Asia pacific industrial market overview dec 2011

ASIA PACIFIC
INDUSTRIAL MARKET OVERVIEW
December 2011

Accelerating success.

TABLE OF CONTENTS
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | DECEMBER 2011

This is the thirteenth issue of the Asia Pacific Industrial Regional Overview 3
Market Overview, which covers 13 cities in nine countries,

for the review period of April to September 2011. With
Australia 5-6
this bi-annual update, we hope to provide an overview of
Melbourne............................................................................................................. 5
industrial markets catering to multinational corporations
Sydney.................................................................................................................. 6
and a comparison of industrial real estate costs across
the key cities of the Asia-Pacific. Three types of industrial China 7-9
properties are tracked in this report, namely single- Beijing....................................................................................................................7
Guangzhou............................................................................................................ 8
user factory premises, single-user warehouse premises
Shanghai............................................................................................................... 9
and multi-user high-specifications industrial premises,

as these are the preferred choices of multinational Hong Kong SAR 10-11
corporations. This publication features land and capital
values, as well as rents of single-user industrial premises; India 12
and rents of multi-user high-specification factories. New Delhi............................................................................................................12

Indonesia 13
Jakarta................................................................................................................. 13

Japan 14
Greater Tokyo......................................................................................................14

New Zealand 15-16
Auckland..............................................................................................................15
Wellington............................................................................................................16

Singapore 17-18

Taiwan 19
Taiwan..................................................................................................................19

International Comparison 20-26
Single-user Warehouse Land Values, Capital Values
and Monthly Gross Rents................................................................................... 20
Single-user Factory Land Values, Capital Values
Multi-user High-Specs Average Monthly Gross Rents..................................... 26

Local Market Norm 27-29
Single-user Warehouse Land Values, Capital Values
Single-user Factory Land Values, Capital Values

Definitions & Terminology 30

REGIONAL OVERVIEW

The economies of the Asia Pacific region showed slower growth weighed down by concerns
over the anaemic state of the US economy and European sovereign debt woes. The more
open economies, like Singapore and Taiwan, saw a marked slowdown in GDP growth on a
year-on-year (YoY) basis during the current review period, due to shrinkages in manufacturing
output. On the other hand, manufacturing sectors in China and Indonesia remained buoyant
bolstered by their strong domestic markets. Economic performance varies for countries
recently hit by natural disasters. While the Japanese economy remained in recession, the
Pacific region was more resilient, evident from the low positive growth in New Zealand’s
and Australia’s GDP numbers.

Of the 182 industrial submarkets across the 13 Asia Pacific cities surveyed, 88.0% or a
total of 160 submarkets either showed growth or were stable during the period between
April and September 2011. This is similar to the 88.0% of the 184 industrial submarkets
surveyed during the previous period between October 2010 and March 2011. We were
unable to track the Urayasu submarket which remained inundated after the earthquake
and tsunami in March.

In line with the downgrading of general business sentiments globally, land and capital
values as well as rents for industrial space saw slower growth averaging at 4.7%, 3.6% and
2.7% during the six months ending September 2011, compared with the average growth of
5.1%, 4.2% and 3.7%, respectively in the previous six-month period. However, high-specs
industrial space bucked this trend, and with a higher average rental growth of 4.1% in this
review period compared with the 2.0% recorded in the previous one.

In total, 43 out of 53 industrial submarkets surveyed in the Asia Pacific region saw their
land values either holding steady at the levels of six months ago or trending up. Notably, in
Jakarta’s Bekasi and Karawang, average land prices soared by a record breaking 45.0%
during the six months between April and September 2011 due to the aggressive growth of
the automotive industry in Indonesia combined with a drought in industrial land supply. In
contrast, limited availability teamed with cautious investor sentiments kept values stable in
Sydney and Auckland. Land values were also flat in Guangzhou’s GETDD as multinational
corporations shied away from acquiring industrial land, following a series of measures
introduced by the Chinese government to regulate the real estate market. The remaining
submarkets which saw decreases in land values are primarily located in quake-stricken Japan.

Moving on to building sales, 49 out of the 58 submarkets surveyed recorded either flat or
an increase in capital values. Growth was strongest in Hong Kong, as uncompromising
vendors kept factory and warehouse prices soaring by up to 19.2% and 16.4% respectively.
Its economic rival, Singapore, saw warehouse capital values increase by as much as 16.0%,
up from the 7.2% recorded in the previous review period, underpinned by occupier demand
and acquisition interest from REITS. Capital values were stable in Delhi and Shanghai
as credit-tightening measures and high financing costs slowed industrial growth and
dampened investor sentiments. Surprisingly, in spite of the booming Indonesian economy,
capital values grew at a slower rate of 6.0%, down from the 19.7% increase recorded in
the previous review period ending March 2011. This was attributed to lower activity levels
in the current review period.

COLLIERS INTERNATIONAL | P. 3

REGIONAL OVERVIEW

Of the 54 submarkets surveyed, only three saw rents heading south in the six-month
period ending September 2011. Tokyo’s Shinsuna submarket saw industrial rents
easing by 3.9% while Delhi’s NH24 saw a 1.9% drop each in both its warehouse
and factory rents. The leasing market remained subdued in Australia and New
Zealand with no change in rental levels from that of half a year ago. On the other
hand, warehousing facilities in Hong Kong saw double-digit rental growth, fuelled by
robust demand. Rapid expansions by third-party logistics (3PLs) players, including
mainland Chinese operators, looking to establish their regional hubs in Hong Kong
pushed rents upwards. However, tenant needs remained unmet given the mismatch
of availability and occupiers’ space requirements in excess of 100,000 sq ft.

For now, Asia continues to drive the global economic recovery, but the region is not
immune to the seemingly never-ending euro zone woes and lacklustre recovery of
the US economy. The outlook for the Asia Pacific industrial property market turned
cautiously optimistic with stabilised values and rents expected in most submarkets
over the next 12 months. Open economies like Hong Kong, which are extremely
vulnerable to global economic headwinds, are already seeing a deceleration in their
external trade growth in the review period. As such, Hong Kong expects industrial
property rents and values to head south in the year ahead. On the other hand, the
red hot Indonesian economy is expecting even better economic performance in
2012, underpinned by strong domestic consumption, solid investment inflows and
higher export numbers. This is expected to drive growth in land and capital values
as well as rents of industrial properties from 10.0% to 25.0% over the next year.

P. 4 | COLLIERS INTERNATIONAL


AUST R A L I A

ECONOMIC INDICATORS FOR MELBOURNE

ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth April - September 2011 1.65%
Year-on-Year Manufacturing Output Growth Rate April - September 2011 -0.50%
Total Imports April - September 2011 A$17.6 billion
Total Exports April - September 2011 A$4.9 billion
Container Throughput (TEUs) April - September 2011 1,252,769
Air Cargo Throughput (Tonnes) January - June 2011 77,763

MELBOURNE

Factory and Warehouse

•  Demand for industrial space continued to grow during the review •  Approximately 2.29 million sq ft of space (involving deals above 32,000 sq ft)
period between April and September 2011, driven by companies’ were leased between April and September 2011, with the bulk of 34.6% (or
moves to expand and consolidate their premises on the back of healthy 793,106 sq ft) located in the west. This is about 11.9% below the six-month
business sentiments amid Australia’s strong economic fundamentals of average of approximately 2.6 million sq ft over the last five years and 33.9%
low unemployment, low public debt and a long pipeline of mining and above the 1.71 million sq ft leased in the previous review period of October 2010
resource-sector related investments. to March 2011. Notable leasing deals include Tasman Logistics committing
to a 150,598-sq ft warehouse at the corner of Robinsons Road and Sunline
•  However, global uncertainties arising from unresolved debt woes in the Drive in Truganina; Shields Transport leasing a 148,004-sq ft warehouse at
United States (US) and Europe tempered optimism and put a cap on Oxford Road in Laverton North; and Ascent Primacy Services taking up a
the growth of industrial land and capital values as well as rents which 97,952-sq ft warehouse at Ordish Road in Dandenong South.
thus remained unchanged during the six-month review period between
April and September 2011. •  Increased demand for new space, in turn, raised construction activity.
Approximately A$87 million worth of industrial space was initiated between
•  On the sales front, the number of investment sales transactions between April and September 2011 as opposed to A$51 million committed to over the
April and September 2011 decreased though their total transaction six months to March 2011.
volume has increased. A total of 11 investment sales (A$5 million and
above) was transacted in Victoria from April to September 2011, as •  Overall, the industrial market is expected to firm up towards the end of
compared to 16 transactions in the preceding six-month period ending 2011, supported by increasing demand and a tightening supply of quality
March 2011. The total value transacted during the review period was in stock given its limited availability. Increasing tenant demand coupled with
excess of approximately A$270 million, a jump from the A$160 million low supply across all industrial regions should continue to push vacancies
recorded between October 2010 and March 2011. down, thereby supporting upward pressure on rentals. In turn, this should
provide opportunities for investors to acquire more industrial properties for
•  Industrial users’ caution on the back of the heightened global their portfolio and to take advantage of the relatively high yields and growth
uncertainties resulted in a stronger leasing market than the vacant potential. However, more new supply is expected to come on stream in the
possession sales market in the six months to September 2011. next few years as developers commence development of new industrial space
Nonetheless, leasing volume remained below the historical average and to ride on the current tight supply situation. Hence, land and capital values
leases are now signed on terms shorter than the long-term average of as well as rents are forecast to stay relatively stable or strengthen marginally
seven to 10 years. over the next 12 months.

MAJOR TRANSACTIONS IN MELBOURNE

TRANSACTIONS
FLOOR/LAND AREA
BUILDING/LAND PLOT PROPERTY TYPE LEASE/SALE TENANT/PURCHASER
(SQ FT)
Lot H - Arkwright Drive, Dandenong South Warehouse Lease Marine Power International 85,638
Lot F - Ordish Road, Dandenong South Warehouse Lease Ascent Primacy Services 97,952
221 Maidstone Street, Altona Warehouse Lease Werribee Nissan 115,691
2-8 Oxford Road, Laverton North Warehouse Lease Shields Transport 148,004
Cnr Robinsons Road & Sunline Drive, Truganina Warehouse Lease Tasman Logistics 150,598
West Park Industrial Estate, Derrimut Warehouse Sale IOOF 404,777
Coles Distribution Centre Warehouse Sale CorVal Partners 746,477



AUST R A L I A

ECONOMIC INDICATORS FOR SYDNEY

ECONOMIC INDICATORS
Year-on-Year GDP Growth January - June 2011 0.3%
Year-on-Year Manufacturing Output Growth Rate April - September 2011 n.a.
Total Imports January - June 2011 A$141.4 billion
Total Exports January - June 2011 A$150.0 billion
Container Throughput (TEUs) January - June 2011 968,123
Air Cargo Throughput (Tonnes) April - September 2011 n.a.
* n.a. denotes not available

SYDNEY

Factory, Warehouse and High-Specs

• An ongoing lack of new industrial development coupled with steady market over the past six months is Aviva’s acquisition of a 50%
tenant demand has kept the Sydney industrial market tight over the interest in the Big W and Dick Smith Properties at Mirvac’s Hoxton
past six months. The continuing lack of available stock has been Distribution Park. The sale price was A$97.4 million, which equates
compounded by withdrawals in industrial stock in some micro- to a tight yield of 7.5%.
markets, as some owners plan to redevelop their industrial buildings
•  A number of institutional landowners in Sydney’s Central West have
into new office, retail and residential properties after assessing the
begun to capitalise on the lack of space in the market with a number
highest and best use of their sites.
of speculative developments under construction. One example is the
•  The leasing market has remained stable over the past six months with recently completed 1-23 Templar Road development in which Dexus
the majority of leases signed being renewals, as an ongoing lack of Property speculatively built a 226,042-sq ft Prime grade building.
confidence and uncertainty in the economy stalls the implementation
•  The outlook for Sydney’s industrial market remains positive over the
of companies’ expansion plans. This stability has helped rents and
next six to 12 months with the Australian dollar expected to remain
incentives for both Prime and Secondary grade stock to remain
strong, thus sustaining importers’ demand for industrial space. On
stable over the past six months. Notable lease transactions during
the other hand, stock levels are expected to remain tight as new
the review period include YHI Australia’s lease of a 75,066-sq ft
developments remained largely subdued. This ongoing tight supply
warehouse at 11 Grand Avenue, Camellia and P&O Trans Australia
of Prime Grade space is expected to lead to a slight growth in rents
(POTA)’s lease of a 102,100-sq ft warehouse at Yennora Distribution
of up to 1.1% and a reduction in incentives for tenants over the next
Centre. In the same centre, Queensland Cotton Corporation Ltd also
12 months. This could lift land and capital values by up to 2.0% over
took up space at a 99,333 sq ft warehouse.
the same period.
•  On the same note, land and capital values also held steady over the
review period. The largest sale transaction in Sydney’s industrial

MAJOR TRANSACTIONS IN SYDNEY

TRANSACTIONS
FLOOR/LAND AREA
(SQ FT)
25 Sirius Road, Lane Cove Warehouse Sale Private 87,153
57 - 67 Roberts Road, Greenacre Warehouse Sale Private 106,800
19 Chifley Street, Smithfield Warehouse Sale Leda Holdings 199,322
8 - 40 Euston Road, Alexandria Warehouse Sale Bunnings Properties 291,693
Hoxton Distribution Park Warehouse Sale Aviva 1,423,322
283 Coward Street, Mascot Warehouse Lease Toll 73,520
11 Grand Avenue, Camellia Warehouse Lease YHI Australia Pty Ltd 75,066
13 Bessemer Street, Blacktown Warehouse Lease Nilfisk Advance 77,593
Yennora Distribution Centre, Loftus Road,
Warehouse Lease Queensland Cotton Corporation Ltd 99,333
Yennora
Yennora Distribution Centre, Loftus Road,
Warehouse Lease P&O Trans Australia (POTA) 102,100
Yennora



CHINA

ECONOMIC INDICATORS FOR BEIJING

ECONOMIC INDICATORS
Year-on-Year GDP Growth January – June 2011 8.0%
Year-on-Year Manufacturing Output Growth Rate January – June 2011 16.6%
Total Imports January – June 2011 US$158.6 billion
Total Exports January – June 2011 US$27 billion
Container Throughput (TEUs) January – June 2011 n.a.
Air Cargo Throughput (Tonnes) January – June 2011 852,400

BEIJING


• Beijing managed to stage a strong economic performance in 1H 2011. and CNY4.69 per sq ft per month, respectively. Rental growth was
GDP expanded by 8.0% YoY, and imports and exports grew by 34.1% achieved on the back of firm leasing demand that was driven by
and 4.0%, to US$158.6 billion and US$27 billion, respectively during overseas and domestic e-business, Food and Beverage (F&B) and
this period. Air cargo throughput also increased to 852,400 tonnes Business-to-Consumer (B2C) companies that are expanding in
in the January to June 2011 period, up 17.2% YoY, in line with the Beijing. For example, Want Want took up approximately 107,639 sq
upbeat economic performance. ft of warehouse space in China Logistics Corp, located in Tongzhou
District, while Tiantian.com and Watson’s each leased approximately
•  The robust economic performance thus lent support to growth
129,000 sq ft in GLP Daxing Park.
in industrial land values. Land values in Tianzhu, Tongzhou and
Shangdi increased 9.0%, 5.0% and 4.3% from the last review period, •  Near-term fixed supply amid firm leasing demand also contributed
to CNY109.16, CNY65.74 and CNY310.58 per sq ft, respectively, to rental growth. The supply of industrial space remained stable in
while land values in Yizhuang remained flat at CNY55.17 per sq ft. the review period from April to September 2011 as there were no
Noticeably, state-owned companies and manufacturing enterprises new completions in Beijing’s industrial market.
were key demand drivers for industrial land during the review period.
For instance, the Beijing Pearl River Investment and Development •  Going forward, the supply of prime logistics parks remains limited
Company invested CNY870 million to develop a logistics industrial and is expected to be insufficient to meet the strong demand from the
park with a land area of 3,168,895 sq ft in the Tongzhou Economic e-business, F&B, manufacturing, B2C and third-party logistics (3PL)
Development Zone. In addition, Unity Opto Technology and Maxwell enterprises. Meanwhile, investors continue to find Beijing’s industrial
Machinery and Electronic Equipment Co. Ltd, each purchased a market alluring, announcing expansion plans and/or creations of
535,892-sq ft plot and a 166,389-sq ft site, respectively in Yizhuang. joint ventures. For instance, Kerry Logistics, Hutchison Port, Beijing
Inland Port International Logistics and New Concord recently came
•  Industrial rents also posted growth in the six months ending together to form a joint venture company that will be headquartered
September 2011. Rents in Tianzhu and Tongzhou increased by in Beijing to invest in logistics properties and related businesses in
5.9% and 4.9% compared with the last review period to CNY2.97 China with a total investable capital of CNY2 billion. Hence, land and
and CNY2.64 per sq ft per month, respectively. Similarly, rents in capital values as well as rents are expected to maintain their growth
Shangdi and Yizhuang recorded hikes of 5.2% and 5.7%, to CNY6.71 by up to 6.0% in the next 12 months.

MAJOR TRANSACTIONS IN BEIJING

TRANSACTIONS
FLOOR/LAND AREA
(SQ FT)
China Logistics Corp Warehouse Lease Want Want 107,639
GLP Daxing Park Warehouse Lease Tiantian.com 129,100
GLP Daxing Park Warehouse Lease Watson’s 129,170
Yizhuang, BDA Land Sale Maxwell Machinery & Electronic Equipment 166,389
Yizhuang, BDA Land Sale Unity Opto Technology 535,892
Beijing Pearl River Investment and
Tongzhou Economic Development Zone Land Sale 3,168,895
Development Company



CHINA

ECONOMIC INDICATORS FOR GUANGZHOU

ECONOMIC INDICATORS
Year-on-Year Manufacturing Output Growth Rate January - August 2011 10.3%
Total Imports March - August 2011 US$30.2 billion
Total Exports March - August 2011 US$29.4 billion
Container Throughput (TEUs) March - August 2011 7.4 million
Air Cargo Throughput (Tonnes) March - August 2011 763,300

GUANGZHOU


• Guangzhou’s economy continued to grow at a robust pace of 11.0% •  Noticeably, multinational firms were more cautious in acquiring
YoY in the first half of 2011. From January to August, Guangzhou’s industrial land plots, while domestic corporations from the food,
manufacturing output reached CNY980.57 billion, up 10.3% YoY, communications, electronics, automotive products and mechanical
supported by increased growth rates in the petrochemical and manufacturing industries remained active in buying land plots. The
electronics manufacturing industries. In particular, there was a latter group clinched 15 out of the 17 plots auctioned in the GETDD
steady increase of high-technological product output during this from April to September 2011. These included China Banknote
period. The local export and import volume from March to August Printing and Minting Corporation’s acquisition of a 2,192,038-sq ft
was also at a strong US$59.65 billion, up 11.4% compared to the plot in Guangzhou Science City and Guangzhou Kingfa Sci. & Tech.
same period last year. Co. Ltd’s acquisition of a 853,203-sq ft site in Jiulong Industrial
Park.
•  As such, domestic and overseas logistics firms, electronics
manufacturing industries and consumer goods retailers continued •  In September, a new subsidy policy was introduced by the
to lift demand for industrial space during the six months from April government of the GETDD to encourage companies to lease
to September 2011. Consequently, the average rents and capital standard factories in the district. Favourable investment policies
values for warehouses and factories in Guangzhou Economic and and a robust domestic economy are expected to continue to
Technological Development District (GETDD) rose by up to 4.9% support demand for industrial properties. In addition, the recent
during this period. rapid development of China’s e-business is expected to raise the
demand for quality warehouses going forward. Thus, capital and
•  In contrast, the overall land values in the GETDD stayed relatively
rental values of factory and warehouse space could grow by up to
unchanged from the levels six months ago as sentiments were
4.2% in the next 12 months. Land values, on the other hand, are
weighed down by measures introduced by the government to
forecast to stay unchanged at current levels through the next 12
regulate the real estate market since 2010. Some of these measures
months.
include monetary tightening policies through interest rate hikes as
well as the requirement for the municipal land resource office to
report to the provincial land resource office, land transactions that
were sealed at prices exceeding 50% of reserve prices.

MAJOR TRANSACTIONS IN GUANGZHOU

TRANSACTIONS
FLOOR/LAND AREA
(SQ FT)
Development Zone, Luogang Land Sale SK Group 169,416
Guangzhou Science City Land Sale Biostime 365,894
Development Zone, Yonghe Land Sale Guangdong Yanlong Dairy 536,031
Jiulong Industrial Park Land Sale Guangzhou Kingfa Sci. &Tech. Co. Ltd 853,203
China Banknote Printing and Minting
Guangzhou Science City Land Sale 2,192,038
Corporation



CHINA

ECONOMIC INDICATORS FOR SHANGHAI

ECONOMIC INDICATORS
Year-on-Year Manufacturing Output Growth April – September 2011 9.4%
Total Imports April – September 2011 US$116.8 billion
Total Exports April – September 2011 US$108.9 billion
Container Throughput (TEUs) April – September 2011 16.5 million
Air Cargo Throughput (Tonnes) April – September 2011 1.9 million

SHANGHAI


•  Growth momentum in Shanghai’s industrial property market slowed •  Looking ahead, although domestic monetary policy measures and
between April and September 2011 as the fragile economic recovery external economic shocks will continue to weigh on the Chinese
in the US and Europe’s sovereign debt crisis weighed on market economy and Shanghai’s industrial sector, land, capital and rental
sentiment. values of industrial properties in Shanghai are expected to receive
strong support at current levels as Shanghai’s industrial sector
•  Additionally, a tightened credit environment led to higher financing
evolves over time to accommodate higher value-added industries.
cost and this dampened investment sales. Local industrial investors
Industrial land usage will continue to shift towards the higher-end of
and developers without the privilege of accessing offshore funding
the tertiary value chain, including corporate headquarters, research
began to experience financial difficulties. Multinational corporations
and development (R&D) and operations centres. Meanwhile, the
with access to offshore financing were less affected. Consequently,
Chinese government’s effort aimed at curbing speculative investment
capital values gained an average of just 1.4% during the six-month
in the residential market may generate investment spill overs to the
review period ending September 2011, in contrast to an average
industrial segment, lending further support to the market. Thus,
growth rate of 5.0% in the six months ending March 2011.
land, capital and rental values have the potential to increase by up
•  Land values, however, continued to grow steadily at an average of to 8.0% in the next 12 months.
approximately 8.5% as inflationary pressures persisted and local
government’s selective stance in allocating sites restricted supply.

•  Rental values recorded an average growth rate of approximately
5.0%, helped by the continued demand for industrial space from
booming sectors such as e-commerce businesses. Leasing
transactions concluded during the review period include eFrance’s
lease of a 12,860-sq ft factory in Minhang district and Phoenix
Waigaoqiao’s lease of a 2,281,788-sq ft warehouse in Pudong New
Area.

MAJOR TRANSACTIONS IN SHANGHAI

TRANSACTIONS
FLOOR/LAND
AREA (SQ FT)
Minhang Factory Lease eFrance 12,860
Pudong New Area Warehouse Lease Phoenix Waigaoqiao 2,281,788



H O N G KO N G S A R

ECONOMIC INDICATORS FOR HONG KONG SAR

ECONOMIC INDICATORS
Year-on-Year Manufacturing Output Growth Rate March – August 2011 -0.67%
Total Imports March – August 2011 HK$1,931 billion
Total Exports March – August 2011 HK$1,702 billion
Container Throughput (TEUs) March – August 2011 12.5 million
Air Cargo Throughput (Tonnes) March – August 2011 2.0 million

HONG KONG SAR

Factory

• Triggered by the Hong Kong Monetary Authority’s call to strengthen performance remain sluggish in the coming quarters. Over the next
risk management in residential mortgage lending business in June 12 months, factory rents and prices are anticipated to decrease by
2011 and the growing uncertain economic outlook, banks in Hong about 5.0% and 12.0%, respectively.
Kong tightened their loan policies in 3Q 2011. For industrial property
Warehouse
mortgages, banks have generally lowered their property valuations
and reduced the loan-to-value ratio to between 30.0% and 40.0%. • The continued growth of local consumption and re-export volume
(the latter expanded by 10.2% YoY to HK$1,667 billion during the
•  Tightened credit led to a contraction in industrial property transaction
period from March to August 2011) had led to a flurry of warehouse
volume during the review period with the decline particularly profound
space expansions by third-party logistics (3PLs) players looking to
in the second half of the review period from July to September 2011.
capture growing demand for logistics services from outsourcing
The number of strata-titled transactions which decreased 6.1%
activities. Noticeably, 3PLs that engaged in local distribution and
quarter-on-quarter (QoQ) to 2,108 in 2Q 2011, plunged by a steep
the export of fashion and electronics products were the most active
37.9% QoQ to 1,310 transactions in 3Q 2011. Chevalier International’s
group of tenants seeking additional spaces.
acquisition of the whole block of an industrial building at 29 to 33
Tsing Yi Road (253,470 sq ft) for a total consideration of HK$286 •  New demand for warehousing facilities was also seen from individual
million, and Central Source Limited’s purchase of the 311,700-sq ft multinational fashion companies and overseas 3PLs, including
Emperor International Square in Kowloon Bay for HK$850 million, mainland Chinese operators, looking to establish their regional hub
were among the sales transactions that occurred between April and in Hong Kong to serve their business needs in Southeast Asia and
September 2011. the south China region. These tenants were seeking warehouse
premises with sizes of 100,000 sq ft or above. However, there are
•  Notwithstanding the contraction in property transaction volume,
currently no available warehouse premises in the market that match
factory prices continued their upward climb by 15.4% during the
their size requirements.
review period, to HK$2,549 per sq ft as of September 2011. This
was partly the result of vendors holding firm on their asking prices •  Robust demand for warehousing facilities saw the average rents
given their low holding costs. As well, healthy tenant demand on the of cargo lift access warehouses increasing 10.8% to HK$6.82 per
back of positive spill-over from the traditional office sector due to sq ft per month while those of ramp access warehouses increased
sustained office rental growth enabled factory rents to gain 10.4% 11.5% to HK$9.81 per sq ft per month during the six months under
between April and September 2011, to HK$8.56 per sq ft per month. review.
This also supported capital value growth for factory space during
the review period. •  Similar to the factory sector, the sustained rental growth underpinned
the price performance of warehouses. Thus, the capital values of
•  The persistently weak economic recovery in the core export markets cargo lift access warehouses and ramp access warehouses rose
– the US and the European Union – has started to take its toll on Hong by 16.4% and 15.3% to HK$2,487 per sq ft and HK$2,600 per sq ft,
Kong’s external trade performance, as reflected in a deceleration in respectively during the review period.
its external trade growth during the review period. In fact, various
organisations have downgraded their economic growth forecasts for •  One notable transaction was the sale of a 50% interest in Interlink,
the coming quarters for Hong Kong. Demand for industrial premises a 2.4-million sq ft logistics warehouse development in Tsing Yi that
is thus expected to soften amid a deceleration in the growth of local is scheduled for completion in January 2012, by Goodman Group
consumption and exports of goods and services. In turn, factory rents to Canada Pension Plan Investment Board for a total of HK$2.26
are expected to see downward adjustments if the global economic billion.



H O N G KO N G S A R

•  Looking forward, given the weak global macroeconomic climate, •  During the six-month period ending September 2011, the average
warehouse rentals are expected to decrease 2.0% to 3.0% over the I-O rental increased 7.9% to HK$16.56 per sq ft per month.
next 12 months while their prices are expected to decline 9.0% to
•  However, in line with the general softening in demand for industrial
13.0% during the same period.
space amid an uncertain economy outlook, I-O rents are expected
High-Specs Industrial Building to decline 5.0% in the next 12 months.

•  Similar to the factory sector, the high-specs Industrial-Office
buildings (I-O) received positive spill over demand from an increase
in rentals in the office market.

MAJOR TRANSACTIONS IN HONG KONG SAR

TRANSACTIONS
FLOOR/LAND AREA
(SQ FT)
Tsuen Wan International Centre Industrial Lease Ingrid Millet 22,000
Texaco Centre Industrial Lease Zara Asia 43,054
Tsuen Wan International Centre Industrial Lease JSI Logistics 45,004
Oceanic Industrial Centre Industrial Lease I.T. Apparels 92,753
Wai Yuen Tong Medicine Building Industrial Sale Local Investor 126,677
29 - 33 Tsing Yi Road Industrial Sale Chevalier International 253,470
Emperor International Square Industrial Sale Central Source Limited 311,700
Interlink Warehouse Sale Canada Pension Plan Investment Board 50% interest



INDIA

ECONOMIC INDICATORS FOR INDIA

ECONOMIC INDICATORS
Year-on-Year Manufacturing Output Growth Rate April - September 2011 n.a
Total Imports April - August 2011 US$189.3 billion
Total Exports April - August 2011 US$134.9 billion
Container Throughput (TEUs) April - September 2011 n.a.
Air Cargo Throughput (Tonnes) April - September 2011 n.a.

NEW DELHI


• The Reserve Bank of India (RBI) has tightened monetary policy during •  As such, in spite of the turbulent global economic conditions, demand
the review period from April to September 2011, which saw its “Repo for Delhi/NCR industrial properties remained relatively stable during
Rate” (i.e. the rate at which the Reserve Bank of India lends money the review period with land and capital values registering an average
to commercial banks) soaring from 6.89% to 8.0%. The continuous increase of 4.0% while rental values grew at an average rate of
hike in the cost of debt resulted in a slowdown in industrial growth, 2.0%. Lease transactions concluded in the review period include
which grew at a slower 7.3% during January to June 2011 versus Jayshree Polyplastic’s lease of a 100,000-sq ft factory at Bhiwadi;
an 11.8% growth in the same period last year. Ananad Raj Industries’s lease of a 60,000-sq ft factory at Manesar;
and Yamaha’s lease of a 56,000-sq ft warehouse along Mathura
•  Despite challenges from an escalating cost of debt, sentiments in Road.
the Delhi industrial property market remained healthy on the back
of various efforts by the government to develop and grow their •  As part of the government’s Relocation of Industries Scheme to
industrial sector. For example, the state government has decided move industries from residential areas to conforming zones, DSIISC
to reduce the multiplicity of authorities in industrial areas in Delhi has recently allotted 51 industrial plots at Bawana and Bhorgarh
so as to streamline the process of entrepreneurs having to obtain through a draw of lots. With this allotment, the total number of plots
clearance from various government agencies to set up businesses in or flatted factories allotted under this scheme since its launch in
these industrial estates. The lease and maintenance administration 1996 has gone up to around 22,500. About 85.0% of the units are
of most of the industrial estate, which is presently under the purview either under construction or are already completed.
of both the Delhi Development Authority (DDA) and the Municipal
•  With the improvements in Delhi’s industrial infrastructure and
Corporation of India (MCD), will be handed over to the Delhi State
business environment, Delhi could emerge as an attractive
Industrial and Infrastructure Development Corporation (DSIIDC).
investment destination in the coming years. This could fuel demand
•  For a start, DSIIDC has identified areas at Narela, Bawana, Patparganj for industrial space to accommodate the growing businesses. Thus,
and Okhla as pilots for upgrading and managing the estates under the capital values and rents of the industrial properties are expected to
build-operate and transfer (BOT) concession to a private partner for continue to record growths in the range of 2.0% to 5.0% in the next
15 years. To bring more investments and industries to Delhi, DSIIDC 12 months.
is also planning to develop a knowledge-based industrial park in
Baprola. The estimated cost of this industrial park is INR12 billion.

MAJOR TRANSACTIONS IN NEW DELHI

TRANSACTIONS
FLOOR/LAND AREA
(SQ FT)
Manufacturing Company of Nuts and Bolts
Bhiwadi Factory Lease 28,000
(Undisclosed)
Mathura Road Warehouse Lease Yamaha 56,000
Manesar Factory Lease Anand Raj Industries Pvt. Ltd 60,000
Bhiwadi Factory Lease Jayshree Polyplastic Pvt. Ltd 100,000
Agriculture Land for
NH8 Purchase Logistics Company (Undisclosed) 10 acres
Logistics Operations



I N D O N ES I A

ECONOMIC INDICATORS FOR JAKARTA

ECONOMIC INDICATORS
Year-on-Year Manufacturing Output Growth Rate January – June 2011 5.6%
Total Imports April – September 2011 US$85,854.7 million
Total Exports April – September 2011 US$107,113.7 million
Container Throughput (TEUs) April – September 2011 n.a.
Air Cargo Throughput (Tonnes) April – September 2011 n.a.

JAKARTA


• The Indonesian industrial land sales market saw heightened activity •  The industrial leasing market remained quiet with no notable
in the current review period, particularly for larger land parcels in leasing transactions in the current review period between April and
excess of 1.08 million sq ft. This was driven by strong domestic September 2011. However, rents saw a 5.8% increase, up from a
consumption and aggressive growth of the automotive industry. 3.4% contraction reported for the period between October 2010 and
All in, land sold in the first three quarters of 2011 totalled 897 ha, March 2011, due to volatility in exchange rates.
exceeding the 543 ha registered in the entire year of 2010. Year-
to-date, the automotive industry remained the dominant purchaser •  Underpinned by strong domestic consumption, solid investment
accounting for 45.0% of total land sales (in ha). With no additional inflows and improving export performance, the Indonesian economy
industrial land being supplied, robust demand drove the average land is forecasted to see robust expansion in the range of 6.5% to 6.9%
prices in Karawang and Bekasi up by a record 45.0% during the six in 2012, higher than the 6.3% estimated for the entire year of 2011.
months between April and September 2011, faster than the 14.9% This is expected to continue to stoke developers’ and investors’
recorded in the previous review period. Notable land transactions optimism and translate to growth in land and capital values, as well
that occurred in the six months ending September 2011 included as rents of industrial properties from 10.0% to 25.0% over the next
Denso Indonesia’s purchase of a 28-ha plot at Bekasi Fajar and the 12 months.
sale of a 31-ha parcel at KIIC to an undisclosed party.

•  On the other hand, a relatively less active investment sales market
led capital values of industrial buildings to grow at a slower rate of
6.0% in the current review period, down from the 19.7% increase
recorded in the previous review period ending March 2011.

MAJOR TRANSACTIONS IN JAKARTA

TRANSACTIONS
FLOOR/LAND AREA
(SQ FT)
Modern Cikande Land Sale Indochem 645,834
Bekasi Fajar Land Sale Food Industry (Undisclosed) 1,076,390
Plastics & Metal Manufacturing
Jababeka Land Sale 1,560,766
(Undisclosed)
Suryacipta Land Sale Automotive Component (Undisclosed) 1,614,585
Jababeka Land Sale Consumer Goods (Undisclosed) 1,832,016
Jababeka Land Sale Pharmacy 2,152,780
KI Mitrakarawang Land Sale Automotive (Undisclosed) 2,152,780
Jababeka Land Sale Automotive (Undisclosed) 2,473,544
Bekasi Fajar Land Sale Denso Indonesia 3,013,892
KIIC Land Sale Undisclosed 3,336,809



JA PA N

ECONOMIC INDICATORS FOR GREATER TOKYO

ECONOMIC INDICATORS
Year-on-Year GDP Growth January - June 2011 -0.8%1)
Year-on-Year Manufacturing Output Growth Rate January - June 2011 -4.7%1)
Total Imports January - June 2011 ¥14.57 trillion2)
Total Exports January - June 2011 ¥11.77 trillion2)
Container Throughput (TEUs) January - June 2011 3.60 million3)
Air Cargo Throughput (Tonnes) January - June 2011 934,1794)
1) Nationwide
2) Tokyo port (Tokyo-kou, Narita) and Yokohama Port (Yokohama, Kawasaki, Chiba and Kisarazu)
3) Tokyo custom and Yokohama custom
4) Narita Airport

GREATER TOKYO


•  Weighed down by the March 2011 earthquake, the Japanese economy •  Prologis Park Kawajima, a five-storey multi-tenanted logistics facility
contracted in 2Q 2011 by 0.5% for the third consecutive quarter with a total gross floor area of 1.8 million sq ft, was completed in July.
on a QoQ basis. On an annualised basis, the Japanese economy It is located in Kawajima of Saitama with convenient access to major
contracted by 2.1% YoY in 2Q 2011. As such, the industrial property roads. As of the end of September, 70.0% of the development was
market stayed in the doldrums. leased to two tenants, one of which is Hitachi Collabonext Transport
System Co.
•  The investment sales market was sluggish in the current review
period ending September 2011 as cautious investors continued to •  While the Japanese economy appears to be on the recovery path now
monitor the market from the sidelines. Thus, land and capital values that supply-side constraints caused by the earthquake are gradually
have generally softened since the previous survey conducted six being resolved and total exports and business investments are seeing
months ago. a slight growth, it is nevertheless still susceptible to externalities such
as the health of other major global economies. Manufacturers and
•  Rental performance remained mixed. For the six-month period
those in the export trade are especially concerned with the further
ending in September 2011, rents in Daikokufuto saw a 4.8% increase,
strengthening of the Japanese Yen. These factors will continue to
while the Shinsuna submarket saw industrial rents easing by 3.9%.
weigh on the Japanese industrial property market, giving land and
With the exception of the Urayasu submarket, rents in the remaining
capital values as well as rents little room for growth. They are thus,
submarkets surveyed were unchanged from their levels recorded in
generally forecast to stay unchanged in the next 12 months.
March 2011. The Urayasu submarket remained flooded/submerged,
following the earthquake and tsunami in March 2011.



NEW ZEALAND

ECONOMIC INDICATORS FOR NEW ZEALAND

ECONOMIC INDICATORS
Year-on-Year GDP Growth June 2011 1.5%
Year-on-Year Manufacturing Output Growth Rate June 2011 1.5%
Total Imports April – September 2011 NZ$23.3 billion
Total Exports April – September 2011 NZ$22.9 billion
Container Throughput (TEUs) April – September 2011 39.3 million
Air Cargo Throughput (Tonnes) April – September 2011 93,953

AUCKLAND

Office/Warehouse

•  The industrial sector continues to lead the commercial property •  Leasing activity continues particularly in the under 21,000 sq ft
market with a total return of 9.0% for the year ending September 2011 market. Nevertheless, the overall vacancy rate dropped marginally
according to the Investment Property Databank/Property Council of from 5.3% in February 2011 to 5.1% in August 2011. As such,
New Zealand. monthly rents are stabilising, and now range between NZ$0.76
per sq ft and NZ$0.83 per sq ft for prime warehouses across
•  The investment market showed signs of stabilising. Approximately Auckland industrial precincts. A significant leasing deal during
NZ$117 million worth of industrial properties (total for sales of this review period was Goodyear and Dunlop Tyres (NZ) taking up a
individual properties at NZ$2 million or more) were transacted in the 102,548-sq ft development in 415 East Tamaki Road in East Tamaki.
first half of 2011, down from the NZ$292 million recorded in 1H 2010.
Consequently, capital values increased moderately by up to 2.3% on •  Colliers Real Estate Confidence Survey September 2011 shows that
average in the current six months review period ending September industrial investors feel the most optimistic about the year ahead
2011. Notable investment transactions included the purchase of 5-7 compared to the other property sectors. Specifically, 41.0% of
Fraser Road (111,783 sq ft) at Mt Wellington to a private investor. Auckland industrial investors forecast improving conditions for the
next 12 months, up from just 34.0% six months ago. Against this
•  Industrial land values, too, are trending upwards on the back of limited backdrop, industrial land and capital values and rentals are likely to
availability of land for sale in South Auckland. However, the shortage see a 2.0% to 5.0% upside through the next 12 months.
of buyers kept land value growth moderate at not more than 2.0%
between April and September 2011. Major land transactions that
occurred in the review period included the sale of a 330,097 sq ft
parcel at 111 Luan Avenue to Eldamos Investments for over NZ$10.5
million.

MAJOR TRANSACTIONS IN AUCKLAND

TRANSACTIONS
FLOOR/LAND AREA
(SQ FT)
6b Wagener Place, St Lukes Office/Warehouse Lease Wilhelmsen Ship Services 9,591
89-91 Captain Springs Road, Penrose Office/Warehouse Lease TIC (Reverse Logistics) NZ 19,246
78 Ellice Road, Wairau Park Office/Warehouse Lease Phoenix Aluminium 15,629
67 Arrenway Drive, Albany Office/Warehouse Lease Dimension Shopfitters 30,699
5 Henry Rose Place, Albany Office/Warehouse Lease Transpacific Industrial (NZ) 32,292
23 Zelanian Drive, East Tamaki Office/Warehouse Lease Exclusive Tyre Distributors (NZ) 35,521
Business Parade North, East Tamaki Office/Warehouse Lease National Aluminium 61,548
415 East Tamaki Road, East Tamaki Office/Warehouse Lease Goodyear and Dunlop Tyres (NZ) 102,548
67 Arrenway Drive, Albany Office/Warehouse Sale Lewis Holdings 30,699
9 Pacific Rise, Mt Wellington Office/Warehouse Sale Private Investor 31,495
5-7 Fraser Road, Mt Wellington Office/Warehouse Sale Private Investor 111,783
111 Lunn Ave, Mt Wellington Land Sale Eldamos Investments 330,097



NEW ZEALAND
WELLINGTON

Office/Warehouse

•  The Wellington investment market remains active, largely in the •  In contrast with the buoyant mood in Auckland, Wellington investor
sub-NZ$2 million price bracket. For the first half of 2011, over confidence is down in general for the 12 months ahead. Industrial
NZ$61 million worth of industrial properties were sold. This is investor confidence dropped to -9.0% in September this year from
close to 50.0% of the NZ$136 million chalked up for the whole of -2.0% in March 2011. However, it has improved from the -18.0%
2010. Hence, land and capital values held steady in the six months recorded a year ago. As such, land values are expected to stay stable
between April and September 2011. Significant transactions that over the next 12 months.
occurred during this six-month review period included the sale of
38-40 Bouverie Street (78,210 sq ft) in Petone to Beijing Gold for
NZ$6.7 million.

•  The leasing market, too, has remained stable over the six months
ending September 2011. As such, rents remained unchanged as
of half a year ago with prime monthly warehouse rents currently
ranging between NZ$0.66 per sq ft NZ$0.77 per sq ft. The majority
of the transactions occurred in the sub-10,764 sq ft market. Notably,
a 6,900-sq ft industrial building in Petone was leased by Pennrith
Holdings to Scafit for NZ$600,000 a year.

MAJOR TRANSACTIONS IN WELLINGTON

TRANSACTIONS
FLOOR/LAND AREA
(SQ FT)
35 - 43 Hutt Road, Petone Office/Warehouse Lease Scafit 6,953
56 Takapu Road, Grenada Office/Warehouse Lease Wellington Scrap Metals 32,292
Astra Print, 97 - 102 Hutt Road,
Office/Warehouse Lease Wickliffe NZ 33,110
Kaiwharawhara
199 Gracefield Road, Gracefield Office/Warehouse Sale Private Investor 15,952
46 Railway Avenue, Lower Hutt Office/Warehouse Sale Azzurro Holdings 27,233
9 - 15 Meachen Street, Lower Hutt Office/Warehouse Sale Chelmsford Properties 36,597
38 - 40 Bouverie Street, Petone Office/Warehouse Sale Beijing Gold 78,210



SINGAPORE

ECONOMIC INDICATORS FOR SINGAPORE

ECONOMIC INDICATORS
Year-on-Year GDP Growth April 2011 – September 2011 3.5%
Year-on-Year Manufacturing Output Growth Rate April 2011 – September 2011 3.7%
Total Imports April 2011 – September 2011 S$232,317 million
Total Exports April 2011 – September 2011 S$259,212 million
Container Throughput (TEUs) April 2011 – September 2011 15,190.6
Air Cargo Throughput (Tonnes) April 2011 – September 2011 933,905

SINGAPORE


•  Singapore’s GDP growth slowed to 3.5% YoY in the period from April edge, it is unlikely that the JTC Corporation (JTC) would raise land
to September 2011 compared with the sterling 10.7% YoY growth prices further in the months ahead. Capital values and rents of
seen in the previous review period from October 2010 to March single-user industrial space should also remain stable in the year
2011, as upheavals on the global economic front rattled confidence ahead, balanced by cautious user demand and limited availability.
and dampened demand for goods and services.
High-Specs Industrial Building
•  Nonetheless industrial investment and land sales remained active
•  The high-specs industrial sector is susceptible to weakening
underpinned by occupier demand and interest from REITS and
confidence in the global economy and thus slowed considerably in
developers. For instance, Sabana REIT made four purchases — 3A
the period from April to September 2011.
Joo Koon Circle, 21 Joo Koon Crescent, 2 Toh Tuck Link and 39 Ubi
Road 1 — totalling S$132.3 million in the current review period. Other •  Despite investor caution amid heightened global uncertainties, Real
major buildings transacted within the six months ending September Estate Investment Trusts (REITs) continue to look out for accretive
2011 include Seagate’s premises at Ang Mo Kio for S$91.5 million and purchases. Notably, Ascendas REITs purchased the Nordic European
Singatronic’s facility at Chai Chee Lane for S$21 million. These led Centre in the International Business Park for S$121.6 million.
land and capital values to extend their climb by as much as 16.0%
during the current review period, up from the 7.2% to 9.3% recorded •  Rents for high-specs space remained under pressure due to the
in the previous review period. ample supply of new high-specs and suburban office space in the
pipeline. Consequently, rental growth for multi-user high-specs space
•  The leasing market was also active and dominated by relocations more than halved from 11.0% in the October 2010 to March 2011
and company expansions. Rents for factories in the central area period to 4.8% in the current review period. At the end of September
rose 4.1% in the current six-month review period to average S$1.50 2011, the average monthly gross rent for high-specs space stood
per sq ft per month in September 2011, while monthly rents for at S$3.28 per sq ft. Major leasing deals concluded during this time
warehouse space in the eastern part of the island grew 5.1% in the included Nordson SEA (Pte) Ltd taking up about 15,800 sq ft at 2
past six months to average S$1.44 per sq ft. Corporation Place.

•  According to the Urban Redevelopment Authority (URA), some 1.91 •  Growth in office rents slowed and has likely reached peak levels,
million sq ft of single-user factories were added onto stock in the resulting in less cost incentives for qualifying office users to relocate
current review period, 10.0% higher than the 1.73 million sq ft net to high-specs space. Given the cloudy economic outlook, leasing
of new completions seen in the previous six months. Developments activities in the short to medium term ahead, is likely to be dominated
completed in the six months ending September 2011 included CN by renewals and consolidations. As such, high-specs rents are
Logistics’ 121,600-sq ft factory at Changi North Way and Kawah expected to stay stable, with an increase of up to 5.0% for ground
Enterprises’ factory at Ubi Link. floor space, in the year ahead.

•  The outlook ahead is less rosy. Business sentiments have been
adversely affected by events in the west. According to the latest
Business Times-UniSIM Business Climate Survey, close to two-thirds
of the companies surveyed said prospects for the next six months
are worse than a year ago. Given the murky outlook for the global
economy and the pressing need to maintain Singapore’s competitive



SINGAPORE

MAJOR TRANSACTIONS IN SINGAPORE

ECONOMIC INDICATORS
FLOOR/LAND AREA
(SQ FT)
2 Corporation Place High-Specs Lease Nordson SEA (Pte) Ltd 15,791
21 Changi North Way Warehouse Lease Armor Asia Imaging Supplies Pte Ltd 45,500
52 Tanjong Penjuru Warehouse Lease Cummins Diesel Sales Corporation 110,860
18 New Industrial Road Factory Sale TAS Services Pte Ltd 30,225
21 Joo Koon Crescent Factory Sale Sabana Shari’ah Compliant REIT 99,575
39 Ubi Road Factory Sale Sabana Shari’ah Compliant REIT 136,195
506 Chai Chee Lane (Singatronics) Factory Sale Undisclosed 172,137
2 Toh Tuck Link Factory Sale Sabana Shari’ah Compliant REIT 180,735
3A Joo Koon Circle Factory Sale Sabana Shari’ah Compliant REIT 217,580
Nordic European Centre High-Specs Sale Ascendas REIT 305,458
7000 Ang Mo Kio Avenue 5 Factory Sale Undisclosed 1,070,644



TA I WA N

ECONOMIC INDICATORS FOR TAIWAN

ECONOMIC INDICATORS
Year-on-Year Manufacturing Output Growth Rate April - September 2011 5.61%
Total Imports April - September 2011 US$145,563 million
Total Exports April - September 2011 US$158,873 million
Container Throughput (TEUs) April - September 2011 6.8 million
Air Cargo Throughput (Tonnes) April - September 2011 847,973

TAIWAN

High-Specs Industrial Building

•  Taiwan’s GDP grew at a moderated 4.2% YoY between April and September 2011 — the lowest vacancy level since 4Q 2008. This
September 2011 compared with the 9.7% recorded in the previous prompted rents to climb 0.8% from NT$31.32 per sq ft per month
corresponding period. Weakening global demand caused capital- in March 2011 to NT$31.57 per sq ft per month in September 2011.
intensive industries, such as semiconductors and thin film transistor This was the highest rental growth in the past three years.
liquid crystal display (TFT-LCD) manufacturers, to reduce capital
•  The current market price for high-specs space remains high and
expenditure. This, in turn, led the capital formation growth rate to
showed no sign of abating. While low yields kept investors away,
drop to a negative 13.5% YoY in 3Q 2011 and manufacturing output
owner-occupiers, on the other hand, have displayed a gradual
to shrink 5.6% YoY during the review period.
acceptance of the current pricing. This was evident from the few
•  This dented sentiments in the high-specs industrial market. As a purchases made in 3Q 2011, including Taiwan Fixed Network Co.’s
result, net take-up of high-specs space in Neihu Technology Park acquisition of the 284,430-sq ft data centre in Neihu for NT$2.87
fell by a hefty 46.6% from the previous review period to 725,049 sq billion, TCI Co.’s acquisition of the 14,382-sq ft Shin Chi Tsai Hsing
ft. This was notwithstanding the continued gravitation of traditional Building for NT$171 million and King Polytechnic Engineering Co.‘s
industries and hi-tech enterprises to Neihu Technology Park due to acquisition of the 10,554-sq ft 21 Century Plaza for NT$211 million.
its attractiveness as a maturing business district. Developments such Notably, Chong Hong Construction Co. purchased a 32,936-sq ft
as A+ Sun Tech City, Fubon Ruei Kwang Building and Metropolitan land parcel at Xihu for development of hi-specs space for NT$2.19
Era Headquarters enjoyed net take-up above 30,000-sq ft each, billion or a record high of NT$66,493 per sq ft.
primarily from expansionary moves. Major leasing deals during the
•  The economic crisis in the Eurozone and the US is likely to impact
review period included Compal Electronics Co., Sumei Chemical Co.
Taiwan’s economic growth adversely in the near future. However,
and Lite-On Clean Energy Co. taking up 120,687-sq ft in Colorful
net take-up is expected to grow given that the high market price is
International Building, 19,605-sq ft in Dubai Building and 19,320-sq
likely to drive users to lease instead of owner-occupy their premises
ft in Solomon Neihu Building, respectively.
for cost-savings purposes. The vacancy rate of high-specs space
•  The plunge in net take-up in the current review period was, however, in Neihu Technology Park may thus fall below 11.0% by the end of
mitigated by a miserly supply of 107,309 sq ft from the completion 2011. As such, rentals are expected to remain flat or show a slight
of Chi-Sing Xi Hu Building in 2Q 2011. As a result, the vacancy rate increase in the next 12 months.
in Neihu Technology Park dipped 2.2 percentage points to 12.3% in

MAJOR TRANSACTIONS IN TAIPEI

TRANSACTIONS
FLOOR/LAND AREA
(SQ FT)
Solomon Neihu Building High-Specs Lease Lite-On Clean Energy Co. 19,320
Dubai Building High-Specs Lease Sumei Chemical Co. 19,605
Colorful International Building High-Specs Lease Compal Electronics, Inc. 120,687
The Plot in Xihu Land Sale Chong Hong Construction Co. 32,936
21 Centry Plaza High-Specs Sale King Polytechnic Engineering Co. 10,554
Shin Chi Tsai Hsing Building High-Specs Sale TCI Co. 14,382
The Data Centre in Neihu High-Specs Sale Taiwan Fixed Network Co 284,430


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