Alhuda CIBE - An overview of REI Ts by Dr. Anthonoy

1. Colonial First State Global Asset Management
What’s next for the Asia Pacific
REITs?
An overview of REITs & AUS-REITs
Dr Anthony De Francesco
Head of Research
Colonial First State
28th September 2006

2. 2
Outline
AUS-REIT market
Dr Anthony De Francesco, Colonial First State
J-REITs
Mr Yuichi Hiromoto, Japan Retail Fund Investment Corporation
K-REITs
Mr Brian Chinappi, Deutsche Asset Management (HK) Ltd
HK-REITs
Mr Jeremy Stewardson, Eagle Asset Management (CP) Ltd
S-REITs
Mr Chris Reily, Henderson Global Investors

3. 3
Evolution of REIT:
- increasing momentum towards REITs
UK
(2007E)
Taiw an/HK
/Malaysia/Thailand
(2005)
Canada
(1993)
US (1960)
Netherlands
(1969)
Australia
(1971) Belgium
(1995) Japan
(2001)
Singapore
/Korea
(2002)
France
(2003)
New Zealand
(1982)
Turkey
(1998)
China
(2010E)
Germany
(2008E)
0
0.05
1956 1962 1968 1974 1980 1986 1992 1998 2004 2010
Time Line
Actual Forecast
Source: CFS Research

4. 4
Listed market valued at about US$500 Bn
- represents about 16% of investment grade R.E
Market Capitalisation Number of REITs
Composition of the Existing Global REIT Market
no of REITs (303) as at June 2006
M LY
1.3%
THA
0.7%
TAI
1.3%KOR
2.6%
US
45.9%
AUS
10.6%
NZ
3.3%
FRA
3.3%
NTL
2.3%
CAN
6.6%
BEL
2.3%
HK
1.3%
SGP
3.3%
JPN
11.9%
TUR
3.3%
Source: S&P/Citigroup Global Equity Indices, UBS, IRESS, HSBC, NAREIT and CFS Research.
Composition of the Existing Global REIT Market
market cap US$502Bn as at June 2006
US
67.9%
M LY
0.1%
THA
0.1%
TUR
0.2%
AUS
13.7%
NZ
0.3%
FRA
3.3%
NTL
2.8%
CAN
2.0%
BEL
0.7%
HK
0.9%
SGP
1.5%
JPN
6.0%
KOR
0.2%
TAI
0.2%
Source: S&P/Citigroup Global Equity Indices, UBS, IRESS, HSBC, NAREIT and CFS Research.
As at June 2006 Asian REITs had a global share of 9% in terms of market
cap and 22% in terms of number of trusts.

5. 5
Proliferation of REITs in recent years
- the growing presence of Asian REITs
Global REIT market capitalisation
monthly data ending June 2006
0
100
200
300
400
500
Jul-89 Jul-91 Jul-93 Jul-95 Jul-97 Jul-99 Jul-01 Jul-03 Jul-05
US$billion
0.0%
1.5%
3.0%
4.5%
6.0%
7.5%
9.0%
US NTL
AUS NZ
CAN BEL
TUR JPN
SGP FRA
TAI HK
KOR M LY
THA Ratio of Asia
Source: S&P/Citigroup, Colliers International and CFS Research.

6. 6
AUS REIT market experienced exceptional
growth, although now moderating
Growth expected to moderate substantially with LPT managers transferring
listed assets into new wholesale funds.
Australian REIT market
Bi-annual data ending June 2006
0
5
10
15
20
25
30
35
40
45
50
Dec-86 Dec-89 Dec-92 Dec-95 Dec-98 Dec-01 Dec-04
No.ofindexedlistedtrusts
0
10
20
30
40
50
60
70
80
90
100
A$Billion
Market Cap (rhs)
Number of trusts (lhs)
IPO / Organic
growth
IPO Boom
Consolidation
phase
Source: UBS and CFS Research.
Takeovers/
mergers

7. 7
Pricing for property core sectors firming
- underpinned by investor demand & flow of funds
Property sector yields
as at year end, average across sub-sectors
5%
6%
7%
8%
9%
10%
11%
12%
1984 1987 1990 1993 1996 1999 2002 2005
CBD Office
Retail
Industrial
Jun-06
Yield compression cascading to non-core property sectors.

8. 8
AUS REITs generally offer an attractive
yield premium to bonds
AUS REIT yield versus bond rate and bill rate
Monthly observations ending August 2006
4%
5%
7%
8%
9%
10%
Sep-95 M ar-97 Sep-98 M ar-00 Sep-01 M ar-03 Sep-04 M ar-06
Distribution yield
10 year T.bond rate
90 day bill rate
Source: UBS, IRESS, RBA and CFS Research.

9. 9
Expanded product offering
- movement along the risk-reward space
Movement up along the
risk space with:
increasing exposure to
offshore real estate
markets
take-on of higher
gearing levels
exposure to real
estate (re)
development
Increasing exposure
to non-core sectors
Risk-reward space
0
1
2
3
4
5
0 1 2 3 4 5
Source: CFS Research.
expectedreturn
risk
core
value-added
enhanced
opportunistic

10. 10
Key features of the Australian REIT market
Market:
mature market - interplay between listed and unlisted markets
exposure to core sectors - retail (55%) and office (25%)
Managers:
operated by quality internationally rated managers
Return performance
relatively high income component and stable income returns
lower volatility of total returns to general equities
Highly transparent and efficient
due to research and legislation
high level of liquidity

11. 11
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should assess whether the information is appropriate for you and consider talking to a financial adviser
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