Asia Industry Market Overview

Asia Pacific Industrial Market Overview
REGIONAL RESEARCH
B I - A N N U A L U P DAT E | M AY | 2 0 0 9
Our Knowledge is your Property
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009
Contents
This is the eighth issue of the Asia Pacific Industrial Market Overview, which covers 13 cities in 9 countries, for the review period of October 2008 to March 2009. With this biannual update, we hope to provide an overview of industrial markets catering to multi-national corporations and a comparison of industrial real estate costs across the key cities of the Asia Pacific. Three types of industrial properties are tracked in this report, namely single-user factory premises, single-user warehouse premises and multi-user high-specifications industrial premises, as these are the preferred choices of multi-national corporations. This publication features land and capital values, as well as rents of single-user industrial premises; and rents of multi-user high-specification factories.
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Greater Tokyo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 New Zealand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33-35 Auckland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Wellington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36-37 Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Taipei . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Definitions & Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Regional Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 International Comparison. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-11 Single-user Warehouse Land Values, Capital Values and Monthly Gross Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Single-user Factory Land Values, Capital Values and Monthly Gross Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Multi-user High-Specs Average Monthly Gross Rents . . . . . . . . . . . . . . . . . 11 Local Market Norm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-15 Single-user Warehouse Land Values, Capital Values and Monthly Gross Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Single-user Factory Land Values, Capital Values and Monthly Gross Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16-19 Melbourne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Sydney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-25 Beijing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Guangzhou . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Shanghai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Hong Kong SAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26-27 India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28-29 New Delhi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30-31 Jakarta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
COLLIERS INTERNATIONAL | REGIONAL RESEARCH

EXECUTIVE SUMMARY
Regional Overview
This May issue of the Asia Pacific Industrial Market Overview is enhanced by the addition of Taiwan, bringing the total number of countries and cities surveyed to nine and 13, respectively. The industrial property markets of the Asia Pacific region deteriorated in the period of review between October 2008 and March 2009 as a result of the lingering global financial crisis. Led by a slump in demand for exports, many export-oriented Asia Pacific cities slipped into recession in the last quarter of 2008. To arrest the slide in economic growth and to boost domestic demand, cities in the region have cut their interest rates and/or approved a large stimulus budget for 2009. With manufacturing plants operating at excess capacity due to the slump in demand, an increasing number of manufacturers across the Asia Pacific region are adopting cost cutting measures such as reducing their workforce and real estate requirements or holding back their expansion plans. As a result, demand for industrial space cooled considerably in the six months under review. Investors continued to remain cautious in the face of uncertain economic conditions and declining rents. Stricter requirements by banks resulting generally in a lower loan-to-value ratio and/or higher borrowing rates, have also constrained sales. Against such a backdrop, industrial rents, land and capital values which largely continued to hold firm in the last review period amidst the global downturn finally buckled and contracted during the period between October 2008 and March 2009 for all cities surveyed except for Jakarta. The extent of declines in rents, land and capital values was more severe when measured in US Dollars for Sydney, Melbourne, Jakarta, Auckland and Wellington as their local currencies had depreciated significantly against the US dollar during the review period. On the contrary, industrial rents, land and capital values for Tokyo recorded a rise when measured in US Dollar as its local currency had strengthened against the US Dollar between October 2008 and March 2009. The economies of most cities in the Asia-Pacific region are likely to be in recession in the next 12 months notwithstanding the interest rates cuts and large stimulus budget. As such, demand for industrial properties is likely to stay weak. With the exception of Jakarta and Shanghai where rents, land and capital values are expected to hold firm, those in the remaining cities surveyed are forecast to see declines of up to 30% over the next 12 months.
International Comparison
The purpose of the International Comparison tables is only to facilitate easy and equal comparison of single-user industrial costs. However, payment schemes vary with each country. Some countries may have the practice of paying annual land rent, whilst others pay lump sum land premium or through other modes. Colliers International does not infer that industrial land and buildings in these cities may be acquired through the same schemes or on the basis stated in the table.
SINGLE-USER WAREHOUSE
SINgLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS
VALUE AS OF MARCH 2009 (US$) CITY LAND VALUE1 (PSF) CAPITAL MONTHLY VALUE2 gROSS (PSF) RENT (PSF) 49.82 43.90 61.30 0.46 0.43 0.55 12-MONTH FORECAST (US$) LAND VALUE1 (PSF) CAPITAL VALUE2 (PSF) MONTHLY gROSS RENT (PSF) 0.40 0.39 0.49 bASIS OF LAND AND CAPITAL VALUES LAND TENURE (YEARS) PLOT RATIO LAND AREA (Sq FT) gROSS FLOOR AREA (Sq FT) 100,000 100,000 100,000
Auckland Auckland Manukau North Shore Beijing Tianzhu Tongzhou Greater Tokyo Yokohama - Daikokufuto Kawasaki - Higashi Ogishima Tokyo - Heiwajima Tokyo - Ariake Tokyo - Shinsuna Chiba - Urayasu Chiba - Shibayama Guangzhou GETDD Hong Kong3 Ramp Access Cargo Lift Access Jakarta Bekasi Melbourne East & South East Fringe North West 9.79 29.79 8.65 7.40 43.30 95.16 42.46 38.87 0.38 0.71 0.47 0.32 9.53 29.10 8.53 7.28 42.34 94.26 41.86 38.20 0.38 0.69 0.47 0.32 60 60 60 60 1.0 1.0 1.0 1.0 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 6.29 15.63 6.29 15.63 60 1.0 100,000 100,000 187.02 172.51 0.97 0.69 158.97 129.38 0.83 0.56 60 60 1.0 1.0 100,000 100,000 100,000 100,000 8.73 52.29 0.41 8.72 52.26 0.41 60 1.0 100,000 100,000 14.97 33.47 120.43 116.18 148.13 44.60 3.58 156.21 181.23 294.42 220.88 269.64 128.87 96.51 1.72 1.79 2.79 1.99 2.26 1.23 1.15 14.22 31.80 114.41 110.37 140.72 42.37 3.40 148.40 172.17 279.70 209.84 256.16 122.43 91.69 1.61 1.66 2.58 1.99 2.26 1.23 1.07 60 60 60 60 60 60 60 1.0 1.0 1.0 1.0 1.0 1.0 1.0 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 19.21 9.49 75.84 58.19 0.41 0.37 19.44 9.49 74.38 57.46 0.41 0.35 60 60 1.0 1.0 100,000 100,000 100,000 100,000 13.27 14.15 16.60 9.95 10.61 12.45 40.90 36.36 50.86 60 60 60 1.0 1.0 1.0 100,000 100,000 100,000
1. Land values are expressed in US$ per sq ft per plot ratio 2. Capital values refer to the values of both land and building 3. Values provided are for multi-user warehouse buildings
continued on page 5

EXECUTIVE SUMMARY
SINgLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS (CONTD)
VALUE AS OF MARCH 2009 (US$) CITY LAND VALUE1 (PSF) CAPITAL MONTHLY VALUE2 gROSS (PSF) RENT (PSF) 57.52 52.53 71.64 71.64 34.91 16.35 0.58 0.65 0.81 0.30 0.39 0.19 0.24 12-MONTH FORECAST (US$) LAND VALUE1 (PSF) CAPITAL MONTHLY VALUE2 gROSS (PSF) RENT (PSF) 52.10 49.50 65.13 65.13 31.34 14.99 0.53 0.61 0.73 0.26 0.34 0.17 0.20 bASIS OF LAND AND CAPITAL VALUES LAND TENURE (YEARS) PLOT RATIO LAND AREA (Sq FT) gROSS FLOOR AREA (Sq FT) 100,000 100,000 100,000 100,000 100,000 100,000 100,000
New Delhi Delhi - East Delhi - West Delhi - South Delhi - North Delhi - NH24 Delhi - NH1 Delhi - NH8 Shanghai Pudong New Area Singapore East Sydney South Southwest West Wellington Ngauranga Petone Seaview 9.04 9.17 9.17 44.86 41.90 41.90 0.42 0.42 0.42 8.14 8.25 8.25 41.44 38.98 38.86 0.40 0.39 0.40 60 60 60 1.0 1.0 1.0 100,000 100,000 100,000 100,000 100,000 100,000 54.16 14.75 24.03 146.26 72.17 126.26 0.98 0.59 0.84 47.84 12.69 20.67 130.59 64.43 113.40 0.98 0.59 0.84 60 60 60 1.0 1.0 1.0 100,000 100,000 100,000 100,000 100,000 100,000 36.12 98.40 0.91 30.71 83.26 0.84 60 1.0 100,000 100,000 38.01 51.75 0.48 38.01 51.75 0.48 60 1.0 100,000 100,000 87.67 166.00 156.06 124.91 30.72 15.41 82.06 157.82 148.98 115.83 27.03 14.23 60 60 60 60 60 60 60 1.0 1.0 1.0 1.0 1.0 1.0 1.0 100,000 100,000 100,000 100,000 100,000 100,000 100,000
1. Land values are expressed in US$ per sq ft per plot ratio 2. Capital values refer to the values of both land and building
INTERNATIONAL COMPARISON OF WAREHOUSE LAND VALUES
Delhi - West Greater Tokyo - Tokyo - -Shinsuna Greater Tokyo - Tokyo Shinsuna Delhi - South Greater Tokyo - Tokyo - - Heiwajima Greater Tokyo - Tokyo Heiwajima Greater Tokyo - Greater- Tokyo - Tokyo - Shinsuna Tokyo Ariake Greater Tokyo - Tokyo- Ariake Delhi - North Sydney -- South Sydney South Greater Tokyo - Tokyo - Heiwajima New Delhi -- Noida New Delhi Noida Greater Tokyo - Tokyo - Ariake Greater Tokyo - Chiba - -Urayasu Greater Tokyo - Chiba Urayasu Delhi - East Shanghai - Pudong New Area Shanghai - Pudong New Area Sydney - South Singapore - East Singapore - East Greater Tokyo - Chiba - Urayasu Melbourne Fringe Melbourne -- Fringe Shanghai - Pudong New Area Greater Tokyo - Kawasaki - Higashi-Ogishima Greater Tokyo - Kawasaki Higashi Singapore - East Sydney West Sydney -- West Greater Tokyo - Kawasaki - Higashi Ogishima NewNew DelhiIMT Manesar Delhi - - IMT Manesar Delhi - NH24 Auckland - North Shore Auckland - North Shore Melbourne - Fringe Sydney - Southwest Sydney - Southwest Sydney - West Auckland Manukau Auckland - -Manukau Beijing - Tianzhu Auckland Auckland Auckland - -Auckland Auckland - North Shore Beijing Tianzhu Beijing - -Tianzhu Delhi - NH1 Wellington Seaview Wellington - -Seaview Greater Tokyo - Yokohama - Daikokufuto Wellington Petone Wellington - -Petone Sydney - Southwest Wellington - Ngauranga Wellington - NgaurangaAuckland - Manukau NewNew DelhiGreater Noida Delhi - - Greater Noida Auckland - Auckland Greater Tokyo - Yokohama Yokohama Daikokufuto Greater Tokyo - - Melbourne - East & South East Beijing - Tongzhou Beijing - Tongzhou Beijing - Tongzhou Melbourne - East & South East Melbourne - East & South East Wellington - Seaview Melbourne North Melbourne -- NorthWellington - Petone Melbourne West Melbourne -- West Wellington - Ngauranga Guangzhou GETDD Guangzhou - -GETDD Guangzhou - GETDD Jakarta Bekasi Jakarta -- Bekasi Melbourne - North Greater Tokyo - Chiba - Shibayama Greater Tokyo - Chiba - Shibayama Melbourne - West
0.00 20.00 Jakarta - Bekasi 0.00 20.00 Greater Tokyo - Chiba - Shibayama
40.00
40.00
60.00
60.00
80.00
80.00
100.00
100.00
120.00
120.00
140.00
140.00
160.00
160.00
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
Warehouse Land Values (US$ psf per plot ratio) Warehouse Land Values (US$ psf per plot ratio)
INTERNATIONAL COMPARISON OF WAREHOUSE CAPITAL VALUES

Greater Tokyo - Tokyo - Heiwajima Greater Tokyo - Tokyo - Shinsuna Greater Tokyo - Tokyo - Ariake *Hong Kong - Ramp Access Greater Tokyo - Kawasaki - Higashi Ogishima *Hong Kong - Cargo Lift Access Greater Tokyo - Yokohama - Daikokufuto Sydney - South Greater Tokyo - Chiba - Urayasu Sydney - West Singapore - East Greater Tokyo - Chiba - Shibayama Melbourne - Fringe Beijing - Tianzhu Sydney - Southwest Delhi - North Delhi - South Auckland - North Shore Beijing - Tongzhou Delhi - East Delhi - West Guangzhou - GETDD Shanghai - Pudong New Area Auckland - Auckland Wellington - Ngauranga Auckland - Manukau Melbourne - East & South East Melbourne - North Wellington - Seaview Wellington - Petone Melbourne - West Delhi - NH24 Delhi - NH8 Jakarta - Bekasi 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00
Warehouse Capital Values (US$ psf) Warehouse Capital Values (US$ psf)
* Values provided are for multi-user warehouse buildings

EXECUTIVE SUMMARY
INTERNATIONAL COMPARISON OF WAREHOUSE MONTHLY GROSS RENTS
Greater Tokyo - Tokyo - Heiwajima Greater Tokyo - Tokyo - Shinsuna Greater Tokyo - Tokyo - Ariake Greater Tokyo - Kawasaki - Higashi Ogishima Greater Tokyo - Yokohama - Daikokufuto Greater Tokyo - Chiba - Urayasu Greater Tokyo - Chiba - Shibayama Sydney - South *Hong Kong - Ramp Access Singapore - East Sydney - West Delhi - South Melbourne - Fringe *Hong Kong - Cargo Lift Access Delhi - West Sydney - Southwest Delhi - East Auckland - North Shore Shanghai - Pudong New Area Melbourne - North Auckland - Auckland Auckland - Manukau Wellington - Seaview Wellington - Ngauranga Wellington - Petone Guangzhou - GETDD Beijing - Tianzhu Delhi - NH24 Melbourne - East & South East Beijing - Tongzhou Melbourne - West Delhi - North Delhi - NH8 Delhi - NH1 0.00 0.50 1.00 1.50 2.00 2.50 3.00
Warehouse Monthly Gross Rents (US$ psf) Warehouse Monthly Gross Rents (US$ psf)
* Values provided are for multi-user warehouse buildings
SINGLE-USER FACTORY
SINgLE-USER FACTORY LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS
VALUE AS OF MARCH 2009 (US$) CITY LAND VALUE1 (PSF) CAPITAL VALUE2 (PSF) MONTHLY gROSS RENT (PSF) 1.14 0.63 12-MONTH FORECAST (US$) LAND VALUE1 (PSF) bASIS OF LAND AND CAPITAL VALUES PLOT RATIO LAND AREA (Sq FT) gROSS FLOOR AREA (Sq FT) 100,000 100,000 CAPITAL MONTHLY LAND VALUE2 gROSS TENURE (PSF) RENT (YEARS) (PSF) 126.95 57.55 1.14 0.59 60 60
Beijing Shang Di Yi Zhuang Greater Tokyo Tokyo - Ota Yokohama - Naka Chiba - Ichikawa Chiba - Mihama Saitama - Ageo Guangzhou GETDD Hong Kong
3
41.71 3.90
126.95 58.24
41.71 3.80
1.0 1.0
100,000 100,000
63.36 33.01 34.64 16.24 12.81
126.03 107.46 123.38 75.33 71.78
61.46 32.02 33.60 15.75 12.43
122.25 104.23 119.68 73.07 69.63
60 60 60 60 60
1.0 1.0 1.0 1.0 1.0
100,000 100,000 100,000 100,000 100,000
100,000 100,000 100,000 100,000 100,000
8.73
54.24
0.51
8.72
54.00
0.50
60
1.0
100,000
100,000
Low Quality Mid Quality Prime Quality Jakarta Bekasi Karawang Melbourne East & South East Fringe North West New Delhi Delhi - East Delhi - West Delhi - South Delhi - North Delhi - NH24 Delhi - NH1 Delhi - NH8 Shanghai Minhang District Pudong New Area Singapore Central
110.92 145.99 221.80
0.70 0.86 1.03
77.64 102.19 155.26
0.53 0.64 0.77
60 60 60
1.0 1.0 1.0
100,000 100,000 100,000
100,000 100,000 100,000
6.35 4.41
19.43 17.54
0.29
6.35 4.41
19.43 17.54
0.29
60 60
1.0 1.0
100,000 100,000
100,000 100,000
9.79 29.79 8.65 7.40
43.30 95.16 42.46 38.87
0.38 0.71 0.47 0.32
9.53 29.10 8.53 7.28
42.34 94.26 41.86 38.20
0.38 0.69 0.47 0.32
60 60 60 60
1.0 1.0 1.0 1.0
100,000 100,000 100,000 100,000
100,000 100,000 100,000 100,000
82.10 155.46 146.15 124.69 28.99 14.54 -
60.78 64.04 78.16 71.64 34.91 16.35
0.66 0.70 0.90 0.29 0.37 0.19 0.24
76.85 147.80 139.52 115.43 25.51 13.43 -
56.01 58.62 71.64 65.13 31.34 14.99
0.61 0.65 0.83 0.26 0.34 0.17 0.20
60 60 60 60 60 60 60
1.0 1.0 1.0 1.0 1.0 1.0 1.0
100,000 100,000 100,000 100,000 100,000 100,000 100,000
100,000 100,000 100,000 100,000 100,000 100,000 100,000
15.15 16.74
46.96 43.07
0.31 0.31
15.15 16.74
46.96 43.07
0.31 0.31
60 60
1.0 1.0
100,000 100,000
100,000 100,000
51.00
101.36
0.94
43.35
86.16
0.87
60
1.0
100,000
100,000
1. Land values are expressed in US$ per sq ft per plot ratio 2. Capital values refer to the values of both land and building 3. Values provided are for multi-user factory buildings

EXECUTIVE SUMMARY
INTERNATIONAL COMPARISON OF FACTORY LAND VALUES
Delhi - West Delhi - South Delhi - North Delhi - East Greater Tokyo - Tokyo - Ota Singapore - Central Beijing - Shang Di Greater Tokyo - Chiba - Ichikawa Greater Tokyo - Yokohama - Naka Melbourne - Fringe Delhi - NH24 Shanghai - Pudong New Area Greater Tokyo - Chiba - Mihama Shanghai - Minhang District Delhi - NH1 Greater Tokyo - Saitama - Ageo Melbourne - East & South East Guangzhou - GETDD Melbourne - North Melbourne - West Jakarta - Bekasi Jakarta - Karawang Beijing - Yi Zhuang 0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 180.00
Factory Land Values (US$ psf per plot ratio)
INTERNATIONAL COMPARISON OF FACTORY CAPITAL VALUES

*Hong Kong - Prime Quality *Hong Kong - Mid Quality Beijing - Shang Di Greater Tokyo - Tokyo - Ota Greater Tokyo - Chiba - Ichikawa *Hong Kong - Low Quality Greater Tokyo - Yokohama - Naka Singapore - Central Melbourne - Fringe Delhi - South Greater Tokyo - Chiba - Mihama Greater Tokyo - Saitama - Ageo Delhi - North Delhi - West Delhi - East Beijing - Yi Zhuang Guangzhou - GETDD Shanghai - Minhang District Melbourne - East & South East Shanghai - Pudong New Area Melbourne - North Melbourne - West Delhi - NH24 Jakarta - Bekasi Jakarta - Karawang Delhi - NH8 0.00 50.00 100.00 150.00 200.00 250.00
Factory Capital Values (US$ psf)

* Values provided are for multi-user factory buildings
INTERNATIONAL COMPARISON OF FACTORY MONTHLY GROSS RENTS
Beijing - Shang Di *Hong Kong - Prime Quality Singapore - Central Delhi - South *Hong Kong - Mid Quality Melbourne - Fringe *Hong Kong - Low Quality Delhi - West Delhi - East Beijing - Yi Zhuang Guangzhou - GETDD Melbourne - North Melbourne - East & South East Delhi - NH24 Melbourne - West Shanghai - Pudong New Area Shanghai - Minhang District Jakarta - Karawang Delhi - North Delhi - NH8 Delhi - NH1 0.00 0.20 0.40 0.60 0.80 1.00 1.20
Factory Monthly Gross Rents (US$ psf)

* Values provided are for multi-user factory buildings
10

EXECUTIVE SUMMARY
MULTI-USER HIGH-SPECS
MULTI-USER HIgH-SPECS AVERAgE MONTHLY gROSS RENTS

AS OF MARCH 2009 CITY Auckland Beijing Hong Kong Melbourne New Delhi - East New Delhi - West New Delhi - South New Delhi - North New Delhi - NH24 New Delhi - NH1 New Delhi - NH8 Shanghai Singapore Sydney Taipei - Neihu Technology Park Greater Tokyo - Kanagawa Science Park Greater Tokyo - Yokohama Business Park Greater Tokyo - Hakusan Hi-Tech Park Wellington AVERAgE MONTHLY gROSS RENT (US$ PSF) 0.62 1.17 1.79 1.11 0.76 0.76 0.90 0.44 0.46 0.22 0.40 1.10 2.24 0.78 0.92 5.16 3.44 3.73 0.47 12-MONTH FORECAST AVERAgE MONTHLY gROSS RENT (US$ PSF) 0.56 1.17 1.26 1.11 0.68 0.72 0.82 0.40 0.42 0.20 0.36 1.10 1.57 0.78 0.84 4.87 3.44 3.44 0.45 LEASE TERM (YEARS) 3 3 3 3 3 to 9 3 to 9 3 to 9 3 to 9 3 to 9 3 to 9 3 to 9 3 3 3 3 to 5 3 3 3 3 bASIS OF RENTAL RATES LOCATION NET FLOOR RENT FREE AREA PERIOD (Sq FT) (MONTH) Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 1 1 1 1 Negotiable Negotiable Negotiable Negotiable Negotiable Negotiable Negotiable 1 1 1 1 to 2 1 1 1 1
INTERNATIONAL COMPARISON OF HIGH-SPECS MONTHLY GROSS RENTS

Greater Tokyo - Kanagawa Science Park Greater Tokyo - Hakusan Hi-Tech Park Greater Tokyo - Yokohama Business Park Singapore Hong Kong Beijing Melbourne Shanghai Taipei - Neihu Technology Park New Delhi - South Sydney New Delhi - West New Delhi - East Auckland Wellington New Delhi - NH24 New Delhi - North New Delhi - NH8 New Delhi - NH1 0.00 1.00 2.00 3.00 4.00 5.00 6.00
High-Specs Average Monthly Gross Rents (US$ psf)
11
Local Market Norm

The purpose of the Local Market Norm tables is only to provide an understanding of single-user industrial costs in the context of the various submarkets. The land tenure, plot ratio, land and building size quoted are based on recent offerings and transactions in each local market. However, payment schemes vary with each country. Some countries may have the practice of paying annual land rent, whilst others pay lump sum land premium or through other modes. Colliers International does not infer that industrial land and buildings in these cities may be acquired through the same schemes.
SINgLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS1
IN LOCAL CURRENCY AS OF MARCH 2009 CITY LOCAL CURRENCY IN US$ AS OF MARCH 2009 bASIS OF LAND, CAPITAL VALUES AND MONTHLY gROSS RENTS (LOCAL MARKET NORM) gROSS FLOOR AREA (Sq FT) 15,000 50,000 52,500
LAND CAPITAL MONTHLY LAND VALUE2 VALUE3 RENT VALUE2 (PSF) (PSF) (PSF) (PSF)
CAPITAL MONTHLY LAND PLOT LAND VALUE3 RENT TENURE RATIO AREA (PSF) (PSF) (YEARS) (Sq FT)
Auckland Auckland Manukau North Shore Beijing Tianzhu Tongzhou Greater Tokyo Yokohama Daikokufuto Kawasaki Ogishima Tokyo - Ariake Tokyo - Shinsuna Chiba - Urayasu Chiba - Shibayama Guangzhou GETDD Hong Kong
4
NZ$ NZ$ NZ$
32.34 30.32 35.58
136.36 111.57 145.41
0.95 0.86 1.03
18.18 17.04 20.00
76.65 62.71 81.73
0.53 0.48 0.58
Freehold Freehold Freehold
0.5 0.5 0.5
30,000 100,000 105,000
CNY CNY
118.31 60.04
484.50 371.74
2.83 2.54
17.31 8.78
70.88 54.38
0.41 0.37
50 50
0.7 0.9
150,000 120,000
105,000 108,000
JPY Higashi JPY JPY JPY JPY JPY JPY
2,039 3,155 10,357 14,987 17,288 6,431 418
14,586 14,214 22,203 24,061 25,176 15,793 9,011
135 121 183 177 177 121 90
20.79 32.18 105.64 152.87 176.34 65.59 4.26
148.77 144.98 226.48 245.43 256.80 161.09 91.92
1.38 1.23 1.86 1.81 1.81 1.23 0.92
Freehold Freehold Freehold Freehold Freehold Freehold Freehold
4.0 3.0 3.0 2.0 2.0 2.0 2.0
107,639
430,556
1,076,390 3,229,170 1,614,585 4,843,755 107,639 215,278 53,820 215,278 215,278 430,556 107,640 430,556
Tokyo - Heiwajima
CNY
56.31
305.50
2.56
8.24
44.69
0.37
50
1.5
150,000
225,000
Ramp Access Cargo Lift Access Jakarta Bekasi
HK$ HK$
1,450.00 1,337.50
7.55 5.38
187.02 172.51
0.97 0.69
N.A. N.A.
N.A. N.A.
N.A. N.A.
N.A. N.A.
Rp
61,608
140,749
5.56
12.71
30
2.4
10,000
24,000
1. Values and rents may not be quoted in $ psf in local market practice 2. Land values are expressed as per sq ft per plot ratio 3. Capital values refer to the values of both land and building 4. Values provided are for multi-user warehouse buildings
continued on page 13
12

EXECUTIVE SUMMARY
Local Market Norm

SINgLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS1 (CONTD)
IN LOCAL CURRENCY AS OF MARCH 2009 CITY LOCAL CURRENCY LAND CAPITAL VALUE2 VALUE3 (PSF) (PSF) MONTHLY RENT (PSF) IN US$ AS OF MARCH 2009 LAND VALUE2 (PSF) bASIS OF LAND, CAPITAL VALUES AND MONTHLY gROSS RENTS (LOCAL MARKET NORM) gROSS FLOOR AREA (Sq FT) 24,000 18,000 24,000 18,000
Melbourne East & South East Fringe North West New Delhi East West South North NH24 NH1 NH8 Shanghai Pudong New Area Singapore East Sydney South Southwest West Wellington Ngauranga Petone Seaview NZ$ NZ$ NZ$ 21.44 19.65 19.65 114.02 106.49 106.49 0.83 0.82 0.83 12.05 11.05 11.05 64.09 59.86 59.86 0.47 0.46 0.47 Freehold Freehold Freehold 0.5 0.5 0.5 70,000 100,000 100,000 35,000 50,000 50,000 A$ A$ A$ 90.58 30.22 37.20 224.00 140.00 167.00 1.24 0.91 0.94 62.26 20.77 25.57 153.96 96.22 114.78 0.85 0.63 0.65 Freehold Freehold Freehold 1.2 1.2 1.2 220,000 60,000 430,000 264,000 72,000 516,000 S$ 56.00 130.00 1.20 36.86 85.57 0.79 30+30 2.0 150,000 300,000 CNY 232.00 330.62 3.26 33.94 48.37 0.48 50 0.6 150,000 90,000 Rs Rs Rs Rs Rs Rs Rs 6,944 13,148 12,361 9,166 2,159 1,083 4,416 4,033 5,500 5,500 2,562 1,200 34 38 48 18 23 11 14 139.16 263.49 247.71 183.69 43.27 21.70 88.50 80.82 110.22 110.22 51.34 24.05 0.68 0.76 0.95 0.35 0.46 0.22 0.28 Freehold Freehold Freehold Freehold 99 99 99 0.6 0.6 0.6 0.6 0.6 0.6 0.6 5,000 7,000 10,000 15,000 15,000 15,000 15,000 3,000 4,200 6,000 9,000 9,000 9,000 9,000 A$ A$ A$ A$ 19.50 59.39 17.25 14.75 90.00 213.00 88.26 87.00 0.62 1.21 0.77 0.55 13.40 40.82 11.86 10.14 61.86 146.39 60.66 59.80 0.43 0.83 0.53 0.38 Freehold Freehold Freehold Freehold 0.6 0.6 0.6 0.6 40,000 30,000 40,000 30,000
1. Values and rents may not be quoted in $ psf in local market practice 2. Land values are expressed as per sq ft per plot ratio 3. Capital values refer to the values of both land and building
13
Local Market Norm

SINGLE-USER FACTORY
SINgLE-USER FACTORY LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS1
IN LOCAL CURRENCY AS OF MARCH 2009 CITY LOCAL CURRENCY LAND CAPITAL MONTHLY VALUE2 VALUE3 RENT (PSF) (PSF) (PSF) IN US$ AS OF MARCH 2009 LAND VALUE2 (PSF) bASIS OF LAND, CAPITAL VALUES AND MONTHLY gROSS RENTS (LOCAL MARKET NORM) gROSS FLOOR AREA (Sq FT) 429,000 54,600
Beijing Shang Di Yi Zhuang Greater Tokyo Tokyo - Ota Yokohama - Naka Chiba - Ichikawa Chiba - Mihama Saitama - Ageo Guangzhou GETDD Hong Kong4 Low Quality Mid Range Prime Quality Jakarta Bekasi Karawang Melbourne East & South East Fringe North West New Delhi East West South North NH24 NH1 NH8 Rs Rs Rs Rs Rs Rs Rs 6,944 13,148 12,361 9,722 2,159 1,083 4,666 4,916 6,000 5,500 2,562 1,200 39 41 53 17 22 11 14 139.16 263.49 247.71 194.83 43.27 21.70 93.51 98.52 120.24 110.22 51.34 24.05 0.78 0.82 1.06 0.34 0.44 0.22 0.28 Freehold Freehold Freehold Freehold 99 99 99 1.25 1.25 1.25 1.25 1.25 1.25 1.25 5,000 7,000 10,000 15,000 15,000 15,000 15,000 6,250 8,750 12,500 18,750 18,750 18,750 18,750 A$ A$ A$ A$ 19.50 59.39 17.25 14.75 90.00 213.00 88.26 87.00 0.62 1.21 0.77 0.55 13.40 40.82 11.86 10.14 61.86 146.39 60.66 59.80 0.43 0.83 0.53 0.38 Freehold Freehold Freehold Freehold 0.6 0.6 0.6 0.6 40,000 30,000 40,000 30,000 24,000 18,000 24,000 18,000 Rp Rp 62,212 40,653 174,950 140,749 3,100 5.62 3.67 15.80 12.71 0.28 30 30 2.4 2.4 15,000 70,000 36,000 168,000 HK$ HK$ HK$ 859.96 1,131.88 1,719.63 5.46 6.66 7.97 110.92 145.99 221.80 0.70 0.86 1.03 N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. CNY 56.31 316.90 3.15 8.24 46.36 0.46 50 1.5 150,000 225,000 JPY JPY JPY JPY JPY 10,183 4,258 4,043 2,412 1,903 17,651 11,706 11,520 9,848 9,383 103.87 43.43 41.24 24.61 19.41 180.04 119.40 117.50 100.44 95.71 Freehold Freehold Freehold Freehold Freehold 2.0 2.0 2.0 2.0 2.0 16,146 107,634 215,278 32,292 32,292 32,292 215,268 430,556 64,584 64,584 CNY CNY 240.58 27.88 657.43 390.33 6.22 4.52 35.19 4.08 96.18 57.10 0.91 0.66 50 50 1.1 1.3 390,000 42,000
1. Values and rents may not be quoted in $ psf in local market practice 2. Land values are expressed as per sq ft per plot ratio 3. Capital values refer to the values of both land and building 4. Values provided are for multi-user factory buildings
continued on page 15
14

EXECUTIVE SUMMARY
Local Market Norm

SINGLE-USER FACTORY
SINgLE-USER FACTORY LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS1 (CONTD)
IN LOCAL CURRENCY AS OF MARCH 2009 CITY LOCAL CURRENCY IN US$ AS OF MARCH 2009 bASIS OF LAND, CAPITAL VALUES AND MONTHLY gROSS RENTS (LOCAL MARKET NORM) gROSS FLOOR AREA (Sq FT) 150,000 150,000
LAND CAPITAL MONTHLY LAND VALUE2 VALUE3 RENT VALUE2 (PSF) (PSF) (PSF) (PSF)
Shanghai Minhang District Pudong New Area Singapore Central S$ 81.57 140.00 1.30 53.69 92.15 0.86 30 + 30 2.5 100,000 250,000 CNY CNY 95.00 105.00 300.00 320.00 2.13 2.52 13.90 15.36 43.89 46.81 0.31 0.37 50 50 1 1 150,000 150,000
1. Values and rents may not be quoted in $ psf in local market practice 2. Land values are expressed as per sq ft per plot ratio 3. Capital values refer to the values of both land and building
15
Australia
ECONOMIC INDICATORS FOR MELBOURNE
ECONOMIC INDICATORS
INDICATORS Year-on-Year GDP Growth Year-on-Year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes)
*n.a. denotes not available
PERIOD October 2008 - March 2009 October 2008 - March 2009 October 2008 - March 2009 October 2008 - March 2009 October 2008 - March 2009 October 2008 - March 2009
DATA -1.2% 2.6% A$24.5 billion A$7.3 billion n.a. n.a.
MELBOURNE
Factory and Warehouse `` In response to the changing economic conditions, the Reserve Bank of Australia cut the official cash rate from 7.0% to 3.25% in the period under review, with further cuts anticipated. The inflation rate for Melbourne, too, decreased to 3.2% for the December 2008 quarter from 4.8% in the September 2008 quarter. `` Investment sales activity was most active within the sub A$5 million range, with private investors taking advantage of falling interest rates and vendors being forced to meet the market. However, tightened lending conditions resulted in the medium to higher-end property market being locked in a stalemate, thereby contributing to the absence of significant sale transactions exceeding A$5 million during the period under review. As a result, land and capital values eased by an average of 1.8% and 1.1%, respectively. Tenant demand declined considerably across most regions during the latter half of 2008, with many businesses opting to postpone any previous relocation plans and instead, choosing to renew leases. The majority of leasing activity occurred within the smaller end market (building areas under 10,760 sq ft) while tenant demand for medium to larger sized warehouses fell significantly, with marketing periods commonly exceeding six months. But on the whole, Melbournes industrial net face rents remained relatively stable between October 2008 and March 2009, whilst incentive levels within the West and East regions increased on average by 5% as landlords competed to secure tenants.
``
Major lease transactions in the period under review include Breeze Logistics 53,800 sq ft commitment to 1464 Ferntree Gully Road, Knoxfield; and, Corus 48,420 sq ft commitment to 1/66-74 Micro Circuit, Dandenong. Amongst the new completion of warehouse space in the period October 2008 to March 2009 was a 59,180-sq ft warehouse for a transport and logistics provider, GKR Transport at the Wyndham Industrial Estate. With the official cash rate reduced by 375 basis points since end-September 2008, to 3.25% in March 2009, and with further reductions anticipated, private investors are expected to continue to return to the market as buying opportunities resulting from forced sales and vendors being compelled to meet the market rise. Capital values are, thus, likely to remain under pressure and are expected to decline by between 0.9% and 2.2% on average in the next 12 months. Average land values are foreseen to decline by a steeper range of between 1.4% and 2.6% during the same time period. Except for eastern and south-eastern Melbourne where rents are forecast to ease by an average of 1.6% over the next 12 months, rents for the remaining submarkets surveyed are forecast to hold firm. However, incentives offered by landlords are likely to increase across all grades and regions over the next 12 months amidst a climate of weakened demand and landlords competing to secure tenants.
``
``
``
``
16

EXECUTIVE SUMMARY
AUSTRALIA
Australia
MAJOR TRANSACTIONS IN MELBOURNE
TRANSACTIONS
BUILDING / LAND PLOT 107 William Angliss Drive, Laverton North 1464 Ferntree Gully Road, Knoxfield Buildings 6, 7 & 8 Aquatica Business Park, 344 Lorimer Street, Port Melbourne 1/66-74 Micro Circuit, Dandenong Units 5, 6 & 7 97 Lewis Road, Wantirna PROPERTY TYPE Warehouse Warehouse Warehouse Warehouse Warehouse LEASE / SALE Lease Lease Lease Lease Lease TENANT / PURCHASER Moreton Hire Breeze Logistics Staging Connections Corus ANL Lighting FLOOR / LAND AREA (SQ FT) 44,632 53,800 33,679 48,420 39,285
17
Australia
ECONOMIC INDICATORS FOR SYDNEY
ECONOMIC INDICATORS
PERIOD October 2008 - March 2009 October 2008 - March 2009 October 2008 - March 2009 October 2008 - March 2009 October 2008 - March 2009 October 2008 - March 2009
DATA -0.02% n.a. A$60.2 billion A$23.1 billion n.a. n.a.
SYDNEY
Factory, Warehouse and High-Specs `` Activity in the pre-commitment market eased in the last quarter of 2008 due to the global financial crisis and softening economic outlook. This, coupled with rising construction costs, has put a halt to speculative development for the timebeing. `` As speculative development activity took a breather, land values for warehouses in Sydney slid by between 4.7% and 14.9% during the review period. Capital values of warehouses also declined, by between 1.2% and 3.6% on average during the review period. Despite the uncertain economic environment, the cut in the official cash rate to 3.25% in March 2009 and increasing
industrial yields have persuaded some investors to enter the investment market. Major transactions which took place, despite the cautious investor market due to the financial market meltdown, include the sale of a 63,593-sq ft building at 70 Euston Road, Alexandria for A$10,000,000 and a large 266,396-sq ft warehouse in Erskine Park to Linfox for A$25,000,000. `` Sydneys industrial market is expected to continue to soften over the next 12 months with land values and capital values decreasing by up to 15%. Investment sales activity is expected to pick up in the second half of 2009 as real estate investment trusts are forced to offload their assets to re-weight their debt.
``
18

EXECUTIVE SUMMARY
Australia
MAJOR TRANSACTIONS IN SYDNEY
TRANSACTIONS
BUILDING / LAND PLOT Homebush Corporate Park 9-15 Gundah Road, Mount Ku-ring-gai Lidcombe Business Park 8 Distribution Place, Seven Hills Capicure Drive Lockwood Road, Erskine Park Beauchamp Road & Botany Road, Port Botany 6 MacDonald Road, Ingleburn 70 Euston Road, Alexandria 6-8 Helles Avenue Moorebank Lot 5&6 Lenore Drive, Erskine Park PROPERTY TYPE Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse LEASE / SALE Lease Lease Lease Lease Lease Lease Lease Lease Sale Sale Sale TENANT / PURCHASER Grays Online Auspods Rentokil Cabac Schnelder Electric Corporate Express PJM Logistics Australia Post Undisclosed Private Investor Linfox FLOOR / LAND AREA (SQ FT) 274,813 26,770 75,595 132,600 193,750 462,525 80,729 54,896 63,593 21,400 266,396
19
China
ECONOMIC INDICATORS FOR BEIJING
ECONOMIC INDICATORS
PERIOD January 2008 - December 2008 January 2008 - December 2008 October 2008 - December 2008 October 2008 - December 2008 October 2008 - December 2008 October 2008 - December 2008
DATA 9.0% 2.2% CNY291.3 billion CNY98.4 billion n.a. 326,000
BEIJING
Factory and Warehouse `` Beijings economic growth slowed to 9.0% in 2008 whilst the growth rate of manufacturing output slowed to 2.2% as of end-2008, a decrease of 6.1 percentage points from 1H08 to 2H08. To sustain economic growth, several local district councils continued to promote and introduce new incentives to incubate the industrial property market. `` As a result, the land sales market remained active, led by domestic demand for owner-occupancy. For example, BOE Technology Group and Suning Appliance acquired land lots of 188,616 sq ft and 1.6 million sq ft, respectively, for industrial development in Beijing Economic Technological Development Area (BDA) and warehouse development in the Beijing Tongzhou Logistics Park. This provided support for factory land values in Shangdi to hold firm and warehouse land values in Tianzhu to nudge up by 6.7% during the period of review. The factory land values in Tongzhou and warehouse land values in Yi Zhuang, however, plummeted by 32.7% and 40.8% during the six-month period ending March 2009 as the government marked down land prices significantly to entice high-profile manufacturers to set up operations in these submarkets. The leasing demand for industrial properties, however, slackened with limited deals concluded, mostly by domestic
enterprises. For example, Shenzhen Sundan, a local home appliance retailer, leased 10,764 sq ft in BDA DHL warehouse. On the other hand, multi-national corporations suspended or froze their expansion plans, resulting in a sharp decrease in leasing demand for industrial space. Echoing the weakened demand, landlords started cutting asking rentals in the last quarter of 2008 to attract tenants. As a result, the overall rental decreased by 7.7%, 9.3%, 7.8% and 15.8% in the submarkets of Tianzhu, Tongzhou, Shangdi, and Yi Zhuang areas, respectively, during the review period. `` Capital values of warehouses and factories decreased moderately by up to 3.3% between October 2008 and March 2009. No significant transactions were recorded, except for ProLogis which, on 23 November 2008, announced an agreement to sell its regional operations in China and property fund interests in Japan to GIC Real Estate for a total consideration of USD1.3 billion. The outlook for the industrial market should be challenging albeit the stimulus plans announced by both the central and local government may likely take gradual effect in the latter half of 2009. Rents of industrial properties are expected to soften by up to 6.2% year-on-year (YoY) in the next 12 months.
``
``
20

EXECUTIVE SUMMARY
China
MAJOR TRANSACTIONS IN BEIJING
TRANSACTIONS
BUILDING / LAND PLOT Beijing Economic Development Area DHL warehouse Beijing Tianzhu Airport Industrial Zone Tongzhou Industrial and Logistics Park Tongzhou Industrial and Logistics Park Tongzhou Industrial and Logistics Park Beijing Zhongguancun Area Beijing Economic Development Area PROPERTY TYPE Warehouse Land Land Land Land Land Land LEASE / SALE Lease Sale Sale Sale Sale Sale Sale TENANT / PURCHASER Shenzhen Sundan ChinaAMC SNP Leefung Liando Jinqiao Real Estate Suning Appliance Beijing Institute of Aeronautical Materials BOE Technology Group Co., Ltd FLOOR / LAND AREA (SQ FT) 10,764 13,207 93,162 593,834 1,552,682 685,402 188,616
21
China
ECONOMIC INDICATORS FOR GUANGZHOU
ECONOMIC INDICATORS
PERIOD October 2008 - December 2008 October 2008 - March 2009 October 2008 - February 2009 October 2008 - February 2009 October 2008 - January 2009 October 2008 - January 2009
DATA 12.3% n.a. CNY87.9 billion CNY102.1 billion 126,580 204,100
GUANGZHOU
Factory and Warehouse `` Guangzhous manufacturing industry is weakening on the back of the contraction in global demand for manufactured goods amidst the global economic downturn. This is evidenced by the fall in imports and exports from US$3.3 billion and US$3.8 billion, respectively, in October 2008 to US$2.2 billion and US$2.0 billion, respectively, in February 2009. The global economic downturn had also led to companies turning their preference towards leasing instead of owning an industrial unit. `` All the above factors have caused the average capital values of warehouses and factories to decrease by 4.3% and 5%, respectively, during the review period. Data from the Guangzhou City Land Resources and Housing Authority showed that the average land values for warehouses and factories had also eased in the review period, by 1.8%. In contrast, the average rent of industrial space rose during the review period, by between 3.3% and 8.5%, fuelled by the
shortage of high quality industrial space for rent, companies preference towards leasing, as well as shortened lease periods to six months or one year. `` The land sale market during the review period was dominated by local corporations. Notable land transactions concluded in the period under review include those by the Guangzhou Automobile Group Motor Co., Ltd., the Guangdong Tianhong Cable Co., Ltd., and the NHK-HK-UNI Spring (Guangzhou) Co., Ltd., which acquired 14.7 million sq ft, 418,669 sq ft and 129,491 sq ft of land, respectively, in the Hualong Modern Industrial Park in Panyu, the Yonghe Economic Zone, and the Economic Development Zone in Luogang, respectively. Looking ahead, the uncertain business environment will have a drag on the industrial market. The rents, land and capital values of factories and warehouses are predicted to ease slightly by up to 0.6% in the next 12 months.
``
22

EXECUTIVE SUMMARY
China
MAJOR TRANSACTIONS IN GUANGZHOU
TRANSACTIONS
BUILDING / LAND PLOT Jiulong Industrial District, Luogang Daiguan Road, Tianhe Development Zone, Luogang Hualong Modern Industrial Park, Panyu Yonghe Economic Zone, Economic Development Zone, Luogang Development Zone, Luogang Jiulong Industrial District, Luogang PROPERTY TYPE Land Land Land Land Land Land Land LEASE / SALE Sale Sale Sale Sale Sale Sale Sale TENANT / PURCHASER Guangzhou Lont Electronic Co.,Ltd. Guangzhou Hongtai Software Techonology Co., Ltd Yongjie Automobile Transportation Co., Ltd Guangzhou Automobile Group Motor Co., Ltd Guangdong Tianhong Cable Co., Ltd NHK-HK-UNI Spring (Guangzhou) Co., Ltd Meiqianuo International Holding Co., Ltd FLOOR / LAND AREA (SQ FT) 201,816 113,070 38,668 14,678,260 418,669 129,491 116,624
23
China
ECONOMIC INDICATORS FOR SHANGHAI
ECONOMIC INDICATORS
INDICATORS Year-on-Year GDP Growth Year-on-Year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes) PERIOD January 2008 - December 2008 August 2008 - January 2009 August 2008 - January 2009 August 2008 - January 2009 August 2008 - January 2009 August 2008 - January 2009 DATA 9.7% -2.4% CNY4,627.5 billion CNY5,734.8 billion 1.4 million 1.5 million
SHANGHAI
Factory and Warehouse `` Shanghai industrial property market slowed down noticeably amidst the volatile external environment and moderation of the China economy as witnessed by the 2.4% contraction in industrial output from August 2008 to January 2009 compared to a 14.9% growth from February 2008 to July 2008. The downturn of the global economy has also hit exports and resulted in the slowdown of growth in container throughput from 16.7% recorded for the six-month period ending August 2007 to 0.9% for the six-month period ending January 2009. `` Shrinking demand for industrial space on the back of a slowing economy resulted in some landlords and developers lowering their asking rents or prices in order to secure tenants or boost sales to improve cash flows. Consequently, rents and capital values of industrial properties recorded declines of up to 12.7% on average during the period of review. Aggressive incentives were also offered, such as extending rent-free period in addition to more competitive rents and prices. Despite the slowing economy, the land auction market held steady. However, funding pressures on the back of the tighter credit market resulted in some landlords in the secondary land sales market succumbing to lower bidding prices from investors. Consequently, land prices fell between 3.1% and
5.8% during the six-month period between October 2008 and March 2009. `` Supply of new industrial properties during the period June to December 2008 decreased markedly to 2.0 million sq ft, down by nearly 70% compared with the same period a year ago. Many developers halted or slowed down the construction progress due to pressure on funding amidst the shrinking demand. Major transactions during the review period included Heidelberg Graphic Equipment Ltds purchase of a 292,549sq ft land parcel in Qingpu Industrial Park and Degussa-AJ (Shanghai) Initiators Co., Ltds purchase of a 371,408-sq ft land lot in Baoshan Industrial Park. On the lease front, Mitsubishi Logistics leased a 174,377-sq ft warehouse in ProLogis Park Pudong Heqing while Parker Hannifin leased a 191,599-sq ft factory in ProLogis Park Jinqiao. Although the global economic slowdown will prevail for some time, the economic stimulus introduced by the Central Government should provide some support for the manufacturing sector and in turn, the industrial market. This will help to hold rents, land and capital values steady at current levels over the next 12 months.
``
``
``
24

EXECUTIVE SUMMARY
China
MAJOR TRANSACTIONS IN SHANGHAI
TRANSACTIONS
BUILDING / LAND PLOT ProLogis Park Pudong Heqing ProLogis Park Jinqiao Qingpu Industrial Park Baoshan Industrial Park PROPERTY TYPE Warehouse Factory Land Land LEASE / SALE Lease Lease Sale Sale TENANT / PURCHASER Mitsubishi Logistics Parker Hannifin Heidelberg Graphic Equipment Ltd Degussa-AJ(Shanghai)Initiators Co., Ltd FLOOR / LAND AREA (SQ FT) 174,377 191,599 292,549 371,408
25
Hong Kong SAR

ECONOMIC INDICATORS FOR HONG KONG SAR
ECONOMIC INDICATORS
INDICATORS Year-on-Year GDP Growth Year-on-Year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes) PERIOD July 2008 - December 2008 September 2008 - February 2009 September 2008 - February 2009 September 2008 - February 2009 September 2008 - February 2009 September 2008 - February 2009 DATA -0.5% -33.0% HK$1,357.0 billion HK$1,291.0 billion 11.0 million 1.6 million
HONG KONG SAR
Factory `` Hong Kongs re-export trade performance continued to deteriorate during the review period amidst contraction in global demand for imports on the back of the global economic downturn. The territorys overall re-export growth slipped into negative territory in November 2008 and the pace of contraction accelerated from -4.1% YoY in November 2008 to -22.4% YoY in February 2009. Meanwhile, the value of total exports dropped 23.0% YoY in February 2009 the sharpest fall registered since the oil crisis in the 1970s. `` Leasing demand for factory space softened during the review period as an increasing number of companies downsized their premises or relocated to cheaper alternatives in order to keep operating costs low as a strategy to weather the prevailing economic downturn. As such, the average rental for factories declined 18.9% to HK$6.76 per sq ft during the six-month period ended February 2009, compared to a positive growth of 3.1% recorded during the preceding six-month period. Uncertainty about rental direction and the economic outlook, and more importantly, the lack of sufficient financing from banks, resulted in only 873 transactions recorded for the sixmonth period ending February 2009. This reflected a decline of 65.4% compared to the preceding six-month period and is the lowest level since 1999. On the price front, the average price of factory premises declined 17.5% during the six-month period ending February 2009 to HK$1,543 per sq ft. Despite falling rents, the prevailing low interest rate environment presents a market entry opportunity for a group of property investors with strong equity positions whose prime acquisition targets are quality strata-titled developments. For example, Rolex (Hong Kong) Limited acquired two floors in Kodak House Phase 2 in North Point from Sun Hung Kai Properties for a total consideration of HK$300 million, or an average unit price of HK$4,531 per sq ft based on a total floor area of 66,208 sq ft. Rolex is reported to be retaining the two floors for owner-occupation.
26 COLLIERS INTERNATIONAL | REGIONAL RESEARCH
``
Looking ahead, worsening global trade on the back of global economic consolidation will remain the key factor limiting new leasing demand for industrial properties. Rentals and capital values of factory premises are forecast to be pressured down by 25% and 30% respectively over the next 12 months.
``
Warehouse `` In tandem with shrinking re-export trade, cargo throughput contracted considerably during the review period. Container throughput declined 9.6% YoY during the six-month period ended February 2009, compared with an increase of 5.3% YoY in the preceding six-month period. Air cargo throughput declined 18.3% YoY during the six-month period ended February 2009, compared with an increase of 3.8% YoY in the preceding six-month period. This has affected the performance of the trading and logistics sector, the main demand driver of the warehouse sub-sector. A number of logistics operators were seen returning a portion of their space to their vendors in view of the current difficult market conditions. `` Slackened leasing demand for warehouse properties resulted in the average rental for cargo lift access warehouse declining 18.9% between August 2008 and February 2009 to HK$5.38 per sq ft per month, while capital values fell 24.1% during the same period to HK$1,338 per sq ft. The average rental for ramp access warehouse also plunged, by 20.5% between August 2008 and February 2009 to HK$7.55 per sq ft per month, while capital values fell 27.1% during the same period to HK$1,450 per sq ft. On top of falling rents, to retain tenants, individual landlords are also proactively offering their tenants favourable terms, such as long leases of up to six years, together with a cap on rental growth on renewal of the lease. Depending on the availability of physical provisions such as ramp access, rentals and prices are expected to decline 15% to 25% over the next 12 months.
``
``
``

EXECUTIVE SUMMARY
Hong Kong SAR

High-Specs Industrial Building `` As with the factory and warehouse sub-sectors, the high-specs Industrial-Office buildings (I-O) have similarly suffered from the contraction in leasing demand amid the deterioration of the re-export trade performance. `` During the six-month period ending February 2009, the average I-O rent declined 20.3% to HK$13.90 per sq ft per month. `` Large office supply in the pipeline in decentralised districts will create additional downward pressure on I-O rentals, which are expected to drop 30% over the next 12 months.
MAJOR TRANSACTIONS IN HONG KONG SAR
TRANSACTIONS
BUILDING / LAND PLOT Smile Centre Sue Yue Co Ltd Godown No.3 Two floors, Kodak House Phase II Informtech Industrial Centre PROPERTY TYPE Factory Warehouse Factory Factory LEASE / SALE Lease Sale Sale Sale TENANT / PURCHASER Logistic company Local developer Rolex (Hong Kong) Limited Local investor FLOOR / LAND AREA (SQ FT) 97,750 Undisclosed 66,208 95,582
27
India
ECONOMIC INDICATORS FOR INDIA
ECONOMIC INDICATORS
PERIOD April 2008 - March 2009 April 2008 - March 2009 April 2008 - February 2009 April 2008 - February 2009 April 2008 - September 2008 April 2008 - September 2008
DATA 7.1% 4.1% Rs 1,223.2 billion Rs 705.2 billion n.a. n.a.
NEW DELHI
Factory and Warehouse `` The Delhi Government announced that the following sectors will be allowed to set up Special Economic Zones (SEZs) in the countrys capital: information technology enabled services (ITES), electronic hardware and software, nanotechnology, biotechnology, gems and jewellery, non-conventional energy equipment, fashion and garments (excluding dyeing) and higher technical education institutes providing world-class manpower. The development of SEZs will provide a muchneeded boost to industrial supply in Delhi. `` Due to prevailing negative sentiments across the globe, a substantial decrease in investors activities has been witnessed for all the segments of the industrial property market. Consequently, land and capital values as well as rent softened during the six-month review period of October 2008 to March 2009. Nevertheless, demand for Noida Authoritys land plots remained buoyant, with 5,500 applications received for 191
industrial plots measuring 21,528 sq ft each in Phases II and III during the review period. All 191 plots were alloted on the basis of a draw of lots at fixed rates of INR516 per sq ft for Phase II and INR534 per sq ft for Phase III. `` Despite the short-term turbulence in the market, some companies remained confident in the long-term prospects of the India market. For example, Arshiya International Ltd, a logistics company, received approval from the Board of Approvals of the SEZs to set up a free trade and warehousing zone (FTWZ) at Khurja in Uttar Pradesh (part of National capital Region). This is the companys second FTWZ in the country and is expected to be completed by end-2009. The slower economy and weaker manufacturing output growth are, however, expected to have a drag on the industrial market. Rents, land and capital values of industrial space could see declines of up to 14%, 12% and 10%, respectively over the next 12 months.
``
``
28

EXECUTIVE SUMMARY
India
MAJOR TRANSACTIONS IN NEW DELHI
TRANSACTIONS
BUILDING / LAND PLOT Building Building Building Building Building Building Building Building Building PROPERTY TYPE Warehouse Warehouse Factory Factory Service Station Service Station Business Process Outsourcing Business Process Outsourcing Factory LEASE / SALE Lease Lease Lease Lease Lease Lease Lease Lease Sale TENANT / PURCHASER Spice Jet Markson Television Relexo Foot ware Pidilite Udiya Service Station Tata Motors ATS Infovision Anand Button FLOOR / LAND AREA (SQ FT) 15,000 12,000 14,000 10,000 22,000 20,000 18,000 18,000 28,000
29
Indonesia
ECONOMIC INDICATORS FOR JAKARTA
ECONOMIC INDICATORS
PERIOD January 2008 - December 2008 January 2008 - December 2008 January 2008 - December 2008 January 2008 - December 2008 January 2008 - December 2008 January 2008 - December 2008
DATA 6.1% 3.7% US$142.6 billion US$151.5 billion 11.1 million n.a.
JAKARTA
Factory and Warehouse `` Indonesias economy is expected to grow by between 3% and 4% this year, down from an earlier forecast of 5%. To bolster demand and stimulate economic growth, Indonesias monetary authority, Bank Indonesia, has slashed its key interest rate for the fifth consecutive month to 7.75% in March 2009 from 9.5% in October 2008. `` In spite of the slowing economy and manufacturing output, industrial rents, capital and land values remain unchanged during the period of review. In the leasing market, industrial landlords have resisted raising rents as they are focused on helping their tenants survive through these difficult times. Some measures taken include allowing tenants to postpone their maintenance cost payment for one to two months at zero interest. As for land values, they had been propped up by the increased in Sales Value of Taxable Object (or NJOP as known in Indonesia) issued by the Government. This is the value on which tax is computed for land ownership in Indonesia.
``
Sales activity slowed in the period of review as industrial developers turned cautious on the back of the slowing economy and held back development and the launch of new projects. The weakening Indonesian Rupiah against the US Dollar also contributed to slow sales, particularly for projects quoted in US Dollar denominations. Nevertheless, the industrial property market is seeing demand from local companies who rely more on the domestic market instead of exports. These companies have continued to expand their operations so as to be ready for the upturn. For example, PT. Timah Tbk, an integrated tin mining company, acquired a 914,932-sq ft land parcel in the Krakatau Industrial Estate during the period of review. While the economy is expected to slow down, demand from local companies will provide some support to the industrial market. As such the industrial market is forecast to remain stable in the next 12 months.
``
30

EXECUTIVE SUMMARY
Indonesia
MAJOR TRANSACTIONS IN JAKARTA
TRANSACTIONS
BUILDING / LAND PLOT Greenland International Industrial Center Greenland International Industrial Center Bekasi Fajar Industrial Estate MM2100 Modern Cikande Krakatau Industrial Estate Cilegon Krakatau Industrial Estate Cilegon Delta Silicon PROPERTY TYPE Land Land Land Land Land Land Land Land LEASE / SALE Sale Sale Sale Sale Sale Sale Sale Sale TENANT / PURCHASER Carpet manufacturer Disposable sanitary napkin company Toyota Heavy equipment manufacturer from Japan Frozen food company PT. Timah Tbk Cheetham Salt LPG station FLOOR / LAND AREA (SQ FT) 2,152,780 753,473 2,475,697 245,417 538,195 914,932 269,098 118,403
31
Japan
ECONOMIC INDICATORS FOR GREATER TOKYO
ECONOMIC INDICATORS
INDICATORS Year-on-Year GDP Growth Year-on-Year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes) PERIOD July 2008 - December 2008 July 2008 - December 2008 July 2008 - December 2008 July 2008 - December 2008 July 2008 - December 2008 July 2008 - December 2008 DATA -0.6% -14.8% JPY16,852.4 billion JPY14,062.0 billion 3.6 million 994,001
GREATER TOKYO
Factory and Warehouse `` Japans economy is showing significant downturn. Gross domestic product contracted by 3.2% quarter-on-quarter (QoQ) in the last three months of 2008 (-12.1% annualised), the worst performance since the first quarter of 1974. `` The officially announced posted land prices as of January 2009 showed declines across the board, by 3.0% on a nationwide basis and 2.7% for Greater Tokyo. Industrial rents declined more significantly with the submarkets of Chiba-Shibayama, Chiba-Urayasu and Kawasaki-Higashi Ogishima experiencing up to 15.5% decrease during the review period. Major completions in the review period include ProLogis Park Ichikawa I, a five-storey warehouse building with a gross floor area of 1.6 million sq ft located 1.5 km from a highway intersection and 16 km away from Tokyo.
``
Industrial sales transactions were limited during the period of review due to the economic recession and financing difficulties. The few which were successfully concluded were mostly by J-REITs. They included the sale of IIF MusashMurayama Logistic Centre for JPY8.04 billion in February 2009, Shinonome Logistic Centre which was sold for JPY11.8 billion in February 2009; and Kazo Logistic Centre which was acquired for JPY3.79 billion in March 2009. As Japans economy is expected to continue deteriorating for the time being, industrial rents, land and capital values are foreseen to remain depressed. Land and capital values are forecast to ease by 3% to 5% and rents by 6% to 8% over the next 12 months.
``
``
MAJOR TRANSACTIONS IN GREATER TOKYO
TRANSACTIONS
BUILDING / LAND PLOT CRE Logi-Square Sagamihara IIF Musash-Murayama Logistic Center Shinonome Logistic Center (47% of total) Kazo Logistic Center PROPERTY TYPE Warehouse Warehouse Warehouse Warehouse LEASE / SALE Sale Sale Sale Sale TENANT / PURCHASER Subsidiary of Mitsubishi Co. SPC of Mitsui & Co., Realty Management Ltd. Japan Logistics Fund, Inc. Japan Logistics Fund, Inc. FLOOR / LAND AREA (SQ FT) 251,468 440,074 174,160 270,503
32

EXECUTIVE SUMMARY
New Zealand
ECONOMIC INDICATORS FOR NEW ZEALAND
ECONOMIC INDICATORS
INDICATORS Year-on-Year GDP Growth Year-on-Year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes) PERIOD December 2008 December 2008 October 2008 - February 2009 October 2008 - February 2009 October 2008 - February 2009 October 2008 - February 2009 DATA 0.2% -2.0% NZ$18.3 billion NZ$17.2 billion 16.3 million 77,877
AUCKLAND
Office / Warehouse `` Currently, both the Resource Management Act (RMA) and Overseas Investment Act in New Zealand are under review. The majority of the RMA reforms are concentrating on improving the resource consent processes, plan development and plan change processes, the streamlining of processes for projects of national significance and overall decision making. The review of the Overseas Investment Act aimed to make the Act easier for constructive foreign investment, and make foreign investment more simple and attractive, while at the same time protecting sensitive land, assets and resources. `` Meanwhile, the global economy deteriorated rapidly in the latter half of 2008, in response to ongoing losses and volatility in international financial markets. The Reserve Bank of New Zealand cut the official cash rate (OCR) to 3% in March this year, the lowest rate since its inception in March 1999. In addition to the substantial change in monetary policy settings, there has been a large stimulus from fiscal policy. These changes coupled with sizeable exchange rate depreciation should act to support the New Zealand economy. Nevertheless, banks high pre-leasing requirements before approving loans under the current weak market condition, has limited developers access to funds for development. As a result, demand for development sites weakened and land value fell significantly by 12% on average during the review period. While the OCR is likely to remain lower for longer, increasing competitions within New Zealand banks for cash deposits and the continued high cost of offshore funding are pressuring long-term fixed interest rates for property mortgages and business loans up. This, coupled with tightening of available finance amid cautious tenant attitudes, is constraining sales. Investors are also opting to take a wait and see approach to determine the full extent of the market downturn before committing. As a result, capital values of industrial premises
eased by up to 5.5% on average in the six-month review period ending March 2009. `` However, despite more cautious investor attitudes, demand for prime grade, well tenanted and located industrial premises remained firm. For example, a 109,200-sq ft industrial space at 41 Nesdale Avenue in Wiri currently leased to Fivestar Distribution was acquired by a private investor for NZ$12.05 million, reflecting a yield of 8.97%. In the leasing market, landlords decisions to offer attractive incentives to keep the face rent up has helped to cushion the drop in rents to 5% on average in the period under review. Some leasing deals successfully concluded between October 2008 and March 2009 included a 61,400-sq ft designbuild industrial warehouse located at Pukekiwiriki Place in Highbrook Business Park, currently under construction. The property was leased by Goodman Property Trust to Schneider Electric on a ten-year lease term for NZ$835,000 a year. Lewis Holdings leased its industrial premises located at 68 Harris Road and 14 Offenhauser Drive in East Tamaki to NZL Group on a seven-and-a-half-year term returning NZ$855,771 per annum. The property comprises a 90,200-sq ft office, warehouse and canopy, and 53,800 sq ft of usable yard space. Several new buildings have come on-stream during the review period and these included a 82,000-sq ft design-build premises for DHL Global Forwarding at Westney Industry Park and a 133,200-sq ft purpose-built distribution centre at 8 Hautu Drive in Wiri for the Amalgamated Hardware Merchants Group (AHM). In addition, a number of design-build industrial premises amounting to 645,800 sq ft are currently under construction and are scheduled to come online in the next 12 months. A few proposed developments are still on the drawing board, waiting for tenants pre-commitment before commencing construction.
``
``
``
``
33
New Zealand
`` The outlook for the industrial market remains volatile. Demand for development sites is expected to weaken further and land values could decline by 25% in the 12 months ahead. Rentals are forecast to fall by another 10% on average while capital values are expected to drop by an average of 17.3% over the next 12 months. During this same time period, yields are predicted to stabilise in the range of 8% to 9% on average for new and prime investment grade stock.
MAJOR TRANSACTIONS IN AUCKLAND
TRANSACTIONS
BUILDING / LAND PLOT 47 William Pickering Drive, Albany 7 John Glenn Avenue, North Harbour 68 Harris Road and 14 Offenhauser Drive, East Tamaki 320 Rosebank Road, Avondale 51 Aintree Avenue, Airport Oaks Pukekiwiriki Place, Highbrook 372 Rosebank Road, Avondale Unit B & C, 89-91 Captain Springs Road, Onghunga Westney Industry Park 41 Nesdale Avenue, Wiri 7 Basalt Place, East Tamaki 39 Rawene Road, Birkenhead 11 Aetna Place, Henderson 16 Dalgety Drive, Wiri PROPERTY TYPE Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse LEASE / SALE Lease Lease Lease Lease Lease Lease Lease Lease Lease Sale Sale Sale Sale Sale TENANT / PURCHASER Eagleburgmann New Zealand Maxwell Marine International NZL Group Doyle Sails Husqvarna Outdoor Schneider-Electric Vernon Carriers Ecodiesel DHL Global Forwarding Private Investor Family Trust Owner Occupier Syndicator Owner Occupier FLOOR / LAND AREA (SQ FT) 20,600 23,500 90,200 67,700 40,400 61,400 24,000 60,800 82,000 109,200 25,100 21,200 69,900 13,700
34

EXECUTIVE SUMMARY
New Zealand
WELLINGTON
Office / Warehouse `` A lack of development finance and higher lease precommitment requirements from the banks continued to strangle new developments and dampen demand for development sites. As a result, the high land values achieved over the years have come to an end with prices dropping by approximately 25% on average during the period of review. `` Investment activity continued to slow with owner occupiers being the main driver of demand at the smaller end. For example, an owner-occupier acquired a 14,900-sq ft warehouse built in the 1980s located at 3-5 Glover Street in Ngauranga for NZ$1.65 million with vacant possession. Enquiries on larger scale industrial properties remained scarce. Nevertheless, capital values managed to hold firm during the period of review. Rents, too, remained static in the review period October 2008 to March 2009. Leasing deals concluded include Nautilus
Properties JV leasing 24,300 sq ft of industrial space with a 5,800-sq ft yard at 14 Tunnel Grove in Lower Hutt to General Cable for NZ$187,500 per annum on a three-year lease. `` Stable rents and capital values were attained despite the weakening economic climate partially because supply was held in balance with levels of occupier demand. Greater difficulty in sourcing finance has reduced development activity and a number of developments were put on hold. Consequently, no new industrial developments were added to the supply pipeline during the review period. Slow economic growth together with an unsettled financial market will result in moderate downward movements of less than 10% in land values, rents and capital values in the Wellington industrial sector in the next 12 months. Yields are projected to soften by another 25 basis points in this time period.
``
``
MAJOR TRANSACTIONS IN WELLINGTON
TRANSACTIONS
BUILDING / LAND PLOT 14 Tunnel Grove, Lower Hutt 15 Birmingham Street, Paraparaumu 115 Hutt Park Road, Lower Hutt 3-5 Glover Street, Ngauranga 69 Waione Street, Petone PROPERTY TYPE Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse LEASE / SALE Lease Lease Lease Sale Sale TENANT / PURCHASER General Cable Harvey Norman ERS New Zealand Owner Occupier Private Investor FLOOR / LAND AREA (SQ FT) 24,300 5,400 20,900 14,900 41,200
35
Singapore
ECONOMIC INDICATORS FOR SINGAPORE
ECONOMIC INDICATORS
INDICATORS Year-on-Year GDP Growth Year-on-Year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes) PERIOD July 2008 - December 2008 July 2008 - December 2008 July 2008 - December 2008 July 2008 - December 2008 October 2008 - March 2009 July 2008 - December 2008 DATA -2.1% -10.9% S$222.5 billion S$233.3 billion 13.0 million 913,000
SINGAPORE
Factory and Warehouse `` The Government announced the 2009 Budget in January 2009. Measures which could help manufacturing concerns and developers of industrial properties ease their cash flow include a 40% property tax rebate for industrial landlords, two years deferment of property tax for land under development and a 15% rental rebate for tenants and land lessees of JTC Corporation and the Housing and Development Boards industrial properties. These measures will provide some support for the industrial property market in this difficult time. `` The decline in exports as a result of contraction in global demand led to excess capacity of manufacturing plants and prompted many firms to shelve their expansion plans or downsize their industrial premises, thus leading to lower demand for industrial properties. The average rents and capital values of factory space dipped 12.8% and 17.6%, respectively, in the review period, compared to a 6.4% and 6.9% growth seen in the previous review period from April 2008 to September 2008. Weakening exports also translated into softening demand for warehouse facilities. Average rents and capital values of warehouse space saw a drop of 13.0% and 13.3%, respectively, in the period under review. Major completions of industrial space during the study period include a 128,000-sq ft light industrial building at Serangoon North Avenue 6 by Credit Suisse and a 80,700-sq ft light industrial building at Changi North Rise by Thales Aerospace Asia Pte Ltd. Acquisition of industrial properties in the review period were limited to smaller properties partly due to tighter credit and investors decisions to limit their risk exposure in the uncertain market. Some of the more significant transactions in the industrial property market in the October 2008 to
March 2009 period were the sale of a 123,693-sq ft land parcel at Ubi Avenue 4 for S$26.3 million to Sim Lian Land Pte Ltd and the sale of a 61,820-sq ft land parcel at Kallang Pudding Road for S$10.8 million to Orion-Four Development Pte Ltd. Acquisitions by listed real estate investment trusts (REITs) have grinded to a halt because of the difficulty in raising funds, increased costs of funds and the sharp spike in distribution yields due to falling stock prices. `` The weak showing of the economy and export growth in the first three months of 2009 (-11.5% and -29.0% YoY respectively) led to the Government revising downwards its 2009 forecast for economic growth to between -9% and -6% and export growth to between -13% and -10%. This will weigh heavily on demand for industrial properties in the next 12 months. Land prices, capital values and rents of industrial space might drop by up to 15% in the next 12 months.
``
``
High-Specs Industrial Building `` The steep falls in office rents due to shrinking demand amid growing supply had significantly slowed down the relocation of qualifying office users to high-specs premises. This contributed to the sluggish demand for high-specs space in the review period. `` As a result, rents of high-specs space eased by 7.8% to S$3.41 per sq ft per month in the six-month period from October 2008 to March 2009. Tighter credit conditions and falling rents curtailed buying interest in high-specs buildings. In the period under review, only one high-specs building Applied Materials Building at Changi Business Park, was sold to Union Investment Real Estate AG for S$63 million or S$318 per sq ft of gross floor area.
``
``
36

EXECUTIVE SUMMARY
Singapore
`` Moving forward, the influx of high-specs space completing in 2009 amounting to an estimated 2.5 million sq ft, coupled with sluggish demand are likely to exert downward pressure of up to 30% on rents in the next 12 months.
MAJOR TRANSACTIONS IN SINGAPORE
TRANSACTIONS
BUILDING / LAND PLOT 10 Changi South Street 2 Agilent Technologies New Tech Park Ubi Avenue 4 Kallang Pudding Applied Materials Building PROPERTY TYPE Warehouse Factory High-Specs Land Land High-Specs LEASE / SALE Lease Lease Lease Sale Sale Sale TENANT / PURCHASER Deutsche Post Global Mail (Australia) Pte Ltd 3M Schaeffer (Singapore) Pte Ltd Sim Lian Land Pte Ltd Orion-Four Development Pte Ltd Union Investment Real Estate AG FLOOR / LAND AREA (SQ FT) 17,480 43,418 11,829 142,030 61,820 198,056
37
Taiwan
ECONOMIC INDICATORS FOR TAIWAN
ECONOMIC INDICATORS
INDICATORS Year-on-Year GDP Growth Year-on-Year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes) PERIOD January 2008 - December 2008 January 2008 - December 2008 October 2008 - February 2009 October 2008 - February 2009 October 2008 - February 2009 October 2008 - February 2009 DATA 0.1% -10.9% NT$64.6 billion NT$76.2 billion 13.0 million 261.8 million
TAIWAN
High-Specs Industrial Building `` The prolonged financial turmoil resulted in the Taiwanese economy growing by just 0.1% in 2008, compared to 5.7 % in 2007. Demand from Taiwans key export markets such as the United States, China, and Hong Kong dropped as their economies further weakened, causing manufacturing output for 2008 to shrink by 10.9% `` Affected by the weakened economy, many companies, including those located in the Neihu Technology Park, are adopting cost cutting measures such as downsizing their workforce, real estate requirements or relocating to more affordable business premises or locations. This led to a rise in the average vacancy rate of the park to 16.0% as of March 2009. Correspondingly rents declined by 5.0% in the six-month review period between October 2008 and March 2009 to NT$31.03 per sq ft per month.
``
The overall stock of high-specs space in Neihu Technology Park increased by 890,978 sq ft between October 2008 and March 2009 to 26.1 million sq ft. Among the major new completions in the review period were Elitegroup Computer Systems Building (315,630 sq ft), Chong-Hong Suntech City (177,900 sq ft), and Chu-Chen Building (131,539 sq ft). In the next 12 months, more than 700,000 sq ft of new high-specs space are expected to be completed in the Neihu Technology Park, adding further pressure on vacancy rates and rents. Rents of high-specs space are expected to decline by 7.8% to NT$28.61 per sq ft per month on average in the next 12 months.
``
``
MAJOR TRANSACTIONS IN TAIPEI
TRANSACTIONS
BUILDING / LAND PLOT Tokyo Technology Plaza PROPERTY TYPE High-Specs LEASE / SALE Sale TENANT / PURCHASER MiTAC INC. FLOOR / LAND AREA (SQ FT) 93,170
38

EXECUTIVE SUMMARY
Definitions and Terminology

1. MULTI-NATIONAL CORPORATION (MNCs) A multi-national corporation is defined as a large company that has operations in multiple nations and that requires industrial space. 2. FACTORY Unless otherwise stated, this refers to single-user industrial space catering to MNCs for production / manufacturing purpose. 3. WAREHOUSE Unless otherwise stated, this refers to single-user industrial space catering to MNCs with warehousing requirements as well as their business as third party logistics, distribution and warehousing. 4. HIGH-SPECIFICATIONS (HIGH-SPECS) INDUSTRIAL SPACE This refers to multi-user industrial premises catering to MNCs with floor areas of about 10,000 sq ft, fitted with higher than normal specifications and offering hybrid office-industrial characteristics. This type of space is suitable for high value-added, technology-based manufacturing, information technology, product development, and research and development. 5. LAND Land refers to vacant prepared land with roads, drainage, electricity supply, water supply, telephone service and sewerage. The land is typically located within industrial estates that are frequently inquired by MNCs and located between 10 and 100 km of the metropolitan area. In addition, the land is also a single-user, single-development site, as opposed to one that is intended for parcellation for multiple users. 7. MONTHLY GROSS RENT FOR SINGLE-USER INDUSTRIAL SPACE This is the monthly rental payable to a landlord for a whole industrial premise by a single tenant. Data is expressed in per sq ft of gross floor area. A three year lease term is common in most countries in the Asia Pacific region. 6. MONTHLY GROSS RENT FOR HIGH-SPECS SPACE This is the monthly rent payable to a landlord less all tenant inducements e.g. rent free periods. It includes the amount of interest income foregone for the security deposit, maintenance fees (i.e. fees for maintaining common areas e.g. security, building insurance and normal water and energy consumption) and statutory real estate charges (e.g. property tax). Data is expressed in per sq ft of net floor area, which includes common areas such as toilets, corridors, stairways, lift lobbies, etc. A three year lease term is common in most countries in the Asia Pacific region.
This report and other research materials may be found on our website at www.colliers.com. Questions related to information herein should be directed to the Research Department at the number indicated on the back page.This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, express or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information.Colliers International excludes unequivocally all inferred or implied terms,conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from.Colliers International is a worldwide affiliation of independently owned and operated companies.This publication is the copyrighted property of Colliers International and /or its licensor(s). 2009.All rights reserved.
39
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gREATER CHINA beijing, China 502 Tower W3, Oriental Plaza No 1 East Changan Avenue, Dongcheng District Beijing 100738 Tel : 86 10 8518 1633 Fax : 86 10 8518 1638 Carlby Xie Associate Director, Research and Advisory Carlby.Xie@colliers.com Shanghai, China 16F Hong Kong New World Tower 300 Huaihai Zhong Road Shanghai 200021 Tel : 86 21 6141 3688 Fax : 86 21 6141 3699 Lee Hingyin Director, Research and Consultancy Hingyin.Lee@colliers.com guangzhou, China 1006 T P Plaza, 9/109 Liu Hua Road Guangzhou 510010, Peoples Republic of China Tel: 86 20 8669 5176 Fax: 86 20 8669 5602 Bryan Chan Associate Director, Consultancy Bryan.Chan@colliers.com Hong Kong, HK SAR 5701 Central Plaza,18 Harbour Road Wanchai Company Licence No. C-006052 Tel : 852 2828 9888 Fax : 852 2828 9899 Simon Lo Director, Research and Advisory Simon.Lo@colliers.com Taipei, Taiwan 49F Taipei 101 Tower No 7 Xin Yi Road Sec 5 Taipei 110 Taiwan ROC GUI No. 23984185 Tel: 886 2 8101 2000 Fax: 886 2 8101 2345 Denny Yang Director, Consultancy and Valuation Denny.Yang@colliers.com
NORTH ASIA Tokyo, Japan Halifax Building 8F, 16-26, Roppongi 3-Chome Minato-ku, Tokyo 106-0032 Tel : 81 3 5563 2111 Fax : 81 3 5563 2100 Yumiko Yasuda Head, Research yyasuda@colliershalifax.com
AUSTRALASIA Melbourne, Australia Level 32 367 Collins Street Melbourne VIC 3000 Tel : 61 3 9629 8888 Fax : 61 3 9629 4944 Felice Spark State Director Commercial Research Felice.Spark@colliers.com Sydney, Australia Level 12, Grosvenor Place, 225 George Street Sydney NSW 2000 Tel : 61 2 9257 0222 Fax : 61 2 9251 3297 Felice Spark State Director Commercial Research Felice.Spark@colliers.com Auckland, New Zealand Level 27, 151 Queen Street, Auckland Tel : 64 9 358 1888 Fax : 64 9 358 1999 Alan McMahon Director, Research and Corporate Services Alan.McMahon@colliers.com Wellington, New Zealand Level 10, 36 Customhouse Quay Wellington Tel : 64 4 473 4413 Fax : 64 4 499 1550 Alan McMahon Director, Research and Corporate Services Alan.McMahon@colliers.com
SOUTH ASIA Jakarta, Indonesia 10F World Trade Centre, Jalan Jenderal Sudirman Kav 29-31 Jakarta 12920 Tel : 62 21 521 1400 Fax : 62 21 521 1411 Ferry Salanto Division Manager, Research Services Ferry.Salanto@colliers.com Singapore 50 Raffles Place, #18-01 Singapore Land Tower Singapore 048623 RCB No. 198105965E Tel : 65 6223 2323 Fax : 65 6222 4901 Tay Huey Ying Director, Research and Advisory Huey-Ying.Tay@colliers.com
INDIA New Delhi 204/205 Kanchenjunga, 18 Barakhamba Road Connaught Place, New Delhi 110 001 Tel : 91 11 2335 6620 Fax : 91 11 2335 6624 Surabhi Arora Senior Manager, Research Surabhi.Arora@colliers.com
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Asia Pacific Industrial Market Overview

Our Knowledge is your Property

ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009

INTERNATIONAL COMPARISON OF WAREHOUSE CAPITAL VALUES

* Values provided are for multi-user warehouse buildings

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009

63.36 33.01 34.64 16.24 12.81

126.03 107.46 123.38 75.33 71.78

61.46 32.02 33.60 15.75 12.43

122.25 104.23 119.68 73.07 69.63

1.0 1.0 1.0 1.0 1.0

100,000 100,000 100,000 100,000 100,000

100,000 100,000 100,000 100,000 100,000

110.92 145.99 221.80

0.70 0.86 1.03

77.64 102.19 155.26

0.53 0.64 0.77

1.0 1.0 1.0

100,000 100,000 100,000

100,000 100,000 100,000

9.79 29.79 8.65 7.40

43.30 95.16 42.46 38.87

0.38 0.71 0.47 0.32

9.53 29.10 8.53 7.28

42.34 94.26 41.86 38.20

0.38 0.69 0.47 0.32

1.0 1.0 1.0 1.0

100,000 100,000 100,000 100,000

100,000 100,000 100,000 100,000

82.10 155.46 146.15 124.69 28.99 14.54 -

60.78 64.04 78.16 71.64 34.91 16.35

0.66 0.70 0.90 0.29 0.37 0.19 0.24

76.85 147.80 139.52 115.43 25.51 13.43 -

56.01 58.62 71.64 65.13 31.34 14.99

0.61 0.65 0.83 0.26 0.34 0.17 0.20

1.0 1.0 1.0 1.0 1.0 1.0 1.0

100,000 100,000 100,000 100,000 100,000 100,000 100,000

100,000 100,000 100,000 100,000 100,000 100,000 100,000

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009

Factory Land Values (US$ psf per plot ratio)

INTERNATIONAL COMPARISON OF FACTORY CAPITAL VALUES

Factory Capital Values (US$ psf)

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009

Factory Monthly Gross Rents (US$ psf)

COLLIERS INTERNATIONAL | REGIONAL RESEARCH

ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009

MULTI-USER HIgH-SPECS AVERAgE MONTHLY gROSS RENTS

INTERNATIONAL COMPARISON OF HIGH-SPECS MONTHLY GROSS RENTS

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

COLLIERS INTERNATIONAL | REGIONAL RESEARCH