MUNICH AN EL DORADO FOR RETAILERS AND RETAIL PROPERTIES JUNE 2018

MUNICH AN EL DORADO FOR RETAILERS AND RETAIL PROPERTIES JUNE 2018

IN FIGURES Federal state: Bayern Population: 1.464.301 Population development (compared to 2012): Employees paying social security contributions: + 7,3 % 850.395 Unemployment rate: 4,1 % Retail purchasing power: 129,8 Retail centrality: 114,4 Relevant shopping centres: Stachus Passagen (C), Schäfflerhof (C), Fünf Höfe Quartier (C), Hofstatt (C), Riem Arcaden (S), Olympia-Einkaufszentrum (S), Pasing Arcaden (S), PEP Einkaufs-Center (S), Mira (S) C=City S=Suburb P=Periphery Source 400 350 300 250 200 150 100 50 State Statistical Offices, GfK GeoMarketing GmbH, Federal Employment Agency PRIME RETAIL RENTS from 2007-2017 in EUR / m² 80-120m² 300-500m² 0 07 08 09 10 11 12 13 14 15 16 17 CITY CENTRE AREA Munich Proportion of sales in % Proportion of retail space in % Ø > 1 Mio. Inhabitants 0 10 20 30 40 Source: COMFORT Research & Consulting Munich traditionally has outstanding national and international significance for politics and business, culture and sport. As the Bavarian regional capital and Germany s third-largest city, Munich isn t just in the Champions League of football: the entire conurbation is also one of the most prosperous economic areas anywhere in Europe. Virtually all of its economic parameters are ideal, including strong population growth (approx. 1.6 million is estimated for 2030), the presence of seven DAX-listed company headquarters and an excellent infrastructure. These factors, in addition to the city s outstanding public safety track record and incomparably high environmental, living and recreational quality, sustain Munich s appeal to investors and tenants. Munich also happens to be a genuine hotspot for visitors and tourists. Some 15 million overnight stays and a high international guest quota of around 50% are figures that speak for themselves. They give the city s economy an additional boost and not just when trade fairs are hosted or the Oktoberfest takes place. Munich is a cosmopolitan city with a heart that boasts a unique combination of traditional and modern; a prestigious city with a great history, impressive culture and a healthy economy. THE CITY S SIGNIFICANCE AS A RETAIL LOCATION Munich is a leading player among European shopping cities with a clear inner city focus. It is currently the largest retail destination in Germany with almost 500,000 m 2 of retail space. At the same time, retail space productivity of around EUR 6,600/m 2 makes Munich Germany s bestperforming location by far. In comparison, second-best performer Hamburg only has retail space productivity of around EUR 5,600/m 2 according to retail and property expert Manfred Schalk, Managing Director of COMFORT. Munich city turns over almost EUR 3.3. billion per annum in sales revenue. The city s urban structure and clearly defined retail locations are extremely consumer friendly and conducive to sales. Accounting for around 30% of Munich s total revenue, the city centre clearly outperforms the average for other German cities with populations exceeding one million. Its retail area percentage is also above average at around 27%. Munich s attractive location and excellent transport infrastructure provide the Munich retail sector with a large and prosperous catchment area and stable regional purchasing relationships. There are also around 1.7 million people with above-average spending power (GfK purchasing COMFORT City Report Munich 2018 2 of 16

PURCHASING POWER AND CENTRALITY PARAMETERS Purchasing power Berlin Düsseldorf Frankfurt am Main Centrality parameters power index = 118.2) living in the Munich suburbs. They are joined by some 1.45 million city dwellers with even higher spending power (GfK purchasing power index = 129.8). City retailers have a total of 3.1 million residents in the catchment area (= Munich + surrounding region) with a retail demand volume of over EUR 22 billion per annum. Hamburg Cologne Munich Stuttgart 0 25 50 75 100 125 150 The large catchment area and spending potential, as well as the previously mentioned high significance for tourism, are reflected in a positive general retail centrality (114.4 according to GfK) of the Bavarian capital. Fashions, which are the city centre s main retail focus, have an even higher centrality rating (221.9). Source: GfK GeoMarketing GmbH FASHION CENTRALITY Berlin Düsseldorf Frankfurt am Main Hamburg Cologne The excellent retail data for Munich are partly due to the city s targeted long-term urban planning and polycentric development concept. Despite a total retail sales area of 1.8 million m², the Bavarian metropolis is comparably short on retail space compared to other major cities. Per capita retail space in Munich is only in the region of 1.3 m², which is considerably below the figure for other retail property strongholds and also below the German average (around 1.5 m² per resident). Munich Stuttgart 0 50 100 150 200 250 Source: COMFORT Research & Consulting CATCHMENT AREA Source: COMFORT Research & Consulting, Base Map RegioGraph COMFORT City Report Munich 2018 3 of 16

CITY RETAIL DATA Strukturdaten Structual data Berlin Hamburg München Munich Köln Cologne Frankfurt Stuttgart Düsseldorf Einzelhandelskaufkraft 2017 Retail purchasing power 2017 (Deutschland/Germany = 100,0) Einzelhandelsverkaufsfläche 2017 Retail sales area 2017 in m² / sqm 96,8 109,7 129,8 108,8 114,2 112,8 117,8 4.850.000 2.686.000 1.833.000 1.575.000 1.167.000 1.014.000 1.012.000 Anteil der Innenstadt in m² Share of the city centre im sqm 644.000 346.500 497.000 313.000 277.000 377.000 347.000 Anteil der Innenstadt Share of the city centre 13,3% 12,9% 27,1% 19,9% 23,7% 37,2% 34,3% Einzelhandelsverkaufsfläche pro Einwohner Retail sales area per inhabitant 1,4 1,5 1,3 1,5 1,6 1,6 1,7 Flächenproduktivität in pro m² Space productivity in per sqm 3.800 4.200 5.900 4.500 3.700 4.100 4.100 Flächenproduktivität Innenstadt in pro m² Space productivity of the city centre in per sqm 3.900 5.600 6.600 5.200 5.200 4.400 4.600 Einzelhandelsumsatz 2017 in Mio. Retail turnover 2017 in million 18.376,0 11.226,8 10.887,0 7.079,5 4.346,0 4.174,1 4.170,4 Anteil der Innenstadt in Mio. Share of the city centre in million 2.530,0 1.955,0 3.290,0 1.625,0 1.430,0 1.670,0 1.610,0 Anteil der Innenstadt Share of the city centre 13,8% 17,4% 30,2% 23,0% 32,9% 40,0% 38,6% Einzelhandelszentralität 2017 Retail centrality 2017 (Deutschland/Germany = 100,0) Modezentralität 2017 Fashion centrality 2017 (Deutschland/Germany = 100,0) 106,7 113,2 114,4 121,4 102,7 117,3 114,4 156,3 173,6 221,9 198,9 202,4 209,8 224,3 Einzugsgebiet / Catchment area Einwohner in Mio. / Inhabitants in mill. 5,3 3,5 3,1 2,4 2,4 2,6 2,0 Quelle / Source: COMFORT - Research & Consulting, GfK GeoMarketing GmbH COMFORT City Report Munich 2018 4 of 16

PRIME LOCATIONS NEUHAUSER STRASSE / KAUFINGERSTRASSE / MARIENPLATZ PRIME RETAIL RENTS in EUR/m² Trend-setting, classic prime location with the highest rent prices and the highest land values in the country. Sustainable high footfall that is additionally boosted by the large number of tourists. Munich retail mix: although the city has many chain stores. it also has a comparatively large proportion of local and traditional retailers including Hirmer, Ludwig Beck, Tretter Schuhe / Bartu / Thomas Schuhe, Bettenrid, Augustiner Stammhaus, and big local names such as Konen, Dallmayr and Lodenfrey. Relevant development projects: the major Alte Akademie project has commenced (in conjunction with the Signa-owned former Hettlage department store) and the Marienplatz 22 project by Bayerische Hausbau closed out on schedule. New tenants: attractive British lifestyle concepts TOPSHOP / TOPMAN and French cosmetics retailer SEPHORA all at Galeria Kaufhof; the Hugendubel comeback, the new Deutsche Telekom flagship store and IQOS on Marienplatz; plus Disney, Levi s, Hunkemöller, Intimissimi / Calzedonia and the H&M Home Labstore on Neuhauser Strasse and Kaufingerstrasse; as well as the new concept restaurant and bar, Leger am Dom, run by the Able family right next to the Frauenkirche church; and, particularly, the new 2,500 m 2 mega store operated by Hamburg-based shoe retailer Görtz which opened in May 2018 in the store occupied for many years by ZARA, which triggered an extensive debate. Rents: approx. EUR 370/m² (small), approx. EUR 240/m² (medium-sized). 80-120 m² 300-500 m² 240 370 Kaufingerstrasse 8: The first H&M Home Store - called a LAB STORE! opened here at the end of 2017! Kaufingerstrasse 14: Schuh Görtz has opened a new 2,500 m² megastore - a strategic move?! COMFORT City Report Munich 2018 5 of 16

PRIME LOCATIONS THEATINERSTRASSE / WEINSTRASSE / ROSENSTRASSE / MAFFEISTRASSE PRIME RETAIL RENTS in EUR/m² Attractive and sought-after premium locations, also with excellent footfall. Diverse tenant mix: upmarket retailers alongside international, vertically integrated chain store operators. The stores are relatively small in size, offering window shoppers plenty of variety. The established Fünf Höfe and Schäfflerhof quarters add to the strengths of Theatinerstrasse, Weinstrasse and Maffeistrasse. Maffeistrasse has now upgraded from a good secondary prime location to a highly frequented prime location. High density of chain stores alongside attractive local retailers such as Sport Schuster and Kaut-Bullinger on Rosenstrasse and Lodenfrey on Maffeistrasse. Relevant developments: new development on the dominant corner plot at Weinstrasse 6. H&M secured this attractive location for its new Arket concept and opened last autumn. Other new tenants: Coccinelle and Hugo Boss in Fünf Höfe and Riani in Schäfflerhof; additionally: extension of the Massimo Dutti stores to provide additional space on the first floor; DoDo the jewellery retailer at Theatinerstrasse 44 (leased by COMFORT), the new FC Bayern experience store including restaurant and city fan shop at Weinstrasse 7 and 7 A; the extension of Sporthaus Schuster at Rindermarkt. Rents: approx. EUR 280/m² (small), approx. EUR 200/m² (medium-sized). 80-120 m² 300-500 m² 200 280 Theatinerstrasse 44: new in Munich / DoDo / the House of Kering's attractive young jewellery concept/ leased via COMFORT COMFORT City Report Munich 2018 6 of 16

PRIME LOCATIONS PRIME RETAIL RENTS in EUR/m² MAXIMILIANSTRASSE / PERUSASTRASSE The place to be for flagship stores of international, renowned luxury labels. Maximilianstrasse: the classic high-end luxury location that makes an important contribution to the city s image. Perusastrasse: a somewhat more charming location with higher footfall. New tenants: spectacular relocation of Hermès, Chanel and Wempe to Maximilian-Arkaden (a high-end development project implemented by Munich business entrepreneur Urs Brunner). The relocations have vacated space on Maximilianstrasse for the first Céline and Van Cleef & Arpels flagship stores in Germany. Special news: the planned and long-awaited comeback of the legendary Café Roma on Maximilianstrasse, almost on the same spot diagonally opposite the historical site. We ve got our fingers crossed! Rents: approx. EUR 320/m² (small), approx. EUR 210/m² (medium-sized). 80-120 m² 300-500 m² 210 320 RESIDENZSTRASSE / DIENERSTRASSE Traditional, middle-class shopping location. Major crowd pullers: Dallmayr, Manufactum, Maison Louis Vuitton. Target group: both tradition-oriented Munich citizens and tourists/visitors. Trading up to new, premium concepts has increased in recent years; both streets benefit from the direct link to the two luxury locations of Maximilianstrasse and Perusastrasse. Around 60% of the retailers there are chain stores and the footfall is very good for a location with upmarket retailers/tenants. New tenants: Rimowa on Dienerstrasse, LVMH Group s men s label Berluti at Residenzstrasse 2. Rents: approx. EUR 225/m² (small), approx. EUR 140/m² (medium-sized). 80-120 m² 300-500 m² 140 225 SENDLINGER STRASSE A very popular shopping location that is developing very positively. Main drivers: Hofstatt (since 2013) as a relatively new shopping and service district with the very well-received second expansion of the pedestrian zone up to Sendlinger Tor. Anchor tenants: Konen, the local top dog plus an increasing number of attractive lifestyle concepts such as Superdry, & Other Stories and Oakley, as well as Sub- 80-120 m² 300-500 m² 130 175 COMFORT City Report Munich 2018 7 of 16

PRIME LOCATIONS PRIME RETAIL RENTS in EUR/m² dued, Intimissimi and Brandy Melville in the Hofstatt shopping mall. Additional development projects are continuing the success story, especially in the area leading up to Sendlinger Tor, e.g. at Sendlinger Strasse 46. The area will be completed by the planned quarter development around Neuer Sattlerplatz, where the entire area between Hofstatt and Kaufingertor and between the post office building and the Hirmer car park (the latter will be demolished) near Färbergraben will undergo a process of repositioning and urban redesign. This will go hand in hand with the planned extension of the pedestrian zone. A new name has also been decided upon for this attractive future plaza with high amenity value: Georg-Kronawitter-Platz. It is named after a former mayor of Munich. Other new tenants: Tezenis, American Vintage and a second Boggi Milano city store at Sendlinger Strasse 44 Weekday, the H&M Group s popular streetwear label, will be opening its first store in Bavaria here. Rents: approx. EUR 175/m² (small), approx. EUR 130/m² (medium-sized). BRIENNER STRASSE Traditional shopping location that has recently regained its attractiveness. Positive development, particularly as a result of the attractive mix of exclusive stores and individual restaurant/cafe concepts. Special highlights: the original Ed. Meier store, a traditional Munich apparel retailer, and Café Luitpold, a Munich institution in the Luitpoldblock. Overall, the area has repositioned itself as a distinctive premium location with a series of new concepts. New tenants: SUITSUPPLY, Renésim Juwelier, Slowear, Mothwurf, Eres, Occhio. Rents: approx. EUR 150/m² (small), approx. EUR 90/m² (medium-sized). 80-120 m² 300-500 m² 90 150 TAL A popular, increasingly attractive location in the extended section of Marienplatz up to Isartor. The retail scene is somewhat lacking in structure and the clear focus is on the F&B-sector. Improved and good amenity value, particularly as a result of the wide, user-friendly pavements. Anchor tenants: Müller Kleinkaufhaus and Globetrotter (the latter behind Isartor) and traditional Bavarian brewery pubs alongside trendy burger joints and steakhouses. New tenants: Elly Seidl, the Stiftl family s new restau- 80-120 m² 135 300-500 m² 90 COMFORT City Report Munich 2018 8 of 16

PRIME LOCATIONS PRIME RETAIL RENTS in EUR/m² rant and a new dm-drogierie markt outlet will be opening in the building that formerly housed the Targo-Bank. Rents: approx. EUR 135/m² (small), approx. EUR 90/m² (medium-sized). LEOPOLDSTRASSE HOHENZOLLERNSTRASSE The most interesting location for chain store operators outside the traditional city shopping areas and Altstadtring. This particularly applies to the Leopoldstrasse / Hohenzollernstrasse intersection, which is called Schwabinger-T. A diverse tenant and sector mix with stand-alone concepts alongside an increasing number of chain stores. New tenants: Edeka follows Tengelmann at Leopoldstrasse 41, Deutsche Bank has moved to Leopoldstrasse 53 55; the prestigious new building at Hohenzollernstrasse 3/on the corner of Leopoldstrasse is still occupied by the historical anchor tenant Commerzbank, which has now been joined by Penny and several small-scale retailers such as Boyco, The Body Shop, Rituals and Jott. Further along Hohenzollernstrasse, Ouí and attractive concept restaurant Cotidiano can be found. Rents: approx. EUR 95/m² (small), approx. EUR 60/m² (medium-sized). 80-120 m² 95 300-500 m² 60 SEPHORA and TOPSHOP/TOPMAN have finally arrived in Munich with stores in Galeria Kaufhof at Marienplatz COMFORT City Report Munich 2018 9 of 16

MUNICH CITY AND ITS RETAILERS ARE A BOOMING INTERNATIONAL BRAND BOOM AS BOOM CAN Munich is a city characterised by a highly attractive mix of retailers with incredible pull. It s no coincidence that the new H&M concept Arket opened its very first store in Germany on Munich s Weinstrasse last autumn. Nor is it a coincidence that TOPSHOP/ TOPMAN and Sephora recently opened stores in the Galeria Kaufhof department store at the intersection of Kaufingerstrasse and Marienplatz. This city is a place where fast-expanding German and international brands meet traditional Bavarian retailers such as Kaufhaus Beck, Lodenfrey, Hirmer, Sport Schuster, Konen and Dallmayr. increasing rents, whereby the rents for small and medium-sized units could rise significantly. The market is therefore very competitive and dynamic. Even after the completion of some of the city s major development projects such as Hofstatt, Palais an der Oper and Joseph-Pschorr-Haus on Neuhauser Strasse, developers and investors are showing no signs of slowing. Retail and property expert Manfred Schalk has identified the following highlights. The Signa development project at the Alter Akademie and the old Hettlage building on Neuhauser Strasse, which is very complex and long-contested but interesting from a listed building/historic ensemble protection viewpoint. It recently got the go-ahead and conversion work will commence in 2019. The benchmark-setting Maximilian-Arkaden project on Maximilianstrasse between Hofgraben and Falkenturmstrasse has now been completed it s a prime example of how Munich and luxury continue to be an unbeatable combination! The new Disney Store has finally arrived in Munich at Neuhauser Strasse 39! They add an important dash of local colour and the genre mix, from conservative to luxury, gives the city a comprehensive yet compact city retail scene. This is what makes Munich so attractive to consumers! A very diverse restaurant scene seasoned with Bavarian hospitality and cuisine, and naturally the brewery pubs, adds to the city s excellent amenity value. Munich certainly doesn t have to give any thought to developing a unique selling proposition like other cities do it already has one. Munich city and its retailers are already a well-established international brand. This very attractive market is a magnet for tenants, investors and developers alike. Retail units and properties in traditional Munich locations are highly sought-after and demand has been kindled in recent years by the progressive German property boom that has its epicentre in Munich. There is a strong focus on properties and units in traditional, prime city centre retail locations in the Bavarian capital. This is safeguarding stable and moderately Weinstrasse 6: The first German Arket store, the H&M Group's latest retail concept, opened here in autumn 2017. The new development of Sattlerplatz involving the entire area between Kaufingertor and Hofstatt, and between the post office building and the Färbergraben car park (which is to be demolished): the aim is to develop a new and attractive quarter with a mix of retailers and service providers offering a high amenity value. COMFORT City Report Munich 2018 10 of 16

New central station development: this mammoth project (which will take many years to complete) envisages a pedestrianised station forecourt. Obviously, it will enhance the image of the entire station area and provide it with tangible benefits. The planned restructuring of the tradition-steeped former Karstadt department store at the station will benefit from the synergetic effects of the new central station project. The building has an unusual elongated layout along the existing pedestrian zone on Schützenstrasse and offers good development opportunities. It will be interesting to see what the building s sole owner Signa (which also owns the tenant Karstadt) will make of it. So there s a good chance that the top Munich retail location will be integrated and extended beyond Stachus to the central station. Outside the city centre, project developers HBB and Bayerische Hausbau are revitalising the retail spaces of the Forum Schwanthalerhöhe district centre in close collaboration there. Whereas Bayerische Hausbau is primarily interested in developing the section that it owns into an additional local shopping supply, HBB is creating a modern shopping quarter with retailers, restaurants and cafés, and public facilities in the former XXXLutz furniture store. There are also a number of projects in the pipeline in Munich s shopping centre sector. They include the extension and modernisation of the two Riem Arcaden shopping centres in the east and south-east of the city (with new tenant P&C) and of the pep centre (including the opening of Munich s first Primark store). The sustained boom at Pasing Arcaden is driving positive developments in the immediate vicinity. One of these is the GEG s attractive Pasing Central project, which COMFORT is exclusively managing. Four attractive new tenants on the popular shopping streets of Neuhauserstrasse and Kaufingerstrasse: Hunkemöller / ON Y GO / Levi's Intimissimi-Calzedonia COMFORT City Report Munich 2018 11 of 16

MUNICH S DISTRICTS ARE DOING OK Munich s districts pale a little in comparison to the excellent news about Munich s city centre and shopping centres. Schwabing, however, is the exception to the rule. This district along Leopoldstrasse, including the front section of Hohenzollernstrasse, is clearly in a process of change. There are many development projects happening there, some already finished, some still in progress, and the tenant landscape is changing. In fact, there are almost too many new opportunities and units for the rental market at the moment. In the mid to long-term, though, every tenant will find the perfect retail space and the finished Schwabing retail picture will be a major improvement. Other locations such as Harras in Sendling, Tegernseer Landstrasse in Giesing, Weissenburger Strasse and Weissenburger Platz in Haidhausen, Rotkreuzplatz and sections of Nymphenburger Strasse in Neuhausen-Nymphenburg only perform a complementary or local supply function. Gärtnerplatz and Reichenbachstrasse, which connect up to the Glockenbach quarter, are mainly of interest as a location for restaurants, cafés and trendy individual retailers. Schwabinger T: an impressive new building right on the corner of Hohenzollernstrasse and Leopoldstrasse - Commerzbank, still the main tenant, has been joined by several smaller retailer concepts. HBB's new Forum Schwanthalerhöhe, a lively shopping quarter in an excellent inner city location! COMFORT City Report Munich 2018 12 of 16

INVESTMENT MARKET HYPED UP AND LARGELY DISENGAGED FROM GENERAL MARKET DEVELOPMENTS Extraordinary retail parameters in conjunction with sustained low interest rates have strongly impacted the investment market. Demand for investment properties in the Bavarian state capital has continued to develop at a very high level. According to Thorsten Sondermann, the COMFORT managing director with responsibility for investments in Munich, it is clear that the relevant factors and yields for premium properties are trending completely independently from general market developments. As a result, opportunities for institutional investors to invest in these kinds of properties have become very rare. Appropriately positioned family offices, in particular, are in an increasingly strong position when these rare investment opportunities arise. Purchase prices for the best properties in prime locations are now well above 40 times the net annual rent and buyers who actually get the opportunity to put in a bid are paying them. In some cases they can be (considerably) higher. Prices have also developed strongly in city district locations, although all of them except for Schwabing are secondary to city centre locations. The market is therefore very competitive and dynamic. In this kind of a scenario the Munich market has spawned some spectacular deals. One was the acquisition of the second half of the Karstadt department store at the PURCHASE PRICE FACTOR from 2012-2017 45,0 30,0 15,0 39,0-41,0 2012 2013 2014 2015 2016 2017 central station by Signa. The first half already belonged to Signa and the second was purchased from RFR in a package deal which also included Alsterarkaden and Kaufmannshaus in Hamburg and the Upper Zeil project in Frankfurt. In another major real estate deal, the August-von-Finck Group purchased two commercial buildings at Weinstrasse 7 and 7A. Deals have also been transacted outside the city centre. One example is a German property development fund's acquisition of the Mira von Hines shopping centre. Another is Development Partners sale of the Leopoldstrasse 37/ Leoho project with over 3,000m 2 of retail space to a family office in North Rhine-Westphalia. The sale of the Correo-Quartier (an entire city quarter with approx. 45,000 m 2 of retail space between Bayerstrasse/ Paul-Heyse-Strasse and Schanthalerstrasse), by Postbank to Credit Suisse was also a major deal. August 2017: the elaborately renovated Hugendubel building Marienplatz reopened with Telekom as its new anchor tenant. COMFORT City Report Munich 2018 13 of 16

COMFORT CITY RANKING MUNICH S ALWAYS A GOOD BET Demography / (socio-)economy Retail trade Location and real estate Using a scoring model, the parameters cover three major areas, within which individual sub-indicators are also analysed. In detail these are as follows: Demography/(socio-)economic index (Parameters for population/development, GDP, employment, unemployment, tourism, retail purchasing power) Retail trade index (Parameters for the catchment area: population size and level of demand, retail centrality, fashion centrality, as well as city centre sales, sales areas and sales-area productivity) Location and real-estate index (Parameters for the rents of small/mediumsized spaces, location / retail space structure of the city centre, industry/operator mix in the city centre, rental demand, intensity of demand [Overall rental space demand in m2 in relation to the available retail spaces in the city centre]) Logically, Munich s excellent statistics and performance put it at the top of the ranking list of all 70 shopping cities in Germany analysed by COMFORT Research & Consulting (COMFORT City Ranking). In terms of the three surveyed subclusters, Munich s impressive performance in comparison to the other German cities is largely due to its excellent macroeconomic figures (population growth, unemployment rate, commuter rate, purchasing power) and retail figures (city centre size, retail space productivity, fashion centrality). It also achieved top figures in the location and real estate clusters compared to other German cities (highest rents and purchase price factors). On this basis, Munich s development has been slightly weaker than that of other cities in some respects. The excellent rating of Munich s property sector, even by European standards, is also expressed in pwc and ULI s renowned survey of around 820 property experts throughout Europe, Emerging Trends in Real Estate Europe 2018, which was released in the new year. In terms of NPV and rent forecasts, Munich is in a very strong third position behind Berlin and Hamburg, far ahead of other major European cities such as Paris (ranked in 6th place) or London (31st place). METROPOLITAN COMPARATIVE SCORING / COMFORT CITY RANKING Munich Stuttgart Hamburg Berlin Frankfurt Düsseldorf Cologne 75% 80% 85% 90% 95% 100% COMFORT City Report Munich 2018 14 of 16

SUMMARY AND OUTLOOK FANTASTIC WAY TO GO! The data and information point very clearly to the fact that Munich has an excellent retail framework and a booming retail and commercial property market. It is by far the TOP location in Germany and, thanks to its sustained good economic performance, Munich additionally has a strong positioning in the European context. However, behind these hard facts are a number of important soft image factors. Munich s national and international fame and attractiveness are based on its unique mix of tradition, hospitality and lifestyle appeal. The city has an urban quality that is unique in Germany which obviously rubs off onto the retail scene. Ongoing and future development projects will ensure that Munich s retail locations remain dynamic and continue to improve their appeal. Further investments will be necessary so that the infrastructure can keep pace. The mammoth central station development and the long-debated completion of the Sendlinger Strasse pedestrian zone aren t the only projects in the city. Several millions of euros are also being invested in the redesign/modernisation of Marienplatz, which will extend the pedestrian zone towards Tal and into the streets surrounding City Hall. A new, attractive rail tunnel is also being constructed as the second central suburban line. It is due to be completed in around nine years time and will cost the city, state and regional government well over EUR 3 billion. Bearing all that in mind, the Munich retail trade has a very rosy future. Bavaria s capital is a shining example of experience-oriented shopping with an extraordinary spectrum of retail genres from basic to luxury and it looks set to hold on to its status as a leading shopping city for many years to come. COMFORT City Report Munich 2018 15 of 16

CONTACT For further questions and / or detailed information / materials do not hesitate to contact us: LEASING / INVESTMENT MANFRED SCHALK COMFORT München Fon: +49 89 219988-10 Mobil: +49 175 7217706 E-Mail: schalk@comfort.de INVESTMENT THORSTEN SONDERMANN COMFORT München Fon: +49 89 219988-80 Mobil: +49 175 7217722 E-Mail: sondermann@comfort.de RESEARCH & CONSULTING OLAF PETERSEN COMFORT Research & Consulting Telefon: +49 40 300858-22 Mobil: +49 175 7217720 E-Mail: petersen@comfort.de Editor: COMFORT Holding GmbH Kaistraße 8A 40221 Düsseldorf About the COMFORT Group: Since it was founded in 1979, the COMFORT Group has specialised in the sale and letting of commercial properties, specialist stores and retail units. As a proven retail property expert, COMFORT makes its knowhow available via a consultancy services portfolio which includes expertises, second opinion appraisals and third party due diligence reports. It also provides shopping centre consultancy services and has a separate Luxury Retail unit. The retail specialist is also exclusive partner of Cushman & Wakefield for retail property letting in Germany. The COMFORT Group is headquartered in Düsseldorf, and has offices in Berlin, Düsseldorf, Hamburg, Leipzig, Munich, Vienna and Zurich. www.comfort.de Media Contact: Karolina Müller, Head of Corporate Communications Kaistraße 8A, 40221 Düsseldorf / Fon: +49 211 9550-144 / E-Mail: mueller@comfort.de DEFINITIONS Rents in prime locations All statements pertaining to rents are to be read with the following in mind: New rent contracts drawn up in absolutely prime business locations for fictive, purely ground floor sales areas; ideal shop space has groundlevel, step-free access, is fitted out to a high standard and, as far as possible, its layout is at a right angle to a shop window with a minimum length of 6 m (for a size of 80 120 m²) or 10 m (for 300 500 m²); peak rents in EUR per m², per month, plus statutory VAT and service charges Purchase price factors The purchase price factors, shown in their full range, serve as a general orientation for the currently achievable purchase price for commercial buildings (rental income from retail > 60%, current rent at around market level) with a typical sales volume in the prime location of the respective city. Technically, the purchase price factor represents the multiplier for calculating the purchase price of a commercial building without a maintenance backlog, when multiplied with the respective annual net rent. Share of city centre Figures in percentage. This value indicates the share of the city center in sales revenue or in the sales space of the entire city area. Purchasing power, Centrality parameters The purchasing power index complements the information on population size for a given location with qualitative criteria. The average value has been standardised nationwide at 100. A value above 100 signals that a location has above average purchasing power potential. However, the purchasing power index does not provide any information as to whether the available capital is in fact spent in the location in question or not. The centrality indicator shows whether, on balance, purchasing power is flowing into or away from a particular location. A value over 100 indicates that the inflow of purchasing power from the surrounding area is higher than the outflow from the city. The centrality indicator thereby sheds a special light on the attractiveness of a location for the retail trade. Fashion centrality Analogous to the industry-wide centrality parameters (= retail centrality), the fashion centrality indicator sheds light on the situation in an important subsector the key city-centre segment fashion, which in turn comprises the two product segments clothing/textiles and shoes/leather products. Catchment Area Cartographic representation of geographic areas in terms of the city s importance to their resident population as a shopping destination. Blue represents the core city area (zone 1) and red represents the immediate and extended catchment area (zone II). COMFORT City Report Munich 2018 16 of 16