Jones Lang LaSalle's global research experts track rental performance of prime office space across 81 major markets in the Americas, Asia Pacific and Europe. 2013 Global Real Estate Outlook Authors: Jeremy Kelly Global Research, Jones Lang LaSalle David Green-Morgan Global Capital Markets Research, Jones Lang LaSalle Ben Breslau Director of Research, Americas, Jones Lang LaSalle

1. Global Real Estate Outlook
Jeremy Kelly
Global Research
David Green-Morgan
Global Capital Markets Research
Ben Breslau
Director of Research, Americas
7th February 2013

2. Global Real Estate Outlook – Road Map
Global Markets: Current Position
Leasing Markets: Review and Outlook
• Offices – prices, demand, vacancy, construction
• Retail, Logistics
Investment Market: Review and Outlook
• Transactional activity
• Where did the money come from and go to?
• Weight of capital and pricing
• Real estate within global capital markets
Global Markets: 2013 Outlook
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3. Global Markets – Current Position
• Optimism returns, momentum gathers pace
• Exceptional end to 2012
• Investment and leasing markets continue to diverge …
Investment – Confidence Returns
• Better than expected 2012 - US$443 billion in transactions
• Major risks receding, debt improving selectively
• Yields in secondary attracting attention
Leasing – Less Resilient
• Leasing volumes down 20% on 2011
• Rental growth at 1.5% y-o-y
• Vacancies edge downwards – 13.2%
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4. Leasing markets:
review and outlook
Jeremy Kelly
Director - Global Research
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5. Office leasing
Global Office Property Clock Q4 2012
Shanghai, Beijing, Paris
Amsterdam, Warsaw Americas
Stockholm, Sao Paulo Milan, Zurich
Asia Pacific
EMEA
Berlin
Moscow
San Francisco, Sydney Rental Growth Rents Hong Kong, Singapore
Munich, Houston Slowing Falling
Toronto
Rental Growth Rents
Dallas
Accelerating Bottoming Out
London
Abu Dhabi
New York, Mumbai, Delhi,
Johannesburg, Istanbul
Boston Washington DC
Los Angeles, Mexico City, Tokyo Madrid
Seoul
Brussels, Dubai, Frankfurt, Chicago
Source: Jones Lang LaSalle IP, January 2013
This data is based on material/sources that we believe to be reliable. While every effort has been made to ensure its
accuracy, we cannot offer any warranty that it contains no factual errors. Neither Jones Lang LaSalle nor any of its
affiliates accept any liability or responsibility for the accuracy or completeness of the information contained herein
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6. Office leasing
Global Office Index – Rental growth stalls
4.0
Rental Change (% QoQ)
2.0
0.0
-2.0 Americas Europe
Asia Pacific Global
-4.0
-6.0
-8.0
-10.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012
Asia Pacific – stock weighted average of 27 markets; Americas – stock weighted average of 39 markets: Europe – stock weighted average of 24 markets
Global Index based on GDP weighted average of the three regional indices
Source: Jones Lang LaSalle, January 2013
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7. Office leasing
Office leasing volumes subdued
US Europe Asia Pacific Global
2012 -10%
-20% -20%
-30%
Flat -5-10%
2013 +0-5% +0-5%
…but momentum building in H2 2013
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8. Office leasing
Office vacancy rates edge downwards
Americas 16.0% Europe 9.6% Asia Pacific 11.0%
% 25
20
15
10
Q4 2012 movement
5
Increased
Decreased
Stable
0
Frankfurt
Washington DC
New York
Boston
Toronto
Paris
Brussels
Mexico City
Sydney
Los Angeles
Stockholm
Shanghai
Chicago
Beijing
San Francisco
Sao Paulo
London
Singapore
Hong Kong
Tokyo CBD
Madrid
Moscow
Mumbai
Regional vacancy rates based on 49 markets in the Americas, 24 markets in Europe and 24 markets in Asia Pacific.
Covers all office sub-markets in each city. All grades except Asia and Latin America (Grade A only). Tokyo relates to CBD only.
Source: Jones Lang LaSalle, January 2013
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9. Office leasing
Global Office Development – deliveries below trend
20 US Europe Asia Pacific
millions sq m
15 Average
10
5
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
(F)
(F)
24 markets in Europe; 25 markets in Asia Pacific; 44 markets in the US. Asia relates to Grade A only.
Source: Jones Lang LaSalle, January 2013
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10. Office leasing
Office Supply Pipeline – Markets diverge
Shanghai
Sao Paulo
Dubai
Mexico City
Mumbai
Moscow
Tokyo CBD
Beijing
London
Singapore
Paris
Frankfurt
Hong Kong
Brussels
Stockholm
Washington DC
Boston
San Francisco
New York
Toronto 2013
Sydney
Madrid 2014
Los Angeles
Completions as % of existing stock
Chicago
0 5 10 15 20 25 30 35 40
Source: Jones Lang LaSalle, January 2013. Covers all office sub-markets in each city. Tokyo - CBD-3 kus
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11. Office leasing
Prime Offices – Projected Changes in Values, 2013
Rental Values Capital Values
+ 10-20% San Francisco San Francisco
Hong Kong, Tokyo, Sydney
+ 5-10% Hong Kong, Tokyo, London*
Moscow, London*
Beijing, Shanghai, Singapore, Sydney, Mumbai Beijing, Shanghai, Singapore, Mumbai
Boston, Chicago, Los Angeles, New York* Boston, Chicago, Los Angeles, New York*
+ 0-5% Toronto, Washington DC, Paris* Toronto, Washington DC
Frankfurt, Stockholm, Brussels, Moscow, Dubai Frankfurt, Brussels, Dubai
Paris*, Stockholm
- 0-5% Sao Paulo, Mexico City Sao Paulo, Mexico City
- 5-10% Madrid Madrid
Provisional. *New York – Midtown, London – West End, Paris - CBD. Nominal rates in local currency.
Source: Jones Lang LaSalle, January 2013
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12. Retail
Global Retail Market Dynamics
Asia Pacific Q4 2012 Rent Clock
• Demand is healthy despite more subdued
retail sales
• Upswing in rents in 2013, albeit moderately Americas
EMEA
• Retailers becoming more selective in China
Paris Asia Pacific
Moscow, Hong Kong
Europe
London
• Turkey and Russia are the stand out markets
Berlin Madrid
• Cross-border retailers targeting prime pitches Rental Value Rental Values
Shanghai growth slowing falling
• Retailers under pressure to restructure
Beijing
• Robust rental growth in 2013 in key markets
(e.g. London, Moscow, German cities) Rental Value Rental Values
growth bottoming
accelerating out Chicago
United States Dubai Washington DC
• Overall market still to find cyclical trough Mumbai
Delhi Boston, Sydney
• Malls show tightest conditions Milan, New York City,
San Francisco, Tokyo
• Key gateway markets starting to turn corner Houston, Singapore
e.g. New York, San Francisco, Houston,
Miami
Source: Jones Lang LaSalle, January 2013
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13. Industrial
Global Industrial Market Dynamics
United States Q4 2012 Rent Clock
• Markets gaining strength
• Memphis, Atlanta and Dallas were the star Singapore
performers in Q4, Hong Kong
• Return of new construction Frankfurt
Shanghai
• Focus on “big-box”
Beijing
Europe Rental Value Rental Values Amsterdam
growth slowing falling
• Demand holding up, above 10y average
Sydney
• Take-up underpinned by supply chain
realignment Philadelphia Rental Value growth Rental Values
• Low supply sustaining prime rents in 2013 London, Warsaw accelerating bottoming
out
Inland Empire, Chicago
Boston, Dallas
Asia Pacific Houston, Tokyo
• Retail sales underpin warehousing demand Atlanta Americas
• Export sector shows renewed buoyancy Paris, Madrid EMEA
• Most major markets expect rental growth in Los Angeles Asia Pacific
Northern
2013 New Jersey/New York
Source: Jones Lang LaSalle, January 2013

14. Investment markets:
review and outlook
David Green-Morgan
Global Capital Markets Research Director
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15. Investment
Year on year growth continues in 2012
Direct Commercial Real Estate Volumes by Region, 2003-2012
US$ bn
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
800
700
600
500
400
300
200
100
0
Americas EMEA Asia Pacific Global
Source: Jones Lang LaSalle
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16. Investment
Strong final quarter typifies post GFC world
Direct Commercial Real Estate Volumes by Region, Q4 2008-Q4 2012
US$ bn
160 92% 100%
140 80%
54% 60%
120 47%
40%
100 22%
8% 10% 11% 20%
5% 7%
80 0% -2%
0%
60 -1%
-6% -20%
-12%
-19%
40 -27% -40%
20 -60%
-60%
0 -80%
Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412
Americas EMEAEMEA Pacific
AM Asia AP Total investment (% change q-o-q, RHS)
Source: Jones Lang LaSalle
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17. Investment
Flows increased in 2012 to $136 billion
Inter-Regional Flows, 2012
Source: Jones Lang LaSalle
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18. Investment
Opportunities in Europe move transactions higher
Net Inter-Regional Flows, 2011,2012
Americas
More product on the market in Europe is the
major factor driving inter-regional flows
EMEA
Asia Pacific
-12 -7 -2 3 8 13 18
US$ bn
2012 2011
Source: Jones Lang LaSalle
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19. Investment
More balanced approach in 2012
Net Investment by Type, 2011,2012
US$ bn
35
25 Western governments starting to
15 dispose of property
5
-5
-15
-25 2011 2012
-35
-45
-55
REIT Unlisted Institution Private Government Hotel Owner / Other Corporate Developers
Operator
Source: Jones Lang LaSalle
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20. Investment
Lack of product holds retail back in 2012
Net Investment by Sector, 2011,2012
2011 2012
3% 1% 3% 3%
8% 7%
12% 13%
47%
50%
29% 24%
Office Retail Industrial Hotel Mixed Other
Source: Jones Lang LaSalle
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21. Investment
Secondary cities starting to see more deals
Net Investment by Type, 2011,2012
Source: Jones Lang LaSalle
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22. Investment
Real estate attracts the cash
Fund Raising by Strategy 2012
Fund of Funds
4%
Other
Growth
0%
6%
Real Assets
6%
Secondary
8% Buyout
43%
Venture
8%
Debt
12%
Real Estate
13%
Source: Bloomberg
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23. Investment
More movement in secondary, Prime stagnant
Prime Offices Yield Shift
Brussels
Frankfurt
London
Europe
Madrid
Moscow
Paris
Stockholm
Boston
Chicago
Los Angeles
Americas
New York
San Francisco
Toronto
Washington DC
Sao Paulo
Mexico City
Beijing
Asia Pacific
Hong Kong
Mumbai Q3 2012 - Q4 2012
Shanghai
Singapore Q4 2011 - Q3 2012
Sydney Basis point change
Tokyo
-150 -100 -50 0 50 100
Source: Jones Lang LaSalle, January 2013
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24. Investment
UK led markets lower in 2006, what about 2013?
Net Investment by Type, 2011,2012
Global Returns All Property UK Returns All Property
25%
15%
5%
-5%
-15%
-25%
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source: IPD
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25. Prime Offices - Capital Value Clock
The Jones Lang LaSalle Property Clocks SM
Q4 2011 Q4 2012
Hong Kong,
New York, Boston, Chicago
Singapore, Paris
Singapore, Amsterdam Los Angeles, Shanghai, Beijing
Sao Paulo Amsterdam
Shanghai, Washington DC, London Hong Kong Toronto
Stockholm Washington DC
Berlin
Milan, New York San Francisco
Paris
Beijing, Stockholm, Houston Milan
Boston Capital value Capital values Capital value Capital values
Berlin, Moscow growth slowing falling Moscow growth slowing falling
Chicago, San
Francisco, Sao Paulo
Capital value Capital values London Capital value Capital values
Toronto growth bottoming out Mexico City growth bottoming out
Los Angeles accelerating Sydney accelerating
Houston, Frankfurt Frankfurt
Dallas Dallas
Sydney Mexico City
Mumbai Madrid
Mumbai Madrid, Seoul
Tokyo
Tokyo, Brussels Seoul, Brussels
Based on notional capital values for Grade A space in CBD or equivalent.
Americas EMEA Asia Pacific US positions relate to the overall market
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26. Investment
$500 billion in sight for 2013
Direct Commercial Real Estate Volumes by Region, 2003-2013
US$ bn
800
700
600
500
400
300
200
100
0
Americas EMEA Asia Pacific Global
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (forecast)
Source: Jones Lang LaSalle
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27. Global Markets – 2013 Outlook
Investment – Stable, with Upside Potential
• 2013 average of US$125 billion transactions/quarter
• Prime yields look close to bottom, secondary starting to attract more investor
interest
• US looks set for major upside in 2013 if political challenges don’t become a
drag; AP resumes growth on improved global trade; EMEA flat
• Major markets & strong secondary to attract majority of deals in 2013
Leasing – Slow Start to Year, Momentum Builds H2
• Gross leasing volumes +0-5%
• Rent growth +2-3%
• New office deliveries +28%, but still 30% below trend
• Vacancy edging down below 13%
• Star performers - San Francisco, Jakarta
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28. Global Real Estate Outlook
Questions and Answers
Jeremy Kelly David Green-Morgan Benjamin Breslau
Director - Global Research Global Capital Markets Head of Americas Research
Research Director
Jeremy.Kelly@eu.jll.com David.Green-Morgan@ap.jll.com Benjamin.Breslau@am.jll.com
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29. Our Global Research Platform
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Global Research Hub
joneslanglasalle.com/Research
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30. Global Real Estate Outlook
Jeremy Kelly David Green-Morgan Benjamin Breslau
Director - Global Research Global Capital Markets Head of Americas Research
Research Director
Jeremy.Kelly@eu.jll.com David.Green-Morgan@ap.jll.com Benjamin.Breslau@am.jll.com
Thank you
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