Future of Logistics Real Estate - Singapore, Asia & Australia | Colliers x Perpetual Limited

THE FUTURE OF LOGISTICS REAL ESTATE –
SINGAPORE, ASIA & AUSTRALIA
Prepared by Prepared for
Colliers x Perpetual Breakfast event – 2 October 2019

AGENDA
THE FUTURE OF LOGISTICS REAL ESTATE
SINGAPORE, ASIA & AUSTRALIA
1. Singapore Logistics Market Update
• Market overview
• Growth drivers
• Recommendations
2. Asia Logistics Market Update
• Market overview and e-commerce trends
• The top logistics real estate markets in Asia
• Transaction volumes and yields
3. Australia Logistics Market Update
• Market overview
• E-commerce
• Technology and AI

1. Singapore Logistics
Market Update

WAREHOUSE RENTS CORRELATED TO GDP GROWTH
• Warehouse rents have been a downtrend for more than 5 years – down 19.4% since peak in Q4 2013
• Now stabilizing, an economic slowdown could add headwinds
COLLIERS INTERNATIONAL | SINGAPORE
Source: Colliers International Research, Oxford Economics, JTC
27.8%
14.5%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
GDP growth vs Warehouse rental index growth
Annual warehouse rent growth Annual GDP growth (RHS)
91.0
warehouse
rental index
Peak in Q4
2013: 105.4
84.9
50
60
70
80
90
100
110
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
JTC Rental Index
(Q4 2012 = 100)
Warehouse rental index
All-industrial property rental index
Warehouse rental index

IS THERE AN OVERSUPPLY OF WAREHOUSE STOCK?
43
37
20 19
6 4
0
5
10
15
20
25
30
35
40
45
50
Japan U.S. Singapore Australia Hong
Kong
South
Korea
sq ft
Warehouse space per capita
11.3%
6%
7%
8%
9%
10%
11%
12%
0
20
40
60
80
100
120
140
2012 2013 2014 2015 2016 2017 2018 H1
2019
Warehouse vacancy rate (%)
Warehouse stock (million of sq ft)
Singapore warehouse stock and vacancy
Stock Vacancy
Source: Colliers International Research, Singapore Department of Statistics, Oxford Economics Source: Colliers International Research, JTC
• Singapore‘s warehouse space per capita is estimated to be more than 20 sq feet, among the highest in Asia
• Island-wide warehouse spaces have seen double-digit vacancy rate for the past 3 years, and remained elevated at 11.3% as of
Q2 2019

TOP OCCUPIERS IN LOGISTICS REAL ESTATE
Based on Colliers’ research, the key occupier sectors are:
Source: Colliers International Research, HomeBiz. Based on Colliers’ basket of multi-user logistics properties
The 6 occupier
groups for
warehouses
• 3PL & Logistics: freight forwarders, transport agents, supply chain and logistics support companies, E-commerce
• Manufacturing: manufacturers of automobile, furniture, semiconductors, electrical, and other types of industrial products
• Distributors & Service Providers: trading, publishing, distribution, export and import services; also includes service providers such as
design, advertising, and real estate companies and ancillary uses.
• Food, Chemicals & Pharmaceuticals: typically located in designated zones due to the strict regulations for this group
• Oil, Marine & Energy: offshore oil rigs and marine equipment
• IT & Technology: internet service and telecommunication service providers, computer and software engineering companies

E-COMMERCE AND LOGISTICS HUB STATUS TO DRIVE DEMAND
Source: Colliers International Research, Statista Portal
Singapore e-commerce market volume growth 2019-2023
• Singapore’s e-commerce revenue is expected to amount to SGD5.0
(USD3.7) billion by the end of 2019, and could grow at a CAGR of
14.7% over 2019-2023
o Amazon launched its Prime Now service in Singapore and
opened its 100,000-sq-foot fulfillment centre in July 2017
o Shopee’s opening of its new 244,000-sq-foot regional
headquarter on 3 September 2019
• The momentum should channel to stronger warehouse demand in
the long term
• Singapore is a top class logistics hub with the world’s busiest
transshipment port, 2nd busiest port in terms of total cargo
tonnage handled, 12th busiest airport by cargo traffic as of 2018
• Singapore is ranked 7th globally and 2nd in Asia in the World
Bank’s 2018 Logistics Performance Index*
• Regional trade and growth in e-commerce should benefit
Singapore given its logistics hub status.
*https://lpi.worldbank.org/international/global, scoring based on customs, infrastructure, international
shipments, logistics quality and competence, tracking and tracing; timeliness
Top e-commerce platforms in Singapore
By monthly active users By number of monthly visits
Source: Colliers International Research, EDB, iPrice. Data as of Q1 2019

EASING SUPPLY PIPELINE
Source: Colliers International Research, JTC
4%
6%
8%
10%
12%
14%
0
2
4
6
8
10
12
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
Vacancy RateMillion sq ft
Net new supply Net new demand Vacancy rate
1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
20122013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
SGDpersqftpermonth
Ramp-up Conventional/Cargo Lift Access
Warehouse net demand, net supply and vacancy rate Warehouse gross rents
Source: Colliers International Research
• Warehouse supply should ease, with annual expansion averaging 2.0% of warehouse total stock over 2018-2021
versus 8.7% for the previous four years over 2014-2017.
• We expect occupancy to gradually improve as existing supply gets absorbed and new supply tapers off after 2020
• We forecast logistics rent to fall marginally by 1.0-1.5% YOY in 2020-2021 before recovering after 2022

RECOMMENDATIONS FOR OCCUPIERS
#1 Widen space options
to decentralized locations to enjoy rental savings
#2 Review existing leases
and recalibrate your space requirements
#3 Adopt smart solutions, technological innovations and
optimization
to improve productivity and reduce costs

TOP MICRO-MARKET LOCATIONS
#3
#1
#2

RECOMMENDATIONS FOR LANDLORDS
Modern logistics facilities are built with better specifications to
align with Industry 4.0 initiatives
Image of Toll City at 60 Pioneer Road, which opened in July 2018
Source: Toll Group. Retrieved on 5 September 2019
• Larger ramps
• Higher power capacity
• Intensified floor loading
• Modern ventilation and cooling systems
• Higher ceilings
• Better loading bay facilities
• Eco-smart systems and innovative features
#1 Asset enhancement and
upgrading
to continuously improve efficiencies of existing assets and
adopt eco-smart systems
#2 Offer flexible lease terms
to differentiate your service
#3 Convert to other uses
such as cold rooms or other niche segments as supply in
these areas remain limited

THE FUTURE OF WAREHOUSES
▪ Utilising technology to
modernise customs systems
and processes
▪ On-demand warehousing
▪ Co-working space in
logistics sector
▪ Automation as a service

INVESTOR DEMAND MAY PICK UP
0
100
200
300
400
500
600
700
2000200120022003200420052006200720082009201020112012201320142015201620172018
MedianPrice
(SGDpersqfoot)
All warehouses Warehouses with land tenure of 30 years and below
Aggregate prices of warehouse transactions
Source: Colliers International Research, Real Capital Analytics, JTC, URA REALIS
• Industrial and warehouse assets have seen
increased investment demand since 2003 with the
rise of REITs
• We estimate that REITs currently own about 35–
40% of total warehouse stock
• For warehouses with 30-year tenure and below, we
estimate net yield to be around 6.0%
• Major transactions mainly involved REITs and
institutional investors:
o Mapletree Logistics Trust’s acquisition of five ramp-
up warehouses from CWT for SGD778 (USD575)
million in July 2018
o Invesco’s acquisition of a facility on Jurong Island in
February 2019
o ESR-REIT’s acquisition of 48 Pandan Road in June
2019
6%
5%
6%
7%
8%
9%
10%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Averageyield
Average yield of warehouse transactions
Source: Colliers International Research, Real Capital Analytics

RECOMMENDATIONS FOR INVESTORS
60%of GFA for Predominant Use
40%for Ancillary & Secondary Uses
TPFP lessees in new third-party
build-and-lease contracts
During investment period and 5 years thereafter
TPFP who have purchased JTC
facilities from the secondary market
Leases ≤ 30 years:
5 years from legal completion of assignment
Leases ≥ 30 years:
10 years from legal completion of assignment
All TPFP lessees Leases with ≤ 5 years remaining
URA Usage Regulation
JTC Assignment Policy – Assignment Prohibition Period
for Third Party Facility Providers (TPFPs)
Source: Colliers International Research, URA, JTC
Note: According to JTC, TPFPs are private investors or companies that provides industrialists with infrastructure
solutions and off-balance sheet financing
#1 Focus on high-growth areas
or long master leases
to lock in long-term stable revenue and mitigate risks
#2 Consider partnering with strategic
logistics operator
for market expertise and risk diversification
#3 Be mindful of the rules and
constraints
regarding industrial properties, in terms of usage, occupancy
period, subletting policy, and other restrictions

KEY TAKEAWAYS
▪ Warehouse rents are now stabilizing after five years, near term economic slowdown could be a headwind
▪ Island-wide warehouse spaces have seen double-digit vacancy rate for the past 3 years, and remained elevated at
11.3% as of Q2 2019
▪ Singapore‘s warehouse space per capita is estimated to be more than 20 sq feet, among the highest in Asia;
▪ 3PLs and logistics operators occupy 44% of warehouse space, and E-commerce should still be a demand driver. E-
commerce revenue is expected to grow at a CAGR of 14.7% over 2019-2023 to SGD8.6 billion by 2023;
▪ Singapore’s top class logistics hub status should benefit from regional trade and growth in e-commerce
▪ A more benign supply pipeline should support occupancy and rental growth
▪ Recommendations for :
▪ Occupiers: 1) Widen your space options – we recommend you three top micro-market locations; 2) Review
your existing lease and recalibrate your needs; 3) Adopt smart solutions, technological innovations and
optimization
▪ Landlords: 1) Asset enhancement and upgrading – future of warehouse; 2) Offer flexible lease terms; 3)
convert to other niche uses;
▪ Investors: 1) Focus on high-growth areas or long master leases; 2) Consider partnering with strategic logistics
operator; 3) Be mindful of the rules and constraints

2. Asia Logistics
Market Update

ASIA LOGISTICS: KEY STATISTICS
3.0%
4.0%
5.0%
6.0%
7.0%
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019F
2020F
2021F
2022F
Constant2015dollar,
YOY
Total consumer spending
Total household disposable income
-
5
10
15
20
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019YTD
BillionsUSD
China Japan Hong Kong South Korea Singapore Other countries
Annual growth of Asia total consumer spending and total
household disposable income (2009 – 2022F)
Source: Colliers International Research, Oxford Economics
Note: YTD – the data for 2019 is updated on 4 June 2019. Each of the transactions
prices is greater than USD10 million.
Asia warehouse property transaction volumes by markets
(2009 – 2019 YTD)

ASIA E-COMMERCE MARKET
New business models from the key logistics players simplify
operations and eliminate significant labour costs associated with
the traditional logistics industry.
▪ Amazon: provides logistics services to other retailers in
addition to operating its traditional online shopping platform.
▪ Zalando: has assumed
responsibility for the entire
customer-facing logistics
chain.
▪ JD.com (JD): relies on its
own logistics unit to handle
the delivery.
▪ Cainiao: has adopted an asset-
light platform model.
▪ UPS and FedEx: has also started
to provide e-fulfillment services
to small-size companies.
▪ Start-ups: exploit new
technologies, collaborating
▪ with incumbents.

ASIA PRIME LOGISTICS MARKET: Q1 2019

TOP LOGISTICS REAL ESTATE MARKETS IN ASIA
Asia logistics property investment remains attractive. The yield of the Asia logistics sector ranged between 4.3% and 6.1% in Q1 2019, and averaged
5.6% over the three years to Q1 2019
6.1%
5.1%
4.3%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
Q12014
Q32014
Q12015
Q32015
Q12016
Q32016
Q12017
Q32017
Q12018
Q32018
Q12019
Bottom quartile Median Top quartile
0
50
100
150
200
250
300
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Q12014
Q32014
Q12015
Q32015
Q12016
Q32016
Q12017
Q32017
Q12018
Q32018
Q12019
MillionsUSD
Quarterly transaction volume Number of properties
Asia logistics property transaction volumes (2014 – 2019)
Asia warehouse property yields (2014 - 2019)
Note: Each of the transactions prices is greater than USD10 million
Hong Kong: Stronger demand for old industrial buildings
which are capable for conversion
Singapore: The limited buying opportunities could lead
to a marginal yield compression for logistics and
warehouse assets
Tokyo: Average vacancy rate could fall to around 6% by
end-2020, with the asking rent starting to rise by end-
2021 and to increase at a rate of about 1% annually
Greater Seoul: Over the next five years, we believe
logistics property rents will rise firmly with yields at
around 6-7%
China: Tradable logistics assets in Tier 1 cities are very
scarce, so investors may have to search for assets in non-
Tier I cities, in particular Foshan, Tianjin and Chengdu

REGIONAL CAP RATES
Source: Colliers International Valuations & Advisory Services Global Cap Rate Report, Q2 2019
Industrial
Low High QOQ
Beijing 5.5% 6.5%
Hong Kong 3% 4%
Jakarta 8% 10%
Seoul 5.5% 6%
Shanghai 5.5% 6.5%
Singapore 5.75% 6.25%
Tokyo 3.5% 4.5%
Manila 10% 12%
Ho Chi Minh City 8% 12%
Bangkok 8% 9%
Taipei 2% 2.5%
Yangon 7% 12.75%
Sydney 4.5% 5.25%
The above rates are net yields for Class A assets in prime locations in their class in the respective locations based on survey results from Colliers'
professional valuers and appraisers. Transactions-based cap rates would typically be slightly lower than the figures shown.

COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL MARKET UPDATE I 22
This document has been prepared by Colliers International for general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed
or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the
accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for
loss and damages arising there from. This publication is for confidential use only and is the copyrighted property of Colliers International and/or its licensor(s). ©2019. All rights reserved.
Colliers International | Asia
For information, please contact
Tricia Song
Director and Head | Research | Singapore
DID: +65 6531 8536
Email: tricia.song@colliers.com
THANK YOU

Perpetual Corporate Trust
AUSTRALIAN LOGISTICS MARKET

│ MARKET OVERVIEW
│ E-COMMERCE
│ TECHNOLOGY AND AI
CONTENTS

MARKET
OVERVIEW
• Transaction Volumes
• Sources of Capital
• Capitalisation Rates
• Case Study:
Calibre Logistics Hub

-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
TransactionVolume(AUD-Millions)
TRANSACTION VOLUME
Total Industrial Total Logistics
The recent increase in e-commerce within the Australian economy has driven many “warehouses” and “storage” assets to be converted into
logistic assets during the hold period of their investment (i.e. post acquisition).
Source: RCA Analytics 2019
MARKET OVERVIEW:
TRANSACTION VOLUME

Domestic capital continually outweighed the amounts of foreign capital used to fund acquisitions within the logistics sector
MARKET OVERVIEW:
TRANSACTION VOLUME
-
500
1,000
1,500
2,000
2,500
3,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
TransactionVolume(AUDmillions) LOGISTICS TRANSACTION VOLUMES (Domestic Vs Foreign Capital)
Domestic Capital Foreign Capital

Acquisition Volume on a company-by-company basis (2014-18)
MARKET OVERVIEW:
CAPITAL SOURCES
Company Country
Charter Hall REIT Australia
Blackstone United States
Ascendas REIT Singapore
Frasers Property Singapore
Mapletree Logistics Trust Singapore
Logos Property Services Australia
AMP Capital Australia
Cache Logistics Trust Singapore
Centuria Industrial REIT Australia
Lend Lease Australia
Propertylink Australia
APN Industrial REIT Australia
DWS Group Germany
Emergent Cold United States
Invesco United States
Stamoulis Property Group Australia
Stockland Australia
IAPF Australia
Sla Homebush Pty Ltd Australia
YYS & Co Pty Ltd Australia
$- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000Thousands

Divestment Volume on a company-by-company basis (2014-18)
MARKET OVERVIEW:
CAPITAL SOURCES
Company Country
Goodman Group Australia
GIC Singapore
Australand Australia
Frasers Property Singapore
Blackstone United States
Woolworths Ltd Australia
Brickworks Australia
Growthpoint Australia
DEXUS Australia
JP Morgan United States
CIC China
CPP Investment Board Canada
Pensioenfonds ABP Netherlands
Charter Hall REIT Australia
Lederer Group Australia
Australian Industrial REIT Australia
John Swire & Sons United Kingdom
CorVal Australia
Lend Lease Australia
Kerry Stokes Australia
$- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000Thousands

Recent trend: Capitalisation rate compression resultant of the increase in value of industrial property assets across Australia as a whole. This
trend has been felt by logistics and distribution assets more than warehousing and manufacturing resultant of the increase in e-commerce and
use of technology and AI.
MARKET OVERVIEW:
CAPITALISATION RATES
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
9.0%
9.5%
2013 2014 2015 2016 2017 2018
CapitalisationRates
INDUSTRIAL VS LOGISTICS
AVERAGE CAPITALISATION RATES
Australia Industrial Property Australia Logistic / Distribution Centres

Mirvac’s Calibre Logistics Hub opened on 10 May 2019, comprising of 110,000 sqm of floor space of flexible warehousing, A-grade office space
and advanced specifications across five buildings.
The logistics precinct is strategically positioned near the newly-enhanced M4 Motorway and M7 Motorway – increasing the connectivity of
Sydney’s Western Suburbs and the CBD.
CASE STUDY:
CALIBRE LOGISTICS HUB
Source: Mirvac Source: Colliers International

E-COMMERCE
• E-commerce in Australia
• Impact of E-commerce
• Changing consumer
behaviours

E-commerce, driven by factors such as convenience and lower prices, has gained traction and transformed the way consumers interact with
retailers in Australia and globally which has seen online retailers take a greater share in sales away from bricks and mortar retailers.
E-COMMERCE IN AUSTRALIA
0%
5%
10%
15%
20%
25%
30%
18-24 25-34 35-44 45-54 55-64 65+
%Annual
Age Group
SHARE OF ONLINE SPENDING, BY AGE GROUP
Share of Online Spending Share of Adult Population
Source: NAB Online Retail Sales Index – June 2018

IMPACT OF E-COMMERCE
ON DEVELOPMENT SUPPLY
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
DevelopmentCompletions(sqm)
AUSTRALIA’S INDUSTRIAL MARKET DEVELOPMENT COMPLETIONS PER ANNUM
Source: JLL
One of the implications of the rise of e-commerce in Australia is the logistical needs to accommodate a structural change in consumer behaviour

CHANGING CONSUMER BEHAVIOURS
IMPACTING E-COMMERCE
Source: PwC Global Consumer Insights Survey 2019
PwC’s Global Consumer Insights Survey 2019 observed that global consumer behaviours are converging to a frictionless consumer transaction
experience through the increasing utilisation of digital channels such as smart phones and tablets.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Bricks and Mortar PC Tablet Mobile/Smartphone
2015 2016 2017 2018 2019
Source: Business Insider

TECHNOLOGY
AND AI
• Automation
• Evolution of Technology
in Logistics
• Implications for
Asset Owners

AUTOMATION
Rapid advancements in technology have resulted in greater flexibility, capability and productivity in the supply chain and distribution
management for tenants. The industrial warehouses and distribution centres are the main touchpoints in the supply chain
ASSET EFFICIENCY
• Optimised capacity
• Reduced downtime
• Increased storage
AUTOMATEDINDUSTRIAL
QUALITY OF PRODUCT
OUTPUT
• Automated process can detect
poor quality stock, improving
wastage, product yields and
customer satisfaction levels.
LOWER COSTS OF
PRODUCTION
• Predictability of inventory
requirements
• Lower warranty costs due to
better quality products
SAFETY AND
SUSTAINABILITY
• Reduced environmental
footprint
• Automated process reducing
workplace accidents

EVOLUTION OF TECHNOLOGY IN LOGISTICS
Advancements in logistics technology have generally been focussed on two strategies:
Software systems; and Physical equipment.
Manual Warehouse Mechanised Warehouse Automated Warehouse
Image
Processing technique Trolley Conveyor Belt Robotic and shuttle guidance system
Process Capacity
(per worker)
50 – 100 goods per hour 100 – 150 goods per hour 500 – 1,000 goods per hour
Storage
Requirements (for
20,000 product
units)
5,000 sqm 5,000 sqm 1,000 sqm
Evolution of Warehouse Processes

IMPLICATIONS FOR ASSET OWNERS
1
2
3
Increased potential for rental reversions
Importance of supply-chain management
Lower risk profile for logistic developments
4
Long term benefits arising from the believed
“shortage” of logistics / distribution supply in
Australia.
5 Transformation of existing industrial investments

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This publication contains general information only and is not intended to
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