ASIA PACIFIC OVERVIEW

OFFICE July - September ASIA PACIFIC OVERVIEW A CUSHMAN & WAKEFIELD QUARTERLY RESEARCH PUBLICATION

A CUSHMAN & WAKEFIELD QUARTERLY RESEARCH PUBLICATION ASIA PACIFIC OFFICE OVERVIEW OCCUPIER CONDITIONS INDIA GREATER CHINA Chongqing Shenyang Tianjin - Kowloon - Central Neutral THAILAND Bankok MALAYSIA SINGAPORE KOREA TAIWAN VIETNAM JAPAN Neutral PHILIPPINES Neutral INDONESIA India Continued expansion by occupiers; consolidations by large scale tech occupiers in established suburban locations to improve efficiencies Tight vacancies in & and in prime markets of other cities are pushing up rents Co-working companies acquiring scale, strong demand from corporate occupiers China Higher than average new supply in 2018, new completions largely concentrated in emerging areas (relocation opportunity for tenants in core areas) Healthy demand, rents still elevated, growing competition among landlords in Demand from Chinese firms remains unabated, tight vacancies and rental growth will continue in Greater Central through 2018 New supply in Kowloon, flat to moderating rents in the short term, 90% of the upcoming supply over the next 12 months is still vacant AUSTRALIA Large scale new supply in 2018, flight to quality will pick up momentum, flat to moderating rents in the short term Pre-leasing is still strong, asking rents are starting to come down, landlords are cautious about supply surge in 2018 New supply is adding on to backfill space, relocations and consolidations likely to gather pace in 2018, rising vacancies and flat to moderating rents will continue the short term Australia - robust leasing activity, lower vacancies and rental growth - outgoings have increased due to land taxes and rising electricity costs - emerging from the worst of the downturn in tenant demand, pace of recovery is expected to gather momentum in 2018 Rents moderating but operational costs and service charges are on the rise, higher new supply in 2018, incentives will continue Leasing activity is below trend, addition of 3 million sf. in 2018 will intensify competition among landlords, demand recovery in 2018 is unlikely Sustained demand from both local and multi-national occupiers, noticeable growth in Fin-tech and offshore gaming sectors Vacancies are still tight, rental growth is slowing down due to large scale new supply over the next 12 15 months, developers staggering completion dates to avoid oversupply Office market experienced an earlier-than-expected recovery as supply pipeline reduced significantly over the next three years. Rental growth will continue through 2019 Competition among coworking players intensified with the entry of WeWork Stable demand, low vacancies and continued rental growth, CBD has no new supply until 2020 Flight to quality, rental growth driven by prime new supply during, positive momentum 2 3

A CUSHMAN & WAKEFIELD QUARTERLY RESEARCH PUBLICATION ASIA PACIFIC OFFICE OVERVIEW KEY TAKEAWAYS Region is riding high Economic growth in Asia Pacific remains on a solid note during the third quarter. Robust growth in China and better than expected performance from Japan, South Korea and Southeast Asia have managed to offset weakening activity in India. Recent events in China suggest that the leadership is committed to economic rebalancing and continuing reforms to achieve better quality economic growth in the long term. Japan is also set for robust growth over the next two to three years with the 2020 Olympics and more Abenomics underway. Meanwhile, growth in South Korea has hit a seven year high on the back of robust recovery of exports. on the other hand has stabilized with the tech and financial sectors leading the recovery. Meanwhile, India has slowed down beyond the central bank s expectations. The government has started to take quick measures by addressing policy induced uncertainty and has announced recapitalization of financial institutions. Central banks in India, Indonesia, and Vietnam have cut rates to spur economic activity. Absorption gains robust while supply impact rental growth Absorption gains at the regional level are 20% higher on an annual basis on the back of strong leasing activity in Tier 1 cities in China,, and. Stronger economic growth has been a driver of leasing activity across multiple sectors in China. New supply is fueling large scale expansions and relocations in,,, and. In, demand is sustained by both local and multi-national occupiers in the outsourcing, fintech and gaming industries. Both consolidation and demand for new space by large tech and BFSI occupiers are driving the activity in India. s office market has recovered faster than expected and with new supply dwindling and rents rising, tenants are more receptive to early renewals or negotiations for relocations. In, larger deals have sustained the momentum and robust absorption has driven vacancies to its lowest since 2008. remains the tightest with vacancies at 3.9% followed by (5.3%) and (5.8%). Meanwhile, coworking has been gaining a strong foothold in the region. WeWork has been the most active player expanding in multiple locations (,, and India). has been a late entrant to the coworking bandwagon but the trend is picking up fast. Coworking operators such as Awfis, CoWrks, IndiQube, Redbrick and Smartworks are acquiring scale across India driven by a strong demand from corporate occupiers. Their growth has been particularly strong in supply constrained markets such as and. IndiQube alone has leased more than a million sf in over the last 12-15 months. Large scale new supply and rising vacancies continue to deter rental growth across most markets in the region. Rental gains in and are moderated by upcoming supply in 2018. In however, rentals in Central are on a continuous upward trend. Occurrence of several landmark transactions this year suggests further upward pressure on rents. In however, outgoings have increased due to land taxes and rising electricity costs. Meanwhile, prime supply has pushed up rents in. Southeast Asia has become the new battleground Ever since Google and Temasek s study last year that projected Southeast Asia s internet economy to grow to US$200 billion per annum by 2025 while adding nearly four million new users per month, the battle for start-up ecosystem dominance has intensified. With Amazon officially entering Southeast Asia in July, the competition has reached a new level. With the world s biggest market at stake, tech, e-commerce, and financial behemoths such as Alibaba, Amazon, Tencent, Softbank, and Ant Financial are trying to carve their positions in addition to a host of other players. They will all be a part of the region s growth story over the next decade. In addition to the consumption boom and employment generation, the war for regional dominance also brings out a host of new opportunities for real estate. Office, logistics and warehousing, and data centers are the obvious beneficiaries in the run up. Multinationals such as Google, Facebook and Amazon (besides a host of other companies) are fully focused on their growth in the region. has been the regional headquarters but we expect expansions into other markets over the next two to three years to fend off competition, thereby triggering growth in office markets. Technical disruption and continued growth in requirements will benefit the logistics and warehousing industry. Data storage is a critical component, and with varying regulations across countries, the battle for cloud dominance is never over. Alibaba and Google are already competing with Amazon and they are all trying to create a niche by differentiating services. As such, the demand for data centers is likely to grow multifold over the next three to five years. OCCUPANCY COSTS ASIA PACIFIC OVERVIEW STATISTICS US$/sf/mo 1 1 1 11.26 2 2 2 8.91 4 4 3 6.60 3 3 4 Delhi - CBD 6.59 6 6 5 5.65 5 5 6 5.48 7 7 7 4.80 8 8 8 - SBD 4.34 9 9 9 3.93 10 10 10 3.79 12 11 11 - CBD 3.62 11 12 12 3.41 13 13 13 3.22 15 14 14 2.76 16 16 15 2.75 17 17 16 2.69 14 15 17 2.68 18 18 18 2.47 19 19 19 2.31 21 21 20 2.17 20 20 21 Gurgaon - CBD 2.15 23 22 22 1.72 22 23 23 1.69 24 24 24 Chengdu 1.51 26 25 25 1.18 25 26 26 1.15 27 27 27 0.97 29 28 28 0.96 28 29 29 0.84 30 30 30 0.67 VACANCY RATES Percentage 7 4 1 Gurgaon - CBD 2.9% 2 3 2 3.5% 1 2 3 5.3% 9 7 4 5.8% 12 11 5 5.8% 10 8 6 6.1% 6 12 7 6.3% 5 10 8 6.3% 8 6 9 6.4% 3 9 10 7.0% 13 5 11 7.0% 19 16 12 7.6% 15 14 13 8.4% 11 15 14 - CBD 8.6% 16 17 15 9.4% 21 20 16 9.4% 17 13 17 9.6% 4 1 18 9.6% 20 18 19 10.3% 22 19 20 11.7% 14 21 21 12.7% 23 22 22 Delhi - CBD 13.0% 24 23 23 14.8% 18 25 24 15.4% 25 24 25 15.7% 27 26 26 - SBD 19.1% 26 27 27 22.4% 29 28 28 Chengdu 31.6% 30 30 29 37.1% 28 29 30 37.6% 4 5

A CUSHMAN & WAKEFIELD QUARTERLY RESEARCH PUBLICATION ASIA PACIFIC OFFICE OVERVIEW Rental Growth (YOY) DECREASING STABLE INCREASING Chengdu Vacancy Rates CORE Occupancy Rates CORE Sorting order: Decreasing: High to Low, Increasing: Low to High Projects Under Construction TOP 10 BOTTOM 10 CORE 8.3 % CORE 60.76 sf sf 3 1 1 98,984,625 21 22 19 6,358,753 1 3 2 85,685,334 19 19 20 4,802,000 2 2 3 78,524,090 25 21 21 3,472,434 EMERGING EMERGING 7 5 4 38,137,220 18 20 22 2,789,860 4 4 5 32,648,705 24 23 23 2,523,061 13 8 6 30,128,535 22 25 24 1,721,083 5 6 7 27,198,600 23 24 25 1,192,046 8 7 8 26,408,582 27 26 26 699,400 6 9 9 22,465,000 26 27 27 516,667 12 10 10 19,431,986 28 28 28 330,527 Construction Completions EMERGING 16.3 % EMERGING 23.54 QUARTERLY TRAILING 12 MONTHS ENDING sf SEP 2015 SEP SEP sf 4 5 1 3,582,818 4 1 1 21,314,570 22 22 2 1,971,904 15 12 2 11,400,614 8 1 3 1,455,583 2 4 3 11,397,199 3 12 4 1,400,000 7 5 4 7,108,570 23 13 5 1,080,300 1 2 5 6,842,740 25 25 6 1,052,784 11 3 6 5,131,165 21 4 7 999,000 17 13 7 3,766,814 18 N/A 8 Chengdu 947,178 10 8 8 3,471,593 9 6 9 943,000 21 23 9 2,730,000 19 11 10 861,120 6 7 10 2,670,526 Chengdu 0 25 50 Chengdu 0 75 150 6 7

A CUSHMAN & WAKEFIELD QUARTERLY RESEARCH PUBLICATION ASIA PACIFIC OFFICE OVERVIEW About The Data YTD Absorption and Supply Million sf 45.0 Supply Absorption Market coverage includes premium and Grade A properties in CBD and where relevant new prime centers that are well located, with office spaces that have higher design standards, large contiguous floor plates, managed professionally, are well leased to high quality tenants and suitable for institutional grade portfolios. 22.5 0.0 Australia Greater China North Asia South Asia Southeast Asia Under construction space includes all projects that have broken ground but not stalled as of the reporting quarter. For more information about C&W Research, contact: Availability and Space U/C Million sf 350 Supply Absorption Construction completions include all new supply with projects that have completed and are ready/fit for possession. Absorption refers to incremental new space takeup, and excludes renewals. 175 Occupancy costs include standardized market rents on net leasable area basis. Service charges are included if applicable. 0 8 Australia Greater China North Asia South Asia Southeast Asia SIGRID ZIALCITA Managing Director, Research, Asia Pacific +(65) 6232 0875 sigrid.zialcita@ap.cushwake.com Disclaimer: Cushman & Wakefield (C&W) is known the world-over as an industry knowledge leader. Through the delivery of timely, accurate, high-quality research reports on the leading trends, markets around the world and business issues of the day, we aim to assist our clients in making property decisions that meet their objectives and enhance their competitive position. In addition to producing regular reports such as global rankings and local quarterly updates available on a regular basis, C&W also provides customized studies to meet specific information needs of owners, occupiers and investors. Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 45,000 employees in more than 70 countries help occupiers and investors optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. marks the 100-year anniversary of the Cushman & Wakefield brand. 100 years of taking our clients ideas and putting them into action. To learn more, visit www. cushwakecentennial.com, www.cushmanwakefield.com or follow @CushWake on Twitter. Cushman & Wakefield, Inc. All rights reserved. Cushman & Wakefield, 3 Church Street #09-03 Samsung Hub 049483 www.cushmanwakefield.com Data for Australia are based on bi-annual numbers as available from PCA. 9

ASIA PACIFIC OFFICE OVERVIEW Cushman & Wakefield, 3 Church Street Samsung Hub #09-03 049483 www.cushmanwakefield.com Cushman & Wakefield, Inc. All rights reserved.