Argentina Real Estate. Presented by Herman Faigenbaum Managing Director, Cushman & Wakefield Rodrigo Millán Regional Director, Jones Lang LaSalle

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1 Argentina Real Estate Presented by Herman Faigenbaum Managing Director, Cushman & Wakefield Rodrigo Millán Regional Director, Jones Lang LaSalle SEPT 13TH, 2016

2 PROPERTY RIGHTS Nature or property rights in Argentina: Title is granted through public deed registered in the Real Estate Registry Title to property is very secure and rarely subject to challenges or attacks Ways and process to acquire / exploit / use property rights in Argentina: - Freehold acquisition Leasehold acquisition - Up to 50 years term Build to suit + Lease - With some limitations, e.g. early termination by tenant Surface right - Right to build and exploit the construction/property for up to 70 years, after which the land and buildings reverts to owner Usufruct Other real estate rights: Trusts special purpose vehicles commonly used by real estate developers. Easy to create and to liquidate Source: Matías Zaefferer RCTZZ Abogados

3 ARGENTINA TAX SYSTEM Three levels of tax authorities Federal Taxes: Income Tax; Value Added Tax (21%); Personal Assets Tax; Tax on Presumed Minimum Income; Debit and Credit Tax Provincial Taxes: Property Tax; Turnover Tax; Stamp Tax Municipal Taxes: ABL Income Tax: 35% rate for all entities incorporated in Argentina - Project of tax regulations to allow adjustment of Balance Sheets per inflation Capital Gains: 35% rate for all entities incorporated in Argentina Foreign entities Withholding taxes: Rental Payments 21% rate - Property sales 17.5% rate - Sale of shares of local companies 15% rate - Interest payments on loans obtained abroad 35% Source: Matías Zaefferer RCTZZ Abogados

4 Office Market

5 OFFICE MARKET Stock comparison - LatAm cities, including Metro suburban area Source: Cushman & Wakefield / Jones Lang LaSalle All data updated as of 2Q 2016

6 Historic Production, Absorption, Rents and Vacancy OFFICE MARKET Source: Cushman & Wakefield / Jones Lang LaSalle All data updated as of 2Q 2016

7 Q 2016 OFFICE MARKET Sales Prices and Cap Rates 7,500 6,500 5,500 4,500 14% - 12% 13% - 11% 12% - 10% 9% - 8% 6% - 4% 14% 12% 10% 8% 8% - 7% 6% 3,500 4% 2,500 2% 1,500 0% % Cap Rate Sale price (USD /sq. m) T-Bonds Yield Source: Cushman & Wakefield / Jones Lang LaSalle All data updated as of 2Q 2016

8 OFFICE MARKET Submarkets Non CBD 30% CBD 70% Source: Cushman & Wakefield / Jones Lang LaSalle All data updated as of 2Q 2016

9 OFFICE MARKET Opportunities Available land in Northern suburban area Large scale, complex, or innovative projects; - Business parks - Mixed use communities - Co-working space - Repositioning of existing downtown properties Addition of new buildings to existing undersupplied markets - Upcoming bids from National and City governments to dispose of development land Funding of local developers Source: Matías Zaefferer RCTZZ Abogados

10 Industrial Market

11 Stock comparison - LatAm cities, including Metro suburban area INDUSTRIAL MARKET Source: Cushman & Wakefield / Jones Lang LaSalle All data updated as of 2Q 2016

12 Rents and Vacancy Evolution INDUSTRIAL MARKET Source: Cushman & Wakefield / Jones Lang LaSalle All data updated as of 2Q 2016

13 Sales Prices and Cap Rates INDUSTRIAL MARKET * F: Information for 2016 is forecasted Source: Cushman & Wakefield / Jones Lang LaSalle All data updated as of 2Q 2016

14 INDUSTRIAL MARKET Submarkets ZARATE-CAMPANA PILAR TRIANGULO DE SAN EDUARDO 77% ESTEBAN ECHEVERRIA 2% 21% Source: Cushman & Wakefield / Jones Lang LaSalle All data updated as of 2Q 2016

15 INDUSTRIAL MARKET Opportunities Available land in Western and Southern suburban areas Addition of new properties to existing undersupplied markets - Multitenant logistic centers - Combined industrial parks and warehousing projects Funding of local developers

16 Retail Market

17 RETAIL MARKET Market Evolution Correspond to retail centers of 10,000 sq.m (GLA) or more. Source: Cushman & Wakefield / Jones Lang LaSalle / International Council of Shoppings Centers

18 RETAIL MARKET Shopping Malls in Argentina GLA of Shopping Centers in 2015 Source: Cushman & Wakefield / Jones Lang LaSalle / International Council of Shoppings Centers

19 Cities with the highest presence of Retail Centers RETAIL MARKET Area (GLA) by city Province/ Location Buenos Aires (Ciudad de Buenos Aires) Buenos Aires (Partido de San Isidro - Martínez) Number of shopping centers GLA (sq. m) Concentration (sq. m) ,400 IRSA 59% 2 129,271 Cencosud 73%, IRSA 27% Santa Fe (Rosario) 4 117,640 Cencosud 56%, IRSA 27% Buenos Aires (Pilar) 5 107,000 Cencosud 48% Cordoba (Ciudad de Cordoba) 5 85,720 IRSA 18%, Libertad 17% Base year 2016: 1,800,000 sq. m In the large urban centers the market is concentrated in a low number of operators Source: Cushman & Wakefield / Jones Lang LaSalle

20 Cities with the highest presence of Retail Centers RETAIL MARKET SOUTH AMERICA Units of shopping centers in 2014 Projected units of shopping centers in 2025 Source: Cushman & Wakefield / Jones Lang LaSalle / International Council of Shoppings Centers

21 Regional comparison of GLA by country RETAIL MARKET Source: Cushman & Wakefield / Jones Lang LaSalle / International Council of Shoppings Centers

22 RETAIL MARKET Opportunities New centers formats (e.g.: Power Centers; Life Style Centers) Malls in secondary and tertiary cities Mixed use developments anchored by retail centers Geographic expansion of undersupplied areas

23 Residential Market

24 Regional comparison of home ownership rate evolution RESIDENTIAL MARKET Source: Cushman & Wakefield / Jones Lang LaSalle / Banco Interamericano de Desarrollo

25 Buenos Aires City GBA Comodoro Rivadavia Bariloche Mar del Plata Santa Fé (Capital) Rosario Neuquén Mendoza Resistencia San Luis (Capital) Paraná USD/ sq. m RESIDENTIAL MARKET Value per sq. m. as of July ,000 2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1, Representative value range of sq. m. for a two/three-room apartment Source: Cushman & Wakefield / Jones Lang LaSalle / Serinco in selected cities

26 Sale Price Evolution RESIDENTIAL MARKET Average value of sq. m. for a two/three room apartment in Buenos Aires City Source: Cushman & Wakefield / Jones Lang LaSalle / Buenos Aires City Government

27 RESIDENTIAL MARKET Access to Housing Source: Cushman & Wakefield / Jones Lang LaSalle / Buenos Aires City Government / INDEC

28 RESIDENTIAL MARKET Activity Evolution Source: Cushman & Wakefield / Jones Lang LaSalle / Association of Notaries of Buenos Aires City

29 RESIDENTIAL MARKET Opportunities 1. Affordable housing for middle class families 2. Credit availability (construction loans and final user mortgages) 3. Larger scale homebuilder companies 4. New opportunities to access houses (rent with option to purchase) 5. Market majority of property owners (low presence of rent)

30 CHALLENGES RELATED TO RE Tax reform still outstanding Lack of financing (to both developers and end users) Breakable leases (limit development of BTS and S&LB) New land law still pending

31 Under Secretary of Urban Development & Housing Private & Public partnership SEPT 13TH, 2016

32 ARGENTINA S OPPORTUNITY OVERVIEW CUALITATIVE DEFICIT CUANTITATIVE DEFICIT 14.6 % 10.9 % 2M households 1,5M households HOUSING DEFICIT 25.4 % 3,5M households (1 out of 4 houses) 1 Quintile 5 Quintile Housing deficit distribution by income quintiles 4 Quintile 2 Quintile 3 Quintile IN ABSOLUT TERMS: 50% is concentrated in Buenos Aires, Santa Fe & Cordoba. IN RELATIVE TERMS: North east & west region concentrates the largest deficit, with over 42 % average. HOUSING DEFICIT ,000 houses were built, while 210,000 new homes emerged LOW INCOME HOUSING: 0.77 % FROM GDP MORTGAGE LOANS: 1 % FROM GDP

33 OUR VISION GOVERNMENT ROLE: BUILDER Discretional funds allocation Low investment recovery Lack of construction terms High bureaucratic costs PUBLIC PARTICIPATION PRIVATE PARTICIPATION GOVERNMENT ROLE: FACILITATOR Eficient/Eficiency oriented processes Higher investmen recovery Terms compliance incentives Less bureaucracy processes GOAL

34 REGULATORY FRAMEWORK - PROGRAM DRAFT PPP ACT DRAFT PROMOTED HOUSING ACT INTEGRATED HOUSING DEVELOPMENT PROGRAMS ACT s MAIN TERM Tax benefits on social housing for real estate developers PUBLIC SECTOR PRIVATE SECTOR EXPECTED GOALS new houses in 4 years Tender (zoning + Q house + fiscal land) Price & house tipology diversity Construction funding Provides Land Proyect development Executes construction new jobs in 4 years Mortgage Loans Sells (1 House + open market) No tax collection implications Social Housing: 20% - 40% (PSF) 1 House Credit Capable: 30% - 60% (PSF) Open Market: 0% - 50% (PSB) (PSF) Public sector funding (PSB) Private sector funding

35 DEMAND PROMOTION

36 Towards an inclusive urban development SEPT 13TH, 2016

37 ARGENTINA S CAPITAL CITY ABOUT US LOCATION AND FAST FACTS

38 OUR CITY VISION

39 OLYMPIC VILLA NEW NEIGHBORHOODS FOR THE CITY

40 NEW NEIGHBORHOODS FOR THE CITY OLYMPIC VILLA

41 OLYMPIC VILLA NEW NEIGHBORHOODS FOR THE CITY

42 URBAN PROJECT

43 URBAN PROJECT

44 URBAN PROJECT 1,100 households First Stage Olympic village Second Stage Households

45 URBAN PROJECT

46 VIDEO

47 CONTACT Franco Moccia Minister of Urban Development and Transportation

48