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nº 43 November 2015

Document issued by LaSBA´s Permanent

Research Program

Shopping Centres in Spain:Semi-annual Activity ReportNovember 2015Economy:

Graph no. 1: GDP

Source: Banco de España and Eurostat.

1. Spain’s GDP is still growing above the European Union’s average (28 countries). It grew 2.7% year-on-year in the first Quarter of 2015, 3.2% in the second Quarter and 3.4% in the third Quarter, whereas the European Union has grown under 2% in each Quarter. (see Graph no. 1)

2. Unemployment has decreased to 21.77% in the third Quarter of 2015, opposite 9.33% for the entire European Union (28 countries), which supposes a gap of 12.43% with the rest of Europe. (see Graph no. 2)

Source: INE and LaSBA.

3. HCPI (Harmonised Consumer Price Index) is still under slight deflation in 2015, with the exception of the second Quarter, when there was a variation of 0.1%. (see Graph no. 3)

4. The Gross Family Savings Rate has been more or less stable in the last Quarters. In the third Quarter of 2015 it’s at 9.2%, which is the last available data. (see Graph no. 4)

5. Confidence indicators have been recovering consistently since the beginning of 2015. (see Graph no. 5)

6. The Retail Index is also recovering, with higher growth rates with respect to 2014. From September to November 2015 the growth rate has always been above 3.5%, at constant prices (discarding service stations). (see Graph no. 6)

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Graph no. 2: Unemployment

Source: Banco de España and Eurostat.

Graph no. 3: Harmonised CPI Graph no. 4: Gross Family Savings Rate

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Source: INE and LaSBA. Source: INE and LaSBA.

Graph no. 5: Confidence Indicators Graphno. 6: Retail Index

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Source: INE and LaSBA.

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nº 43 November 2015

OBSERVATORIO LaSBA

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Bandeira Vigo

Siam Mall Tenerife

Bauhaus Zaragoza

La Fira Tarragona

8. For the final Quarter of 2015, around 153,000 sqm of new GLA are planned for the market, with the opening of Abella in Lugo (31,000 sqm GLA) and La Fira in Reus as highlights.

9. According to the estimations, the year 2015 should end with around 230,000 sqm of new GLA, a higher amount than in 2014 (156,600 sqm), with 10 openings expected for the year’s final Quarter. (see Table no. 3)

10. By the end of 2015, Spain will have a retail allocation of more than 20.4 million sqm of GLA (LaSBA’s Data Base). This data is different than the one managed by the Spanish Association of Shopping Centres (AECC), due to the fact that LaSBA includes in its Data Base department stores and some centres and retail parks that the AECC does not consider. Considering the current population data, the estimated retail density will be 440 sqm/1,000 inhab., slightly above the 438 sqm/1,000 inhab. of the same period of 2014.

L’Epicentre Valencia

Shopping Centre Development:

7. During the first three Quarters of 2015 a total of 5 openings took place, which add up a GLA of 75,100 sqm; this amount includes 29,700 sqm of GLA corresponding to specialised medium-sized units established outside of retail complexes. This amount is roughly 90% of the 83,200 sqm of GLA inaugurated during the same period of 2014. No extensions of existing shopping centres were registered (see Table no. 1)

Table no. 1: Openings 2015 until September

Source: LaSBANote: Stand-Alone Medium-Sized Units and Department Stores are included.

Table no. 2: Planned Openings Q4 2015

Source: LaSBANote: Stand-Alone Medium-Sized Units and Department Stores are included.

Graph no. 7: Inaugurated GLA 2006-2015 (year-end estimation)

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Average 2006-2010: 829,300 sqm GLA

Est.

Average 2011-2015: 335,600 sqm GLA

Source: LaSBA’s Data Base

Shopping Centre Location Developer GLA (sqm) OpeningBandeira O Calvario Inversiones Abuín 14.000 21-maySiam Mall Adeje Depósitos Almacenes Número Uno 31.400 23-mayTotal Shopping Centres 2 45.400Bricomart Madrid Bricomart 7.700 17-marLeroy Merlin Logroño Leroy Merlin 8.000 24-junBauhaus Zaragoza Bauhaus 14.000 26-junTotal Medium-Sized Units 3 29.700Total Openings 5 75.100

Shopping Centre Location Developer GLA (sqm) OpeningL'Epicentre Sagunto, Valencia Saguncenter 16.000 OctoberLa Fira Reus, Tarragona Metrovacesa 33.000 NovemberNevada (1ª fase - Leroy Merlin) Granada General de Galerías Comerciales 12.000 NovemberAbella Lugo Inversiones Abuín 31.000 NovemberP.C. Gines Plaza Sevilla Paster 8.500 NovemberTotal Shopping Centres 5 100.500Bauhaus Madrid Bauhaus 16.000 OctoberBrico Dêpot Oiartzun Brico Dêpot 6.500 OctoberCostco Getafe Costco 13.800 OctoberLeroy Merlin Sant Cugat del Vallès Leroy Merlin 8.500 NovemberBricomart Santander Bricomart 7.500 NovemberTotal Medium-Sized Units 5 52.300Total Openings 10 152.800

nº 43 November 2015

OBSERVATORIO LaSBA

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Plaza Imperial Zaragoza

Nasssica Madrid

Aqualón Huelva

Marineda City A Coruña

11. Regarding affluences, on average there was a growth of 4% in August 2015, with respect to the same month of the previous year, with four consecutive months of positive results, according to the FootFall Index. The index has varied since the beginning of the year, and went from 111.21 points in January, to 86.63 in February, 84.46 in March, 88.53 in April, 87.06 in May, 87.17 in June, 100.31 in July and 94 in August.

12. According to data by the AECC, shopping centres and retail parks’ affluences will have grown around 6% by the end of 2015, closing the year with 1.9 billion visitors.

13. Also according to the AECC, sales in these types of establishments will grow 5.9% in 2015, reaching 40.914 billion Euros.

14. Plaza Imperial has decided its new strategy for revitalising this shopping centre located in front of the Zaragoza Fair. Its owners want to convert the establishment into an outlet centre. This way, for example, they have reached an agreement with Grupo Cortefiel to introduce its low cost brand Fifty Factory before the end of the year. The centre should conclude its project throughout 2016.

15. Nassica is undergoing a change in image which includes the refurbishment and modernisation of its facilities to improve the attention and customer service and their shopping experience. The refurbishment works, which will not affect the centre’s commercial activity, have started in June and will conclude before the end of the year.

16. Aqualón will change its concept. The first shopping centre to appear in Huelva, it intends to seek its own space by polarising the capital’s retail supply through the mutation of the centre into a leisure and restoration complex.

17. Marineda City has begun construction to change the image of its leisure and restoration area, located in the shopping centre’s second floor, seeking to generate new space and incorporate more alternatives to its family type costumers. The project intends to rehabilitate new terrace spaces on the restoration establishments, giving a warmer and more natural image to the infrastructure.

18. Carrefour San Pablo has reopened its facilities after a complete refurbishment. This reform meant a renovation of the entire shopping centre and a change of its global image, with aesthetics modifications and improvements in the services which make the visitation experience more comfortable and attractive.

19. Parc Central in Tarragona has changed its management team. The new managers are CBRE. The shopping centre has 110 units and almost 32,000 sqm.

Shopping Centres in Operation:

Information regarding Retailers:I. The Spanish Market

20. Primark has inaugurated at Gran Vía of Madrid the largest Clothing store in Spain. With 12,400 sqm of GLA, five floors, 573 employees, 131 registers or 91 changing rooms, Primark of Gran Vía is now the largest mono-brand retail store in Spain, only surpassed by the El Corte Inglés department stores, according to the company. The Irish chain plans to double its area size in Spain and will do so by opening new stores and extending the 41 existing ones.

21. The Fashion brand Tommy Hilfiger strengthens its presence in Spain with the opening of its first store in Castilla y León, specifically at the Vallsur S.C. in Valladolid. The American brand has 15 own stores in Spain.

22. Silvia Tcherassi, Colombian designer, one of the most reputable ones in her country both creatively and due to her entrepreneurial vision, has inaugurated a new Spanish store at the Milla de Oro of Madrid, between Lagasca street and Ortega y Gasset street.

23. Bata reaffirms its investment in the concept AW Lab, which they introduced in the Spanish market in 2013. The company expects to conclude 2015 with a total of 10 establishments and double the amount in 2016.

24. The Danish group Bestseller undertakes its ambitious expansion plan in Spain. The company has set the goal of expanding its brand Object, directed towards the female costumer, with up to 150 stores in five years starting from 2016. The company has set in motion the search for a business partner to reach its goal.

25. Oxygene, company specialised in Women’s Fashion, plans to open six new stores in Madrid, Bilbao and Seville for late 2015 and 2016.

26. The American Fashion chain Gap opened its first store in Madrid at El Corte Inglés de Castellana, after its Alliance with the Spanish distribution firm.

27. The Swedish Fashion chain Hennes & Mauritz (H&M) continues with its expansion in Spain with openings in Tenerife, Madrid, Lanzarote and Reus.

28. Macson has opened a flagship store in the Capital, at calle Serrano. With this unit, the Catalan chain now has more than 55 stores in Spain. The unit is located at number 17 of calle Serrano and substitutes Massimo Dutti. The store has a GLA of 600 sqm,

nº 43 November 2015

OBSERVATORIO LaSBA

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Primark Madrid

Tommy Hilfiger Valladolid

Silvia Tcherassi Madrid

Levi Strauss Barcelona

divided between three floors.29. The American group Levi Strauss has opened a new Levi’s store at L’illa Diagonal

of Barcelona, at a unit formerly occupied by Dockers, another one of the company’s brands.

30. Páez, Argentinian Shoes company, has opened a flagship store in Barcelona, at number 4 of calle Petritxol. The unit has an area of 200 sqm, from where Páez will distribute its shoe ware and accessories collections.

31. Fyord has also opened its flagship store in Barcelona, at avenida Diagonal, and plans to open ten new establishments in Spain in a five-year period.

32. Mango has opened a new megastore at calle Goya in Madrid, with which the brand now accounts for four establishments of this kind in the Spanish Capital.

33. Deichmann will open in the centre of Barcelona its first Snipes store, an urban Clothing and Shoes multi-brand concept. Snipes, which for the moment has establishments only in Germany, Austria and Switzerland, will open in the building located at number 15 of calle Portaferrisa, just beside Portal de l’Àngel street.

34. El Corte Inglés has inaugurated the largest urban format BriCor in Spain, at the Ademuz S.C. of Valencia. The store has 2,000 sqm with more than 10,000 products for sale.

35. Media Markt continues with its expansion. They opened among others their eleventh store in Andalusia, specifically at the Plaza Mayor S.C. in Málaga, which will be the first of the new generation stores that will have electronic tags synchronising automatically with the website prices.

36. Conforama also continues to expand in Spain. They opened their third store in Tenerife, at Multicentro El Trompo, and the fifth store in the Madrid Region, at Parque Rivas.

37. Lot Of Colors, Decathlon’s urban brand specialising in Sports material and clothing, has opened a store at the Plenilunio S.C. in Madrid. With it, they have reached 10 units in the Capital and a total of 15 nationally.

38. FNAC opens a new store in Pamplona, specifically at the La Morea S.C.. It is the chain’s 26th establishment in Spain and first one located in the Navarra Region.

39. Supermarkets continue their expansion: Mercadona, Dia, Miquel, Lidl, Eroski, Caprabo, Dinosol, Covirán, Unide, Simply, Grupo Hermanos Martín, among others, are chains that continue to open new stores in Spain.

40. Cinépolis has announced the acquisition of Yelmo Cines, the second most significant Cinema chain in Spain. According to the Mexican company, with this operation they begin their expansion in the European market. With this acquisition, Cinépolis increases its number of screens from 3,934 to 4,348.

41. Ilusiona, leader in the Leisure sector in Spain, advances its expansion. This year they have extended their units at the Equinoccio S.C., in Madrid, and opened three more units, at the following shopping centres: Príncipe Pio, in Madrid, Islazul (Madrid) and Parque Principado (Oviedo).

42. Pangea The Travel Store has opened a mega store at calle Príncipe de Vergara 26, using the unit formerly occupied by the Cid Campeador cinema, which has over 1,500 sqm of GLA. It is the first unit by this Travel Agency company.

43. VIPSmart, created by Grupo Vips in 2010, continues to invest in Levante and opens its first unit in Valencia, after recently having arrived at the provinces of Alicante and Almería.

44. Heineken opens cafeterias. Beer&Food, owned by the multinational in Spain, opened a Flunch Café in Zaragoza, making its debut in the cafeteria business.

45. Dunkin’ Coffee, a brand integrated in the group Dunkin’ Brands Inc, has opened its first establishment in the Canary Islands, specifically at the Atlántico de Vecindario S.C., in Las Palmas of Gran Canaria.

46. Burger King plans to open more than 50 restaurants in Spain in 2015.47. Restalia has surpassed 50 ‘TGB’ restaurants in Spain, with several openings in the last

few months.

II. Marcas españolas en otros mercados

48. El Corte Inglés will seek international expansion. The Qatari investor sheik Hamad Bin Jassim Bin Jaber Al Thani has acquired 10% equity in the company and they are now determined to go international. They will put in place an expansion plan in search of opportunities outside of the current markets of Spain and Portugal.

49. The Catalan multinational Mango has opened in Singapore its largest store in Asia, with 1,200 sqm in a single floor. The store is located in the country’s capital, at the Wisma Atria S.C., and has the company’s several brands: Mango, Mango Man and Mango Kids. It is the fifteenth Mango unit in Singapore since they arrived in 1995.

50. Grupo Cortefiel consolidates its strong growth in Russia with the opening of a new Women’s Secret store in the city of Saint Petersburg, reaching 44 stores in the country. The new store is located at the Galereya S.C., one of the city’s most emblematic

nº 43 November 2015

OBSERVATORIO LaSBA

pag 5

Airesur Sevilla

Doce Vita Odeón A Coruña

Espacio León León

Plaza Éboli Madrid

Investment Market:

Graph no. 8: Comparative Yield / Financial Cost / Debt

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I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III

Prime Yield German Bond 10 years Euribor 1 year

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centres.51. Tous has opened its first three stores in China, located in Beijing, Wuhan and Shanghai,

taking the first step in their business plan to be developed together with their local partner, Parkson.

52. El Ganso proceeds with its expansion in the UK. The company from Madrid has opened a new store in London, specifically at the Westfield S.C..

53. Sfera has arrived in Chile. It is the third Latin American country, together with Mexico and Peru, where the company operates. To enter into Chile with Sfera, El Corte Inglés has reached an agreement with Ripley, one of the leaders in the Fashion sector in Latin America. Both of the inaugurated stores are located in shopping centres owned by this retailer, specifically Parque Arauco and Costanera Center.

54. The Educational Toys chain Eurekakids has announced the opening of 28 units in the second Semester of 2015. The new stores will be located in 9 countries of Latin America, Asia and Europe.

55. Imaginarium, Spanish brand specialising in Toys and Children’s development, continues with its international expansion planned for this year, strengthening its presence in Eastern Europe. Specifically, the Company has landed in Latvia with the opening of its first store in Riga, the country’s capital and largest city of the Baltic states. The new store is located at the Spice S.C..

56. Telepizza inaugurates its third store in Bolivia, and advances in its international expansion strategy, strengthening its investment in strategic international markets. In this context there was the inauguration of its third store in Santa Cruz, at Ventura Mall, the largest shopping centre in the country.

57. The Yogurt chain Llaollao strengthens its presence in China with five new establishments in the Capital. These new openings expand the brand’s number of stores, since they already had two units, one located in the amusement park Sea World, in the province of Canton, and the other one in Zhengzhou, Capital of the Henan province.

58. Smöoy, the franchise from Murcia specialising in frozen Yogurt, continues to gain ground in Latin America and has opened its third unit in Peru. This time, at the Real Plaza de Chiclayo S.C., in one of the most important cities, after having opened in two major establishments in the two main cities, Lima and Trujillo.

Source: Banco de España, Euribor-Rates.eu and LaSBA.

59. German Bonds and especially Euribor are still going down to historical lows. Prime Yields are also dropping significantly. (see Graph no. 8)

60. Property investment in shopping centres has taken off, supported by the slight economic and consumption recovery. During 2015, until October, there were shopping centre transactions by an amount which is around 1.8 billion Euros, slightly lower with respect to the same period of the previous year.

61. There were 24 shopping centres and retail parks acquired with an aggregate GLA of around 860,000 sqm. (see Table no. 3)

Document issued by LaSBA´s Permanente

Research Program

Paseo Castellana, 143 6ºC28946 Madrid, EspañaTel. +34 914 178 100

Praça de Alvalade, 6 1ºC1700-037 Lisboa, Portugal

Tel. +351 213 136 060

nº 43 November 2015

OBSERVATORIO LaSBA

page 6

www.lasba.com

Disclaimer LaSBA 2015The information contained in this document is for the sole use of LaSBA clients. Any information contained in the document does not represent the current performance of the market, not that of its future performance. This includes projections, estimates and opinions. LaSBA does not take any responsibility for the information contained in this document and cannot provide representation, warranty or guarantee for its accurateness. Although the sources used for the information contained in this document are believed by the authors to be reliable, independent verification is necessary for confirmation of its correctness and comprehensiveness. Reproduction of the document is strictly forbidden without written permission from LaSBA itself.

European Retail Consulting AllianceLondon, París, Milano, Madrid, Lisboa, Москва

Part of

Table no. 3: Main Investment Operations 2015 until October

Shopping Centre Location Province Seller Buyer GLA (sqm) Price (Mln€)Airesur Sevilla Sevilla Lar Socimi CBRE Global Investors 20.000 77Arturo Soria Plaza (50%) Madrid Madrid Obraser Merlin Properties 8.200 30As Termas Lugo Lugo ADIA Lar Socimi 44.500 67Connecta Córdoba Córdoba Córdoba Alpha Pyrenees MDSR Investments 15.000 15Dolce Vita Odeón Narón La Coruña Chamartín Eurofund / Patron Capital 26.100 n.d.El Manar Massalfassar Valencia Pradera Harbert Management Corporation 23.500 n.d.El Rosal Ponferrada León Doughty Hanson Lar Socimi 50.000 88Espacio León León León CG Malls Europe Blackstone 37.000 n.d.Heron City Barcelona Barcelona Barcelona Azorallom Activum SG 36.000 n.d.León Plaza León León Grupo Norte / Martinsa Fadesa EspañaDuero 16.000 n.d.Megapark (50%) Barakaldo Vizcaya Oaktree Lar Socimi 64.000 170Miramadrid Paracuellos del Jarama Madrid Hercesa Meridia Capital Partners 7.850 13Montecarmelo Madrid Madrid Invesco New Winds Group 11.800 n.d.Moraleja Green Alcobendas Madrid ING Kennedy Wilson 27.050 73P.C. La Dehesa Alcalá de Henares Madrid Triuva MDSR Investments 9.500 11Parque Ceuta Ceuta Ceuta HIG Capital Hemisferio / TIIA Henderson 13.780 25Plaza Éboli Pinto Madrid Doughty Hanson HIG Capital 31.000 30Plenilunio Madrid Madrid Orion Capital Managers Klépierre 70.000 375Puerto Venecia (50%) Zaragoza Zaragoza Intu Properties Canada Pension Plan Investment Board206.000 225Ribera del Xúquer* Carcaixent Valencia UBS Real Estate CBRE Global Investors 33.300 40Rivas Futura Rivas Vaciamadrid Madrid Lone Star Credit Suisse 55.000 52Sevilla Factory Sevilla Sevilla Unibail Rodamco GreenOak 16.000 15Viladecans The Style Outlets (50%)** Viladecans Barcelona Neinver TH Real Estate 25.000 n.d.Zielo Shopping Pozuelo de Alarcón Madrid HEVAF UBS 15.650 70

Source: LaSBA.* The operation did not include the Eroski hypermarket.** Proyect still under development