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Overview 03 Macro-economic The Greek economy slipped back into recession in H2 2015 after growing in late 2014 and early 2015. Significant events in H1 2015 - the unsuccessful conclusion of the 2 nd Adjustment Programme, the referendum called in June 2015, the ensuing capital controls forced on the Greek banking system, the signing of the 3rd MoU and the early elections of September 2015 – increased economic uncertainty and deteriorated the growth trend recorded in 2014. Despite the uncertainty, real GDP grew in H1 2015 by 1.0% supported by consumer demand, goods’ exports and tourism. Consumer demand reflected spending in response to depositors’ fears of suffering haircuts. Bank holidays and capital controls severely harmed credit availability, particularly affecting investments and the shipping industry. Uncertainty eased with the ratification of the 3rd adjustment programme, yet the agreed budgetary targets and structural reforms in combination with back loaded tax payments affecting disposable income are forecasted to lead to GDP contraction by 1.4% in 2015. In 2016 GDP is expected to remain negative due to carry over effects from 2015. Disposable income will be subdued as a result of the fiscal drag and investment and exports will gradually recover dependent on the betterment of confidence and financing. Growth is forecasted to gather speed in 2017, projected at 2.7%.

Disposable Income

Real GDP growth 4.0%

250,000 Ä

2.7%

2.0%

2.1%

0.7%

0.0%

17,409 16,363 14,661

-0.4%

150,000 Ä

-1.3%

-1.4%

-2.0%

13,996

13,390

2012

2013

13,206

-3.2%

-4.0% -6.0%

200,000 Ä 17,854

-4.4%

100,000 Ä -5.4%

50,000 Ä

-7.3%

-8.0% -8.9%

-10.0% 2008

2009

2010

0Ä

2011

2012

Hellenic Statistical Authority

2013

2014

2008

2015F 2016F 2017F

OECD

European Commission

Source: ELSTAT, OECD, EU, edited by NAI Hellas

2009

2010

Net National Disposable Income (in bil.Ä)

2011

2014

Per Capita Net National Disposable Income

Source: ELSTAT, edited by NAI Hellas

Inflation in 2015 is expected to be negative for the third consecutive year as the impact of lower oil prices and weak demand outweigh the impact of increased VAT on many goods and services. New VAT rates (+10.0% on processed food, +10.0% on catering and +6.5% on hospitality) applied during year-end 2015 and awaiting to be applied to transportation rates in early 2016 are expected to affect inflation that is forecasted to move into positive territories from 2016 onwards. Unemployment decreased to 24.6% in H1 2015 from 27.2% in H1 of 2014 and is expected to further decrease in H2 2015, remaining however high compared to the EU-28 average (9.5%). Employment increased as a result of an improvement in the overall economy, the restructured flexible forms of employment and maintenance of low labour cost. Comparing sub-sectors of the economy in H1 2015, employment in tourism increased by 10.7%, by 4.3% in commerce, by 4.0% in processing and by 9.0% in services. On the contrary employment continued to decrease in construction, in financial and insurance activities and in the public administration sector. Growth in employment is expected to be interrupted by the end of 2015 yet, further de-escalation in unemployment will depend upon stabilisation of the economic climate and successful implementation of structural changes.

Unemployment Rate

Inflation 6.0% 5.0%

30.0% 4.7%

24.4%

25.0%

4.2%

4.0%

3.3%

27.5%

17.9%

20.0%

3.0%

15.0%

2.0% 1.0%

1.5%

1.0%

1.2% 0.7%

0.0%

0.9%

-0.9%

-1.0%

-0.9%

-2.0% 2008

2009

2010

2011

2012

Hellenic Statistical Authority

Source: ELSTAT, OECD, EU, edited by NAI Hellas

2013 OECD

-1.3% 2014

-1.0% 2015F 2016F 2017F European Commission

12.7%

10.0%

0.5%

5.0%

7.8%

9.6%

2008

2009

0.0% 2010

2011

2012

Long-term Unemployment OECD

100% 90% 24.4% 80% 25.2% 24.8% 23.4% 70% 60% 50% 40% 30% 20% 10% 0%

26.5% 25.7% 25.8%

2013

2014 2015F 2016F 2017F Hellenic Statistical Authority European Commission

Source: ELSTAT, OECD, EU, edited by NAI Hellas Note: Long-term Unemployment refers to people who been unemployed for 12 months or more and is a proportion of total unemployment.

04 Overview Economic Climate The economic sentiment indicator for November 2015 remained at the same level as October 2015 (86.5 units), approximately 16.0% lower than November 2014, indicating the “on hold” position characterising economic activity of the period in Greece. On a sector level, expectations in retail trade have improved while sentiment in consumer confidence is deteriorating as increased tax liabilities in the last months of 2015 maintain consumer expectations at low levels. The retail trade confidence indicator improved in November 2015 ending up at 82.3 units (+7.3% from October 2015 and -17.9% from November 2014), continuing the correction trend post the shock of the imposition of capital controls in July. Estimates for current and short-term forecasts of sales were not met while inventories posted minor increases. The consumer confidence indicator in November returned to September levels of -64.1 (from -59.6 in October 2015) units, 28.4% lower than November 2014. Greece holds the lead in terms of pessimism at country level in the EU (-4.4 units average). Consumers appear wary in terms of the upcoming fiscal measures and increased liabilities.

Economic Sentiment Indicator (ESI) & Components

Retail Trade Sub-sectors % YoY November % change change from October (November Sentiment 2015 2015 2014)

150 100 50 0 -50 -100 2009

2008

2010

Economic Sentiment Indicator

2011

2012

Component: Consumer Confidence Indicator

2013

2014

2015

Component: Retail Trade Confidence Indicator

Source: DG-ECFIN, IOBE, edited by NAI Hellas Note: The economic sentiment indicator (ESI) as calculated by the European Commission, is a composite indicator that reflects and represents judgments and anticipations for different components of the economy. It is made up of the individual opinion balances of five confidence indicators, which are weighted as follows: industrial confidence indicator (40%), service confidence indicator (30%), consumer confidence indicator (20%), construction confidence indicator (5%) and retail trade confidence indicator (5%).

Food Alcohol Tobacco

80.1

+9.7%

-18.5%

Fabrics Clothing Footwear

97.1

+41.0%

-9.2%

Home Equipment

64.1

Vehicles Replacements

103.8

+6.8%

-14.7%

Department Stores

90.8

+14.8%

+2.7%

-12.4%

Source: Foundation for Economic & industrial Research (IOBE), edited by NAI Hellas

Retail Market The turnover index in retail trade fell by 5.2% in September 2015 compared to September 2014 and by 2.9% for the first 9 months of 2015 compared to the same period in 2014. Volume of retail trade (i.e. turnover in retail trade at constant prices) decreased by 3.2% in September 2015 compared to the corresponding index of September 2014 and by 1.3% for the first 9 months of 2015 compared to the same period in 2014. The turnover index in wholesale trade decreased by 11.2% in the 3rd quarter of 2015 compared to the corresponding quarter of 2014 and by 5.9% for the first 9 months of 2015 compared to the same period in 2014. The categories of retail business with the biggest change between the first 9 months of 2014 and 2015 were automotive fuel (-11.7%), furniture, electrical and household equipment (-7.6%) and department stores (-7.0%).

Percentage change of Turnover Index in Retail Trade by category (9M 2015/2014)

Retail Trade Indices (2010=100) 145

Books, Stationery & other goods

135

4.3%

Furniture, Electrical & Household equipment

-7.6%

Clothing & Footwear

125

2.6%

Pharmaceutical products & Cosmetics

-2.9%

115 Food, Beverages & Tobacco

-3.6% -11.7%

105

Automotive fuel

95

-7.0%

Department stores

-0.3%

Super Markets

85

-1.0%

Non-Food sector except automotive & fuel

75 -0.7%

Overall index except automotive & fuel

-0.7%

Source: ELSTAT, edited by NAI Hellas Note: Volume Index in Retail Trade is the estimation of Turnover Index in Retail Trade deflated by the CPI.

Source: ELSTAT, edited by NAI Hellas

+ 2. 0 + % 4. 0% + 6. 0%

%

0%

.0

%

-4

%

0%

.0 -6

Turnover Index in Wholesale Trade

.0

-1 4

Volume Index in Retail Trade

-1

Turnover Index in Retail Trade

0.

2015

-8

2014

-1

2013

%

2012

0%

2011

.0

2010

2.

2009

%

-2.9%

Overall index 2008

-2

55

Food sector

.0

65

Overview 05 Household Budget Survey, 2014 According to the 2014 household budget survey produced by the Hellenic Statistical Authority, the average monthly household expenditure amounted to Ä1,460.52, lower by 3.2% since 2013. In real terms expenditure fell marginally by 0.7% (Ä9.63) when accounting for inflation. Percentage distribution of the average monthly expenditure for the 12 main categories of goods and services at current prices in 2014 is presented in the following table. Food accounts for the biggest share (20.5%) of the average household expenditure, followed by housing (13.4%) and transport (12.7%). Education and communication services represent the smallest share of expenditure, 3.5% and 4.1%, respectively.

Average Monthly Household Expenditure (at constant 2014 prices) 2,400 Ä

Percentage distribution of monthly expenditure (purchases) on good and services at current prices, 2014 4.0% 5.0%

2,262 Ä

5.9%

2,150 Ä

2,200 Ä

13.4% 9.2%

1,935 Ä

2,000 Ä

1,760 Ä

1,800 Ä

9.8%

1,567 Ä

1,600 Ä

1,470 Ä

1,461 Ä

20.5%

1,400 Ä 1,200 Ä

12.7%

1,000 Ä

7.2%

2008

2009

2010

2011

2012

2013

3.5% 4.1% 4.7%

2014

Source: ELSTAT Household budget Survey 2014, edited by NAI Hellas

Durables Clothing & Footwear Miscellaneous goods & Services Hotels, Cafes & Restaurants Transport Recreation & Culture Communication Education Health Food Housing Alcoholic, Beverages & Tobacco

Source: ELSTAT Household budget Survey 2014, edited by NAI Hellas

Between 2008 and 2014, the average monthly household expenditure decreased by 31.1% at current prices or 35.4% at constant 2014 prices. The biggest decrease both at current and constant prices was recorded in durable goods (51.3% and 54.4%, respectively) while the smallest decrease was recorded in food (13.7% at current and 19.1% at constant prices).

Change 2008-2014 in the Average Household Expenditure on goods & services (at constant 2014 prices) -19.1%

Alcoholic, Beverages & Tobacco

-19.4%

Housing

-26.5%

Food

-26.7%

Health

-30.2%

Education

-36.9%

Communication

-38.9%

Recreation & Culture

-40.1%

Transport

-40.7%

Hotels, Cafes & Restaurants

-41.5%

Miscellaneous goods & Services

-53.9%

Clothing & Footwear

-54.4% -60.0%

Durables -50.0%

-40.0%

Source: ELSTAT Household budget Survey 2014, edited by NAI Hellas

-30.0%

-20.0%

-10.0%

0.0%

06 High Street Retail Markets The momentum the Athenian high street retail markets had gained during the last quarter of 2014 and the first quarter of 2015 was interrupted by the political and economic events that began at the end of 2014. Consumers became very wary as uncertainty rose which culminated with the imposition of capital controls, new austerity measures and increased tax liabilities in H2 2015. Investors seeking opportunities in the Greek market have a wait and see approach, as the government proceeds with the necessary restructuring steps of the 3rd MoU.

High Street Prime Retail Market Overview

BoG-Athens High Street Retail Market Indices (2010=100)

350 Ä

8%

140

300 Ä

7%

120

6%

250 Ä

5%

200 Ä

100 80

4% 150 Ä

3%

100 Ä

2%

50 Ä 0Ä 2008

2009

2010

2011 2

Rent (Ä/m /month)

Source: NAI Hellas Research

2012

2013

2014 Yield

2015

60 40

1%

20

0%

0 2006

2007

2008

2009

2010

Retail Rent Index

2011

2012

2013

2014

2015H1

Retail Price Index

Source: Bank of Greece, edited by NAI Hellas

Despite the year’s difficulties, prime high street markets in Athens recorded lower vacancy rates in 2015 compared to 2014, whilst sales increased as a result of the positive consumer sentiment that existed prior to July 2015. Previously vacant stores within the largest share of high street retail markets in Athens are now occupied by international brands trying to penetrate the heart of the city’s high streets and many local food and beverage stores. Traditional high streets in Athens in 2015 saw very low vacancy rates in prime locations while secondary areas still exhibit high vacancies. From the sample of the main high streets examined, the majority of retail stores were, of course, fashion (clothing and footwear) averaging approximately 40% of each market with that of Ermou leading with 76%. The food and beverage continued to increase in size for the second consecutive year, being the leader growth retail category. Prime rents in 2015 increased marginally in traditional high street markets of the city centre, Athens’s Northern and Southern suburbs while in 40% of the markets examined, prime rents decreased. In very few high street markets rental values for secondary locations saw marginal increases, caused mainly due to there being limited or no supply on the prime streets of these markets. Yields rose overall for high street retail markets in Athens by approximately 0.25% (prime) and 0.50% (secondary) reflecting the risk associated with the political and economic turmoil.

High Street Retail Markets 07 High Street Retail Space in Athens 2015 50,000

35% 31%

45,000

30% 40,000 25%

35,000 21%

30,000

18%

20%

17%

25,000

16%

20,000 10%

15,000

10%

9%

8%

15%

12%

11%

9%

7%

10,000

10% 6%

5% 4%

5%

3%

5,000 0

Vacant space (m2)

Io

ni a

ni N ea

Sm

yr

a N ea

G

ly fa d

i at gr Pa

llit he a Ka

eu s Pi ra

al eo Eg

ri ris

te

i Pe

i ou ss ar M

N ea

Pa

Retail space (m2)

H al an dr

ia

a hr e yt Er

tis Pa

is t ne p

Ki fis s

si on

io u im

io u ad St

lo na ki Ko

Er

m

ou

0%

Vacancy rate (%)

Source: NAI Hellas, on-site inspections

Athens High Street Retail Market 2015 Rent (Ä/m2/month) Market

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Ermou Kolonaki Stadiou Panepistimiou Patission Nea Erythrea Kifissia Maroussi Halandri Peristeri Egaleo Piraeus Kallithea Pagrati Glyfada Nea Smyrni Nea Ionia

Yields

Change 2014/2015 Prime

Secondary

90-140 55-90 35-65 60-105 16-25 20-50 60-90 30-55 45-90 18-40 15-30 20-45 20-40 20-45 60-100 45-90 30-70

50-75 15-40 15-30 30-55 5-12 12-17 25-55 7-20 20-40 6-15 5-14 4-16 6-15 5-15 25-55 25-40 10-25

Prime

Secondary

Change 2014/2015 Prime

Secondary

Prime

Secondary

7.50%-8.25% 8.00%-9.50%

n/a n/a

n/a n/a

Source: NAI Hellas Research

Retailers looking into the Greek market The entry of the American fast food chain Burger King was delayed due to the political and economic events that took place in 2015, yet the chain is now considering entering the market with 5 pilot stores in Athens within 2016. Also, the American fashion brand American Eagle Outfitters is considering entering the Greek market in alliance with Notos Com Holdings Group.

08 High Street Retail Markets Retailers entering the Greek market The Dutch underwear chain Hunkemoller entered the Greek market in October 2015 with its first store in Patras, while the chain is planning to expand into the Athenian and Thessaloniki markets. Also, the Spanish underwear chain women’secret entered the market in 2014 with a store in the Metro Mall shopping centre and opened its second store in Athens in the River West shopping centre in September 2015. The UK homeware brand English Home entered the Greek market in 2015 with new stores in Piraeus, Kifissia, Halandri, Glyfada, Nea Ionia, Kolonaki and in the River West shopping centre. The international sports brand Athlete’s foot entered the Greek market in 2015 with 2 stores in Kifissia and Piraeus.

Retailers expanding in the Greek market H&M celebrated the opening of a 2nd flagship store in October 2015 on 11 Ermou street, bringing its total store number to 32 across 11 Greek cities. The new flagship store is located in the 3,900m2 listed landmark building (ex home to the Fokas shop-in-a-shop chain) that underwent a significant renovation and offers not only fashion but homeware and beauty products. H&M plans to open one more store in the new Mare West shopping centre in Corinth. The Swedish chain is also expected to launch its on-line shop within 2016. Inditex group that owns the chains Zara, Massimo Duty, Bershka, Pull & Bear, Stradivarius, Oysho and Zara Home increased its market share during 2015 despite the difficulties the market faced. New stores of the brands Bershka, Stradivarius and Pull & Bear opened in the River West shopping centre, a Zara store opened in the One Salonica Outlet of Thessaloniki, one Oysho store on the island of Mykonos and two Stradivarius stores in Trikala and Rhodes. Furthermore, the Attica department stores chain is projected to achieve Ä155mil. revenues in 2015 compared to Ä141mil. in 2014. The Attica department stores in Syntagma, Athens (Citylink building) and the Golden Hall shopping centre showed an increase in sales for the first five months of 2015 of 6% and 5%, respectively. The books and electronics chain Public, the fashion chains Orchestra and Mexx and the cosmetics chain Sephora are expanding their store networks. In April 2015 the chain Tommy Hilfiger opened its 36th store in the One Salonica Outlet in Thessaloniki. In 2015 Vivartia group further developed the new concepts of its trademark food and beverage chains Goody’s Burger House, Flocafe Espresso Room and Everest. Goody’s Burger House stores total 51 while in 2015 the chain added 8 new stores in Komotini, Thessaloniki, Patras, Kos, Patissia, Megara and in the Metro Mall shopping centre. In the food and beverage sector, the cafe chains Mikel and Grigoris and the bakery chains Apollonion, Artopoiitis and Focaccino are also expanding their network. The Apollonion chain opened 2 new stores in Athens in 2015 in Peristeri and Psyhiko. Pizza Fan introduced 4 new stores in 2015, 3 in Athens - Kipseli, Elliniko & Nea Erythrea - and one in Volos.

Food & Beverage Cosmetics (incl. bakeries) & Perfume Accessories

High Street Retail Markets 09

5

OMONIA

PATISSION

4

PANEPISTIMIOU

PANEPISTIMIO

3

KOLONAKI

2

STADIOU

ERMOU

1 MONASTIRAKI SUNTAGMA

Catchment Area Accessibility Vacancy Rate (change 2014/2015)

Catchment Area Accessibility Vacancy Rate (change 2014/2015)

Catchment Area Accessibility Vacancy Rate (change 2014/2015)

Catchment Area Accessibility Vacancy Rate (change 2014/2015)

Catchment Area Accessibility Vacancy Rate (change 2014/2015)

12 High Street Retail Markets Retail Mix - Major Athenian Markets Ermou 4%

5%

Patission

Stadiou 4%

11%

6%

12%

16%

31% 35%

17%

38% 8% 13% 76%

4%

Panepistimiou 5%

3%

3%

6%

Kolonaki

1%

7%

13%

8%

3% 2%

20% 18%

25% 7% 32% 3% 3% 3%

1% 5% 2%

Nea Erythrea

9%

Maroussi

Kifissia

11%

9%

20%

33% 5%

Halandri

2%

3% 16%

6%

15%

11%

5%

4%

3%

28%

5%

10%

4%

6%

1%

1% 5%

4%

10%

4%

3%

12% 20%

2% 4%

4%

46%

6% 7%

54%

7%

Peristeri 5%

38%

Egaleo 6%

15%

Piraeus 6%

8%

7%

9%

Kallithea 7%

13%

11%

15%

15%

3% 11%

2% 5%

9% 21%

4%

1%

4%

7%

45%

5%

2%

1% 49%

12%

2%

39% 6%

14%

6% 4%

Pagrati

Glyfada

3% 1%

9%

6%

9%

24%

23% 9%

11% 2% 2%

Nea Ionia

Nea Smyrni

3%

11%

4%

27%

2% 2%

9%

7% 7%

21%

4%

4%

1%

2%

4%

5%

2% 4% 21%

6%

8%

58%

10% 2% 4% 1% 2%

38% 37%

Food & Beverage

Household Goods

Cosmetics

Vacant

Clothing & Footwear

Books/Electronics/Toys/Mobile

Cars/Moto/Heavy Equipment

Other

Supermarket/Grocery/Butcher

Services

Source: NAI Hellas, on-site inspections

14 Supermarkets & Big Boxes Supermarkets Between 2008-2014 the number of supermarket chains operating in Greece reduced by 34.0% to 63 chains. It is estimated that during this period 850 supermarket stores switched hands while in 2014 alone seven chains were acquired by other players in the sector. The economic downturn of 2008 shortly led to chains with financial issues going bankrupted (e.g. Atlantik chain) and foreign chains exiting the Greek market (e.g. Aldi chain). In late 2013 and early 2014 strong players initiated an expansion policy through the acquisition of struggling smaller chains, resulting in those gaining higher market shares and penetrating into new markets around the country.

Evolution of Supermarket Chains in Greece 120 100

96

88

89

86 81 70

80

63

60 40 20 0 2009

2008

2010

2011

2012

2013

2014

Source: Greek Supermarket Panorama 2015, edited by NAI Hellas

The consolidation trend of supermarket chains in Greece continued throughout 2015. After the deal of Sklavenitis and Makro cash & carry in 2014, a new deal is close to completion this year. Metro SA has agreed to the acquisition of the Veropoulos chain in Greece. The deal gained bank agreement and is awaiting confirmation from the Competition Commission. The closure of the deal is very important for the continuation of the chain Veropoulos due to its increasing outstanding debt obligations. Veropoulos opened a new store of 1,350m2 GLA in Lavrio in 2015 and today counts 182 units nationally. The supermarket chain AB Vassilopoulos only in H1 2015 introduced 23 new stores to the market (Thessaloniki-580m2, Larissa-630m2, Serres-1,570m2, Nea Kio-420m2 and in Karisto-460m2) and is continuing the refurbishment campaign of a number of its stores. In October 2015 one of the chain’s oldest stores on the National Rd of Athens reopened offering new services to customers. The chain also acquired 4 retail stores of the chain Key Food on the island of Chios penetrating into the North Aegean market. The chain Sklavenitis opened its first store outside of Attica in the new Mare West shopping centre in Corinth with a 4,000m2 GLA. The Northern supermarket chain Masoutis opened 2 new stores in Thessaloniki and Larissa in 2015. The chain is also planning its entry into the Athenian market.

Top 5 Supermarket Chains in Greece

Earnings before Tax (EBIT) 2014 in mil. Ä

ΑΒ Vassilopoulos SA

68.8

Diamantis Masoutis SA

23.2

Metro SA

17.1

Sklavenitis SA

16.2

Pente SA (Galaxias chain)

12.6

Source: Greek Supermarket Panorama 2015, edited by NAI Hellas

Food Retail Sales in Greece (in bil. Ä) 30 25

? = - 30%

20 15 10 5 0 2008

2009

2010

2011

2012

2013

2014

2015Ε

2016F

Source: Institute of Retail Consumer Goods (IELKA), edited by NAI Hellas

The acquisition of 18 stores of the Kronos-Karakitsos chain in Achaia and 51% of the Cretan Retail Management chain by the Marinopoulos Group was completed in 2015, bringing the total number of stores around the country to 1,022, 139 of those located in Crete. The group, however, is planning to close 20 stores in Athens and Thessaloniki as part of its restructuring plan. The Market In chain expanded during 2015 with 4 new stores in Athens (250m2), Avlonas (400m2), Agrinio (400m2) and Inofyta (700m2). Lidl opened a new store on the island of Syros (totalling 221 stores nationwide). Changes in the market have also led to the growth of the chain ELOMAS (group of smaller market share chains) that, after the inclusion of the Asteras and Aspida chains in 2015, numbers 35 members with 540 stores. The chain Bazaar (member of ELOMAS) introduced 2 new stores in 2015, one in Athens and one in Thessaloniki (400m2 GLA each). The chain Ellinika Market (also a member of the group) launched new stores in Larissa and Thessaloniki in 2015.

Turnover Index in Wholesale (2010=100)

Retail Sales Indices in Supermarkets (2010=100) 140 120 100 80 60 40 20 0

140 120 100 80 60 40 20 0 2008

2009

2010

2011

Turnover Index in Retail Sales

2012

2013

2014

Volume Index

Source: ELSTAT, edited by NAI Hellas Note: Volume Index in Retail Sales is the estimation of Turnover Index in Retail Sales deflated by the CPI.

2015

2008

2009

2010

2011

Turnover Index in Retail Sales

Source: ELSTAT, edited by NAI Hellas

2012

2013 Volume Index

2014

2015

Supermarkets & Big Boxes 15 According to the Institute of Retail Consumer Goods, total supermarket sales decreased in 2015 by 2.0%, however, this largely reflects results of the smaller chains and not that of the bigger players. H2 2014 recorded increased sales as a result of high investment in the sector, growth of chains and strategies against challenges caused by the crisis.

How did Supermarkets respond to issues caused by Capital Controls? 12%

Positive 18%

Indifferent

Sales continued to increase during H1 2015 and in particular after the ‘supermarket run’ effect in July by 1.3%. In H2 2015, after increases in VAT and taxes, the sector is expected to close with 1.9% losses in sales. 2016 is forecasted to experience a fall between 2% and 4% due to higher VAT on products.

Negative 70%

Source: Institute of Retail Consumer Goods (IELKA), edited by NAI Hellas

According to research conducted by the Institute of Retail Consumer Goods regarding problems caused by imposed capital controls in July 2015, 70% of consumers responded that supermarkets dealt positively. This reflects actions taken by supermarkets during the summer of 2015 that included the continuous refilling of products, the minimisation of shortage in products, the effort to maintain a good environment and the avoidance of anxiety caused by crowding. Also 73% of consumers believe that supermarkets responded better to new needs caused by capital controls through properly trained staff, economies of scale and modern POS (Point Of Sale) systems.

Supermarkets

Rent (Ä/m2/month)

Turnover Rent

Yields

7.00-14.00

5.0%-10.0%

8.0%-10.0%

Source: NAI Hellas

Big Boxes The sector of big box retailers welcomed the Danish home equipment chain Jysk in 2015 that made a dynamic entry into the Greek market with the launch of 4 new stores; two in Athens (in Patissia and in Hellinicon), one in Larissa and one in Thessaloniki. The chain is a direct competitor to IKEA, however, follows a different expansion strategy by placing stores in the heart of cities in comparison to IKEA that prefers locations on the outskirts. Also in 2015 the cinema chain Odeon announced the cease of operations for the entertainment centre Kosmopolis on Kifissias Av. in Maroussi. The 22,752m2 property is said to change use and become a Leroy Merlin store. A similar case was witnessed in the market in 2013 when the Ster Cinemas complex on Agiou Eleftheriou in Patissia closed down and reopened as a Jumbo toy store. Jumbo group opened a new store in Iasmos, near Komotini, in August 2014 with a GLA of 9,000m2 and a new store in Tripoli, Peloponnese, in June 2015 of 9,000m2 GLA. It also acquired the adjacent land plot (4,531.2m2) to its store in Nikaia and expanded its store in Piraeus with the acquisition of additional 456.5m2. Jumbo ceased the operations of its store in the West Plaza shopping centre in February 2015. The group currently totals 53 stores around the country. The electrical appliances chain Kotsovolos launched a new store in Thessaloniki in May 2015. Electrical chain Kafkas added 2 new stores to its network in 2015, in Haidary (Nov.) and Pyrgos (Feb.). Media Markt, that already operates 10 stores in Greece and holds a market share of 11%, is planning to launch 2-3 new stores within 2016. Electrical appliances chain Electronet grew its network of stores with the addition of 3 more on the islands of Rhodes, Alonissos and Karpathos. Grivalia Properties REIC, currently with 5 Praktiker stores in its portfolio added one more in Heraklion, Crete in March 2015. The 12,585m2 retail box was bought for Ä8.5mil. at an investment yield of 9.5%. Praktiker with 14 stores already operating around the country is planning to expand its network with the addition of 2 more stores in 2016.

Big Boxes Source: NAI Hellas

Rent (Ä/m2/month)

Turnover Rent

Yields

5.00-10.00

5.0%-10.0%

8.0%-10.0%

16 Shopping Centres Shopping Centre GLA (m ) / 1,000 population by Prefecture in Greece, 2015 2

48 42

List of Shopping Centres in Greece Shopping Centre The Athens Heart

Location

The Golden Hall The Mall Athens McArthurGlen Outlet

67

Metro Mall

2011

23,500 40,000 34,605 23,500

2010 2011 2011 2009

49,217

2005

19,049

2014

13,809 16,000 27,000

2001

21,900

1994

9,000

2007

7,580

2014

17,897 Eastern Macedonia & Thrace 11,369

2011

Ag. Dimitrios Kifissos Spata Aspropyrgos

Smart Park West Plaza Mediterranean Cosmos

Thessaloniki

One Salonica Outlet

Thessaloniki

78

21,152

Attica

Spata

River West

44

23,000 26,500 44,881 62,159

Tavros Maroussi Maroussi Maroussi

The Avenue Mall

Veso Mare

Patra

Mare West

Corinth

Pantheon Plaza

Larissa

Thessalia Mall

Larissa

Talos Plaza

Heraklion

Olea Shopping Centre

Platania

Flamingo Retail Park

Xanthi

Kosmopolis Centre

Komotini

GLA (m2)

Opening Year 2008 2006 2008 2005

Prefecture

Central Macedonia Western Greece Thessaly

Crete

2015 2008

2008

492,118

Total Source: NAI Hellas Research

27 Shopping Centre GLA (m ) per 1,000 population, 2015 1,000 900 800 700 600 500 400 300 200 100 0

234

242

55

Source: ICSC, Eurostat processed by NAI Hellas

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Shopping Centres 17 Greece has the lowest shopping centre GLA(m2) per 1,000 population ratio in Europe, currently at 55m2. Between 2013 and 2015 GLA per 1,000 population of Greece increased by 4%. The region of Attica ranks higher than the country’s average at 78m2.

New Supply

Key Market Indicators 2015 Total shopping centre stock including outlets

492,118m2

Total shopping centre stock

451,917m2

In 2015 one new shopping centre and one redeveloped shopping outlet New completions in 2015 2 were introduced to the Greek market: Mare West - the new shopping centre is located in the city of Corinth and New stock in 2015 20,649m opened in September 2015. It has a GLA of 16,000m2 and provides 800 parking spaces. The centre’s occupancy amounts to approximately 50% Source: NAI Hellas Research and offers a combination of retail brands, supermarket, F&B and entertainment. One Salonica - Thessaloniki’s new shopping outlet that opened to public in April 2015. One Salonica is located in the building of the old shopping centre City Gate that closed due to low performance. The outlet comprises of 19,049m2 GLA and offers a combination of retail stores, supermarket, F&B and entertainment. The outlet also offers 1,500 parking spaces. 2

Demand The region of Attica and in particular the city of Athens, has the highest potential for shopping centre development as the city concentrates a quarter of the country’s population that has the highest GDP per capita. Thessaloniki (Central Macedonia) has the second highest development potential partly due to high population concentration and consumer demand from Balkan visitors.

Prefectures in Greece - Shopping Centre Development Potential High Potential

South Aegean Ionian Islands

Attica

Central Greece West Macedonia

Peloponnese Crete West Greece Central Macedonia

North Aegean Ipiros

East Macedonia & Thrace

Thessaly

Low Potential

Source: ELSTAT, processed by NAI Hellas Research Note: Development potential is estimated based on Prefectures’ population and per capita GDP.

Projects in the Pipeline Project Name

2

Developer

GBA (m )

Location

Cambas Project

REDS

90,000

Katza, Eastern Attica

exp. 2016

2018

IBC (Golden Hall)

Lamda Development

16,000

Maroussi, Athens

Yes

2017

70,000

Athens Centre

Yes

2018/2019

250,000

Hellinikon, Athens

exp. 2017

unknown

Votanikos Mall Hellinikon Source: NAI Hellas Research

Lamda Development

Granted Planning Permission Expected Completion

18 Shopping Centres Supply New shopping centre projects are concentrated within the region of Attica and will be driven by the recovery expected in the Greek market in late 2016 and 2017. The Cambas Project is a mixed use development scheme in the Eastern suburbs of Attica that will include retail, office, cafe, restaurant, cinema and entertainment uses in 79,700m2 GBA as well as exhibition, cultural, wine museum and boutique hotel uses in 9,345m2 GBA in existing listed buildings. The development will also offer approx. 53,000m2 of open air space and the total investment is expected to exceed Ä200mil. The Cambas Project is estimated to be completed by 2018, attract 12mil. visitors per annum and have an annual lease income of Ä30mil. The ex IBC (International Broadcast Centre) of the 2004 Olympic Games of Athens in Maroussi is planned to be redeveloped and united with the existing Golden Hall shopping centre. The 24,600m2 GBA redevelopment will include retail space (app. 8,000m2 GLA), office, cafe and restaurant uses plus a museum dedicated to the Olympic Games. The investment is estimated to exceed Ä15mil. and to be completed by 2017. The Votanikos Mall, a project which had been put on hold, seems to have returned to life as the development company responsible for the project which faced financial issues transferred the project via an SPV to the two banks financing it (Alpha Bank and Piraeus Bank). The banks are now looking for investors interested in the project and it is believed that a sponsor developer will be found in the short term. The Hellenicon Development, one of the 9 privatisation projects in Greece, is slowly gaining momentum. According to the President of the Hellenic Republic Asset Development Fund (HRADF) a structured process of improvements and adjustments to the agreement should be completed in H1 2016 in order for licencing and implementation steps to begin. The development, the billion euro real estate project, will include a 2mil.m2 Metropolitan Park, 1km open beach, sports, cultural and educational facilities, residential uses (Marina Tower, seafront town), the marina development with shops and entertainment facilities, shopping centres and business park. Shopping centres in Greece proved resilient to challenging economic conditions and for a consecutive year outperformed traditional high street markets. 2015 shopping centres’ performance in terms of shopkeepers’ sales closed at levels lower than 2014, yet on average most centres increased their occupancy rates and number of visitors. The International Council of Shopping Centres (ICSC) estimates that shopkeepers’ sales for 2014 in shopping centres in Greece reached Ä1.9bil. In other words, per capita spending in shopping centres was Ä173.9. Top 5 - Best Performing Shopping Centres in Greece, 9M 2015 Shopping Centre

Shopkeepers Sales Number of Visitors

Occupancy Rate

Revenue

EBITDA

98%

+5.0%

+10.0%

0.0%

97%

0.0%

0.0%

n/a

100%

n/a

n/a

+1.0%

99%

+4.0%

+8.5%

+5.0%

100%

+5.0%

+6.0%

The Golden Hall

+4.1%

+1.6%

The Mall Athens

+2.8%

Metro Mall

n/a

Mediterranean Cosmos

+3.5%

Smart Park

+6.0%

Source: NAI Hellas Research

Key Figures, 2015 Averages

Shopkeepers Sales per GLA

Spending per visit

Attica

2,100-2,000 Ä/m2

15.0-25.0 Ä/visit

Source: NAI Hellas Research

Shopping Centres, 2015 Turnover Rent

Yield

Service Charges (Ä/m2/month)

Anchor Tenant (2,000m +)

Rent (Ä/m /month) 9.00-20.00

Tenant >100m2

35.00-60.00

6.00% - 14.00%

8.25% - 9.25%

6.00-8.00

2

50.00-90.00

2

2

Tenant