Real Capital Analytics - Global Capital Trends Mid-Year Review

$0

$20

$40

$60

$80

$100

$120

$140

1'08

2 3 4 1'09

2 3 4 1'10

2 3 4 1'11

2

Americas

AsiaPac

EMEA

Global transaction volume in the second quarter totalled $165.3b representing a 36% increase from a year earlier and bringing the total for 2011 at mid-year to approxi-mately $350.0b. � e period was marked by potential national defaults in Europe, natural disasters in Asia Pac and increas-ing worries about a double-dip recession across the globe. � erefore, property in-vestment trends are far more dynamic than the headline � gures imply. � e US mar-kets are roaring back to life this year with property sales soaring 147% year-over-year in Q2. Trading in EMEA was an anemic 10% gain year-over-year in Q2 on $42.5b in transactions, despite robust increases in Germany and Scandinavia. Japan saw volumes fall 42% in Q2 while transactions moderated in China and Hong Kong but surged in Singapore and Australia.

Billion

IN THIS ISSUE:• Overview: Investors Stay the Course

H1 volume hits $350 billion . . . . . . . . . . 1-4• EMEA: Investors Focus on Stable Economies . 5-9

Investment Momentum Linked To Risk . . . . 7Market Table . . . . . . . . . . . . . . . . . . 9

• Asia Pacifi c: China’s Land Sales Drop as CRE Volume Grows . . . . . . . . . . . . . . . . . 10-14Cross-border Buyers Move Australia . . . . .12Market Table . . . . . . . . . . . . . . . . . .14

• Americas: US Momentum Leads Growth . .15-19Pretend and Extend Withers in Q2Brazil: A Growing Institutional Market . . . .17Market Table . . . . . . . . . . . . . . . . . .19

• Changing Landscape for Agents . . . . . . . . . 20

• Peak-Era Buyers: Where Are Th ey Now? . . . . 21

• Selected Investment Sales Transactions . . . . 22

• Notes & Defi nitions . . . . . . . . . . . . . . . . 23

AUGUST 2011 - REPORT CONTENTS

CROSS-BORDER ACQUISITIONS AND DISPOSITIONS IN AUSTRALIA

(2,000)

(1,000)

0

1,000

2,000

3,000

4,000

5,000

'08 '09 '10 '11

acq disp netMillion

Mid-Year Review: US, Germany, Singapore Lead in Dynamic Marketplace

QUARTERLY TRANSACTION VOLUME

1©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater.

A U G U S T 2 011

M I D - Y E A R R E V I E W

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

$0

$10

$20

$30

$40

$50

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

$0

$10

$20

$30

$40

$50

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

$0

$10

$20

$30

$40

$50

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

-100%

-50%

0%

50%

100%

150%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

-100%

-50%

0%

50%

100%

150%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

-100%

-50%

0%

50%

100%

150%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

Average yields have continued to trend slightly downward in the Americas and EMEA. In the Americas, the

wave of capital entering the market this year is causing downward pressure, but that is being partially o� set by increased sales of troubled assets in the US. In EMEA, stable cap rates still re� ect strong German and Nordic volume combined with select UK trophy transactions. Higher yields in Asia Pac partly re� ect rebounding activity in Australia, where property o� ers among the highest average cap rates globally, as well as the severe slide in activity in traditionally lower-yielding Japan.

Pricing trends in the world’s global � nan-cial capitals provide more insight. Yields in these markets were relatively unchanged in Q2 and have moved little since the be-ginning of the year. � ese markets already

had very low cap rates, and without greater economic certainty, investors are hesitant about becoming even more bullish. In addition, with yields so low in these major markets, secondary cities and other higher yield-ing alternatives are more attractive. � e surge of cross-border capital into Australia well illustrates this trend.

TRANSACTION SUMMARYQ2'11

Vol ($B)YOY Chg

H1’11Vol ($B)

YOY Chg

Offi ce $41.2 29% $81.9 36%

Retail 32.7 97% 60.6 61%

Industrial 11.6 26% 22.3 41%

All Commercial $85.5 48% $164.8 45%

Hotel 8.8 80% 16.7 66%

Apartment 20.4 38% 33.2 37%

Land 50.6 14% 134.6 11%

Total $165.3 36% $349.3 30%

*Totals may not sum due to rounding

Billion Billion Billion

CAP RATES CAP RATES CAP RATES

TRANSACTION TRANSACTION TRANSACTION

YOY CHANGE IN TRANS VOL YOY CHANGE IN TRANS VOL YOY CHANGE IN TRANS VOL

QUARTERLY TRANSACTION SUMMARY BY ZONEOFFICE, RETAIL AND INDUSTRIAL

ASIA PAC EMEA AMERICAS

PROPERTY ACQUISITION YIELDS IN MAJOR GLOBAL MARKETS

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

'07 '08 '09 '10 '11

NYC/DCHK/SingLondon/Paris


M I D - Y E A R R E V I E WA U G U S T 2 0 1 1

VOLUME BY THEATERALL PROPERTY TYPES

Q2'11Vol ($B)

YOY Chg

H1’11Vol ($B)

YOY Chg

United States $49.0 147% $77.8 124%Canada 4.5 8% 7.8 5%Latin America 2.1 17% 5.6 95%Americas $55.6 115% $91.2 102%Western Europe 28.8 27% 52.8 27%United Kingdom 9.0 -25% 24.3 14%Eastern Europe 3.1 17% 7.6 17%MidEast 0.8 -29% 1.5 -18%Africa 0.9 161% 1.1 -8%EMEA $42.5 10% $87.4 21%East Asia 50.7 21% 133.3 11%Japan 3.6 -42% 15.0 -5%SE Asia 6.6 41% 13.2 92%Australia - NZ 5.7 96% 8.1 24%India/Other 0.6 -71% 1.3 -56%Asia Pacifi c $67.2 17% $170.8 12%

Global* $165.3 36% $349.3 30%*Totals may not sum due to rounding

TRANSACTIONS BY COUNTRYALL PROPERTY TYPES

Q1’11 Q2’11 H1’11

Country Vol ($B)

YOY Chg

Vol ($B)

YOY Chg

Vol ($B)

YOY Chg

1 China $75.7 8% $41.8 21% $117.6 12%

2 United States 28.8 93% 49.0 147% 77.8 124%

3 United Kingdom 15.3 62% 9.0 -25% 24.3 14%

4 Germany 9.3 42% 11.2 65% 20.5 54%

5 Japan 11.4 18% 3.6 -42% 15.0 -5%

6 Singapore 5.4 237% 6.2 68% 11.5 119%

7 Hong Kong 3.5 -29% 6.0 38% 9.5 3%

8 France 3.9 32% 5.3 -20% 9.1 -4%

9 Sweden 2.8 23% 5.1 80% 8.0 55%

10 Canada 3.3 2% 4.5 8% 7.8 5%

11 Australia 2.0 -34% 5.6 102% 7.6 32%

12 Brazil 2.9 399% 1.1 -32% 4.0 85%

13 Taiwan 1.7 -8% 1.3 -41% 3.0 -26%

14 South Korea 1.5 71% 1.4 91% 3.0 80%

15 Italy 1.6 87% 0.8 -9% 2.5 37%

16 Spain 1.3 -31% 1.1 -29% 2.3 -30%

17 Netherlands 1.3 19% 1.0 -5% 2.3 7%

18 Russia 0.2 -91% 1.8 85% 2.0 -34%

19 Poland 1.4 91% 0.5 -22% 1.8 40%

20 Norway 0.4 -33% 1.1 77% 1.5 22%

21 India 0.8 -29% 0.6 -71% 1.3 -56%

22 Finland 0.3 4% 0.8 182% 1.2 91%

23 Belgium 0.4 -9% 0.8 105% 1.2 47%

24 Czech Republic 0.9 279% 0.2 24% 1.2 168%

25 Switzerland 0.5 97% 0.6 280% 1.1 162%

26 Denmark 0.5 38% 0.6 78% 1.1 56%

27 South Africa 0.2 -79% 0.8 1362% 1.0 12%

28 Malaysia 0.6 47% 0.3 -58% 0.9 -23%

29 Israel 0.2 -48% 0.6 -6% 0.8 -22%

30 Ukraine 0.6 446% 0.1 -80% 0.7 40%

31 Chile 0.2 100% 0.6 4453% 0.7 678%

32 Austria 0.6 38% 0.1 -79% 0.7 -19%

33 Turkey 0.6 30% 0.1 94% 0.7 38%

34 New Zealand 0.4 -39% 0.1 -10% 0.5 -33%

35 Hungary 0.4 20% 0.1 27% 0.5 22%

36 UAE 0.5 64% 0.0 -95% 0.5 -36%

37 Romania 0.5 207% 0.0 -100% 0.5 59%

38 Croatia 0.4 - 0.0 -100% 0.4 283%

39 Portugal 0.2 -43% 0.2 -68% 0.4 -57%

40 Thailand 0.3 61% 0.1 -61% 0.4 -10%

All Others 1.4 54% 1.3 69% 2.7 61%

Grand Total $184.0 25% $165.3 36% $349.3 30%

Each global zone combated pressures from within. Sovereign debt fears in EMEA’s peripheral countries and

heavy belt-tightening in the UK restrained growth, but domestic and cross-border investors were active in Germany and the stable Scandinavian economies. While

Russia struggled, Central and Eastern Europe at-tracted yield-seeking in-vestment. In Asia Paci� c, the retail and industrial sectors were a counter-weight to slow o� ce vol-ume and a sharp drop-o� in Q2 land sales in China. In the US, the intense selective focus on major assets in major markets began to spread out, as yield-conscious investors moved into other markets and embraced garden apartments. � e � ow of new distress slowed and, with credit easing and prices � rming, lenders opted more for liquida-tions than restructurings of troubled assets.

Highlighting the choppy and o� en local-ized activity across the global markets, many countries saw quarterly yoy volume trends reverse, in both directions, from Q1 to Q2. Other countries, with the US in the lead, saw strong positive acceleration in growth in Q2. � e US had the highest yoy growth in both Q2 and H1, with its second quarter gain of 147% outpacing its 124% H1 growth. Ger-many and Sweden were the standout gainers in EMEA as France and the UK lost ground. China’s land sales turndown slowed the gi-ant Asia Pac market to just 12% in H1, one-third below its growth for commercial prop-erty only. Australia’s transaction volume moved rapidly positive, pushing the country to a 102% gain. Spectacular Q1 growth in Singapore and Brazil inevitably slowed in Q2, but both countries turned in solid posi-tive improvements for H1.



Blackstone $9,008 CPP Investment Board 3,689 Capital Shopping Ctrs Grp PLC 3,098 China Vanke Co Ltd 3,048 Yunnan Zhonghao Props Co Ltd 2,714 CA Immo 2,402 Tesco Pension Trustees Ltd 2,200 Poly Real Estate Group 2,128 Invesco Real Estate 2,117 Wheelock & Co 2,105 Greentown China Hldgs Ltd 2,099 Cheung Kong (Holdings) Ltd 2,034 CapitaLand Limited 1,929 JP Morgan 1,747 China Overseas L & I Ltd 1,650 Mitsubishi Estate 1,611 China Merchants Group 1,517 Arminius Funds Mgmt 1,457 DekaBank 1,429 Far East Organization 1,423

Centro Properties Group $8,102 Urban Redevelopment Authority 3,356 Housing & Dev Board 2,821 Volksbank AG 2,426 Tesco plc 2,223 Beacon Capital Partners 2,215 Goldman Sachs 1,868 Deutsche Bank 1,782 CITIC Group 1,780 Broadway Partners 1,715 GE Capital 1,653 Aberdeen Property Investors 1,541 Eurocastle 1,544 Bracor Invtos Imobiliarios 1,297 Morgan Stanley 1,336 Equity Residential 1,345 Lone Star Partners 1,230 Unibail-Rodamco 1,242 Carlyle Group 1,097 Lehman Brothers Hldgs Inc 1,108

TOP 20 BUYERS#Vol

($M)

TOP 20 SELLERS #Vol

($M)

TOP 25 PROPERTY SALESType Transaction Location Price

($M)SF(K)/Units

PPSF/PPU (K) Buyer

1 RET The Trafford Centre† Manchester, GBR $2,498 1,900 $1,315 Capital Shopping Ctrs Grp PLC

2 RET Centr0† Oberhausen, DEU 1,913 2,174 880 Canada Pension Plan Investment Board

3 DEV Borrett Road Site, Mid-levels Hong Kong, HKG 1,498 113 13,266 Cheung Kong (Holdings) Ltd

4 OFF 280 Park Avenue† New York, NY 1,100 1,179 941 SL Green JV Vornado

5 RET Northland Shopping Centre† Preston East, AUS 998 994 1,004 Canada Pension Plan Investment Board

6 DEV Shenzhen 2011-K202-0014 Shenzhen, CHN 991 7,509 132 China Merchants Property Dev Co Ltd

7 DEV CITIC City B,C,D blocks (Prt II) Beijing, CHN 929 848 1,095 Financial Street Holding Co Ltd

8 OFF Otemachi PAL Bldg Tokyo, JPN 877 301 2,916 Mitsui Fudosan Co Ltd JV Mitsui & Co

9 OFF Deutsche Bank Twin Towers Frankfurt, DEU 857 807 1,062 DWS Investments Gmbh

10 DEV Changsha 2011-001 Changsha, CHN 855 800 1,068 Wharf Holdings

11 DEV Punggol Central & Punggol Walk Singapore, SGP 799 323 2,475 Frasers Centrepoint Ltd‡

12 DEV Boon Lay Way Singapore, SGP 791 194 4,085 CapitaMalls Asia JV HSBC Bank

13 OFF Chiswick Park London, GBR 781 1,900 411 Blackstone

14 OFF Helmsley Building† New York, NY 763 1,213 629 Invesco Real Estate

15 OFF Capital Square Singapore, SGP 700 387 1,810 Alpha Investment Partners (AIP)‡

16 OFF The Fifth Square† Beijing, CHN 682 1,009 677 China Minmetals Corporation

17 DEV Nanjing 2011G07 Nanjing, CHN 681 3,667 186 Shimao Property Holdings Ltd‡

18 DEV Toyosu District Site Tokyo, JPN 680 1,132 601 Tokyo Metropolitan Government

19 OFF The Centre Shanghai, CHN 666 963 692 China Pacifi c Insurance (Group) Co Ltd

20 RET La Rinascente Milan, ITA 652 566 1,151 First Atlantic Real Estate SGR

21 OFF Market Square East & West Washington, DC 615 680 905 Wells Real Estate Funds, Inc

22 HTL Ritz Carlton HTL Moscow, RUS 609 334 1,824 Verny Capital

23 DEV CITIC City B,C,D blocks Beijing, CHN 607 848 716 Financial Street Holding Co Ltd

24 DEV Yiwu 2011017 Yiwu, CHN 594 883 672 Guangsha Construction

25 IND Interlink† Hong Kong, HKG 589 2,400 245 Canada Pension Plan Investment Board

TOP 15 PORTFOLIO SALESType Transaction Location Price

($M)SF(K)/Units

PPSF/PPU (K) Buyer

1 RET Centro United States Portfolio Multiple, USA $9,150 99,051 $92 Blackstone

2 RET Tesco RET Portfolio 11 Multiple, GBR 2,200 3,500 629 Tesco Pension Trustees Limited

3 MIX Europolis MIX Eastern Euro Ptfl 11 Europe 2,009 13,011 154 CA Immobilien Anlagen AG

4 OFF Eurocastle Mars Fixed 1 Ptfl 2011† Berlin, DEU 1,457 4,989 292 Arminius Funds Management

5 IND Bracor IND Portfolio 11 Multiple, BRA 1,322 10,764 123 Prosperitas

6 RET Metro RET Portfolio 11 Multiple, DEU 1,215 9,688 125 Cerberus Capital Management

7 OFF Kokusai Shin-Akasaka Towers Tokyo, JPN 1,066 863 1,236 Mitsubishi Estate Company, Limited

8 DEV Greentown China Hldgs Gov't Land Ptfl Taizhou, CHN 1,011 7,386 137 Greentown China Holdings Limited

9 DEV Kunming Guandu KC2010-76 Kunming, CHN 987 22,158 45 Yunnan Zhonghao Properties Co Ltd

10 APT Dombron Intressenter Ptfl † Multiple, SWE 948 8,281 115 AMF Fastigheter

11 MIX Melrose Arch† Melrose North, ZAF 686 1,808 332 Amdec Property Development

12 OFF Mapletree Com Trust Ptfl 2011 Singapore, SGP 625 733 853 Mapletree Commercial Trust

13 HTL MSREF HTL Portfolio 11 Multiple, Europe 621 2,537 245 Toufi c Aboukhater

14 MIX Capital and Counties Mix Ptfl Multiple, CA 600 2,106 253 Equity One‡

15 IND World Market Center Ptfl * Las Vegas, NV 600 4,832 124 Bain Capital‡

Global: Top Deals and Players in H1’11

# Full credit to each JV partner, 100% valuation given *Estimated † Partial Interest ‡ JV



$0

$10

$20

$30

$40

$50

$60

$70

1'08

2 3 4 1'09

2 3 4 1'10

2 3 4 1'11

2

CommercialApartmentHotelLand

Following six consecutive quarters of strong year-over-year gains, EMEA transaction volumes stalled in Q2.

� e slowdown, to $42.5b of signi� cant property sales, was � at against a year ear-lier and re� ects widening divergence in in-vestor outlook across core and peripheral European markets. Pricing was also gener-ally � at in Q2 across EMEA and yields on acquisitions have changed little since the beginning of the year.

Among property types, retail was the big-gest gainer in H1’11 with volume up 41% boosted by billion-dollar transactions such as Tra� ord Centre in Manchester, Centr0 in

Oberhausen and a major Tesco portfo-lio in the UK. � e of-� ce and hotel sectors also recorded healthy gains in transaction volume while indus-trial and apartment volume fell yoy.

Germany and the Nordic countries have emerged as fa-

voured investment targets in the current market and all posted robust gains in trans-action activity in each quarter this year. � is helped o� set signi� cant Q2’11 yoy declines in the UK and France of 25% and 20%, respectively, in addition to continued weak performance in the peripheral mar-kets such as Greece, Portugal, Spain and Ireland. Investors are � ocking to Germany and Scandinavia which currently o� er the highest risk adjusted yields (see page 7). Germany’s Q2’11 yoy growth of 65% was well ahead of its H1’11 gain of 54% (and the UK’s 14%) as domestic and cross-border demand broadened. Sweden, the hottest Nordic market, saw yoy growth of 55% for H1’11. With the strong exception of Russia’s 34% yoy decline, Eastern European activ-ity remained stable, with core properties in key markets attracting increased attention from yield-seeking investors. In the Middle East, both Israel and the United Arab Emir-ates saw a steep fallo� in activity in H1.

TRANSACTION SUMMARY Q2'11

Vol ($B)YOY Chg

H1’11Vol ($B)

YOY Chg

Offi ce $18.0 40% $33.7 31%Retail 12.1 26% 29.2 41%Industrial 2.8 -35% 7.1 -1%All Commercial 32.9 23% 70.0 31%Hotel 2.6 47% 5.6 39%Apartment 5.3 -33% 8.1 -25%Land 1.8 -20% 3.7 -11%Total $42.5 10% $87.4 21%


Billion

RUS

FIN

AUT

ITA

MCO

ESP

SWE

NOR

DEU

FRA

PRT

HUNHRV ROU

BGR

TUR

DNK

POL

UKRCZE

NLD

BEL

CHE

ISR

IND

CHN

MYS

TWN

JPNKOR

AUS

NZL

GBR

USA

CAN

MEX

ARG

BRA

SGP

HKG

CHL

ARE

SVK

THA

ZAF

QAT

IRL

SAU

PER

MNE

VNM

GRC

SRB

50–100%0–20% >100%20–50%-50–0%<-50%INCREASEDECREASE

PERCENT CHANGE IN TRANSACTION VOLUME(H1’10 VS H1’11)(H1’10 VS H1’11)

QUARTERLY TRANSACTION VOLUMEBY PROPERTY TYPE

EMEA: Quarter in Review Summary



5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

$0

$5

$10

$15

$20

$25

$30

$35

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

$0

$5

$10

$15

$20

$25

$30

$35

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

$0

$5

$10

$15

$20

$25

$30

$35

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

-100%

-50%

0%

50%

100%

150%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

-100%

-50%

0%

50%

100%

150%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

-100%

-50%

0%

50%

100%

150%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

Among markets, positive yoy growth has slowed but been maintained in London and Paris indicating the

investment trends in secondary markets in the UK and France continue to under-perform. However, � ve German metros now occupy the top markets list, with all showing positive investment growth.

Cap rates on commercial properties in Western Europe and the UK are closely aligned averaging between 6.6% and 6.7%. Average cap rates in Eastern Europe record a decline in Q2, but are skewed by a higher quality of properties trading as investors seek to minimize risk. Recent prices and cap rates for new or newly ren-

ovated o� ce buildings in select European markets illustrate the premium prices commanded by the highest quality properties.

RECENTLY BUILT OR RENOVATED OFFICE BUILDING SALES IN Q2

Property City Price ($M)

PPSF/ PPU ($K) Cap Rate Built/

Renov

Selmer Building Oslo $166.7 1,006 4.5% 2008

Origami Paris 124.0 2,421 4.7% r2010

Guim'arts Brussels 46.7 620 5.4% r2010

DB Twin Towers Frankfurt 857.4 1,062 5.5% r2010

1 Finsbury Circus London 236.5 1,183 5.5% r2009


CAP RATES* CAP RATES* CAP RATES*



QUARTERLY TRANSACTION SUMMARY BY THEATEROFFICE, RETAIL AND INDUSTRIAL

UNITED KINGDOM WESTERN EUROPE EASTERN EUROPE

*Two quarter rolling average





Europe: Investment Momentum Linked To Risk

0 100 200 300 400

0% 2% 4% 6% 8%

Spain

Italy

France

UK

Germany

Sweden

Cap Rate Gov't Bond Spread

Looking at investment volume increases across European markets and comparing spreads between cap rates and relevant

government bonds, it is clear that the momen-tum of real estate investment in Europe is � ow-ing towards the highest relative yields in the safest markets.

� e upper right quadrant of the momentum graph highlights the focus of capital on Ger-many and Sweden in response to the attractive cap rate spread over government bonds through Q2’11. Like Germany and the Nordics, the other countries in this quadrant display strong trans-

action volume growth both on a six-month and quarterly basis. � ey include a higher propor-tion of non-eurozone countries with more stable economic conditions. Countries plotted in the lower le� quadrant, notably Spain and Portugal, are experiencing negative transaction momen-tum. � e UK on a half-year basis yoy escapes this grouping, but its lower Q2’11 volume yoy re� ects a weakening market. Among the outli-ers, Ireland saw already low volume falter in Q2’11, while Russia’s good Q2 re� ects a major luxury Moscow hotel acquired by Kazakhstan backed private equity.

-40%

-20%

-80%

-60%

0%

20%

40%

60%

80%

100%

-40%-60% -20% 0% 20% 40% 60% 80% 100% 120%

Czech Republic

Norway

Hungary

Italy

Romania

Denmark

Germany

Turkey

Sweden

Switzerland

Finland

Ireland

Spain

Portugal

*Greece

Russia

Belgium

Austria

Poland

United Kingdom

Netherlands

Ukraine

France

Croatia

CAP RATE SPREADS TO SOVEREIGN BONDS

*No significant transactions recorded for Greece over the last 12 months. Based on percent change in Euros

INVESTMENT MOMENTUM BY COUNTRY ALL PROPERTY TYPES

H1’11 vs H1’10 % Chg

Q2’1

1 vs

Q2’

10 %

Chg

Capital Shopping Ctrs Grp PLC $2,498 CA Immo 2,402 Tesco Pension Trustees Limited 2,200 CPP Investment Board 1,913 Arminius Funds Management 1,457 Cerberus Capital Management 1,215 DekaBank 1,179 Deutsche Bank 1,160 AMF 948 AEW Capital Management 788 Invesco Real Estate 786 Blackstone 781 Signa Holding 721 Corio NV 716 Amdec Property Development 686 First Atlantic Real Estate SGR 652 Prudential PLC 640 Legal & General Property 631 Real I.S. AG 612 Verny Capital 609

Peel Group $2,498 Volksbank AG 2,426 Tesco plc 2,223 Stadium Group 1,913 Deutsche Bank 1,782 Aberdeen Property Investors 1,541 Eurocastle 1,544 Unibail-Rodamco 1,242 Beacon Capital Partners 1,043 Fourth Swedish Nat'l Pension Fund 948 Morgan Stanley 922 Pirelli & C. Real Estate SpA 804 ECE Projektmanagement 817 Schroders plc 781 Stanhope Plc 781 Kuwait Investment Authority 741 Highstreet Holding 760 GE Capital 734 Hermes 678 Investitori Associati 652


($M)SF(K)/Units

PPSF/PPU (K) Buyer

1 RET The Trafford Centre† Manchester, GBR $2,498 1,900 $1,315 Capital Shopping Ctrs Grp PLC (CSC)

2 RET Centr0† Oberhausen, DEU 1,913 2,174 880 Canada Pension Plan Investment Board

3 OFF Deutsche Bank Twin Towers Frankfurt, DEU 857 807 1,062 DWS Investments Gmbh

4 OFF Chiswick Park London, GBR 781 1,900 411 Blackstone

5 RET La Rinascente Milan, ITA 652 566 1,151 First Atlantic Real Estate SGR

6 HTL Ritz Carlton HTL Moscow, RUS 609 334 1,824 Verny Capital

7 RET Boulevard Berlin Berlin, DEU 533 753 707 Corio NV

8 OFF Rolls Building London, GBR 492 262 1,880 Legal & General Property

9 OFF MidCity Place† London, GBR 468 352 1,329 Oxford Properties Group

10 OFF Aviva Tower London, GBR 439 315 1,393 Kuok Khoon Hong & Martua Sitorus

11 OFF River Court London, GBR 437 425 1,029 Chinese Estates Group

12 OFF 10 Aldermanbury London, GBR 434 312 1,393 JP Morgan

13 OFF River Ouest Bezons, FRA 400 689 581 ING RE Invt Mgmt France OBO Predica SA‡

14 OFF 20 Gresham St London, GBR 374 237 1,580 AXA RE Investments Managers (REIM)

15 OFF Park House London, GBR 366 310 1,180 Qatar National Bank

16 HTL Paris Marriott Champs-Elysees Paris, FRA 362 192 1,887 Abu Dhabi Investment Authority

17 RET Spitalerstrasse 22-26† Hamburg, DEU 361 55 6,560 Signa Holding

18 HTL Le Meridien Montparnasse Paris, FRA 350 953 367 Unibail-Rodamco

19 OFF Belgrave House† London, GBR 347 280 1,239 TIAA-CREF (fund)

20 RET Jubilee & West End Houses London, GBR 342 121 2,834 Pontegadea Inversiones SL

21 RET Schloss Arkaden Braunschweig, DEU 335 597 561 Deka Immobilien Investment GmbH

22 OFF Defense Plaza Puteaux, FRA 325 335 969 Northwood Investors LLC

23 RET Eden Shopping Centre† High Wycombe, GBR 313 850 368 Aldersgate Investments

24 RET Marmara Park† Istanbul, TUR 302 1,076 281 DWS Investments Gmbh

25 RET Wankdorf Shopping Centre Bern, CHE 300 678 442 UBS JV Swissreal Investments Ltd


($M)SF(K)/Units

PPSF/PPU (K) Buyer

1 RET Tesco RET Portfolio 11 Multiple, GBR $2,200 $3,500 $629 Tesco Pension Trustees Limited

2 MIX Europolis MIX Eastern Euro Ptfl 11 Multiple, Europe 2,009 13,011 154 CA Immobilien Anlagen AG

3 OFF Eurocastle Mars Fixed 1 Ptfl 2011† Berlin, DEU 1,457 4,989 292 Arminius Funds Management

4 RET Metro RET Portfolio 11 Multiple, DEU 1,215 9,688 125 Cerberus Capital Management

5 APT Dombron Intressenter ptfl † Sweden other 948 8,281 115 AMF Fastigheter

6 MIX Melrose Arch† Melrose North, ZAF 686 1,808 332 Amdec Property Development

7 HTL MSREF HTL Portfolio 11 Multiple, Europe 621 2,537 245 Toufi c Aboukhater

8 MIX NR Nordic & Russia Props Ltd Mix Ptfl 11 Multiple, Europe 542 8,872 61 Kungsleden AB

9 APT Genesis Housing APT Ptfl 11† London, GBR 464 1,630 284 Grainger plc

10 MIX ECE MIX portfolio 2011† Hamburg, DEU 435 665 655 Real I.S. AG

11 RET Rubin Moscow RET Ptfl 2011 Moscow, RUS 428 1,017 421 Yuri and Alexei Hotin

12 IND VGP IND Portfolio 11† Prague, CZE 414 4,629 89 AEW Europe JV Tristan Capital Partners

13 RET Unibail RET Portfolio 11 Multiple, SWE 379 1,002 379 Grosvenor‡

14 RET Karstadt Highstreet Ptfl 2011 Multiple, DEU 370 524 706 Quantum Immobilien AG

15 RET Highstreet Karstadt Ptfl Munich, DEU 361 570 632 Signa Holding‡

TOP 20 BUYERS#Vol

($M)

TOP 20 SELLERS #Vol

($M)

EMEA: Top Deals and Players in H1’11




APAR

TMEN

TIN

DU

STR

IAL

OFF

ICE

RET

AIL

HO

TEL

LAN

D S

ITE

GR

AND

TO

TAL*

YOY

CH

ANG

E

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol

Prop

s

EMEAEurope

Aust

riaAu

stria

, all

$72

2$7

22

$258

3$3

165

$717

12-1

9%-4

5%Be

lgiu

mBe

lgiu

m, a

ll21

192

391

420

583

882

1,173

2947

%16

%Bu

lgar

iaBu

lgar

ia, a

ll62

362

3-5

2%-2

5%Cz

ech

Repu

blic

Czec

h Re

publ

ic, a

ll41

47

445

830

45

1,163

2016

8%25

%

Denm

ark

Cope

nhag

en43

345

231

88

347

672

182

520

81%

100%

Denm

ark o

ther

181

654

151

29

124

38

7%10

0%Ba

ltic S

tate

sBa

ltic S

tate

s25

129

97

171

341

999

4%35

0%

Finl

and

Hels

inki

604

282

552

1015

23

792

1922

6%58

%Fi

nlan

d ot

her

293

845

859

8611

101

338

431

3%10

7%

Fran

cePa

ris18

34

237

74,

699

8337

842

1,08

041

6,57

817

741

%51

%Fr

ance

oth

er28

68

282

2851

917

1,26

023

196

52,

543

81-4

7%-4

9%

Germ

any

Berli

n-Br

ande

nbur

g98

939

271

1,81

336

886

1215

23

200

44,

068

9553

%-1

3%Ha

mbu

rg34

124

216

81,

413

241,

056

652

212

54

3,20

368

309%

209%

Mun

ich

286

1817

83

321

950

18

363

119

51,

441

4610

%59

%Fr

ankf

urt/

Rhin

e-M

ain

794

801

1,29

48

298

822

15

297

62,

269

3217

5%-1

4%St

uttg

art

111

382

106

414

24

211

100

142

013

23%

-7%

Rhin

e-Ru

hr34

527

483

704

142,

348

2727

120

47

3,67

679

12%

-66%

Saxo

n Tr

iang

le22

710

355

145

341

37

221

131

775

116

11%

625%

Germ

any o

ther

564

216

492

315

113,

293

138

228

520

78

4,65

738

037

%22

2%Gr

eece

Gree

ce, a

ll-1

00%

-100

%Hu

ngar

yHu

ngar

y, al

l12

82

169

310

01

691

352

501

922

%12

5%Ire

land

Irela

nd,a

ll34

64

346

411

1%-4

3%

Italy

Rom

e26

36

661

961

425

8-4

6%0%

Italy

oth

er13

190

017

1,02

97

872

2,02

927

102%

4%N

ethe

rland

sN

ethe

rland

s, al

l27

429

434

191,

035

3248

316

412

302

2,29

710

07%

-3%

Nor

way

Nor

way

, all

282

121

695

014

403

610

11,

512

2922

%0%

Pola

ndPo

land

, all

220

889

711

543

642

211

35

1,81

532

40%

28%

Port

ugal

Port

ugal

, all

403

553

591

703

150

437

314

-57%

-60%

Rom

ania

Rom

ania

, all

461

201

318

219

52

459

859

%-2

7%

Russ

iaM

osco

w16

52

331

362

83

639

21,

763

10-2

0%-5

8%Ru

ssia

oth

er20

152

218

115

02

211

261

7-6

9%-9

1%

Spai

nM

adrid

281

211

170

332

523

718

95

371

770

248

-40%

700%

Spai

n ot

her

183

818

74

570

248

443

1018

75

1,56

927

5-2

4%-4

0%

Swed

enSt

ockh

olm

771

4528

822

716

1769

67

118

218

22

2,76

995

20%

16%

Swed

en o

ther

1,96

313

41,

042

691,

504

119

581

2647

562

35,

198

356

82%

88%

Switz

erla

ndSw

itzer

land

, all

189

348

35

326

294

21,

092

1216

2%20

%Tu

rkey

Turk

ey, a

ll13

113

23

462

239

224

167

09

38%

-25%

Unite

d Ki

ngdo

m

Lond

on M

etro

958

1722

716

9,43

410

81,

338

2129

113

196

512

,444

180

19%

-8%

Man

ches

ter M

etro

392

894

2,57

24

245

42,

945

1426

3%-4

6%Sc

otla

nd16

64

603

364

1016

160

618

-50%

-67%

UK o

ther

125

41,

205

531,

458

485,

159

9331

99

874

8,35

321

1-7

%-5

6%Uk

rain

eUk

rain

e al

l49

91

251

200

372

45

40%

-38%

Euro

pe o

ther

Euro

pe11

23

295

110

22

141

523

752

%-3

6%To

tal

$7,7

6369

4$7

,043

303

$33,

270

681

$28,

517

1,01

6$5

,459

143

$2,7

2379

$84,

775

2,91

622

%2%

Mid-East

Isra

elIs

rael

, all

306

262

317

73

256

580

113

-22%

-32%

UAE

Duba

i48

36

483

6-3

6%-6

7%UA

E, a

ll16

52

165

2-

-M

id-E

ast o

ther

Saud

i Ara

bia,

all

671

671

-16%

0%To

tal

$306

2$6

23

$177

3$9

7214

$1,5

1622

-18%

-42%

Afr

ica

Afric

a Af

rica,

all

891

319

354

66

983

201

1,07

114

-6%

0%To

tal

$89

1$3

193

$546

6$9

83

$20

1$1

,071

14-6

%0%

EMEA

: Tra

nsac

tions

by

Mar

ket i

n H

1’11

MID

-YE

AR

RE

VIE

WA

UG

US

T 2

01

1

9©

2011

Rea

l Cap

ital A

naly

tics,

Inc.

All

right

s re

serv

ed. D

ata

belie

ved

to b

e ac

cura

te b

ut n

ot g

uara

ntee

d; s

ubje

ct to

futu

re re

visi

on; b

ased

on

prop

ertie

s &

por

tfol

ios

$10m

and

gre

ater

.

Sales of signi� cant properties in Asia Paci� c totaled $67.2b in Q2’11, bringing the total for the � rst half

of 2011 to $170.8b. While the region con-tinues to show solid, steady growth in commercial property investment, some signi� cant changes were noted in Q2 as investment surged in Australia and plum-meted in Japan. Hong Kong recovered from a relatively poor Q1 with a stronger Q2 to be � at at the mid-year point while Singapore’s 119% increase in transactions in H1 topped every major economy glob-ally except the US.

Also noteworthy, cross-border inves-tors were part of the surge in transactions

in Australia and Singapore, and the buyers included a healthy mix of Eu-ropean and North American invest-ment � rms which have been relatively quiet since 2007.

South Korea also posted strong results in each quarter this year and its 80% in-

crease in H1 was the second highest in Asia. � e only countries in Asia Paci� c where in-vestment momentum appears waning and volume fell in both quarters this year were India, Taiwan and New Zealand.

Across Asia Paci� c, growth accelerated in the second quarter in every property type save o� ce, which is largely due to curtailed investment in Japan. In China, sales of o� ce and retail properties nearly doubled in H1’11 while sales of develop-able land moderated in Q2 as China’s long-running e� orts to calm exuber-ant sales appear to be bearing fruit. In addition, transactions in China’s over-heated primary markets dropped as ac-tivity moved to secondary and tertiary cities. Land rights in China accounted for $38.7b in Q2, up slightly on a year-over-year basis, but half of levels recorded in the two most recent quarters.


Vol ($B)YOY Chg

H1’11Vol ($B)

YOY Chg

Offi ce $8.5 -8% $22.2 14%Retail 5.1 75% 9.8 15%Industrial 2.9 71% 4.9 52%All Commercial 16.5 19% 36.9 18%Hotel 1.6 13% 2.5 -11%Apartment 2.0 46% 4.0 25%Land 47.2 15% 127.4 11%Total $67.2 17% $170.8 12%


$0

$20

$40

$60

$80

$100

$120

1'08

2 3 4 1'09

2 3 4 1'10

2 3 4 1'11

2


Billion

RUS

FIN

AUT

ITA

MCO

ESP

SWE

NOR

DEU

FRA

PRT

HUNHRV ROU

BGR

TUR

DNK

POL

UKRCZE

NLD

BEL

CHE

ISR

IND

CHN

MYS

TWN

JPNKOR

AUS

NZL

GBR

USA

CAN

MEX

ARG

BRA

SGP

HKG

CHL

ARE

SVK

THA

ZAF

QAT

IRL

SAU

PER

MNE

VNM

GRC

SRB




Asia Pacifi c: Quarter in Review Summary



3.5%

4.5%

5.5%

6.5%

7.5%

8.5%

9.5%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

3.5%

4.5%

5.5%

6.5%

7.5%

8.5%

9.5%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

3.5%

4.5%

5.5%

6.5%

7.5%

8.5%

9.5%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

$0

$5

$10

$15

$20

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

$0

$5

$10

$15

$20

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

$0

$5

$10

$15

$20

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

-100%

-50%

0%

50%

100%

150%

200%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

-100%

-50%

0%

50%

100%

150%

200%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

-100%

-50%

0%

50%

100%

150%

200%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

At the same time, land-hungry inves-tors have poured capital into Singapore and Hong Kong, especially as Hong Kong authorities greatly expanded available de-velopment sites in Q2, a policy they are ex-pected to continue into Q3 as over $1.7b of sites were sold just in July.

Within Asia Paci� c, the di� erences in yields are signi� cant. Yields in Hong Kong, now averaging slight-

ly above 3.0% are by far the lowest in Asia and throughout the world. Stunningly, 36 signi� cant assets traded in Hong Kong in H1 at a 3.5% yield or lower, mostly strata retail units. Average cap rates in Asia (ex-Japan), displayed an uptick in Q2, but mainly due to an increasing number of transactions recorded in markets such as South Korea and Taiwan. Meanwhile,

Australia is o� ering some of the highest yields, per-haps explaining the recent surge in acquisitions there. A summary of select o� ce sales of recently construct-ed or renovated properties highlights the sharp dif-ferences in cap rates available in major and secondary markets throughout AsiaPac.


RECENTLY BUILT OR RENOVATED OFFICE BUILDING SALES IN Q2

Property City Price ($M)

PPSF/ PPU ($K) Cap Rate Built/

Renov

Arena Tower Yokohama $117.0 605 5.6% 2008

SA Water House Adelaide 98.5 587 7.6% r2010

Akihabara Business Center Tokyo 62.3 1,359 4.8% 2009

BAML HarbourFront Singapore 246.6 1,139 4.3% 2008

Wood Group House Perth 33.2 668 9.3% 2011

CAP RATES* CAP RATES CAP RATES




ASIA - EX JAPAN JAPAN AUSTRALIA - NZ

*Q4'10 excludes several industrial sales at high cap rates



$0

$2

$4

$6

$8

$10

$12

$14

$0

$5

$10

$15

$20

$25

$30

1'08

2 3 4 1'09

2 3 4 1'10

2 3 4 1'11

2

Rolling 12 months totalQuarterly Vol

(2,000)

(1,000)

0

1,000

2,000

3,000

4,000

5,000

'08 '09 '10 '11

acqdispnet

Australia’s property markets zoomed back into recovery mode in Q2 af-ter a steep retreat the prior quarter,

rising 127% yoy to $4.5b in commercial property sales alone. Australia’s tradition-ally higher yields—averaging over 8.3% in Q2—have drawn cross-border investment at a phenomenal clip, accounting for 42% of Australia’s total investment volume in Q2. � e capital originated with relative uniformity from each of the global zones.

Net cross-border acquisitions so far this year have already outpaced the combined total for 2009 and 2010. � e 2011 tally does not yet include Blackstone’s pending $764m acquisition of all the assets of Valad Properties, likely to close in mid-August. � e deal illustrates one source of assets that is contributing to the rising percent-age of foreign investment: Australian listed companies have been net sellers this year, with major dispositions by some of the most active companies, including Stock-land, Mirvac and Lend Lease. In contrast, dispositions by foreign owners account for less than $500m in volume, against nearly $4.0b in cross-border acquisitions.

Melbourne has captured over 50% of cross-border and overall investment, in-cluding the largest single-asset transaction so far this year. CPPIB from Canada, ac-quired a 50% interest in Northland Shop-ping Centre for nearly $1.0b, and Brook-� eld O� ce Properties was also an active investor. Other large deals include a $219m acquisition of a mixed-use complex by La-Salle and the purchase in Sydney by K-RE-IT of a 50% stake in an o� ce development project for $330m.

Singaporean investors have also been very active, representing a sizeable Asian investment contingent mainly in Victoria, Queensland, and New South Wales. � ese include the aforementioned K-REIT trans-action as well as the acquisition by GIC of multiple industrial assets including a large portfolio from Australand. Even European capital has been making the long swim to Australia, with Swiss, British, and German investors joining the value hunt.

ORIGIN OF CROSS-BORDER INVESTORS IN AUSTRALIA*

EMEA29% Americas

39%

AsiaPac32%

* Data based on past 12 months

CROSS-BORDER ACQUISITIONS AND DISPOSITIONS IN AUSTRALIA

AUSTRALIA TRANSACTION VOLUMEOFFICE, RETAIL AND INDUSTRIAL

Billion

Quar

terly

Vol

Rolli

ng 1

2-m

onth

s

Australia Rebounds on Cross-Border Buying

See all the details on these deals and keep up with this evolving trend using RCACross-border Capital Tracker at www.rcanalytics.com



China Vanke Co Ltd $3,048 Yunnan Zhonghao Props 2,714 Poly Real Estate Group 2,128 Wheelock & Co 2,105 Greentown China Hldgs Ltd 2,099 Cheung Kong (Holdings) Ltd 2,034 CapitaLand Limited 1,794 China Overseas L & I Ltd 1,650 CPP Investment Board 1,587 Financial Street Hldg Co Ltd 1,536 China Merchants Group 1,517 Far East Organization 1,423 SOHO China 1,350 Shimao Group 1,286 Farglory Land Dev Co., Ltd. 1,219 HSBC Holdings 1,197 Mitsubishi Estate 1,174 Keppel Land Limited 1,146 Sumitomo 1,133 Mitsui Fudosan 1,109

Urban Redev Authority $3,356 Housing & Dev Board 2,821 CITIC Group 1,780 Lone Star Partners 1,230 Promise Co Ltd 877 Mori Trust Holdings 762 Munich Re 715 ERGO Group 706 Wheelock & Co 703 Harvest Capital Partners 700 Tokyo Gas 700 JTC Corporation 680 Asia Pacifi c Land Limited 666 DE Shaw Group 666 Urban Renaissance Agency 653 Mitsui Fudosan 635 CapitaLand Limited 625 Mapletree 612 Goodman Group 589 Stockland Trust Group 566


($M)SF(K)/Units

PPSF/PPU (K) Buyer

1 DEV Borrett Road Site, Mid-levels Hong Kong, HKG $1,498 113 $13,266 Cheung Kong (Holdings) Ltd

2 RET Northland Shopping Centre Preston East, AUS 998 994 1,004 Canada Pension Plan Investment Board

3 DEV Shenzhen 2011-K202-0014 Shenzhen, CHN 991 7,509 132 China Merchants Property Dev Co Ltd

4 DEV CITIC City B,C,D blocks (Prt II) Beijing, CHN 929 848 1,095 Financial Street Holding Co Ltd

5 OFF Otemachi PAL Bldg Tokyo, JPN 877 301 2,916 Mitsui Fudosan Co Ltd JV Mitsui & Co

6 DEV Changsha 2011-001 Changsha, CHN 855 800 1,068 Wharf Holdings

7 DEV Punggol Central & Punggol Walk Singapore, SGP 799 323 2,475 Frasers Centrepoint Ltd‡

8 DEV Boon Lay Way Singapore, SGP 791 194 4,085 CapitaMalls Asia JV HSBC Bank

9 OFF Capital Square Singapore, SGP 700 387 1,810 Alpha Investment Partners (AIP)‡

10 OFF The Fifth Square Beijing, CHN 682 1,009 677 China Minmetals Corporation

11 DEV Nanjing 2011G07 Nanjing, CHN 681 3,667 186 Shimao Property Holdings Ltd‡

12 DEV Toyosu District Site Tokyo, JPN 680 1,132 601 Tokyo Metropolitan Government

13 OFF The Centre Shanghai, CHN 666 963 692 China Pacifi c Insurance (Group) Co Ltd

14 DEV CITIC City B,C,D blocks Beijing, CHN 607 848 716 Financial Street Holding Co Ltd

15 DEV Yiwu 2011017 Yiwu, CHN 594 883 672 Guangsha Construction

16 IND Hong Kong Interlink Project Hong Kong, HKG 589 2,400 245 Canada Pension Plan Investment Board

17 DEV Stubbs Road Site Hong Kong, HKG 578 160 3,605 Sun Hung Kai Properties Limited

18 DEV Yiwu 2010044 Yiwu, CHN 559 334 1,674 Sunion (Sanlian) Group

19 DEV Nanjing 2011G14 Nanjing, CHN 508 2,458 207 Nanjing Qingao Development Co Ltd‡

20 DEV 3-1 Ariake-Kita Tokyo, JPN 506 1,186 427 Sumitomo Realty & Development Co Ltd

21 DEV Qingdao 2011-04 Qingdao, CHN 499 2,930 170 Qingdao Zhonghai Huaye RE Co. Ltd.

22 OFF Toyosu Center Bldg Tokyo, JPN 497 1,072 463 IHI Corporation

23 OFF SK Building Seoul, KOR 495 863 573 SK Corporation‡

24 OFF New World Changning Com Ctr Shanghai, CHN 493 1,079 457 SOHO China

25 DEV Shanghai 201100510 Shanghai, CHN 476 1,482 321 Sino-Ocean Land Holdings Ltd


($M)SF(K)/Units

PPSF/PPU (K) Buyer

1 OFF Kokusai Shin-Akasaka Towers Tokyo, JPN $1,066 863 $1,236 Mitsubishi Estate Company, Limited

2 DEV Greentown China Govt Land Ptfl Taizhou, CHN 1,011 7,386 137 Greentown China Holdings Limited

3 DEV Kunming Guandu KC2010-76 Kunming, CHN 987 22,158 45 Yunnan Zhonghao Properties Co Ltd

4 OFF Mapletree Com Trust Ptfl 2011 Singapore, SGP 625 733 853 Mapletree Commercial Trust

5 MIX Perennial China RET Trust IPO '11 Shenyang, CHN 575 6,119 94 Perennial China RET Trust

6 MIX Waterfront Place Brisbane, AUS 510 714 714 Australian Government Future Fund

7 DEV Greentown China Govt Land Ptfl Shenyang, CHN 476 12,263 39 Greentown China Holdings Limited

8 DEV Dadong Plot 1&2 Zhenjiang, CHN 464 3,439 135 China Merchants Property Dev Co Ltd

9 DEV Wharf Hldgs Govt Land Ptfl Suzhou, CHN 442 2,502 176 Wharf Holdings

10 DEV Taiwan Govt Land Ptfl 2011 Sinjhuang, TWN 412 246 1,678 Farglory Land Development Co., Ltd.

11 DEV JiShu Housing Govt Land Ptfl Suzhou, CHN 391 1,907 205 JiShu Housing Co Ltd‡

12 DEV Wheelock Props Ltd Foshan Ptfl '11 Foshan, CHN 372 6,153 61 Wharf Holdings

13 DEV Beijing Huaye Govt Land Ptfl Beijing, CHN 353 277 1,276 Beijing HOMYEAR RE Company Ltd

14 IND Sagawa Express Warehouses Multiple, JPN 348 1,541 226 SG Realty

15 DEV Zhonghai Govt Land Ptfl Qingdao, CHN 338 2,093 162 China Overseas Land & Investment Ltd

TOP 20 BUYERS#Vol

($M)

TOP 20 SELLERS #Vol

($M)

Asia Pacifi c: Top Deals and Players in H1’11




APAR

TMEN

TIN

DU

STR

IAL

OFF

ICE

RET

AIL

HO

TEL

LAN

D S

ITE

GR

AND

TO

TAL*

YOY

CH

ANG

E

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol

Prop

s

Asia Pacifi cAsia

Chin

a

Beiji

ng$1

,574

10$1

851

1$6

,711

62$8

,512

74-3

9%-1

4%

Shan

ghai

491

2,23

916

221

27,

740

102

10,2

5012

1-1

1%98

%

Tian

jin10

82

4,04

510

54,

154

107

-42%

22%

Hang

zhou

4,57

282

4,57

282

-17%

14%

Dalia

n3,

006

403,

006

40-3

1%-5

%

Nan

jing

3,03

229

3,03

229

112%

71%

Shen

zhen

612

129

140

11,

371

91,

602

1332

0%11

7%

Chon

gqin

g3,

421

393,

421

3936

%22

%

Guan

gzho

u14

71

541

1,61

523

1,81

625

171%

150%

Dong

guan

705

2470

524

0%41

%

Nan

tong

727

1172

711

-21%

-21%

Chan

gsha

1,49

29

1,49

29

28%

-36%

Shen

yang

236

243

32

4,26

684

4,93

688

172%

83%

Xiam

en32

411

324

11-8

1%-5

0%

Chin

a ot

her

342

221

1,72

815

611

67,2

021,

232

69,0

471,

251

37%

51%

Hong

Kon

gHo

ng K

ong

486

91,

443

262,

123

702,

021

8216

72

3,25

519

9,49

420

83%

8%

Indi

aIn

dia,

all

112

318

45

231

353

964

101,

318

22-5

6%38

%

Japa

n

Toky

o1,

551

5181

711

6,91

870

861

1184

22,

540

4612

,770

191

-7%

-11%

Osak

a28

311

140

115

74

162

246

128

66

1,07

425

12%

-11%

Japa

n ot

her

886

188

612

22

607

797

434

21,

136

273%

-40%

Mal

aysi

aKu

ala

Lum

pur

233

618

63

322

574

114

-27%

-50%

Mal

aysi

a ot

her

101

711

623

143

59%

0%

Sing

apor

eSi

ngap

ore,

all

1,08

317

854

302,

269

1224

22

647

46,

455

3211

,550

9711

9%62

%

Sout

h Ko

rea

Seou

l12

34

1,89

523

124

250

411

2,64

440

88%

43%

Sout

h Ko

rea

othe

r15

13

401

482

241

643

327

1035

%-3

8%

Taiw

anTa

iwan

, all

383

1663

719

417

1111

21

1,48

631

3,03

578

-26%

-4%

Asia

Oth

erAs

ia o

ther

207

312

51

886

483

1390

323

107%

53%

Tota

l*$3

,892

103

$4,1

8110

0$1

9,14

724

6$7

,423

146

$1,4

0326

$126

,683

2,04

3$1

62,7

302,

664

12%

28%

Australia / NZ

Aust

ralia

Mel

bour

ne31

129

611

527

91,

224

635

03

272

102,

701

4014

1%-2

2%

Sydn

ey33

231

310

955

2226

510

177

101,

743

54-1

5%32

%

Bris

bane

986

789

712

06

161

271

1,04

921

47%

5%

Pert

h28

87

875

684

443

16-4

5%-6

%

Aust

ralia

oth

er35

119

144

37

439

2255

811

132

71,

626

4952

%26

%

New

Zea

land

New

Zea

land

, all

975

209

1819

68

141

516

32-3

3%25

6%

Tota

l*$9

94

$725

28$3

,100

57$2

,343

67$1

,120

23$6

9033

$8,0

7721

224

%20

%

Asia

Pac

ific:

Tra

nsac

tions

by

Mar

ket i

n H

1’11

MID

-YE

AR

RE

VIE

WA

UG

US

T 2

01

1

14©

2011

Rea

l Cap

ital A

naly

tics,

Inc.

All

right

s re

serv

ed. D

ata

belie

ved

to b

e ac

cura

te b

ut n

ot g

uara

ntee

d; s

ubje

ct to

futu

re re

visi

on; b

ased

on

prop

ertie

s &

por

tfol

ios

$10m

and

gre

ater

.

Investment volume in the Americas surged to $55.6b in Q2, a 115% increase from a year earlier, just shy of the year-

end spike in transactions recorded in Q4’10. � e acceleration in sales cut across all property sectors and was dominated by the US, up 124% year over year (yoy), the highest gain among major economies globally. Prices were generally stable or improved over the quarter, but the dichot-omy in pricing between the favored major markets and all others persisted through-out the Americas.

A� er an explosive start to the year, di-rect property sales in Brazil fell 32% in Q2, yet there have been a hand-ful of recent real estate M&A deals and development joint ventures an-nounced. Canada recorded sales of $4.5b in Q2, up 8% yoy, but forward-looking activity is

already strong in Q3.Portfolios accounted for $26.7b of

Americas’ sales in H1’11, including the $9.2b acquisition of Centro’s US shop-ping centers by Blackstone. Nearly $10.0b of portfolio transactions are in contract, mostly in the US or Canada. � e rise in large multi-market portfolio signals a growing bullishness on entire property sectors as opposed to smaller bets on spe-ci� c assets in favored markets.

For the � rst half of 2011, property sales in the Americas totaled $91.2b and ap-pear on a trajectory to easily surpass the $200.0b mark for the year, almost quadru-pling 2009 volume. Yet recent turmoil in the bond market slowed originations by US CMBS conduits, at least temporarily.

Commercial property yields were sta-ble to slightly lower throughout most of the Americas in Q2 and in the US have been at similar levels since the beginning of the year.


Vol ($B)YOY Chg

H1’11Vol ($B)

YOY Chg

Offi ce $14.8 47% $26.0 73%Retail 15.5 282% 21.6 154%Industrial 5.8 86% 10.3 89%All Commercial 36.1 110% 57.9 100%Hotel 4.6 170% 8.7 168%Apartment 13.2 137% 21.1 105%Land 1.7 26% 3.5 39%Total $55.6 115% $91.2 102%


$0

$10

$20

$30

$40

$50

$60

$70

1'08

2 3 4 1'09

2 3 4 1'10

2 3 4 1'11

2


Billion

RUS

FIN

AUT

ITA

MCO

ESP

SWE

NOR

DEU

FRA

PRT

HUNHRV ROU

BGR

TUR

DNK

POL

UKRCZE

NLD

BEL

CHE

ISR

IND

CHN

MYS

TWN

JPNKOR

AUS

NZL

GBR

USA

CAN

MEX

ARG

BRA

SGP

HKG

CHL

ARE

SVK

THA

ZAF

QAT

IRL

SAU

PER

MNE

VNM

GRC

SRB




Americas: Quarter in Review Summary



5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

$0

$5

$10

$15

$20

$25

$30

$35

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

$0

$2

$4

$6

$8

$10

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

$0

$2

$4

$6

$8

$10

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

-100%

0%

100%

200%

300%

400%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

-100%

0%

100%

200%

300%

400%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

-100%

0%

100%

200%

300%

400%

1 '08

2 3 4 1 '09

2 3 4 1 '10

2 3 4 1 '11

2

Even in top markets such as Manhattan and DC, cap rates have been remarkably stable over the past two quarters. Canada has seen the most movement with yields falling over 25bps since the beginning of the year.

By property type, average US cap rates in H1’11 are � at across most sectors, except industrial and sub-

urban o� ce properties. � ese sectors have been the slowest to attract inves-tors in the recovery, but their yields were down slightly. Across all sectors, yields for prime assets are signi� cantly lower than the average and this gap is at histori-cally wide levels, a trend that shows no signs of abating even as investors begin to stretch their horizons.


CAP RATES CAP RATES CAP RATES



US AVERAGE CAP RATES


UNITED STATES CANADA LATIN AMERICA



$0

$1

$2

$3

$4

$5

$0

$1

$2

$3

$4

$5

$6

$7

$8

1'08

2 3 4 1'09

2 3 4 1'10

2 3 4 1'11

2

Rolling 12 months totalQuarterly Vol

23%

6%

29%

6%15%

10%25%

40%14%

54%12%

7%

16%

7%

34%45%

53%

2008 2009 2010 2011User/Other PrivatePublic Listed/REITs Cross-BorderInstitutional

Some $15.6b of distressed property traded in the US in H1’11, more than double the H1’10 level as lend-

ers increasingly chose to liquidate as op-posed to modify and restructure troubled mortgages. A year ago, half of all workouts were accomplished via loan modi� cations, dubbed “extend and pretend.” � at ratio had shi� ed dramatically to favor liquida-tions by six-to-one over modi� cations. As credit conditions and property prices have improved, lenders are moving more aggressively and decisively away from pre-tend-and-extend.

BUYER COMPOSITION

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

07 08 09 10 11

BRAZIL AVERAGE PPSF*

sf

BillionDespite the decline in activity in Q2, Brazil appears on its way to establish a new record for transaction volume

in 2011 having already surpassed $4.0b of transactions at the mid-year point. Pricing is also in record territory with the average for commercial properties reaching $450/sf last quarter.

While Brazil is drawing increased inter-est and exploration from many global in-vestors, domestic institutional capital has been driving the recent spike in activity. Brazil-based institutions were responsible for more than half of acquisitions so far in 2011 and its share of acquisitions has in-creased steadily over the past three years. Recent transactions include Prosperitas’ $1.1b acquisition of Bracor, a prestigious owner of business parks and a joint ven-ture between Carlos Betancourt and Sam Zell’s Equity International Group. Other institutional investors such as BTG Pac-tual, Funcef, WWI Group and Previ have all made signi� cant acquisitions recently. In addition, cross-border institutional in-vestors have been clearly on the prowl for direct property acquisitions, entity-level investments, and development joint ven-tures.

BRAZIL TRANSACTION VOLUMEOFFICE, RETAIL AND INDUSTRIAL

Quar

terly

Vol

Rolli

ng 1

2-m

onth

s

US: End of Pretend & Extend

0%

5%

10%

15%

20%

25%

$0

$2

$4

$6

$8

$10

$12

$14

1'08

2 3 4 1'09

2 3 4 1'10

2 3 4 1'11

2

DistressTotal Sales

DISTRESSED PROPERTY SALESBillion

*Commercial properties only

Brazil: A Growing Institutional Market



Blackstone $8,227 Vornado Realty Trust 1,867 Invesco Real Estate 1,330 JP Morgan 1,313 Prosperitas 1,297 Related Companies 1,187 Oaktree 1,056 Network World Market Ctr 1,005 Bain Capital 1,005 SL Green 1,000 Host Hotels & Resorts Inc 884 Sunstone Hotel Investors 855 USAA Real Estate 807 Equity One 807 Westbrook Partners 780 Wells Real Estate Funds 758 Bassett Furniture 730 Teacher Retirement Sys of Texas 681 Cole Real Estate Investments 655 Area Property Partners 640

Centro Properties Group $7,974 Goldman Sachs 1,783 Broadway Partners 1,715 Bracor Invts Imobiliarios 1,297 Equity Residential 1,345 Beacon Capital Partners 1,172 Lehman Brothers Hldgs Inc 1,108 Investcorp 1,000 Hines Interests LP 959 GE Capital 918 Highgate Holdings 792 Monday Properties 763 Murray Hill Properties 740 Blackstone 756 Shorenstein Properties 697 Equity One 656 RREEF 671 Related Companies 667 Vornado Realty Trust 650 Brookfi eld Asset Mgmt 660


($M)SF(K)/Units

PPSF/PPU (K) Buyer

1 OFF 280 Park Avenue† New York, NY $1,100 1,179 $941 SL Green JV Vornado

2 OFF Helmsley Building New York, NY 763 1,213 629 Invesco Real Estate

3 OFF Market Square East & West Washington, DC 615 680 905 Wells Real Estate Funds, Inc

4 HTL Manchester Grand Hyatt San Diego, CA 570 1,625 351 Host HTLs & Resorts Inc

5 OFF Landmark Center Boston, MA 531 950 558 JP Morgan Asset Management‡

6 OFF 450 West 33rd Street New York, NY 525 1,750 300 Brookfi eld OFF Properties

7 OFF 750 Seventh Avenue New York, NY 485 591 820 Fosterlane Management

8 HTL Hilton San Diego Bayfront San Diego, CA 475 1,190 399 Sunstone HTL Investors

9 APT Independence Plaza North New York, NY 473 1,334 355 Vornado Realty Trust‡

10 OFF One Park Avenue† New York, NY 394 957 411 Vornado Realty Trust

11 OFF Atrium on Bay Toronto, CAN 356 1,070 333 H&R Real Estate Investment Trust

12 OFF Waterfront Station Washington, DC 356 635 561 USAA Real Estate

13 OFF Four Allen Center Houston, TX 340 1,260 270 Chevron Corp

14 HTL Radisson Lexington New York, NY 336 712 471 DiamondRock Hospitality Co

15 OFF Parsons HQ Pasadena, CA 325 932 349 Lincoln Property Co‡

16 RET fmr NBA Store New York, NY 324 39 8,361 Inditex

17 APT One Superior Place Chicago, IL 320 809 396 Hartz Mountain Industries

18 HTL YOTEL New York, NY 315 669 471 IFA HTLs & Resorts (IFA HR)‡

19 HTL New York Helmsley HTL New York, NY 314 773 406 Host HTLs & Resorts Inc

20 OFF Bell Tower Montreal, CAN 296 975 304 Dundee REIT

21 OFF Horizon in Playa Vista Los Angeles, CA 294 501 587 JP Morgan Asset Management

22 OFF 499 Illinois St San Francisco, CA 293 453 646 Alexandria RE Equities

23 OFF US Steel Tower Pittsburgh, PA 287 2,300 125 Mark Karasick

24 HTL Doubletree Guest Suites Times New York, NY 286 460 622 Sunstone HTL Investors

25 APT Liberty Towers Jersey City, NJ 280 648 432 JP Morgan Asset Management


($M)SF(K)/Units

PPSF/PPU (K) Buyer

1 RET Centro United States Portfolio Multiple, USA $9,150 99,051 $92 Blackstone

2 IND Bracor IND Portfolio 11 Multiple, BRA 1,322 10,764 123 Prosperitas

3 MIX Capital and Counties Mix Ptfl Multiple, CA 600 2,106 253 Equity One‡

4 IND World Market Center Portfolio Las Vegas, NV 600 4,832 124 Bain Capital‡

5 RET Ivanhoe Cambridge RET Portfolio Multiple, CAN 591 2,507 236 Primaris RET REIT

6 APT Magazine Portfolio Sale 2011 Mid-Atlantic 460 2,580 178 Pantzer Properties‡

7 OFF Eola OFF Portfolio 11 Multiple, USA 380 2,471 154 Parkway Properties‡

8 OFF CBRE Duke Realty JV Multiple, USA 343 2,050 167 CB Richard Ellis Realty Trust

9 OFF Hartz OFF Portfolio 11 Jersey City, NJ 310 827 375 CB Richard Ellis Investors

10 APT Starwood/Bainbridge Mid-Atlantic 287 1,626 176 Starwood Capital Group‡

11 RET Regency/Macquarie Portfolio Multiple, USA 280 2,329 120 USAA Real Estate

12 APT AvalonBay Apt Portfolio 11 Multiple, USA 263 1,060 248 United Dominion Realty Trust

13 APT UDR Apt Portfolio 11 Multiple, CA 263 1,418 176 AvalonBay Communities

14 APT AREA-ECI SE APT JV Southeast 262 2,746 95 Area Property Partners

15 APT Camden Acquires Apt Ptfl 11 Multiple, TX 261 2,957 88 Camden Property Trust‡

TOP 20 BUYERS#Vol

($M)

TOP 20 SELLERS #Vol

($M)

Americas: Top Deals and Players in H1’11




APAR

TMEN

TIN

DU

STR

IAL

OFF

ICE

RET

AIL

HO

TEL

LAN

D S

ITE

GR

AND

TO

TAL*

YOY

CH

ANG

E

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol (

$M)

# Pr

ops

Vol

Prop

s

The AmericasNorth America

Cana

daTo

ront

o$3

1821

$413

17$9

1620

$1,0

6913

$48

2$1

275

$2,8

9178

8%-7

%Ca

lgar

y15

111

48

424

777

345

167

520

2%-3

1%Ca

nada

oth

er78

230

516

411,

334

391,1

7571

131

726

913

4,20

720

14%

-12%

Unite

d St

ates

NYC

Met

ro2,

890

8147

024

5,37

761

1,68

670

1,81

319

425

1212

,661

267

124%

79%

LA M

etro

1,97

361

873

451,

827

341,1

2042

598

1218

78

6,57

720

215

1%94

%DC

Met

ro2,

114

4325

28

3,57

656

604

2268

614

153

77,

386

150

69%

79%

SF M

etro

1,62

510

055

530

1,68

339

1,09

426

523

715

25

5,63

120

790

%15

6%Ch

icag

o70

113

727

3848

911

1,06

142

178

869

23,

226

114

310%

235%

Atla

nta

826

3722

89

476

1164

039

174

646

22,

390

104

219%

215%

So F

la35

514

654

916

2079

629

382

1219

512

2,71

091

91%

75%

Dalla

s83

144

436

1455

019

490

2880

42,

388

109

114%

106%

Hous

ton

357

1615

917

934

2064

854

201

313

2,14

911

141

%10

6%Ph

oeni

x64

928

120

458

310

330

1321

49

393

1,93

667

311%

168%

Seat

tle51

919

182

1050

510

239

1020

04

662

1,71

155

160%

175%

Bost

on63

814

157

111,1

5717

245

1834

47

2,54

167

67%

72%

Denv

er57

018

291

567

1224

311

187

41,

597

4619

0%10

9%Sa

n Di

ego

211

620

511

235

728

718

1,53

616

492

2,52

360

120%

82%

Phill

y Met

ro32

710

180

358

134

253

342

1,147

5257

7%47

8%Au

stin

121

437

314

36

632

31

366

16-3

2%-2

7%Or

land

o26

510

171

873

111

711

127

151

723

85%

53%

Las V

egas

146

561

14

462

132

793

418

1208

%20

0%Ra

leig

h/Du

rham

258

1360

489

297

718

252

228

72%

155%

Port

land

254

865

223

65

132

571

625

1828

%38

%Ch

arlo

tte

253

626

265

222

69

342

604

2115

9%13

3%M

inne

apol

is11

25

144

1838

411

280

2070

299

056

155%

460%

Tam

pa43

519

111

187

1228

618

152

933

5227

%13

6%Sa

cram

ento

107

216

55

124

647

144

314

76%

56%

Haw

aii

161

191

51

592

613

160

8-5

8%0%

Detro

it26

215

112

42

196

1631

639

227

34%

108%

Indi

anap

olis

463

998

564

201

1581

%50

%St

Lou

is53

278

376

336

831

121

587

40-6

%34

4%Ka

nsas

City

382

183

1482

72

130

524

263%

380%

Unite

d Sta

tes o

ther

3,02

418

51,

936

109

1,61

380

6,10

342

764

448

287

1113

,608

860

218%

255%

Carib

bean

Carib

bean

, all

-100

%-1

00%

Mex

ico

Mex

ico,

all

514

151

210

01

151

317

896

%33

%No

rth A

meric

a oth

erNo

rth A

meric

a oth

er15

215

2-7

0%10

0%To

tal*

$20,

856

823

$8,6

8145

5$2

5,28

654

6$2

0,58

41,

108

$8,2

3220

6$2

,226

93$8

5,86

43,

231

102%

109%

South America

Arge

ntin

aBu

enos

Aire

s20

123

317

111

12

641

282

262

1034

4%40

0%Ar

gent

ina

othe

r28

14

132

2-5

9%0%

Braz

ilSa

o Pa

ulo

251

329

534

82

426

121,

128

20-1

2%-5

%Ri

o de

Jan

eiro

171

148

324

116

64

220

723

15

806

2122

1%25

0%Br

azil

othe

r17

49

1,31

330

338

261

218

319

2,07

062

223%

88%

Chile

Sant

iago

313

251

236

219

334

593

4054

3%56

7%Ch

ile o

ther

125

512

55

--

Sout

h Ame

rica o

ther

Latin

Am

oth

er93

528

130

641

599

2929

146

27%

475%

Tota

l*$2

6513

$1,5

8142

$711

10$1

,044

18$4

2217

$1,2

8510

6$5

,307

206

102%

164%

Amer

icas

: Tra

nsac

tions

by

Mar

ket i

n H

1’11

MID

-YE

AR

RE

VIE

WA

UG

US

T 2

01

1

19©

2011

Rea

l Cap

ital A

naly

tics,

Inc.

All

right

s re

serv

ed. D

ata

belie

ved

to b

e ac

cura

te b

ut n

ot g

uara

ntee

d; s

ubje

ct to

futu

re re

visi

on; b

ased

on

prop

ertie

s &

por

tfol

ios

$10m

and

gre

ater

.



CBRE21%

CBRE20%

CBRE13%

JLL6%

JLL23%

JLL12%

Eastdil15%

C&W8%

C&W 4%

C&W6%

Savills16%

Savills6%

HFF7%

Colliers 2%

Colliers11%

Colliers 1%

Knight Frank 4%

Knight Frank 5%

DTZ 5%

DTZ 4%

BNP4%

M&M 3%

Catella 2%King Sturge

Cassidy 2%

GVA 2%

ARA 2%

Pangea

G&E 1%

Others31%

Others17%

Others40%

Americas AsiaPac EMEA

Changing Landscape for Agents

A wave of mergers and acquisitions among commercial property bro-kers has been underway in recent

months. Among the targets are some sig-ni� cant players: DTZ, King Sturge, NAI Global and others. Most of the deals are strategic consolidations as the industry remains highly fragmented. While in-vestment agency is just one of many busi-ness lines for the major brokerage � rms, it is clear that the landscape for the in-vestment sector is changing quickly.

In investment sales, Jones Lang LaSalle is signi� cantly enhancing its European mar-ket share with King Sturge. BNP stands to almost double its market share in Europe

and establish a signi� cant pres-ence in Asia if combined with DTZ. � e acquisition of NAI Global by experienced investor Andrew Farkas of C-III could result in a new competitive force. � e same holds for Rock-wood, the former US a� liate of DTZ which is being acquired by a unit of equity fund heavy-weight Fortress. BGC Partners

has entered into an agreement to acquire Newmark, the real estate advisory � rm which operates as Newmark Knight Frank in the U.S. � eir alliance with London-based Knight Frank remains una� ected. � e Relative Market Share of Investment Brokerage chart highlights how fragmented the industry is, and how ripe it is for further consolidation. Europe is perhaps the most fragmented and Asia Pac the least. It also illustrates the di� culties many of the large European � rms have had in establishing signi� cant presence in the US, and high-lights the leading contenders to dominate Asia’s booming property markets. Only � ve � rms currently have a signi� cant market share across all global zones: CBRE, JLL, C&W, Colliers and Savills, but if the recent wave of M&A continues, expect a sixth or seventh global platform soon.

RECENT BROKERAGE M&AStatus Acquirer Target

Proposed SGL/BNP or UGL DTZ

Pending Jones Lang LaSalle King Sturge

Pending C-III Capital Partners NAI Global

Pending BGC Partners (Cantor) Newmark Knight Frank

Closed CWCapital Rockwood (fmr DTZ)

Pending Cassidy Turley Carter

RELATIVE MARKET SHARE FOR INVESTMENT BROKERAGE*

(by dollar volume, 12 months through June 2011)

*Based upon the percentage of brokered deals for property sales of US$10m+ involving all property types. Credit is given to both buy-side and sell-side representation and full credit is given to multiple different brokers involved in same deal. Based on published reports and RCA’s own research which is believed to be comprehensive, but not entirely complete. Over the past year, RCA has recorded a broker for 43% of EMEA transactions, 25% of AsiaPac transactions (excluding China land deals), and 62% of Americas transactions.



Peak-Era Buyers: Where Are They Now?

Reverberations from the world-wrench-ing � nancial crisis that upended global property markets in 2008 are still being

felt. One indicator of just how much ground was lost, and how much has been regained, is in the ranks of the most aggressive buyers from the 2007 peak that are still active today. Based on this indicator, AsiaPac has been the most resilient with 82 of the top 100 buyers in 2007 having bought at least one property since the beginning of 2010. In the US, the number is surprisingly high with 81 still active owing largely to greater non-recourse lending and the “pretend and extend” strategy employed by lenders until recently. Europe has been hardest

hit with only 60 of the most active buyers at the peak still buying.

But the strengths and weaknesses of all three zones are even more evident in the persever-ance of those at the very top, the 20 most active buyers in the year preceding the � nancial crisis and global recession. On those terms, only one buyer has vanished from Asia, while � ve from the US and 11 from Europe have been elimi-nated. Most of those that have dropped out are from countries with severe internal � nancial problems, such as Ireland, or from companies that have been liquidated, like Lehman Broth-ers. � e complete reports and lists are available for download on our website.

Top Buyers at PeakEurope United States AsiaPac

Company Still Buying* Company Still

Buying* Company Still Buying*

1 Unibail-Rodamco Blackstone Morgan Stanley

2 Morgan Stanley Tishman Speyer National Pension Service (NPS)

3 Avestus Capital Partners - Lehman Brothers Holdings Inc - Prudential

4 Goldman Sachs** - Morgan Stanley Mitsubishi Estate

5 IVG Immobilien GE Capital - CapitaLand Limited

6 Metrovacesa - Goldman Sachs Wheelock & Co

7 Aviva PLC Beacon Capital Partners Sino Land Company Limited -

8 Aberdeen Property Investors Broadway Partners - LaSalle Investment Management

9 Pirelli & C. Real Estate SpA - Brookfi eld Asset Management Macquarie Glob Prop Advs (MGPA)

10 Pearl Group - Prudential RE Investors China Vanke Co Ltd

11 Electra Ltd - BlackRock DB RREEF

12 ING Group Centro Properties Group - Tokyo Tatemono Co Ltd

13 RREEF TIAA-CREF GIC RE (Govt of Singapore)

14 Prudential PLC Lightstone Group Nan Fung Group

15 Propinvest Group - CalSTRS Kerry Properties Limited

16 SEB Group Chetrit Group China Overseas Land & Invt Ltd

17 Lehman Brothers Holdings Inc - CalPERS K Wah International

18 GE Capital - Simon Property Group Sun Hung Kai Properties Limited

19 Immofi nanz JP Morgan Hong Leong Group

20 Evans Randall Dubai World - Tokyu Land Corporation

B Buyer S Seller Broker

Property Name SF/Units PriceAddress Year Built PPSF/PPU Location Property Type Qualifi er

AMERICASHelmsley Building 1212,576 $763,266,667 230 Park Ave 1929 $629 New York, United States Offi ce confi rmed

Atrium on Bay 1070,287 $356,221,543 595 Bay St 1981 $333 Toronto, Canada Offi ce confi rmed

The Corner 196 $209,000,000 200 W 72nd St 2007 $1,066,327 New York, United States Apartment approximate

Millennium Warner Center 438 $132,883,333 21201 Kittridge St 2010 $303,387 Woodland Hills, United States Apartment approximate

Rockhill Apartments 1000 $120,417,957 4858 Chemin De La Côte-des-neiges 1968 $120,418 Montreal, Canada Apartment street talk

Prime Outlets Jeffersonville I 409,959 $134,000,000 8000 Factory Shops Blvd 1993 $327 Jeffersonville, United States Retail confi rmed

Scottsdale Promenade 433,533 $110,000,000 16447 N Scottsdale Rd 1999 $254 Scottsdale, United States Retail confi rmed

New York Palace Hotel 899 $377,000,000 455 Madison Ave 1981 $419,355 New York, United States Hotel approximate

YOTEL 669 $315,000,000 440 W 42nd St 2011 $470,852 New York, United States Hotel approximate

future Shopping 204,516 $164,504,902 Avenida Paulista 1904 $804 Sao Paulo, Brazil Dev Site approximate

MidCity Place 352,000 $467,685,744 71 High Holborn 2001 $1,329 London, GBR Offi ce approximate

Aviva Tower 315,000 $427,906,742 1 Undershaft 1969 $1,358 London, GBR Offi ce approximate

TDC 871,884 $243,695,329 Teglholmsgade 1 1988 $280 Copenhagen, DNK Offi ce approximate

Eye of Ajman 6,271,420 $406,111,785 Sheikh Kjalifa Bin Zayed St 104 And Emirates Rd $65 Ajman, United Arab Emirates Dev Site street talk



EMEA

Reported in the Past 3 MonthsSelected Investment Sales Transactions

B Invesco Real Estate by Houlihan Lokey from S Monday Properties ‡

B H&R Real Estate Investment Trust from S Hines Real Estate Investment Trust Inc by Brookfi eld Financial BMO Capital Markets

B TIAA-CREF from S Gotham Organization Inc JV Philips International JV Rhodes New York by CB Richard Ellis

B Essex Property Trust from S Dinerstein Companies by Institutional Property Advisors - Marcus & Millichap Company

B Ivanhoe Cambridge from S Canapen

B Tanger Factory Outlet from Simon Property Group by Jones Lang LaSalle

B Excel Trust Inc from S Levine Investments LP by Lucescu Realty

B Northwood Investors LLC from S Brunei Investment Agency (BIA)

B IFA Hotels & Resorts JV Kuwait Real Estate Co by Hodges Ward Elliott Inc from S Related Companies JV Goldman Sachs

B Groupe Allard from S Previ

B OMERS OBO Oxford Properties Group by Farebrother from S Beacon Capital Partners by GM Real Estate

B Kuok Koon Hong & Martua Sitorus by Jones Lang LaSalle DLA from S CBRE Loan Servicing (CBRELS) by CB Richard Ellis

B KLP Ejendomme A/S from S TDC Pensionskasse

B OMERS OBO Oxford Properties Group by Farebrother from S Beacon Capital Partners by GM Real Estate

‡ JV



Peak-Era Buyers: Where Are They Now?

Reverberations from the world-wrench-ing � nancial crisis that upended global property markets in 2008 are still being

felt. One indicator of just how much ground was lost, and how much has been regained, is in the ranks of the most aggressive buyers from the 2007 peak that are still active today. Based on this indicator, AsiaPac has been the most resilient with 82 of the top 100 buyers in 2007 having bought at least one property since the beginning of 2010. In the US, the number is surprisingly high with 81 still active owing largely to greater non-recourse lending and the “pretend and extend” strategy employed by lenders until recently. Europe has been hardest

hit with only 60 of the most active buyers at the peak still buying.

But the strengths and weaknesses of all three zones are even more evident in the persever-ance of those at the very top, the 20 most active buyers in the year preceding the � nancial crisis and global recession. On those terms, only one buyer has vanished from Asia, while � ve from the US and 11 from Europe have been elimi-nated. Most of those that have dropped out are from countries with severe internal � nancial problems, such as Ireland, or from companies that have been liquidated, like Lehman Broth-ers. � e complete reports and lists are available for download on our website.

Top Buyers at PeakEurope United States AsiaPac

Company Still Buying* Company Still

Buying* Company Still Buying*

1 Unibail-Rodamco Blackstone Morgan Stanley

2 Morgan Stanley Tishman Speyer National Pension Service (NPS)

3 Avestus Capital Partners - Lehman Brothers Holdings Inc - Prudential

4 Goldman Sachs** - Morgan Stanley Mitsubishi Estate

5 IVG Immobilien GE Capital - CapitaLand Limited

6 Metrovacesa - Goldman Sachs Wheelock & Co

7 Aviva PLC Beacon Capital Partners Sino Land Company Limited -

8 Aberdeen Property Investors Broadway Partners - LaSalle Investment Management

9 Pirelli & C. Real Estate SpA - Brookfi eld Asset Management Macquarie Glob Prop Advs (MGPA)

10 Pearl Group - Prudential RE Investors China Vanke Co Ltd

11 Electra Ltd - BlackRock DB RREEF

12 ING Group Centro Properties Group - Tokyo Tatemono Co Ltd

13 RREEF TIAA-CREF GIC RE (Govt of Singapore)

14 Prudential PLC Lightstone Group Nan Fung Group

15 Propinvest Group - CalSTRS Kerry Properties Limited

16 SEB Group Chetrit Group China Overseas Land & Invt Ltd

17 Lehman Brothers Holdings Inc - CalPERS K Wah International

18 GE Capital - Simon Property Group Sun Hung Kai Properties Limited

19 Immofi nanz JP Morgan Hong Leong Group

20 Evans Randall Dubai World - Tokyu Land Corporation



EMEAMorfa Shopping Park 335,000 $132,071,819 Brunel Way 2005 $394 Swansea, GBR Retail approximate

Old George Mall 137,000 $131,742,463 High St 1965 $962 Salisbury, GBR Retail confi rmed

E Space Tower 150,273 $297,270,749 3-6 Maruyamacho Shibuya-ku 2002 $1,978 Tokyo, Japan Offi ce confi rmed

Shanghai Port Intl Terminal No 1 230,350 $238,023,565 568 Dongdaming Rd $1,033 Shanghai, China Offi ce approximate

Hana Daetoo IB Bld 530,657 $223,026,734 Yeongdeungpo-gu Yeoeuido-dong 23-3 1994 $420 Seoul, South Korea Offi ce approximate

Anson House 76,127 $120,345,128 72 Anson Rd 1998 $1,581 Singapore, Singapore Offi ce approximate

Yodobashi Camera Kichioji 408,310 $370,349,808 1-19-1 Kichioji-honcho 1974 $907 Musashino, Japan Retail street talk

Shenyang Longemont Mall 2,252,819 $235,090,719 22 Pangjiang St 2011 $104 Shenyang, China Retail confi rmed

Red Star Macalline Mall 1,954,689 $198,291,227 Xing Hua Bei Jie 2010 $101 Shenyang, China Retail confi rmed

Nan Fung Plaza 176,000 $150,406,285 8 Pui Shing Rd 1999 $855 Hong Kong, Hong Kong Retail approximate

Ascott Beijing 310 $167,564,554 108b Jian Guo Rd 2002 $540,531 Beijing, China Hotel confi rmed

Lot No IL 8949 112,893 $1,497,635,236 21 Borrett Rd $13,266 Hong Kong, Hong Kong Dev Site approximate

Shenzhen 2011-K202-0014 7,509,397 $990,915,872 Nanshan Sheko $132 Shenzhen, China Dev Site approximate

CITIC City B,C,D blocks 848,196 $928,940,216 Caishikou Rd $1,095 Beijing, China Deb Site approximate



ASIA PAC

Reported in the Past 3 MonthsSelected Investment Sales Transactions

B The Crown Estate by Wilkinson Williams from S Capital & Regional PLC JV Aviva PLC by Cushman & Wakefi eld

B Orchard Street Investment Management by Savills from S Doughty Hanson

B Daiwa Offi ce Investment Corp from S Daiwa Securities JV Goldman Sachs JV Sumitomo Mitsui Banking Corporation

B Baogang Resource from S Franshion Properties

B Mirae Asset MAPS Global Investments Co Ltd from S Hanshin Mutual Savings Bank JV Seongil Oh

B ING Real Estate from S Uncharted Hotels and Resorts Pte Ltd by Savills

B Hulic from S Lone Star Partners

B Perennial China Retail Trust from S Shanghai Summit (Group) Co Ltd

B Perennial China Retail Trust from S Shanghai Summit (Group) Co Ltd

B The Link Real Estate Investment Trust from S Bright Region Enterprise Limited JV Cloud Fort Development Limited

B Ascott Group from S CapitaLand Limited

B Cheung Kong (Holdings) Ltd from The Land Deparment

B China Merchants Property Development Co Ltd from S Chinese Government

B Financial Street Holding Co Ltd from S CITIC Real Estate





ABOUT REAL CAPITAL ANALYTICS

Real Capital Analytics, Inc (RCA) is an independent research firm focused exclusively on the capital investment markets for commercial real estate. RCA offers the most in-depth, comprehensive and current information of activity in the industry. Formed in 2000, RCA has offices in New York City, San Jose, and London. In addition to collecting transactional information for property sales and financing, RCA interprets the data including capital-ization rates, market trends, pricing and sales volume. The firm publishes a series of Capital Trends reports and offers an online service that provides real-time, global transactional market information. For more information, visit: www.rcanalytics.com.

ABOUT GLOBAL CAPITAL TRENDS

Global Capital Trends™ is published by Real Capital Analytics, Inc. Copy-right ©2011 Real Capital Analytics, Inc. All rights reserved.

It is a violation of Federal law to photocopy or reproduce any part of this publication, or forward it electronically, without first obtaining permission from RCA. To subscribe as an individual or to purchase a corporate license for your office, please contact us at [email protected].

Information presented by RCA has been compiled from sources believed to be reliable. While we have no reason to doubt its accuracy, RCA makes no representation or warranty regarding the information. The information is provided as is without warranties of any kind, express or implied, and may be subject to material revisions.

NOTES & METHODOLOGY

The information presented in this report is based on a proprietary data-base of commercial property transactions. With data integrity the primary concern, RCA has established a data collection and classification method-ology including sourcing requirements and other procedures to ensure the information is comprehensive, timely, accurate and completely objective.

The information contained in this report is based on sales of properties and portfolios valued $10m USD and greater. RCA endeavors to track all property sales within the specified property types above this threshold on a global basis.

The availability and reliability of property sales information varies greatly by country, but RCA endeavors to track transactions as comprehensively as possible via published reports, public filings, industry relationships and other proprietary means. In certain markets, RCA compliments its own research with data partners. Wherever possible, RCA attempts to conform to the standards and definitions adopted by the leading industry organizations.

Although averages provide a useful benchmark, commercial property is not a commodity. Each property and deal is unique and data points are not as plentiful as in other financial markets. The underlying specifics on each deal are available online at www.rcanalytics.com to subscribers only.

Geography: RCA divides the globe into three major regions:1. Americas: North and South America, and the Caribbean2. EMEA: Includes Europe, the Mid-East, and Africa3. Asia Pacific: Includes all parts of Asia (not including the Mid-East),

as well as Australia, New Zealand, and Pacific islands

Cross-Border Methodology: A transaction is defined as “cross-border” if the buyer or major capital partner is not headquartered in the same coun-try where the property is located. The buyer’s identity or country of origin is known for well over 90% of total volume. If the country of origin is not known, the buyer is assumed to be domestic. An increasing number of firms have subsidiaries accessing capital in multiple countries so a firm may have two headquarters locations for the purposes of this analysis. For example, ING Group is assumed to be based in the Netherlands for deals outside of the US while their acquisitions in the US are assumed to be made via its US headquartered subsidiary, ING Clarion. Deutsch Bank (DB Real Estate) and its RREEF unit are treated in a similar manner. For the purposes of this cross-border analysis, continental regions generally follow conventional definitions for continents except that the Middle East is treated as a sepa-rate continent and Hong Kong is treated as a separate country from China.

Property Types: This report is limited to office, industrial, retail, multi-family apartments, hotels and commercially developable land. Readers should note there is substantial investment activity not captured in this report outside these property types and below the $10m USD threshold.

Cap Rate: The initial annual un-leveraged return on an acquisition is known as the capitalization rate (yield is also used interchangeably throughout this report).

Prices: Prices are qualified as to the reliability of each source. Estimates of some prices are made using industry and market averages. Prices of prop-erties sold within a portfolio may be allocated pro rata (based on size) if individual pricing is not available. In either case, the estimates are excluded from any pricing analysis.

Transactions: Asset sales and entity-level transactions are included. Asset sales include properties that are sold individually (one-off) or with other properties in a portfolio. Entity-level sales include merger and acquisition activity of REITs and other real estate-owning companies. Transactions include only the sale of 50% or more and prices are grossed up to reflect a full valuation of the property.

Currency Conversion: Transaction prices are tracked in whatever currency is reported and are converted to USD, EUR, GBP and JPY based on the con-version rates in effect on the first day of the month when the transaction is reported to have occurred. Due to this, all price aggregations are composed of the sum of individually converted prices on the transaction level for the time period in discussion. For this reason pairs of figures representing volume in USD with its EUR equivalent do not represent a single conversion rate, currency conversion are on deal by deal basis at the time of transaction.

Measurement: Office, retail and industrial are tracked in square feet and square meters. Hotels and apartments are measured primarily by units based on the number of for “lease apartments” or hotel rooms in the property. Development sites are tracked in four units: hectares, acres, square feet and square meters and automatically converted to the alternate measures.

Global Land Methodology: RCA tracks the sale of plots of land that trade for more than $10m USD and are destined for commercial development. This includes the sale of land use rights in countries where plots are not traded on a freehold basis and where these rights are the equivalent of a land pur-chase in markets with freehold ownership rights.

Numbers Expressed as Text: 1K = 1 Thousand = 1,000 1m = 1 Million = 1,000,000 1B = 1 Billion = 1,000,000,000 1T = 1 Trillion = 1,000,000,000,000

Abbreviations: PPSF = Price Per Square Foot m2 = Per Square Meter BPS = Basis Points YOY = Year-Over-Year YTD = Year-To-Date Q1 = First Quarter of Year H1 = First Half of Year

Data PartnersTo become a data partner, please email [email protected]

Property Data in The United KingdomConfidencial Imobiliário in PortugalRP Data in AustraliaVastgoedmarkt in The NetherlandsKTI Property Information in FinlandE-Commercial in ChinaEconomic Prop. Research Ctr. (EPRC) in HKGJLR Real Estate Data Builders in CanadaVida Imobiliaria in Brazil

THOMAS DAILY in GermanyBulwienGesa AG in GermanyHBS-Research in FranceMate Plus in KoreaNikkei Business Publications in JapanGabetti Property Solutions in ItalyPrime in Costa RicaBregman-Baraz Real Estate in IsraelStrabo in Netherlands

ISO STANDARD COUNTRY CODES

REAL CAPITAL ANALYTICS

www.rcanalytics.com

US Headquarters139 Fifth AvenueNew York, NY 10010

Toll-Free: 1.866.REAL.DATAPhone: 212.387.7103

Robert M White, Jr Founder & PresidentJeanne Jambor Chief Financial OfficerDan Fasulo Managing DirectorMatt Stone SVP, MarketingBryan Grad SVP, SalesPeter Slatin Editorial DirectorNina Turner Web Content CoordinatorMichael Gilligan Web ArchitectClaudine Plecy Senior Graphic DesignerDoug Murphy Director, AnalyticsAndrew Pisanelli Senior Quantitative AnalystHermann Lademann Research Analyst

US West Coast OfficePruneyard Towers1901 South Bascom AvenueCampbell, CA 95008

Phone: 408.371.8880

Joe Mannina Chief Operating OfficerJohn Strand Dir, ResearchGrace (Tzu-Yu) Chin Sr Market AnalystKevin Imboden Sr Market AnalystLena Krivopaltsev Market AnalystLawrence Amasa Research ManagerLori Reisinger Research ManagerEve Neill Research ManagerMaria Carvalho Training Manager

Europe Office58 Grosvenor StreetLondon, United Kingdom W1K 3JB

Phone: +44.207.297.6860

Steve Williams Dir, Global Business DevRichard Yorke Dir, Europe Business DevMelanie Heath Mgr, Research Svcs & MarketingJoseph Kelly Dir, Market AnalysisKristina Andersson Research ManagerCigdem Giray-Guvener Research Specialist

Code CountryARE United Arab EmiratesAUS AustraliaAUT AustriaBEL Belgium

BRA BrazilCAN CanadaCHE SwitzerlandCHN ChinaDEU GermanyDNK DenmarkESP SpainFIN Finland

FRA FranceGBR United KingdomGGY GuernseyHKG Hong KongHUN Hungary

IRL IrelandISR Israel

Code CountryITA Italy

JPN JapanKOR South Korea

KWT KuwaitLUX Luxembourg

MEX MexicoMYS MalaysiaNLD NetherlandsNOR NorwayPOL PolandRUS RussiaSGP Singapore

SWE SwedenTHA ThailandTUR Turkey

TWN TaiwanUSA United StatesZAF South Africa