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Real Capital Analytics Global Capital Trends
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Real Capital Analytics Global Capital Trends Document Transcript

  • 1. AUGUST 2 011 MID-YEAR REVIEW Mid-Year Review: US, Germany, Singapore Lead in Dynamic Marketplace Global transaction volume in the second QUARTERLY TRANSACTION VOLUME quarter totalled $165.3 representing a 36 $140 Billion increase from a year earlier and bringing Americas the total for 2011 at mid-year to approxi- $120 AsiaPac mately $350.0 . e period was marked EMEA by potential national defaults in Europe, $100 natural disasters in Asia Pac and increas- ing worries about a double-dip recession across the globe. erefore, property in- $80 vestment trends are far more dynamic than the headline gures imply. e US mar- $60 kets are roaring back to life this year with property sales soaring 147 year-over-year $40 in Q2. Trading in EMEA was an anemic 10 gain year-over-year in Q2 on $42.5 $20 in transactions, despite robust increases in Germany and Scandinavia. Japan saw volumes fall 42 in Q2 while transactions $0 moderated in China and Hong Kong but 1 2 3 4 1 2 3 4 1 2 3 4 1 2 surged in Singapore and Australia. 08 09 10 11 AUGUST 2011 - REPORT CONTENTS IN THIS ISSUE: • Overview: Investors Stay the Course • EMEA: Investors Focus on Stable Economies . 5-9 H1 volume hits $350 billion. . . . . . . . . . 1-4 Investment Momentum Linked To Risk . . . . 7 Market Table . . . . . . . . . . . . . . . . . . 9 CROSS-BORDER ACQUISITIONS AND DISPOSITIONS IN AUSTRALIA • Asia Pacific: China’s Land Sales Drop as CRE Volume Grows . . . . . . . . . . . . . . . . . 10-14 acq disp net Cross-border Buyers Move Australia . . . . . 12 5,000 Million Market Table . . . . . . . . . . . . . . . . . .14 4,000 • Americas: US Momentum Leads Growth . . 15-19 3,000 Pretend and Extend Withers in Q2 Brazil: A Growing Institutional Market . . . . 17 2,000 Market Table . . . . . . . . . . . . . . . . . .19 1,000 • Changing Landscape for Agents . . . . . . . . . 20 0 • Peak-Era Buyers: Where Are They Now? . . . . 21 (1,000) • Selected Investment Sales Transactions . . . . 22 (2,000) • Notes & Definitions . . . . . . . . . . . . . . . . 23 08 09 10 11©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 1
  • 2. AUGUST 2011 MID-YEAR REVIEW A verage yields have continued to trend TRANSACTION SUMMARY slightly downward in the Americas Q211 YOY H1’11 YOY and EMEA. In the Americas, the Vol ($B) Chg Vol ($B) Chg wave of capital entering the market this Office $41.2 29% $81.9 36% year is causing downward pressure, but that Retail 32.7 97% 60.6 61% is being partially o set by increased sales of Industrial 11.6 26% 22.3 41% troubled assets in the US. In EMEA, stable All Commercial $85.5 48% $164.8 45% cap rates still re ect strong German and Nordic volume combined with select UK Hotel 8.8 80% 16.7 66% trophy transactions. Higher yields in Asia Apartment 20.4 38% 33.2 37% PROPERTY ACQUISITION YIELDS IN MAJOR GLOBAL MARKETS Pac partly re ect rebounding activity in Land 50.6 14% 134.6 11% Australia, where property o ers among the Total $165.3 36% $349.3 30% NYC/DC highest average cap rates globally, as well as HK/Sing *Totals may not sum due to rounding London/Paris the severe slide in activity in traditionally7.5% lower-yielding Japan. had very low cap rates, and without greater economic Pricing trends in the world’s global nan- certainty, investors are hesitant about becoming even7.0% cial capitals provide more insight. Yields in more bullish. In addition, with yields so low in these6.5% these markets were relatively unchanged major markets, secondary cities and other higher yield- in Q2 and have moved little since the be- ing alternatives are more attractive. e surge of cross-6.0% ginning of the year. ese markets already border capital into Australia well illustrates this trend.5.5% QUARTERLY TRANSACTION SUMMARY BY ZONE5.0% OFFICE, RETAIL AND INDUSTRIAL ASIA PAC EMEA AMERICAS4.5% CAP RATES CAP RATES CAP RATES 9.0% 9.0% 9.0%4.0% 8.5% 8.5% 8.5% 8.0% 8.0% 8.0%3.5% 7.5% 7.5% 7.5%3.0% 7.0% 7.0% 7.0% 6.5% 6.5% 6.5% 07 08 09 10 11 6.0% 6.0% 6.0% 5.5% 5.5% 5.5% TRANSACTION $50 Billion 2 3 4 TRANSACTION 3 4 1 2 1 1 2 3 4 1 2 $50 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 $50 Billion 2 3 4 TRANSACTION 3 4 1 2 1 1 2 3 4 1 2 08 09 10 11 08 09 10 11 08 09 10 11 $40 $40 $40 $30 $30 $30 $20 $20 $20 $10 $10 $10 $0 $0 $0 150% 1 2 YOY 4 1 2 3 IN TRANS3 4 1 2 3 CHANGE 4 1 2 VOL 150% 1 2 YOY 4 1 2 3 IN TRANS3VOL 1 2 3 CHANGE 4 1 2 4 150% 1 2 YOY 4 1 2 3 IN TRANS3 4 1 2 3 CHANGE 4 1 2 VOL 08 09 10 11 08 09 10 11 08 09 10 11 100% 100% 100% 50% 50% 50% 0% 0% 0% -50% -50% -50% -100% -100% -100% 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 08 09 10 11 08 09 10 11 08 09 10 11 ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 2
  • 3. AUGUST 2011 MID-YEAR REVIEW E ach global zone combated pressures TRANSACTIONS BY COUNTRY from within. Sovereign debt fears ALL PROPERTY TYPES in EMEA’s peripheral countries and Q1’11 Q2’11 H1’11 heavy belt-tightening in the UK restrained Vol YOY Vol YOY Vol YOY growth, but domestic and cross-border Country ($B) Chg ($B) Chg ($B) Chg investors were active in Germany and the 1 China $75.7 8% $41.8 21% $117.6 12% stable Scandinavian economies. While 2 United States 28.8 93% 49.0 147% 77.8 124% Russia struggled, Central VOLUME BY THEATER and Eastern Europe at- 3 United Kingdom 15.3 62% 9.0 -25% 24.3 14% ALL PROPERTY TYPES 4 Germany 9.3 42% 11.2 65% 20.5 54% tracted yield-seeking in- Q211 YOY H1’11 YOY 5 Japan 11.4 18% 3.6 -42% 15.0 -5% Vol ($B) Chg Vol ($B) Chg vestment. In Asia Paci c, 6 Singapore 5.4 237% 6.2 68% 11.5 119%United States $49.0 147% $77.8 124% the retail and industrial 7 Hong Kong 3.5 -29% 6.0 38% 9.5 3%Canada 4.5 8% 7.8 5% sectors were a counter- 8 France 3.9 32% 5.3 -20% 9.1 -4%Latin America 2.1 17% 5.6 95% weight to slow o ce vol- ume and a sharp drop-o 9 Sweden 2.8 23% 5.1 80% 8.0 55%Americas $55.6 115% $91.2 102% in Q2 land sales in China. 10 Canada 3.3 2% 4.5 8% 7.8 5%Western Europe 28.8 27% 52.8 27%United Kingdom 9.0 -25% 24.3 14% In the US, the intense 11 Australia 2.0 -34% 5.6 102% 7.6 32%Eastern Europe 3.1 17% 7.6 17% selective focus on major 12 Brazil 2.9 399% 1.1 -32% 4.0 85%MidEast 0.8 -29% 1.5 -18% assets in major markets 13 Taiwan 1.7 -8% 1.3 -41% 3.0 -26%Africa 0.9 161% 1.1 -8% began to spread out, as 14 South Korea 1.5 71% 1.4 91% 3.0 80%EMEA $42.5 10% $87.4 21% yield-conscious investors 15 Italy 1.6 87% 0.8 -9% 2.5 37%East Asia 50.7 21% 133.3 11% moved into other markets 16 Spain 1.3 -31% 1.1 -29% 2.3 -30%Japan 3.6 -42% 15.0 -5% and embraced garden 17 Netherlands 1.3 19% 1.0 -5% 2.3 7%SE Asia 6.6 41% 13.2 92% apartments. e ow of 18 Russia 0.2 -91% 1.8 85% 2.0 -34%Australia - NZ 5.7 96% 8.1 24% new distress slowed and, 19 Poland 1.4 91% 0.5 -22% 1.8 40%India/Other 0.6 -71% 1.3 -56% with credit easing and 20 Norway 0.4 -33% 1.1 77% 1.5 22%Asia Pacific $67.2 17% $170.8 12% prices rming, lenders 21 India 0.8 -29% 0.6 -71% 1.3 -56% opted more for liquida-Global* $165.3 36% $349.3 30% 22 Finland 0.3 4% 0.8 182% 1.2 91% tions than restructurings *Totals may not sum due to rounding 23 Belgium 0.4 -9% 0.8 105% 1.2 47% of troubled assets. 24 Czech Republic 0.9 279% 0.2 24% 1.2 168% Highlighting the choppy and o en local- 25 Switzerland 0.5 97% 0.6 280% 1.1 162% ized activity across the global markets, many countries saw quarterly volume trends 26 Denmark 0.5 38% 0.6 78% 1.1 56% reverse, in both directions, from Q1 to Q2. 27 South Africa 0.2 -79% 0.8 1362% 1.0 12% Other countries, with the US in the lead, saw 28 Malaysia 0.6 47% 0.3 -58% 0.9 -23% strong positive acceleration in growth in Q2. 29 Israel 0.2 -48% 0.6 -6% 0.8 -22% e US had the highest growth in both 30 Ukraine 0.6 446% 0.1 -80% 0.7 40% Q2 and H1, with its second quarter gain of 31 Chile 0.2 100% 0.6 4453% 0.7 678% 147 outpacing its 124 H1 growth. Ger- 32 Austria 0.6 38% 0.1 -79% 0.7 -19% many and Sweden were the standout gainers 33 Turkey 0.6 30% 0.1 94% 0.7 38% in EMEA as France and the UK lost ground. 34 New Zealand 0.4 -39% 0.1 -10% 0.5 -33% China’s land sales turndown slowed the gi- 35 Hungary 0.4 20% 0.1 27% 0.5 22% ant Asia Pac market to just 12 in H1, one- 36 UAE 0.5 64% 0.0 -95% 0.5 -36% third below its growth for commercial prop- 37 Romania 0.5 207% 0.0 -100% 0.5 59% erty only. Australia’s transaction volume 38 Croatia 0.4 - 0.0 -100% 0.4 283% moved rapidly positive, pushing the country 39 Portugal 0.2 -43% 0.2 -68% 0.4 -57% to a 102 gain. Spectacular Q1 growth in 40 Thailand 0.3 61% 0.1 -61% 0.4 -10% Singapore and Brazil inevitably slowed in All Others 1.4 54% 1.3 69% 2.7 61% Q2, but both countries turned in solid posi- Grand Total $184.0 25% $165.3 36% $349.3 30% tive improvements for H1.©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 3
  • 4. AUGUST 2011 MID-YEAR REVIEW Global: Top Deals and Players in H1’11 TOP 25 PROPERTY SALES TOP 20 BUYERS# Price SF(K)/ PPSF/ Type Transaction Location Buyer ($M) Units PPU (K) Vol 1 RET The Trafford Centre† Manchester, GBR $2,498 1,900 $1,315 Capital Shopping Ctrs Grp PLC ($M) 2 RET Centr0† Oberhausen, DEU 1,913 2,174 880 Canada Pension Plan Investment BoardBlackstone $9,008 3 DEV Borrett Road Site, Mid-levels Hong Kong, HKG 1,498 113 13,266 Cheung Kong (Holdings) LtdCPP Investment Board 3,689 4 OFF 280 Park Avenue† New York, NY 1,100 1,179 941 SL Green JV VornadoCapital Shopping Ctrs Grp PLC 3,098China Vanke Co Ltd 3,048 5 RET Northland Shopping Centre† Preston East, AUS 998 994 1,004 Canada Pension Plan Investment BoardYunnan Zhonghao Props Co Ltd 2,714 6 DEV Shenzhen 2011-K202-0014 Shenzhen, CHN 991 7,509 132 China Merchants Property Dev Co LtdCA Immo 2,402 7 DEV CITIC City B,C,D blocks (Prt II) Beijing, CHN 929 848 1,095 Financial Street Holding Co LtdTesco Pension Trustees Ltd 2,200 8 OFF Otemachi PAL Bldg Tokyo, JPN 877 301 2,916 Mitsui Fudosan Co Ltd JV Mitsui & CoPoly Real Estate Group 2,128 9 OFF Deutsche Bank Twin Towers Frankfurt, DEU 857 807 1,062 DWS Investments GmbhInvesco Real Estate 2,117 10 DEV Changsha 2011-001 Changsha, CHN 855 800 1,068 Wharf HoldingsWheelock & Co 2,105 11 DEV Punggol Central & Punggol Walk Singapore, SGP 799 323 2,475 Frasers Centrepoint Ltd‡Greentown China Hldgs Ltd 2,099 12 DEV Boon Lay Way Singapore, SGP 791 194 4,085 CapitaMalls Asia JV HSBC BankCheung Kong (Holdings) Ltd 2,034 13 OFF Chiswick Park London, GBR 781 1,900 411 BlackstoneCapitaLand Limited 1,929 14 OFF Helmsley Building† New York, NY 763 1,213 629 Invesco Real EstateJP Morgan 1,747 15 OFF Capital Square Singapore, SGP 700 387 1,810 Alpha Investment Partners (AIP)‡China Overseas L & I Ltd 1,650Mitsubishi Estate 1,611 16 OFF The Fifth Square† Beijing, CHN 682 1,009 677 China Minmetals CorporationChina Merchants Group 1,517 17 DEV Nanjing 2011G07 Nanjing, CHN 681 3,667 186 Shimao Property Holdings Ltd‡Arminius Funds Mgmt 1,457 18 DEV Toyosu District Site Tokyo, JPN 680 1,132 601 Tokyo Metropolitan GovernmentDekaBank 1,429 19 OFF The Centre Shanghai, CHN 666 963 692 China Pacific Insurance (Group) Co LtdFar East Organization 1,423 20 RET La Rinascente Milan, ITA 652 566 1,151 First Atlantic Real Estate SGR 21 OFF Market Square East & West Washington, DC 615 680 905 Wells Real Estate Funds, Inc 22 HTL Ritz Carlton HTL Moscow, RUS 609 334 1,824 Verny Capital TOP 20 SELLERS # 23 DEV CITIC City B,C,D blocks Beijing, CHN 607 848 716 Financial Street Holding Co Ltd Vol 24 DEV Yiwu 2011017 Yiwu, CHN 594 883 672 Guangsha Construction ($M) 25 IND Interlink† Hong Kong, HKG 589 2,400 245 Canada Pension Plan Investment BoardCentro Properties Group $8,102Urban Redevelopment Authority 3,356Housing & Dev Board 2,821 TOP 15 PORTFOLIO SALESVolksbank AG 2,426 Price SF(K)/ PPSF/ Type Transaction Location BuyerTesco plc 2,223 ($M) Units PPU (K)Beacon Capital Partners 2,215 1 RET Centro United States Portfolio Multiple, USA $9,150 99,051 $92 BlackstoneGoldman Sachs 1,868 2 RET Tesco RET Portfolio 11 Multiple, GBR 2,200 3,500 629 Tesco Pension Trustees LimitedDeutsche Bank 1,782 3 MIX Europolis MIX Eastern Euro Ptfl 11 Europe 2,009 13,011 154 CA Immobilien Anlagen AGCITIC Group 1,780 4 OFF Eurocastle Mars Fixed 1 Ptfl 2011† Berlin, DEU 1,457 4,989 292 Arminius Funds ManagementBroadway Partners 1,715 5 IND Bracor IND Portfolio 11 Multiple, BRA 1,322 10,764 123 ProsperitasGE Capital 1,653 6 RET Metro RET Portfolio 11 Multiple, DEU 1,215 9,688 125 Cerberus Capital ManagementAberdeen Property Investors 1,541 7 OFF Kokusai Shin-Akasaka Towers Tokyo, JPN 1,066 863 1,236 Mitsubishi Estate Company, LimitedEurocastle 1,544 8 DEV Greentown China Hldgs Govt Land Ptfl Taizhou, CHN 1,011 7,386 137 Greentown China Holdings LimitedBracor Invtos Imobiliarios 1,297 9 DEV Kunming Guandu KC2010-76 Kunming, CHN 987 22,158 45 Yunnan Zhonghao Properties Co LtdMorgan Stanley 1,336 10 APT Dombron Intressenter Ptfl† Multiple, SWE 948 8,281 115 AMF FastigheterEquity Residential 1,345 11 MIX Melrose Arch† Melrose North, ZAF 686 1,808 332 Amdec Property DevelopmentLone Star Partners 1,230Unibail-Rodamco 1,242 12 OFF Mapletree Com Trust Ptfl 2011 Singapore, SGP 625 733 853 Mapletree Commercial TrustCarlyle Group 1,097 13 HTL MSREF HTL Portfolio 11 Multiple, Europe 621 2,537 245 Toufic AboukhaterLehman Brothers Hldgs Inc 1,108 14 MIX Capital and Counties Mix Ptfl Multiple, CA 600 2,106 253 Equity One‡ 15 IND World Market Center Ptfl* Las Vegas, NV 600 4,832 124 Bain Capital‡ # Full credit to each JV partner, 100% valuation given *Estimated † Partial Interest ‡ JV ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 4
  • 5. AUGUST 2011 MID-YEAR REVIEW EMEA: Quarter in Review Summary F ollowing six consecutive quarters of QUARTERLY TRANSACTION VOLUME strong year-over-year gains, EMEA BY PROPERTY TYPE $70 Billion transaction volumes stalled in Q2. Commercial e slowdown, to $42.5 of signi cant $60 Apartment property sales, was at against a year ear- Hotel lier and re ects widening divergence in in- $50 Land vestor outlook across core and peripheral European markets. Pricing was also gener- $40 ally at in Q2 across EMEA and yields on acquisitions have changed little since the $30 beginning of the year. $20 Among property types, retail was the big- gest gainer in H1’11 with volume up 41 $10 boosted by billion-dollar transactions such as Tra ord Centre in Manchester, Centr0 in $0 Oberhausen and a TRANSACTION SUMMARY 1 2 3 4 1 2 3 4 1 2 3 4 1 2 major Tesco portfo- 08 09 10 11 Q211 YOY H1’11 YOY lio in the UK. e of- Vol ($B) Chg Vol ($B) Chg ce and hotel sectors PERCENT CHANGE IN TRANSACTION VOLUMEOffice $18.0 40% $33.7 31% (H1’10 VS H1’11) also recorded healthy <-50% - 50–0% 0–20% 20–50% 50–100% >100%Retail 12.1 26% 29.2 41% gains in transaction DECREASE INCREASEIndustrial 2.8 -35% 7.1 -1%All Commercial 32.9 23% 70.0 31% volume while indus-Hotel 2.6 47% 5.6 39% trial and apartment FIN NORApartment 5.3 -33% 8.1 -25% volume fell .Land 1.8 -20% 3.7 -11% Germany and the SWE DNKTotal $42.5 10% $87.4 21% Nordic countries RUS*Totals may not sum due to rounding have emerged as fa- IRL NLD CAN GBR POL voured investment targets in the current BEL DEU CZE market and all posted robust gains in trans- FRA SVK AUT HUN UKR CHE action activity in each quarter this year. ITA HRV ROU SRB is helped o set signi cant Q2’11 MCO MNE BGR USA declines in the UK and France of 25 and PRT ESP GRC TUR 20 , respectively, in addition to continued weak performance in the peripheral mar- ISR kets such as Greece, Portugal, Spain and MEX Ireland. Investors are ocking to Germany QAT and Scandinavia which currently o er the SAU ARE highest risk adjusted yields (see page 7). Germany’s Q2’11 growth of 65 was well ahead of its H1’11 gain of 54 (and the UK’s 14 ) as domestic and cross-border demand broadened. Sweden, the hottest Nordic market, saw growth of 55 for H1’11. With the strong exception of Russia’s PER 34 decline, Eastern European activ- BRA ity remained stable, with core properties in key markets attracting increased attention from yield-seeking investors. In the Middle East, both Israel and the United Arab Emir- CHL ates saw a steep fallo in activity in H1. ZAF ARG©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 5
  • 6. AUGUST 2011 MID-YEAR REVIEW A mong markets, positive growth RECENTLY BUILT OR RENOVATED has slowed but been maintained in OFFICE BUILDING SALES IN Q2 London and Paris indicating the Price PPSF/ Built/ Property City Cap Rate investment trends in secondary markets ($M) PPU ($K) Renov in the UK and France continue to under- Selmer Building Oslo $166.7 1,006 4.5% 2008 perform. However, ve German metros Origami Paris 124.0 2,421 4.7% r2010 now occupy the top markets list, with all showing positive investment growth. Guimarts Brussels 46.7 620 5.4% r2010 Cap rates on commercial properties in DB Twin Towers Frankfurt 857.4 1,062 5.5% r2010 Western Europe and the UK are closely aligned averaging between 6.6 and 1 Finsbury Circus London 236.5 1,183 5.5% r2009 6.7 . Average cap rates in Eastern Europe record a decline in Q2, but are skewed by a higher quality of properties trading as ovated o ce buildings in select European markets investors seek to minimize risk. Recent illustrate the premium prices commanded by the prices and cap rates for new or newly ren- highest quality properties. QUARTERLY TRANSACTION SUMMARY BY THEATER OFFICE, RETAIL AND INDUSTRIAL UNITED KINGDOM WESTERN EUROPE EASTERN EUROPE CAP RATES* CAP RATES* CAP RATES* 9.0% 9.0% 9.0% 8.5% 8.5% 8.5% 8.0% 8.0% 8.0% 7.5% 7.5% 7.5% 7.0% 7.0% 7.0% 6.5% 6.5% 6.5% 6.0% 6.0% 6.0% 5.5% 5.5% 5.5% TRANSACTION TRANSACTION TRANSACTION $35 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 $35 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 $35 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 08 09 10 11 08 09 10 11 08 09 10 11 $30 $30 $30 $25 $25 $25 $20 $20 $20 $15 $15 $15 $10 $10 $10 $5 $5 $5 $0 $0 $0 1 2 YOY4 1 2 3 IN TRANS3VOL 1 2 3 CHANGE 4 1 2 4 1 2 YOY4CHANGE IN TRANS3VOL 1 2 3 1 2 3 4 1 2 4 1 2 YOY4 1 2 3 IN TRANS3VOL 1 2 3 CHANGE 4 1 2 4 150% 150% 150% 08 09 10 11 08 09 10 11 08 09 10 11 100% 100% 100% 50% 50% 50% 0% 0% 0% -50% -50% -50% -100% -100% -100% 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 08 09 10 11 08 09 10 11 08 09 10 11 *Two quarter rolling average©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 6
  • 7. AUGUST 2011 MID-YEAR REVIEW Europe: Investment Momentum Linked To Risk L ooking at investment volume increases action volume growth both on a six-month and across European markets and comparing quarterly basis. ey include a higher propor- spreads between cap rates and relevant tion of non-eurozone countries with more stable government bonds, it is clear that the momen- economic conditions. Countries plotted in the tum of real estate investment in Europe is ow- lower le quadrant, notably Spain and Portugal, ing towards the highest relative yields in the are experiencing negative transaction momen- safest markets. tum. e UK on a half-year basis escapes e upper right quadrant of the momentum this grouping, but its lower Q2’11 volume graph highlights the focus of capital on Ger- re ects a weakening market. Among the outli- many and Sweden in response to the attractive ers, Ireland saw already low volume falter in cap rate spread over government bonds through Q2’11, while Russia’s good Q2 re ects a major Q2’11. Like Germany and the Nordics, the other luxury Moscow hotel acquired by Kazakhstan countries in this quadrant display strong trans- backed private equity. CAP RATE SPREADS INVESTMENT MOMENTUM BY COUNTRY ALL PROPERTY TYPES TO SOVEREIGN BONDS Cap Rate Govt Bond Spread Switzerland 0 100 200 300 400 Finland 100%Sweden 80% Turkey Belgium Sweden Denmark 60%Germany Russia Norway 40% Q2’11 vs Q2’10 % Chg Germany UK 20% Czech Republic Hungary 0% Netherlands France Italy France -20% Poland Italy -40% Spain United Kingdom Ireland -60% Ukraine Portugal Spain Austria -80% Romania Croatia *Greece 0% 2% 4% 6% 8% -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% H1’11 vs H1’10 % Chg *No significant transactions recorded for Greece over the last 12 months. Based on percent change in Euros ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 7
  • 8. AUGUST 2011 MID-YEAR REVIEW EMEA: Top Deals and Players in H1’11 TOP 25 PROPERTY SALES TOP 20 BUYERS# Price SF(K)/ PPSF/ Type Transaction Location Buyer ($M) Units PPU (K) Vol 1 RET The Trafford Centre† Manchester, GBR $2,498 1,900 $1,315 Capital Shopping Ctrs Grp PLC (CSC) ($M) 2 RET Centr0† Oberhausen, DEU 1,913 2,174 880 Canada Pension Plan Investment BoardCapital Shopping Ctrs Grp PLC $2,498 3 OFF Deutsche Bank Twin Towers Frankfurt, DEU 857 807 1,062 DWS Investments GmbhCA Immo 2,402 4 OFF Chiswick Park London, GBR 781 1,900 411 BlackstoneTesco Pension Trustees Limited 2,200CPP Investment Board 1,913 5 RET La Rinascente Milan, ITA 652 566 1,151 First Atlantic Real Estate SGRArminius Funds Management 1,457 6 HTL Ritz Carlton HTL Moscow, RUS 609 334 1,824 Verny CapitalCerberus Capital Management 1,215 7 RET Boulevard Berlin Berlin, DEU 533 753 707 Corio NVDekaBank 1,179 8 OFF Rolls Building London, GBR 492 262 1,880 Legal & General PropertyDeutsche Bank 1,160 9 OFF MidCity Place† London, GBR 468 352 1,329 Oxford Properties GroupAMF 948 10 OFF Aviva Tower London, GBR 439 315 1,393 Kuok Khoon Hong & Martua SitorusAEW Capital Management 788 11 OFF River Court London, GBR 437 425 1,029 Chinese Estates GroupInvesco Real Estate 786 12 OFF 10 Aldermanbury London, GBR 434 312 1,393 JP MorganBlackstone 781 13 OFF River Ouest Bezons, FRA 400 689 581 ING RE Invt Mgmt France OBO Predica SA‡Signa Holding 721 14 OFF 20 Gresham St London, GBR 374 237 1,580 AXA RE Investments Managers (REIM)Corio NV 716 15 OFF Park House London, GBR 366 310 1,180 Qatar National BankAmdec Property Development 686First Atlantic Real Estate SGR 652 16 HTL Paris Marriott Champs-Elysees Paris, FRA 362 192 1,887 Abu Dhabi Investment AuthorityPrudential PLC 640 17 RET Spitalerstrasse 22-26† Hamburg, DEU 361 55 6,560 Signa HoldingLegal & General Property 631 18 HTL Le Meridien Montparnasse Paris, FRA 350 953 367 Unibail-RodamcoReal I.S. AG 612 19 OFF Belgrave House† London, GBR 347 280 1,239 TIAA-CREF (fund)Verny Capital 609 20 RET Jubilee & West End Houses London, GBR 342 121 2,834 Pontegadea Inversiones SL 21 RET Schloss Arkaden Braunschweig, DEU 335 597 561 Deka Immobilien Investment GmbH 22 OFF Defense Plaza Puteaux, FRA 325 335 969 Northwood Investors LLC TOP 20 SELLERS # 23 RET Eden Shopping Centre† High Wycombe, GBR 313 850 368 Aldersgate Investments Vol 24 RET Marmara Park† Istanbul, TUR 302 1,076 281 DWS Investments Gmbh ($M) 25 RET Wankdorf Shopping Centre Bern, CHE 300 678 442 UBS JV Swissreal Investments LtdPeel Group $2,498Volksbank AG 2,426Tesco plc 2,223 TOP 15 PORTFOLIO SALESStadium Group 1,913 Price SF(K)/ PPSF/ Type Transaction Location BuyerDeutsche Bank 1,782 ($M) Units PPU (K)Aberdeen Property Investors 1,541 1 RET Tesco RET Portfolio 11 Multiple, GBR $2,200 $3,500 $629 Tesco Pension Trustees LimitedEurocastle 1,544 2 MIX Europolis MIX Eastern Euro Ptfl 11 Multiple, Europe 2,009 13,011 154 CA Immobilien Anlagen AGUnibail-Rodamco 1,242 3 OFF Eurocastle Mars Fixed 1 Ptfl 2011† Berlin, DEU 1,457 4,989 292 Arminius Funds ManagementBeacon Capital Partners 1,043 4 RET Metro RET Portfolio 11 Multiple, DEU 1,215 9,688 125 Cerberus Capital ManagementFourth Swedish Natl Pension Fund 948 5 APT Dombron Intressenter ptfl† Sweden other 948 8,281 115 AMF FastigheterMorgan Stanley 922 6 MIX Melrose Arch† Melrose North, ZAF 686 1,808 332 Amdec Property DevelopmentPirelli & C. Real Estate SpA 804 7 HTL MSREF HTL Portfolio 11 Multiple, Europe 621 2,537 245 Toufic AboukhaterECE Projektmanagement 817 8 MIX NR Nordic & Russia Props Ltd Mix Ptfl 11 Multiple, Europe 542 8,872 61 Kungsleden ABSchroders plc 781 9 APT Genesis Housing APT Ptfl 11† London, GBR 464 1,630 284 Grainger plcStanhope Plc 781 10 MIX ECE MIX portfolio 2011† Hamburg, DEU 435 665 655 Real I.S. AGKuwait Investment Authority 741 11 RET Rubin Moscow RET Ptfl 2011 Moscow, RUS 428 1,017 421 Yuri and Alexei HotinHighstreet Holding 760GE Capital 734 12 IND VGP IND Portfolio 11† Prague, CZE 414 4,629 89 AEW Europe JV Tristan Capital PartnersHermes 678 13 RET Unibail RET Portfolio 11 Multiple, SWE 379 1,002 379 Grosvenor‡Investitori Associati 652 14 RET Karstadt Highstreet Ptfl 2011 Multiple, DEU 370 524 706 Quantum Immobilien AG 15 RET Highstreet Karstadt Ptfl Munich, DEU 361 570 632 Signa Holding‡ # Full credit to each JV partner, 100% valuation given *Estimated † Partial Interest ‡ JV ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 8
  • 9. AUGUST 2011 MID-YEAR REVIEW EMEA: Transactions by Market in H1’11 APARTMENT INDUSTRIAL OFFICE RETAIL HOTEL LAND SITE GRAND TOTAL* YOY CHANGE Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol Props Austria Austria, all $72 2 $72 2 $258 3 $316 5 $717 12 -19% -45% Belgium Belgium, all 21 1 92 3 914 20 58 3 88 2 1,173 29 47% 16% Bulgaria Bulgaria, all 62 3 62 3 -52% -25% Czech Republic Czech Republic, all 414 7 445 8 304 5 1,163 20 168% 25% Copenhagen 43 3 45 2 318 8 347 6 72 1 825 20 81% 100% Denmark Denmark other 18 1 65 4 151 2 9 1 243 8 7% 100% Baltic States Baltic States 25 1 299 7 17 1 341 9 994% 350% Helsinki 60 4 28 2 552 10 152 3 792 19 226% 58% Finland Finland other 29 3 84 5 85 9 86 11 101 3 384 31 3% 107% Paris 183 4 237 7 4,699 83 378 42 1,080 41 6,578 177 41% 51% France France other 286 8 282 28 519 17 1,260 23 196 5 2,543 81 -47% -49% Berlin-Brandenburg 989 39 27 1 1,813 36 886 12 152 3 200 4 4,068 95 53% -13% Hamburg 341 24 216 8 1,413 24 1,056 6 52 2 125 4 3,203 68 309% 209% Munich 286 18 178 3 321 9 501 8 36 3 119 5 1,441 46 10% 59% Frankfurt/Rhine-Main 79 4 80 1 1,294 8 298 8 221 5 297 6 2,269 32 175% -14% Germany Stuttgart 11 1 38 2 106 4 142 4 21 1 100 1 420 13 23% -7% Rhine-Ruhr 345 27 48 3 704 14 2,348 27 27 1 204 7 3,676 79 12% -66% Saxon Triangle 227 103 55 1 45 3 413 7 22 1 13 1 775 116 11% 625% Germany other 564 216 49 2 315 11 3,293 138 228 5 207 8 4,657 380 37% 222% Greece Greece, all -100% -100% Hungary Hungary, all 128 2 169 3 100 1 69 1 35 2 501 9 22% 125% Ireland Ireland,all 346 4 346 4 111% -43% Rome 263 6 66 1 96 1 425 8 -46% 0% Europe Italy Italy other 13 1 900 17 1,029 7 87 2 2,029 27 102% 4% Netherlands Netherlands, all 274 29 434 19 1,035 32 483 16 41 2 30 2 2,297 100 7% -3% Norway Norway, all 28 2 121 6 950 14 403 6 10 1 1,512 29 22% 0%EMEA Poland Poland, all 220 8 897 11 543 6 42 2 113 5 1,815 32 40% 28% Portugal Portugal, all 40 3 55 3 59 1 70 3 150 4 373 14 -57% -60% Romania Romania, all 46 1 201 3 18 2 195 2 459 8 59% -27% Moscow 165 2 331 3 628 3 639 2 1,763 10 -20% -58% Russia Russia other 20 1 52 2 18 1 150 2 21 1 261 7 -69% -91% Madrid 28 1 21 1 170 3 325 237 189 5 37 1 770 248 -40% 700% Spain Spain other 183 8 187 4 570 248 443 10 187 5 1,569 275 -24% -40% Stockholm 771 45 288 22 716 17 696 7 118 2 182 2 2,769 95 20% 16% Sweden Sweden other 1,963 134 1,042 69 1,504 119 581 26 47 5 62 3 5,198 356 82% 88% Switzerland Switzerland, all 189 3 483 5 326 2 94 2 1,092 12 162% 20% Turkey Turkey, all 13 1 132 3 462 2 39 2 24 1 670 9 38% -25% London Metro 958 17 227 16 9,434 108 1,338 21 291 13 196 5 12,444 180 19% -8% Manchester Metro 39 2 89 4 2,572 4 245 4 2,945 14 263% -46% United Kingdom Scotland 166 4 60 3 364 10 16 1 606 18 -50% -67% UK other 125 4 1,205 53 1,458 48 5,159 93 319 9 87 4 8,353 211 -7% -56% Ukraine Ukraine all 499 1 25 1 200 3 724 5 40% -38% Europe other Europe 112 3 295 1 102 2 14 1 523 7 52% -36% Total $7,763 694 $7,043 303 $33,270 681 $28,517 1,016 $5,459 143 $2,723 79 $84,775 2,916 22% 2% Israel Israel, all 306 2 62 3 177 3 256 5 801 13 -22% -32% Dubai 483 6 483 6 -36% -67% UAE UAE, all 165 2 165 2 - - Mid-East other Saudi Arabia, all 67 1 67 1 -16% 0% Mid-East Total $306 2 $62 3 $177 3 $972 14 $1,516 22 -18% -42% Africa Africa, all 89 1 319 3 546 6 98 3 20 1 1,071 14 -6% 0% Africa Total $89 1 $319 3 $546 6 $98 3 $20 1 $1,071 14 -6% 0% ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater.9
  • 10. AUGUST 2011 MID-YEAR REVIEW Asia Pacific: Quarter in Review Summary S ales of signi cant properties in QUARTERLY TRANSACTION VOLUME Asia Paci c totaled $67.2 in Q2’11, $120 Billion BY PROPERTY TYPE bringing the total for the rst half Commercial of 2011 to $170.8 . While the region con- Apartment $100 tinues to show solid, steady growth in Hotel commercial property investment, some Land signi cant changes were noted in Q2 as $80 investment surged in Australia and plum- meted in Japan. Hong Kong recovered $60 from a relatively poor Q1 with a stronger Q2 to be at at the mid-year point while $40 Singapore’s 119 increase in transactions in H1 topped every major economy glob- $20 ally except the US. Also noteworthy, cross-border inves- $0 tors were part of the surge in transactions in Australia and 1 2 3 4 1 2 3 4 1 2 3 4 1 2 TRANSACTION SUMMARY Singapore, and the 08 09 10 11 Q211 YOY H1’11 YOY buyers included a PERCENT CHANGE IN TRANSACTION VOLUME Vol ($B) Chg Vol ($B) Chg healthy mix of Eu- (H1’10 VS H1’11) FIN Office $8.5 -8% NOR $22.2 14% ropean and North <-50% - 50–0% 0–20% 20–50% 50–100% >100% Retail 5.1 75% 9.8 15% American invest- DECREASE INCREASE SWE Industrial 2.9 71% 4.9 52% DNK RUS ment rms which All Commercial 16.5 19% 36.9 18% NLD have been relatively Hotel IRL1.6GBR 13% 2.5 -11% DEU POL quiet since 2007. Apartment 2.0 46% CZE 4.0 BEL 25% Land 47.2 SVK UKR South Korea also FRA 15% AUT 127.4 HUN 11% Total $67.2 CHE 17% ITA $170.8 ROU 12% HRV posted strong results SRB *Totals may not sum due to rounding MCO MNE BGR in each quarter this PRT ESP GRC TUR year and its 80 in- KOR crease in H1 was the second highest in Asia. JPN CHN e only countries in Asia Paci c where in- ISR vestment momentum appears waning and volume fell in both quarters this year were QAT ARE TWN SAU India, Taiwan and New Zealand. IND HKG Across Asia Paci c, growth accelerated THA in the second quarter in every property VNM type save o ce, which is largely due to curtailed investment in Japan. In China, MYS sales of o ce and retail properties nearly SGP doubled in H1’11 while sales of develop-BRA able land moderated in Q2 as China’s long-running e orts to calm exuber- ant sales appear to be bearing fruit. In addition, transactions in China’s over- heated primary markets dropped as ac- AUS tivity moved to secondary and tertiary ZAF cities. Land rights in China accounted for $38.7 in Q2, up slightly on a year-over- year basis, but half of levels recorded in the two most recent quarters. ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 10
  • 11. AUGUST 2011 MID-YEAR REVIEW At the same time, land-hungry inves- RECENTLY BUILT OR RENOVATED tors have poured capital into Singapore OFFICE BUILDING SALES IN Q2 and Hong Kong, especially as Hong Kong Price PPSF/ Built/ Property City Cap Rate authorities greatly expanded available de- ($M) PPU ($K) Renov velopment sites in Q2, a policy they are ex- Arena Tower Yokohama $117.0 605 5.6% 2008 pected to continue into Q3 as over $1.7 of SA Water House Adelaide 98.5 587 7.6% r2010 W sites were sold just in July. ithin Asia Paci c, the di erences Akihabara Tokyo 62.3 1,359 4.8% 2009 Business Center in yields are signi cant. Yields in BAML Singapore 246.6 1,139 4.3% 2008 Hong Kong, now averaging slight- HarbourFront ly above 3.0 are by far the lowest in Asia Wood Perth 33.2 668 9.3% 2011 Group House and throughout the world. Stunningly, 36 signi cant assets traded in Hong Kong in H1 at a 3.5 yield or lower, mostly strata Australia is o ering some of the highest yields, per- retail units. Average cap rates in Asia (ex- haps explaining the recent surge in acquisitions there. Japan), displayed an uptick in Q2, but A summary of select o ce sales of recently construct- mainly due to an increasing number of ed or renovated properties highlights the sharp dif- transactions recorded in markets such ferences in cap rates available in major and secondary as South Korea and Taiwan. Meanwhile, markets throughout AsiaPac. QUARTERLY TRANSACTION SUMMARY BY THEATER OFFICE, RETAIL AND INDUSTRIAL ASIA - EX JAPAN JAPAN AUSTRALIA - NZ CAP RATES* CAP RATES CAP RATES 9.5% 9.5% 9.5% 8.5% 8.5% 8.5% 7.5% 7.5% 7.5% 6.5% 6.5% 6.5% 5.5% 5.5% 5.5% 4.5% 4.5% 4.5% 3.5% 3.5% 3.5% TRANSACTION TRANSACTION TRANSACTION $20 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 $20 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 $20 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 08 09 10 11 08 09 10 11 08 09 10 11 $15 $15 $15 $10 $10 $10 $5 $5 $5 $0 $0 $0 1 2 YOY 4 1 2 3 IN TRANS3 4 1 2 3 CHANGE 4 1 2 VOL 1 2 YOY4CHANGE IN TRANS VOL 1 2 3 1 2 3 4 1 2 3 4 1 2 YOY4 1 2 3 IN TRANS3VOL 1 2 3 CHANGE 4 1 2 4 200% 08 09 10 11 200% 08 09 10 11 200% 08 09 10 11 150% 150% 150% 100% 100% 100% 50% 50% 50% 0% 0% 0% -50% -50% -50% -100% -100% -100% 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 08 09 10 11 08 09 10 11 08 09 10 11 *Q410 excludes several industrial sales at high cap rates©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 11
  • 12. AUGUST 2011 MID-YEAR REVIEW Australia Rebounds on Cross-Border Buying A ustralia’s property markets zoomed AUSTRALIA TRANSACTION VOLUME back into recovery mode in Q2 af- OFFICE, RETAIL AND INDUSTRIAL $30 Billion $14 ter a steep retreat the prior quarter, rising 127 to $4.5 in commercial Rolling 12 months total $25 $12 property sales alone. Australia’s tradition- Quarterly Vol ally higher yields averaging over 8.3 in $10 Q2 have drawn cross-border investment $20 Rolling 12-months at a phenomenal clip, accounting for 42 Quarterly Vol $8 of Australia’s total investment volume in $15 Q2. e capital originated with relative $6 uniformity from each of the global zones. $10 Net cross-border acquisitions so far this $4 year have already outpaced the combined $5 total for 2009 and 2010. e 2011 tally $2 does not yet include Blackstone’s pending $0 $0 $764 acquisition of all the assets of Valad 1 2 3 4 1 2 3 4 1 2 3 4 1 2 Properties, likely to close in mid-August. 08 09 10 11 e deal illustrates one source of assets that is contributing to the rising percent- CROSS-BORDER ACQUISITIONS AND age of foreign investment: Australian listed DISPOSITIONS IN AUSTRALIA  See all the details on these 5,000 companies have been net sellers this year, deals and keep up with this acq evolving trend using RCA with major dispositions by some of the 4,000 disp Cross-border Capital Tracker most active companies, including Stock- net at www.rcanalytics.com land, Mirvac and Lend Lease. In contrast, 3,000 dispositions by foreign owners account for less than $500 in volume, against nearly 2,000 $4.0 in cross-border acquisitions. Melbourne has captured over 50 of 1,000 cross-border and overall investment, in- cluding the largest single-asset transaction 0 so far this year. CPPIB from Canada, ac- quired a 50 interest in Northland Shop- (1,000) ping Centre for nearly $1.0 , and Brook- eld O ce Properties was also an active (2,000) investor. Other large deals include a $219 08 09 10 11 acquisition of a mixed-use complex by La- Salle and the purchase in Sydney by K-RE- ORIGIN OF CROSS-BORDER INVESTORS IN AUSTRALIA* IT of a 50 stake in an o ce development project for $330 . Singaporean investors have also been very active, representing a sizeable Asian EMEA investment contingent mainly in Victoria, 29% Queensland, and New South Wales. ese Americas 39% include the aforementioned K-REIT trans- action as well as the acquisition by GIC of multiple industrial assets including a large portfolio from Australand. Even European AsiaPac capital has been making the long swim to 32% Australia, with Swiss, British, and German investors joining the value hunt. * Data based on past 12 months©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 12
  • 13. AUGUST 2011 MID-YEAR REVIEW Asia Pacific: Top Deals and Players in H1’11 TOP 25 PROPERTY SALES TOP 20 BUYERS# Price SF(K)/ PPSF/ Type Transaction Location Buyer ($M) Units PPU (K) Vol 1 DEV Borrett Road Site, Mid-levels Hong Kong, HKG $1,498 113 $13,266 Cheung Kong (Holdings) Ltd ($M) 2 RET Northland Shopping Centre Preston East, AUS 998 994 1,004 Canada Pension Plan Investment BoardChina Vanke Co Ltd $3,048 3 DEV Shenzhen 2011-K202-0014 Shenzhen, CHN 991 7,509 132 China Merchants Property Dev Co LtdYunnan Zhonghao Props 2,714 4 DEV CITIC City B,C,D blocks (Prt II) Beijing, CHN 929 848 1,095 Financial Street Holding Co LtdPoly Real Estate Group 2,128Wheelock & Co 2,105 5 OFF Otemachi PAL Bldg Tokyo, JPN 877 301 2,916 Mitsui Fudosan Co Ltd JV Mitsui & CoGreentown China Hldgs Ltd 2,099 6 DEV Changsha 2011-001 Changsha, CHN 855 800 1,068 Wharf HoldingsCheung Kong (Holdings) Ltd 2,034 7 DEV Punggol Central & Punggol Walk Singapore, SGP 799 323 2,475 Frasers Centrepoint Ltd‡CapitaLand Limited 1,794 8 DEV Boon Lay Way Singapore, SGP 791 194 4,085 CapitaMalls Asia JV HSBC BankChina Overseas L & I Ltd 1,650 9 OFF Capital Square Singapore, SGP 700 387 1,810 Alpha Investment Partners (AIP)‡CPP Investment Board 1,587 10 OFF The Fifth Square Beijing, CHN 682 1,009 677 China Minmetals CorporationFinancial Street Hldg Co Ltd 1,536 11 DEV Nanjing 2011G07 Nanjing, CHN 681 3,667 186 Shimao Property Holdings Ltd‡China Merchants Group 1,517 12 DEV Toyosu District Site Tokyo, JPN 680 1,132 601 Tokyo Metropolitan GovernmentFar East Organization 1,423 13 OFF The Centre Shanghai, CHN 666 963 692 China Pacific Insurance (Group) Co LtdSOHO China 1,350 14 DEV CITIC City B,C,D blocks Beijing, CHN 607 848 716 Financial Street Holding Co LtdShimao Group 1,286 15 DEV Yiwu 2011017 Yiwu, CHN 594 883 672 Guangsha ConstructionFarglory Land Dev Co., Ltd. 1,219HSBC Holdings 1,197 16 IND Hong Kong Interlink Project Hong Kong, HKG 589 2,400 245 Canada Pension Plan Investment BoardMitsubishi Estate 1,174 17 DEV Stubbs Road Site Hong Kong, HKG 578 160 3,605 Sun Hung Kai Properties LimitedKeppel Land Limited 1,146 18 DEV Yiwu 2010044 Yiwu, CHN 559 334 1,674 Sunion (Sanlian) GroupSumitomo 1,133 19 DEV Nanjing 2011G14 Nanjing, CHN 508 2,458 207 Nanjing Qingao Development Co Ltd‡Mitsui Fudosan 1,109 20 DEV 3-1 Ariake-Kita Tokyo, JPN 506 1,186 427 Sumitomo Realty & Development Co Ltd 21 DEV Qingdao 2011-04 Qingdao, CHN 499 2,930 170 Qingdao Zhonghai Huaye RE Co. Ltd. 22 OFF Toyosu Center Bldg Tokyo, JPN 497 1,072 463 IHI Corporation TOP 20 SELLERS # 23 OFF SK Building Seoul, KOR 495 863 573 SK Corporation‡ Vol 24 OFF New World Changning Com Ctr Shanghai, CHN 493 1,079 457 SOHO China ($M) 25 DEV Shanghai 201100510 Shanghai, CHN 476 1,482 321 Sino-Ocean Land Holdings LtdUrban Redev Authority $3,356Housing & Dev Board 2,821CITIC Group 1,780 TOP 15 PORTFOLIO SALESLone Star Partners 1,230 Price SF(K)/ PPSF/ Type Transaction Location BuyerPromise Co Ltd 877 ($M) Units PPU (K)Mori Trust Holdings 762 1 OFF Kokusai Shin-Akasaka Towers Tokyo, JPN $1,066 863 $1,236 Mitsubishi Estate Company, LimitedMunich Re 715 2 DEV Greentown China Govt Land Ptfl Taizhou, CHN 1,011 7,386 137 Greentown China Holdings LimitedERGO Group 706 3 DEV Kunming Guandu KC2010-76 Kunming, CHN 987 22,158 45 Yunnan Zhonghao Properties Co LtdWheelock & Co 703 4 OFF Mapletree Com Trust Ptfl 2011 Singapore, SGP 625 733 853 Mapletree Commercial TrustHarvest Capital Partners 700 5 MIX Perennial China RET Trust IPO 11 Shenyang, CHN 575 6,119 94 Perennial China RET TrustTokyo Gas 700 6 MIX Waterfront Place Brisbane, AUS 510 714 714 Australian Government Future FundJTC Corporation 680 7 DEV Greentown China Govt Land Ptfl Shenyang, CHN 476 12,263 39 Greentown China Holdings LimitedAsia Pacific Land Limited 666 8 DEV Dadong Plot 1&2 Zhenjiang, CHN 464 3,439 135 China Merchants Property Dev Co LtdDE Shaw Group 666 9 DEV Wharf Hldgs Govt Land Ptfl Suzhou, CHN 442 2,502 176 Wharf HoldingsUrban Renaissance Agency 653 10 DEV Taiwan Govt Land Ptfl 2011 Sinjhuang, TWN 412 246 1,678 Farglory Land Development Co., Ltd.Mitsui Fudosan 635 11 DEV JiShu Housing Govt Land Ptfl Suzhou, CHN 391 1,907 205 JiShu Housing Co Ltd‡CapitaLand Limited 625Mapletree 612 12 DEV Wheelock Props Ltd Foshan Ptfl 11 Foshan, CHN 372 6,153 61 Wharf HoldingsGoodman Group 589 13 DEV Beijing Huaye Govt Land Ptfl Beijing, CHN 353 277 1,276 Beijing HOMYEAR RE Company LtdStockland Trust Group 566 14 IND Sagawa Express Warehouses Multiple, JPN 348 1,541 226 SG Realty 15 DEV Zhonghai Govt Land Ptfl Qingdao, CHN 338 2,093 162 China Overseas Land & Investment Ltd # Full credit to each JV partner, 100% valuation given *Estimated † Partial Interest ‡ JV ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 13
  • 14. AUGUST 2011 MID-YEAR REVIEW Asia Pacific: Transactions by Market in H1’11 APARTMENT INDUSTRIAL OFFICE RETAIL HOTEL LAND SITE GRAND TOTAL* YOY CHANGE Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol Props Beijing $1,574 10 $185 1 1 $6,711 62 $8,512 74 -39% -14% Shanghai 49 1 2,239 16 221 2 7,740 102 10,250 121 -11% 98% Tianjin 108 2 4,045 105 4,154 107 -42% 22% Hangzhou 4,572 82 4,572 82 -17% 14% Dalian 3,006 40 3,006 40 -31% -5% Nanjing 3,032 29 3,032 29 112% 71% Shenzhen 61 2 129 1 40 1 1,371 9 1,602 13 320% 117% China Chongqing 3,421 39 3,421 39 36% 22% Guangzhou 147 1 54 1 1,615 23 1,816 25 171% 150% Dongguan 705 24 705 24 0% 41% Nantong 727 11 727 11 -21% -21% Changsha 1,492 9 1,492 9 28% -36% Shenyang 236 2 433 2 4,266 84 4,936 88 172% 83% Xiamen 324 11 324 11 -81% -50% Asia China other 34 2 22 1 1,728 15 61 1 67,202 1,232 69,047 1,251 37% 51% Hong Kong Hong Kong 486 9 1,443 26 2,123 70 2,021 82 167 2 3,255 19 9,494 208 3% 8% India India, all 112 3 184 5 23 1 35 3 964 10 1,318 22 -56% 38% Tokyo 1,551 51 817 11 6,918 70 861 11 84 2 2,540 46 12,770 191 -7% -11% Japan Osaka 283 11 140 1 157 4 162 2 46 1 286 6 1,074 25 12% -11% Japan other 88 6 188 6 122 2 607 7 97 4 34 2 1,136 27 3% -40%Asia Pacific Kuala Lumpur 233 6 186 3 322 5 741 14 -27% -50% Malaysia Malaysia other 10 1 71 1 62 3 143 5 9% 0% Singapore Singapore, all 1,083 17 854 30 2,269 12 242 2 647 4 6,455 32 11,550 97 119% 62% Seoul 123 4 1,895 23 124 2 504 11 2,644 40 88% 43% South Korea South Korea other 151 3 40 1 48 2 24 1 64 3 327 10 35% -38% Taiwan Taiwan, all 383 16 637 19 417 11 112 1 1,486 31 3,035 78 -26% -4% Asia Other Asia other 207 3 125 1 88 6 483 13 903 23 107% 53% Total* $3,892 103 $4,181 100 $19,147 246 $7,423 146 $1,403 26 $126,683 2,043 $162,730 2,664 12% 28% Melbourne 31 1 296 11 527 9 1,224 6 350 3 272 10 2,701 40 141% -22% Sydney 33 2 313 10 955 22 265 10 177 10 1,743 54 -15% 32% Australia Brisbane 98 6 789 7 120 6 16 1 27 1 1,049 21 47% 5% Perth 288 7 87 5 68 4 443 16 -45% -6% Australia other 35 1 19 1 443 7 439 22 558 11 132 7 1,626 49 52% 26% Australia / NZ New Zealand New Zealand, all 97 5 209 18 196 8 14 1 516 32 -33% 256% Total* $99 4 $725 28 $3,100 57 $2,343 67 $1,120 23 $690 33 $8,077 212 24% 20% ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater.14
  • 15. AUGUST 2011 MID-YEAR REVIEW Americas: Quarter in Review Summary I nvestment volume in the Americas QUARTERLY TRANSACTION VOLUME surged to $55.6 in Q2, a 115 increase BY PROPERTY TYPE $70 Billion from a year earlier, just shy of the year- Commercial end spike in transactions recorded in $60 Apartment Q4’10. e acceleration in sales cut across Hotel all property sectors and was dominated $50 Land by the US, up 124 year over year ( ), the highest gain among major economies $40 globally. Prices were generally stable or improved over the quarter, but the dichot- $30 omy in pricing between the favored major markets and all others persisted through- $20 out the Americas. A er an explosive start to the year, di- $10 rect property sales TRANSACTION SUMMARY in Brazil fell 32 $0 Q211 YOY H1’11 YOY in Q2, yet there 1 2 3 4 1 2 3 4 1 2 3 4 1 2 Vol ($B) Chg Vol ($B) Chg have been a hand- 08 09 10 11Office $14.8 47% $26.0 73% ful of recent realRetail 15.5 282% 21.6 154% PERCENT CHANGE IN TRANSACTION VOLUMEIndustrial 5.8 86% 10.3 89% estate M&A deals (H1’10 VS H1’11)All Commercial 36.1 110% 57.9 100% and development <-50% -50–0% 0–20% 20–50% 50–100% >100%Hotel 4.6 170% 8.7 168% joint ventures an- DECREASE INCREASEApartment 13.2 137% 21.1 105% nounced. CanadaLand 1.7 26% 3.5 39% recorded sales of CANTotal $55.6 115% $91.2 102% $4.5 in Q2, up 8*Totals may not sum due to rounding , but forward- looking activity is already strong in Q3. Portfolios accounted for $26.7 of USA Americas’ sales in H1’11, including the $9.2 acquisition of Centro’s US shop- ping centers by Blackstone. Nearly $10.0 of portfolio transactions are in contract, MEX mostly in the US or Canada. e rise in large multi-market portfolio signals a growing bullishness on entire property sectors as opposed to smaller bets on spe- ci c assets in favored markets. For the rst half of 2011, property sales in the Americas totaled $91.2 and ap- PER pear on a trajectory to easily surpass the BRA $200.0 mark for the year, almost quadru- pling 2009 volume. Yet recent turmoil in the bond market slowed originations by US CMBS conduits, at least temporarily. CHL Commercial property yields were sta- ble to slightly lower throughout most of ARG the Americas in Q2 and in the US have been at similar levels since the beginning of the year.©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 15
  • 16. AUGUST 2011 MID-YEAR REVIEW Even in top markets such as Manhattan US AVERAGE CAP RATES and DC, cap rates have been remarkably stable over the past two quarters. Canada has seen the most movement with yields falling over 25 since the beginning of B the year. y property type, average US cap rates in H1’11 are at across most sectors, except industrial and sub- urban o ce properties. ese sectors have been the slowest to attract inves- tors in the recovery, but their yields were down slightly. Across all sectors, yields for prime assets are signi cantly lower than the average and this gap is at histori- cally wide levels, a trend that shows no signs of abating even as investors begin to stretch their horizons. QUARTERLY TRANSACTION SUMMARY BY THEATER OFFICE, RETAIL AND INDUSTRIAL UNITED STATES CANADA LATIN AMERICA CAP RATES CAP RATES CAP RATES 9.0% 9.0% 9.0% 8.5% 8.5% 8.5% 8.0% 8.0% 8.0% 7.5% 7.5% 7.5% 7.0% 7.0% 7.0% 6.5% 6.5% 6.5% 6.0% 6.0% 6.0% 5.5% 5.5% 5.5% TRANSACTION TRANSACTION TRANSACTION $35 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 $10 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 $10 Billion 2 3 4 1 2 3 4 1 2 3 4 1 2 1 08 09 10 11 08 09 10 11 08 09 10 11 $30 $8 $8 $25 $20 $6 $6 $15 $4 $4 $10 $2 $2 $5 $0 $0 $0 1 2 YOY 4 1 2 3 IN TRANS3 4 1 2 3 CHANGE 4 1 2 VOL 1 2 YOY 4 1 2 3 IN TRANS3 4 1 2 3 CHANGE 4 1 2 VOL 1 2 YOY 4 1 2 3IN TRANS 3 4 1 2 3 CHANGE 4 1 2 VOL 400% 08 09 10 11 400% 08 09 10 11 400% 08 09 10 11 300% 300% 300% 200% 200% 200% 100% 100% 100% 0% 0% 0% -100% -100% -100% 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 08 09 10 11 08 09 10 11 08 09 10 11©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 16
  • 17. AUGUST 2011 MID-YEAR REVIEW US: End of Pretend & Extend S ome $15.6 of distressed property DISTRESSED PROPERTY SALES $14 Billion 25% traded in the US in H1’11, more Distress than double the H1’10 level as lend- $12 Total Sales 20% ers increasingly chose to liquidate as op- $10 posed to modify and restructure troubled $8 15% mortgages. A year ago, half of all workouts were accomplished via loan modi cations, $6 10% dubbed “extend and pretend.” at ratio had shi ed dramatically to favor liquida- $4 5% tions by six-to-one over modi cations. $2 As credit conditions and property prices $0 0% have improved, lenders are moving more 1 2 3 4 1 2 3 4 1 2 3 4 1 2 aggressively and decisively away from pre- 08 09 10 11 tend-and-extend. Brazil: A Growing Institutional Market D espite the decline in activity in Q2, BRAZIL TRANSACTION VOLUME Brazil appears on its way to establish OFFICE, RETAIL AND INDUSTRIAL a new record for transaction volume $8 Billion $5 Rolling 12 months total in 2011 having already surpassed $4.0 of $7 Quarterly Vol $4 BRAZIL transactions at the mid-year point. Pricing $6 Rolling 12-months AVERAGE PPSF* is also in record territory with the average $5 $3 Quarterly Vol for commercial properties reaching $450/ $4$500 sf sf last quarter. $3 $2 While Brazil is drawing increased inter-$450 est and exploration from many global in- $2 $1$400 vestors, domestic institutional capital has $1$350 been driving the recent spike in activity. $0 $0 Brazil-based institutions were responsible$300 1 2 3 4 1 2 3 4 1 2 3 4 1 2 for more than half of acquisitions so far in 08 09 10 11$250 2011 and its share of acquisitions has in- creased steadily over the past three years. BUYER COMPOSITION$200 Recent transactions include Prosperitas’ 7%$150 $1.1 acquisition of Bracor, a prestigious 34% owner of business parks and a joint ven- 45%$100 53% ture between Carlos Betancourt and Sam 54% $50 Zell’s Equity International Group. Other 12% institutional investors such as BTG Pac- 7% $0 tual, Funcef, WWI Group and Previ have 25% 07 08 09 10 11 16% all made signi cant acquisitions recently. 10% *Commercial properties only In addition, cross-border institutional in- 6% 40% 14% vestors have been clearly on the prowl for 29% 23% 15% direct property acquisitions, entity-level 6% investments, and development joint ven- tures. 2008 2009 2010 2011 User/Other Private Public Listed/REITs Cross-Border Institutional ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 17
  • 18. AUGUST 2011 MID-YEAR REVIEW Americas: Top Deals and Players in H1’11 TOP 25 PROPERTY SALES TOP 20 BUYERS# Price SF(K)/ PPSF/ Type Transaction Location Buyer ($M) Units PPU (K) Vol 1 OFF 280 Park Avenue† New York, NY $1,100 1,179 $941 SL Green JV Vornado ($M) 2 OFF Helmsley Building New York, NY 763 1,213 629 Invesco Real EstateBlackstone $8,227 3 OFF Market Square East & West Washington, DC 615 680 905 Wells Real Estate Funds, IncVornado Realty Trust 1,867 4 HTL Manchester Grand Hyatt San Diego, CA 570 1,625 351 Host HTLs & Resorts IncInvesco Real Estate 1,330JP Morgan 1,313 5 OFF Landmark Center Boston, MA 531 950 558 JP Morgan Asset Management‡Prosperitas 1,297 6 OFF 450 West 33rd Street New York, NY 525 1,750 300 Brookfield OFF PropertiesRelated Companies 1,187 7 OFF 750 Seventh Avenue New York, NY 485 591 820 Fosterlane ManagementOaktree 1,056 8 HTL Hilton San Diego Bayfront San Diego, CA 475 1,190 399 Sunstone HTL InvestorsNetwork World Market Ctr 1,005 9 APT Independence Plaza North New York, NY 473 1,334 355 Vornado Realty Trust‡Bain Capital 1,005 10 OFF One Park Avenue† New York, NY 394 957 411 Vornado Realty TrustSL Green 1,000 11 OFF Atrium on Bay Toronto, CAN 356 1,070 333 H&R Real Estate Investment TrustHost Hotels & Resorts Inc 884 12 OFF Waterfront Station Washington, DC 356 635 561 USAA Real EstateSunstone Hotel Investors 855 13 OFF Four Allen Center Houston, TX 340 1,260 270 Chevron CorpUSAA Real Estate 807 14 HTL Radisson Lexington New York, NY 336 712 471 DiamondRock Hospitality CoEquity One 807 15 OFF Parsons HQ Pasadena, CA 325 932 349 Lincoln Property Co‡Westbrook Partners 780Wells Real Estate Funds 758 16 RET fmr NBA Store New York, NY 324 39 8,361 InditexBassett Furniture 730 17 APT One Superior Place Chicago, IL 320 809 396 Hartz Mountain IndustriesTeacher Retirement Sys of Texas 681 18 HTL YOTEL New York, NY 315 669 471 IFA HTLs & Resorts (IFA HR)‡Cole Real Estate Investments 655 19 HTL New York Helmsley HTL New York, NY 314 773 406 Host HTLs & Resorts IncArea Property Partners 640 20 OFF Bell Tower Montreal, CAN 296 975 304 Dundee REIT 21 OFF Horizon in Playa Vista Los Angeles, CA 294 501 587 JP Morgan Asset Management 22 OFF 499 Illinois St San Francisco, CA 293 453 646 Alexandria RE Equities TOP 20 SELLERS # 23 OFF US Steel Tower Pittsburgh, PA 287 2,300 125 Mark Karasick Vol 24 HTL Doubletree Guest Suites Times New York, NY 286 460 622 Sunstone HTL Investors ($M) 25 APT Liberty Towers Jersey City, NJ 280 648 432 JP Morgan Asset ManagementCentro Properties Group $7,974Goldman Sachs 1,783Broadway Partners 1,715 TOP 15 PORTFOLIO SALESBracor Invts Imobiliarios 1,297 Price SF(K)/ PPSF/ Type Transaction Location BuyerEquity Residential 1,345 ($M) Units PPU (K)Beacon Capital Partners 1,172 1 RET Centro United States Portfolio Multiple, USA $9,150 99,051 $92 BlackstoneLehman Brothers Hldgs Inc 1,108 2 IND Bracor IND Portfolio 11 Multiple, BRA 1,322 10,764 123 ProsperitasInvestcorp 1,000 3 MIX Capital and Counties Mix Ptfl Multiple, CA 600 2,106 253 Equity One‡Hines Interests LP 959 4 IND World Market Center Portfolio Las Vegas, NV 600 4,832 124 Bain Capital‡GE Capital 918 5 RET Ivanhoe Cambridge RET Portfolio Multiple, CAN 591 2,507 236 Primaris RET REITHighgate Holdings 792 6 APT Magazine Portfolio Sale 2011 Mid-Atlantic 460 2,580 178 Pantzer Properties‡Monday Properties 763 7 OFF Eola OFF Portfolio 11 Multiple, USA 380 2,471 154 Parkway Properties‡Murray Hill Properties 740 8 OFF CBRE Duke Realty JV Multiple, USA 343 2,050 167 CB Richard Ellis Realty TrustBlackstone 756 9 OFF Hartz OFF Portfolio 11 Jersey City, NJ 310 827 375 CB Richard Ellis InvestorsShorenstein Properties 697 10 APT Starwood/Bainbridge Mid-Atlantic 287 1,626 176 Starwood Capital Group‡Equity One 656 11 RET Regency/Macquarie Portfolio Multiple, USA 280 2,329 120 USAA Real EstateRREEF 671Related Companies 667 12 APT AvalonBay Apt Portfolio 11 Multiple, USA 263 1,060 248 United Dominion Realty TrustVornado Realty Trust 650 13 APT UDR Apt Portfolio 11 Multiple, CA 263 1,418 176 AvalonBay CommunitiesBrookfield Asset Mgmt 660 14 APT AREA-ECI SE APT JV Southeast 262 2,746 95 Area Property Partners 15 APT Camden Acquires Apt Ptfl 11 Multiple, TX 261 2,957 88 Camden Property Trust‡ # Full credit to each JV partner, 100% valuation given *Estimated † Partial Interest ‡ JV ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 18
  • 19. AUGUST 2011 MID-YEAR REVIEW Americas: Transactions by Market in H1’11 APARTMENT INDUSTRIAL OFFICE RETAIL HOTEL LAND SITE GRAND TOTAL* YOY CHANGE Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol ($M) # Props Vol Props Toronto $318 21 $413 17 $916 20 $1,069 13 $48 2 $127 5 $2,891 78 8% -7% Canada Calgary 15 1 114 8 424 7 77 3 45 1 675 20 2% -31% Canada other 782 30 516 41 1,334 39 1,175 71 131 7 269 13 4,207 201 4% -12% NYC Metro 2,890 81 470 24 5,377 61 1,686 70 1,813 19 425 12 12,661 267 124% 79% LA Metro 1,973 61 873 45 1,827 34 1,120 42 598 12 187 8 6,577 202 151% 94% DC Metro 2,114 43 252 8 3,576 56 604 22 686 14 153 7 7,386 150 69% 79% SF Metro 1,625 100 555 30 1,683 39 1,094 26 523 7 152 5 5,631 207 90% 156% Chicago 701 13 727 38 489 11 1,061 42 178 8 69 2 3,226 114 310% 235% Atlanta 826 37 228 9 476 11 640 39 174 6 46 2 2,390 104 219% 215% So Fla 355 14 65 4 916 20 796 29 382 12 195 12 2,710 91 91% 75% Dallas 831 44 436 14 550 19 490 28 80 4 2,388 109 114% 106% Houston 357 16 159 17 934 20 648 54 20 1 31 3 2,149 111 41% 106% Phoenix 649 28 120 4 583 10 330 13 214 9 39 3 1,936 67 311% 168% Seattle 519 19 182 10 505 10 239 10 200 4 66 2 1,711 55 160% 175% Boston 638 14 157 11 1,157 17 245 18 344 7 2,541 67 67% 72% Denver 570 18 29 1 567 12 243 11 187 4 1,597 46 190% 109% San Diego 211 6 205 11 235 7 287 18 1,536 16 49 2 2,523 60 120% 82% Philly Metro 327 10 180 3 581 34 25 3 34 2 1,147 52 577% 478% United States Austin 121 4 37 3 143 6 63 2 3 1 366 16 -32% -27% Orlando 265 10 17 1 87 3 111 7 11 1 27 1 517 23 85% 53% Las Vegas 146 5 611 4 46 2 132 7 934 18 1208% 200% North America Raleigh/Durham 258 13 60 4 89 2 97 7 18 2 522 28 72% 155% Portland 254 8 65 2 236 5 13 2 57 1 625 18 28% 38% Charlotte 253 6 26 2 65 2 226 9 34 2 604 21 159% 133% Minneapolis 112 5 144 18 384 11 280 20 70 2 990 56 155% 460% Tampa 435 19 11 1 187 12 286 18 15 2 933 52 27% 136% Sacramento 107 2 165 5 124 6 47 1 443 14 76% 56%The Americas Hawaii 16 1 19 1 5 1 59 2 61 3 160 8 -58% 0% Detroit 26 2 15 1 124 2 196 16 31 6 392 27 34% 108% Indianapolis 46 3 99 8 56 4 201 15 81% 50% St Louis 53 2 78 3 76 3 368 31 12 1 587 40 -6% 344% Kansas City 38 2 183 14 82 7 2 1 305 24 263% 380% United States other 3,024 185 1,936 109 1,613 80 6,103 427 644 48 287 11 13,608 860 218% 255% Caribbean Caribbean, all -100% -100% Mexico Mexico, all 51 4 151 2 100 1 15 1 317 8 96% 33% North America other North America other 15 2 15 2 -70% 100% Total* $20,856 823 $8,681 455 $25,286 546 $20,584 1,108 $8,232 206 $2,226 93 $85,864 3,231 102% 109% Buenos Aires 20 1 23 3 17 1 111 2 64 1 28 2 262 10 344% 400% Argentina Argentina other 28 1 4 1 32 2 -59% 0% Sao Paulo 25 1 329 5 348 2 426 12 1,128 20 -12% -5% Brazil Rio de Janeiro 17 1 148 3 24 1 166 4 220 7 231 5 806 21 221% 250% Brazil other 174 9 1,313 30 338 2 61 2 183 19 2,070 62 223% 88% Santiago 313 2 51 2 36 2 193 34 593 40 543% 567% Chile Chile other 125 5 125 5 - - South America South America other Latin Am other 93 5 28 1 30 6 41 5 99 29 291 46 27% 475% Total* $265 13 $1,581 42 $711 10 $1,044 18 $422 17 $1,285 106 $5,307 206 102% 164% ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater.19
  • 20. AUGUST 2011 MID-YEAR REVIEW Changing Landscape for Agents A wave of mergers and acquisitions RELATIVE MARKET SHARE among commercial property bro- FOR INVESTMENT BROKERAGE* kers has been underway in recent (by dollar volume, 12 months through June 2011) months. Among the targets are some sig- Americas AsiaPac EMEA ni cant players: DTZ, King Sturge, NAI Global and others. Most of the deals are strategic consolidations as the industry CBRE remains highly fragmented. While in- CBRE 13% CBRE vestment agency is just one of many busi- 21% 20% ness lines for the major brokerage rms, it is clear that the landscape for the in- JLL vestment sector is changing quickly. 12% In investment sales, Jones Lang LaSalle is JLL signi cantly enhancing its European mar- 6% ket share with King Sturge. BNP stands to C&W 6% almost double its market share in Europe JLL and establish a signi cant pres- 23% Savills RECENT BROKERAGE M&A ence in Asia if combined with Eastdil 6% 15% Status Acquirer Target DTZ. e acquisition of NAI Colliers 1%Proposed SGL/BNP or UGL DTZ Global by experienced investor Knight Frank 5%Pending Jones Lang LaSalle King Sturge Andrew Farkas of C-III could C&W 4% DTZ 4%Pending C-III Capital Partners NAI Global result in a new competitive C&W 8% force. e same holds for Rock- BNPPending BGC Partners (Cantor) Newmark Knight Frank 4% wood, the former US a liate ofClosed CWCapital Rockwood (fmr DTZ) Catella 2% DTZ which is being acquired HFF Savills King SturgePending Cassidy Turley Carter 7% 16% by a unit of equity fund heavy- GVA 2% Pangea weight Fortress. BGC Partners Colliers 2% has entered into an agreement to acquire M&M 3% Newmark, the real estate advisory rm Cassidy 2% ARA 2% which operates as Newmark Knight Frank G&E 1% Colliers 11% in the U.S. eir alliance with London- based Knight Frank remains una ected. Knight Frank e Relative Market Share of Investment 4% Brokerage chart highlights how fragmented DTZ 5% Others 40% the industry is, and how ripe it is for further Others consolidation. Europe is perhaps the most 31% fragmented and Asia Pac the least. It also illustrates the di culties many of the large Others European rms have had in establishing 17% signi cant presence in the US, and high- lights the leading contenders to dominate Asia’s booming property markets. Only ve *Based upon the percentage of brokered deals for property sales of US$10m+ rms currently have a signi cant market involving all property types. Credit is given to both buy-side and sell-side share across all global zones: CBRE, JLL, representation and full credit is given to multiple different brokers involved in same C&W, Colliers and Savills, but if the recent deal. Based on published reports and RCA’s own research which is believed to be wave of M&A continues, expect a sixth or comprehensive, but not entirely complete. Over the past year, RCA has recorded a broker for 43% of EMEA transactions, 25% of AsiaPac transactions (excluding seventh global platform soon. China land deals), and 62% of Americas transactions.©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 20
  • 21. AUGUST 2011 MID-YEAR REVIEW Peak-Era Buyers: Where Are They Now? R everberations from the world-wrench- hit with only 60 of the most active buyers at the ing nancial crisis that upended global peak still buying. property markets in 2008 are still being But the strengths and weaknesses of all three felt. One indicator of just how much ground zones are even more evident in the persever- was lost, and how much has been regained, ance of those at the very top, the 20 most active is in the ranks of the most aggressive buyers buyers in the year preceding the nancial crisis from the 2007 peak that are still active today. and global recession. On those terms, only one Based on this indicator, AsiaPac has been the buyer has vanished from Asia, while ve from most resilient with 82 of the top 100 buyers in the US and 11 from Europe have been elimi- 2007 having bought at least one property since nated. Most of those that have dropped out are the beginning of 2010. In the US, the number from countries with severe internal nancial is surprisingly high with 81 still active owing problems, such as Ireland, or from companies largely to greater non-recourse lending and that have been liquidated, like Lehman Broth- the “pretend and extend” strategy employed by ers. e complete reports and lists are available lenders until recently. Europe has been hardest for download on our website. Top Buyers at Peak Europe United States AsiaPac Still Still Still Company Company Company Buying* Buying* Buying* 1 Unibail-Rodamco  Blackstone  Morgan Stanley  2 Morgan Stanley  Tishman Speyer  National Pension Service (NPS)  3 Avestus Capital Partners - Lehman Brothers Holdings Inc - Prudential  4 Goldman Sachs** - Morgan Stanley  Mitsubishi Estate  5 IVG Immobilien  GE Capital - CapitaLand Limited  6 Metrovacesa - Goldman Sachs  Wheelock & Co  7 Aviva PLC  Beacon Capital Partners  Sino Land Company Limited - 8 Aberdeen Property Investors  Broadway Partners - LaSalle Investment Management  9 Pirelli & C. Real Estate SpA - Brookfield Asset Management  Macquarie Glob Prop Advs (MGPA)  10 Pearl Group - Prudential RE Investors  China Vanke Co Ltd  11 Electra Ltd - BlackRock  DB RREEF  12 ING Group  Centro Properties Group - Tokyo Tatemono Co Ltd  13 RREEF  TIAA-CREF  GIC RE (Govt of Singapore)  14 Prudential PLC  Lightstone Group  Nan Fung Group  15 Propinvest Group - CalSTRS  Kerry Properties Limited  16 SEB Group  Chetrit Group  China Overseas Land & Invt Ltd  17 Lehman Brothers Holdings Inc - CalPERS  K Wah International  18 GE Capital - Simon Property Group  Sun Hung Kai Properties Limited  19 Immofinanz  JP Morgan  Hong Leong Group  20 Evans Randall  Dubai World - Tokyu Land Corporation ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 21
  • 22. AUGUST 2011 MID-YEAR REVIEW Selected Investment Sales Transactions Reported in the Past 3 Months Property Name Address Location SF/Units Year Built Property Type Price PPSF/PPU Qualifier B S Buyer Seller  Broker AMERICAS Helmsley Building 1212,576 $763,266,667 B Invesco Real Estate by Houlihan Lokey 230 Park Ave 1929 $629 from S Monday Properties ‡ New York, United States Office confirmed Atrium on Bay 1070,287 $356,221,543 B H&R Real Estate Investment Trust from 595 Bay St 1981 $333 S Hines Real Estate Investment Trust Inc by Toronto, Canada Office confirmed Brookfield Financial BMO Capital Markets The Corner 196 $209,000,000 B TIAA-CREF from S Gotham 200 W 72nd St 2007 $1,066,327 Organization Inc JV Philips International New York, United States Apartment approximate JV Rhodes New York by CB Richard Ellis Millennium Warner Center 438 $132,883,333 B Essex Property Trust from S Dinerstein 21201 Kittridge St 2010 $303,387 Companies by Institutional Property Woodland Hills, United States Apartment approximate Advisors - Marcus & Millichap Company Rockhill Apartments 1000 $120,417,957 B Ivanhoe Cambridge from S Canapen 4858 Chemin De La Côte-des-neiges 1968 $120,418 Montreal, Canada Apartment street talk Prime Outlets Jeffersonville I 409,959 $134,000,000 B Tanger Factory Outlet from Simon 8000 Factory Shops Blvd 1993 $327 Property Group by Jones Lang LaSalle Jeffersonville, United States Retail confirmed Scottsdale Promenade 433,533 $110,000,000 B Excel Trust Inc from S Levine 16447 N Scottsdale Rd 1999 $254 Investments LP by Lucescu Realty Scottsdale, United States Retail confirmed New York Palace Hotel 899 $377,000,000 B Northwood Investors LLC from 455 Madison Ave 1981 $419,355 S Brunei Investment Agency (BIA) New York, United States Hotel approximate YOTEL 669 $315,000,000 B IFA Hotels & Resorts JV Kuwait Real 440 W 42nd St 2011 $470,852 Estate Co by Hodges Ward Elliott Inc from New York, United States Hotel approximate S Related Companies JV Goldman Sachs future Shopping 204,516 $164,504,902 B Groupe Allard from S Previ Avenida Paulista 1904 $804 Sao Paulo, Brazil Dev Site approximate Property Name Address Location SF/Units Year Built Property Type Price PPSF/PPU Qualifier B S Buyer Seller  Broker EMEA MidCity Place 352,000 $467,685,744 B OMERS OBO Oxford Properties Group 71 High Holborn 2001 $1,329 by  Farebrother from S Beacon London, GBR Office approximate Capital Partners by  GM Real Estate Aviva Tower 315,000 $427,906,742 B Kuok Koon Hong & Martua Sitorus by  1 Undershaft 1969 $1,358 Jones Lang LaSalle DLA from S CBRE Loan London, GBR Office approximate Servicing (CBRELS) by  CB Richard Ellis TDC 871,884 $243,695,329 B KLP Ejendomme A/S from S TDC Teglholmsgade 1 1988 $280 Pensionskasse Copenhagen, DNK Office approximate Eye of Ajman 6,271,420 $406,111,785 B OMERS OBO Oxford Properties Group Sheikh Kjalifa Bin Zayed St 104 And Emirates Rd $65 by  Farebrother from S Beacon Ajman, United Arab Emirates Dev Site street talk Capital Partners by  GM Real Estate ‡ JV©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 22
  • 23. AUGUST 2011 MID-YEAR REVIEW Selected Investment Sales Transactions Reported in the Past 3 Months Property Name Address Location SF/Units Year Built Property Type Price PPSF/PPU Qualifier B S Buyer Seller  Broker EMEA Morfa Shopping Park 335,000 $132,071,819 B The Crown Estate by  Wilkinson Brunel Way 2005 $394 Williams from S Capital & Regional PLC Swansea, GBR Retail approximate JV Aviva PLC by  Cushman & Wakefield Old George Mall 137,000 $131,742,463 B Orchard Street Investment Management High St 1965 $962 by  Savills from S Doughty Hanson Salisbury, GBR Retail confirmed Property Name Address Location SF/Units Year Built Property Type Price PPSF/PPU Qualifier B S Buyer Seller  Broker ASIA PAC E Space Tower 150,273 $297,270,749 B Daiwa Office Investment Corp 3-6 Maruyamacho Shibuya-ku 2002 $1,978 from S Daiwa Securities JV Goldman Sachs Tokyo, Japan Office confirmed JV Sumitomo Mitsui Banking Corporation Shanghai Port Intl Terminal No 1 230,350 $238,023,565 B Baogang Resource from 568 Dongdaming Rd $1,033 S Franshion Properties Shanghai, China Office approximate Hana Daetoo IB Bld 530,657 $223,026,734 B Mirae Asset MAPS Global Yeongdeungpo-gu Yeoeuido-dong 23-3 1994 $420 Investments Co Ltd from S Hanshin Seoul, South Korea Office approximate Mutual Savings Bank JV Seongil Oh Anson House 76,127 $120,345,128 B ING Real Estate from S Uncharted 72 Anson Rd 1998 $1,581 Hotels and Resorts Pte Ltd by Savills Singapore, Singapore Office approximate Yodobashi Camera Kichioji 408,310 $370,349,808 B Hulic from S Lone Star Partners 1-19-1 Kichioji-honcho 1974 $907 Musashino, Japan Retail street talk Shenyang Longemont Mall 2,252,819 $235,090,719 B Perennial China Retail Trust from 22 Pangjiang St 2011 $104 S Shanghai Summit (Group) Co Ltd Shenyang, China Retail confirmed Red Star Macalline Mall 1,954,689 $198,291,227 B Perennial China Retail Trust from Xing Hua Bei Jie 2010 $101 S Shanghai Summit (Group) Co Ltd Shenyang, China Retail confirmed Nan Fung Plaza 176,000 $150,406,285 B The Link Real Estate Investment Trust 8 Pui Shing Rd 1999 $855 from S Bright Region Enterprise Limited Hong Kong, Hong Kong Retail approximate JV Cloud Fort Development Limited Ascott Beijing 310 $167,564,554 B Ascott Group from S CapitaLand Limited 108b Jian Guo Rd 2002 $540,531 Beijing, China Hotel confirmed Lot No IL 8949 112,893 $1,497,635,236 B Cheung Kong (Holdings) Ltd 21 Borrett Rd $13,266 from The Land Deparment Hong Kong, Hong Kong Dev Site approximate Shenzhen 2011-K202-0014 7,509,397 $990,915,872 B China Merchants Property Development Nanshan Sheko $132 Co Ltd from S Chinese Government Shenzhen, China Dev Site approximate CITIC City B,C,D blocks 848,196 $928,940,216 B Financial Street Holding Co Ltd Caishikou Rd $1,095 from S CITIC Real Estate Beijing, China Deb Site approximate©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 23
  • 24. AUGUST 2011 MID-YEAR REVIEWREAL CAPITAL ANALYTICS ABOUT REAL CAPITAL ANALYTICS Prices: Prices are qualified as to the reliability of each source. Estimates of some prices are made using industry and market averages. Prices of prop-www.rcanalytics.com Real Capital Analytics, Inc (RCA) is an independent research firm focused erties sold within a portfolio may be allocated pro rata (based on size) if exclusively on the capital investment markets for commercial real estate. individual pricing is not available. In either case, the estimates are excludedUS Headquarters RCA offers the most in-depth, comprehensive and current information of139 Fifth Avenue from any pricing analysis. activity in the industry. Formed in 2000, RCA has offices in New York City,New York, NY 10010 San Jose, and London. In addition to collecting transactional information Transactions: Asset sales and entity-level transactions are included. AssetToll-Free: 1.866.REAL.DATA for property sales and financing, RCA interprets the data including capital- sales include properties that are sold individually (one-off) or with otherPhone: 212.387.7103 ization rates, market trends, pricing and sales volume. The firm publishes a properties in a portfolio. Entity-level sales include merger and acquisition series of Capital Trends reports and offers an online service that provides activity of REITs and other real estate-owning companies. TransactionsRobert M White, Jr Founder & President include only the sale of 50% or more and prices are grossed up to reflect aJeanne Jambor Chief Financial Officer real-time, global transactional market information. For more information, visit: www.rcanalytics.com. full valuation of the property.Dan Fasulo Managing DirectorMatt Stone SVP, Marketing Currency Conversion: Transaction prices are tracked in whatever currencyBryan Grad SVP, Sales ABOUT GLOBAL CAPITAL TRENDS is reported and are converted to USD, EUR, GBP and JPY based on the con-Peter Slatin Editorial Director version rates in effect on the first day of the month when the transaction isNina Turner Web Content Coordinator Global Capital Trends™ is published by Real Capital Analytics, Inc. Copy- reported to have occurred. Due to this, all price aggregations are composedMichael Gilligan Web Architect right ©2011 Real Capital Analytics, Inc. All rights reserved. of the sum of individually converted prices on the transaction level for theClaudine Plecy Senior Graphic Designer time period in discussion. For this reason pairs of figures representing volume It is a violation of Federal law to photocopy or reproduce any part of thisDoug Murphy Director, Analytics in USD with its EUR equivalent do not represent a single conversion rate, publication, or forward it electronically, without first obtaining permissionAndrew Pisanelli Senior Quantitative Analyst currency conversion are on deal by deal basis at the time of transaction. from RCA. To subscribe as an individual or to purchase a corporate licenseHermann Lademann Research Analyst for your office, please contact us at service@rcanalytics.com. Measurement: Office, retail and industrial are tracked in square feet and square meters. Hotels and apartments are measured primarily by units based Information presented by RCA has been compiled from sources believed to on the number of for “lease apartments” or hotel rooms in the property. be reliable. While we have no reason to doubt its accuracy, RCA makes noUS West Coast Office Development sites are tracked in four units: hectares, acres, square feet representation or warranty regarding the information. The information isPruneyard Towers and square meters and automatically converted to the alternate measures. provided as is without warranties of any kind, express or implied, and may1901 South Bascom Avenue be subject to material revisions. Global Land Methodology: RCA tracks the sale of plots of land that tradeCampbell, CA 95008 for more than $10m USD and are destined for commercial development. ThisPhone: 408.371.8880 NOTES & METHODOLOGY includes the sale of land use rights in countries where plots are not traded on a freehold basis and where these rights are the equivalent of a land pur-Joe Mannina Chief Operating Officer chase in markets with freehold ownership rights.John Strand Dir, Research The information presented in this report is based on a proprietary data-Grace (Tzu-Yu) Chin Sr Market Analyst base of commercial property transactions. With data integrity the primary Numbers Expressed as Text:Kevin Imboden Sr Market Analyst concern, RCA has established a data collection and classification method- 1K = 1 Thousand = 1,000Lena Krivopaltsev Market Analyst ology including sourcing requirements and other procedures to ensure the 1m = 1 Million = 1,000,000Lawrence Amasa Research Manager information is comprehensive, timely, accurate and completely objective. 1B = 1 Billion = 1,000,000,000Lori Reisinger Research Manager The information contained in this report is based on sales of properties 1T = 1 Trillion = 1,000,000,000,000Eve Neill Research Manager and portfolios valued $10 m USD and greater. RCA endeavors to track all Abbreviations:Maria Carvalho Training Manager property sales within the specified property types above this threshold PPSF = Price Per Square Foot on a global basis. m2 = Per Square Meter The availability and reliability of property sales information varies greatly BPS = Basis Points by country, but RCA endeavors to track transactions as comprehensively as YOY = Year-Over-YearEurope Office YTD = Year-To-Date58 Grosvenor Street possible via published reports, public filings, industry relationships and other proprietary means. In certain markets, RCA compliments its own research Q1 = First Quarter of YearLondon, United Kingdom W1K 3JB H1 = First Half of Year with data partners. Wherever possible, RCA attempts to conform to thePhone: +44.207.297.6860 standards and definitions adopted by the leading industry organizations. Data PartnersSteve Williams Dir, Global Business Dev Although averages provide a useful benchmark, commercial property is To become a data partner, please email partners@rcanalytics.comRichard Yorke Dir, Europe Business Dev not a commodity. Each property and deal is unique and data points are Property Data in The United Kingdom THOMAS DAILY in GermanyMelanie Heath Mgr, Research Svcs & Marketing not as plentiful as in other financial markets. The underlying specifics on Confidencial Imobiliário in Portugal BulwienGesa AG in GermanyJoseph Kelly Dir, Market Analysis each deal are available online at www.rcanalytics.com to subscribers only. RP Data in Australia HBS-Research in FranceKristina Andersson Research Manager Vastgoedmarkt in The Netherlands Mate Plus in Korea Geography: RCA divides the globe into three major regions:Cigdem Giray-Guvener Research Specialist KTI Property Information in Finland Nikkei Business Publications in Japan 1. Americas: North and South America, and the Caribbean 2. EMEA: Includes Europe, the Mid-East, and Africa E-Commercial in China Gabetti Property Solutions in Italy 3. Asia Pacific: Includes all parts of Asia (not including the Mid-East), Economic Prop. Research Ctr. (EPRC) in HKG Prime in Costa Rica as well as Australia, New Zealand, and Pacific islands JLR Real Estate Data Builders in Canada Bregman-Baraz Real Estate in Israel Vida Imobiliaria in Brazil Strabo in Netherlands Cross-Border Methodology: A transaction is defined as “cross-border” if the buyer or major capital partner is not headquartered in the same coun- try where the property is located. The buyer’s identity or country of origin ISO STANDARD COUNTRY CODES is known for well over 90% of total volume. If the country of origin is not Code Country Code Country known, the buyer is assumed to be domestic. An increasing number of firms ARE United Arab Emirates ITA Italy have subsidiaries accessing capital in multiple countries so a firm may have AUS Australia JPN Japan two headquarters locations for the purposes of this analysis. For example, AUT Austria KOR South Korea ING Group is assumed to be based in the Netherlands for deals outside of BEL Belgium KWT Kuwait the US while their acquisitions in the US are assumed to be made via its BRA Brazil LUX Luxembourg US headquartered subsidiary, ING Clarion. Deutsch Bank (DB Real Estate) CAN Canada MEX Mexico and its RREEF unit are treated in a similar manner. For the purposes of this CHE Switzerland MYS Malaysia cross-border analysis, continental regions generally follow conventional CHN China NLD Netherlands definitions for continents except that the Middle East is treated as a sepa- DEU Germany NOR Norway rate continent and Hong Kong is treated as a separate country from China. DNK Denmark POL Poland Property Types: This report is limited to office, industrial, retail, multi- ESP Spain RUS Russia family apartments, hotels and commercially developable land. Readers FIN Finland SGP Singapore should note there is substantial investment activity not captured in this FRA France SWE Sweden report outside these property types and below the $10 m USD threshold. GBR United Kingdom THA Thailand GGY Guernsey TUR Turkey Cap Rate: The initial annual un-leveraged return on an acquisition is known HKG Hong Kong TWN Taiwan as the capitalization rate (yield is also used interchangeably throughout HUN Hungary USA United States this report). IRL Ireland ZAF South Africa ISR Israel ©2011 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed; subject to future revision; based on properties & portfolios $10m and greater. 24