Asia Pacific Industrial 2012 H1

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ASIA PACIFICINDUSTRIAL MARKET OVERVIEW

Accelerating success.

May 2012


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TABLE OF CONTENTSASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY 2012

Regional Overview 3

Australia 5-6

Melbourne .................................. ..................................... ..................................... 5

Sydney ................................ ..................................... ..................................... ....... 6

China 7-9

Beijing ...................................................................................................................7

Guangzhou ................................. ..................................... ..................................... 8

Shanghai .................................... ..................................... ..................................... 9

Hong Kong SAR 10-11

India 12

New Delhi ...........................................................................................................12

Indonesia 13-14

Jakarta ................................................................................................................13

Japan 15

Greater Tokyo .....................................................................................................15

New Zealand 16-17 Auckland .............................................................................................................16Wellington .................................. ..................................... .................................... 17

Singapore 18-19

Taiwan 20

Taiwan ................................................................................................................20International Comparison 21-27

Single-user Warehouse Land Values, Capital Values

and Monthly Gross Rents ...................................................................................21

Single-user Factory Land Values, Capital Values

and Monthly Gross Rents ................................... ...................................... ......... 24

Multi-user High-Specs Average Monthly Gross Rents..................................... 27

Local Market Norm 28-30

Single-user Warehouse Land Values, Capital Values


Single-user Factory Land Values, Capital Values


Defnitions & Terminology 31

This is the 14th issue of the Asia Pacic Industrial Market

Overview, which covers 13 cities in nine countries,

for the review period of October 2011 to March 2012.

With this bi-annual update, we hope to provide an

overview of industrial markets catering to multinational

corporations and a comparison of industrial real estate

costs across the key cities in the Asia-Pacic region.

Three types of industrial properties are tracked in this

report, namely single-user factory premises, single-user

warehouse premises and multi-user high-specications

industrial premises, as these are the preferred choices

of multinational corporations. This publication features

land and capital values, as well as rents of single-user

industrial premises; and rents of multi-user high-

specication factories.


3/33COLLIERS INTERNATIONAL | P. 3

REGIONAL OVERVIEW

Weighed down by the persistent uncertainties surrounding the United States (US) and

the Eurozone economic situations, the Asia-Pacic region generally experienced slower

economic growth in the nal quarter of 2011. Reduced demand for exports from the Eurozone

as well as massive oods in Thailand that disrupted manufacturing production lines, also

contributed to the slowdown in economic growth in 4Q 2011. However, the overall economic

situation in the Asia-Pacic region appeared to have improved somewhat in the rst three

months of 2012 in response to signs of improvement in the US economy and eorts by the

European Central Bank to resolve the sovereign debt crisis.

Against this backdrop, the performance of the industrial markets in the 13 Asia-Pacic cities

surveyed softened over the period between October 2011 and March 2012. Although the

majority of the submarkets surveyed continued to enjoy appreciation in land, capital and

rental values, most reported either stable or a slower rate of growth.

In the industrial land segment, the majority (44 out of 55) of single-user industrial submarkets

surveyed saw land values rise or hold steady compared to the previous six-months. The

remaining 11 submarkets saw declines in land values.

Leading the price increases were Indonesias Karawang and Bekasi areas, where land

prices surged by another 38.6% and 24.9% respectively during the current review period,

as Indonesias sustained economic growth and low labour costs continued to appeal to

manufacturers. However, the growth rate moderated from the blistering 45.0% recorded

in the preceding period. Similarly, while land prices in Singapore continued to rise on the

back of robust industrial land sales, the rate of increase slowed. In contrast, industrial land

prices in Greater Tokyo fell for the seventh consecutive review period, albeit at a slower

pace during the October 2011 to March 2012 period amid signs of an improving economy.

Underpinned by healthy sales, capital values in the majority (52 out of 58) of the submarkets

surveyed either held steady or experienced some upside over the six months ending March

2012. This was relatively unchanged from the previous review period where 51 out of 58

submarkets recorded growth or maintained their capital values.

Notably, average capital values growth in Shanghai accelerated to close to 12.0% in the

current review period, compared to just 1.4% in the preceding six months, as the lowering

of the reserve requirement ratio for banks facilitated the acquisition of ready-built industrial

facilities. Likewise in Auckland, the relatively active industrial sales market led to a

strengthening in capital values growth. However, it was a dierent picture in Wellington

where a slight softening of yields caused capital values to fall. Meanwhile, capital values

in Greater Tokyo exhibited greater stability with marginal declines recorded on the back

of healthy investment sales.

The survey also revealed a rise in the number of single-user industrial submarkets

experiencing a rent decline in the October 2011 to March 2012 period. Overall, rents fell

in eight out of 53 submarkets surveyed, compared to just one out of 54 submarkets in the

preceding six-month period. This was mainly due to weaker rents in New Zealand, where

a slowdown in industrial leasing activity in Auckland caused net rents to fall. Likewise, in

New Zealands Wellington region, net rents fell for the rst time since March 2010 due to

increased insurance costs arising from the Christchurch earthquakes that was typically

passed on to tenants.


4/33P. 4 | COLLIERS INTERNATIONAL

REGIONAL OVERVIEW

Rents of high-specication (high-specs) multi-user industrial facilities were moreresilient. Although the number of submarkets reporting a rise in rents had declined

from 12 in the last survey, to seven in the most recent survey (out of 17 submarkets),

only one submarket (Yokohama) saw rents fall due to weak leasing demand. The

remaining eight submarkets reported stable rents during the current review period.

Amid signs of an uplift in economic prospects, the majority of the submarkets surveyed

are expected to experience stability or growth in values and rents over the next 12

months, on the back of healthy demand and reduced vacancy. The exceptions are

Singapore, Hong Kong and Taipei where industrial rents and values are forecasted

to decline due to the presence of downside risks in the external environment, which

is expected to aect demand. In Wellington, while land values are expected to staystable in the next 12 months, capital values and net rents are projected to fall over

the same period as earthquake issues surrounding the property market are expected

to remain a dampening factor in the industrial market.


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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY 2012

COLLIERS INTERNATIONAL | P. 5

ECONOMIC INDICATORS FOR MELBOURNE

ECONOMIC INDICATORS

INDICATORS PERIOD DATA

Year-on-Year GDP Growth October - March .%

Year-on-Year Manufacturing Output Growth Rate October - March -.%

Total Imports October - March A. billion

Total Exports October - March A. billion

Container Throughput (TEUs) October - March ,,

Air Cargo Throughput (Tonnes) October - March n.a.

AUSTRALIA

MELBOURNE

Factory and Warehouse

Demand for industrial space remained stable during the reviewperiod between October 2011 and March 2012 supported by

companies move to expand and consolidate their premises on

the back of a robust trade market. The market saw imports and

exports holding relatively stable at A$30.6 billion and A$9.6 billion

respectively between October 2011 and March 2012, as compared

to A$30.1 billion and A$10.8 billion achieved in the previous review

period.

However, unresolved sovereign debt issues in the Eurozone

continued to impinge on the global economic recovery and has put

a cap on the growth of Melbournes industrial land and capital values

as well as rents, which thus remained stable during the six-monthreview period between October 2011 and March 2012.

On the sales front, a total of eight investment sale transactions (A$5

million and above) took place between October 2011 and March 2012.

The total value transacted during the review period was in excess of

approximately A$145 million. This is lower than the A$270 million

garnered from 11 investment sales done in the preceding six-month

period. Sale transactions concluded during the current review period

included GPTs acquisition of a 299,594-sq ft warehouse at Citiport

Business Park, Port Melbourne and Quintessential Equities purchase

of a 268,228-sq ft warehouse at 8 Dunlop Court, Bayswater.

The industrial leasing market remained healthy in the six monthsleading up to March 2012 but the average lease term is now shorter

(i.e. ve years) than the long term average of seven to 10 years.

Approximately 3.5 million sq ft of space (involving deals above

32,000 sq ft) was leased between October 2011 and March 2012,

with the bulk taking place in the West (1.80 million sq ft) and in the

South East (1.25 million sq ft). This is an improvement from the

2.2 million sq ft leased in the previous review period between April

and September 2011. Recent leasing deals include Silk Logistics

committing to a 474,004-sq ft warehouse at Kororoit Creek Road,

Altona North; Trimas taking up a 270,209-sq ft warehouse along

Atlantic Drive, Keysborough; and Corning leasing a 188,704-sq ft

warehouse at 71-83 Whiteside Road, Clayton.

Increase in tenant demand for new space resulted in increased

construction activity. Approximately A$173 million worth of industrial

space was initiated between October 2011 and March 2012 as

opposed to A$87 million committed over April to September 2011.

Overall, the industrial market is expected to continue to perform well

in 2012 as limited availability of quality stock coupled with increasing

tenant demand should see a decline in vacancies. Rents, capital

values and land values are thus expected to increase marginally due

to the tighter space market over the next 12 months.

MAJOR TRANSACTIONS IN MELBOURNE

TRANSACTIONS

BUILDING/LAND PLOT PROPERTY TYPE LEASE/SALE TENANT/PURCHASERFLOOR/LAND AREA

(SQ FT)

- Plummer Street, Port Melbourne Industrial Lease Chrysler Australia ,

Atlantic Drive - Warehouse A, Keysborough Industrial Lease ESR Holdings ,

- Whiteside Road, Clayton Industrial Lease Corning ,

Atlantic Drive, Keysborough Industrial Lease Trimas ,

Kororoit Creek Road, Altona North Industrial Lease Silk Logistics ,

- Studley Court, Derrimut Industrial Sale Private Investor ,

Dunlop Court, Bayswater Industrial Sale Quintessential Equities Pty Ltd ,Citiport Business Park, Port Melbourne Industrial Sale GPT ,

Mount Derrimut Road, Derrimut Industrial Sale Private Investor ,

* n.a. denotes not available




ECONOMIC INDICATORS FOR SYDNEY

ECONOMIC INDICATORS


Year-on-Year GDP Growth July - December .%

Year-on-Year Manufacturing Output Growth Rate October - March n.a.

Total Imports August - January A. billion

Total Exports August - January A. billion

Container Throughput (TEUs) August - January ,,


AUSTRALIA

SYDNEY

Factory, Warehouse and High-Specs

High interest rates and ongoing growth in the economy that was

driven mainly by the mining and resources boom has caused the

Australian dollar to remain strong against the US dollar. This has

led to strong import growth, which in turn supported demand for

warehouse and storage space for goods, despite the uncertain global

economic environment.

Land values, rents and capital values have all remained stable across

Sydney over the past six months, as tenant demand and owner

occupier sale transactions have remained steady.

Functional, well designed and correctly priced developments

continued to receive healthy interest from owner occupiers and

private investors during the review period. The largest deal that

took place in Sydney over the past six months was Qube Logisticss

A$123 million purchase of Stocklands 55% stake in the Moorebank

Industrial Property Trust in March 2012. The trust owns the

Moorebank Intermodal Terminal.

However, quality industrial space remains limited in stock.

Institutional landowners, who have taken advantage of the lack of

available space in the market to speculatively build new industrial

assets, have benetted from the robust occupier demand. This is

evident from the high commitment rates of all recently completed

speculatively built stock. The largest of these commitments is the

Dexus lease of a 226,042-sq ft newly built facility in Lenore Lane,

Erskine Park to DB Schenkar.

The availability of Prime Grade stock on the market is expected to

continue to tighten over the next 12 months, as existing supply and

speculative new developments continues to fall short of demand.

This will likely lead to a reduction in the availability of lower grade

stock, as demand spills over from the Prime Grade market into the

Secondary Grade market. This decline in vacancy levels is expected

to support the return of rents and capital values growth of up to

2.4% over the next 12 months across a number of Sydneys industrial

markets while incentives for tenants should begin to fall in the short

term.


MAJOR TRANSACTIONS IN SYDNEY

TRANSACTIONS


(SQ FT)

Hale Street, Botany Warehouse Lease TOLL Paper ,

Britton Street, Smitheld Warehouse Lease Cope Sensitive Freight ,

- Lenore Drive, Erskine Park Warehouse Lease DB Schenkar ,

Moorebank Intermodal Terminal [% stake] Intermodal Terminal Sale Qube Logistics n.a.

Richmond Rd, Marsden Park Land Sale Ikea n.a.

L, Central Hills Business Park , Gregory Hills Land Sale Owner Occupier ,

- Doody St, Alexandria Warehouse Sale Owner Occupier ,

Wicks Rd, North Ryde Warehouse Sale Owner Occupier ,

- Orion Rd, Lane Cove Warehouse Sale Private Investor ,

Williamson Rd, Ingleburn Warehouse Sale Owner Occupier ,

Worth St, Chullora Warehouse Sale Private Investor ,



7/33



ECONOMIC INDICATORS FOR BEIJING

ECONOMIC INDICATORS


Year-on-Year GDP Growth January December .%

Year-on-Year Manufacturing Output Growth Rate January December .%

Total Imports July December US. billion

Total Exports July December US. billion

Container Throughput (TEUs) July December n.a.

Air Cargo Throughput (Tonnes) July December ,

CHINA

BEIJING


Beijing managed to achieve a gross domestic product (GDP) and a

manufacturing output growth of 8.1% year-on-year (YoY) and 7.9%

YoY respectively in 2011. Meanwhile, exports and imports amounted

to US$32 billion and US$171.9 billion during 2H 2011, up 6.5% and

34.2% YoY respectively. On the other hand, air cargo throughput

declined 5.2% YoY in the same period, but still managed to clock

780,600 tonnes.

Beijings stable economy in 2011 paved the way for a strong industrial

property market that saw hikes in land and capital values as well as

rents during the review period between October 2011 and March

2012. On average, land values expanded by between 2.7% and 3.5%,whilst capital values strengthened by between 2.7% and 4.3% over

the six-month period. Rents of industrial properties also experienced

increases across the board, ranging between 4.3% and 5.3%.

State-owned and domestic enterprises continue to be the main

demand generators for industrial land, mostly purchasing land to

construct facilities for self-occupancy. Some examples include

Beijing Hi-tech Business Innovation Service Centres purchase of a

parcel with a land area of 4.43 million sq ft in the Miyun Economic

and Development Zone for CNY248 million and Beijing Jingdong

Century Commerce Companys acquisition of a 2.25 million sq ft-plot

in Yizhuang for CNY290 million. In addition, Beijing LiandongyongleInvestment and Management Company recently bought a piece of

land, which covers an area of 0.93 million sq ft, for CNY42 million.

The leasing market was supported by occupier demand from various

overseas and domestic companies including Business-to-Consumers

(B2C) industries, third party logistics (3PL) companies and retailers.

For example, during the review period, DHL took up 43,055-sq ft

of warehouse space at Crown Logistics Centre, Unipart Logistics

committed to 53,819-sq ft of warehouse space at GLP Park Beijing

Capital Airport and Gome leased 269,100-sq ft of warehouse space

at Dewei.

Supply-wise, three new projects were added to Beijings industrial

market stock during this review period. One was the Goodman Beijing

Airport Logistics Centre that has a gross oor area (GFA) of 320,624sq ft. The others were GLPs completed projects, namely GLP Park

Beijing Capital Airport and GLP City Park Daxing with GFA of 0.32

million sq ft and 1.02 million sq ft respectively.

Despite the expected deceleration of Chinas economy, Beijings

industrial market is expected to maintain its upward trend in the

coming 12 months, underpinned by the continued strong demand

from 3PL, B2C and e-business companies as well as retailers.

However, growth could be limited by rising operational and

transportation costs facing logistics players. Therefore, average

rents are expected to grow more moderately by up to about 4%,

underscored by the continued strong occupier demand. Land andcapital values are expected to inch up around 2-3% during this

period.

MAJOR TRANSACTIONS IN BEIJING

TRANSACTIONS


(SQ FT)

Crown Logistics Centre Warehouse Lease DHL ,

GLP Park Beijing Capital Airport Warehouse Lease Unipart Logistics ,

Dewei Warehouse Lease Gome ,

Tongzhou Land Sale

Beijing Liandongyongle Investment and

Management Company ,

Yizhuang Land SaleBeijing Jingdong Century Commerce

Company,,

Miyun Economic and Development Zone Land SaleBeijing Hi-tech Business Innovation Service

Centre,,





ECONOMIC INDICATORS FOR GUANGZHOU

ECONOMIC INDICATORS


Year-on-Year GDP Growth January December .%

Year-on-Year Manufacturing Output Growth Rate January December .%

Total Imports July December US. billion

Total Exports July December US. billion

Container Throughput (TEUs) July December . million

Air Cargo Throughput (Tonnes) July December ,

CHINA

GUANGZHOU


Notwithstanding the slowdown in global economic recovery andthe contagion of the Eurozone sovereign debt crisis, Guangzhous

economy grew by a steady 11.0% YoY in 2011. The export and import

volumes also maintained steady growth in the second half of 2011

to US$29.5 billion and US$31.8 billion respectively, up 12.7% and

10.3% compared to the same period in 2010.

Supported by a healthy economic environment and an expanding

domestic retail market, leasing demand for industrial properties

remained robust between October 2011 and March 2012. The demand

for warehouse space came mainly from domestic enterprises in

sectors such as food, clothes, electronic components and the fast

moving consumer goods industry while factory space was in demand

by the medicine, mechanical and electric equipment and material

industrial companies. On the other hand, the availability of high quality

industrial facilities for lease in the district remained limited. These

provided the impetus for average rents of warehouse and factory

space in Guangzhou Economic & Technology Development District

(GETDD) to grow by 4.0% and 2.6% to reach CNY2.85 per sq ft

per month and CNY2.73 per sq ft per month respectively during

the review period.

The average capital value of industrial properties also trended

up by 4.2% over the review period to CNY269.50 per sq ft while

the average land value rose by 0.9% in the six-month period to

CNY56.67 per sq ft by the end of March 2012. These gures were

fuelled by robust demand on the back of the favourable economic

performance and increasing domestic consumption demand. In

particular, enterprises from the logistics, electric instruments,medicine, mechanical and electric equipment and material industries

were active in looking to purchase ready-built industrial properties

and land plots during the review period.

Domestic enterprises continued to dominate land purchases,

acquiring 12 out of the 15 industrial land plots launched for sale

in GETDD in the six months ending March 2012. For example,

Guangzhou Jingdong Trade Co. Ltd, a famous e-business company

in China, acquired an industrial land plot with a total site area of

1.08 million sq ft in Jiulong Industrial Park for CNY60.41 million. In

addition, Guangzhou Nanxin Medicine acquired an industrial land

plot with a total site area of 0.44 million sq ft in Guangzhou ScienceCity for CNY25.09 million.

The three deals by foreign or multinational rms were Guangzhou

Procter & Gambles acquisition of a 2.16 million sq ft plot in China-

Singapore Knowledge City, Yakult (Guangzhou) Co. Ltds acquisition

of 0.36 million sq ft plot in Yonghe, GETDD and Vejesto Electrics

acquisition of a 0.14 million sq ft site in Jiulong Industrial Park.

Underpinned by continuous healthy performance of the domestic

economy and the limited new supply of industrial space (especially

for warehouses), rental and capital values of warehouse and factory

space in GETDD are expected to continue to grow by between 2.6%and 4.2% in the next 12 months. Land values, on the other hand,

will likely hold relatively stable with upsides of about 0.4% in the

same period.

MAJOR TRANSACTIONS IN GUANGZHOU

TRANSACTIONS


(SQ FT)

Jiulong Industrial Park Land Sale Vejesto Electric ,

Jiulong Industrial Park Land Sale Guangzhou Zhenghan Material Technology ,

Development Zone, Yonghe, GETDD Land Sale Yakult (Guangzhou ) Co.Ltd ,Guangzhou Science City Land Sale Guangzhou Nanxin Medicine ,

Jiulong Industrial Park Land SaleGuangzhou Jingdong Trade Co. Ltd

(buy.com),,

China-Singapore Knowledge City, GETDD Land Sale Guangzhou Procter & Gamble ,,


9/33



ECONOMIC INDICATORS FOR SHANGHAI

ECONOMIC INDICATORS


Year-on-Year GDP Growth October March .%

Year-on-Year Manufacturing Output Growth October March .%

Total Imports October March US. billion

Total Exports October March US. billion

Container Throughput (TEUs) October March . million

Air Cargo Throughput (Tonnes) October March . million

CHINA

SHANGHAI


Aimed partly at stimulating Chinas domestic retail sales and easelending for small and medium-sized businesses, the Chinese Central

Bank lowered the reserve requirement ratio for banks twice in the

review period between October 2011 and March 2012 by 50 basis

points in November 2011 and another 50 basis points in February

2012. An estimated CNY800 billion was released into the market

as a result. Thus, Shanghais economy managed to stay on the

expansion path in the six months ending March 2012 in spite of the

troubled global economy. In fact, Shanghais Purchasing Managers

Index (PMI) for March 2012 outperformed Chinas national levels for

the rst time since May 2011, with a reading of 53.2, indicating that

the citys manufacturing sector is in a recovery period.

The lowering of the reserve requirement ratio for banks also

facilitated the acquisition of land and ready-built industrial facilities.

As a result, average land and capital values of industrial properties

increased by about 4% and 12% respectively during the six-month

review period ending March 2012.

Notable land transactions done during this period include XCMGs

acquisition of a 3.75 million sq ft plot in Fengxian district and AVIC

Civil Aviation Electronics purchase of a 2.65 million sq ft industrial

land parcel in the Minhang district.

Likewise, average rental values achieved a 6.0% growth in thecurrent six-month period. Increasing demand for industrial space

from e-commerce businesses and multinational companies, whichoutpaced new supply, drove up occupancy rates and supported rental

growth. Major leasing transactions sealed during the review period

include Nissans lease of a 0.43 million sq ft warehouse facility in

Songjiang district and KWEs lease of a 0.32 million sq ft warehouse

in Pudong New Area.

As Shanghai moves up the manufacturing value chain, traditional

manufacturing activity is increasingly being phased out and is being

replaced by high value, high-technology, research and development

(R&D) and pharmaceutical activities. This is likely to result in

some existing low end industrial facilities being withdrawn from the

industrial stock when they are being redeveloped for more valuableuses. Coupled with the low pipeline supply of industrial space, the

market is poised to remain tight, thus providing the impetus for the

average land, capital and rental values to increase by up to 6% in the

next 12 months. The medium to long term prospects of Shanghais

industrial property market look bright too as it is likely to enjoy

strong demand from occupiers and investors alike on the back of the

Shanghai Municipal Governments target for Shanghai to achieve an

average economic growth rate of 8% for the next ve-year period

from 2011.

MAJOR TRANSACTIONS IN SHANGHAI

TRANSACTIONS


(SQ FT)

Vailog Dianshan Lake Warehouse Lease IHUSH ,

GLP PVG Warehouse Lease KWE ,

Blogis Songjiang Warehouse Lease Nissan ,

Minhang Workshop Sale AVIC Civil Aviation Electronics ,,

Fengxian Workshop Sale XCMG ,,




ECONOMIC INDICATORS FOR HONG KONG SAR

ECONOMIC INDICATORS


Year-on-Year GDP Growth July - December .%

Year-on-Year Manufacturing Output Growth Rate September February -.%

Total Imports September February HK, billion

Total Exports September February HK, billion

Container Throughput (TEUs) September February . million

Air Cargo Throughput (Tonnes) September February . million

HONG KONG SAR

HONG KONG SAR

Factory

The Government of Hong Kong announced in the 2012-13 Budget, twomeasures to incentivise the conversion from conventional industrial

to data centre space necessary to support the sustainable growth of

Hong Kongs traditional pillar industries like nancial services, trading

and logistics. First, fees for changing parts of eligible industrial

buildings to data centre use will be exempted. Second, the premium

payable for modifying land leases to allow high-tier data centre

usage on industrial sites, will be assessed on the basis of actual

development intensity and high-tier data centre use. Targeted to

be implemented as early as mid-2012 for application until 31 March

2016, these measures are foreseen to boost the supply of data centre

space in land-scarce Hong Kong while at the same time, facilitate

the rejuvenation of old industrial estates.

Similar to past quarters, the interest cost for vendors holding

industrial premises remains low. Most of the vendors also remained

rm on their asking prices in view of sustained occupational demand

from tenants and stable rental income from their premises. On the

prospective buyers front, the banks are more willing to oer them

nancing support for acquiring premises, which helped the recovery

in the transaction volume during the second half of the review period.

The number of strata-titled transactions plunged 30.2% quarter-

on-quarter (QoQ) to 956 in 4Q 2011 but rebounded by 35.7% QoQ

to 1,297 in 1Q 2012.

However, in view of the global economic uncertainties, more end-

users are on tighter budgets for their business addresses. This has

caused factory rental and capital value growth to slow down. During

the period from October 2011 to March 2012, factory rents increased

3.6% to HK$9.00 per sq ft per month. Meanwhile, factory prices

increased 3.3% to HK$2,630 per sq ft during the same period.

Looking ahead, while the US economy has recently fared better-

than-expected and the Eurozone sovereign debt crisis has stabilised

somewhat lately, the still-weak fundamentals of these advanced

economies will continue to weigh on their import demand. Signs of

negative spill-over to the Asian region have also been increasinglyevident. Demand for industrial premises is thus anticipated to soften

amid a deceleration of growth in local consumption and exports of

goods and services. As such, average factory rents and prices are

expected to decline 4% and 6%, respectively, over the coming 12

months.

Warehouse

The pace of external trade growth slowed signicantly amidst a

rocky global economic environment but remained positive over the

review period. During the period from September 2011 to February

2012, re-exports increased 4.0% YoY to HK$1,619 billion, down

from an increase of 10.2% YoY in the preceding six-month period.

Nevertheless, the sustained outsourcing activities from retailers have

translated into demand from third-party logistics companies (3PLs)

for prime quality warehouses. This group of tenants is looking for

ramp access warehouse premises in the range of 50,000 sq ft to

100,000 sq ft in size.

Robust demand for warehousing facilities saw the average rents of

cargo lift access warehouses increase by 9.3% to HK$7.45 per sq ft

per month while those of ramp access warehouses increased 10.4%

to HK$10.83 per sq ft per month during the current review period.

Take-up for new warehousing facilities has been healthy. Interlink,

a new logistics warehouse in Tsing Yi, which was ocially opened

in March 2012, is now almost fully leased to a range of well-known

multinationals and 3PLs players, including Nippon Express. The next

upcoming major logistics warehouse new supply will be two new

projects also located in Tsing Yi, although the construction work is

yet to start. Upon completion, the two projects will add a total of

about 2.1 million sq ft of warehouse space to the market.

In view of the uncertain external environment, warehouse rentals

are anticipated to decrease 2% to 3% over the next 12 months while

prices are expected to decline 4% to 5% during the same period.


11/33




ECONOMIC INDICATORS FOR INDIA

ECONOMIC INDICATORS


Year-on-Year GDP Growth September - February .%

Year-on-Year Manufacturing Output Growth Rate September - February .%

Total Imports September - February US. billion

Total Exports September - February US. billion

Container Throughput (TEUs) October - March n.a.


INDIA

NEW DELHI


Thanks to the moderation in Indias ination rates, the Reserve Bank

of India (RBI) has softened their monetary policy stance for the rst

time in one and a half years by reducing the Cash Reserve Ratio

(CRR) of nancial institutions in two tranches (i.e. 50 basis points

in January 2012 and a further 75 basis points in March 2012). As a

result, the CRR stood at 4.75% by the end of March 2012 from 6.0%

in December 2011. The RBI recently also lowered its repo rate (i.e. the

rate at which the Reserve Bank of India lends money to commercial

banks) to 8% from 8.5% to boost Indias sagging economic growth.

These measures have helped to stamp falling growth rates in Delhis

industrial sector. The manufacturing sector, which accounts for

over 75% of Indias Index of Industrial Production (IIP) displayed

a healthy 4.0% expansion in February 2012, relative to the 1.4%

growth in January 2012 and the low 2.6% growth in December 2011.

Nevertheless, the average growth rate of the manufacturing sector

remains at a low 1.9% over the six month period from September

2011 to February 2012, as compared to 8.3% in the same period a

year ago.

Despite a slowdown in Indias manufacturing sector, sentiments

in Delhis industrial property market remained healthy on the back

of continuous eorts by the government to develop and grow their

industrial sector. For example, to encourage non-polluting small andmedium scale industries to the capital, the Delhi State Industrial and

Infrastructure Development Corporation (DSIIDC) is planning to set

up a multi-level manufacturing hub in Rani Khera in north west Delhi

with an estimated cost of INR 31 billion. The project is expected to

generate 100,000 direct employment opportunities and 200,000

indirect employment opportunities. Additionally, to further improve

basic infrastructure and amenities in industrial locations, the Delhi

Government has recently called for bids to maintain some industrial

estates under a Public Private Partnership (PPP) Model. Under this

model, projects will be tendered on a build-operate-transfer system

whereby concessionaires will redevelop the estates in two years and

maintain it during the concession period.

Thus, demand for Delhi/NCR industrial properties remained stable

during the review period. Coupled with their limited supply, the

average land and capital values as well as rents of Delhi/NCR

industrial properties registered marginal increases of 1.5%, 0.6%

and 1.1%, respectively, between October 2011 and March 2012.

Recent sales transactions include Bhushan Steels purchase of a

144,000-sq ft factory at NH 24 and Jee Chemicals acquisition of a

100,000-sq ft factory at Bhiwadi while a notable lease transaction

concluded in the review period was Eichers lease of a 100,000-sq

ft factory at Palwal.

With the continuous improvements in Delhis industrial infrastructure

and the governments proactive approach in transforming Delhi into

an advanced industrial hub, Delhi could emerge as an attractiveinvestment destination in the coming years. This could fuel demand

for industrial space to accommodate the growing businesses. Thus,

average land, capital values and rents of the industrial properties

are expected to grow by up to 4.4% in the next 12 months.

MAJOR TRANSACTIONS IN NEW DELHI

TRANSACTIONS


(SQ FT)

NH Warehouse Lease Om Pipes ,

Palwal Factory Lease Eicher ,

Bhiwadi Warehouse Sale Swastik ,

Bhiwadi Factory Sale Jee Chemical ,

NH Factory Sale Bhushan Steel ,



13/33



MAJOR TRANSACTIONS IN JAKARTA

TRANSACTIONS


(SQ FT)

Modern Cikande Land Sale Samotor Gas ,

MM Land Sale autoparts company (name undisclosed) ,

Delta Silicon Land Sale Warehouse company ,

Indotaisei Land Sale Asahimas (glass) ,

Modern Cikande Land Sale Jeewong (textile from Hong Kong) ,

Modern Cikande Land Sale Mikakuto (confectionary from Japan) ,

Suryacipta Land Saleautomotive component (name

undisclosed),

Delta Silicon Land Sale Japanese autoparts (name undisclosed) ,

Delta Silicon Land Sale Japanese autoparts (name undisclosed) ,

ECONOMIC INDICATORS FOR JAKARTA

ECONOMIC INDICATORS


Year-on-Year GDP Growth January March .%

Year-on-Year Manufacturing Output Growth Rate January March -.%

Total Imports October March US. billion

Total Exports October March US. billion

Container Throughput (TEUs) January December . million

Air Cargo Throughput (Tonnes) October March n.a.

INDONESIA

JAKARTA


Indonesias large domestic market has shielded the country from the

volatile global economic environment and has helped the economy

to expand by 6.5% in 2011, its fastest pace since the Asian Financial

Crisis in 1997.

Continued economic growth coupled with low labour costs has

paved the way for Indonesia to grow as an attractive destination

for manufacturers. This has translated into a healthy demand for

industrial land. While Japanese companies were still the major

demand generator for industrial land in Jakarta, South Korean

investors have also become quite active in searching for sizeable

industrial land. In terms of the type of industries, the automotive

and other related industries remain the major buyers. Other active

industries include manufacturing, steel and related industries,

pharmaceutical, logistics and building material industries. For

example, during the review period, two undisclosed Japanese

auto part makers each bought land at Delta Silicon. A number of

automotive component companies have also recently bought land

of various sizes in Suryacipta.

There is, however, a lack of ready-to-use industrial land. Some

industrial estates situated within strategic locations like Karawang

or Bekasi have reported that they have had very limited land to sell

throughout 2012 and this has triggered them to further increase

their land prices. During the review period, land prices in these two

regions went up by an average of 29.5%. Meanwhile, due to the small

market size, rents and prices of industrial buildings recorded milder

growths averaging 13.1% and 3.9% respectively in the six months

ending March 2012.

The Asian Development Bank (ADB) forecasts that Indonesias

economic growth could slow marginally to 6.4% in 2012 from 6.5%

in 2011 due to weaker external demand. Lagging development of

infrastructure, especially in the transportation and energy sectors,

also continues to be a major constraint to economic growth.

Nonetheless, land and capital values as well as rents of industrial

properties are expected to continue to post strong increases of up

to 25% in the next 12 months on the back of robust demand and the

scarcity of ready-to-use industrial land. Although some industrial

estates are observed to be rushing to develop their land bank into

ready-to-use industrial plots, new industrial land supply will only

be ready in early 2013 given the time needed for the preparation

works.


continued on next page >




INDONESIA

MAJOR TRANSACTIONS IN JAKARTA

TRANSACTIONS


(SQ FT)

Suryacipta Land Saleautomotive component

(name undisclosed),


(name undisclosed),

Jababeka Land Salepharmacy

(name undisclosed),


(name undisclosed),

Suryacipta Land Saleplastic

(name undisclosed),


(name undisclosed) - # ,


(name undisclosed) - #,

Jababeka Land Salemanufacturing & electronics

(name undisclosed),


(name undisclosed),,

< continued from previous page


15/33



ECONOMIC INDICATORS FOR GREATER TOKYO

ECONOMIC INDICATORS


Year-on-Year GDP Growth July - December -.%)

Year-on-Year Manufacturing Output Growth Rate July - December -.%)

Total Imports July - December . tillion)

Total Exports July - December . tillion)

Container Throughput (TEUs) July - December . million)

Air Cargo Throughput (Tonnes) July - December ,)

JAPAN

GREATER TOKYO


Japans economic progress in 2011 was aected by a series of

unfavourable events including the Great East Japan (Tohoku)

Earthquake, the appreciation of the Japanese Yen, the oods in

Thailand, and the Eurozone debt crisis. Consequently, real GDP

growth which contracted by 0.8% YoY in the rst half of 2011,

continued to contract in the second half of the year, albeit by a

smaller margin of 0.6% YoY.

While the quake in March 2011 and the resulting liquefaction have not

led to major tenants relocating from the bay area to inland locations,

weak leasing demand drove rents in some bay areas like Kawasaki

and Yokohama to decline by 3.1% and 9.1% respectively during the

six months ending March 2012.

Although industrial land prices had declined for the seventh

consecutive review period, the rate of decline was slower during

the current October 2011 to March 2012 period, compared to six

months earlier, amid signs of an improving economy. Supported by

acquisition activities by both foreign and local property funds, capital

values also showed greater stability during the review period with

marginal declines recorded.

The largest transaction involved the acquisition of 15 logistic facilitieswith a total gross oor area (GFA) of 8.3 million sq ft by a joint

venture of Global Logistic Properties and China Investment Co.

from LaSalle Investment Management for JPY122.6 billion. More

than 90% of the total GFA is located within the Greater Tokyo and

Osaka areas. Another signicant transaction was Mapletree Logistic

Trusts acquisition of seven logistic facilities for JPY17.5 billion. Of

the aggregate GFA of 1.3 million sq ft, more than 70% is located in

Greater Tokyo and 15% is in Greater Osaka and Greater Nagoya.

Acquisitions by JREITs included IIF Investments acquisition of IIF

Atsugi logistic centre in the Kanagawa prefecture for JPY2.29 billion

and the Japan Logistics Fund, Inc.s purchase of Misato logistic centre

in Saitama prefecture for JPY6.36 billion.

In terms of new supply, Mitsubishi Estate Co. and Mitsui & Co. Ltd.

completed a build-to-suit ve-storey warehouse facility for Nakano

Shokai Co. Ltd., a warehousing and logistic company with total GFA

of 339,418 sq ft in the Koto ward in Tokyo during the review period.

Prospects for the Japanese economy appear to be brighter, with the

International Monetary Fund (IMF) forecasting real GDP growth of

2.0% and 1.7% for 2012 and 2013 respectively, up from the negative

0.7% growth for 2011. This is expected to lend support to rents, land

prices and capital values, which are forecast to remain stable over

the next 12 months.

1) Nationwide

2) Tokyo port (Tokyo-kou, Narita) and Yokohama Port (Yokohama, Kawasaki, Yokosuka, Chiba and Kisarazu)3) Tokyo custom and Yokohama custom

4) Narita Airport

MAJOR TRANSACTIONS IN GREATER TOKYO

TRANSACTIONS


(SQ FT)

IIF Atsugi Logistic Centre III Logistics Sale IIF Investment Co. ,

Misato Logistic Centre Logistics Sale Japan Logistics Fund, Inc. ,

Tsurugashima Logistic Centre Logistics Sale Orix Real Estate Co. ,

Seven Logistic facilities (more than %located in Tokyo, % in Greater Osaka

and Greater Nagoya)

Logistics Sale Mapletree Logistic Trust ,,

Three Logistic facilities located inKawasaki

Logistics Sale SPC of Fortress Investment Group ,,

logistic facilities (more than %located in Greater Tokyo and Osaka)

Logistics SaleThe joint venture of Global Logistic Properties

and China Investment Corporation,,




ECONOMIC INDICATORS FOR NEW ZEALAND

ECONOMIC INDICATORS


Year-on-Year GDP Growth December .%

Year-on-Year Manufacturing Output Growth Rate December .%

Total Imports October March NZ. billion

Total Exports October March NZ. billion


Air Cargo Throughput (Tonnes) October March ,

NEW ZEALAND

AUCKLAND

Ofce/Warehouse

New Zealands economic recovery continues to be shallow, as delaysin the Canterbury rebuild continue to dampen market activity. This

is reected in the marginal GDP growth of 0.3% YoY in 4Q 2011,

compared to 0.7% YoY in the previous quarter.

The shallow economic recovery slowed down industrial leasing

activity, resulting in the overall industrial vacancy in Auckland rising

marginally to 6% in February 2012 (latest available gures), from

the 5.3% recorded in February 2011. Thus, industrial net rental

rates across the greater Auckland region generally declined over the

current review period from October 2011 to March 2012. Except for

the Manukau submarket where net rents stayed constant, net rents of

oce / warehouse premises in the former Auckland City and NorthShore submarkets saw declines of 0.7% and 1.2%, respectively over

the review period.

While rents eased over the six months to March 2012, land values

saw a marginal upside of up to 0.7% during the review period. Land

continues to be in limited supply particularly in the North Shore

submarket, and what is available is tightly held. As a consequence,

North Shore has the highest land values in the greater Auckland

region.

Capital values, on the other hand, were supported by the relativelyactive industrial sales market over the six months to the end of March

2012, rising by between 2.6% and 6.1% across the three submarkets.

Industrial sales over NZ$2 million made up 50% of all commercial

sales in the second half of 2011 in the greater Auckland region. A

notable transaction was the sale of 36 - 50 Wilkinson Road in Penrose

by Trevor Rands and a group of investors from APN Print Media for

NZ$25.5 million. However, the rise in capital values against softer

rents led prime industrial yields in the greater Auckland region to

tighten over the review period from October 2011 to March 2012,

most notably in the former Auckland City and Manukau City precincts.

Going forward, prospects for the industrial sales market remainedpositive. Industrial investor condence in Auckland has recorded

the highest optimism since the inception of the Col liers Real Estate

Condence Survey in December 2008, with a net 51% of Auckland

industrial investors who participated in the March 2012 survey

forecasting improving conditions in the next 12 months, up from

41.0% six months earlier. As a result, land and capital values are

forecast to rise over the next 12 months. However, prime rents and

incentives are expected to remain static as leasing activity is forecast

to stay soft on the back of the shallow economic recovery.

MAJOR TRANSACTIONS IN AUCKLAND

TRANSACTIONS


(SQ FT)

- Jarvis Way, East Tamaki Oce/Warehouse Lease Royal Wolf Trading New Zealand ,

- Westeld Place, Mt Wel lington Oce/Warehouse Lease Mazda Motors ,

Sir Wil liam Avenue, East Tamaki Oce/Warehouse Lease LFA (NZ) ,

- Carbine Road, Mt Wellington Oce/Warehouse Lease Rentokil Initial ,

Rockridge Ave, Penrose Oce/Warehouse Lease Rilee Signs ,

- Sims Road, Penrose Oce/Warehouse Lease Loadlift ,

Carbine Road, Mt Wellington Oce/Warehouse Lease Southern Pine Products ,

- Wilkinson Road, Penrose Oce/Warehouse Sale Trevor Rands and Investors , - Harris Road, East Tamaki Oce/Warehouse Sale Direct Property Fund ,

Woodcocks Road, Warkworth Oce/Warehouse Sale Private Investor ,

Hugo Johnston Drive, Penrose Oce/Warehouse Sale Jerdi Partnership ,

Great South Road, Penrose Oce/Warehouse Sale Akoranga Properties ,


17/33



NEW ZEALAND

WELLINGTON

Ofce/Warehouse

The Christchurch earthquakes have led to signicantly increased

insurance premiums around New Zealand. This increased cost,

typically passed on to tenants, has caused net rental rates in Petone

and Seaview to fall by more than 3% in the current six-month review

period to March 2012, and by 2.0% in Ngauranga. This marks the

rst decline in net rents in the Wellington industrial market since

March 2010.

Gross rents on the other hand (which includes all operating

expenses) held relatively stable given that leasing activity gathered

momentum over the six months ending March 2012. The largest

leasing transaction that took place during the review period was the60,278 sq ft secured by Wellington Regional Council at 201 Eastern

Hutt Road for three years.

While leasing activity has picked up, the majority of the industrial

transactions during the second half of 2011 remains largely in the

sub-NZ$2 million price bracket, totalling over NZ$35.5 million. A

slight softening of yields during the October 2011 to March 2012

period has led to capital values declining by between 8.4% and 8.6%

across the three submarkets. Land values also declined over the past

six months by 14.8% in Ngauranga and 16.0% in Petone. However,

land values rose by 15.0% in Seaview.

Overall investor condence in Wellington continues to improve slowly

with 11% of respondents remaining pessimistic in the March 2012

Colliers Real Estate Condence Survey, as compared to 25% during

the September 2011 survey. Although still recording the lowest level

of condence among the main centres in New Zealand, industrial

investor condence in Wellington is now in positive territory, with a

net 2% of respondents indicating optimism for the next 12 months.However, earthquake issues surrounding the property market will

continue to be a dampening factor in the Wellington industrial market

in the near future. As a result, while land values are expected to

stay stable in the next 12 months, capital values and net rents are

projected to fall over the same period.

MAJOR TRANSACTIONS IN WELLINGTON

TRANSACTIONS


(SQ FT)

Unit , Blenheim St, Upper Hutt Oce/Warehouse Lease Fuji Xerox New Zealand ,

Unit & , Port Road, Seaview Oce/Warehouse Lease Forman Building Systems ,

Uniplas Building, Eastern Hutt Road,Lower Hutt

Oce/Warehouse Lease Wellington Regional Council ,

- Jackson Street & Te PuniStreet

Oce/Warehouse Sale Tom Hudig Trust ,

Parkside Road, Lower Hutt Oce/Warehouse Sale Private Investor ,

Broken Hill, Porirua Oce/Warehouse Sale Takakopa Properties ,




ECONOMIC INDICATORS FOR SINGAPORE

ECONOMIC INDICATORS


Year-on-Year GDP Growth October March .%

Year-on-Year Manufacturing Output Growth Rate October March .%

Total Imports October March S . billion

Total Exports October March S . billion


Air Cargo Throughput (Tonnes) October March ,

SINGAPORE

SINGAPORE


The Government of Singapore introduced a slew of measuresduring the current review period between October 2011 and March

2012. These measures include disallowing the strata subdivision of

industrial projects on selected state land parcels in the rst 10 years

after the completion of the project and specifying the minimum size of

a unit in a multi-user industrial development at 1,615 sq ft. Developers

selling industrial properties are also required by the authorities to

stipulate the approved use of units sold in the purchase options and

sales-and-purchase agreements. These measures should weed out

unauthorised users and ensure industrial space caters to the needs

of genuine industrialists. In so doing, it is hoped that runaway rents

and prices of industrial space due to competition with unauthorised

users can be prevented, resulting in market stability.

Cautious expansion plans of industrialists on the back of the further

moderation of Singapores economic growth to 2.6% YoY in the

October 2011 to March 2012 period from the 3.6% YoY growth

recorded in the preceding six-month period led to a lacklustre leasing

market. Coupled with oncoming supply pressures, the gross monthly

rents for factories in the central area inched up a mere 1.3% in the

review period to average S$1.52 per sq ft per month by the end of

March 2012, while the average gross monthly rents for warehouse

space in the eastern part of the island stayed at at S$1.44 per sq

ft during the same period.

In contrast, industrial investment and land sales activities remained

robust, driven by institutional investors, especially REITs, as well as

end-users who were looking to secure their own landed premises.

Signicant REIT purchases in the review period include Cambridge

Industrial Trusts buy of a factory located on 16 Tai Seng Street for

S$59.25 million as well as a warehouse at 3C Toh Guan Road East

for S$35.5 million; and Cache Logistics Trusts purchase of Pan Asia

Logistics Centre on 21 Changi North Way for S$35.18 million. These

supported the continued uptrend in land and capital values albeit at

a slower pace of between 5.1% and 13.5% during the current review

period, down from 10.0% to 16.0% in the previous review period.

According to the Urban Redevelopment Authority (URA), the stock

of single-user factory space grew by a hefty 2.22 million sq ft in

the current review period, up from 1.91 million sq ft in the previous

six-month period. Developments completed in the six months

ending March 2012 include Tiong Seng Contractors 187,290-sq ft

Tiong Seng Prefab Hub at Tuas South Avenue 1, YHI Corporations

198,055-sq ft factory at 2 Pandan Road and CWTs 304,620-sq ft

Pandan Logistics Hub along Pandan Road.

Downside risks in the external environment such as the persistent

Eurozone debt crisis, the sluggish recovery in the US and the weak

growth momentum in Asia will continue to weigh on Singapore's

economic growth going forward and expose companies in the

manufacturing as well as the transport and storage sector to strong

headwinds. However, these rms are expected to maintain theirpresence in Singapore so as to leverage Singapores Global-Asia

positioning to tap into growth opportunities in Asia and the rest of

the world. In addition, Singapores sound economic fundamentals

should help the country and the industrial market ride through the

current uncertainties. Hence, while Singapores industrial land,

capital values and rents will likely soften in the next 12 months, the

fall is expected to be capped at 3%.

High-Specs Industrial Building

On top of slowing occupier demand from industrialists as they cut

back on expansion and capital investment plans, the high-specsindustrial sector also suered from easing spill-over demand from

the oce sector in line with its falling rents and rising stock of

suburban oce space.

Coupled with ample supply in the pipeline, the rents for high-specs

industrial space stood at S$3.50 per sq ft per month, based on a

new basket of high-specs spaces tracked. However, in the prime

central locality, some high-specs industrial space could still command

a strong rent of about S$3.80 to S$4.00 per sq ft while business

parks could achieve S$4.50 to S$5.00 per sq ft.

Notwithstanding the global uncertainties and the near-term pressure

on rents, REITs took advantage of the low interest rate environment

to secure yield accretive purchases. For example, in February 2012,

Ascendas REIT bought four high-specs buildings located in the


19/33



MAJOR TRANSACTIONS IN SINGAPORE

ECONOMIC INDICATORS


(SQ FT)

Mapletree Business City, & PasirPanjang Road

High-Specs Lease Samsung Asia ,

Mapletree Business City, & PasirPanjang Road

High-Specs Lease Toshiba ,

UE Bizhub East, & Changi BusinessPark Avenue

High-Specs Lease Cisco Systems ,

,,,,, Howard Road Factory Sale Dairy Industries ,

Pioneer Crescent Factory Sale Cambridge Industrial Trust ,

Ubi Close Factory Sale Alpine Motors ,

Woodlands Loop Factory Sale Sabana REIT ,

Tai Seng Street Factory Sale Cambridge Industrial Trust ,

Admiralty Road Warehouse Sale Storhub ,

C Toh Guan Road East Warehouse Sale Cambridge Industrial Trust ,

Changi North Way Warehouse Sale Cache Logistics Trust ,

Changi Business Park Vista High-Specs Sale Ascendas REIT ,

Cintech I, II, III, IV High-Specs Sale Ascendas REIT ,

Corporation Place, Corporation Road High-Specs Sale Ascendas REIT ,

SINGAPORE

Singapore Science Park Cintech I, II, III and IV for a collective sum

of S$183.00 million. This comes shortly after their announcement

in December 2011 that they have acquired two properties, namely

Corporation Place at 2 Corporation Road and 3 Changi Business

Park Vista for a combined S$179 million.

Although overriding caution in the industrial property sector is

expected to weigh on current market sentiments, demand for

high-specs industrial space could be shored up by, among other

factors, expansion in research and development functions as well

as the setting up of new high-value information and communication

technology, bio-medical and digital media outts. This should help

to limit the dip in overall high-specs industrial rents to 3% for the

whole of 2012.




ECONOMIC INDICATORS FOR TAIWAN

ECONOMIC INDICATORS


Year-on-Year GDP Growth October - March .%

Year-on-Year Manufacturing Output Growth Rate October - March -.%

Total Imports October - March US. billion

Total Exports October - March US. billion

Container Throughput (TEUs) October - March . million

Air Cargo Throughput (Tonnes) October - March ,

TAIWAN

TAIWAN

High-Specs Industrial Building

Taiwans GDP growth rate slowed further to 0.6% YoY for the periodbetween October 2011 and March 2012, compared to the 4.2%

YoY recorded during the preceding six months ending September

2011. Over the same period under review, the manufacturing sector

contracted by about 2.2% YoY, on the back of declines in the output

value of electronic components, chemical materials, basic metals

and machinery equipment.

Against the weaker economic backdrop, the expansion in net take-

up of high-specs space in Neihu Technology Park fell by a hefty

59.6% to just 292,930 sq ft for the period between October 2011

and March 2012, from the 725,049 sq ft recorded for the previous

review period. Major leasing deals that took place during the reviewperiod included Nestle Taiwan Co. Ltd, Satellite Television Asia

Region Ltd, Taiwan Branch, E-Ten Information Systems Co. Ltd and

Jollywiz Digital Technology Co. Ltds take-up of 49,812 sq ft in Union

Freedom Plaza, 46,254 sq ft in Tokyo Technology Headquarters (A),

28,464 sq ft in Yang Ming Neihu Building and 17,790 sq ft in Guang

Yuan Technology Building, respectively.

Notwithstanding the marked slowdown in demand growth, the

average rents of high-specs space in Neihu Technology Park

managed to gain another 0.9% over the review period from NT$31.57

per sq ft per month in September 2011 to NT$31.86 per sq ft per

month in March 2012. This came on the back of the continued fall

in vacancy rate by 0.7 percentage points to 11.6% as of March 2012,

the lowest level since 4Q 2008. The persistent tightening of thevacancy rate, in turn, was the result of continued growth in demand

amid limited new completions.

Only one new project was completed during the review period. The

completion of the 120,865-sq ft S.I.T. Wanguo Centre in 1Q 2012,

raised the total stock of high-specs space in Neihu Technology Park

by just 0.4% to about 28.4 million sq ft as of March 2012.

On the investment front, the review period saw several transactions

for investment and owner-occupation purposes. Major transactions

included Delta Electronics Inc.s acquisition of the 263,292-sq ft Eten

Neihu Building for NT$2.53 billion, Mercuries Life Insurance Co. Ltds

acquisition of the 120,865-sq ft S.I.T. Wanguo Centre for NT$2.47

billion, TransAsia Airways Co. Ltds acquisition of the 42,583-sq ft

Green Energy Headquarters for NT$704 million and Taiwan Secom

Co. Ltds acquisition of the 28,262-sq ft Green Energy Headquarters

for NT$487 million.

Going forward, the Eurozone crisis and deceleration of Chinas

economic growth is expected to aect Taiwans economic growth

and impact demand for high-specs space in Neihu Technology Park.

And with more new high-specs space expected to enter the market

in the next 12 months, this may place some upward pressure on the

vacancy rate. As such, rents are forecast to remain at over the next12 months.

MAJOR TRANSACTIONS IN TAIPEI

TRANSACTIONS


(SQ FT)

Guang Yuan Technology Building High-Specs Lease Jollywiz Digital Technology Co. Ltd ,

Yang Ming Neihu Building High-Specs Lease E-TEN Information Systems Co. Ltd ,

Tokyo Technology Headquarters(A) High-Specs LeaseSatellite Television Asia Region Ltd, Taiwan

Branch,

Union Freedom Plaza High-Specs Lease Nestle Taiwan Co. Ltd ,

Green Energy Headquarter High-Specs Sale Taiwan Secom Co. Ltd ,

Green Energy Headquarter High-Specs Sale TransAsia Airways Co. Ltd ,

S.I.T. Wanguo Centre High-Specs Sale Mercuries Life Insurance Co. Ltd ,

Eten Neihu Building High-Specs Sale Delta Electronics, Inc. ,


21/33



INTERNATIONAL COMPARISONThe purpose of the International Comparison tables is only to facilitate easy and equal comparison of single-user industrial costs. However, payment

schemes vary with each country. Some countries may have the practice of paying annual land rent, while others pay a lump sum land premium

or through other modes. Colliers International does not infer that industrial land and buildings in these cities may be acquired through the same

schemes or on the basis stated in the table.

SINGLE-USER WAREHOUSE

SINGLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY GROSS RENTS

CITY

VALUE AS OF MARCH 2012 (US$) 12-MONTH FORECAST (US$) BASIS OF LAND AND CAPITAL VALUES

LANDVALUE1

(PSF)

CAPITALVALUE2(PSF)

MONTHLYGROSSRENT(PSF)

LANDVALUE1(PSF)

CAPITALVALUE2(PSF)


LANDTENURE(YEARS)

PLOTRATIO

LANDAREA

(SQ FT)

GROSSFLOORAREA

(SQ FT)

Auckland

Former Auckland City . . . . . . . , ,

Manukau . . . . . . . , ,

North Shore . . . . . . . , ,

Beijing

Tianzhu . . . . . . . , ,Tongzhou . . . . . . . , ,

Greater Tokyo

Chiba - Urayasu - - - - - - . , ,

Kawasaki - Higashi Ogishima . . . . . . . , ,

Tokyo - Ariake . . . . . . . , ,

Tokyo - Heiwajima . . . . . . . , ,

Tokyo - Shinsuna . . . . . . . , ,

Yokohama - Daikokufuto . . . . . . . , ,

Guangzhou

GETDD . . . . . . . , ,

Hong Kong

Ramp Access - . . - . . . , ,

Cargo Lift Access - . . - . . . , ,Jakarta

Bekasi . . - . . - . , ,

Melbourne

East & Southeast . . . . . . . , ,

Fringe . . . . . . . , ,

North . . . . . . . , ,

West . . . . . . . , ,

New Delhi

Delhi - NH . - . . - . . , ,

Delhi - NH . . . . . . . , ,

Delhi - NH . . . . . . . , ,

Delhi - East . . . . . . . , ,

Delhi - North . . . . . . . , ,

Delhi - South . . . . . . . , ,

Delhi - West . . . . . . . , ,

Shanghai

Pudong New Area . . . . . . . , ,

Singapore

East . . . . . . . , ,

Sydney

South . . . . . . . , ,

Southwest . . . . . . . , ,

West . . . . . . . , ,

Wellington

Ngauranga . . . . . . . , ,

Petone . . . . . . . , ,

Seaview . . . . . . . , ,

1. Land values are expressed in US$ psf per plot ratio2. Capital values refer to the values of both land and building

3. Rental series for Auckland and Wellington are on a net basis

4. The Urayasu submarket remained ooded. Land, capital values and rents are not available5. Values provided are for multi-user warehouse buildings




INTERNATIONAL COMPARISON

INTERNATIONAL COMPARISON OF WAREHOUSE LAND VALUES(MARCH 2012)

INTERNATIONAL COMPARISON OF WAREHOUSE CAPITAL VALUES(MARCH 2012)

* Values provided are for multi-user warehouse buildings

05 01 00 1502 00 2503 00 3504 00

De lhi-NH8Jakarta-Bekasi

De lhi-NH24Guangzhou-GETDD

Melbourne-WestWellington-Seaview

Delhi-WestWellington-Petone

De lhi-EastBeijing-Tong zhouMelbourne-North

Wellington-Nga urangaShangh ai-Pudong New Area

Me lbourne-East & South EastDe lhi-NorthDelhi-South

Auckland-ManukauAuckland-Former Auckland City

Beijing-Tianzhu

Auckland-North ShoreSydney-SouthwestMe lbourne-Fringe

Sydney-WestSydney-South

Greater Tokyo-Yokohama-DaikokufutoSingapore-East

Greater Tokyo-Kawasaki-Higashi OgishimaGreater Tokyo-Tokyo-Ariake

Greater Tokyo-Tokyo-ShinsunaGrea ter Tokyo-Tokyo-He iwajimaHong Kong-Cargo Lift Access*

Hong Kong-Ramp Access*

Warehous e Capital Values (US$ psf)

0 50 100 150 200 250 300 350 400

Warehouse Capital Values (US$ psf)

Warehouse Land Values (US$ psf per plot ratio)

Guangzhou-GETDDMelbourne-West

Beijing-TongzhouMelbourne-North

Melbourne-East & South EastGreater Tokyo-Yokohama-Daikokufuto

Jakarta-BekasiSydney-Southwest

Delhi-NH1Wellington-SeaviewAuckland-Manukau

Auckland-Former Auckland CityBeijing-Tianzhu

Delhi-NH8Auckland-North Shore

Sydney-WestWellington-Ngauranga

Wellington-Petone

Delhi-NH24Greater Tokyo-Kawasaki-Higashi Ogishima

Melbourne-FringeShanghai-Pudong New Area

Singapore-East

Sydney-SouthDelhi-East

Greater Tokyo-Tokyo-AriakeGreater Tokyo-Tokyo-Heiwajima

Delhi-NorthGreater Tokyo-Tokyo-Shinsuna

Delhi-South

Delhi-West

0 50 100 150 200

Warehouse Land Values (US$ psf per plot ratio)

Delhi - WestDelhi - South

Greater Tokyo - Tokyo - ShinsunaDelhi - North

Greater Tokyo - Tokyo - HeiwajimaGreater Tokyo - Tokyo - Ariake

Delhi - EastSydney - South

Singapore - EastShanghai - Pudong New Area

Melbourne - FringeGreater Tokyo - Kawasaki - Higashi Ogishima

Delhi - NH 24Wellington - Petone

Wellington - NgaurangaSydney - West

Auckland - North ShoreDelhi - NH 8

Beijing - TianzhuAuckland - Former Auckland City

Auckland - ManukauWellington - Seaview

Delhi - NH 1Sydeny - Southwest

Jakarta - BekasiGreater Tokyo - Yokohama - Daikokufuto

Melbourne - East & South EastMelbourne - NorthBeijing - TongzhouMelbourne - West

Guangzhou - GET DD

Hong Kong - Ramp Access*Hong Kong - Cargo Lift Accees*

Greater Tokyo - Tokyo - HeiwajimaGreater Tokyo - Tokyo - Shinsuna

Greater Tokyo - Tokyo - AriakeGreater Tokyo - Kawasaki - Higashi Ogishima

Singapore - EastGreater Tokyo - Yokohama - Daikokufuto

Sydney - SouthSydney - West

Melbourne - FringeSydeny - Southwest

Auckland - North Shore

Beijing - TianzhuAuckland - Former Auckland CityAuckland - Manukau

Delhi - SouthDelhi - North

Melbourne - East & South EastShanghai - Pudong New Area

Wellington - NgaurangaMelbourne - NorthBeijing - Tongzhou

Delhi - EastWellington - Petone

Delhi - WestWellington - Seaview

Melbourne - WestGuangzhou - GET DD

Delhi - NH 24Jakarta - Bekasi

Delhi - NH 8


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SINGLE-USER FACTORY

SINGLE-USER FACTORY LAND VALUES, CAPITAL VALUES AND MONTHLY GROSS RENTS

CITY

VALUE AS OF MARCH 2012 (US$) 12-MONTH FORECAST (US$) BASIS OF LAND AND CAPITAL VALUES

LANDVALUE1

(PSF)

CAPITALVALUE2(PSF)


LANDVALUE1(PSF)

CAPITALVALUE2(PSF)


LANDTENURE(YEARS)

PLOTRATIO

LANDAREA

(SQ FT)

GROSSFLOORAREA

(SQ FT)

Beijing

Shang Di . . . . . . . , ,

Yi Zhuang . . . . . . . , ,

Greater Tokyo

Chiba - Ichikawa . . - . . - . , ,

Chiba - Mihama . . - . . - . , ,

Saitama - Ageo . . - . . - . , ,

Tokyo - Ota . . - . . - . , ,

Yokohama - Naka . . - . . - . , ,

Guangzhou

GETDD . . . . . . . , ,

Hong Kong

Low Quality - . . - . . . , ,

Mid Quality - . . - . . . , ,

Prime Quality - . . - . . . , ,

Jakarta

Bekasi . . - . . - . , ,

Karawang . . . . . . . , ,

Melbourne

East & South East . . . . . . . , ,

Fringe . . . . . . . , ,

North . . . . . . . , ,

West . . . . . . . , ,

New Delhi

Delhi - NH . - . . - . . , ,

Delhi - NH . . . . . . . , ,

Delhi - NH . . . . . . . , ,

Delhi - East . . . . . . . , ,

Delhi - North . . . . . . . , ,

Delhi - South . . . . . . . , ,

Delhi - West . . . . . . . , ,

Shanghai

Minhang District . . . . . . . , ,

Pudong New Area . . . . . . . , ,

Singapore

Central . . . . . . . , ,

1. Land values are expressed in US$ psf per plot ratio2. Capital values refer to the values of both land and building

3. Values provided are for multi-user factory buildings


25/33



INTERNATIONAL COMPARISON OF FACTORY LAND VALUES(MARCH 2012)


INTERNATIONAL COMPARISON OF FACTORY CAPITAL VALUES(MARCH 2012)

* Values provided are for multi-user factory buildings

Beijing-Yi Zhuang

Guangzhou-GETDD

Melbourne-West

Jakarta-Karawang

Melbourne-North

Greater Tokyo-Saitama-Ageo

Melbourne-East & South East

Jakarta-Bekasi

Delhi-NH1

Delhi-NH8

Greater Tokyo-Chiba-Mihama

Shanghai-Minhang District

Shanghai-Pudong New Area

Delhi-NH24

Greater Tokyo-Yokohama-Naka

Greater Tokyo-Chiba-Ichikawa

Melbourne-Fringe

Beijing-Shang Di

Greater Tokyo-Tokyo-Ota

Delhi-East

Singapore-Central

Delhi-North

Delhi-South

Delhi-West

Factory Land Values (US$ psf per plot ratio)

500 100 150 200

Delhi-NH8

Jakarta-Karawang

Jakarta-Bekasi

Delhi-NH24

Guangzhou-GETDD

Melbourne-West

Shanghai-Pudong New Area

Shanghai-Minhang District

Delhi-East

Melbourne-North

Beijing-Yi Zhuang

Delhi-West


Delhi-NorthGreater Tokyo-Saitama-Ageo

Greater Tokyo-Chiba-Mihama

Delhi-South

Greater Tokyo-Yokohama-Naka

Greater Tokyo-Chiba-Ichikawa

Greater Tokyo-Tokyo-Ota

Melbourne-Fringe

Beijing-Shang Di

Singapore-Central

Hong Kong-Low Quality*

Hong Kong-Mid Quality*

Hong Kong-Prime Quality*

0 100 150 200 250 300 350 400 450 500

Factory Capital Values (US$ psf)

50


Delhi - West

Delhi - South

Delhi - North

Singapore - Central

Delhi - East

Greater Tokyo - Tokyo - Ota

Beijing - Shanghai Di

Melbourne - Fringe

Greater Tokyo - Chiba - Ichikawa

Greater Tokyo - Yokohama - Naka

Delhi - NH 24

Shanghai - Pudong New Area

Shanghai - Minhang District

Greater Tokyo - Chiba - Mihama

Delhi - NH 8

Delhi - NH 1

Jakarta - Bekasi

Melbourne - East & South East

Greater Tokyo - Saitama - Ageo

Melbourne - North

Jakarta - Karawang

Melbourne - West

Guangzhou - GET DD

Beijing - Yi Zhuang

0 50 100 150 200

Factory Land Values (US$ psf per plot ratio)

Hong Kong - Prime Quality*

Hong Kong - Mid Quality*

Hong Kong - Low Quality*

Singapore - Central

Beijing - Shang Di

Melbourne - Fringe

Greater Tokyo - Tokyo - Ota

Greater Tokyo - Chiba - Ichikawa

Greater Tokyo - Yokohama - Naka

Delhi - South

Greater Tokyo - Chiba - Mihama

Greater Tokyo - Saitama - AgeoDelhi - North


Delhi - West

Beijing - Yi Zhuang

Melbourne - North

Delhi - East

Shanghai - Minhang District

Shanghai - Pudong New Area

Melbourne - West

Guangzhou - GET DD

Delhi - NH 24

Jakarta - Bekasi

Jakarta - Karawang

Delhi - NH 8

0 50 100 150 200 250 300 350 400 450 500





INTERNATIONAL COMPARISON OF FACTORY MONTHLY GROSS RENTS(MARCH 2012)


* Values provided are for multi-user factory buildings

Delhi-NH1

Delhi-NH8

Delhi-North

Jakarta-Karawang

Delhi-NH24

Shanghai-Pudong New AreaShanghai-Minhang District

Guangzhou-GETDD

Melbourne-West

Melbourne-North


Delhi-East

Delhi-West

Beijing-Yi Zhuang

Delhi-South

Hong Kong-Low Quality*

Melbourne-Fringe

Hong Kong-Mid Quality*

Singapore-Central

Beijing-Shang Di

Hong Kong-Prime Quality*

0.00

Factory Monthly Gross Rents (US$ psf)

0.50 1.00 1.50

Hong Kong - Prime Quality*Beijing - Shanghai Di

Singapore - Central

Hong Kong - Mid Quality*

Melbourne - Fringe

Hong Kong - Low Quality*

Delhi - South

Beijing - Yi Zhuang

Delhi - West

Delhi - East


Melbourne - North

Melbourne - West

Guangzhou - GET DD

Shanghai - Minhang DistrictShanghai - Pudong New Area

Delhi - NH 24

Jakarta - Karawang

Delhi - North

Delhi - NH 8

Delhi - NH 1

0.00 0.50 1.00 1.50

Factory Monthly Gross Rents (US$ psf)


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MULTI-USER HIGH-SPECS

MULTI-USER HIGH-SPECS AVERAGE MONTHLY GROSS RENTS

CITY

AS OF MARCH 2012 12-MONTH FORECAST BASIS OF RENTAL RATES

AVERAGE MONTHLYGROSS RENT (US$ PSF)

AVERAGE MONTHLYGROSS RENT (US$ PSF)

LEASETERM

(YEARS)LOCATION

NET FLOORAREA

(SQ FT)

RENT FREEPERIOD

(MONTH)

Beijing . . Suburban ,

Hong Kong . . Suburban ,

Melbourne . . Suburban ,

New Delhi - NH . . to Suburban , Negotiable



New Delhi - East . . to Suburban , Negotiable

New Delhi - North . . to Suburban , Negotiable

New Delhi - South . . to Suburban , Negotiable

New Delhi - West . . to Suburban , Negotiable

Shanghai . . to Suburban , Singapore . . Suburban ,

Sydney . . Suburban ,

Taipei - Neihu Technology Park . . Suburban ,

Greater Tokyo - Hakusan . . Suburban ,

Greater Tokyo - Kanagawa . . Suburban ,

Greater Tokyo - Yokohama . . Suburban ,

INTERNATIONAL COMPARISON OF HIGH-SPECS MONTHLY GROSS RENTS(MARCH 2012)

1. With eect from May 2012, the basket used to compute Singapores high-specs industrial rents has been expanded to include an array of both independent high-specs industrial buildings and business parks.

New Delhi - NH1

New Delhi - NH8

New Delhi - NH24

New Delhi - North

New Delhi - East

New Delhi - West

New Delhi - South

Taipei - Neihu Technology Park

Sydney

Shanghai

Beijing

Melbourne

Hong Kong

Singapore

Greater Tokyo - Hakusan

Greater Tokyo - Yokohama

Greater Tokyo - Kanagawa

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

High-Specs Average Monthly Gross Rents (US$ psf)

Greater Tokyo - Kanagawa

Greater Tokyo - Yokohama

Greater Tokyo - Hakusan

Singapore

Hong Kong

Melbourne

Beijing

Shanghai

Sydney

Taipei - Neihu Technology Park

New Delhi - South

New Delhi - West

New Delhi - East

New Delhi - North

New Delhi - NH 24

New Delhi - NH 8

New Delhi - NH 1

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

High-Specs Average Monthly Gross Rents (US$ psf)




LOCAL MARKET NORMThe purpose of the Local Market Norm tables is only to provide an understanding of single-user industrial costs in the context of the various submarkets.

The land tenure, plot ratio, land and building size quoted are based on recent oerings and transactions in each local market. However, payment

schemes vary with each country. Some countries may have the practice of paying annual land rent, while others pay a lump sum land premium or

through other modes. Colliers International does not infer that industrial land and buildings in these cities may be acquired through the same schemes.



CITYLOCAL

CURRENCY

IN LOCAL CURRENCY AS OFMARCH 2012

IN US$ AS OF MARCH 2012

BASIS OF LAND, CAPITAL VALUESAND MONTHLY GROSS RENTS

(LOCAL MARKET NORM)

LANDVALUE2

(PSF)

CAPITALVALUE3(PSF)


LANDVALUE2(PSF)

CAPITALVALUE3(PSF)


LANDTENURE(YEARS)

PLOTRATIO

LANDAREA

(SQ FT)

GROSSFLOORAREA

(SQ FT)

Auckland

Former AucklandCity

NZ . . . . . . Freehold . , ,

Manukau NZ . . . . . . Freehold . , ,

North Shore NZ . . . . . . Freehold . , ,

Beijing

Tianzhu CNY . . . . . . . , ,

Tongzhou CNY . . . . . . . , ,

Greater Tokyo

Chiba-Urayasu JPY - - - - - - Freehold . , ,

Kawasaki - HigashiOgishima

JPY ,. ,. . . . . Freehold . ,, ,,

Tokyo - Ariake JPY ,. ,. . . . . Freehold . , ,

Tokyo - Heiwajima JPY ,. ,. . . . . Freehold . ,, ,,

Tokyo - Shinsuna JPY ,. ,. . . . . Freehold . , ,

Yokohama -Daikokufuto

JPY ,. ,. . . . . Freehold . , ,

GuangzhouGETDD CNY . . . . . . . , ,

Hong Kong

Ramp Access HK - ,. . - . . N.A N.A N.A N.A

Cargo Lift Access HK - ,. . - . . N.A N.A N.A N.A

Jakarta

Bekasi Rp ,. ,. - . . - . , ,

Melbourne

East & South East A . . . . . . Freehold . , ,

Fringe A . . . . . . Freehold . , ,

North A . . . . . . Freehold . , ,

West A . . . . . . Freehold . , ,

New Delhi

Delhi - NH Rs ,. - . . - . . , ,

Delhi - NH Rs ,. ,. . . . . . , ,

Delhi - NH Rs ,. ,. . . . . . , ,

Delhi - East Rs ,. ,. . . . . Freehold . , ,

Delhi - North Rs ,. ,. . . . . Freehold . , ,

Delhi - South Rs ,. ,. . . . . Freehold . , ,

Delhi - West Rs ,. ,. . . . . Freehold . , ,

Shanghai

Pudong New Area CNY . . . . . . . , ,

Singapore

East S . . . . . . + . , ,

Sydney

South A . . . . . . Freehold . , ,

Southwest A . . . . . . Freehold . , ,

West A . . . . . . Freehold . , ,

Continued on next page >


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LOCAL MARKET NORM



CITYLOCAL

CURRENCY

IN LOCAL CURRENCY AS OFMARCH 2012

IN US$ AS OF MARCH 2012BASIS OF LAND, CAPITAL VALUESAND MONTHLY GROSS RENTS

(LOCAL MARKET NORM)

L

Documents

Asia Pacific Industrial 2012 H1