Cromwell European REIT - Annual Report 2021

CEO INTERVIEW Some retailers are also re-thinking their global supply chains which are often designed around low- cost manufacturing hubs in Asia. Central European countries are now receiving much attention due to the potential cost savings. Based on all these factors, the sector remains very attractive and has become increasingly competitive over the last couple of years. From a pricing perspective, we continue to see accretive off-market opportunities from our transaction teams, with logistics yield spreads still high in a global context. European logistics transaction volumes continue to break records and were up 20% y-o-y in 2021, 21% higher than the five-year average. Meanwhile in the European office sector, despite the average increase in availability, office rents in prime locations remained stable, albeit incentive levels vary across cities, as recently reported by CBRE. Some cities, such as Milan and Rotterdam, saw no change in office vacancies y-o-y. EUROPEAN LOGISTICS OUTLOOK: VACANCY RATES (%) AVERAGE QUARTERLY LOGISTICS MARKET RENT GROWTH (%) OFFICE VACANCY RATES (%) OFFICE RENTS (€ PER SQM) 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 Germany France Denmark Czech Republic Netherlands Italy UK 8 7 6 5 4 3 2 1 0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5 -1.0 -1.5 20 15 10 5 0 4Q 2010 4Q 2010 2Q 2011 2Q 2011 2Q 2012 2Q 2012 2Q 2013 2Q 2013 2Q 2014 2Q 2014 2Q 2015 2Q 2015 2Q 2016 2Q 2016 2Q 2017 2Q 2017 2Q 2018 2Q 2018 2Q 2019 2Q 2019 2Q 2020 2Q 2020 2Q 2021 2Q 2021 4Q 2011 4Q 2011 4Q 2012 4Q 2012 4Q 2013 4Q 2013 4Q 2014 4Q 2014 4Q 2015 4Q 2015 4Q 2016 4Q 2016 4Q 2017 4Q 2017 4Q 2018 4Q 2018 4Q 2019 4Q 2019 4Q 2020 4Q 2020 4Q 2021 4Q 2021 Paris CBD Paris CBD IIe-de-France IIe-de-France Amsterdam Zuidas (CBD) Amsterdam Zuidas (CBD) Milan CBD Milan CBD Warsaw City Centre Warsaw City Centre 1,000 900 800 700 600 500 400 300 200 2Q 2017 2Q 2019 2Q 2018 2Q 2020 4Q 2017 4Q 2019 4Q 2018 4Q 2020 2Q 2021 3Q 2017 3Q 2019 3Q 2018 3Q 2020 1Q 2018 1Q 2020 1Q 2019 1Q 2021 4Q 2021 3Q 2021 FOCUS ON STRENGTHS PIVOT TO LOGISTICS 14