Cushman & Wakefield (S) Pte Ltd 3 Church Street, 09-03 Samsung Hub, Singapore 049483

www.cushmanwakefield.com DECEMBER 2013 1

DECEMBER 2013

14 FOR 2014TOP TRENDS TO WATCH

A Cushman & Wakefield Business Briefing

2014 : ON COURSE FOR CONTINUED GROWTH

As 2013 draws to a close, we are anxious to turn the page into a new year with hope and fervor. There is still much uncertainty and many challenges ahead – tenuous global recovery, more brinkmanship around the U.S. federal budget and debt ceiling, a heavy reliance on easy monetary policy, to name a few. For Asia, we have witnessed another large-scale natural disaster in the Philippines, whose impact bears striking similarities to the Indonesian tsunami in 2004, and the Japanese earthquake and tsunami in 2011. While the human tragedy from super typhoon Haiyan is incomprehensible, it serves as a sobering reminder

about structural challenges that exist and must be addressed, especially in every emerging market in the region.

Though the upcoming year may appear like a repeat of 2013, the slower but solid growth still provides upside potential for the property markets in Asia Pacific, and ample opportunities for savvy occupiers and investors. In this latest report on 14 for 2014 - Top Trends to Watch, we have summarized the key trends in the regional economy, and occupational and investment environment that should help you navigate 2014 and beyond.

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1 SLOWER GROWTH: THE NEW NORMAL The region is projected to expand at an annual rate of 5.0-5.3% through 2015, down slightly from 5.4-5.5% in 2012-2013. The shift towards slower growth among the region’s largest economies is largely instrumental for the lower growth trajectory over the near term. Notably, these

reductions in potential growth reflect, in part, some structural impediments. In the case of India, the economy remains constrained by supply-side bottlenecks and slow progress in pushing through structural reforms. Similarly, growth in fast-expanding ASEAN economies is slowing. Indonesia is struggling with trade deficits, while Vietnam’s dysfunctional banking sector continues to be a drag. Even the Philippines will likely decelerate somewhat from the impact of recent disasters, but reconstruction efforts should counterbalance damage losses and positive momentum should continue in its other major economic centers. While looming elections are likely to lead to economic status quos in India and Indonesia at least through the first half of 2014, the case for structural reforms that aim to boost investment, employment, and productivity has never been clearer. Progress would go a long way toward fostering competitiveness and a more sustainable, inclusive economic growth over the long term.

In China, reforms are facilitating its transition from public investment-led growth toward a consumer and business-oriented economy. The region’s largest economy recently unveiled its reform blueprint called “Decision Concerning Major Issues in Comprehensively Deepening Reform”, that is expected to sustain a more moderate expansion but reverberate across the region through lower import demand. Nonetheless, the gradual improvement in the broader global economy, particularly the U.S., which is expected to pick up speed next year,

Progress would go a long way toward fostering competitiveness and a more sustainable, inclusive economic growth over the long term.

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should generally lift export-oriented economies in the region, while Australia will rely on consumption and exports as the mining boom ends. Japan remains a bright spot, with effects of “Abenomics” taking root provided the successful implementation of the “third arrow” consisting of a vast array of microeconomic reforms.

2 POSITIVE LEASING MOMENTUM, BUT CAUTION STILL RULESThe relatively favorable macroeconomic climate should continue to buoy employment and ensure healthy demand for office space across the region. However, demand is not likely to grow at its customary

rapid pace in 2014, with absorption gains reaching 60 million square feet (msf) in all 30 major cities tracked within Asia Pacific, as compared to about 60-65 msf absorbed annually between 2009 and 2013. Australia is most likely to underperform in 2014. Unemployment looks set to rise again in 2014, which will increasingly weigh on consumer and business confidence so that demand for office space will continue to gradually lose momentum in all of its major cities next year. Office demand in regional financial hubs, including Hong Kong and Singapore, will also be on a slow ascent over the short term on the back of a gradual recovery in the financial sector. Longer term, we believe both markets stand to rebound with their positive attributes as world-class financial centers.

SOUTH KOREA

CHINA

HONG KONGTAIWAN

PHILIPPINESVIETNAM

THAILAND

MALAYSIA

SINGAPOREINDONESIA

AUSTRALIA

NEW ZEALAND

INDIA

JAPAN

5.1 6.2

3.3 2.7

6.0 6.3

4.5 3.0

3.7 3.1

5.5 6.0

1.8 2.1

6.3 3.4

3.1 1.9

1.2 2.1

3.2 2.9

7.0 2.8

3.1 4.4

2.1 2.1

Slow growth: The New Normal

ASIA PACIFIC

GDP Growth 5.1

Inflation Rate 3.4

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Similarly, we expect a modest pickup in demand pace across the rest of the region. For Japan, the success of “Abenomics”, especially the implementation of key structural reforms such as joining the Trans-Pacific Partnership, will remain vital to sentiment and optimism, thus generating new demand drivers. In China, demand is expected to maintain its brisk pace, except in Beijing and Shanghai’s CBDs, where steep rents and low vacancies will limit take-up levels and fuel decentralization. Nonetheless, we still see several growth catalysts that should underpin future leasing activity, with the government continuing to play a crucial role in supporting a dynamic ecosystem for firms. The recent establishment of the new China (Shanghai) Pilot Free Trade Zone has the potential to lure more high-profile corporations to Shanghai and drive up office demand. Additionally, newly announced reforms to open up are expected to have a meaningful impact on real estate markets in other Tier 1 and 2 cities. In Taipei, the Cross-Strait on Trade in Services Agreement is expected to draw more companies from mainland China. For India, its subpar growth will cause absorption gains to be modest by historical standards. However, we believe a weak Rupee will rejuvenate its information technology and information technology enabled services (IT/ITeS) sector, and better policies such as the recent liberalization of the banking sector will facilitate the entry of new players and expansion in the vast Indian market. Similarly, Southeast Asian markets are expected to see a steady acceleration in leasing activity, along with continued economic growth. Manila’s office sector will outperform on account of a thriving Business Process Outsourcing sector.

3 WORKPLACE STRATEGIES HAVE STAYING POWER, IMPACTING ABSORPTIONIn some cases, new workplace strategies are impacting absorption. First, companies

are striving to use real estate more efficiently and manage costs, especially as maintaining profitability has become very challenging for many firms in a volatile environment. Case in point is the amount of dedicated space per office worker, which has already dropped below 100 square feet (sf) this year in expensive locations in the region such as Hong Kong and Singapore, as compared to 120 sf five years ago and 200-250 sf space per employee in the U.S. Second, it also reflects the shift in how companies are utilizing space to accommodate changing work patterns that promote greater collaboration, creativity and productivity. A growing number of companies across industries are eliminating offices, private work stations and cubicles in favor of a more informal, team-oriented work setting. We believe such non-traditional space adaptations will continue to gain traction and potentially put the brakes on traditional office growth, especially in high-cost locations within the region.

0.10.10.20.20.20.30.30.40.40.40.50.50.60.8

1.21.51.6

2.32.52.7

3.03.23.3

3.74.94.9

6.06.3

7.6

BrisbaneAuckland

Hong KongPerth

TaipeiHo Chi Minh

SydneyBangkok

HanoiKolkata

MelbourneMumbai

AhmedabadSingapore

ChennaiKuala Lumpur

Beiji ngSeoul

HyderabadJakarta

PuneChengduShenzhen

New DelhiShanghai

GuangzhouManila

BangaloreTokyo

In Million

Square Feet

2014 ABSORPTION

60 msf

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400million square feet of new projects are under way, the highest globally.

4 AVAILABILITIES ABOUND IN EMERGING MARKETS, DWINDLING IN COREOffice completions are expected to fall 10% to 68 msf across all 30 cities in 2014, before rebounding to nearly 79 msf in 2015. Given this backdrop, and a modest uptick in demand, Grade A vacancies are

expected to remain stable for emerging markets at around 17% next year. Vacancies will be the highest for Ho Chi Minh City, Kuala Lumpur, Pune, Mumbai, Hanoi, Kolkata, New Delhi, Chengdu, and Ahmedabad, ranging between 20% and nearly 50%. In contrast, relatively moderate development activity in core mature markets should cause vacancies in top-grade space to dip below 7% over the next two years, with Tokyo, Hong Kong, Singapore, Shanghai’s CBD and Auckland potentially the tightest. In Taipei, low vacancies and the lack of developable land in the core CBD has led to a suburban renaissance. Meanwhile, Seoul and all cities in Australia, excluding Brisbane, will sustain double-digit vacancies through 2015, with new construction fairly active in those cities. However, construction is set to drop precipitously in Seoul after nearly four years of uninterrupted boom. Still, with average annual absorption to remain below trend through 2015, it would take another two to three years for Grade A vacancies in the CBD and Yeouido markets to dip below 10%.

5 NEW SUPPLY HIGHEST IN THE WORLD, AND CONCENTRATED IN EMERGING MARKETSEven with elevated vacancies, a boom in new development continues to ripple through the emerging markets, which accounts for nearly 70% of the office construction pipeline of 400 msf in the region. In

China, speculative development has been particularly robust in the non-core markets of Beijing and Shanghai. With nearly 60 msf under way through 2014, developers are targeting the overflow demand from the CBD, as well as tenants seeking less congested, more affordable locations. Notably, top-grade rents in Beijing’s CBD have more than doubled between 2009 and 2012, while those in Shanghai went up over 40% over the same period. Similarly, Tier 2 cities in China are in the midst of a building spree, with nearly 150 msf of office space under construction through 2014, led by Chengdu, Tianjin and Chongqing. Though average vacancies through the third quarter of 2013 stood at over 20% in those secondary locations, government efforts to cool the red-hot residential sector have largely encouraged developers to switch to commercial development. The surge in development in the suburbs of Kuala Lumpur is fueling decentralization; rents for new office projects in those suburban locations are at least 30-40% lower relative to those in the CBD. Meanwhile, office construction in India remains unabated, with over 95 msf underway. Nearly 90% of the office projects are located at New Delhi, Mumbai’s non-CBD, Bengaluru, Hyderabad and Pune, with all except IT/ITeS hubs and Special Economic Zones (SEZs) in those locations, being at a risk of a supply overhang given that vacancies are already elevated (over 20%). Also, Jakarta’s Grade A stock is set to double over the next five years, with 32 msf in its construction pipeline.

ESTIMATED OFFICE COMPLETIONS BY YEAR

0

10

20

30

40

50

60

70

Developed

Milli

on S

quar

e Fe

et

2014

2015

2016

2017

2018

2014

2015

2016

2017

2018

Emerging

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6 POSITIVE RENT REVERSIONS IN MOST MARKETSWhile high occupancies will generally be supportive of rising rents in a number of core and emerging markets over the next two years, rent spikes are less likely to occur in this slow growth environment. In core markets, rents are expected to rise by just nearly 2% over the

next year, with much of the growth seen in the region’s financial centers. Tokyo’s five central wards are set for a rent rebound after six years of no growth; but the recovery will be moderate, with rents expected to grow 7-8% next year. In Hong Kong’s Greater Central, rents are also expected to inch up in 2015, especially with continuing limited options; however, the incremental increase will not be sufficient to offset the cumulative rent decline of over 20% from September 2011 to the first half of 2013. Meanwhile, effective rents will continue their downtrend across all major cities in Australia on the back of a weak office sector. Demand for China’s core markets of Beijing and Shanghai has also come off the boil, but sub-10% vacancies in their CBDs will support the perpetuation of high rents – which are among the highest in the world. Similarly, rent growth in emerging markets is set to subside. Even Jakarta, which is expected to post the strongest rental reversions in 2014, will likely see Grade A rents to escalate by 15% next year, after soaring nearly 40% this year. To be sure, there will be exceptions with occupiers likely to benefit from lower market rents relative to 2013, owing to the abundance of new options and double-digit vacancies: New Delhi, Hanoi, Mumbai, Kolkata, Kuala Lumpur, Pune, Ahmedabad and Bengaluru.

7 PERFORMANCE GAINS INSULATE NEAR-TERM YIELD SPREAD COMPRESSION AND SUPPORT CAPITAL VALUESHigher financing costs are expected to erode at least some of the wide yield spread advantage of investing in both core and emerging markets, or even value-add and opportunistic assets in the region.

Already, we have seen current spreads between office cap rates and the risk-free rate contract by an average of 10-30 basis points in both core and emerging markets in 2013. Nonetheless, they remain attractive, averaging over 200 basis points for core and 300 basis points for emerging markets. Additionally, rent stands to pick up in a number of core and emerging locations led by Bengaluru, Bangkok, Hong Kong, Hyderabad, Jakarta, Manila, Seoul, Singapore and Tokyo, upon the resumption of stronger economic growth over the medium term. On average, we can expect rents to rise annually by 4-5% for core markets, and 6-7% for institutional-grade office properties in emerging markets where supply risks are low. Consequently, we expect relatively solid performance gains to offset the effect of rising interest rates and underpin moderate but stable capital value increases across the region.

8 REGIONAL FINANCIAL HUBS WILL BE MOST VULNERABLE TO FED TAPERING AND CHINA SLOWDOWNWe expect tightening will inevitably occur in an orderly manner with long-term yields to inch up from their low levels. In addition, a Fed taper will occur in the context of a resurgent U.S. so that any adverse

effects on financial conditions in the region should be buffered by the favorable

-50% 0% 50% 100% 150%

Hong KongSeoul

SingaporeShanghai

BeijingTaipei

Auck landMelbourne

SydneyTokyo

BrisbanePerth

Adelaide

HanoiHo Chi Minh City

ChengduNew Delhi

MumbaiKolkata

Kuala LumpurAhmedabadGuangzhouHyderabad

PuneBengaluru

BangkokShenzhen

ChennaiManila

Jakarta

2011- 2014 R ent Growth (%)

EMER

GIN

GD

EVEL

OPE

D

2011-2014 RENT REVERSION

10.3%

3.9%

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impact of improving external demand. Nonetheless, certain economies where capital markets are open will be vulnerable and especially in light of China’s economic slowdown, we see a commensurate impact on investment sales and prices. In Hong Kong, we expect the entire real estate spectrum to be affected, particularly the residential sector. The consensus outlook calls for a 15% decline in residential prices through 2015 that is largely resulting from higher mortgage rates (up 200-300 basis points), but we expect other factors such as slow income growth, low affordability, and increased housing supply to further contribute to a larger price decline. Office values will likewise be affected and likely drop 5-10%, given their high correlation with residential values. For Singapore, we also expect home prices to fall by as much as 15% by 2015, when an interest-rate hike is expected to coincide with a high volume of supply and a weak secondary market. Its commercial sector should fare better, especially given improving fundamentals. However, we could reasonably expect the government in Hong Kong and Singapore to intervene by unwinding the property cooling measures such as easing taxes on stamp duties and capital gains, if a downturn in their economies ensues.

9 INVESTMENT ACTIVITY TO HOLD STEADY Even with Fed Tapering back on the table, the policy adjustment will vary across the region, depending on each economy’s spot in the business cycle. For Japan, quantitative easing will continue in 2014. The Bank of Japan is committed to making tangible progress against

deflation, and stepping in to counter an economic slump that could follow the

5 – 7%

INVESTMENT ACTIVITY TO RISE IN 2014

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consumption-tax hike. This augurs well for Japan’s real estate sector; and with strengthening property fundamentals, it is poised for another run-up after a banner year in 2013 with volumes likely to increase by at least 20% in 2014. We also expect some countries in the region to likely maintain an accommodative monetary policy. Fortunately, the changing growth dynamics are projected to come with subdued inflationary pressures, and allow policymakers to ease, if needed. Case in point is Australia; expectations of further Reserve Bank of Australia rate cuts to prop up growth at least through the first half of next year will prevent the 10-year Australian bond yield from rising as fast, and thus be supportive of the property markets. Hence we anticipate more investors to be drawn to the relatively high yields, liquidity and stability offered by its property markets.

10 ASIAN REAL ESTATE MOVE TO THE GLOBAL STAGEAdditionally, Asia is an important destination for Asian sovereign wealth funds, pension funds, and insurers particularly in China, Taiwan, South Korea and Malaysia. Specifically, insurance companies are willing to accept more risk in their portfolios, and

showing more appetite for real estate debt and equity, in an attempt to chase more yield and boost shareholder returns. The region is also increasingly of interest for U.S. and Europe-based investors as they target globally diversified portfolios. According to data tracker Preqin, Asia-focused real-estate funds have raised US$6.4 billion this year through September, and there are more funds in the pipeline, compared to US$7.8 billion raised for all of 2012. Even real estate now accounts for 16% of the portfolio of Asian family offices, which manage the affairs of wealthy families, compared with just under 9% in 2012, according to a survey by UBS/Campden Wealth Asia-Pacific. Indeed, this rise in allocation to Asian real estate demonstrates a vote of confidence and we expect this trend to continue, especially with solid economic prospects in the region. As such, this backdrop should still provide ample opportunities and thus, impetus to investment activity. We expect volume expected to be up another 5-7% from the record level in 2013.

11 LOWER RETURN EXPECTATIONS This measured pace of growth across the region has prompted investors to adjust their return expectations incrementally over five-year cash flows. These expectations have resulted in lower cash-on-cash required income yield and acceptance for prime office

and retail in core markets. However, this should not be interpreted as a fundamental firming in capitalization rates across the region but more as a recognition that there are few markets where there are significant rental spikes anticipated. This means that investors will seek long-term stable cash flows with an IRR of 7-8 % for core product based on 10-year discounted cash flow, and sellers can expect steady but incremental growth without any significant price spikes in the near to medium term. In 2014, we anticipate this trend will result in more opportunities coming to the market, as sellers seek to redeploy capital in higher growth market sectors or markets.

INVESTMENT OPPORTUNITIES IN INDIA

In the office segment, India has an average annual transaction activity of around 35 msf of Grade A office space. This space take-up ranges from high-end corporate offices, research centers, regional headquarters to data processing centers and back-offices, with rentals ranging from US$5.25 per square foot per month (psf/mo.) to US$75.98 psf/mo. For the first time since 2009, multinational corporates are making large capital commitments in purchasing ready office buildings even amidst a general slowdown in the Indian real estate market, which demonstrates a long term tenant/occupier view. For investment properties consisting of leased core office assets, investors can expect Net Property Income (NPI) cap rates ranging from 9.5% to 12% on Indian Rupee (INR) terms, with 3-4% contracted annual growth escalated every 36 months with Grade A tenants. The pricing, rental growth, tenant quality and overall office market outlook have prompted large investments by various offshore institutions like the Ascendas India Trust listed on SGX and Blackstone (US$650 million). The other asset class is development projects comprising of well-located, mid-priced, new housing projects. This is quite attractive, considering further India’s population, housing gap and increasing affordability per person. Investors have seen IRRs of at least 20% on INR terms often structured with preference to investors to meet certain hurdle IRRs. Additionally, there is an opportunity for fully guaranteed, secured and collateralized mezzanine transactions with returns of more than 18% IRR in residential development stage assets with minimal approval risk and acquisition risk and self-liquidating exit. An untapped opportunity is investment in industrial estates, which could be the next growth stock given the increase in industrial investments in India and the expansion of established industrial estates in Haryana, Rajasthan, Gujarat, Chennai and Pune. These promise long-term tenants, long leases and stable yields.

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“Since 2007, emerging cities have continued to see increasing investments.”

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For India, we also believe that a recovery is in sight.

12 CAPITAL WILL INCREASINGLY FLOW TO NON-CORESince 2007, emerging cities have continued to see increasing investments on the back of a buoyant economic environment. Notably, emerging markets now account for over 60% of investment volume in the region compared to just 30% in 2007,

with bulk of the capital ploughed into development land sites, especially in Chinese cities. We believe that this new era of lower but more consistent growth in core markets will inevitably encourage investors who have a slightly higher risk tolerance to redeploy capital into higher growth sectors and geographies such as emerging markets. Yield is in the secondary growth markets, where there is availability of better, newer quality stock at more attractive pricing relative to the top-tier markets. This is a trend which will fundamentally change the attitude of global investors and the way they assess emerging markets. Previously, investment capital seeking emerging market exposure was targeted at opportunistic due to a limited risk profile range of opportunities. A higher supply of better quality opportunities in emerging markets will offer investors a greater risk profile range to invest which will encourage core plus investors. Case in point is the large-scale exposure Blackstone has taken in India’s office sector where the future supply of quality income and stabilized opportunities will be more limited and in greater demand.

13 GROWTH IN EMERGING ASIA INTACT, OPPORTUNITIES ABOUNDConflicting Fed signals about the timing of monetary policy changes have left financial markets skittish, resulting in a global sell-off of equities, bonds and currencies last summer, with India

and Indonesia being the hardest hit in the region. While central banks and markets across the globe have now priced in an eventual Fed tapering, thus reducing the likelihood of any market turmoil, we believe fundamentals for emerging markets in Asia remain sound. The underlying growth potential for emerging markets remains intact, and even robust relative to other regions. While concerns proliferated about China’s slowing growth, investor sentiment has not waned. According to Preqin data, China has accounted for a growing proportion of capital raised for Asia funds, with a share of 32% in 2013 compared to 15% in 2009. We believe China’s growth story – of urbanization, rising affluence, growing middle class and now, with a potential population boom due to easing of China’s one-child policy – continues to unfold and warrants such optimism.

For India, we also believe that a recovery is in sight and is therefore, rife with opportunities for several reasons. First, India’s economy has been slowing for the past three years and recent indicators show that it is close to the bottom of the current cycle. Policy reforms are now in the works, and are expected to bring the country back to a respectable growth path that should lend support to the Indian Rupee. We expect the economy to hit its potential growth of 6-6.5% in 2015 and expand by 7-8% subsequently. Notably, even at this lower potential growth rate, India would be the fastest-growing large economy in Asia Pacific over the next five years. Additionally, India’s large young population base, increasing incomes and urbanization among others, suggest that there is

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2014 will likely be another record year, even as investment volumes increase in their home region.

potential for achieving double-digit growth rate, provided bold structural reforms and improvements in governance take place. Second, India remains one of the few markets globally offering one of the highest IRR returns in real estate projects, ranging from institutional-grade office properties to residential development projects (See Investment Opportunities in India).

Not surprisingly, there has been a pickup in private equity investments in real estate (PERE) in India, especially in the second half of 2013, with the highest number of deals actively being negotiated simultaneously since 2009, though primarily in residential development projects and leased office assets. Notably, Qatar Investment Authority, ADIA, Temasek, Oman State General Reserve Fund and CPPIB among others, have already committed over US$1.0 billion this year through September. The fund-raising environment (domestic and offshore) has consistently improved with more quality capital available for the sponsors with demonstrated track record, and more fund raises may be announced in 2013 than the previous few years. Lastly, the proposed regulatory changes will also contribute towards the institutionalization of this industry. These include Alternative Investment Fund Regulations by SEBI for domestic PERE funds, proposed Real Estate Regulator Bill, proposed REIT regulations by SEBI, etc. The enactment of the proposed REIT regulations could create a secondary market for commercial property, and therefore increase the exit options and retail participation in non-residential income-yielding real estate, bringing much-needed liquidity in India.

14 CONTINUING APPETITE FOR OTHER REGIONSCapital outflows from the Asia Pacific region continued to rise, hitting another record year in 2013 as investments into Europe/Middle East/Asia and the Americas from the region grew by over a third to reach US$14.9 billion. Growth this year was the highest

since 2010, as recovering asset values in Europe and the U.S. spurred investment into these region’s core markets. 2014 will likely be another record year, even as investment volumes increase in their home region. But we expect the drivers to shift and the outflow to grow at a faster rate as Asian investors increase their allocation to real estate. However, with the Fed beginning its taper, the urgency to diversify will take precedence. Investors will largely seek to hedge against weakening currencies in Asia and reap the returns from a strengthening US dollar. Led by sovereign wealth funds from China, as well as institutional funds from South Korea and Taiwan who are actively seeking real estate investments, the conditions are ripe. While the gateway cities of Europe are traditional investment destinations for Asian investors, we expect investors to remain largely cognizant of any opportunities when seeking out returns in 2014. The property cycle in Asia Pacific is also maturing with yields likely to compress further. Cash-rich institutional funds from Asia are increasingly more sophisticated in seeking out returns and less likely to remain tethered to any location; opportunities to diversify and increase returns will drive investment decisions.

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Cushman & Wakefield is the world’s largest privately-held commercial real estate services firm. The company advises and represents clients on all aspects of property occupancy and investment, and has established a preeminent position in the world’s major markets, as evidenced by its frequent involvement in many of the most significant property leases, sales and management assignments. Founded in 1917, it has approximately 250 offices in 60 countries, employing more than 16,000 professionals. It offers a complete range of services for all property types, including leasing, sales and acquisitions, equity, debt and structured finance, corporate finance and investment banking, corporate services, property management, facilities management, project management, consulting and appraisal. The firm has nearly $4 billion in assets under management globally. A recognized leader in local and global real estate research, the firm publishes its market information and studies online at www.cushmanwakefield.com/knowledge.

This report has been prepared solely for information purposes. It does not purport to be a complete description of the markets or developments contained in this material. The information on which this report is based has been obtained from sources we believe to be reliable, but we have not independently verified such information and we do not guarantee that the information is accurate or complete. Published by Corporate Communications.

©2013 Cushman & Wakefield, Inc. All rights reserved.

Cushman & Wakefield (S) Pte Ltd 3 Church Street, 09-03 Samsung Hub, Singapore 049483

www.cushmanwakefield.com

CONCLUSIONThe outlook for Asia Pacific is one of cautious optimism. The region should remain among the strongest from an economic and property fundamental standpoint for the foreseeable future, but the environment is not without risk and near-term volatility should be expected. For occupiers, the region generally remains bifurcated, with an abundance of options in emerging markets, and decreasingly so for more mature, established markets. Meanwhile, occupancy costs will continue their gradual uptrend for most markets and even reach new highs, especially in fast-growing cities in Southeast Asia. The tightening of the U.S. monetary policy will certainly bring some challenges to the fore in some markets. However, solid economic activity across the region should be sufficient to strengthen income and property values, and still provide compelling opportunities for investors.

For more information about C&W Research, contact:

Sigrid Zialcita Managing Director Research, Asia Pacific sigrid.zialcita@ap.cushwake.com +(65) 6232 0875

John Stinson Executive Managing Director Capital Markets, Asia Pacific john.stinson@ap.cushwake.com +(65) 6232 0878

Richard Middleton Executive Managing Director, Asia Pacific Corporate Occupier & Investor Services richard.middleton@ap.cushwake.com +(852) 2956 7075

Simon Lynch Executive Managing Director, Asia Pacific Valuation & Advisory simon.lynch@ap.cushwake.com +(852) 2956 7038

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