.2% 51.5% 26,488 27.6% 47.5% 4,840 17.9% 41.1% 9,575 19.7% 49.7% 2,688 21.2% 49.4% 23,451 26.0% 36.0% 1,835 22.1% 37.8% 3,820 18.0% 45.9% 1,416 19.0% 45.3% 10,108 27.0% 34.6% 31,773 21.6% 50.7% 58,329 23.4% 57.1% 22,627 28.1% 56.3% 157,742 27.4% 47.2% 17

NNT Mo 2016 Mortgages 2016 Regions Veneto 9.9% 0.2% Aosta Valley 1.3% Umbria Tuscany 7.2% Sicily 4.8% 2.1% Sardinia Apulia 5.2% Piedmont 8.9% 0.3% Molise 2.1% Marche Lombardy 3.4% Liguria Lazio 11.1% 1.7% Friuli V. G. E. Romag. 9.4% 5.1% Campania 1.1% Calabria 0.5% Basilicata 1.6% Abruzzo 24.1% The number of residences purchased with a mortgage (NNT Mo) is growing throughout all regions of Italy by more than 20%, except for Basilicata (+19.1%); the largest increase in terms of absolute amount of NNT Mo has been registered in Emilia Romagna, Liguria and Piedmont where growth has exceeded 30%. The share of mortgages on housing sales finalized by an individual is on average higher in the Northern regions, but compared to 2015, the share has increased by more than 3 percentage points in all regions of the South, with the exception of Puglia. However, the share of NNT Mo on total NNT in Puglia along with Sardinia remains among the highest in the south. Friuli-Venezia Giulia is the Italian region with the highest share of transactions completed with a mortgage (57.5%). 0 10 20 30 NNT Mo variation 2015 vs 2016 Veneto Aosta Valley Umbria Tuscany Sicily Sardinia Apulia Piedmont Molise Marche Lombardy Liguria Lazio Friuli V. Giulia E. Romagna Campania Calabria Basilicata Abruzzo 28.5% 28.7% 23.6% 29.2% 24.3% 28.2% 25.8% 31.0% 26.6% 27.2% 27.1% 31.8% 22.3% 23.2% 30.4% 28.7% 24.0% 19.1% 26.2% 0 25 50 NNT Mo 2016 Var. % NNT Mo 2015/2016 Share NNT Mo per region Share total NNT 2016 Abruzzo 3,876 26.2% 1.6% 38.9% Basilicata 1,132 19.1% 0.5% 30.4% Calabria 2,774 24.0% 1.1% 26.1% Campania 12,602 28.7% 5.1% 41.1% Emilia Romagna 23,156 30.4% 9.4% 53.0% Friuli V.G. 4,213 23.2% 1.7% 57.5% Lazio 27,294 22.3% 11.1% 51.3% Liguria 8,419 31.8% 3.4% 43.7% Lombardy 59,305 27.1% 24.1% 56.0% Marche 5,181 27.2% 2.1% 46.7% Molise 667 26.6% 0.3% 31.5% Piedmont 22,023 31.0% 8.9% 48.3% Apulia 12,724 25.8% 5.2% 41.8% Sardinia 5,183 28.2% 2.1% 44.8% Sicily 11,821 24.3% 4.8% 35.9% Tuscany 17,727 29.2% 7.2% 51.2% Umbria 3,115 23.6% 1.3% 46.9% Aosta Valley 608 28.7% 0.2% 38.6% Veneto 24,364 28.5% 9.9% 52.6% Total 246,182 27.3% 100.0% 48.5% Source: PwC analysis on data provided by Italian IRS 18 Italian Real Estate Market Overview

Geographical distribution of the NNT Mo incidence over the Total NNT in 2016 Piemonte 48% Lombardia Veneto Emilia Romagna Friuli V 56% 53% 53% 57%. G. Toscana Marche Umbria Lazio Sardegna 51% 47% 47% 51% 45% 40%-55% (11) Liguria Valle D Aosta Abruzzo Puglia Campania 44% 39% 39% 42% 41% 30%-40% (5) Sicilia Molise Basilicata Calabria re Tr T e ntino A. A. 36% 31% 30% 26% n.a. 20%-30% (3) n.a. Source: PwC analysis on data provided by Italian IRS 19

NNT Mo 2016 - Cities 5% 7% 12% 6% Rome Turin Bologna 6% 5% 24% Milan Palermo Florence 35% Incidence distribution of NTN Mo on Total NTN 2015 Florence Naples Genoa 52.3% Mortgages 2016 Main cities and Provinces As for the trend in the main cities of Italy, the residences purchased with a mortgage increased at 25.5% while the national average was 27.3%. Within the main cities, a well marked increase was recorded in Turin, Genoa and Bologna where growth exceeded 30%. NNT Mo 2016 Var. % NNT Mo 2015/2016 The municipalities within the rest of the provinces analysed show widespread growth, where the highest growth rate is registered in the provinces of Florence, Turin and Naples. Share NNT Mo Share on total NNT 2016 City Rome 16,446 21.0% 34.9% 56.2% Milan 11,381 27.2% 24.2% 53.9% Naples 2,776 26.8% 5.9% 42.3% Turin 5,732 35.8% 12.2% 48.6% Palermo 2,159 14.3% 4.6% 46.0% Genoa 3,422 31.6% 7.3% 52.3% Bologna 2,752 31.6% 5.8% 51.5% Florence 2,391 21.9% 5.1% 52.3% Total 47,059 25.5% 100.0% 52.3% Bologna Genoa Palermo Turin Naples Milan 51.5% 52.3% 46.0% 48.6% 42.3% 53.9% Rest of province Rome 6,948 27.5% 14.6% 51.2% Milan 18,487 26.9% 38.8% 61.7% Naples 4,544 31.5% 9.5% 46.0% Turin 8,140 31.1% 17.1% 54.6% Palermo 1,183 20.7% 2.5% 32.4% Genoa 1,273 29.0% 2.7% 41.7% Bologna 3,775 27.8% 7.9% 57.2% Florence 3,326 34.8% 7.0% 59.2% Total 47,675 28.6% 100.0% 54.6% Rome 56.2% Source: PwC analysis on data provided by Italian IRS 0% 30% 60% 20 Italian Real Estate Market Overview

In terms of capital distributed, Rome and Milan represent an important share of the total amount financed for the main cities, with about 2.8 billion in Rome, nearly 2 billion in Milan. NNT Mo variation 2015 vs 2016 40 35 30 25 20 15 10 5 0 35.8% 31.6% 31.6% 27.2% 26.8% 21.0% 21.9% 14.3% Rome Milan Naples Turin Palermo Genoa Bologna Florence NNT Mo 2016 Rest of province 3% 2% 8% 7% 15% 17% 39% Rome Milan Naples 9% Turin Bologna Palermo Florence Genoa Source: PwC analysis on data provided by Italian IRS 21

Italian affordability index - 2016 Lazio 6% Liguria 6% Tuscany 8.5% Campania 9.5% Sardinia 10.2% Aosta Valley 11.0% Lombardy 11.25% Italy 12.5% Marche 14.7% Veneto 14.8% E. Romagna 14.8% Apulia 15.1% Italian Affordability Index The affordability index is calculated based on the following variables: 1. Interest rate, which reflects the trend of available credit and monetary policy; 2. Housing prices, which express the situation of the housing market; 3. Disposable income, which expresses how developed a country is and its overall level of competitiveness. An Affordability Index >0% means that the average Italian household is able to purchase a home at the average price of the market. An Affordability Index <0% means that the average Italian household is not able to purchase a home at the average price of the market. The further away from zero conveys the level of ease or difficulty for an average Italian family to purchase a home. The recovery of disposable income, which started in 2014, gained momentum last year. At the end of 2016, the disposable income of the average Italian household was just over 42,300, which was a 1.4% increase compared to the previous year, but still not very far from the levels recorded 10 years before. Based on the variations in the first few months of 2017, the affordability index showed a slight decrease: during March, the index reached 12.9%, just 0.3% lower compared to December 2016. Piedmont Umbria Friuli V. G. Sicily 15.4% 15.6% 15.8% 16.0% Affordability index for Italian households 14 12 10 8 6 Abruzzo 17.5% 4 Basilicata 18.0% 2 0 Calabria 18.5% H1 2004 H2 2004 H1 2005 H2 2005 H1 2006 H2 2006 H1 2007 H2 2007 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H3 2015 H4 2015 H1 2016 H2 2016 Molise 19.5% Household income and housing prices (index base H1 2014=100) The affordability index is calculated as follows: 135 130 ff e e 125 120 Payment (interest, years, house price* LTV%)* Income 115 110 105 ff e ff e e e e e e e ce e f yearly income that should be used to service a mortgage. 100 95 90 H1 2004 H2 2004 H1 2005 H2 2005 H1 2006 H2 2006 H1 2007 H2 2007 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H3 2015 H4 2015 H1 2016 H2 2016 House price Disposable Income Campania 22 Italian Real Estate Market Overview Sardinia

Affordability index for Italian geographic region North West 20% The analysis of the affordability Index by geographic region shows that from the North-Western region, only Piedmont has today an affordability Index above the national average. On the other hand all the North-East is above the national average. In the center, only Marche and Umbria are above the national average. In the Southern regions, only Campania is beneath the national average. 15% 10% 5% 0% -5% -10% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Liguria Lombardy Piedmont Aosta Valley Italy North East 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 E. Romagna Friuli V. G. Veneto Italy Center 20% 15% 10% 5% 0% -5% -10% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Tuscany Marche Umbria Lazio Italy South 20% 15% 10% 5% 0% -5% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Abruzzo Molise Campania Basilicata Italy 23

Key data 74% Percentage of households that can buy a house Q2 2016 3 years and 139 days Number of annual salaries necessary to buy a house Trend of salaries The relationship between average housing prices and the income of the average Italian household provides the number of annual salaries needed to buy a house. Until 2010, the relative price of houses (expressed by the number of annual salaries necessary to buy a house) tended to grow, especially because of a reduction in household income. However, the beginning of the crisis restricted this increasing trend, which was then followed by a sharp decrease that continued until the end of 2016: in the fourth quarter of last year, an average Italian family needed 3 years and 139 days of its own income to buy a house, 16 days less than the previous year and 255 days less than the maximum point registered in the third quarter of 2010. In 2012, 47% of total Italian households were capable of acquiring a house, while in the second quarter of 2016, the percentage jumped up to 74%, 5 percentage points more than the data at the end of 2015. In this case, a new maximum historical point (over the period under examination) is established, with an increase of 12 percentage points over the first quarter of 2014. In summary, in 2016, the expansive policy of the ECB and the improvement of the economic conditions, with the consequent increase in Italian household income, have further improved the possibility for the average Italian household to acquire an average house, continuing the trend started in 2013. Percentage of households that can buy a house 80 70 60 50 40 30 20 10 0 2004,1 2004,2 2005,1 2005,2 2006,1 2006,2 2007,1 2007,2 2008,1 2008,2 2009,1 2009,2 2010,1 2010,2 2011,1 2011,2 2012,1 2012,2 2013,1 2013,2 2014,1 2014,2 2015,1 2015,2 2016,1 2016,2 Number of annual salaries necessary to buy a house 4,2 4,0 3,8 3,6 3,4 3,2 Source: PwC analysis on data provided by Italian IRS 24 Italian Real Estate Market Overview 3,0 2004.1 2004.3 2005.1 2005.3 2006.1 2006.3 2007.1 2007.3 2008.1 2008.3 2009.1 2009.3 2010.1 2010.3 2011.1 2011.3 2012.1 2012.3 2013.1 2013.3 2014.1 2014.3 2015.1 2015.3 2016.1 2016.3

Key data 3.5 Number of annual salaries necessary to buy a house Italian average -0.4% Variation in housing prices at national level 11 Regions with a positive average annual growth of salaries Salaries vs Housing prices The regional variations in housing prices are observable, ranging from the highest in Liguria and Lazio (where average prices are about 200,000, 30-40% higher than the average of Italy) to the lowest in Molise and Calabria (where average prices are a little over 70,000, circa 50% below the average). As for the household disposable income by region, the analysis highlights the dual characteristics of Italy, with every Southern region recording an average disposable income significantly lower than the average of Italy, while almost all the Northern regions (including Tuscany and Marche) are above the average. Comparing the data between the disposable income with the housing prices confirms that the former is significantly less relevant: the standard deviation of the variation from the average of Italy is 14% for disposable income and 29% for housing prices. This shows that the affordability index is linked more with prices of the real estate market than household income. Analysing the connection between housing prices and average family income of each region shows that the average Italian requires a little less than 3.5 annual salaries to purchase a home, which varies by region: in Lazio, the average is higher at 5 annual salaries and in Molise it is lower at 2 annual salaries. Source: PwC analysis on data provided by Italian IRS Housing prices 2016 deviation (%) from the average of Italy by region 45 35 25 15 5-5 -15-25 -35-45 -55 Household disposable income 2016 deviation (%) from the average of Italy by region 25 20 15 10 5 0-5 -10-15 -20-25 -30 Liguria Marche Sicily Sardinia Piedmont Friuli VG Lombardy Molise Veneto Household disposable income growth average annual change (%) between 2004-2016 0,5 0,4 0,3 0,2 0,1 0,0-0,1-0,2-0,3-0,4-0,5 Liguria Liguria Marche Marche Sicily Sicily Sardinia Sardinia Piedmont Piedmont Friuli VG Friuli VG Lombardy Lombardy Molise Molise Italy Veneto Veneto Apulia Apulia Apulia Abruzzo Abruzzo Abruzzo Lazio Lazio Lazio E. Romagna E. Romagna E. Romagna Tuscany Tuscany Tuscany Basilicata Basilicata Basilicata Calabria Calabria Calabria Campania Campania Campania Aosta Valley Aosta Valley Aosta Valley Umbria Umbria Umbria 25

26 Italian Real Estate Market Overview

Real estate market trends In 2016, the residential real estate market, after a long and sharp drop that started in 2007, grew by circa 19% compared to 2015, with this being the third continuous year of growth. The number of residential transactions completed by individuals reached approximately 529,000 in 2016. The number of transactions in 2016 continued the positive trend started in 2014 at an even stronger pace, highlighting a clear sign of recovery. In fact, the growth registered in 2014 was mainly influenced by lower registration costs that came into effect on 1 January 2014 for mortgages and cadastral documents, which are applicable to the transfer of real property (Article 10 of D.lgs 14 marzo 2011, n. 23). 2015 saw a growth of +6.5%. However, it is early to say if the considerable growth in 2016 represents the beginning of a new cycle or it is just a temporary situation. Historic number of residential transactions (1985 2016) 900 850 800 750 700 650 600 550 500 450 400 464 464 430 Cycle I 1985-1992 519 494 476 558 467 Cycle II 1992-1996 503 497 504 483 525 Cycle III 1996-2006 First phase: Growth 578 696 642 769 768 2006 Peak: 869,000 transactions 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 687 828 858 Cycle III 2006-2013 Second phase: Crisis 869 809 684 609 612 444 598 403 2013-2016 529 418 445 NNT Residential (000) Source: PwC analysis on data provided by Italian IRS 27

Key data 528,865 Residential NNT 2016 +18.94% Residential NNT 2016 vs 2015 9,946 Office NNT 2016 +12.49% Office NNT2016 vs 2015 30,586 Retail NNT 2016 +16.59% Retail NNT 2016 vs 2015 11,287 Industrial NNT 2016 +22.11% Industrial NNT 2016 vs 2015 Historical trend of the Italian real estate market (2004 2016) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Residential Stock Val. Ass. 29,230,658 29,730,243 30,588,991 31,229,051 31,804,801 32,271,134 32,689,812 33,204,511 33,579,054 33,740,601 33,818,772 33,808,141 33,882,180 Var. % 1.71% 2.89% 2.09% 1.84% 1.47% 1.30% 1.57% 1.13% 0.48% 0.23% -0.03% 0.22% NNT Val. Ass. 828,037 858,476 869,308 808,827 684,034 609,456 611,878 598,224 444,018 403,124 417,524 444,636 528,865 Var. % 3.68% 1.26% -6.96% -15.43% -10.90% 0.40% -2.23% -25.78% -9.21% 3.57% 6.49% 18.94% MII Val. Ass. 2.83% 2.89% 2.84% 2.59% 2.15% 1.89% 1.87% 1.80% 1.32% 1.19% 1.23% 1.32% 1.56% Var. % 1.93% -1.58% -8.86% -16.96% -12.19% -0.89% -3.75% -26.61% -9.64% 3.33% 6.53% 18.68% Office Stock Val. Ass. 452,211 485,265 511,446 572,157 572,842 589,408 605,560 617,981 624,774 627,980 639,548 664,271 664,429 Var. % 7.31% 5.40% 11.87% 0.12% 2.89% 2.74% 2.05% 1.10% 0.51% 1.84% 3.87% 0.02% NNt Val. Ass. 21,080 22,647 21,913 21,261 17,864 16,182 15,246 14,468 10,622 9,453 9,011 8,842 9,946 Var. % 7.43% -3.24% -2.97% -15.98% -9.42% -5.78% -5.10% -26.58% -11.01% -4.67% -1.88% 12.49% MII Val. Ass. 4.66% 4.67% 4.28% 3.72% 3.12% 2.75% 2.52% 2.34% 1.70% 1.51% 1.41% 1.33% 1.50% Var. % 0.11% -8.19% -13.27% -16.08% -11.97% -8.29% -7.01% -27.38% -11.47% -6.39% -5.53% 12.46% Retail Stock Val. Ass. 2,183,637 2,287,776 2,345,538 2,575,523 2,558,210 2,578,718 2,604,249 2,632,825 2,630,414 2,637,210 2,892,098 2,829,027 2,833,089 Var. % 4.77% 2.52% 9.81% -0.67% 0.80% 0.99% 1.10% -0.09% 0.26% 9.67% -2.18% 0.14% NTN Val. Ass. 54,456 55,182 52,816 50,271 44,146 36,892 35,423 34,408 25,931 23,980 25,340 26,234 30,586 Var. % 1.33% -4.29% -4.82% -12.18% -16.43% -3.98% -2.87% -24.64% -7.52% 5.67% 3.53% 16.59% IMI Val. Ass. 2.49% 2.41% 2.25% 1.95% 1.73% 1.43% 1.36% 1.31% 0.99% 0.91% 0.88% 0.93% 1.08% Var. % -3.28% -6.64% -13.32% -11.59% -17.10% -4.92% -3.92% -24.57% -7.76% -3.64% 5.84% 16.42% Industrial Stock Val. Ass. 439,731 494,964 530,019 510,713 519,411 524,099 532,420 567,460 573,888 582,700 618,271 742,712 752,185 Var. % 12.56% 7.08% -3.64% 1.70% 0.90% 1.59% 6.58% 1.13% 1.54% 6.10% 20.13% 1.28% NTN Val. Ass. 16,060 17,397 17,436 16,830 15,276 12,282 11,847 12,477 10,020 9,246 9,562 9,243 11,287 Var. % 8.32% 0.22% -3.47% -9.23% -19.60% -3.54% 5.31% -19.69% -7.73% 3.42% -3.34% 22.11% IMI Val. Ass. 3.65% 3.51% 3.29% 3.30% 2.94% 2.34% 2.23% 2.20% 1.75% 1.59% 1.55% 1.24% 1.50% Var. % -3.76% -6.41% 0.18% -10.75% -20.32% -5.05% -1.19% -20.59% -9.12% -2.53% -19.53% 20.58% Source: PwC analysis on data provided by Italian IRS 28 Italian Real Estate Market Overview

In 2016, the non- residential sector, which includes office, retail and industrial property types, has shown positive signs of transacted volume: +16.9% compared to 2015. This is the first year since 2006, which was the start of the decline in NNTs, that all non-residential property types grew simultaneously. Industrial has recorded the greatest increase in transaction activity in 2016 (+22.1% compared to 2015), followed by retail (+16.6%) and then office (+12.5%). Office, retail and industrial property types account for 11.1% of the total building stock and 8.9% of the total number of transactions. Residential 1,00 32,271.134 418,678 514,699 374,543 161,547 78,171 10,631 74,039 33,882.180 609,456 2,423 (13,654) (154,206) (40,894) 14,400 27,112 84,229 528,865 Stock NNT MII 0,88 0,87 0,84 0,61 0,56 0,57 0,61 0,73 2009 2010 2011 2012 2013 2014 2015 2016 Finish 2009 2010 2011 2012 2013 2014 2015 2016 Finish 2008 2009 2010 2011 2012 2013 2014 2015 2016 Office 589,408 16,152 12,421 6,793 3,206 11,568 24,723 158,0 664,429 16,182 Stock NNT MII 2009 2010 2011 2012 2013 2014 2015 2016 Finish 2009 2010 2011 2012 2013 2014 2015 2016 Finish 2008 2009 (935) (778) (3,846) (1,170) (441) (169) 1,104 9,946 1,00 0,88 0,81 0,75 0,55 0,48 0,45 0,43 0,48 2010 2011 2012 2013 2014 2015 2016 Retail 1,00 2,578.718 25,531 28,576 (2,411) 6,797 254,888 (63,071) 4,062 2,833.089 36,892 (1,468) (1,015) (8,477) (1,951) 1,359 894 4,352 30,586 Stock NNT MII 0,83 0,79 0,76 0,57 0,53 0,51 0,54 0,63 2009 2010 2011 2012 2013 2014 2015 2016 Finish 2009 2010 2011 2012 2013 2014 2015 2016 Finish 2008 2009 2010 2011 2012 2013 2014 2015 2016 Industrial 524,099 8,321 35,040 6,428 8,812 35,571 124,441 9,473 752,185 12,282 435 630 (2,456) (774) 316 (319) 2,004 11,287 Stock NNT MII 1,00 0,80 0,76 0,75 0,59 0,54 0,53 0,42 0,51 2009 2010 2011 2012 2013 2014 2015 2016 Finish 2009 2010 2011 2012 2013 2014 2015 2016 Finish 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: PwC analysis on data provided by Italian IRS 29

As for the real estate stock, the retail property type has the highest number of units among the non residential types (slightly over 2.7 million units). Number of transactions trend (NNT) (2004 2016) 120% 110% Retail accounts for nearly 66% of the total non residential stock, followed by industrial with almost 18%, and then office with just over 16%. Retail still has the highest share of NNT at about 58,6% of total non residential transactions, followed by industrial and then office transactions at 22% and 19%, respectively. The relationship between NNT and stock is reflected by the values of MII, which are higher for office and industrial (both at 1.5%) than retail (1.08%). 100% 90% 80% 70% 60% 50% 40% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 e e Office e Trend of ratio between transaction and stock (MII) (2004 2016) 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 e e Office e Source: PwC based on data from Agenzia delle Entrate 30 Italian Real Estate Market Overview

NNT 2016 600,000 528,865 580,684 2% 5% 2% 500,000 400,000 300,000 200,000 100,000 0 9,946 30,586 11,287 Residential Office Retail Industrial Total Residential Office Retail 91% Industrial Stock 2016 45,000,000 40,000,000 35,000,000 33,882,180 38,131,883 2% 7% 2% 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 500,000 664,429 2,833,089 752,185 89% 0 Residential Office Retail Industrial Total Residential Office Retail Industrial Source: PwC analysis on data provided by Italian IRS 31

Var. % Res. Not Res. Q1 04-05 1,8% 2,4% Q2 04-05 4,9% 4,0% Q3 04-05 5,1% 10,2% Q4 04-05 3,0% 1,6% Q1 05-06 9,8% 12,9% NNT % change of the Italian real estate market (2004-2017) Q2 05-06 1,0% 4,7% Q3 05-06 -5,3% -33,6% Q4 05-06 0,1% -0,5% Q1 06-07 -4,8% -8,2% Q2 06-07 -6,6% -9,8% Q3 06-07 -3,4% 34,2% Q4 06-07 -11,6% -13,8% Q1 07-08 -14,9% -7,3% Q2 07-08 -14,9% -12,1% Q3 07-08 -14,1% -11,1% Q4 07-08 -17,4% -17,7% Q1 08-09 -17,8% -24,0% Q2 08-09 -12,3% -12,6% Q3 08-09 -11,0% -17,8% Q4 08-09 -3,1% -9,3% Q1 09-10 4,3% -0,7% Q2 09-10 4,5% -6,9% Q3 09-10 -2,7% -9,8% Q4 09-10 -4,1% -1,2% Q1 10-11 -3,6% -6,6% Q2 10-11 -6,6% -1,2% Q3 10-11 1,4% 13,3% Q4 10-11 0,6% -8,8% Q1 11-12 -19,5% -16,3% Q2 11-12 -25,2% -29,1% Q3 11-12 -26,8% -28,4% Q4 11-12 -30,5% -22,3% Q1 12-13 -14,1% -8,2% Q2 12-13 -9,2% -5,2% Q3 12-13 -5,1% -9,2% Q4 12-13 -8,0% -10,1% Q1 13-14 4,1% 0,2% Q2 13-14 -1,0% -2,3% Q3 13-14 4,2% 5,0% Q4 13-14 7,1% 8,6% Q1 14-15 -3,0% -5,8% Q2 14-15 8,2% 3,3% Q3 14-15 10,8% 4,7% Q4 14-15 9,4% -1,7% Q1 15-16 20,7% 10,4% Q2 15-16 23,0% 16,5% Q3 15-16 17,5% 25,2% Q4 15-16 15,2% 16,1% Q1 16-17 8,6% 10,8% Q2 16-17 3,8% 6,2% Q1 04-05 Q2 04-05 Q3 04-05 Q4 04-05 Q1 05-06 Q2 05-06 Q3 05-06 Q4 05-06 Q1 06-07 Q2 06-07 Q3 06-07 Q4 06-07 Q1 07-08 Q2 07-08 Q3 07-08 Q4 07-08 Q1 08-09 Q2 08-09 Q3 08-09 Q4 08-09 Q1 09-10 Q2 09-10 Q3 09-10 Q4 09-10 Q1 10-11 Q2 10-11 Q3 10-11 Q4 10-11 Q1 11-12 Q2 11-12 Q3 11-12 Q4 11-12 Q1 12-13 Q2 12-13 Q3 12-13 Q4 12-13 Q1 13-14 Q2 13-14 Q3 13-14 Q4 13-14 Q1 14-15 Q2 14-15 Q3 14-15 Q4 14-15 Q1 15-16 Q2 15-16 Q3 15-16 Q4 15-16 Q1 16-17 Q2 16-17 Delta % NTN - Residential Source: PwC analysis on data provided by Italian IRS Delta % NTN - Non Residential 32 Italian Real Estate Market Overview

NNT - 2016 The Italian real estate market continued to record growth over the last quarter of 2016 with total transactions increasing by 16,4% compared to the same period of the year before. The total number of transactions surpassed the 1 million mark, which hasn t occurred since 2011. Transactions recorded in 2016 reached 1,141,012, which is circa 177,00 NNT more than 2015 (+18.4%). 326,141 NNT Q4 2016 +16.4% NNT Q4 2016 vs NNT Q4 2015 +18.9% Residential NNT Q4 2016 vs. NNT Q3 2016 NNT: 2015-2016 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Year 2015 Year 2016 Var. % 2015-2016 Residential 95,455 116,523 105,105 127,553 115,194 143,298 123,476 146,896 444,636 528,865 18.9% Office 1,997 2,101 1,913 2,831 2,025 2,413 2,510 3,000 8,842 9,946 12.5% Retail 5,918 6,725 5,826 7,765 6,776 7,598 7,188 9,024 26,234 30,586 16.6% Industrial 1,979 2,250 2,059 2,954 2,121 2,897 2,565 3,704 9,242 11,287 22.1% Appurtances 74,621 89,238 80,164 100,825 87,554 110,015 94,007 119,427 344,848 411,003 19.2% Other 28,411 33,322 30,179 38,188 30,828 38,687 35,719 44,090 130,100 149,324 14.8% Total 208,381 250,159 225,246 280,116 244,498 304,908 265,465 326,141 963,902 1,141,012 18.4% NNT by property type: 2016 vs 2015 600,000 500,000 400,000 444,636 528,865 300,000 200,000 100,000 0 Residential Year 2015 Year 2016 8,842 9,946 26.234 30.586 9,242 11,287 Office Retail Industrial Source: PwC analysis on data provided by Italian IRS 33

NNT - 2016 In Q4 2016, the residential sector, with nearly 147,000 NNT, grew over 15% over Q4 2015, slowing down the growth rates compared to the previous quarters. Among the non residential sectors, office, which includes credit institutions, recorded a +6.0% increase during Q4 2016 over the same period the year before, closing the year by more than a thousand units than in 2015. In the industrial sector, another strong increase was recorded in Q4 with +25.4%, which is the third quarter of consecutive growth at an elevated level. As for the entire year, industrial transactions increased by 22% which is the largest increase among the asset classes. In the end, the retail sector, after the peak registered in the third quarter of 2016, Q4 2016 reached levels similar to the average of the year (+16.2% vs.+16.8%). +18.4% NNT 2016 vs NNT 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Year 2015 Year 2016 Residential 95,455 116,523 105,105 127,553 115,194 143,298 123,476 146,896 444,636 528,865 Office 1,997 2,101 1,913 2,831 2,025 2,413 2,510 3,000 8,842 9,946 Retail 5,918 6,725 5,826 7,765 6,776 7,598 7,188 9,024 26,234 30,586 Industrial 1,979 2,250 2,059 2,954 2,121 2,897 2,565 3,704 9,243 11,287 Appurtances 74,621 89,238 80,164 100,825 87,554 110,015 94,007 119,427 344,848 411,003 Other 28,411 33,322 30,179 38,188 30,828 38,687 35,719 44,090 130,100 149,324 Total 208,381 250,159 225,246 280,116 244,498 304,908 265,465 326,141 963,902 1,141,012 Var. % Q1 2014-2015 Var. % Q2 2014-2015 Var. % Q3 2014-2015 Var. % Q4 2014-2015 Var. % Q1 2015-2016 Var. % Q2 2015-2016 Var. % Q3 2015-2016 Var. % Q4 2015-2016 Var. %year 2014-2015 Var. %year 2015-2016 Residential -3.0% 8.2% 10.8% 9.4% 20.7% 23.0% 17.5% 15.2% 6.5% 18.9% Office -6.4% -3.7% 0.9% 0.9% 1.4% 14.8% 31.2% 6.0% -1.9% 12.5% Retail -5.2% 10.4% 7.3% -2.8% 14.5% 13.0% 23.4% 16.2% 1.9% 16.6% Industrial -7.1% -8.0% 2.2% -1.3% 7.2% 28.8% 24.6% 25.4% -3.5% 22.1% Appurtances -3.7% 6.1% 9.0% 5.6% 17.3% 23.3% 17.3% 18.4% 4.3% 19.2% Other -3.2% 4.9% 3.2% 0.5% 8.5% 16.1% 18.4% 15.5% 1.4% 14.8% Total -3.4% 6.8% 8.8% 6.2% 17.3% 21.9% 17.9% 16.4% 4.7% 18.4% 30 25 20 15 10 5 0-5 -10-15 -5.1% -9.2% -14.1% 7.1% 4.1% 4.2% -1.0% -3.0% -8.0% 23.0% 20.7% 17.5% 10.8% 15.2% 9.4% 8.2% 30 25 20 15 10 5 0-5 -10-15 -5.2% -8.2% 5.0% 0.2% -2.3% -9.2% -10.1% 8.6% 25.2% 16.4% 16.1% 4.7% 7.0% 3.3% -1.7% -5.8% Q1 12-13 Q2 12-13 Q3 12-13 Q4 12-13 Q1 13-14 Q2 13-14 Q3 13-14 Q4 13-14 Q1 14-15 Q2 14-15 Q3 14-15 Q4 14-15 Q1 15-16 Q2 15-16 Q3 15-16 Q4 15-16 Q1 16-17 Q2 16-17 Q1 12-13 Q2 12-13 Q3 12-13 Q4 12-13 Q1 13-14 Q2 13-14 Q3 13-14 Q4 13-14 Q1 14-15 Q2 14-15 Q3 14-15 Q4 14-15 Q1 15-16 Q2 15-16 Q3 15-16 Q4 15-16 Q1 16-17 Q2 16-17 Delta % NNT - Residential Delta % NNT - Non Residential Source: PwC analysis on data provided by Italian IRS 34 Italian Real Estate Market Overview

Key Data +6.6% NNT North West H1 17 vs 16 +5.9% NNT Islands H1 17 vs 16 +6.2% NNT North East H1 17 vs 16 +5.5% NNT Center H1 17 vs 16 +5.0% NNT South H1 17 vs 16 City Milan 23,9% Rome 31,9% Turin 13,2% Genoa 7,1% Naples 7,5% Palermo 5,5% Bologna 5,6% Florence 5,3% NNT H1 2017 Residential In H1 2017, there were 267,505 residential transactions, 15,042 more than the same period of 2016 (an increase of 6.0%). Although the growth in the number of residential transactions recorded in Q2 2017 was below the levels seen in the previous quarter (+3.8% compared to 8.6%), the absolute number of transactions are reaching levels previously recorded before the drop in 2012. According to NNT historical trend, seasonally adjusted with fourquarter moving average, the housing market has been recovering almost uninterrupted since 2014. Although the Islands recorded the lowest number of residential transactions in H1 2017 at 23,000, this territory has shown a strong increase at 5.9% over the same quarter in 2016. Source: PwC analysis on data provided by Italian IRS In the Northern territories, the increases were 6.4%, with circa 92,000 homes sold in the North-West and approximately 50,000 in the North- East. In the Center, the growth was close to 5.5% with more than 55,000 purchased homes, and finally in the South, transactions rose by 5.0%, exceeding 45,000 units. Distinguishing the residential market between province capitals and the rest of their provinces, during H1 2017, there was a different increase in transactions between the two areas with +5.3% in the province capitals and +6.3% in rest of their provinces. 35

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 H1 2016 H1 2017 Var. % Q1 16-17 Var. % Q2 16-17 Var. % H1 16-17 North West Province capitals 12,738 15,680 13,150 15,286 13,918 16,328 28,418 30,246 9.3% 4.1% 6.4% Rest of province 25,480 32,844 27,934 34,724 27,934 34,276 58,324 62,210 9.6% 4.4% 6.7% Total 38,218 48,524 41,084 50,010 41,852 50,604 86,742 92,456 9.5% 4.3% 6.6% North East Province capitals 6,879 9,087 7,420 8,706 7,414 8,899 15,966 16,313 7.8% -2.1% 2.2% Rest of province 13,804 17,867 16,320 19,082 15,245 19,018 31,671 34,263 10.4% 6.4% 8.2% Total 20,683 26,954 23,740 27,788 22,659 27,917 47,637 50,576 9.6% 3.6% 6.2% Center Province capitals 11,184 14,101 11,873 14,167 12,325 14,651 25,285 26,976 10.2% 3.9% 6.7% Rest of province 12,373 15,216 13,319 15,547 13,100 15,723 27,589 28,823 5.9% 3.3% 4.5% Total 23,557 29,317 25,192 29,714 25,425 30,373 52,874 55,798 7.9% 3.6% 5.5% South Province capitals 5,367 6,253 5,090 6,042 5,504 6,503 11,620 12,007 2.6% 4.0% 3.3% Rest of province 14,631 17,205 14,984 17,585 15,507 18,131 31,836 33,638 6.0% 5.4% 5.7% Total 19,999 23,458 20,074 23,627 21,011 24,634 43,457 45,645 5.1% 5.0% 5.0% Islands Province capitals 3,512 4,247 3,522 4,174 3,956 4,314 7,759 8,270 12.6% 1.6% 6.6% Rest of province 6,346 7,647 6,924 7,980 7,073 7,687 13,993 14,760 11.5% 0.5% 5.5% Total 9,858 11,894 10,446 12,154 11,029 12,001 21,752 23,030 11.9% 0.9% 5.9% Italy Province capitals 39,681 49,368 41,055 48,375 43,116 50,695 89,049 93,811 8.7% 2.7% 5.3% Rest of province 72,635 90,779 79,481 94,918 78,860 94,834 163,414 173,694 8.6% 4.5% 6.3% Total 112,316 140,147 120,536 143,293 121,976 145,529 252,463 267,505 8.6% 3.8% 6.0% Source: PwC analysis on data provided by Italian IRS 36 Italian Real Estate Market Overview

In H1 2017, the eight main Italian cities (by population), registered a growth in residential transactions of 6.9%, compared to the same period in 2016 with 49,638 traded units. Among the main cities, Palermo stands out the most with a 12.7% increase. Positive results were also recorded in Naples (8.9%), Milan (8.1%), Florence, where the market continues to grow at high rates (7.6%), and Genoa with just over 3,524 NNT and a growth of 7.1%. The main cities that are below the average are Rome, Turin, and Bologna. In addition, municipalities in the surrounding provinces of the main cities show, on an annual basis, widely positive results. For the full year 2016, compared to 2015, increases were between 6.5% in Palermo and 24.2% in Turin. Residential NNT H1 2017 Main cities Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 H1 2016 H1 2017 Var. % Q1 16-17 Var. % Q2 16-17 Var. % H1 16-17 Milan 4,804 6,150 5,090 5,915 5,447 6,395 10,954 11,842 13.8% 4.1% 8.1% Rome 6,564 8,250 6,904 8,500 7,213 8,602 14,814 15,815 10.2% 4.5% 6.8% Turin 2,847 3,406 2,732 3,350 2,978 3,595 6,253 6,573 4.6% 5.7% 5.1% Genoa 1,468 1,823 1,579 1,752 1,683 1,841 3,291 3,524 15.0% 1.3% 7.1% Naples 1,584 1,851 1,403 1,839 1,659 2,082 3,435 3,741 4.8% 13.6% 8.9% Palermo 1,084 1,332 1,049 1,306 1,306 1,418 2,416 2,724 22.4% 8.3% 12.7% Bologna 1,218 1,591 1,262 1,456 1,265 1,521 2,809 2,786 4.4% -4.3% -0.8% Florence 1,063 1,384 1,105 1,235 1,237 1,396 2,447 2,633 16.5% 0.9% 7.6% Residential NNT 2016 Provinces (excluding capitals) Q1 2016 Q2 2016 Q3 2016 Q4 2016 year 2016 Var. % Q1 15-16 Var. % Q2 15-16 Var. % Q3 15-16 Var. % Q4 15-16 Var. % 2015-2016 Milan 6,528 8,665 6,943 8,928 31,067 24.0% 22.7% 19.0% 21.5% 21.8% Rome 3,191 3,782 3,210 3,919 14,111 23.0% 22.4% 19.3% 16.9% 20.3% Turin 3,117 4,155 3,531 4,531 15,338 20.8% 26.2% 23.5% 25.1% 24.2% Genoa 652 845 745 865 3,109 25.6% 29.8% 19.0% 9.0% 20.0% Naples 2,334 2,795 2,328 2,819 10,283 17.3% 24.9% 24.7% 13.2% 19.8% Palermo 842 919 941 1,024 3,730 2.7% 5.3% 13.3% 4.7% 6.5% Bologna 1,414 1,881 1,549 1,956 6,800 15.1% 29.3% 15.2% 15.9% 19.0% Florence 1,240 1,574 1,389 1,587 5,792 23.0% 27.4% 31.4% 16.1% 24.1% Source: PwC analysis on data provided by Italian IRS 37

In H1 2017, circa 4.5 million residential sqm were sold in the 8 main cities of Italy (about 16% of the national total), an increase of 6.7% compared to H1 2016 and similar to the observed growth for the entire country. The average size of residences sold is lower in Rome and Milan, below 90 sqm, while largest average surface area recorded is in Rome with over 100 sqm. The distribution of the transactions in the main cities by residence type shows that in H1 2017, transactions regarding residences between 50 and 115 sqm accounted for 66.4% of the total. In Milan, houses up to 50 sqm purchased in H1 2017 were almost 19% of the total in Milan; Palermo, Florence and Naples showed the largest share of houses over 145 sqm among the other main cities. Residential NNT (#) by dimensional classes H1 2017 Up to 50 sqm Between 50 and 85 sqm Between 85 and 115 sqm Between 115 and 145 sqm 145 sqm and above Total Rome 1,492 6,551 4,359 1,999 1,414 15,815 Milan 2,227 5,162 2,534 1,067 852 11,842 Turin 849 3,077 1,556 607 482 6,571 Naples 517 1,102 1,063 634 424 3,740 Genoa 206 1,403 1,183 428 304 3,524 Palermo 297 649 736 595 447 2,724 Bologna 347 1,151 761 301 229 2,789 Florence 289 927 765 351 302 2,634 Total 6,224 20,021 12,958 5,981 4,453 49,638 Residential NNT (%) by dimensional classes H1 2017 Up to 50 sqm Between 50 and 85 sqm Between 85 and 115 sqm Between 115 and 145 sqm 145 sqm and above Total Rome 9.4% 41.4% 27.6% 12.6% 8.9% 100.0% Milan 18.8% 43.6% 21.4% 9.0% 7.2% 100.0% Turin 12.9% 46.8% 23.7% 9.2% 7.3% 100.0% Naples 13.8% 29.5% 28.4% 17.0% 11.3% 100.0% Genoa 5.8% 39.8% 33.6% 12.1% 8.6% 100.0% Palermo 10.9% 23.8% 27.0% 21.8% 16.4% 100.0% Bologna 12.4% 41.3% 27.3% 10.8% 8.2% 100.0% Florence 11.0% 35.2% 29.0% 13.3% 11.5% 100.0% Total 12.5% 40.3% 26.1% 12.0% 9.0% 100.0% Source: PwC analysis on data provided by Italian IRS 38 Italian Real Estate Market Overview

The analysis of the variation of prices and of the transactions in the residential Real estate market per semester since 2004 shows that since 2006 the transaction volume for the residential market has suffered a reduction, whereas the house prices kept growing, even if slowing down until 2008. During 2009, although the transaction volume alternated bad semesters to slightly acceptable ones, prices kept staying stationary. During the 1st half of 2012, due to a strong contraction of the purchases, the volume resulted reduced of one fourth compared to that of 2011 and as a consequence prices suffered a deep decrease. Trend variation for prices and number of transactions within the residential market 0.0 7.3 3.7 Var. % NNT 1.3 8.3-7.0 6.1 Var. % Prices -15.4 3.0-10.9-0.5 0.4 0.1 0.8-2.2-2.8-5.7-4.4-9.2 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Residential purchase prices trend (% variation quarterly house price trend) -25.8 3.5 6.5-2.6 18.9-0.7 A negative period followed until 2015, when the trend switched to positive for what concerns the transactions, whereas kept being negative for the prices. In 2016 the positive trend of transactions went on and the prices registered a reduction in the negative trend. I-2011 II-2011 III-2011 IV-2011 I-2012 II-2012 III-2012 IV-2012 I-2013 II-2013 III-2013 IV-2013 I-2014 II-2014 III-2014 IV-2014 I-2015 II-2015 III-2015 IV-2015 I-2016 II-2016 III-2016 IV-2016 Total house New house Existing house Source: PwC analysis on data provided by Italian IRS and Italian National Statistical Institute (INSI) 39

Residential Estimated total purchases* and average purchase value per unit by region 2015 vs 2016 2016 Region Estimated Total Purchases 2016 million Average Purchase per unit 2016 Share Purchase by Region (%) Var. % Purchases 2015/16 Delta ( ) Average Purchases 2015/16 Abruzzo 1,188 113,800 1.30% 13.30% -2,100 Basilicata 391 100,700 0.40% 16.00% 2,500 Calabria 950 84,500 1.10% 11.60% 500 Campania 5,045 157,900 5.70% 14.00% -2,000 Emilia-Romagna 7,565 166,000 8.50% 19.10% -5,100 Friuli- Venezia Giulia 1,871 146,600 2.10% 16.60% -2,800 Lazio 12,461 225,800 14.00% 7.70% -11,500 Liguria 4,269 217,400 4.80% 23.40% -700 Lombardy 20,399 183,700 22.90% 21.80% 600 Marche 1,717 148,700 1.90% 11.10% -10,800 Molise 224 101,800 0.30% 12.20% 3,900 Piedmont 6,633 139,600 7.50% 20.50% -2,700 Apulia 3,699 116,900 4.20% 18.50% 1,800 Sardinia 1,945 161,600 2.20% 21.60% 4,500 Sicily 3,566 105,400 4.00% 11.60% -800 Tuscany 7,811 217,200 8.80% 17.80% -4,100 Umbria 930 132,100 1.00% 14.20% -2,100 Aosta Valley 307 185,600 0.30% 26.40% 2,500 Veneto 8,023 165,200 9.00% 22.00% -1,500 Italy 88,993 166,700 100.00% 17.40% -2,200 2015 Region Estimated Total Purchases 2015 million Average Purchase per unit 2015 Share Purchase by Region (%) Var. % Purchases 2015/16 Delta ( ) Average Purchases 2014/15 Abruzzo 1,048 115,900 1.40% 7.20% 0 Basilicata 337 98,300 0.40% 14.00% 3,200 Calabria 851 84,000 1.10% 0.10% 100 Campania 4,432 160,200 5.80% 4.80% -1,300 Emilia-Romagna 6,372 171,700 8.40% 5.40% -2,300 Friuli- Venezia Giulia 1,604 149,400 2.10% 10.80% 100 Lazio 11,555 237,000 15.20% -2.10% -10,300 Liguria 3,459 218,100 4.60% 3.30% 800 Lombardy 16,863 184,300 22.20% 10.30% 2,100 Marche 1,548 159,800 2.00% 6.10% -800 Molise 199 97,900 0.30% -2.70% 2,800 Piedmont 5,506 142,200 7.20% 1.60% -4,600 Apulia 3,116 114,900 4.10% 3.30% 0 Sardinia 1,601 157,200 2.10% 6.20% -2,600 Sicily 3,195 106,200 4.20% 4.10% -800 Tuscany 6,631 221,300 8.70% 8.30% -5,100 Umbria 821 135,400 1.10% 3.30% -800 Aosta Valley 243 183,200 0.30% 4.30% 9,200 Veneto 6,591 167,000 8.70% 10.90% -1,900 Italy 75,972 169,200 100.00% 5.40% -1,800 Source: PwC analysis on data provided by Italian IRS 40 Italian Real Estate Market Overview

Key 2016 average residential purchase value per unit by region and variation compared to 2015 185,600 +1.31% 139,600-1.83% n.a 183,700-0.33% 165,200-1.08% 166,000-3.32% 146,600-1.87% 1. Average purchase value per unit in 2016 2. Delta 2015-2016 regarding the average purchase value per unit 217,400-0.32% 217,200-1.85% 148,700-6.95% 132,100-2.44% 101,800 +3.98% 225,800-4.73% 113,800-1.81% 116,900 +1.74% 161,600 +2.80% 157,900-1.44% 100,700 +2.44% 84,500 +0.60% 105,400-0.75% *Estimated by the Italian IRS (Agenzia delle Entrate): based on the estimated surface area and the average municipal price from the OMI database, total residential purchases in terms of monetary volume were estimated. The total and average surface area for residential units transacted were estimated based on the number of rooms on the cadastral survey (vani catastali) and the average room (vano) size in the respective municipality. 41

As reported in the survey Sondaggio congiunturale sul mercato delle abitazioni in Italia based on 1,300 real estate agencies and updated at Q2 2017, the average discount on sales prices applied to the initial vendor has risen to 12.5%, from 12.4% of Q1 2017. The average time needed for negotiation, occurring from the put on sale date and the purchase date, has increased to 7.7 months. The share of purchases financed via mortgages is 78.9% (down from 80.6% of the previous survey), with a similar trend seen in the principal territories of Italy, except in the South and Islands, where the figure has stabilised at 75.1% (76.9% in urban areas). 12.5% Average discount on sales price 7.7 Average amount of months for negotiation until the sale date Negotiation, sale time and finance for residential units Q2 2017 Relationship between purchase price and bid price Sale time and mortgages over 30% 20 to 30% Lower 10 to 20% 5 to 10% less then 5% Equal or higher Average discount Months occurring from the put up for sale to the purchase date Purchases (%) fi ce mortgage Amount of loans vs market value of properties Geographic distribution North West 3.2% 12.8% 36.0% 33.7% 8.2% 6.1% 12.4% 7.5 77.4% 74.3% Urban areas 1.6% 11.4% 37.1% 40.1% 4.9% 4.9% 12.1% 6.2 78.9% 72.8% not urban areas 4.7% 14.2% 34.9% 27.2% 11.6% 7.4% 12.8% 8.8 75.4% 75.7% North East 1.4% 4.0% 42.6% 35.9% 10.5% 5.6% 10.8% 7.7 81.3% 76.5% Urban areas 0.0% 0.5% 42.2% 37.3% 9.9% 10.2% 9.5% 6.4 79.8% 75.1% not urban areas 1.8% 5.1% 42.8% 35.5% 10.7% 4.1% 11.2% 8.1 81.8% 76.9% Center 6.3% 9.4% 48.2% 28.3% 1.7% 6.1% 13.9% 8.0 81.0% 73.1% Urban areas 3.2% 9.6% 50.4% 28.9% 2.1% 5.8% 13.3% 6.8 79.5% 70.0% not urban areas 9.1% 9.2% 46.3% 27.7% 1.4% 6.3% 14.5% 9.0 82.0% 75.8% South and Islands 2.5% 11.3% 43.6% 32.0% 6.0% 4.6% 12.8% 7.9 75.1% 74.4% Urban areas 1.1% 4.5% 33.8% 45.8% 6.7% 8.2% 10.2% 6.0 76.9% 73.3% not urban areas 3.1% 14.0% 47.6% 26.4% 5.7% 3.2% 13.9% 8.6 74.1% 74.9% Population resident urban areas (>250k inhabitants) noturban areas urban areas (>500k inhabitants) not metropolitan areas 1.8% 8.5% 41.5% 36.9% 4.9% 6.3% 11.9% 6.4 78.9% 72.4% 4.5% 10.3% 42.2% 29.7% 7.9% 5.4% 12.9% 8.6 78.8% 75.9% 2.4% 10.0% 41.1% 35.9% 4.4% 6.2% 12.3% 6.4 79.4% 71.9% 3.9% 9.4% 42.3% 31.1% 7.8% 5.5% 12.6% 8.3 78.6% 75.6% Total 3.4% 9.6% 41.9% 32.6% 6.7% 5.7% 12.5% 7.7 78.9% 74.5% Q1 2017 3.3% 12.8% 36.7% 30.5% 10.7% 6.0% 12.4% 7.3 80.6% 73.2% Q4 2016 3.2% 8.3% 38.2% 32.4% 12.0% 6.0% 11.6% 7.7 79.5% 75.5% Q3 2016 4.3% 15.0% 36.1% 27.2% 10.6% 6.8% 13.0% 8.9 80.2% 74.7% Q2 2016 4.3% 20.0% 42.1% 19.0% 10.4% 4.2% 14.5% 9.4 77.1% 73.1% Q1 2016 4.5% 16.2% 40.7% 24.6% 10.4% 3.6% 13.8% 8.6 73.8% 69.3% Source: PwC analysis on Bank of Italy data Sondaggio congiunturale sul mercato delle abitazioni in Italia 42 Italian Real Estate Market Overview

The graph reports the series of yearly percentage variations by quarter since 2004, within not residential segments. The recovery of the market is clearly shown starting from 2009, along with a continuing positive trend for all the not residential segments, even though it was suddenly interrupted in 2011; as a matter of fact, from the beginning of 2013, there is a noticeable slow down of the negative trend, only partially confirmed in 2015. In 2015 indeed, the non residential segment suffered a fall of the industrial asset class, throughout almost all the quarters of the year, except for the third one. For what concerns the office market, a slight positive trend was registered, resulting in a sharp growth in Q4; on the opposite, the retail markets have quickened particularly during the central quarters, then slackened later. During 2016, the not residential segment consistenly grew across all asset classes over year before, further confirming the market recovery. Q1 04-05 Q2 04-05 Q3 04-05 Q4 04-05 Q1 05-06 Q2 05-06 Q3 05-06 Q4 05-06 Q1 06-07 Q2 06-07 Q3 06-07 Q4 06-07 Q1 07-08 Q2 07-08 Q3 07-08 Q4 07-08 Q1 08-09 Q2 08-09 Q3 08-09 Q4 08-09 Q1 09-10 Q2 09-10 Q3 09-10 Q4 09-10 Q1 10-11 Q2 10-11 Q3 10-11 Q4 10-11 Q1 11-12 Q2 11-12 Q3 11-12 Q4 11-12 Q1 12-13 Q2 12-13 Q3 12-13 Q4 12-13 Q1 12-13 Q2 13-14 Q3 13-14 Q4 13-14 Q1 14-15 Q2 14-15 Q3 14-15 Q4 14-15 Q1 15-16 Q2 15-16 Q3 15-16 Q4 15-16 Q1 16-17 Q2 16-17 Office Retail Industrial 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Office -9,2% -10,6% -11,7% -12,4% -10,3% -6,9% -2,0% 0,3% -6,4% -3,8% 0,9% 0,9% 1,3% 14,7% 31,3% 5,9% 16,7% 2,9% Retail -8,6% -2,6% -8,1% -9,7% 4,7% -5,0% 9,0% 14,1% -5,2% 10,3% 7,4% -2,8% 14,3% 12,9% 23,3% 16,2% -8,3% -5,5% Industrial -5,9% -6,5% -9,4% -8,8% -0,7% 10,4% 1,6% 3,1% -7,1% -8,0% 2,2% -1,3% 7,0% 28,7% 24,5% 25,4% 9,8% 3,4% Source: PwC analysis on data provided by Italian IRS 43

The office sector, during H1 2017 in terms of percentage, recorded the most significant growth in the non residential sector at +9.2%. The office sector registered 4,846 NNT, though less than the other two segments (retail and industrial). The retail sector recorded an 6.1% decrease in the number of transactions over the same period the year before. During H1 2017, the industrial sector (logistics and manufacturing) registered 5,325 NNT showing an increases of 6.1% over the same period of the previous year. There are significant differences in the macro territories for industrial growth, which ranges between -5.4% in the South and 11.1% in the Center. The North of Italy accounts for most of the transactions (almost 66% of total sales). NNT H1 2017 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 H1 2016 H1 2017 Var. % Q1 16-17 Var. % Q2 16-17 Var. % H1 16-17 North 1,186 1,413 1,579 1,918 1,385 1,455 2,599 2,840 16.8% 3.0% 9.3% Center 417 505 488 559 573 527 922 1,100 37.4% 4.4% 19.3% South 422 494 442 523 404 504 916 908-4.3% 2.0% -0.9% 2,025 2,412 2,509 3,000 2,363 2,483 4,437 4,846 16.7% 2.9% 9.2% NNT H1 2017 Retail Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 H1 2016 H12017 Var. % Q1 16-17 Var. % Q2 16-17 Var. % H1 16-17 North 3,309 3,619 3,633 4,442 2,843 3,400 6,928 6,243-14.1% -6.1% -9.9% Center 1,451 1,700 1,620 2,051 1,434 1,629 3,151 3,063-1.2% -4.2% -2.8% South 2,016 2,279 1,935 2,531 1,938 2,147 4,295 4,085-3.9% -5.8% -4.9% 6,776 7,598 7,188 9,024 6,216 7,177 14,374 13,393-8.3% -5.5% -6.8% NNT H1 2017 Industrial Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 H1 2016 H12017 Var. % Q1 16-17 Var. % Q2 16-17 Var. % H1 16-17 North 1,396 1,867 1,710 2,371 1,536 1,997 3,263 3,533 10.0% 7.0% 8.3% Center 364 430 449 628 381 501 794 882 4.7% 16.5% 11.1% South 361 600 406 706 411 498 961 909 13.9% -17.0% -5.4% 2,121 2,897 2,565 3,705 2,329 2,996 5,018 5,325 9.8% 3.4% 6.1% Source: PwC analysis on data provided by Italian IRS 44 Italian Real Estate Market Overview

45

Market of residential rental trends Number of houses rented 2016 (%) Rental and leases trend - 2016 17% 23% 2% 57% ORD_T ORD_L AGE_S Leasing rents ( ) 2016 (%) 17% 24% 3% 56% AGE_C The table summarises the main national data for new residential lease contracts registered during 2016, divided by different types of contracts. On the whole, the houses rented during 2016 accounted for 5.6% of the potential available stock, which corresponds to an overall amount of rentals of 4.6 billion and 76 million sqm. The average surface of the rented houses is approximately 91.5 sqm, and the average yearly rent is equal to 60.7 per sqm, 0.3% higher than 2015. The composition of the residential market shows that 57% of rentals are ordinary long term agreements, in terms of both number of houses rented and total rents ( ). The segment of temporary ordinary agreements and the agreed upon one represent respectively about 17% and 23% of the market. Rents for students during 2016,came to just over 2% of the total. The average yearly rent per sqm decreased across all market segments, except ordinary - long term, with contracts for students recording the highest average rent (70.6 /sqm) and ordinary long term agreed upon agreements are the lowest (58.9 /sqm). ORD_T ORD_L AGE_S AGE_C Total 2016 Amount of units rented 142,094 475,744 20,394 191,245 829,477 IML 2016 - Rental market strength 1.0% 3.2% 0.1% 1.3% 5.6% Total surface rented (sqm) 12,2 44,1 1,9 17,7 75,9 Average unit surface rented (sqm) 86,2 92,6 94,1 92,4 91,5 Total amount of rents 2016 ( mln) 772,0 2,594,6 135,4 1,109,8 4,611,7 ORD_T ORD_L AGE_S AGE_C Average yearly rent 2016 ( /sqm) 63,0 58,9 70,6 62,8 60,7 Average yearly rent Var. % 2015/16-0.5% 0.5% -0.1% -0.1% 0.3% Market segments for rentals: ORD_T: ORDINARY TEMPORARY: not facilitated agreements, from 1 to 3 years; this segment belongs to the set of temporary and not facilitated agreements. ORD_L: ORDINARY LONG TERM: agreements not facilitated, whose duration is more than 3 years; this segment belongs to the rental market of long term leases. AGE_S: FACILITATED STUDENTS: facilitated agreements, whose duration is included between 1 and 3 years; this segments belongs to the market of facilitated leases for students. AGE_C: FACILITATED AGREED UPON: agreed upon contracts, facilitated and whose duration is higher than 3 years; this segments belongs to the set of agreements facilitated and agreed upon. Source: PwC analysis on data provided by Italian IRS 46 Italian Real Estate Market Overview

The temporary rental market in 2016 accounted for 142,000 houses, 1% of the potential stock for lease, for a total surface rented of 12.2 million sqm. The overall yearly rents accounted for almost 772 million and the yearly average rent per sqm is 63.3, 0.50% lower than 2015. Considering only the dwellings in the main cities, the annual average rent is 101 /sqm. The highest rents per sqm for temporary contracts are recorded in Rome, Milan and Florence, which are all above the overall average. Milan remains the most active market (IML by 2.2%), although it recorded a decrease of 9% in the average yearly rent price. Average rent per sqm also significantly decreased in Naples as well. Houses rented 2016 (#) IML 2016 - Rental market strength Total surface rented (sqm) Average unit surface rented (sqm) Total yearly rented 2016 ( mln) Average yearly rent 2016 ( /sqm) Average yearly rent var, 2015/2016 (%) North West 50,865 1.2% 3,920,365 77,1 278,8 71,1-0.80% North East 18,148 0.7% 1,577,820 86,9 98,4 62,4-1.60% Center 36,136 1.4% 3,217,014 89,0 237,4 73,8-0.80% South 24,496 0.7% 2,358,973 96,3 103,4 43,8-0.10% Islands 12,449 0.7% 1,178,612 94,7 54,0 45,8 0.50% Total 142,094 1.0% 12,252,784 86,3 772,0 63,3-0.50% Rome 8,430 1.6% 680,639 80,7 79,5 116,8 0.5% Milan 7,906 2.2% 561,549 71,0 64,8 115,4-9.2% Naples 1,501 0.7% 130,601 87,0 7,8 60,1-4.1% Turin 3,686 1.7% 256,395 69,6 21,1 82,3 1.5% Palermo 1,696 1.2% 160,937 94,9 8,5 52,6 2.4% Genoa 1,556 1.3% 121,874 78,3 10,1 82,6-0.8% Bologna 938 0.9% 78,988 84,2 6,9 87,9 2.6% Florence 2,274 2.8% 201,099 88,4 22,7 112,8 2.5% Total 27,987 1.6% 2,192,082 78,3 221,4 101,0-2.1% Number of houses rented Average yearly rent 17% 9% 36% 6% 3% 6% 8% 30% Florence Bologna Genoa 82.6 87.9 112.8 13% Palermo Turin 52.6 82.3 25% 13% 5% 28% Naples 60.1 North West South North East Islands Center Rome Turin Bologna Milan Palermo Florence Naples Genoa Milan Rome 115.4 116.8 0 50 100 150 Source: PwC analysis on data provided by Italian IRS 47

Ordinary long term market 2016 In 2016, the long-term ordinary market accounted for 475,000 units rented, with an IML equal to 3.2% and a total surface of 44 million sqm. The total annual rent amounted to almost 2.6 billion and the average annual rent per sqm is 58.9, up 0.5% compared to 2015. Considering only the dwellings in the main cities, the annual average rent per sqm is 106.3, up 2.2% compared to 2015. In addition, the long term ordinary market is particularly dynamic in Milan, with an IML of 8.6% and an average annual rent per sqm close to 139 /sqm, up 5.4% from the previous year and the highest among the main cities. For all the main cities collectively, the rent grew an average of 2.2% compared to 2015, but some cities showed a decrease. Houses rented 2016 (#) IML 2016 - Rental market strength Total surface rented (sqm) Average unit surface rented (sqm) Total yearly rented 2016 ( mln) Average yearly rent 2016 ( /sqm) Average yearly rent var. 2015/2016 (%) North West 187,066 4.5% 15,780,734 84,4 1.067,0 67,6 2.50% North East 83,190 3.2% 7,851,482 94,4 435,5 55,5-0.30% Center 87,069 3.3% 8,013,297 92,0 569,1 71,0-1.80% South 86,364 2.5% 9,017,681 104,4 381,9 42,4-0.30% Islands 32,055 1.8% 3,383,310 105,5 141,0 41,7 0.30% Total 475,744 3.2% 44,046,504 92,6 2.594,6 58,9 0.50% Rome 22,069 4.2% 1,832,363 83,0 211,9 115,6-2.1% Milan 31,636 8.6% 2,239,177 70,8 310,7 138,8 5.4% Naples 10,058 4.9% 844,613 84,0 59,8 70,8-0.1% Turin 10,118 4.8% 726,832 71,8 56,2 77,4-1.4% Palermo 5,947 4.1% 576,469 96,9 30,7 53,2 0.1% Genoa 2,405 2.1% 194,506 80,9 12,7 65,2-0.5% Bologna 5,700 5.7% 422,915 74,2 43,8 103,5 3.0% Florence 3,868 4.7% 323,950 83,8 35,1 108,3 3.5% Total 91,801 5.2% 7,160,825 78,0 760,9 106,3 2.2% Number of houses rented Average yearly rent 18% 7% 6% 6% 3% 4% 24% Florence Bologna 108.3 103.5 39% 11% Genoa Palermo 65.2 53.2 18% 18% 11% 34% Turin Naples 77.4 70.8 North West South North East Islands Center North West South North East Islands Center Milan Rome 138.8 115.6 Source: PwC analysis on data provided by Italian IRS 0 50 100 150 48 Italian Real Estate Market Overview

The portion of agencies stating to have leased at least one property remained basically unchanged from the previous period (83.0% from 81.2%). In Q3 2017, the share of operators expecting rents to remain unchanged has fallen to 81.7% (from 84.1%), as a result of a slight increase in the percentage of those expecting an increase. Trend of Leases Q2 2017 The average discount margin on rents compared to the initial request of the lessor has decreased to 3.6% (from 5.0% in the previous quarter). The difference between the agents opinions on the outlook of new job mandates (negative and positive) again increased (to -13.8% from -7.7%) as a result of less agents expecting the number of mandates to remain flat (from 65.0% to 57.6%). % of rents via agency Q2 Market Rents Q2 2017 vs Q1 2017 Expected rents Q3 vs Q2 2017 Amount of mandates Q2 vs Q1 2017 negative positive negative positive negative positive Average discount on rents Geographic distribution North West 83.7% 14.7% 79.0% 6.3% 4.5% 82.0% 13.5% 30.7% 56.5% 12.9% 3.6% urban areas 83.3% 10.4% 83.6% 6.1% 4.5% 83.3% 12.2% 27.2% 56.7% 16.1% 3.4% non-urban areas 84.1% 19.4% 74.1% 6.5% 4.6% 80.5% 14.9% 34.0% 56.2% 9.7% 3.8% North East 87.3% 8.5% 82.9% 8.6% 6.0% 81.8% 12.2% 27.7% 59.1% 13.3% 2.6% urban areas 86.4% 8.6% 73.8% 17.6% 5.3% 77.5% 17.2% 33.4% 49.3% 17.3% 2.0% non-urban areas 87.5% 8.4% 85.9% 5.7% 6.2% 83.1% 10.7% 26.0% 61.8% 12.1% 2.7% Center 80.3% 32.0% 61.1% 6.9% 12.8% 81.0% 6.2% 31.0% 59.3% 9.7% 4.1% urban areas 87.1% 37.2% 57.0% 5.8% 19.0% 74.8% 6.2% 24.2% 64.0% 11.8% 4.9% non-urban areas 74.1% 26.4% 65.5% 8.1% 6.2% 87.6% 6.2% 36.7% 55.4% 7.8% 3.1% South and Islands 79.8% 25.2% 68.5% 6.2% 6.2% 82.3% 11.5% 31.2% 55.3% 13.4% 4.5% urban areas 90.7% 24.8% 71.3% 3.9% 6.0% 85.0% 9.0% 28.5% 52.2% 19.3% 6.0% non-urban areas 75.2% 25.5% 67.1% 7.4% 6.3% 81.0% 12.7% 32.2% 56.5% 11.3% 3.7% Residential "urban areas (>250k inhabitants) " "non urban areas 85.7% 19.8% 72.9% 7.3% 9.1% 80.2% 10.7% 27.2% 57.5% 15.3% 4.0% 81.2% 18.5% 74.8% 6.7% 5.7% 82.9% 11.4% 32.1% 57.6% 10.3% 3.3% "metropolitan areas (>500k inhabitants) " 85.8% 22.5% 72.6% 4.9% 10.2% 79.6% 10.2% 26.3% 58.1% 15.6% 4.2% "non metropolitan areas 81.8% 17.3% 74.6% 8.0% 5.6% 82.8% 11.6% 31.8% 57.4% 10.8% 3.3% Total 83.0% 19.1% 74.0% 7.0% 7.2% 81.7% 11.1% 30.2% 57.6% 12.2% 3.6% Q1 2017 81.2% 20.5% 73.8% 5.7% 10.7% 84.1% 5.2% 25.2% 65.0% 9.8% 5.0% Q4 2016 83.2% 15.7% 81.1% 3.2% 8.2% 88.8% 3.0% 16.9% 73.9% 9.2% 5.2% Q3 2016 77.9% 19.7% 74.7% 5.6% 11.3% 86.1% 2.6% 23.8% 65.2% 10.9% 5.8% Q2 2016 77.7% 33.2% 62.9% 3.9% 17.3% 78.4% 4.3% 28.2% 60.5% 11.4% 6.9% Q1 2016 78.1% 31.2% 64.2% 4.6% 13.1% 83.4% 3.5% 23.3% 63.9% 12.8% 6.5% Source: PwC analysis on data provided by Bank of Italy Economic survey on the housing market in Italy 49

50 Italian Real Estate Market Overview

Investments in construction Key data -0.1% Investments in residential constructions 2017 vs 2016-1.5% Investments in residential constructions 2017 vs 2016 0.5% Investments in residential refurbishment 2017 vs 2016 140 Investments in constructions The Istat Index regarding building constructions, adjusted for calendar effects, underlines that there was a decrease of 1.2% during the first 4 months of 2017 compared to the same period the previous year. In 2016, investments in new residential houses were 19.7 billion, which was 1.8% lower than 2015. 10% During the same year, the investments for upgrading the housing stock have been estimated at 46.15 billion. The investments in private non-residential buildings amounted to 33.4 billion (+0.8% compared to 2015), while those in public non-residential buildings amounted to 23.6 billion (-4.5% in real terms). 30% 130 120 110 37% 53% 70% 100 90 80 70 60 50 Residential Non residential Non residential - Public Residential - New Buildings Residential - Refurbishment 40 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 New houses Total houses Extraordinary maintenance Total investments (Mln ) 2016 Milion Euro 2014 2015 2016* 2017* 2018* Var. % in quantities 122,830-6.8% -1.0% -0.6% 0.2% 1.5% Residential 65,864-7.1% -0.3% 0.2% -0.1% 1.0% Residential - New Buildings Residential - Refurbishment 19,716-21.7% -2.1% -1.8% -1.5% 1.0% 46,148 1.5% 0.5% 1.1% 0.5% 1.0% Non residential 56,965-6.5% -1.8% -1.5% 0.6% 2.1% Non residential - Private Non residential - Public 33,352-7.5% -4.3% 0.8% 0.9% 0.7% 23,614-5.1% 1.9% -4.5% 0.2% 4.0% * Elaboration by NAB Source: PwC analysis based on NAB data 51

6.0 5.1 4.0 2.0 0.0-2.0-4.0 0.7 1.0-0.6 2.8-3.1-0.3-1.0-1.4 Year 2016-0.3% -2.1-2.3-0.2 1.3 3.6 Jan- Apr 2017-1.2% -6.0-5.6-4.6 Jan Feb Mar Apr May Jun Jul Ago Sept Oct Nov Dec Jan Feb Mar Apr 2007-2016 Total investments (Mln ) -36,4% Residential -28,6% Residential - New buildings -63,4% Residential - Refurbishment 20,4% Non residential -43,5% Non residential - Private -38,3% Non residential - Public -49,4% Source: PwC analysis based on NAB data 52 Italian Real Estate Market Overview

Key data 122.8 mld Investments in constructions in 2016-0.6% Investments in constructions 2016 vs 2015 124.5 mld Forecast NAB investments in constructions in 2017 +1.3% Forecast NAB investments in constructions 2017 vs 2016 Forecasting construction investments for buildings - 2017 For 2017, investments in the construction sector for buildings (net of the ownership transfer costs) are forecasted at 124.5 billion at the national level, which is a 0.2% increase in real terms (+1.3% in current values) compared to 2016. In 2018, there could be a recovery for the construction sector; according to forecasts prepared by NAB, construction investments could increase by 1.5% in real terms. Because of government incentives that have been extended, additional investments of 1.64 billion are expected of which 450 million in the housing sector (new and renovations), 50 million in the private non residential sector and 1.14 billion in the sector of public works. In this context, forecasts include an increase of 4.0% with respect to 2017 for public works investments, an increase of 1.0% for extraordinary maintenance works on residential stock, and an increase of 0.7% for private non residential building investments. Investments in new residential houses are expected to grow, thanks to the first positive sign recorded in 2016 in building permits relating to new homes (+4.5% compared to the previous year). For this sector, a 1.0% increase in real terms is forecasted during 2018. To help the construction sector recover, an extension of the measure to deduct 50% of IVA to purchase energy class A or B houses (introduced by Legge di Stabilità 2016 and expiring on 31 December) would be fundamental. Construction investments for buildings: change in quantity with respect to the previous year 1-1 -3-5 -7 0.5-3.1-3.8-3.8-5.2-1.0-0.6 0.2 1.5 Construction investments for buildings (Mln ) -9-11 -9.5-7.6-7.5 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018* 2010 2011 2012 2013 2014 2015 2016* 2017* 2018* Current values Buildings 154,793 155,336 144,919 134,042 126,970 123,584 122,830 124,468 127,718 Houses 78,379 75,166 72,888 70,617 67,955 65,444 65,864 66,524 67,928 - new houses (*) 37,863 32,945 29,710 26,087 22,539 19,992 19,716 19,634 20,048 - exceptional maintenance (*) 40,517 42,222 43,179 44,530 45,416 45,452 46,148 46,889 47,879 Non-residential 76,414 80,170 72,032 63,426 59,016 58,140 56,965 57,944 59,790 - private (*) 42,705 48,470 43,564 37,671 34,748 33,274 33,352 34,022 34,637 - public (*) 33,708 31,699 28,467 25,755 24,268 24,866 23,614 23,922 25,152 Source: PwC analysis on data from NAB (*) Elaboration by NAB 53

For nine years now, founding for new investments in real estate sector is decreasing. In the first quarter of 2017 the flow of new mortgages for residential investments are slightly increasing: +0.3 with respect to the previous year. This positive sign it s not enough for changing the negative trend. The reduction in residential mortgages has been particularly strong: in 2007 31.5 billion euro have been granted while just 8 billion euro have been provided in 2016, that means a decrease of 74%. In the first quarter of 2017 the founding in non-residential sector has registered a slight decrease by -0.2% after a strong drop in 2016 of -14.5%. These negative results were registered after an unexpected increase of more than 60% in 2015. Flows of new founding provided for real estate sector in Italy ( mln) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1 Q 2017 Residential 31,427 29,802 24,407 23,458 19,418 16,090 11,212 9,141 8,172 8,169 1,740 Non-Residential 21,091 18,708 16,543 14,668 11,729 7,130 5,584 5,960 9,972 8,528 2,126 Var. % compared to the same period in the previous year Residential 17.2-5.2-18.1-3.9-17.2-17.1-30.3-18.5-10.6 0.0 0.3 Non-Residential 4.9-11.3-11.6-11.3-20.0-39.2-21.7 6.7 67.3-14.5-0.2 Var. % 2016-2007 -74.0-59.6 Flows of new financing for residential investments in Italy (Var. % Q3 2017 vs Q3 2016) Flows of new financing for non residential investments in Italy (Var. % Q3 2017 vs Q3 2016) Molise 91 Umbria Aosta Valley Tuscany Basilicata Campania Trentino A. A. Sardinia Sicily Lombardy Italy +0.3 37 32.2 25.3 23.1 21.1 18.7 14.9 12.9 10.5 Veneto Friuli V. G. Liguria Piedmont Abruzzo Lazio Apulia Calabria Marche E. Romagna -1.6-1.8-2.7-8.8-8.8-12.6-12.9-14.1-18 -30.2-50 -30-10 10 30 50 70 90 110 Molise -60.2 Umbria -12 Aosta Valley -58.6 Tuscany 6.8 Basilicata Campania Trentino A. A. Italy -0.2 31.8 14.4 40.1 Sardinia Sicily Lombardy Veneto -20.6-18.3-4.9-17.6 Friuli V. G. -72 Liguria 20.1 Piedmont -31.7 Abruzzo 23 Lazio 93.2 Apulia 0.3 Calabria Marche -29.6-30.1 E. Romagna 0.4-110 -60-10 40 90 140 Source: PwC analysis based on NAB data 54 Italian Real Estate Market Overview

There were 53,791 building permits authorized in 2014 for new residential buildings and for extension works, which was 11.8% lower compared to 2013. This represents the ninth consecutive year in a row with a decline. If comparing 2014 with 2005 when 305,706 permits were recorded, there was an 82.4% decrease (-79.8% in volume terms). NAB forecasts 47,500 permissions in 2015, which is 11.7% lower than 2014. Overall, from 2005 to 2015, the decrease of building permits is forecasted at 84.5%. The estimation takes into account the available Istat data regarding the requirements for the construction of new residential buildings, which represents circa 90% of total permissions (new constructions and extension works). Residential buildings (new constructions and extensions) Construction permits Number 400,000 300,000 200,000 100,000 206.612 192.427 177.785 175.708 187.030 203.615 206,993 228.414 250.796 296.498 305.706 289.891 276.702 215.046 160.454 128.707 121.299 90.817 61.000 53.791 47.500 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* Number Year New Buildings Extension Works Total 2005 278,602 27,104 305,706 2006 261,455 28,436 289,891 2007 250,271 26,431 276,702 2008 191,783 23,263 215,046 2009 141,587 18,867 160,454 2010 119,409 9,298 128,707 2011 112,391 8,908 121,299 2012 82,058 8,759 90,817 2013 53,408 7,592 61,000 2014 46,788 7,003 53,791 Var. % compared to previous year Year New Buildings Extension Works Total 2006-6.2 4.9-5.2 2007-4.3-7.1-4.5 2008-23.4-12.0-22.3 2009-26.2-18.9-25.4 2010-15.7-50.7-19.8 2011-5.9-4.2-5.8 2012-27.0-1.7-25.1 2013-34.9-13.3-32.8 2014-12.4-7.8-11.8 Var. % 2005-2014 -83.2-74.2-82.4 Source: PwC analysis based on NAB data 55

Residential buildings (new buildings and extension works) Construction permits Volume and Number (n.i. 1995 = 100) 140 160 120 140 100 120 80 60 40 100 80 60 40 20 20 0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Extensions New Building Total Extensions New Building Total Source: PwC analysis based on NAB data 56 Italian Real Estate Market Overview

In 2015, the number of forecasted residential building permits is one of the lowest levels that has ever been reached. Actually, it is the lowest amount since the Second World War, when, in 1936, 58,668 residential building permits were authorized. In 2014, the decrease in building permits (-11.8%) continues to be more intense for new residential buildings (-12.4%) compared to a decrease of -7.8% for extension works. This drastic decrease recorded between 2005 and 2014 at national level (-82,4%) involves all regions of Italy with a decline of -83.4% in the Center and North-West, -83.3% in the North- East (-85.5% if we consider that the decrease in this area started one year before the national average), and -77% in the South and Islands. Particularly in 2014, the decrease was more intense than the average in North-West (-14,3% with respect to 2013) and in North-East (-12,6%), compared to South (-11%) and Center (-7,9%). Residential buildings (new buildings and extension works) Construction permits Regions 1995 2000 2004 2005 2006 2007 2014 Cumulated var. % 2014 compared to the peak Piedmont 11,958 13,215 16,348 17,466 17,733 17,381 3,280-81.5 Aosta Valley 519 311 635 628 744 507 223-70.0 Lombardy 44,224 41,320 61,909 64,251 62,455 61,888 10,082-84.3 Trentino Alto Adige 5,740 5,236 8,769 9,169 7,322 6,274 3,022-67.0 Veneto 24,017 27,993 40,713 38,562 34,952 31,028 6,004-85.3 Friuli Venezia Giulia 4,841 5,796 8,057 7,865 7,169 6,511 1,079-86.6 Liguria 2,056 1,693 3,364 3,677 3,067 2,344 680-81.5 Emilia-Romagna 19,224 22,592 33,508 34,434 29,045 25,893 3,085-91.0 Tuscany 10,500 10,044 14,423 17,529 14,143 13,294 1,224-93.0 Umbria 3,416 3,132 3,635 5,344 5,671 5,223 580-89.8 Marche 5,477 5,890 8,720 8,807 8,104 8,823 1,210-86.3 Lazio 11,315 15,446 24,022 23,230 25,500 23,243 6,095-76.1 Abruzzo 5,534 4,362 7,302 7,872 7,555 8,785 1,384-84.2 Molise 1,361 858 1,309 1,828 1,164 1,366 361-80.3 Campania 7,475 8,650 12,968 12,262 11,256 13,130 4,301-67.2 Apulia 12,052 11,569 16,428 17,835 15,511 16,280 3,393-81.0 Basilicata 2,193 1,562 1,730 1,578 2,708 1,763 454-83.2 Calabria 8,314 5,872 7,742 8,514 9,033 8,706 1,753-80.6 Sicily 15,656 10,927 13,646 14,050 14,053 14,469 3,903-73.0 Sardinia 10,740 7,147 11,270 10,805 12,706 9,794 1,678-86.8 Italy 206,612 203,615 296,498 305,706 289,891 276,702 53,791-82.4 North-West 58,757 56,539 82,256 86,022 83,999 82,120 14,265-83.4 North-East 53,822 61,617 91,047 90,030 78,488 69,706 13,190-85.5 Center 30,708 34,512 50,800 54,910 53,418 50,583 9,109-83.4 South and Islands 63,325 50,947 72,395 74,744 73,986 74,293 17,227-77.0 Source: PwC analysis based on NAB data 57

Residential construction permits: focus on regions 2014 (number) Var. % compared to the previous year Var. % 2014/2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 Italy 53,791-5.2-4.5-22.3-25.4-19.8-5.8-25.1-32.8-11.8-82.4 North-West 14,265-2.4-2.2-25.1-24.0-20.0-5.4-23.6-38.4-14.3-83.4 North-East 13,190-12.8-11.2-30.8-26.1-21.0-8.5-20.7-26.1-12.6-85.3 Center 9,109-2.7-5.3-18.7-23.1-24.7-4.1-35.5-32.8-7.9-83.4 South and Islands 17,227-1.0 0.4-13.6-27.7-15.3-5.2-23.3-32.3-11.0-77.0 New Buildings Regions 1995 2000 2004 2005 2006 2007 2014 Piedmont 9,544 11,673 14,555 15,600 15,442 15,252 2,875 Aosta Valley 507 280 561 593 708 488 183 Lombardy 39,722 37,276 55,308 57,985 55,234 55,484 9,375 Trentino Alto Adige 4,650 4,446 7,236 7,883 6,230 5,127 2,350 Veneto 20,857 25,676 37,755 35,432 31,680 28,347 4,845 Friuli Venezia Giulia 4,248 5,266 7,378 7,136 6,505 5,990 981 Liguria 1,767 1,503 2,820 3,108 2,553 1,755 586 Emilia-Romagna 17,517 21,049 31,616 32,680 27,423 24,382 2,898 Tuscany 9,196 9,315 13,314 16,293 13,051 12,398 1,152 Umbria 2,960 2,782 3,198 4,865 5,223 4,851 499 Marche 5,022 5,528 8,200 8,239 7,420 8,239 1,030 Lazio 10,318 14,724 22,803 22,284 24,317 22,153 5,526 Abruzzo 4,744 3,732 6,290 6,861 6,614 7,684 1,191 Molise 1,150 778 1,234 1,640 1,034 1,214 309 Campania 6,458 7,771 11,324 10,779 9,747 11,487 3,104 Apulia 10,112 10,180 14,564 16,003 13,882 14,671 3,036 Basilicata 1,829 1,389 1,534 1,399 2,521 1,597 408 Calabria 7,033 5,235 6,874 7,631 7,967 7,729 1,566 Sicily 14,045 9,861 12,156 12,829 12,769 12,842 3,527 Sardinia 8,604 5,960 9,665 9,362 11,135 8,581 1,347 Italy 180,283 184,424 268,385 278,602 261,455 250,271 46,788 North-West 51,540 50,732 73,244 77,286 73,937 72,979 13,019 North-East 47,272 56,437 83,985 83,131 71,838 63,846 11,074 Center 27,496 32,349 47,515 51,681 50,011 47,641 8,207 South and Islands 53,975 44,906 63,641 66,504 65,669 65,805 14,488 Source: PwC analysis based on NAB data 58 Italian Real Estate Market Overview

Extension Regions 1995 2000 2004 2005 2006 2007 2014 Piedmont 2,414 1,542 1,793 1,866 2,291 2,129 405 Aosta Valley 12 31 74 35 36 19 40 Lombardy 4,502 4,044 6,601 6,266 7,221 6,404 707 Trentino Alto Adige 1,090 790 1,533 1,286 1,092 1,147 672 Veneto 3,160 2,317 2,958 3,130 3,272 2,681 1,159 Friuli Venezia Giulia 593 530 679 729 664 521 98 Liguria 289 190 544 569 514 589 94 Emilia-Romagna 1,707 1,543 1,892 1,754 1,622 1,511 187 Tuscany 1,304 729 1,109 1,236 1,092 896 72 Umbria 456 350 437 479 448 372 81 Marche 455 362 520 568 684 584 180 Lazio 997 722 1,219 946 1,183 1,090 569 Abruzzo 790 630 1,012 1,011 941 1,101 193 Molise 211 80 75 188 130 152 52 Campania 1,017 879 1,644 1,483 1,509 1,643 1,197 Apulia 1,940 1,389 1,864 1,832 1,629 1,609 357 Basilicata 364 173 196 179 187 166 46 Calabria 1,281 637 868 883 1,066 977 187 Sicily 1,611 1,066 1,490 1,221 1,284 1,627 376 Sardinia 2,136 1,187 1,605 1,443 1,571 1,213 331 Italy 26,329 19,191 28,113 27,104 28,436 26,431 7,003 North-West 7,217 5,807 9,012 8,736 10,062 9,141 1,246 North-East 6,550 5,180 7,062 6,899 6,650 5,860 2,116 Center 3,212 2,163 3,285 3,229 3,407 2,942 902 South and Islands 9,350 6,041 8,754 8,240 8,317 8,488 2,739 Source: PwC analysis based on NAB data 59

60 Italian Real Estate Market Overview

Real estate leasing Key data 3.8 billion Real Estate leasing 2016 22.5% % leasing Existing estates > 2.5 mln 10.7%% leasing Existing estates > 0.5 and <= 2.5 mln 6.7% Growth of leasing volumes in 2014 Real Estate leasing performances A tax regulation issued in 2014 redrew the best practices of Real Estate leasing; as a result of this new regulatory framework, the total leasing volumes of the year grew by 40%. In 2016, the total amount of leasing stabilised at a level of 3.8 billion. In 2016 the trend has been confirmed in line with 2015, with an increase of 6.7% in the number of contracts, that means 4.257 units. The monthly dynamic of these values is similar to the one registered in 2015, underlying higher values in June, July and December. The value of existing estates is higher than the value of in progress estates, except in February. The difference between the two sectors is lower compared to the one in 2015, both in absolute terms and in percentage. Leasing financing stocks e trends in non residential sectors The analysis of different leasing classes by amount reveals a slight decrease for existing estates valued > 2.5 million (-8.1%). On the contrary, projects in progress valued < 0.5 million as well as those between 0.5 and 2.5 million respectively increased by 1.1% and 1.3%. Also to be build estate valued > 2.5 million increased (+5.2%). Real Estate leasing (existing and in progress properties) by total amount 27% 14% 24% In 2016, to in progress estates leasing brushed up against 40% of the sector. 11% 2% 23% Existing estates <= 0,5 mil. Existing estates > 0,5 and <= 2,5 mil. Existing estates > 2,5 mil. In progress estates <= 0,5 mil. In progress estates > 0,5 and <= 2,5 mil. In progress estates > 2,5 mil. 600.000 500.000 400.000 300.000 200.000 100.000 0 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 In progress estates Existing estates Total estates Source: PwC analysis on data provided by OMI Agenzia delle Entrate 61

Key data The dynamics of leasing, divided by destination of the financed estate, underlines the stability of volumes in the industrial sector. Leasing trends by asset class (% variation 2016 vs. 2015) 120% The industrial sector registered the best dynamic in the contracts number (+19.8%). Other positive trends are registered in office and tourist sectors (both +2.9%). 20% 19.8% 2.8% 2.9% There was an important increase in industrial sector both with respect to 2015 and compared to the other destinations. -12.6% -29.0% +19.8% Growth in number of contracts in industrial sector -80% Industrial Retail Office Residential Public Administration Percentage of lease agreements by asset class (value) Percentage of lease agreements by asset class (number of contracts) 0.2% 10.0% 3.6% 0.7% 4.7% 3.6% 10.7% 15.8% 49.8% 47.7% 25.7% 27.8% Industrial Retail Office Residential Industrial Retail Office Residential c e e e c e e e Source: PwC analysis on data provided by OMI Agenzia delle Entrate 62 Italian Real Estate Market Overview

Investment trends in the real estate market Key data - H1 2017 Investments in H1 2017 reached a level of 5.7 billion, 58% more compared to the same period in 2016. Foreign capital still represents the greater portion of investments on the total with 80% of investments have cross-border origins, mainly from North America and France. The share of domestic capital is almost 1 billion invested in the Italian real estate market. Investments by sector H1 2017 13% 17% 35% Italian investments in 2016 In the Italian market operators with different risk profiles are present and they are interested in different investment typologies, which mainly include office, retail, industrial, and hotels. Milan and Rome are the primary markets, representing 53% of total transaction volumes. Thanks to some major transactions, investments in Rome increased by 53% compared to 2015, but still only reached 55% of the volumes invested in Milan. 7% 7% 12% 5% 44% The high level of competition for the main products has generated a reduction of prime yields in most markets. The logistic and office sectors remain stable compared to the previous quarter. Office Prime Roma Office Prime Milano High Street Prime Shopping Center Prime Prime Logistic Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Q1 16 4,00% 4,00% 4,00% 4,00% 4,00% 4,00% 3,50% 3,50% 3,75% 4,00% 4,00% 4,00% 3,15% 3,15% 3,25% 3,50% 3,50% 3,50% 4,90% 4,90% 5,00% 5,00% 5,00% 5,00% 6,00% 6,00% 6,25% 6,25% 6,40% 6,50% Source: PwC analysis on CBRE data 21% 13% 25% Office c e O e e Office e e O e Source: PwC analysis on CBRE data 63

Italian investments 2010 - H1 2017 2010 2011 2012 2013 2014 2015 2016 H1 2017 Total investments ( mln) 4,213 4,383 1,744 5,130 5,221 8,100 9,100 5,732 Product Office 45% 35% 43% 29% 27% 40% 44% 35% Retail 37% 55% 27% 44% 45% 18% 25% 21% Industrial 4% 4% 1% 4% 8% 2% 7% 13% Tourist 7% 3% 17% 10% 11% 8% 7% 13% Mixed 3% 1% 4% 12% 0% 6% 12% Others 4% 3% 9% 1% 9% 26% 6% 17% Investors Italian Investors 73% 83% 74% 30% 22% 27% 40% 20% Foreign Investors 27% 17% 26% 70% 78% 73% 60% 80% Typology RE Italian funds 29% 41% 38% 13% 15% 14% 17% Foreign open funds and German funds 7% 8% 4% 20% 38% 17% 26% Public RE funds and REITs 15% 9% 1% 10% 10% 19% 32% Assurance companies and pension funds 9% 2% 2% 8% 6% 4% 6% Private investors 11% 14% 15% 5% 1% 5% 2% Corporates 7% 10% 27% 12% 14% 5% 8% Others* 23% 17% 14% 32% 15% 36% 10% *Banks, public sector and so vereign funds included The office asset class continues to attract investors and represents 44% of the transaction volume in 2016, 23% more than 2015, while the largest gain was recorded in the logistics sector (+270%). The shortage of core products in Italy moves investors towards peripheral locations in primary markets and city centers of secondary markets, and also increases demand for value-added operations. Source: PwC analysis on data provided by BNP PARIBAS REAL ESTATE 64 Italian Real Estate Market Overview

Transaction and deal analysis The table reported herein shows recent top transactions in terms of value for each asset class. Key data 1,190 mln Value office 397 mln Value retail 623 mln Value shopping center 149 mln Value and logistics 627 mln Value hotel Office Retail Shoppig center Industrial and logistics Hotel Price ( million) Seller Purchaser Location Six-asset Portfolio, Various locations 300 Prelios SGR Ardian Real Estate Milan, Rome, Bari 1, Piazza Tommaso Edison, Milan 220 Ream SGR Hines SGR, Ream SGR Milan 91, Via Monte Rosa, Milan 220 Torre SGR AXA IM Real Assets Milan 6A, 8A, 10A, Via Nino Bonnet, Milan 140 n.a. Coima Res, Sovereign fund Milan Alliaz three-asset Portfolio, Milan 120 Allianz Kryalos SGR Milan 2, Via Cantù, Milan 110 c Hines SGR Milan 33, Via Moscova, Milan 80 Ubi Banca JP Morgan, Savillis Investment Management SGR 15, Via Montenapoleone, Milan 120 Fondo Ipi Milan Six-asset Portfolio, Various locations 120 Beni Stabili CBRE Global Investment Partners 59, Corso Buenos Aires, Milan 90 Sansedoni S.p.A. Meyer Bergman Milan 33-37, Corso Buenos Aires, Milan 55 Società Porta Rossa Meyer Bergman Milan 15-17, Via Torino, Milan 52 Private individuals Hines SGR Milan High-street retail Portfolio, Various locations 50 La Feltrinelli Coima SGR 58, Via Sparano da Bari, Bari 30 De Napoli Bel Real Estate Bari Le Befane Shopping Cneter, Rimini 244 Credit Suisse Asset Management Da Vinci Shopping Center, Fiumicino 208 Aig Lincoln Union Investment M&G Real Estate, Gwm Group, Pimco 22, Via Macello, Pompei 128 Sator SGR ECE Projektmanagement Naples Milan Bologna, Padua, Vicenza, Cuneo, Pisa, Novara, La Spezia, Treviso Milan, Florence, Rome, Pisa, Modena Rimini Fiumicino fie e e fe 62 Schroder Italy SIM S.p.A. CBRE Global Investment Partners Molfetta Le Vele Shopping Center, Desenzano del Garda 57 Garda SGR KKR, Coima SGR Desenzano del Garda Nuovo Borgo Shopping Center, Asti 52 Warburg HiH Invest Real Estate GmbH Barings Real Estate Asset Portfolio, Various locations 50 Castello SGR Blackstone, Kryalos SGR Industrial asset, Rolo 40 n.a. Kryalos SGR Rolo 13, Strada Provinciale, Gorgonzola 24 Polis Fondi SGR AXA IM Real Assets, Columbus Real Estate Industrial asset, Carisio 23 BNP Paribas Reim SGR Institutional investor Carisio Asti Cherasco, Cornaredo, Liscate, S. Giuliano Milanese, Massalengo, Veronella Gorgonzola Località Interporto, Bentivoglio 12 n.a. Prologis Bentivoglio Hotel Excelsior, Rome 222 n.a. Katara Hospitality Rome Hotel Excelsior and St. Regis, Florence 190 Starwood Hotels & Resorts Nozul H&R Boscolo Exedra, Milan 102 n.a. Marseglia Family Milan Aldrovandi Villa Borghese, Rome 62 Fratelli Ossani Dogus Group Rome Hotel Nhow, Milan 51 Kryalos SGR Cattolica Assicurazione Milan Florence Source: PwC analysis 65

Key data Almost 5.7 billion has been invested in H1 2017, +55% compared to the same period of the previous year. The investment volume registered during the last quarter is 122% higher than the average of all quarters for the last four years. The domestic component of the capital invested continues to grow, accounting for 1.1 billion during H1 2017, which is 500 million more than the same quarter the previous year (+81%). However, the main source for real estate investments in Italy is still represented by foreign capital. Investments in the industrial and logistic sectors have grown by 291% compared to 2016, while the office sector has increased by 25% of the total half year volume, remaining the favourite asset class. 4.5 bln Foreign investments in Italy H1 2017 Investments in Italy from 2006 to H1 2017 ( mln) H1 2017 vs H1 2016 + 55% 4,000 3,000 2,000 1,000 0 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Investments in Italy yearly aggregated trend ( mln) 12,000 10,000 8,000 6,000 Investments in Italy ( mln) H1 2016 H1 2017 Var. Y-o-Y Rome 806 1,000 24% Milan 1,500 1,800 20% Other markets 1,400 2,932 109% ITALY 3,706 5,732 55% Foreign Capital 3,072 4,586 67% Domestic Capital 634 1,146 81% Foreign capital share (%) on total 83% 80% 4,000 2,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 2017 Source: PwC analysis on data provided by CBRE 66 Italian Real Estate Market Overview

New stock of shopping centers (GLA > 10,000 sqm) and projects in progress 1,200 1,000 800 600 400 200 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Retail investments by typology H1 2017 48% 43% Retail Industry H1 2017 Supply In the first quarter of the year two projects have been completed for a total GLA of 62,000 sqm. The projects are Torino Outlet Village (Settimo Torinese) and the shopping center Adigeo (Verona). A positive trend was confirmed through six projects reached completion in the second quarter for a total GLA of 115,700 sqm. Three of these were new openings, the shopping center Brinpark (Brindisi), Parco Fiore (Treviso) and a new family destination outlet DeltaPo (Rovigo), for a GLA of 59,700 sqm, and three were extension, Orio Center (Bergamo), ESP (Ravenna), and the Veneto Designer Outlet (Veneto) for a GLA of 56,000 sqm. In 2017, the total new retail stock is estimated at circa 310,000 sqm, maintaining the same volumes of 2016. The pipeline for 2018-2019 measures circa 570,000 sqm of GLA, of which 30% are currently under development. Retail projects in the pipeline are primarily in the North and they involve malls (59%), followed by leisure and lifestyle centers (18%), retail parks (17%), shopping centers with mixed use (3%) and outlets (3%). Thanks to the increase of tourism and the new initiatives, Milan has become the main location for retailers to enter the Italian market with the aim of opening new flagship stores, followed by Rome. In 2016 and 2017, new brands and concepts have entered the market, i.e. Primark, Lego, Metrocity, Oakley, Moleskine Cafè, Chloè, 3INA, Manuel Ritz, American Vintage, Thule, Wagamama and Under Armour. During the first half of 2017, new international and Italian brands have opened, such as Thom Browne s first European flagship store in Milan. In addition, Starbucks and Apple are expected to enter the Italian market in 2017 with stores in the Milan. The prime rents for shops in the shopping centers and on high streets have remained stable. Shopping Center FOC 3% 6% Retail Park High street Volumes of existing and under construction new stock retail (GLA > 10,000 sqm) in Italy H1 2017 Evolution of Prime High Street rents in Milan and Rome 300 1,200,000 250 200 800,000 150 400,000 100 50 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 0 Q1 2005 Q3 2005 Q1 2006 Q3 2006 Q1 2007 Q3 2007 Q1 2008 Q3 2008 Q1 2009 Q3 2009 Q1 2010 Q3 2010 Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Completions Under contruction Milano - Prime High Street rents ( /mq/a) - Q1 2005 = 100 Roma - Prime High Street rents ( /mq/a) - Q1 2005 = 100 Source: PwC analysis on data provided by CBRE 67

Investment trend ( mln) Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 0 300 600 900 1200 Retail sector 2017 Investments In 2016, more than 2.6 billion were invested in the retail sector, up 80% compared with 2015, and representing circa 25% of total investments in Italy. Furthermore, circa 1.1 billion of the total retail investments were deployed in the last quarter of the year. In H1 2017, retail investments growth accelerated compared to the same period of the previous year, from 745 million in first half of 2016 to 1.2 billion (+61%). There continues to be strong interest in high street retail, which accounted for 48% of the retail volume for the half with 569 million, followed by shopping centers, which accounted for 43% with 513 million of investments. One of the most significant deals for high street segment was the acquisition of two portfolios with shops in secondary markets for a total value of around 200 million. During the first quarter Fondo Estense Grande Distribuzione was sold by BNP Paribas Real Estate Investment Management, including the Mongolfiera mall and the Galleria Japigia mall in Bari, for a value of around 60 million. In the second quarter was sold the H&M flagship store in Piazza Duomo to Cbre GI. High street continues to be on the radar of a growing number of core and core plus investors who are no longer looking at just Milan and Rome, but are beginning to study other secondary cities with rich catchment areas that also benefit from good tourism flows. Foreign capital is dominant in the retail asset class and represents more than 69% of total investments in the half (mainly UK and USA), even if the Italian investors show a slight increase, especially in the high street. Prime yields remains stable in all sectors of the retail market, after suffering a slight contraction in the first quarter. The lack of product is starting to put a brake on any further expansion of retail investments. The outlook for the sector in the second part of the year remains positive. 1.2 bln Investments in H1 2017 2.6 bln Total investments in 2016 3.15% High street prime net yield Q2 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 High Street Prime (%) 3.15 3.15 3.25 3.50 3.50 3.50 3.50 4.00 High Street Secondary (%) 4.75 4.75 4.75 5.00 5.00 5.00 5.00 5.75 Shopping Center Prime (%) 4.90 4.90 5.00 5.00 5.00 5.00 5.00 5.50 SC Good Secondary (%) 5.90 5.90 5.90 6.00 6.00 6.00 6.00 6.50 Retail Park Prime (%) 5.90 5.90 5.90 5.90 6.00 6.00 6.00 7.00 Source: PwC analysis on data provided by CBRE 31% Percentage of domestic capital over total investments in H1 2017 68 Italian Real Estate Market Overview

Key data Industrial and logistic sector 2017 762 mln Investments in H1 2017 6% Prime Net Yield in H1 2017 995,750 sqm Take up H1 2017 Take up trend (sqm) H1 2017 2016 2015 2014 2013 2012 2011 2010 The level of take up in of 2016 has exceeded 1.38 million sqm: this is the first time in years such a result in logistics was achieved in Italy. The positive trend continued even in the first six months of 2017, with a take-up at almost a million sqm, which is up by 32% on the amount reported in the same period the previous year. Lombardia and Emilia Romagna were pillars within the sector, representing 76% of the total take up in the first quarter. In Lombardia, the take up of logistics parks is taking off extremely quickly due to three pre-let agreements signed (56,000 sqm for Arcese Trasporti in Basiano, 27,000 sqm for Banzai at the AKNO Business Park 2 in Trucazzano, and 30,000 at Pozzuolo Martesana which Prologis is building for Brivio&Viganò). In the second quarter there were 20 transactions for the lease of logistics warehouses and developments with pre-let agreements; 5 for the sale and construction of owneroccupier properties. In the first half of 2017 3PLs* retailers and courier services were the most dynamic users, while the demand by e-commerce operators is decreasing. The volume invested in 2016 reached 630 million. Institutional investors continue to confirm their interest in logistics with the total volume in the first six months of 2017 registered at 762 million, a record amount for this sector. CIC acted as the main player of the H1 2017 having bought from Blackstone a logistics portfolio of 20 properties in Italy. Other players active in the market were Kryalos Sgr with the purchase of a logistics portfolio of six buildings with a surface area of 140,000 sqm. Tristan Capital Partners continues to be active in the Italian market purchasing from AXA two logistics buildings in Anagni and Pavia for a total value of 20 million. Recent investments in prime locations favoured the further fall in yields observed in Q4 2016 by 25 bps, down to 6.00%. The market sentiment is positive, and the activity and volume of investments is expected to keep growing during the year. 800 700 600 500 400 300 2009 200 2008 2007 *3PL (Third Party Logistics Service Providers) Integrated logistic 100 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 2017 0 500 1,000 1,500 Total Q1 Q2 Q3 Q4 Source: PwC analysis on data provided by CBRE Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Vacancy Rate (%) 5 5,3 5,5 6 6 6,3 6,3 6,3 Take up (.000 sqm) 609,9 385,8 358,9 271,2 416 334 201 201 Prime rent Milan ( /mq/y) 53 52 50 50 50 50 50 50 Secondary rent Italy ( /mq/year) 43 40 40 40 40 40 40 40 Prime rent Rome ( /mq/y) 55 52 52 52 52 52 52 52 Prime Net Yield (%) 6 6 6.25 6.25 6.4 6.5 6.5 6.5 Logistic Investment ( mln) 659 103 397 36 165 30 110 103 69

Real estate funds Asset allocation H1 2016 Europe 13% 6% Retail 15% 21% Residential 15% 7% Asset composition H1 2016 43% North West Italy Office Other 14% 43% 46% 20% 12.9% North East 33.6% Center of Italy Industrial 8.1% South and Islands Real estate funds Real Estate funds in Italy represent about 3% of the Italian asset management market. The funds examined by Bank of Italy have an assets amounting of 64.5 billion. During 2016 the weight of the first 5 Sgr, which amounted to 31.1 billion, has slightly decreased (from 50.9% to 48.2% ). 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 37 37 44 46 49 54 26 56 55 51 48 174 Operative funds 229 267 439 417 392 364 351 329 296 0 200 400 600 Operative SGR The funds examined by Assogestioni point out 43% of the assets are located in Northwest of Italy, while 33.6% in the Center; Northeast with 12.9%, South of Italy with the Islands and the assets located abroad follow respectively accounting for 8.1% and 2.4%. Offices are the most common among the asset classes, constituting by themselves 42.7% of the entire asset stock, followed afar by residence 19.5% and retail 14.3%. SGR Value ( bln) Dea Capital 7.84 Investire 7.07 Generali 5.67 BNP Paribas 5.56 Coima 5.50 Fabrica Immobiliare 3.70 Prelios 3.56 Sorgente Italia 2.48 Castello 1.98 Savills 1.70 4% 2% 3% 11% 15% 14% 21% 43% 21% 7% 43% 3% 14% Office Retail Logistic Residential Nursing home care (RSA) Tourism/accomodation Industrial Other Source: PwC analysis on data provided by Assogestioni 70 Italian Real Estate Market Overview

Number of SGR and of operative funds 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Operative SGR 3 5 9 10 10 14 26 33 48 51 55 56 54 49 46 44 37 37 Operative funds 3 6 11 14 19 31 61 119 174 229 267 296 329 351 364 392 417 439 - Retail funds 3 6 10 12 14 19 23 29 30 29 27 27 28 27 26 27 26 26 - Reserved funds 0 0 1 2 5 12 38 90 144 200 240 269 301 324 338 365 391 413 Evoluzione dell'asset Under Management delle SGR attive ( bln) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Var. % 2007/2016 Total 36.1 42.4 47.5 50.6 53.6 53.4 55.1 58.4 60.4 64.5 78.7% - Top 5 SGR 19.7 22.5 24.5 25.5 27.1 27.3 26.4 30.5 30.7 31.1 57.9% - Top 10 SGR 24.3 28.7 31.3 33.6 35.7 35.9 35.6 42.4 43.5 45.1 85.6% Share on total (Top 5 SGR) 54.7% 53.1% 51.5% 50.4% 50.6% 51.0% 47.9% 52.2% 50.9% 48.2% -11.9% Share on total (Top 10 SGR) 67.3% 67.7% 65.9% 66.5% 66.5% 67.2% 64.5% 72.6% 72.1% 69.9% 3.8% Source: PwC analysis on data provided by Bank of Italy 71

72 Italian Real Estate Market Overview

Milan 03 73

Residential market NNT data 2016 21,978 NNT 2016 +50.07% NNT 2016 vs 2012 796,304 Real Estate stock Municipality of Milan 2016 +21.86% NNT 2016 vs 2015 Trend of transactions (NNT) - 2004/2016 Over the period 2004 2016, the historical trend of NNT (Number of Normalized Transactions) of residential estates in Milan has presented an average value of 19,803 transactions; the trend has been characterised by a general recover over the last four years, with a growth rate of +50.07% in 2016 in comparison with 2012. NNT H1 2016 by geographic region 2% 12% 5% 3% 14% 12% 6% 5% 24% 16% Centre Inner city Semi centre East side Semi centre North side Semi centre West side Semi centre South side Periphery East side Periphery North side Periphery West side Periphery South side 30,000 25,000 20,000 15,000 100% 101% 101% 87% 76% 71% 75% 77% 59% 61% 64% 72% 88% 10,000 5,000 0 24,966 25,130 25,127 21,843 18,977 17,665 18,843 19,182 14,645 15,140 15,900 18,035 21,978 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 NNT NNT Trend Source: PwC analysis on data provided by Italian IRS 74 Italian Real Estate Market Overview

Trend of Real Estate stock 2004/2016 The Real estate stock in Milan has growth on average by 0.51% per year over the period 2004-2016. Also, as regards the MII (Market intensity Index), it results equal 2.76%, which entails a slightly negative trend in 2016 compared to 2015. 800,000 105% 106% 106% 106% 106% 106% 790,000 105% 104% 104% 780,000 103% 770,000 102% 101% 760,000 100% 750,000 740,000 730,000 720,000 710,000 700,000 748,817 759,822 766,615 771,852 777,757 780,736 785,000 788,645 790,623 794,244 795,000 794,493 796,304 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Stock Stock Trend NNT 2016 by dimensional class 40 34.4% 30 25.5% 20 19.6% 10 12.1% 8.5% 0 Studio apartment Small Small medium Medium Large Dimensional classes: Studio apartment: up to 45 sqm (2.5 cadastral units); Small: between 45 and 60 sqm (2.5 4 cadastral units); Small medium: between 60 and 90 sqm (4 5.5 cadastral units); Medium: between 90 and 120 sqm (5.5 7 cadastral units); Large: 120 sqm and above (more than 7 cadastral units). Source: PwC analysis on data provided by Italian IRS 75

Province of Milan NNT data 2016 53,046 NNT 2016 + 31.76% NNT 2016 vs 2012 2,131,833 Real Estate stock Province of Milan 2016 +21.83% NNT 2016 vs 2015 Trend of transactions (NNT) - 2004/2016 Over the period 2004 2016, the historical trend of NNT (Number of Normalized Transactions) of residential in the Province of Milan has presented an average value of 55,428 transactions; the trend has been characterised by a general recover over the last four years, with a growth rate of 31.76% in 2016 in comparison with 2012. NNT H1 2016 by geographic region 9% 8% 6% 16% 10% 51% Abbiatense Magentino Alto Milanese North part of Milan East part of Milan Milan City South of Milan 80,000 100% 108% 110% 100% 70,000 87% 77% 60,000 75% 77% 77% 50,000 63% 58% 55% 57% 40,000 30,000 20,000 10,000 0 68,996 74,838 75,959 68,966 60,072 51,713 53,088 52,997 40,261 37,920 39,164 43,542 53,046 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 NNT NNT Trend Source: PwC analysis on data provided by Italian IRS 76 Italian Real Estate Market Overview

Trend of Real estate stock 2004/2016 The Real estate stock in the Province of Milan has growth on average by 1.04% per year over the period 2004-2016, while the growth in the last four periods 2012-2016 remains stable (+0.37%). 2,300,000 2,100,000 1,900,000 1,700,000 1,500,000 1,300,000 1,100,000 900,000 700,000 112% 113% 113% 113% 113% 110% 111% 109% 108% 105% 106% 102% 100% 1,882,657 1,922,725 1,971,123 2,003,944 2,035,354 2,057,703 2,078,498 2,097,997 2,112,002 2,123,934 2,130,931 2,130,931 2,131,833 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Stock Stock Trend NNT 2016 by dimensional class 40 30 31.2% 31.6% 20 20.2% 10 8.1% 8.9% 0 Studio apartment Small Small medium Medium Large Dimensional classes: Studio apartment: up to 45 sqm (2.5 cadastral units); Small: between 45 and 60 sqm (2.5 4 cadastral units); Small medium: between 60 and 90 sqm (4 5.5 cadastral units); Medium: between 90 and 120 sqm (5.5 7 cadastral units); Large: 120 sqm and above (more than 7 cadastral units). Source: PwC analysis on data provided by Italian IRS 77

Investment trends in the real estate market Investment trends The market of investments in Milan remains lively, with transaction accounting for 1,596 million in 2016, even if diminishing by 28% in comparison with 2015. However, when the 900 million transaction of Porta Nuova is not considered, the investment market over performs the results of 2015 by 21%. The most relevant investors are open-end German funds, international property companies and sovereign funds. Offices account to 78% of transactions. The foremost deal for this sector has been closed by AXA, having acquired the estate in Via Monte Rosa 91 for 220 million. For what concerns the retail sector, the only relevant transaction was the closing for the building in Via Monte Napoleone 15, acquired by Max Mara Group for circa 15 million; this is the result of an increasing interest for highstreet retail properties expressed by national and international investors. Institutional real estate investments by investor class 100 80 60 5% 22% 5% 22% 12% 17% 23% 14% 16% 12% 8% 11% 35% 5% 1% 2% 16% 15% 44% 9% 18% 10% 8% 4% 36% 3% 8% 31% 27% 40 11% 10% 4% 7% 28% 27% 2% 7% 67% 19% 20 47% 31% 40% 45% 32% 14% 35% 0 21% 12% 4% 2008 2009 2010 2011 2012 2013 2014 2015 Q2 2016 Real estate Italian funds Open-end funds (German and foreign) Real estate companies and REITs Assurance companies and Pension funds Private companies and investors Others* *Others: Banks, public sector and sovereign funds Source: PwC analysis on data provided by BNP Paribas REAL ESTATE 78 Italian Real Estate Market Overview

Office market Trend of prime rents ( /sqm/y) Q4 2000 Q4 2001 Q4 2002 Q4 2003 Q4 2004 Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 520 0 100 200 300 400 500 600 Offices: Overview The office supply in 2016 in Milan accounts for nearly 3.2 million sqm distributed over 4,717 properties, both entire buildings and individual units. The properties offered for sale account 1,234 residential units for a total amount of 469,000 sqm (also assessed as individual units or as entire buildings). In the city of Milan, the relevancy of properties available for lease is preponderant: 3,483 residential units for a total amount of 2.7 million sqm. Overall, the lease supply amounts to 29% of the entire surface equal to a 8.3% share of the entire stock in terms of units. Office (buildings and single units) 4,717 Assets 3,167,862 sqm Offices: Supply (1/3) The properties offered for sale account for 5% of the estimated surface for office destination use and 2.9% of surveyed real estate units in stock for office destination. It is relevant to underline that the trading market is still more focused on medium and small-medium surfaces (average of circa 380 sqm per property unit offered for sale) while for lease on average are available larger surfaces (average of circa 775 sqm per property unit offered for lease). Investments by asset class Milan Q4 2016 5% 2% 1% 6% 5% Source: PwC analysis on data provided by CBRE Sale 1,234 Assets 468,632 sqm Lease 3,483 Assets 2,699,180 sqm 81% Big size Portfolios 367 Units 1.009 mln sqm Announcements 3,116 Units 1.691 mln sqm Office e c e e O e Source: PwC analysis on data provided by BNP PARIBAS REAL ESTATE The comparison between the data of the last year and those in 2016 shows a decrease in total supplied surface in the city of Milan (sale and lease) equal to -6%; the reduction (-10.5%) is even more bigger in the number of property units offered on the market. Source: PwC analysis on data provided by Cresme Ricerche S.p.A. 79

Key data -6.0% Surface supply 2016 vs 2015-10.5% Number of units supplied on the market 2016 vs 2015-4.1% Surface supply for rent 2016 vs 2015 29% Surface supply for rent vs Office stock in Milan 29% Vacancy rate 2016 Offices: Supply (1/3) The office market supply, although still high, has been slightly reduced compared to last year; the supply appears coherent in comparison to the general volume of transactions and in comparison to the area estimated to be involved in sales. 1,234 property units available for sale, represent 2.9% of total office stock in Milan. In terms on surface, nearly 469,000 sqm offered for sale represent circa 5.0% of the area of office space existing in Milan. The values are in line with the existing stock, also taking into account the properties that remains unattended while waiting for an appropriate sale. Data from Agenzia delle Entrate show there were 595 sales of offices in 2013 (185,000 sqm) in Milan (lowest peak of the city market), 629 in 2014 (195,000 sqm), 850 in 2015 (350,000 sqm). Agenzia delle Entrate has estimated around 1,000 sales during 2016, equal to 380,000 sqm. The office market shows a misalignment, confirmed by the excess of rent supply surface: currently of the total supply of 2.7 million sqm only 1.7 million sqm (63.1%) are for rent and 1 million sqm are among large real estate portfolios. The vacancy rate for offices currently stands at 29%; despite this data, in the large real estate portfolios, are already planned 654,000 sqm of office surface (the increase compared to 2015 is 1 million sqm). The comparison between last year results show a decrease of surfaces that will affect the market in the next few years and the purchase of unsold properties. Actual and potential supply - Milan Actual Announcements - Lease 1.691 mln sqm Big size Portfolios - Lease 1.009 mln msqm 3,168 mln sqm Announcements - Sale 0.411 mln sqm Big size Portfolios - Sale 0.057 mln sqm Potential Building permits 2011 2014 e c c e fic 0.304 mln sqm of which 0.179 sqm out of P.A. 0.125 mln sqm out of P.A. Further potential supply Other assets not available Big size Portfolios 0.654 mln sqm of which 0.115 mln sqm already choosen (17.5%) Source: PwC analysis on data provided by Cresme Ricerche S.p.A. 80 Italian Real Estate Market Overview

Surface supply for rent Offices: Supply (1/3) 21.7% Percentage of surface supply for rent in the semi-central zone of Milan 14.9% Percentage of surface supply for rent in CBD In Milan the office market supply for lease in 2016 present strong concentration in the semi-central area (590,000 sqm equal to 21.7% of the total supply - in 2015 it was 24.9%), in the northern suburbs (about 470,000 sqm equal to 17.6% of the total supply in 2015 it was 15.8%) and in the southern suburbs (about 370,000 sqm equal to 13.6% of the total supply in 2015 it was 16.0%). The CBD (Central Business District), as well as the southern periphery and the semi center, showed a faster absorption of surface for lease (400,000 sqm in 2016), decreasing from 15.6% to 14.9% between 2015 and 2016. Despite the limited surface in the area, the CBD accounts for a sizeable portion of the total supply for lease in Milan. The comparison between 2015 and 2016 shows a -10% decrease in the total sqm for lease in the city of Milan. Significant drops were recorded in the southern periphery (decrease of -18.3% or -82,000 sqm) and in the CBD (decrease of -8.6% or -38,000 sqm). The office market supply for sale has a similar distribution as the supply for lease. The semi center supply is 140,0000 sqm (29.7% of the total supply in 2015 it was 25.9%), in the northern periphery is 77,000 sqm (equal to 16.3% - in 2015 it was 16.2%) and in the southern periphery is above 61,000 (equal to 13.1% - in 2015 it was 13.6%). In the CBD 56,000 sqm of office space are for sale (12.0%) and in center outside CBD 58,000 sqm (12.5%) are for sale. The comparison between the data of 2015 and 2016 shows a decrease in total sqm for sale (-15.6% of the total supply in Milan), with drops recorded in the western periphery (-38.3% or -23,000 sqm), in the eastern periphery (-26.5% or -14,000 sqm), in the southern periphery (-18.9% or -14,000 sqm), in the center outside CBD (-15.0% or -10,000 sqm) and in the northern periphery (-14.8% or 13,000 sqm). The CBD and semi center both registered a higher stability with a drop of -8.8% (CBD with less 5,000 sqm than in 2015) and -3.0% (semi center with less 4,000 sqm than in 2015) respectively. Zone Delta surface 2016 vs 2015 (mq) Delta % surface 2016 vs 2015 CBD -38,000-8.6 Center outside the CBD 32,000 14.4 Semi center -116,000-16.3 Periphery North side 29,000 6.6 Periphery East side 30,000 17.2 Periphery South side -82,000-18.3 Periphery West side -18,000-5.6 Total Milan -163,000-10.6 Source: PwC analysis on data provided by Cresme Ricerche S.p.A. 81

New projects and refurbishments by area ('000 sqm) Hinterland Periphery 74 Semi Center 61 39 CBD 100 0 500 1,000 1,500 New projects New projects 61% 100 26 Renovations 9% 30% Semi center Periphery Hinterland Offices: Supply (2/3) In the upcoming years the urban features of the city of Milan will be affected by a large number of projects. In recent years, companies, in order to have at disposal modern spaces and to maximize their uses, have started to transfer their offices in outlying areas of the city, in order to obtain substantial economic savings. Including renovations and new projects, 2,390,000 sqm are currently under construction or still in planning in Milan. In a context where companies are more and more decentralizing, the central area (CBD) records only six renovation projects for a total of 24,000 sqm. The CBD has no projects involving new constructions because it is characterized by historic buildings often under preservation and as well as lack of building spaces. Looking at the new projects for office destination use, there is the possibility to develop 2,031,000 sqm. In the upcoming years, divided as follows: 9% in Mid-Center, 30% in Periphery and the largest share, 61% in the Hinterland of Milan. In fact, the Hinterland has significant advantages in terms of rent and offers the possibility to create new developments for companies deciding to move in less central structures but attractive likewise. Within the Semi Center Zone, the North western side is the area where we can find a great number of major development projects; among them, stands out the City Life project, consisting of the redevelopment of the Fiera Campionaria of Milan. During 2015, the Hisozaki Tower was concluded, and this resulted in the subsequent getting hold of the property by Allianz Italy; he works for the Hadid Tower, future headquarters of Generali, started right after. Finally in 2017, 30,000 not-yet-rented sqm of the Libeskind Tower are expected to be delivered on the market. In the Semi Center area it is also worth mentioning the redevelopment project of Porta Volta that covers an area of about 9,000 sqm and includes the construction of the new headquarters of the Giangiacomo Feltrinelli Foundation between Viale Montello and Porta Volta. Source: PwC analysis on data provided by BNP Paribas REAL ESTATE 82 Italian Real Estate Market Overview

The Subway Offices: Supply (2/3) The closeness to public transport has always been key in assessing the value of an estate. As regards the Periphery, the most dynamic area is represented by South East Milan, where a number of development projects, such as Symbiosis-Ortles for the realisation of mixed-destination buildings with a prevalence of offices, are still under construction. In North East Milan, the EverEst- Giardini di Lambrate project remains the most noteworthy and aims at requalifying the old headquarters of Laminati-Colombo. Finally, with regard to the Hinterland, the great majority of Real Estate projects will be developed North East Milan, with expected volumes of 843,000 sqm of offices. The Ex-Falk area will be hosting circa 150,000 sqm, mainly devoted to offices; the projects is expected to be delivered within December 2020. Both accomplished and in progress works are redrawing the mobility of Milan and strengthening the existing network. The Line M5 connects CityLife with Porta Garibaldi FS, while the Line M4, still to be completed, is going to became strategic to connect Linate airport and the city center. Finally the Line M1 has to be further developed northbound towards Monza from Sesto 1 Maggio FS. Source: PwC analysis on data provided by BNP Paribas REAL ESTATE Source: ATM S.p.A. 83

Take up trend (sqm) Office market: Supply (3/3) H1 2017 208,651 2016 2015 2014 2013 2012 2011 2010 2009 2009 2008 2007 2006 2005 0 200,000 400,000 226,000 Number of sqm in construction in June 2017 +6% Growth take up Q1 2017 vs. Q1 2016 In June 2017, there were over 226,000 sqm of office space under construction, slightly down on the previous quarter, but with total completions in the second quarter of 55,426 sqm. Of these, 54% refer to projects of a speculative nature. Refurbishments are increasing in prime location, which help to raise the quality of grade A properties on offer. The most noteworthy projects are sited in the area of CityLife: among them stand out the Libeskind Tower and the Porta Nuova BD, where a new skyscraper will be hosting the headquarter of an important assurance company, thus completing the skyline of the city. The take-up in H1 2017 has been equal to 208,651 sqm, up by 27% compared to the same half of 2016. Projects under development and already accomplished (sqm) 0 150,000 300,000 450,000 Source: PwC analysis on dasta provided by CBRE During the second quarter of 2017 take-up office space in Milan was 98,385 sqm, lower than the record figure of the first quarter but was 24% higher than the average of the last 10 years. Prime rent for office is slightly growing, in H1 2017 mounted to 530 /sqm. The main features driving the tenants choices during the last months are the quality of Real Estate properties, the implementation of smart working policies and the research of the best locations; the year has been also featured by relevant rental agreements signed with primary IT, industrial and financial tenants. 84 Italian Real Estate Market Overview

Key data - Q2 2017 In H1 2017, the value of investments in offices in Milan reached the level of 908 million, down by 17% in comparison with the same half of 2016. The lack of quality product remains a central issue even for the Milan market but there continues to be investor interest for value-add assets in central locations. The most recent deal of this kind involved the property in Via Cantù bought by Hines for around 100 million Euro. This building will be converted into a trophy asset that will have a mixed use, part office and part retail. Foreign capital in H1 2017 represents 65.7% of the total investments. Prime and secondary net yields, which were still contracting in the first quarter, stood at 3.5% and 5.25% respectively. 12.1% Vacancy rate 908 mln Investments in H1 2017 Office market: Investments trend ( mln) 3,000 2,500 2,000 1,500 1,000 500 0 Foreign Key data 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 2017 Investors H1 2017 (%) Domestic Prime Net Yeld % Q2 2017 H1 2017 H1 2016 Var. H1 2017 vs H1 2016 Vacancy rate (%) 12,1 12,1 12 1% Take - up (,000 sqm) 98,3 208 164,1 27% New stock (,000 sqm) 22 22 6,8 224% Prime rent ( /sqm/y) 530 530 490 8% Weighted Average Rent ( /sqm/y) 281 281 240 17% Prime net yield (%) 3,50 3,50 4,00-13% Secondary net yield (%) 5,25 5,25 5,75-9% Office e e 417 908 1.100-17% 4% 30% 66% Domestic Foreign Nd Source: PwC analysis on dasta provided by CBRE 85

Key data 346 /sqm/y Average Prime Rent Q2 2017 530 /sqm/y Average Prime Rent CBD Q2 2017 4.75% Average prime net yield Q2 2017 Office market: Overview In H1 2017, the main deal in the first quarter was the acquisition of the Project All Stars by Blackstone, a portfolio compromising 3 buildings worth a total of approximately 120 million Euro. In the first quarter other two operations involved an important company specializing in e-commerce which leased almost 18,000 sqm and an Italian luxury brand that has moved its HQ to Porta Nuova in a surface area of around 8,500 sqm. In the second quarter were registered two important transactions, for a total value of 280 million Euro. These were the acquisition of Palazzo V, by Kryalos Sgr on behalf of a foreign investor and the acquisition of the CreVal portfolio, including 17 bank premises, by Beni Stabili SIIQ. Offices: Rents From the analysis of rental agreements emerges that the average prime rent for Q2 2017 is 346 /sqm/y, which is increasing compared to the previous quarters. The analysis shows that all the categories considered show a slight increase. Rent /sqm/y Growth % Milan Average Rent 1 year 5 years (CAGR) CBD 530 8.20% 0.00% Center 420 10.50% n/a Semi center 320 14.30% 3.10% Periphery 240 9.10% 1.80% Hinterland 220 10.00% n/a Average 346 Office market: Yields In Q2 2017 considering the market rents, the Prime net yields have slightly decreased compared to the last quarter; the Prime Yield in the center of Milan is about 4.00% and rises to 5.50% in the periphery. e Office e Milan Q2 2017 Q1 2017 Q1 2016 CBD 3.50% 3.50% 4.25% Center 4.00% 4.25% 5.00% Semi center 5.25% 5.25% 6.00% Periphery 5.50% 5.50% 6.25% Hinterland 5.50% 5.50% 6.50% Average 4.75% The Porta Nuova area confirms its ranking s one of the most attractive areas for occupiers. The high demand for the few prime products available on the market is creating competition between tenants, bringing a decrease in offered incentives. Prime rents rise in the CBD, in Q2 2017. It has reached 530 /sqm/year. Source: PwC analysis on data provided by CBRE ce e efie 86 Italian Real Estate Market Overview

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88 Italian Real Estate Market Overview

Rome 04 89

Residential market NNT data 2016 30,253 NNT 2016 + 27.01% NNT 2016 vs 2013 Trend of transactions (NNT) - 2004-2016 Over the period 2004 2016, the historical trend of NNT (Number of Normalized Transactions) of residential estate in Rome has presented an average value of 32.097 transactions. As reported in the chart, the lowest result was scored in 2013, followed by a general recover over the last two years with a growth rate of 27,01% in 2016. 1,457,523 Real Estate stock Municipality of Rome 2016 +10.59 % NNT 2016 vs 2015 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 100% 105% 96% 87% 82% 83% 75% 73% 75% 64% 67% 68% 59% 40,279 42,350 38,865 35,079 30,202 29,434 33,168 33,633 25,693 23,819 27,132 27,356 30,253 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 NNT NNT Trend NNT H1 2016 by geographic region 14 12 10 8 6 4 2 3.98% 5.13% 5.27% 3.96% 1.77% 3.56% 5.25% 5.85% 8.12% 5.78% 8.53% 3.32% 3.41% 3.83% 6.37% 7.46% 4.20% 8.53% 1.17% 2.63% 0.78% 1.10% 0 Inner city SC Appia - Tuscolana SC Aurelia - Gianicolese SC Ostiense - Navigatori SC Parioli - Flaminio SC Prati - Trionfale SC Salaria - Trieste - Nomentana Appia - Tuscolana Asse Colombo - Ostiense - Litorale Aurelia Casilina - Prenestina Cassia - Flaminia Cintura EUR EUR - Laurentina Portuense Salaria Tiburtina Fuori GRA East Fuori GRA North Fuori GRA West Fuori GRA South Fuori GRA North West Source: PwC analysis on data provided by Italian IRS 90 Italian Real Estate Market Overview

Trend of Real Estate stock 2004/2016 The Real estate stock in Rome has growth on average by 1.2% per year over the period 2004 2016. Also, as regards the MII (Market intensity Index), a positive trend has been observable since 2012. 1,500,000 1,450,000 1,400,000 1,350,000 1,300,000 1,250,000 1,200,000 102% 100% 1,270,909 1,291,437 111% 112% 112% 114% 114% 114% 115% 110% 109% 108% 104% 1,324,593 1,370,109 1,388,101 1,401,059 1,413,091 1,426,282 1,426,282 1,446,387 1,446,388 1,452,279 1,457,523 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Stock Stock Trend NNT 2016 by dimensional class 40 30 31.3% 28.4% 20 22% 10 9.1% 9.3% 0 Studio apartment Small Small medium Medium Large Dimensional classes: Studio apartment: up to 45 sqm (2.5 cadastral units); Small: between 45 and 60 sqm (2.5 4 cadastral units); Small medium: between 60 and 90 sqm (4 5.5 cadastral units); Medium: between 90 and 120 sqm (5.5 7 cadastral units); Large: 120 sqm and above (more than 7 cadastral units). Source: PwC analysis on data provided by Italian IRS 91

Province of Rome NNT data 2016 44,364 NNT 2016 + 27.63% NNT 2016 vs 2012 2,199,062 Real Estate stock Province of Rome 2016 Trend of transactions (NNT) - 2004-2016 Over the period 2004 2016, the historical trend of NNT (Number of Normalized Transactions) of residential estates in the Province of Rome has presented an average value of 50,034 transactions; the trend has been characterised by a general recover over the last four years, with a growth rate of 27.63% in 2016 in comparison to 2012. +13.51 % NNT 2016 vs 2015 80,000 70,000 60,000 50,000 40,000 100% 105% 100% 90% 75% 72% 79% 80% 59% 54% 59% 60% 68% 30,000 20,000 10,000 0 64,945 68,384 64,701 58,349 48,814 46,889 51,485 51,824 38,382 34,761 38,466 39,083 44,364 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 NNT NNT Trend NNT H1 2016 by geographic region 1% 1% 2% 2% 68% 3% 3% 7% 7% 6% 0% Area Braccianese Area Fiume Aniene Asse Casilina Asse Flaminia Asse Salaria Asse Tiburtina Castelli Romani Northern coast Southern coast Monti della Tolfa Rome city Source: PwC analysis on data provided by Italian IRS 92 Italian Real Estate Market Overview

Trend of Real Estate stock 2004/2016 The Real estate stock in the Province of Rome has grown on average by 1.3% per year over the period 2004 2016, while the growth in the last four periods 2012-2016 remains stable (+0.05%). 2,400,000 2,200,000 2,000,000 1,800,000 100% 102% 105% 109% 111% 112% 114% 115% 116% 117% 118% 116% 117% 1,600,000 1,400,000 1,200,000 1,880,039 1,915,483 1,981,236 2,046,373 2,081,806 2,110,298 2,135,489 2,165,679 2,187,052 2,202,985 2,212,974 2,190,204 2,199,062 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Stock Stock Trend NNT 2016 by dimensional class 40 30 31.8% 27.5% 20 22,3% 10 9.4% 9% 0 Studio apartment Small Small medium Medium Large Dimensional classes: Studio apartment: up to 45 sqm (2.5 cadastral units); Small: between 45 and 60 sqm (2.5 4 cadastral units); Small medium: between 60 and 90 sqm (4 5.5 cadastral units); Medium: between 90 and 120 sqm (5.5 7 cadastral units); Large: 120 sqm and above (more than 7 cadastral units). Source: PwC analysis on data provided by Italian IRS 93

Investment trends in the Real estate market In H1 2016 the market of investments in Rome accounted for 706 million, with a level of volumes 69% higher than the same semester in 2015. Important transactions such as the disposal of the Great Beauty portfolio ( 220 million) as well as the deal involving the Coin located in Via Cola di Rienzo ( 85 million), contributed to this satisfying result. This latter, specifically, was the first closing by the Bank of Montreal RE branch in Italy. As shown in the chart, 64% of the investments were promoted by Real estate funds, especially German but also foreign, followed by private investors (25.5%), real estate companies and REITs (10.5%). The analysis has highlighted emerging interests from the investors in development projects, aiming at converting vacant offices (mostly located in the CBD area) into hotels and retail spaces. Istitutional real estate investments by investor class 100% 2% 16% 15% 18% 24% 26% 80% 60% 13% 21% 1% 19% 15% 10% 19% 26% 66% 47% 44% 50% 11% 40% 19% 10% 10% 19% 5% 5% 6% 1% 2% 26% 16% 3% 5% 11% 4% 10% 64% 20% 32% 32% 28% 38% 30% 7% 5% 27% 0% 14% 25% 6% 2008 2009 2010 2011 2012 2013 2014 2015 Q2 2016 Real estate Italian funds Open-end funds (German and foreign) Real estate companies and REITs Assurance companies and Pension funds Private companies and investors Others* *Others: Banks, public sector and sovereign funds Source: PwC analysis on data provided by BNP PARIBAS REAL ESTATE 94 Italian Real Estate Market Overview

Rome office Key data - H1 2017 In H1 2017, investments in offices in Rome were equal to 821 million, increasing compared to the same period of 2016 (+96%). Foreign capital once again accounted for most of the capital invested, 92% of that of the first half of the year. The city of Rome which is historical dominated by domestic investors, is gradually becoming attractive even for foreign players, particularly for trophy assets and assets to be repositioned as trophy assets. Take Up (.000 sqm) H1 2017 72 2016 2015 2014 2013 2012 2011 2010 2009 2009 2008 2007 0 100 200 300 Office market: Investments trend ( mln) 1,000 900 800 700 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 2017 Foreign Domestic Nd Prime Net Yeld % Key Data Q2 2017 H1 2017 H1 2016 Var. H1 2017 vs H1 2016 Vacancy rate (%) 12.5 12.5 9 39% Take - up (,000 sqm) 18,2 71,6 66,8 7% Stock (,000 sqm) 12 12 7 71% Prime rent CBD ( /sqm/y) 400 400 380 5% Prime rent EUR ( /sqm/y) 330 330 320 3% Prime net yield (%) 4.00 4.00 4.00 0% Office e e 650,0 821 421 95% Offices: Supply In the first quarter of 2017, was recorded a pre-let of 15,600 sqm for the new HQ of a primary Hi- Teck multinational in the Fiumicino Corridor Area; In the second quarter the sale of a the second tranche of buildings by a Rome building contractor accounted for around 80% of the total absorption in the quarter. The pipeline of developments is stable, with 143,000 sqm under construction/being refurbished and with expected delivery dates between 2017 and 2018; while one completions of 6,616 were reported in the second quarter. Interest towards the capital is high and expectations for the coming months are positive; prime net yields remain stable at 4.00%. Accomplished and in progress projects (sqm) 120,000 100,000 80,000 60,000 40,000 20,000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Existing In progress Source: PwC analysis on data provided by CBRE 95

Key data 308 /sqm/y Average full capacity Prime Rent Q2 2016 400 /sqm/y Prime Rent CBD Q2 2017 5.75% Average net prime rent Q2 2017 Offices: Overview Take-up in H1 2017 was 71,646 sqm, up by (+7%) compared to the previous semester. The number of units absorbed in the first six months of the year was 60, which was higher than the semi-annual average of the last five years, around 36 units. Take-up in 2016 was circa 150,300 sqm, confirming the positive trend compared to previous year (+43% on 2015 and +73% on 2014). Source: PwC analysis on data provided by CBRE Offices: Returns The volume of space absorbed in the first half of 2017 is higher by 7% compared to the same period of 2016. Prime rents were stable in the CBD and in the EUR area at 400 and 340 / sqm/y respectively. Considering the market rents, the Prime net yields are substantially aligned; the Prime Yield in the center of Rome is about 5.00% and rises to 8.00% in the periphery. e Office e Roma Q2 2017 Q1 2017 Q1 2016 CBD 4.00% 4.00% 4.50% Center 5.00% 5.00% 5.00% Semi center 6.50% 6.50% 6.50% EUR 5.25% 5.25% 5.75% Periphery 8.00% 8.00% 8.00% AVERAGE 5.75% Offices: Rents From the analysis of rental agreements emerges that the average prime rent for Q2 2017 is 308 /sqm/y, which is slightly higher to the value registered during the previous quarters (312 /sqm/y). The slight variation is due to a decrease of the values recorded in the Center area (350 /sqm/y from 370 /sqm/y). Rent /sqm/y Growth % Rome Average Rent 1 year 5 years (CAGR) CBD 400,00 0.00% -3.20% Center 350,00-7.90% n/a Semi center 300,00 0.00% -2.50% EUR 340,00 7.90% 0.90% Periphery 150,00 0.00% -1.30% AVERAGE 308 ce e efie 96 Italian Real Estate Market Overview

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