Research. An Upbeat End to 2015 BUENOS AIRES 4Q15 OFFICE MARKET. Current Conditions

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1 4Q15 OFFICE MARKET An Upbeat End to 2015 Year in Review A number of large buildings were added to the inventory during the first quarter of 2015, including Belgrano Office, Libertador 8400, Go Green and Eco Office Altman, providing empty space that was occupied throughout the year. Accordingly vacancy fell by almost 20% during 2015, reaching 8.1% in the first quarter and then declining slightly to 6.4% in the fourth quarter. Current Conditions Vacancy rate for Class A office went down almost about 20% since the beginning of the year. During the last quarter declined 0.50%. The average asking price declined since the beginning of 2015 reaching US$27.51/SF/YR in 4Q15. An expectation and optimism environment was generated by the political changes during December. Despite devaluation reaches 40%, the asking rent in US dollars did not suffer any chages. Market Analysis As vacancy decreased in 2015, so did asking rental rates, declining 2.6% from $28.22/SF at the beginning of the year to $27.51/SF at year-end. Asking Rent vs. Vacancy $35 10% A devaluation of approximately 30% occurred in December 2015, but did not impact overall property values, nor are any changes in either vacancy or property values expected to occur as a result. The recent changes to the nation s political landscape are expected to significantly impact the real estate industry in The first quarter may serve as a period of adjustment for both the industry and the new president, who took office in December. Every day, new critical economic measures that directly impact the market are declared. With the release of the currency exchange control, there is considerable optimism that market dynamics and business activity will improve in These changes in economic market indicators are expected to materialize by the end of the first quarter. $28 8% $21 6% $14 4% $7 2% $0 0% Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Q315 Q415 Ave. Asking Rent (US$/SF/Annum) Vacancy (%) Net Absorption 600, , , , ,000 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Net Absorption (SF) New Inventory (SF) Argentina Capital City Buenos Aires Population 41,450,000 PIB Nominal MM (2013) US$609,889 PIB Nominal Per Capita (2014) US$12,521 Currency Peso Unemployment Rate 7,5% Market Summary Current Quarter Prior Quarter Year Ago Period Forecast Total Inventory (SF) 11,8MM 11,8MM 1,1MM â Vacancy (%) 6.41% 6.95% 9.3% â Net Absorption (SF) - 244, ,734-26,909 â Average Asking Rent $27.51 $27.45 $28.42 â Under Construction (SF) 4,207,264 4,207,264 2,976,218 =

2 4T15 MERCADO DE OFICINAS Northen Area Submarkets: Asking Rent - Vacancy Rate CABA Submarkets: Asking Rent - Vacancy Rate LIBERTADOR CORRIDOR Rent (US$/SF/YR) Vacancy Rate (%) CATALINAS - RETIRO Rent (US$/SF/YR) Vacancy Rate (%) Class A Class A PANAMERICANA CORRIDOR MIDTOWN DE JULIO MICROCENTRO SOUTH AREA PUERTO MADERO Space Calculation The BOMA method (the standard method of floor measurement for office buildings) is used to make comparisons between different corporate buildings and to obtain market statistics. It recognizes the different types of building areas, depending on use see diagrams-. TOTAL AREA RENTABLE AREA COMMON AREA USABLE AREA The sum of all areas within the outer surface of the enclosure. It includes stairs and elevators area. Excluding the vertical circulation area, counting the structure area or other items needed for the building itself. Shared area on each floor. The common include elevator halls and services that all tenants use, and also may include the restrooms and kitchens. The space that tenants occupy to work, counting distances from inside the enclosure or curtain wall and deducting the structure area. In corporate buildings, the asking rent usually corresponds to the private areas of the office, including the usable office area and common areas such as bathrooms, kitchenette/break room server rooms and reception areas. The relationship between the cost and the usable area is calculated as the load factor. Its result is an explicit percentage of the property value, so it is useful to compare different buildings. Besides the analysis numbers, there are other variables to consider: Location, accessibility, image, level of sustainability and relationship with surrounding green areas are among the features weighed most heavily by companies when choosing where to settle, especially multinational companies that must respect corporate mandates and standards.

3 4Q15 OFFICE MARKET Development of Specific Areas The Southern and Northern submarkets are expected to grow during 2016, decentralizing the market. The Southern submarket will be mostly developed by patrimonial buildings that have been recycled and Class B projects that are currently under construction. Located at the opposite corner of Buenos Aires, the Northern submarket will see the development of new large Class A buildings totaling 1.9 million square feet during 2016, representing approximately 1.3 million rentable square feet. Together, the Northern and Southern submarkets will approximately 12% of Class A current inventory. Under Construction Projects Class A Catalinas Retiro 14.83% 13.48% Libertador 9.85% 46.03% More than 516,667 square feet will be added to one building in the Catalinas submarket. However, several floors in the building have already been sold, and more are expected to be occupied by completion. Consequently, vacancy in that submarket will not change significantly. The increase in Class A inventory will not impact asking rents in the short term, since most new buildings already have tenants committed. Additionally, higher demand is anticipated from multinational and financial services companies, due to the projected economic recovery. Panamericana 9 de Julio 8.79% 3.03% 1.94% 1.79% The Future is Sustainable The first sustainable building in Argentina was built in Currently, the Buenos Aires sustainable office inventory comprises more than 200,000 square meters. That amount is expected to increase over the next three years, as several sustainable buildings are currently under construction. Argentina is catching up to Brazil and Chile, which have twice the amount of certified buildings. Inventory Composition Vacancy Rate Composition Class A 5.4% 6.5% 6.7% 7.4% 11.1% 26.7% 31.8% Catalinas - Retiro Panamericana 9 de Julio Libertador 15.5% 19.7% 1.5% 2.3% 3.8% 23.2% 33.8% 9 de Julio Catalinas - Retiro Panamericana Libertador

4 3Q15 OFFICE MARKET Actual Vacancy Vacancy decreased throughout Several buildings in the North Zone, 9 de Julio, and Catalinas submarkets were fully occupied. In the 9 de Julio submarket, 217,646 square feet in the Belgrano Office Building was occupied during the year. This left the building nearly 70% occupied, with only 109,576 square feet still available. Nevertheless, 9 de Julio remains the submarket with the highest vacancy, due to availability in the GoGreen and Altman Eco office buildings. Moreover, space is available in each of the most important buildings in the Catalinas-Retiro submarket. However, this space amounts to isolated floors that will probably be occupied in the near future due to the changes expected in The space available in this submarket and along the city s North Corridor will be the properties to watch during the next few months. As vacancy continues to fall and most available space is split, the properties under construction that will be added to the inventory in the near future have become more relevant for companies that are looking to settle in large areas within a single building. Sale and Lease-back The past few years have seen the emergence of owneroccupiers, companies that bought the office space they were occupying instead of renting it. With economic recovery on the horizon, it is predicted that some companies will sell units they are currently occupying and then lease the space back. Therefore, even if those do not relocate, some background changes will occur that will reactivate the corporate real estate market. Economic Conditions The outcome of the recent presidential election has produced an optimistic atmosphere. Investors and developers are waiting for more stable economic indicators, such as the rate of inflation, mortgage, IPB growth and a government exchange rate control and restrictions, which would set the stage for future transactions. These economic changes will make future transactions more predictable. Market Recovery Buildings that were on hold, in a phase of analysis, or pending because of economic uncertainty will reactivate the construction process. As they come onto the market, these properties are expected to be leased within a reasonable timeframe. Also, new companies are expected to arrive in Argentina that will strongly impact the demand for corporate real estate, further justifying the optimism of local developers. Demand for new stock will mostly come from companies looking for Class A office space with high standards of efficiency. Consequently, future Class A projects may suffer if demand is not sustained. Argentina s Exchange Rate - CPI PBI 9% 5% 1% * -3% 30 % 23 % 16 % 9 % 2 % $ 14 $ 12 $ 10 $ 8 $ 6 $ 4 $ 2 $ 0-7% -11% Source: Banco Mundial *PiB 2015 = 1,00, Cepal CPI (%). Exchange Rate BNA (AR$) * INDEC Source Calculated through the price for the consumer geometrical average calculated by statistical institutes Source: Banco de la Nacion Argentina, INDEC

5 4T15 MERCADO DE OFICINAS $ 50 Average Asking Rent vs. Vacancy Rate (Class A) 30% Inventory - Average Asking Rent - Vacancy By Submarket Clase A 4,000,000 SF $ 40 $ 30 24% 18% 3,500,000 SF 3,000,000 SF 2,500,000 SF 2,000,000 SF 30 % 24 % 18 % $ 20 $ 10 12% 6% 1,500,000 SF 1,000,000 SF 500,000 SF 12 % 6 % $ 0 0% 0 Catalinas Retiro Puerto Madero 9 de Julio Panamericana Libertador 0 % Rent (US$/SF/YR) Vacancy Rate (%) Inventory (SF) Vacancy Rate (%) Rent (US$/SF/YR) Business Cycle By Submarket Northen Area 9 de Julio Catalinas-Retiro While the Northern Areas have expanded faster in recent years than the traditional districts, the latter have maintained their relevance and leading role in the overall Buenos Aires market. Argentina's real estate market has begun a slow recovery, with some uncertainty about the measures that have just been taken. Fortunately, a more stable market is expected, due to the exchange rate adjustment and fewer government restrictions on the economy.

6 4Q15 OFFICE MARKET Submarket Statistics By Submarket Total Under Total Qtr YTD Direct Sublet Total Inventory Construction Vacancy Absorption Absorption Asking Rent Asking Rent Asking Rent (SF) (SF) Rate (SF) (SF) (US$/SF/YR) (US$/SF/YR) (US$/SF/YR) CABA 795, , % 0 4, $26.75 N/A $26.75 Catalinas-Retiro 3,770,594 1,802, % 0 134, $30.10 N/A $ ,167, , % $28.42 N/A $ de J ulio 876,870 76, % - 220, , $26.75 N/A $ , ,766 0% 0 0 $25.64 N/A $ ,069 69, % - 5,166 18, $26.75 N/A $26.75 GBA Libertador Corridor 775, , % 0 14, $28.98 N/A $28.98 Panamericana Corridor 1,319, , % 0 53, $26.75 N/A $26.75 By Class Class A 11,854,261 4,283, % - 244, , $27.51 N/A $27.51 Class B 14,262, , % N/A N/A $15.61 N/A $15.61

7 Principal Buildings Under Construction Class A Proyect Submar ket Total Area (SF) Torre IRSA C atalinas-retiro 597, , , , ,876 Madero Riverside Al Rio Nodus II C orredor Libertador Corredor Panam ericana SD WTC III Puerto M adero 82,343 Officia Pilar I Corredor Panamericana 107,639 R entable Ar ea (SF) 376, ,427 D ate Q , ,055 1Q17 Ban co Macro Catalinas - Retiro 441, , Consultatio Catalinas-Retiro 817, ,667 1Q16 LEED

8 4Q15 OFFICE MARKET Newmark Grubb Bacre HEADQUARTERS 1515 Olazabal St, Suite C203 CABA 1428, Argentina Domingo Speranza Founder and President Newmark Grubb BACRE Melina Szienberg Market Research Newmark Grubb BACRE Glossary of Terms Absorption A measure of the change in occupied space Availability Space marketed for lease regardless of when the space will be available or whether the space is vacant or occupied Deliveries The total RBA of properties added to the inventory once construction has been completed Direct Space Available space offered for lease by the building owner, landlord, or owner representative Leasing Activity The volume of leases signed including new leases, direct and sublet leases, extensions and renewals, and leases signed in proposed or under construction buildings Occupancy Any space physically occupied by a tenant, regardless of lease status of the space Rentable Building Area (RBA) A measurement of the total square feet in a building including the tenant and common areas such as the lobby and hallways Sublet Space Available space offered for lease by a building tenant seeking a subtenant to fulfill the remaining lease obligation Under Construction Buildings under construction are defined by the time the foundation is poured through the time the building is certified for occupancy Vacancy Space not physically occupied by a tenant, regardless of the lease status or availability of space Weighted Average Rent The asking dollar amount for the use of available space, weighted by size--the average does not include negotiable or unpublished rates and is reported as full service including operating costs Office inventory includes all multi-tenant and single tenant buildings at least 20,000 square feet in total rentable building area. Owner occupied buildings are not included in the inventory. Newmark Grubb Knight Frank has implemented a proprietary database and our tracking methodology has been revised. With this expansion and refinement in our data, there may be adjustments in historical statistics including availability, asking rents, absorption and effective rents. Newmark Grubb Knight Frank Research Reports are also available at All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark Grubb Knight Frank (NGKF) has not verified any such information, and the same constitutes the statements and representations only of the source thereof, and not of NGKF. Any recipient of this publication should independently verify such information and all other information that may be material to any decision that recipient may make in response to this publication, and should consult with professionals of the recipient s choice with regard to all aspects of that decision, including its legal, financial, and tax aspects and implications. Any recipient of this publication may not, without the prior written approval of NGKF, distribute, disseminate, publish, transmit, copy, broadcast, upload, download, or in any other way reproduce this publication or any of the information it contains.