CAPITAL MARKETS OVERVIEW

(1)

A S I A P A C I F I C

2 0 2 0 Q 3

CAPITAL MARKETS OVERVIEW

(2)

2020 Q3 Asia Pacific Capital Markets Overview 1

Anna Town

Head, Business Development APAC

Catherine Chen

Director, Research Greater China

1. INTRODUCTIONS

2. ASIA PACIFIC CAPITAL

MARKETS OVERVIEW

3. TOKYO CAPITAL MARKETS

OVERVIEW

4. Q & A

AGENDA

Timothy Gregersen

Head of Cross Border Transactions Japan

Dennis Yeo

Head, Investor Services APAC

Gordon Marsden

Regional Director

Asia Pacific Capital Markets

Catherine Chen

Director, Research Greater China

Timothy Gregersen

(3)

KEY INVESTMENT THEMES

Asia Pacific

Core Markets Are

Seen as Safe Havens

Stabilized Assets Are

Most Sought After

Logistics, Data Centers,

and Multifamily Gain

Increasing Traction

FLIGHT TO

SAFETY

FLIGHT TO

QUALITY

FLIGHT TO

NECESSITY

(4)

TRANSACTION VOLUME BY MARKET

Source: Real Capital Analytics, updated on Nov 12th_{, 2020}

0 20 40 60 80 100 120 140 160 180 200 2015 2016 2017 2018 2019 2020 Q1-Q3

Japan Mainland China South Korea Australia Hong Kong SAR Taiwan Singapore India New Zealand Philippines Others US$ bn

Asia Pacific Transaction Volume (Excluding Land)

(5)

TOP INVESTMENT DESTINATIONS

NOTE: Apartment, hotel, industrial, office, retail and seniors housing transactions included. Entity level deals included. Development sites excluded.

Total Transaction Volume (Excluding Land)

USD Bn

2x 24% 66% 51% 35% 55% 54% 39% 51% 73% 0 4 8 12 16 Guangzhou Singapore Osaka Melbourne Sydney Beijing Shanghai Hong Kong Tokyo Seoul 2020 Q1-Q3 Transaction Volume 2020 Q3 Transaction Volume %of 2019 FY Transaction Volume

By Sector

Office 48% Industrial 15% Retail 23% Hotel 9% Apartment 4% Seniors Housing 1%

2019

Office 45% Industrial 21% Retail 19% Hotel 7% Apartment 8% Seniors Housing 0.4%

2020 Q1-Q3

Asia Pacific

(6)

2020 Q3 Asia Pacific Capital Markets Overview 5 0 2 4 6 8 10 12 Australia Canada Netherlands France United Kingdom Hong Kong SAR China Germany Singapore United States

Transaction Volume 2020 Q1-Q3 (US$ bn)

So u rc e o f C a p it a l

CROSS -BORDER INVESTMENT

55% 56% 60% 51% 53% 44% 45% 44% 40% 49% 47% 56% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2015 2016 2017 2018 2019 2020 Q1-Q3 Within Asia Pacific Outside Asia Pacific

WITHIN VS. OUTSIDE APAC

0 5 10 Indonesia Thailand New Zealand India South Korea Hong Kong SAR Singapore Australia China Japan

Transaction Volume 2020 Q1-Q3 (US$ bn)

T a rg e t o f C a p it a l

TOP 10 TARGETS OF CROSS BORDER CAPITAL TOP 10 SOURCES OF CROSS BORDER CAPITAL

(7)

Strategy

Theme

Where / What?

Why?

Core

Urban Logistics Singapore, Seoul, Sydney, Tokyo, Osaka, large mainland China cities

Structural change driving demand and an intensification in usage

Late-cycle offices Seoul, Tokyo, Singapore Flight to safety: low vacancy, and reversionary potential to return as recovery gathers pace

“No-cycle” sectors “Living” sectors, data centers, essential retail Flight to necessity: diversification and income resilience

Core-Plus to Value

Add

Mixed use Gateway cities Driving performance in attractive but supply constrained markets

Repositioning “Core in Core”: Beijing CBD, Singapore CBD Development restrictions in core CBD areas lead to opportunities for repositioning

Hi-tech/business parks Tech cities: Beijing, Tokyo, Seoul, Bengaluru,

Singapore Covid-19 accelerates growth in the TMT sector

Opportunistic

Hospitality Singapore, Japan, Hong Kong Distressed pricing but medium-term recovery

Emerging markets India office, Vietnam industrial Population growth and structural change

Platform investment Underperforming assets, development Driving performance through management

INVESTMENT STRATEGIES

(8)

GRADE A OFFICE MARKET DYNAMIC

2020 Q3

Source: Cushman & Wakefield, updated on Nov 4th_{, 2020}

Absorption

Vacancy Rate

-1.0 0.0 1.0 2.0 3.0 Seoul Bengaluru Shanghai Changsha Beijing Xiamen Kuala Lumpur Hyderabad Tokyo Shenzhen Melbourne* Nanjing Suzhou Hangzhou Xi'an Guangzhou Qingdao Chongqing Tianjin Pune Canberra* Chengdu Ahmedabad NCR Shenyang Wuhan Chennai Brisbane* Ho Chi Minh City Kolkata Dalian Taipei Hanoi Bangkok Jakarta Wuxi Sydney* Singapore Mumbai Hong Kong sf (millions) 0 5 10 15 20 25 30 35 40 45

Ho Chi Minh City Tokyo Singapore Sydney* Taipei Melbourne* Pune Canberra* Guangzhou Bengaluru Hyderabad Chennai Seoul Bangkok Hanoi Brisbane* Hong Kong Hangzhou Chengdu Beijing Mumbai Shanghai Kuala Lumpur NCR Shenzhen Nanjing Qingdao Xi'an Suzhou Jakarta Shenyang Wuhan Dalian Wuxi Chongqing Kolkata Xiamen Tianjin Changsha Ahmedabad %

*estimated based on lagged data *Q2 2020 data

QoQ Rent Growth

-6.6% -6.4% -5.3% -4.7% -3.1% -2.9% -2.8% -2.8% -2.7% -2.5% -2.4% -1.8% -1.6% -1.6% -1.4% -1.1% -1.1% -0.8% -0.7% -0.5% -0.5% -0.4% -0.4% -0.3% -0.2% -0.1% 0.0% 0.0% 0.0% 0.0% 0.1% 0.1% 0.1% 0.2% 0.5% 0.6% 0.8% 1.3% 2.3% Changsha Sydney Singapore Hong Kong Qingdao Chongqing Beijing Suzhou Shenyang Melbourne Jakarta Shenzhen Hyderabad Shanghai Mumbai NCR Wuhan Guangzhou Kuala Lumpur Hangzhou Chengdu Chennai Bangkok Tianjin Brisbane Wuxi Bengaluru Pune Taipei Tokyo Xi'an Hanoi Kolkata Dalian Nanjing Xiamen Ahmedabad Ho Chi Minh City Seoul

(9)

2020 Q3 Asia Pacific Capital Markets Overview 8 0% 20% 40% 60% 80% 100% 120% 140% Taipei Tokyo Kolkata Hong Kong Sydney Melbourne Seoul Bangkok Wuxi Singapore Brisbane Nanjing Jakarta Manila Ahmedabad Changsha Kuala Lumpur Mumbai Bengaluru NCR Beijing Chennai Hangzhou Shanghai Guangzhou Hyderabad Shenyang Tianjin Chongqing Chengdu Dalian Suzhou Xi'an Qingdao Hanoi Shenzhen Pune Wuhan Ho Chi Minh City Xiamen

% of New Supply to Stock

GRADE A OFFICE STOCK AND SUPPLY

2020 Q4 - 2022

Source: Cushman & Wakefield Research

future supply as a

share of existing

stock

0% 5% 10% 15% 20% 25% 30% 35% 40% 0 100 200 300 400 500 600 700 800 900

Australia Greater China India North Asia Southeast Asia

m

sf

Stock Q420-2022 Supply New Supply/Stock (%)

468 msf

1,895

msf

Office inventory

to rise by 25%

to 2022

Total Inventory

(10)

Concentration of tech demand

India 45% Greater China 30% Southeast Asia 15% North Asia 9% Australia 2%

2 0 1 9

*Selected major transactions Q1-Q3 2020

-0.5 0.7 1.9 3.1 4.3 5.5 Tokyo Bengaluru Hyderabad Seoul Mumbai Shenzhen Shanghai NCR Changsha Suzhou Manila Beijing Nanjing Xiamen Ahmedabad Kuala Lumpur Chennai Shenyang Hangzhou Guangzhou Jakarta Tianjin Kolkata Melbourne Pune Chongqing Taipei Canberra Singapore Chengdu Hanoi Wuxi Xi'an Brisbane Qingdao Ho Chi Minh City Sydney Bangkok sf (millions)

Q3 YTD

Net Absorption

Total: 100 msf

Q 3 Y T D

Total: 36 msf 356,000 sf Tokyo 300,000 sf Delhi-NCR 470,000 sf Chennai 1,000,000 sf Bengaluru 215,000 sf Seoul 60,000 sf Singapore 340,000 sf Hyderabad 270,000 sf Sydney 277,550 sf Tokyo 560,000 sf Pune India 37% Greater China 28% North Asia 25% Southeast Asia 8% Australia 2%

(11)

2020 Q3 Asia Pacific Capital Markets Overview 10 2.9 1.6 -0.1 -0.8 -3.1 -3.8 -5.0 -5.6 _-5.7 _-6.0 -6.1 -7.7 -8.3 -12.7 4.9 5.5 1.5 1.9 4.9 3.1 _2.8 3.6 _2.8 1.0 2.6 3.0 7.3 6.6 (15) (10) (5) 0 5 10 Mainland China

Vietnam Taiwan South Korea Indonesia Australia New Zealand

Malaysia Singapore Japan Hong Kong SAR

Thailand Philippines India

2019 GDP Growth 2020 GDP Growth

2021 -2030 GDP Average GDP Growth, y/y %

GDP GROW TH OUTLOOK

Mainland China leads recovery in 2020

(12)

2020 Q3 Asia Pacific Capital Markets Overview 11 0 50 100 150 200 250 300 350 400 450 500

OFFICE EMPLOYMENT OUTLOOK

Strong future employment growth in Greater China

Source: Moody’s Analytics, updated on Nov 4th_{, 2020}

APAC Office Employment Gain 2020-2030

Office Employment Growth Rate

Employment Increase in Office-using Industries (2020-2030)

T h o u s a n d -4% -2% 0% 2% 4% 6% 8% 2012 2015 2018 2021 2024 2027 2030

APAC United States Europe _{Greater China}

55% India 23% Philippines 10% Vietnam 4% Indonesia 3% Japan 2% Other APAC 3%

(13)

MACRO ECONOMY

Japan

Source:

Suganomics

• Continued Abenomics • New Age of Digitalization

- Remote working

(14)

REAL ESTATE TRANSACTION VOLUME

Japan | 2006

– 2020 Q3 (Preliminary)

0% 20% 40% 60% 80% 100% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2015 2016 2017 2018 2019 2020

J-REIT Public Institutional Private Unknown User/Other

0% 20% 40% 60% 80% 100% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2015 2016 2017 2018 2019 2020

Office Retail Apartment Industrial Hotel Dev Site Healthcare Others

Quarterly Transaction Volume

All Japan

Transaction Volume by Buyer Type

Transaction Volume by Asset Type

0 2 4 6 8 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (-Q3)

(15)

FUNDS TARGETING J APAN

2000

– 2020 Nov

0.6 6.7 6.5 _5.6 3.9 14.7 22.1 40.1 40.3 38.9 28.8 27.5 21.7 27.3 _26.9 28.1 28.5 34.0 37.4 41.5 35.5 0 5 10 15 20 25 30 35 40 45 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Nov. 2020 USD bn

Real Estate Opportunistic Real Estate Value Added Real Estate Core Real Estate Debt

(16)

2020 Q3 Asia Pacific Capital Markets Overview 15 2,661,022 1,085,147 193,658 2,917 1,663 2,565 3,782 8,700 13,700 0.0 M 0.5 M 1.0 M 1.5 M 2.0 M 2.5 M 3.0 M 3.5 M

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2018 2019 2020 0 10 20 30 40 50 60 70 80 90%

Hokkaido Aichi Kyoto Osaka

Fukuoka Okinawa Tokyo All Japan

2.5 M 0.0 M 0.5 M 1.0 M 1.5 M 2.0 M 2.5 M 3.0 M 3.5 M 2011 2012 2013 2014 2015 2016 2017 2018 2019

HOTEL

Japan

Source: JNTO Statistics; Construction Starts Survey, MLIT; Statistical Survey on Overnight travel, MLIT

Number of Inbound Tourists

Total GFA of Construction Starts

(Lodging Facilities)

Room Occupancy Ratio

• Hospitality industry has been hit hard but is showing signs of a slow recovery due to the easing of travel restrictions and the “GO TO Campaign”, a stimulus measure

implemented by the government.

(17)

2020 Q3 Asia Pacific Capital Markets Overview 16 5.99 T 6.80 T 7.24 T 8.00 T 8.60 T 9.30 T 10.52 T 3.9% 4.4% 4.8% 5.4% 5.8% 6.2% 6.8% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 0 2 T 4 T 6 T 8 T 10 T 12 T 2013 2014 2015 2016 2017 2018 2019 JPY

Market Size (Physical Products only) Ratio of Online Sales

RETAIL

Japan

Source: METI; Digital Economy Report 2019, Ministry of Economy, Trade and Industry, Cushman & Wakefield Research

-40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 2 0 1 8 Su m 2 0 1 9 W in 2 0 1 9 Su m 2 0 2 0 W in 2 0 2 0 Su m 2 0 1 8 Su m 2 0 1 9 W in 2 0 1 9 Su m 2 0 2 0 W in 2 0 2 0 Su m 2 0 1 8 Su m 2 0 1 9 W in 2 0 1 9 Su m 2 0 2 0 W in 2 0 2 0 Su m 2 0 1 8 Su m 2 0 1 9 W in 2 0 1 9 Su m 2 0 2 0 W in 2 0 2 0 Su m

RETAIL SALES BY SECTOR (YoY)

Total General Merchandise Apparel Drugs and Toiletries

0 100,000 200,000 300,000 400,000

PRIME RETAIL RENT BY SUBMARKET

Shibuya Shinjuku Omotesando Ginza

JPY • COVID-19 accelerating the e-commerce shift

• High street rents are highly affected by decline in inbound tourism

(18)

2020 Q3 Asia Pacific Capital Markets Overview 17 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 2 01 1 2 01 3 2 01 5 2 01 7 2 01 9 2 01 1 2 01 3 2 01 5 2 01 7 2 01 9 2 01 1 2 01 3 2 01 5 2 01 7 2 01 9 2 01 1 2 01 3 2 01 5 2 01 7 2 01 9 2 01 1 2 01 3 2 01 5 2 01 7 2 01 9 2 01 1 2 01 3 2 01 5 2 01 7 2 01 9 Ken-O Expwy Ibaraki Ken-O Expwy Saitama Kanagawa Inland

Route 16 Gaikan Road Greater Tokyo Bay JPY/Tsubo/Mo

LOGISTICS

Greater Tokyo

Greater Tokyo Logistics Market

• E-commerce demand remains high and helped push logistics vacancies to the lowest we have on record • Rents continue to grow in the markets with better accessibility to population-dense areas

Greater Tokyo Logistics Market Rent

Greater Tokyo Supply & Vacancy Rate

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 0.0 M 0.2 M 0.4 M 0.6 M 0.8 M 1.0 M 1.2 M Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q4 Q2 Q4 Q2 Q4 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Vacancy Rate Area (sq.m.)

Supply Net Absorption

(19)

2020 Q3 Asia Pacific Capital Markets Overview 18 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 J PY /t s u b o /m o n th

Grade A Asking Rent (LHS) All Grade Asking Rent (LHS) Grade A Vacancy Rate (RHS) All Grade Vacancy Rate (RHS)

0 50,000 100,000 150,000 200,000 250,000 300,000 ts u b o Chiyoda Chuo Minato Shibuya

OFFICE

Source: Cushman & Wakefield Research, Miki Shoji

Asking Rent & Vacancy Rate

Greater Tokyo Office Supply

• COVID-19 effect is emerging but will become more visible in 2021

• Lower supply in 2021 and 2022 will mute the effect to a certain extent but long time expected secondary vacancies will start to emerge

Pre-leasing

Activities

C&W FORECAST C&W FORECAST

Greater Tokyo

(20)

CONCLUSION

Political stability created under Abe’s tenure expected to continue

Transaction activity remains solid compared with global peers and capital

continues to target Tokyo and Japan, in general, as an attractive destination

As travel restrictions ease, so too will the pain in the hospitality sector and

this should have a positive knock-on effect for the retail sector as well. With

the advancement of e-commerce, the long-term outlook for the retail sector

is more clouded.

Trends in ‘Work From Home’ and the increase in new supply create

headwinds for the office sector that will take years to unfold

(21)

Q&A

Please click on the Q&A icon on the top right hand corner

of your window to submit your questions.

Timothy Gregersen

Head of Cross Border

Transactions

Japan

Dennis Yeo

Head, Investor Services

APAC

PANELISTS:

Gordon Marsden

Regional Director

Asia Pacific Capital Markets

MODERATOR:

Catherine Chen

Director, Research

Greater China

(22)

THANK YOU

This live webinar has now ended.

Gordon Marsden

Regional Director

Asia Pacific Capital Markets [email protected]

KEY CONTACT S:

Anna Town

Head, Business Development Services, APAC [email protected] Catherine Chen Director, Research Greater China [email protected] Timothy Gregersen

Dennis Yeo

Head, Investor Services APAC