2012 Global Market report - NAI Global

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Pune, India Punjab, India Contact NAI Property Terminus +91 20 2563 5551 Country Data Area (Sq Mi) GDP Growth GDP 2011 (US$ B) GDP/Capita (US$) Inflation Rate Unemployment Rate Interest Rate Population (Millions) 1,269,219 8.4% $1,598.39 $1,296.68 6.7% 9.4% 7.3% 1,232.68 Pune witnessed more than 2.3 million SF of absorption in just the first two quarters of 2011 compared to 3.54 million SF in 2010. This is expected to jump to about 10 million SF in 2012. The micro markets witnessed an increase in absorption levels, largely in the secondary spaces vacated by companies relocating to areas outside of the CBD. Overall vacancy rates remained stable at 15.7% and 15.8% in Q1 2011 and Q2 2011 respectively. The most active regions in terms of absorption and leasing activity were Hinjewadi located in the suburban micro-market, and Yerwada, Hadapsar and Kharadi in the secondary business district. Hinjewadi alone accounted for approximately 50% (1.12 million SF) of the total space absorbed thus far in 2011, as the majority of the active and under-construction IT SEZs are in this region. The markets outside of the CBD micro market observed an increase in the number of occupier inquiries which are expected to lead to transaction closures over the next several quarters. Almost 300,000 SF of fresh supply came on to the market. The peripheral business district continued to be the preferred destination for IT/ITES companies. Numerous companies that had made inquiries for space last year transacted for the same in mid to late 2011. Approximately 1.37 million SF of fresh supply was added to the market. Pune witnessed an addition of almost 4.5 million SF of new Grade A supply by the end of 2011. With various IT occupiers as well as non-IT companies expanding their presence across the city, an increase in demand is likely to be observed over the next several quarters. In the industrial market, leasing activity remained in line with expectations and is anticipated to increase in the coming months. Rents and yields are stable and not expected to change to any significant degree as new supply remains soft. Pune’s retail market witnessed completion of the long awaited In orbit Mall, Pulse Mall and Phoenix Market City. With these three completions totaling up to a leasable area of 1.7 million SF, Pune’s total stock of organized retail space was 3.25 million SF at the end of Q2 2011. Net absorption in the micro-market is expected to be 2.2 million SF of the total 2.6 million SF expected by the end of 2011. Contact NAI Space Alliance +91 98 1183 4000 Country Data Area (Sq Mi) GDP Growth GDP 2011 (US$ B) GDP/Capita (US$) Inflation Rate Unemployment Rate Interest Rate Population (Millions) 1,269,219 8.4% $1,598.39 $1,296.68 6.7% 9.4% 7.3% 1,232.68 The real estate sector in Punjab provided sustainable and profitable capital growth through the last six months of 2011. As the demand has risen, the rate of land and built up properties increased by 10% to 20% over the last several months of 2011. The imposition of a new levy by the local government for approval of upcoming commercial projects within the municipal area, however, will affect the builder’s margins. There is a growing demand for office space due to the sustained economic activity driven mostly by demand from software companies. In the retail sector, once again retailers are leasing retail space in the malls rather than only considering High Street locations. Punjab is also emerging as a preferred destination for investment in real estate for the information technology industry, owing to its strong telecom infrastructure and availability of qualified manpower at a lower cost compared to other cities of north India. The fresh supply of Class A office space in and around the CBD area is negligible. Recent office space take-up has kept a check on the vacancy rates. The capital values of the properties have increased recently by 12% to 18%, but the rentals have increased by only 5% to 7 %. This compression has affected yields for new investors who now can buy pre-leased properties at 5% to 7%, which were previously trading at 6% to 9% depending on the size and location. The share of organized retail markets in Punjab is growing as many domestic and global players have already entered this sector. Fuelled by active retailer interest, the rental values are increasing across all High Street destinations and better performing mall properties. In the industrial sector, the local companies have shown a trend of leasing spaces rather than buying properties as the industrial rentals are low compared to the existing capital values. The Punjab real estate market expects to see an upward trend in the second half of 2012 as Q1 2012 figures will be sluggish due to a wait and watch policy that will be adopted by the investors as well as the industrial houses, waiting on the budget announcement for the new fiscal year. Pune At A Glance conversion 52.49 Inr = 1 us$ RENT/SF/MO US$ RENT/SF/YR low High low High Vacancy doWntoWn offIce New Construction (AAA) INR 40.00 INR 75.00 $ 9.14 $ 17.15 18.00% Class A (Prime) INR 55.00 INR 75.00 $ 12.57 $ 17.15 20.00% Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) INR INR INR 40.00 28.00 40.00 INR INR INR 55.00 45.00 50.00 $ $ $ 9.14 6.40 9.14 $ 12.57 $ 10.29 $ 11.43 15.00% 18.00% 15.00% Class B (Secondary) IndustrIal Bulk Warehouse INR INR 30.00 18.00 INR INR 40.00 35.00 $ $ 6.86 4.12 $ $ 9.14 8.00 20.00% 5.00% Manufacturing High Tech/R&D retaIl INR INR 20.00 20.00 INR INR 45.00 45.00 $ $ 4.57 4.57 $ 10.29 $ 10.29 0.50% N/A Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores INR INR INR INR INR 80.00 70.00 70.00 60.00 90.00 INR INR INR INR INR 140.00 120.00 120.00 100.00 110.00 $ 18.29 $ 16.00 $ 16.00 $ 13.72 $ 20.58 $ 32.01 $ 27.43 $ 27.43 $ 22.86 $ 25.15 15.00% 20.00% 20.00% 25.00% 20.00% deVeloPment land low/acre High/acre low/acre High/acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential INR 2,500.00 INR 6,000.00 $ 47.63 $ 114.31 INR 2,000.00 INR 3,500.00 $ 38.10 $ 66.68 INR 400.00 INR 650.00 $ 7.62 $ 12.38 INR 300.00 INR 650.00 $ 5.72 $ 12.38 INR 3,000.00 INR 10,000.00 $ 57.15 $ 190.51 INR 1,000.00 INR 6,000.00 $ 19.05 $ 114.31 Punjab At A Glance conversion 52.49 Inr = 1 us$ RENT/SF/MO US$ RENT/SF/YR low High low High Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal INR INR INR 35.00 34.00 17.00 N/A N/A N/A INR 53.00 INR 50.00 INR 25.00 N/A N/A N/A $ $ $ 8.00 7.84 3.90 N/A N/A N/A $ 12.00 $ 11.43 $ 7.06 N/A N/A N/A 11.00% 14.00% 18.00% N/A N/A N/A Bulk Warehouse Manufacturing High Tech/R&D retaIl Downtown Neighborhood Service Centers INR 12.00 N/A N/A N/A N/A INR 21.00 N/A N/A N/A N/A $ 2.74 N/A N/A N/A N/A $ 4.80 N/A N/A N/A N/A 14.00% N/A N/A N/A N/A Community Power Center Regional Malls Solus Food Stores INR 98.00 INR 88.00 N/A INR 143.00 INR 133.00 N/A $ 22.40 $ 20.11 N/A $ 32.69 $ 30.40 N/A 8.00% 17.00% N/A deVeloPment land low/acre High/acre low/acre High/acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 2012 Global Market Report n www.naiglobal.com 37
Jakarta, Indonesia Tokyo, Japan Contact NAI Indonesia +6221 5795 7599 Country Data Area (Sq Mi) GDP Growth GDP 2011 (US$ B) GDP/Capita (US$) Inflation Rate Unemployment Rate Interest Rate Population (Millions) 737,815 6.2% $776.98 $3,270.01 5.5% 7.0% 6.5% 237.606 Indonesia is one of the few countries to have been least affected by the rest of the world’s economic woes with a slight slowdown in 2009 but a regained momentum in 2010. The country has a growing economy, a large population and relative political stability. The Indonesian economy continued making progress, growing at 6.5% year-on-year in Q2 2011, in line with expectations. Strong export, rising investment activity and tamed inflation supported the consistent growth. In general, office inquires remained active during Q3 2011, with most space requirements between 100 SM and 300 SM, mainly as a result of existing tenants planning for expansion. The occupancy rate of the Jakarta CBD office market increased by 0.5% to 89.4% with approximately 448,000 SM of space remaining vacant. Net take up of 83,100 SM was realized over the final quarter of 2011, and although it represented a 10% decrease from the previous quarter’s take-up of 92,300 SM, the year-to-date take up was 26% higher than the entire 2010 absorption. Average gross rental is expected to remain stable until the end of the year before it is expected to increase at the beginning of 2012 in anticipation of the increase of the utility tariffs. The Jakarta prime retail market should continue to see positive trends on the back of robust consumption and improving lifestyles, particularly in the growing middle class. Potential high demand over the next few years is indicated by positive absorption in proposed retail developments. The additional retail supply through the end of 2011 came from retail centers, namely Kuningan City, Ancol Beach City, Tebet Green and Kalibata City Square. Most of this supply is in retail centers or supporting retail facilities within the mixed-use developments. Rental growth is expected to continue, reaching a peak within the next two years before slowing down. On an annual basis, the quarterly net demand grew by almost 60% from about Ha 113 during the same quarter last year. With the above activities, the cumulative sales rate continued to increase to 77.9% from 76.4% in the previous quarter. Most industrial real estate developers have been enthusiastic about performance this year, and many of them believe that this trend will continue in the short-term. More transactions occurred during the end of 2011, particularly because investors were anticipating price increases going into 2012. In 2012, industries actively looking for land will come from the automotive, food, chemical, steel and pharmaceutical segments. Contact NAI Japan +65 9270 8051 Country Data Area (Sq Mi) GDP Growth GDP 2011 (US$ B) GDP/Capita (US$) Inflation Rate Unemployment Rate Interest Rate Population (Millions) 145,920 1.5% $5,683.29 $42,820.00 -0.3% 4.1% 0.3% 128.056 The Japanese economy is bound for a recovery from a sharp downturn caused by the March 2011 earthquake, with swift restoration of the supply chain and an increase in demand from reconstruction activities. Economic statics show a trend towards recovery. Worldwide uncertainties, such as the European debt issue, recessionary conditions in the US economy and floods in Thailand, cast a shadow over the Japanese economy. The negative affects have been felt through a decrease in production and exports, and with an appreciation of the Japanese currency. The property investment market has been relatively quiet since the earthquake. Investors, especially from overseas, have maintained a wait and see position. Looking at actual transactions, cap rates have seen little movement in any of the sectors (office, residential and retail) in Tokyo except for a minor fluctuation in logistic properties in the coastal area. New buildings standing in good condition are most attractive. At the end of October 2011, the vacancy rate in the office market showed a slight increase in the central five wards of Tokyo for the first time in four months. In the meantime, it appears that office rents are close to hitting the bottom, as they continue to show signs of flattening. A negative impact from the earthquake was observed on sales of multifamily residential units. Up to a 10% reduction was observed in the price of large units newly built in Tokyo, compared to prices before the earthquake. Buyers are more selective about ground conditions and building resistance. On the other hand, its impact on the residential leasing market is comparatively limited. Rents have seen only a slight downturn. Retail rents in Ginza rose 10% on average in the first half of 2011, while other major shopping districts remain relatively stable. Since June, retail sales have continued their recovery with few negative impacts experienced from the earthquake. Jakarta At A Glance conversion 9040 Idr = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR low High low High Vacancy doWntoWn offIce New Construction (AAA) IDR 220,000.00 DR 235,000.00 $ 27.13 $ 28.98 N/A Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal IDR 180,000.00 IDR 125,000.00 IDR 180,000.00 IDR 160,000.00 IDR 125,000.00 IDR 200,000.00 IDR 175,000.00 IDR 200,000.00 IDR 180,000.00 IDR 150,000.00 $ 22.20 $ 15.42 $ 22.20 $ 19.73 $ 15.42 $ 24.66 $ 21.58 $ 24.66 $ 22.20 $ 18.50 N/A N/A N/A N/A N/A Bulk Warehouse Manufacturing High Tech/R&D retaIl IDR IDR IDR 80,000.00 80,000.00 80,000.00 IDR 500,000.00 IDR 500,000.00 IDR 500,000.00 $ $ $ 9.87 9.87 9.87 $ 61.66 $ 61.66 $ 61.66 N/A N/A N/A Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores deVeloPment land IDR 200,000.00 IDR 200,000.00 IDR 175,000.00 IDR 200,000.00 N/A low/acre IDR 400,000.00 IDR 300,000.00 IDR 500,000.00 IDR 350,000.00 N/A High/acre $ 24.66 $ 24.66 $ 21.58 $ 24.66 N/A low/acre $ 49.33 $ 37.00 $ 61.66 $ 43.16 N/A High/acre N/A N/A N/A N/A N/A Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential IDR 20,000,000.00 IDR 50,000,000.00 $8,953,235.99 $22,383,089.99 IDR 15,000,000.00 IDR 50,000,000.00 $6,714,927.00 $22,383,089.99 IDR 1,000,000.00 IDR 4,000,000.00 $ 447,661.80 $ 1,790,647.20 IDR 1,000,000.00 IDR 20,000,000.00 $ 447,661.80 $ 8,953,235.99 IDR 10,000,000.00 IDR 40,000,000.00 $4,476,618.00 $17,906,471.99 IDR 10,000,000.00 IDR 30,000,000.00 $4,476,618.00 $13,429,853.99 Tokyo At A Glance conversion: 77.87 JPY = 1 US$ RENT/M 2 /MO US$ RENT/SF/YR low High low High Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal Bulk Warehouse Manufacturing High Tech/R&D retaIl Downtown Neighborhood Service Centers Community Power Center Regional Malls JPY 6,000.00 JPY 14,000.00 $ 85.90 $ 200.43 N/A JPY 5,000.00 JPY 13,500.00 $ 71.58 $ 193.27 5.20% JPY 3,000.00 JPY 5,000.00 $ 42.95 $ 71.58 12.30% JPY 4,000.00 JPY 5,500.00 $ 57.27 $ 78.74 N/A JPY 3,000.00 JPY 5,500.00 $ 42.95 $ 78.74 9.80% JPY 2,000.00 JPY 3,000.00 $ 28.63 $ 42.95 12.50% JPY 1,200.00 JPY 4,000.00 $ 17.18 $ 57.27 7.00% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A JPY 6,000.00 JPY 50,000.00 $ 85.90 $ 715.83 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A deVeloPment land low/m 2 Highm 2 low/acre High/acre Office in CBD JPY 651,000.00 JPY 27,500,000.00 $ 33,832,125.31 $ 1,429,160,439.41 Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Retail/Commercial Land JPY 510,000.00 JPY 27,600,000.00 $ 26,504,429.97 $ 1,434,357,386.47 Residential JPY 435,000.00 JPY 2,830,000.00 $ 22,606,719.68 $ 147,073,601.58 2012 Global Market Report n www.naiglobal.com 38
Page 1 and 2: 2012 Global Market report Values, t
Page 3 and 4: n n n table of contents General Inf
Page 5 and 6: Global Outlook US Year in Review As
Page 7 and 8: On the Road to Recovery % of Loss S
Page 9 and 10: 55% (1.1 million) owning and 45% (8
Page 11 and 12: short-term leases, the multifamily
Page 13 and 14: Alberta is home to Canada’s oil a
Page 15 and 16: Office The sovereign debt crisis an
Page 17 and 18: Area Type Q1 2010 Q2 2010 Q3 2010 Q
Page 19 and 20: obust telecom infrastructure and av
Page 21 and 22: egion’s cities. Nevertheless, lea
Page 23 and 24: For 2012, absorption in the commerc
Page 25 and 26: n us Highlights - northeast region
Page 27 and 28: n us Highlights - midwest region n
Page 29 and 30: n us Highlights - West region n Ari
Page 31 and 32: Adelaide, Australia Brisbane, Austr
Page 33 and 34: Sydney, Australia Beijing, China Co
Page 35 and 36: Shanghai, China Shenzhen, China Con
Page 37: Chennai, India Mumbai, India Contac
Page 41 and 42: Christchurch, New Zealand Wellingto
Page 43 and 44: Taipei, Taiwan Ho Chi Minh City, Vi
Page 45 and 46: Calgary, Alberta, Canada Edmonton,
Page 47 and 48: Halifax, Nova Scotia, Canada Ottawa
Page 49 and 50: Regina, Saskatchewan, Canada Contac
Page 51 and 52: The Baltics (Latvia/Estonia/Lithuan
Page 53 and 54: Helsinki, Finland Paris - lle de Fr
Page 55 and 56: Tel Aviv, Israel Almaty, Kazakhstan
Page 57 and 58: Amsterdam, The Netherlands Oslo, No
Page 59 and 60: Moscow, Russia St. Petersburg, Russ
Page 61 and 62: Madrid, Spain Stockholm, Sweden Con
Page 63 and 64: Istanbul, Turkey Kiev, Ukraine Cont
Page 65 and 66: Leeds, England, United Kingdom Lond
Page 67 and 68: Latin America sectIon contents Buen
Page 69 and 70: Rio de Janeiro, Brazil Sao Paulo, B
Page 71 and 72: San Jose, Costa Rica Contact NAI Co
Page 73 and 74: Guadalajara, Jalisco, Mexico Guanaj
Page 75 and 76: Mexico City, Mexico Contact NAI Mex
Page 77 and 78: Saltillo, Coahuila, Mexico San Luis
Page 79 and 80: Lima, Peru Caracas, Venezuela Conta
Page 81 and 82: Birmingham, Alabama Huntsville/Deca
Page 83 and 84: Little Rock, Arkansas Bakersfield,
Page 85 and 86: Oakland, California Orange County,
Page 87 and 88: San Francisco, California Ventura C
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Hartford, Connecticut Wilmington, D
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Fort Lauderdale, Florida Ft. Myers/
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Miami, Florida Ocala/Gainesville, F
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Tampa Bay, Florida Atlanta, Georgia
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Boise, Idaho Southeast (Idaho Falls
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Fort Wayne, Indiana Indianapolis, I
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Des Moines, Iowa Sioux City, Iowa C
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Baton Rouge, Louisiana Lake Charles
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Greater Portland, Maine Baltimore,
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Greater Springfield, Massachusetts
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Minneapolis/St. Paul, Minnesota Jac
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Billings, Montana Bozeman, Montana
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Omaha, Nebraska Las Vegas, Nevada C
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Portsmouth, New Hampshire Atlantic
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Ocean/Monmouth Counties (“Shore M
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Las Cruces, New Mexico Albany, New
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Westchester, New York Asheville, No
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Raleigh/Durham, North Carolina Farg
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Cincinnati, Ohio Cleveland, Ohio Co
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Oklahoma City, Oklahoma Tulsa, Okla
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Berks County, Pennsylvania Bucks Co
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Philadelphia, Pennsylvania Philadel
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Wilkes-Barre/Scranton/Hazleton, Pen
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Sioux Falls, South Dakota Chattanoo
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Memphis, Tennessee Nashville, Tenne
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Corpus Christi, Texas Dallas, Texas
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Houston, Texas Contact NAI Houston
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Salt Lake City, Utah Washington Cou
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Northern Virginia Seattle/Puget Sou
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Madison, Wisconsin Milwaukee, Wisco
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n Glossary n Acre Area of land equa
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