MARKETVIEW Investment activity recovers; logistics leads occupier rebound, office stabilises and retail lags Asia Pacific, Q4 2020 OFFICE RETAIL LOGISTICS INVESTMENT Q4 2020 CBRE Research CBRE Inc. 2021 | 1 Quick Stats Office q-o-q y-o-y Rent -1.2% -4.9% Capital value -1.3% -5.9% Retail q-o-q y-o-y Rent -2.1% -11.3% Capital value -2.8% -16.0% Logistics q-o-q y-o-y Rent +0.5% +0.0% Capital value +1.9% +1.8% Investment* q-o-q y-o-y Total volume (Q4) +40.8% +6.8% Cross-border (Q4) +11.6% -14.7% Source: CBRE Research, Q4 2020. *Transactions include deals above US$10 million in the office, retail, mixed, industrial, hotel and other commercial sectors Source: CBRE Research, Thompson Reuters/INSEAD Asian Business Sentiment Survey, Oxford Economics, January 2021 -1.2% / +6.6% (2020 / 2021F) 53 / 62 (Q3 2020 / Q4 2020) -1.9% / +7.5% (2020 / 2021) MARKETVIEW ASIA PACIFIC LEADS GLOBAL RECOVERY LOW INTEREST RATES FOR EVEN LONGER 2 ASIA PACIFIC Q4 2020 Table 1: Policy Interest Rate Changes ECONOMY CBRE Inc. 2021 |Q4 2020 CBRE Research Figure 1: Asia Pacific 2020 and 2021 GDP Growth Forecast (%, Y-o-Y) Source: Oxford Economics, CBRE Research, January 2021. Source: CBRE Research, Various Central Banks and Monetary Authorities, 26 January 2021. Market Rate As of 26th Jan 2021 (%) Change from end- 2019 India Repo Rate 4.00 -115 bps Mainland China 1-yr Loan Prime Rate 3.85 -30 bps Indonesia 7-day Repo Rate 3.75 -125 bps Vietnam Discount Rate 2.50 -150 bps Philippines Reverse Repo Rate 2.00 -200 bps Taiwan Discount Rate 1.125 -25 bps Thailand 1-day Repo Rate 0.5 -75 bps Korea Base Rate 0.5 -75 bps Singapore 3M SIBOR 0.405 -137 bps New Zealand Official Cash Rate 0.25 -75 bps Hong Kong SAR 3M HIBOR 0.245 -218 bps Australia Cash Rate 0.1 -75 bps Japan Call Rate -0.1 0 bps -12% -9% -6% -3% 0% 3% 6% 9% 12% Ind ia Main land Chin a Phili ppines Vietna m Sing apo re Mala ysia Hon g K ong SA R Ind onesia Thaila nd Taiw an New Zea land Austr alia Korea Japan Asia Pa cific 2020E 2021F MARKETVIEW -1.3% q-o-q -1.2% q-o-q Figure 2: Asia Pacific Office Net Absorption 3 Table 2: Major New Office Supply in Q4 2020 Source: CBRE Research, Q4 2020 Source: CBRE Research, Q4 2020. OFFICE SLIGHT IMPROVEMENT IN LEASING ACTIVITY TECH DEMAND REMAINS RESILIENT +24.2% y-o-y Market Development Name Estimated Size (000 sq. ft.) Houhai, Shenzhen Shenzhen Bay Innovation Y-o-Y change of Singapore is calculated from the change in absolute figures. Source: National Statistics Bureau, CBRE Research, Q4 2020. RETAIL -39.5% y-o-y -2.8% q-o-q -2.1% q-o-q Figure 7: Y-o-Y Growth in Overall Retail Sales In Selected Markets in 2020 ASIA PACIFIC Q4 2020 CBRE Inc. 2021 |Q4 2020 CBRE Research Note: YTD represents 2020 Jan to November (except Mainland China which full year figure is used); Y-o-Y change of Singapore is calculated from the change in absolute figures. Source: CEIC, January 2021. -40% -30% -20% -10% 0% 10% 20% Australia Japan Korea Mainland China Singapore* Hong Kong SAR H1 2020 Q3 2020 Q4 2020 YTD -60% -50% -40% -30% -20% -10% 0% 10% 20% Mainland China Australia Korea Japan Singapore* Hong Kong SAR H1 2020 Q3 2020 Q4 2020 Jan - Nov 2020 MARKETVIEW NEW SUPPLY FALLS TO RECORD LOW RENTAL DECLINE LOSES MOMENTUM Figure 10: Asia Pacific Retail Rental and Capital Value Index 6 Figure 9: Retail Development Pipeline Source: CBRE Research, Q4 2020. Source: CBRE Research , Q4 2020. ASIA PACIFIC Q4 2020 50 100 150 200 250 300 350 20 04 Q4 20 05 Q4 20 06 Q4 20 07 Q4 20 08 Q4 20 09 Q4 20 10 Q4 20 11 Q4 20 12 Q4 20 13 Q4 20 14 Q4 20 15 Q4 20 16 Q4 20 17 Q4 20 18 Q4 20 19 Q4 20 20 Q4 Ind ex Q1 20 03 = 100 Rental Index Capital Value Index Figure 11: Markets with Strongest Y-o-Y Rental Correction CBRE Inc. 2021 |Q4 2020 CBRE Research Note: The rental changes do not take temporary rental reductions into account but reflect changes in asking rents. Source: CBRE Research , Q4 2020. -30% -25% -20% -15% -10% -5% 0% Singapore Sydney Perth Brisbane Melbourne Hong Kong SAR 0 5 10 15 20 25 Shan ghai She nzh en Guan gzh ou Beijin g Ade laid e Ban gko k Hon g Ko ng SAR Ta ipei Hanoi Perth Ho Chi M inh City Delh i-NC R Melbo urn e Tok yo Sydn ey Auc klan d Seo ul Singa pore Bris ban e Mum bai Wellin gton Develo pme nt Pipe line (M illion sq. ft.) 2022F 2021F MARKETVIEW 7 CBRE Inc. 2021 |Q4 2020 CBRE Research INDUSTRIAL SENTIMENT STRENGTHENS FURTHER DEMAND REMAINS UPBEAT +28.6% y-o-y +1.9% q-o-q +0.5% q-o-q Figure 13: Logistics Vacancy Rate Note: CBRE tracks net absorption and completions for selected major markets in Asia (Mainland China Tier I Australia reported pipeline of metro areas Source: CBRE Research, Q4 2020. 0 10 20 30 40 50 60 70 Gre ater Seo ul Gre ater Tok yo Shan ghai Sydne y Gre ater Osak a Guan gzh ou Beijin g Singa pore Melbo urn e Bris ban e Auc klan d She nzh en Hon g Ko ng SAR Adelaid e Pert h Develo pme nt Pipe line (M illion sq. ft.) 2022F 2021F Source: CBRE Research, Q4 2020. 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Greater Tokyo Beijing Shanghai Sydney Shenzhen MARKETVIEW 9 INVESTMENT +6.8% y-o-y -14.7% y-o-y INVESTMENT VOLUME CONTINUES TO RECOVER Source: CBRE Research, RCA , Q4 2020; Transactions include deals above US$10 million in the Office, Retail, Mixed, Industrial, Hotel and Other commercial sectors. Note: * Other SE Asia includes Malaysia, Indonesia, the Philippines, Thailand and Vietnam. Figure 17: Transaction Volume by Market ASIA PACIFIC Q4 2020 CBRE Inc. 2021 |Q4 2020 CBRE Research Figure 18: Transaction Volume by Buyer Type 0 20 40 *Other SE Asia New Zealand India Taiwan Singapore Hong Kong SAR Australia Korea Japan Mainland China (US$ billion) 2020 2019 0 20 40 Private Institutional Property Company REIT Corporation Real Estate Fund (US$ billion) 2020 2019 MARKETVIEW 10 Figure 19:Total capital raised by Asia Pacific focused close-ended real estate funds Source: CBRE Research, Q4 2020. Table 3: Major Transactions in Q4 2020 CROSS-BORDER ACTIVITY SLOWS LOGISTICS FUNDS LEAD FUND RAISING Source: CBRE Research, Q4 2020. Figure 18: Cross-border Investment in Asia Pacific Source: CBRE Research, Preqin, Q4 2020. Market Property Name Sector Price (US$ mil) Buyer Seller Hong Kong SAR Goldin Financial Global Centre Office 1,806 Fong Tim Mirae Asset Tokyo Shinjuku Mitsui Building Office 1,627 Nippon Building Fund Mitsui Fudosan Co., Ltd. Hong Kong SAR Cityplaza 1 Office 1,270 Gaw Capital & Schroder Pamfleet Swire Properties India Prestige Asset Portfolio Mixed 1,241 Blackstone Prestige Group Japan 18 properties Mixed 1,053 Blackstone PAG ASIA PACIFIC Q4 2020 CBRE Inc. 2021 | 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0 5 10 15 20 25 30 35 40 45 US$ billi on Q1 Q2 Q3 Q4 0 5 10 15 20 25 2016 2017 2018 2019 2020 US$ billi on Q4 2020 CBRE Research MARKETVIEW OFFICE RETAIL LOGISTICS INVESTMENT 11 OUTLOOK ASIA PACIFIC Q4 2020 CBRE Inc. 2021 |Q4 2020 CBRE Research MARKETVIEW Rental Cycle Source: CBRE Research, Q4 2020. Note: Markets do not necessarily move along the curve in the same direction or at the same speed. Figure 21: Asia Pacific Retail Rental Cycle Q4 2020 Figure 20: Asia Pacific Office Rental Cycle Q4 2020 12 Figure 22: Asia Pacific Logistics Rental Cycle Q4 2020 ASIA PACIFIC Q4 2020 Decline Accelerating Decline Slowing Growth Accelerating Growth Slowing Guangzhou Shenzhen Singapore Brisbane Melbourne Sydney Tokyo Auckland Beijing Ho Chi Minh City Hong Kong SAR Mumbai Kuala Lumpur Perth Shanghai Seoul Taipei CBRE Inc. 2021 |Q4 2020 CBRE Research Decline Accelerating Decline Slowing Growth Accelerating Growth Slowing Decline Accelerating Decline Slowing Growth Accelerating Growth Slowing Beijing Shanghai Ho Chi Minh City Hanoi Shenzhen Greater Tokyo Sydney Melbourne Chennai Singapore Mumbai Guangzhou Greater Seoul Adelaide Wellington Bangalore Delhi NCR Jakarta Hong Kong SAR Shanghai Beijing Tokyo (Ginza) BangkokMelbourne Brisbane Perth Adelaide Hanoi Wellington Singapore Ho Chi Minh City Auckland Sydney TaipeiNew Delhi Mumbai Shenzhen Guangzhou Hong Kong SAR Adelaide Bangalore New Delhi Bangkok Canberra Hanoi Wellington Pune Perth Brisbane Auckland MARKETVIEW Capital Value Cycle Source: CBRE Research, Q4 2020. Note: Markets do not necessarily move along the curve in the same direction or at the same speed. The capital value cycle is intended to display the trend in prime office, retail and industrial properties Figure 23: Asia Pacific Office Capital Value Cycle Q4 2020 13 Figure 25: Asia Pacific Logistics Capital Value Cycle Q4 2020 Decline Accelerating Decline Slowing Growth Accelerating Growth Slowing Decline Accelerating Decline Slowing Growth Accelerating Growth Slowing Decline Accelerating Decline Slowing Growth Accelerating Growth Slowing Perth Bangkok Shanghai Melbourne Sydney Taipei ShanghaiSeoul Tokyo Guangzhou Brisbane Melbourne Sydney Figure 24: Asia Pacific Retail Capital Value Cycle Q4 2020 Hong Kong SAR Beijing Singapore Hong Kong SAR Kuala Lumpur Singapore Shanghai Beijing Tokyo Kuala Lumpur Bangkok Seoul Tokyo Bangalore New Delhi Bangkok Shenzhen Auckland Mumbai Beijing Kuala Lumpur ASIA PACIFIC Q4 2020 CBRE Inc. 2021 |Q4 2020 CBRE Research Auckland Auckland Melbourne Sydney Hong Kong SAR Singapore Taipei MARKETVIEW Table 4: Key Markets Indicative Grade A Office Rent and Overall Vacancy Rate 14 Source: CBRE Research, Q4 2020. Note: Grade A effective rents are used for Hong Kong SAR, Singapore, Bangkok and the Pacific, while Grade A face rents are used for other markets. Grade A rents in U.S. dollars are quoted based on net floor area basis ASIA PACIFIC Q4 2020 City Per local measurement Grade A rent local US$/sq. ft. per annum Q-o-Q change (%, local) Y-o-Y change (%, local) Vacancy rate (%) Beijing RMB sq. m. p.m. 478 113 -1.9 -3.2 17.9 Shanghai RMB sq. m. p.m. 297 73 -0.1 -4.5 19.6 Guangzhou RMB sq. m. p.m. 184 46 -0.7 -3.5 9.0 Shenzhen RMB sq. m. p.m. 212 51 -0.7 -4.6 22.5 Hong Kong SAR HK$ sq. ft. p.m. 58.4 90 -4.1 -17.4 9.9 Taipei NT$ ping p.m. 2,858 53 0.4 2.5 3.9 Tokyo JPY tsubo p.m. 37,650 123 -2.7 -3.0 1.5 Seoul CBD KRW sq. m. p.m. 33,372 64 0.2 1.6 10.7 Seoul Gangnam KRW sq. m. p.m. 29,074 57 0.0 2.8 2.0 Seoul Yeouido KRW sq. m. p.m. 25,963 57 -1.5 6.2 25.2 New Delhi CBD INR sq. ft. p.m. 295 65 0.0 0.0 9.1 New Delhi Gurgaon INR sq. ft. p.m. 98 25 -3.0 -1.9 29.7 Mumbai Nariman Point INR sq. ft. p.m. 210 43 0.0 0.0 6.9 Mumbai BKC INR sq. ft. p.m. 260 61 0.0 -3.7 20.8 Bangalore - CBD INR sq. ft. p.m. 145 32 0.0 0.0 7.8 Singapore S$ sq. ft. p.m. 10.4 94 -2.8 -10.0 6.0 Bangkok CBD THB sq. m. p.m. 1,100 41 0.0 2.5 9.8 Ho Chi Minh City US$ sq. m. p.m. 42.8 48 -3.6 -5.3 17.0 Hanoi US$ sq. m. p.m. 26.8 30 0.3 2.2 23.2 Jakarta CBD IDR sq. m. p.m. 263,029 23 -0.8 -4.5 25.3 Kuala Lumpur MYR sq. ft. p.m. 6.8 20 0.0 -1.4 23.3 Adelaide CBD A$ sq. m. p.a. 296 21 -0.3 0.5 17.4 Brisbane CBD A$ sq. m. p.a. 338 24 -4.2 -11.5 13.6 Canberra CBD A$ sq. m. p.a. 294 21 0.0 1.3 12.8 Melbourne CBD A$ sq. m. p.a. 423 30 -3.3 -10.7 8.2 Perth CBD A$ sq. m. p.a. 304 22 0.0 -7.1 20 Sydney CBD A$ sq. m. p.a. 821 59 -1.3 -15.5 8.6 Auckland CBD NZ$ sq. m. p.a. 389 26 -1.7 -3.5 8.5 Wellington CBD NZ$ sq. m. p.a. 384 26 -3.1 1.9 8.3 CBRE Inc. 2021 |Q4 2020 CBRE Research MARKETVIEW City Type Per localmeasurement Average rent local US$/sq. ft. per annum Q-o-Q change (%, local) Y-o-Y change(%, local) Beijing Shopping Centre RMB sq. m. p.day 36 187 -0.1 -2.8 Shanghai Shopping Centre RMB sq. m. p.day 35 182 -0.3 -4.0 Guangzhou Shopping Centre RMB sq. m. p.day 28 146 -0.2 -5.2 Shenzhen Shopping Centre RMB sq. m. p.day 20 105 0.1 -4.3 Hong Kong SAR High Street HK$ sq. ft. p.m. 267 413 -9.0 -27.2 Taipei High Street NT$ sq. m. p.m. 4,802 191 -1.9 -6.9 Tokyo (Ginza) High Street JPY tsubo p.m. 247,000 807 0.0 -4.3 Singapore Shopping Centre S$ sq. ft. p.m. 23 208 -3.4 -8.6 Bangkok Shopping Centre THB sq. m. p.m. 2,180 81 0.0 0.0 Ho Chi Minh City Shopping Centre US$ sq. m. p.m. 48 54 0.0 0.0 Hanoi Shopping Centre US$ sq. m. p.m. 31 35 0.6 -0.4 New Delhi Shopping Centre INR sq. ft. p.m. 1,105 180 -15.0 -15.0 New Delhi High Street INR sq. ft. p.m. 1,530 250 0.0 -15.0 Mumbai Shopping Centre INR sq. ft. p.m. 1,000 163 0.0 0.0 Sydney High Street A$ sq. m. p.a. 4,900 351 0.0 -9.3 Melbourne High Street A$ sq. m. p.a. 2,714 195 0.0 -22.1 Adelaide High Street A$ sq. m. p.a. 2,117 152 0.0 0.0 Brisbane High Street A$ sq. m. p.a. 3,137 225 0.0 -13.6 Perth High Street A$ sq. m. p.a. 2,453 176 0.0 -12.4 Auckland High Street NZ$ sq. m. p.a. 4,800 321 0.0 0.0 Wellington High Street NZ$ sq. m. p.a. 2,459 165 0.0 -5.1 Table 5: Key Markets Indicative Retail Rent 15 ASIA PACIFIC Q4 2020 CBRE Inc. 2021 |Q4 2020 CBRE Research Source: CBRE Research, Q4 2020. Note: All markets measure the relative performance of retail properties of similar quality with the exception of Vietnam, which tracks the overall market movement. MARKETVIEW Table 6: Key Markets Indicative Logistics Rent and Vacancy Rate 16 Source: CBRE Research, Q4 2020. Logistics rents - Average rental values are derived from a basket of prime logistics properties located in major industrial zones in each market. This publication starts to report effective rents in Auckland and Wellington from Q3 2020 onwards. Vacancy rates in Australian markets are as of Q3 2020. Refers to like-for-like rental change for Q-o-Q & Y-o-Y ASIA PACIFIC Q4 2020 CBRE Inc. 2021 |Q4 2020 CBRE Research City Type Per localmeasurement Average rent local US$/sq. ft. per annum Q-o-Q change (%, local) Y-o-Y change(%, local) Vacancy rate (%) Beijing Logistics RMB sq. m. p.m. 51.0 8.7 1.5% 2.7% 3.4% Shanghai Logistics RMB sq. m. p.m. 47.9 8.2 0.4% 1.7% 8.2% Guangzhou Logistics RMB sq. m. p.m. 36.8 6.3 0.8% 0.8% 13.0% Shenzhen Logistics RMB sq. m. p.m. 46.5 8.0 0.6% 1.3% 3.0% Hong Kong SAR Warehouse HK$ sq. ft. p.m. 12.2 18.9 -0.4% -6.8% 3.6% Greater Tokyo Logistics JPY tsubo p.m. 4,460 14.6 0.9% 4.0% 0.5% Greater Seoul Logistics KRW pyeong p.m. 30,834 9.6 N/A 0.6% 3.2% Singapore Warehouse (ground floor) S$ sq. ft. p.m. 1.6 14.3 0.6% 0.0% 10.1% Chennai Logistics INR sq. ft. p. m. 28.0 4.6 0.0% 0.0% N/A Pune Logistics INR sq. ft. p. m. 27.0 4.4 0.0% -3.6% N/A Sydney Warehouse A$ sq. m. p.a. 157.7 11.3 1.6% 1.7% 1.8% Melbourne Warehouse A$ sq. m. p.a. 97.5 7.0 0.0% -1.8% 3.0% Brisbane Warehouse A$ sq. m. p.a. 111.7 8.0 0.0% 0.4% 2.7% Adelaide Warehouse A$ sq. m. p.a. 78.8 5.7 0.0% 0.0% N/A Perth Warehouse A$ sq. m. p.a. 81.7 5.9 0.0% 0.0% 2.9% Auckland Warehouse NZ$ sq. m. p.a. 142.4 9.5 1.0% -1.6% 1.5% Wellington Warehouse NZ$ sq. m. p.a. 122.8 8.2 0.0% -2.5% 3.7% MARKETVIEW Table 7: Key Markets Indicative Prime Yields 17 Notes: Yield figures are rounded to the nearest 0.05%. Y-o-Y changes in yields are rounded to the nearest 5 bps. Source: CBRE Research, Q4 2020. Notes and Definitions CBREs investment transaction data in this report is based on real estate transactions valued at US$10 million and above in the office, retail, industrial, hotel, mixed-use and commercial property sectors in 15 markets throughout Asia Pacific. Development sites and residential transactions are exclud