Economic Conditions

The Q2 National Accounts figures show that the restoration in the Irish economy continues to gain ground. GDP increased in volume terms by 1.9% in the period while GNP also increased by 1.9%. Personal consumption, the largest component of domestic demand, rose by 0.4% in the quarter and increased by 2.7% in the year to Q2 2015. This marked the sixth consecutive quarterly increase. Notably, the volume of retail sales rose by a 9.1% on an annual basis in Q3. Investment and net exports were also key drivers of growth in Q2 increasing by 18.3% and 4.9% respectively on an annual basis.

Ireland’s GDP growth ranked the highest amongst the euro area in 2014 and appears to be set to do so again in 2015. The ESRI anticipates GDP growth of 6.0% in 2015 and GNP growth of 5.9%. These forecasts are closely followed by the Central Bank of Ireland, with estimated GDP growth of 5.8% and GNP of 5.3% in 2015.

In the year to June 2015, unemployment levels decreased by 17%, while the seasonally adjusted unemployment rate in Q2 was 9.6%, down from 10% in Q1.

Exchequer returns for the first nine months of 2015 showed continued improvement with the deficit falling by €4bn compared with last year.

Overall Market

The strong demand for commercial property witnessed in the first half of the year continued into Q3. Activity levels in both the office and industrial markets continued at cycle highs, while prime retail units remained well sought after. However, a shortage of good quality accommodation was a feature across all sectors.

Lisney’s composite index of commercial rents increased by 3.2% in Q3 2015. Growth in the index was driven by the office sector. In the 12 months to end September, the index grew by 18.6%. From the cycle trough in December 2012, this index has increased by 39.6%, but remains 33.8% off peak levels.

Rental Indices

Overall MarketGrowth driven by the office sector.

RetailProvincial high streets the only sub-sector to increase.

OfficeCity centre index has grown by 91.0% since Q1 2013.

IndustrialIncreased 1.4% in the quarter.

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Lisney Research produces a range of timely and authoritative reports on the commercial and residential property markets. The Rental Indices have been researched and compiled by Lisney Research. The establishment of the indices was carried out in conjunction with the School of Real Estate and Construction Economics at the Dublin Institute of Technology. The school is a recognised centre of excellence and the premier provider of education in real estate and construction economics in the Republic of Ireland.

For more information contact: Aoife Brennan, Lisney. T: +353 1 634 0932 E: abrennan@lisney.com

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3rd Quarter 2015

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Overall Retail Index Grafton Street Henry Street Provincial High Street Dublin Shopping Centres Retail Warehousing

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Overall Office Index City Centre Index North Suburbs Index South Suburbs Index West Suburbs Index

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Retail Sector

Office Sector Demand for office accommodation remained strong in Dublin in Q3. This is despite the fact that this period is traditionally quieter. Take-up reached 45,750 sqm, representing a 44% drop on the record Q2 levels, but it was the strongest third quarter since 2009 and almost double the recorded level in Q3 2014. Vacancy rates continued to fall as supply of office space became even tighter.

Over the three months, the index of all Dublin office rents rose by 6.7% and a significant 29.2% in annual terms. At the end of September, it was just 17.4% off its previous cycle peak (2007), having increased by 83.1% since early 2013.

City centre rents remain under significant upward pressure, growing by 7.6% in Q3, marking the eleventh consecutive quarterly increase. In the twelve month period, the

index rose by a substantial 30.9% and since Q1 2013, has grown by 91.0%.

The indices for each of the suburban regions also continued to rise in Q3 but at a reduced pace to the city centre. Both the south and west suburbs rose by 1.7% in Q3, while the north suburbs index increased by 1.8%. Annually, these indices were up by 28.6%, 17.3% and 4.5% respectively at the end of September.

The retailing environment continued to improve in Q3 with the volume of core retail sales (i.e. excluding motor trades) increasing by 1.3% over the three months. Consumer sentiment continued to run at very high levels but with some level of caution. Demand was strong with some retailers finding it difficult to source units in the desired locations.

Lisney’s overall index of retail rents increased by a minor 0.1% in Q3. This

followed a significant increase of 10.2% the previous quarter. As such, this index rose by 10.4% in the nine months to the end of September and by 11.4% annually. However, it remained 44% below its 2007 peak level.

In terms of Dublin high streets, Lisney’s Grafton Street index was unchanged in Q3, but has risen by 22.2% annually. Since the bottom of this index series in mid-2013, it has increased by 29.4%. The Henry Street

index was also unchanged in Q3 following a 2.9% rise the previous quarter. Since mid-2013 this index risen by 7.7%.

The index of provincial high street rents was the only sub-index within retail that increased in Q3. This was driven by Cork and rose by 2.5% in the quarter. Annually, the index was up by 6.6% at the end of September.

Sectoral and Sub-Sectoral Base June 2005 =100

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DATE COmpOSITE OVERALL GRAFTON HENRy pROVINCIAL DUbLIN RETAIL INDEX RETAIL STREET STREET HIGH SHOppING WAREHOUSE INDEX STREET CENTRES

Jun 11 66.12 77.52 82.31 74.07 53.48 91.15 50.00Sep 11 65.87 77.36 82.31 74.07 51.87 91.15 50.00Dec 11 63.76 73.67 76.92 69.44 48.13 91.15 50.00Mar 12 62.93 72.00 76.92 64.81 42.99 91.15 50.00Jun 12 62.74 71.98 76.92 64.81 42.78 91.15 50.00Sep 12 61.22 68.93 73.08 60.19 41.71 91.15 45.00Dec 12 60.39 67.28 69.23 60.19 40.64 91.15 45.00Mar 13 60.91 67.09 69.23 60.19 39.57 91.15 43.33Jun 13 60.89 65.50 65.38 60.19 39.04 91.15 43.33Sep 13 62.64 65.39 65.38 60.19 37.97 91.15 43.33Dec 13 62.40 64.40 65.38 55.56 37.97 91.15 46.67Mar 14 65.62 67.77 66.15 62.96 40.64 95.83 46.67June 14 67.85 67.77 66.15 62.96 40.64 95.83 46.67Sept 14 71.12 69.79 69.23 62.96 40.64 98.96 50.00Dec 14 73.21 70.41 69.23 62.96 40.64 102.08 50.00Mar 15 76.04 70.41 69.23 62.96 40.64 102.08 50.00June 15 81.75 77.61 84.62 64.81 42.25 102.08 58.33Sept 15 84.33 77.71 84.62 64.81 43.32 102.08 58.333 Month Change % 3.15 0.14 0.00 0.00 2.53 0.00 0.006 Month Change % 10.90 10.37 22.22 2.94 6.58 0.00 16.679 Month Change % 15.20 10.37 22.22 2.94 6.58 0.00 16.6712 Month Change % 18.57 11.36 22.22 2.94 6.58 3.16 16.67

DATE OVERALL CITy NORTH SOUTH WEST OVERALL OFFICE CENTRE SUbURbS SUbURbS SUbURbS INDUSTRIAL INDEX INDEXJun 11 53.19 52.01 63.49 56.92 61.38 60.87Sep 11 53.19 52.01 63.49 56.92 61.38 59.13Dec 11 53.19 52.01 63.49 56.92 61.38 56.52Mar 12 53.19 52.01 63.49 56.92 61.38 56.52Jun 12 53.19 52.01 63.49 56.92 61.38 54.78Sep 12 53.19 52.01 63.49 56.92 61.38 54.78Dec 12 53.19 52.01 63.49 56.92 61.38 54.78Mar 13 54.94 54.12 63.49 56.92 61.38 53.91Jun 13 56.23 55.29 68.25 58.00 62.87 56.52Sep 13 60.31 59.48 76.19 61.24 62.87 58.26Dec 13 60.92 59.95 79.37 61.96 64.37 58.26Mar 14 64.12 63.49 84.12 61.96 67.36 60.87June 14 69.70 69.58 87.30 64.12 73.35 60.87Sept 14 75.36 75.91 88.09 66.28 77.84 60.87Dec 14 79.78 80.12 90.47 72.05 85.32 60.87Mar 15 86.87 87.62 90.47 80.22 85.32 60.87June 15 91.29 92.31 90.47 83.83 89.82 64.35Sept 15 97.38 99.34 92.06 85.37 91.32 65.223 Month Change % 6.68 7.62 1.75 1.72 1.67 1.356 Month Change % 12.10 13.37 1.75 6.29 7.02 7.149 Month Change % 22.06 23.98 1.75 18.34 7.02 7.1412 Month Change % 29.23 30.87 4.50 28.65 17.31 7.14

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The strong demand witnessed in recent quarters for industrial space continued with pace in Q3 2015. Transaction levels reached exceptional levels, marking one of the strongest quarterly take-up levels in

recent times. Supply continued to diminish and consequently, many enquiries were focusing once again on design-and-build options.

The industrial index in Q3 edged slightly upwards, by 1.4%. This marks a 7.1% increase in annual terms and a 21.0% increase since the cycle low in Q1 2013.

St. Stephen’s Green HouseEarlsfort Terrace, Dublin 2.D02 PH42T: +353 1 638 2700E: dublin@lisney.com

1 South MallCork. T12 CCN3T: +353 21 427 5079E: cork@lisney.com

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Industrial

Lisney Rental Index - Historical (June 05 = 100)

DATE RETAIL OFFICE INDUSTRIAL OVERALLDec 2000 47.03 114.14 103.20 83.44Dec 2001 51.73 110.09 100.07 84.17Dec 2002 59.26 101.06 98.52 84.14Dec 2003 74.04 96.81 96.55 88.87Dec 2004 96.29 96.81 98.52 97.29Dec 2005 110.74 105.80 100.00 107.69Dec 2006 127.46 117.79 102.61 121.10Dec 2007 138.72 117.89 107.83 127.30Dec 2008 122.76 103.76 106.09 113.49Dec 2009 93.60 67.31 84.35 82.16Dec 2010 78.03 55.57 64.35 67.68Dec 2011 73.67 53.19 56.52 63.76Dec 2012 67.28 53.19 54.78 60.39Dec 2013 64.40 60.92 58.26 62.40Dec 2014 70.41 79.78 60.87 73.21Sept 2015 77.71 97.38 65.22 84.33

Please note: Lisney first produced commercial rental indices in 1970. This index series was discontinued following the release of the Q2 2004 publication. A new index series based on a different set of data commenced in Q2 2005, i.e. the current index series. As an indicative exercise to provide some continuity between the old and the new indices, they have been chain linked and the results are set out in the table above.

Disclaimer: The Lisney Commercial Rental Indices are derived and published solely for information purposes as a means of tracking the commercial property rental market. They are not derived for the purpose of valuation and should not be used as such. Lisney bears no liability for any losses, damages, costs or expenses suffered by any person as a result of any reliance on this information.

Aoife BrennanDivisional DirectorT: +353-1-638 2700E: abrennan@lisney.com

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Tanya DuffyProperty ResearcherT: +353-1-638 2700E: tduffy@lisney.com