Real Estate & Construction Industry

27 February 2012

© 2012 Grant Thornton International Ltd. All rights reserved.

Presentation Plan

Global Commercial Real Estate Investments

Global Residential Market Trends

Global Office Market Trends

© 2012 Grant Thornton International Ltd. All rights reserved.

Sources 1 – Link

Commercial real estate projects continues to attract capital from investors with investments seen in cross-border as well. The 2012

investment levels are projected to match 2011 levels although euro-zone crisis is expected to have a negative impact on global

investments.

• The Americas region investments volumes were up about 60% in 2011 over 2010.

• EMEA region was up 20% in 2011 over 2010.

• The Asia-Pacific region investment levels remained same in 2010 and 2011

Direct Commercial Real Estate Investment, 2005 – 2012(E)

Global commercial direct real estate investment totalled USD 411 billion in 2011 an increase of 28% over 2010

0

50

100

150

200

250

300

350

Americas EMEA Asia Pacific

2005 2006 2007 2008

2009 2010 2011 2012

0

50

100

150

200

250

300

350

2005 2006 2007 2008 2009 2010 2011 2012

Americas EMEA Asia Pacific

© 2012 Grant Thornton International Ltd. All rights reserved.

Sources 1 – Link

Investments in Asian market remain stable while European region exceeds expectations. US market sees maximum investment

32,3

15

7,2 7,5 7 4,3 3,9

1,9 2,4

34,1

12,6 9,3 8,2

5 4 3,9 2,5 1,8

US UK France Germany China Australia Japan Russia Canada

Q4 2010

Q4 2011

37,2

43

21,7

37,4

46,4

22,4

Americas EMEA Asia Pacific

Q3 2011

Q4 2011

32

12,7

5,5

8,9

3 2,8 4,8

2 3,3

34,1

12,6

9,3 8,2

5 4 3,9 2,5 1,8

US UK France Germany China Australia Japan Russia Canada

Q3 2010

Q4 2011

97,4

137,7

85,4

154,8 164,8

90,9

Americas EMEA Asia Pacific

FY 2010

FY 2011

All figures in USD billion

© 2012 Grant Thornton International Ltd. All rights reserved.

Residential Market Trends

The US rental apartment market continues to be strong and remains in favour with investors; Europe and Asian market to witness slow residential growth

Sources 1 – Link

Americas

• The US apartment vacancy rate declined by 100 basis points through the first three quarters of 2011.

• The vacancies are projected to fall further to under 5% in 2012 as the employment growth improves.

• Rents in 2012 are expected to have steady growth with modest acceleration in H1 2012.

Europe

• In most of the European countries price fall in residential property will be of about 2-6% per year. However home prices in Germany

and France will rise strongly to about 7% and 8% respectively.

• Prices in Spain are expected to fall down 8% per year while in Ireland the decline will be even more at 14% per year.

Asia

• Residential real estate sale slowed further across Asia in 2011, with fewer new projects.

• Shanghai and Singapore both experienced negative growth, although Manila and Jakarta remained unaffected.

• Growth of 3.8% and 2.8% seen in Jakarta and Beijing respectively due to ongoing corporate expansion.

• In the Middle-Eastern region, the residential market in Dubai is expected to see mixed performance in 2012.

© 2012 Grant Thornton International Ltd. All rights reserved.

Global Office Net Absorption 2011

Global office leasing volume remains resilient; Demand continues to be strong in China, India, Brazil, the CEE* region, Germany, the Nordics, Canada and Australia

Sources 1 – Link * Central & Eastern Europe

Asia Pacific:

• For the entire year 2011, net absorption in Asia-

Pacific increased by 20% as compared to 2010.

However in Q4 2011 the leasing volume was down

due to decreased business activity.

• For 2012, it is expected that the leasing demand

will weaken due to slower corporate hiring.

Europe:

• In 2011, net absorption in Europe increased by 5%

as compared to 2010.

• In 2012, it is expected that the overall leasing

volumes in Europe will be similar to 2011 levels.

The US:

• The office sector in the US posted 7 consecutive

gains with the last 2 quarters showing maximum

rate of increase.

• In Q4 2011, a total of 10.6 million square feet of

space was absorbed.

• The occupancy gains have been mainly from the

technology and energy sector.

© 2012 Grant Thornton International Ltd. All rights reserved.

Global office vacancy rates continue to decline across all the three regions, with further falls expected in 2012

Sources 1 – Link

Office Vacancy Rates - Major Markets Q4 2011

Asia Pacific:

• Across the Asia-Pacific mixed performance was

seen in vacancy levels.

• The occupancy rates across North Asia (Japan and

South Korea) improved due to affordable office

rents.

• Vacancy rates increased marginally in Hong Kong

and Singapore.

Europe:

• Due to increase in net absorption rate, the

European office vacancy rate declined to 9.9%.

• It is projected that European vacancy rate will fall

further in 2012.

• Moreover, uncertain business conditions will result

in postponements in expansion.

Americas:

• The total vacancy rate across the US dipped to

16.7%, lowest since Q2 2009.

• In Brazil, the overall demand for office space

remains strong.

© 2012 Grant Thornton International Ltd. All rights reserved.

During Q4 2011, office rental growth remained slow in some of the major regions

Sources 1 – Link

Office Rental Trends

Asia Pacific:

• In most of the regions across Asia Pacific the office

rental growth slowed in 2011.

• In Hong Kong, the rates declined for the second

consecutive quarter. Singapore also saw decline in

rate for first time since Q1 2010.

Europe:

• In Europe the office rents mostly remained

unchanged in Q4 2011.

• However it is expected that rental will increase in

2012 due to shortage of office space in key

regions.

The US:

• Office rents in the US is expected to increase in

2012 with the recovery in economy.

• Technology, energy and healthcare industry is

expected to drive the majority of growth.

© 2012 Grant Thornton International Ltd. All rights reserved.

Global Office Market Conditions Matrix

According to JLL*, from 2012 to 2014 global office real estate industry will shift in favour of landlords from tenants

Sources 1 – Link

City 2012 2013 2014

Chicago

Los Angeles

New York

Toronto

Mexico City

Sao Paulo

City 2012 2013 2014

Brussels

Frankfurt

London

Madrid

Paris

Dubai

City 2012 2013 2014

Beijing

Hong Kong

Mumbai

Singapore

Sydney

Tokyo

Tenant Favourable Neutral Market Landlord Favourable

Americas EMEA APAC

* JLL – Jones Lang LaSALLE

© 2012 Grant Thornton International Ltd. All rights reserved.

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