1. The Asia Opportunity Nicholas Brooke, FRICS, SIOR President, RICS Presented at MIPIM 2004

2. Asian Bites - Overview Asia’s economies growing strongly, and SARS now just an unpleasant memory China and India providing momentum for regional growth North and East Asia still outperforming south Asia although Singapore recovering Election year - everywhere! Property markets mixed Currency and exchange rate concerns

3. Hong Kong – Cityscape

4. Economic Transformation

5. Hong Kong A vacuum in leadership but recovering nevertheless GDP: 5.4-6.2% Inflation: -0.6% Rents and prices rising, particularly in luxury residential sector Increase in tourism with subsequent spending helping to lift deflation Unemployment figures improving CEPA

6. India

7. The next driver of growth? GDP: 7.0% Inflation: 5.0% Still major challenges in attracting FDI IT and business services sectors continue to drive demand for office space – making the most of highly skilled, English speaking but low cost workforce Stable rents/prices due to high supply levels

8. Indonesia

9. Precariously poised and still muddling through GDP: 4.9% Inflation: 6.5% Economy improved in late 2003 and interest rates have fallen Limited progress in resolving bad debt issues Property markets showing signs of recovery with most interest in the retail and luxury residential sectors FDI still showing little sign of improving

10. Japan

11. An enigma and a puzzle to most, but moving out of deflation despite itself GDP: 1.4% Inflation: -0.5% Office sector rents have declined by 30% for new stock and 15% for existing since early 2001 Economic improvement could lead to increased employment opportunities Demographic challenge of ageing population

12. Mainland China - Beijing

14. Mainland China - Shanghai

15. Mainland China Huge engine of growth domestically and in Asia GDP: 7-8% Inflation: 3% FDI continues at high levels but domestic market now as important as exports Olympics 2008, World Expo 2010 Enormous amount of development – risk of markets overheating Growing interest in second tier cities Potential for social unrest, under employment, shift to the cities

16. Malaysia

17. Potential dark horse GDP: 4.4-5.0% Inflation: 1.8% Improved utilisation rate in manufacturing capacity Budgetary deficit still a concern Office sector in KL performing steadily Retail sector continues active although with high levels of supply Jury still out on new leadership

18. Philippines

19. Circumspect scepticism as rich get richer and poor go nowhere GDP: 4.2% Inflation: 4.5% Economy improved in late 2003 but concern over the upcoming Presidential election in May Call centres still main driver of demand in the office sector, again using low cost, English speaking workforce Rents expected to stabilise after 50% decline since 1997 Concerns over election/succession issues

20. Singapore

21. On the mend but not yet out of the woods GPD: 4.9-5.5% Inflation: 1.8% Financial services giving impetus to economy Office sector remains oversupplied due to weak demand over recent years Take-up of industrial space improved in later 2003 and investment in this sector is active Previous over reliance on electronics being replicated with investment in biotech Role as entrepot under threat from Malaysia

22. South Korea

23. The star pupil in the Asia class GDP: 5.5% Inflation: 2.8% Fiscal stimuli have added to recent economic growth although politics remain an issue Office sector stable in all three main Seoul markets with low vacancy rates of 1-3% Significant investment in hard assets by international institutional community US suspended disbelief and investing heavily

24. Taiwan

25. Smoke and mirrors or the real thing? GPD: 4.1-5.4% Inflation: 0.45% Government investment in infrastructure driving expansion Presidential elections could be disruptive – reunification still high on the agenda Residential prices on the rise Essentially a local play for local players

26. Thailand

27. Leaner and more streetwise but bad habits continue GDP: 8% Inflation: 2.0% Perception v informed opinion as to whether recovery for real PM Taksin has major following but are his policies sustainable Office market still oversupplied but rentals slowly improving

30. Investor profile Still very cautious and risk averse Essentially irr driven - 15% + Focus on cbd office and quality residential Growing interest in sub-centres around the region e.g. Osaka. Incheon, Guangzhou, Ho Chi Minh City Specialist players, either opportunistic or very selective e.g. retail

31. Investor profile - contd Club mentality – safety in numbers Realisation of size and scale of opportunity Reality is that most international developers will be out- manoeuvred by local competition Challenge of demonstrating added value – liquidity not in short supply