Asia Pacific Real Estate Investment Market Overview - 2nd quarter

Asia Pacific Real Estate Investment Market Bulletin 2009 SECOND SECO SE COND CO ND QUARTER Q UA UART R ER RT

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

CONTENTS Regional Overview .................................................................................. 3-4 Greater China ........................................................................................ 5-10 Beijing, China ....................................................................................................5 Chengdu, China ...............................................................................................6 Guangzhou, China ...........................................................................................7 Shanghai, China ................................................................................................8 Hong Kong SAR, China ..................................................................................9 Taipei, Taiwan ................................................................................................. 10

North Asia ............................................................................................11-12 Tokyo, Japan ................................................................................................... 11 Seoul, South Korea....................................................................................... 12

South Asia..............................................................................................13-17 Jakarta, Indonesia .......................................................................................... 13 Manila, Philippines......................................................................................... 14 Singapore ....................................................................................................... 15 Bangkok, Thailand ......................................................................................... 16 Ho Chi Minh City, Vietnam ......................................................................... 17

India ..............................................................................................................18 Australasia ............................................................................................. 19-26 Adelaide, Australia ........................................................................................ 19 Brisbane, Australia ........................................................................................ 20 Canberra, Australia ...................................................................................... 21 Melbourne, Australia .................................................................................... 22 Perth, Australia .............................................................................................. 23 Sydney, Australia ........................................................................................... 24 Auckland, New Zealand .............................................................................. 25 Wellington, New Zealand ........................................................................... 26

APPENDIX Major Market News ............................................................................ 28-35 Greater China ......................................................................................... 28-30 North Asia ..................................................................................................... 31 South Asia ...................................................................................................... 32 India................................................................................................................. 33 Australasia ..................................................................................................... 35

Contacts ................................................................................................ 36-37

2

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

REGIONAL OVERVIEW A Distinct Improvement

Thanks to the concerted efforts of a number of central banks in the region to provide sufficient liquidity, the problem of the credit crisis eased further, while overall investment sentiment saw a distinct improvement in 2Q2009. In addition to the improved flow of liquidity, the proactive initiatives implemented by the various governments also played a key role in enlivening the real estate investment market during 2Q2009.

Government Initiatives

In Mainland China, investment market sentiment was boosted after the State Council announced a reduction in the minimum capital ratio for ordinary residential developments from 35% to 20% during 2Q2009. Meanwhile, the Council also lowered the minimum capital ratio for commercial property and high-end housing projects, down from 35% to 30%. More investors started jumping on the bandwagon based on expectations that the Central Government in China might relax the current restrictions on foreign real estate investment even further. In Taipei, insurance companies have been permitted to participate in auctions and development projects since 2Q2009. In Ho Chi Minh City, the recently amended housing law was reckoned to be a key initiative in boosting foreign investment in the residential market there.

Robust Growth of Sales Activities

Notwithstanding the fact that the region is still in the midst of a consolidation, the pace of downward adjustment for a number of economic indicators tapered off further, indicating not only that the worst is over, but also that there is more hope of a global recovery towards the end of 2009. The above was essentially the consensus among a group of cash-rich individuals and local companies who actually made pre-emptive moves by snapping up quality investment opportunities in 2Q2009. With the general improvement of market sentiment arising from the growth in stock market prices and, more importantly, the gradual relaxation of banks’ lending policies concerning property financing, the real estate investment market in the region saw a distinct increase in sales activities in 2Q2009. Beijing, Hong Kong, Taipei, Singapore and Melbourne were the key centres seeing a quantum leap in the total value of sales transactions during the period.

Active Centres

According to a separate measurement undertaken by Real Capital Analytics, North Asia was on top of the list in terms of the total number office investment transactions valued at US$20 million or above over the past 12 months. Tokyo achieved US$9.2 billion and Seoul was ranked the second at US$3.3 billion.

Other active centres including the key cities in the Greater China region registered a total volume of over US$1 billion during the same period.

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

3

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

REGIONAL OVERVIEW Office and Residential Markets in the Spotlight

Buying interest was concentrated primarily on the office and residential property sectors. Office investment yields in the region edged down 19 basis points (bps) during 2Q2009, with Hong Kong seeing the most significant drop at 110 bps. In the residential sector, most centres in the region recorded a decrease of investment yields during 2Q2009. Hong Kong and Jakarta were the key performers compared with the average fall of 39 bps across the region.

Market Outlook

Looking forward, the real estate investment market in the region will continue to be underpinned by a group of high-net-worth individuals, local companies and wealthy families, given the projection that the volume of liquidity will remain plentiful in the system and, more importantly, that a global economic recovery will materialise before the end of 2009. Institutional investors, currently sitting on the sidelines, are expected to make a comeback if there are signs of solid improvement in the occupational side of the market over the next 6-12 months.

OFFICE INVESTMENT SALES TRANSACTIONS

PROPERTY INVESTMENT YIELDS 2Q 2009 (% per annum)

(Asia Pacific Region in the past 12 months)

10,000

City

9,000

Greater China Beijing Chengdu Guangzhou Shanghai Hong Kong Taipei

Total Value (US$ million)

8,000 7,000 6,000 5,000 4,000

Office

Residential

Retail

Industrial

7.9% 10.6% 6.2% 8.0% 4.1% 4.2%

3.6% 7.8% 5.5% 2.5% 3.1%

6.5% 6.7% 5.9% 7.6% 4.5% 4.1%

7.4% 8.7% 5.9% 4.4%

5.7% 4.6%

6.5%

4.5% -

6.5%

8.1% 11.2%

10.0% 6.5%

4.4% -

8.0% -

3,000

North Asia Seoul Tokyo

2,000

0

Tokyo Seoul Beijing Shanghai Osaka Hong Kong Taipei Melbourne Brisbane Sydney Kuala Lumpur Canberra Singapore Nagoya Perth Mumbai Nanjing Fukuoka Adelaide Sapporo Guangzhou New Delhi Auckland Shenzhen Wellington Chennai Pune Gold Coast

1,000

Source: Real Capital Analytics, August 2009 Note: Sales transactions closed in the past 12 months valued at US$20 million or greater

* Strata net yield # Strata net yield for 60-year leasehold multi-user upper floor space

South Asia Jakarta Manila Singapore

*

*

*

#

Bangkok Ho Chi Minh City

4.1% 7.4% 12.5%

2.1% 4.9% 11.5%

7.3% 8.2% 12.5%

6.5% 10.9% 14.0%

India Bangalore Chennai New Delhi Mumbai

14.0% 13.0% 12.5% 11.5%

5.5% 5.5% 4.0% 4.0%

16.0% 16.0% 13.0% 13.0%

-

8.0% 8.0% 7.8% 7.8% 8.3% 7.7% 8.2% 7.3%

-

8.5% 8.0% 7.0% -

8.0% 8.0% 8.6% 9.0% 8.5% 8.4% -

Australasia Adelaide Brisbane Canberra Melbourne Perth Sydney Auckland Wellington

Source: Colliers

4

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

CHINA - BEIJING

I

n 2Q2009, in addition to the continued proactive fiscal and moderating monetary policies, the Beijing real estate market enjoyed more preferential measures initiated by both the central and local governments. For instance, the State Council lowered the minimum capital ratio for real estate development for the first time since 1996 and the Beijing Municipal Bureau of Land and Resources extended the time limit for land acquisition payments. All these policies were designed to ease financial pressure on domestic developers and boost the market.

1-YEAR LENDING RATE 28% 24%

% per annum

20% 16% 12% 8% 4%

Reacting to the stimulus measures from the government and easier access to bank loans, the level of investment activity soared, with domestic market players continuing to take the lead, as evidenced by four significant sales transactions registered in the residential and office sectors during the quarter. For example, Greentown China purchased a residential project at Dongzhimenwai Xiejie No. 8 in Chaoyang District; a joint venture launched by Winbase and SOHO China bought No. 2 building of Chaoyangmen SOHO Phase I; and The China Development Bank acquired No. C1 Beifeng. These deals amounted to an estimated several billion RMB.

1Q 2009

3Q 2007

1Q 2006

3Q 2004

1Q 2003

3Q 2001

1Q 2000

3Q 1998

1Q 1997

3Q 1995

1Q 1994

3Q 1992

1Q 1991

3Q 1989

1Q 1988

0%

Source: The People’s Bank of China

BEIJING PROPERTY YIELDS 16% 14%

% per annum

12%

Beijing’s land sales market was particularly active during 2Q2009, with more than ten land transactions reported and an overall investment exceeding RMB11.5 billion. Headline deals were concluded mostly by domestic developers, either state-owned enterprises or those with strong financing. For example, R&F Properties acquired the Guangqumen No. 10 plot and Franshion Properties (China) Limited purchased the Guangqu Road No. 15 land plot at the prices of RMB1.022 billion and RMB4.06 billion, respectively.

10% 8% 6% 4% 2%

Office

Residential

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Retail

Source: Colliers

Looking forward, with an economic rebound having started in the locality, the capital values of properties in conventional sectors, having bottomed out in 2Q2009, should be slowly on the uptick, with improving market sentiment across the board. However, pricing gaps for existing projects, particularly in commercial sectors, should remain wide, continuing to ward off the entry of capital from overseas investment institutions.

MAJOR INVESTMENT TRANSACTIONS Development

Floor Area (sq m)

Lump Sum Price (RMB million) (US$ million)

Seller

Buyer

Office Chaoyangmen SOHO Gongsan Plaza 2# Office No.C1 Beifeng Finance Street

46,394 7,000 45,966

1,221.28 250.00 1,275.22

178.76 36.59 186.66

SOHO China Shimao Group Beijing Huihong Real Estate Development Ltd.,Co.

Capital International Ltd. Undisclosed China Development Bank

Retail Dongzhimenwai Xiejie No. 8

61,080

539.24

78.93

Laifu Century

Greentown China

Note: US$1 = RMB6.8319

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

5

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

CHINA - CHENGDU

P

rime office rentals fell 8%-10% QoQ in 2Q2009. On a positive note, the highlight of the Chengdu real estate market in 2Q2009 was the launch of the Chengdu Real Estate Fair in May, giving the market another platform for long-term growth.

1-YEAR LENDING RATE 28% 24%

% per annum

20%

On the demand front, the real estate market in Chengdu saw increasing demand from end-users who have been looking to improve their living accommodation.

Meanwhile, investment demand was on the rise during 2Q2009. The key reasons for the demand growth were the price reductions since the beginning of 2009, and the financial and tax privileges.

16% 12% 8% 4%

1Q 2009

3Q 2007

1Q 2006

3Q 2004

1Q 2003

3Q 2001

1Q 2000

3Q 1998

1Q 1997

3Q 1995

1Q 1994

3Q 1992

1Q 1991

A total of ten prime office developments, representing 440,000 sq m in floor area, will be coming onto the market during the period between 2009 and 2010, providing more options for both investors and occupiers going forward.

3Q 1989

1Q 1988

0%

Source: The People’s Bank of China

CHENGDU PROPERTY YIELDS

Given the continued support by the local and central government, the office market in Chengdu will attract the attention of investors and end-users over the next 18 months.

16% 14%

% per annum

12% 10% 8% 6% 4% 2%

Office

Residential

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Retail

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development

Office West Qingjiang Road Retail Yang Xi Road

Floor Area (sq m)

Lump Sum Price (RMB million) (US$ million)

Buyer

1,500

11.25

1.65

Chengdu Winera Property Co., Ltd

Individual investor

550

4.20

0.61

Henan Xinhao Investment Co., Ltd

Local individual investor

Note: US$1 = RMB6.8319

6

Seller

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

CHINA - GUANGZHOU

D

uring the first half of 2009, sales activities in the residential and office markets picked up from the low base seen in 4Q2008. Local developers and investors took advantage of the market weakness by acquiring real estate assets for capital gains in the future.

1-YEAR LENDING RATE 28% 24% 20% % per annum

Notable sales transactions included the acquisition of the 10-storey R&F Winner Plaza by the China Development Bank. Meanwhile, China Aoyuan Group purchased a 70% share of Tianyu Phase IV project from Skyfame Group during 2Q2009.

16% 12% 8% 4%

1Q 2009

3Q 2007

1Q 2006

3Q 2004

1Q 2003

3Q 2001

1Q 2000

3Q 1998

1Q 1997

3Q 1995

1Q 1994

3Q 1992

1Q 1991

3Q 1989

1Q 1988

0%

In the retail sector, the overall market sentiment continued to be clouded by the uncertainty about global economic growth and the prevailing threats attributed to the global financial crisis. Demand for retail space contracted in 2Q2009, although units located in prime areas remained relatively resilient.

Source: The People’s Bank of China

GUANGZHOU PROPERTY YIELDS

The performance of the retail market continued to be dampened by the global financial crisis and the shrinking global economy. Despite a general contraction in demand for retail space, the transacted prices of retail shops in prime locations seemed to be more resilient in 2Q2009.

16% 14%

% per annum

12%

In the residential market, developers have been planning the launch of retail units for sale in the core area of Pearl River New City. Investors have been largely positive towards the sector in anticipation of the forthcoming Asian Games to be held in November 2010.

10% 8% 6% 4% 2%

Office

Retail

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Industrial

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development Office R&F Winner Plaza Skyfame Phase IV Residential W Residences

Floor Area (sq m)

Lump Sum Price (RMB million) (US$ million)

Seller

Buyer

22,000 * 6,057

484.00 365.00

70.84 53.43

R&F Group Skyfame Realty (Holdings) Ltd

Company China Aoyuan Property Group Ltd

1,193

28.89

4.23

KWG Property

Individual buyer

Note: US$1 = RMB6.8319 * Land area

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

7

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

CHINA - SHANGHAI

T

he market remained relatively quiet in 2Q2009. Major en-bloc transactions included sales of Yueda Huangpu Riverside Mansion and City Apartment.

While foreign investors remained cautious, domestic investors were rather active as they were impacted less by the global financial crisis than were foreign investors.

24%

% per annum

20% 16% 12% 8% 4%

1Q 2009

3Q 2007

1Q 2006

3Q 2004

1Q 2003

3Q 2001

1Q 2000

3Q 1998

1Q 1997

3Q 1995

1Q 1994

3Q 1992

1Q 1991

3Q 1989

1Q 1988

0%

Source: The People’s Bank of China

SHANGHAI PROPERTY YIELDS 16% 14% 12% 10% 8% 6% 4% 2%

Office

Residential

Retail

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

0% 1Q 2004

In 2Q2009, there was no significant change in real estate investment policies, which remained accommodating, with the RMB exchange rate holding stable.

The central government lowered the equity ratio requirement for investment in real estate from 35% to 30%, which helped reduce the capital requirement for developers acquiring land. While there were discussions about property tax, it is unlikely that such a tax will be rolled out within 2009 due to the technicalities involved. Recently, it was also reported that the central government may loosen restrictions on foreign investment in real estate against the background of a decline in foreign direct investment. However, this was subsequently denied by the government, making a dramatic relaxation of the current restrictions on foreign investment in real estate unlikely over the near term.

28%

% per annum

Local buyers have not been affected by the restrictions on investment imposed on foreign investors. Therefore, they are able to act fast to capture any investment opportunity that comes up. In contrast, a number of foreign investors intended to offload their real estate portfolios in 2Q2009. For example, Carlyde, Morgan Stanley and HKR International have put their projects, viz. Zhongfang Forrest Villa, Chateau Pinnacle and Chelsea, respectively, up for sale. Due to the improved sentiment in the residential market, the overall sales volume saw positive results.

1-YEAR LENDING RATE

Industrial

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development Office No. 356 Xin Zha Road No. 888 Tianlin Road Residential No. 3 Shan Xi Road

Floor Area (sq m)

Lump Sum Price (RMB million) (US$ million)

Buyer

9,501 13,508

219.00 285.00

32.06 41.72

Yueda Real Estate Ashland

A domestic investor Undisclosed

16,508

270.00

39.52

Macquarie Global Property Advisor

Undisclosed

Note: US$1 = RMB6.8319

8

Seller

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

HONG KONG

D

espite the current economic consolidation and the contraction of leasing demand, the sales and investment markets showed exceptional performance thanks to an inflow of liquidity and growing market optimism in 2Q2009. In the case of the former, the daily aggregate balance as proxy to the liquidity level in the market ballooned from an average of HK$5 billion to more than HK$250 billion at the end of May 2009, while the three-month interbank rates fell by 50 basis points from 0.87% in February 2009 to 0.37% in May 2009. Local banks became aggressive in offering mortgage loans to customers. For example, property purchasers enjoy effective mortgage rates as low as 1.0% per annum based on a premium of 70 base points above the prevailing level of interbank offered rates.

With interest rates coming down, luxury residential yields were compressed further by 40-50 basis point to a new low of 2.5% in 2Q2009.

HONG KONG 3-MONTH HIBOR 28% 24%

% per annum

20% 16% 12% 8% 4%

1Q 2009

3Q 2007

1Q 2006

3Q 2004

1Q 2003

3Q 2001

1Q 2000

3Q 1998

1Q 1997

3Q 1995

1Q 1994

3Q 1992

1Q 1991

3Q 1989

1Q 1988

0%

Source: The Hong Kong Monetary Authority

The sales market in the various property sub-sectors saw an increase in activities as real estate investors anticipate a sooner-than-expected global recovery and are taking advantage of the inexpensive cost of financing by acquiring real estate for future capital gains. Despite the fact that individual institutional investors have been wary of the leasing market and are waiting on the sidelines, a batch of local buyers and cash-rich private investors were aggressive in snapping up opportunities in the marketplace in 2Q2009, even before seeing more evidence of the anticipated economic recovery. The major deals transacted were strata-title offices, ground-floor shops in traditional locations and a number of whole-block industrial buildings with lump sum considerations in the range of HK$100-$300 million.

HONG KONG PROPERTY YIELDS 14% 12%

% per annum

10% 8% 6% 4% 2%

Looking ahead, sales in the local real estate market are expected to see further growth, given the sustained volume of liquidity in the system and, more importantly, expectations of a global economic recovery before the end of 2009.

However, the leasing market may suffer from further downward pressure over the near term until occupiers change their strategic business plans. According to our research, property investment yields will be compressed and luxury residential yields are predicted to edge down by 25 basis points over the next 12 months.

Office

Residential

Retail

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Industrial

Source: Rating and Valuation Department, HKSAR Government

MAJOR INVESTMENT TRANSACTIONS Development Office 29/F, Cosco Tower

Floor Area (sq ft)

Lump Sum Price (HK$ million) (US$million)

Seller

Buyer

20,533

215.60

27.64

GIC

4/F, 9 Queen’s Road Central 13,721 Residential Unit 3, Belvedere 4,790 House 1, Abergeldie 3,580 Retail A shop, G/F, 1/F & 2/F, 26-36 Sai Yeung Choi Street11,200 G/F and 1/F, 7 Shing Yip Street, Kwun Tong 41,803 Industrial Niche Centre 18,250 Gold Peak Building 200,000

161.91

20.76

Shau Kee Financial Enterprises

China Great Wall Coins Invs Ltd Undisclosed

196.80 120.00

25.23 15.38

Linkbridge Int’l Ltd Ambrose Ltd

Gain Brilliant Dev Ltd Forever Shiny Holdings Ltd

350.00 303.00

44.87 38.85

Reindeer Village Ltd Billion Development

Sunny Profit (H.K.) Ltd Local Investor

234.00 155.00

30.00 19.87

ING Real Estate Fund Gold Peak Industries

First Group Campell Group

Note: US$1 = HK$7.8

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

9

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

TAIWAN - TAIPEI

T

TAIPEI INTERBANK CALL LOAN MARKET WEIGHTED AVERAGES OF OVERNIGHT INTEREST RATES 28% 24% 20% % per annum

16% 12% 8%

The total available investment amount from Taiwan’s insurance companies, including Cathy Life, Fubon Life, Nan Shan Life and Shin Kong Life, was approximately NT$200 billion. For instance, after integrating ING, Fubon Life is planning to continue to purchase valuable commercial properties. Its total budget for 2009 is a maximum of NT$68.2 billion. In fact, Fubon Life spent NT$11.6 billion on the purchase of Shin Kong A11 in April 2009. Furthermore, Nan Shan Life just acquired Min-Sheng Commercial Building at the price of NT$8.2 billion, with an NOI yield of 3.02%. The development is an en-bloc prime office building located in Taipei’s CBD.

4%

1Q 2009

3Q 2007

1Q 2006

3Q 2004

1Q 2003

3Q 2001

1Q 2000

3Q 1998

1Q 1997

3Q 1995

1Q 1994

3Q 1992

1Q 1991

1Q 1988

0% 3Q 1989

hanks to the relaxation of the monetary policy, the investment markets showed signs of recovery during the quarter. The real estate sector saw an increase of activity in 2Q2009, with the number of sales transactions of commercial properties increasing 24% QoQ and an encouraging rise in luxury residential property transactions. In 2Q2009, demand attributed to investors from the US and Europe remained weak, but local and institutional investors became more aggressive in 2Q2009.

Source: Central Bank of the Republic of China (Taiwan)

TAIPEI PROPERTY YIELDS 16% 14% 12% 10% 8% 6% 4% 2%

Office

Looking forward, the economic prospects of Taiwan look generally more positive than those in the Western world due to the increasing cross-Strait collaboration.

Initiatives included the forthcoming signing of an MOU on financial supervision with China, the further relaxation of real estate investment restrictions in Taiwan and the promotion to welcome more Mainland China tourists to Taiwan. As such, investment potential for prime office space in Taipei’s CBD, industrial offices in Neihu, hotels and luxury residential developments looks attractive.

Residential

Retail

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

0% 1Q 2004

% per annum

Generally speaking, institutional investors continued to focus on prime commercial buildings in Taipei’s CBD, industrial offices in Neihu and Nangang Districts, and potential development projects. After the opening of Taipei’s MRT Neihu Line on July 4, 2009, the connection between Taipei Son-Shan Airport, Neihu High-tech Park and Taipei World Trade Centre Nangang Exhibition Hall has been made more convenient, thus enhancing the development potential in Neihu District,

Industrial

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development Office An office building in Jhongjheng District No.210, Sec. 3, Chengde Rd. No.35, Bo-ai Rd. No.10, Sec. 3, Minsheng E. Rd. Residential No.1, Aly. 7, Ln. 219, Sec. 7, Zhongshan N. Rd. Retail No.11, Songshou Rd. Industrial Building No. 131, Keji Sec. 3F., 3F.-1, 4F., 4F.-1, 5F., and 5F.-1, No.151, Zhouzi St.

Floor Area Lump Sum Price (ping) (NT$ million) (US$ million)

Buyer

2,551 3,012

1,274.00 906.00

38.82 27.61

Undisclosed Undisclosed

673 14,325

299.00 8,201.00

9.11 249.89

Undisclosed Undisclosed

Nan Shan Life Insurance Tuanta Commercial Bank & Yaunta Securities Corporation Star Travel Nan Shan Life Insurance

1,035

520.00

15.84

Undisclosed

Undisclosed

19,206

11,600.00

353.46

Undisclosed

Fubon Anti Life Insurance

12,744 527

1,170.00 235.00

35.65 7.16

Undisclosed Undisclosed

Kingston Technology Company, Inc Advanced Analog Technology, Inc.

Note : 1 ping = 3. 3 sq m : US$1 = NT$32.818

10

Seller

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

JAPAN - TOKYO

I

n 2Q2009, both domestic and overseas investors remained cautious about taking action as they looked for more indicators pointing to a recovery of both the economy and the real estate market. The bid-offer spread remained wide, particularly for quality assets.

JAPAN 10-YEAR GOVERNMENT BOND YIELDS 5%

4%

3%

% per annum

Investment sales transactions in 2Q2009 were concluded mostly by individual investors. Quality residential developments with a lump sum consideration of JPY2-3 billion remained the most favoured targets among prospective investors.

As of 2Q2009, net investment yields were in the range of 8%-12% per annum.

2%

1%

In the office sector, institutional investors focused primarily on assets priced between JPY1-3 billion. The negative impact that many players had been expecting highly leveraged office property owners to suffer has not materialised as financial institutions have been supportive in working around broken covenants and/or rolling over debt.

2Q 2009

4Q 2008

2Q 2008

4Q 2007

2Q 2007

4Q 2006

2Q 2006

4Q 2005

2Q 2005

4Q 2004

2Q 2004

4Q 2003

2Q 2003

4Q 2002

2Q 2002

4Q 2001

2Q 2001

4Q 2000

2Q 2000

4Q 1999

2Q 1999

4Q 1998

0%

Source: Bank of Japan

TOKYO PROPERTY YIELDS

In the retail and logistics markets, there was very little liquidity. Development sites for all asset types acquired in 2007 and 2008 have generally been postponed.

With the total market capitalisation of JREITs declining by more than 60% from the peak in May 2007, JREIT asset management companies have been facing difficult conditions and falling values. In June 2009, a leading Japanese security group took over the asset management of one of the largest funds

7% 6%

% per annum

5% 4% 3% 2% 1%

Office

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Residential

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development Office Meiji Yasuda Life Osaka Umeda Building (33.3% of ownership share) AIG Otemachi Building Asahi Seimei Otemachi Building NBF Ochanomizu Building KDX Toyosu Grandsquare Olinas Tower Residential Lietocourt Arx Tower Domitory Harada-machi

Floor Area (sq m)

Lump Sum Price (Yen billion) (US$million)

Seller

Buyer

17,661

10.60

110.93

Japan Prime Realty Investment

37,560

115.50

1,208.66

49,603 9,258 63,893 46,955

80.00 20.84 35.00 31.30

837.17 218.08 366.26 327.54

American International.

Group, Inc Asahi Mutual Life Insurance Co. Aquarius Investment Kenedix Japan Prime Realty Investment

SPC of Tokyo Tatemono Investment Advisors Nippon Life Insurance Company Tokiwabashi Investment TMK Nippon Building Fund Inc. CARLYLE Tokyo Tatemono Co. Ltd.

29,701 1,831

13.00 0.37

136.04 K.K.daVinci Advisors 3.87 Nippon Residential Investment Co.

St Martins Property Mizuho Shin Fudosan Hanbai

Note: US$1 = Yen 95.56

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

11

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

SOUTH KOREA - SEOUL

T

he latest economic indicators in 2Q2009 showed that the local economy was still in negative growth territory compared to 2008. However, with the implementation of the government’s stimulus measures, the market consensus for GDP figures in 2009 has been revised from -4.0% to -2.5%.

KOREA BASE RATE (7-DAY REPURCHASE RATE) 6% 5%

3% 2% 1%

2Q 2009

4Q 2008

2Q 2008

4Q 2007

2Q 2007

4Q 2006

2Q 2006

4Q 2005

2Q 2005

4Q 2004

2Q 2004

4Q 2003

2Q 2003

4Q 2002

2Q 2002

4Q 2001

2Q 2001

4Q 2000

2Q 2000

4Q 1999

0% 2Q 1999

In the office market, vacancy rates increased sharply from 1.09% in 1Q2009 to 3.13% in 2Q2009. In particular, the vacancy rates in the GBD were much higher, at 4.31%, in 2Q2009, compared with 1.26% in 1Q2009. In the GBD, tenants engaged in the financial industries saw the most severe impact resulting from the prevailing global contraction. In addition, there was a sharp rise in vacant office space in both the CBD and the YBD during 2Q2009. Although there will be limited new supply in 2009 and 2010, the overall vacancy rate is predicted to rise to about 4% in 2010.

% per annum

4%

Source: Bank of Korea

Monthly rents in the GBD and the YBD decreased 0.85% and 0.12%, respectively, QoQ in 2Q2009. However, rents in the CBD rose 1.47% QoQ in 2Q2009.

SEOUL PROPERTY YIELDS 16% 14% 12% % per annum

On the sales front, office transacted prices bottomed out in 4Q2008 after a steep plunge of 45% from the peak in 3Q2008 due to the global recession. However, a rebound has sent average sale prices up to KRW13,424,939 per pyung in 2Q2009, an average of 21.44% higher than the levels seen in 4Q2008.

10% 8% 6% 4% 2%

Office

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

0% 1Q 2004

Looking ahead, it might take some time for the market to regain full momentum due to the challenges presented by the continued cost-saving initiatives in the private sector. Without any signs of recovery in the external environment over the next few quarters, the current trends of corporate downsizing and restructuring will slow the pace of recovery of capital values going forward.

Retail

Source: Ministry of Land, Transport and Maritime Affairs, Republic of Korea

MAJOR INVESTMENT TRANSACTIONS Development

Floor Area (Pyung)

Lump Sum Price (KRW billion) (US$ million)

Seller

Buyer

Hankook Samgong (HKSGI) Co,. Ltd. BIT Computer Co., Ltd. Kiwoom Securities Co., Ltd. MITAA Wilshire Investment Group LLC GE NPS 1 CR-REITs

Office Yangjae Building

3,178

47.00

36.89

Samsung Life Insurance Co., Ltd.

BIT Computer Building Kiwoom Finance Square Hyundai-Swiss Tower

2,238 5,766 4,560

21.00 78.60 59.98

16.48 61.70 47.08

New-one 1st ABS-SPC DBRE DEGI Korea ABS-SPC

Keukdong Building

22,737

310.00

243.35

Macquarie Central Office(MCO) CR-REITs

Note : 1 Pyung = 3.306 sq m : US$1 = KRW1,273.9

12

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

INDONESIA - JAKARTA

T

BANK INDONESIA RATE 16% 14% 12% % per annum

here were more positive signs that investors have started returning to Indonesia. The Jakarta Composite index jumped 44% this year and the Rupiah strengthened 6% against the US dollar, the best performance among Asia’s 10 most-used currencies. Meanwhile, according to the Investment Coordinating Board (BKPM), foreign direct investment (FDI) amounted to US$1.97 billion between January and February 2009, a 105.9% increase over the US$957.2 million posted in the same period last year. Indonesia’s economy recorded a 4.4% year-on-year growth in 1Q2009. The full-year growth is expected to reach 5%, which will make the city one of the top performers among other key cities in the region.

10% 8% 6% 4% 2%

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

Source: Bank of Indonesia

JAKARTA PROPERTY YIELDS 18% 16% 14% % per annum

In the office market, the prevailing economic downturn has been responsible for the modest performance of the CBD office market. The level of demand for sizeable office space remained low in 2Q2009. In anticipation of a batch of new supply coming on line over the next two years, the average occupancy rate is predicted to decline in the second half of 2009. Corporate relocations are expected to constitute the majority of market activities on the leasing front.

1Q 2006

The Central Bank of Indonesia (BI) cut its rate further by 25 basis points to 6.75% as of early July 2009 in order to stimulate the local economy. The housing and apartment sectors were the prime beneficiaries. Individual developers started raising their asking prices in 2Q2009, although the leasing market was depressed by the introduction of new projects at lower asking rentals.

4Q 2005

3Q 2005

0%

12% 10% 8% 6% 4% 2%

Office

Residential

Retail

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

0% 1Q 2004

Due to the threat of the global recession, the retail sector was hurt by the decline of private consumption expenditure in 2Q2009. Survivors were those with sound management and the ability to adapt to changes in the market. Overall, the property sector in Indonesia has been one of the most resilient markets in the region. One of the key reasons is that the economic structure of the country is not sensitive to exports and the volatile financial industries.

Industrial

Source: Colliers

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

13

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

PHILIPPINES - MANILA

T

he property market scenario has not changed that much over the past six months. Office rentals continued to see a downward trend; the residential market has witnessed relatively thin demand; the number of land sale transactions remained minimal; and sizeable developers continued to defer their land acquisition plans in 2Q2009.

18% 16% 14% 12% % per annum

8% 6% 4% 2% 1Q 2009

3Q 2008

1Q 2008

3Q 2007

1Q 2007

3Q 2006

1Q 2006

3Q 2005

1Q 2005

3Q 2004

1Q 2004

3Q 2003

1Q 2003

3Q 2002

1Q 2002

3Q 2001

1Q 2001

3Q 2000

0%

Source: Central Bank of Philippines

In the residential sector, the market faced the problem of insufficient demand for the brand new condominium projects in Metro Manila. Vacancy rates were rising, although there was no change in rental rates. Slow demand for the condominium market was largely expected in the first half of 2009 and a recovery in take-up should start before the end of the year.

MANILA PROPERTY YIELDS 18% 16% 14% % per annum

On the investment front, office capital values are expected to come down further, with initial yields expected to be in the range of 10%-12%. Investment yields in the residential sector will be stable at 6%-7%.

10%

1Q 2000

On the commercial front, rental rates continued to consolidate in 2Q2009. It is likely that the trend of prevailing adjustment will last at least into the second half of 2009. Landlords remained competitive in offering incentives to attract prospective tenants. In addition, a huge amount of brand new office space has become available in a number of sub-markets in Metro Manila. Although the demand for office space showed signs of a rebound in 2Q2009, the market might take some time to absorb the current vacant stock.

PHILIPPINES REVERSE REPURCHASE RATE (OVERNIGHT)

12% 10% 8% 6% 4% 2%

Office

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Residentail

Source: Colliers

14

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

SINGAPORE

B

uoyed by returned interest following price corrections and a turnaround in market sentiment on the back of an improved economic outlook and the ensuing stock market rally, the Singapore investment sales market experienced a surge in activities in 2Q2009. Total investment sale transactions amounted to S$1.35 billion in 2Q2009, the highest level achieved since 3Q2008.

SINGAPORE 3M-INTERBANK 10% 9% 8%

% per annum

7%

The residential sector accounted for the bulk of investment sales concluded in 2Q2009, contributing S$887.13 million (65.8%) to the pie. The commercial and industrial sectors accounted for S$311.63 million (23.1%) and S$52.08 million (3.9%), respectively.

6% 5% 4% 3% 2% 1% 1Q 1988 4Q 1988 3Q 1989 2Q 1990 1Q 1991 4Q 1991 3Q 1992 2Q 1993 1Q 1994 4Q 1994 3Q 1995 2Q 1996 1Q 1997 4Q 1997 3Q 1998 2Q 1999 1Q 2000 4Q 2000 3Q 2001 2Q 2002 1Q 2003 4Q 2003 3Q 2004 2Q 2005 1Q 2006 4Q 2006 3Q 2007 2Q 2008 1Q 2009

0%

The revival was marked by the resurgence of en bloc commercial deals, particularly that of office buildings. The independent en bloc sales of three office buildings - Anson House, Parakou Building and VTB Building - chalked up a total sale volume of S$237.38 million during the quarter.

Source: Monetary Authority of Singapore

SINGAPORE PROPERTY YIELDS 18%

A total of 37 strata retail units in the Kovan Centre were also sold en bloc to Roxy-Pacific Holdings Limited for $22.20 million or $540 per sq ft over total strata floor area.

16% 14% % per annum

12%

As well, there was an evident revival in interest in development sites, both in the public and private sectors. In the private sector, a number of smallish development sites worth some S$130.12 million were transacted, compared to those worth S$14.32 million in 1Q2009.

10% 8% 6% 4% 2%

Going forward, developers are expected to remain vigilant in their land banking activities and are likely to minimise risk exposure by committing to smallish sites that require lower capital outlay. The en bloc acquisition segment will see continued interest from high net worth individuals and wealthy families looking to invest in properties priced below S$150 million. Institutional investors are, however, expected to continue to stay out of the market until there is a further improvement in market conditions and better investment opportunities.

Office

Residential

Retail

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Industrial

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development

Floor Area (sq ft)

Lump Sum Price (S$ million) (US$ million)

Seller

Buyer

Commercial Anson House

76,127

85.00

58.63

Macquarie Bank

Parakou Building

63,580

81.38

56.13

VTB Building

66,918

71.00

48.97

New Star Asset Management Group VTB Capital

Strata Retail Units at Kovan Centre Residential Cree Court Hang Tat Garden Commercial / Residential Village Centre & Neighbouring Site Industrial 9 Pandan Road

41,129

22.20

15.31

Ho Bee Group

A group of private high net worth individuals Subsidiary of Cathay Organisation Joint Venture bewteen Yi Kai Group & Fission Group Roxy-Pacific Holdings Limited

* 65,416 47,975

53.00 29.70

36.56 20.49

The Asia Life Assurance Society Agrow Development Pte Ltd

Widjaja Family Fragrance Land Pte Ltd

* 31,532

23.00

15.86

Ridge Investments

Hume Homes Pte Ltd

N.A

10.50

7.24

Aztech Group Ltd Swissco Structural Mechanical

Note : US$1 = S$1.5194 * Land Area

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

15

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

THAILAND - BANGKOK

T

he property market of Bangkok showed signs of recovery during 2Q 2009 but many investors were still waiting on the sidelines for better market entry levels. Due to the constraint of obtaining financing for real estate purchases, cash-rich individuals and institutions continued to the key players in the market during 2Q 2009.

THAILAND 3M-BIBOR 10%

% per annum

8%

Individual overseas investors retreated and prepared to exit the local property market due to the global financial crisis and the latest political unrest in Thailand during 2Q 2009. Land and condominium prices in the central business district fell as a result of demand contraction. Some foreign investors prepared to sell their developments either at cost or at a lower margin. For most local investors, many of them reckoned the current price weakness as the opportunity to snap up quality developments, particularly condominiums located in the CBD area or in close proximity to BTS for long-term growth.

6%

4%

2%

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

0%

Source: Bank of Thailand

BANGKOK PROPERTY YIELDS

Looking forward, the property market in Thailand can potentially enter into a next platform for growth when more incentives on property acquisition are made available to those who prepare to retire in Thailand. Overall, it is our view that real estate investment growth in Thailand will be picking up additional momentum in 4Q 2009 and 1Q 2010.

18% 16% 14% % per annum

12% 10% 8% 6% 4% 2%

Office

Residential

Retail

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Industrial

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development Office TMB Bank Office Building A development in Srinakarin District Residential Ascott Sathorn Angkaet Pattaya Condominium

Floor Area (sq m) 30,626 6,735 16,569

**

23.66 3.53

Buyer

PYTPF Asset Management Car Dealer

CP Plaza Company Limited Car Dealer Pacific Asset PLC

750.00

22.04

Pierra Maternity & Child Welfare

154.00

4.53

Asia Estate Development Co., Ltd.

Bliss tel PLC

*

24

124.59

3.66

Eastern Star Real Estate PLC

1,740

126.20

3.71

Individual

Bangkok Broadcasting & Television Company Limited Individual

Note: US$1 = THB34.024 * Number of units ** Land Area

16

805.00 120.00

Seller

250

*

The Star Estate @ Rama 3 A development in Sukhumvit District

Lump Sum Price (Baht million) (US$ million)

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

VIETNAM - HO CHI MINH CITY

T

he GDP in Vietnam expanded 3.9% in the first half of 2009, which was an encouraging improvement compared with the 3.1% economic growth registered in 1Q2009. The latest GDP forecast for 2009 has been revised to 4.0%-5.0% in anticipation of a gradual return of business confidence and capital inflow into the local economy.

16% 14% 12% % Per annum

Meanwhile, the local inflation rate fell to 3.94% in June 2009 - the lowest level in more than five years. A total of US$4.0 billion of Foreign Direct Investment (FDI) has been disbursed in Vietnam over the first six months of 2009, representing a fall of 18.4% compared with the same period last year.

VIETNAM PRIME INTEREST RATE

10% 8% 6% 4% 2%

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

In an attempt to stimulate the local economy and to encourage consumer spending, the Vietnamese Government has deferred the implementation of its new Personal Income Tax (PIT) since January 2009. All kinds of income subject to the PIT have been exempted in the first six months of 2009. In addition, the Government has also proposed that income from capital investment and capital transfer (including transfer of stock, copyright and franchise) be exempted until the end of 2010. Therefore, income from salaries and wages are taxed in accordance with the new PIT regulations from July 1, 2009. However, a reduction of VND200,000 per month per person will be applied until the end of 2009.

2Q 2004

1Q 2004

0%

Source: The State Bank of Vietnam

HO CHI MINH CITY PROPERTY YIELDS 18%

14% 12% 10% 8% 6% 4% 2%

Office

Residential

Retail

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

0% 1Q 2004

During the three years since the Housing Law took effect in 2006, a total of 140 overseas Vietnamese have bought into Vietnam. With the recent amendments, the Government estimates that the number of overseas Vietnamese buying houses in Vietnam will increase to 1,400 within one year of the implementation of the new law.

16%

% per annum

Amendments to Article 126 of the Housing Law and Article 121 of the Land Law regarding overseas Vietnamese ownership of houses and land use rights in Vietnam were passed by the National Assembly in June and will become effective on September 1, 2009. According to the new law, the residence period in Vietnam required to satisfy criteria for eligible foreigners has been reduced from six to three months. In addition, the new law also gives eligible foreigners the right to sell, gift, receive compensation for and mortgage any property they purchase.

Industrial

Source: Colliers

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

17

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

INDIA

A

With few developers managing to raise funds, market sentiment improved slightly.

Low valuations and stagnant demand are favouring investors and it is expected that some long-awaited transactions will see success in the near future. Overall, the sentiment towards the residential sector inclined towards the affordable/ mid-segment. The quantum of home loans, especially in the priority sector, increased substantially in the first half of 2009 due to the increased interest among buyers in affordable housing projects. Further, a reduction in the home loan rates, along with a number of waivers/benefits offered by most of the banks, also contributed to this increase. A number of affordable projects that were launched in 2009 have received a good response. On the other hand, the demand fundamentals for the retail segment remained weak and passive.

18

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

8% 7% 6% 5% 4% 3% 2% 1% 2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Source: Reserve Bank of India

INDIA REAL GDP GROWTH 12% 10% 8% 6% 4% 2%

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

0% 2Q 2004

Unitech, one of the largest property developers in the country, was the first to employ the QIP route to raise funds. After raising INR 1,621 crore (US$325 million) at INR 38.50 per share through QIPs earlier this quarter, the company raised an additional INR 2,800 crore (US$575 million) by placing shares with overseas private equity funds at INR 81 per share, which shows the rising interest of foreign investors in the Indian real estate market. The interesting fact pertaining to this deal was that the company planned to raise only US$200 million but, on seeing the demand at approximately US$1,000 million from investors, increased the issue size.

9%

1Q 2004

The revival in stock market sentiment came as a boon to real estate companies, such as Unitech, DLF and Indiabulls Real Estate, raising more than INR 8,000 crore through Qualified Institutional Placements (QIPs) in 2Q2009, which is quite high compared to the total amount of roughly INR 3,500 crore raised in 2008. Other realty developers, such as Omaxe, Parsvnath, Purvankara, Ansal API, are also likely to follow suit; thus, a large number of such issues are expected to hit the market in the short to medium term. The Mumbai-based HDIL developer and the Bangalore-based Sobha developer have already received approval for raising funds through this route. The reason for the popularity of the QIP route among companies is its cost-effectiveness, coupled with rapid implementation and fewer legal hassles.

10%

Per annum

Despite the fact that the Indian economy is showing signs of recovery, the investment climate remained largely cautious during the first half of 2009. Amidst the cautiousness of investors, companies were exploring new channels to arrange funds to retire their expensive debt and restructure their balance sheets.

INDIA REPO RATE

Year-on-Year Change

t a time when the Indian economy is showing signs of recovery, the re-election of the United Progressive Alliance increased optimism and confidence with respect to the future outlook, as seen in the stock market, which hit upper levels the day following the announcement of the poll results. Further, the continuity of the old Government will not hamper the ongoing focus on priority sectors and will help the smooth, uninterrupted implementation of the key initiatives.

Source: Central Statistical Organisation, Ministry of Statistics and Programme Implementation, Government of India

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

AUSTRALIA - ADELAIDE

I

n the office market, despite shrinking office demand, the impact on vacancy levels has so far been minimal, with many tenants choosing to remain in their current location. Sublease vacancy rates have increased by around 1%, which is expecting to push overall vacancy levels up by 1%-1.5% to approximately 5%.

New development projects with satisfactory pre-commitment rates were actively under construction in 2Q2009 and there are currently five buildings that are targeted for completion in 4Q2009.

AUSTRALIA OCR 10%

% per annum

8%

6%

4%

2%

The current market consolidation showed no signs of abating in 2Q2009 and the number of sales transactions with lump sum prices at AU$10 million or above remained scarce. The key transaction was the sale of a building located at 25 Grenfell Street for AU$76 million, representing an initial yield of 9.7%. Overall, individual yields increased by 25-50 basis points in 2Q2009.

1Q 2009

3Q 2008

1Q 2008

3Q 2007

1Q 2007

3Q 2006

1Q 2006

3Q 2005

1Q 2005

3Q 2004

1Q 2004

3Q 2003

1Q 2003

3Q 2002

1Q 2002

3Q 2001

1Q 2001

3Q 2000

1Q 2000

3Q 1999

1Q 1999

3Q 1998

0%

Source: Reserve Bank of Australia

In the industrial market, the activity of sale transactions with lump sum prices at AU$5 million or above remained weak in 2Q2009. However, the leasing market was relatively active as prospective buyers turned to the leasing market.

In addition, there was an increase in the number of quality assets being put onto the market for sale.

ADELAIDE PROPERTY YIELDS 16% 14%

% per annum

12%

There has been an increase in availability of quality investment options in this category, with several quality assets being put on the market. The lack of funding for new development is encouraging more demand within the existing building market and a return to the traditional inner precincts. With the majority of offerings sitting in the sub AU$3-4 million market, a lift in sales market activity is expected to sustain into 2010.

10% 8% 6% 4% 2%

Office

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Industrial

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development Office 25 Grenfell Street Retail Mawson Lakes Town Centre, Mawson Lakes

Industrial 575 South Road, Regency Park

Floor Area (sq m)

Lump Sum Price (AUD million) (US$ million)

Seller

Buyer

25,244

76.00

61.67

AMP

GDI

6,412

19.55

15.86

Mawson Lakes JV (Land Management Corporation & Delfin Lend Lease)

Taplin Group of Companies

7,691

6.50

5.27

JE & FJ Cunningham Pty Ltd

Arturo Taverna Properties Pty Ltd

Note: US$1 = AUD1.2324

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

19

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

AUSTRALIA - BRISBANE

I

AUSTRALIA OCR 10%

8%

% per annum

6%

4%

2%

In the industrial market, there was a decline in the number of leasing transactions in the first half of 2009. Amid the trend of rising vacancy rates across most industrial precincts, the average net face rents continued to fall in 2Q2009.

Quality stock within a price bracket of AU$30 million or below continued to be favoured by both private investors and owner occupiers.

1Q 2009

3Q 2008

1Q 2008

3Q 2007

1Q 2007

3Q 2006

1Q 2006

3Q 2005

1Q 2005

3Q 2004

1Q 2004

3Q 2003

1Q 2003

3Q 2002

1Q 2002

3Q 2001

1Q 2001

3Q 2000

1Q 2000

3Q 1999

3Q 1998

0% 1Q 1999

n the office market, leasing activity in Brisbane’s CBD remained relatively resilient during the first half of 2009. In particular, there was strong demand from the energy and government sectors for brand new quality office accommodation. However, with rising lease incentives, office rental growth was stagnant across the board. On a positive note, private investors and owner occupiers remained active to secure quality stock prices at AU$20 million or below.

Source: Reserve Bank of Australia

In the retail sector, the overall performance was encouraging as quality tenants continued to pay good rents in 2Q2009. However, with rising unemployment and consumer confidence, the overall volume of retail turnover is going to slow, putting downward pressure on rental rates.

BRISBANE PROPERTY YIELDS 16% 14%

10% 8% 6% 4% 2%

Office

Retail

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

With a significant number of tenants going to renegotiate their leases over the next 6-12 months, landlords are expected to start offering a range of lease incentives, such as fitting-out subsidies and rent-free periods. More retailers have started to take advantage of their covenant strength to negotiate better terms with their landlords.

2Q 2004

0% 1Q 2004

Despite the economic turmoil of the past 12 months, Brisbane’s retail leasing market continues to attract quality tenants and good average rents. However, looking ahead, as the economy weakens and unemployment rises, consumer confidence and retail turnover growth is expected to slow. This will be the case particularly for units located in secondary areas.

% per annum

12%

Industrial

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development Office 57 Cornation Drive 380 Queen Street Industrial 26-52 Platinum Street 55 Meakin Road 28 Bullockhead Street

Floor Area (sq m)

Lump Sum Price (AUD million) (US$ million)

Buyer

Z Corp Property Group

Private Investor Private Investor Private Investor

3,166

13.20

10.71

4,363

19.00

15.42

BNY Trust Company of Australia Ltd ARIA International

18,210 3,007 9,880

15.10 6.50 9.18

12.25 5.27 7.45

Encore Trust Australia Pty Ltd Coates Hire Macarthur Cook Industrial Fund

Note: US$1 = AUD1.2324

20

Seller

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

Private Investor

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

AUSTRALIA - CANBERRA

M

arket certainty and investor confidence for prime commercial property in Canberra improved during 2Q2009. The return of both international and national institutions; and vendors now willing to accept softer yields; have significantly narrowed the gap between the expectation of buyers and sellers.

The attraction of Canberra’s long term leases to government and quality of new stock have underpinned the transaction of major office buildings and increased market interest. Prime yields have started to stabilise after nearly two years of expansion.

AUSTRALIA OCR 10%

% per annum

8%

6%

4%

2%

However, the outlook for non-contemporary accommodation is less optimistic and yields are expected to soften further. The gap between old and new building stock widened in terms of both rental values and yields. Tenants in older accommodation have greater bargaining power, which will reduce rental growth and increase incentive levels.

1Q 2009

3Q 2008

1Q 2008

3Q 2007

1Q 2007

3Q 2006

1Q 2006

3Q 2005

1Q 2005

3Q 2004

1Q 2004

3Q 2003

1Q 2003

3Q 2002

1Q 2002

3Q 2001

1Q 2001

3Q 2000

1Q 2000

3Q 1999

1Q 1999

3Q 1998

0%

Source: Reserve Bank of Australia

CANBERRA PROPERTY YIELDS

Vacancy levels increased to 9.2% for the whole of Canberra and 8.6% for the CBD according to data released by the Property Council of Australia (PCA) as at 1 July 2009. The sharp increase over the last 12 months may be attributed to the surge in new supply at the Canberra International Airport Business Parks (Airport) and an increase in sub leasing vacancies in the CBD. The supply of more new stock over the next two years will further increase vacancy levels and increase the competition between landlords for attracting and maintaining tenants. Demand has also been sluggish over the last 12 to 18 months as government funding has been directed towards other parts of the economy. The outlook for demand market will therefore depend largely upon decisions by the federal government at forthcoming budgets.

16% 14%

% per annum

12% 10% 8% 6% 4% 2%

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Office

Source: Colliers

New development completed in the CBD in 2Q2009 included 16 Marcus Clarke Street (around 8,000 sq m) and Childers Square (around 15,000 sq m). Three other developments with an average 65% pre-commitment rate are expected to provide a further 72,000 sq m over the next 12 months.

Major sales transactions included the sale of Industry House for AU$123 million at a yield of 7.8% and the disposal of 64 Allara Street for AU$18.5 million. The sales reflected the impact of yield expansion over the past 18 months.

MAJOR INVESTMENT TRANSACTIONS Development Office Industry House 64 Allara Street

Floor Area (sq m) 25,000 3,155

Lump Sum Price (AUD million) (US$ million) 123.00 18.50

99.81 15.01

Seller

Buyer

AMP Orchard

Roberts family Aust Ethical Investments

Note: US$1 = AUD1.2324

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

21

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

AUSTRALIA - MELBOURNE

T

aking advantage of softening yields and the inexpensive cost of funds, private and offshore investors dominated the bulk of sales activity in 2Q2009. Five investment sales transactions involving a total of AU$363 million were registered during the period.

AUSTRALIA OCR 10%

% per annum

8%

Leasing activity levels remained steady during 2Q2009, with a number of significant leasing transactions taking place in quality office buildings as landlords continued to offer attractive incentives. Net office rentals were steady, but rentals for second-tier offices fell 4% QoQ to AU$275-300 per sq m per annum as of 2Q2009.

6%

4%

2%

Office investment yields softened by an average of 25 basis points across Premium and A grade buildings in 2Q2009. Second-tier buildings softened 25-50 basis points to the average range of 8.50%-9.00% during the same period.

1Q 2009

3Q 2008

1Q 2008

3Q 2007

1Q 2007

3Q 2006

1Q 2006

3Q 2005

1Q 2005

3Q 2004

1Q 2004

3Q 2003

1Q 2003

3Q 2002

1Q 2002

3Q 2001

1Q 2001

3Q 2000

1Q 2000

3Q 1999

1Q 1999

3Q 1998

0%

Source: Reserve Bank of Australia

MELBOURNE PROPERTY YIELDS

Further encouraging indicators were highlighted in the inaugural Colliers International Investor Sentiment Survey, released in June 2009. The survey, designed to better understand Australian investor sentiment in the current economic climate, found that more than half of the respondents intended to buy property within Australia during the next 12 months, with 60% of these prospective buyers nominating the office sector as their preferred property investment choice.

16% 14%

% per annum

12% 10% 8% 6% 4% 2%

In the industrial sector, investment yields for prime assets softened 25-50 basis point to the range of 8.50%-9.00% as of 2Q2009. Second-tier industrial developments averaged at 10.25% during the same period. The rise of investment yields was attributed to the difficult economic environment and the sustained downward pressure on rentals.

Office

Retail

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Industrial

Source: Colliers

In the residential sector, the market has been underpinned by lowering interest rates, improving affordability and the financial assistance offered to first-time homebuyers according to the Real Estate Institute of Victoria.

MAJOR INVESTMENT TRANSACTIONS Development Office 15 William Street 303 Collins Street 1 Spring Street 120 Harbour Esplanade 412 St Kilda Road Retail Box Hill,Victoria Industrial 51-65 Wharf Road Regal Business Park, Corner Kelletts & Henderson Roads

Floor Area (sq m)

Lump Sum Price (AUD million) (US$ million)

Buyer

Deka Immobilien Investment Private Investor Private investor

40,434 20,742 30,844

167.00 56.00 65.25

135.51 45.44 52.95

8,019 16,655

33.01 42.00

26.79 34.08

AMP Capital Investors Macquarie Direct Australian Prime Property Fund (50% Interest) APN Funds Management Limited ING Office Fund

14,106

21.50

17.45

Charter Hall Core Plus Retail Fund

Private Investor

4,256 20,782

7.85 22.00

6.37 17.85

Salta Undisclosed

Private Investor Knowles Group

Note: US$1 = AUD1.2324

22

Seller

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

Private Investor IGR Property Group

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

AUSTRALIA - PERTH

D

ue to the deteriorating economic conditions, demand for office space in Perth softened further in 2Q2009. Coupled with further business consolidation and a rising level of sub-lease space in the market, the whole market saw a negative net absorption in 2Q2009. Vacancy rates increased to over 7.0% as of June 2009.

AUSTRALIA OCR 10%

% per annum

8%

On the investment front, there were signs of transactional activities picking up in 2Q2009 due to demand attributed to both overseas funds and local syndicators.

However, the access to financing remained the major obstacle to a further increase in transactional activity. Office investment yields in the Perth CBD ranged from 8.0% to 9.5% during 2Q2009.

6%

4%

2%

1Q 2009

3Q 2008

1Q 2008

3Q 2007

1Q 2007

3Q 2006

1Q 2006

3Q 2005

1Q 2005

3Q 2004

1Q 2004

3Q 2003

1Q 2003

3Q 2002

1Q 2002

3Q 2001

1Q 2001

3Q 2000

1Q 2000

3Q 1999

1Q 1999

3Q 1998

0%

Source: Reserve Bank of Australia

Looking ahead, activity from overseas investors and local syndicators are expected to continue during the second half of 2009 as investor confidence is anticipated to improve further. Generally, the difficulty in obtaining sufficient funding will remain the key challenge for the investment market going forward. Individual banks have been forced to raise interest rates to attract more capital, despite the fact that official cash rates were unchanged during the period.

PERTH PROPERTY YIELDS 16% 14%

% per annum

12%

In the industrial sector, the volume of sale transactions remained low during the first half of 2009. The bulk of institutions continued to stay out of the market during the period, although a number of cash-rich industrial investors have been motivated to acquire industrial assets for long-term investment due to attractive yields. The average industrial yields currently ranging from 8.0% to 10.0% in 2Q 2009 are expected to remain at this level during the second half of 2009.

10% 8% 6% 4% 2%

Office

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Industrial

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development Office 81 St Georges Terrace 45 Francis Street 1100 Hay Street Industrial 45 Baile Road Canning Vale 256 Star Street

Floor Area (sq m)

Lump Sum Price (AUD million) (US$ million)

Seller

Buyer

Private Investor Dekabank Private Investor Private Investor Private Investor

11,910

38.00

30.83

22,013 7,245

95.00 38.00

77.09 30.83

Macquarie St Georges Terrace Pty Ltd Macquarie Office Trust Macquarie Office Trust

6,663 3,507

13.10 7.00

10.63 5.68

Capral Ltd PPI Corporation

Note: US$1 = AUD1.2324

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

23

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

AUSTRALIA - SYDNEY

O

ne of the most positive items of news for the real estate investment market was that the Australian economy has avoided a recession recording positive GDP growth in 2Q 2009, although employment remained difficult. The seasonally adjusted unemployment rate for the nation increased from 5.5% in April 2009 to 5.8% in June 2009.

AUSTRALIA OCR 10%

% per annum

8%

Thanks to the supportive measures implemented by the New South Wales State Government, the residential market was busy as a number of first-time homebuyers have been encouraged to enter the market during 2Q2009. The measures included the continuation of the First Home Buyers’ Boost and the recent announcement in the state budget that it will provide a 50% cut in stamp duty for people buying newly constructed dwellings valued up to AU$600,000 for a six-month period between 1st July and 31st December 2009. The most-favoured market segment was residential units priced at AU$500,000 or below.

6%

4%

2%

1Q 2009

3Q 2008

1Q 2008

3Q 2007

1Q 2007

3Q 2006

1Q 2006

3Q 2005

1Q 2005

3Q 2004

1Q 2004

3Q 2003

1Q 2003

3Q 2002

1Q 2002

3Q 2001

1Q 2001

3Q 2000

1Q 2000

3Q 1999

1Q 1999

3Q 1998

0%

Source: Reserve Bank of Australia

SYDNEY PROPERTY YIELDS

In the industrial market, the bulk of activity continued to be dominated by private investors who took advantage of softer yields in 2Q2009. The overall number of sales transactions increased and the majority of deals had a lump sum price of AU$15 million or below.

16% 14%

% per annum

12%

In the retail sector, the Westpac–Melbourne Institute Index of Consumer Sentiment rose from 88.8 in May to 100.1, the largest increase in the past 22 years, providing a positive outlook for the market. Meanwhile, there was a 6% year-on-year increase in retail spending in April 2009 as a result of the economic stimulus package introduced by the Government.

10% 8% 6% 4% 2%

Office

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Industrial

In the office sector, the general level of enquiry increased during 2Q2009.

Leasing activity was dominated by lease renewals. Tenants preferred to stay put as incentives offered by landlords increased 7% QoQ in 2Q2009. Average gross office rentals fell 2-4% QoQ in 2Q2009.

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development Office 50 Margaret Street, Sydney Residential McIntyre Street, Gordon Industrial 55-63 Bourke Road, Alexandria 4 Decker Place, Huntingwood 2-4 Butu Wargun Drive,Greystanes

Floor Area (sq m)

Lump Sum Price (AUD million) (US$ million)

Buyer

8,722

40.50

32.86

Challenger Hybrid Property Fund

Private Investor

8,400

17.15

13.92

Stockland

Meriton

24,000 7,938 10,995

23.46 10.25 14.70

19.03 8.32 11.93

Stockland Colonial First State Property Australand

Private Investor Private Investor Private Investor

Note: US$1 = AUD1.2324

24

Seller

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

NEW ZEALAND - AUCKLAND

T

he Auckland CBD office vacancy level recorded an overall increase from 7.7% in December 2008 to 8.4% in June 2009. Vacancy rates for prime quality buildings rose to 5.4% in June 2009. With subdued investment sentiment, major sales transactions continued to be absent from the market during 2Q2009 as individual investors continued to find it difficult to obtain sufficient financing.

Overall, prime CBD office yields softened to 8.2% in June 2009. According to the Property Council of New Zealand/Investment Property Databank (PCNZ/ IPD), New Zealand commercial property returned -0.8% for the year to March 2009 - the first negative total return since the inception of the index in 1994 and a sharp reverse compared with the return of 18.3% recorded in March 2008.

NEW ZEALAND OCR 9.0% 8.0% 7.0% % per annum

6.0% 5.0% 4.0% 3.0% 2.0% 1.0%

In the industrial sector, rental and capital values fell across the board during the first half of 2009. Due to the economic slowdown and the tightening lending policy by banks, development activity slowed and demand for land weakened further. However, there has been a steady flow of enquiries about investment opportunities for low-risk assets priced in the low end of the market. Overall industrial yields are predicted to soften further in the second half of 2009.

According to PCNZ/IPD, a total return of 0.6% for Auckland industrial property was recorded during 1Q2009.

1Q 2009

3Q 2008

1Q 2008

3Q 2007

1Q 2007

3Q 2006

1Q 2006

3Q 2005

1Q 2005

3Q 2004

1Q 2004

3Q 2003

1Q 2003

3Q 2002

1Q 2002

3Q 2001

1Q 2001

3Q 2000

1Q 2000

3Q 1999

1Q 1999

0.0%

Source: The Reserve Bank of New Zealand

AUCKLAND PROPERTY YIELDS 16% 14%

% per annum

12%

In the retail sector, a dramatic deterioration of capital growth has been the major trigger to the fall of total returns across all the ten categories measured by PCNZ/ IPD. New Zealand shopping centres were hit the hardest, at -4.1% for the year to March 2009. Returns have fallen over 35% since their strongest performance recorded in June 2007. Total return for all New Zealand retail followed closely at -3.7%. With the total vacant retail floor space almost doubled in the first half of 2009, the average retail vacancy rate was at 4.8% as of June 2009. The investment yields have softened by 100-150 basis points since the peak of the market, prime retail yields are currently fetching 6%-7% while second-tier assets are between 7.5% and 8.5%.

10% 8% 6% 4% 2%

Office

Retail

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

1Q 2004

0%

Industrial

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development Industrial 55-65 Shortland Street

Floor Area (sq m) 11,774

Lump Sum Price (NZD million) (US$ million) 41.50

27.07

Seller

Buyer

AMP Capital Properties

Robt. Jones Holdings

Note: US$1 = NZD1.5330

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

25

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

NEW ZEALAND - WELLINGTON

I

n the office market, a total return of 0.22% for Wellington CBD office was registered in 1Q2009. Investment activity remained robust, with a number of major transactions concluded during 2Q2009. Prime office yields stabilised over the period and are forecast to remain at the current level throughout 2009.

NEW ZEALAND OCR 9.0% 8.0% 7.0% % per annum

6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 1Q 2009

3Q 2008

1Q 2008

3Q 2007

1Q 2007

3Q 2006

1Q 2006

3Q 2005

1Q 2005

3Q 2004

1Q 2004

3Q 2003

1Q 2003

3Q 2002

1Q 2002

3Q 2001

1Q 2001

3Q 2000

1Q 2000

3Q 1999

0.0% 1Q 1999

In the industrial market, the global economic downturn continued to take its toll on Wellington’s industrial market. Land values continued to decline in the earlier part of 2009 and are forecast to continue to fall over the next coming months. A lack of development financing and a deferral of tenancy pre-commitment have put a stranglehold on supply. Demand for prime quality industrial premises remained firm, but the absorption of second-tier industrial stock remained uninspiring, resulting in a further rental reduction during 2Q2009. As of 2Q2009, there was a total of about 100,000 sq m of vacant industrial stock in the marketplace.

Source: The Reserve Bank of New Zealand

The overall investment activity for industrial properties remained steady during 2Q2009. Small industrial premises showed a significant pick-up during the period, while prime yields remained relatively firm and secondary yields eased further over 2Q2009.

WELLINGTON PROPERTY YIELDS 16% 14%

10% 8% 6% 4% 2%

2Q 2009

1Q 2009

4Q 2008

3Q 2008

2Q 2008

1Q 2008

4Q 2007

3Q 2007

2Q 2007

1Q 2007

4Q 2006

3Q 2006

2Q 2006

1Q 2006

4Q 2005

3Q 2005

2Q 2005

1Q 2005

4Q 2004

3Q 2004

2Q 2004

0% 1Q 2004

In the retail market, retailers occupying secondary locations suffered the most from the weakening economy during 2Q2009. The overall fall in retail spending has made retailers cautious about rental reviews, lease renewals and property acquisitions. With stagnant rental growth, retail investment yields stayed flat across the whole market. The range was 6.5%-8.5% for units in prime locations as of 2Q2009.

% per annum

12%

Office

Looking forward, the retail market in Wellington will continue to face rising vacancy rates and static or declining rentals until economic conditions improve and investors’ confidence returns. According to our research, retail investment yields are going to soften by 25-50 basis points in the second half of 2009 as investors are expected to price in thicker risk margins to cover the uncertain growth prospects for rentals.

Source: Colliers

MAJOR INVESTMENT TRANSACTIONS Development Office Maritime Tower BP House Eagle Technology House Former Public Trust Buidling AMP Chambers Retail Cnr Parumoana Street & Lyttleton Avenue

Floor Area (sq m)

Lump Sum Price (NZD million) (US$ million)

Buyer

10,740 2,845 10,114 6,754 4,305

62.00 26.00 23.00 19.00 12.60

40.44 16.96 15.00 12.39 8.22

Valad Property Group Kiwi Income Property Trust St Laurence Properties DNZ Property Group AMP Capital Properties

Private Investor Private Investor Oyster Property Group Robt. Jones Holdings Private Investor

3,787

12.00

7.83

Brookfields Multiplex

Anaro Investments

Note: US$1 = NZD1.5330

26

Seller

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

Appendix Major Market News Contacts

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

Greater China

MAJOR MARKET NEWS entered the CBD area in 1Q2009, most of them are MNCs, the branches of State-Owned Enterprises and leading domestic companies from the cultural and media, F&B and investment sectors. As of now, none of the 200 largest enterprises that pay 80% of the total tax in the CBD area have moved out from the area.

Beijing The Chaoyang District council set up nearly RMB100 million in subsidies through rental rebates and tax refunds for senior executives of financial institutions that relocate to the district.The local government is offering these institutions RMB1,000 for every sq m of office space they purchase for owner-occupancy and RMB200 annually for three years for every sq m of office space they rent.

The Science and Technology Commission of the Chaoyang District Government also launched 11 initiatives to support the development of new high-tech enterprises, including improving the policy and management environment, providing research funds and offering more support to the agriculture sector.

On 30 March 2009, the Beijing Administration for Industry and Commerce enacted 22 measures to create a favourable environment for foreign enterprises, including a permit for investment by equity and early approval for major construction projects, etc.

On 9 April 2009, the Government of Chaoyang District announced that 56 of 77 high-rise buildings in the CBD area will benefit from its Office Property Subsidies plan, with payments expected in April. The subsidies will encourage landlords to lower rental levels and help enterprises to reduce operation costs. The CBD Management Committee also revealed that 484 new enterprises

28

On 5 May 2009, the Beijing Land Resource and Reserve Centre officially started the preapplication mechanism for land transactions to avoid the failure of land auctions. Not all land plots have to have pre-applications before entering the land tender system, rather this is just a supplement to the land tender system.The new policy issued by the Beijing Land Resource and Reserve Centre resulted from several cases of failed land auctions in the past year and the recent land transaction market situation in Beijing, said the Beijing Municipal Bureau of Land and Resources.

The Beijing Municipal Bureau of Land and Resources decided to extend the original time limit for payment for land acquisitions from two to six months, aiming to alleviate the financial pressure on developers and attract purchasers.

The Bureau also said that the policy aims to avoid irrational increases in housing prices when the real estate market recovers should land supply be halted in this period.

On 18 May 2009, the State Administration of Foreign Exchange (SAFE) posted a draft regulation on foreign exchange management involving domestic enterprises investing overseas in order to solicit public opinion.The draft regulation aims to assist and encourage Chinese companies to invest overseas, as well as to standardise the management of the foreign exchange involved in such investments, said SAFE in an announcement that accompanied the draft.According to the draft, domestic companies will be allowed to register the source of their foreign exchange financing after their overseas investment, rather than obtaining

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

approval beforehand. The draft regulation also allows domestic enterprises to seek financing from more sources, including domestic foreign exchange loans, purchasing foreign exchange with RMB, foreign currency funds already held and profits earned overseas.

On 27 May 2009, the State Council circulated an announcement that the minimum capital ratio requirement for non-luxury residential property development will be lowered to 20% from the current 35%; the requirement for other categories of real estate developments will fall to 30%.The change is reckoned to be a positive sign for real estate industry, as developers will benefit from lower capital costs, and accelerate the pace of construction and development. Meanwhile, the capital ratio for project development has also been named a self-owned capital ratio by real estate developers. The minimum capital requirement of 35% was set by the Central Government in September 2004 for developers applying for banking loans to ease the real estate market. As noted, this is the first time that the Government has relaxed the capital requirements for the real estate sector since the introduction of the rule in 1996.

On 21 May 2009, the State Administration of Taxation promulgated the Settlement Management Rules of Land Value-added Tax, which has been effective since 1 June 2009.The passage of the new “Settlement Management Rules” is seen as part of the State Administration of Taxation’s continuing efforts to strengthen the loosely enforced Land Value-added Tax regulations in its early stage management, case acceptance and hearing, auditing, assessment and collection based on the Provisional Regulations on Land Value-added Tax introduced in 1993 and the Notice on the Land Value-added Tax Collection and Administration Issues for Real Estate Developers, Guoshuifa [2006] No.187.

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

Greater China

MAJOR MARKET NEWS It has been reported that the China Banking Regulatory Commission has selected three pilot units for the launch of REITs, including Harvest Fund Management Co., Ltd. These three units will issue REITs in the inter-institutional market.

CITIC Securities and Union Trust was previously identified as the pilot unit, withTianjin and Shanghai previously identified as the pilot cities. However, the China Securities Regulatory Commission, the China Banking Regulatory Commission, fund companies, trust companies and local governments have begun to fight for the priority issuance of REITs. The Central Government has not yet specified the form of the REITs. On 11 May 2009, the Beijing Municipal Bureau of Land and Resources delivered the Beijing 2009 Annual Land Supply Plan, which noted that a total of 5,700 hectares of land is scheduled to be put onto the local market in 2009, up 23% compared to the actual total land supply of 2008.

Some 1,300 hectares of land will be developed for residential use, up 51% over the actual residential land supply in 2008. It was also quoted that the 1,300 hectares of residential land in the pipeline consists of 200 hectares of land for low-rental and economy housing, up 35% over the actual land supply for this category in 2008; 400 hectares of land will be made available for upper-price commodity properties and policy-rental housing, up 82% compared to the actual land supply in this category in 2008; and 700 hectares of land will be set aside for other commodity properties, up 41% compared to the actual figure in 2008.

Chengdu

Shanghai

In 2Q2009, Chengdu was ranked No. 1 of 50 cities nationwide in the soft power chart by Oriental Outlook Weekly, the China association of mayors at the International Relationship Research Centre of Fudan University.

On 15 May 2009, the Ministry of Land and Resources issued an announcement concerning the Notice on the Implementation of Policies for Comfortable Housing Project Land, which would give policy support for low-rent and affordable housing to relieve expenses.According to the announcement, the land development for low-rent and affordable housing will benefit from preferential policies to reduce expenses, although it will not include supporting facilities for commercial use.

Guangzhou Positive news in 2Q2009 included a reduction in the business tax and a lowering of interest rates by local banks. With the introduction of 15 rules covering the promotion of the healthy development of the real estate market by the Government of Guangdong Province, the local property market is expected to stabilise over the coming months.

In early June 2009, The State Council, China’s Cabinet, reduced the minimum capital requirement for housing developments to 20% from 35%, the first cut since 1996 when fixed-investment curbs were imposed across a broad array of industries to reduce risk and control runaway growth.

The sales of new homes in Shanghai reached a 21-month high in May 2009 amid growing demand for mid to high-end residential properties. The city’s property-buying momentum has been propelled by stimulus measures unveiled by the municipal and central governments. They include cuts in property-related taxes and fees, and more favourable mortgage terms, the local statistics bureau said.

The real estate investment market rebounded quickly in the first half of 2009.The latest figures indicate that the number of sales transactions of first-hand property reached a five-year high during the period.

The China Banking Regulatory Commission has stepped up risk control on mortgage loans by closely monitoring the mortgage approval process.

The amount of initial deposit has been raised from 20% to 40% for the purchase of second residential properties.

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

29

INVESTMENT MARKET OVERVIEW | AUGUST | 2009

Greater China

MAJOR MARKET NEWS

7.8% year-on-year (YoY) for 1Q2009 according to the Census and Statistics Department of the Hong Kong SAR Government. This marked the largest decline since 3Q1998. Private consumption expenditure fell by 5.5% YoY. With the pace of deterioration in global demand markedly worse than earlier expectations, Hong Kong’s economy contracted severely in the first quarter. Taking into account the considerable downturn in world economic outlook, real GDP for 2009 is forecasted to contract by 5.5%-6.5%.

Hong Kong In May 2009, the Financial Secretary unveiled a new round of HK$16.8 billion relief measures, bringing the total stimulus package since last year’s Budget to HK$87.6 billion, or 5.2% of GDP. The measures include raising the one-off tax reduction for 2008-09 salaries tax and tax under personal assessment from 50% to 100%, with a ceiling of HK$8,000. In addition, the guarantee under the Special Loan Guarantee Scheme, which was set up in December 2008 to help small and mediumsized enterprises secure loans from banks, has been raised from 70% to 80%.

In July 2009, according to a quarterly survey conducted by Hudson, a leading human resources consultant, hiring expectations in Hong Kong have risen for the first time since 1Q2008, with 22% of respondents planning to increase hiring in 3Q2009, compared with 14% in 2Q2009.

After several quarters of declining expectations, the Banking & Financial Services sector has the highest proportion of respondents who expect to increase hiring, at 29%. This is substantially higher than the 12% reported for 2Q2009.

In May 2009, Hong Kong’s real GDP decreased

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Taipei In April 2009, the additional housing subsidised loan programme of NT$200 billion at the lower loan interest rate of 1.325% annually was issued by the ExecutiveYuan.The extension of real estate investment items and amounts aims to allow insurance companies to participate in auctions, development projects and lot purchases from 2Q2009. Further relaxation of the restrictions on real estate investment for Chinese investors have been announced, including allowing Chinese institutions to purchase properties based on their business needs.

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

North Asia

MAJOR MARKET NEWS

Seoul According to the latest economic indicators, Korea’s economy remained in negative growth as of 2Q2009. Local GDP in 1Q2009 grew 0.1% over the previous quarter, matching the estimate released on April 24 2009. The economy shrank 4.2% from a year ago, less than the previously published 4.3% drop.

Tokyo Real GDP fell 3.8% QoQ (or -14.2% YoY) in 1Q2009. Exports and industrial production showed signs of upward momentum, but corporate profits and business investments decreased 70.1% YoY - a decline over seven consecutive quarters.

Housing completions in April 2009 amounted to 66,198 units, representing a decline of 32.4% YoY. According to the Ministry of Land, Infrastructure, Transport and Tourism, land values fell 3% across the board year to date in 2009.

Private consumption remained weak due to the continued decline in household income. The average unemployment rate edged up to 5.0% in April 2009 compared with 4.3% as of the end of 2008.

Thanks to the economic stimulus measures implemented by the Korean Government and the reduction in interest rates, the pace of the current economic downturn has been tapering off. Analysts from a number of global investment banks have also revised their 2009 GDP estimates upward, from -4.0% to -2.5%.

Domestic demand has been underpinned by record rate cuts and government spending, while the depreciation of the local currency against the dollar in the past year helped limit the slide in exports.There have been some improvements in economic indicators that suggest that the economy has bottomed out, according to individual analysts in the market. However, the economy will continue to face a number of risks, including the global financial sector and rising oil prices.

On a positive note, the overall interest rate level remained low in 2Q2009. The short-term prime rate stayed at 1.475%, while the long-term prime rate was 2.1%-2.3% as of 2Q2009. The 10-year JGB yield was 1.35-1.48% in 2Q2009.

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INVESTMENT MARKET OVERVIEW | AUGUST | 2009

South Asia

MAJOR MARKET NEWS

Manila Business sentiment improved as the overall confidence index (CI) rose by 21.3 percentage points from -23.9% in 1Q2009 to -2.6% in 2Q2009.

With improving confidence in the US and global financial markets, the Economic Resiliency Plan implemented by the Philippine Government and a series of rate cuts, the CI is expected to return to positive territory at 13.7% in 3Q2009.

Jakarta The Central Statistics Agency reported that local inflation continued to ease in 2Q2009.The change in CPI was 3.65% YoY as of June 2009 compared with 6.04% YoY in May 2009.

Bank Indonesia lowered the BI Rate for seven straight months from 9.5% in November 2008 to 6.75% in early July 2009. With lower interest rates, the local economy is predicted to grow 4.6% in the second half of 2009, making a full-year growth of 4.3%.

Foreign direct investment (FDI) net inflows amounted to US$44 million during 1Q2009 due to the positive balances registered in equity capital and reinvested earnings that more than offset the net outflow in other capital. However, the cumulative FDI level declined 83.5% YoY in March 2009.

As of 1Q2009, the total residential real estate loans (RRELs) of universal/commercial banks (U/KBs) and thrift banks (TBs) reached P160.4 billion, up by 4.2% QoQ and 33.5% YoY respectively. Likewise, the ratio of total RRELs to total loan portfolio (TLP), exclusive of interbank loans, rose to 6.3% in 1Q2009 compared with 6.0 % in 4Q2008.TBs held the larger slice of the total residential real estate exposure in the banking system at 53.3% (P85.5 billion). U/KBs accounted for the remaining 46.7% (P74.9 billion).

Singapore Given the prevailing market uncertainties, the Government announced that it will: (a) Extend the suspension of the Confirmed List1 of the Government Land Sales (GLS) Programme for another six months, i.e. there will be no Confirmed List in the second half of 2009.

But it will continue to maintain a Reserve List2.

This will provide flexibility for the market to adjust supply in accordance with the current economic and demand conditions; and (b) Make adjustments to the supply of land for development from other Government agencies outside the GLS Programme for the second half of 2009 by: • Reducing the supply for commercial space • Not offering new supply for private residential units and hotel rooms With the above, all land for development will be made available via the Reserve List system of the GLS Programme.

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1

Sites on the Confirmed List are released for tender at a pre-determined date, without the need for the sale to be triggered by an application. The number of sites on the Confirmed List in each GLS programme will depend on market conditions, the strategic need for certain sites to be developed, and other factors.

2

On the Reserve List, the Government will only release a site for sale if an interested party submits an application for the site to be put up for tender with an offer of a minimum purchase price that is acceptable to the Government.The successful applicant must undertake to submit a bid for the site in the ensuing tender at or above the minimum price offered in the application.

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

South Asia

MAJOR MARKET NEWS

Bangkok Japanese manufacturers rankedThailand fifth, after China, India, Vietnam and Russia, for investment thanks to its strong supply-chain infrastructure, lower labour costs and large domestic market.

Japanese investors, including Nippon and JFE, are determined to push forward their mega-investment projects for upstream steel smelters in Thailand.

Ho Chi Minh City Vietnam’s GDP expanded 3.9%YoY in the first half of 2009, in fact a substantial improvement over the growth of 3.1% YoY registered in 1Q2009.

Inflation dropped to 3.94% in June 2009, the lowest level in more than five years. According to market consensus, the economy will gain additional momentum over the coming month and the latest GDP forecast for the remainder of 2009 will range from 4.0% to 5.0%.

During the first six months of 2009, a total of US$4.0 billion in Foreign Direct Investment (FDI) was disbursed inVietnam, representing an 18.4% fall compared with the same period in 2008. A total of 306 FDI-based projects have been licensed, with a total registered capital of US$4.7 billion, since the beginning of 2009. The Vietnam government indicated that 91% of the total value of FDI has been pledged for real estate, food manufacturing and agriculture, and hospitality investment.

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INVESTMENT MARKET OVERVIEW | AUGUST | 2009

INDIA

MAJOR MARKET NEWS In January 2009, the Foreign Investment Promotion Board (FIPB) cleared the Keystone proposal for offshore investment. Sun Apollo Ventures, a joint venture company between the Delhi-based Khemka family and the US-based AREA Property Partners (formerly the Apollo Group), picked up a 15% stake in Mumbai-based developer Keystone Realtors for Rs300 crore, making this the first private equity deal in the cash-strapped real estate sector in 2009.

The total foreign direct investment (FDI) into India nearly doubled to Rs 13,400 crore in January 2009 compared with Rs 6,900 crore in December 2008, thanks to higher inflows from Mauritius, Singapore and Japan. Mauritius remained the largest source of FDI, while Singapore replaced the US to become the second-largest source of long-term investment into India. According to data compiled by the Commerce and Industry Ministry, these three Asian countries together contributed more than 55% of the total FDI inflows in January 2009, a revival after three months of decline. The continual FDI inflows amounted to Rs15,000 crore in April 2009, followed by Rs16,000 crore in May.

The Ajay Piramal-promoted Indiareit Fund Advisors Pvt. Ltd. has invested Rs 250 crore in four projects —three in Mumbai and one in Hyderabad. Of these, one is in the Rs 5 lakh per house category and the rest in the mid-segment range. Realty funds are also trying to gauge the risk factors attached to such low-cost projects.

Funded by Indiareit, Neptune Developers Pvt. Ltd. launched a 125-acre low-cost project near Mumbai for sale. About 2,000 of the 2,100 units in the first phase of this Mumbai project were sold in just two months.

In addition, there are plans to sell three more projects in Chennai, Nagpur and Pune.

Of industry segments, the services sector was the highest recipient of FDI at Rs 5,061 crore, while FDI flowing into such sectors as computers, telecom and real estate stood at Rs1,600 crore, Rs2,374 crore and Rs2,408 crore, respectively.

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INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

Australasia

MAJOR MARKET NEWS

Brisbane

New Zealand

According to Access Economics, Queensland’s Gross State Product is expected to rise to a record high of 5.2% in 2012 and stay above 5.0% for the three years thereafter. Given the anticipated slowdown in State demand, however, white collar employment growth in Brisbane is expected to enter negative territory in 2009 (-0.27%) and 2010 (-1.53%), but regain momentum in 2011.

Due to the decline in manufacturing activity, New Zealand’s GDP declined 1.0% YoY in 1Q2009.

According to the Queensland Office of Statistical and Economic Research (May 2009), total business investment in Queensland rose 23.8% YoY in 4Q2008. Investment in other buildings and structures increased 26.2% YoY, while machinery and equipment investment rose 21.9% YoY.

Melbourne According to the Australian Bureau of Statistics, the economy expanded by 0.4% (seasonally adjusted) in 1Q2009.

During 2Q2009, the Reserve Bank of Australia left the official cash rate on hold at 3% for the second consecutive month following a period of significant easing of monetary policy.

These key indicators are suggested to have influenced the recent 12.7% rise in the WestpacMelbourne Institute Index of Consumer Sentiment from 88.8 in May to 100.1 in June 2009, the highest increase in 22 years.

The Consumer Price Index is now back within the RBA’s target range of 2% to 3% for the first time since December 2007, recording 2.5%YoY in March 2009, down from 3.7% YoY in December 2008.

Statistics New Zealand released its latest Consumer Price Index (CPI) figures, with inflation increasing 0.6% in the June quarter this year, taking the annual inflation rate to 1.9%. CPI declined from its peak of 5.1% in the September quarter 2008 to 3% in the March quarter 2009, due to disinflation in key commodities such as oil but also as a result fo a depressed demand environment. June figure shows New Zealand’s inflation rate has slowed to its lowest levels in more than 19 months. Inflation hotspots remained in areas such as food, housing, rent and utilities such as electricity.

The Reserve Bank of New Zealand held the Official Cash Rate at 2.5% on 11th June 2009 and reiterated its commitment to keeping interest rates low until late 2010.This supportive monetary policy should help stabilise the economy in 2009 and contribute to an eventual recovery path in 2010 and beyond.

According to the Westpac McDermott Millier Consumer Confidence Index, consumer confidence moved back into optimistic territory (i.e. above the 100 level) in 2Q2009, reaching an 18-month high of 106. The rebound is broad-based, led by an improvement in perceptions of the short-term economic outlook.

Australia’s unemployment rate increased to 5.7% in May 2009 (seasonally adjusted), up 0.2 percentage points from April 2009.

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INVESTMENT MARKET OVERVIEW | AUGUST | 2009

For further details, please contact: GREATER CHINA Beijing, China 502 Tower W3 Oriental Plaza No 1 East Changan Avenue Dongcheng District Beijing 100738 John Wong Director, Investment & Project Department Tel : 86 10 8518 1578 Email : john.wong@colliers.com

Chengdu, China Room L 16F City Tower 86 Section One Renmin Nan Road Chengdu 610016 Jacky Tsai General Manager Tel : 86 28 8620 2128 Email : jacky.tsai@colliers.com

Hong Kong, HKSAR Suite 5701 Central Plaza 18 Harbour Road Wanchai, Hong Kong

Tokyo, Japan Halifax Building 8F, 16-26 Roppongi 3-Chome Minato-ku, Tokyo 106-0032

Antonio Wu Regional Director / Head of HK Investment & Retail Services Tel : 852 2822 0733 Email : antonio.wu@colliers.com

Christopher Parry Senior Investment Adviser Tel : 813-5563-2180 Email : cparry@colliershalifax.com

Taipei, Taiwan 49/F TAIPEI 101 TOWER No 7 Xin Yi Road Sec 5 Taipei 110 Charles Huang Director, Investment Sales Tel : 886 2 8101 1150 Email : charles.huang@colliers.com

Guangzhou, China Room 702 Teem Tower 208 Tianhe Road Guangzhou 510620 Eric Lam General Manager Tel : 86 20 3819 3988 Email : eric.lam@colliers.com

Shanghai, China 16F Hong Kong New World Tower 300 Huaihai Zhong Road Shanghai 200021 Betty Wong Director, Investment Services & Special Projects - East China Tel : 86 21 6141 3529 Email : betty.wong@colliers.com

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NORTH ASIA

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Osaka, Japan Sumitomo Seimei Kawaramachi #2 Building 8-4, Kawaramachi 4-chome Chuo-ku Osaka, 541-0048 Brett Jensen Account Manager Tel : 81 6 6232 0790 Email : bjensen@colliershalifax.com

Seoul, South Korea 10F. Korea Tourism Organization Bldg.

10 Da-dong, Jung-gu, Seoul 100-180 Jay Yun Senior Director & General Manager Tel : 82 2 6740 2007 Email : jay.yun@colliers.com

INVESTMENT MARKET OVERVIEW | AUGUST | 2009 EXECUTIVE SUMMARY

SOUTH ASIA

INDIA

AUSTRALASIA

Jakarta, Indonesia World Trade Centre, 10th Floor Jalan Jenderal Sudirman Kav 29-31 Jakarta 12920

Mumbai, India 31-A, 3rd Floors, Film Centre 68, Tardeo Road Mumbai 400 034

Melbourne, Australia Level 32, Optus Centre 367 Collins Street Melbourne VIC 3000

Mike Broomell Managing Director Tel : 62 21 521 1400 ext 131 Email : mike.broomell@colliers.com

Joe Verghese Managing Director Tel : 91 22 4050 4500 Email : joe.verghese@colliers.com

John Marasco Managing Director, Investment Sales Tel : 61 3 9612 8830 Email : john.marasco@colliers.com

Manila, Philippines 10/F Tower 2 RCBC Plaza 6819 Ayala Avenue cor. Sen. Gil J Puyat Avenue Makati City 1200 Ieyo de Guzman Director, Investment Sales Tel : 632 888 9988 Email : ieyo.deguzman@colliers.com

Singapore 1 Raffles Place #45-00 OUB Centre Singapore 048616 Ho Eng Joo Executive Director, Investment Sales Tel : 65 6531 8618 Email : eng-joo.ho@colliers.com

Bangkok, Thailand 17/F Ploenchit Center 2 Sukhumvit Road Klongtoey, Bangkok 10110

Sydney, Australia Sydney CBD Level 12, Grosvenor Place 225 George Street Sydney, NSW 2000 John Kenny Chief Executive Tel : 61 2 9257 0222 Email : john.kenny@colliers.com Jon Chomley National Director, Investment Sales Tel : 61 2 9257 0236 Email : jon.chomley@colliers.com

Auckland, New Zealand Level 27, 151 Queen Street PO Box 1631, Auckland 1140 John Goddard Director Tel : 64 9 356 8837 Email : john.goddard@colliers.com

Asharawan Wachananont Director, Retail & Investment Tel : 662 656 7000 Email : asharawan.wachananont@colliers.com

Ho Chi Minh City,Vietnam Bitexco Building, 7th Floor 19-25 Nguyen Hue Street District 1, Ho Chi Minh City KP Singh Managing Director Tel : 84 83 827 5665 Email : kp.singh@colliers.com

The content of this report is for information only and should not be relied upon as a substitute for professional advice, which should be sought from Colliers International prior to acting in reliance upon any such information. The opinions, estimates and information given herein or otherwise in relation hereto are made by Colliers International and affiliated companies in their best judgement, in the utmost good faith and are as far as possible based on data or sources which they believe to be reliable in the contest hereto.

Notwithstanding, Colliers International and affiliated companies disclaim to the extent permitted by law, any liability in respect of any claim which may arise from any errors or omissions or from providing such advice, opinions, judgement or information.

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