Corporate overview

Generali Real Estate (GRE) is one of the world’s leading real estate asset and investment manager, with around €38.1bn of assets under management as of 30 June 2022. It leverages on the expertise of more than ~370 professionals, with operating units located in the main European cities through five macro areas (Southern Europe, Western Europe, Central Northern Europe, Central Eastern Europe and Nordics and Logistic).

The company’s integrated business model covers the full scope of asset management activities and the entire real estate value chain. GRE has recently launched a series of 10 cross-border investment vehicles, geographically diversified and specialised in terms of destination of use, allowing investors to build a ‘personalised’ portfolio. Strategies aim to create long-term value for investors with a core/core+ profile by investing in assets characterised by good locations, high liquidity and strong underlying leasing dynamics.

By managing a portfolio comprising a unique mix of historical and modern properties, ranging from landmark buildings such as Procuratie Vecchie in Venice, to new architectural masterpieces defining the skyline of modern cities such as CityLife in Milan or Tour Saint-Gobain in Paris, the company has developed best-in-class skills in the fields of technological innovation, sustainability and urban development.

Generali Real Estate is part of the Generali Investments ecosystem of asset management firms.

Sector forecasts

INDUSTRIAL: COVID -19 caused consumer habits to change, increasing speed of online sales growth, which creates demand for additional storage space, demonstrating strength and resilience of logistics real estate. While other investment/asset classes have been hit by the pandemic with different severity levels due to their correlation with traditional demand factors, logistics has shown a further yield compression. Furthermore, thanks to consolidation of e-commerce, supply chain reconfiguration and omnichannel distribution trends, logistics is expected to continue surfing market momentum in the medium to long run. At the same time, demand for last mile will lead to further development projects across Europe.

OFFICE: The COVID -19 crisis created a sudden need for businesses and their employees to start or increase working from home. Companies are now recognising the value of bringing employees together – even if less frequently – while tenants are identifying their new long-term office needs. Companies need to create spaces that inspire employees and give them compelling reasons to come together with their colleagues, while employees need the office to support their desire to learn, make cultural connections and engage.

Office is becoming the place for building and reflecting company culture, social beliefs and for inspiring creativity and innovation, with a focus on wellbeing. Office will have high ESG features and high-quality locations. Companies are required to comprehensively review the experience, to create a place that is the physical manifestation of culture and needs – meet, connect, collaborate, re-energise – that will inspire employees to choose the office over their home or a third place. Demand for quality ESG assets significantly outweighs supply and indicates confidence, a signal that the office sector will continue to be a primary feature in the workplace ecosystem of the future.

RESIDENTIAL: Residential destination of use is resilient by definition, with household needing a home to live in. Limited volatility of the residential asset class allows investors to benefit from its intrinsic guarantee and its granularity, preserving liquidity over the long term thanks to its low correlation with market cycles, leveraging also on the how people modified their habits and use of the houses in the post-pandemic world. Households are now re-assessing how they use their houses and, in this context, the possibility to live in a ‘sustainable’ home granting wellness (in terms of size/light/and ideally outdoor space) and accessibility will be even more appreciated in the future for tenants.

RETAIL: Despite the COVID -19 crisis and the subsequent change in consumer habits, the high street segment has once again proven its strong resilience. While the secondary retail sector was the hardest hit segment, high street retail has shown its capacity to recover rapidly, and interest in this sector remained high both for investors and international tenants. Retail assets located in prime locations will continue to be an attractive and resilient asset class, especially when the assets will be able to provide a high-level customer’s purchase experience. Likewise, shopping centres located in prime locations continued to attract new tenants, and the current high-level yield of this segment presents a relative premium versus other property sectors. Historically, GRE has always aimed to lease its high street retail spaces to international brands tenants, and thanks to its widespread presence, GRE has established a robust connection with most of international players. In future, in addition to location and brand attractiveness, landlords will need to improve the environmental credentials of shopping centres, by introducing more efficient energy and waste management processes, making greater use of greenery as well as implementing ‘green leases’.

Investment principles & strategy

Generali Real Estate manages the Generali real estate portfolio worldwide and is responsible for the implementation of the group real estate strategy. Leveraging on this expertise, GRE has launched a series of European cross- border real estate funds specialised by investment strategy, geographically diversified, and investing in high-quality underlying assets. GRE integrates environmental, social and governance (ESG) metrics in every stage of the business operations and daily activities, leveraging on best practices implemented during the overall asset life cycle (ie, transaction, asset and property management), wrapped thanks to robust and transparent sustainable governance framework implemented at fund level. GRE funds are managed both on behalf of Generali Group’s companies and of other long-term institutional investors.

The main appetite is for investing in core and core-plus assets in the largest European cities, with a focus on prime office, logistics, residential and CRE debt and with indirect investments in Asia. Generali Real Estate uses a disciplined risk-return based investment and divestiture process to maintain a high-quality portfolio.

Strategic corporate development

Coherently with Generali Group strategy, aimed at enlarging its external investor base, Generali Real Estate is currently developing a cross-border investment programme aimed to offer to investors a broader real estate investment exposure and diversification in terms of asset classes, geographies and risk-reward profiles. In this context, the specialised asset manager Generali Real Estate SpA Società di gestione del risparmio (GRE SGR) is currently managing 10 real estate investment funds, targeting external clients, institutional ones in particular, and in the next years will further enlarge its catalogue by managing additional vehicles.

Moreover, GRE SGR offers its expertise to establish long-term relationships with like-minded investors through joint ventures and co-investments, leveraging on GRE’s long-lasting track record developed over decades in the management of real estate investment across all of continental Europe.

Performance verification

Generali Real Estate periodically evaluates its performance against several benchmarks, according to best market practices. The performance of each fund is measured and analyzed by independent third parties on a regular basis.

COMPLIANCE STATEMENT

This information is prepared by Generali Real Estate S.p.A. (GRE) and is for information purposes only. In preparing this presentation, GRE took all reasonable care and diligence to provide updated and correct information. Notwithstanding GRE believes the information contained herein to be reliable, no representation or warranty, expressed or implied, is made as to the accuracy or completeness thereof. Certain information contained herein may represent forward- looking statements and/or statements that are based on information and belief. Such statements are subject to change for a variety of reasons. This presentation does not constitute an offer or solicitation to buy or to sell securities. Any reproduction hereof, total or partial, is prohibited without prior consent of GRE.