CBRE Research | Asia Pacific Leasing Market Sentiment Survey May 2021 by CBRE-SEA

A S I A PAC I F I C L E A S I N G MARKET SENTIMENT SURVEY M AY 2 0 2 1

ASIA PACIFIC LEASING MARKET SENTIMENT INDEX

CBRE’S Leasing Market Sentiment Survey is based on responses from leasing market professionals across Asia Pacific

Tenant enquiries and site inspections affected by new distancing measures

40%

20%

-20%

Apr-21

Net Intention - Net % difference between positive & negative answers A S I A PA C I F I C MA RKET S ENTI MENT S URV EY

May-21

Mar-21

Jan-21

Feb-21

Dec-20

Oct-20

Nov-20

Sep-20

Weak

Aug-20

-80%

Jul-20

May-21

-60% Apr-21

Decrease

-40%

Mar-21

May-21

Apr-21

Mar-21

Feb-21

Decrease

Jan-21

-60%

Dec-20

-40%

Oct-20

-20%

Nov-20

-30%

-40% Sep-20

-10%

Feb-21

-20%

20%

Jan-21

Leasing sentiment

60%

10%

-10%

Landlord strength

Strong 80%

20%

10%

Less

Incentives

Dec-20

20%

30%

Nov-20

30%

Rents

Leasing sentiment in Australia, Korea and mainland China are largely stable or positive. Some improvement was observed in Japan but sentiment in India was hit by the second wave of COVID.

60%

Aug-20

Net Intentions

40%

Increase

Oct-20

50%

Flexible space demand

Increase

While rents are still on downward trend, the pressure is not increasing. There is also less pressure to increase incentives.

Sep-20

Tenant enquries and tour requests Site inspections

Similar to last month, around 55% of respondents to May’s survey stated they had not detected any major change in demand for flexible office space.

Leasing sentiment softened

Downward pressure on rents continues

Aug-20

Tighter measures to control the spread of COVID-19 led to fewer enquiries and site inspections in India, Japan and Singapore. Australia continues to recover.

Steady demand for flexible space

ASIA PACIFIC LEASING MARKET SENTIMENT INDEX – INDIVIDUAL MARKETS Positive 80%

Positive/Stable Leasing Sentiment

60%

Net Intentions

40%

May-21

20%

May-21 May-21

-20%

May-21

-40%

-60%

-80%

Negative

Asia Pacific

Australia

Korea

Mainland China

Singapore

Hong Kong SAR

Japan

South East Asia

Note: Surveyed indicators were revised in May 2021. Market sentiment is based on the simple average of net intentions (net % difference between positive & negative answers) of eight surveyed indicators. A S I A PA C I F I C MA RKET S ENTI MENT S URV EY

India

EXPANSIONARY DEMAND IS RECOVERING; BUT SOME TAKE LONGER TIME TO CONCLUDE Q3. What was the nature of the five largest enquiries you received over the past month? (Top two answers apply) Q4. Of the five largest enquiries you received over the past month, when do you expect them to be converted to signed leases?

Less than 8 months on average to conclude the leases

100% 90%

More than 8 months

Months 14

11% 12

80% 10

70% 60%

50% 6

40% 30%

20% 10%

25%

0 APAC

South East Asia

Australia

Mainland China

Appetite for more space

Neutral

New set-up, expansion and upgrading

Relocation, renewal, renewal vs relocation analysis, lease restructure

India

Korea

Appetite for less space

Japan

Hong Kong SAR

Singapore

Average time to sign lease (LHS)

Downsizing and sublease

Note: N=162, New question from May 2021. Appetite for more space includes new set-up, expansion and upgrading. Neutral includes relocation, renewal, renewal vs relocation analysis, lease restructure. Appetite for less space includes downsizing and sublease. Source: Asia Pacific Market Sentiment Survey, May 2021. A S I A PA C I F I C MA RKET S ENTI MENT S URV EY

INDIVIDUAL SECTOR RESULTS Rental Movement

Frequency of Site Inspections 100%

80%

14%

17%

90%

25%

50%

36%

43%

70%

% of respective respondents

38%

37%

60%

Leasing Sentiment

53%

58%

64%

63%

27%

57%

34%

40% 30% 20%

57%

17%

46% 35%

33%

35%

30%

10%

19%

18%

Office

Retail

Infrequent

Normal

Industrial Frequent

Source: Asia Pacific Market Sentiment Survey, May 2021. A S I A PA C I F I C MA RKET S ENTI MENT S URV EY

Office Decrease

Retail About the same

Industrial Increase

Office Negative

Retail Neutral

Industrial Positive

ASIA PACIFIC LEASING MARKET SENTIMENT – SECTORS

On a scale of 1-5, 1 being the worst and 5 being the best, how would you rate current leasing sentiment in your market?

Best

5.0 4.5 4.0 May-21

3.5 May-21

May-21

3.0 May-21

2.5 2.0 1.5

Worst 1.0

Overall

A S I A PA C I F I C MA RKET S ENTI MENT S URV EY

Office

Retail

Industrial

SURVEY PROFILE • •

The CBRE Asia Pacific Market Sentiment Survey was conducted from May 3 to May 14, 2021. A total of 162 responses from CBRE’s leasing market professionals across Asia Pacific were received.

RESPONDENTS BY MARKET May-21

Apr-21

13%

30%

35%

17%

Mar-21

10%

23%

Feb-21

11%

23%

Jan-21

12%

Dec-20

12%

RESPONDENTS BY SECTOR

28%

4% 7% 3% 1%

30%

23%

29%

18%

41%

10% 3% 5%2%

13%

12%

11%

10%

16%

6% 2% 10%

8% 2%

15%

13%

68%

Apr-21

66%

Mar-21

12%

10%

48%

11%

20%

23% 41%

15%

Feb-21

71%

14%

15%

17%

Jan-21

71%

12%

17%

7% 2% 9%

Mainland China

Japan

India

Singapore

Australia

Hong Kong SAR

Korea

Dubai

Others

Note: Others include South East Asia (Cambodia, Philippines, Thailand & Vietnam), Taiwan and New Zealand. Source: Asia Pacific Market Sentiment Survey, May 2021. A S I A PA C I F I C MA RKET S ENTI MENT S URV EY

May-21

Dec-20

68%

20%

Office

40% 60% Industrial Retail

19%

13%

80%

100%

DISCLAIMERS AND WAIVERS This presentation has been prepared in good faith based on CBRE’s current views of the commercial real-estate market. Although CBRE believes its views reflect market conditions on the date of this presentation, they are subject to significant uncertainties and contingencies, many of which are beyond CBRE’s control. In addition, many of CBRE’s views are opinion and/or projections based on CBRE’s subjective analyses of current market circumstances. Other firms may have different opinions, projections and analyses, and actual market conditions in the future may cause CBRE’s current views to later be incorrect. CBRE has no obligation to update its views herein if its opinions, projections, analyses or market circumstances later change.

Nothing in this presentation should be construed as an indicator of the future performance of CBRE’s securities or of the performance of any other company’s securities. You should not purchase or sell securities – of CBRE or any other company – based on the views herein. CBRE disclaims all liability for securities purchased or sold based on information herein, and by viewing this presentation, you waive all claims against CBRE and the presenter as well as against CBRE’s affiliates, officers, directors, employees, agents, advisers and representatives arising out of the accuracy, completeness, adequacy or your use of the information herein.

A S I A PA C I F I C MA RKET S ENTI MENT S URV EY

FOR MORE INFORMATION ABOUT THIS REGIONAL REPORT, PLEASE CONTACT Asia Pacific Research Henry Chin, Ph.D. Global Head of Investor Thought Leadership Head of Research, APAC henry.chin@cbre.com.hk

Ada Choi, CFA Head of Occupier Research, APAC Head of Data Intelligence and Management, APAC ada.choi@cbre.com.hk

Cynthia Chan Office Research Specialist, APAC

Felix Lee Senior Analyst, APAC

cynthia.chan@cbre.com.hk

felix.lee@cbre.com

Advisory & Transaction Services (A&T) Manish Kashyap Head of A&T, APAC Global Head of A&T – Agile manish.kashyap@cbre.com.sg

Paul Hubbard-Brown Managing Director, APAC

Rohini Saluja Managing Director, APAC

Emily Gray Senior Director, APAC

paul.hubbardbrown@cbre.com.hk

Rohini.saluja@cbre.com.sg

emily.medwaygray@cbre.com

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CBRE RESEARCH This report was prepared by the CBRE Asia Pacific Research Team, which forms part of CBRE Research—a network of preeminent researchers who collaborate to provide real estate market research and econometric forecasting to real estate.

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