SECOND HALF 2011 | OFFICE

HIGHLIGHTS

GLOBAL OFFICE

Global Office Demand Growth Slow and Steady

JAMES COOK Director of Research | USA
Global Office Trend Forecast
Global

office vacancies will continue their decline, due to steady demand and low levels of new construction in North America and Europe. flight to quality trend will continue in many major markets, with occupiers trading up to higher-quality space or a better location as their leases expire.

GLOBAL CAPITALIZATION RATES / PRIME YIELDS: 10 LOWEST CITIES MARKET (Ranked by Dec 2011)
Taipei Hong Kong Vienna London West End Zurich Singapore Geneva Paris Munich Tokyo

The The

CBD CAP RATE (%) DEC 2011 2.60 2.94 3.50 4.00 4.10 4.20 4.25 4.50 4.50 4.50 JUNE 2011 2.80 3.22 3.50 4.00 4.10 4.30 4.00 4.50 4.50 4.60 DEC 2010 2.90 3.31 3.50 4.50 4.10 4.20 4.00 4.75 4.50 4.70

European sovereign debt crisis will likely push the Eurozone into a mild recession in early 2012. This contraction will be felt most profoundly in a handful of commercial property markets within the most troubled nations. Economic prospects in the Eurozone have slightly reduced overall positive global expectations for market performance in 2012. We expect continuing modest demand for office space, with most cities seeing a drop in vacancy rates. But global averages do not speak to the nuances of individual markets, andwhile we expect positive absorption due to business growth and expansion in the United States, China and Australiasome Eurozone countries may see negative absorption and increased vacancy as the region enters a mild recession. Latin America Boasts the Tightest Office Markets Some of the worlds lowest office vacancy rates are found in Latin American cities. Santiago, Chile; Rio de Janeiro, Brazil; So Paulo, Brazil; and Lima, Peru all have vacancy rates below three percent, resulting in a market that strongly favors landlords, prompts new construction and might squeeze some tenants that desire to expand. For the most part, we expect the strength of these markets to persist. While decreases in European demand for its commodities will likely hurt Latin America, this will be tempered by continued demand from China. In So Paolo, heightened demand has spurred the highest rates of new development in the region, which will eventually put downward pressure on asking rents. Select Asia Pacific Markets See Big Vacancy Drops The global trend in dropping vacancy rates should be evident in Asia and continue through 2012. Markets that saw a drop in vacancy in the second half of 2011 outnumbered by a two-to-one margin those where vacancy increased. each has shown apparent decline in rents between June and December of 2011, when quoted in U.S. dollars. Substantial declines, in fact: led by a $10.87 USD drop in Parisian Class A rents. But how significant are these figures? The change in London and Paris rents is due to the strengthening dollar relative to the euro and pound sterling. In local currency, prime rents in these markets are holding ground. Although smaller, the decline in Hong Kong of $7.56 USD ($5.10 HKD) per square foot may be a more important indicator of things to come, as demand from the banking and financial sector continue to weaken.

GLOBAL OFFICE OCCUPANCY COSTS: TOP 10 CITIES

CLASS A / NET RENT (USD/SQ FT)

MARKET (Ranked by Dec 2011)

Hong Kong London West End Paris Rio de Janeiro Moscow London City Perth Singapore Geneva So Paulo

DEC 2011 178.34 120.31 90.26 78.98 75.78 75.29 68.73 65.81 65.31 63.43

JUNE 2011 185.91 124.50 101.13 85.70 64.86 77.91 69.76 69.21 72.83 71.42

DEC 2010 166.62 108.28 92.31 79.89 77.54 75.02 55.29 57.80 64.20 60.71

EMEA and Asia Pacific Lead Global Construction A significant percentage of the office space under construction is in Europe, the Middle East and Africa (EMEA), and much of that is occurring in Moscow and Dubai. While both of these markets should expect strong economic growth in 2012, the fact that Dubaiwith a vacancy rate of 50 percentis constructing at such a pace Of the worlds most populous markets, those with the most leads us to expect that supply will continue to outpace significant declines in six-month vacancy rates were nearly demand in that market. all in the Asia Pacific region. Chengdu, propelled by its strong manufacturing sector, saw its vacancy rate drop by The other two top markets for office construction are in the GuangzhouChinas leading 7.8 percent in the period, and Shanghai saw a 3.2 percent Asia Pacific region. commercial port cityand Tokyo have 19.6 and 15.6 million drop in vacancy. square feet under construction respectively. Asian economic Two other large Asian markets saw vacancy rates drop by growth rates will remain strong in the coming months, with 1.5 percent or more: Jakarta, which has also seen China and India leading the pack. Rents are on the rise in sustained growth in CBD rental rates and renewed global most cities in the region. However, dropping rents in Seoul investor interest; and Singapore, where occupancies are and Hong Kong are a potential indicator of global economic expected to stabilize. uncertainty. In Tokyo, where new supply has been increasing for the past three years, we expect construction to peak and Marquee Markets See Rent Decline begin to decline in the coming year. While Hong Kong, Londons West End and Paris command the top three highest asking rents for Class A office space,

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HIGHLIGHTS | SECOND HALF 2011 | OFFICE | GLOBAL

LOCAL MEASURE / CURRENCY CBD RENTS

MEASURE
QUOTED CURRENCY TIME PERIOD EXCHANGE RATE (USD) DEC 31, 2011

CBD RENT LOCAL CURRENCY

AVERAGE CLASS A NET RENT AVERAGE CLASS A GROSS RENT

CBD RENT US DOLLARS/SQ FT/YR

AVERAGE CLASS A NET RENT AVERAGE CLASS A GROSS RENT CBD CAP RATE / PRIME YIELD (%)

MARKET
ASIA PACIFIC

COUNTRY

UNIT

Adelaide Brisbane Canberra Melbourne Perth Sydney Chengdu Guangzhou Hong Kong Shanghai Bangalore Chennai Delhi Mumbai Jakarta Tokyo Auckland Wellington Makati Singapore Seoul Taipei Bangkok Vienna Antwerp Sofia* Zagreb* Prague* Copenhagen Cairo Tallinn Helsinki Bordeaux Lyon Montepelier Paris Berlin Dsseldorf Frankfurt Hamburg Munich Stuttgart Athens* Budapest* Dublin Milan Rome Riga

Australia Australia Australia Australia Australia Australia China China China China India India India India Indonesia Japan New Zealand New Zealand Philippines Singapore South Korea Taiwan Thailand Austria Belgium Bulgaria Croatia Czech Republic Denmark Egypt Estonia Finland France France France France Germany Germany Germany Germany Germany Germany Greece Hungary Ireland Italy Italy Latvia

SM SM SM SM SM SM SM SM SF SM SF SF SF SF SM SM SM SM SM SF SM PING SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM

AUD AUD AUD AUD AUD AUD CNY CNY HKD CNY INR INR INR INR IDR JPY NZD NZD PHP SGD KRW TWD THB EUR EUR EUR EUR EUR DKK USD EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR

Year Year Year Year Year Year Month Month Month Month Month Month Month Month Month Year Year Year Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month Month

0.98 0.98 0.98 0.98 0.98 0.98 6.29 6.29 7.77 6.29 53.06 53.06 53.06 53.06 9,070.00 77.12 1.29 1.29 43.80 1.30 1,158.10 30.27 31.55 0.77 0.77 0.77 0.77 0.77 5.73 1.00 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77 0.77

350.00 615.00 367.00 498.00 725.00 631.00 143.76 158.82 115.45 249.89 55.00 60.00 222.00 191.00 132,753.00 307.00 343.00 850.00 7.11 22,883.00 2,450.00 665.00 18.00 10.40 9.00 12.50 17.00 108.30 21.80 13.30 22.00 13.50 18.80 12.50 62.50 19.00 20.00 30.00 22.00 27.00 14.20 14.00 12.50 20.00 40.00 29.00 12.00

460.00 745.00 445.00 613.00 880.00 762.00 162.51 215.80 133.39 249.89 65.00 70.00 261.00 225.00 188,164.00 91,476.00 434.00 439.00 8.93 26,867.00 2,940.00 712.00

33.18 58.30 34.79 47.21 68.73 59.82 25.45 28.12 178.34 44.27 12.44 13.57 50.21 43.20 16.31 22.17 24.77 21.63 65.81 22.02 26.98 23.49 26.00 15.02 13.00 18.05 24.55 21.06 24.30 19.21 31.77 19.50 27.15 18.05 90.26 27.44 28.88 43.33 31.77 38.99 20.51 20.22 18.05 28.88 57.77 41.88 17.33

43.61 70.62 42.19 58.11 83.42 72.24 28.77 38.21 206.06 44.27 14.70 15.83 59.03 50.89 23.12 110.17 31.34 31.70 82.65 25.85 32.38 25.15

7.63 7.50 9.98 7.00 8.00 6.95 7.20 6.25 2.94 6.10 9.90 10.00 9.00 10.56 8.10 4.50 8.66 8.30 9.40 4.20 5.80 2.60

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

3.50 7.25 9.00 9.25 6.20 5.00 9.00 7.50 5.75 6.50 6.00 7.00 4.50 5.00 5.25 5.20 4.70 4.50 5.40 7.50 7.75 7.50 5.50 6.00 8.00

* Rents reflect combined A and B Class. COLLIERS INTERNATIONAL | P. 2

HIGHLIGHTS | SECOND HALF 2011 | OFFICE | GLOBAL

LOCAL MEASURE / CURRENCY CBD RENTS

MEASURE QUOTED CURRENCY TIME PERIOD

EXCHANGE RATE (USD) DEC 31, 2011

CBD RENT LOCAL CURRENCY

AVERAGE CLASS A NET RENT AVERAGE CLASS A GROSS RENT

CBD RENT US DOLLARS/SQ FT/YR

AVERAGE CLASS A NET RENT AVERAGE CLASS A GROSS RENT CBD CAP RATE / PRIME YIELD (%)

MARKET

COUNTRY

UNIT

EUROPE, MIDDLE EAST AND AFRICA (EMEA) continued

Vilnius Amsterdam Oslo Warsaw* Lisbon Bucharest* Moscow Saint Petersburg Riyadh Belgrade* Bratislava* Madrid Stockholm Geneva Zurich Istanbul Kyiv* Abu Dhabi Dubai Belfast Birmingham Bristol Edinburgh Glasgow London City London West End Manchester LATIN AMERICA Buenos Aires Rio de Janeiro So Paulo Santiago Bogot San Jos Mexico City Panama Lima

Lithuania Netherlands Norway Poland Portugal Romania Russia Russia Saudi Arabia Serbia Slovakia Spain Sweden Switzerland Switzerland Turkey Ukraine United Arab Emirates United Arab Emirates United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom

SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SM SF SF SF SF SF SF SF SF

EUR EUR NOK EUR EUR EUR USD USD SAR EUR EUR EUR SEK CHF CHF USD USD USD USD GBP GBP GBP GBP GBP GBP GBP GBP

Month Month Year Month Month Month Month Month Year Month Month Month Year Month Month Month Month Month Month Year Year Year Year Year Year Year Year

0.77 0.77 5.98 0.77 0.77 0.77 1.00 1.00 3.75 0.77 0.77 0.77 6.91 0.94 0.94 1.00 1.00 1.00 1.00 0.64 0.64 0.64 0.64 0.64 0.64 0.64 0.64

13.10 17.10 3,250.00 22.60 15.00 15.00 68.00 30.70 1,200.00 13.00 11.45 24.00 4,500.00 55.00 40.00 31.05 33.00 33.10 35.79 12.50 21.00 24.00 21.00 23.00 48.50 77.50 22.00

18.92 24.70 50.49 32.64 21.66 21.66 75.78 34.21 29.72 18.77 16.54 34.66 60.52 65.31 47.50 34.60 36.78 36.89 39.89 19.40 32.60 37.26 32.60 35.70 75.29 120.31 34.15

8.50 6.50 5.50 6.25 7.50 8.25 9.50 11.00 10.00 9.00 7.50 5.75 5.00 4.25 4.10 7.00 11.00 10.00 10.00 6.25 6.00 6.25 6.00 6.00 5.25 4.00 6.00

Argentina Brazil Brazil Chile Colombia Costa Rica Mexico Panama Peru

SM SM SM SM SM SM SM SM SM

USD BRL BRL USD USD USD USD USD USD

Month Month Month Month Month Month Month Year Month

1.00 1.86 1.86 1.00 1.00 1.00 1.00 1.00 1.00

28.60 132.00 106.00 23.51 27.40 17.30 27.00 20.00 18.83

32.00 152.50 131.00 27.97 30.30 19.21 30.00 24.00 24.58

31.87 78.98 63.43 26.20 30.54 19.28 30.09 1.86 20.99

35.66 91.25 78.39 31.17 33.77 21.41 33.43 2.23 27.39

9.50 10.50

8.31 8.30 9.54 9.00

12.50

* Rents reflect combined A and B Class. COLLIERS INTERNATIONAL | P. 3

HIGHLIGHTS | SECOND HALF 2011 | OFFICE | GLOBAL

LOCAL MEASURE / CURRENCY CBD RENTS

MEASURE
QUOTED CURRENCY TIME PERIOD EXCHANGE RATE (USD) DEC 31, 2011

CBD RENT LOCAL CURRENCY

AVERAGE CLASS A NET RENT AVERAGE CLASS A GROSS RENT

CBD RENT US DOLLARS/SQ FT/YR

AVERAGE CLASS A NET RENT AVERAGE CLASS A GROSS RENT

MARKET NORTH AMERICA Calgary Edmonton Guelph Halifax Montral Ottawa Regina Saskatoon Toronto Vancouver Victoria Waterloo Region, ON Atlanta Bakersfield Baltimore Boise Boston Charleston Charlotte Chicago Cincinnati Cleveland Columbia Columbus Dallas/Fort Worth Denver Detroit Fresno Ft. LauderdaleBroward Grand Rapids Greenville Hartford Honolulu Houston Indianapolis Jacksonville Kansas City Las Vegas

COUNTRY

UNIT

CBD CAP RATE / PRIME YIELD (%)

Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada Canada United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States

SF SF SF SF SF SF SF SF SF SF SF SF SF USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD

CAD CAD CAD CAD CAD CAD CAD CAD CAD CAD CAD CAD USD SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF

Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year

1.02 1.02 1.02 1.02 1.02 1.02 1.02 1.02 1.02 1.02 1.02 1.02 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

36.00 22.33 16.00 17.05 23.24 27.07 22.00 25.00

55.38 39.90 27.36 31.82 42.00 48.36 37.00 37.00 53.31

35.24 21.86 15.66 16.69 22.75 26.50 21.53 24.47

54.21 39.06 26.78 31.15 41.11 47.34 36.22 36.22 52.18

6.00 6.44 7.25

6.75 7.25 7.00 7.00 5.90 5.50 6.25 7.25 8.60

34.60 23.78 13.99 11.23 9.31 11.41 12.62 27.75 19.14

54.50 37.78 25.36 22.73 17.40 22.41 18.62 47.75 29.14 24.27

33.87 23.28 13.69 11.23 9.31 11.41 12.62 27.75 19.14

53.35 36.98 24.82 22.73 17.40 22.41 18.62 47.75 29.14 24.27

5.30 8.00

14.50 13.87

35.00 23.37 20.68

14.50 13.87

35.00 23.37 20.68

6.50 9.75

11.75 11.07 15.00 12.19

19.15 18.80 25.00 28.04 22.46

11.75 11.07 15.00 12.19

19.15 18.80 25.00 28.04 22.46 7.80 6.00

17.90 17.76 13.02 10.48 10.26 18.60 24.92 12.27 9.22 11.57 20.08

26.00 31.26 20.97 20.63 22.76 34.80 35.29 19.27 19.12 19.57 31.08

17.90 17.76 13.02 10.48 10.26 18.60 24.92 12.27 9.22 11.57 20.08

26.00 31.26 20.97 20.63 22.76 34.80 35.29 19.27 19.12 19.57 31.08

9.00 6.30 9.00

9.00

6.60 8.50

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HIGHLIGHTS | SECOND HALF 2011 | OFFICE | GLOBAL

LOCAL MEASURE / CURRENCY CBD RENTS

MEASURE
QUOTED CURRENCY TIME PERIOD EXCHANGE RATE (USD) DEC 31, 2011

CBD RENT LOCAL CURRENCY

AVERAGE CLASS A NET RENT AVERAGE CLASS A GROSS RENT

CBD RENT US DOLLARS/SQ FT/YR

AVERAGE CLASS A NET RENT AVERAGE CLASS A GROSS RENT

MARKET
NORTH AMERICA continued

COUNTRY

UNIT

CBD CAP RATE / PRIME YIELD (%)

Little Rock Los Angeles Louisville Memphis Miami-Dade Minneapolis Nashville New York Downtown Manhattan New York Midtown Manhattan New York Midtown S. Manhattan Oakland Oklahoma City Omaha Orlando Philadelphia Phoenix Pittsburgh Pleasanton/Walnut Creek Portland Raleigh/Durham/Chapel Hill Reno

United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States

SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF SF

USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD

Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year

1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

8.35 22.52

15.60 38.52 20.34

8.35 22.52

15.60 38.52 20.34

9.50 7.00

8.40 25.75

16.65 41.25
14.33 22.57

8.40 25.75

16.65 41.25
14.33 22.57

25.17 35.72 28.83 18.18 10.18 10.29 13.06 14.89 14.87 17.00 16.08 15.20 15.56

48.17 67.72 48.83 31.68 17.18 19.29 24.06 26.41 27.87 27.50 27.48 25.20 22.56 23.04

25.17 35.72 28.83 18.18 10.18 10.29 13.06 14.89 14.87 17.00

48.17 67.72 48.83 31.68 17.18 19.29 24.06 26.41 27.87 27.50 27.48

6.00 5.50 5.25 8.00

8.80 8.00

8.25 8.00

15.20 15.56

25.20 22.56 23.04 8.00

Sacramento San Diego San Francisco San Jose/Silicon Valley Savannah Seattle/Puget Sound St. Louis St. Paul, MN Stamford Stockton/San Joaquin County Tampa Washington, DC West Palm Beach/Palm Beach County White Plains

United States United States United States United States United States United States United States United States United States United States United States United States United States United States

SF SF SF SF SF SF SF SF SF SF SF SF SF SF

USD USD USD USD USD USD USD USD USD USD USD USD USD USD

Year Year Year Year Year Year Year Year Year Year Year Year Year Year

1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 28.16 17.52 13.61 30.85 21.81 19.28 17.54 12.20 19.64 7.28 13.46

32.34 28.32 41.12 32.04 19.20 30.11 17.78 11.33 41.16 21.12 22.61 52.85 36.81 32.28 28.16 17.52 13.61 30.85 21.81 19.28 17.54 12.20 19.64 7.28 13.46

32.34 28.32 41.12 32.04 19.20 30.11 17.78 11.33 41.16 21.12 22.61 52.85 36.81 32.28 8.00 8.30 8.00 5.75 9.12 8.00 9.50 7.63 9.25 5.50

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HIGHLIGHTS | SECOND HALF 2011 | OFFICE | GLOBAL

GLOSSARY
Class A Gross Rent The average rent quoted per square foot per annum for Class A office building within the CBD plus additional costs such as property taxes, service charges or operating expenses. Class A Net Rent The average rent quoted per square foot per annum for a Class A office building within the CBD. Class A (Prime) Buildings Most prestigious building competing for premier office users with rents above average for the area. Buildings have high quality standard for finishes, state-of-the-art systems, exceptional accessibility and a definite market presence. Characterized by: Prime central locations; first-class tenant improvements; on-site parking; state of the art elevators and HVAC systems; concrete and steel construction; contemporary design and architecture; high quality of upkeep and maintenance; ability to command a premium rent within the relevant market. The Class A building designation implies that the size of the building is significant in accordance with the market. Quoted Currency The currency quoted locally in all lease transactions. Not necessarily national currency. (Note: Chile utilizes Unidad de Fomento, which equals USD 24.30) Time Period The standard way in which leases are quoted. Usually on a per month or per year basis. Existing Inventory Existing office floor space (Classes A, B and C) within each citys CBD (central business district). Under Construction The total office floor space (Classes A, B and C) within each citys CBD (central business district) which is under construction, but not yet completed, giving an indication of the development pipeline for each market. This includes both available and pre-let floor space. Unit The normal convention locally in which area is measured. Usually on a per square foot or per square meter basis. Vacancy Rate (%) The percentage of the inventory (total completed office floor space, Classes A, B and C, within the CBD) which is unoccupied. Yield (%) The average prime yield (or capitalization rate), expressed as a percentage, for a Class A office building within the CBD.
Note: SF = square feet SM = square meter PSF = per square foot PSM = per square meter CBD = central business district

512 offices in 61 countries on 6 continents

United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117 $1.5 billion in annual revenue 979 million square feet under management Over 12,500 professionals COLLIERS INTERNATIONAL 601 Union Street, Suite 4800 Seattle, WA 98101 USA TEL +1 206 695 4200

Copyright 2012 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

GLOBAL RESEARCH CONTACTS

AMERICAS
James Cook USA james.cook@colliers.com Jeff Simonson USA jeff.simonson@colliers.com

ASIA PACIFIC
Simon Lo Asia simon.lo@colliers.com Amit Oberoi India amit.oberoi@colliers.com Nerida Conisbee Australia/New Zealand nerida.conisbee@colliers.com Yumiko Yasuda Japan yumiko.yasuda@colliers.com

EUROPE, MIDDLE EAST AND AFRICA

Thomas Grounds EMEA thomas.grounds@colliers.com Mark Charlton United Kingdom mark.charlton@colliers.com Damian Harrington Central and Eastern Europe damian.harrington@colliers.com Renaud Roger France rroger@colliers-ufgpm.fr

Accelerating success.

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