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1. Property Times
Greater Toronto Area Office Q3 2013
Sublet space continues to rise

The vacancy rate in the Greater Toronto Area (GTA) increased to 8.8%
in Q3 2013 from 8.5% at the end of Q2 2013. Sublet space is on the rise
in most markets in Class A buildings.

30 office buildings, representing 7.7 million square feet of new
inventory were under construction. The majority of new construction is
concentrated in the Downtown and GTA West markets.

The Globe and Mail and Samsung penned significant deals over the
quarter. The Globe and Mail will occupy 125,000 square feet of the
500,000 square foot building at 351 King Street E in Downtown East,
construction will start shortly. Samsung will occupy 125,000 square
feet at 2050 Derry Road West in Meadowvale.

Two buildings reached completion over Q3 2013 totalling 133, 600
square feet. 30 buildings were under construction totalling 7.7 million
square feet and 79 buildings are in the pre-leasing state with the
opportunity to add 13.1 million square feet to the inventory.

30 October 2013
The GTA West possessed the greatest amount of vacant space for lease
(5.8 million sq ft) while Midtown had the least amount of vacant
options (840,177 sq ft).
Contents
Executive summary
1
Greater Toronto Area
2
Downtown
4
Midtown
5
GTA North
6
GTA East
7
GTA West
8
Statistics summary
9
Definitions
11
Author
Warren D’Souza
Research Manager
+ 1 905 804 3559
warren.dsouza@dtz.com
Figure 1
GTA Under Construction Comparison, Under construction (000s sq ft) and
vacancy rate (%)
9,000
10.0%
8,000
9.5%
7,000
Contacts
6,000
9.0%
5,000
John Wickes
Head of Americas Research
3,000
+ 1 312 424 8087
2,000
john.wickes@dtz.com
8.5%
4,000
1,000
8.0%
7.5%
0
Hans Vrensen
7.0%
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Global Head of Research
Downtown
GTA East
GTA North
+ 44 (0) 20 3296 2159
GTA West
Midtown
Vacancy Rate
hans.vrensen@dtz.com
DTZ Research
Source: Altus InSite and DTZ Research

2. Greater Toronto Area Q3 2013
Greater Toronto Area
Figure 3
Although demand for office space continues to remain
strong in the GTA, a significant amount of space came to
market over the quarter. The vacancy rate increased to
8.8% from 8.5% in Q2 2013. Net absorption was negative as
179,190 square feet came to market (Figure 2).
GTA Market Vacancy Rate Comparison
16.0%
14.0%
12.0%
10.0%
Three out of five nodes experienced negative net
absorption in Q3 2013.
8.0%
6.0%
Figure 2
4.0%
Quarterly GTA Absorption by Market, sq ft
2.0%
Q3 2012
Q4 2012
Downtown
800,000
600,000
Q1 2013
Midtown
GTA North
400,000
Q2 2013
GTA West
Q3 2013
GTA East
GTA Total
Source: Altus InSite and DTZ Research
200,000
7.7 million square feet of office space, spread across 30
buildings, were under construction in Q3 2013.
0
-200,000
-400,000
-600,000
Q3 2012
Downtown
Q4 2012
Midtown
Q1 2013
GTA East
Q2 2013
GTA North
Q3 2013
GTA West
The majority of office space under construction is located
within nine buildings Downtown (5.7 million sq ft), followed
by 16 buildings in the GTA West (1.4 million sq ft), and five
buildings in the GTA North (514,869 sq ft). Midtown and
GTA East had no office buildings under construction in Q3
2013.
Source: Altus InSite and DTZ Research
GTA North experienced 128,147 square feet of positive net
absorption resulting in a 6.3% vacancy rate. This was the
second lowest vacancy rate in the GTA.
The GTA West market had the highest vacancy rate at
14.0%. The overall GTA vacancy rate was 8.8% (Figure 3).
GTA West had over 5.7 million square feet of vacancy
followed by Downtown with over 3.9 million square feet of
vacancy. The GTA East (3.5 million sq ft), Midtown (1.3
million sq ft) and GTA North (840,177 sq ft) made up the
balance of vacancy in the GTA in Q3 2013.
Two buildings reached completion over Q3 2013, both in
the GTA West market, totalling 133,600 square feet. 7685
Hurontario Street in Brampton is a seven story LEED Gold
registered building that totals 73,600 square feet. 5135
Creekbank Road, Mississsauga is 60,000 square feet of
office space in a larger flex building, it is fully leased.
Total vacant space increased by 449,456 square feet in Q3
2013, a 3.1% change in square feet since Q2 2013. Vacant
sublet space increased by 144,467 square feet over the
quarter, a 5.3% change in square feet since Q2 2013. Sublet
vacancy was at the highest level since Q3 2010 at over 2.8
million square feet in Q3 2013 (Figure 4).
Figure 4
GTA Direct and Sublet Vacancy, 000s sq ft
16,000
2,900
14,000
2,800
12,000
10,000
2,700
8,000
2,600
6,000
4,000
2,500
2,000
0
2,400
Q3 2012
Q4 2012
Q1 2013
Direct Vacant Space (lhs)
Q2 2013
Q3 2013
Total Vacant Space (lhs)
Sublet Vacant Space (rhs)
Source: Altus InSite and DTZ Research
www.dtz.com
Property Times
2

3. Greater Toronto Area Q3 2013
Greater Toronto Area
Figure 6
Average asking gross rents for the GTA were $29.95 per
square foot in Q3 2013 and continue to hover around the
$26.00 to $36.00 per square foot range (Figure 5).
GTA Average Gross Rent Comparison
Rents for the most part have remained fairly stable in nodes
with high vacancy rates and have increased in nodes with
low vacancy rates.
Downtown
$27.62
Midtown
$17.01
GTA North
$16.99
GTA Total
$15.61
GTA West
$14.66
$26.33
$18.42
$15.63
Figure 5
Average Gross Rents ($/psf)
GTA Rent Trends All Classes
$14.34
$12.43
$55.00
GTA East
$50.00
$45.00
$12.79
$0.00
$40.00
$13.10
$10.00 $20.00 $30.00 $40.00 $50.00 $60.00
Net Rent
$35.00
$30.00
Additional Rent
Source: Altus InSite and DTZ Research
$25.00
$20.00
Q3 2012
Q4 2012
Downtown
GTA Total
Q1 2013
Q2 2013
GTA East
GTA West
Q3 2013
GTA North
Midtown
Select Lease Transactions in Q3 2013
Source: Altus InSite and DTZ Research
GTA Vacancy Rate and Net Absorption
Q3 2013 Vacancy Net Absorption
Rate (%)
(Sq Ft)
Size
(Sq Ft)
The Globe and Mail
125,000 351 King Street E
Samsung
125,000 2050 Derry Road W Meadowvale
46,000
250 Yonge Street
DT North
Shepell FGI
Table 1
Tenant
LinkedIn
For all classes of office in the GTA, the Downtown node
maintained the highest average asking net rent of $27.62
per square foot in Q3 2013 whereas the GTA East averaged
the lowest net rent of $12.79 per square foot (Figure 6).
GTA Node
Table 2
Address
Market
Node
46,000
800 Bay Street
DT North
Mercatus
39,500
545 King Street W
DT West
Catalyst Capital
32,700
181 Bay Street
Zurich
24,066
901 King Street W
DT East
Financial Core
Downtown
5.6%
-210,492
Midtown
6.4%
-137,223
GTA East
11.6%
-126,663
Cogent
Communications
22,789
245 Consumers
Road
Consumers
Road
GTA North
6.3%
128,147
Epsilon
17,519
GTA West
14.0%
160,246
111 Gordon Baker
Road
Hwy 404 &
Steeles
GTA Total
8.8%
-179,190
Regus
16,557
50 Bay Street
DT South
Office Clouds
16,000
25 Sheppard
Avenue W
North Yonge
Source: Altus InSite and DTZ Research
DT West
Source: Altus InSite and DTZ Research
www.dtz.com
Property Times
3

4. Greater Toronto Area Q3 2013
Downtown Market
Figure 8
Vacancy increased from 5.3% in Q2 2013 to 5.6% in Q3 2013
due mainly to negative net absorption.
Downtown Absorption by Node
Downtown Direct and Sublet Vacancy
5.8%
600,000
5.6%
400,000
5.4%
5.2%
200,000
5.0%
0
4.8%
4.6%
-400,000
Sublet,
805,832,
20.5%
-200,000
Vacancy Rate (%)
Figure 7
Net Absorption (Sq ft)
800,000
Negative absorption was recorded in Downtown North
(66,474 sq ft), Financial Core (208,450 sq ft) and Liberty
Village (37,386 sq ft). Downtown West recorded the most
positive absorption (96,183 sq ft).
4.4%
-600,000
4.2%
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
DT East
DT North
DT South
DT West
Financial Core
Liberty Village
Source: Altus InSite and DTZ Research
Significant transactions in Q3 include The Globe and Mail
taking 125,000 square feet at 351 King Street East and
LinkedIn taking 46,000 square feet at 250 Yonge Street.
Direct,
3,125,428,
79.5%
Source: Altus InSite and DTZ Research
79.5% of vacant space was available direct with the landlord
while sublet space made up 20.5% (Figure 7).
The majority of space that came to market over the quarter
was for sublease. Despite a negative absorption rate for Q3
2013, we expect the surplus space that came to market to
be absorbed in the coming months due to strong demand
and low vacancy rates (Figure 8).
Currently there are nine buildings under construction
totalling over 5.8 million square feet. This represents 74.0%
of the total square feet under construction in the GTA. Two
buildings, 60 Atlantic Avenue and 661 University Avenue
the MaRS Discover Centre (Phase II) (46.2% pre-leased) are
scheduled for completion in 2013. The remainder of the
buildings are scheduled for completion between 2014 to
2017.
Table 3
Financial Core gross asking rents continue to be the highest
in the GTA at $55.81 per square foot. The average gross
rent for the Downtown node was $53.95 per square foot
(Figure 9).
Vacancy Rate and Net Absorption
Figure 9
GTA Node
Q3 2013 Vacancy
Rate (%)
Net Absorption
(Sq Ft)
DT East
6.8%
5,690
DT North
4.8%
-66,474
DT South
3.2%
-55
DT West
4.8%
96,183
Financial Core
6.1%
-208,450
Liberty Village
9.9%
-37,386
Downtown
5.6%
-210,492
Downtown Average Asking Rent Comparison
Source: Altus InSite and DTZ Research
Financial Core
DT South
$30.26
$25.55
$23.60
$19.24
DT North
$19.98
$19.47
DT West
$20.69
$16.67
DT East
$19.58
$17.40
Liberty Village
$18.23
$0.00
Net Rent
$14.27
$20.00
$40.00
Additional Rent
$60.00
Source: Altus InSite and DTZ Research
www.dtz.com
Property Times
4

5. Greater Toronto Area Q3 2013
Midtown Market
Figure 11
Midtown experienced negative absorption of 137,223
square feet. The Eglinton node accounted for the largest
segment of negative absorption, with 100,776 square feet
followed by Bloor with negative 46,722 square feet. St. Clair
recorded a positive 10,315 square feet.
Midtown Absorption by Node
9.0%
150,000
8.0%
100,000
50,000
Vacancy Rate (%)
Net Absorption (Sq Ft)
Midtown’s vacancy rate increased by 0.7% in Q3 2013 to
6.4%. This node’s vacancy continues to range between 4.0%
and 8.0%.
200,000
7.0%
0
6.0%
-50,000
-100,000
5.0%
-150,000
Figure 10
-200,000
Midtown Direct and Sublet Vacancy
4.0%
Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013
Sublet,
267,374,
25.8%
Bloor
Eglinton
St. Clair
Vacancy Rate
Source: Altus InSite and DTZ Research
Average gross asking rents increased from $35.26 per
square foot in Q2 2013 to $35.43 per square foot in Q3
2013.
Increasing by $0.37 from Q2 2013, Bloor remains the most
expensive node in Midtown with an average gross rent of
$38.86 per square foot.
Direct,
770,388,
74.2%
Eglinton continues to be the most economical node within
Midtown with average gross rent of $32.12 per square foot
in Q3 2013 (Figure 12).
Source: Altus InSite and DTZ Research
74.2% of space was directly available for lease from the
landlord while 25.8% of space was available for sublet.
(Figure 10).
The majority of negative absorption occurred in Class B
buildings with space coming to market for sublease. There
were 18 available blocks of space 10,000 square feet and up
in this market offering many options to larger users (Figure
11).
Figure 12
Midtown Average Asking Rent Comparison
Bloor
St. Clair
Table 4
$19.74
$19.12
$17.58
$19.28
Vacancy Rate and Net Absorption
GTA Node
Q3 2013 Vacancy
Rate (%)
Net Absorption
(Sq Ft)
Bloor
4.8%
-46,772
Eglinton
9.0%
7.3%
10,315
Midtown
6.4%
$14.66
-100,766
St. Clair
Eglinton
$17.46
-137,223
$0.00
$10.00
$20.00
Net Rent
$30.00
$40.00
$50.00
Additional Rent
Source: Altus InSite and DTZ Research
Source: Altus InSite and DTZ Research
www.dtz.com
Property Times
5

6. Greater Toronto Area Q3 2013
Vaughan recorded negative absorption of 25,163 square
feet. Dufferin and Finch remained relatively unchanged
recording 32 square feet of negative absorption. The
majority of positive absorption was in North Yonge (74,571
sq ft) and Richmond Hill (64,328 sq ft).
Figure 13
GTA North Direct and Sublet Vacancy
Sublet,
213,502,
25.4%
Figure 14
GTA North Absorption by Node
200,000
7.0%
6.0%
100,000
5.0%
0
4.0%
-100,000
Vacancy Rate (%)
The GTA North market’s vacancy rate decreased from 6.6%
in Q2 2013 to 6.3% in Q3 2013.
Net Absorption (Sq Ft)
North Market
3.0%
2.0%
-200,000
1.0%
-300,000
0.0%
Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013
Downsview
Richmond Hill
Vacancy Rate
Dufferin and Finch
Vaughan
North Yonge
Yorkdale
Source: Altus InSite and DTZ Research
A significant transaction in Q3 included Office Clouds taking
16,000 square feet at 25 Sheppard Avenue West in North
Yonge.
Direct,
626,675,
74.6%
Source: Altus InSite and DTZ Research
74.6% of vacant space in the GTA North market was for
lease whereas 25.4% of space was for sublease (Figure 13).
GTA North’s gross asking rents averaged $32.62 in Q3 2013.
The most expensive node continued to be North Yonge with
an average gross rent of $37.62 per square foot. Yorkdale
continued to be the most affordable area with average
gross rents remaining at $21.01 per square foot (Figure 15).
Figure 15
This market experienced positive net absorption in Q3. The
majority of this growth was experienced in Class B buildings
in North Yonge and Class A buildings in Richmond Hill
(Figure 14).
GTA North Average Asking Rent Comparison
North Yonge
$18.44
Downsview
Table 5
Vacancy Rate and Net Absorption
$12.50
Vaughan
GTA Node
Q3 2013 Vacancy
Rate (%)
Net Absorption
(Sq Ft)
Downsview
5.0%
1,803
Dufferin and Finch
10.4%
-32
North Yonge
5.7%
74,571
Richmond Hill
5.9%
64,328
Vaughan
10.1%
-25,163
Yorkdale
1.6%
6.3%
$10.56
$14.20
$11.14
$10.13
$9.50
$0.00
$13.32
$11.51
$10.00
Net Rent
$20.00
$30.00
$40.00
Additional Rent
12,640
GTA North
Yorkdale
$17.25
$16.71
Richmond Hill
Dufferin and Finch
$19.18
128,147
Source: Altus InSite and DTZ Research
Source: Altus InSite and DTZ Research
www.dtz.com
Property Times
6

7. Greater Toronto Area Q3 2013
East Market
Figure 17
The GTA East recorded 124,663 square feet of negative net
absorption in Q3 2013. The vacancy rate increased to 11.6%
from 11.3% in Q2 2013.
GTA East Absorption by Node
12.0%
200,000
11.8%
11.6%
100,000
11.4%
0
11.2%
-100,000
11.0%
-200,000
10.8%
-300,000
10.6%
-400,000
10.4%
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Consumers Road
Markham
Pickering
GTA East Direct and Sublet Vacancy
Don Mills Corridor
Hwy. 404 & Steeles
Figure 16
Scarborough
Vacancy Rate
Source: Altus InSite and DTZ Research
Sublet,
589,500,
16.8%
GTA East gross asking rents averaged $25.89 per square
foot in Q3 2013.
Direct,
2,916,586,
83.2%
Consumers Road posted the highest average asking gross
rent at $26.90. Pickering posted the lowest average gross
rent this quarter at $22.80 (Figure 18).
Source: Altus InSite and DTZ Research
83.2% of vacant space was directly available with the
landlord while sublet space comprised 16.8% (Figure 16).
Net absorption over the past five quarters has averaged
negative 89,136 sq ft (Figure 17).
Table 6
Figure 18
GTA East Average Asking Rent Comparison
Consumers Road
Markham
$11.45
$14.26
$15.45
$12.18
Don Mills and Eglinton
Q3 2013 Vacancy Net Absorption
Rate (%)
(Sq Ft)
Consumers Road
15.8%
10,857
Don Mills & Eglinton
7.8%
8.9%
13.4%
-166,389
Markham
10.5%
9.9%
16.0%
11.6%
$10.72
$14.52
Highway 404 and Steeles
$12.14
$11.38
Pickering
$12.14
$10.66
18,381
GTA East
Scarborough
-7,090
Scarborough
$14.48
3,978
Pickering
$11.69
10,674
Hwy 404 & Steeles
$14.24
4,926
Duncan Mill
$12.15
Duncan Mill
Vacancy Rate and Net Absorption
GTA Node
There are 19 buildings in the pre-leasing stage ranging from
24,000 square feet to over 500,000 square feet with the
possibility of adding over 3.1 million square feet to the
inventory if completed.
-124,663
$0.00
Net Rent
$10.00
$20.00
Additional Rent
$30.00
Source: Altus InSite and DTZ Research
Source: Altus InSite and DTZ Research
www.dtz.com
Property Times
7
Vacancy Rate (%)
Net Absorption (Sq Ft)
Five nodes within the GTA East recorded positive absorption
this quarter, Consumers Road (10,857 sq ft), Don Mills and
Eglinton (4,926 sq ft), Duncan Mill (10,674 sq ft), Markham
(3,978 sq ft) and Scarborough (18,381 sq ft). Highway 404
and Steeles (-166,389 sq ft) and Pickering (-7,090 sq ft) both
recorded negative net absorption. The majority of negative
net absorption can be attributed to ING Bank of Canada
vacating their space at 111 Gordon Baker Road.
300,000

8. Greater Toronto Area Q3 2013
West Market
Figure 20
GTA West performed the best in the GTA with the highest
positive net absorption rate in the GTA in Q3 2013 of
160,246 square feet. Brampton (67,452 sq ft) and Dixie and
Eglinton (71,693 sq ft) recorded the highest positive net
absorption.
GTA West Absorption by Node
Figure 19
15.0%
200,000
14.0%
0
13.0%
-200,000
12.0%
-400,000
Vacancy Rate (%)
Net Absorption (Sq Ft)
GTA West vacancy increased to 14.0 % in Q3 2013 from
13.6% at the end of Q2 2013. This is due to a significant
increase in inventory and sublet space on the market.
400,000
11.0%
Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013
GTA West Direct and Sublet Vacancy
Airport
Burlington
Hurontario North
Mississauga City Centre
Oakville
Sublet,
1,000,315,
17.3%
Brampton
Highway 427 Corridor
Meadowvale
Mississauga South
Vacancy Rate
Source: Altus InSite and DTZ Research
Over the quarter two buildings reached completion within
the GTA West totalling 133,600 square feet. 7685
Hurontario Street in Brampton is a seven story LEED Gold
registered building that totals 73,600 square feet. 5135
Creekbank Road, Mississsauga is 60,000 square feet of
office space in a larger flex building, it is fully leased.
Direct,
4,793,627,
82.7%
Source: Altus InSite and DTZ Research
82.7% of direct vacant space was available with the landlord
while sublet space comprised 17.3% (Figure 19).
Absorption over the past five quarters has averaged positive
48,024 square feet (Figure 20).
Currently there are 16 buildings under construction that will
add 1.5 million square feet to the market between 2013 and
2015. Also, there are 45 buildings in the pre-leasing stage
totalling over 5.6 million square feet.
Table 7
Figure 21
GTA West Average Asking Rent Comparison
Mississauga City Centre
Vacancy Rate and Net Absorption
GTA Node
GTA West gross asking rents averaged $27.09 in Q3. The
Mississauga City Centre posted the highest gross rent at
$32.01. Mississauga South continues to be the most
affordable area with an average gross rent of $22.45 (Figure
21).
$16.34
Highway 427 Corridor
Q3 2013 Vacancy
Rate (%)
Net Absorption
(Sq Ft)
Airport
14.4%
13.0%
67,452
Burlington
16.3%
-76,458
Highway 427 Corridor
13.0%
Hurontario North
$14.27
Oakville
$16.19
$18.08
$10.82
96,042
Brampton
$15.67
Meadowvale
$16.06
Brampton
$14.75
Burlington
$15.02
24,539
Hurontario North
$13.95
10.0%
27,263
Airport
Meadowvale
12.8%
-15,138
Mississauga South
Mississauga City Centre
14.9%
5,955
Mississauga South
13.8%
28,957
Oakville
17.6%
1,634
GTA West
14.0%
160,246
$12.09
$12.17
$10.44
$11.32
$11.94
$11.98
$10.75
$0.00
Net Rent
$11.71
$10.00
$20.00
$30.00
Additional Rent
Source: Altus InSite and DTZ Research
Source: Altus InSite and DTZ Research
www.dtz.com
Property Times
8

9. Greater Toronto Area Q3 2013
Statistics Summary
Table 8
Quarterly data
Total
Inventory
(Sq Ft)
Under
Construction
(Sq Ft)
Change in
Occupied
Area (Sq Ft)
Vacancy
Rate (%)
Average Net
Rent ($/psf)
Average
Additional Rent
($/psf)
Average Gross
Rent ($/psf)
DT East
4,080,172
455,000
5,690
6.8%
$19.58
$17.40
$36.98
DT North
-66,474
4.8%
$19.98
$19.47
$39.46
Q3 2013
Downtown Toronto
12,391,831
746,898
DT South
4,382,790
2,355,843
-55
3.2%
$23.60
$19.24
$42.84
DT West
13,576,221
284,405
96,183
4.8%
$20.69
$16.67
$37.37
Financial Core
32,836,276
1,911,452
-208,450
6.1%
$30.26
$25.55
$55.81
Liberty Village
2,573,143
27,834
-37,386
9.9%
$18.23
$14.27
$32.50
Downtown
69,840,433
5,781,432
-210,492
5.6%
$27.62
$26.33
$53.95
Consumers Road
4,008,828
0
10,857
15.8%
$11.45
$15.45
$26.90
Don Mills and Eglinton
3,506,276
0
4,926
7.8%
$12.15
$14.24
$26.39
Duncan Mill
2,120,533
0
10,674
8.9%
$11.69
$14.48
$26.17
Highway 404 and Steeles
6,026,442
0
-166,389
13.4%
$12.14
$11.38
$23.52
Markham
6,702,187
0
3,978
10.5%
$14.26
$12.18
$26.44
GTA East
Pickering
944,064
0
-7,090
9.9%
$12.14
$10.66
$22.80
Scarborough
4,062,454
0
18,381
16.0%
$10.72
$14.52
$25.24
GTA East
30,117,691
0
-124,663
11.6%
$12.79
$13.10
$25.89
Bloor
9,184,953
0
-46,772
4.8%
$19.74
$19.12
$38.86
Eglinton
4,796,205
0
-100,766
9.0%
$14.66
$17.46
$32.12
St. Clair
2,268,507
0
10,315
7.3%
$17.58
$19.28
$36.86
Midtown
16,249,665
0
-137,223
6.4%
$17.01
$18.42
$35.43
Downsview
445,556
0
1,803
5.0%
$12.50
$17.25
$29.75
Dufferin and Finch
760,209
0
-32
10.4%
$10.13
$13.32
$23.45
North Yonge
8,498,333
0
74,571
5.7%
$18.44
$19.18
$37.62
Richmond Hill
2,746,907
0
64,328
5.9%
$14.20
$11.14
$25.34
Vaughan
2,307,379
514,869
-25,163
10.1%
$16.71
$10.56
$27.27
Yorkdale
1,246,820
0
12,640
1.6%
$9.50
$11.51
$21.01
GTA North
13,408,184
514,869
128,147
6.3%
$16.99
$15.63
$32.62
Midtown
GTA North
www.dtz.com
Property Times
9

10. Greater Toronto Area Q3 2013
Table 9
Quarterly data, continued
Total
Inventory
(Sq Ft)
Under
Construction
(Sq Ft)
Airport Corp. Centre
4,914,300
Airport East
2,301,946
Airport North
Q3 2013
Change in
Occupied Area
(Sq Ft)
Vacancy
Rate (%)
Average Net
Rent ($/psf)
Average
Additional
Rent ($/psf)
Average
Gross Rent
($/psf)
180,722
12,167
13.3%
$15.24
$12.77
$28.01
0
-25,517
22.5%
$12.58
$12.51
$25.09
1,043,350
0
32,849
13.8%
$10.94
$11.63
$22.57
GTA West
Airport West
460,619
0
-2,554
20.7%
$8.80
$10.78
$19.58
Bloor and Islington
1,041,370
0
716
12.1%
$15.25
$17.05
$32.30
Brampton
3,104,863
190,000
67,452
13.0%
$14.75
$12.17
$26.92
Burlington
3,459,670
0
-76,458
16.3%
$15.02
$10.44
$25.46
Cooksville
852,464
0
36,927
24.9%
$11.11
$11.82
$22.93
Dixie and Eglinton
2,764,531
60,000
71,693
5.7%
$12.10
$9.51
$21.61
Etobicoke North
974,260
0
7,404
22.9%
$11.96
$14.66
$26.62
Etobicoke South
555,542
0
8,701
23.7%
$12.88
$14.80
$27.68
Highway 427 Corridor
2,144,028
0
15,122
10.7%
$14.69
$16.72
$31.41
Hurontario North
3,702,159
567,131
27,263
10.0%
$13.95
$11.32
$25.27
Meadowvale
5,959,072
92,778
-15,138
12.8%
$16.06
$12.09
$28.15
Mississauga City Centre
3,730,278
56,324
5,955
14.9%
$16.34
$15.67
$32.01
Oakville
3,373,271
191,436
1,634
17.6%
$18.08
$10.82
$28.90
Sheridan
1,076,325
0
-7,970
4.9%
$10.38
$11.59
$21.97
GTA West
41,458,048
1,480,391
160,246
14.0%
$14.66
$12.43
$27.09
GTA Total
171,074,021
7,776,692
-179,190
8.8%
$15.61
$14.34
$29.95
www.dtz.com
Property Times 10

11. Greater Toronto Area Q3 2013
Definitions
Absorption:
Difference (positive or negative) between total Occupied Area for current
quarter/year and total Occupied Area from previous quarter/year.
Asking Rate:
Posted rental rate, in dollars per sq. ft. per annum, for a specific available
space. This rate is typically a negotiable cost.
Available Area:
The area contained within a building that is currently being marketed as
available for lease with an immediate or future possession date.
Building Class:
Class A: Higher quality combination of design, materials, tenant mix, age, size
and location.
Class B: Lower quality combination of design, materials, tenant mix, age, size
and location.
Class C: remaining poorer quality properties
Building Completion:
A development in which the main contract has been completed, whether this
be to shell and core or developer’s finish. Also the tenant has taken
occupancy of the space.
Direct Available:
Space available for lease directly from the landlord.
Speculative Development:
A newly developed or comprehensively refurbished building undertaken
without the benefit of a secured tenant.
Sublet Available:
Space available for lease from one of the tenants in the building for the
remaining portion of their lease term.
Sublet Vacant:
The portion of Sublet Available that is physically unoccupied or unoccupied
by a tenant.
Total Additional Rent:
The sum of additional costs (realty taxes, operating costs, in-suite power) for
all spaces in a building. This amount is typically not negotiable.
Total Available:
Sum of Direct Available Area and Sublet Available Area.
Total Available Rate:
Total of Direct and Sublet Available Area divided by Total Office Area and
expressed as a percentage.
Total Vacant:
Sum of Direct Vacant Area and Sublet Vacant Area.
Total Vacant Rate:
Total of Direct and Sublet Vacant Area divided by Total Office Area and
expressed as a percentage.
Under Construction:
A development in which work has started on the main contract. This usually
excludes demolition and site clearance contracts.
Vacant and Leased:
Space that is both physically unoccupied and leased but not currently being
marketed as available. Most often describes leased area in properties under
construction.
Vacant Area:
The area contained within a building that is currently physically unoccupied
by a tenant.
www.dtz.com
Property Times 11

12. Greater Toronto Area Q3 2013
Other DTZ Research Reports
Other research reports can be downloaded from www.dtz.com/research. These include:
Occupier Perspective
Updates on occupational markets from an occupier
perspective, with commentary, analysis, charts and data.
Global Occupancy Costs Offices
Global Occupancy Costs Logistics
Obligations of Occupation Americas
Obligations of Occupation Asia Pacific
Obligations of Occupation EMEA
Global Office Review
India Office Demand and Trends Survey 2012-13
Poland Banking Sector - January 2013
Motorways of the Sea - January 2013
The TMT Sector - October 2012
Property Times
Regular updates on occupational markets from a landlord
perspective, with commentary, charts, data and forecasts.
Coverage includes Asia Pacific, Bangkok, Beijing, Berlin,
Brisbane, Bristol, Brussels, Budapest, Central London,
Chengdu, Chongqing, Dalian, Edinburgh, Europe, Frankfurt,
Glasgow, Guangzhou, Hangzhou, Ho Chi Minh City, Hong
Kong, India, Jakarta, Japan, Kuala Lumpur, Luxembourg,
Madrid, Manchester, Melbourne, Milan, Nanjing,
Newcastle, Paris, Poland, Prague, Qingdao, Rome, Seoul,
Shanghai, Shenyang, Shenzhen, Singapore, Stockholm,
Sydney, Taipei, Tianjin, Ukraine, Warsaw, Wuhan, Xian.
Investment Market Update
Regular updates on investment market activity, with
commentary, significant deals, charts, data and forecasts.
Coverage includes Asia Pacific, Australia, Belgium, Czech
Republic, Europe, France, Germany, Italy, Japan, Mainland
China, South East Asia, Spain, Sweden, UK.
Money into Property
For more than 35 years, this has been DTZ's flagship
research report, analysing invested stock and capital flows
into real estate markets across the world. It measures the
development and structure of the global investment
market. Available for Global, Asia Pacific, Europe, North
America and UK.
Foresight
Quarterly commentary, analysis and insight into our inhouse data forecasts, including the DTZ Fair Value Index™.
Available for Global, Asia Pacific, Europe, UK and China. In
addition we publish an annual outlook report.
www.dtz.com
Insight
Thematic, ad hoc, topical and thought leading reports on
areas and issues of specific interest and relevance to real
estate markets.
Great Wall of Money - October 2013
Quantitative Easing - UK Regions - September 2013
Singapore Government Land Sales - September 2013
UK lending market -September 2013
Quantitative Easing - August 2013
Property Investment Guide Asia Pacific 2013-2014
Singapore Insight – Residential – July 2013
Net Debt Funding Gap - June 2013
China Insight - The Healthcare Sector - April 2013
City of London occupier demand - April 2013
European Sustainability Guide - April 2013
DTZ Research Data Services
For more detailed data and information, the
following are available for subscription. Please
contact graham.bruty@dtz.com for more
information.

Property Market Indicators
Time series of commercial and industrial
market data in Asia Pacific and Europe.

Real Estate Forecasts, including the DTZ
TM
Fair Value Index
Five-year rolling forecasts of commercial
and industrial markets in Asia Pacific,
Europe and the USA.

Investment Transaction Database
Aggregated overview of investment activity
in Asia Pacific and Europe.

Money into Property
DTZ’s flagship research product for over 35
years providing capital markets data
covering capital flows, size, structure,
ownership, developments and trends, and
findings of annual investor and lender
intention surveys.
Property Times 12

13. DTZ Research
DTZ Research Contacts
Global Head of Research
Head of Americas Research
Hans Vrensen
John Wickes
Phone: +44 (0)20 3296 2159
Phone: +1 312 424 8087
Email: hans.vrensen@dtz.com
Email: john.wickes@dtz.com
DTZ Business Contacts
President, DTZ Canada Inc.
Colin Ross
Phone: +1 416 863 1215
Email: colin.ross@dtz.com
Senior Vice President, Mississauga
Ryan McAskile
Phone: +1 905 848 1215
Email: ryan.mcaskile@dtz.com
Senior Vice President, GTA Northeast
Jim Brown
Phone: +1 905 943 4010
Email: jim.brown@dtz.com
DISCLAIMER
This report should not be relied upon as a basis for entering into transactions without seeking specific,
qualified, professional advice. Whilst facts have been rigorously checked, DTZ can take no
responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy within this
report. Information contained herein should not, in whole or part, be published, reproduced or
referred to without prior approval. Any such reproduction should be credited to DTZ.
© DTZ October 2013
www.dtz.com
Property Times 13

14. DTZ Foresight
2014 Annual Outlook
Time for occupiers and investors to boldly go…
5 December 2013

Economic sentiment has improved markedly, with risk aversion no longer in
focus. In fact, the outlook has now improved so much that many central
banks are looking to unwind their supportive monetary policies. Therefore,
bond yields and interest rate are projected to increase in 2014 and beyond.

Occupiers will benefit from below-inflation cost increases over the next few
years. But, in Asia Pacific we do forecast the highest regional average cost
increase. This is despite vacancy projected to increase across the region as
inflation pushes up rents (Figure 1). The pipeline of new space for 2014-15 is
limited and vacancy across the US and Europe is projected to be stable.

As far as space use efficiency, there is little room for improvement across
most Asian markets and larger European and US markets. Therefore,
occupiers need to be bold about improving their operational flexibility.
Across European markets, we consider corporate affordability for the first
time. Our analysis shows that highly productive cities are typically least
affordable, confirming price signals work. This does leave some smaller
markets with low costs and high productivity for corporate expansion.

Investors will benefit from good relative value across most markets,
especially in the US. But, lack of attractive prime opportunities has already
led investors to re-focus on non-core and non-prime opportunities.
Together with improved availability of debt and equity capital, investment
volumes have been breaking post-crisis records. But, unfortunately the
opportunity is limited in time. We forecast relative value to reduce as
interest rates rise. This means that investors need to move ahead boldly,
before relative value is no longer available.

With limited time available, market-level liquidity is expected to become
more relevant in the next few years. Based on our initial analysis across 26
key markets, London and some of the key US markets come out particularly
strong. London ranks top for cross-border liquidity also.
Contents
Introduction
Section 1: Global Outlook
Section 2: Regional Outlooks
2
3
10
Authors
Hans Vrensen
Global Head of Research
hans.vrensen@dtz.com
Magali Marton
Head of CEMEA Research
magali.marton@dtz.com
Richard Yorke
Head of UK Research
richard.yorke@dtz.com
Dominic Brown
Head of SEA / ANZ Research
dominic.brown@dtz.com
Andrew Ness
Head of North Asia Research
andrew.ness@dtz.com
John Wickes
Head of Americas Research
john.wickes@dtz.com
Figure 1
Average office stock growth (as % of existing stock) and vacancy rate
Europe
US
APAC
Nigel Almond
Head of Strategy Research
nigel.almond@dtz.com
10%
8%
20%
Fergus Hicks
Global Head of Forecasting
fergus.hicks@dtz.com
6%
15%
4%
10%
2%
5%
0%
0%
Dennis Fung
Head of Asia Pacific Forecasting
dennis.kk.fung@dtz.com
2009-13
Source: DTZ Research
DTZ Research
2014-15
Vacancy (RHS)
25%

15. 2014 Annual Outlook
Introduction
2014 promises to be another eventful year for occupiers
and investors across global property markets. If we take
stock, we note that many markets have already turned.
Occupiers consider their individual businesses and
industries in the context of a sustained global macro
economic recovery, which appears to be experiencing a
temporary slowing. Many occupiers are still focused on
achieving costs efficiencies across their portfolios, while a
small but increasing number of occupiers are getting ready
for their first expansion in years. Many investors are still
looking for distressed opportunities, while the recovery in
most core markets has already run its course. An increasing
number of investors are taking more risk and actively
looking at non-core markets, partly because of lack of core
opportunities. Even new development is back on the
agenda in selected markets. Investors are further
encouraged by a normalisation of the lending markets. This
has brought investment volumes back to historical levels in
the US and Europe while setting new records in Asia Pacific.
There has been a gradual shift towards a more positive
market sentiment, as most occupiers and investors have
shifted away from their focus on possible downside
scenarios. This does not mean that we have become blind
to the remaining challenges on the regulatory, policy and
political fronts. But, one of the biggest challenges might
now come from better than expected economic growth,
which is likely to trigger the unwinding of accommodating
central bank policies in the US and Europe. This will trigger
an increase in interest rates, which have been at record
lows for some time. Interest rate increases have
traditionally proven to be challenging for property
investors. But, they are also likely to slow economic growth
and dampen occupiers’ plans for expansion.
Despite these potential headwinds, we find ourselves for
the first time in a long while focusing on an increased
probability for upside surprises. As in previous Outlooks, we
start with a global economic and market review followed by
the three regional sections covering occupiers and investors
separately. Our key views are summarised on the front
page. Finally, I thank my senior research team in assisting
me with our fourth DTZ Research annual outlook.
With warmest regards and best wishes for 2014,
Hans Vrensen
Global Head of Research
DTZ
www.dtz.com
DTZ Foresight
2

16. 2014 Annual Outlook
Section 1: Global Outlook
Figure 2
Average per annum GDP growth
Economic and policy context
Economic growth projected to improve
As we look ahead into 2014, we note a significantly better
forecast for GDP growth for the next five years (Figure 2). It
has taken a longer time for this latest recovery to take hold
after the unprecedented global financial crisis, when
compared to previous rebounds. However, growth across
all regions is now projected to be positive. Southern
European countries drag down the regional average, but
most will return to growth. The US and China are returning
as the main engines of global economic growth.
Accommodating monetary policies in the US, Europe and
Japan have worked well to kick-start this recovery. But,
these will have to be reversed to avoid inflationary impact.
Downside scenarios have faded into the background
The improved sentiment is further evidenced by the
disappearance of the infamous euro-zone breakdown
scenario. Most of our clients are no longer asking about this
happening. The key risk the euro-zone now faces is actually
deflation. Upside and base case scenarios have become
more probable (Figure 3). However, we do note that most
of the systemic and structural impediments to effective
crisis management remain, such as the lack of a federal EU
government and the inability to compromise on key policy
decisions across US political parties. These have been the
key factors for sovereign rating downgrades and need to be
addressed to avoid future problems. In the mean time,
accommodating monetary policies have worked well and
many newly proposed regulatory controls have been
delayed to dampen their short term impact.
2009-13
8%
2014-18
China
Lithuania
6%
4%
Japan
2%
0%
Cyprus
-2%
EU
US
APAC
EU
US
APAC
Source: Oxford Economics
Figure 3
Estimated scenario probabilities
Eurozone exits
Other scenarios
Base Case
Upside
Mid-2012
End-2012
Mid-2013
End-2013
Source: Oxford Economics
Figure 4
Sustained recovery to trigger bond yield widening
As a result of quantitative easing, government bond yields
fell to historical lows in early 2013 (Figure 4). Initial talk of
tapering in the US triggered a significant widening in the
first half of 2013. With the economic recovery gaining
momentum, we anticipate that bond yields will widen in
2014 and beyond. Our economic forecasters and market
forward rates support this view. This will have significant
repercussions for our property markets, as we will see later.
However, we do need to bear in mind that central banks
will only reverse their accommodating policies if they are
concerned about inflation. This will happen if the economic
recovery remains on track. Of course, this in turn will
provide a strong positive for both corporate occupiers’
profitability and investors’ expectations for income growth.
Both would be a welcome reversal from the recent past.
www.dtz.com
Government bond yields and forward rates
8%
6%
4%
2%
Italy
US
UK
Singapore
Germany
Japan
0%
Source: Bloomberg
DTZ Foresight
3

17. 2014 Annual Outlook
Global occupier outlook
Asia Pacific vacancy to increase, offering wider choice
With most corporations focused on costs savings during the
global financial crisis, vacancy rates across European and US
markets have held steady on average, due to existing leases
and the small amount of new space delivered. With a
limited pipeline of future new supply, this is not expected
to change significantly going forward (Figure 5). However,
the situation in Asia Pacific is very different. Of course, it is
not unreasonable to expect higher office vacancy rates for
markets that add nearly 10% of space to existing inventory
every single year. However, the recent (temporary)
slowdown in economic growth and the very strong pipeline
of new supply is triggering a significant increase in vacancy
rates across this region. This vacancy provides a wider
range of choice for occupiers across the Asia Pacific region.
These trends are further confirmed when we consider
individual markets across regions on Map 1 on pages 8 & 9.
Asia Pacific occupancy costs increase most and are now
above US, with Europe remaining least affordable
Despite the increase in vacancy rates, we forecast the
highest increase in occupancy costs for the Asia Pacific
region, when compared to the US and Europe (Figure 6).
Higher inflation will push up Asia Pacific rents. Regardless
of this projected increase, many Asian markets remain
more affordable on an absolute basis. However, on average
Asia Pacific average occupancy costs have now become less
affordable than the US national average. Europe remains
the most expensive region on average, offering low costs
only in CEE and Baltic markets. Regional differences aside,
we forecast average global occupancy cost increases at just
below inflation for the next two years, which should be an
acceptable result for most corporate occupiers.
Figure 5
Average office stock growth (as % of existing stock) and
vacancy rate by region
Europe
10%
APAC
US
25%
8%
20%
6%
15%
4%
10%
2%
5%
0%
0%
2009-13
2014-15
Vacancy (RHS)
Source: DTZ Research
Figure 6
Top five most affordable markets by region and growth
rates of occupancy costs per workstation
10,000
Europe
US
APAC
10%
8,000
6,000
5%
4,000
2,000
0
0%
Costs 2013
Inflation
2014-15 pa increase (RHS)
Source: DTZ Research
Figure 7
Change in Global occupancy costs and space efficiency
www.dtz.com
Low Efficiency
Asia Pacific
STO
MUC
Europe
US
PRG
SYD
NYC
HKG
MAD
High Efficiency
Little room for efficiency gains to offset cost increases
across Asia Pacific markets, but plenty left elsewhere
If we next consider space efficiency in combination with
cost increases, we note some interesting patterns (Figure
7). Most Asia Pacific markets (except Australia) show high
space efficiency and a wide range around the highest
average regional cost increase. Europe and US show similar
regional average space efficiency, but US markets are in a
tighter range. This outlook leaves occupiers with little room
for efficiency gains in Asian markets. Across Europe and the
US, there is more room left for space efficiencies, especially
in some of the smaller markets. Therefore, we think that
occupiers need to move more boldly on improving their
operational flexibility. Our global occupier metrics tool can
help in that respect. We highlight its features in Box 1.
JKT
TKO
BEJ
LON
CHG
KOL
Low
PUN
High
2014-15 Cost increase
Source: DTZ Research
DTZ Foresight
4

18. 2014 Annual Outlook
Box 1: Global Occupier Metrics Tool
New DTZ analytical tool offers occupiers tailored solutions
In November 2013, DTZ launched its Global Occupier
Metrics Tool (GOMT) giving occupiers easy online access to
relevant market information across 130 global markets.
GOMT allows occupiers to calculate occupancy costs and
identify potential cost savings by considering their own
space utilisation against the local markets’ best practice. By
combining workplace strategy with the most up-to-date
and forecasted market information, DTZ is helping
occupiers to make informed choices.
New workplace practices trigger lower space density
Workplace practices have evolved rapidly in recent times
with companies needing fewer employees present in the
office at all times. Technology and low-cost mobile phone
and widespread wi-fi access have lead to a much more fluid
way of working for many workers across industry sectors.
This has had a knock-on effect on workplace density and
corporate occupiers often retain more space than they
actually need. Taking time to re-examine the amount of
space allocated to each employee can therefore prove a
worthwhile exercise for occupiers.
Focusing on lower cost locations can lead to false savings
Corporations looking to realise savings from their property
portfolio usually target rents and can therefore end up
moving to less desirable areas in pursuit of reduced
operating expenses. However, the biggest cost savings are
not necessarily through changing location – in fact, quite
the contrary. Focusing instead on workplace density allows
corporate real estate managers to find the right solution to
the traditional trade off between costs and talent. It means
that corporations can in fact save money, while staying in
or moving to a prime location to retain and attract the best
available talent, as long as they reduce the space per
worker.
Provides latest market research on:
 Total occupancy cost benchmarks
 Workplace density best practice
 Typical fit-out costs
 Tenant obligations of occupation.
Converts and visualises net and lease area:
 Provides visuals of lease area components
 Converts Net Internal Area (NIA) into local Gross
Lease Area (GLA).
Total occupancy cost simulation based on:
 Head count projections
 Workplace strategy
 Location and building type.
Includes environmental regulation and best
practice information:
 Environmental regulation
 Prevailing certification systems
 Local energy costs
 Typical office access modal split.
(Currently EU. only)
Typical costs savings of up to 30%, when following local
best practice
Companies with a typical portfolio of offices across major
European capitals can save up to 30% by adjusting their
space utilisation to local market best practice, according to
data from DTZ Research. This assumes a typical services
company occupying offices in the ten major European
capitals for 1,000 employees can save up to €1.5m a year –
which, given cost-to-revenue ratio. This equates to an
EBITDA increase of around three per cent.
www.dtz.com

Global Occupier Metrics Tool
http://occupiermetrics.dtz.com
DTZ Foresight
5

19. 2014 Annual Outlook
Global investor outlook
Figure 8
TM
Good relative value, with US top and APAC least attractive
Most property markets are now attractively priced based on
our Fair Value Index (“FVI”) approach (Figure 8). This has
been partly driven by an improved outlook for rental and
capital growth. However, the improvement in the relative
attractiveness of property is mostly due to historically low
government bond yields. This has resulted in a global FVIindex score of 75, which identifies over 200 markets in the
attractive categories of hot and warm. Regionally, the US
remains most attractive, with Asia Pacific re-pricing leaving
it at below the global average. Some core global markets,
like Paris and Hong Kong, have seen yield tightening to such
extent as to now render them unattractive.
Record equity capital availability combines with
normalisation of the lending markets
Apart from an improving macro outlook and good relative
value, investors have benefitted from a normalisation in the
lending markets. This is evidenced by a continued decline in
the net debt funding gap in both Japan and Europe. Figure 9
illustrates the size of the debt related problems around the
world, now solely concentrated in Europe. With the strong
uplift in non-bank lending activity the net debt funding gap
has reduced strongly. Loan portfolio sales are occurring
nearly weekly now, partly fuelled by the large volume of
available opportunistic or non-core equity capital. In fact,
there is more capital available for commercial property than
ever before. We expect this record to be broken as the
fundraising environment should improve further.
Global Fair Value Index , Q3 2013
100%
88
74
65
75
San Francisco offices
Tokyo offices
Berlin retail
New York offices
Los Angeles industrial
Singapore industrial
80%
60%
40%
New York industrial
London City offices
Sydney offices
20%
Paris CBD offices
Hong Kong offices
0%
US
Europe
APAC
Cold
Warm
Global
Hot
Source: DTZ Research
Figure 9
Global debt funding gap and available equity 2013-14
350
300
250
200
150
100
50
0
Europe
APAC
North
America
Global
Non- Core equity  Core equity  Net debt funding gap  Non-bank debt
Source: DTZ Research
Investors need to act boldly before relative value
disappears due to interest rate increases
With good relative value and improved debt and equity
capital availability, it is no wonder that investment volumes
have been breaking post-crisis records (Figure 10). But, as
our forecast of the global FVI-index shows, we expect
relative value to come down as soon as interest rates start
rising. Of course, this does not mean there are no longer
any attractive opportunities available. However, we do
expect that new capital commitment growth will slow as a
result, especially from mixed-asset investors. With some
delay, we would expect volumes to also come down as a
consequence. In other words, investors should move boldly
ahead with their execution, before relative value is no
longer available across a broad range of markets. With time
running out we think investors should carefully consider
liquidity on a market-level. Box 2 further looks into liquidity.
www.dtz.com
Figure 10
Investment volumes (USD bn) and Fair Value Index score
1,000
100
800
80
FVI (RHS)
600
60
400
40
200
20
0
0
2005
2007
Europe
2009
APAC
2011
2013E
2015F
North America
Source: DTZ Research, RCA, RealNet
DTZ Foresight
6

20. 2014 Annual Outlook
Box 2: City-level liquidity ratio analysis
Liquidity becomes more relevant when time is limited
Going forward we believe liquidity will become an even
more critical factor for global investors. Especially as real
estate’s relative attractiveness reduces in future and
available capital remains strong. Liquidity is an important
factor for investors wishing to both enter and exit markets
through the cycle. We have now extended our analysis of
liquidity from a country level to drill down to the 26 key
office markets globally.
Figure 11
City liquidity by source of capital 10 year average 2003-12
15%
10%
5%
0%
London top for overall and cross border liquidity
Overall, we find higher liquidity ratios in the US (8%)
compared to Asia Pacific (6%) and Europe (5%). See Figure
11. Even when comparing inter-regional flows (capital
invested from outside a region) there is a similar hierarchy,
albeit with wide variations. Globally, London is the most
liquid market over the last ten years (11.5%) followed by
San Francisco (11%). The most liquid city in Asia is Sydney at
9% and it is ranked fourth globally. Paris and Frankfurt show
significantly lower ratios compared to their peers. Based on
inter-regional activity, London is again the most liquid
market, underscoring the diverse range of investors
attracted to this market.
  Inter-regional
  Total
Source: DTZ Research
Figure 12
Tends in City liquidity across key gateway cities
30%
25%
20%
15%
10%
5%
www.dtz.com
10y avg
2012
10y max
10y min
Source: DTZ Research
Figure 13
Country and city level liquidity (10 year average) and 2012
market size USD bn
STO
Country Liquidity
High
Market size and liquidity key for investors
For cross border investors we believe absolute market size,
as well as liquidity is critical. In Figure 13 we compare the
average liquidity scores at both the country and city level,
together with the invested stock of a city shown by the size
of the bubble. On this basis London and New York stand out
as having critical mass and above average liquidity scores.
Both Paris and Washington are sizable markets with close to
average liquidity ratios. Of the Asian markets Singapore
stands out with the highest liquidity, but lacks relative size.
Comparatively larger markets Tokyo and Hong Kong show
lower liquidity levels.
0%
Low
New York’s liquidity more volatile, Tokyo and Paris least
For investors, it is important to understand these trends
through the cycle and the market position today. Figure 12
outlines the range through the cycle for key cities ranked by
their ten year average. This shows a wider range in San
Francisco and New York and above the global average. Paris
and Tokyo show far less volatility. In New York, Paris,
Singapore and Tokyo we see the 2012 ratio at or below the
ten year average. These leave some room to grow, in
contrast to London and San Francisco, where the ratio is
close to its ten year high.
SIN
FRA
NYC
HKG
LON
WDC
CHI
PAR
SYD
Stock Size
TKO
SHA
High
City Liquidity
EUR
$50bn
BEJ
Low
Region
$10bn
APAC
$100bn
US
Source: DTZ Research
DTZ Foresight
7

21. 2014 Annual Outlook
Map 1: New 2014-15 supply as % of stock and average 2014-15 rent growth
Source: DTZ Research
AMS
Amsterdam
BOS
Boston
DEL
Delhi
HKG
Hong Kong
ANT
Antwerp
BRU
Brussels
DEN
Denver
HOU
Houston
ATL
Atlanta
BUC
Bucharest
DUB
Dublin
HYD
Hyderabad
BCN
Barcelona
BUD
Budapest
EDI
Edinburgh
JKT
Jakarta
BEJ
Beijing
CHE
Chennai
FRA
Frankfurt
KOL
Kolkata
BER
Berlin
CHG
Chengdu
GEN
Geneva
KUL
Kuala Lumpur
BGL
Bengaluru
CHI
Chicago
GLA
Glasgow
LAX
Los Angeles
BKK
Bangkok
COP
Copenhagen
GOT
Gothenburg
LON
London
BNE
Brisbane
DAL
Dallas
HGH
Hangzhou
LUX
Luxembourg
www.dtz.com
DTZ Foresight
8

22. 2014 Annual Outlook
LYN
Lyon
MUM
Mumbai
QIN
Qingdao
SYD
Sydney
MAD
Madrid
NAN
Nanjing
RIG
Riga
SZX
Shenzhen
MEL
Melbourne
NYC
New York
ROM
Rome
TAL
Tallinn
MIA
Miami
PAR
Paris
SEA
Seattle
TKO
Tokyo
MIL
Milan
PER
Perth
SEO
Seoul
WAR
Warsaw
MIN
Minneapolis
PHL
Philadelphia
SFO
San Francisco
WDC
Washington DC
MOS
Moscow
PHX
Phoenix
SHA
Shanghai
ZUR
Zurich
MRS
Marseille
PRG
Prague
SIN
Singapore
MUC
Munich
PUN
Pune
STO
Stockholm
www.dtz.com
DTZ Foresight
9

23. 2014 Annual Outlook
Section 2: Regional Outlooks
Figure 14
Inflation, prime and average rent forecasts
EMEA occupier outlook
5%
Prime rents
4%
Most efficient cities likely to see fastest cost increases
Space efficiency, defined as space per workstation, ranges
from a low of 8 sq m in Moscow to 23 sq m in Helsinki
(about twice the sq m European average). Looking forward,
many of the most efficient cities are also likely to see the
fastest increases in occupational costs, as indicated by the
fitted line in Figure 16. Consequently, occupiers might find it
difficult to increase space efficiency in order to offset these
higher costs. Munich and Frankfurt, however, stand out as
exceptions. Here space efficiency is below the European
average, and occupiers therefore have the opportunity to
increase efficiencies in the face of rising costs. Similarly,
occupiers in less efficient cities such as Dusseldorf, Helsinki,
Amsterdam and Stockholm have the opportunity to make
efficiency gains, despite lower cost increases.
www.dtz.com
Inflation
2%
1%
0%
2013
2014
2015
Source: DTZ Research, Oxford Economics
Figure 15
Occupancy costs per workstation vs output per worker
Office stock (m sq m)
LUX
High output
Highest productivity cities are typically the most expensive
We have, for the first time, assessed affordability at the city
level (Figure 15). When we analyse corporate affordability
of property, we calculate affordability as the occupational
cost per workstation divided by economic output per
employee. This reveals that many of the highest
productivity cities, including London, Paris and Frankfurt
also have high occupancy costs. This is expected given that
all three cities are large internationally important centres
for finance and commerce. Conversely, Moscow is by far
the least affordable market. This is mainly due to high
occupancy costs and relatively low productivity. Markets
such as Copenhagen, Brussels and Rome are especially
appealing based on these metrics. All three are more
productive and affordable than the European average,
providing a good alternative for occupiers looking for
expansion.
Average rents
3%
PAR
COP
BRU
15
10
STO
ZUR
GOT
MIL
FRA
LON
GEN
ROM
MUC
BCN
Low output
Demand will push up average rents more than prime
The emerging economic recovery will feed into improved
job growth and increased occupational. The biggest
employment gains in 2014 are forecasted for office-based
service sectors such as business, information &
communication and financial services. This improved
demand and limited new supply will push up both prime
and average rents (Figure 14). It should be noted that we
forecast average rents to increase more rapidly than prime,
during 2014-15. This reflects a ‘catch-up’ effect as
secondary rents recover from their current low base. But,
the expansion of small and medium sized enterprises will
also be a contributory factor, as they take up non-prime
office space.
MAD
MOS
WAR
BUD
BUC
Low costs
High costs
Source: DTZ Research
Figure 16
Space efficiency and future occupancy costs
25
6%
20
4%
15
2%
10
0%
5
-2%
0
-4%
Space per workstation, sq m
2014-15 costs increase pa (RHS)
Source: DTZ Research
DTZ Foresight 10

24. 2014 Annual Outlook
EMEA investor outlook
Figure 17
TM
European Fair Value Index , Q3 2013
Record high attractiveness across Europe, with UK top
The European FVI score at Q3 2013 stood at 74, meaning
that Europe continues to offer a wide range of attractively
priced markets with the UK ranking as the most attractive
with a FVI score of 85 (Figure 17). The CEE markets should
also draw investors with a score of 81. Similarly, Italy and
Spain have become more attractive since the last quarter
with a combined score of 67. Here bond yields have fallen,
which has led to a corresponding fall in required returns.
Conversely, Germany, usually considered as a safe haven in
Europe, has lost some of its appeal on the back of higher
bond yields, but remains fairly priced. The French market,
however, is relatively over priced despite a majority of
markets considered as warm or hot.
Secondary opportunities increasingly attractive
Investor appetite for commercial real estate remains very
strong. However, the opportunity to acquire prime product
has been diminishing, with pricing also getting less
attractive. Consequently, investors are moving up the risk
curve in terms of country focus and non-prime assets. As
more investors struggle to source prime product, the
appetite for secondary assets will continue to grow. Based
on our analysis of transaction yields, we have already seen
the gap between prime and secondary yields stabilise at
historically highs in the UK, whilst across the rest of Europe
we have seen signs of this gap narrowing (Figure 18). With
growing investor interest for European property and
attractive pricing, we expect these gaps to narrow further
over the next 12-18 months.
Investors should take advantage of current pricing quickly,
as attractiveness will start to deteriorate
The current attractiveness of property combined with the
emerging economic recovery is likely to encourage further
inflows of equity into commercial real estate. Consequently,
we have upgraded our forecasts of investment volume to
increase by 10% to EUR 150bn in 2014. Investment volume
will increase by a further EUR 10bn in 2015 (Figure 19).
While we expect domestic investors will continue to
account for the majority of investment, non domestic
investors are projected to account for an increasing share of
investment. This increased weight of investment will
coincide with the expected fall in the FVI. This decline in
attractiveness, triggered by increased interest rates, should
ultimately result in reduced investor interest and lower
volumes. But the strong current momentum is expected to
carry through until at least 2015. Finally, we highlight the
need for proper benchmarking for investors going forward
and introduce our transaction-based index for Europe in
Box 3 next.
www.dtz.com
85
100%
81
80
73
67
61
55
74
Dublin offices
Frankfurt retail
Milan offices
Brussels offices
80%
60%
40%
London City offices
Frankfurt offices
20%
Paris CBD offices
0%
UK
Other
CEE Germany Spain Nordics France Europe
& Italy
Cold
Warm
Hot
Source: DTZ Research
Figure 18
Gap between prime and secondary transaction yields
10%
UK
8%
6%
Cont.
Europe
4%
2%
Q3 2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013
Source: DTZ Research
Figure 19
European investment volume (EUR bn) and Fair Value
TM
Index
250
100
200
80
FVI (RHS)
150
60
100
40
50
20
0
0
2005
2007
Domestic
2009
European
2011
2013E
2015F
Non European
Source: DTZ Research
DTZ Foresight 11

25. 2014 Annual Outlook
Box 3: A European transaction-based index
Transaction-based index is leading performance indicator
DTZ Research introduces for the first time a transaction
based index (TBI) for Europe to measure price performance
of the European real estate market. The main advantage of
a TBI is that it reflects actual price changes in a timelier
manner than a valuation-based index. This brings property
more in line with other asset classes, like stocks and bonds.
Valuation based indices tend to smooth price volatility and
lag behind transaction based indices in price movements.
Due to lack of a quarterly pan-European valuation-based
index going back far enough, we compare the UK indices.
Such a comparison between the UK all property capital
growth in both transaction and valuation-based indices
shows higher volatility and the leading nature inherent in
TBIs. This suggests TBIs have the capability to provide
earlier signals in major market turning points (Figure 20). In
other words, they can function as a leading indicator for
market pricing and performance.
Europe and UK TBIs show improvement in 2013Q3
According to our TBI, both UK and European capital values
improved last quarter. This represents a reversal from the
decline since mid-2011. Both have partly recovered
following the boom and bust of the global financial and
sovereign debt crisis. The lacklustre recovery in European
capital values mirrored economic conditions across Europe
during the last few years (Figure 21). We expect the TBI to
further improve, as more investors commit an increasing
amount of capital to the sector.
Rigorous methodology adjusting for lack of data in
Continental Europe
Our TBI is constructed by using actual paired sales
transactions from the Investment Transaction Database
(ITD). The DTZ TBIs are constructed following rigorous
procedures and checks, combining the ITD and a robust
econometric model built in-house by DTZ Research, based
on repeat sales regression (RSR) and enhancement
1
techniques introduced by S.Bokhari and D.Geltner (2012) .
These methodologies have been used by other providers of
TBIs, particularly in the US. RSR is at the core of constructing
the TBIs, in which the price changes of individual properties
are used to estimate price changes for the market as a
whole over time. The Europe all property TBI is constructed
as a combination of the UK and Europe ex-UK all property
TBIs, weighted by invested stock (Figure 22).
1
Bokhari, Sheharyar and David Geltner. (2012). Estimating Real Estate
Price Movement for High Frequency Tradable Indexes in a Scarce Data
Environment. Journal of Real Estate Finance and Economics 45(2)
Figure 20
DTZ UK TBI and IPD UK all property capital values, %y/y
45%
IPD
30%
DTZ
15%
0%
-15%
-30%
-45%
Q3 2003 Q3 2005 Q3 2007 Q3 2009 Q3 2011 Q3 2013
Source: DTZ Research, IPD
Figure 21
DTZ Europe and UK all property TBIs, Q1 2002 = 100
180
140
UK
100
Europe
60
Q3 2003 Q3 2005 Q3 2007 Q3 2009 Q3 2011 Q3 2013
Source: DTZ Research
Figure 22
DTZ UK TBI Indices construction process overview
DTZ Investment Transaction
Database
Data filters applied to the chosen geography
Compile data into list of dummy variables to allow for
Repeat Sales Regression (RSR)
Estimate four annual indexes based at each quarter
Using Weighted Least Square Regression (WLSR)
Convert the four annual indexes into quarterly index using
approach introduced by S.Bokhari and D.Geltner (2012)1
DTZ Transaction Based Quarterly Index
Source: DTZ Research
www.dtz.com
DTZ Foresight 12

26. 2014 Annual Outlook
Asia Pacific occupier outlook
Figure 23
Office rent growth to slow as absorption trails new supply
Office net absorption, new supply (m sq m) and change in
prime rents
In light of the improving economic outlook, the window of
opportunity for occupiers to secure preferential deals
appears to be closing, with the majority of markets forecast
to experience an increase in occupancy costs in the near
term (Figure 24). Tokyo is expected to lead the increase in
absolute and relative levels as its economic recovery gains
momentum and rents are further bolstered by a limited
development supply pipeline. Beijing is also expected to
show strong growth in occupancy costs, underpinned by
tight vacancy and limited new supply. In contrast, a large
pipeline of new completions will continue to suppress cost
growth in many Tier 2 Chinese cities. Despite registering
rental decline over 2013, Hong Kong is expected to return
to rental growth over the next two years, further
reinforcing its position as the most expensive office market
in the region.
Cost mitigation still possible in Tokyo and Australia
Rental growth is the primary driver of increases in
occupancy costs. However, there are opportunities to
mitigate this in some markets. Cost increase is the largest in
Tokyo, but space utilisation in this market is still above the
Asia Pacific average (Figure 25). Aligning space efficiency to
the average would reduce the costs of occupancy per
workstation by over 15%. Although rental growth is slower
in the Australian markets, they offer more potential for
increased space efficiency. Indeed, space consolidation has
already been underway for much of 2013, resulting in an
increase in sublease vacancy. Opportunities for cost saving
are more limited in the main Indian and Tier I Chinese
markets as both already display high levels of space
efficiency. In these cities, opportunities for cost reduction
may be achieved via decentralisation strategies.
www.dtz.com
40%
16
20%
12
8
0%
4
0
-20%
2005
2007
2009
2011
2013E
Net absorption
Change in prime rents (RHS)
2015F
New Supply
Source: DTZ Research
Figure 24
Prime office occupancy cost USD per workstation
Hong Kong
Tokyo
Sydney
Singapore
Beijing
Seoul
Shanghai
APAC average
Delhi
Taipei
Melbourne
Mumbai
Jakarta
Kuala Lumpur
Bangkok
2013
2015
0
5,000
10,000
15,000
20,000
25,000
Source: DTZ Research
Figure 25
Asia Pacific occupancy costs and space efficiency
Low Efficieny
Average occupancy costs up by 7% over the next two years
20
KUL
PER
BNE
SYD
TKO
SEO
High Efficeincy
2013 was a year of consolidation in Asia Pacific. Weakening
economic conditions over the year have impacted tenant
demand, leading to the second consecutive year of decline
in net absorption (Figure 23). Consequently, rental growth
was largely suppressed, as tenants became more concerned
about controlling office operating costs. We expect a
marginal improvement in conditions in 2014. Net
absorption is forecast to bounce back by 25% as new supply
in the emerging markets of the region will broadly act to
increase the availability of quality space there. Meanwhile,
most mature markets will continue to receive support as
new supply is limited. Given the highly diverse supply-side
condition in Asia Pacific, the rental outlook varies across the
region. But, in general we expect moderate rental increases
in the next two years.
SIN
HKG
JKT
BEJ
SHA
HGH
SZX
CHG
PUN BGL
NAN
QIN
Low
KOL
CHE
HYD
High
2014-15 Cost increase
Source: DTZ Research
DTZ Foresight 13

27. 2014 Annual Outlook
Asia Pacific investor outlook
Emerging markets drag down Asia Pacific attractiveness
At a score of 65, the Asia Pacific FVI remains in positive
territory, with more attractive markets than unattractive
markets (Figure 26). Within the region, Australia and China
offer the most opportunities to investors with a majority of
markets considered warm or hot. But, the regional score
has now begun a downward trajectory since reaching its
recent peak of 71 in Q2 2013. The reduction has been led by
the region’s emerging markets. Although these markets still
offer many attractive opportunities, structural deficits in
markets like India and an oversupply in China’s tier 2 cities
have weakened investor confidence, resulting in the
downgrade of many emerging markets from hot to warm
over Q3 2013.
Figure 26
Asia Pacific Fair Value Index
83
100%
TM
, Q3 2013
61
74
40
65
Tokyo offices
Shanghai industrial
Shanghai offices
Sydney industrial
80%
60%
40%
Delhi offices
Melbourne offices
Sydney offices
20%
Hong Kong offices
0%
Australia China
Cold
India
Other
Warm
Asia
Pacific
Hot
Source: DTZ Research
Figure 27
Interest rates to erode attractiveness & limit volumes
In light of the overall attractiveness of the Asia Pacific
region, investment volumes (excluding land sales) in 2013
are forecast to hit USD88bn (Figure 27), up by 9% year-onyear and representing the fourth consecutive year of
increase. However, we expect volumes to moderate slightly
over the next two years. Rising interest rates combined with
weaker economic growth will erode market attractiveness
of the region, while the on-going lack of available prime
stock in some locations limits market liquidity. However,
this stock shortage will provide good opportunities for
vendors to lock in capital value growth in prime locations.
Furthermore, quality assets in off-CBD, secondary locations
or development opportunities in CBD areas that offer
attractive yield spreads will become more sought after.
Asia Pacific investment volumes (USD bn) and Fair Value
TM
Index
120
100
100
80
FVI (RHS)
80
60
60
40
40
20
20
0
0
2005
2007
Domestic
2009
2011
Asia Pacific
2013E
2015F
Non Asia Pacific
Source: DTZ Research
Figure 28
Despite yield widening in some markets, rental growth is
projected to stimulate capital growth
In light of declining market attractiveness, investors need to
more carefully assess drivers of investment performance.
The expected winding down of QE will increase bond yields
and interest rates, thereby placing upward pressure on
property yields. This is especially the case in markets that
are currently at or near record lows such as Hong Kong and
Seoul (Figure 28). Investors therefore need to consider the
extent to which rental growth will offset these negative
impacts on total returns. Core markets like Tokyo, Beijing
and Shanghai will offer steady rental growth going forward.
Although Australian markets such as Sydney and Melbourne
offer limited rental growth, the continuing high spread
between property yields and bond yields provides a buffer
to any potential upward yield movement and so they
remain attractive investment destinations for now.
www.dtz.com
Prime office capital value growth forecast by component
(2014-18 pa)
8%
30
4%
15
0%
0
-4%
-15
-8%
-30
Rental Growth
Yield change in bps (RHS)
Capital value growth
Source: DTZ Research
DTZ Foresight 14

28. 2014 Annual Outlook
North American occupier outlook
Figure 29
US vacancy rate and growth in stock
Occupiers will continue to receive concessions in most
markets, as rental growth remains at inflation
As a result, we project moderate rental growth for most US
office markets, with a few notable exceptions (Figure 30).
Most landlords are expected to increase occupancy through
concessions, which in some cases offset higher rents. San
Francisco and New York are notable exceptions to the slow
rent growth projected. Demand by the technology and
professional and business services sectors will drive up
occupancy and rental rates. Landlords will be more selective
about tenants, sometimes extending discounts only to more
creditworthy tenants. They are also trying to diversify their
tenant mix to reduce risk.
Little room for efficiency savings in high cost markets
San Francisco and New York will have the highest occupier
costs growth throughout our forecast period. With many
tenants opting for more efficient floor plans (Figure 31),
there is more room for further efficiencies in New York,
Chicago and Dallas when compared to San Francisco and
Los Angeles.
2.0%
16%
1.5%
12%
1.0%
8%
0.5%
4%
0.0%
0%
2009
2010
2011
2012
2013E 2014F 2015F
Office stock
Industrial stock
Retail vacancy (RHS)
Retail stock
Office vacancy (RHS)
Industrial vacancy (RHS)
Source: DTZ Research
Figure 30
Prime office rental growth by year
2007-2013
2014
New York
4%
2015
San Francisco
2016
San Francisco
San Francisco
2%
Houston
0%
Philadelphia
Los Angeles
-2%
-4%
Phoenix
US Average
Max
Min
Inflation
Source: DTZ Research
Figure 31
US occupancy costs and space efficiency
ATL
Low Efficieny
Job growth and limited new supply lowers vacancy
Business confidence remains high about future economic
conditions. But, this has not yet triggered many new hires,
with political uncertainty and reduced government
spending making businesses pause. But, there are several
industries that will grow headcount including technology,
healthcare, energy, mining, and professional and business
services. As a result, office requirements are expected to
grow, especially in San Francisco and New York. Consumer
confidence, however, continues to trend down, which
impacts retail sales. So far, developers have largely
remained on the sidelines. Also, we forecast only modest
growth in space inventories across all property types. This
additional space will be absorbed causing vacancy to trend
down (Figure 29).
PHX BOS
DEN
PHL
WDC
MIN
NYC
In Canada, the economy is also under performing. But, the
labour market is healthier than in the US Job growth is
forecast to be moderate in 2014, triggering slow demand
for space. Vacancy is projected to rise in 2014 due to more
sub-lease space and tenants right size their space. Rents are
expected to hold steady in most markets, but will increase
in prime CBD buildings with low vacancy rates, such as
Toronto. With this exception, we expect that Canadian
occupiers will remain in strong bargaining positions in 2014.
www.dtz.com
High Efficeincy
MIA HOU DAL CHI
SEA
Low
LAX
SFO
High
2014-2015 Cost increase
Source: DTZ Research
DTZ Foresight 15

29. 2014 Annual Outlook
North American investor outlook
Figure 32
US Fair Value Index
US remain a good destination for investment
With its high transparency and property law that promotes
the facile buying and selling of commercial real estate, the
US has always been popular with investors. Add large
markets with many investment opportunities, high liquidity,
and good pricing and it is easy to understand why the US
remains top-ranked globally. Record-low US government
bond yields are an advantage for mixed asset investors - our
Fair Value Index (FVI) categorises most U.S. markets as
attractive (Figure 32). One of the impacts of the many
investment opportunities has been the growth of
opportunistic funds, which tend to look for higher yields in
secondary and tertiary markets (defined here as smaller
markets). Buildings with creditworthy clients in smaller
markets are gaining appeal. Most Canadian markets also
remain popular with investors, but the inventory is much
smaller than the US hence the lower amount of investment.
This is partly why Canadian investors have been so active in
cross-border investing.
10
100%
4
4
TM
4
52 88 79 86 88
San Francisco offices
Houston retail
New York offices
Denver industrial
Los Angeles retail
Chicago offices
New York industrial
Miami industrial
Los Angeles offices
80%
60%
40%
20%
0%
2005
2007
2009
Cold
2011
Warm
2013
Hot
Source: DTZ Research
Figure 33
US Fair Value Index
100%
TM
100
by sector, Q3 2013
78
88
88
80%
60%
Investors look for retail and industrial as prime offices
have partly re-priced
The increased competition to place capital in the larger US
metros in prime office has produced lower yields; so many
investors have started to turn their attention to other
property types. This is reflected in the larger amount of hot
retail and industrial opportunities (Figure 33). The reemergence of retail as an attractively priced property type
is surprising, given the negative impact from the recession
and the changes in US consumer buying habits and increase
internet shopping.
Relative value to come down with higher rates, but
momentum on investment volumes expected to last
Despite an expected increase in bond and mortgage rates,
we believe volumes will increase for the next two years
(Figure 34). Our base case assumes no geo-political or
global financial events. Part of this increased volume will
come from Asian investors, who have been steadily growing
their market share in many US markets. REITs are also
expected to be active buyers. Cap rates will certainly rise
over our forecast but not significantly so. The weight of
equity capital looking to be invested in property will
continue to drive growth in volumes. However, with lower
relative value, we do expect a delayed impact on investor
appetite and volume momentum after 2015.
www.dtz.com
40%
20%
0%
Retail
Industrial
Cold
Office
Warm
US
Hot
Source: DTZ Research
Figure 34
North American investment volumes (USD bn) and US Fair
TM
Value Index
400
FVI (RHS)
350
100
80
300
250
60
200
40
150
100
20
50
0
0
2007
Domestic
2009
2011
North American
2013E
2015F
Non North American
Source: DTZ Research, RCA, RealNet
DTZ Foresight 16

30. 2014 Annual Outlook
Other DTZ Research Reports
Other research reports can be downloaded from www.dtz.com/research. These include:
Occupier Perspective
Updates on occupational markets from an occupier
perspective, with commentary, analysis, charts and data.
Global Occupancy Costs Offices
Global Occupancy Costs Logistics
Obligations of Occupation Americas
Obligations of Occupation Asia Pacific
Obligations of Occupation EMEA
Global Office Review
India Office Demand and Trends Survey 2012-13
Regional Headquarters Asia Pacific November 2013
Poland Banking Sector - January 2013
Motorways of the Sea - January 2013
Property Times
Regular updates on occupational markets from a landlord
perspective, with commentary, charts, data and forecasts.
Coverage includes Asia Pacific, Bangkok, Beijing, Berlin,
Brisbane, Bristol, Brussels, Budapest, Central London,
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Regular updates on investment market activity, with
commentary, significant deals, charts, data and forecasts.
Coverage includes Asia Pacific, Australia, Belgium, Czech
Republic, Europe, France, Germany, Italy, Japan, Mainland
China, South East Asia, Spain, Sweden, UK.
Money into Property
For more than 35 years, this has been DTZ's flagship
research report, analysing invested stock and capital flows
into real estate markets across the world. It measures the
development and structure of the global investment
market. Available for Global, Asia Pacific, Europe, North
America and UK.
Foresight
Quarterly commentary, analysis and insight into our inhouse data forecasts, including the DTZ Fair Value Index™.
Available for Global, Asia Pacific, Europe, UK and China. In
addition we publish an annual outlook report.
www.dtz.com
Insight
Thematic, ad hoc, topical and thought leading reports on
areas and issues of specific interest and relevance to real
estate markets.
Net Debt Funding Gap - November 2013
UK secondary market pricing October 2013
Great Wall of Money - October 2013
Quantitative Easing - UK Regions - September 2013
Singapore Government Land Sales - September 2013
UK lending market -September 2013
Quantitative Easing - August 2013
Property Investment Guide Asia Pacific 2013-2014
Singapore Insight – Residential – July 2013
China Insight - The Healthcare Sector - April 2013
City of London occupier demand - April 2013
DTZ Research Data Services
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following are available for subscription. Please
contact graham.bruty@dtz.com for more
information.

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Time series of commercial and industrial
market data in Asia Pacific and Europe.

Real Estate Forecasts, including the DTZ
TM
Fair Value Index
Five-year rolling forecasts of commercial
and industrial markets in Asia Pacific,
Europe and the USA.

Investment Transaction Database
Aggregated overview of investment activity
in Asia Pacific and Europe.

Money into Property
DTZ’s flagship research product for over 35
years providing capital markets data
covering capital flows, size, structure,
ownership, developments and trends, and
findings of annual investor and lender
intention surveys.
DTZ Foresight 17

31. DTZ Research
DTZ Research Contacts
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Head of North Asia Research
Hans Vrensen
Andrew Ness
Phone: +44 (0)20 3296 2159
Phone: +852 2507 0507
Email: hans.vrensen@dtz.com
Email: andrew.ness@dtz.com
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Head of South East Asia / Australia New Zealand Research
Fergus Hicks
Dominic Brown
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Phone: +61 (0)2 8243 9999
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Phone: +852 2250 8864
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DISCLAIMER
This report should not be relied upon as a basis for entering into transactions without seeking specific,
qualified, professional advice. Whilst facts have been rigorously checked, DTZ can take no
responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy within this
report. Information contained herein should not, in whole or part, be published, reproduced or
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© DTZ December 2013
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DTZ Foresight 18