Line illustration with keyword in drive box Presentation ... › europe › resources › upload › ... · Chennai Kochi Bangalore Coimbatore ... Likely Trends over Next 12 Months

Asia Pacific Real Estate

Market Outlook

Alastair Hughes

Chief Executive Officer, Asia Pacific

13 June 2011

Adelaide

Brisbane

Canberra

SydneyPerth

Melbourne

Beijing

Chengdu

Qingdao

Shanghai

Hong Kong

Shenzhen

MacauGuangzhou

Taipei

Tianjin

Jakarta

Sapporo

Tokyo

Osaka

Seoul

Auckland

Wellington

Cebu CityManila

Singapore

Phuket

Bangkok

Hanoi

Ho Chi

Minh

Chandigarth DelhiGuragon

MumbaiPune

Kolkata

HyderabadChennai

Kochi

Bangalore Coimbatore

13 Countries

77 Offices

20,000 Staff

“One platform, one culture”

Jones Lang LaSalle Asia Pacific

3

Asia Pacific real estate markets are in good shape

based on

3

• Sustained tenant demand from Asia Pacific corporations and

Western MNCs looking to grow in Asia Pacific

• Asia Pacific capital looking to buy Asia Pacific real estate with

high levels of equity

4

Today, we will look at……….

Asia Pacific Office Rents – Update and Outlook

Likely Trends over Next 12 Months

Asia Pacific Capital Values – Update and Outlook

4

5

Rental Trends

80

90

100

110

120

Q1

2007

Q2

2007

Q3

2007

Q4

2007

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Asia Pacific

North America

Europe

Prime offices – rental trends 2007 to 2011

North America – average of 6 markets; Asia Pacific –weighted average of 26 markets: Europe – weighted average of 24 markets

Ren

tal I

ndex

(Q

1 20

07 =

100

)Global rents fell during crisis

Source: Jones Lang LaSalle, April 20116

77

Figures relate to the major submarket in each city and represent the rebound from the last trough / peak to 1Q 2011

Hong Kong

50%

Tokyo

1%

Singapore

34%

Shanghai

30%

Mumbai

10%

Source: Jones Lang LaSalle (Real Estate Intelligence Service), 1Q 2011

Peak to 1Q11Trough to 1Q11

Hong Kong

-14%

Singapore

-49%

Shanghai

-15%

Mumbai

-39%

Tokyo

-46%

40

60

80

100

120

140

160

180

200

220

4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10

Net

Eff

ecti

ve R

ents

(4Q

06 =

100

)

Shanghai Hong Kong Tokyo Singapore Mumbai Sydney

Sydney

6%

Sydney

-33%

Asia Pacific rent not yet back at peaksRental value changes, key Asia Pacific markets

8

Projected additions to office stock in 2011 to 2013

44.9%Shanghai

26.9%Singapore

6.5%Sydney

15.2%Tokyo

5.2%Hong Kong

Beijing

29.4%14.6%Seoul

37.4%Kuala Lumpur

8.5%Bangkok

Figures relate to grade A overall market, except Tokyo (3 kus). Sydney, prime grade for actual and all grades for forecast


74.2%Mumbai

84.5%Delhi

8

9

Asia Pacific growing stronglyAnnual GDP growth

Source: IHS Global Insight, May 2011

2010 2011

World 4.1 3.5

US 2.9 2.7

EU 1.7 2.0

Asia Pacific 7.0 4.9

0

3

6

9

12

15

Ch

ina

Ind

ia

Vie

tnam

Ind

on

esia

Sin

gap

ore

Ho

ng

Ko

ng

Taiw

an

Ph

ilip

pin

es

So

uth

Ko

rea

Mal

aysi

a

Th

aila

nd

Au

stra

lia

New

Zea

lan

d

Jap

an

Bra

zil

Ru

ssia

Ger

man

y

US

UK

y-o

-y (

%)

2010 2011 (May 2011 Forecast)

9

10

Take-up is strengthening


0

1

2

3

4

5

6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011F 2012F 2013F

Net

Ab

sorp

tio

n (

mill

ion

sq

m)

0%

2%

4%

6%

8%

10%

12%

14%

Ave

rag

e V

acan

cy R

ate

India (DL, MB, CN, BG) China (BJ, SH, GZ) North Asia (TK, OS, SL)

Australia (Six Cities) Singapore Hong Kong

Other Average Vacancy Rate

10

11

2010

1 Million SqmTake Up of Space

&

London

Manhattan

12

Growth Slowing Rents Falling

Decline SlowingRents Rising

Office Rental Clock

Seoul

Beijing Singapore

Shanghai,

Hong Kong

Tokyo

Kuala Lumpur

1Q101Q11

Delhi

Bangkok

Sydney


JakartaMumbai

Kuala Lumpur, Tokyo

Beijing, Hong Kong

Shanghai

Mumbai

12

13

Rental values – 2011 outlook

Figures relate to the major submarket in each city

-5%

28%

20%

18%

22%

7%

6%

8%

-1%

-7%

2%

0 200 400 600 800 1000 1200 1400 1600 1800 2000

Bangkok

Kuala Lumpur

Sydney

Delhi

Beijing

Seoul

Shanghai

Mumbai

Singapore

Tokyo

Hong Kong

Net Effective Rents (USD per sqm pa)4Q11 RV 4Q10 RV

13


14

Capital Trends

15

Asia Pacific luxury residential price growth

100

120

140

160

180

200

220

4Q

03

1Q

04

3Q

04

1Q

05

3Q

05

1Q

06

3Q

06

1Q

07

3Q

07

1Q

08

3Q

08

1Q

09

3Q

09

1Q

10

3Q

10

1Q

11

4Q

03

= 1

00

City

Quarterly

Change

1Q11 vs 4Q10

Yearly Change

1Q11 vs 1Q10

(Local

Currency)

Hong Kong 8.3% 20.0%

Beijing 3.2% 12.3%

Shanghai 0.4% 5.4%

Singapore 0.0% 8.2%

Bangkok 0.8% 1.8%

Kuala Lumpur -1.1% 12.1%

Jakarta 2.9% 5.3%

Mumbai 0.0% 6.7%

(Local

Currency)

15

60

70

80

90

100

110

120

Q1

2007

Q2

2007

Q3

2007

Q4

2007

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Asia Pacific

North America

Europe

Prime offices – Capital value trends, 2007 to 2011

North America – average of 6 markets; Asia Pacific – weighted average of 26 markets: Europe – weighted average of 24 markets


•Cap

ital V

alue

Inde

x (Q

1 20

07 =

100)

Global capital values fell during crisis

16

80

90

100

110

120

Q1

2007

Q2

2007

Q3

2007

Q4

2007

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Asia Pacific

North America

Europe

1717

Capital Value Changes - Key Asia Pacific Markets

Hong Kong

97%

Tokyo

3%

Singapore

35%

Shanghai

82%

Mumbai

12%

Figures relate to the major submarket in each city and represent the rebound from the last trough/peak to 1Q 2011

Peak to 1Q11Trough to 1Q11

Hong Kong

34%

Tokyo

-54%

Singapore

-21%

Shanghai

13%

Mumbai

-38%

40

60

80

100

120

140

160

180

200

4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10

Cap

ital

Val

ues

(4Q

06 =

100

)

Shanghai Hong Kong Tokyo Singapore Mumbai Sydney

Sydney

4%

Sydney

-20%

Capital value index shows some markets over peak


18

Asia Pacific - Direct Commercial Real Estate Investment2003 - YTD 1Q11

Figures exclude transactions below USD5mil, land acquisitions and developments


0

20

40

60

80

100

120

140

2003 2004 2005 2006 2007 2008 2009 2010 Q1

2011

US$ bn

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Domestic Cross-Border Cross Border (%)

$86bn

$66bn

$95bn

$121bn

$46bn

$27bn

$66bn

$85bn

$27bn

18

19

Asia Pacific - Commercial Real Estate Investment Volumes1Q11 vs 1Q10

0 1 2 3 4 5 6 7 8 9 10

Other Asia Pacific

India

Malaysia

Taiwan

Thailand

Australia

South Korea

Hong Kong

Singapore

China

Japan

US$ bn

1Q11

1Q10

▲ 308%

▼ 5%

▼ 16%

▲ 64%

▲ 52%

▼ 61%

▲ 2,072%

▲ 54%

▲ 82%

▼ 25%

▲ 96%

19



20

Who are the buyers?

High net worth individuals

Funds

Corporates

20

Explosive growth in private wealth

Asia-Pacific: High Net Worth population 3 million, equal to HNW in Europe

HNW wealth up 31% to $9.7 trillion

Forbes Asia: 332 billionaires in 2011, versus 79 in 2001

Rise of high net worth investor

Chinese Estates Holdings

River Court, London

HK private wealth

£280 million, January 2011

Sources: Jones Lang LaSalle21

Kerisvale Pte Ltd

One Finlayson Green, Singapore

Private equity group

S$ 277 million, March 2011

22

Corporate Occupiers in Asia Pacific

Corporations in Asia Pacific

generate 30% world’s output

- About 40% manufacturing world

output

Asian corporates have savings to spend

Sources: Jones Lang LaSalle

Owner occupied

Shanghai World Finance Centre

5 floors sold to owner occupiers

$40 million a floor

January 2011

Sale and leaseback

Singapore industrial property portfolio

5 buildings sold by Freight Links toSabana Shari’ah Compliant Industrial REIT

$148 million approximately

November 2010

Corporations buy or develop real

estate for their own occupation

- Part of trend that leads on to sale

and leaseback in market maturity

cycle

23

Asia Pacific institutional capital inter-regional

Sources: Jones Lang LaSalle

Asian pension assets to double 2000 - 2015

Employer’s Provident Fund (EPF)

1 Sheldon Square, London

Rreef for Malaysian pension fund

£157 million, November 2010

National Pension Service (NPS)

O’Parinor shopping centre, Île-De-France

Rockspring on behalf of Korean pension fund

€223m for 51% share, November 2010

24



0

20

40

60

80

100

120

140

2003 2004 2005 2006 2007 2008 2009 2010 Q1

2011

US$ bn

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Domestic Cross-Border Cross Border (%)

$86bn

$66bn

$95bn

$121bn

$46bn

$27bn

$66bn

$85bn

$27bn

Asia Pacific direct commercial real estate investment 2003 to YTD 1Q 11

25

Figures relate to the major submarket in each city

-7%

32%

11%

14%

18%

4%

23%

3%

Source: Jones Lang LaSalle (Real Estate Intelligence Service), 1Q11

1%

15%

-5%

0 5000 10000 15000 20000 25000 30000 35000 40000 45000

Bangkok

Kuala Lumpur

Delhi

Mumbai

Seoul

Beijing

Sydney

Shanghai

Singapore

Tokyo

Hong Kong

Capital Values (USD)4Q11 CV 4Q10 CV

25

Capital values – 2011 outlook

26

Economic growth tenant demand rental growth capital value growth

More investment activity as buyers and sellers meet on price

Traditional Residential buyers will turn to Commercial property

Japan will attract foreign capital despite earthquake and slow economy

Offices and Industrial will perform best, then Retail, then Residential

Cyclical recovery but also shifting fundamentals

26

Likely trends over next 12 months

27

©Jones Lang LaSalle 2011. All rights reserved.

This presentation has been produced solely as a general guide and does not constitute advice. We have used and relied upon information from sources generally regarded

authoritative and reputable, but the information obtained from these sources may not have been independently verified by Jones Lang LaSalle. Whilst the material contained in

the presentation has been prepared in good faith and with due care, no representation is made for the accuracy of the whole or any part of the presentation. No liability for

negligence or otherwise is assumed by Jones Lang LaSalle for any loss or damage suffered by any party resulting from their use of this presentation. The whole or any part of this

presentation must not be reproduced or copied without Jones Lang LaSalle’s written consent.

Thank You

Documents

Line illustration with keyword in drive box Presentation ... › europe › resources › upload › ... · Chennai Kochi Bangalore Coimbatore ... Likely Trends over Next 12 Months