Asia Pacific MarketView Q1 2018 FINAL

MARKETVIEW
Asia Pacific, Q1 2018
Occupier and capital markets enjoy

positive start to the year
+4.6% in 2018F +15% in Q1 2018 +4.1% in 2018F
OFFICE
Quick Stats
Office q-o-q y-o-y
Rent +1.1% +3.5%

Capital value +1.1% +8.7%
Retail q-o-q y-o-y
Rent +0.5% + 0.7%

Logistics q-o-q y-o-y R E T A IL
Rent +1.2% +1.8%

Investment* q-o-q y-o-y
Total volume -48% +7.8%

Cross-border -67% -29%
Source: CBRE Research, Q1 2018.
*Transactions include deals above US$10

million in the office, retail, mixed, industrial, L O G I S TI C S
hotel and other commercial sectors
I N V E S TMENT
Q1 2018 CBRE Research © CBRE Inc. 2018 | 1

M A R K E T V I E W ASIA PACIFIC Q1 2018
ECONOMY
OUTLOOK REMAINS UPBEAT Figure 1: Asia Pacific 2018 and 2019 GDP Forecast Growth (%, Y-o-Y)
8
2018F 2019F
7
Vietnam
Philippines
Japan
Indonesia
New Zealand
Korea
India
Taiwan
Hong Kong
Australia
Asia Pacific
Thailand
China
Malaysia
Singapore
Source: Oxford Economics, CBRE Research, Q1 2018.
H O N G K O N G U N D E R R A T E H I K E P R E S S UR E
Table 1: Policy Interest Rate Changes
End of Mar 2018, Change in Q1

Market
% 2018
Australia 1.50 0 bps

China 4.35 0 bps
Hong Kong* 1.59 +28 bps
India 6.00 0 bps
Indonesia 4.25 0 bps
New Zealand 1.75 0 bps
Singapore* 1.51 +1 bps
Korea 1.50 0 bps
Taiwan 1.375 0 bps
Thailand 1.50 0 bps
Note on policy interest rates: Australia - Cash rate, China - 1 Yr

lending rate, Hong Kong – 3M HIBOR, India - Repo rate ,
Indonesia – 7-days Repo rate, New Zealand - Official Cash Rate,
Singapore – 3M SIBOR, Korea - Base rate, Taiwan – Discount Rate,
Thailand -1-day repo rate.
* Rates for Singapore and Hong Kong are as of 30 April 2018.
Source: CBRE Research, Various Central Banks and Monetary Authorities,
Q1 2018.

OFFICE 12% y-o-y 1.1% q-o-q 1.1% q-o-q
N E T A B S O R P T I O N R E G I S T E R S S O L ID G R O W T H Figure 2: Office Net Absorption (‘000s sq. ft.)

80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Q1 Q2 Q3 Q4 Annual New Supply
Source: CBRE Research, Q1 2018
Table 2: Major New Office Supply in Q1 2018

Market Development Name Estimated Size
(sq. ft.)
Bangalore Ramaiah Soft Tech Park 1,600,000
Beijing Azia Center 1,352,000

F I N AN CE A N D T E C H M O S T A C T I V E Shanghai One Museum Place 1,227,000
Taipei Taipei Nan Shan Plaza 1,145,000
Seoul KTCU Building 897,000
Mumbai Kanakia Wall Street - Phase II 650,000
Figure 3: Vacancy Rate and Development Pipeline

60
Vacancy & development pipeline as % of stock
Development Pipeline of 2019

50 Current Vacancy Rate (Q1 2018)
40
30
20
10
0
Sydney
Taipei
Tokyo
Bangkok
Seoul
HCMC
Shenzhen
Auckland
Adelaide
Canberra
Hanoi
Mumbai
Shanghai
Kuala Lumpur
Perth
Jakarta
Guangzhou
Beijing
Brisbane
Hong Kong
Bangalore
Singapore
Wellington
Melbourne
New Delhi

Note: Grade A vacancy rate and new supply as % of Grade A stock for Asian
markets. Pacific markets are based on total vacancy and new supply as % of
total stock

V A C A N CY R A T E E D G E S U P M A R G I N A LLY Figure 4: Asia Pacific Vacancy Rate (%)

16
14
12
Vacancy Rate (%)

10
8
6
4
Asia
2 Pacific
0 Asia Pacific
H2 01
H2 02
H2 04
H2 05
H2 06
H2 07
H2 08
H2 09
H2 10
H2 11
H2 12
H2 13
H2 14
H2 15
H2 16
H2 17
H2 03
Figure 5: Asia Pacific Office Rental and Capital Value Index

300
275
250
225
Index Q1 2001 = 100
200
175
150
R E N T S R E C O R D S L IG H T G R O W T H
125
100
75
50
2004 Q1
2008 Q1
2002 Q1
2003 Q1
2005 Q1
2006 Q1
2007 Q1
2009 Q1
2010 Q1
2011 Q1
2012 Q1
2013 Q1
2014 Q1
2015 Q1
2016 Q1
2017 Q1
2018 Q1
Rental Value Index Capital Value Index
Figure 6: Strongest Grade A Rental Growth, Q-o-Q

5%
Q4 2017 Q1 2018
4%
3%
2%
1%
0%
HCMC Singapore Sydney Bangalore - New Delhi -
Outer Ring Road Noida

RETAIL 39% y-o-y 0.5% q-o-q 0.5% q-o-q
L E A S IN G D E M A N D G A I N S M O M E N T U M
Figure 7: Y-o-Y Growth in Retail Sales In Selected Markets
2017 2018 Q1
18%
15%
12%
9%
6%
3%
0%
*Korea
Japan
*Australia
Hong Kong
China
*Singapore
Remarks: * indicates those y-o-y change in Jan and Feb combined
Source: Department of Statistics Singapore, National Bureau of Statistics of China, CEIC, 2018.
Figure 8: New Retail Entrants by Sector 2017 – 2018 Q1
2017 2018 Q1
40%
30%
20%
10%
0%
Coffee and Specialist Luxury and Mid Range Value and Health and
Restaurants Clothing Business Fashion Denim Personal
Care

N E W S U P P L Y P I P E L IN E R E M A I N S H I G H Figure 9: Development Pipeline
40
2020
35
2019
30
Development Pipeline (Million sq. ft.)

2018
25
20
15
10
Shanghai
Hong Kong
Tokyo
Melbourne
Beijing
Jakarta
Brisbane
Adelaide
Bangkok
Guangzhou
Hanoi
Singapore
Taipei
Auckland
HCMC
New Delhi
Seoul
Mumbai
Sydney
Perth
Shenzhen
Figure 10: Asia Pacific Retail Rental and Capital Value Index
350
300
Index Q1 2003 = 100
RENTAL GROWTH PICKS UP

250
200
150
100
50
2007 Q1
2003 Q1
2004 Q1
2005 Q1
2006 Q1
2008 Q1
2009 Q1
2010 Q1
2011 Q1
2012 Q1
2013 Q1
2014 Q1
2015 Q1
2016 Q1
2017 Q1
2018 Q1
Rental Value Index Capital Value Index
Figure 11: Strongest Average Q-o-Q Rental Growth
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
Adelaide Sydney Guangzhou Singapore

LOGISTICS 103% y-o-y 2.1% q-o-q 1.2% q-o-q
W A R E H O US IN G D E M A N D R E M A I N S R O B U S T Figure 12: Warehousing Net Absorption (million sf)

70
60
50
Million sq. ft.

40
30
20
10
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018
Note: CBRE tracks net absorption for selected major markets in Asia Pacific.
Figure 13: Logistics Vacancy Rate
24%
Q4 2017 Q1 2018
20%
16%
Vacancy Rate (%)
12%
8%
4%
0%
Note: CBRE tracks vacancy rate for selected major markets in Asia Pacific.
G R E A T E R C H I N A S U P P LY T I G H T E N S

Figure 14: Logistics Development Pipeline

50
45 2020F
Development Pipeline (million sq. ft.)

40 2019F
35
2018F
30
25
20
15
10
5
0
Sydney*
Shenzhen
Greater Tokyo
Greater Seoul
Melbourne*
Shanghai
Perth*
Auckland*
Hong Kong
Brisbane*
Guangzhou
Singapore
Beijing
Note: Singapore records net supply; Australia reported pipeline of entire state
Figure 15: Asia Pacific Industrial Rental and Capital Value Index
225
C H I N A D R I V E S S O L ID R E N T A L G R O WT H 200
175
Index Q4 2005 = 100
150
125
100
75
2016 Q1
2007 Q1
2008 Q1
2009 Q1
2010 Q1
2011 Q1
2012 Q1
2013 Q1
2014 Q1
2015 Q1
2017 Q1
2018 Q1
Capital Value Index Rental Value Index
Figure 16: Strongest Rental Growth, Q-o-Q
12%
9%
6%
3%
0%
Auckland
Canberra
Shanghai
Guangzhou
Beijing

INVESTMENT 7.8% y-o-y 29% y-o-y
I N V E S T O R A P P E T IT E R E M A I N S R O B U S T
Figure 17: Transaction Volume and Key Themes by Market

(US$ billion) 0 2 4 6 8 10 Key Themes
• J-REITs dominate buying activity, supported by stronger capital raising
Japan
• Tighter yield gap between regional market sand Tokyo
• Domestic investors most active
China
• Insurance companies returning to the market
• Retail investment picking up thanks to stronger retail sales and inbound
Hong Kong
tourism
• Growing interest from foreign investors for value-added opportunities
Korea
• Yield compressing further for offices with master lease terms
• Robust interest from foreign buyers but no major deals
Australia
• Brisbane office assets saw further yield compression
• No major office sales recorded. Activity confined to strata-title sales
Singapore
• Robust demand for residential site from developers
• Investment sentiment remains strong, with experienced foreign investors
India
continuing to expand their portfolios
• Steady demand from owner occupiers for industrial and office assets
Taiwan
• Local developers looking for residential sites for development
• Strong interest from foreign investors due to high initial yields
New Zealand Q1 2018 • Logistics assets generating stronger interest
Q1 2017 • Foreign investors keen to partner with local developers for residential
*Other SE Asia
projects in Thailand and Vietnam
Source: CBRE Research, RCA , Q1 2018; Transactions include deals above US$10 million in the Office, Retail, Mixed, Industrial, Hotel and Other commercial sectors.
Note: * Other SE Asia include Malaysia, Indonesia, the Philippines, Thailand and Vietnam.

C R O S S - B O R D E R I N V E S T M E N T S L O WS
Figure 18: Cross-border Investment in Asia Pacific by Source of Capital
45
40
35
30
US$ billion
25
20
15
10
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Q1 Q2 Q3 Q4

PROPERTY FUNDS ENJOY BUSY QUARTER
Figure 19: Net Acquisitions by Property Funds in Asia Pacific
40
30
20
10
US$ billion
-10
-20
-30
-40
2012 2013 2014 2015 2016 2017 Q1 2018
Gross acquisitions Gross disposals Net acquisitions
Note: Net acquisitions = gross acquisitions – gross disposals

Table 3: Major Transactions in Q1 2018
Price
Market Property Name Sector Buyer Seller
(US$ mil)
Hong Kong 18 King Wah Road Office 1,271 A Chinese consortium Henderson Land
Samsung SRA Asset
Seoul K-Twin Towers Office 665 Vestas Investment Management
Management
Singapore Capitol Singapore (50% stake) Retail 390 Perennial and New Capitol Chesham Properties
LaSalle Investment
Shanghai Shanghai International Plaza Office 372 Alpha Asia Marco Trends Fund II
Management
Shanghai Neo Central Park Mixed 367 Gopher Asset Management Sunac

OUTLOOK
O F F IC E L O G I S T IC S
INVESTMENT
RETAIL

Rental Cycle
Figure 20: Asia Pacific Office Rental Cycle Q1 2018
Beijing
New Delhi
Auckland Bangkok Taipei
Shanghai Canberra Tokyo
Shenzhen Hong Kong
Brisbane Bangalore
Kuala Lumpur
Seoul Guangzhou Ho Chi Minh City
Jakarta Adelaide Hanoi
Perth Singapore Melbourne
Mumbai Sydney
Wellington
Decline Accelerating Decline Slowing Growth Accelerating Growth Slowing
Figure 21: Asia Pacific Retail Rental Cycle Q1 2018

Beijing
Shanghai
Shenzhen Jakarta Mumbai
Adelaide New Delhi
Brisbane
Hong Kong Ho Chi Minh City
Taipei Guangzhou
Perth Melbourne
Singapore Bangkok
Tokyo Sydney
Hanoi Auckland
Wellington
Figure 22: Asia Pacific Logistics Rental Cycle Q1 2018
Guangzhou
Tokyo Seoul
Beijing Adelaide
Shanghai
Singapore Hong Kong Shenzhen
Chennai Bangkok
Perth Pune Melbourne Sydney
Brisbane Auckland
Wellington

Note: Markets do not necessarily move along the curve in the same direction or at the same speed.

Capital Value Cycle

Hong Kong
Figure 23: Asia Pacific Office Capital Value Cycle Q1 2018 Tokyo
Brisbane
Seoul Shanghai
Shenzhen New Delhi Sydney
Auckland Bangalore Beijing
Melbourne
Taipei
Mumbai
Singapore
Perth

Tokyo
Shanghai
Figure 24: Asia Pacific Retail Capital Value Cycle Q1 2018 Beijing
Auckland
Melbourne
Sydney
Taipei
Singapore
Hong Kong
Figure 25: Asia Pacific Logistics Capital Value Cycle Q1 2018
Beijing Melbourne
Shanghai Auckland
Tokyo Sydney
Seoul
Singapore
Hong Kong

Note: Markets do not necessarily move along the curve in the same direction or at the same speed.
The capital value cycle is intended to display the trend in prime office, retail and industrial properties

Table 4: Key Markets Indicative Grade A Office Rent and Overall Vacancy Rate
City Per local Grade A rent US$/sq. ft. per Q-o-Q change Y-o-Y change Vacancy
measurement local annum (%, local) (%, local) rate (%)
Beijing RMB sq. m. p.m. 487 120 -3.8 0.1 8.4
Shanghai RMB sq. m. p.m. 333 85 -0.2 -3.8 14.0
Guangzhou RMB sq. m. p.m. 178 46 1.5 6.5 7.2
Shenzhen RMB sq. m. p.m. 257 65 1.0 7.4 10.6
Hong Kong HK$ sq. ft. p.m. 71 108 1.6 3.2 5.5
Taipei NT$ ping p.m. 2,640 47 0.1 0.2 16.5
Tokyo JPY tsubo p.m. 36,500 108 0.1 1.5 2.3
Seoul – CBD KRW sq. m. p.m. 31,759 63 0.8 2.2 11.4
Seoul – Gangnam KRW sq. m. p.m. 27,196 55 0.9 2.1 7.3
Seoul – Yeouido KRW sq. m. p.m. 23,046 54 0.3 0.3 14.6
New Delhi – CBD INR sq. ft. p.m. 295 73 0.0 0.0 2.9
New Delhi – Gurgaon INR sq. ft. p.m. 99 28 0.0 2.1 24.3
Mumbai – Nariman Point INR sq. ft. p.m. 220 51 0.0 0.0 7.0
Mumbai – BKC INR sq. ft. p.m. 250 66 0.0 0.0 19.4
Bangalore - CBD INR sq. ft. p.m. 138 34 2.2 6.2 5.3
Singapore S$ sq. ft. p.m. 10 89 3.2 8.4 5.9
Bangkok CBD THB sq. m. p.m. 998 36 0.4 3.1 6.7
Ho Chi Minh City US$ sq. m. p.m. 40 44 3.6 7.3 6.0
Hanoi US$ sq. m. p.m. 31 34 0.3 4.5 7.3
Jakarta CBD IDR sq. m. p.m. 290,746 24 -0.2 -4.3 19.7
Kuala Lumpur MYR sq. ft. p.m. 7 21 0.0 0.0 17.6
Adelaide CBD A$ sq. m. p.a. 268 19 -0.3 -2.2 16.2
Brisbane CBD A$ sq. m. p.a. 365 26 0.0 -1.1 15.6
Canberra CBD A$ sq. m. p.a. 268 19 -0.3 -0.7 11.3
Melbourne CBD A$ sq. m. p.a. 425 30 2.4 15.0 4.6
Perth CBD A$ sq. m. p.a. 268 19 -0.3 -10.7 19.8
Sydney CBD A$ sq. m. p.a. 717 51 3.9 11.7 4.6
Auckland CBD NZ$ sq. m. p.a. 394 27 0.2 0.9 6.6
Wellington CBD NZ$ sq. m. p.a. 326 22 0.8 5.4 7.4

Note: Grade A rents are stated in local currency and prevailing unit of measure, as well as in those terms – effective or face rents, gross or net floor basis
that are customarily employed in the respective market. Grade A rents in U.S. dollars are quoted based on net floor area basis

Table 5: Key Markets Indicative Retail Rent
Per local Average rent US$/sq. ft. per Q-o-Q change Y-o-Y change
City Type
measurement local annum (%, local) (%, local)
Beijing Shopping Centre RMB sq. m. p.day 36 192 0.2 1.4
Shanghai Shopping Centre RMB sq. m. p.day 39 208 0.5 0.8
Guangzhou Shopping Centre RMB sq. m. p.day 35 189 1.4 1.8
Shenzhen Shopping Centre RMB sq. m. p.day 23 125 0.4 1.1
Hong Kong High Street HK$ sq. ft. p.m. 493 753 0.3 -2.2
Taipei High Street NT$ sq. m. p.m. 5,383 206 0.0 -2.0
Tokyo* High Street JPY tsubo p.m. 400,000 1,270 0.0 0.0
Singapore Shopping Centre S$ sq. ft. p.m. 25 228 0.6 -1.6
Bangkok Shopping Centre THB sq. m. p.m. 2,180 78 0.0 0.0
Ho Chi Minh City Shopping Centre US$ sq. m. p.m. 58 65 0.4 3.8
Hanoi Shopping Centre US$ sq. m. p.m. 30 33 -1.1 0.5
New Delhi Shopping Centre INR sq. ft. p.m. 1,250 153 0.0 0.0
New Delhi High Street INR sq. ft. p.m. 1,650 288 0.0 0.0
Mumbai Shopping Centre INR sq. ft. p.m. 750 111 0.0 0.0
Sydney High Street A$ sq. m. p.a. 5071 362 1.7 11.2
Melbourne High Street A$ sq. m. p.a. 3,701 265 -2.1 -2.6
Adelaide High Street A$ sq. m. p.a. 2,100 150 3.3 3.3
Brisbane High Street A$ sq. m. p.a. 3,155 225 0.0 0.0
Perth High Street A$ sq. m. p.a. 2,729 195 0.0 -10.2
Auckland High Street NZ$ sq. m. p.a. 4,500 303 0.0 0.0
Wellington High Street NZ$ sq. m. p.a. 2,668 179 -0.1 -0.5
* Prime Rent - The prime retail rents represent the typical “achievable” open market headline rent which an international retail chain would be expected to
pay for a ground floor retail unit (either high street or shopping centre depending on the market) of up to 200 sq. m. of the highest quality and
specification and in the best location in a given market. The quoted rents reflect the level at which relevant transactions are being completed in the market
at the time but need not be exactly identical to any of them, particularly if deal flow is very limited or made up of unusual one-off deals. In these
circumstances, the quoted figure will be more hypothetical, based on expert opinion of market conditions, but the same criteria on building size and
specification apply. The figures exclude any leasing incentives or “key money” (premium, or initial payment, to secure the right to occupy the unit).
Note: All markets measure the relative performance of retail properties of similar quality with the exception of Vietnam, which tracks the overall market movement.

Table 6: Key Markets Indicative Logistics Rent
Per local Average rent US$/sq. ft. per Q-o-Q change Y-o-Y change
City Type
measurement local annum (%, local) (%, local)
Beijing≠ Logistics RMB sq. m. p.m. 46.3 8.2 9.9 15.2
≠
Shanghai Logistics RMB sq. m. p.m. 45.3 8.0 4.5 4.6
≠
Guangzhou Logistics RMB sq. m. p.m. 36.1 6.4 1.5 1.5
Shenzhen≠ Logistics RMB sq. m. p.m. 43.0 7.4 0.3 -1.1
Hong Kong Warehouse HK$ sq. ft. p.m. 12.3 18.8 0.2 -0.3
Greater Tokyo Logistics JPY tsubo p.m. 4,080 13.0 0.2 1.7
Warehouse 1.6 14.5 -0.6 -3.1

Singapore S$ sq. ft. p.m.
(ground floor)
Chennai Logistics INR sq. ft. p. m. 27.0 5.0 0.0 -3.6
Pune Logistics INR sq. ft. p. m. 28.0 5.2 0.0 0.0
Sydney Warehouse A$ sq. m. p.a. 135.1 9.7 0.6 1.4
Melbourne Warehouse A$ sq. m. p.a. 86.5 6.2 0.0 3.0
Brisbane Warehouse A$ sq. m. p.a. 109.3 7.8 0.0 -2.2
Adelaide Warehouse A$ sq. m. p.a. 76.3 5.5 0.0 1.7
Perth Warehouse A$ sq. m. p.a. 94.0 6.7 0.0 -1.9
Canberra Warehouse A$ sq. m. p.a. 97.5 7.0 1.6 2.6
Auckland Warehouse NZ$ sq. m. p.a. 144.5 9.7 1.6 5.1
Wellington Warehouse NZ$ sq. m. p.a. 110.3 7.4 0.9 3.1

Logistics rents - Average rental values are derived from a basket of prime logistics properties located in major industrial zones in each market.
≠Refers to like-for-like rental change for Q-o-Q & Y-o-Y

Table 7: Key Markets Indicative Prime Yields
Prime Office Y-o-Y Change Prime Retail Y-o-Y Change Prime Industrial Y-o-Y Change
City
Yield (bps) Yield (bps) Yield (bps)
Beijing 4.00 -40 4.30 -30 5.50 -50
Shanghai 4.00 -25 4.30 0 5.50 -40
Hong Kong 2.80 0 3.30 0 3.65 -20
Taipei 2.50 +5 3.00 0 3.85 0
Tokyo 2.90 -25 2.90 0 4.00 -15
Seoul 4.80 0 n/a n/a 6.50 -40
Singapore 3.30 +20 4.80 -10 n/a n/a
New Delhi 8.20 0 8.50 0 10.50 0
Mumbai 9.10 0 12.50 0 13.50 0
Sydney 4.75 -25 4.50 0 5.85 -10
Melbourne 4.90 -30 4.15 -5 6.00 -20
Brisbane 5.15 -85 5.25 -25 6.45 -100
Auckland 5.50 -25 4.80 0 5.25 -40
N o t es a n d D e f i n i ti ons
CBRE’s investment transaction data presented in this report is based on real estate transactions valued US$10 million and above. It included real estate
transactions reported in 25 major markets in 12 countries across Asia Pacific. It included office, industrial, retail, hotel and mixed-use properties. Development
site and residential transactions are excluded. Transactions prices are tracked in local currencies and converted to US dollars using exchange rates as recorded
on the last day of the respective quarters of the year.
The CBRE Asia Pacific Office Capital Value Index tracks the performance of 24 office markets throughout Asia Pacific.
The CBRE Asia Pacific Retail Capital Value Index tracks the performance of 15 retail markets throughout Asia Pacific.
The CBRE Asia Pacific Industrial / Logistics Capital Value Index tracks the performance of 14 industrial markets throughout Asia Pacific.
The CBRE Asia Pacific All Sectors Capital Value Index is the weighted average of three capital value indices for office, retail and industrial sectors.
The indicative prime yield presented in this report is the ratio between annual net rental income (rent less non-recoverable costs) and the total amount invested
(purchase price plus purchasers’ on-costs), expressed as a percentage figure, achievable in the relevant top-tier building(s) in prime location, let according to
market conditions. It is based both on sale & purchase contracts concluded during a period and also on the market overview of the local investment department.
No allowance is made for any future rental growth.

ASIA PACIFIC RESEARCH GLOBAL RESEARCH
CBRE GLOBAL RESEARCH
This report was prepared by the CBRE Asia Pacific Research Team, which forms part of CBRE Global Research – a network of preeminent researchers who
collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate investors and occupiers around the globe.
Disclaimer
All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, including
projections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not
verified it and make no guarantee, warranty or representation about it. Readers are responsible for independently assessing the relevance, accuracy, completeness
and currency of the information of this publication. This report is presented for information purposes only, exclusively for CBRE clients and professionals, and is not
to be used or considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other financial instruments. All rights to the material
are reserved and none of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party
without prior express written permission of CBRE. Any unauthorised publication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for
any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication.

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MARKETVIEW

Asia Pacific, Q1 2018

Occupier and capital markets enjoy

Rent +1.1% +3.5%

Rent +0.5% + 0.7%

Rent +1.2% +1.8%

Total volume -48% +7.8%

*Transactions include deals above US$10

hotel and other commercial sectors

Q1 2018 CBRE Research © CBRE Inc. 2018 | 1

Table 1: Policy Interest Rate Changes

End of Mar 2018, Change in Q1

Australia 1.50 0 bps

Note on policy interest rates: Australia - Cash rate, China - 1 Yr

Q1 2018 CBRE Research © CBRE Inc. 2018 | 2

OFFICE 12% y-o-y 1.1% q-o-q 1.1% q-o-q

N E T A B S O R P T I O N R E G I S T E R S S O L ID G R O W T H Figure 2: Office Net Absorption (‘000s sq. ft.)

Q1 Q2 Q3 Q4 Annual New Supply

Source: CBRE Research, Q1 2018

Table 2: Major New Office Supply in Q1 2018

Beijing Azia Center 1,352,000

Taipei Taipei Nan Shan Plaza 1,145,000

Seoul KTCU Building 897,000

Mumbai Kanakia Wall Street - Phase II 650,000

Source: CBRE Research, Q1 2018.

Figure 3: Vacancy Rate and Development Pipeline

Development Pipeline of 2019

Source: CBRE Research, Q1 2018.

Q1 2018 CBRE Research © CBRE Inc. 2018 | 3

V A C A N CY R A T E E D G E S U P M A R G I N A LLY Figure 4: Asia Pacific Vacancy Rate (%)

Vacancy Rate (%)

Figure 5: Asia Pacific Office Rental and Capital Value Index

Figure 6: Strongest Grade A Rental Growth, Q-o-Q

Q1 2018 CBRE Research © CBRE Inc. 2018 | 4

RETAIL 39% y-o-y 0.5% q-o-q 0.5% q-o-q

Figure 8: New Retail Entrants by Sector 2017 – 2018 Q1

Source: CBRE Research, Q1 2018.

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N E W S U P P L Y P I P E L IN E R E M A I N S H I G H Figure 9: Development Pipeline

Development Pipeline (Million sq. ft.)

RENTAL GROWTH PICKS UP

Source: CBRE Research, Q1 2018.

Figure 11: Strongest Average Q-o-Q Rental Growth

Source: CBRE Research, Q1 2018.

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LOGISTICS 103% y-o-y 2.1% q-o-q 1.2% q-o-q

W A R E H O US IN G D E M A N D R E M A I N S R O B U S T Figure 12: Warehousing Net Absorption (million sf)

Million sq. ft.

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Figure 14: Logistics Development Pipeline

Development Pipeline (million sq. ft.)

Figure 16: Strongest Rental Growth, Q-o-Q

Source: CBRE Research, Q1 2018.

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INVESTMENT 7.8% y-o-y 29% y-o-y

Figure 17: Transaction Volume and Key Themes by Market

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Source: CBRE Research, Q1 2018.

Figure 19: Net Acquisitions by Property Funds in Asia Pacific

Note: Net acquisitions = gross acquisitions – gross disposals

Table 3: Major Transactions in Q1 2018

Source: CBRE Research, Q1 2018.

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