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PT PricewaterhouseCoopers FAS

In cooperation withPT Paragon Property

1st Quarter 2007

TRENDS SUMMARYOffice: While demand for space is increasing, occupancy levels

remain nearly the same as newly completed buildings addmore market supply.

Retail: Even though lease occupancies remain high, there has beenonly marginal rental rate growth and fixed rate increases.The predictable kiosks oversupply and vacancy crisis hasmaterialized. There are thousands of empty units which willbe very difficult to utilize or re-position for alternative uses.

Apartment: While lease and serviced apartment occupancies are stillbelow ideal levels, more and more investor strata title unitshave been completed and now competing for tenants.

Hotel: Hotel performance continues to improve, but not yet to 1997levels. While the improvement is encouraging, the keyperformance benchmarks are below standard industrylevels.

overview economic

Inflation during 1Q07 was 1.91%, lower compared to1.98% in the same quarter last year. 1Q07 monthlyinflation was at 1.04%, 0.62% and 0.24% in January,February and March, respectively. As of March,Year on Year inflation was 6.52% in 2007 comparedto 15.74% the previous year.

The quarterly average exchange rate wasRp9,099:US$1.00; strengthening fromRp9,134:US$1.00 in 4Q06. The three month BankIndonesia certificate (SBI) rate fell to 7.83% on 9May 2007 from 8.10% on 7 February 2007 and12.15% on 10 May 2006. The Jakarta CompositeIndex closed at 1,831 on 30 March 2007, comparedto 1,803 on 27 December 2006, and 1,323 on 29March 2006.

During the period January – March 2007, ApprovedDomestic and Foreign Direct Investment was aboutRp77.2 trillion and US$14.1 billion, an increase of378.9% and 496.4% respectively from the sameperiod last year.

During the same period, Realised Domestic andForeign Direct Investment was about Rp13.7 trillionand US$3.0 billion, an increase of 60.4% and 14.9%respectively from the same period last year.

The value of exports and imports from January toMarch 2007 increased each by 15.2% compared tothe same period last year to US$25.9 billion andUS$15.4 billion respectively.

GDP growth increased by 2.0% compared to theprevious quarter and increased by 6.0% comparedto the same quarter last year.

During this quarter, the Indonesia Business Indexwas 100.19 compared to 107.43 in the previousquarter and is expected to be 101.35 next quarter(Index 100 = no changes compared to the previousquarter).

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2 Jakarta Property Trend - 1Q07 PricewaterhouseCoopers

Jakarta Property and Composite Indexes

020406080

100120140160180

03/27

/1997

03/30/1998

03/30/1999

03/30

/2000

3/29/200

1

03/28

/2002

03/31/2003

03/31/2004

03/31/200

5

03/29/200

6

03/30/2007

JPI

2004006008001,0001,2001,4001,6001,8002,000JCI

Jakarta Property Index Jakarta Composite Index

US$/Rp Conversion Rate and YoY Inflation Rate

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1Q97

1Q98

1Q99

1Q00

1Q01

1Q02

1Q03

1Q04

1Q05

1Q06

1Q07

Rp/1US$

-10%0%10%20%30%40%50%60%70%80%90%

US$/Rp Exchange Rate Inflation

SupplyThere was new supply of about 134,000 m2 fromthe operation of Marein Plaza, Indofood Towerand Menara Karya in the CBD, and Ratu Prabu 2in the secondary area during 1Q07. Office stockincreased to approximately 4.56 million m2.

Buildings currently under construction in theCBD include: Sentral Senayan II, Menara Satrio,Grand Indonesia, Pacific Place and The East.

Demand / OccupancyOverall, occupancy of office buildings in Jakartadecreased during this quarter to 85.0%.Occupancy rates decreased to 84.9% in theCBD but increased to 85.0% in the secondaryarea. Total vacant space increased toapproximately 686,000 m2.

Secondary area Grade B transacted gross rentsranged from Rp75,000–Rp85,000/m2/mth andGrade C from Rp65,000–Rp70,000.

Service charges (within gross rents) for the CBDranged from Rp30,000–Rp70,000/m2/mth and, forsecondary areas, Rp25,000–Rp60,000. Thebroad ranges are due, in part, to theinclusion/exclusion of tenant electricity charges.

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TrendsWhile demand for space is increasing,occupancy levels remain nearly the same asnewly completed buildings add more marketsupply. After 10 years, rental rates still lagbehind 1997 levels.

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Occupancy rates for the various office grades inthe CBD were 84.6%, 85.0%, 86.1% and 84.5%for Grades A+, A, B and C, respectively. In thesecondary area, occupancy was 86.1% and79.2% in Grades B and C.

RentsMost CBD Grade A+ transacted gross rentsgenerally remained in the range of US$17.00 -US$19.00/m2/mth, mostly in US$ with floatingexchange rates. For other grades, mosttransactions were still in rupiah: Grade ARp130,000–Rp145,000/m2/mth; Grade BRp100,000–Rp125,000; and Grade C Rp80,000–Rp95,000.

Jakarta Property Trend - 1Q07PricewaterhouseCoopers

Leased Office Gross Offering RentsCBD & Secondary Area 4Q97 - 1Q07

0

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25

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CBD A+ CBD A CBD B CBD C Sec B Sec C

Leased Office Occupancy RatesCBD & Secondary Area 4Q97 - 1Q07

50%

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80%

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100%

4Q97

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2Q99

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CBD A+ CBD A CBD B CBD C Sec B Sec C

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1Q07

SupplyThere was no new supply completed during1Q07. Total Jakarta lease and strata title stockremained at approximately 1.53 million m2 and1.19 million m2, respectively. Bodetabek leasestock remained at approximately 444,000 m2 andstrata title stock increased to 371,000 m2.

Subject to timely completion, new supply up to2008 is estimated at about 1.1 million m2. Apartial list of future supply includes: Mall ofIndonesia, Kota Casablanca, Grand Indonesiaand Pacific Place.

Demand / OccupancyJabodetabek shopping centre occupancy ratesdecreased to 91.9% in this quarter. Jakartaoccupancy decreased to 91.8% and Bodetabekremained at 92.0%.

Occupancies were 96.1%, 90.3%, 86.4% and91.9% for Grades A+/A, B, C and D respectivelyin Jakarta.

Offering contract rents for typical floors remainedat US$50.00/m²/mth in Jakarta andUS$26.50/m²/mth in the Bodetabek area. The1Q07 fixed exchange rates generally rangedbetween Rp9,000 (Grade A+) and Rp5,000(Grade C) across Jabodetabek. Offeringcontract service charges remained at the rangeof US$7.00 to US$14.50/m2/mth forJadebotabek. Strata title kiosk units and longlease prices generally range from Rp30million/m2 to Rp250 million/m2.

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RentOverall, offering contract rents, fixed exchangerates and effective rents remained the same inJakarta and Bodetabek compared to theprevious quarter.

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Jakarta Property Trend - 1Q07 PricewaterhouseCoopers

Shopping Centre Occupancy Rates4Q97 - 1Q07

70%

75%

80%

85%

90%

95%

100%

4Q

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3Q

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Grade A+ Grade A Grade B Grade C

Shopping Centre US$ Offering Effective 'Typical Floor' Rent(excludes Ground Floor and Anchor Tenants)

4Q97 - 1Q07

0102030405060708090

4Q9

7

3Q9

8

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9

1Q0

0

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Grade A+ Grade A Grade B Grade C

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1Q07

TrendsEven though lease occupancies remain high,there has been only marginal rental rate growthand fixed rate increases.

The predictable kiosks oversupply and vacancycrisis has materialized. There are thousands ofempty units which will be very difficult to utilize orre-position for alternative uses.

SupplyThere was a new supply of approximately 1,770strata title units from the operation of MarriottExecutive Apartments and Setiabudi Residencesin the CBD, and Margonda Residences, TheSummit, Paladian Park Tower G and PondokIndah Square Tower B in the secondary area.

The total stock of apartments increased to about14,100 units in the CBD and 35,900 units in thesecondary area. Leased (non strata title) andserviced apartments account for about 5,640units (48% CBD and 52% secondary) and stratatitle approximately 44,360 units (26% CBD and74% secondary).

New supply up to 2009 is estimated at about44,000 units. A partial list of future supplyincludes: Shangri-la Residences, Pearl Garden,Hollywood Residences, Oakwook Premier, FourSeasons Towers 3 & 4 and Senayan CityResidences.

Occupancy / Sold RateOverall occupancy of lease/serviced apartmentsof all grades decreased in the CBD by 4.5% butincreased in the secondary areas by 1.6%.

The average lease/serviced apartmentoccupancy was about 75.0% in the CBD and72.7% in secondary areas. In the strata market,83.0% of the CBD supply (current stock andprojects under construction/launched) and88.1% in secondary areas was stated bydevelopers as sold. The occupancy rate of thecurrent stock was 66% and 72%, respectively.

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apartment

Average 1Q07 transaction base rents for CBDUpper and Middle Grade lease apartments wereUS$14.60 and US$8.10 respectively and forserviced apartments were US$15.70 andUS$9.80 respectively. Average service chargeswere around US$3.20 and US$1.60 for leaseapartments and US$4.70 and US$3.80 forservice apartments. Average transaction pricesfor strata title apartments were US$1,860/m2 forUpper and effectively US$990/m2 for MiddleGrade apartments.

Rent / PricesOn average, rents for lease/serviced in the CBDand secondary areas remained the samecompared to the previous quarter. Strataapartment offering prices increased in the CBDand in the secondary areas by 2.0% and 6.0%,respectively.

Jakarta Property Trend - 1Q07PricewaterhouseCoopers

CBD Average Occupancy & Sold Rates2Q97 to 1Q07

50%

60%

70%

80%

90%

100%

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Serviced Lease Strata

CBD Average Base Rents2Q97 to 1Q07

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TrendsWhile lease and serviced apartmentoccupancies are still below ideal levels, moreand more investor strata title units have beencompleted and now competing for tenants.

Rents are still below 1997 levels and currentreal investor rental yields maybe much lowerthan expected. With strata unit stock doublingover the next 2 years, the risk of a serious oversupply condition increases significantly.

Jakarta Property Trend - 1Q07 PricewaterhouseCoopers

hotel

SupplyThere was no new supply during 1Q07. Jakartahotel supply totals 22,297 rooms, consisting of8,890 5-star, 8,152 4-star and 5,255 3-starrooms.

New hotels under development include: RitzCarlton Pacific Place and Hotel Indonesia -Kempinski.

Bodetabek hotel supply remains atapproximately 1,030 rooms, consisting of 3705-star, 490 4-star and 170 3-star rooms. Overall,Jadebotabek hotel supply was 23,327 rooms.

Demand / OccupancyOverall, occupancy increased by 2.9% to 61.8%from the previous quarter. The changes were4.0%, 1.7% and 2.3% for 5-star, 4-star and 3-star hotels. The occupancies were 56.8%,64.0% and 71.1%, respectively.

Compared to the same quarter last year, thechanges were 6.6%, 3.6% and 3.7% for 5-star,4-star and 3-star hotels, respectively. Overallsame quarter year on year occupancy increasedby 5.1%.

Room RatesThe overall rate increased from the previousquarter by 4.2% to US$55.00 per night. Thechanges were 4.1%, 4.2% and 3.3% for 5-star,4-star and 3-star hotels. US$ room rates wereUS$73.90, US$45.00 and US$33.30 per night,respectively.

Compared to the same quarter last year, roomrates changed by 5.0% for 5-star, 5.8% for 4-star and 8.8% for 3-star hotels. Overall, roomrates increased by 6.2%.

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Revenue Per Available RoomOverall RevPAR this quarter was US$34.00 pernight or about 9.1% higher than the previousquarter. Compared to the previous quarter,all-star hotel categories RevPAR increased. Thechanges were 11.9%, 6.5% and 6.2% for 5-star,4-star and 3-star hotels. RevPAR wasUS$42.00, US$28.80 and US$23.60 per night,respectively.

Compared to the same quarter last year,RevPAR changed by 18.8%, 12.1% and 14.9%for each star-category and 15.7% overall.

PricewaterhouseCoopers Jakarta Property Trend - 1Q07

Jabodetabek Hotel Occupancy Rates4Q97 to 1Q07

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5 Star 4 Star 3 Star Overall

Jabodetabek Hotel Average Room Rates4Q97 to 1Q07

020406080

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5 Star 4 Star 3 Star Overall

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TrendsHotel performance continues to improve, but notyet to 1997 levels.

While the improvement is encouraging, the keyperformance benchmarks are below standardindustry levels.

Jakarta Property Trend - 1Q07 PricewaterhouseCoopers

Jabodetabek Hotel RevPAR1Q99 to 1Q07

05

1015202530354045

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5-star 4-star 3-star Overall

Jakarta Property Trends

Mirza DiranWillie PrasetioPT PricewaterhouseCoopers FAS

In cooperation withJay SmithPT Paragon Property

PricewaterhouseCoopersJl. HR. Rasuna Said Kav. X-7 No.6Jakarta 12940Tel: +62(21) 521 2901Fax: +62(21) 521 3926www.pwc.com/id

ABBREVIATIONS

PwC : PricewaterhouseCoopersCBD : Central Business DistrictJadebotabek : includes Jakarta, Depok, Bogor,

Tangerang and BekasiDebotabek : includes Depok, Bogor, Tangerang

and BekasiGDP : Gross Domestic ProductE : Estimatedm2 : Square metres/m2/mth : Per square metre per months-g area : Semi-gross areapa : Per annum1Q07 : 1st Quarter 2007

(each quarter abbreviated similarly)s/c : Service chargeUS$ : US dollarRp. : Rupiah

DEFINITIONS

GeneralCentral Business : Bounded by Jl Sudirman, Jl RasunaDistrict Said and Jl Gatot Subroto (the

‘Golden Triangle’ of Jakarta)Secondary area : Area outside the CBDet area : space occupied solely by tenants (or

available for the tenant’s sole use)Semi-gross area : Net area plus a proportion of common

spaceRents and service : Are stated per m2 according to thecharge relevant basis of lease in each sector

(such as on s-g area for offices, seebelow)

SectorsOfficesGrade A+ : A high quality and well maintained

office building located in the CBD area,generally more than 20,000m2

Grade A : A standard quality office building,generally more than 20,000 m2

Grade B : A medium quality office building,generally 6,000 –20,000 m2

Grade C : A low quality office building,generally less than 6,000 m2 andusually more than 20 years old

Retail (Shopping centres)Grade A+ : High specification with quality finishes,

located in prime CBD area, generallymore than 40,000 m2. Mainly upperclass retailers and internationaldepartment stores

Grade A : Modern specification with qualityfinishes located in CBD and secondaryareas, generally more than 40,000m2.Mainly middle to upper class retailersand international department stores

Grade B : Medium specification of generally morethan 20,000 m2. Mainly middle classlocal retailers and department stores

Grade C : Basic to medium quality buildinggenerally less than 20,000m2

Basis of lease : Retail units are let on a net area basis

HotelsStar Categorization: The 5, 4 and 3 categories used in our

survey are in accordance with theGovernment licenses awarded to eachindividual hotel

ApartmentUpper Grade : High specification building with larger

units (3BR>150 m2), and a range of sportand leisure activities

Middle Grade : Medium specification building withsmaller units (3BR<150 m2), andstandard sports facilities

Basis of lease : Apartments are let on a net area basisApartment size : Average base rents and service chargessurveyed are derived from rentals of 3 bedroom

unitsSold Unit : A unit is considered ‘sold’ after a

deposit has been paid

This publication is provided as a general overview of market trends. Whilst the information contained is believed accurate at the time of printing, it may be subject to future changewithout notice. PricewaterhouseCoopers and PT Paragon Property accept no liability to any party for reliance on the contents of this publication. This document is the property of PwC

and no part of it may be copied or reproduced without our prior written permission.