© 2011 Deloitte Corporate Finance Limited - Private and confidential Developing for the future, for more sustainable returns and higher value Question: What will produce higher sustainable returns?

© 2011 Deloitte Corporate Finance Limited - Private and confidential Modern office development – Eastern Province Assumption: A long term investor Note: All property markets are imperfect Note: Reasonable assumptions must be made Case Study:

© 2011 Deloitte Corporate Finance Limited - Private and confidential Case Study: Modern office development – Eastern Province End user requirements: Build for the occupier not the profit Corporate identity Car parking Specification

© 2011 Deloitte Corporate Finance Limited - Private and confidential Case Study Modern office development – Eastern Province Corporate identity Impressive entrance hall Good quality atria Professional reception desk & tenant’s directory

© 2011 Deloitte Corporate Finance Limited - Private and confidential Case Study Modern office development – Eastern Province Car parking Limited public transport – preference to drive 1 car park space per 25 sq. m net minimum 1 space requires 33 sq. m

© 2011 Deloitte Corporate Finance Limited - Private and confidential Case Study Modern office development – Eastern Province Specification Flexible floor plates High speed lifts State of the art security

© 2011 Deloitte Corporate Finance Limited - Private and confidential Case Study Modern office development – Eastern Province Typical building 1,250 sq. m plot 20 levels 1,000 sq. m gross per floor (85% efficiency)

© 2011 Deloitte Corporate Finance Limited - Private and confidential Case Study High specification building 14,450 sq. m net 578 car park spaces (1:25) Triple height atria (lose 3 x levels rental) Build cost $1,460/sq. m Build cost car $ 475/sq. m $ 318/sq. m pa Medium specification building 16,575 sq. m net 166 car park spaces (1:100) Basic atria (loose 50% ground level) Build cost $1,200/sq. m Build cost car $ 475/sq. m $ 255/sq. m pa

© 2011 Deloitte Corporate Finance Limited - Private and confidential Case Study High specification building 14,450 sq. m net Construction cost offices $29.2 million Car park $ 9.1 million Land $ 7.1 million Total $ 45.4 million Rent $4.6 million pa Medium specification building 16,575 sq. m net Construction cost offices $ 23.9 million Car park $ 2.6 million Land $ 7.1 million Total $ 33.6 million $ 4.2 million pa

© 2011 Deloitte Corporate Finance Limited - Private and confidential Case Study High specification building 14,450 sq. m net Construction cost 22% higher Land - same Rent 9% higher 10% return on cost Medium specification building 16,575 sq. m net % return on cost

© 2011 Deloitte Corporate Finance Limited - Private and confidential Case Study High specification building 14,450 sq. m net Impact on yield Quality tenants – covenant strength + Longer leases – typically 5 years plus Better efficiency (85%) Lower yield – higher capital value Medium specification building 16,575 sq. m net Lower quality tenant – covenant strength - Shorter leases – typically 2 years Less efficient (80%) Higher yield – lower capital value

© 2011 Deloitte Corporate Finance Limited - Private and confidential Case Study High specification building 14,450 sq. m net Impact on value $4.6 million pa Yield say 8.0 % Capital value $57.5 million Medium specification building 16,575 sq. m net $4.2 million pa Yield say 10.0 % Capital value $42.0 million The higher specification building is $ 15.5 million more valuable (37%)

© 2011 Deloitte Corporate Finance Limited - Private and confidential Developing for the future and for higher and more sustainable value Question: What will produce higher sustainable returns? Answer: Buildings designed and constructed for end-users

© 2011 Deloitte Corporate Finance Limited - Private and confidential Developing for the future and for higher and more sustainable value How do you achieve results? By working with experienced relevant professionals

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