Where do Asian, European and American investors see opportunities in Asia today?

1. MIPIM Asia 2011
Wrap Up

2. Remembering: MIPIM Asia 2009
• Growing sense of optimism
– Asia weathered the storm
– Capital is flowing in
• Chief concerns:
– US double dip recession
– Housing bubble in China

3. Remembering: MIPIM Asia 2010
• Strong sense of optimism
• China is leading the way
• Great diversity of opportunities
• Chief concerns
– Housing bubble in China
– Limited availability of quality assets

4. 2010 optimism was justified
How is your business activity this quarter
compared to same quarter last year?
60%
50%
40%
30%
20%
10%
0%
Better Same Worse

5. Optimism in the data
Europe United States AsiaPac
Company Still Buying? Company Still Buying? Company Still Buying?
Unibail- Rodam co  Blackstone  Morgan Stanley 
Morgan Stanley  Tishm an Speyer  National Pension Service (NPS) 
Avestus Capital Partners Lehm an Brothers Holdings Inc Prudential 
Goldm an Sachs** Morgan Stanley  Mitsubishi Estate 
IVG Im m obilien  GE Capital CapitaLand Lim ited 
Metrovacesa Goldm an Sachs  Wheelock & Co 
Aviva PLC  Beacon Capital Partners  Sino Land Com pany Lim ited -
Aberdeen Property Investors  Broadway Partners LaSalle Investm ent Managem ent 
Pirelli & C. Real Estate SpA Brookfield Asset Managem  ent Macquarie Glob Prop Advs (MGPA) 
Pearl Group Prudential RE Investors  China Vanke Co Ltd 
Electra Ltd BlackRock  DB RREEF 
ING Group  Centro Properties Group Tokyo Tatem ono Co Ltd 
RREEF  TIAA- CREF  GIC RE (Govt of Singapore) 
Prudential PLC  Lightstone Group  Nan Fung Group 
Propinvest Group CalSTRS  Kerry Properties Lim ited 
SEB Group  Chetrit Group  China Overseas Land & Invt Ltd 
Lehm an Brothers Holdings Inc CalPERS  K Wah International 
GE Capital Sim on Property Group  Sun Hung Kai Properties Lim ited
Im m ofinanz  JP Morgan  Hong Leong Group 
Evans Randall  Dubai World Tokyu Land Corporation 

6. Looking forward: mixed picture
What is your perspective on your real
estate market compared to last year?
50%
40%
30%
20%
10%
0%
More Optimistic Same Less Optimistic

7. 2011: Focus on China, cautious optimism
• China in the driver seat
• Nuances across
– Investment horizons: short and long term
– Property types
– Investment structures
– Chinese provinces
– Asia Pacific markets

8. China: Strong fundamentals
• Scale and performance of the economy
• Favorable long term trends
– Continued urbanization
– Unavoidable export sector
– Strengthening domestic demand

9. China: Mixed short-term perspective
• Global economic crisis
– China – US
– European Union
• Global tensions
– Currency exchange rates – Terms of trade
– Current account imbalances

10. China: Mixed short-term perspective
• Government’s ability to engineer
– Continued growth
– Availability of debt to the small-medium businesses
– Demography
– A soft landing
• Chinese regional disparities

11. China: Real estate perspective
• Maturing real estate market
– Sustainability
– Exit strategies, insurance companies
– Greater quantity of investment opportunities

12. China: Real estate perspective
• In the hands of the policymakers
– Supply – competition
– Availability of credit
– Investment performance
• Critical to foreign investors:
The local partner
The regulations

13. Latest Regulatory Changes which Have an Impact on
Real Estate Market
1. Land Supply
 Increase land supply for low-income housing, no less than 70% of the
total land supply for residential purposes
 Crack down land stocking and land speculation
 Formulate detailed planning and construction conditions for each plot
of land before tendering of land

14. Latest Regulatory Changes which Have an Impact on
Real Estate Market
 Shorten the payment term for Land Grant Contract; and increase the
deposit for land bidding
 Reform the Land Bidding System
 Strengthen control for land supply in second and third tier cities by
central government

15. Latest Regulatory Changes which Have an Impact on
Real Estate Market
2. Financing Policy
 Lower risks associated with real estate development loan
- No loan for delay in development
- No loan for land premium
- Under-construction will be used as collateral
 Increase down payment and interest rate for housing loan
 Monitor risks associated with real estate investment trust plan

16. Latest Regulatory Changes which Have an Impact on
Real Estate Market
3. Expand Purchase Limit to More Cities
 cities that have experienced a significant increase in the purchase
p r i c e a n d t ra n s a c t i o n v o l u m e o f n e w l y c o n s t r u c t e d
residential properties;
 cities in close proximity to major cities that have already
implemented restrictive regulations.

17. Latest Regulatory Changes which Have an Impact on
Real Estate Market
4. Encourage Low-income Housing
 increase land supply for low-income housing; 70% of the land
marked for residential properties will be used for low-income
housing;
 increase investment by central and local government; all revenue
from housing public fund and 10% of land premium will be invested
in low-income housing;
 Increase credit support for low-income housing by banks;
 Reduce and exempt taxes and fees in connection with the
building, selling and operating of the low-income housing.

18. Latest Regulatory Changes which Have an Impact on
Real Estate Market
5. Foreign Investment in Real Estate
 MOC delegates its power to approve any foreign investment below
US$ 300 million falling into encouraged categories to the local
government, as well as the foreign investment below US$50 million
falling into the restricted categories.
 MOC Filing applies to all foreign investment in real estate.

19. Beyond China?
Where are the best opportunities for real
estate investment in Asia-Pacific?
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
China Australia/NZ Japan

20. Beyond China?
• Australia – New Zealand
• Japan
• Taiwan
• Hong Kong, Singapore
• India, Russia
• Indonesia
• Thailand, Malaysia, Vietnam, Philippines,…

21. Global Office Property Clock Q3 2011
Note
The Jones Lang LaSalle Property ClocksSM • This diagram illustrates where Jones Lang LaSalle estimate
each prime office market is within its individual rental
cycle at end of September 2011
Hong Kong • Markets can move around the clock at different speeds
Singapore and directions
• The diagram is a convenient method of comparing the
Shanghai relative position of markets in their rental cycle
Moscow, Zurich Rental • Their position is not necessarily representative of
investment or development market prospects.
London City Growth Rents • Their position refers to Prime Face Rental Values
London West End
Slowing Falling Americas
Asia-Pacific
Paris, Beijing, São Paulo
EMEA
Rental Rents
San Francisco Growth Bottoming
Stockholm Accelerating Out Abu Dhabi
New York Dubai, Seoul, Detroit
Berlin, Sydney Mexico City
Madrid
Milan, Washington DC, Toronto Amsterdam, Brussels, Los Angeles
Mumbai, Dallas, Dehli Rome, Tokyo, Chicago
Frankfurt, Johannesburg, Atlanta
Source: Jones Lang LaSalle IP, October 2011

22. Asia Pacific real estate markets in 2012
Sustained
Strong Asian Negative
tenant economic real interest
demand fundamentals rates
Federal cheap
lending rates
are not showing
signs of increase
Capital Undersupply
values of investable
stable stock
Borrowing
Risk and
uncertainty costs might
Volatile rise
Appreciating
Dollar, Pound Asian
and Euro currencies
Source: Jones Lang LaSalle Capital Markets Research

23. Real estate markets in the global cycle
Phases of the
Credit Cycle
Expansion Downturn
Households
Europe,
Middle Advanced Banking Sector
East, Africa Europe
Valuation
Emerging
Asia Credit conditions
US
Japan
Asset quality
Recovery Latin Repair
Corporate
America
fundamentals
Source: Jones Lang LaSalle Capital Markets Research

24. China: Why go elsewhere? (2010 GDP at PPP)
Guangdong 1,152 South Korea 1,466
Jiansu 1,037 Indonesia 1,033
Shandong 999 Australia 884
Zhejiang 690 Taiwan 824
Henan 581 Thailand 589
Hebei 512 Malaysia 417
Liaoning 463 Philippines 369
Sichuan 428 Hong Kong 327
Shanghai 428 Singapore 293
Hunan 403 Vietnam 277
Hubei 401 New 119
Zealand Source: China NBS Statistical Data and IMF

25. The rise of the discerning investor
• Within China
– Performing local governments
– Strong balance sheets
– Strong small and medium enterprise
– Growing service sectors
• Within the Asia-Pacific region
– Secure/efficient business environment
– Trade flows with China
– Local Chinese communities

26. The discerning governments?
Emerging markets
Imperative to act
• Improve the legal/business environment
• Improve the physical infrastructure

27. The discerning governments?
China
• First stage of growth: economic adjustment
• Transfer of resources across sectors
• Infrastructure investment
Easy to manage and plan
• Sustainable growth: growth in productivity
• About R&D
• About Innovation
Tough for government to pick winners

28. The discerning governments?
China
The key question for the future:
Pace of reforms toward freer markets to
unleash innovation in SME

29. In the end…
How has MIPIM Asia
changed your outlook?
70%
60%
50%
40%
30%
20%
10%
0%
More Optimistic Same Less Optimistic

30. And outstanding award-winning projects
Shanghai Shimao Wonderland
Intercontinental
Marina Bay Financial
Center
Singapore