2012 Global Market report - NAI Global

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Singapore Seoul, South Korea Contact NAI Global +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) 270 4.5% $233.17 $44,968.38 2.4% 2.2% N/A 5.185 Due to global uncertainties, Singapore has experienced a weaker corporate hiring sentiment and lower tenant demand as some companies have shelved plans for relocation and expansion. In the last 12 to 18 months, the Singapore government has instituted a number of anti-speculation measures. Prices have stabilized, however a recent residential buyer paid a record-breaking S$19 million for a four-bedroom apartment at The Marq on Paterson Hill for just under S$6,400/SF. The Singapore office property market looks likely to stay caught in the renewed concerns of a global economic slump in the short to medium term. Singapore’s average CBD, Class A office space is still more than 50% cheaper than equivalent space in Hong Kong. With the overall market pre-commitments at around 60% for new buildings, we do not forecast a substantial risk of large oversupply. While vacancies are expected to continue creeping up, we believe that rents will stay flat (to slightly receding) through early 2012. Singapore has been listed as one of the three most expensive prime industrial land markets in the world as of mid-2011. Biomedical/pharma manufacturing was recently the greatest contributor to the market. Average monthly gross rents for factories and warehouses grew between 15% and 17% in the first three quarters of 2011. With occupancies at 92% for conventional flatted factories and warehouses, this has provided the backdrop for continued, moderate rental growth. Demand was mostly from manufacturers renewing their existing leases at slightly higher rents. Retailers have become more cautious over their space needs. New entrants which dominated the market in recent times include fashion brands of Aeropostale (at Vivocity, CityLink Mall and Ion Orchard), H& M (at Knightsbridge) and Abercrombie & Fitch (at Orchard Building). With the city center, fringe and Orchard Road areas having the largest inventories and highest quality of retail space, developers are seeking alternative, suburban locations. Overall real estate investment in Singapore in the first half of 2011 was stronger than 2010, but with a trend to slowing transaction volumes. As of Q4 2011, Singapore was ranked the seventh most active global investment market with nearly US $20 billion in concluded investment transactions over the previous 12 month period. Capital values have primarily ranged from S$1,500/SF to S$2,500/SF for prime, Class A office space with retail values ranging generally from S$1,700/SF (suburban, fringe and smaller size lots) to S$6,250/SF (prime, central). Contact NAI Korea +82 2 6205 3500 Country Data Area (Sq Mi) GDP Growth GDP 2011 (US$ B) GDP/Capita (US$) Inflation Rate Unemployment Rate Interest Rate Population (Millions) 38,544 6.1% $986.26 $30,000.00 3.0% 3.7% 3.3% 48.91 The commercial real estate market of 2011 continued a steady growth from last year. Even though the economy is still unstable due to the depressed housing market and rising inflation, investor demand for commercial real estate such as retail shops and studio type apartments for one or two people was very high this year. The office market is taking on different aspects dictated by region. The CBD is experiencing unprecedented oversupply and struggling to bring in tenants. Approximately 1 million SM of new office space entered the market in 2011 with most of that located in the CBD. In addition, approximately 5.3 million SM of new office space is expected in Seoul through 2015. Over the next few years Seoul is likely to suffer from an oversupply in the market. The rent remained stable but given the lease incentives offered by landlords, the effective rent is expected to drop. On the contrary, the Gangnam BD has seen a relatively healthy level of leasing activity and falling vacancy rates as the IT and social commerce firms strongly expanded. Retail continued to experience a steady growth in lease activity since last year. Even though the sharp decrease of Japanese tourists after the disaster drove sales down in the biggest commercial area, affluent Chinese shoppers contributed to the recovery. The continuous inflow of SPA or luxury brands is increasing demand for shops in department stores and major commercial districts. The industrial sector is showing signs of recovery in comparison to the latter half of 2010. The rents increased by 10% to 20% due to the strong lease activity and the rising demand is expected to continue into 2012. The Free Trade Agreement with EU is anticipated to boost imports and increase the demand for warehouse space. Numerous redevelopment and reconstruction projects are planned in Seoul. The Yongsan project, with a total projected cost of KRW 31 trillion (US $30 billion), is expected to stimulate the real estate market. Renovating office to hotel space is also very active due to the lack of current accommodations and an increase in investors seeking opportunities in the hospitality market. The investment in prime office is decreasing due to the lack of quality assets available, whereas the demand for mid-sized office space is huge and the prices are gradually rising. Singapore At A Glance conversion 1.29 sGd = 1 us$ RENT/SF/MO US$ RENT/SF/YR low High low High Vacancy cItY center offIce New Construction (AAA) Class A (Prime) SGD SGD 10.00 8.00 SGD 15.00 SGD 12.00 $ 93.02 $ 74.42 $ 139.53 $ 111.63 7.50% 11.00% Class B (Secondary) suburban offIce SGD 6.00 SGD 9.00 $ 55.81 $ 83.72 11.00% New Construction (AAA) SGD 7.00 SGD 10.00 $ 65.12 $ 93.02 8.00% Class A (Prime) Class B (Secondary) IndustrIal Bulk Warehouse Manufacturing High Tech/R&D retaIl SGD SGD SGD SGD SGD 6.00 5.00 1.40 1.50 2.50 SGD SGD SGD SGD SGD 9.50 7.50 2.00 2.30 3.50 $ 55.81 $ 46.51 $ 13.02 $ 13.95 $ 23.26 $ 88.37 $ 69.77 $ 18.60 $ 21.40 $ 32.56 8.00% 8.00% 8.00% 9.00% 12.00% Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores SGD SGD SGD 22.00 20.00 N/A 22.00 N/A SGD 45.00 SGD 39.00 N/A SGD 45.00 N/A $ 204.65 $ 186.05 N/A $ 204.65 N/A $ 418.60 $ 362.79 N/A $ 418.60 N/A 2.50% 3.50% N/A 2.50% N/A deVeloPment land low/sf High/sf low/acre High/acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential SGD 850.00 SGD 1,300.00 $ 28,702,126.96 $ 43,897,370.65 SGD525.00 SGD 850.00 $ 17,727,784.30 $ 28,702,126.96 SGD 35.00 SGD175.00 $ 1,181,852.29 $ 5,909,261.43 SGD 30.00 SGD 80.00 $ 1,013,016.25 $ 2,701,376.66 SGD 900.00 SGD 1,400.00 $ 30,390,487.37 $ 47,274,091.47 SGD 400.00 SGD1,500.00 $ 13,506,883.28 $ 50,650,812.29 Seoul At A Glance conversion 1135.29 krW = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR low High low High Vacancy cItY center offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) KRW 217,800.00 KRW 360,000.00 $ 17.82 KRW 294,000.00 KRW 447,600.00 $ 24.06 KRW 236,400.00 KRW 336,000.00 $ 19.34 KRW 138,000.00 KRW 312,000.00 $ 11.29 KRW 132,000.00 KRW 288,000.00 $ 10.80 $ 29.46 $ 36.63 $ 27.50 $ 25.53 $ 23.57 7.90% 4.40% 3.30% 4.10% 2.90% Class B (Secondary) IndustrIal Bulk Warehouse KRW 102,000.00 KRW 234,000.00 $ KRW 120,000.00 KRW 217,800.00 $ 8.35 9.82 $ 19.15 $ 17.82 2.10% 5.00% Manufacturing KRW 84,000.00 KRW 186,000.00 $ 6.87 $ 15.22 7.00% High Tech/R&D retaIl N/A N/A N/A N/A N/A Downtown Neighborhood Service Centers KRW 1,910,000.00 KRW 3,675,000.00 $ 156.30 KRW 572,250.00 KRW 1,144,500.00 $ 46.83 $ 300.73 $ 93.66 5.30% 7.20% Community Power Center KRW 287,100.00 KRW 506,000.00 $ 23.49 $ 41.41 12.00% Regional Malls KRW 487,000.00 KRW 729,300.00 $ 39.85 $ 59.68 9.60% Solus Food Stores N/A N/A N/A N/A N/A deVeloPment land low/m 2 High/m 2 low/acre High/acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential KRW 36,300,000.00 KRW 39,325,000.00 $129,395,233.74 $140,178,169.88 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 2012 Global Market Report n www.naiglobal.com 41
Taipei, Taiwan Ho Chi Minh City, Vietnam Contact NAI Taiwan + 886 2 8770 6699 Country Data Area (Sq Mi) GDP Growth GDP 2011 (US$ B) GDP/Capita (US$) Inflation Rate Unemployment Rate Interest Rate Population (Millions) 13,972 4.4% $455.42 $19,348.37 1.5% 4.9% 1.9% 23.538 Taiwan’s 2011 economic growth is estimated at 5.06% according to the Taiwan government. The IMF forecasted that Taiwan’s economy in 2012 would grow, parallel to Hong Kong, by 5.4% and leave Singapore and South Korea behind at 5.2% and 4.5% respectively. Consumer spending is projected to reach the NT $8 trillion mark and rise by 3.96%. Both of Taiwan’s total export/import volume and GDP are escalating steadily. The unemployment rate in October 2011 was reported at 4.27%. Eleven major transactions in Taipei’s commercial real estate market were recorded in Q2 2011, totaling NT $148.45 million, with most of the deals congregated in the CBD. In Q2, the market responded with stagnation to the luxury tax bill that was finalized. Two building auctions were suspended in NHTP; the Ya-Hsin Technology Building and the Ace Eten Building. San-Yang Chung-Hsiao Building, on the other hand, was auctioned off successfully. Located on the most dominant and much sought-after site, the auction drew stiff competition among a number of participants. The winning bid produced an 86% increment out of the reserved price. This exhibits capital abundance and solid confidence in Taiwan’s real estate market. The overall net absorption in Taipei was 20,668 pings and vacancies declined from 14.89% to 13.46%. Positive net absorption was recorded in both the CBD and in the suburban markets where the vacancy rates were consequently lowered. The suburban CDB posted 19,178 pings and the vacancy rate dropped by 1.96% to 11.73%. Favored by office tenants, the CBDs in the outskirts of Taiwan have shown progressive absorption, quarter after quarter. Rents, nonetheless, have not experienced a noticeable increase. The average rent lingered at NT $1,152 per ping. The commercial property market in the Nei-Hu Technology Park Taipei was mixed in 2011. On the one hand, Taiwan witnessed a gloomy performance since Q2 2011 due to the implementation of the luxury tax, but on the other hand, the start of Chinese tourism in Taiwan has infused investor confidence in the commercial real estate market. Expanding investments in retail shops, hotel properties and office space are forecast for 2012. In the downtown area of Taipei, vacancy is at 13.46%. The suburban area vacancy rate is 11.73%. In 2011, among the six main CBDs in the Taipei downtown area, Class A space had the highest occupancy. In contrast, Class B and Class C space registered negative net absorption. Rent averaged upwards NT $2,030 per ping per month. In suburban areas of Taipei, vacancy is 11.66% and rental rates are NT $1,152 per ping per month. Contact NAI Nguyen Alliance Corp. +84 08 6291 5551 Country Data Area (Sq Mi) GDP Growth GDP 2011 (US$ B) GDP/Capita (US$) Inflation Rate Unemployment Rate Interest Rate Population (Millions) 127,882 6.8% $113.63 $1,272.18 8.0% 5.0% 9.0% 89.316 The real estate market in 2011 still encountered difficulties due to credit restrictions and high interest rates, making for a stagnant credit flow. Traditional customers in the apartment market were quiet due to soaring gold prices attracting outside investors. Thos customers lost faith in the real estate market. Prices of the mid-range and high-end apartment markets decreased. About 100 apartments were offered in Ho Chi Minh City in the mid-range market. From January to September, 2011, CPI increased to around 16.63%, up some 22.42% year-on-year. Therefore, the future supply of the retail projects in HCMC is expected to exceed 1,680,000 SM in 2012. This figure doubles the current supply of some 658,000 SM comprised of supermarkets, trade centers, grocery stores and shopping malls. Due to the difficulties in the economy, the number of customers visiting shopping centers dropped from 20% to 10%, leading investors to renegotiate rental rates. Accordingly, developers of trade center projects had to protract the time of capital reclamation. However, the rentals will be adjusted as those centers are fully leased. The office market by the end of 2011 was relatively stable with respect to Class A and Class B office projects. The Class A office market focused mainly on the office tower projects at the fulfillment rate of 90% to100%. The rental rates for Class B office space remain unchanged with the high fulfillment rate in the downtown area of District 1 at $26 to $29 per month on average. The project is being promoted and developed in order to attract the attention of tenants who are interested in high quality services. Some small space projects are being offered for lease with appropriate rental rates to meet the increasing trend of seeking flexible office services. The market will receive a new supply of projects located in neighborhood provinces such as Binh Duong and Dong Nai. The mid-term real estate market of villas, frontage houses and land plots remains attractive to the Vietnamese. Forecasting for 2012, this segment is expected to grow at a faster rate compared with other market segments. According to the comments of Knight Frank, in order to overcome the gloominess of the current housing market, developers need to be more prudent and flexible. It is important for developers to do careful research in the apartment market to meet customer’s requirements before launching the serviced apartments into the market. Taipei At A Glance conversion 29.8 tWd = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR low High low High Vacancy doWntoWn offIce New Construction (AAA) TWD 666.00 TWD 1,089.00 $ 24.92 $ 40.74 16.20% Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) TWD 529.00 TWD 475.00 TWD 378.00 TWD 303.00 TWD TWD TWD TWD 968.00 635.00 454.00 424.00 $ 19.79 $ 17.77 $ 14.14 $ 11.34 $ 36.21 $ 23.76 $ 16.98 $ 15.86 14.90% 12.90% 25.10% 8.40% Class B (Secondary) IndustrIal Bulk Warehouse TWD 242.00 TWD 212.00 TWD TWD 333.00 454.00 $ $ 9.05 7.93 $ 12.46 $ 16.98 20.50% 6.30% Manufacturing TWD 127.00 TWD 230.00 $ 4.75 $ 8.60 18.60% High Tech/R&D retaIl TWD 242.00 TWD 424.00 $ 9.05 $ 15.86 11.00% Downtown TWD 1,573.00 TWD 10,890.00 $ 58.85 $ 407.40 N/A Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores deVeloPment land TWD 756.00 TWD 968.00 TWD 968.00 TWD 1,210.00 low/m 2 TWD 1,815.00 TWD 3,630.00 TWD 2,420.00 TWD 2,269.00 High/m 2 $ 28.28 $ 36.21 $ 36.21 $ 45.27 low/acre $ 67.90 N/A $ 135.80 N/A $ 90.53 N/A $ 84.88 N/A High/acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential TWD1,210,000.00 TWD1,512,500.00 $ 164,318,920.48 $205,398,650.60 TWD1,512,500.00 TWD1,815,000.00 $ 205,398,650.60 $246,478,380.72 TWD 544,500.00 TWD 605,000.00 $ 73,943,514.22 $ 82,159,460.24 TWD 363,000.00 TWD 453,750.00 $ 49,295,676.14 $ 61,619,595.18 TWD 2,268,750.00 TWD 2,722,500.00 $ 308,097,975.90 $369,717,571.08 TWD 484,000.00 TWD 680,625.00 $ 65,727,568.19 $ 92,429,392.77 Ho Chi Minh City At A Glance NET 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 Bulk Warehouse Manufacturing High Tech/R&D retaIl Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores N/A $ 34.00 $ 20.00 $ 10.00 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A $ 39.00 $ 22.00 $ 15.00 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A $ $ $ N/A 37.90 22.30 11.15 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A $ 43.48 $ 24.53 $ 16.72 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 deVeloPment land low/m 2 High/m 2 low/acre High/acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential $ 9,850.00 $ 10,231.00 $ 39,861,597.30 $ 41,403,451.97 N/A N/A N/A N/A $ 714.00 $ 904.00 $ 2,889,459.95 $ 3,658,363.85 N/A N/A N/A N/A $ 7,614.00 $ 8,327.00 $ 30,812,812.37 $ 33,698,225.45 $ 1,903.00 $ 11,420.00 $ 7,701,179.66 $ 46,215,171.69 2012 Global Market Report n www.naiglobal.com 42
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 and 38: Chennai, India Mumbai, India Contac
Page 39 and 40: Jakarta, Indonesia Tokyo, Japan Con
Page 41: Christchurch, New Zealand Wellingto
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
Page 89 and 90: Hartford, Connecticut Wilmington, D
Page 91 and 92: 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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