CITY REPORTROMEH2 2011

CITY REPORT ROME H2 2011 2

In the course of 2011, investments in office properties in Rome cameout at around € 600m, a decrease of approximately 10% compared to2010, which confirmed the trend of continuous reduction in volumesinvested which has been occurring for four years.The Roman office market was very lively in the first half year withrespect to previous periods, while in the second half, only 42,000 m²of transactions were recorded, of which only four regarded surfaceareas of over 3,000 m².

Another recession in 2012• During the second half of 2011, concerns regarding

the financial stability of the Eurozone increased• In Italy, after the recession that began in the second half of 2011

and which will continue in 2012, forecasts show that domestic gDPgrowth will also be very limited in 2013

• With a very critical public finance situation, the Italian economycan count on a very solid private sector in financial terms

Office investment market still on the decline• supply and demand have not yet attained equilibrium: on the one

hand, owners are still reluctant to lower requirements and givediscounts, while on the other hand, potential investors find it hardto find investment opportunities that meet their expectations

• In 2011, there was almost no investment activity by foreignparties in Rome

Small transactions are not able to offsetthe lack of large transactions• During 2011, office take-up levels came out at 182,000 m²,

a decrease of 12% compared to the total from 2010• Activities in Eur district decreased by 60%, going from 51%

of the total volume in 2010 to 24%

Net office take-up remains negative• Vacancy levels increased mainly in peripheral areas and

in the city centre, while they decreased in other sectors• Average rents generally decreased, reaching -17% in the Periphery

European markets were quite resilient• The german market was driving occupier demand

in Western Europe• In Brussels, the weakness of demand was visible in all submarkets• The year was clearly marked by the positive development

underway on the supply side

CONTACTS

MilanCorso Italia, 15/A20122 MilanTel: +39 02 5833 141Fax: +39 02 3211 5369

RomeVia delle Tre Madonne, 1200197 RomeTel: +39 06 9826 2112Fax: +39 06 9826 2139

RESEARCH

Simone RobertiHead of ResearchTel: +39 02 3211 5357

Nicola FranceschiniResearch Analyst

BUSINESS LINES & SERVICES

Cesare FerreroCountry Manager

PROPERTY DEVELOPMENTCesare FerreroManaging Director

ADVIsORYRoberto NicosiaManaging Director

PROPERTY MANAgEMENTVincenzo NovielloManaging Director

INVEsTMENT MANAgEMENTIvano IlardoManaging Director

CLIENT sOLUTIONsGiuseppe RagoHead of Client solutions

COMUNICAZIONEGabriele FrontoniHead of Communication

email: name.surname@bnpparibas.com

Cover photo:rendering of office building Gin the Europarco project in Rome

Spread between German and other European Countries Gov. Bonds YieldsSpread between German and other European Countries Gov. Bonds YieldsSpread between German and other European Countries Gov. Bonds YieldsSpread between German and other European Countries Gov. Bonds Yields(basis points)

0

200

400

600

800

1,000

1,200

Jun-0

2

Jun-0

2

Jun-0

2

Jun-0

2

Dec-0

2

Dec-0

2

Dec-0

2

Dec-0

2

Jun-0

3

Jun-0

3

Jun-0

3

Jun-0

3

Dec-0

3

Dec-0

3

Dec-0

3

Dec-0

3

Jun-0

4

Jun-0

4

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4

Jun-0

4

Dec-0

4

Dec-0

4

Dec-0

4

Dec-0

4

Jun-0

5

Jun-0

5

Jun-0

5

Jun-0

5

Dec-0

5

Dec-0

5

Dec-0

5

Dec-0

5

Jun-0

6

Jun-0

6

Jun-0

6

Jun-0

6

Dec-0

6

Dec-0

6

Dec-0

6

Dec-0

6

Jun-0

7

Jun-0

7

Jun-0

7

Jun-0

7

Dec-0

7

Dec-0

7

Dec-0

7

Dec-0

7

Jun-0

8

Jun-0

8

Jun-0

8

Jun-0

8

Dec-0

8

Dec-0

8

Dec-0

8

Dec-0

8

Jun-0

9

Jun-0

9

Jun-0

9

Jun-0

9

Dec-0

9

Dec-0

9

Dec-0

9

Dec-0

9

Jun-1

0

Jun-1

0

Jun-1

0

Jun-1

0

Dec-1

0

Dec-1

0

Dec-1

0

Dec-1

0

Jun-1

1

Jun-1

1

Jun-1

1

Jun-1

1

Dec-1

1

Dec-1

1

Dec-1

1

Dec-1

1

Portugal

Ireland

Italy

Spain

France

Source: Datastream

GDP Growth Forecast in Major European CountriesGDP Growth Forecast in Major European CountriesGDP Growth Forecast in Major European CountriesGDP Growth Forecast in Major European Countries(yearly % GDP var.)

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

GermanyGermanyGermanyGermany FranceFranceFranceFrance ItalyItalyItalyItaly SpainSpainSpainSpain UKUKUKUK

2011 2012 2013

S

CITY REPORT ROME H2 2011 3

ANOTHER RECESSION IN 2012

Employment Growth in ItalyEmployment Growth in ItalyEmployment Growth in ItalyEmployment Growth in Italy(yearly % var.)

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2002200220022002 2003200320032003 2004200420042004 2005200520052005 2006200620062006 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011 2012201220122012 2013201320132013

Source: BNP Paribas

During the second half of 2011, concerns regarding the financialstability of the Eurozone increased, as demonstrated by the trendsin some European countries' government bonds. At the beginning of2011, the spread between the yield of government bonds of a specificEuropean country and of those issued by the german governmentwas very high only for Portugal (402 bps), Ireland (603 bps) andgreece (910 bps). To the contrary, at the end of the year, not onlydid the spread increase in those countries, but it also increasedconsiderably in other large European countries such as, in particular,Italy, spain, and to a lesser extent, France.

Various countries implemented austerity plans in an attempt toreduce government bond yields. These plans include cuts to publicspending and tax increases, inevitably causing an additionalslowdown in economic growth. That slowdown already turned intoa recession in the second part of 2011, and in 2012 a fall in gDP isexpected for countries in the worst financial situations (in 2012, theItalian gDP should reduce by 0.8%, in spain by 0.9%, in Portugal by4.7% and in greece by 3.7%) and stagnation is expected even in thosecountries which, although they do not arouse any financial stabilityconcerns, will be affected by the overall European economic andfinancial situation, like germany, where gDP growth is expected toreduce from +3% in 2011 to +0.4% in 2012.

In Italy, after the recession that began in the second half of 2011 andwhich will continue in 2012, forecasts show that domestic gDPgrowth will also be very limited in 2013 (+0.2%). As a consequence,the unemployment rate, which had started to decrease again in2011, will very probably increase in 2012, and we will have to waituntil 2014 to see a significant reduction. The measures applied by theItalian government in recent months should in fact lead to abalancing of accounts in 2013, but in the short-term, they will havea recessive effect. First of all, public spending should decreasefollowing the cuts that have been made, and the increase in taxesshould also lead to a drop in private consumption. However,consumption will only decrease slightly in 2012 (-0.2%), to thenbegin to grow again slowly (+0.3%) in 2013, while the reduction inpublic spending should be stronger and longer lasting: public sectorconsumption will decrease by 1.4% in 2012 and by 1.2% in 2013.

In fact, with a very critical public finance situation (the debt/gDPratio will fall to under 120% only in 2013), the Italian economy cancount on a very solid private sector in financial terms: compared tohouseholds of the main global economies, Italian households have avery low debt/income ratio (88% compared to an average of 123% inthe g7 countries) and high real wealth (real estate, liquidity, etc.)/income ratio (601% compared to an average of 424% in the g7countries).

Direct Investment Volume by QuartersDirect Investment Volume by QuartersDirect Investment Volume by QuartersDirect Investment Volume by QuartersRome Investment Market (of�ce)

0

500

1,000

1,500

2004200420042004 2005200520052005 2006200620062006 2007200720072007 2008200820082008 2009200920092009 201020102010201 2011

Q1 Q2 Q3 Q4

€ million

BNP

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12

Direct Investment Volume by Investor OriginDirect Investment Volume by Investor OriginDirect Investment Volume by Investor OriginDirect Investment Volume by Investor OriginRome Investment Market (of�ce)

0

500

1,000

1,500

2006200620062006 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011

Italy Germany UK USA Other

€ million

BNP

Pari

bas

Real

Esta

te-

Rese

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12

Prime Yields by ZonePrime Yields by ZonePrime Yields by ZonePrime Yields by ZoneRome Investment Market (of�ce)

6.5%

5.9%

4.5%

5.5%

6.5%

7.5%

2004200420042004 2005200520052005 2006200620062006 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011

Greater Eur

City Centre

BNP

Pari

bas

Real

Esta

te-

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12

CITY REPORT ROME H2 2011 4

OFFICE INVESTMENT MARKETSTILL ON THE DECLINE

In the course of 2011, investments in office properties in Rome cameout at around € 600m, a decrease of approximately 10% compared to2010, confirming the trend of continuous reduction in volumesinvested which has been occurring for four years. In fact, since 2007,when the invested volume was exceptionally high (€ 1.3bn),investments in offices have gradually decreased by approximately10% each year. supply and demand have not yet attained equilibrium:on the one hand, owners are still reluctant to lower requirementsand give discounts, while on the other hand, potential investors findit hard to find investment opportunities that meet their expectations.Average negotiation times are therefore steadily increasing.

However, amongst transactions carried out, there were also somerather large transactions: the two largest investments in offices in2011 in fact regarded the headquarters of ACEA at Piazzale Ostiense(purchased by ACEA for € 110m) and the former collector's office onVia dei Normanni (purchased by a Mittel sgr fund for € 130m).Furthermore, there were also some medium-sized transactions: theownership of the property on Via del Tritone 142 was transferredfrom a Prelios sgr fund to another fund managed by the same assetmanagement company for approximately € 40m, the property on Viagiulio Cesare Viola 34 was purchased by Fabbrica Immobiliare sgrand the one on Via Cristoforo Colombo 416 by Amundi sgr (both forapproximately € 50m).

It is not coincidental that all of these transactions involved a buyer,possibly international such as Amundi sgr, but with offices in Italyand which invests through real estate investment funds whose quotaholders are essentially Italian. In fact, the Roman market is traditionallyvery closed off from foreign investors, particularly in relation toinvestments in office properties (unlike the situation of investmentsin shopping centres). 2011 did not contradict this characteristic ofthe Roman market, indeed there was almost no investment activityby foreign parties in Rome.

In a market such as the Roman one which has always been dominatedby local players, the effect of uncertainty characterising globalfinancial markets (and the increase in country risk perception in Italy)seems to have had a lower impact compared to the effect, for example,in the Milanese market. Prime yields for office property investmentsin the city centre were stable throughout the year, after a slightdecrease (-10 bps) in the first months of 2011 (an increase in thenext few months should not be ruled out).In the Eur area, prime yields were even revised to 25 bps lower:Amundi Europa's investment on Via Colombo was closed with a grossyield of 6.87%. The net prime yield is therefore estimated to bearound 6.5% today.

Of�ce Take-up VolumeOf�ce Take-up VolumeOf�ce Take-up VolumeOf�ce Take-up Volume

0

50

100

150

200

250

2004200420042004 2005200520052005 2006200620062006 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011

Q1 Q2 Q3 Q4

'000 m²

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Real

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12

Take-up by ZoneTake-up by ZoneTake-up by ZoneTake-up by Zone

0

50

100

150

200

250

2004200420042004 2005200520052005 2006200620062006 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011

City Centre Greater Eur Periphery Outside GRA Serie5'000 m²

BNP

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Real

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12

Take-up by Tenants Business Districts in 2011Take-up by Tenants Business Districts in 2011Take-up by Tenants Business Districts in 2011Take-up by Tenants Business Districts in 2011(in m²)

19%19%19%19%

11%11%11%11%

7%7%7%7%

7%7%7%7%

5%5%5%5%

5%5%5%5%

4%4%4%4%

42%42%42%42%

Industries

Public Sector

Legal - Consultancy

Other Non Pro!t

Other Services

Financial

Transport - Logistics - Distribution

ICT

BNP

Pari

bas

Real

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12

CITY REPORT ROME H2 2011 5

During 2011, office take-up levels came out at 182,000 m², a decreaseof 12% compared to 2010 total. In the first six months of the year, theactivity of the office market was very lively compared to previousperiods, thanks to two large transactions carried out by MBDA andby the Ministry of the Economy (MEF). specifically, the MEF leasedthe former collector's office on Via dei Normanni, which was thensold as an income producing asset by Monte dei Paschi di siena toa fund managed by Mittel RE. In the second half of the year, only42,000 m² in transactions were recorded, of which only four werefor surface areas of over 3,000 m². In particular, the largest wascarried out by Cofely, a company working in the energy sector, whichleased 5,900 m² in the new project under development in theEuroparco Business Park.

During 2011, activities in Eur district decreased by 60%, going from51% of the total volume in 2010 to 24%. This result is mainly due toa lack of large transactions. In fact, there were only three for surfaceareas of over 5,000 m²: other than the aforementioned Cofely, theEspresso group leased 6,100 m² on Via Cristoforo Colombo andsaipem leased 5,700 m² in the Laurentina area. Eur's office take-uplevel is linked to this transaction type since it is in this area of thecity where companies can find large offices with modern andtherefore more efficient energy performance.

To the contrary, activities in the City Centre increased by 43%, movingfrom 27% of the total volume in 2010 to 44%. The centre of Romesurely benefitted from the MEF transaction, even though the transactionsreported increased from 31 to 51, including three with surface areasof over 5,000 m². In general, medium-small transactions take placein the centre, given the layout of offices in this sector.

Outside of the grande Raccordo Anulare motorway, Colgate leased3,000 m² in the Da Vinci Business Center, developed along the Rome-Fiumicino motorway, in front of the Nuova Fiera di Roma. The complexis an example of high functionality and great space flexibility, withparticular focus on energy efficiency in line with internationalstandards. It is interesting to observe that the two other tenantscurrently located in the complex are foreign companies.

In Rome, the public sector and industry accounted for 27% and 23%,respectively, of transaction volumes in the last five years. In 2011,unlike in the past, the main market driver was industry, with 42% ofthe transaction volume thanks not only to the MBDA transaction,but also to ENEL, saipem and gDF-suez, to name only a few. Thepublic sector, understood in the strict sense, accounted for only 19%of transaction volumes, since aside MEF, other public bodies werenot very active in the market. With 7% of the total, other non-profitbodies, including the transactions of the Italian Football Federation(Federcalcio), the Kenyan Embassy and the Democratic Party,outperformed the long-term average of 4%.

SMALL TRANSACTIONS ARE NOTABLE TO OFFSET THE LACK OF LARGETRANSACTIONS

Supply & Vacancy RateSupply & Vacancy RateSupply & Vacancy RateSupply & Vacancy Rate

200

300

400

500

600

700

2004200420042004 2005200520052005 2006200620062006 2007200720072007 2008200820082008 2009200920092009 2010201020102010 20112011201120112%

3%

4%

5%

6%

7%Supply Volume Vacancy Rate

'000 m²

BNP

Pari

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Real

Esta

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12

Prime Rents by ZonePrime Rents by ZonePrime Rents by ZonePrime Rents by Zone

€ 420€ 420€ 420€ 420

€ 320€ 320€ 320€ 320

€ 262€ 262€ 262€ 262

100

150

200

250

300

350

400

450

500

550

600

2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011

City CentreCity CentreCity Centre ruEretaerGertneCytiC Greater EurGreater EurGreater Eur Periphery & Outside GRAPeriphery & Outside GRAPeriphery & Outside GRAPeriphery & Outside GRA

€/m²/year

BNP

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Real

Esta

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Rese

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12

Weighted Average Rents by ZoneWeighted Average Rents by ZoneWeighted Average Rents by ZoneWeighted Average Rents by Zone

€ 160€ 160€ 160€ 160

€ 282€ 282€ 282€ 282

€ 253€ 253€ 253€ 253

100

150

200

250

300

350

400

450

500

2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011

City CentreCity CentreCity Centre ruEretaerGertneCytiC Greater EurGreater EurGreater Eur Periphery & Outside GRAPeriphery & Outside GRAPeriphery & Outside GRAPeriphery & Outside GRA

€/m²/year

BNP

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CITY REPORT ROME H2 2011 6

NET OFFICE TAKE-UP REMAINS NEGATIVE

The vacancy level for Rome offices increased by 6.4% in 2011 andcame out at 598,000 m² at the end of the year, 6.2% of the total stock.During the year, vacancy levels increased mainly in the Peripheryand in the City Centre, while they decreased in other sectors. Thepolicy of streamlining company spaces remains the main, if not theonly, market driver. Companies working in the City Centre are notmoving to this sector, rather they were already there. Therefore, eventhough the transaction volume is high in the centre, the net officetake-up remains negative.The volume of grade C vacancies continues to decrease because,since it is difficult to find a new tenant for these spaces, the ownersprefer to take them off the market to renovate them or change themover for another use, mainly residential. This last case remainseconomically easier to carry out in the centre than in peripheralneighbourhoods.

In the current economic environment, with dropping employmentlevels, companies will continue to free up more spaces than theytake up. Therefore, the vacancy volume should continue to increase,even though construction on new executive projects has not yetbegun. In fact, builders are reluctant to introduce new supply on themarket due to the fear of not finding a tenant, even though Romesuffers from a lack of new, modern and good quality products.

THE RENTAL CORRECTIONCONTINUES

It is interesting to note that two transactions involving new grade Aproperties had rents which reached € 320/m²/year in Eur and € 235/m²/year outside of the grande Raccordo Anulare motorway. Thesetwo transactions show that certain rent levels can be reached onlyby offering quality products.

In the course of 2011, average rents generally decreased in Rome,reaching -17% in the Periphery. However, this strong decrease ismostly due to the MBDA transaction which closed with a very lowrent. In the City Centre and Eur, the decrease in rents was moremoderate, reaching -5% and -2%, respectively. This further pushesaverage weighted rents in the City Centre close to the ones in theEur: the spread between the two sectors is less than € 30/m²/year.

This situation could be only momentary and linked to the generaleconomic situation. However, in the long-term, the quality of officesin Eur will always be higher since grade A offices can only bedeveloped outside of the City Centre. Therefore, the spread recordedbefore the 2008-2009 crisis should not be reached again.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2004200420042004 2005200520052005 2006200620062006 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011

T1 T2 T3 T4

European Of!ce Take-upEuropean Of!ce Take-upEuropean Of!ce Take-upEuropean Of!ce Take-up'000 m²

BNP

Pari

bas

Real

Esta

te-

Rese

arch

-Fe

brua

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12

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

CentralCentralCentralCentralParisParisParisParis

CentralCentralCentralCentralLondonLondonLondonLondon

MunichMunichMunichMunich BerlinBerlinBerlinBerlin FrankfurtFrankfurtFrankfurtFrankfurt MilanMilanMilanMilan BruxellesBruxellesBruxellesBruxelles MadridMadridMadridMadrid

0

200

400

600

800

1,000

1,200

1,400

1,600Take-up Prime Rent'000 m² €/m²/year

Take-up Volume & Prime RentsTake-up Volume & Prime RentsTake-up Volume & Prime RentsTake-up Volume & Prime RentsMain European Cities

BNP

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CITY REPORT ROME H2 2011 7

EUROPEAN MARKETSWERE QUITE RESILIENT

Market conditions in the nine major Western European cities resistedthe ongoing economic downturn relatively well. Office take-up in Q42011 dropped just slightly on a rolling year basis compared to Q32011. The german market was driving occupier demand in WesternEurope as 2011 was one of the best years ever for office take-up.Thanks to the improvement in office employment, net absorptionstrengthened considerably over 2011 and significantly contributed tothe rise in transactions.Following the exceptional result in 2010, take-up in Central Londonfell by 34%, but the 1 million m² of office space taken up correspondsto the average take-up of the past 10 years.

In Central Paris, following a historically high third quarter, office take-up fell back in Q4. Nevertheless, the annual take-up level was abovethe average result of the past ten years, increasing by 9% in 2011thanks to the return of large transactions. The Western Crescentremained the most dynamic district attracting tenants looking forcheaper rents. In Brussels, the weakness of demand was visible in allsubmarkets, including the CBD which traditionally accounts for morethan half of office demand.In Madrid, take-up in 2011 underperformed compared to 2010 giventhe weak overall activity in the market. The downward trendcharacterised almost all market districts, including the CBD.

The year was clearly marked by the positive development underwayon the supply side. The average vacancy rate of the nine majorEuropean markets continued to drop in the year’s last quarter,reaching 9.3%. In Central London, deliveries in 2011 represented lessthan one-third of last year’s completions thus helping to reduce thevacancy rate from 7.5% to 6.6%. In Central Paris, the vacancy rateincreased slightly in Q4 2011, a trend that featured in almost allsubmarkets. In germany, the fast reduction in vacant office spacewent further in Q4 2011 especially in the CBD and vacant space coulddecline further in most german cities in 2012 as office space underconstruction was mostly decreasing at the end of the year.

globally, European prime rents stabilised in the final quarter of 2011.The prime rent in Central London was stable for a third quarter in arow in Q4 2011 even though in the West End, the sharp reduction inthe vacancy rate maintains rents under upward pressure.Average rents in the most dynamic CBDs remain on an upward trend,especially in germany, where the market witnessed a decline inimmediate supply with particularly fast reduction in modern officespace. On the other hand, in the short term, any rental growth isunlikely in Brussels and in Madrid considering the weakness ofdemand in both cities. Due to challenging market conditions evenfurther rental drops might occur, should the occupier market worsenfurther.

0

400

800

1,200

1,600

2,000

2,400

2,800

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2007

2007

2007

2007

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

2008

2008

2008

2008

2009

2009

2009

2009

2010

2010

2010

2010

2011

2011

2011

2011

CentralCentralCentralCentralParisParisParisParis

CentralCentralCentralCentralLondonLondonLondonLondon

MunichMunichMunichMunich BerlinBerlinBerlinBerlin FrankfurtFrankfurtFrankfurtFrankfurt MilanMilanMilanMilan BruxellesBruxellesBruxellesBruxelles MadridMadridMadridMadrid

0%

4%

8%

12%

16%Supply Vacancy Rate'000 m²

Supply & Vacancy RateSupply & Vacancy RateSupply & Vacancy RateSupply & Vacancy RateMain European Cities

BNP

Pari

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CITY REPORT ROME H2 2011 8

ROME OFFICE MAP

CITY REPORT ROME H2 2011 9

GLOSSARY

Average rent is calculated on the headline rent in a specific marketdistrict of the last four quarters’ average. Each quarterly averagerent is weighted by the surface of each lease signed during thequarter, in either new or second-hand premises.

Completions represent the total amount of floor space that hasreached practical completion and is occupied, ready for occupationor an occupancy permit where required has been issued during thesurvey period.

Closed Ended Fund is a vehicle that has a targeted range of investorcapital and a finite life.

Development Pipeline represents the total amount of floor space forall developments under construction and/or schemes (includingmajor refurbishments) that have the potential to be built in thefuture through having a secured level of planning permission butremain unimplemented at the survey date. It includes all proposednew buildings, those constructed behind retained facades andbuildings (or parts of buildings) undergoing a change of use to offices.

German Open Ended Fund (GOEF) is a public vehicle that does nothave a finite life and continually accepts new investor capital.The list of german Open Ended Funds is published by the BVI(Bundesverband Investment und Asset Management e.V.).

Investment volume takes into account all commercial propertiesBNP Paribas Real Estate is aware of, whose owner has changed duringthe studied period, whatever the purchasing price. It includes Officebuildings, Retail (supermarkets, hypermarkets, etc.), Industrial andLogistics Warehousing, Hospitality (hotels, resorts, etc.), Mixed (partsof portfolio or single asset which cannot be split up by product) andOthers (care homes, cinema, leisure, car parks, etc.). Quoted investmentvolumes are not definitive and are consequently subject to change.

Initial Gross Yield is defined as gross income (i.e. income before costsof ownership) over purchase price excluding costs of acquisition.

Initial Net Yield is defined as Net income (or NOI) over purchaseprice plus all other costs of acquisition.

Italian Macro Regions correspond to the NUTs 1 classification, withthe south and the Islands included in a single macro region.

Prime Office Rent / Prime Office Yield represent the top open-marketrent/yield at the survey date for an office unit:• of standard size commensurate with demand in each location• of the highest quality and specification• in the best location in a marketActual transactions are used to support the headline prime rental/yield quoted, but one-off deals, which do not represent the market,are disregarded. If there are no prime transactions during the survey

The numerical data used by BNP Paribas Real Estate Research Italy for its statistics feature all the information when compiling them. Thesestatistics may change according to new information brought to our knowledge. We adopt the PEPCIg1 definitions, on which most of thefollowing indicators published by BNP Paribas Real Estate are based, while other indicators are from INREV2 and from BNP Paribas RealEstate International Research Department. BNP Paribas Real Estate Italy collaborates with the other member of the Italian Research Forum3

(IRF) exchanging non confidential data in order to increase the data quality and thus contribute to the transparency of the Italian market.

period a hypothetical rent/yield is quoted, based on expert opinionof market conditions.

Investment volume by investor/seller type refers to the followingcategories: Italian property funds, gOEFs and other property funds,Property companies and REITs, Insurance companies and pension funds,Private Investors and Other (Public sector, Corporates, Banks, etc.).

Major Refurbishments represents refurbishments, where buildingwork must involve either structural alteration, and/or the substantialreplacement of the main services and finishes. The quality of the floorspace must have been substantially improved from its previouscondition so as to offer accommodation of a modern standard - althoughnot necessarily to the standard of a completely new building.

Take-up represents the total floor space (Net letting area) known tohave been let or pre-let, sold or pre-sold to tenants or owner-occupiersduring the survey period; it does not include space that is under offer.The take-up volume includes the transactions of all size that we areaware of.• A property is deemed to be “taken-up” only when contracts

are signed or a binding agreement exists• Pre-let refers to take-up that was either in the planning

or construction stage• All deals (including pre-lets) are recorded in the period

in which they are signed• Contract renewals are not included• sales and leasebacks are not included as there had been

no change in occupation• Quoted take-up volumes are not definitive and are consequently

subject to change.

Under Construction represents the total amount of floor space inproperties where construction has commenced on a new developmentor a major refurbishment (see separate definition) at the survey date.It includes properties for owner occupation, but it does not include sitesbeing cleared for possible development in the future. Property that isunder construction but pre-let or for owner occupation is recordedseparately where appropriate.

Vacancy represents the total floor space in existing properties, whichare physically vacant, ready for occupation in the next six months (thisperiod covers fit-out time) and being actively marketed at the survey date.

Vacancy Rate represents the total vacant floor space divided by thetotal stock at the survey date.

BNP Paribas Real Estate Disclaimer clauseBNP Paribas Real Estate cannot be held responsible if, despite its best efforts, theinformation contained in the present report turns out to be inaccurate or incomplete.This report is released by BNP Paribas Real Estate and the information in it is dedicatedto the exclusive use of its clients. The report and the information contained in it maynot be copied or reproduced without prior permission from BNP Paribas Real Estate.

1 Pan-European Property Common Interest group. This group assembles a wide range of European advisors and investors and major agents.2 European Association for Investors in Non-listed Real Estate Vehicles.3 CBRE, C&W, DTZ, gabetti, JLL and savills.

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