PRESS WEBAugust 2014

Massimo Caputi / PRELIOS SGR

SITO WEB: www.propertyeu.info INFO: Portale internazionale di informazione immobiliare UTENTI UNICI GIORNALIERI: - - DATA: 11/07/2014

AXA teams up with Apollo to buy Italian listed retail fund at 28% discount Category: Deal Watch, Top Stories

AXA Real Estate has joined forces with US private equity group Apollo Global Management to acquire the remaining portfolio of Prelios’ Olinda Fondo Shops for €303 mln.

AXA Real Estate and Apollo’s European Principal Finance Fund II have signed a binding

agreement to buy the remaining 26 assets in the listed closed-end fund, which is approaching maturity and is in liquidation mode. AXA and Apollo have agreed to close the deal before the fund’s maturity date of year-end 2014.

The price represents a 28% discount on the fund’s open market value per year-end

2013. A portion of the price - or €8 mln - is conditional upon the achievement of certain lease conditions on some of the assets.

Olinda - Fondo Shops is a real estate mutual fund managed by Prelios’ asset management arm and listed on the MIV of the Borsa Italiana stock exchange.

Launched in 2004 with €743 mln of properties, the fund specialises in retail and leisure assets and has generated an average return of 5% over the past years. With

debt of €220 mln, it currently owns €420 mln worth of properties including stores, retail facilities and multiplex cinemas, primarily located in the regions of Piedmont,

Lombardy, Veneto, Friuli Venezia Giulia, Emilia Romagna and Lazio. The portfolio has a total gross lettable space of 280,000 m2 with a vacancy rate of 12% and a gross

yield of 5.6%. Investment bank Lazard advised Prelios on the sale.

Prelios Sgr said in a statement that the fund unitholders will receive a first equity

reimbursement of at least €85 per unit after the approval of the 2014 annual report. Olinda’s units were valued at €106.4 at year-end 2013, reflecting a 71.6% discount to NAV, but the units' trading price rose by 52% to €161.5 in the first quarter of 2014.

FIRST MOVER IN ITALY

AXA Real Estate has been a first mover back into the Italian real estate market with the acquisition last year of the Bodio Center for €64 mln, or a yield of 10.5%. The European investment manager recently acquired the U10 office property in Milan for

€44 mln as well as a 7,154 m2 property at Milan’s Via Tazzoli for €20 mln. With capital gradually coming back to the long moribund Italian property market, a

number of closed-end funds approaching maturity have been looking to liquidate assets. However, listed closed-end vehicles have no easy way out as their units are

trading at an average discount of 38% to net asset value (compared to a peak of 57% in October 2012).

Market experts estimate that there are 26 closed-end funds in Italy approaching maturity by 2021, representing in total some €6 bn of assets. Around €1.1 bn is

expected to come for sale this year from three retail funds in liquidation. Another five funds are expected to offer €1.2 bn worth of properties in 2015 and six funds another €1.4 bn in 2016.

According to adviser CBRE, an additional €1 bn of assets will be put on the market by

the German open-ended funds in liquidation such as SEB ImmoInvest and CSAM IMMO. 'The bulk of the product offer in the coming months and years will come from the real estate funds as well as the banks,' commented Paolo Bellacosa, head of

capital markets at CBRE Italy.

Demand is also picking up. CBRE estimates that foreign investors made offers representing at least €4 bn of capital for portfolios as well as single assets currently

on the market. Rome-based IdeaFimit recently turned down an offer from US private equity group

Blackstone for its Atlantic 1 closed-end fund, currently in liquidation. Blackstone had presented a bid of €335 per fund unit, valuing the entire fund at around €175 mln.

This represented a discount of roughly 35% to the fund’s net asset value per unit of €505, or €263 mln in total.

Meanwhile, asset manager Beni Stabili Gestioni Sgr's Italian Real Estate Fund (IREF) has launched the disposal of a value-add portfolio of five office and logistics properties

for a 30% discount to the assets’ acquisition price before the financial crisis. Launched in 2004, the vehicle comes to maturity at year-end 2015

SITO WEB: www.propertyeu.info INFO: Portale internazionale di informazione immobiliare UTENTI UNICI GIORNALIERI: - - DATA: 22/08/2014

MARKET WATCH

INTERVIEW WITH ANDREA BOERI: Prelios mulls European expansion, says business development head Date: 22 August 2014

Category: Market Watch

Italian property services firm Prelios is looking to broaden its

European presence through new partnerships, according to

Andrea Boeri, new head of business development and CEO of

Prelios Deutschland.

‘We would like to be able to support our clients in a large number of

countries, covering France, Central Europe as well as the UK,’ Boeri

told PropertyEU in an interview.

Milan-listed Prelios, which is currently active in Italy and Germany,

is already working on a partnership with US private equity group

Fortress Group for the integration of their real estate asset

management and NPL platforms.

PropertyEU: With the new three-year plan Prelios aims to

complete its repositioning as a pure third-party asset

manager and service provider. How will this be achieved?

Boeri: Our current strategy rules out any direct investment like we

used to do in the past. We have worked on the integration of the

different service businesses of Prelios under a single name and platform, Integrated Services,

and this will be used as our springboard for growth. Today the services and the asset

management for third parties already represent nearly 60% of the total business in

comparison to a very minor part before the crisis. This percentage continues to grow, we hope

that it will reach up to 80% in the future.

PropertyEU: What about your activities in Germany?

Boeri: In Germany, we have completely exited the housing sector with the sale of the DGAG

portfolio and the residential platform. The latter previously employed 300 of the 800 staff of

the group. In future, we will focus exclusively on the commercial property sector and in

particular on the provision of transactional services as well as asset management services,

where we have carved a niche for ourselves in the management of shopping centres. Germany

has a big institutional market and the market is very mature and specialised, you do not need

to do everything in-house.

We will also continue to sell the Karstadt assets acquired in the past together with other

members of the Highstreet consortium. The company has divested over €1 bn of these

properties in 2013 alone, largely thanks to strong demand for German real estate on the part

of both local and foreign investors.

PropertyEU: Italy, Prelios’ home market, is also witnessing somewhat of a revival. In

what way could this benefit Prelios?

Boeri: One of the major transactions completed in the market was the sale of the Olinda Fondo

Shops portfolio that we managed. [Prelios has signed a binding agreement to sell the

remaining portfolio of Olinda Fondo Shops to AXA Real Estate and US private equity group

Apollo Global Management for €303 mln, ed.] However, a majority of the investors active in

Italy at the moment have an opportunistic profile and we are not willing to divest assets at a

yield of 10-13%. We prefer to work on prime assets, as we did with the historic Galleria

Manzoni in Milano, or with the launch of the Parchi Agroalimentari Italiani fund, aimed to

develop the new Eataly department store in Bologna.

PropertyEU: The new 2016-2018 business plan envisages the disposal of all co-

investments by end-2018. How is the divestment strategy proceeding?

Boeri: If we wanted to, we could accelerate the process but there is no rush. We do not want

to sell at a huge discount.

PropertyEU: What are Prelios’ priorities for the next 18 months?

Boeri: We would like to give support to our clients through the provision of services in a larger

number of countries. We would like to be present in France, the UK, as well as Central Europe

beyond Poland. We would like to achieve this also through the creation of business

partnerships.

PropertyEU: On the partnership front, how are the discussions with Fortress shaping

up?

Boeri: The deadline has been extended to allow talks to go forward. We shall see.

PropertyEU: The company aims to halve its debt load by 2016. How will this be

achieved?

Boeri: This will be done through the planned sale of our co-investments. Furthermore, the

services business is currently at a profit and the Italian business no longer requires large cash

injections. The real issue in Italy though is for how long the write-downs – which have put a

heavy drain on the company’s profits in the past - will continue.

SITO WEB: www.pie-mag.com INFO: mensile trade Property Investor Europe UTENTI UNICI GIORNALIERI: - - DATA: 11.07.2014

AXA, Apollo to pay Italy's Prelios €303m for Olinda fund retail

Paris-based AXA Real Estate and US private equity firm Apollo are to

jointly buy the entire portfolio of the Olinda-Fondo Shops retail fund

managed by Italian listed firm Prelios. The purchase price for the 26 assets

is €303m.

Prelios said it signed a binding agreement with AXA RE and the Apollo

European Principal Fund II on the sale of the fund’s residual portfolio at a

discount of 28% on the fund open market value and €8m of the agreed

price are subject to the achievement of lease conditions before closing date

on 19 December. The sale will enable liquidation of the fund before its

expiry date in December, after which a first equity reimbursement of at

least €85 per unit to investors will be made, said Prelios.

Olinda-Fondo Shops is a property mutual fund listed on the Italian stock

exchange, established in 2004 with an initial portfolio of 42 assets and

total open market value of €743m. I now has a residual portfolio of 26

stores, retail facilities and multiplex cinemas – mainly in the Piedmont,

Lombardy, Veneto, Friuli Venezia Giulia, Emilia Romagna and Lazio

regions.

Prelios, the former Pirelli Real Estate, manages €3.7bn AUM in 25

institutional funds. AXA Real Estate is the largest real estate asset

manager in Europe, with €48bn AUM, with over 160 third-party

institutional clients across the world, in addition to managing funds for 10

AXA insurance companies. New York-based Apollo Global Management

has $159bn in assets under management and invests in private equity,

credit and real estate. pie