french commercial property markets 2012

FRENCH

PROPERTY MARKETS

2012 SUMMARY & 2013 OUTLOOK9th JANUARY 2013

CUSHMAN & WAKEFIELD 1

INVESTMENT

INTRODUCTION

INTRODUCTION


INVESTMENTECONOMIC CONTEXT AND FORECASTS INTRODUCTION

GLOBAL ECONOMY / GDP GROWTH (%)

2011 2012 2013* 2014*

Euro Zone 1.4 - 0.4 0.0 1.3

Germany3.1 1.0 0.6 1.7

France 1.7 0.1 0.4 1.3

United Kingdom 0.8 - 0.2 0.4 1.1

USA 1.7 2.2 1.9 2.8

China 9.3 7.7 8.5 7.8

Global 3.8 2.9 3.2 3.6

Sources: Crédit Agricole and OCDE / *Forecast.

• After relative improvements during 2011, the global economic climate for both developed and emerging countriesdeteriorated in 2012.

• French growth remained sluggish in 2012, a year which was also marked by the general elections. Industry in particular,was hit the hardest and saw the multiplication of restructuring plans.

• Whilst household consumption remained resilient somehow, it is no longer the driver of growth and is expected to declinefurther due to the deterioration of the job market.

TRENDS IN FRENCH UNEMPLOYMENT RATE *

8,0%

8,5%

9,0%

9,5%

10,0%

10,5%

11,0%

q1 q2 q3 q4 q1 q2 q3 q4 q1 q2

Source: INSEE / * Metropolitan France / **Forecast

2011 2012 2013**


INVESTMENTEFFECTS OF THE CRISIS ON THE FRENCH PROPERTY MARKET INTRODUCTION

• A longer economic crisis than expected.

• The real estate market has felt the impact of

the crisis since 2008.

• 2009 was the year of the recession and the

accentuation of the public deficit, marking the

lowest point in the rental and investment

property markets.

• After a slight recovery in 2010, the real estate

market saw the most growth in 2011: the

regaining of confidence was helped by

government measures taken both in the

Eurozone and USA to stabilize the global

economy.

• Further decline in 2012: the debt crisis

remained unresolved and the French elections

resulted in a decrease in investor and company

confidence.

Security

Visibility

Savings


INVESTMENTOVERVIEW OF THE 2012 FRENCH INVESTMENT MARKET INTRODUCTION

• A total of €14.9bn was invested in France in 2012 representing a decrease

of 10% when compared to the previous year and a volume close to the 10 year

average (-2 %). Large transactions, which mostly occurred in Paris, limited the

decline in activity.

• With take-up of 2.1 million sq.m of office space in Ile-de France, demand has

fallen by 10% compared with 2011. There was lower appetite for small and medium

sized areas although the Parisian market was offset by the completion of several

large-scale operations.

• With1.8 million sq.m of warehouse space let or sold to occupiers in France

in 2012, take-up was down by 25% on the previous year. The logistics market has

suffered due to the wait and see attitude of occupiers as well as the poor

performance of the majority of the large logistics hubs in France

• The arrival of a number of major foreign brands to France, the rapid expansion of

large retailers and the dynamism of the luxury sector have been of benefit to

zone A locations and to prime markets.


INVESTMENT

PROPERTY INVESTMENT ACTIVITY IN FRANCE


INVESTMENT2012 KEY FACTS

Moderate FALL in investment volume.

Less active OFFICE LETTINGS

MARKET.

Contrasting performances in the

different business districts of ILE-DE-

FRANCE.

- - - +++

LARGE TRANSACTIONS played a

key role.

Increasing presence of

INTERNATIONAL INVESTORS.

Domination of PARIS INTRA-

MUROS.

RETAIL: targeted sectors

performed well.

Rebound of the LOGISTICS market.


INVESTMENTINVESTMENT VOLUMES IN FRANCE (€ BN)

• A total of €14.9bn was invested in France in 2012 (418 transactions), €11bn of which was

invested in Ile-de-France.

•A 10% fall in investment volumes over the course of the year, or a 2 % fall when compared with

the yearly average of the last 10 years (€15.2bn).

• Investment volume still greatly exceeded its low point of 2009 (€7.8bn).

€14.9BNinvested in France

in 2012

-10%

yoy

11,1

9,8

12,2

17,5

24,4

28,5

13,0

7,8

11,1

16,5

14,9

0

5

10

15

20

25

30

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

10-year average (€15.2bn)


INVESTMENTOFFICE INVESTMENT VOLUMES IN FRANCE

•A 19% fall yoy, or an 11% fall in comparison with the yearly average of the last 10 years (€11.2bn).

• Accounting for 67% of all investments, the share of office investments was down slightly on last year, due to the fall in

transactions in the region of €50-100m.

7,7

8,0

10,2

14,0

18,2

19,5

10,3

5,3

6,7

12,3

10,0

84%

61%

67%

0%

20%

40%

60%

80%

100%

0

5

10

15

20

25

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Office investments (€bn) Share in total investments (%)



INVESTMENTOFFICE INVESTMENT VOLUMES IN PARIS/ILE DE FRANCE

INVESTMENT BREAKDOWN (€ VOLUME)

• Investment volumes were down by 32% in the “Western Crescent” (Western Business District, La Défense and the

South-Western Suburbs) in 2012.

•Certain well-located markets in the suburbs performed well. Boasting quality office buildings at competitive rents and with

excellent transport links, these sectors provide a good alternative for office lettings.

Urbagreen – Joinville-le-PontStart – Guyancourt

Liberté II – Charenton-Le-Pont

Terra Nova IV – Montreuil

City Zen – Bois-Colombes

47%

2%11%

7%

11%

4%2%

7%

9%

Inner Paris

La Defense

Western business districts

Boucle de Seine

Southwestern suburbs

Southern suburbs

Eastern suburbs

Northern suburbs

Rest of Paris region

2011

60%

4%

10%

2%

7%

8%1%

7%

Inner Paris

La Defense


Boucle de Seine

Southwestern suburbs

Southern suburbs

Eastern suburbs

Northern suburbs

Rest of Paris region

2012


INVESTMENTINVESTMENT DEAL ANALYSIS

•Out of a total of 418 transactions, 39 were over €100m, representing 53% of investments (9% of the total number).

•Medium-sized deals were fewer, penalised by the tightening of financing conditions and a reduced number of investors.

Neo-Retiro, Paris

Avant Seine-52 Hoche, ParisHaussmann-Courcelles, Paris

Portefeuille ANF, Lyon

Portefeuille Mercure, France

52-60 CE, Paris

Faubourg One, Paris

Carré Saint-Germain, Paris 7% 9%

22% 21%

21% 17%

23%25%

27% 28%

0%

20%

40%

60%

80%

100%

2011 2012

€1-15mn €15-50mn €50-100mn €100-200mn >€200mn

>€100mn

= 53%

*All types of products


INVESTMENTPURCHASER NATIONALITY IN FRANCE

• French, mainly institutional investors, are still in the majority (57%).

• Foreign investors mainly positioned themselves on large transactions and made up for 43% of all acquisitions (compared

with 38% in 2011)

• Sovereign Funds made a name for themselves in 2012 with 7 major acquisitions over €200m (representing €2.7bn).

INVESTMENT BREAKDOWN BY NATIONALITY OF PURCHASERS*

*All types of products

France

57%

Germany

9%

Norway

3%

UK

3%

Europe - other

3%

Middle East

14%

North America

7%

Asia

4%


INVESTMENTCROSS-BORDER ACTIVITY

•While the French are still in the lead, the foreign investor share went up from 38% in 2011 to 43% in 2012,

accounting for €6.4bn.

ASIA

10%

MIDDLE EAST

34%

EUROPE

40%

NORTH AMERICA

16%


INVESTMENTFRANCE INVESTMENT BREAKDOWN

23 Université, Paris 7 Siège d’Amundi, Paris 15

Cité du Retiro, Paris 8

116bis Champs-Élysées, Paris 8Faubourg One, Paris 8

52-60 Champs-Élysées, Paris 8

• Predominance of inner Paris: 20 transactions > €100m out of a total of 39 recorded in France.

• Volumes were boosted by large transactions carried out by foreign investors who targeted the most liquid and prestigious

assets of the capital.

• Investor aversion to risk increased further, favouring the most secure assets.

Paris CBD

25%

Rest of

Paris

16%

Rest of

Paris region

33%

Provinces

26%

*All type of products

PARIS

= 41%

FRANCE INVESTMENT BREAKDOWN*


INVESTMENTRETAIL INVESTMENT VOLUMES IN FRANCE

•A 9% increase yoy and a 64% increase when compared with the yearly average of the last 10 years (€2.2bn).

• This performance was boosted by 12 acquisitions of retail or mixed assets over €100m, accounting for 52% of retail

investments.

•High street retail accounted for 51% of all investments in retail.

0,9

0,8

1,2

1,9

2,3

4,8

1,2

1,9

3,6

3,3

3,6

0%

20%

40%

60%

80%

100%

0

1

2

3

4

5

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Retail investments (€bn) Share in total investments (%)

RETAIL INVESTMENT ACTIVITY IN FRANCE (€ BN)


33%

51%

45%

35%

22%14%

0%

20%

40%

60%

80%

100%

2011 2012

High street retail Shopping centres Retail warehousing

INVESTMENT ACTIVITY BY ASSET TYPE


INVESTMENTINDUSTRIAL INVESTMENT VOLUMES IN FRANCE

• Investment volumes were just below the 10 year average (€1.4bn), but up by 44% on 2011.

• The strong performance was aided by the sale of 3 large logistics portfolios (accounting for 45% of all industrial

investments).

€1.3BNinvested in industrial

in 2012

+44%

yoy

1,1

0,9

0,8

2,6

2,1

3,2

1,5

0,6

0,7

0,9

1,3

0%

20%

40%

60%

80%

100%

0

1

2

3

4

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Industrial investments (€bn) Share in total investments (%)



INVESTMENTTHE INVESTMENT MARKET IN THE PROVINCES

•Volumes invested in the provinces remained stable compared with last year (€3.9bn)

• The Lyons market accounted for 22% of sums invested outside Ile-de-France.

• Activity in other large towns in the provinces was animated by some significant transactions.

EXAMPLES OF TRANSACTIONS MADE IN THE PROVINCES IN 2012

Type Property Location Vendor Purchaser Area sqm Price

€mn

Retail ANF portfolio Lyons ANF Grosvenor - >300

Retail 65 Croisette Cannes KanAm Thor Equities 1,800 90

Office Oxygène tower Lyons Unibail-Rodamco AEW Europe 30,000 130

Office Lugdunum building Lyons Sogelym Dixence Unofi Assurances 21,200 76.4

Logistics Arrow portfolio Prologis Blackstone 480,000 208


INVESTMENTINTEREST RATES

•Competition between investors for the best assets weighed on yields, the fall in which followed on from the fall in

interest rates

• The spread between the OAT 10 year bonds and prime yields in Paris still remains attractive (227 bp as at 31/12).

•Growing distinction between prime and secondary markets

-2 %

-1 %

0 %

1 %

2 %

3 %

4 %

5 %

6 %

7 %

q4 05 q4 06 q4 07 q4 08 q4 09 q4 10 q4 11 q4 12

Prime office yield 3-month Euribor 10-year bonds Spread

PROPERTY YIELDS AND INTEREST RATES, AS AT 31/12

1.98%

0.19%

4.25%

227 bp


INVESTMENT2013 FORECAST

?

Predominance of EQUITY INVESTORS.

LACK OF PRIME investment opportunities.

DEBT MARKET potentially more favourable.

LETTINGS MARKETS under pressure.

Likely 10% FALL in INVESTMENT VOLUMES in 2013.


INVESTMENT

THE OFFICE LETTINGS MARKETS IN PARIS/ILE-DE-FRANCE

OFFICES


INVESTMENTOFFICES

TAKE-UP: An “average” year.

Key role played by LARGE TRANSACTIONS.

NEW AND REDEVELOPED properties make up for a significant share of take-up.

Strong performance in the NORTHERN & SOUTHERN INNER SUBURBS.

A less active PARIS INTRA-MUROS market.

Decrease in activity in the FINANCE & ADMINISTRATION SECTORS.

INCREASE IN SUPPLY available within 6 months.

PRIME RENTS remain high.

2012 KEY FACTS


INVESTMENTTAKE-UP: AN “AVERAGE” YEAR

• A 10% fall compared with 2011 and a 1% fall compared with the average of the last 10 years.

• Still, much higher take-up than in 2009 (+20%).

TRENDS IN TAKE-UP IN PARIS/ILE-DE-FRANCE (SQM)

OFFICES

1 5

81 1

02

1 7

42 3

28

1 9

37 6

38

2 0

49 4

52

2 7

91 6

22

2 6

56 4

43

2 3

57 4

03

1 7

52 6

65

2 0

91 8

64

2 3

21 0

82

2 0

98 3

51

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2002-2011 average (2.13 million sqm)


INVESTMENTLARGE TRANSACTIONS PLAY KEY ROLE

• 91 transactions > 4,000 sqm accounted for 1,044,379 sqm, i.e. 50% of total take-up.

• 10 transactions > 20,000 sqm accounted for 33% of total take-up > 4,000 sqm

TRANSACTION BREAKDOWN BY SURFACE AREA (IN SIZE)

CNET/ORANGE• ECO-CAMPUS

• Châtillon (92)

• 70,000 sqm

MINISTÈRE DE L’ÉCOLOGIE• TOUR ESPLANADE

• PUTEAUX (92)• 53,600 sqm

THALÈS• NEW VELIZY

• VELIZY-VILLACOUBLAY (78)

• 49,000 sqm

EXAMPLES OF SIGNIFICANT TRANSACTIONS

OFFICES

56% 54% 56% 57%49%

58%51% 55%

49%55%

50%

44% 46% 44% 43%51%

42%49% 45%

51%45%

50%

0%

20%

40%

60%

80%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Transactions <4,000 sqm Transactions >4,000 sqm


INVESTMENTNEW PROPERTIES MAKE UP FOR A SIGNIFICANT SHARE

Take-up > 4,000 sqm

• New/redeveloped properties accounted for 67% of all take-up >4,000 sqm.

• This figure includes a large number of turn key schemes (CNET, Thalès, Unilever, etc.).

• These projects show that occupiers are acting early to profit from the best possible leasing conditions

QUALITY OF TAKE-UP > 4,000 SQM TAKE-UP > 4,000 SQM ACCORDING

TO REASON FOR MOVING (IN SIZE)

OFFICES

42%

47%

10%

1%

Consolidation

Cost cuttings

Relocalisation

Extension

698 1

23

800 2

97

860 3

80

881 9

65

1 4

19 9

72

1 1

16 3

29

1 1

57 0

54

794 8

11

1 0

73 7

48

1 0

50 6

67

1 0

44 3

79

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Take-up Share of new/refurbished office space leased


INVESTMENTSTRONG PERFORMANCE IN THE NORTHERN AND

SOUTHERN INNER SUBURBS

• The high increase in take-up in the southern suburbs (+141% on 2011) can be in part explained by CNET moving all

staff to one roof in Châtillon, as this lettings transaction alone accounted for 48% of take-up in the sector in 2012.

• The northern suburbs also performed well, with a 55% increase in take-up compared with the 10-year average and

much more balanced activity than in 2011.

TAKE-UP BY SUBMARKETS2011/2012 (SQM)

SNCF• CITY ONE

• SAINT-DENIS (93) / 22,000 sqm

SNCF• INNOVATIS 2


SIGNIFICANT TRANSACTIONS IN THE

NORTHERN SUBURBS

SIEMENS• LE SISLEY


BETC EURO RSCG• EX-BÂTIMENT DES DOUANES

• PANTIN (93) / 16,000 sqm

CONSEIL GENERAL 93• LE PAPILLON

• BOBIGNY (93) / 15,000 sqm

SAMSUNG• OVALIE

• SAINT-OUEN (93) / 13,355 sqm

OFFICES

482 5

52

389 4

38

278 6

55

248 2

95

188 2

36

108 6

34

60 1

84

215 1

59

235 6

46

46 6

74

67 6

09

424 8

36

337 7

40

289 0

44

231 5

86

163 1

83

158 8

04

145 1

59

138 8

00

99 1

67

56 3

20

53 7

12

0

100 000

200 000

300 000

400 000

500 000

2011 2012


INVESTMENTA LESS ACTIVE PARIS INTRA-MUROS MARKET

• Take-up in central Paris fell by 24% over the course of a year.

• The Parisian market suffered from the fall in small and medium sized lettings transactions, as well as those over

4,000 sqm (24 compared with 30 in 2011).

• The fall in take-up in central Paris can also be explained by the lack of quality availabilities.

TAKE-UP IN INNER PARISSIGNIFICANT TRANSACTIONS IN PARIS

NEXITY• SOLSTYS

• PARIS 8 / 24,500 sqm

BANQUE POPULAIRE• PUSHED SLAB

• PARIS 13 / 19,000 sqm

RFF• EQUINOXE

• PARIS 13 / 18,200 sqm

PPR• LAENNEC

• PARIS 7 / 16,460 sqm

CRITEO• 32 BLANCHE

• PARIS 9 / 10,000 sqm

HOGAN LOVELLS• 17 AVENUE MATIGNON

• PARIS 8 / 7,000 sqm

OFFICES

62 %54 %

64 % 61 %67 %

58 %53 % 55 % 53 %

62 %

15 %

13 %

14 % 17 %

15 %25 %

18 %23 % 26 %

14 %

23 %

33 %

22 % 22 %18 % 17 %

29 %22 % 21 % 24 %

0%

20%

40%

60%

80%

100%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Paris CBD Paris Centre East Paris Left Bank


INVESTMENT

DECREASE IN ACTIVITY IN THE FINANCE &

ADMINISTRATION SECTORS

• The economic and financial crisis weighed on the take-up of office space by the banking and insurance sector (157,489

sqm of take-up in 2012 compared with an average of 246,900 sqm over the last 10 years).

•Due to the general elections in 2012, the number of transactions over 4,000 sqm in the administration sector fell to 11

transactions in 2012 compared with an average of 18 per year between 2002 and 2011).

• The letting of the Esplanade tower by the Ministry of Ecology suggests that the French government’s cost cutting

strategy is likely to mean further large-scale moves in the next few months.

TAKE-UP > 4,000 SQM ACCORDING TO ACTIVITY (IN SIZE)

2012 2011 MOYENNE 2002-2011

16%

15%

5%

2%43%

12%

7%

Administration

Banque-Assurance

Communication

Conseil

Industrie-Distribution

IT-Telecom

Services

18%

21%

8%4%

23%

16%

10%

Administration

Banque-Assurance

Communication

Conseil


IT-Telecom

Services

19%

25%

5%6%

28%

11%

6%

Administration

Banque-Assurance

Communication

Conseil


IT-Telecom

Services

OFFICES

2002-2011 AVERAGE

Public sector Banking-Insurance- Communication Advisory Manufacturing-Distribution- IT Services


INVESTMENTINCREASE IN SUPPLY AVAILABLE WITHIN 6 MONTHS

• The amount of available supply went up in 2012 (+4%) due to the vacating of premises and several new lettings

schemes being put on the market.

•New and redeveloped stock went down by 3% over the course of a year and only represents 23% of the total supply on

the market within a 6 month period.

SUPPLY AVAILABLE IN LE-DE-FRANCE (SQ.M) ACCORDING TO BUSINESS DISTRICT

OFFICES

2 7

72 0

90

3 1

17 6

55

3 3

83 3

20

3 4

13 6

81

3 1

33 1

13

2 7

94 6

76

3 2

90 7

64

4 1

03 1

09

4 0

66 0

53

3 7

20 9

02

3 8

69 3

80

6,1%

6,7%7,1% 7,1%

6,5%

5,7%

6,6%

8,0% 7,9%

7,1%7,4%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

3 500 000

4 000 000

4 500 000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Supply (sqm) Vacancy rate (%)

18%

17%

26%

26%

23%

52%

14%

36%

19%

36%

0 100 000 200 000 300 000 400 000 500 000 600 000 700 000

Paris CBD

WBD

Northern

suburbs

La Défense

Southwestern

suburbs

Boucle de Seine

Paris Left Bank

Eastern suburbs

Paris Centre

East

Southern

suburbsNew/redeveloped

Renovated

Secondary/to be renovated


INVESTMENTPRIME RENTS REMAIN HIGH

• The lack of quality supply was accentuated in 2012, encouraging tenants with a high profit margin to pay the highest

prices for the last availabilities in the best districts of the capital.

• There are still big differences in rental values, whilst incentive measures have been a key point of negotiation

between occupiers and landlords.

RENTAL VALUES IN ILE-DE-FRANCE

ROLAND BERGER• LE MAGISTERE

• PARIS 8 / 7,390 sqm

HOGAN LOVELLS• 17 AVENUE MATIGNON

• PARIS 8 / 7,000 sqm

EXAMPLES OF TRANSACTIONS

+/- €800/sqm/yr

SJ BERWIN• OZONE

• PARIS 8 / 3,500 sqm

AT KEARNEY• 23-25 RUE DE L’UNIVERSITÉ

• PARIS 7 / 2,000 sqm

OFFICES

760

662

820

700

823

507

440

539

540

595

495

550

581

512

319

295

354 357

327

200 €/m²

500 €/m²

800 €/m²

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Paris CBD: prime rent (€/sqm/yr) Paris CBD: average rent (€/sqm/yr)

Hauts de Seine: prime rent (€/sqm/yr) Hauts de Seine: average rent (€/sqm/yr)

(1) Prime rent: average of the 5 highest transactions in terms of headline rent >1,000 sq. m. in a year

(2) Average rent: average rental values (headline rents mentioned in transactions) all areas included, refurbished or second-hand premises


INVESTMENTINCREASE IN FUTURE SUPPLY

• The market will be in over-supply in 2013 and is likely to remain so in 2014. This is due to not all availability having been

taken-up in 2012.

• The amount of future supply depends greatly on the geographical sector and the specific business district, with

70% of supply concentrated in the Western Crescent (Western Business District, La Défense, South Western

Suburbs, Boucle de Seine).

FUTURE SUPPLY IN ILE-DE-FRANCE (SQ.M) GREOGRAPHICAL BREAKDOWN

946 445 m²

701 013 m²

1 525 731 m²

799 482 m²

OFFICES

20%

20%

17%

13%

9%

8%

7%6%

18%

17%

13%12%

12%

11%

11%6% Northern suburbs

La Defense


Boucle de Seine

South Western suburbs

Eastern suburbs

Paris non CBD

Paris CBD

474 652

2013 2014

Volume of secure future supply > 10,000 sq.m Volume of likely future supply > 10,000 sq.m

Average > 10,000 sq.m take -up over the last 5 years Average > 5,000 sq.m take -up over the last 5 years


INVESTMENTSUMMARY

OFFICE LETTINGS KEY INDICATORS

2011 2012 TREND

Take-up (sqm) 2,321,082 2,098,351 ▼

Take-up > 4,000 sqm (sq.m) 1,050,667 1,044,379 ►

Take-up > 4,000 sqm (sq.m)

– share of new office space66% 67% ►

Number of transactions > 4,000 sqm 92 91 ►

Supply available within 6 months (sqm) 3,720,902 3,869,380 ▲

Vacancy rate (%) 7.1% 7.4% ▲

Prime rent (1) (€/excl. taxes & charges/yr) 838 838 ►

Average rent (2) (€/excl. taxes & charges/yr) 364 356 ▼

OFFICES

(1) Prime rent: average of the 5 highest transactions in terms of headline rent >1,000 sq. m. in a year

(2) Average rent: average rental values (headline rents mentioned in transactions) all areas included, refurbished or second-hand premises


INVESTMENT

? Poor ECONOMIC OUTLOOK.

Further SOCIAL TENSIONS are likely to weigh on take-up.

Companies will still seek EFFICIENCY and REDUCTION OF COSTS.

Success of WELL-LOCATED districts in the suburbs offering NEW AND ECONOMICAL PREMISES

More significant INCENTIVE MEASURES in secondary markets.

Stable rental values in ESTABLISHED SECTORS with a limited office supply.

OFFICES2013 FORECAST


INVESTMENT

LARGE WAREHOUSE MARKET IN FRANCE

GRANDS

ENTREPÔTS

Jean-Paul Deheeger

Head of the Industrial Department

LARGE

WAREHOUSES


INVESTMENT

1 800 000

1 000 000

1 500 000

2 000 000

2 200 000

2 600 000 2 600 000

1 600 000

1 760 000

2 400 000

1 800 000

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

France Ile-de-France

TAKE-UP > 5 000 sq.mIn France

Source: Cushman & Wakefield/Entrepôts > 5 000 m², incluant opérations en compte-propre et ventes utilisateurs.

LARGE

WAREHOUSES


INVESTMENT

740 000

250 000

450 000

690 000

1 000 000

700 000

640 000 630 000

790 000

850 000

560 000

0

200 000

400 000

600 000

800 000

1 000 000

1 200 000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

In Ile-de-France

Source: Cushman & Wakefield/Entrepôts > 5 000 m², incluant opérations en compte-propre et ventes utilisateurs.

TAKE-UP > 5 000 sq.m LARGE

WAREHOUSES


INVESTMENTCHARACTERISTICS OF TAKE-UPIn France (transaction size)

31%

20%14%

8%

1%

3%

6%

5%

3%9%

Ile-de-France

Rhône-Alpes

Nord-Pas-de-Calais

PACA

Pays de la Loire

Burgandy

Normandy

Alsace-Lorraine

Centre

Other

Geographical Breakdown – 2012

GRANDS

ENTREPÔTS

Geographical Breakdown – 2011

33%

14%17%

11%

4%0%

3% 3%

2% 13%

Ile-de-France

Rhône-Alpes

Nord-Pas-de-Calais

PACA

Pays de la Loire

Burgundy

Normandy

Alsace-Lorraine

Centre

Other

LARGE

WAREHOUSES


INVESTMENT

18%

25%

20%

37%

5 000 - 10 000 m²

10 000 - 20 000 m²

20 000 - 30 000 m²

> 30 000 m²

Size Bracket – 2012

14%

28%

16%

42%

5 000 - 10 000 m²

10 000 - 20 000 m²

20 000 - 30 000 m²

> 30 000 m²

Size Bracket – 2011

CHARACTERISTICS OF TAKE-UPIn France (transaction size)

LARGE

WAREHOUSES


INVESTMENTCHARACTERISTICS OF TAKE-UPIn France (transaction size)

34%

52%

14%

3PL

In-House Logisticians (Distribution sector)

In-House Logisticians (Manufacturing sector)

Type of Activity – 2012

GRANDS

ENTREPÔTS

47%

45%

8%3PL

In-House Logisticians (Distribution sector)

In-House Logisticians (Manufacturing sector)

Type of Activity – 2011

LARGE

WAREHOUSES


INVESTMENTEXAMPLES OF SIGNIFICANT TRANSACTIONSTransactions > 10 000 sq.m carried out in France in 2012

MARKET NEW TENANT ADDRESS SURFACE AREA

Sq.m

Ile-de-France INTERMARCHÉ Parc d’activités Jean Monnet/Vert-Saint-Denis (77) 94 300

Nord-Pas-de-Calais AMAZON.FR Lauwin-Planque (59) 90 000

Nord-Pas-de-Calais OXYLANE (DÉCATHLON) Lieu-dit Terres d’Epinoy/Rouvignies (59) 57 000

Rhône-Alpes FIDUCIAL OFFICE SOLUTIONS Satolas-et-Bonce (38) 45 000

Normandy SCHNEIDER ELECTRIC ZAC du Long Buisson/Guichainville (27) 43 000

Burgundy AMAZON.FR Distripôle/Sevrey (71) 40 000

Ile-de-France INDESIT ZAC Parisud/Combs-la-Ville (77) 40 000

Alsace SCAPALSACE ZA de Niederhergheim (68) 30 000

Pays de la Loire SYSTÈME U Vendéopôle/Fontenay-le-Comte (85) 27 400

Rhône-Alpes CONFORAMA ZA Lafayette/Saint-Georges-d’Espéranche (38) 25 200

Champagne EURODIF Parc logistique de l’Aube/Troyes (10) 24 000

Nord-Pas-de-Calais IM LOGISTIQUE Distripôle/Houplines (59) 22 500

Ile-de-France OTELO Avenue du Fief/Saint-Ouen-l’Aumône (95) 18 300

PACA PROLOG Distriport/Fos-sur-Mer (13) 14 500

GRANDS

ENTREPÔTS

LARGE

WAREHOUSES


INVESTMENTRENTSPrime rents as at end 2012

GRANDS

ENTREPÔTS

PRIME RENTS OF LARGE WAREHOUSES (€/sq.m/yr)

LARGE

WAREHOUSES


INVESTMENTOVERVIEW OF 2012Large Warehouse Market in France

GRANDS

ENTREPÔTS

• 1.8 million sq.m of take-up France, representing a 25 % fall

compared with 2011.

• The four hubs of the north-south axis concentrated 73% of total

take-up, a figure similar to that recorded in 2011.

• 560,000 sq.m of take-up in Ile-de-France: a sharp 34 % decrease

compared with 2011, representing the lowest level of take-up since 2004.

• 360,000 sq.m of take-up in the Lyons region, the only market on

the north-south axis to have performed well in 2012.

• Stability of prime rents: slightly over 50 €/sq.m/yr in Ile-de-France.

• Slight fall in available supply which can be explained by the take-up of

new and well-located secondary assets, as well as by the slowdown in

forward sale developments.

LARGE

WAREHOUSES


INVESTMENTOUTLOOK FOR 2013Large Warehouse Market in France

GRANDS

ENTREPÔTS

LARGE

WAREHOUSES


INVESTMENT

THE RETAIL LETTINGS MARKET IN FRANCE

COMMERCESRETAIL


INVESTMENT2012 KEY FACTS

A large INCREASE in RETAIL STOCK

Higher QUALITY retail developments

Shopping centres: development of new, innovative and exciting concepts to stand out from the

competition and to create a BUZZ in the market place

The LUXURY SECTOR has strengthened the attractiveness of the high street

A LARGE GULF between prime and secondary

Competition has been accentuated by the boom of E-COMMERCE

ILLADAPTED REGLEMENTATION surrounding retail

A CHANGING retail property market

RETAIL


INVESTMENTFRENCH RETAIL PROPERTY STOCK

An increase in supply

Retail property stock in France

LOCATION NUMBER OF SITES NUMBER OF SHOPS TOTAL AREA(SQM)GROWTH IN TOTAL

AREA - 2011/2012 (%)

HIGH STREET₁

Provinces 209 112,306 13,572,138 0 (0.1)

Ile-de-France 83 26,154 4,007,729 0 (0)

Total 292 138,460 17,579,867 0 (0)

SHOPPING CENTRES²

Provinces 746 25,673 14,634,982 1.3 (1.1)

Ile-de-France 187 9,799 4,988,392 1.2 (2.2)

Total 933 35,472 19,623,374 1.3 (1.4)

RETAIL PARKS³

Provinces 923 34,943 29,006,821 1.5 (0.8)

Ile-de-France 132 4,919 4,189,721 3.0 (1.8)

Total 1,055 39,862 33,196,542 1.7 (0.9)

(1) Comprising at least 50 sites

(2) Shopping centre comprising at least 10 sites

(3) Out of town retail zone comprising at least 10 sites

*Source: Cushman & Wakefield as at 1st January 2013 (X): Annual growth 2011/2012 in %

RETAIL


INVESTMENTA LARGE INCREASE IN RETAIL STOCK

Recent and forthcoming openings

RETAIL

354,1

91

316,3

60

Shopping centres Retail parks

260,1

63

547,6

46


493 990

798 333

430 341

892 745

Effective openingsOpening announced on the 1st January

2011 – OPENINGS IN SQM 2012 – OPENINGS IN SQM 2013 – ESTIMATED OPENINGS IN SQM*

488,2

89

884,1

40


Source: Cushman & Wakefield

*As at 1st January 2013


INVESTMENTA LARGE INCREASE IN RETAIL STOCK

2012: A significant year for postponed retail projects


1 449 443

893 209

(62 %)

267 160

214 944

72 130

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

2012 Forecast Breakdown of 2012 forecast

Remainder

Moved back to 2015

Moved back to 2014

Moved back to 2013

Developments completed in 2012

Shopping centres +

Retail parks

1,323,086 sq. m.

Shopping centres +

Retail parks

807,809 sq. m.

RETAIL


INVESTMENTHIGHER QUALITY RETAIL DEVELOPMENTS

New emblematic projects and openings

So Ouest, Levallois-Perret (92)

L’Atoll, Beaucouzé (49)

Beaugrenelle, Paris (75015)

L’Aire des Moissons, Saint-Parres-aux-Tertres (10)

RETAIL


INVESTMENTMAJOR OPENINGS AND FORTHCOMING PROJECTS

Examples of new shopping centres

2012 OPENINGS

TOWN DEVELOPMENT TYPE AREA SQM

Lyon (69) Confluence Creation 52,000

Levallois-Perret (92) So Ouest Extension-redevelopment 46,770

La-Chapelle-Saint-Luc (10) L’Escapade Transfer-Extension 16,700

Montreuil (93) Grand Angle Creation 15,000

Claye-Souilly (77) Les Sentiers de Claye Extension 13,000

Saint-Herblain (44) Atlantis Extension 9,800

2013 PROJECTS


Tremblay-en-France (93) Aéroville Creation 65,000

Villeneuve-la-Garenne (92) Bongarde Creation 63,000

Paris (75015) Beaugrenelle Extension-redevelopment 45,000

Epinay-sur-Seine (93) L’Ilo Redevelopment 36,700

Caen (14) Les Rives de l’Orne Creation 28,700

Cherbourg (50) Les Eleis Creation 15,400

260,163 SQMof openings in France

in 2012

- 27%

YOY


RETAIL


INVESTMENT

NEW AND INNOVATIVE SHOPPING CENTRES WHICH STAND

OUT FROM THE COMPETITION

Significant lettings transactions in shopping centres

MARKS & SPENCER

So Ouest – Levallois-Perret (92)

6,970 sqm

HOLLISTER

Carré Sénart - Lieusaint (77)

800 sqm

JD SPORTS

Carré Sénart – Lieusaint (77)

700 sqm

MUJI TO GO

Cœur Saint-Lazare – Paris (75)

80 sqm

CLAUDIE PIERLOT


150 sqm

FOREVER 21

Rosny 2 – Rosny-sous-Bois (93)

1,800 sqm

PRÊT-À-MANGER


200 sqm

PARIS PROVINCES

HOLLISTER

Atlantis – Saint-Herblain (44)

800 sqm

DESIGUAL

Cap 3000 – Nice (06)

700 sqm

ALDO

Confluence – Lyons (69)

150 sqm

LEGO

Euralille – Lille (59)

300 sqm

SUITE BLANCO

Confluence – Lyons (69)

900 sqm

FOSSIL

La Part-Dieu – Lyons (69)

220 sqm

JD SPORTS

Saint-Sever – Rouen (76)

400 sqm

Source: Cushman & Wakefield: Those in dark blue indicate openings in new shopping centers sqm (creations or extensions and redevelopments)

RETAIL


INVESTMENTHIGHER QUALITY RETAIL DEVELOPMENTS

Examples of new and forthcoming retail parks

547,646 SQMof openings in France

in 2012

+ 73 %

YOY

2012 OPENINGS


Beaucouzé (49) L’Atoll Creation 91,000

Pontault-Combault (77) Les Quatre Chênes Creation 47,000

Chambourcy (78) Les Vergers de la Plaine Creation 29,500

Les-Clayes-sous-Bois (78) Alpha Park Extension 25,400

Salaise-sur-Sanne (38) Green 7 Creation 21,000

Lieusaint (77) Shopping Parc Extension 13,500

2013 PROJECTS


Mondeville (14) Mondeville 1 Creation 42,000

Saint-Parres-aux-Tertres (10) L’Aire des Moissons Creation 35,000

Nîmes (30) Costières Park Creation 27,000

Boé (47) Agen-Boé Creation 23,000

Montévrain (77) Clos du Chêne Extension 21,000

Soyaux (16) Parc de la Jaufertie Creation 16,000


RETAIL


INVESTMENT

THE LUXURY SECTOR HAS STRENGTHENED THE

ATTRACTIVENESS OF THE HIGH STREET

Significant lettings transactions in 2012

C & A

23-25 bd de la Madeleine – 75001

6,870 sqm

FOREVER 21

144 rue de Rivoli – 75001

4,000 sqm

BERLUTI

14 rue de Sèvres – 75006

800 sqm

BERLUTI

9 rue du Faubourg St-Honoré – 75008

790 sqm

HERMES

20 rue Grignan – Marseilles

300 sqm

ZARA

28 rue Alsace-Lorraine – Toulouse

2,350 sqm

VANS

97 rue Sainte-Catherine – Bordeaux

240 sqm

TIFFANY & CO

62 avenue des Champs-Élysées – 75008

690 sqm

ARMANI

42 boulevard de la Croisette– Cannes

260 sqm

JD SPORTS (SIZE)

18 rue Berger – 75001

300 sqm

HERMES/SHANG XIA

8 rue de Sèvres – 75006

160 sqm

AIGLE

29-33 av. des Champs-Elysées – 75008

150 sqm

PARIS PROVINCES

TOMMY HILFIGER

25 rue Grignan – Marseilles

300 sqm

TIFFANY & CO

6 avenue de Verdun – Nice

150 sqm

Source: Cushman & Wakefield: note the dark blue transactions indicate the openings of luxury brands.

RETAIL


INVESTMENTA LARGE GULF BETWEEN PRIME AND SECONDARYPrime high street rental values

PRIME RENTS IN PARIS (€/sqm/yr – zone A)

LOCATION Q4 2011 Q4 2012 TREND 2013

Avenue des Champs-Élysées 10,000 15,000 ▲

Rue du Faubourg Saint-Honoré 6,500 8,000 ▲

Avenue Montaigne 6,500 8,000 ▲

Boulevard Haussmann 4,600 5,000 ▲

Boulevard Saint-Germain 4,500 5,500 ▲

Rue de Rivoli 3,500 4,000 ▲

PRIME RENTS IN THE PROVINCES (€/sqm/yr – zone A)

LOCATION Q4 2011 Q4 2012 TREND 2013

Bordeaux – Rue Sainte-Catherine 2,000 2,000 ►

Cannes – Croisette 6,000 6,500 ▲

Lille – Rue Neuve/Béthune 2,000 2,000 ►

Lyons – Rue de la République 2,000 2,200 ▲

Marseilles – Rue Saint-Ferréol 1,800 1,800 ►

Nice – Avenue Jean Médecin 2,000 2,000 ►

Strasbourg – Place Kléber 2,000 2,000 ▲

Toulouse – Avenue Alsace-Lorraine 2,000 2,000 ►

€15,000

/SQM/YRZA Rental Value

for the Champs-Elysées

- 7%

Annual decline of

national valuesSource/ L’Argus de l’Enseigne


RETAIL


INVESTMENTA LARGE GULF BETWEEN PRIME AND SECONDARY

Prime rental values for shopping centres

PRIME RENTS IN PARIS/ILE DE FRANCE (€/sqm/yr)

TYPE Q4 2011 Q4 2012 TRENDS 2013

Regional shopping centres 2,000 2,000 ►

Large shopping centres 950 950 ▼

PRIME RENTS IN THE PROVINCES (€/sqm/yr)

TYPE Q4 2011 Q4 2012 TRENDS 2013

Regional shopping centres 1,400 1,400 ►

Large shopping centres 800 700 ▼

• The rental values for the best located units in regional shopping centres have remained stable, whilst units located in

secondary locations have shown a slight decrease.

• Negotiations between retailers and landlords have intensified, with more and more brands determined to renegotiate and

decrease their occupational costs to regain competiveness in a difficult environment

• Shopping centres have particularly suffered from brands having successfully negotiated substantial rental incentives.

RETAIL

For well-located surface areas of 150 sqm let to fashion or service retailers


INVESTMENT

• Retailers are continuing to target priority strategic sites where they consider it necessary to be present, which explains the

stability of prime rental values.

• Retail parks offer both a lower level of rent and setting up costs than shopping centres, providing an advantage at a

time when the fall in consumer spending makes it hard for retailers to remain competitive.

• Despite their advantages, retail parks still remain affected by retailers negotiating their lease terms (reduced firm periods, capped

charges etc.).

PRIME RENTS IN PARIS/ILE DE FRANCE (€/sqm/yr)

LOCATION Q4 2011 Q4 2012 TRENDS 2013

Herblay, Plaisir, etc. 180 180 ►

PRIME RENTS IN THE PROVINCES (€/sqm/yr)

LCOATION Q4 2011 Q4 2012 TRENDS 2013

Lyons (St-Priest), Marseilles (Plan de Campagne),

etc.170 170 ►

A LARGE GULF BETWEEN PRIME AND SECONDARY

Prime rental values for retail parks

RETAIL

For well-located surface areas of 1,000 sq.m located in prime locations in large catchment areas.


INVESTMENT

COMPETITION HAS BEEN ACCENTUATED BY THE BOOM

OF E-COMMERCE Growth in online sales in France

8,4

11,6

15,6

20,0

25,0

31,0

37,7

45,2

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

5

10

15

20

25

30

35

40

45

50

2005 2006 2007 2008 2009 2010 2011 2012e

Chiffres d'affaires (Mds €) Croissance annuelle (%)

Source: FEVAD

RETAIL

11,6

15,6

20,0

25,0

31,0

37,7

45,5

33%34%

28%

25%24%

22%

18%

0%

10%

20%

30%

40%

50%

0

10

20

30

40

50

2006 2007 2008 2009 2010 2011 2012 e.

Turnover (€ billion) YOY growth (%)


INVESTMENTILLADAPTED REGLEMENTATION SURROUNDING RETAIL The general elections have halted progress on retail law

COMMERCES

The incertitude observed in 2011

UNFAIRNESS between laws governing

E-commerce and those governing

general retail

Unclear implementation of the DAC

SALES occurring outside the fixed

sales periods criticized by

professionals

SUNDAY REST remained a key issue

Negative impact of APPEALS on retail

development projects

… continued into 2012

Proposal of the LAW ON TAXATION ON

INTERNET SITES but rapid proliferation of drive-

through grocery pickup

The proposed LAW ON URBAN RETAIL has not

been followed up

SALES occurring outside the fixed sales periods have

not been dealt with

Majority opposition to SUNDAY OPENINGS

condemned by retailers

New proposal for a law on CONTROLLING

EXCESSIVE APPEALS to dissuade appealing parties

RETAIL


INVESTMENT

Atoll

Cœur Saint-Lazare

One Nation Paris

Lego

Babycare by Orchestra

FNAC Bercy Village

Pandora

Prêt à Manger

JD Sports

A CHANGING RETAIL PROPERTY MARKET Significant examples

Newcomers New concepts New formats

RETAIL


INVESTMENT

OUTLOOK

OUTLOOK


INVESTMENTREAL ESTATE MARKET OUTLOOK FOR 2013 OUTLOOK

• Rise in unemployment coupled with fiscal tightening: a poor economic

outlook

• Lack of confidence amongst investors and businesses

• Investors and occupiers continue to disfavour secondary markets

• New transactions for prime and emblematic properties: France and the

Parisian region are the destination of choice for large wealthy investors and

international fund managers who see Paris as the place to invest in.

• A strongly contrasted market with developments reflecting the following:

- the appetite of new players (sovereign funds, foreign brands);

- transformation of work patterns;

- disruption of consumption patterns.

www.cushmanwakefield.fr

french commercial property markets 2012

Documents

france bn investment

office investment volumes

key facts investment

investment breakdown

metropolitan france

france cushman wakefield5

year average

office investments bn