JLL Asia Pacific Property Digest 2q 2014

A Sunnier Outlook for Leasing
Asia Pacific Property Digest

Second Quarter 2014
Asia Pacific Property Digest Second Quarter 2014 3
Dear Reader,
In 2Q14, there were some encouraging signs in the occupational markets across Asia Pacific. We saw a further improvement in
office leasing activity, which supported a moderate pick-up in rental growth. The second half of the year should be stronger for
both leasing and investment activity.
You can view this report on-line at www.jll.com/thehub where you will also find our other research outputs.
The AP research team hopes that you find this publication valuable.
Happy reading!
Best regards,
Dr Jane Murray
Head of Research Asia Pacific
Feature Articles
Asia Pacific Economy and Property Market
Do you really add value at work?
Hong Kong residential prices holding up better than expected
The magnetic retail landscape of Asia Pacific
Are Australian consumers ready for more international retailers?
4
8
9
10
11
Office
Hong Kong
Beijing
Shanghai
Guangzhou
Taipei
Tokyo
Osaka
Seoul
Singapore
Bangkok
Kuala Lumpur
Jakarta
Manila
Ho Chi Minh City
Delhi
Mumbai
Bangalore
Sydney
Melbourne
Perth
Auckland
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Retail
Hong Kong
Beijing
Shanghai
Guangzhou
Tokyo
Singapore
Bangkok
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Kuala Lumpur
Jakarta
Delhi
Mumbai
Sydney
Melbourne
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Residential
Hong Kong
Beijing
Shanghai
Singapore
Bangkok
Kuala Lumpur
Jakarta
Manila
46
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49
50
51
52
53
Industrial
Hong Kong
Beijing
Shanghai
Tokyo
Singapore
Sydney
Melbourne
54
55
56
57
58
59
60
Hotels
Hong Kong
Beijing
Shanghai
Tokyo
Singapore
Bangkok
Kuala Lumpur
Jakarta
Sydney
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Economy
4 Asia Pacific Property Digest Second Quarter 2014
Asia Pacific Economy

Moderate slowdown continues
Dr Jane Murray
Figure 1: Uneven Growth Across Asia Pacific in 2014
10
8
y-o-y (%)
6
4
2
Thailand
Japan
Hong Kong
Taiwan
Australia
South Korea
Singapore
Malaysia
India
2014F
New Zealand
2013
Indonesia
Vietnam
Philippines
0
2
China
Regional economic growth slowed further in 2Q14. Asia Pacifics

second biggest economy, Japan, likely contracted by up to 7% q-o-q
(annualised) due to a sharp pull-back in consumption and production
after the April sales tax hike. Singapore also contracted q-o-q due to
weak manufacturing output, while Indonesian growth fell to its lowest
rate in almost five years. Second quarter growth is also likely to have
slowed in Australia and Korea and remained below trend in India and
Hong Kong. On the other hand, the regions largest economy, China,
posted a solid result assisted by targeted stimulus measures. Also
on a positive note, the Philippines remains one of the fastest growing
economies in the region and political tension has eased in Thailand.
Source: Oxford Economics, July 2014
Figure 2: Outlook for Major Economies

Real GDP
Growth (%)
2013
Real GDP
Growth (%)
2014F
China
7.7
7.4
Growth likely to moderate this year, with export growth and consumption unable to offset
weaker property investment.
Further targeted stimulus measures likely to be rolled out, but with ongoing downside risks
including real estate and shadow banking.
Japan
1.5
1.1
Slower growth with consumption unlikely to rebound strongly. Further monetary easing
may be needed before the planned second sales tax hike next year.
Insufficient progress on structural reforms to raise medium-term growth trajectory.
India
4.7
4.8
The worst of the downturn should be over but growth to remain below trend on sluggish
domestic demand.
The new majority government has bolstered sentiment. However it will need time to implement reforms. Interest rate cuts are unlikely before early 2015.
Australia
2.4
3.1
Faster 2014 growth as low interest rates are buoying housing investment while a stabilisation in commodity demand and prices should assist exports.
Challenges include the weakening labour market and a strong AUD impacting the recovery
in non-mining exports and investment.
South Korea
3.0
3.4
Stronger export demand from the US but demand from China (Koreas largest trading
partner) to remain weak.
Low interest rates and fiscal stimulus to help support consumer and investment spending.
Indonesia
5.8
5.2
Solid consumer spending with political risks dissipating after the July election. Gradual
recovery in export growth.
Inflation should continue to ease but interest rates to remain high.
Singapore
3.9
3.4
Slower growth with consumer spending and real estate-related sectors impacted by the
ongoing housing market correction.
CPI inflation to edge higher as labour shortages induced by tighter restrictions on foreign
workers are fuelling wage increases.
Hong Kong
2.9
2.7
Below-trend growth due to an uneven export recovery coupled with lacklustre consumption
and real estate sector activity.
Retail sales growth slowing back to its historical trend (single-digit growth), with Mainland
Chinese tourist arrivals growing at a more moderate pace.
Country
Source: Oxford Economics, July 2014; JLL
2014 Outlook
Inflation and interest rates edging up

Inflation is finally abating in Indonesia (latest 4.5% y-o-y) and India
(7.3%). On the other hand, Japans core inflation reached a 32-year
high in May (3.3%). Elsewhere in the region inflation is edging up and
several countries Malaysia, the Philippines and New Zealand have
hiked interest rates in recent months. Concerns are mounting in a
number of markets regarding credit bubbles and rising financial sector
risks, but no significant interest rate hikes are expected until 2015.
10
8
6
4
2
Taiwan
New Zealand
Singapore
China
South Korea
Japan
Thailand
Australia
Hong Kong
Malaysia
Philippines
Vietnam
2013
Indonesia
0
India
In 2Q, retail sales took a dive in both Japan and Hong Kong. Sales fell
by 1.8% y-o-y in Japan after the tax hike and by 7.0% in Hong Kong
on plunging watch and jewellery sales. Meanwhile, growth
momentum remained generally healthy in China and picked up in
Australia in June. Encouragingly, the latest manufacturing PMI
readings for July saw activity picking up in most markets, and rising
new orders suggest a continued recovery in the coming months.
Export performance has been uneven: latest figures show exports
strengthening in China and Korea, but falling in Japan and Singapore.
Figure 3: Inflation Edging Up in Some Countries
y-o-y (%)
Mixed retail sales and export performance. Manufacturing

recovering
Economy and Property Market
2014F
Source: Oxford Economics, July 2014
More moderate regional growth this year

Asia Pacific will continue to be the fastest growing region in 2014.
However full year growth is likely to be slightly down on 2013 due to
slow export recovery and constraints on domestic demand in some
countries due to tax hikes, slow structural reforms and soft housing
markets. Oxford Economics is currently forecasting aggregate growth
of 4.9% in 2014 (5.2% in 2013) with major economies including
China, Japan and Indonesia expected to grow at a slower pace than
last year. The global economy looks to be on a more solid footing, but
there are a number of challenges on the horizon including the impact
of US Fed policies and increasing geo-political risks.
Asia Pacific Property Market

A sunnier outlook for leasing
There were some encouraging signs in the occupational markets
across Asia Pacific in 2Q14. We saw a further improvement in office
leasing activity, which supported a moderate strengthening in rental
growth. At the same time, the commercial real estate investment
market remained active with transaction volumes improving from the
slow start to this year on sustained investor interest.
Further signs of improvement in office leasing activity
One of the regional highlights over the last six months has been the
pick-up in office leasing activity. The improvement is still patchy
across markets and sectors, but as corporate confidence grows, we
are seeing stronger leasing in a diverse number of markets including
Manila, Tokyo and Bangalore. The technology sector is currently one
of the more active sectors across the region, with tech companies
often backfilling space left by financial services firms.
During 2Q14, aggregate office leasing activity rose 20% y-o-y on a
gross basis, but was still down 8% y-o-y on a net basis as many large
corporates remained in cost-saving mode and were not yet
expanding. Most tenants in Hong Kong and Singapore opted for
renewals over relocations due to cost concerns. However, Tokyo and

Seoul saw stronger pre-leasing activity. Demand in China mainly
came from domestic firms and select MNCs including international
retailers. Leasing activity in India was similar to 1Q although occupier
sentiment improved after the election in May. Manila was a bright
spot in Southeast Asia with the offshoring and outsourcing sector
driving demand. Leasing conditions in Australia remained segmented,
with technology and financial services becoming more active, while
the commodity and public sectors were still weak.
Rental growth starts to pick up. Singapore grows fastest
Office rental growth has started to strengthen also, with an average
annual increase of 1.8% in 2Q, a full percentage point higher than six
months ago. Net effective rents increased in over half of all AP
markets. Singapore continued to pick up the pace and is currently the
fastest growing in the region (4.6% q-o-q), closely followed by
Auckland (4.4%), while growth improved in Beijing (2.5%), with
vacancy edging lower in all of these locations. Growth remained steady
(2%) in Tokyo, while small rental increases were seen in Hong Kong,
Shanghai and Manila (1 to 1.5%).
Rental growth is still a mixed bag though, with rents static or falling in
some markets. In Jakarta, 2Q rents slipped back 0.4% q-o-q, the first
fall in almost five years, with occupiers cautious prior to the July
election. In Australia, effective rents were largely steady in Sydney
and Melbourne on healthy levels of activity but fell in other cities by
up to 9% q-o-q, mainly on higher incentives, due to limited demand.
For the twelve months to end-2Q14, Singapore (+15.9%) leapt to the
top of the rental growth table, followed by Taipei, Bangkok and
Jakarta (between 7.5 and 8.5%). At the opposite end of the spectrum,
the Australian CBDs (down between 2 and 27% for the year except
for Sydney) continued to deliver the weakest performance.
International retailers continue to arrive
Across the region, international retailers continue to look for growth
opportunities although some caution was seen in 2Q14. Mass market
and F&B retailers are generally the most active currently. China saw
healthy demand during the quarter, but with slow expansion by luxury
brands. Demand softened in secondary locations in Hong Kong as a
result of slowing retail sales. Australia saw stable leasing demand,
while foreign retailers were generally more discerning about expansion
across most of Southeast Asia and faced ongoing regulatory
challenges to setting up shop in India. Rents were generally flat in
2Q14 outside of China (12% q-o-q) and Bangkok (3.9%).
Subdued residential leasing. Small rental declines in Hong Kong
and Singapore
In 2Q14, high-end residential leasing demand remained subdued in
most markets and rents declined slightly in Hong Kong, Singapore,
Beijing and Jakarta. In general we dont expect take-up or rents to
strengthen much in the near term.
Figure 4: Office Rental & Capital Value Changes
Warehousing demand driven by the retail sector but stronger

from exporters
Across the region, e-commerce and logistics companies continued to
underpin industrial leasing activity, but demand picked up from
exporters and manufacturers in markets such as Shanghai and
Singapore. Moderate rental growth was seen in Greater China
(largest quarterly growth of about 3% in Hong Kong), while rents
remained mostly stable in Singapore and Australia.
Mixed trends for real estate investment
In 2Q14, regional investment activity was mostly flat y-o-y at
USD 31.8 billion, with the top three markets of Japan, China and
Australia accounting for two-thirds of activity. In 1H14, volumes
totalled USD 54.9 billion, a dip of 8% on the same period in 2013.
Japan again led the way and accounted for one-quarter of total
regional activity, but volumes were down 18% y-o-y due to slower IPO
activity and with some deals likely to have been brought forward to
1Q. In Australia, volumes were up 7% y-o-y but largely due to a large
REIT take-over. Volumes in China fell 14% y-o-y although the market
is stabilising from debt market concerns earlier this year. Elsewhere,
volumes in Hong Kong were up 24% y-o-y, mainly supported by the
largest office transaction on record in the city. Volumes in Singapore
also rose on a yearly basis, by 15%.
Office capital values rose in most AP markets in 2Q14 and at an
overall q-o-q rate of 1.9%, strengthening from 1.6% in 1Q. Auckland
led the way with a 7.1% q-o-q increase, while prices also rose
strongly in Tokyo, Sydney and Beijing (around 35% q-o-q) on the
back of rising rentals and sustained investor interest.
Figure 5: Direct Commercial Real Estate Transactions
Yearly % Changes, 2Q14
20061H14
20
150
15
125
100
10
USD Billion
y-o-y %
75
1H14 $54.9 bill

8% y-o-y
50
25
Rental Values
Capital Values
Figures relate to the major submarket in each city

Source: JLL (Real Estate Intelligence Service), 2Q14
Seoul
Melbourne
Mumbai
Beijing
Hong Kong
Sydney
Shanghai
Tokyo
Manila
Jakarta
Bangkok
0
Singapore
Property Market
2006
2007
2008
2009
2010
2011
2012
Japan
China
Australia
Hong Kong
South Korea
Other
2013
1H14
Singapore
Figures refer to transactions over USD 5 million in office, retail, hotels and industrial
Grade A Office
Jakarta, Kuala Lumpur
Prime Retail
Singapore, Jakarta
Hong Kong
Guangzhou
Beijing, Kuala Lumpur
Guangzhou
Shanghai
Bangkok
Manila
Growth
Slowing
Rents
Falling
Rents
Rising
Decline
Slowing
Adelaide
Perth
Brisbane
Tokyo
Bangalore
Delhi, Mumbai
Canberra
Singapore
Chennai
Hanoi
Beijing
Melbourne
Auckland
Taipei
Hong Kong, Osaka, Ho Chi Minh City,
Wellington
Seoul Sydney
Prime Residential
Kuala Lumpur
Shanghai
Guangzhou
Property Market
Figure 6: Rental Property Clocks, 2Q14
Jakarta, Beijing
Growth
Slowing
Rents
Falling
Rents
Rising
Decline
Slowing
Manila
Bangkok
Tokyo
Mumbai
Delhi
Bangalore
Chennai
Shanghai
SE Queensland*
Wellington
Sydney*,
Melbourne*, Auckland
*Regional
Industrial
Singapore (Conventional/Multi User)
Singapore (Business Park)
Bangkok
Growth
Slowing
Rents
Falling
Rents
Rising
Decline
Slowing
Shanghai
Tokyo
Manila
Growth
Slowing
Rents
Falling
Rents
Rising
Decline
Slowing
Brisbane
Manila
Auckland
Hong Kong, Beijing
Wellington
Hong Kong
Singapore *
*For Luxurious Residential Properties
Sydney, Melbourne
*Business Parks (Singapore) & Conventional (Singapore)

Logistics Space (Hong Kong, Shanghai, Beijing, Tokyo Bay Area)

Note: Clock positions for the office sector relate to the main submarket in each city.
Meanwhile in the residential sector, restrictive policies remain in place

in various markets as governments attempt to rein in prices on the
back of abundant liquidity in the system. Hong Kong and Singapore
have resorted to a range of tax and lending curbs, while New Zealand
has been one of the few countries to hike interest rates to avert a
property bubble. The year ahead will certainly be an interesting one
as the US Fed completes its QE tapering and all eyes turn to the
timing of the first interest rate rise in the US.
Moderate improvement in leasing. Investment to strengthen in
second half of 2014
We expect AP office leasing volumes to grow 1520% this year as
corporate confidence strengthens. Meanwhile, with a strong pipeline
of investment deals for the second half of 2014, annual investment
volumes across the region should be similar to the record level
achieved in 2013. For the full year, single-digit rental and capital
value growth is expected across most sectors and markets, with
outperformers likely to include Singapore, Tokyo and Taipei in the
office sector, Beijing in retail, Hong Kong in industrial and Manila in
the residential sector.
About the Author

Dr Jane Murray joined JLL in 1998
and in 2005 was appointed as Head
of Research Asia Pacific. In this
role, Jane leads a team of over
100 professional researchers in the
region, which forms part of a network
of around 300 researchers in 60
countries around the globe.
The Asia Pacific Research team
produces a range of outputs to
assist the clients of the Firm with their decision making, including
comprehensive market monitoring and analysis across major
institutional-grade real estate markets in the region; forecasts of key
real estate indicators; consultancy projects; thought leading research
papers on topical issues as well as regular publications.
Asia Pacific
Do you really add value at work?

Alexander Colpaert
Associate Director, Corporate Research, Asia Pacific
Figure 1: A significant disconnect between time spent and value added
emails
brainstorming
thinking
talking
reading/
writing
TIME SPENT
formal
meetings
phonecalls
waiting
VALUE CREATED
How did the day fly past and why havent I achieved what I set out
to do today? All of us ask ourselves this question at some point or
another. Being productive at work often comes down to prioritisation
and ultimately focusing on activities that create the most value for
your business simple.
Now take a good look around you and ask yourself: Does my
workplace actually support these activities?
A global JLL poll revealed a staggering disconnect between what
we actually do at work, and what generates the most value. 74% of
respondents say that thinking, talking and brainstorming create the
most value for their organisation but only 24% indicate that they
spend most of their time on these high-value activities.
Some might say that this is obvious and that phone conversations,
e-mailing and attending meetings are required to facilitate higher
value activities. This might be true, but it doesnt take away from the
following: Shouldnt your workplace support the processes and
activities that ultimately drive business value?
The poll tells us that creative collaboration, concentrated work and
face-to-face interaction are viewed as the highest-value activities.
However, the balance of how you spend your time at work and how
much these activities are valued obviously differs significantly between
functions. For example, as a property researcher, I highly value a
place to think, write and basically just get on with things without being
constantly disturbed by lots of noise around me. At the same time,
sitting with the business, listening to their issues and soaking up the
knowledge can be very handy from time to time as well. This balance
will be completely different for a sales exec or an IT support role.
This is often where things go wrong, as many offices are not equipped
to facilitate the required balance of focused and collaborative work
that their employees do. Getting this delicate balance wrong can
significantly impede a companys ability to best develop new products
and services and generally deliver best value to clients.
The key is not to apply a silver-bullet approach to your workplace
strategy and get dragged into new fancy or flashy workplace
formats without first having a detailed look at your business
fundamentals. These formats may be the right solution for some, but
wont necessarily best serve your organisation.
To achieve measurable workplace productivity improvements,
organisations should ask the right questions from the outset
questions that will uncover what makes your company successful
and then, and only then, look at what workplace fits best.
To find out which questions frame this discussion and how the
workplace can ensure measurable productivity improvements, please
visit our SlideShare channel and sign up to receive our latest
research report, Forget the Workplace for Now.
About the Author
Alexander Colpaert is an Associate
Director for JLLs Asia Pacifics
Corporate Research team, based in
Singapore. Alexander is responsible
for the delivery of thought leadership
research and consultancy for
Corporate Solutions in Asia Pacific.
Alexander holds a bachelor degree in
Real Estate Studies from Fontys
University, Eindhoven,
The Netherlands.
Hong Kong residential property prices holding up better

than expected
Denis Ma
Head of Research, Hong Kong
By most measures, Hong Kongs residential property market is

overpriced and the possibility of a large correction is much talked
about. Indeed, prices are already coming down. Since reaching alltime highs in 2013, transaction volumes have dropped to generational
lows and prices have retreated by about 7% as the governments
cooling measures have started to weigh on the market. However,
unlike others in the market, we think the risk of an outright collapse in
residential property prices is unlikely.
Firstly, sharp corrections in Hong Kongs residential market have
historically been triggered by major external economic shocks: the
US stock market crash of 1987; aggressive monetary policy
tightening in China in 1994; Asia Financial Crisis in 1997; and Global
Financial Crisis in 2008. With most economists forecasting moderate
global growth over the next few years, barring a substantial policy
misstep in China, an economic crisis is not our baseline scenario.
Secondly, holding costs for home owners remain low. As much talk as
there has been on the tapering of QE and rising interest rates in the
bond markets, the reality is that mortgage rateswhich are closely tied
to the US Federal Funds Rateremain at extremely low levels. In fact
the average mortgage rate in Hong Kong has actually fallen in the past
12-months as banks aggressively compete for business in an
otherwise slow market. Furthermore, low interest rates limit investment
alternatives with most Hong Kong investment properties generating
positive carry. Not to mention there is plenty of debate as to how fast
rates will rise and whether they will return to normal levels at all.
Thirdly, supply remains low. While the government has been doing its
best to ramp up supply, it is unlikely to get close to its annual target of
20,000 private residential units until 2016. The lack of supply in the
primary sales market limits the amount of pressure placed on vendors
in the secondary market, especially with some recent launches
enjoying reasonable response rates.
With government policy continuing to suppress demand, developers
will need to continue to offer discounts to draw buyers into the primary
sales market. However, the lack of motivation for sellers in the
secondary market to lower prices significantly is likely to lead a gradual
decline in prices over a prolonged period rather than a sharp correction.
For bargain hunters, the wait may turn out being longer than they think.
About the Author
Denis Ma is Head of Research for
JLL in Hong Kong. He has over
10 years of experience in real estate
markets in Greater China and leads
a team that is responsible for the
monitoring, analysis and forecasting
of key real estate indicators in the
local market as well as providing
consultancy services to the firms
clients. He has contributed to a
variety of thought leadership papers and as a designated
spokesperson for the firm, is a regular commentator on Hong Kongs
real estate markets.
Hong Kong
Asia Pacific
The magnetic retail landscape of Asia Pacific

Lee Fong
Senior Manager, Research, Asia Pacific
Hong Kong has the highest presence of international retailers
Shenyang
Beijing 4
24
25
Delhi
Mumbai
27 Bangalore
13
6
Seoul
Tokyo
5
7
Nanjing 15
Chengdu 10 Wuhan
Osaka
21
2 Shanghai
Chongqing 23 Shenzhen 17 Hangzhou
8 Taipei
Guangzhou 18 15
1 Hong Kong
Bangkok
10
11
22
Retailer presence ranking

9
High-income city
Low- to middle-income city
14
Manila
Ho Chi Minh City
Kuala Lumpur
3 Singapore
12
Jakarta
Perth 29
Although each retail market has its own intricacies and appeal, there
are drivers such as urbanisation, a growing middle class population
and rising tourism that are influencing much of the region. In
emerging Asia, rapid urbanisation is seeing 40 million more people
living in cities each year and helping drive wealth creation. Currently,
AP accounts for around one-third of the worlds middle class
population and this is projected to reach 46% (1.32 billion people) by
2020. Though staggering figures, this really just helps put in
perspective the huge potential the region presents for retailers.
Brisbane
Sydney
Melbourne
28
Auckland
or Tsim Sha Tsui in Hong Kong can certainly understand Hong Kongs
position at the top of the list. These areas are adorned with an array
of global retailers catering to all types of consumers. Another
interesting observation from the map is the subregional variation, with
Greater China and North Asia generally having the highest presence
of international retailers while Australia and India have the lowest.
Interestingly Australia is now seeing a pick-up in international retailers
setting up shop you can read more about this from my colleague
Jenny Dong on the next page.
All in all, Asia Pacifics huge population, rapid economic growth and
rising income levels will surely act as a magnet for international
retailers in the years ahead. Further insights are in our report A
Magnet for Retail.
About the Author
Rising income levels and greater ease in travel are also seeing more
people go abroad, most notably Mainland Chinese. In 2013, an
estimated 97 million Chinese tourists spent USD 129 billion on
tourism abroad. Aside from supporting retail sales, tourists are
influencing local retail landscapes with their tastes and needs. I have
certainly noticed such changes on my recent travels around Asia
Pacific and even Canada, from hearing Mandarin spoken around me
to having retailers accepting my UnionPay bank card.
The map above shows AP city rankings by retailer presence. Anyone
who has ever walked through the streets or malls in Causeway Bay
20
19
Note: Ranking based on the presence of 100 retailers in major cities across Asia Pacific
Source: JLL Research
As I check my emails every morning, I often come across news

articles highlighting the arrival of new international retailers to Asia
Pacific. With an influx of retailers and growth of store networks, I had
often found myself wondering what factors are drawing retailers to the
region. In our recent retail report, A Magnet for Retail, we look at
major underlying factors attracting retailers and also the presence of
100 top global brands, both luxury and mid-tier across AP.
26
Adelaide 30
Lee Fong is a Senior Manager

for JLLs Asia Pacific Research
team, based in Hong Kong. Lee is
responsible for coordinating and
contributing to the production of
regional publications. He holds a
Master of Business Administration
degree from The Chinese University
of Hong Kong and a Bachelor of
Commerce degree from Saint Marys
University in Canada.
Are Australian consumers ready for more international retailers?

Jenny Dong
Senior Analyst, Research, Australia
Waves of new international retailers have arrived on Australian
shores in recent years, most commonly establishing flagship stores
in the eastern coast cities of Sydney, Melbourne and Brisbane,
before expanding their reach further. One major barrier to entry for
new retailers has been the lack of suitable sites. The new groups
of international retailers to enter the Australian market typically
require larger store formats than domestic retailers, and typically
multi-level formats that may require redevelopment or improvement
works, such as, installing internal escalators and lifts. The search
for suitable sites can take up to several years for some of these
retailers.
Shopping centre landlords have used redevelopments and
refurbishments as an opportunity to attract new international retailers
over the past few years. Recent examples include the redevelopment
of the Emporium shopping centre in Melbournes Central Business
District (CBD) and refurbishment of the nearby GPO building, which
both completed in early 2Q14. Emporium houses Japanese retailer,
Uniqlos flagship store in Australia (2,180 sqm over four levels), as
well as standalone stores for a number of new international retailers,
including Brooks Brothers, Kate Spade and Zoo York. H&M opened
its first Australian store (approximately 5,000 sqm) at Melbournes
GPO building, which underwent a full refurbishment to accommodate
the international retailer.
In Sydney, Sephora has committed to opening its first Australian
store at Westfield Sydney, in a prime location along Pitt Street Mall
in the CBD. Sephora is one of the top performing beauty retailer
chains globally, as well as one of the fastest growing brands in
parent company, Moet Hennessy-Louis Vuittons (LVMH) portfolio.
LVMH, along with other major retail groups, Richemont, Kering,
Prada Group, Labelux, Fast Retailing, Inditex and Hennes & Mauritz,
own or manage many retail brands that do not yet have a presence
or a standalone store in Australia (some have a presence in
department stores). Of the aforementioned retail groups, which own
or manage a range of well-known luxury and fast fashion brands,
only around 20% of their retail brands (fashion, leather goods,
watches and jewellery categories) currently have standalone stores
in Australia.
This leads to the question, are Australian consumers ready for more
of these retailers? The appetite is certainly there. Australians have
experienced steady income growth and higher levels of household
wealth in recent years, hence would have higher levels of disposable
income to spend on discretionary retail. There is also a growing
market for luxury retailing in Australia, with inbound international
tourists a strong driver of this trend. As more and more Australians
travel overseas and/or shop online, we are exposed to a wider range
of retail offerings. It could benefit the local market for more of these
retailers to have a presence in Australia. International retailers

generally draw increased foot traffic to the centres and retail strips
they are located in, benefitting neighbouring retailers, and in turn
generating increased leasing demand for landlords.
For more information, please refer to our latest Pulse research paper
CBD Retail: The Transformation and Outlook.
About the Author
Jenny Dong is currently a Senior

Analyst in the Australian Research
department, based in Sydney. She
joined JLL in 2011. She has an active
role in the Real Estate Intelligence
Service (REIS) specialising in office
and retail research. Jenny holds a
double bachelor degree in Property
Economics and International Studies
from the University of Technology,
Sydney.
Australia
Hong Kong: Office

Leasing activity slows after a solid start to the year
Rental decline in Kowloon East reverses gains recorded in 1Q14
Government land sales market lends support to marginal capital value growth
Financial Indices
200
Demand
Weak demand for Grade A office space contributed to net take-up slowing to 15,500 sq
ft in 2Q14, down from 303,200 sq ft in 1Q14. Buoyed by smaller requirements (i.e. less
than 5,000 sq ft) from the banking and finance sector and new PRC set-ups, net
take-up in Central amounted to a market leading 79,600 sq ft. Beijing-based UCF
Corporate Financial Group leased a whole floor in Two Pacific Place in Admiralty to
accommodate expansion plans.
100
50
0
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index
Arrows indicate 12-month outlook

Index base: 4Q09 = 100
Source: JLL
Financial Indicators are for Central.
Outside of Central, Wanchai/Causeway Bay and Hong Kong East were the only two
office submarkets to record net withdrawals. With vacancy remaining tight in both
submarkets less than 2% in Hong Kong East there was little room to cater for
tenant expansion. Padded by sales transactions in strata-titled buildings, net take-up
amounted to 24,700 sq ft in Kowloon East.
Supply
There was no new Grade A office supply completed in 2Q14.
Physical Indicators
400
300
200
100
100
09
10
11
12
Take-Up (net)
Future Supply
13
14F
A commercial site in Tsimshatsui was released by the government for sale via public
tender in June. Located at 15 Middle Road, the site covers an area of 28,309 sq ft and
has a maximum buildable GFA of about 339,700 sq ft. The purchaser is required to
build a public car park with no less than 315 car parking spaces within the building.
Percent
Thousand sqm
Hong Kong: Office
Index
150
Completions
Vacancy Rate
Source: JLL
For 2009 to 2013, take-up, completions and vacancy

rates are year end annual. For 2014, take-up,
completions and vacancy rates are as at 1H14, while
future supply is for 2H14.
Physical Indicators are for the Overall market.
Asset Performance
Kowloon East was the only major office submarket to post rental decline, reversing the
gains recorded in 1Q14. The correction was driven by increased competition from
refurbished industrial buildings and landlords shifting properties from the sales to
leasing market.
Capital values held firm across the market. Despite the pressure on rentals, capital
values in Kowloon East continued to move higher on the back of owner-occupier
purchases and strong government land sale results. In one of the largest transactions
recorded this year, Citigroup purchased the East Tower of One Bay East in Kwun Tong
for a record HKD 5.4 billion (about HKD 10,600 per sq ft), reportedly for its
headquarters. The amount is 20% more than that paid by Manulife for the West Tower
in 2013. Meanwhile, First Group Holdings won the public tender for a commercial
development site with a maximum buildable GFA of about 193,500 sq ft in Cheung
Sha Wan for HKD 1 billion (Accommodation Value HKD 5,177 per sq ft).
12-Month Outlook
Rental Information
Rental Value^
HKD 89.6 psf pm
Stage in Cycle
Rents rising
No. of QuartersSince
Last Trough
^ net effective, on NFA
12-Month Outlook
Rental Value
Demand for Grade A office space is expected to remain intact on the back of a
moderately growing economy. Demand from PRC firms, along with the steady growth
of the Finance Insurance Real Estate and Business Services sector should underpin
rental growth in Central. However, rentals in Kowloon East are expected to face further
downward pressure owing to increasing supply side competition. Rentals in the overall
market are forecasted to grow modestly for the rest of the year. With rentals holding up
and holding costs remaining low, vendors are unlikely to lower asking prices. With
interest rates now expected to increase gradually rather than sharply, investors and
especially end-users are likely to be on the lookout for opportunities, lending support to
marginal capital value growth.
Capital Value
Note: Hong Kong Office refers to Hong Kongs Overall Grade A office market.
Beijing: Office
Financial Indices
260
220
Demand
Supply
No new supply completed in 2Q14. FFC in the CBD, the most recent completion, had
an increase in commitment to approximately 65%, up 5% from last quarter. Leasing
progress slowed as only high-zone spaces remain available, for which the landlord is
charging a significant premium.
CBD rents rose 2.9% q-o-q on a chain-linked basis, the first increase in six quarters.
Strong leasing velocity in FFC in recent quarters, coupled with limited availability in the
CBD, led key buildings such as China World to regain confidence and raise rents.
Third Embassy Area rents grew 1.1% q-o-q, the second consecutive q-o-q increase.
Most other submarkets were flat or registered minimal increases; however overall
rents increased 1.1% q-o-q. Pacific Century Premium Developments entered into a
deal to sell Pacific Century Place to Gaw capital for a consideration of USD 928 million.
The Third Embassy Area project comprises office, serviced apartments and retail.
12-Month Outlook
CBD rents are set to rise in the next 12 months as landlord confidence increases; we
expect this to be backed by limited available space in the market coupled with a strong
demand outlook for domestic firms. With the exception of FFC, most available spaces
in the CBD are under negotiation. Throughout the city, wealth management companies
are likely to continue to be a key demand source, although landlords are likely to
exercise caution towards this sector. Domestic financial firms are set to continue to
expand in Finance Street, but Grade A rental growth may be held back by competition
from Grade B in Finance Street and other submarkets particularly the CBD.
Index
140
100
60
4Q09
4Q10
4Q011
4Q12
4Q13
Rental Value Index

Source: JLL
Financial Indicators are for the CBD.
Physical Indicators
1,500
30
1,250
25
1,000
20
750
15
500
10
250
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Completions
Vacancy Rate
Source: JLL

Rental Information
Rental Value^
RMB 365 psm pm
Stage in Cycle
Rents rising
Last Trough
^ net effective, on GFA
12-Month Outlook
Rental Value
Note: Beijing Office refers to Beijings Overall Grade A office market.
4Q14
Capital Value Index
Percent
Asset Performance
180
Thousand sqm
The market registered 39,800 sqm of net absorption, with the majority coming from
Fortune Financial Center (FFC) in the CBD. Tenants began occupying spaces that
were leased in late 2013 and early 2014. A lack of new supply pushed overall vacancy
down slightly to 3.7% from 4.3% in 1Q14. Domestic companies again accounted for
the vast majority of new lettings, while foreign firms generally renewed or leased
comparatively smaller spaces. The banking and insurance industries were again the
main drivers of demand and several new lettings were signed by tenants from this
sector. Landlords continued to experience demand from the booming wealth
management industry but exercised caution during negotiations due to instability of
these small companies. Demand from IT and hi-technology firms remained strong and
a global software company signed a large lease in the Third Embassy Area. There was
limited net absorption from professional services, as they generally renewed existing
spaces.
Capital Value
Beijing: Office
Vacancy declines to 3.7% as tenants move into Fortune Financial Center

CBD rents increase 2.9% q-o-q due to increasing confidence from landlords
Market yield remains unchanged q-o-q
Shanghai: Office
Domestic companies increasingly active in both Pudong and Puxi
Rents continue to rise in Pudong while remaining flat in Puxi
Domestic financial institutions active acquiring buildings for self-use
Financial Indices
180
160
Demand
120
100
80
60
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index

Source: JLL
Financial Indicators are for the CBD.
Physical Indicators
Domestic companies from the financial services sector became increasingly active in
the CBD leasing market in 2Q14, particularly in the Pudong submarket. The Shanghai
Free Trade Zone (FTZ) and related financial reform initiatives attracted domestic
companies looking to register in the zone but lease office space in the traditional CBD
area. Many of these companies are interested in office space in Lujiazui in order to
enhance their corporate image. For example, Xinhua Assets and Equity Exchange
registered in the FTZ in 2Q14 and leased around 1,000 sqm in Shanghai World
Financial Center. In the Puxi CBD market, with the exception of retailers, most MNC
companies were inactive in the leasing market and preferred to renew space in their
current buildings. Meanwhile, as available office space in Pudong CBD was very
limited, more domestic financial service companies turned to Puxi for office space. For
example, a domestic financial company leased around 2,100 sqm in Verdant Place in
the Peoples Square area. Leasing demand in the decentralised market remained
stable in 2Q14.
Supply
15
800
12
600
400
200
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Percent
1000
Thousand sqm
Shanghai: Office
Index
140
Completions
Vacancy Rate
Source: JLL

Physical Indicators are for the CBD.
In the Pudong CBD, no new projects reached completion and strong demand
continued to push down the vacancy rate which fell to 2.4% in 2Q14. In the Puxi CBD,
two new projects with a total GFA of 104,621 sqm reached completion in 2Q14
Henderson 688 (59,774 sqm) in Jingan District and 100 Bund Square (44,847 sqm) in
Huangpu District. In the decentralised market, two new projects with a total of 94,958
sqm of office space were completedGreenland The Center (32,833 sqm) in Xuhui
District and Lujiazui Century Financial Plaza Bloc 2 (62,125 sqm) in Pudong District.
Asset Performance
In Pudong, strong demand from domestic companies combined with limited available
leasing space caused Grade A rents to continue to increase, rising 2.5% q-o-q to
RMB 9.8 per sqm per day. However, Pudong Premium Grade A rents grew more
slowly, up 0.6% q-o-q. In Puxi, rents remained flat in 2Q14, up slightly by 0.4% q-o-q to
RMB 9.0 per sqm per day. Continued new supply intensified competition among
Premium Grade A buildings in Puxi, causing Puxi Premium Grade A rents to fall slightly
by 0.6% q-o-q.
Domestic financial institutions remained active in the office investment market,
showing strong interest in en bloc investment opportunities for self-use. For example,
Ping An acquired two twin towers of Greenland Center Phase 2 for around
RMB 4.4 billion, planning to self-use at least part of the space.
12-Month Outlook
Rental Information
Rental Value^
RMB 9.4 psm per day
Stage in Cycle
Growth slowing
Last Trough
^net effective, on GFA
Looking forward, we anticipate that strong demand from domestic companies along
with limited supply in Pudong should continue to support steady rental growth
throughout 2014. Meanwhile, in the Puxi CBD market, we expected that the rising
activity of domestic tenants is likely to partially offset quiet expansion demand from
MNC companies. As a result, rents in Puxi CBD are expected to stabilise in the second
half of 2014.
12-Month Outlook
Rental Value
Capital Value
Note: Shanghai Office refers to Shanghais Overall Grade A office market consisting of Pudong, the Puxi CBD and the
decentralised areas.
Guangzhou: Office
Financial Indices
200
180
Demand
Net absorption increased to 48,000 sqm (GFA) in 2Q14. The absence of new supply
and stronger demand resulted in the overall vacancy rate continuing a downtrend,
from 12.2% in 1Q14 to 10.9% in 2Q14.
Supply
There were no new completions in 2Q14 and total Grade A office stock remained at
3.7 million sqm (GFA). Due to the completion of the Agile Centre (79,000 sqm, GFA)
being pushed back to 2015, G.T. Land Plaza Phase IV (North Tower; GFA: 82,000 sqm)
is the only project expected to complete in the second half of 2014.
Index
Leasing activity increased slightly in 2Q14, driven by cost-sensitive tenants looking for
more affordable options. Despite stabilising economic growth, expansion demand from
domestic companies remained intact. The financial, professional services and consumer
product sectors were among the most active industries seeking expansion opportunities.
New set-ups targeting high-quality properties also underpinned leasing activity.
160
80
60
4Q09
12-Month Outlook
Softening economic growth in China over the next 12 months is expected to see
enquiry levels from MNCs slow as they remain cautious about expansion. However,
some MNCs maybe willing to move to newer buildings as anchor tenants if leasing
terms are favourable. Expansion demand from domestic companies is expected to
remain intact, but will be less aggressive toward premium grade buildings until they
see a more positive economic outlook.
Although 2014 is likely to see the lowest annual supply (82,000 sqm) since 2004, a
huge volume of completions expected in 2015 and 2016 is likely to translate into a
minor rental downtrend in the overall Grade A office market. We expect average rents
to continue to edge down in 2H14, but are optimistic that the downward trend in
vacancy rates will continue through year-end. In investment market, we expect both
sales volumes and capital values for strata-titled properties to grow at a slower rate
compared to 2013, given softening market sentiment and investor demand.
4Q10
4Q11
4Q12
4Q13
Rental Value Index

Source: JLL
Financial Indicators are for Zhujiang New Town.
Physical Indicators
Thousand sqm
800
28
600
21
400
14
200
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Completions
Vacancy Rate
Source: JLL
For 2009 to 2013, completions are year end annual.

For 2014, completions are as at 1H14, while future
supply is for 2H14.
Rental Information
Rental Value^
RMB 163.3 psm pm
Stage in Cycle
Growth slowing
Last Peak
12-Month Outlook
Rental Value
Note: Guangzhou Office refers to Guangzhous Grade A office market.
4Q14
Capital Value Index
Capital Value
Percent
Below trend economic growth continued to impact market sentiment and individual
investors were more cautious about making purchase decisions. In addition, lower
rents in select buildings resulted in some end-user demand moving to the leasing
market. As a result, sales transactions in both the primary and secondary markets
weakened during the quarter, leading to a minor 0.3% q-o-q decline in capital values to
RMB 37,400 per sqm (GFA), the first decline since 2Q09.
120
100
Asset Performance
As a result of higher incentives being offered by landlords to improve early pre-leasing
of buildings slated for completion in 201516, a few landlords of existing buildings
lowered asking rents to retain tenants. As such, overall rents edged down by 0.4%
q-o-q to RMB 156.7 per sqm per month (GFA) in 2Q14. However, higher quality
buildings run by experienced developers continued to see an improvement in
occupancy rates and landlords of such building raised rents.
140
Guangzhou: Office
Leasing activity increases slightly, driven by cost-sensitive demand

A few landlords of existing buildings lower rents to retain tenants
Individual investors are cautious about making purchase decisions
Taipei: Office
Demand supported by expansions and relocations
Landlords of buildings with low vacancy continue to increase rents
Transaction volumes surge, as investors seek assets with higher returns
Financial Indices
150
140
Demand
120
110
100
90
80
4Q09
4Q10
4Q11
Rental Value Index
4Q12
4Q13
4Q14
Capital Value Index

Source: JLL
There were no office completions in 2Q14. However, five projects are scheduled to
complete by end-2014. Amongst the upcoming supply due this year, nearly 58% is
planned for owner self-use. It has been observed that domestic corporations have
started acquiring properties to establish headquarters or to consolidate operations for
cost savings. Although most of this space is anticipated to be for self-use, some may
be released into the leasing market.
Physical Indicators
32
180
24
120
16
60
Asset Performance
Percent
240
60
120
09
10
11
12
Take-Up (net)
Future Supply
Net take-up declined from 10,500 pings in 1Q14 to 2,900 pings in 2Q14. Lower net
absorption was largely due to a reduction in large space owner-occupancies during the
quarter, with most take-up being concentrated in Xinyi. As a result of positive take-up
and no new supply, the overall vacancy rate continued to trend lower decreasing by
0.5 percentage points to 8.2%. This was the second straight quarter that the vacancy
rate was below 10%. By submarket, Xinyi witnessed the largest q-o-q decline in
vacancy, moving lower by nearly 2% as tenants continued to take-up space in newly
completed buildings. This was the first time in 10 years that this submarket saw the
vacancy rate below 10%.
Supply
Financial Indicators are for Xinyi.
Thousand sqm
Taipei: Office
Index
130
13
14F
16
Completions
Vacancy Rate
Source: JLL

Rental Information
Rental Value^
NTD 2,954 per ping pm
Stage in Cycle
Rents rising
No. of Quarters Since

Last Trough
Several landlords of buildings with decreasing vacancy increased rents in 2Q14,

pushing overall rentals up by 0.9% q-o-q to NTD 2,541 per ping per month. This is the
highest rental level since 2008.
Total investment volumes in 2Q14 reached NTD 28.6 billion, an increase of 335%
q-o-q or 79% y-o-y. In spite of the q-o-q improvement, total sales volumes for 1H14
were low relative to the same period over the past five years. Uncertain economic
prospects and restrictions on insurers investing in commercial properties appear to
have led some investors to take a more cautious tone toward real estate investments.
12-Month Outlook
With vacancy having been below 10% for two consecutive quarters and in some
buildings below 5%, the leasing market is expected to be landlord favourable as a
relatively low vacancy environment persists. This situation is likely to limit tenants room
for rental negotiation. Demand should continue to be concentrated in existing buildings
as landlords of upcoming completions are likely to ask for rents above average market
rates.
Given soft economic conditions, a restrictive investment policy environment for
insurers and elevated property values, investors may shy away from direct real estate
investments. In 1H14, investments in leasehold and public-private partnered
developments exceeded direct property acquisitions. With of some these partnerships
involving government land located within major urban centres, this may give investors
a conduit for development in urban core areas where vacant land is scarce.
^ net, on GFA
12-Month Outlook
Rental Value
Capital Value
Note: Taipei Office refers to Taipeis Overall Grade A office market.
Tokyo: Office
Financial Indices
120
Demand
Demand continued to be strong in 2Q14 supported by a rise in corporate spending and

a tightening labour market. Demand for new leases came from various industries
including information and communication, manufacturing and finance, as they sought
to expand or consolidate/relocate to improve business efficiency. Net absorption
totalled 214,000 sqm in 2Q14, a very strong figure for a quarter, with a significant
portion attributable to new supply completed in the quarter.
Relocations in the quarter included Asatsu-Dk moving into Toranomon Hills Mori Tower,
Internet Initiative Japan moving to Iidabashi Grand Bloom and Kubota moving to
Kyobashi Trust Tower.
Supply
Asset Performance
Rents in 2Q14 averaged JPY 32,779 per tsubo per month, increasing 1.6% q-o-q and
4.1% y-o-y. Growth was largely driven by higher rents in Shinjuku/Shibuya and
Akasaka/Roppongi submarkets. Overall rental growth accelerated for the second
consecutive quarter, with market conditions being tilted in favour of landlords amid
positive economic growth and a low vacancy environment.
Capital values in 2Q14 increased 4.9% q-o-q and 14.4% y-o-y, marking the ninth
consecutive quarter of growth. Y-o-Y growth exceeded 10% for the second straight
quarter while investment yields continued to decline.
Two notable sales transactions in the quarter involved Invesco Office J-Reit acquiring
upon its initial public offering Ebisu Prime Square for JPY 25.015 billion or a net
operating income (NOI) yield of 4.5%, and Harumi Island Triton Square Office Tower Z
for JPY 9.3 billion or an NOI yield of 5.6%.
12-month Outlook
According to Oxford Economics forecasts, Japans real GDP in 2014 is expected to
grow 1.1% y-o-y. Positive economic growth should support solid occupier demand and
with no supply due in 2H14, vacancy is likely to trend lower. As such, rents are
expected to rise gradually over the remainder of the year.
In the investment market, strong interest from investors and expectations for further
rental increases should drive capital values higher. However, capital value growth is
expected to slow while investment yields remain mostly flat.
Index
80
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index

Source: JLL
Physical Indicators
600
450
300
150
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Completions
Vacancy Rate
Source: JLL

Rental Information
Rental Value^
JPY 32,779 per tsubo

pm
Stage in Cycle
Rents rising

Last Trough
^ gross, on NLA
12-Month Outlook
Rental Value
Note: Tokyo Office refers to Tokyos 5 Kus Grade A office market.
4Q14
Capital Value Index
Percent
New supply in 2Q14 totalled 222,000 sqm and increased total stock by 3.4% q-o-q. New
buildings launched in the quarter were Nissay Otemachi Building (NLA 31,000 sqm),
Nishi-Shimbashi Square (NLA 30,000 sqm), Iidabashi Grand Bloom (NLA 62,000 sqm)
and Toranomon Hills Mori Tower (NLA 99,000 sqm). The average commitment rate at
completion for the four new buildings was above 90%.
100
90
Thousand sqm
The vacancy rate was stable at 3.7% in 2Q14, but lower y-o-y by 90 bps. Vacant space
increased in Otemachi/Marunouchi but decreased in Akasaka/Roppongi. This marked
the third consecutive quarter that vacancy was below 4%, providing limited opportunities
for tenants with large space requirements.
110
Capital Value
Tokyo: Office
Strong pre-commitments for new supply from domestic firms

Rental growth continues to accelerate amid low vacancy
Investment yields compress as capital value growth outpaces rentals
Osaka: Office
Vacancy edges up due to consolidations/relocations to Grand Front Osaka
Rents continue to trend lower as vacancy remains elevated
Capital values increase slightly, while yields decline
Financial Indices
Index
120
110
Demand
100
The vacancy rate at end-2Q14 stood at 10.4%, increasing 10 bps q-o-q but decreasing
200 bps y-o-y. The slight uptick in vacancy over the quarter was in part due to tenants
consolidating and relocating to Grand Front Osaka from other Grade A buildings.
Osaka: Office
90
80
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index
Notable leasing transactions in the quarter included Temp Holdings Group relocating to
Grand Front Osaka Tower B and Umeda Hanshin Daiichi Building (Herbis Osaka
Office Tower), Chiyoda Corporation relocating to Yodoyabashi Mitsui Building and ANA
Business Solutions relocating to Applause Tower.

Source: JLL
Supply
Physical Indicators
There was no new supply in the quarter and market stock remained at 1.6 million sqm.
200
14
12
160
120
80
Percent
Thousand sqm
10
4
40
0
2
09
10
In spite of businesses increasing capital expenditures and an improving labour market,

net absorption in 2Q14 was negative for the first time in three quarters. Consolidations
and relocations offset take-up attributable to expansion demand from the information
and communication industry.
11
12
Take-Up (net)
Future Supply
13
14F
Completions
Vacancy Rate
Asset Performance
Rents in 2Q14 averaged JPY 15,492 per tsubo per month, decreasing 0.4% q-o-q and
0.9% y-o-y. Overall rents continued to decrease moderately although some buildings in
the Umeda submarket registered growth. Meanwhile, rent-free periods continued to
expand marginally q-o-q.
Capital values in 2Q14 increased 2.1% q-o-q and 4.1% y-o-y in the third consecutive
quarter of increase. Growth accelerated marginally q-o-q and investment yields
continued to decrease.
A noteworthy investment transaction in the quarter was Resorttrust acquiring
Sumitomo Life Midosuji Building for JPY 5.94 billion from Sumitomo Life.
12-month Outlook
Source: JLL

According to the Bank of Japans Greater Osaka Tankan Survey in June, large
manufacturers continued to be optimistic about short-term prospects. The
manufacturers outlook index registered a plus 17, slightly higher than the index for
current conditions which was recorded at 11. Furthermore, large businesses have
indicated their intention to increase capital expenditures in FY2014.
New supply in 2014 is expected to amount to only 20% of the past ten-year annual
average, while demand is expected to strengthen gradually. Under these
circumstances, the vacancy rate should decrease modestly while rents reach a bottom
and then resume growth over the next 12 months.
Rental Information
Rental Value^

pm
Stage in Cycle
Decline slowing

Last Peak
12
As the investment market remains active, capital values are expected to increase
while investment yields should be placed under further downward pressure.
^ gross, on NLA
12-Month Outlook
Rental Value
Capital Value
Note: Osaka Office refers to Osakas 2 Kus Grade A office market.
Seoul: Office
Financial Indices
140
130
Demand
In the CBD, leasing activity was focused in Gran Seoul, which welcomed Dongyang
Life (11,000 sqm) and Hana Bank (23,000 sqm), pushing occupancy in the building
above 90%.
120
Index
Net absorption slowed to 36,800 sqm in 2Q14 from a record quarterly high in 1Q14.
110
100
There was limited tenant movement in Yoido in the quarter, with several small tenants
moving into Two IFC while the Economic and Social Development Commission
relocated from Yoido POBA Building to a government building in the CBD.
Supply
No new buildings completed during the quarter. D Tower (GFA 105,800 sqm) in the CBD
is expected to be the only completion in the remainder of the year. Daelim is expected
to owner-occupy the north tower of the development (50% of the office space). No
third-party tenants are known to have committed to the building as at end-2Q14.
The overall net effective rent in Seoul remained relatively stable q-o-q in 2Q14.
Rents in the CBD and Yoido increased by less than 0.5% q-o-q in 2Q14. However,
rents in Gangnam declined 0.6% q-o-q due to the increased vacancy rate in Posco
Center and continuing soft demand in the submarket.
Foreign investor interest into Korea rose in 2Q14. In April, the State Oil Fund of
Azerbaijan acquired Uljiro Mirae Asset Tower in Seoul (GFA 657,800 sqm) for around
KRW 477 billion. The CBD property is fully leased to SK E&C. More recently, private
equity firms have been active, with both KKR in partnership with LIM Advisors and
Gaw Capital closing deals. KKR acquired K-Twin Towers in the CBD (GFA 83,800
sqm) for an undisclosed price from Vestas Investment Management in an off-market
transaction, while Gaw Capital acquired the office, office-tel (mixed-use office and
residential) and retail portions of a twin-tower development in Yongsan (GFA 70,700
sqm) for around KRW 230 billion.
Other notable deals included Blackstone offloading two adjoining buildings, The Dio
Center (GFA 18,600 sqm) and Central Place (GFA 34,100 sqm), to KB Asset
Management for a total consideration of KRW 218.6 billion.
The overall market yield continued to tighten during the quarter to 5.1%. Capital values
rose 0.5% q-o-q to KRW 21.2 million per pyung.
12-Month Outlook
Despite solid tenant demand, the overall vacancy rate may soften slightly before yearend due to the completion of D Tower (GFA 105,800 sqm) in 4Q14.
Overall rent growth is expected to be modest with the CBD likely to experience the
strongest growth as incentives are lowered.
Foreign investor interest in real estate is expected to grow further, with increased
competition for core assets such as State Tower Namsan likely to push yields lower.
Note: Seoul Office refers to Seouls Overall Grade A office market.
4Q11
4Q12
4Q13
4Q14
Capital Value Index

Source: JLL
Physical Indicators
600
15
400
10
200
200
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Percent
Asset Performance
4Q10
Rental Value Index
Thousand sqm
In Gangnam, Hyundai Auto (10,600 sqm) and Hyundai Auto Ever (8,000 sqm) entered
the recently completed Autoway Tower (formerly known as SK Networks Building, GFA
47,300 sqm). At Gangnam Finance Center, vacancy rose with the departure of
Samsung Life (10,000 sqm).
90
4Q09
Completions
Vacancy Rate
Source: JLL

Rental Information
Rental Value^
KRW 163,384 per

pyung pm
Stage in Cycle
Rents rising

Last Peak
^ Grade A net effective, on NLA
12-Month Outlook
Rental Value
Capital Value
Seoul: Office
Leasing activity is focused on Gran Seoul and Autoway Tower

Overall rents remain stable, although Gangnam sees a decline on soft demand
Foreign investor interest grows, with several sales involving offshore parties
Singapore: Office
Small-space occupiers continue to support demand
Rents trend higher as office vacancy tightens
Capital values rise slightly as investors search for higher office yields
Financial Indices
200
180
Demand
While small-space occupiers continued to support take-up in 2Q14, some expansion
and consolidation activity was witnessed during the quarter. As large-space demand
from financial institutions remained muted, firms from the e-commerce and consumer
products sectors have increasingly been taking up additional space.
140
120
100
80
4Q09
4Q10
4Q11
4Q12
Rental Value Index
4Q13
4Q14
Capital Value Index

Source: JLL
Overall, space demand in the CBD remained healthy across all submarkets. The
Marina Bay submarket reported the largest net absorption across all submarkets in the
CBD, as firms continued to show a preference for prime quality space on the back of
the limited supply. Healthy demand has led the vacancy rate in the CBD to tighten
further, from 6.6% in 1Q14 to 5.8% in 2Q14.
Supply
Financial Indicators are the CBD.
No new completions were recorded in 2Q14.

Asset Performance
Physical Indicators
300
12
250
10
200
150
100
50
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Percent
Thousand sqm
Singapore: Office
Index
160
Completions
Vacancy Rate
Source: JLL

Rental Information
Rental Value^
SGD 9.96 psf pm
Stage in Cycle
Rents rising
Last Trough
Average CBD rents rose by 4% q-o-q to SGD 10 per sq ft per month in 2Q14,
maintaining the quarterly growth pace seen in the previous quarter. Rental growth was
supported by healthy demand for good quality space and tightening vacancy due to
limited supply.
Indicative en bloc capital value growth continued to trend lower in 2Q14 to 0.5% q-o-q,
slightly lower than the 0.7% quarterly growth seen in the previous quarter. Investors
appeared more cautious towards office assets with narrowing premiums over
valuations, likely due to investors seeking higher yields when assessing asset
purchases. Yields continued to expand during the quarter as rental growth continued
to outpace capital value growth.
12-Month Outlook
Small-space occupiers are expected to continue supporting leasing activity in the CBD,
keeping office demand stable as take-up from large-space occupiers remains muted.
With no new office developments in the CBD expected to complete until end-2014,
vacancy rates are likely to decline further in the second half of 2014. The current
availability of newer prime office space could potentially encourage a flight-to-quality
trend among occupiers, on the back of the healthy occupancy rates in the market.
As CBD vacancy rates tighten, rents are likely to continue growing at a gradual pace.
However, capital values are expected to experience modest growth, trailing the pace
of rent growth, as investors increasingly seek higher office yields. The growing
expectation for higher yields follows the decision by the US Federal Reserve to begin
tapering its bond buying programme, bringing closer the possibility of an interest rate
rise. As such, the office market is expected to see a continued expansion in yields over
the next 12 months.
^ gross effective, on NLA
12-Month Outlook
Rental Value
Capital Value
Note: Singapore Office refers to Singapores CBD Grade A office market in Marina Bay, Raffles Place, Shenton Way
and Marina Centre.
Bangkok: Office
Financial Indices
130
120
Demand
As a result of positive take-up and no new supply, the overall vacancy rate decreased
slightly from 8.5% in 1Q14 to 8.2% in 2Q14.
110
Index
Due to the uncertain political environment in 2Q14, demand for Grade A space in
Central Bangkok and Central East was less active than in the first quarter of 2014, with
net absorption of 4,500 sqm. In Central Bangkok, Virgin Active (Thailand) Limited
signed the largest lease in the quarter, taking up 4,300 sqm at Empire Tower for its first
fitness club in Thailand. Apart from that, two other notable deals were the renewal of
1,400 sqm at Asia Centre by AstraZeneca (Thailand) Ltd and in Central East, Yum
Restaurants International (Thailand) Co. Ltd. renewing its lease of 2,900 sqm at One &
Two Pacific Place.
100
90
80
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index

Source: JLL
Supply
Asset Performance
Average gross rents increased 0.9% q-o-q to THB 732 per sqm per month in 2Q14,
while capital values increased at a slightly faster rate, rising 1.3% q-o-q to THB 95,155
per sqm. As a result, averge market yield stood at 7.1% at end-2Q14.
A freehold office building, namely Siriphinyo, was sold in the quarter for THB 1.7 billion
to Siri Prime Office Property Fund. The building is located on Sri Ayutthaya Road and
has 17 floors including 2 basement floors for rent, with a total leasable area of 18,364
sqm.
125
25
100
20
75
15
50
10
25
09
10
11
12
Take-Up (net)
Future Supply
13
14F
The vacancy rate is expected to decline further with only one new building due to come
on stream in the second half of 2014 and with good pre-commitments. With limited
supply, rents should continue increasing through end-2014, although the current
political situation will influence the economy.
Source: JLL

Rental Information
Rental Value^
THB 732 psm pm
Stage in Cycle
Growth slowing

Last Trough
10
^ gross, on NLA
12-Month Outlook
Rental Value
Note: Bangkok Office refers to Bangkoks CBD Grade A office market.
Completions
Vacancy Rate
12-Month Outlook
The outlook for the Thai economy is expected to improve over the remainder of 2014,
although the Bank of Thailand (BOT) officially reduced its estimate for annual GDP
growth to 1.5%, down from the previous quarters expectation of 2.7%. Meanwhile, the
BOT held the policy rate at 2% in order to stimulate the economy.
Percent
According to the construction timeline, Magnolia Ratchadamri Boulevard, on

Ratchadamri Road, which has 6,000 sqm of office space as well as luxury residences
and the Waldorf-Astoria Hotel, is expected to complete in 1Q14. AIA Sathorn Tower,
comprising 38,500 sqm of office space on Sathorn Road, is due for completion in 2Q15.
The Noble Ploenchit development, which comprises 3,000 sqm of office space and
high-quality condominiums, is under construction with completion expected in 1Q17.
Physical Indicators
Thousand sqm
Grade A office stock remained unchanged in 2Q14 at 1,758,000 sqm, with no new
supply completed in Central Bangkok or Central East. One new office project is
scheduled to complete in 2014 in Central East. This is Bhiraj Tower (formerly UBC III),
comprising 47,442 sqm of office and retail space, located near Phrom Phong BTS
station.
Capital Value
Bangkok: Office
Weaker demand owing to continuing political uncertainty

Rents trend higher due to limited supply
Capital values increase at slightly faster rate than rents
Kuala Lumpur: Office

Stable demand for prime office space
Average gross rentals edge up, driven by high rents at recent completions
Quiet investment market with no prime office sales transactions
Financial Indices
105
Demand
100
The average vacancy rate declined marginally from 14.2% in 1Q14 to 13.8% in 2Q14
due to positive net absorption of 111,000 sq ft.
Notable take-up in the City Centre included the expansion of OCBC Bank at Wisma
Lee Rubber, relocation of the Spanish Embassy from Menara Boustead to The Icon
and expansion of Nadayu Properties at Menara Standard Chartered.
95
90
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index

Source: Jones Lang Wootton
The total existing stock of City Centre office space remained at 23.8 million sq ft in
2Q14, with no new supply coming into the market. Menara Hap Seng 2, a 320,000 sq
ft prime office building located on Jalan Tengah (in the Golden Triangle), is the only
office building expected to be completed in 2014.
Physical Indicators
24
250
20
200
16
150
12
100
50
4
09
10
11
12
Take-Up (net)
Future Supply
13
14F
The completion of IB Tower which was initially expected to be in 2014 has been
deferred to 2015. The refurbishment of Menara Tun Razak has been cancelled as the
landlord plans to demolish the building and construct a new office tower on the site.
Percent
300
Good demand for office space within accessible, prime locations (City Centre and
select City Fringe areas), high quality and dual compliant (green certified and
Multimedia Super Corridor cyber centre status) buildings prevailed in 2Q14.
Supply
Financial Indicators are for the City Centre.
Thousand sqm
Kuala Lumpur: Office
Index
110
Completions
Vacancy Rate

Asset Performance
Generally, rentals of the majority of office buildings remained stable. However, the
average rental rate increased marginally by 0.3% q-o-q to MYR 6.4 per sq ft per month
in 2Q14, driven by higher rents in a few recently completed high quality office buildings.
Many landlords continued to maintain their asking rentals as a result of stable vacancy
rates. However, landlords of buildings with high vacancy rates were more willing to
offer incentives to attract prospective tenants.
No prime office buildings in the City Centre were transacted in 2Q14. The lack of sales
transactions was mainly attributable to the cautious approach of investors, limited
short term rental growth prospects and limited number of investment grade office
buildings available for sale.
12-Month Outlook
The average vacancy rate in the City Centre is expected to increase marginally by the
end of 2014, as a result of the potential incoming supply.
Generally, demand is expected to remain stable in the second half of 2014, driven by
tenants relocation from older to newer, better specified office buildings at competitive
rentals and supported by continuous economic growth, especially in the services sector.
Rental Information
Rental Value^
MYR 6.4 psf pm
Stage in Cycle
Growth slowing

Last Trough
Despite limited rental growth prospects, capital values are generally expected to
marginally increase in the short to medium term, underpinned by several factors such
as higher construction costs, better quality buildings and escalating land costs in the
more sought after commercially established locations.
^gross, on NLA
12-Month Outlook
Rental Value
Capital Value
Note: Kuala Lumpur Office refers to Kuala Lumpurs Grade A office market.
Jakarta: Office
Financial Indices
320
280
Demand
240
Index
A slowing economy and more modest business expansion prior to the general election
in July adversely impacted demand in 2Q14. Weaker demand in combination with high
occupancy costs led many tenants to put off expansion plans. However, enquiries from
MNCs and major domestic companies remained positive, while some smaller tenants
decided to move to more affordable buildings as landlords began to introduce new
rental rates. With quiet leasing activity, quarterly net take-up totalled only 240 sqm in
2Q14. Net take-up was supported by relocation demand and tenant expansion in a
number of buildings in Sudirman, which continued to be perceived as a prestigious
address for corporate tenants. Among tenants active in the leasing market, companies
from the IT, financial and retail services sectors contributed the most demand during
the quarter. Most of the leasing deals during the quarter involved enquiries for office
space below 500 sqm, which include an IT company taking up space in The Energy
Building and a financial consultant and a retail services company taking up space in
the Sampoerna Strategic Square Complex. With limited new take-up and no additional
supply, the market vacancy rate remained stable at 3.6% at end-2Q14.
200
160
120
80
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index

Source: JLL
Physical Indicators
30
No new projects completed during 2Q14. As such, the existing stock of office space in
Jakarta remained at 1.29 million sqm. In spite of robust demand growth during the past
three years, the development of prime office buildings in Jakarta has been relatively
limited. Furthermore, we expect no new project to enter the market this year.
250
25
200
20
150
15
100
10
50
Asset Performance
After three years of strong growth, rents began to cool and the pace entered a
slowdown mode. Anecdotal evidence suggests that current rents are perceived to be in
the upper range of affordability for some tenants. With less enthusiasm in the market,
landlords kept rents stable from the previous quarter. However, some landlords were
willing to provide incentives and flexibility for select prospective tenants. Overall, the
average rent stood at USD 332 per sqm per annum in 2Q14. As capital values were
stable, yields were steady at 7.8%.
12-Month Outlook
Indonesias economic growth and the general outlook for businesses are likely to
remain positive. However, weak investor sentiment prior to the election, combined with
the likely impact of US tapering, may possibly be a drag on economic growth in the
remainder of the year. In view of this, we expect to see a further market slowdown in
2H14. Limited available space and the absence of new completions this year are likely
to keep vacancy rates at a low level. Demand is also likely to remain soft for the
remainder of the year. As such, we expect no significant changes to rentals for the
next 12 months. As we anticipate a modest growth in capital values, yields are likely to
remain relatively stable.
Thousand sqm
300
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Completions
Vacancy Rate
Source: JLL

Rental Information
Rental Value^
USD 330 psm pa
Stage in Cycle
Growth slowing

Last Trough
15
^ net effective, on NLA
12-Month Outlook
Rental Value
Note: Jakarta Office refers to Jakartas CBD Grade A office market.
Percent
Supply
Capital Value
Jakarta: Office
Slowing economy and uncertainty prior to elections impacts demand

Rents remain flat on back of slow leasing activity
Yields are broadly stable, while capital values decline slightly
Manila: Office
Stable leasing activity supported by the O&O sector
Healthy leasing demand drives rental growth
Investment yields slightly decrease as capital value growth outpaces rents
Financial Indices
160
150
Demand
140
Index
130
120
110
Manila: Office
100
90
80
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index

Source: JLL
450
12
375
10
300
225
150
75
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Percent
Thousand sqm
Physical Indicators
Completions
Vacancy Rate
Source: JLL

Net take-up of office space within the Makati CBD and Bonifacio Global City (BGC)
was recorded at 31,100 sqm in 2Q14. Stable demand from various multinational and
local firms, particularly offshoring and outsourcing (O&O) firms, supported the healthy
take-up of office space. Notable sources of demand in the quarter included the
financial services, logistics, as well as IT/software sectors. Healthy office demand was
evidenced by the continued decrease in the overall vacancy rate, from 4.4% in 1Q14
to 4.1% in 2Q14.
Many Grade A office buildings within the Makati CBD and BGC were fully occupied,
while other buildings exhibited high occupancy levels. Further, recently completed
developments Venice Corporate Tower and Panorama Tower were observed to have
healthy pre-commitment levels. On average, the pre-commitment level in both office
buildings was recorded at 60% upon completion.
Key lease transactions in 2Q14 included a financial services firm and an IT/software
firm occupying 1,700 sqm and 2,000 sqm, respectively, in W Fifth Avenue. Another
significant lease transaction was a logistics company leasing 1,100 sqm of office
space in the V Corporate Center.
Supply
Two office developments completed in 2Q14, namely Venice Corporate Tower in
McKinley Hill and Panorama Tower in BGC, which added 8,000 and 18,900 sqm,
respectively, to the total stock of office space.
Upcoming office developments slated to complete in 3Q14 include Orion, Twenty-Four
Seven McKinley and the MDI Building. The three buildings are located in BGC and are
expected to add a consolidated 30,100 sqm of office space to the market.
Asset Performance
Robust office demand, coupled with continued healthy leasing activity, supported the
positive performance of office rents and capital values.
Average rents increased by 1.5% q-o-q to PHP 10,179 per sqm per annum in 2Q14.
Meanwhile, average capital values continued to outpace the growth of rents, exhibiting
a 3% q-o-q growth to reach PHP 104,064 per sqm in 2Q14. Consequently, investment
yields posted a slight of 10 bps q-o-q to 9.8%.
12-Month Outlook
Nine office developments with a consolidated total area of 187,100 sqm are slated to
complete in the second half of 2014. Given the large volume of incoming office space,
vacancy levels may be pushed upwards by end-2014, as well as in early 2015.
Rental Information
Rental Value^
PHP 10,179 psm pa
Stage in Cycle
Rents rising

Last Trough
18
Robust demand for office space from various industries, such as financial services and
logistics, coupled with rising demand from the knowledge process outsourcing sector,
a sub-sector under the O&O sector, are likely to support the continued growth of the
local office property market. Further, the positive economic outlook and the recent
credit upgrade by Standard and Poors may provide support to the positive trend of
both rents and capital values for the rest of the year.
12-Month Outlook
Rental Value
Capital Value
Note: Manila Office refers to the Makati CBD and Bonifacio Global City Grade A office market.
Ho Chi Minh City: Office

Financial Indices
120
100
In 2Q14, the occupancy rate for the CBD Grade A office market increased to 82%,
driven by positive net absorption of 1,800 sqm. In spite of a q-o-q improvement in
take-up, total net absorption in the first half of 2014 was still much lower than the same
period in 2012 and 2013.
Established Grade A office properties continued to see reasonable leasing activity with
occupancy rates in excess of 90%. Bitexco Financial Tower and Times Square
recorded some good leasing deals and lowered their vacancy rates by a few
percentage points.
Index
Demand
80
60
40
20
0
4Q09
4Q10
4Q11
4Q12
Supply

Source: JLL
No new buildings were completed in 2Q14. Consequently, the stock of Grade A office
space remained unchanged at 220,000 sqm. Construction progressed steadily on five
buildings and at a faster rate on the three projects to be launched in 2015. The Saigon
One Tower project continued to see construction on hold during the quarter.
Physical Indicators
No investment deals in the Grade A office market were recorded during the quarter,
marking the second year of a quiet office investment market. Nevertheless,
transactions were still recorded in other sectors, such as retail, hotel and residential.
Valuation-based yields for Grade A office space held steady in the range of 89% in
2Q14.
12-Month Outlook
4Q14
140
70
120
60
100
50
80
40
60
30
40
20
20
10
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Percent
Average net effective rent remained at USD 36.4 per sqm per month (USD 437 per
sqm per annum) for the fifth consecutive quarter. Incentives were offered to tenants in
select buildings, such as Vincom Center, as a possible attempt by landlords to prevent
reductions in headline rents while improving the buildings competitiveness.
Thousand sqm
After a recent revision of its layout plan, The Waterfront Saigon, previously known as
the Delta River Tower, is expected to add only around 10,000 sqm to the stock of
Grade A office space in 2015, a major reduction from the previous expectation of more
than 23,000 sqm.
Asset Performance
4Q13
Rental Value Index
Completions
Vacancy Rate
Source: JLL

Present market conditions suggest stable demand for the second half of 2014. Any
noteworthy increase in net absorption is likely to come from space pre-commitment at
the three new properties to be completed in 2015, which will add more than 70,000 sqm
to the market stock.
Stable rents are also expected for the remainder of 2014, due to the flat trend in both
demand and supply. However, a small boost in rents is likely starting in 2015, given the
upward trend of some macroeconomic indicators and the introduction of newly built
properties with modern facilities and in prime locations.
Rental Information
Rental Value^
USD 36.4 psm pm
Stage in Cycle
Rents stable

Last Peak
23
12-Month Outlook
Rental Value
Note: Ho Chi Minh City Office refers to Ho Chi Minh Citys CBD Grade A office market.
Capital Value
NA
Ho Chi Minh City: Office
Occupancy rises amid a slight improvement in demand and no new supply

Rents hold steady for the fifth consecutive quarter
No Grade A office investment deals take place
Delhi: Office
Healthy leasing momentum, with net take-up at four quarter high
Rents increase in Gurgaon and Noida but are stable elsewhere
Capital values increase in select submarkets
Financial Indices
140
120
Demand
Delhi: Office
Index
100
80
60
40
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index

Source: JLL
Financial Indicators are for the SBD.
Physical Indicators
900
30
600
20
300
10
Thousand sqm
40
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Completions
Vacancy Rate
Source: JLL

Rental Information
Rental Value^
INR 145 psf pm
Stage in Cycle
Rents rising

Last Trough
16
In the CBD, the University of Chicago leased 3,000 sq ft in DLF Capitol Point and
Vantage leased 2,000 sq ft in the Ambadeep Building. Major transactions in the SBD
included CNB Fashion leasing 18,000 sq ft in Splendor Forum and NEC leasing
10,000 sq ft in the TDI Centre. Notable leases in Gurgaon included Concentrix leasing
300,000 sq ft in the DLF Building 14 D, Accenture leasing 64,212 sq ft in Unitech
Infospace at Gurgaon Phase II Building 6 and KPMG leasing 48,521 sq ft in DLF
Building 5C. In Noida, major leases included Pine Labs leasing 60,000 sq ft in Unitech
I at Noida Tower 2, Dion Labs leasing 27,273 sq ft in Logix Cyber Park Tower A and
Accretive Health leasing 29,206 sq ft in Unitech Infospace Sec 135 Phase II Building 9.
Supply
Percent
1,200
Leasing activity continued to show healthy momentum, with net absorption reaching a
four-quarter high. Along with relocations and consolidations, demand was also driven
by the expansion strategies of select occupiers. While leasing volumes remain
sluggish in Prime City, the suburban markets of Gurgaon and Noida recorded healthy
absorption volumes on the back of renewed activity, primarily by the IT/ITeS occupiers.
Though cost savings remain the primary reasons for relocations/consolidation, a better
business outlook is driving fresh space demand from large IT occupiers.
Supply in 2Q14 was at its lowest level in six quarters, with four completions adding
930,000 sq ft to market stock. Of these new completions, three were located in
Gurgaon while one was in Noida.
Asset Performance
In 2Q14, overall rents edged higher q-o-q by less than 1% for the third straight quarter.
Capital values showed a slight increase in the CBD, select Gurgaon office corridors
and Noida. Overall capital value growth remained weak, with a q-o-q growth of less
than 1%. Yields remained stable across all submarkets during the quarter.
12-Month Outlook
Improving occupier sentiment in tandem with healthier global economic indicators are
likely to result in improved leasing volumes and net absorption. Pre-commitment
levels over recent quarters and ongoing space requirements point towards large-sized
IT occupiers likely favouring SEZs. Going forward, occupier interest is likely to shift
towards the growth corridors, as the established office corridors have lower vacancy
rates and limited new supply. The expansion needs of occupiers are also likely to
emerge as significant contributors to fresh demand. Rental growth in the established
office corridors is likely to improve while improving investor sentiment pushes capital
values higher.
^ gross, on GFA
12-Month Outlook
Rental Value
Capital Value
Note: Delhi Office refers to the Overall NCR Grade A office market.
Mumbai: Office
Financial Indices
140
120
Demand
Market sentiment turned positive following the formation of the new national
government in May. Clearly there is optimism amongst occupiers regarding expansion
and this is evident by the increased number of Request for Proposals (RFPs) floating
around the market. Increased leasing activity caused the vacancy rate to decrease by
40 bps to 21.9% q-o-q. Key contributors to office absorption were companies in the
manufacturing and pharmaceutical sectors.
Supply
Two buildings became operational in 2Q14 with a total area of 940,000 sq ft. Phase 1
of Oberoi Commerz 2 added 700,000 sq ft in Goregaon and Marathon Icon added
240,000 sq ft in Lower Parel. Both buildings had low levels of pre-commitment upon
completion. As a result of the new supply, Mumbais total stock grew to 93.7 million sq ft.
100
Index
Net absorption in 2Q14 stood at 1.06 million sq ft, a decline of 16.9% q-o-q. However,
this reduction should not be viewed in isolation as gross leasing volumes remained
high while new supply additions had low pre-commitment levels. A notable share of
leased space was for relocations/consolidations or renewals.
60
40
4Q09
4Q12
4Q13
Financial Indicators are for the SBD BKC.
Physical Indicators
Thousand sqm
1,500
25
1,200
20
900
15
600
10
300
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Completions
Vacancy Rate
Source: JLL

Rental Information
Rental Value^
INR 231 psf pm
Stage in Cycle
Rents rising

Last Peak
17
^ gross, on GFA
12-Month Outlook
Rental Value
Note: Mumbai Office refers to Mumbais Overall office market.
4Q14
Capital Value Index
Percent
After the formation of the new government, there has been an improvement in
business sentiment among occupiers. Tenants looking to expand are expected to
begin executing such plans in upcoming quarters, with a surge in demand anticipated
to begin towards year end. With many MNCs and Indian corporations looking for office
space in Mumbai, some may have to pay a premium to secure quality, well-located
premises. Rents and capital values are likely to increase gradually in select submarkets
in tandem with an improvement in demand. As such, yields are expected to hold firm.
The CBD should see stable market conditions while the SBDs continue to gain traction.
4Q11

Source: JLL
12-Month Outlook
4Q10
Rental Value Index
Asset Performance
In 2Q14, financial indicators (capital values and rents) for the SBD Central, SBD North
and Eastern Suburbs submarkets showed slight growth of 1% q-o-q. Commencement
of the metro rail, which connects Mumbai from east to west and reduces travel time,
was a primary reason for the appreciation in the financial indicators. It is worth
mentioning that rents in the CBD remained stable in the quarter, halting its recent
down trend.
80
Capital Value
Mumbai: Office
Occupier sentiment improves following election

Rents appreciate in SBD Central, SBD North and Eastern Suburbs
Yields remain unchanged across all submarkets
Bangalore: Office
Transaction activity improves as corporate expansion continues
Rents increase marginally in CBD and SBD
Yields remain stable as capital values increase in line with rents
Financial Indices
150
140
Demand
Transaction activity in the Bangalore office market increased during 2Q14 in
comparison with 1Q14 as corporates continued to expand. A total transaction area of
1.7 million sq ft was leased in 2Q14 compared with 1.2 million sq ft in 1Q14.
Absorption in Bangalore city improved significantly during 2Q14 and was recorded at
2.2 million sq ft.
120
110
100
90
80
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index

Source: JLL
Financial Indicators are for the SBD.
1000
16
12
750
250
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Percent
500
Due to improved leasing activity, the overall vacancy rate decreased by 0.9% q-o-q to
8.6% in 2Q14.
Major companies taking up space in 2Q14 included Accenture, Flipkart, TATA
Technologies and Capita.
Supply
Physical Indicators
Thousand sqm
Bangalore: Office
Index
130
Completions
Vacancy Rate
Source: JLL

Rental Information
Rental Value^
INR 51 psf pm
Stage in Cycle
Rents rising

Last Trough
16
Five projects totalling 1.7 million sq ft commenced operations in 2Q14. The new
buildings were Bagmane Phoenix, Mantri Commercio, Prestige Valdel Velene,
Nagarjuna Zenith and Bagmane World Trade Centre Amber. As a result of the new
completions, total stock of Grade A office space in Bangalore increased to 79.1 million
sq ft as at end-2Q14.
Asset Performance
In 2Q14, average rents for office space increased in the CBD and SBD submarkets. In
the CBD, the average gross rent increased slightly by 1.2% q-o-q to INR 84 per sq ft
per month. Meanwhile, in the SBD, stronger leasing activity pushed average gross
rents higher by 2% q-o-q to INR 51 per sq ft per month. Rents in the Whitefield and
Electronic City submarkets were stable at INR 33 and INR 26 per sq ft per month,
respectively.
Capital values increased by around 2% in the CBD and SBD submarkets due to
increasing investor demand. In the CBD, capital values rose to INR 9,900 per sq ft
during 2Q14, while in the SBD they increased to INR 5,250 per sq ft. In Whitefield and
Electronic City submarkets, capital values held steady at INR 3,200 and INR 2,500 per
sq ft, respectively.
12-Month Outlook
Absorption is likely to improve even further in the second half of 2014 as overall
business sentiment is improving. The SBD and Whitefield submarkets are expect to
account for the bulk of the office space take-up.
Rents and capital values are expected to increase marginally across all of the
submarkets of the city in 2H14, due to a marginal rise in demand, with selective
expansion by major sectors (e.g. Manufacturing, Information Technology, and Banking
and Financial Services).
^ gross, on GFA
12-Month Outlook
Rental Value
Capital Value
Note: Bangalore Office refers to Bangalores overall Grade A office market.
Sydney: Office
Financial Indices
140
130
Demand
The CBD value proposition encouraged centralisation activity. AIPE (Australian Institute of
Professional Education) relocated from North Sydney into 3,800 sqm at 160 Sussex Street
in the Western Corridor. Meanwhile Tabcorp moved into 3,600 sqm at 680 George Street
from Ultimo in the Sydney Fringe.
Sublease availability declined in the quarter. Much of the space surrendered through 2013
has been either withdrawn or leased. As a result, sublease vacancy fell to 1%, down from
the recent peak of 1.8% in 2Q13.
Vacancy tightened from 10.5% in 1Q14 to 9.9% in 2Q14. However, prime vacancy edged
up slightly to 12.6%. The reduction in vacancy was therefore attributable to the take-up of
space in the secondary market. The secondary grade vacancy rate compressed by 1.5
percentage points to 6.8% in 2Q14.
Supply
Asset Performance
Average prime net face rents were stable at AUD 824 per sqm per annum while
average prime gross effective rents edged up by 0.4% q-o-q to AUD 622 per sqm per
annum. Average secondary gross effective rents decreased 0.6% q-o-q to AUD 400
per sqm per annum.
The significant weight of capital looking to invest in the Sydney CBD resulted in further
yield compression in 2Q14. Prime yields moved below 6.00% at the tighter end of the
range for the first time since 2008 with the range now sitting at 5.75%7.00%. Investor
appetite also flowed through to secondary assets with yields tightening 50 basis points
at the lower end to 7.00%7.75%.
Index
110
100
90
80
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index

Source: JLL
Physical Indicators
200
12
150
100
50
50
100
3
09
10
11
12
Take-Up (gross)
Future Supply
13
14F
Rental growth is expected to be modest over the second half of 2014. Nevertheless,
there is still scope for further yield compression as competition for prime grade assets
pushes pricing.
Source: JLL

Rental Information
Rental Value^
AUD 622 psm pa
Stage in Cycle
Rents rising

Last Peak
12-Month Outlook
Rental Value
Note: Sydney CBD Office refers to Sydneys CBD office market (all grades).
Completions
Vacancy Rate
12-Month Outlook
Leasing enquiry and activity are expected to improve over the 2014/15 financial year.
However, the development pipeline will only be partly offset by the withdrawal of office
stock for residential conversion. As a result, vacancy is forecast to remain around 10%
over the next 12 months.
4Q14
Capital Value Index
Percent
There were no completions in 2Q14. There are two refurbishments due to complete in
the second half of the year with Macquarie Groups 24,000 sqm office at 4850 Martin
Place expected in August, while the refurbishment of 155 Clarence Street is scheduled
to complete in 4Q14.
120
Thousand sqm
The Sydney CBD has recorded consecutive quarters of positive net absorption through
the first half of 2014. Improved tenant demand comes on the back of a general uplift in
business confidence which translated into net absorption of 21,800 sqm in 2Q14.
Capital Value
Sydney: Office
Tenant demand improves on back of uplift in business confidence

Average prime gross effective rents see marginal increase
Prime yields below 6% at tighter end of range for first time since GFC
Melbourne: Office
Demand stabilises following three straight quarters of negative net take-up
Prime gross effective rents stable while secondary rents edge up
Prime equivalent yield range remain unchanged at 6.25% to 8.00%
Financial Indices
140
130
Demand
Melbourne CBDs office demand stabilised in 2Q14, following three consecutive
quarters of negative net absorption. Positive net absorption of 11,100 sqm was
recorded in the quarter, taking the 1H14 total to 8,800 sqm. Occupancy rates were
supported by several large transactions, the most notable included Medibanks
relocation to 720 Bourke Street, pre-committing to 30,000 sqm. A sharp rise in sublease
availability was recorded, up 18,000 sqm q-o-q, equating to 2.1% of total stock.
110
100
90
80
70
4Q09
4Q10
4Q11
Rental Value Index
4Q12
4Q13
4Q14
Capital Value Index

Source: JLL
Physical Indicators
210
12
175
10
140
105
70
35
35
70
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Supply
Just one project totalling 47,000 sqm reached practical completion in 2Q14 at 720
Bourke Street. The scheme will be partly occupied by Medibank, relocating within the
Docklands precinct. Net supply additions are likely to be negative over 2014, with
several buildings already withdrawn from stock for refurbishment or redevelopment
into other uses. Six buildings totalling 131,750 sqm are under construction, anticipated
to come online by end-2015, of which 75% is pre-committed. As a result of new supply
and a rise in sublease availability, total market vacancy increased 0.6 percentage
points to 11.1% at end-2Q14. Prime vacancy increased to 10.1% while secondary
vacancy decreased to 12.6%.
Asset Performance
Percent
Thousand sqm
Melbourne: Office
Index
120
Completions
Vacancy Rate
Source: JLL

Although investment transaction volumes reached AUD 1.7 billion in 1H14, volumes
were inflated by the DXS / CPPIB acquisition of the CPA portfolio. DXS/CPPIB
acquired AUD 1.17 billion worth of assets in Melbourne CBD, accounting for nearly 70%
of the first half total. Prime and secondary yields were unchanged, ranging between
6.25% and 8.00% (prime), and 7.25% and 9.25% (secondary).
Average prime gross effective rents were unchanged at AUD 384 per sqm per annum,
with incentive levels remaining at 37 months rent free (30%). Secondary gross
effective rents increased 0.3% q-o-q to AUD 285 per sqm per annum.
12 Month Outlook
Tenant demand and enquiry has started to show signs of improvement, as the domestic
economy gains momentum. Net absorption forecasts for 2014 still remain positive,
driven by centralisation of non-CBD tenants who continue to take advantage of
attractive leasing terms offered in a core location. While supply additions are limited in
2014, headline vacancy is expected to remain in double digit figures as sublease and
backfill space continue to enter the market. Investment demand for prime core product
is anticipated to remain buoyant over the remainder of 2014, although a scarcity of
openly marketed stock may have an impact on transactional volumes going forward.
Rental Information
Rental Value^
AUD 384 psm pa
Stage in Cycle
Decline slowing

Last Peak
12-Month Outlook
Rental Value
Capital Value
Note: Melbourne Office refers Melbournes CBD office market (all grades).
Perth: Office
Financial Indices
150
125
Demand
There were five tenant moves (greater than 1,000 sqm) in 2Q14, contributing positive
take-up of 3,500 sqm. The largest contribution was made by Fluor, which leased 1,800
sqm of space. The main sectors to vacate space were property and business services
(10,400 sqm) and mining companies (5,500 sqm).
100
Index
In 2Q14, sub-lease vacancy decreased by 17.4% from last quarter to 63,500 sqm. It
accounts for 31% of vacant stock and 3.9% of market stock. Headline vacancy rose to
12.7%, reflecting a quarterly increase of 0.9 percentage points. Consolidation and
contraction from corporate occupiers contributed to subdued demand. Perth is
Australias third tightest CBD market, behind Sydney at 9.9% and Melbourne at 11.1%.
An eighth consecutive quarter of negative net absorption (13,800 sqm) brought the
6-month total to 32,500 sqm.
75
50
25
0
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index

Source: JLL
Supply
Asset Performance
Prime net effective rents decreased by 8.6% q-o-q in 2Q14 to AUD 452 per sqm per
annum, following an increase in average incentives to 32 months rent free (on a
ten-year lease). Capital values are trending downward, with a decrease of 0.9% q-o-q
recorded or a decline of 1.9% over the 12 months to June.
Two investment transactions were finalised in 2Q14 totalling AUD 200 million.
Septimus Roe Square transacted for AUD 91 million and was sold to Singaporean
property developer Far East Organisation by Aspen Group. This sale represents a
sizeable transaction on the city fringe. Alluvion at 58 Mounts Bay Road was sold as
part of the DEXUS and CPPIB joint venture acquisition of CPA.
120
18
100
15
80
12
60
40
20
20
40
60
80
12
100
09
10
11
12
Take Up (net)
Future Supply
13
14F
Demand levels are expected to track at similar levels through the second half of 2014,
as occupiers continue to rationalise space requirements. Vacancy is expected to
increase in 2015 with a large amount of new supply coming into the Perth CBD
market. While net absorption is expected to improve in 2015, a sustained recovery in
net absorption will depend on a pickup in the resource sector.
Source: JLL

Rental Information
Rental Value^
AUD 620 psm pa
Stage in Cycle
Rents falling
Last Peak
12-Month Outlook
Rental Value
Note: Perth Office refers to Perths CBD office market (all grades).
15
Completions
Vacancy Rate
One transaction was finalised in 1Q14. 130 Stirling Street transacted for AUD 90 million.
The building was sold to a Singaporean property group by Charter Hall.
12-Month Outlook
Percent
However, a medium-term construction cycle is underway, with 2015 expecting the

highest annual addition to stock since 1982. Eight projects totalling 148,400 sqm are
expected to reach completion in 2015, which equates to 9.2% of total office stock in
the Perth CBD.
Physical Indicators
Thousand sqm
There were no project completions in 1H14. This figure represents the lowest area of
new supply since 2005 when there were also no completions. Three projects (21,100
sqm) are expected to reach completion by the end of 2014: 863 Hay Street (10,700
sqm); the refurbishment of 565 Hay Street (7,700 sqm); and the refurbishment of 50
William Street (2,695 sqm).
Capital Value
Perth: Office
Consolidation and contraction contribute to subdued demand

Net face rents decline while incentives increase
Investment volumes in 1H14 total AUD 290 million
Auckland: Office
CBD supply pipeline restricted in short term
Robust demand and limited available prime space pushes rents higher
Strong investor demand drives yields lower
Financial Indices
130
120
Demand
100
90
80
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index

Source: JLL
60
15
40
10
New supply will remain minimal over the short term to the detriment of occupiers.
Construction of new office stock remains limited with only two office buildings, one
located on Victoria Street and Fonterras new headquarters in the Wynyard Quarter,
expected to complete by end-2015. Robust market conditions have seen a number of
landlords beginning refurbishments of office buildings, especially secondary grade
space. The lack of occupier options is likely to spur more speculative development,
with several corporates having expressed interest in developing new office premises,
but this activity has generally been concentrated in the Fringe areas.
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Percent
20
20
Stronger business sentiment and robust economic fundamentals are driving leasing
activity in the Auckland office market. In the first half of 2014, vacancy for the overall
CBD declined by 160 basis points to 7.8%. Occupancy levels in prime grade have
returned to pre-recession highs as occupiers continue to demand quality space. This
situation has been further exacerbated by the limited, fragmented space currently
available. Vacancy in secondary grade has largely remained unchanged, moving 0.2%
lower in 1H14 to 13.3%. Improving market conditions have motivated landlords to start
to renovate and restore their buildings in expectation of better times ahead.
Supply
Physical Indicators
Thousand sqm
Auckland: Office
Index
110
Completions
Vacancy Rate
Source: JLL

Rental Information
Rental Value^
NZD 421 psm pa
Stage in Cycle
Rents rising

Last Peak
23
Asset Performance
Falling vacancy and better market conditions are providing an opportunity for landlords
to increase rents. Average prime rents on a q-o-q basis have moved 2.1% higher to
NZD 421 per sqm per annum, while average secondary rents have moved 1.2% higher
to NZD 245 per sqm per annum.
Strong investor demand in both the prime and secondary markets has led to a further
compression in investment yields. In 2Q14, average Prime yields declined by 20 bps
to 7.3% while secondary yields have compressed 30 bps to 8.6%. With several
landmark transactions currently in the final stage of negotiations, yields are likely to
witness further compression in the short term.
12-Month Outlook
Healthy macroeconomic conditions are flowing through to the commercial property
market. A sustained strengthening of office market fundamentals and no new supply
likely to be developed in the CBD over the near term is continuing to move the market
in favour of landlords. The prime segment is expected to continue to be the main
recipient of growing demand going forward, as competition for limited available quality
space remains high, with any excess demand flowing into the secondary segment and
pushing vacancy levels lower. Strong investor confidence and robust economic
fundamentals should further support a compression in yields, both for prime and
secondary assets.
^ net face, on NLA
12-Month Outlook
Rental Value
Capital Value
Note: Auckland Office refers to Aucklands CBD and Viaduct Harbour office markets.
Hong Kong: Retail
Financial Indices
280
240
Index
Demand
Supply
No prime projects were completed in 2Q14.
Asset Performance
Sustained leasing demand and a tight vacancy environment in the citys best shopping
locations helped retail rents edge higher. However, with vacant shops starting to
appear along some High Streets and sales slowing, retailers adopted a more
measured approach in leasing negotiations. As a result, prime rentals remained
broadly stable, edging up by less than 0.5% q-o-q in 2Q14.
Activity in the investment market recorded a surprising pick-up with investors showing
interest in larger sized premises with value-add potential in non-core locations. A
portfolio of shops (15,088 sq ft) on the third floor of Diamond Square in Shun Tak
Centre in Sheung Wan was sold to a Mainland investor for HKD 230 million. Link REIT
sold four local shopping centres, including, the retail podium of Tung Hei Court (6,340
sq ft) in Shaukeiwan for HKD 72.9 million; Hing Tin Commercial Centre (28,313 sq ft)
in Lam Tin for HKD 210 million; Kwai Hing Shopping Centre (24,664 sq ft) in Kwai
Chung for HKD 438.839 million; and Wah Kwai Shopping Centre (41,878 sq ft) in
Aberdeen for HKD 518 million.
12-Month Outlook
With the decline in retail sales being mainly due to a higher base comparison brought
about by higher gold prices at the start of 2013, retail sales are forecasted to return to
growth in 2H14. However, headwinds remain for the sector. The possibility of the
government imposing a quota on visitors from Mainland China, for example, has the
potential to affect the market negatively. On the positive side, international retailers,
especially mass market retailers, remain keen on using Hong Kong as a springboard to
enter the Mainland markets. Against this backdrop, we retain our forecast for rentals of
prime retail assets to grow in the range of 05% in 2014. With holding costs remaining
low and investors continuing to look for undervalued properties with value-add potential,
we believe that capital values of prime retail assets should remain stable in 2014.
80
4Q09
4Q10
4Q11
4Q12
4Q13
4Q14
RV Index (High Street Shop)
CV Index (High Street Shop)
RV Index (Premium Prime Shopping Centres)
RV Index (Overall Prime Shopping Centres)

Source: JLL
Physical Indicators
160
120
80
40
0
09
10
Completions
11
12
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Rental Information (High Street Shops)

Rental Value^
HKD 744.5 psf pm
Stage in Cycle
Growth slowing
No. of Quarters Since 21
Last Trough
^ net, on GFA
Rental Information
(Premium Prime Shopping Centres)
Rental Value^
HKD 301.6 psf pm
Stage in Cycle
Growth slowing
Last Trough
^ net, on LFA
Rental Information
(Overall Prime Shopping Centres)
Rental Value^
HKD 172.6 psf pm
Stage in Cycle
Growth slowing
Last Trough
^ net, on LFA
12-Month Outlook
Rental Value
High Street Shops

Premium Prime
Shopping Centres
Overall Prime
Shopping Centres
Note: Hong Kong Retail refers to Hong Kongs Overall Prime Shopping Centres and High Street retail markets.
Perth: Office
Despite declining retail sales, leasing demand in prime shopping locations remained
largely intact. Mass market retailers, supported by sustained local consumption and
the changing shopping patterns of Mainland tourists, remained optimistic towards
expansion. Fast fashion retailer, Esprit, pre-leased three floors (17,944 sq ft) at Wings
Building in Central for around HKD 2 million per month while Korean cosmetics brand,
Sulwhasoo, reportedly pre-leased a 9,400 sq ft space at Silvercord for around
HKD 2.9 million per month.
160
120
Thousand sqm
The retail sector continued to show signs of a slowdown with total retail sales declining
by 7% y-o-y in 2Q14. The decline was led by a 31.5% y-o-y drop in the sales of
jewellery and watches, albeit off a high base of comparison caused by the spike in
gold related sales a year earlier. The changing profile and spending patterns of
Mainland Chinese tourists also contributed to the slower sales growth, with more
same-day (lower spend) tourists visiting the city.
200
Capital Value
High Street Shops
Hong Kong: Retail
Retail sales retreat by 7% y-o-y in 2Q14

Rental growth moderates across all prime retail assets classes
Sales volumes up as investors target retail assets with value-add potential
Beijing: Retail
Food and beverage chains expand rapidly throughout the city
Rents rise in top performing, centrally located shopping centres
Gaw Capital enters into deal to buy Pacific Century Place
Financial Indices
160
Demand
Index
140
120
100
80
4Q09
4Q10
4Q11
4Q12
Rental Value Index
4Q13
4Q14
Capital Value Index
Supply
800
Two malls were completed in 2Q14. Beijing Mall (78,000 sqm), developed by the
New Yansha Group, opened in Wangfujing with 90% occupancy. Ocean International
Centre Phase II was completed with a GFA of 19,000 sqm. Developed by Sino-Ocean
Land and located along the 4th ring, the property serves local residents and was fully
occupied upon opening. Another mall converted retail space into office use, continuing
last quarters trend. Wangjing International Centre closed its 20,000 sqm anchor,
Yokado Department Store, and converted the space into offices for strata title sale.
600
Asset Performance
Physical Indicators
1,000
Thousand sqm
Beijing: Retail

Source: JLL
Retail sales growth was faster in April and May than the same period last year.
Landlords were more aggressive in holding events to drive foot traffic to coincide with
Mothers Day, Childrens Day and the World Cup. Major demand drivers were F&B
operators targeting the mid-range market, including Grandmas Home, Nanjing
Dapaidang, Nan Xiao Guan and Pizza Express, and the childrens sector, including
Chloe Kids, Deloras, Gusella, Sarabanda and Pororo (a childrens entertainment
centre). International apparel retailers remained keen to open their first stores in
Beijings core locations, evidenced by Dickies, Simonetta and Chrome Hearts. Most
brands remain highly selective in choosing locations.
400
200
0
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Rental Information
Rental Value^
RMB 839 psm pm
Stage in Cycle
Growth slowing

Last Trough
18
Urban ground floor open-market rents increased 1.9% q-o-q on a chain-linked basis,
with higher increases recorded in key top-performing properties. Vacancy in the market
increased marginally by 30 basis points. One en bloc transaction was recorded in early
2Q14. Gaw Capital entered into a deal to acquire Pacific Century Place, a mixed-use
project with a total GFA of 170,000 sqm (retail GFA of 75,000 sqm), from Pacific
Century Premium Developments for a total consideration of USD 928 million.
12-Month Outlook
New supply in 2014 is expected to unleash pent-up demand in Wangfujing. Two
shopping centres totalling 88,000 sqm of GFA are slated for completion in the second
half of 2014 in overall urban areas. Both new centres are expected to target the
mid-market. Several luxury malls, including Seasons Place, Jinbao Place and China
Central Place are showing renewed emphasis on affordable luxury brands and are
attempting to increase their F&B and services portions. With some landlords focusing
on more traffic generating tenants and fewer specialty stores, base rental income
growth may slow but there remains potential to generate more turnover rent. The next
12 months are also the beginning of a supply wave of super-regional malls in the
suburban areas of Beijing, such as Inter IKEA, following the growth of the urban rail
network.
12-Month Outlook
Rental Value
Capital Value
Note: Beijing Retail refers to Beijings Urban retail market.
Shanghai: Retail
Financial Indices
150
140
Demand
Vacancy increased to 8.3% in the core area, as several large tenants (including a gym,
several weight loss centres and a restaurant) vacated space. Vacancy increased to
6.8% in the non-core market due to the high vacancy levels at newly opened properties.
Supply
One core project closed in 2Q14. Golden Eagle Department Store (40,000 sqm),
located adjacent to CITIC Plaza on West Nanjing Road, closed down all of its shops
(except for Gucci) for renovation. Low foot traffic and poor sales performance
contributed to this decision. In the non-core market, the River Mall, located at the Expo
Site in Pudong, held its grand opening in April and became the largest shopping mall in
Shanghai with a total retail GFA of over 330,000 sqm. The project is long and narrow,
stretching 1.1 km in total, and includes a rooftop zoo with exotic animals. In 2Q14,
there was also a new retail property completed in non-core ShanghaiBaoland Plaza
(35,470 sqm)located on the North Bund in Yangpu. The project features supporting
retail amenities for local office workers and residents. Anchor tenants include Tesco,
Decathlon and a Physical gym. As of end-2Q14, the project was fully occupied.
Asset Performance
In the core area, open-market ground floor base rents increased 0.8% q-o-q to
RMB 51.7 per sqm per day, while non-core rents rose by 3.9% q-o-q to RMB 17.3 per
sqm per day. The investment market was quiet during the quarter with no en bloc
transactions.
Index
130
120
100
90
4Q09
4Q10
4Q11
Rental Value Index
4Q12
4Q13
4Q14
Capital Value Index

Source: JLL
Financial indicators are for the Core market.
Physical Indicators
400
300
200
100
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Physical indicators are for the Core market.
12-Month Outlook
There are still a large number of enquiries from retailers looking for opportunities in
Shanghai. Due to intensified competition and cost-saving incentives, many tenants are
now adjusting their strategies according to consumer preferences. F&B operators, for
instance, are shrinking the size of individual stores and focusing on more casual
dining. Due to a large supply pipeline, the likelihood of project delays will be high,
especially among projects scheduled for delivery in the second half of the year.
Rental Information
Rental Value^
RMB 51.7 psm per day
Stage in Cycle
Rents rising

Last Trough
^ net, on NLA
12-Month Outlook
Rental Value
Note: Shanghai Retail refers to Shanghais Overall Core and Non-core retail markets.
Perth: Office
110
Thousand sqm
Fast fashion tenants remained active in the quarter. H&M, for example, opened their
largest flagship store in Shanghai, occupying 3,500 sqm of space over four storeys
in Mosaic (previously known as Plaza 353) on East Nanjing Road. Other fast fashion
brands continued to expand in non-core properties. C&A, after leaving Middle Huaihai
Road, opened a new 3,000 sqm street shop on North Sichuan Road in Hongkou
District. Hollister entered Global Harbour, while American Eagle Outfitters plans to
open a new store in Daning Life Hub. Meanwhile, New Look opened three stores. F&B
tenants continued to expand rapidly across the city. Casual dining chain Salad+, for
instance, is opening two new stores in Jingan and Pudong CBD to meet the needs of
office workers.
Shanghai: Retail
One core project closes for renovation and two non-core projects open
Rents rise moderately in both core and non-core markets
No major investment transactions close as investors grow more cautious
Capital Value
Guangzhou: Retail
Leasing momentum remains muted, while overall vacancy declines
Overall rental growth slows as a few malls lower rents
Investor demand softens on weaker rental growth prospects
Financial Indices
150
140
Demand
Index
130
As in recent quarters, leasing momentum remained muted in the Guangzhou retail

market. Given concerns about economic growth, most retailers were more diligent
about selecting new store locations. Fast fashion and F&B retailers continued to be
among the most active participants in the leasing market.
120
110
100
90
80
4Q09
4Q10
4Q11
Rental Value Index
4Q12

Source: JLL
4Q13
4Q14
Capital Value Index
Zengcheng Wanda Plaza (130,000 sqm, GFA) opened in the quarter with full
occupancy. It is the first prime retail property in the Zengcheng district. At end-2Q14,
total prime retail stock in Guangzhou was 2.2 million sqm (GFA).
600
500
Asset Performance
400
In general, retail rents in most shopping malls remained stable in the quarter. Amid
fears of weakening leasing demand and intensifying competition, some landlords
softened their stance on asking rents to attract new tenants, while some established
malls in Tianhe CBD continued to raise rents. Thus, overall rents grew at a slower
pace of 0.7% q-o-q to RMB 395.8 per sqm per month (on GFA) in 2Q14.
300
200
100
0
Vacancy rates in most existing malls in the core market were stable in 2Q14. However,
overall vacancy slightly declined to 4.1% with net absorption of 144,000 sqm (GFA)
recorded in the quarter. Strong take-up was largely attributable to a new retail centre
that completed in the quarter.
Supply
Physical Indicators
Thousand sqm
Guangzhou: Retail
Financial Indicators are for the Overall market.
New international retailers continued to enter Guangzhou, with their preferred location
the core shopping area. In 2Q14, Roger Viver and Din Tai Fung, a famous restaurant
from Taiwan, established their first outlets in southern Mainland China at Taikoo Hui.
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Rental Information
Rental Value^
RMB 395.8 psm pm
Stage in Cycle
Growth slowing
Last Trough
20
^ net, on GFA
A weakening residential market increased cash flow pressures for many developers,
leading some to put retail assets in the non-core area up for sale. Coupled with
softening rental growth, these factors exerted downward pressure on capital values
which experienced a 0.5% q-o-q decline in the quarter.
12-Month Outlook
We expect weak leasing demand to persist over the next 12 months. Slowing
economic growth and competition from e-commerce are likely to depress expansion
demand of retailers and tighten their rental budgets. Fast fashion and F&B retailers
should continue to be key demand sources. However, these retailers are likely to be
more methodical about their expansion plans, in particular in emerging retail
catchment areas, and focus on established core shopping areas.
New supply is expected to reach 410,000 sqm (GFA) over the next 12 months, with
most new projects to be developed as regional malls targeting the mid-market
segment in emerging submarkets. Considering expectations for softener demand and
a glut of new supply, rental growth in most existing malls is expected to be flat.
However, mature malls or those that have successfully completed tenant mix
adjustments and position upgrading should continue to outperform in the leasing
market. Therefore, we forecast average rents to trend up steadily in the range of 34 %
over the next 12 months.
12-Month Outlook
Rental Value
Capital Value
Note: Guangzhou Retail refers to Guangzhous Overall Prime retail market.
Tokyo: Retail
Financial Indices
130
Demand
Demand from retailers remained robust in the quarter, with luxury brands and F&B
retailers opening a number of new stores on the main high streets and periphery
streets in the prime submarket.
New store openings in the prime submarket in 2Q14 included MCM along Ginza
Chuo-dori and Apple Store and Givenchy alongside Omotesando. Secondary high
streets in Ginza saw a number of new store openings, including Kate Spade New York,
Weekend Max Mara and IWC. Moreover, Audemars Piguet relocated and opened a
new store in Ginza. Also in the Omotesando area, Zara Home, Balenciaga and
Christian Louboutin opened new shops.
120
100
90
4Q09
3.7% y-o-y. Rental growth accelerated q-o-q and this marked the seventh consecutive
quarter of increase.
Capital values trended higher for the third straight quarter, rising 5.3% q-o-q or 9.1%
y-o-y. Capital value growth accelerated in the quarter amid rising rents, while
investment yields compressed.
4Q12
4Q13
4Q14
Capital Value Index
Tokyo Retail Sales

10
8
6
4
y-o-y (%)
Asset Performance
4Q10
4Q11
Rental Value Index

Source: JLL
Supply
In 2Q14, there was no new supply in the prime areas of Ginza and Omotesando.
110
2
0
2
4
6
8
10
1Q09
1Q10
1Q11
1Q12
1Q13
1Q14
Sales Growth of Large-Scale

Retail Stores in Tokyo
Source: Ministry of Economy, Trade and Industry
A notable transaction in the quarter was Japan Retail Fund acquiring G Building
Omotesando 02 (50% ownership) for JPY 17.705 billion or an NOI yield of 3.7% from
Mitsubishi Corporation.
12-Month Outlook
A tight labour market and increasing wages are expected to underpin solid growth of
private consumption as the effects of the tax hike slowly abate. Moreover, the number
of visitor arrivals is expected to continue to grow, given the relaxation of travel visas for
a number of countries in the past year and the depreciation of the yen.
Strong market fundamentals should underpin demand from retailers and support a
modest rise in rents. With capital values expected to grow faster than rentals, yields
should compress further.
Rental Information
Rental Value^
Stage in Cycle
Last Trough

pm
Rents rising
7
^ gross on NLA
12-Month Outlook
Rental Value
Note: Tokyo Retail refers to the Ginza and Omotesando Prime retail market.
Perth: Office
Index
A consumption tax increase implemented in April saw sales of large retail stores in
AprilMay decrease 4.9% y-o-y, while sales of luxury goods in department stores in
Tokyo declined 32.5% y-o-y for the same period. However, the pullback in consumer
spending may be easing as the decline in sales for large retail stores in May (0.8%
y-o-y) was less than most economists anticipated. Furthermore, consumer confidence
for the same month rose m-o-m for the first time since December. A record number of
tourists are also supporting the retail market, with visitor arrivals for the JanuaryMay
period increasing 28.4% y-o-y.
Tokyo: Retail
Sustained retailer demand despite a sales tax hike in April

Rents continue to grow amid robust retailer demand
Capital values grow faster than rents, leading to yield compression
Capital Value
Singapore: Retail
Leasing interest sustained despite declining retail sales
Island-wide rents show muted growth alongside fall in visitor arrivals
Capital values remain flat due to continued fall in strata-titled sales
Financial Indices
120
115
Demand
Index
110
105
100
95
90
4Q09
4Q10
4Q11
Rental Value Index
4Q12
4Q13
4Q14
Capital Value Index
Physical Indicators
300
200
150
100
50
0
In the tourism sector, visitor arrivals decreased 5.2% y-o-y, mainly due to a sharp
decline in Chinese visitor numbers which have been declining since October of last
year. Based on 2013 data, mainland Chinese were the second-largest international
visitor group to Singapore, after Indonesians. The declining trend in visitor arrivals
contributed to weaker retail sales growth in May of 0.1% y-o-y (excluding vehicle
sales), despite the on-going Great Singapore Sale. Retail segments that are typically
highly dependent on tourist purchases, such as watches and jewellery, showed a
sharp decline in sales. However, domestic consumption remained stable.
Supply
250
Thousand sqm
Singapore: Retail

Source: JLL
Occupancy rates increased slightly in the Primary submarket in 2Q14 due to sustained
interest from domestic and new-to-market retailers, such as Etro and Givenchy, which
opened stores in The Shoppes at Marina Bay Sands. Despite weak retail sales and
slowing visitor arrivals in 1H14, retailers continued to show interest in prime space and
supported leasing demand. Available space in the Primary submarket remains tight
and 268 Orchard is the only upcoming mall slated for completion (1Q15) in the next
few years.
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL

supply is for 2H14.
In the Marina submarket, Kallang Wave, the retail mall in the new sports hub, obtained
a Temporary Occupancy Permit in the quarter and handed over 441,319 sq ft of retail
space to tenants, most of whom are expected to open their doors by the official
opening in July. As of end-2Q14, the mall was 80% pre-committed. One Raffles Place,
formerly known as UOB Centre, with 90% pre-commitment inched towards full
completion in the quarter after a major refurbishment, with anchors H&M and UNIQLO
welcoming shoppers in late May. The remaining tenants are slated to open in 3Q14.
Smaller-scale projects, Aperia and Hillv2 in the Marina and Suburban submarkets,
respectively, also opened in the quarter with tenants still fitting-out as at end-2Q14.
Asset Performance
Rents grew marginally island-wide in 2Q14, supported by healthy leasing activity
particularly in new malls, although continued increases in business costs and labour
constraints are putting a strain on operations.
Capital values remained stable in 2Q14, as strata-titled retail transaction volumes
increased marginally. 139 units were transacted in 2Q14, a 31% increase from the 106
units transacted in 1Q14. However, transaction volumes dropped 70% y-o-y. The key
highlight during 2Q14 was the acquisition of Changi City Point mall from JV Ascendas
Development Pte Ltd by Frasers Centrepoint Ltd.
12-Month Outlook
Rental Information
Rental Value^
SGD 37.8 psf pm
Stage in Cycle
Rents stable

Last Trough
18
^ gross, on NLA
12-Month Outlook
Rental Value
The lowering of foreign dependency ratios is expected to continue affecting retail and
F&B businesses and may potentially have a negative impact in the longer term. The
Total Debt Servicing Ratio framework may continue to discourage investors, as potential
buyers remain cautious due to sluggish retail sales and the growing e-commerce market.
However, a low unemployment rate, stable inflation and more proactive management
by landlords/developers, should support demand and the rent environment in 2014.
Capital values are likely to show muted growth as tighter financing requirements put a
dampener on investment, allowing the overall yield to expand.
Capital Value
Note: Singapore Retail refers to Singapores Prime, Suburban and Marina retail markets.
Bangkok: Retail
Financial Indices
120
Demand
The vacancy rate increased by 0.3% q-o-q to 4.5%, mainly the result of tenant fit-outs
at two newly opened shopping centres.
Supply
After having its grand opening postponed in 1Q14, Central Embassy, a prime grade
luxury regional centre, officially opened in 2Q14. A prime grade community centre,
Siam Square One, had its soft opening in early June. The two shopping centres have
total leasable retail space of 73,600 sqm. Central Embassy provided a large amount of
leasable area (41,000 sqm) to top international luxury brands.
Asset Performance
A military coup calmed political unrest in late May and landlords responded by slightly
adjusting rents higher; rents had been temporarily lowered for tenants affected by the
political demonstrations. This resulted in average gross rents increasing by 3.6% q-o-q
and net effective rents increasing by 3.9% q-o-q in 2Q14. The increase in average
gross rent also affected capital values, which rose by 3.5% q-o-q. Average market
yields in 2Q14 expanded slightly by 0.1% q-o-q.
12-Month Outlook
Following the military coup that calmed political turmoil, Thai consumer confidence has
risen and the number of international tourists to Bangkok is expected to recover soon.
It is expected that demand for prime grade retail space will continue rising, resulting in
an increase in rents.
The grand opening of the luxury Central Embassy centre created a more competitive
environment in the prime grade retail market. Several shopping centres in Bangkok,
including Gaysorn Plaza and The Emporium, are expected to undergo renovation in
2015 in order to increase their competitiveness and ability to command higher rents.
Growing leasing demand and higher rents should push capital values up.
Three prime grade projects totalling 218,000 sqm (NLA), namely Central Plaza Salaya,
HaHa Market and EmQuartier, are scheduled to complete in 2H14. Moreover, two Prime
grade retail centres, Central Westgate and Bangkok Chaophraya Riverfront I-CITY,
with a combined area of 150,000 sqm (NLA), are planned to open in 2Q15. The overall
vacancy rate is expected to rise in the short-term upon completion of the new projects,
but given the high level of pre-commitments, should then decline relatively quickly as
tenants move in and begin operations.
Index
100
90
80
4Q09
4Q10
4Q12
4Q13
4Q14
Capital Value Index

Source: JLL
Physical Indicators
600
500
400
300
200
100
0
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Rental Information
Rental Value^
THB 2,256 psm pm
Stage in Cycle
Rents rising
Last Trough
^ gross, on NLA
12-Month Outlook
Rental Value
Note: Bangkok Retail refers to Bangkoks Prime retail market.
4Q11
Rental Value Index
Perth: Office
Many new international brands opened their first stores in Thailand in 2Q14. Five new
fashion brands and one beauty and cosmetic brand opened their first branch in
Thailand at the newly opened Central Embassy. Fauchon, an internationally renowned
French restaurant and pastry shop, opened its store branch in Thailand at Groove @
Central World. Moreover, Embassy Diplomat Screens, an ultra-luxury cinema, opened
at Central Embassy in the quarter. The cinema was designed by Rockwell Group
Europe, an architecture firm recognised worldwide.
Thousand sqm
Prime grade retail space remained in strong demand in the quarter with two new
shopping centres opening in 2Q14, both with notably high pre-commitment levels.
110
Bangkok: Retail
Central Embassy and Siam Square One complete, adding 73,600 sqm to stock
Average gross rents rise after political unrest settles
Capital values grow in line with rentals
Capital Value
Kuala Lumpur: Retail

Vacancy declines, backed by good take-up especially in the Suburbs
Average rents remain stable as retailers resist upwards rental revisions
No sales transactions of prime malls and capital values hold steady
Financial Indices
120
Demand
110
Index
Good demand sustained in 2Q14 with absorption recorded at 749,400 sq ft. Strong
take-up helped push the vacancy rate lower by 1.5 percentage points to 6.5%, as a
significant amount of the unoccupied space which was completed in 1Q14 was
occupied in 2Q14.
100
90
4Q09
4Q10
4Q11
4Q12
Rental Value Index
4Q13
4Q14
Capital Value Index

In the City Centre, the average vacancy rate decreased q-o-q from 8.3% to 7%, with
positive net absorption of 152,600 sq ft. There was continued demand from foreign
retailers especially in the City Centre, where Halston Heritage set up its first store
(flagship) at Pavilion KL. Tory Burch and Kate Spade Saturday have also committed to
opening up their first stores in the City Centre and had stores under renovation at
end-2Q14.
Physical Indicators
500
400
Thousand sqm
Kuala Lumpur: Retail
Financial Indicators are for the City Centre.
Supply
One new completion occurred in 2Q14, namely gateway@klia2 (350,000 sq ft), a retail
centre integrated with the new low-cost carrier terminal of the Kuala Lumpur
International Airport. It is located before the passport control zone of the airport
terminal and is accessible to the public. Overall shopping centre stock increased by
1.2% q-o-q to 29.4 million sq ft.
300
200
100
There was good take-up in the Suburbs, where 596,800 sq ft of space was occupied,
mainly contributed by the new completiongateway@klia2. Notable retailers at this
shopping centre include: Pandora, Jelly Bunny, F.O.S, Giordano and Old Town White
Coffee. At Jaya Shopping Centre (completed in 1Q14), The Body Shop, Cold Storage
and AsterSpring commenced operations. The Suburban vacancy rate declined to 6.2%
in 2Q14 from 7.8% q-o-q in 1Q14.
Asset Performance
09
10
11
Completions
12
13
Future Supply
14F

supply is for 2H14.
Physical Indicators are for City Centre and Suburbs.
Rents and capital values were stable in 2Q14, both in the City Centre and Suburbs, as
retailer resisted rental increases. Monthly gross rents were registered at MYR 32.5 per
sq ft and MYR 24.5 per sq ft in the City Centre and Suburbs, respectively. Capital
values in the City Centre and Suburbs remained steady at MYR 3,650 per sq ft and
MYR 2,200 per sq ft.
No sales transactions of prime retail centres were recorded in 2Q14. However, part of
an old secondary grade Suburban mall, Pandan Safari Lagoon, was transacted for a
total consideration of MYR 50 million.
12-Month Outlook
Rental Information
Rental Value^
MYR 32.5 psf pm
Stage in Cycle
Rents stable

Last Trough
20
^ gross, on NLA
12-Month Outlook
Rental Value
The retail sectors recent good growth is expected to slow in 2H14, with limited rental
and capital value appreciation expected. Slightly improved consumer sentiment, as a
result of improving household finances and moderating inflationary pressures, and a
healthy tourism industry, boosted by the Visit Malaysia 2014 campaign, should support
demand in the retail sector.
However, the general outlook remains on the cautious side and coupled with the new
supply expected to enter the market in the next 12 months, landlords could experience
downward pressure on rents as competition intensifies. The investment market is likely
to remain quiet in the short term, with rental growth prospects limited and the mismatch
between owners and purchasers price expectations persisting.
Capital Value
Note: Kuala Lumpur Retail refers to Kuala Lumpurs Overall shopping centre market.
Jakarta: Retail
Financial Indices
130
Demand
110
100
90
4Q09
Asset Performance
Despite a rebound in occupancy levels, tight competition among landlords continued
to put downward pressure on rents. No landlords increased rents during the quarter.
Modest rental growth in the past few years was attributed to low space productivity
due to the growing number of malls competing to reach customers. While tenants
focused their efforts on revenue generation and minimising costs, landlords were
focused on maintaining occupancy levels. In 2Q14, average net effective rent was
IDR 5,303,545 per sqm per annum. Meanwhile, capital values have remained stable
for four consecutive quarters. Accordingly, yields were unchanged at 10.9%.
4Q11
4Q12
4Q13
4Q14
Capital Value Index

Index base: 4Q09
4Q07 = 100
Source: JLL
Jones Lang LaSalle
Physical Indicators
Supply
250
200
Thousand sqm
With no new completion in 2Q14, total stock of prime retail space remained at 1.37 million
sqm. The St. Moritz shopping mall is the only project expected to enter the market this
year. The completion of the St. Moritz shopping mall (located in the West Jakarta area)
is anticipated to bring around 130,000 sqm of new stock to the prime retail market in
Jakarta. Supply growth in the market has been limited over the past few years due to
the tight provision for new mall development implemented by the Jakarta provincial
government.
4Q10
Rental Value Index
150
100
50
0
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL
Jones Lang LaSalle

supply is for 2H14.
12-Month Outlook
Following weaker market conditions in 1Q, demand is expected to grow gradually over
the remainder of the year supported by robust consumption. Higher incomes and
improving lifestyles are also likely to generate demand for quality and luxury retail
products. This trend is expected to lure more foreign and international retailers to
expand to Jakarta. Considering the high pre-commitment level in the upcoming St.
Moritz shopping mall (planned to open in mid-2014), the market vacancy rate is likely
to remain low, at around 5% by year-end. Rents and capital values are projected to
hover around current levels as landlords continue their efforts to increase occupancy.
Rental Information
Rental Value^
IDR 5,303,545
4,804,018 psm pa
Stage in Cycle
Rents stable
rising

Last Trough
5
13
12-Month Outlook
Rental Value
Note: Jakarta Retail refers to Jakartas Overall Prime retail market.
Perth: Office
Index
After a challenging 1Q14, when net take-up plunged to a record low, retail demand
rebounded in 2Q14 supported by restored retailer confidence. Despite a tough
business environment due to the impact of the US dollar appreciation and high interest
rates, retailers remained positive on the outlook and expanded their store networks. In
2Q14, net take-up in Jakartas prime shopping malls totalled 5,300 sqm, compared to
6,800 sqm in 1Q14. The positive net take-up in the quarter was primarily contributed
by shopping malls located in the Jakarta CBD, which saw an increase in occupancy
levels along with the opening of new outlets by local and international retailers. By
sector, F&B and fashion retailers continued to generate most demand among
speciality retailers. Major new leases in the quarter included H&M and Aunty Anne
taking up space in Grand Indonesia Shopping Town, Tiffany & Co and Eric Kayser
taking up space in Plaza Senayan as well as Bakerzin and Chung Gi Wa Korean
Restaurant taking up space in Mal Kota Kasablanka. With positive net take-up, the
market vacancy rate declined to 3.7% in 2Q14.
120
Jakarta: Retail
Demand rebounds, helped by restored retailers confidence

Landlords continue to focus on occupancy levels and hold rents steady
With no changes in capital values, yields remain broadly stable
Capital Value
Delhi: Retail
Retailers eye smaller stores or high streets due to limited quality mall space
Good performing malls driving rent increments
Capital values rise in Prime South and Prime Others
Financial Indices
140
130
Demand
Index
120
110
100
90
80
4Q09
4Q10
4Q11
Rental Value Index
4Q12
4Q13
4Q14
Capital Value Index

Source: JLL
Within the Prime South submarket, Nine West leased 3,000 sq ft in Select Citywalk
and Woodland leased 2,500 sq ft in DLF Courtyard in Saket. Triumph Motorcycles
leased 3,200 sq ft in Vasant Square, Hackett and Armani Junior leased 1,800 sq ft and
2,000 sq ft, respectively in DLF Emporio. Lifestyle leased 24,000 sq ft in Moments
Mall, CnM leased 20,000 sq ft in MGF City Square and Pure Home+Living leased
2,000 sq ft in Pacific Mall.
Physical Indicators
In the Suburbs submarket, Pizza Express leased 7,317 sq ft in Ambience Mall and
Inox leased 16,000 sq ft in Gurgaon Dreamz, in the Gurgaon precinct. Inox also leased
30,000 sq ft in EF3 Mall in the Faridabad precinct. Smaller-sized leases were recorded
in Noida, Ghaziabad and Greater Noida precincts, largely by domestic retailers.
400
300
Thousand sqm
Delhi: Retail
Financial Indicators are for the Prime South.
Supply
200
No new completions were recorded in the National Capital Region retail market in 2Q14.
Asset Performance
100
In 2Q14, net absorption remained net negative, although some momentum was visible
in leasing activity during the quarter. Retailers are showing some positive intention of
expanding, but only in quality mall developments. However, with vacant space limited
in such projects, retailers are looking to scale down their store sizes or turning to high
streets. Net absorption was net negative in Prime South, primarily due to the cyclical
nature of lease expirations, tenant adjustments and the downsizing of store sizes by
retailers. The Prime Others recorded modest positive absorption, while the Suburbs
was marginally net negative. The overall vacancy rate rose by 10 bps q-o-q to 24.5%.
Overall rents remained relatively stable, although minor increments of less than 1%
q-o-q were recorded in Prime South and Prime Others submarkets.
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Rental Information
Rental Value^
INR 247 psf pm
Stage in Cycle
Rents rising

Last Trough
14
Capital values moved up by less than 1% q-o-q in Prime South, while they increased
by 1.7% q-o-q in the Prime Others submarket on account of leased retail assets being
considered by investors. This resulted in the average market yield in Prime Others
compressing by 10 bps during the quarter.
12-Month Outlook
Retailer expansion is likely to regain some momentum with an expected improvement
in macroeconomic fundamentals. While occupancy costs and business margin
oriented expansion remain key factors in their business plans, retailers remain keen to
expand although are limiting themselves to good-quality projects. FDI in multi-brand
retail is being reconsidered by the new government. Single-brand retail is likely to spur
demand in the retail sector as new entrants and active retailers plan expansion,
contributing towards absorption going forward.
Retailer interest is likely to be sustained in Prime South, with rents showing marginal
growth. Rent increments in other retail markets are likely to be driven by projects that
are performing well. Capital values may show slightly higher growth compared to
rents, especially for leased assets.
^ gross, on GFA
12-Month Outlook
Rental Value
Capital Value
Note: Delhi Retail refers to Delhis Overall retail market.
Mumbai: Retail
Absorption was particularly weak in Prime North, which severely lacked good quality
mall space and faced stiff competition from prominent high streets. Prime South saw a
few notable leases being signed at malls within the submarket, while Suburbs
contributed the largest share of overall net absorption.
Supply
With one mall becoming operational during the quarter, total stock of retail space
increased by 0.6% q-o-q to 19.13 million sq ft. This new mall is located in the Navi
Mumbai region within the Suburbs submarket.
The overall vacancy rate continued to hover around 21% as absorption in good malls
was met with rising vacant space in poorly built or managed malls. The majority of the
poorly built malls have witnessed a rise in their vacancy rates over the last two quarters.
120
110
100
90
80
4Q09
As a result, overall rents in Mumbai grew by 0.7% q-o-q to INR 124 per sq ft per month.
For the reasons mentioned above, capital values also rose marginally by 0.4% q-o-q
to INR 11,854 per sq ft. With rents rising at a relatively faster pace than capital values,
average market yields rose by 10 basis points to 11.3%.
12-Month Outlook
We expect two good quality malls to commence operations in the next 35 quarters.
The opening of these malls is likely to come at a time when the retail market witnesses
a transition in retailer sentiment. Many retailers have been taking a wait-and-see
approach for some time and holding back on their expansion plans due to policyrelated uncertainties. However, with the formation of a new pro-reform government,
this may help trigger demand. Therefore, new supply should not have an adverse
impact on rents and capital values. However, high streets are likely to continue to
attract a sizeable portion of demand in the near-term.
4Q11
4Q12
4Q13
Financial Indicators are for the Prime South.
Physical Indicators
400
Thousand sqm
300
200
100
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Rental Information
Rental Value^
INR 249 psf pm
Stage in Cycle
Rents rising

Last Trough
13
^ gross, on GFA
12-Month Outlook
Rental Value
Note: Mumbai Retail refers to Mumbais Overall retail market.
4Q14
Capital Value Index

Source: JLL
Asset Performance
Rents in the Prime South and Suburbs marginally increased, largely as a consequence
of increasing demand by retailers for space in quality malls. However, in Prime North,
while demand was rising, stiff competition from high streets limited the ability of mall
developers to raise rents. Moreover, this submarket lacks good quality retail malls
required to command an increase in rents.
4Q10
Rental Value Index
Perth: Office
Net absorption during 2Q14 stood at 49,100 sq ft, falling from 68,900 sq ft in the
previous quarter. However, underlying demand for retail space remained higher than
the low levels witnessed at end-2013. A lack of quality mall space and limited supply of
new malls have led many reputable retailers to lease space on prominent high streets.
130
Mumbai: Retail
Demand
Financial Indices
Index
One mall completes in Navi Mumbai

Overall rents increase in Prime South and Suburbs
Average market yield expands as rental growth outpaces capital values
Capital Value
Sydney: Retail
Lead indicators are strengthening
Vacancy rates edge higher in 1H14
Sub-regional yields continue to tighten
Financial Indicators
120
Demand
110
Index
Retail turnover growth in NSW has recovered significantly over the past twelve months.
The Australia Bureau of Statistics reported that retail turnover growth (year-ended) in
NSW was 7.3% in the 12 months to May 2014, up from just 2.7% in the 12 months to
May 2013. However, this has not yet translated into stronger leasing demand.
100
90
4Q09
4Q10
4Q11
4Q12
4Q13
4Q14
Rental Value Index

Source: JLL
The average Sydney retail vacancy rate for specialty shops edged slightly higher in 1H14
to 2.4% from 2.2% but still remains the lowest in the country. The increase in the average
was driven by the CBD which increased to 3.6% from 3.3% and sub-regional to 2.6%
from 1.9%, although partially offset by a decline in neighbourhood from 2.7% to 2.5%.
International retailers continue to be one of the key drivers of leasing activity with the US
retailer, Brooks Brothers, committing to a new store in Martin Place in Sydneys CBD.
Construction activity in the Sydney retail market has begun to increase. Annual
completions appear to have reached a trough in 2013 (106,800 sqm), with 129,000
sqm either already completed or under construction and scheduled to complete in
2014, and a further 134,500 sqm under construction scheduled to complete in 2015.
There have been two distinct themes in retail construction activity. Firstly, the need for
institutional landlords to refurbish and expand existing centres and the expansion of
the two major retail conglomerates (Woolworths and Wesfarmers) to expand their
home hardware store chains and supermarkets.
Physical Indicators
250
200
150
Thousand sqm
Sydney: Retail
Supply
100
50
0
09
10
11
12
Completions
13
14F
Future Supply
Asset Performance
Source: JLL

supply is for 2H14.
Rental Information
Rental Value^
AUD 1933 psm pa
Stage in Cycle
Rents stable

Last Peak
11
12-Month Outlook
Capital Value
Sub-regional, neighbourhood, prime CBD and bulky goods average rents remained
unchanged in 2Q14. Average super-prime CBD rents increased 0.5% q-o-q driven by
demand from international retailers for super-prime retail sites with high exposure and
limited available space. Average specialty rents in regional centres declined by 0.25%
q-o-q in 2Q14 as high occupancy cost ratios continue to weigh on tenants.
While retail investment activity has been lower nationally in 1H14, there has been a
reasonable level of activity in the Sydney market. There were ten sales transactions
totalling AUD 321.8 million in New South Wales in 2Q14. Sub-regional format has
been the most active with a significant wave of activity occurring. In early July, one
further sub-regional centre has transacted with additional transactions close to being
concluded. A stable yet robust level of investor demand, combined with a lack of
opportunities to acquire assets, is driving yield compression in the retail sector.
12-Month Outlook
^ net, on GLA
Rental Value
The largest project to complete in 2014 will be AMP Capitals 45,000 sqm expansion
and redevelopment of Macquarie Centre in North Ryde in 4Q14, followed by Colonials
27,800 sqm expansion and redevelopment of DFO Homebush which completed in
1Q14. The remainder of the 2014 supply will comprise a range of supermarket based
centres and home hardware stores.
NA
The 12-month outlook for the Sydney retail market continues to strengthen as retail
turnover growth continues to grow at an above trend pace. Leasing market conditions
should improve from the subdued demand levels witnessed over the past three years
resulting in a reduction in vacancy rates and modest uplift in rental growth. We expect
investment demand to remain firm but activity is likely to slow as opportunities remain
limited.
Note: Sydney Retail refers to Sydneys Overall retail market.
Melbourne: Retail
Financial Indicators
120
Demand
Leasing market conditions are improving from the subdued demand levels witnessed
over the previous three years. The Melbourne CBD continues to be revitalised with
new supply, enhancing the retail offerings and drawing shoppers in from the suburbs.
The Melbourne CBD vacancy rate declined from 4.2% in December 2013 to 3.5% in
June 2014. Vacancy rates fell in all retail formats in 1H14 except regional centres
which remained low and stable at 0.6%.
110
Index
Growth in Victorian retail turnover has remained strong, rising by 5.4% per annum
(year-ended) in May 2014, higher than long term 15-year average of 4.6% per annum.
Food categories remain a key driver with supermarkets, liquor and cafes/restaurants
reporting above trend levels of growth, while department stores remain a detractor
from growth, a theme consistent with the national trend.
100
90
4Q09
4Q10
4Q11
4Q12
4Q13
12
13
4Q14
Rental Value Index

Source: JLL
Asset Performance
Stronger retail trading conditions and a small decline in vacancy rates did not translate
into a pick-up in rental growth in 2Q14. Changes in average rents were mixed across
retail formats in Melbourne in 2Q14. Regional centres recorded a decline of 0.5% q-o-q
while neighbourhood centres recorded growth of 0.5%. All other formats were unchanged.
Investment activity was relatively low in 2Q14 with sales volumes of just AUD 364 million.
Some of the notable transactions include: 25% share in DFO South Wharf
(AUD 87.5 million), Waurn Ponds (AUD 63 million) and Somerville (AUD 42.1 million).
Retail yields remained steady across the sub-sectors, except for prime CBD yields, which
tightened by 50 basis points at the lower end to now range between 6.00% and 7.50%.
Physical Indicators
400
350
300
Thousand sqm
There were three completions in 2Q14 comprising Emporium Melbourne (45,900 sqm)
in the CBD, a supermarket based centre in Seville (5,000 sqm) and a Bunnings
Warehouse in Sunbury (11,400 sqm). Only one project commenced in 2Q14, the
Pakenham Lifestyle Centre (Stage 2), a 16,000 sqm extension to a bulky goods centre.
Melbourne: Retail
Supply
Melbourne retail supply is slowing from the peak of 309,600 sqm in 2013, with just
81,500 sqm either already completed or under construction and scheduled to complete
in 2014. Beyond 2014, completions are expected to be below trend, with just 123,300
sqm of retail space under construction due to complete over 2015 and 2016. Historically,
annual supply in Melbourne has averaged 166,000 sqm over the past 15-years.
250
200
150
100
50
0
09
10
11
Completions
14F
Future Supply
Source: JLL

supply is for 2H14.
12-Month Outlook
A sustained recovery in retail spending growth will translate to leasing demand with a
lag. With a small supply pipeline in 2014 and 2015, vacancy rates are likely to decline
further. Rental growth is forecast to remain stable in 2014 before beginning to recover
slowly from 2015. As fundamentals become healthier, there is likely to be strong
institutional investor demand for retail investments resulting in further yield
compression across all formats.
Rental Information
Rental Value^
AUD 1,462 psm pa
Stage in Cycle
Rents stable

Last Peak
^ net, on NLA
12-Month Outlook
Rental Value
Note: Melbourne Retail refers to Melbournes Overall retail market.
Perth: Office
Supply of retail space is contracting

Rental trends are mixed between shopping centre types
Investment volumes remain low but demand remains firm
Capital Value
NA
Hong Kong: Residential

Sales market up slightly but still well below normal levels
Weak demand for leasing properties leads to further rental corrections
Discounting at new launches continues to weigh on secondary home prices
Financial Indices
200
180
Demand
Index
160
In mid-May, the government relaxed conditions associated with the Double Stamp
Duty (DSD) policy. Under the changes, second-home buyers can seek a refund of the
DSD if their first home is sold within six months of the conveyance date rather than the
sale and purchase agreement date of the new flat. For buyers upgrading through the
primary sales market, the grace period could potentially be extended from six months
to a maximum of 36 months.
140
120
100
80
60
4Q09
4Q10
4Q11
4Q12
4Q13
4Q14

Source: JLL
Demand for luxury units remained soft in 2Q14. Although 55 properties priced above
HKD 50 million were transacted, up 3.8% q-o-q and 5.8% y-o-y, the figure was still
below the ten-year (20042013) quarterly average of 73 transactions. Market activity
in the overall market picked-up noticeably, albeit off a lower base of comparison, rising
by 48.4% q-o-q and 39.9% y-o-y to 16,011 transactions.
Physical Indicators
The luxury sales market was highlighted by the launch of Grand Austin in West
Kowloon and Mayfair By The Sea I and II in Tai Po, which were put up for sale towards
the end of 2Q14. Response to these launches was positive. Over 60% of the 691 units
at Grand Austin and over 40% of the combined 1,091 units at Mayfair By The Sea I
and II were sold.
Rental Value Index
Capital Value Index
1,000
Properties seeking lower lump sum rentals attracted the strongest interest in an
otherwise quiet luxury residential leasing market.
800
600
Hong Kong: Residential
Units
Supply
Nine luxury projects were scheduled to have been completed in 2Q14, providing 34 luxury
units to the market.
400
200
0
Asset Performance
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Rental Information
Rental Value^
HKD 43.2 psf pm
Stage in Cycle
Decline slowing

Last Peak
11
With buyers being drawn to the primary sales market, some vendors in the secondary
market lowered asking prices, contributing to a mild 0.3% q-o-q correction in capital
values. Lacklustre leasing demand, coupled with tight housing budgets, brought luxury
rents down further by 2.3% q-o-q over the same period.
12-Month Outlook
Looking ahead, more new residential schemes are set to be launched for the sales
market, keeping the primary sales market as the main focus of buying activity. In view
of increased competition, developers are likely to need to continue to set prices at
competitive levels and offer discounts to drive sales volumes. Price discounting in the
primary sales market along with interest rate uncertainty should continue to weigh on
capital values. However, the decline in home prices forecasted for 2014 is now likely to
be less severe than our earlier forecasts. As such, we have revised our forecast for
luxury home prices to drop by 510% in 2014 instead of the previous 1015%. Leasing
activity is expected to remain quiet on the back of lacklustre expatriate hiring. Coupled
with an increase in leasing stock amid a slow sales market, luxury rents are expected
to fall further.
^ net, on NFA
12-Month Outlook
Rental Value
Capital Value
Note: Hong Kong Residential refers to Hong Kongs Overall Luxury residential market.
Beijing: Residential
Financial Indices
160
150
Demand
Supply
Five luxury apartment projects totalling 617 units and four high-end villa projects with
315 units were released to the market in 2Q14. One unit at No. 7 Beiheyan Avenue, a
26-unit luxury apartment project in the city centre, sold for RMB 105,000 per sqm, the
highest price among all newly launched projects. The refurbished Kerry Residence,
which opened in early 2Q14, added 193 serviced apartment units to the leasing
market.
Asset Performance
The rising transaction volumes supported a continued increase in transaction prices.
The primary high-end apartment market recorded price growth of 8.4% q-o-q, and
the secondary market increased 1.2% q-o-q. Some landlords facing rising vacancy
rates offered rental incentives to attract tenants. Luxury apartment rental growth was
relatively stable at 0.3% q-o-q while villas declined 2.2% q-o-q, due to weak demand
from expatriates and insufficient demand from other sources. However, rents for
serviced apartments rose slightly by 0.4% q-o-q as high-occupancy projects had
greater bargaining power.
12-Month Outlook
With home purchase restrictions to remain in effect, the high-end sales volume is likely
to remain low for the remainder of 2014. While the upward trend for rising home prices
is not projected to change, price growth is expected to be limited in the second half
of 2014. The overall vacancy rate is likely to decrease as no new serviced apartment
projects are expected to enter the market in the next 12 months. Given slower
expansion by foreign companies, we do not expect leasing demand in the high-end
leasing market to see any quick upturn over the remainder of 2014, and thus, rents are
expected to be stable.
Index
130
120
110
100
90
4Q09
4Q10
4Q11
4Q12
Rental Value Index
4Q13

Source: JLL
Financial Indicators are for the overall luxury market.
Physical Indicators
15 ,000
12,000
9,000
6,000
3,000
0
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Physical Indicators are for the Overall luxury market.
Rental Information
Rental Value^
RMB 125.6 psm pm
Stage in Cycle
Rents stable

Last Peak
^ gross, on GFA
12-Month Outlook
Rental Value
Note: Beijing Residential refers to Beijings Overall Luxury and High-end residential market.
4Q14
Capital Value Index
Units
Sales volumes for the mass residential market declined 3% q-o-q in 2Q14. Compared
to the falling transaction volumes in the mass market, demand in the high-end
residential primary sales market improved slightly in 2Q14. The high-end apartment
sales volume was up 12% q-o-q, but remained 61% below that of the same period last
year. Meanwhile, total villa sales climbed 23% q-o-q in the same period, an increase
of 13% y-o-y. Several projects achieved large sales volumes due to the high quality
of the buildings and their attractive prices. Among them, Zhen Yuan in the Wangjing
submarket sold a total of 232 units, after releasing 100 units to the market. Chinoiserie
Villas, meanwhile, launched 20 units and sold 7 at an average price of RMB 74,900
per sqm. Leasing demand from expatriates working for MNCs increased in 2Q14, but
was still weak compared to the same time last year. Net absorption was boosted by
strong leasing at the newly refurbished Kerry Residence and Lee Garden, holding the
citywide serviced apartment vacancy rate nearly flat.
140
Capital Value
Beijing: Residential
Transaction volumes for high-end apartments remains low

Rents continue to decline despite slight recovery in demand
Primary market is witnessing steady rise in capital values
Shanghai: Residential
Several developers offer discounts, luring buyers back to the high-end market
Serviced apartment rents edge up as vacancy falls
High-end primary sales flat despite some developers reducing prices
Financial Indices
140
Demand
Index
120
100
80
4Q09
4Q10
4Q11
4Q12
Rental Value Index
4Q13
4Q14
Capital Value Index

Source: JLL
In the leasing market, demand picked up moderately in 2Q14 as international schools

in Shanghai became active, leasing serviced apartments for their faculty members
and leading to a pick-up in new leases. With no new completions in the quarter, the
vacancy rate for serviced apartments fell by 2.8 percentage points to 15.1% in 2Q14.
Physical Indicators
6,000
Supply
In the sales market, The Bound of Bund in Huangpu District, developed by China
Resources, launched 106 units in 2Q14, of which 29 were sold during the quarter at an
average price of RMB 83,361 per sqm. Meanwhile, West Shore developed by Poly
launched 131 units for sale in late June. In the leasing market, no new serviced
apartment projects were completed in 2Q14.
5,000
Shanghai: Residential
Units
4,000
3,000
2,000
Asset Performance
1,000
0
Buying sentiment in Shanghais residential market deteriorated further in April and May
as home buyers remained on the sidelines amidst policy and price uncertainties. As a
result, sales volumes of commodity housing saw a contraction of 17% and 22% m-o-m
in April and May, respectively. Coming into June, as the Peoples Bank of China urged
banks to increase mortgage availability especially for first-time home buyers, market
sentiment gradually improved towards the end of June, leading to a recovery of 19%
m-o-m in sales volumes for June. As such, the total sales volume reached 2.1 million
sqm for the full quarter, up slightly by 1.4% q-o-q, though still down 29% from a year
ago. In the high-end segment, several cash-strapped developers offered discounts for
select units in their projects, luring buyers back to the market. As a result, the high-end
segment saw 295 units sold during the quarter, up 74% from 1Q14.
09
10
11
Completions
12
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Primary prices for high-end apartments remained largely flat in the quarter.
Although several projects offered price discounts for a few units, most developers in
Shanghai held their prices firm. However, in the secondary market individual sellers
became more flexible on their sales prices due to reduced enquiries in 2Q14. As a
result, average secondary prices stabilised in 2Q14. In the leasing market, rental
performance diverged among different projects. Landlords of projects facing rising
vacancy rates offered more rental discounts in the quarter, while landlords of projects
with high occupancy, such as Residences at Kerry Parkside in Pudong District
continued to raise rents. On average, rents for serviced apartments edged up by 0.4%
q-o-q in 2Q14. In the land sales market, developers appetite for land acquisitions
softened due to weaker market sentiment in 2Q14.
12-Month Outlook
Rental Information
Rental Value^
RMB 130.2 psm pm
Stage in Cycle
Growth slowing

Last Trough
18
^ gross, on GFA
12-Month Outlook
Rental Value
Although some tier-II cities have reportedly eased home purchase restrictions (HPRs)
in the quarter, Shanghai is unlikely to see any relaxation of HPRs in 2014. However,
improving mortgage availability coupled with some price discounts are likely to result
in a gradual sales recovery in the second half of the year. In the high-end segment, we
maintain our outlook for a flat price trend in the primary market in 2014 due to limited
new supply and healthy market fundamentals in Shanghai. In the leasing market,
competition from non-serviced apartments should continue to put downward pressure
on rents for serviced apartments. As such, rental growth for serviced apartments is
likely be very limited in 2H14 despite solid leasing demand.
Capital Value
Note: Shanghai Residential refers to Shanghais high-end residential market.
Singapore: Residential
Financial Indices
150
140
130
Demand
New sales activity remained muted due to poor market sentiment, with only 72 sales
transactions registered in the Prime districts in 2Q14, down 22.6% q-o-q. New sales
volumes in 2Q14 showed a steeper year-on-year decline of 80.2%.
Supply
Preliminary figures from the Building and Construction Authority of Singapore showed
that new completions in 2Q14 stood at 822 units spread over five projects. This was a
strong 50% q-o-q increase from the 547 units of 1Q14. The largest projects to obtain
Temporary Occupation Permits in 2Q14 were Cyan on Keng Chin Road (278 units),
Sophia Residences (272 units) and Lincoln Suites (175 units). Other smaller projects
included Skyline @ Orchard Boulevard (54 units) and Le Nouvel Ardmore (43 units).
120
110
Index
Resale market activity within Prime districts 9, 10 and 11 registered a slight pick-up in
sales volumes in 2Q14, with the number of units sold rising 18.6% q-o-q to 191 units,
based on preliminary estimates. After three consecutive quarters of weak sales due to
the Total Debt Servicing Ratio framework, the resale market improved slightly in 2Q14.
However, it is too early to determine if the market has reached a bottom.
100
90
80
70
60
4Q09
Lacklustre investor demand persisted in 2Q14 causing capital values of Typical Prime
properties to fall by 1% q-o-q, after three consecutive quarters of marginal decline at
0.3% on average per quarter. Luxury Prime capital values followed suit, falling by 1.3%
q-o-q, marking the seventh straight quarter of decline.
4Q12
4Q13
4Q14
RV Index (Luxury)
CV Index (Luxury)

Source: JLL
Physical Indicators
4,000
Asset Performance
3,000
Units
Monthly leasing volumes within the Prime districts were similar to 1Q14 with a total of
2,359 leases signed in April and May combined. Finance-related companies continue
to relocate business functions offshore, with the market witnessing more cases of early
lease termination. As a result, market sentiment remains cautious with rental volumes
relatively flat. Gross rents in the Typical Prime segment softened further by 2% q-o-q
to SGD 3.82 per sq ft per month, while the Luxury Prime segment declined 2.8% q-o-q
to SGD 4.37 per sq ft per month. However, units in select properties which are typical
leasing strongholds continue to see strong demand.
4Q10
4Q11
RV Index (Prime)
CV Index (Prime)
2,000
1,000
09
10
11
Completions
12
13
14F
Future Supply
Source: JLL

supply is for 2H14.
12-Month Outlook
The tighter lending environment has tapered investment demand and weakened home
prices. Cautious buying in the Prime market is likely to keep volumes low and capital
values soft. With the full year supply for 2014 expected to surpass the annual level
witnessed in the past two years and coupled with softer leasing demand, rents are
likely to face further downward pressure with large-scale projects at greater risk.
Rental Information
Rental Value^
SGD 4.37 psf pm
Stage in Cycle
Decline slowing

Last Peak
12
^ gross, on GFA
12-Month Outlook
Rental Value
Note: Singapore Residential refers to Singapores Overall Prime and Luxury residential markets.
Capital Value
Singapore: Residential
New sales activity declines while resale volumes slight improve

Expectations of strong oncoming supply keeps rents muted
Prime market capital values soften on back of cautious buying
Bangkok: Residential
Less new supply coincides with slightly weaker demand
Gross rents remain steady despite a more active leasing market
Both capital values and yields remain unchanged
Financial Indices
120
Demand
110
Index
Demand slightly decreased in 2Q14, during which two new projects were launched.
Rhythm Sukhumvit 3638, a 496-unit high-end condominium by AP reported a presales rate of 60% as at end-2Q14, while Circle Sukhumvit 31 by Fragrant Real Estate
Development Group Ltd., a high-end condominium with 139 units achieved a pre-sales
rate of 88%.
100
90

Source: JLL
In 2Q14, the leasing market was active relative to the previous quarter owing to a
limited supply of luxury apartments. The dwindling amount of stock is a function of a
growing numbers of conversions to hotels and serviced apartments, which can yield
higher returns. Also some developers of new projects have a preference for
condominiums, which also can achieve much higher yields.
Physical Indicators
The vacancy rate declined in 2Q14, owing to cyclical expatriate tenancy patterns. The
second quarter is typically a period when expatriates relocate to Bangkok. However,
the numbers of new expatriate arrivals slowed relatively the previous year due to
concerns over the political situation in Thailand.
80
4Q09
4Q10
4Q11
4Q12
Rental Value Index
4Q13
4Q14
Capital Value Index
5,000
Supply
Two new high-end condominium projects, Tidy Deluxe and Centric Sathorn-St. Louis
completed in 2Q14, bringing 505 new units to the market and increasing total stock to
28,640 units.
4,000
Bangkok: Residential
Units
3,000
2,000
1,000
0
09
10
11
Completions
12
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Another six new high-end condominiums are scheduled to complete in 3Q14. The
projects are the 224-unit Condolette Dwell, 128-unit The Room Sukhumvit 40, 197-unit
HQ Thonglor, 923-unit Rhythm Sathorn, 116-unit Mirage Sukhumvit 27 and 484-unit Q.
House Sukhumvit 79. All six projects have achieved a sales rate of more than 90% as
at end-2Q14. Two new high-end condominium projects with 635 units were launched
in the quarter and are scheduled to complete between 2016 and 2017.
No new luxury apartments launched in 2Q14 as most developers remain interested in
building condominiums. Total apartment stock at end-2Q14 was 4,428 units.
Asset Performance
Although overall demand for condominiums dropped in 2Q14, gross rents held steady
at THB 511 per sqm per month. However, on a y-o-y basis gross rents were slightly
higher by 0.9%.
Capital values also remained stable q-o-q at THB 111,033 per sqm but were up 1.5%
y-o-y. As both gross rents and capital values held steady q-o-q, market yield remained
unchanged at 4.9%.
Rental Information
12-Month Outlook
Rental Value^
THB 511 psm pm
Stage in Cycle
Growth slowing
Last Trough
10
^ gross, on NLA
12-Month Outlook
Rental Value
Capital Value
By end-2014, more than 2,900 new high-end condominium units in Central Bangkok
and Central East are expected to complete, amongst which more than 90% have been
sold. However, a continuing labour shortage could delay the construction schedule of
some condominium projects.
After a limited number of new project launches in 1H14, developers are likely to
considering ramping up the number of new launches in the 2H14 as consumer
confidence is expected to rebound in the wake of the political unrest. Sales rates for
new condominiums are expected to remain strong as developable freehold land is
becoming increasingly scarce.
Note: Bangkok Residential refers to Bangkoks Central high-end and luxury residential market.
Kuala Lumpur: Residential

Financial Indices
140
130
Demand
Residensi 22 is located on Jalan Kiara 3 in Mont Kiara. The built-up areas for these
units is relatively large, ranging between 1,8002,900 sq ft and are priced at MYR 850
per sq ft. The developer, UEM Sunrise, is offering a 10% price discount and free legal
fees on Sale and Purchase agreement (SPA) and loan documentation. The developers
good reputation witnessed many of its purchasers being repeat buyers (having
purchased units in other developments by the developer) and the developer registered
a 50% sales rate as at end-2Q14.
The Expressionz Professional Suites is located on Jalan 1/65A in KL City. The built-up
areas for these condominiums range between 6741,405 sq ft and are priced at
MYR 1,300 per sq ft. A unique feature of the development is its dual key concept where
these units are separated into two independent units. The units are fully furnished and
the developer, Exsim Group Berhad, is offering a 13% discount on the first two down
payments, free legal fees on SPA, loan documentation and stamp duty. The developer
began marketing activities 6 months prior to its launch and achieved a 70% sales rate
as at end-2Q14, with a mix of Malaysian and foreign buyers.
120
Index
In 2Q14, Residensi 22 (Block B) and Expressionz Professional Suites comprising 270

units and 447 units respectively were launched.
110
100
90
80
4Q09
Asset Performance
In 2Q14, gross rental rates and capital values remained stable at MYR 3.25 per sq ft
per month and MYR 728 per sq ft, respectively. As such, the average market yield was
unchanged at 4.7%.
12-Month Outlook
Demand for high-end developments is expected to continue to be slow and some
developers are likely to continue to defer launch dates until the market becomes more
receptive to the current high pricing. However, some developers will continue to soft
launch and open their units for bookings or registration and only officially launch (6 to
9 months on average after soft launching) when they have secured a satisfactory
number of booked sales. With cooling measures implemented in 2013, which involved
restrictions on financial incentives, many developers are now providing fully furnished
units to entice demand, justify pricing and increase profit margins.
Local purchasers have become less receptive to properties priced above MYR 2 million
and developers of such products are expected to target high net worth foreigners,
mainly through foreign agents. Weak demand in the rental market, along with
significant new supply is likely to put downward pressure on rents of existing stock
while capital values are expected to be stable.
4Q11
4Q12
4Q13
Financial Indicators are for the Prime market.
Physical Indicators
4,000
3,000
Units
2,000
1,000
09
10
11
12
Completions
13
14F
Future Supply

supply is for 2H14.
Rental Information
Rental Value^
MYR 3.25 psf pm
Stage in Cycle
Rents stable

Last Peak
23
^ gross, on NLA
12-Month Outlook
Rental Value
Note: Kuala Lumpur Residential refers to Kuala Lumpurs Prime residential markets.
4Q14
Capital Value Index

Supply
Market stock increased by 735 units to 25,497 units in 2Q14, with the completion of
three projects. The developments were M Suites (Ampang Hilir), Kenny Hills
Residences (Kenny Hills) and Laman Ceylon (Bukit Ceylon).
4Q10
Rental Value Index
Capital Value
Kuala Lumpur: Residential
Three projects complete and two high-end projects launch

Strong investor holding power underpins stable rentals
Yields hold firm and capital values remain steady
Jakarta: Residential
Limited enquiries and competition impacts apartment demand
Weak demand and rising vacancy puts downward pressure on rents
Capital values decline with average market yields of 8.6%
Financial Indices
210
190
Demand
Index
170
150
130
110
90
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index

Source: JLL
Meanwhile, the strata condominium market saw a significant increase in take-up

between April and June 2014, with total absorption for the quarter reaching 327 units.
The rise was largely a reflection of sales at two new completions, MyHome Apartment
and Pakubuwono Signature.
Supply
Physical Indicators
No apartment projects completed in 2Q14. As such, total existing stock in the leasing
market remained at 2,327 units. The completion of Ascoft Serviced Apartment in
Ciputra World 1 was rescheduled to 2H14 due to slow finishing works. The project is
expected to be the only addition for this year.
250
200
Two condominiums projects completed, MyHome Apartment in Ciputra World 1 and

Pakubuwono Signature in the Kebayoran Baru area, adding 324 units and taking total
stock to 7,069 units. Due to slow finishing works, the completions of several
condominium projects, i.e. The Grove Suites, The Grove Empyreal and Masterpiece,
were rescheduled to end-2014 or early 2015.
Units
150
Jakarta: Residential
100
50
0
Demand for luxury rental apartments continued to weaken along with a decline in
expatriate arrivals and business travel. The trend was attributed to the current
economic slowdown and uncertainty prior to the presidential election, which prompted
companies to hold their expansion plans. While new enquiries were very limited,
demand was concentrated in select quality apartments in prime CBD locations. Overall,
more units were returned to the market than leased in the quarter. As such, the
vacancy rate in the Jakarta rental apartment market increased from 11.7% to 14.7% by
end-June 2014.
Asset Performance
09
10
11
Completions
12
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Limited enquiries and tight competition among landlords to attract tenants continued to
put downward pressure on rents in the apartment market. The increase of vacancy
rates pushed some landlords to provide rent discounts, although a number of landlords
of good quality apartments managed to maintain stable rents. Overall, net effective
rents in the luxury apartment market in 2Q14 stood at USD 217 per sqm per annum,
down by 1.5% q-o-q. Along with the decline of rents, apartment capital values softened
by 0.8% q-o-q. Average market yields were 8.6% at end-2014.
12-Month Outlook
Rental Information
Rental Value^
USD 217 psm pa
Stage in Cycle
Rents Falling

Last Trough
Demand in the luxury apartment market is expected to soften in the remainder of 2014,
in view of slower business expansion and the country holding a general election.
These two factors are likely to affect the growth of expatriate numbers in the capital
city. However, limited future stock in the market is likely to provide some support for
apartment rents. In the condominium market, buying sentiment is expected to remain
weak in the next few quarters because of the high interest rate environment and
uncertainty surrounding the election. Sales are likely be driven by quality projects
attached to international luxury hotels. Many cash rich Indonesian buyers perceive
residential properties as an attractive investment that offers good rental income and
prestige.
12-Month Outlook
Rental Value
Capital Value
Note: Jakarta Residential refers to Jakartas Overall Prime residential market.
Manila: Residential
Financial Indices
160
150
140
Leasing activity in the luxury condominium market in Makati and Bonifacio Global City
(BGC) remained stable, supported by demand from expatriate workers in offshoring
and outsourcing (O&O) firms and high-income households.
130
Positive investment sentiment supported demand for luxury condominiums. Many

upcoming luxury residential towers launched in the past couple of years are almost
fully sold. In line with this, new projects were launched in the quarter as a result of the
positive sales take-up of pre-selling residential developments.
Supply
In 2Q14, four new developments completed, adding 3,328 units to the prevailing stock
in the market. The completed developments are Jazz Residences Tower C in the
fringe submarket of the Makati CBD, The Fort Victoria, 8 Forbes Town Road and Arya
Residences Tower 1 in BGC.
Rockwell Land recently launched its new tower at the Proscenium at Rockwell, the
Lorraine Tower, which is scheduled to complete in 2019. Shang Properties launched
a new project, The Rise by Shangri-La, which is scheduled to complete by 2017. Both
developments are in Makati City and are projected to contribute more than 3,000 units
to the existing stock.
Asset Performance
Buoyant leasing activity in the market has supported the continued growth of rents in
the luxury condominium market. Average rents grew by 1% q-o-q to PHP 8,484 per
sqm per annum in 2Q14.
Likewise, with sustained positive investment sentiment in the market, capital values
grew by 3.1% q-o-q to PHP 131,505 per sqm in 2Q14. As capital value growth
continued to outpace rent growth, investment yields decreased slightly by 10 bps q-o-q
to 6.5% in 2Q14.
120
110
100
90
80
4Q09
4Q10
4Q11
4Q12
4Q13
Rental Value Index
4Q14
Capital Value Index

Source: JLL
Physical Indicators
12,000
10,000
8,000
Units
Despite the large supply of newly completed developments, the vacancy rate dropped
by 50 bps q-o-q, from 6.2% in 1Q14 to 5.7% in 2Q14. On the other hand, net
absorption increased from 2,232 units in 1Q14 to 3,209 units in 2Q14 as recently
completed developments were taken up.
Index
Demand
6,000
4,000
2,000
0
09
10
11
Completions
12
13
14F
Future Supply
Source: JLL

supply is for 2H14.
12-Month Outlook
Leasing and investment demand are likely to continue growing on the back of the
positive outlook on the economy and the projected expansion of the O&O industry.
Sustained demand is expected to support modest increases in rents and capital values
over the remainder of the year.
Upcoming projects in the second half of 2014 are expected to total 3,800 units,
bringing total supply for 2014 to 9,800 units. The majority of these developments are
located in the Makati CBD and nearby submarkets. The large upcoming supply is
projected to drive up vacancy rates by end-2014.
Rental Information
Rental Value^
PHP 8,484 psm pa
Stage in Cycle
Rents rising

Last Trough
12-Month Outlook
Rental Value
Note: Manila Residential refers to the Makati CBD and Fringe Residential Condominium market.
Capital Value
Manila: Residential
Four developments complete, adding 3,328 units to total stock

Stable leasing demand sustains positive rent growth
Capital values continue to grow moderately, while market yields decline
Hong Kong: Industrial

Vacancy remains low with returning stock being quickly re-absorbed
Large spaces with monthly rents below HKD 10 per sq ft see strong demand
Owner-occupier purchases help push sales volumes and capital values higher
Financial Indices
180
170
160
Demand
Index
150
Visible trade improved slightly in 2Q14 with the total value of all exports and imports in
AprilMay growing by 1.7% y-o-y and 3.1%, respectively. While headline trade numbers
showed only moderate growth, air-freight cargo and container throughput volumes
were up 7% y-o-y and 6.3% y-o-y, respectively, over the same two-month period.
140
130
120
110
100
90
4Q09
4Q10
4Q11
4Q12
Rental Value Index
4Q13
4Q14
Capital Value Index

Source: JLL
In addition to the pick-up in external freight volumes, demand for warehousing space
was also supported by on-going outsourcing requirements. Japanese 3PL Konoike
Transport leased 58,500 sq ft in Gateway ts in Tsing Yi after securing a supply chain
management mandate from a Japanese fast fashion brand while Arvato Digital
Services leased the whole building at 18 Hoi Wah Road (172,600 sq ft) in Tuen Mun
after being awarded a service contract with a German OEM.
Demand for warehousing space close to the Kwai Chung container port remained
strong, especially for properties with floor plates over 40,000 sq ft and monthly rentals
below HKD 10 per sq ft. Hong Kong-based freight forwarder, U-Freight (UFL) leased
39,100 sq ft in Gateway ts while Mitex leased 16,000 sq ft in Hopewell Logistics
Centre in Kwai Chung. Both transactions were driven by expansion requirements.
Physical Indicators
500
Supply
450
400
There was no new supply completed in 2Q14. Supply will remain tight over the near
term as no new supply is scheduled for completion until 2015.
Thousand sqm
350
300
250
Asset Performance
200
Landlords continued to leverage on the tight vacancy situation to push rentals to new
record highs. In addition to properties in the Kwai Tsing area, strong rental growth was
also recorded in secondary locations such as Tuen Mun, Fanling and Sheung Shui.
250
100
50
0
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL
Hong Kong: Industrial

supply is for 2H14.
Capital values continued to trend higher, buoyed by several larger en bloc purchases.
Local retailers Bonjour and Chow Tai Fook each acquired buildings for owneroccupation; Bonjour acquired Harrington Building in Tsuen Wan for HKD 490 million
and Chow Tai Fook acquired World Peace Centre in Kwai Chung for HKD 850 million,
respectively. Logistics property fund, Goodman, acquired Central Textiles a group of
low rise industrial buildings in Tsuen Wan for about HKD 1 billion; reportedly for
redevelopment.
12-Month Outlook
Rental Information
Rental Value^
HKD 10.6 psf pm
Stage in Cycle
Rents rising

Last Trough
18
^ net, on GFA
12-Month Outlook
Rental Value
Hong Kongs visible trade is expected to steadily gather momentum over the next
618 months growing by 4.7% in 2014 and 12.7% in 2015. The pick-up in external
freight volumes should help offset any slowdown in demand from the local retail sector.
Coupled with the absence of new supply, vacancy rates are likely to remain at low
levels over the short term, supporting current rental levels. In view of the strongerthan-expected growth through 1H14, we have revised our full-year rental forecast up
to a range of 510%. The change in interest rate expectations most economists now
expect rates to rise gradually and over a longer period of time is likely to encourage
more investors back into the market, especially owner-occupiers; something that we
did not anticipate earlier in the year. With investor sentiment rising, warehouse market
yields may potentially compress further given the positive spread over other industrial
asset classes.
Capital Value
Note: Hong Kong Industrial refers to Hong Kongs Industrial Warehouse market.
Beijing: Industrial
Net absorption surges due mainly to 3PL demand
Market rents register a slight increase of 0.4% q-o-q
GLP acquires Treasury Beijing International Center for RMB 424 million
Financial Indices
180
160
Demand
140
Index
Third party logistics firms (3PLs) continued to drive demand for high quality nonbonded warehouse spaces. Two projects experienced strong take-up, including 15,000
sqm from two foreign 3PLs and 10,000 sqm from a domestic 3PL. In a rare example
of pre-leasing, one 3PL company signed a relocation deal at an upcoming project in
Tongzhou Logistics Park (TLP). Additional demand came from the pharmaceutical and
medical technology industries including a lease from a local pharmaceutical company,
which leased 12,000 sqm in Liangxiang. Several warehouse operators offer typical
3PL services such as picking, packing and delivery to last mile distribution points.
Some of them are changing their strategy to lease only to tenants who use these
services instead of renting to pure warehouse tenants.
120
100
80
4Q09
4Q10
4Q11
4Q12
Rental Value Index
4Q13
4Q14
Capital Value Index

Source: JLL
Supply
As several e-commerce firms have relocated their main distribution centres further
away to cheaper, more strategic locations like Wuqing and Langfang between Beijing
and Tianjin, these spaces are being backfilled by other tenant types. Half of the space
vacated by a large e-tailer in 1Q14 has already been leased. The relocation of many
e-commerce distribution centres has weakened the pricing power of Beijing landlords,
constraining rental growth. However, it is important to note the large e-commerce firms
continue to operate small distribution centres and last mile delivery points within Beijing.
Several investors have committed more capital to invest in the warehouse sector in
China, and a recent sale in Beijing attracted much interest. GLP acquired Beijing
International Logistics Centre from Forterra for RMB 424 million. Our analysis of the
sale indicates that the market yield compressed q-o-q.
300
250
200
150
100
50
0
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL

supply is for 2H14.
Beijing: Industrial
Asset Performance
Physical Indicators
Thousand sqm
Two projects were scheduled for 2Q14 and both delayed completion as they have not
yet received fire safety permits. This problem is not new, as both domestic and foreign
developers have consistently under-estimated the length of the permit approval
process in Beijing. For example, a project constructed by an international developer
faced the same problem when it completed construction in 3Q13. However, after
three quarters, this project is now fully leased and was able to substantially increase
achievable rents q-o-q.
12-Month Outlook
Over the next 12 months, 265,000 sqm of new supply is scheduled to complete
construction, over half of which is planned for future submarkets. These new projects
present tenants with options to upgrade from low quality warehouses. Due to
sustained demand from 3PLs, automotive and pharmaceuticals, we expect to see
rental growth accelerate modestly.
Rental Information
Rental Value^
Stage in Cycle
Rents rising

Last Trough
18
12-Month Outlook
Rental Value
Note: Beijing Industrial refers to Beijings Prime non-bonded logistics market.
Capital Value
Shanghai: Industrial
Non-bonded vacancy declines on strong take-up in Lingang
Demand remains stable with moderate non-bonded rental growth
APG commits USD 650 million for 20% stake in E-Shang
Financial Indices
170
Index
160
150
Demand
140
In the non-bonded market, leasing demand remained stable in 2Q14, but still relatively
weak compared to the markets peak from two years ago. Two new projects reached
completion in the quarter in West Shanghai with a combined pre-commitment rate of
50%. The overall vacancy rate fell, thanks to strong take-up in the long-subdued
Lingang submarket. For example, some existing tenants in GLPs Lingang project
expanded in order to consolidate their Shanghai warehousing capacity. However,
landlords continue to be cautious as leasing activities have not yet indicated a
sustained improvement in demand. In addition, inquiries were reported to be at a
similar level to the previous quarter.
130
120
110
100
90
80
4Q09
4Q10
4Q11
4Q12
Rental Value Index
4Q13
4Q14
Capital Value Index

Source: JLL
In the bonded market, demand improved further in 2Q14 on the back of a continued
recovery in international trade. In addition to 3PLs and trading companies, high-tech
manufacturers also became active in leasing bonded space in Waigaoqiao and Lingang.
With no new completions in the quarter, bonded vacancy continued to decline.
Physical Indicators
Supply
Two new non-bonded projects were completed in West Shanghai. GLP completed its
Liantang project in Qingpu District in the quarter, providing the market with 51,000 sqm
of single-storey non-bonded space, of which Haier pre-leased 70%. In Songjiang,
E-Shang completed a double-storey warehouse, adding 47,500 sqm to the market with
a pre-commitment rate of around 30%.
700
600
Thousand sqm
500
400
300
Asset Performance
200
With demand remaining stable, non-bonded rents posted slight growth of 0.9% q-o-q
to RMB 1.27 per sqm per day in 2Q14 as landlords remained concerned over the
sustainability of current demand levels.
100
0
09
10
11
12
Completions
13
14F
Future Supply
Source: JLL
Shanghai: Industrial

supply is for 2H14.
Enthusiasm from investors remained upbeat in the quarter. Investors continued to

pursue direct investment in logistics assets as well as equity stakes in developers. For
example, Dutch pension fund asset manager APG invested USD 650 million in
E-Shang, acquiring a 20% stake. E-Shang is one of the major warehouse developers
based in Shanghai with projects across a number of cities in China, including
Shanghai, Kunshan, Jiaxing and Jinan.
Shanghai is set to introduce a new land policy which will reduce the industrial land-use
period from 50 to 20 years. Secondary land prices rose in the quarter as developers
sought to pick up parcels unaffected by the policy.
12-Month Outlook
Rental Information
Rental Value^
Stage in Cycle
Rents rising

Last Trough
19
^net effective, on GFA
12-Month Outlook
Rental Value
Looking forward, there is over 500,000 sqm of non-bonded space scheduled for
completion over the remainder of 2014. However, based on current enquiry levels,
demand is unlikely to improve this year. As such, market vacancies are expected to
rise, which should weaken landlords pricing power. For the full year of 2014, we
expect non-bonded rents to grow by approximately 4% y-o-y, similar to the level of
2013 and down from the 20102012 period, when increases of 710% were the norm.
In contrast, rents in the bonded market are expected to see faster growth amid
optimism towards the Shanghai Free Trade Zone and an on-going improvement in
foreign trade.
Capital Value
Note: Shanghai Industrial refers to Shanghais Prime Industrial Logistics market.
Tokyo: Industrial
Strong demand in the inland area from the transportation sector
Rents continue a modest growth trend for the 12th consecutive quarter
GLP J-Reit acquires GLP Tatsumi IIa for an NCF yield of 4.9%
Financial Indices
110
Demand
In 2Q14, strong leasing demand continued with occupiers coming from a range of
sectors including transportation and storage, wholesale and retail trade and
manufacturing. Strong take-up in the quarter was partly supply driven, with new
facilities having a high level of pre-commitment upon completion. Moreover, forward
commitment activity for new supply due in the next couple of years continued to be
healthy, in particular from 3PLs.
A major leasing transaction in the quarter included Ricoh Logistics taking up 50,000
sqm (assumed) in D Project Tokyo Jonanjima. In Greater Tokyo, Shibamata Transport
leased 14,000 sqm in Prologis Park Kitamoto, DHL Supply Chain 44,000 sqm in
Sagamihara Logistics Centre and Mitsubishi Shokuhin 30,000 sqm in D Project Hachioji.
Index
Key performance indicators in May were mixed, with industrial production increasing
0.8% y-o-y and exports decreasing 2.7% y-o-y, the first decline in 15 months.
Domestic demand was supported by a rise in corporate capital expenditures, while a
slowdown in the economies of some trade partners impacted exports.
105
95
90
4Q09
A number of new projects were added to the development pipeline in 2Q14 including
the Shinkiba Distribution Centre (GFA 46,000 sqm) which is due for completion in
2015. In Greater Tokyo, new developments included the Yokohama-shi Naka-ku
Distribution Centre (GFA 71,000 sqm) which is due in 2015, and Prologis Park
Narashino 5 (GFA 65,000 sqm) which is due in 2016. Additionally, Moriya Logistics
Centre (GFA 48,000 sqm) and Logi-Square Kuki (GFA 44,000 sqm) are due in 2016, in
the Inland area.
4Q10
4Q11
4Q12
4Q13
4Q14
1Q10
1Q11
1Q12
TEUs shipped per quarter
1Q13
1Q14
Rental Value Index
Arrow indicates 12-month outlook

Source: JLL
Container Throughput
1.4
Supply
1.3
1.2
TEUs (Million)
In 2Q14, the prime logistics market saw the completion of D Project Tokyo Jonanjima,
which increased stock by 50,000 sqm (GFA). In Greater Tokyo, new supply was ample
in the inland areas, with the completions of Prologis Park Kitamoto (GFA 74,000 sqm),
Sagamihara Logistics Center (GFA 44,000 sqm) and D Project Kita Hachioji Wing C
(GFA 29,000 sqm).
100
1.1
1.0
0.9
0.8
1Q09
Source: Bureau of Port and Harbour, Tokyo Metropolitan

Government
Asset Performance
Sales transactions in the quarter included GLP J-Reit acquiring two logistics facilities
located in the prime areas. Tatsumi IIa (GFA 17,000 sqm) was acquired for
JPY 6.694 billion or an NCF yield of 4.9%, while Tatsumi IIb (GFA 3,400 sqm) was
acquired for JPY 1.056 billion or an NCF cap rate of 5.3%.
12-month Outlook
According to economic forecasts from Oxford Economics, industrial production in 2014
is expected to grow 5.8% y-o-y, while exports should increase 6.9% y-o-y. With an
improving economic environment, demand for industrial space is likely to be supported
by the transportation and storage sector, in particular from 3PLs. This, coupled with
limited supply, and rents are expected to continue to grow modestly in the prime areas.
Despite Greater Tokyo recently seeing major additions to the development pipeline,
healthy forward commitments should limit the impact of a supply influx on vacancy.
Rental Information
Rental Value^
JPY 5,963 per tsubo

pm
Stage in Cycle
Rents rising

Last Trough
12
^ gross, on NLA
12-Month Outlook
Rental Value
Note: Tokyo Industrial refers to Tokyos Prime logistics market. Compiled in collaboration with Ichigo Real Estate Services Co., Ltd.
Tokyo: Industrial
1.8% y-o-y. Rental growth accelerated q-o-q and marked the 12th straight quarterly rise.
Capital Value
NA
Singapore: Industrial
Vacancy moves lower with fewer completions
Rents remain stable despite weaker demand from back-office users
Capital values hold steady as yields stabilise
Financial Indices
220
200
180
Demand
Index
160
Singapores economic growth forecast was downgraded by several economists

following a surprise 2.5% y-o-y contraction in manufacturing output in May. However,
when the more volatile biomedical sector was excluded, the decline was less steep at
0.5% y-o-y. This lower decline was driven largely by a reduction in electronics output
(7.5% y-o-y) which contributes one-third of total manufacturing production.
140
120
100
80
60
250
25
Demand for space in business parks remained largely healthy as existing projects
continued to attract attention, particularly corporations looking to expand R&D
capabilities. Realtek Semiconductor Corporation opened its regional headquarters and
R&D centre at International Business Park in June. This supported positive net
absorption of 19,000 sqm and a decline in vacancy to 16%. The improved vacancy
rate was also due to the limited completions in the quarter. However, this was not the
case for business parks catering to back room operations, with banks and IT firms
facing a labour crunch. Coupled with increasing occupancy costs due to the
appreciating Singapore dollar, this has prompted some banks to reduce their real
estate footprint through subletting of their unused premises if early termination is not
an option.
200
20
Supply
150
15
100
10
50
40
4Q09
4Q10
4Q11
4Q12
Rental Value Index
4Q13
4Q14
Capital Value Index

Source: JLL
50
09
10
11
12
Take-Up (net)
Future Supply
13
14F
Percent
Thousand sqm
Physical Indicators
Completions
Vacancy Rate
Singapore: Industrial
Source: JLL

In 2Q14, an estimated 10,000 sqm of business park space was completed, with the
remaining portion of Cleantech Two at Cleantech Loop receiving an Temporary
Occupation Permit.
Asset Performance
Gross rents of business parks held steady in 2Q14 as landlords remained positive
about the outlook following a sustained run-up in office rents over the past few
quarters. However, these prospects may not be sustained as back-office demand from
financial institutions has weakened and no new enquires are known to have been
made in the quarter.
Both capital values and yields of business park space remained stable in the absence
of investment transactions. However, institutional investors remain on the lookout for
assets occupied by reputable anchor tenants and secured with long-term leases.
12-Month Outlook
Despite a substantial amount of supply expected this year, pre-commitments levels
remain healthy in the range of 7080%. However, rental growth should remain muted
amid a lack of back office expansion support, alongside an injection of new supply
which is likely to take time to be absorbed.
Rental Information
Rental Value^
SGD 3.84 psf pm
Stage in Cycle
Rents stable

Last Trough
With demand segmented into different clusters, any negative implication for rents
going forward will likely be confined to the back-office processing cluster, which
includes Mapletree Business City and Changi Business Park. For instance, Credit
Suisse is poised to give up space at One@Changi while The Signature has been
struggling to backfill space vacated by its key tenants Credit Suisse and Lucasfilm.
12-Month Outlook
Rental Value
Capital Value
Note: Singapore Industrial refers to Singapores island-wide Business Park market.
Sydney: Industrial
Financial Indices
130
120
Demand
The existing space market again accounted for the majority of take-up. In the Inner
West, Logistics company CouriersPlease relocated to Rosehill (19,300 sqm) and
online book retailer Booktopia leased 8,300 sqm in Lidcombe. Retailer Woolworths
leased 9,900 sqm in Mascot in Sydneys South, expanding their delivery capacity in
the area.
There were no pre-lease deals recorded in 2Q14. Pre-lease activity was subdued
through the first half of 2014, accounting for only 11% of gross take-up (23,700 sqm).
Meanwhile, improved access to debt has increased the volume of design and
construction and owner-occupier deals occurring in the sector.
110
Index
Tenant demand was subdued in 2Q14 with a distinct lack of pre-lease activity
hampering gross take-up. A total of 74,700 sqm of take-up was recorded over the
quarter, down 47% q-o-q from 1Q14 (140,100 sqm). The majority of activity was
focused on industrial precincts closer to the CBD, with South Sydney and the Inner
West accounting for two-thirds of quarterly gross take-up.
100
90
80
4Q09
Asset Performance
Average net face rents across both prime and secondary grades were mostly
unchanged in 2Q14. A lack of available stock in Sydneys North precinct increased
both prime and secondary rents moderately. However, all other precincts were
relatively stable.
Yields held firm across most precincts in 2Q14 after significant tightening at the start of
2014. The only movement recorded in the quarter was a 25 basis points tightening in
the upper end of Outer South West prime yields, reflecting the widening search
parameters of investors with unsatisfied capital. Broadly, average prime yields ranged
from 7.25%8.75%, unchanged from the previous quarter.
Transaction volumes were again very positive as demand for industrial assets in Sydney
continued. There were 24 transactions recorded in 2Q14, totalling AUD 409.2 million.
Numerous institutional local developers replenished land-banks with Stockland,
Goodman and DEXUS all purchasing large tracts of land.
4Q12
4Q13
4Q14
Capital Value Index

Source: JLL
Financial Indicators are for Outer Central West.
Physical Indicators
Supply
800
600
Thousand sqm
Supply totalled 127,700 sqm in 2Q14. The majority of the supply additions again
centred in the Outer Central West with 88% of the new space (112,200 sqm)
developed in the precinct. Of the five projects reaching practical completion in the
quarter, a Goodman developed distribution centre for Toll IPEC in Eastern Creek in the
Outer Central West was the largest at 61,100 sqm. Goodman also completed a 31,700
sqm distribution centre for DHL in Horsley Park and DEXUS finalised a 19,500 sqm
facility for The Consortium Centre in Greystanes.
4Q10
4Q11
Rental Value Index
400
200
09
10
11
12
Take-Up (gross)
Future Supply
13
Source: JLL

supply is for 2H14.
Rental Information
Rental Value^
AUD 113 psm pa
12 Month Outlook
Stage in Cycle
Rents stable
A resilient Aussie dollar is likely to boost online retailing and is expected to keep
demand for distribution space in Sydney ticking over the next 12 months. Rents are
expected to remain flat in most precincts, impacted by increasing incentive levels.
However, yields could see further compression in the short term if premium assets
come to market.

Last Peak
^ net, on GFA
12-Month Outlook
Rental Value
Note: Sydney Industrial refers Sydneys industrial market (all grades).
14F
Completions
Sydney: Industrial
Tenant activity declines and gross take-up falls sharply q-o-q

Average net face rents hold firm across most precincts
Investor demand remains positive with AUD 409.2 million of transactions
Capital Value
Melbourne: Industrial
Occupier activity improves, supported by transport and storage sector
Rental growth flat apart from a slight increase in North precinct
Investor demand buoyant with sales volumes totalling AUD 525.6 million
Financial Indices
110
Demand
Index
105
100
95
90
4Q09
4Q10
4Q11
4Q12
4Q13
4Q14
Rental Value Index

Source: JLL
Supply
New construction activity remains buoyant with 227,000 sqm completed across 11
schemes in 1H14. Of the developments completed, approximately 65% was precommitted. Melbourne continues to boast a high number of speculatively developed
projects, with 150,100 sqm under construction. New supply in 2014 is expected to
exceed 2013 totals with a further 363,000 sqm currently under construction,
anticipated to come on line by end-2014.
Financial Indicators are for West Prime.
Physical Indicators
800
Asset Performance
Thousand sqm
600
Investment activity remained positive, although volumes in 2Q14 were slightly lower
than the first quarter. In 1H14, AUD 525.6 million has been transacted, the highest 1H
total since our series began back in 1988.
400
200
09
10
11
12
Take-Up (gross)
Future Supply
13
14F
Completions
Source: JLL

supply is for 2H14.
Melbourne: Industrial
There was a notable improvement in leasing activity in 2Q14 with a number of large
pre-lease deals announced. Gross take-up of 248,300 sqm was recorded in the
second quarter, taking the 1H14 total to 318,600 sqm. Leasing activity of existing
space remains low with demand expressed through pre-commitment and design &
construct (D&C) activity. The transport and storage sector continues to drive demand,
accounting for 65% of take-up in 1H14. Notable leasing transactions in 2Q14 include
Toll Holdings (71,000 sqm), Reece Plumbing (24,235 sqm) and Bradford Insulation
(20,190 sqm).
AUD 73 psm pa
Stage in Cycle
Rents stable

Last Trough
15
The North precinct was the only market to record rental growth over the quarter, up
0.9% to AUD 73 per sqm per annum. Land values for an average standard serviced
allotment (2,000 sqm) during the quarter were also unchanged.
12 Month Outlook
Notable improvements in industrial demand drivers in the first six months of 2014 have
seen occupier demand gain momentum. This is likely to continue over the remainder
of 2014, driven through pre-commitment and D&C activity. Speculative activity is
expected to remain buoyant over the medium term, with Melbourne accounting for
over half of the national total currently under construction. Prime rents are forecast to
remain relatively stable across all Melbourne industrial precincts, with a competitive
pre-lease environment and healthy level of construction likely to limit rental growth in
existing stock.
Rental Information
Rental Value^
Prime investment yields in the City Fringe tightened 25 basis points at the upper end
of the range to sit between 7.25%8.00%. In the North precinct, prime yields recorded
tightening of 25 basis points at both ends of the range to sit between 7.50%8.50%.
Secondary yields tightened in both the South East and West precincts, to range
between 8.50%9.75% and 9.00%10.00% respectively.
^ net, on GFA
12-Month Outlook
Rental Value
Capital Value
NA
Note: Melbourne Industrial refers Melbournes industrial market (all grades).
Hong Kong: Hotels
Supply
In 2014, according to the Hong Kong Tourism Board, 3,331 hotel rooms are expected
to open. If all projects materialise, hotel room stock will increase by 4.8% y-o-y to
73,348 rooms. In 1H14, 843 hotel rooms have opened, all of which are independently
operated or managed by local chains. Hotels to open in 2H14 include the 37-room A3
Hotel, the 29-room Residence G, the 547-room Dorsett Tsuen Wan, the 68-room The
Pottinger and the 162-room Ovolo 64 Wong Chuk Hang Road. The majority of other
hotels planned to open over the remainder of the year are relatively small in room
count (below 150 rooms) and dominated by local brands.
Asset Performance
As at YTD May 2014, occupancy for luxury hotels in Hong Kong was registered at
79%, a 4.7 percentage point y-o-y improvement. Average Daily Rate (ADR) increased
by 4.8% y-o-y to HKD 3,779 resulting in strong Revenue per Available Room (RevPAR)
growth of 11.4% y-o-y to HKD 2,986. This indicates strong corporate and MICE
visitation to the city.
90
3,500
80
3,000
70
60
2,500
50
2,000
40
1,500
30
1,000
20
500
10
0
ADR
Occupancy (%)
Nov 13
Nov 12
May 13
Nov 11
May 12
Nov 10
May 11
Nov 09
May 10
May 09
May 14
ADR / RevPAR (HKD)
As at YTD May 2014, visitor arrivals continued to rise, recording a 13.6% increase on
the same period last year. This is driven mainly by the Mainland Chinese market which
registered 17.6% y-o-y growth. Notably, Japanese inbound visitation has improved by
3.4% y-o-y suggesting that ongoing political tensions between Mainland China and
Japan are having a reduced impact on tourism. Regional markets such as South Korea
(+17.5%) and Singapore (+16.4%) showed the most significant y-o-y growth as at YTD
May 2014. As at YTD March 2014, visitors arriving for Meetings, Incentives,
Conventions and Exhibitions (MICE) registered a 5.2% improvement y-o-y, indicating
more events have taken place in the city. Leisure visitors continued to reflect a
significant increase of 18.4% y-o-y during the same period. Hong Kong was voted as
the Best City for Business Events for the third consecutive year in 2013, according to
the 20132014 readers poll conducted by CEI Asia, once again reaffirming Hong Kongs
status as a world class business city.
4,000
Occupancy (%)
Demand
Luxury Hotel Trading Performance
RevPAR
Source: STR Global, JLL

Note: Moving Annual Average
Major Additions to Hotel Supply

7,000
6,000
5,000
No. of rooms
Visitor arrivals from Mainland China continue to show significant growth

Hotel openings are primarily independently operated or local chains
RevPAR growth is driven by improvements in occupancy and ADR
4,000
3,000
2,000
1,000
0
09
10
11
12
13
Additions to Supply
14F
15F
Future Supply
Source: Industry sources, JLL
The moving annual average for RevPAR was registered at HKD 2,847 in May 2014,
driven by robust occupancy and ADR.
12-Month Outlook
Nevertheless, Hong Kong will remain a vibrant business and leisure hub as its hotel
market continues to trade exceptionally well although the pace of growth witnessed
since the global financial crisis is likely to slow.
12-Month Outlook
Note: Hong Kong Hotels refers to Hong Kongs Luxury hotel market.
RevPAR
Increasing
Occupancy
ADR
Hong Kong: Hotels
Despite headwinds facing some Asian economies, improvements in the United States
and Europe bode well for corporate demand in Hong Kong although weak activity in
the finance industry is likely to impact demand in the luxury hotel segment. Leisure
demand to Hong Kong continues to be supported by inbound tourism from Mainland
China, although the Hong Kong government has voiced concerns about the strains
that the rapid growth of tourism is having on its infrastructure.
Beijing: Hotels
International arrivals to Beijing continue to decline
The 407-room Beijing JW Marriott Hotel Central opens
RevPAR shows marginal improvement of 1.8% y-o-y to RMB 628
1,600
80
1,400
70
1,200
60
1,000
50
800
40
600
30
400
20
200
10
ADR
Occupancy (%)
May 14
Nov 13
Nov 12
May 13
May 12
Nov 11
Nov 10
May 11
Nov 09
0
May 10
May 09
Occupancy (%)
ADR/RevPAR (RMB)
Upscale Hotel Trading Performance
RevPAR


4,500
No. of rooms
4,000
Demand
As at YTD May 2014, international arrivals to Beijing were recorded at 1.7 million,
registering a y-o-y decline of 6.7%. Concerns of air pollution in Beijing and the
continuing appreciation of the Chinese Yuan which potentially increases the travelling
cost in Beijing for leisure visitors might have contributed to the decline in international
visitor arrivals.
The top three source markets remain unchanged with the United States ranking first,
followed by South Korea and Japan. Despite the overall decline in international visitor
arrivals, tourists from South Korea and Japan witnessed growth of 12.2% and 8.2%
respectively as at YTD May 2014. The improvements in the above-mentioned source
markets are partly due to improving economies and promotional activities carried out
by the central government. Similarly, visitor arrivals from Hong Kong, Taiwan and
Macau have consistently shown an increase; in particular, visitor arrivals from Taiwan
registered a significant improvement of 13.6% y-o-y as at YTD May 2014. Improving
relationships between Taiwan and Mainland China have resulted in more visitor traffic.
Investments in new industries such as finance and communications industries have
also contributed to more visitors from Macau, Hong Kong and Taiwan.
3,500
Supply
3,000
The Beijing JW Marriott Hotel Central, which was originally scheduled to open in 2013,
opened in June 2014, adding 407 rooms to the market. This is the only international
hotel which opened in 2Q14 in Beijing. The hotel market witnessed many
postponements in hotel openings during the quarter. The second half of 2014 may see
more international hotel openings such as the 279-room Rosewood Beijing.
2,500
2,000
1,500
1,000
500
0
Asset Performance
09
10
11
12
13
Additions to Supply
14F
15F
Future Supply
The Average Daily Rate (ADR) of Beijing upscale hotels as at YTD May 2014 showed
a decline of 6.6% y-o-y, reaching RMB 969. However, occupancy recorded a y-o-y
increase of 3.2 percentage points to 64.9% during the same period. As a result,
Revenue per Available Room (RevPAR) registered a slight decrease of 1.8% y-o-y,
achieving RMB 628.
In terms of moving annual average, occupancy showed a slight improvement from
65.1% in May 2013 to 66.7% in May 2014, while ADR continues to reflect a gradual
decline from RMB 1,037 in May 2013 to RMB 980 in May 2014.
Beijing: Hotels
12-Month Outlook
12-Month Outlook
RevPAR
Declining
Occupancy
ADR
JLL estimates that 4,178 rooms will be added to the hotel stock over the remainder of
2014. With the uncertainties in the political and economic environment, we expect some
hotels to postpone their opening dates and adopt a wait-and-see approach. On a
positive note, Meetings, Incentives, Conventions and Exhibitions (MICE) demand is set
to remain strong in view of the pipeline of events in 2014. More than 180 exhibitions and
major international conferences are scheduled in Beijing for 2014 with most planned for
the second half of the year, including the Asia-Pacific Economic Corporation (APEC)
meetings in October and November. The rapid development of high-speed rail service
to Beijing will also enhance accessibility and encourage domestic travel.
Note: Beijing Hotels refers to Beijings Upscale hotel market.
Shanghai: Hotels
Supply
In 2Q14, the 180-room Hyatt Regency Shanghai Chongming and 313-room Crowne
Plaza Shanghai Noah Square opened. In addition, there are more than 10 hotels with
approximately 3,000 rooms planned to open in 2014. The 345-room Sheraton Jiading
Hotel is expected to open in October 2014 while the rest of the hotels have yet to
announce opening dates. It is common for projects to be postponed in Mainland China
as hotel developers tend to adjust the opening dates to the changing market dynamics.
On a moving annual average basis, RevPAR declined from February 2011 to May
2014 and was recorded at RMB 648 in May 2014. This can be attributed to fluctuations
in occupancy levels and a decline in ADR during this period.
12-Month Outlook
As global economic conditions continue to improve, international arrivals are expected
to show steady growth. Visitor arrivals from Hong Kong, Macau and Taiwan are likely
to increase as government policies in place encourage business activities. The
cooperation between Taiwan and Mainland China seems to have further progressed as
Mr. Zhang Zhijun, the official of Taiwan Affairs Office, visited Taiwan in early July 2014.
Favourable policies that stimulate economic exchanges and tourism are likely to have
a positive impact on visitor arrivals in Shanghai and other major cities in Mainland
China. In addition, Shanghai is also a popular venue for many conferences and events,
such as the annual international software development conference in October 2014,
which was also held in Beijing in April this year, attracting more than 1,300 participants.
1,200
60
1,000
50
800
40
600
30
400
20
200
10
ADR
Occupancy (%)
RevPAR


10,000
8,000
No. of rooms
Asset Performance
The Average Daily Rate (ADR) for upscale hotels in Shanghai declined by 3.2% y-o-y
to RMB 1,049, while occupancy increased by 5.1 percentage points to 62.6% as at
YTD May 2014. As a result, Revenue per Available Room (RevPAR) improved by 5.3%
y-o-y, achieving RMB 657 during the same period.
70
Feb 11
May 11
Aug 11
Nov 11
Feb 12
May 12
Aug 12
Nov 12
Feb 13
May 13
Aug 13
Nov 13
Feb 14
May 14
According to the Shanghai Statistics Bureau, international visitor arrivals as at YTD

May 2014 recorded a y-o-y growth of 7.6%, reaching 3.3 million. Arrivals from
Hong Kong and Macau showed a y-o-y increase of 19.4%, due to an improvement in
both corporate and leisure travel. The increase in corporate travellers might be due to
the launch of the Shanghai Free-Trade Zone in September 2013 which has attracted
international investors and corporations. With the development of tourism in Mainland
China and policies to encourage both corporate and leisure travellers from nearby
cities such as Hong Kong and Macau, visitation to Shanghai is likely to continue on the
growth trajectory.
1,400
Occupancy (%)
Demand
ADR/RevPAR (RMB)
International visitor arrivals continue on the growth trajectory

New hotel supply pipeline has diminished
RevPAR shows healthy growth as at YTD May 2014, driven by occupancy
6,000
4,000
2,000
0
09
10
11
12
13
Additions to Supply
14F
15F
Future Supply
12-Month Outlook
Note: Shanghai Hotels refers to Shanghais Upscale hotel market.
RevPAR
Declining
Occupancy
ADR
Shanghai: Hotels
Although the supply pipeline seems to be significant, many projects are being delayed
due to various reasons. Approximately eight of 20 hotels scheduled to open in 2013
were delayed.
Tokyo: Hotels
Steady rise in demand on back of improving economic fundamentals
The 164-room Andaz Tokyo Toranomon Hills opens
ADR growth is likely to drive RevPAR in the short term

50,000
90
80
70
60
30,000
50
40
20,000
30
20
10,000
10
Nov 13
Nov 12
May 13
Nov 11
May 12
May 11
Nov 10
Nov 09
May 10
ADR
Occupancy (%)
May 14
0
May 09
Occupancy (%)
ADR/RevPAR (JPY)
40,000
RevPAR

The 164-room Andaz Tokyo Toranomon Hills, a luxury boutique hotel, opened in June
2014. The 80-room Aman Tokyo, set to be the most luxurious hotel in Tokyo, is
scheduled to open by end-2014. No other major hotel openings are scheduled in 2014.
Asset Performance
500
Luxury hotel trading performance in Tokyo continues to show improvement as reflected

by the y-o-y Revenue per Available Room (RevPAR) increase of 19.3% as at YTD May
2014. This can be attributed to the y-o-y growth in both occupancy (+ 4.7 percentage
points) and Average Daily Rate (ADR) (+12.4%). On a moving annual average,
RevPAR continues on the growth trajectory from 2Q12 to 2Q14.
400
No. of rooms
International visitor arrivals to Japan have reported a y-o-y increase of 28.4% to

5.2 million as at YTD May 2014. This can be attributed to a significant growth in visitors
arriving from Mainland China and Taiwan, which recorded a y-o-y increase of 90.8%
and 41.6% respectively. Visitor arrivals from Thailand and Malaysia also registered a
robust growth of 62.3% and 60.7% y-o-y respectively, partly due to the deregulation of
tourism visas in place since July 2013. Domestic accommodation demand continues to
witness a strong recovery both in business and leisure travel since the earthquake in
March 2011. A weakening Japanese Yen and the increase in low cost carriers have
also boosted domestic travel.
Supply
300
200
While there were no hotel transactions in the luxury hotel sector in Tokyo, two limitedservice hotels, including Super Hotel Shinbashi-Karasumoriguchi (74 rooms) and The
b Roppongi (76 rooms), were traded in 2Q14. The b Roppongi was transacted at
JPY 3.5 billion (JPY 46 million per key).
100
0
Demand
09
10
11
12
13
Additions to Supply
14F
15F
Future Supply
12-Month Outlook
Domestic and international demand is expected to maintain upward momentum, given
the steady increase in inbound tourism since the lows of 2011. RevPAR growth in the
short term is likely to be driven by a growth in ADR as occupancy has already
recovered and is at its highest level in seven years.
Tokyo: Hotels
The successful bid to host the 2020 Olympic Games is expected to stimulate demand
and underpin growth in Tokyos room supply over the next few years. As new projects
are being developed, existing hotels are likely benefit from increasing ADR.
12-Month Outlook
RevPAR
Rising
Occupancy
ADR
Note: Tokyo Hotels refers to Tokyos Luxury hotel market.
Singapore: Hotels
Supply
In 1H14, four major hotel projects were completed, adding 921 rooms to the market.
The 134-room Sofitel So opened in May, making it the sixth property operated by
Accor in Singapore. The hotel operator also announced in May that they will be
managing two additional hotels Novotel Singapore on Stevens with 254 rooms and
ibis Stevens with 528 rooms at the site of the former The Pines Country Club. The
hotels are expected to open in 2016. As at end-2Q14, Singapores accommodation
market comprised approximately 55,883 rooms. Major hotel openings for the
remainder of year include the 502-room Traders Orchardgateway and the 250-room
One Farrer Hotel and Spa.
Asset Performance
As at YTD May 2014, occupancy levels declined slightly by 1.5 percentage points to
78.8%, while the Average Daily Rate (ADR) increased by 5.3% to SGD 412 as
compared to the same period in the previous year. As a result, Revenue per Available
Room (RevPAR) registered a y-o-y growth of 3.7% to SGD 325.
In terms of moving annual average, luxury occupancy levels and ADR remained stable
within the ranges of 82.6% to 83.3% and SGD 420 to 428 respectively in 2014.
12-Month Outlook
In order to curb the drop in Mainland Chinese arrivals, Singapore is marketing itself as
a standalone tourist destination through a SGD 1 million marketing campaign that will
last from June to October 2014. A cooperative marketing campaign between Singapore
airport operator Changi Airport Group and STB, aims to attract young independent
travellers who are more likely to visit short-haul destinations like Singapore, due to
shorter vacation times.
ADR/RevPAR (SGD)
90
450
80
400
70
350
60
300
50
250
40
200
30
150
20
100
10
0
ADR
Occupancy (%)
Nov 13
May 14
May 13
Nov 12
Nov 11
May 12
Nov 10
May 11
Nov 09
May 10
0
May 09
According to Singapore Tourism Board (STB), international visitor arrivals faced a

0.6% y-o-y decline as at YTD April 2014 despite a 5.5% y-o-y growth in visitors from
Indonesia Singapores largest source market. One of the key reasons for the
stagnant arrivals is the overall decrease in number of Mainland Chinese visitors
(21.9% y-o-y), who have avoided Malaysia as a result of the Malaysia Airlines tragedy
and political unrest in Thailand. Singapore often forms part of the same Southeast
Asian travel itinerary and has been directly impacted by this fall in inbound visitors.
500
Occupancy (%)
Demand
RevPAR


7,000
6,000
5,000
No. of rooms
Arrivals from Singapores second largest market, Mainland China, on decline

The 134-room Sofitel So Singapore opens in the CBD area
Stable marketwide hotel trading performance
4,000
3,000
2,000
1,000
0
09
10
11
12
13
Additions to Supply
14F
15F
Future Supply
12-Month Outlook
Note: Singapore Hotels refer to the Luxury hotel market.
RevPAR
Stable
Occupancy
ADR
Singapore: Hotels
Looking ahead, occupancy levels in Singapores hotel sector are likely to remain stable
but ADR growth may be limited given the entry of several large midscale and economy
hotels over the next 12 months. Tighter labour conditions might continue to affect
labour intensive sectors such as the hotel industry and subsequently affect gross
operating profit margins. However, the market is expected to benefit in the second half
of the year from a strengthening economy, the opening of the Singapore Sports Hub
as well as a pipeline of major events and conventions.
Bangkok: Hotels
International visitor arrivals decline substantially as at YTD May 2014
Significant supply pipeline in 2014, particularly in upscale segment
Decline in trading performance due to political uncertainties
7,000
80
6,000
70
60
5,000
50
4,000
40
3,000
30
2,000
20
1,000
10
ADR
Occupancy (%)
May 14
Nov 13
Nov 12
May 13
May 12
Nov 11
Nov 10
May 11
Nov 09
0
May 10
0
May 09
Occupancy (%)
ADR / RevPAR (THB)
RevPAR
Demand
As at YTD May 2014, total international visitor arrivals to Bangkok declined by 15.4%
to 6.1 million as compared to the same period in 2013, according to the latest statistics
from Tourism Authority of Thailand (TAT). This is a result of the political demonstrations
and the coup in May 2014. After the announcement of the coup, more than 40 countries
issued travel alerts, including the United States and Hong Kong, which led to a number
of flight cancellations. Tourism authorities have revised their forecasts for international
visitor arrivals to Thailand from 28 million to 25.9 million this year.
Mainland China, Russia and Japan remained the three largest source markets in the
first five months of 2014. However, visitor arrivals from these countries declined by
31.4%, 21.1% and 8.1% y-o-y, respectively, across the period.

Supply
According to JLL, approximately 628 hotel rooms were added to the Bangkok market in
1H14. Notable hotel openings in 2Q14 include the 184-room Holiday Inn Express
Bangkok Sathorn and the 290-room Radisson Blu Plaza Hotel Bangkok. JLL estimates
that 1,617 rooms will be added to the Bangkok market in 2014 if all projects materialise.
The majority of new supply is in the upscale segment, accounting for 70.4% of total new
room stock. Future hotel openings include the 161-room Holiday Inn Express Sukhumvit
Soi 11 and the 214-room Le Meridien Suvarnabhumi Golf Resort and Spa.

5,000
No. of rooms
4,000
3,000
The former Swiss Park Hotel was rebranded and opened in May 2014 as the Grand
Swiss Sukhumvit 11 Hotel. The 568-room Amari Atrium Bangkok is now owned by the
Minor Hotel Group and will be rebranded to the Avani brand following an extensive
renovation and will open in 2H14.
2,000
1,000
0
Asset Performance
09
10
11
12
13
Additions to Supply
14F
15F
Future Supply
Political demonstrations leading to the coup resulted in a substantial decline in visitor

arrivals to Bangkok. As a result, market occupancy in the luxury hotel segment
declined 21.9 percentage points to 46.7% as at YTD May 2014, while Average Daily
Rate (ADR) experienced a moderate increase of 2.4%. Consequently, Revenue per
Available Room (RevPAR) saw a decline of 30.3% y-o-y to THB 2,789 for the same
period.
The moving annual average of ADR continued to be stable whilst RevPAR has shown
a persistent decline since December 2013, reaching THB 3,382 in May 2014 owing to
the dip in occupancy.
Bangkok: Hotels
12-Month Outlook
12-Month Outlook
RevPAR
Declining
Occupancy
ADR
The coup announced by the army on 22 May 2014 is likely to have a pronounced
negative impact on tourism arrivals to Bangkok and on the domestic economy in the
short term. As such, hotel occupancies are likely to decline in 2014 while further
pressure is placed on ADR as operators offer discounts and promotional packages to
drive occupancy. However, as was the case for previous political crises in Thailand,
the tourism industry has historically recorded a rapid rebound upon a return to a stable
political environment.
Note: Bangkok hotels refer to the Luxury hotel market.
Kuala Lumpur: Hotels
Supply
There were no new hotel openings in 2Q14. JLL forecast approximately 3,300 rooms
to enter Kuala Lumpurs hotel supply by the end of 2018. Given the high concentration
of corporate demand in the market, the supply is largely within the upscale and luxury
category. The new rooms slated to enter the market represent a CAGR of 1.5% during
this period. Whilst this CAGR is relatively low overall, the new supply is positioned in
the upscale and luxury segment and represents a large increase when compared to
the existing stock in that segment. New entrants to the market are represented by
international hotel chains including Starwood, Hilton, Four Seasons, Banyan Tree and
Accor.
80
70
60
300
50
40
200
30
20
100
10
0
ADR
Occupancy (%)
Nov 13
May 14
May 13
Nov 12
Nov 11
May 12
Nov 10
May 11
Nov 09
May 10
0
May 09
Malaysia is continuing to target the lucrative Meetings, Incentives, Conventions and

Exhibitions (MICE) segment, which is expected to grow through newly introduced
financial incentives targeted at planners and organisers as well as Upscale
construction of new infrastructure. The Malaysian Convention and Exhibition Bureau
(MyCEB) is competing for high-profile international conventions with a specific focus on
health and medical care, science and technology, education and energy (oil and gas).
90
400
ADR/RevPAR (MYR)
According to Tourism Malaysia, international visitor arrivals to Malaysia were recorded

at 9.3 million as at YTD April 2014 representing growth of 9.9% y-o-y. Kuala Lumpur is
predominantly a corporate market with strong weekday business but relatively limited
leisure demand which places a cap on occupancy as weekends tend to be low
periods. The major leisure business comprises of tour groups from Mainland China
and the Middle East which are more price sensitive and not as high yielding.
500
Occupancy (%)
Demand
RevPAR


2,000
1,500
No. of rooms
International arrivals continue to grow, rising 9.9% y-o-y as at YTD April

No major hotel openings in 2Q14
Trading performance continues to improve despite earlier pessimism
1,000
500
Asset Performance
As of YTD May 2014, Average Daily Rate (ADR) rose by 6.9% y-o-y from MYR 464 to
MYR 496 whilst occupancy increased by 4.1 percentage points to reach 75.6%. As a
result, Revenue per Available Room (RevPAR) increased from MYR 332 to reach
MYR 375 representing y-o-y growth of 13%. Visitor arrivals from Singapore and
Indonesia remain key inbound markets to Malaysia, showing improvements of 11.5%
and 6.1% y-o-y as at YTD April 2014. Ultimately, improved trading performance in the
luxury sector is dependent on growth in corporate demand, which leads back to
demand for office space in KLCC and the number of MICE events held annually.
09
10
11
12
13
Additions to Supply
14F
15F
Future Supply
Market observers remain focused on the effect of the Mainland Chinese outbound
market to Kuala Lumpur in light of the Malaysian Airlines tragedy. Our investigations
have shown minimal impact to Kuala Lumpurs luxury accommodation sector as most
Mainland Chinese arrivals on leisure tours traditionally stay in midscale or lower
category hotels.
In the short to medium term, Kuala Lumpur could face an oversupply of new hotel
rooms in the upscale and luxury sectors given the current pipeline of development.
Encouragingly, the Malaysian government remains committed to promoting the city as
a key MICE market which is expected to drive inbound corporate travel over the
coming years. This promotion of Kuala Lumpur will continue to lift demand along with
the growth of its low cost carrier network, which will further develop Kuala Lumpur as a
global tourism and aviation hub.
Note: Kuala Lumpur Hotels refers to Kuala Lumpurs Luxury and Upscale hotel market.
12-Month Outlook
RevPAR
Rising
Occupancy
ADR
Kuala Lumpur: Hotels
12-Month Outlook
Jakarta: Hotels
All major international source markets register an increase as at YTD May
Additions to supply comprise economy and midscale hotels
ADR continues to grow with the depreciation of the Indonesian Rupiah

200
90
180
80
70
140
60
120
50
100
40
80
30
60
May 14
Nov 13
Nov 12
ADR
Occupancy (%)
May 13
May 12
Nov 11
Nov 10
May 11
0
Nov 09
10
0
May 10
20
May 09
40
20
Occupancy (%)
ADR/RevPAR (USD)
160
RevPAR

Demand
As at YTD May 2014, international visitor arrivals to Jakarta registered a 6.6% y-o-y
improvement to 0.9 million. All top ten geographical source markets recorded a y-o-y
increase as at YTD March 2014, with significant improvements in arrivals from Saudi
Arabia (+61%), Malaysia (+16.3%), Singapore (+10.2%), Taiwan (+10.1%) and India
(+10%).
The Ministry of Culture and Tourism Indonesia launched several initiatives in 2013 to
develop sharia tourism and promote Indonesia as a Muslim friendly destination. The
Ministry of Culture and Tourism Indonesia is targeting a total of 200,000 Muslim visitors
to Indonesia in 2014, a 25% y-o-y increase from 2013.
Supply
In 2Q14, there were a few new major openings including the 151-room The Grove
Suites by Aston, the 253-room DoubleTree Diponegoro and the 240-room Ibis Jakarta
Cawang. In 1H14, we estimate that a total of 1,158 rooms opened and upcoming
supply in 2H14 will total 2,460 rooms. Hotels in the pipeline comprise primarily of
economy and upscale brands which are currently present in Jakarta including ibis,
Best Western, Swiss-Belinn and Harris. Upscale and luxury hotels openings in 2H14
are limited to the 180-room Raffles at Ciputra World and the 275-room JW Marriott at
Kemang Village.

5,000
No. of rooms
4,000
3,000
Asset Performance
2,000
1,000
0
09
10
11
12
13
Additions to Supply
14F
15F
Future Supply
As at YTD May 2014, occupancy recorded a marginal 0.7 percentage points decline to
64.3% while Average Daily Rates (ADR) showed a 3.2% y-o-y decrease to USD 182
which can be attributed to the depreciation of the Indonesian Rupiah. Indonesias
central bank has allowed for the depreciation of the Indonesian Rupiah in an attempt to
boost the competitiveness of the countrys exports which will have a positive impact on
the countrys trade balance. Comparatively, ADR showed a significant improvement of
15.7% to IDR 2.1 million resulting in Revenue per Available Room (RevPAR) growth of
14.5% to IDR 1.4 million.
On a moving annual average, upscale hotel RevPAR levels remained steady, achieving
levels above USD 111 from May 2013 to May 2014. This can be attributed to the stable
occupancy levels and ADR levels during this period.
Jakarta: Hotels
12-Month Outlook
Indonesias macroeconomic fundamentals remain strong and with the decline in
inflationary pressures in 2013, foreign capital inflows showed a significant improvement.
Similarly, the outlook for the domestic economy is relatively positive as government
spending remains robust, boosted by the elections and strong consumer confidence.
Hence, international and domestic visitor arrivals to Jakarta are likely to continue on
the growth trajectory in the short to medium term as visitors to Jakarta comprises
mainly of corporate travellers. The limited number of upscale and luxury hotel additions
in the pipeline are also likely to result in stable trading performances of these sectors
while the midscale and economy hotel expansions continue.
12-Month Outlook
RevPAR
Stable
Occupancy
ADR
Note: Jakarta Hotels refers to Jakartas Upscale hotel market.
Sydney: Hotels
90
We are aware of five accommodation developments which were under construction as

at end-2Q14 and due for completion between 2014 and 2016 being the extension of
Base Backpackers Sydney (3 rooms, 2014), Central Park Frasers Broadway (60
rooms), the conversion of 34 Hunter Street into The Tankstream Hotel (midscale - 282
rooms), the conversion of 88 Liverpool Street Sydney into The Spanish Club (76 rooms)
and the Sydney International Convention Centre Hotel (590 rooms). We have also
identified five proposed projects thought likely to commence in the short to medium term.
70
150
60
50
40
100
30
50
20
10
0
May 14
Nov 14
Nov 12
ADR
Occupancy (%)
May 13
Nov 11
May 12
Nov 10
May 11
Nov 09
0
May 10
Supply
There were no new hotel openings during 2Q14.
80
200
May 09
A total of 25.5 million visitor nights were spent in Sydney Tourism Region (city and
surrounds) in 1Q14, representing an increase of 6.4% compared to the same period in
2013. Domestic visitor nights increased 16.7% to 6.4 million and international nights by
3.4% to 19.1 million. Increases were most evident in the domestic and international
visiting friends and relatives segments, whereas domestic business and international
holiday travel also increased.
100
250
Occupancy (%)
Demand
Marketwide Hotel Trading Performance
ADR/RevPAR (AUD)
RevPAR increases 8.7% y-o-y as at YTD June 2014

No new hotel openings in the quarter
Four hotel sales transactions
RevPAR


600
500
Asset Performance
Investment transactions in Sydney in 2Q14 included Blu Hotel (undisclosed, June),

Sofitel Sydney Wentworth (May, AUD 201 million), Hotel 1888 (May, AUD 32.8 million)
and Airport Sydney International (May, AUD 23.9 million).
12-Month Outlook
400
No. of rooms
As at YTD June 2014 occupancy levels increased 2.5% to 86.8% while Average Daily
Rate (ADR) rose 6.0% to AUD 236. As a result, Revenue per Available Room (RevPAR)
grew by 8.7% y-o-y to AUD 196. Sydneys accommodation market has continued to
trade at strong levels which has been boosted by improving corporate demand, as well
as strong leisure, cruise and VFR business.
300
200
100
0
100
200
09
10
11
12
13
Additions to Supply
14F
15F
Future Supply
Source: Australian Bureau of Statistics, JLL
12-Month Outlook
Note: Sydney Hotels refers to all grades of accommodation and includes both hotels and serviced apartments.
RevPAR
Rising
Occupancy
ADR
Sydney: Hotels
The outlook for Sydneys accommodation market remains strong following the
recovery which has been evident over the past four years. Occupancy levels have
reverted to a very high level and ADR growth is strengthening in line with the benign
supply outlook and more stable demand environment with growth across a variety of
segments including corporate, cruise and inbound. The closure of the Sydney
Convention & Exhibition Centre in late 2013 has had only a small impact on the overall
market with a number of five-star hotels enjoying considerable demand-uplift
throughout the year. Notwithstanding, an element of caution still prevails given the lack
of blockbuster events through the winter months. This may result in a slight softening
through the mid part of the year but with a strong year end currently anticipated.
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A Sunnier Outlook for Leasing

Asia Pacific Property Digest

Asia Pacific Property Digest Second Quarter 2014 3

4 Asia Pacific Property Digest Second Quarter 2014

Asia Pacific Economy

Regional economic growth slowed further in 2Q14. Asia Pacifics

Source: Oxford Economics, July 2014

Figure 2: Outlook for Major Economies

Source: Oxford Economics, July 2014; JLL

Inflation and interest rates edging up

Figure 3: Inflation Edging Up in Some Countries

Mixed retail sales and export performance. Manufacturing

Economy and Property Market

Asia Pacific Property Digest Second Quarter 2014 5

Source: Oxford Economics, July 2014

More moderate regional growth this year

Asia Pacific Property Market

renewals over relocations due to cost concerns. However, Tokyo and

Warehousing demand driven by the retail sector but stronger

Figure 5: Direct Commercial Real Estate Transactions

Yearly % Changes, 2Q14

1H14 $54.9 bill

Figures relate to the major submarket in each city

6 Asia Pacific Property Digest Second Quarter 2014

Asia Pacific Property Digest Second Quarter 2014 7

Jakarta, Kuala Lumpur

Figure 6: Rental Property Clocks, 2Q14

Singapore (Conventional/Multi User)

Singapore (Business Park)

*For Luxurious Residential Properties

*Business Parks (Singapore) & Conventional (Singapore)

Source: JLL (Real Estate Intelligence Service), 2Q14

Meanwhile in the residential sector, restrictive policies remain in place

About the Author

8 Asia Pacific Property Digest Second Quarter 2014

Do you really add value at work?

Hong Kong residential property prices holding up better

By most measures, Hong Kongs residential property market is

Asia Pacific Property Digest Second Quarter 2014 9

10 Asia Pacific Property Digest Second Quarter 2014

The magnetic retail landscape of Asia Pacific

Retailer presence ranking

Ho Chi Minh City

As I check my emails every morning, I often come across news

Lee Fong is a Senior Manager

Are Australian consumers ready for more international retailers?

retailers to have a presence in Australia. International retailers

About the Author

Jenny Dong is currently a Senior

Asia Pacific Property Digest Second Quarter 2014 11

12 Asia Pacific Property Digest Second Quarter 2014

Hong Kong: Office

Rental Value Index

Capital Value Index

Arrows indicate 12-month outlook

Financial Indicators are for Central.

Hong Kong: Office

For 2009 to 2013, take-up, completions and vacancy

HKD 89.6 psf pm

^ net effective, on NFA

Asia Pacific Property Digest Second Quarter 2014 13

Rental Value Index

Arrows indicate 12-month outlook

Financial Indicators are for the CBD.