SPOTLIGHT ON AUSTRALIA

(1)

A S I A P A C I F I C C A P I T A L M A R K E T S O V E R V I E W

2 0 2 1 Q 1

This live webinar will begin shortly…

SPOTLIGHT ON

AUSTRALIA

(2)

2021 Asia Pacific Capital Markets Overview 1

James Shepherd

Head of Business Development Services

Greater China

Catherine Chen

Head of Capital Markets Research

Greater China

1. INTRODUCTIONS

2. ASIA PACIFIC MARKET OVERVIEW

3. AUSTRALIA MARKET OVERVIEW

4. Q & A

AGENDA

Josh Cullen

International Director

Head of Capital Markets

-Australia & New Zealand

John Sears

Head of Research

Australia & New Zealand

Gordon Marsden

Regional Director

Asia Pacific Capital Markets

Dennis Yeo

Head, Investor Services

Asia Pacific

(3)

ASIA PACIFIC IN RECOVERY AND EXPANSION

Moody’s Global Business Cycle Status (March 2021)

Source: Moody’s Analytics

Mainland China

Vietnam

Taiwan

Expansion:

Australia

Hong Kong SAR

India

Japan

Singapore

South Korea

Recovery:

Expansion Recovery At risk Recession

(4)

GDP GROW TH OUTLOOK

Strong growth in India and Philippines in the next decade

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

1.9

5.3 _5.0

1.7

2.4

4.9

2.9

1.2

2.5

4.8

2.2

2.8

6.5

7.4

(12) (10) (8) (6) (4) (2) 0 2 4 6 8 10

Taiwan Vietnam China South Korea

New Zealand

Indonesia Australia Japan Singapore Malaysia Hong Kong SAR

Thailand India Philippines

2010-2019 Average GDP Growth 2020 GDP Growth 2021-2030 Average GDP Growth

(5)

TRANSACTION VOLUME BY MARKET

Source: Real Capital Analytics, as of on May 6th, 2021

ASIA PACIFIC TRANSACTION VOLUME (EXCLUDING LAND)

Q1 2021

TOTAL TRANSACTION VOLUME (EXCLUDING LAND)

US$ bn

0

2

4

6

8 Guangzhou

Osaka

Shanghai

Beijing

Singapore

Shenzhen

Sydney

Hong Kong

Seoul

Tokyo

2021 Q1

2020 Q1

Transaction Volume (US$ bn)

0

20

40

60

80

100

120

140

160

180

200 2016

2017

2018

2019

2020

Q1 2021

Japan

Mainland China

South Korea

Australia

Hong Kong SAR

India

Taiwan

Singapore

Others

(6)

CROSS -BORDER TRANSACTIONS

Source: Real Capital Analytics, as of on April 28th, 2021

WITHIN VS. OUTSIDE APAC

TOP SOURCES OF CROSS BORDER

TOP TARGETS OF CROSS BORDER CAPITAL

CAPITAL

Increasing proportion of investors based outside APAC

60% 51% 53% 43% 44% 40% 49% 47% 57% 56% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2018 2019 2020 Q1 2021 Within Asia Pacific Outside Asia Pacific

0 1 2 3 Singapore India China Australia Japan

2021 Q1 2020 Q1

0 2 4

Germany Hong Kong SAR Singapore Canada United States

(7)

ACTIVE NORTH AMERICAN AND EUROPEAN INVESTORS

Cross-border capital flows (last 12 months*)

Japan: 8.9b USD +42%

Source: Real Capital Analytics Feb 9th_{, 2021}

Based on deals over 100 million USD, excluding land or development sites.

Europe

North America

India: 4.1b USD +31%

Singapore: 4.1b USD +31%

Australia:

3.8b USD +312%

(8)

MOST LIQUID MARKETS IN ASIA PACIFIC

Increasing investment in industrial and retail asset

Source: Real Capital Analytics on May 6th, 2021

Billion USD Office 45% Industrial 25% Retail 21% Hotel 5% Apartment 4% Seniors Housing 0.2%

2021

Q1

Office 44% Industrial 19% Retail 16% Hotel 6% Apartment 15% Seniors Housing 0.1%

2020

Q1

0 2 4 Australia China Japan Thousands -49% -24% +57%

OFFICE

0 0.5 1 1.5 Singapore Japan -42% x3.9 times Billion USD

MULTIFAMILY

+41% 0 1 2 Australia South Korea Japan +52% +4% Billion USD

LOGISTICS

0 1 2 Australia South Korea China Thousands +2% Billion USD

RETAIL

-41% +139%

(9)

60%

40%

Single sector

Multi-sector

41% 30% 15% 14% Core Value added Opportunity Mixed strategies 73 ₇₀ ₆₉ 72 ₆₉ 76 8 ₆ ₁₀ 9 ₇ 3 18 ₂₁ ₁₈ ₁₅ ₂₂ 20 0% 20% 40% 60% 80% 100% 2015 2016 2017 2018 2019 2020

Increase Decrease No Change Undecided

STRONG PREFERENCE FOR CORE A ND INDUSTRIAL ASSET

ANREV Capital Raising Survey 2021

Capital raised for APAC non-listed real estate funds by sector strategy

Capital raised for APAC non-listed real estate funds by country strategy

Capital raised for APAC non-listed vehicles by investment style

Expectations for capital raising activity over the next two years (Global)

63% 37%

Single country Multi-country

31 3 29 Japan China Australia 50 8 Healthcare Residential Office Industrial

(10)

2 0 2 1 M AY

AUSTRALIAN CRE

MARKET OVERVIEW

(11)

AUSTRALIAN ECONOMIC GROW TH

Growth is bouncing in the short term, real GDP annual growth forecasts

Source: Deloitte Access Economics; Cushman & Wakefield

-3

-2

-1

0

1

2

3

4

5 2019

2020

2021

2022

2023

2024

2025

GDP GROWTH, Y/Y %

(12)

SENTIMENT REBOUNDS

Business conditions and consumer sentiment

Source: Westpac-Melbourne Institute; NAB; Cushman & Wakefield

60

70

80

90

100

110

120

130

140 -40

-30

-20

-10

0

10

20

30 2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

Business conditions, record high Consumer sentiment, 10 year high Business conditions Consumer sentiment Consumer sentiment (rhs) Business conditions (lhs)

(13)

ECONOMIC GROW TH OUTLOOK

T he long-term outlook is also solid, Annual average real growth

Source: Moody’s Analytics; Cushman & Wakefield

0%

1%

2%

3%

4%

5%

6%

7%

India

China, People’s Republic of

Australia

United States

Canada

Singapore

New Zealand

United Kingdom

Euro Zone

Korea (Republic of) (South)

Japan

(14)

CRE TRANSACTION VOLUMES

Total real estate purchasing activity

Source: Deloitte Access Economics; Cushman & Wakefield

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021YTD

A

$

m

ill

io

n

s

New South Wales Victoria Queensland Western Australia Other Australia Wide $45.5bn

(15)

CRE TRANSACTION VOLUMES

Total real estate purchasing activity

Source: RCA; Cushman & Wakefield

Office

59%

Retail

14%

Industrial

9%

Other

18%

Office

41%

Retail

19%

Industrial

23%

Other

17%

Q1 2021

Annual Volume

(16)

CRE TRANSACTION VOLUMES

Quarterly investment volumes

0%

10%

20%

30%

40%

50%

60%

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

Q1 2015

Q1 2016

Q1 2017

Q1 2018

Q1 2019

Q1 2020

Q1 2021

Domestic (LHS) Foreign (LHS) Rolling Annual Foreign Investment (RHS)

A

$

m

ill

io

n

s

(17)

COMMERCIAL PROPERTY INCOME RETURN TREND

Office, retail & industrial income returns and 10 year government bond yields

Source: MSCI/IPD: RBA; Cushman & Wakefield

0%

2%

4%

6%

8%

10%

12%

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021

(18)

GLOBAL YIELDS

Prime Office Cap Rates (%)

Source: MSCI/IPD: RBA; Cushman & Wakefield

0% 2% 4% 6% 8% 10% 12%

Max*

Min*

20Q4 (current)

19Q4

APAC/China

Americas

Europe

(*max/min refer to 2007-2020 Q4)

(19)

0%

5%

10%

15%

20%

25%

30%

35%

Sydney

Melbourne

Brisbane

Adelaide

Perth

Canberra

CBD OFFICE VACANCY

Vacancy moved higher in 2020, vacancy range since 1990

Source: PCA; Cushman & Wakefield

(20)

CBD OFFICE MARKET SUMMARY

Office markets have softened over 2020

Source: PCA; Cushman & Wakefield

Perth

-45,098 sqm 12m Net Absorption

20.0%

Vacancy

~$300 sqm Net Effective Rent

~50% Net Incentive

Brisbane

-9,807

sqm 12m Net Absorption

13.6%

Vacancy

$445

sqm Gross Effective Rent

41% Gross Incentive

Melbourne

22,397 sqm 12m Net Absorption

8.2%

Vacancy

$395

Net Effective Rent

39% Net Incentive

Sydney

-113,346

sqm 12m Net Absorption

8.6%

Vacancy

$910

sqm Gross Effective Rent

33% Gross Incentive

(21)

RETAIL TURNOVER GROW TH

Moving annual turnover growth rate

Source: ABS; Cushman & Wakefield

0%

2%

4%

6%

8%

10%

12%

14%

1985

1989

1993

1997

2001

2005

2009

2013

2017

2021

High CPI & stock bubble

Housing boom

Recessions Asian crisis

Tech boom & wreck

Housing/credit boom

Petrol spikes & Int rate hikes

Fiscal stimulus

GFC

Euro crisis & carbon tax Slowing income growth SE Aust. Housing boom COVID-19

(22)

ONLINE SALES

Online sales as a percentage of total sales

Source: NAB; ABS; Cushman & Wakefield

Online

share Feb

2020, 9.4

87.1 Increase during

pandemic, 3.5

(23)

RETAIL TRANSACTION VOLUMES

Annual investment volumes

New South Wales Victoria Queensland Western Australia Other Australia Wide

$2,000

$4,000

$6,000

$8,000

$10,000

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021YTD

A

$

m

ill

io

n

s

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020 2021YTD

A

$

bi

lli

on

s

(24)

Q1 2021

Source: ABS; NAB; Nearmap; Cushman & Wakefield

1. DECLINE OF MANUFACTURING

Transaction volume by market

2. RISE OF E-COMMERCE & TECHNOLOGY

3. SUBURBAN INFILL: E.G. SOUTH SYDNEY: 2009 TO 2019

– INDUSTRIAL TO APARTMENTS

MANUFACTURING SHARE OF ECONOMIC OUTPUT

5% 7% 9% 11% 13% 15% 17% 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018 P e rce n t o f to ta l re ta il t ra d e 6% 8% 10% 12% 14% 2016 2017 2018 2019 2020 2021

(25)

INDUSTRIAL TRANSACTION VOLUMES

Annual investment volumes

New South Wales Victoria Queensland Western Australia Other Australia Wide

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021YTD

A

$

m

ill

io

n

s

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020 2021YTD

A

$

bi

lli

on

s

(26)

SUMMARY

01

02

03

04

05 Economy – bouncing strongly, COVID risks

Investment – supported by economy and low interest rates

Office – suffered in 2020, resetting in 2021

Retail – adapting to structural change

(27)

Q&A

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

of your window to submit your questions.

PANELISTS:

Gordon Marsden

Regional Director

Asia Pacific Capital Markets

MODERATOR:

Catherine Chen

Director, Research

Greater China

Dennis Yeo

Head, Investor Services

Asia Pacific

Josh Cullen

International Director

Head of Capital Markets

-Australia & New Zealand

THANK YOU

ABOUT CUSHMAN & WAKEFIELD

Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 50,000 employees in over 400 offices and 60 countries. In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

© 2021 Cushman & Wakefield. All rights reserved. The information in this communication has been obtained from sources believed to be reliable but has not been verified. NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IS MADE AS TO THE CONDITION OF THE PROPERTY (OR PROPERTIES) REFERENCED HEREIN OR AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN, AND THE SAME INFORMATION IS SUBMITTED SUBJECT TO ERRORS, OMISSIONS, CHANGE OF PRICE, RENTAL OR OTHER CONDITIONS, WITHDRAWAL WITHOUT NOTICE, AND TO ANY SPECIAL LISTING CONDITIONS IMPOSED BY THE PROPERTY OWNER(S). ANY PROJECTIONS, OPINIONS OR ESTIMATES ARE SUBJECT TO UNCERTAINTY AND DO NOT SIGNIFY CURRENT OR FUTURE PROPERTY PERFORMANCE.

SPOTLIGHT ON AUSTRALIA

A S I A P A C I F I C C A P I T A L M A R K E T S O V E R V I E W

2 0 2 1 Q 1

This live webinar will begin shortly…

SPOTLIGHT ON

AUSTRALIA

James Shepherd

Head of Business Development Services

Greater China

[email protected]

Catherine Chen

Head of Capital Markets Research

Greater China

[email protected]

1.

INTRODUCTIONS

2.

ASIA PACIFIC MARKET OVERVIEW

3.

AUSTRALIA MARKET OVERVIEW

4.

Q & A

AGENDA

Josh Cullen

International Director

Head of Capital Markets

-Australia & New Zealand

[email protected]

John Sears

Head of Research

Australia & New Zealand

[email protected]

Gordon Marsden

Regional Director

Asia Pacific Capital Markets

[email protected]

Dennis Yeo

Head, Investor Services

Asia Pacific

ASIA PACIFIC IN RECOVERY AND EXPANSION

Moody’s Global Business Cycle Status (March 2021)

Mainland China

Vietnam

Taiwan

Expansion:

Australia

Hong Kong SAR

India

Japan

Singapore

South Korea

Recovery:

GDP GROW TH OUTLOOK

Strong growth in India and Philippines in the next decade

1.9

5.3

5.0

1.7

2.4

4.9

2.9

1.2

2.5

4.8

2.2

2.8

6.5

7.4

TRANSACTION VOLUME BY MARKET

ASIA PACIFIC TRANSACTION VOLUME (EXCLUDING LAND)

Q1 2021

TOTAL TRANSACTION VOLUME (EXCLUDING LAND)

0

2

4

6

8

Guangzhou

Osaka

Shanghai

_5.0