asian real estate market monitor - cbre.co.th real estate... · greater china ... the logistics...

ASIAN REAL ESTATE MARKET MONITORPROPERTy INvESTMENT NEwS ANd PERSPEcTIvES fROM cB RIchARd ELLIS

MAy 2010

ASIA REAL ESTATE INvESTMENT vOLUME (q1 08 – q1 10)

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0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2008 2008 2008 2008 2009 2009 2009 2009 2010

cONTENTSOverview .......................................1Feature .................................... 2−5Greater China ...............................6Hong Kong ....................................7Japan ............................................8Korea ............................................9India ...........................................10South East Asia ............................11CBRE Offices ................................12

www.cbre.com/asia

cBRE RESEARch ASIAAndrew NessT: (852) 2820 [email protected]

Ada Choi, CFAT: (852) 2820 [email protected]

Jonathan HillsT: (852) 2820 [email protected]

Source: Corresponding statistics bureaus

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Sentiment in China dipped in April as a raft of new measures directed at expanding the housing supply and cutting out speculators from the mass residential market came into force. Prices in most major cities remained firm despite the fall in transaction volume, indicating that a wait-and-see market had formed.

There was a steady flow of deals in Hong Kong although investor sentiment was somewhat affected by a number of external factors including the increased uncertainty in the eurozone and the new measures to cool the market on the mainland. Many investors adopted a wait-and-see approach, particularly for major deals.

Investors retained a healthy appetite for Japanese real estate in April and the month saw the completion of one major deal together with a steady flow of small and medium sized transactions. There will be an increased appetite for larger deals with a number of funds under pressure to spend raised equity within a limited timeframe.

Korea remained quiet although domestic conglomerates continued to retain a strong appetite for acquiring office properties for use as their headquarters. Interest among selected foreign investors for quality office assets appeared to be gradually reviving but transactions were generally thin on the ground.

Buyers were actively reviewing potential acquisitions in India but transaction volume remained low as investors continued to tread carefully. The market outlook remains positive although investors continue to be vigilant of external risks and retain a certain degree of concern that India may be impacted by further setbacks in the global economy.

Singapore enjoyed another active month as sentiment remained positive amid brisk residential sales. Developers remained keen to replenish their dwindling land banks and buy land for future development and interest in the office sector among S-REITs, local high net worth individuals and Asian and European funds continued to be strong.

Markets remain stable but China shows signs of coolingl

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ASiAn ReAl eStAte MARket MonitoR | MAY 2010 CBRe ReSeARCH

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By Anshuman MagazineChairman & MDCB Richard ellisSouth Asia Pvt. ltd.

Investor interest and activity in

the Indian logistics sector has

grown significantly in recent

years as the country’s rapid

economic development brings

with it an increased demand

for qual i ty warehous ing

and logistics facilities. The

growth of the import and

export sectors, augmentation

of the manufacturing base

and widespread urbanisation ensured the domestic

logistics sector grew at the rate of 8–10% per annum

in the period between 2002 and 2008. As the country

steadily recovers from the impact of the global financial

crisis, investor activity is rising once again in 2010 with

an array of private equity funds, joint-venture vehicles

and other major players stepping into the market.

Aside from rising demand amid the economic recovery,

investor interest in the Indian logistic sector is being

encouraged by several key drivers including a number

of major government infrastructure projects and policy

initiatives designed to foster growth in the sector. These

include the Dedicated Freight Corridor Project, which

will involve the construction of two dedicated railways

along India’s eastern and western coasts, and the

opening of Free Trade Warehousing Zones (FTWZs)

which aim to provide world class infrastructure for the

warehousing and distribution of various products and

serve as a one stop clearance point for the import and

export of goods. Elsewhere, the construction of new

logistics hubs, parks and warehouses and various other

improvements to infrastructure and technology are

well underway. The logistics sector was also accorded

industry status in the recently announced 2010-2011

Union Budget.

2010 has seen numerous venture capitalists,

investment funds and domestic warehouse developers

resume projects that had been put on hold by the

economic downturn. Even before the New Year the

sector was already the subject of considerable interest

from private equity funds with 11 deals worth a total

of US$215 million recorded in 2009. Private equity

is increasingly targeting the sector as it offers stable

cash flow and significant potential for improvement

through infrastructure upgrades and consolidation.

International companies have also been looking to

establish a foothold in the market, the most recent

entrant being Hitachi Transport System of Japan,

which acquired Flyjac Logistics for Rs 246 crore

(US$55 million) in the first quarter of 2010. On the

developer front, recent quarters have seen trends

shift from constructing purely built-to-suit facilities to

building speculative warehouses. In the first quarter

of 2010 Vision India Real Estate announced plans to

spend US$110 million to develop new logistics parks

in Bangalore and Chennai.

End users have also become more active in the first

quarter of 2010 and have resumed setting up their

logistics infrastructure after the economic downturn,

although the forthcoming implementation of the GST

(Goods & Service Tax) is encouraging companies to

reorganise and consolidate their logistics operations

across the country. Many are opting for a Hub and

Spoke Model with between five and ten National

Distribution Centres and smaller support warehouses

for meeting service deliverables and maintaining

market penetration. These projects are generally large

and modern buildings on Greenfield sites, delivering

economies of scale and increasing efficiency. This trend

has led to a surge in requirements for large distribution

centres (15,000 sqm – 80,000 sqm) close to metros,

industrial hubs and port infrastructure.

Investor trends in the Indian Logistics Sector: Market enjoys strong revival, gears up for rapid growth in 2010–2012


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The third party logistics (3PL) and outsourcing business

is also set to witness rapid growth in the years ahead.

According to the Associated Chambers of Commerce

and Industry of India (ASSOCHAM), around 55%

of Indian companies are currently outsourcing

logistic services including supply chain management

and warehousing. As the country recovers from

the economic downturn, enquiry levels from 3PL

companies for client requirements and their own multi-

client logistics centres have been steadily increasing.

KEY MARKETS

National Capital Region

The logistics market in the NCR consists of the National

Highway 8, Haryana and Ghaziabad regions and

is expected to see a revival in 2010 in terms of

consumption of warehouse space, although abundant

new supply in the pipeline will prevent any escalation

in rentals. As GST implementation draws closer, more

players will consider consolidating their operations

and will not hesitate to look away from Delhi to reduce

costs and secure more favourable rentals.

Mumbai

The logistics market in Mumbai has seen a steady

flow of new warehouse supply over the past two years

with established warehouse developers and funds

developing modern integrated warehouse complexes

in a market previously dominated by local developers

Sub Market Avg Rent in Mar 2010 (INR psf/month)

Avg Rent in Dec 2009 (INR psf/month)

national Highway 8 INR 13−15 INR 11−13



Source: CBRE Research India


4 Source: Ministry of Land and Resources

who favoured constructing old RCC (Reinforced

Cement Concrete) type buildings. This phenomenon

has been particularly noticeable in Bhiwandi district,

which aims to be a logistic hub catering to Central

and Western India. Over 4 million sf of new supply

is expected to come on stream in Mumbai over the

remainder of 2010.

Bangalore

The current demand for logistic facilities, especially

from Fast Moving Consumer Goods (FMCG)

companies and 3PL firms has encouraged an

increasing number of developers and infrastructure

companies to build large-scale logistic parks and big

warehouse facilities. Several such projects are currently

under construction across the city. Market sentiment

is upbeat, enquiry levels are rising and a number of

major transactions are expected to close in the second

quarter of 2010.

Hyderabad

Demand in the primary warehousing and logistics

area of Kompally & Medchal was lacklustre in the

first two quarters of 2009 but there was an increase

in demand and absorption during the third quarter

when a number of fresh RFP’s were floated in the

market, primarily by 3PL operators. The fourth quarter

of 2009 saw demand rise further on the back of the

improved retail scenario. The secondary market of

Pathancheru is yet to see local developer interest

despite its good location. Looking ahead, 2010 is

expected to be a busy year for the logistics sector in

Hyderabad although the 1.5 million sf of new space

currently in the pipeline means rental increases are

unlikely.

Pune

The Chakan industrial belt in North Eastern Pune is

a popular location for automotive and automotive

component manufacturers and has witnessed

immense growth over the last two years. The lack of

industrial zone land parcels has caused land rates to

rise astronomically and the zone currently has 2,500

industrial applicants on its waiting list. The area will

continue to witness a high degree of growth for the

next three years due to the ongoing influx of auto

ancillary units from the US and Europe supplying to

OEMs. Other key micromarkets including Sanaswadi



Bhiwandi inR 9−12 inR 10−13

Panvel inR 13−16 inR 14−17



kompally & Medchal inR 8−10 inR 8−9

Pathancheru inR 7.50−8.50 inR 7.25−8





north Corridor inR 14−18 inR 14−18

east Corridor inR 18−22 inR 18−22

West Corridor inR 13−18 inR 13−16

South Corridor(Grade A Multi-level industrial

Premises)

inR 16−22 inR 16−20



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& Ranjangaon and Pimpri & Chinchwad have seen

rents rise by 20% and 10% respectively over the past

few years. Looking ahead, rentals and land rates in

Pune are anticipated to increase by a minimum of 10

to 15% in the next two years and the city is set to be

provided with an additional boost with the construction

of a new international airport.

Kolkata

Kolkata is increasingly becoming an important centre

in the East and North East India freight corridor

and many companies are opting to establish their

logistic centres and warehouses here. The outlook

for the logistics sector in the city looks robust with an

increased number of enquiries reported in the first

quarter of 2010. Warehousing facilities are being

upgraded to meet the demands and standards

required by MNCs and additional land parcels being

prepared in case further infrastructure needs to be

put into place at short notice. Further infrastructural

improvements such as new roads and power supply

are also encouraging companies to evaluate Kolkata

as a potential logistics location.



Pimpri INR 25−30 INR 25−30

Chinchwad INR 25−30 INR 25−30

Hinjewadi INR 25−30 INR 25−30

Wagholi INR 14−18 INR 18−20

Sanaswadi INR 20−25 INR 20−25

Ranjangaon INR 17−20 INR 17−20

Hadapsar INR 17−20 INR 17−20

Chakan INR 23−29 INR 20−25

talegaon INR 18−20 INR 18−20

takve INR 14−17 INR 14−17

Shirwal INR 15−20 INR 15−20





tARAtAlA INR 10−12 INR 10−12




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AMARKET ANALySIS

By Stephen ChenSenior Directorinvestment PropertiesChina

[email protected]

Intime strikes Huaqiao Plaza deal

Intime Department Store Company Limited is to acquire a 100% interest in the Huaqiao Plaza shopping centre project in Hefei, Anhui from Chevalier Development for RMB 684 million (US$100 million). Intime also reportedly plans to dispose of its non-shopping centre commercial properties and use the proceeds to fund future investment.

SOEs prepare to exit property market

Some 78 state owned enterprises whose core business is not real estate have submitted plans to the State-owned Assets Supervision and Administration Commission detailing their planned withdrawal from the real estate sector. The Commission will require the 78 state owned enterprises to firstly divest their commercial real estate properties although it has yet to announce a specific deadline for selling the properties.

CIRC to issue regulations for insurers

The China Insurance Regulatory Commission (CIRC) has announced that it will shortly release detailed regulations on property investment for insurers. The new regulations will prohibit insurers from investing in residential housing, commercial property or being involved in the development stage of property projects.

Chongqing implements consumption tax

The Chinese Ministry of Finance has approved Chongqing’s application to impose a property consumption tax. The new tax will mainly target buyers who purchase more than one house or houses for commercial use. In related news, the government is set to implement a trial property tax in cities including Shanghai, Beijing, Chongqing and Shenzhen.

Sentiment in the Chinese real estate investment market dipped in April as a raft of new measures directed at expanding the housing supply and cutting out speculators from the mass residential market looked to have succeeded in curbing speculation and reigning in soaring prices, at least temporarily. the month saw noticeably less activity than had been expected but despite the fall in transaction volume prices in most major cities remained firm, indicating that a wait-and-see market had formed.

the abrupt change in market sentiment took place in mid-April after the State Council issued two notices relating to the residential market. the notices raised the down payment requirement on second home mortgages to at least 50% from 40% and increased the down payment on first homes bigger than 90 sm to 30% from 20%. they also instructed commercial banks to refuse loans to people buying their third houses in areas suffering from rapidly appreciating property prices, and also enabled local governments to restrict the number of homes a buyer could own. these measures prompted investors to take a step back and the market came to a virtual standstill. Capital-raising was still ongoing and domestic buyers were still hunting around for opportunities but the month saw very few noteworthy deals as investors paused to ascertain the longer term impact of the new legislation.

earlier this year we identified the second quarter as a period that would see a brisk flow of deals as investors swung back into action after the Chinese new Year vacation. However, given the events over the past two weeks market players are likely to remain cautious going forward and we will see limited deal flow over the next month or so, although pricing should generally remain firm.


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MARKET ANALySIS

By William LiuDirectorinvestment PropertiesHong kong

[email protected]

Govt proposes new flat sale rules

The government has proposed new non-binding measures requiring local developers to provide better information to buyers of uncompleted flats and release more details about flats sold to senior executives. Developers would have to provide accurate information in show flats and announce details of any sales of flats to senior executives of their company or related companies, including the unit involved and the price paid. The new rules would also require the address and location of developments to be clearly stated in promotional materials, which are often misleading.

RREEF CCT delists from HKEx

RREEF China Commercial Trust was the first REIT to delist from the Hong Kong Stock Exchange after receiving approval from its shareholders to sell its sole asset, Beijing Gateway Plaza, to Mapletree’s India and China Fund for US$1.16 billion. The REIT suspended trading on 19 April 2010.

Swire Properties shelves IPO

Swire Properties has dropped plans to conduct an initial public offering because of worsening market conditions. The firm had originally planed to raise around US$3 billion by listing on the Hong Kong Stock Exchange on 14 May. The property unit of conglomerate Swire Pacific abandoned the plan after shares on the Hong Kong stock and property indexes slumped in response to moves by China to tighten credit on the mainland. Market sentiment has also been hit by concerns over the Greek debt crisis.

April saw a steady flow of deals in the Hong kong real estate investment market although investor sentiment was somewhat affected by a number of external factors including the increased uncertainty in the eurozone after the downgrading of Greece’s credit rating and the mainland’s abolition of mortgages on the purchase of third homes. there were a number of small-size deals in the luxury residential and retail sectors with the largest transaction being Swire Properties’ disposal of six villas at Peel Rise on the Peak for Hk$1.098 billion.

the government introduced a series of measures during the month to boost land supply and increase transparency in the primary residential sales market. on the land supply front, the lands Department made two residential sites available for public auction, marking the first time in eight years that the government has sold land sites on the application list without the sale being triggered by developers. in line with the government’s policy of releasing more sites, the month saw the MtR Corporation start the tender process for its nam Cheong station commercial and residential project which is set to provide over 3,300 new units upon completion. Although the new measures mainly focused on the residential sector, they had a noticeable spillover effect on overall investment market sentiment.

While investors generally remain confident about the market outlook, an increasing number are adopting a wait-and-see approach, particularly for major deals worth over Hk$1 billion. looking ahead, as a consequence of the weaker market sentiment, the market may see vendors turn less aggressive in pricing. Vendors who have made their assets available for sale for more than 12 months could adopt a more flexible stance on pricing, which will act as a catalyst to speed up buying decisions.


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NMARKET ANALySIS

By Andy Hurfurtexecutive DirectorCBRe ConsultingJapan

[email protected]

Tosei launches new business line

Tosei Corp has set up a new business line focusing on the acquisition, renovation and resale of old residential buildings in Tokyo to individual buyers. The company has so far purchased three buildings including one in Minato Ward and another in Shinjuku Ward for a total investment of JPY 3 billion (US$31.9 million). As of the end of March, 115 units had been made available for sale and 28 units had been sold. Tosei plans to spend a further JPY 2 billion (US$21.3 million) to acquire additional residential properties by the end of November.

ING Real Estate to manage Creed

ING Real Estate Investment Management Asia has taken over the management of Japan-based private equity real estate fund Creed Real Estate Partners. Creed is a US$1.1 billion closed-end value added fund focusing on investing in office, residential and retail assets across the country. As part of the new management structure the fund will be renamed Nozomi Real Estate Fund.

J-REITs in asset swap

Mori Trust Sogo REIT has announced plans to swap properties in Tokyo’s Minato Ward with Mori Trust Company to strengthen the latter’s financial position. Mori REIT will shortly acquire the Shiodome Building for JPY 110 billion (US$1.18 billion) and has already signed a lease agreement with Mori Trust to lease the office and retail portion of the building for 10 years and the hotel portion for 25 years at a fixed rate. The REIT will also sell the Akasaka-mitsuke MT Building to Mori Trust for JPY 26.9 billion (US$256 million). The swap will increase the REIT’s assets by 40% to around JPY 280 billion (US$3.004 billion).

CLSA Capital eyes Tokyo property

CLSA Capital Partners has revealed it intends to buy two to three properties in Tokyo this year via its US$816 million real estate fund as it looks to capitalise on declining prices and the recovery in credit markets. In April the CLSA fund acquired Yanagibashi First Building in the city and more are set to follow. Kenedix Inc and Chuo Mitsui Trust & Banking Company have also announced that they plan to begin investing in the Japanese real estate market shortly.

investors retained a healthy appetite for Japanese real estate in April and the month saw the completion of one major deal together with a steady flow of small and medium sized transactions. Sentiment was upbeat with confidence of both domestic and foreign investors continuing to increase, whereas previously they had exercised more caution. J-Reits continued to be active after a bumper first quarter although a large number of these transactions continued to be related party deals.

the largest transaction completed during the month saw Daibiru Corp acquire the Aoyama Rise Square office building in tokyo from Yk FF invests for just under JPY 38 billion (US$405 million) at an estimated cap rate of between 4.0-4.5%. the sale is being viewed as one of the best benchmarks for pricing in the central tokyo office market being as it is one of the only recent and completely “arm’s length” transactions involving a major tokyo office asset. elsewhere, Gk G2, an SPV of Mitsubishi UFC lease & Finance, entered into a contract to acquire the Albore Ginza block for around JPY 12 billion (US$129 million), in a deal which underlined the strong long-term investment appeal of the Ginza district.

looking ahead, the office and residential investment markets should continue to remain highly competitive and it will be challenging for investors to locate good deals as there is not a lot of quality stock on the market. interest could spread to other asset classes including retail and logistics as investors look for higher yielding assets beyond what is currently a rather narrow band of options. there should be an increased appetite for larger deals with a number of funds under a certain amount of pressure to spend raised equity within a limited timeframe. there will also be an increase in groups buying debt, which will lead to the possibility of disposition in the years ahead.


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MARKET ANALySIS

By Steve Y. K. KimManaging DirectorSouth korea

[email protected]

Nomura to launch local real estate business

Nomura Group is to establish a real estate management business with the locally based RIFA Group in South Korea. The new entity, Nomura RIFA, will focus on investment opportunities, including office buildings and commercial facilities, in the Seoul metropolitan area.

NPS nears deal for Sony Centre

The Korean National Pension Service (NPS) is closing in on a deal to acquire the Sony Centre in Berlin, Germany from a Morgan Stanley real estate fund for about KRW 850 billion (US$768 million). The acquisition will bring stable rental income and the asset value may also increase if Germany’s real estate market recovers. Once the transaction is completed overseas property will account for 1.3% of the fund’s total assets.

the korean real estate investment market remained quiet in April although domestic conglomerates continued to retain a strong appetite for acquiring office properties for use as their headquarters. the month was also notable for the korean national Pension Service (nPS) moving forward with its plan to acquire an office building in Seoul, whilst interest among selected foreign investors for quality office assets appeared to be gradually reviving.

last month we reported on rumours that the nPS was looking at acquiring a landmark building in Seoul for use as its headquarters. these reports were confirmed in April after the nPS sent out an RFP to agencies detailing its requirements for a Grade A office tower in the CBD for a sum of around kRW 300 billion. Whilst the deal is still in its very early stages and a formal bid has yet to be lodged, the likelihood of the nPS acquiring a foreign-owned property is small given that it is a publicly funded institution and koreans would have some reservations about inadvertently assisting a foreign investor dispose of an asset in the midst of an economic recovery that is still by no means assured. it is more likely that the nPS will acquire a building owned by a domestic investor or possibly a financially troubled local company or conglomerate.

elsewhere, the Public officials Benefit Association (PoBA) was selected as the preferred bidder for the eugene Securities Building, a Grade B property in the YBD. PoBA’s bid was understood to be in the region of just under kRW 15 million per pyeong which translated to a very aggressive cap rate of mid-5%. PoBA reportedly outbid a number of foreign and local investors for the property and will gradually occupy portions of the building before utilising it entirely for self use when the master lease runs out in 2019. elsewhere, transactions were thin on the ground with only a small number of relatively minor deals completed during the month, and we still see this situation persisting for the rest of the first half of 2010.


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IAMARKET ANALySIS

By Rami KaushalHeadCBRe Consultingindia

[email protected]

DLF to offload Aman Resorts

DLF has appointed Goldman Sachs to find buyers for the Aman Resort luxury hotel chain it originally acquired in November 2007 for US$400 million. India’s largest developer hopes to sell its non-core businesses to lower its overall debt level, which stood at IND 16 billion (US$341 million) as of the end of 2009. Going forward, the company plans to focus purely on real estate development, particularly in the residential, commercial and retail sector.

Unitech to spin off SEZ investments

India’s second largest real estate developer Unitech has announced plans to spin off its investments in telecoms, hotels and investments in special economic zones into a new company. The proceeds from will be used to reduce its debt level, which stood at INR 62 billion (US$1.32 billion) at the end of 2009.

Red Fort to invest US$1bn in India

Real estate private equity fund Red Fort Capital Advisors Pvt plans to invest as much as US$1 billion in the Indian property market over the next few years. Red Fort has already invested US$400 million since 2007, mainly in residential projects. The fund has delivered an average return of 25% to its investors in each of the past three years and will focus on investing in office, hotel and shopping mall development projects going forward.

Cache lists on Singapore Stock Exchange

Cache Logistics Trust has raised US$300 million in its initial public offering on the Singapore stock exchange. In view of Cache’s success, DLF and Unitech are reportedly considering revisiting their plans to conduct an IPO in Singapore which they put on hold in 2008 due to the global financial crisis. DLF had planned a US$1.5 billion IPO while Unitech had planned to raise about US$500 million from its IPO.

investors continued to actively review potential acquisitions in the indian real estate investment market in April but transaction volume remained low as external factors including the Greek fiscal crisis and concerns over a possible recurrence of global economic turmoil obliged buyers to tread carefully. Private equity funds remained active and the month saw Red Fort Capital Advisors reveal plans to invest up to US$1 billion in indian real estate over the next couple of years. end user demand for residential properties remained firm and healthy sales were recorded for new launches as the sector continued to drive the market recovery. the month was also notable for the government revising its new regulations on service tax, bringing the effective service tax for new apartments down to 2.5% from the previously announced 3.3%, a move which further bolstered market sentiment.

Developers were buoyed by the positive response to new residential launches in cities including Mumbai, Bangalore and new Delhi and continued to plan new projects. Recently a number of such firms have set up funds which are focusing on acquiring land for future development or investing in new schemes. the period also saw new York-headquartered investment firm Brahma Management acquire a 13-acre land parcel in Gurgaon for Rs 620 crore (US$140 million), marking the biggest land transaction since the onset of the global financial downturn in September 2008 and reflecting the optimistic view currently held by many investors in indian real estate.

overall the market outlook remains positive although investors continue to be vigilant of external risks and retain a certain degree of concern that india may be impacted by further setbacks in the global economy. However, sentiment in the long term looks more firm after the government pledged some 46% of its 2010-2011 Budget outlay or a total of inR 1.73 trillion to construct new infrastructure including roads, ports, airports and railways in urban and rural areas, all of which will support the development of the indian real estate sector.


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MARKET ANALySIS

By Jeremy Lakeexecutive Directorinvestment PropertiesSingapore

[email protected]

Perennial to launch shopping mall funds

Perennial Real Estate has unveiled plans to launch property funds to buy shopping malls in China and Singapore. The company recently closed a RMB 1.2 billion (US$176 million) China shopping mall fund and is about to begin pre-marketing a similar fund targeted at international investors. It also plans to establish a S$300 million (US$215 million) to S$400 million (US$286 million) fund to invest in underperforming shopping malls in Singapore as well as shopping mall development projects.

Govt proposes change to collective sale rules

The government has proposed several changes to the rules governing the collective sales of properties in order to streamline the entire block sale process. The Strata Titles Board will be refined and will have only a mediatory function for en bloc sale applications. There will be a two years restriction period when a collective sale falls through and owners who want to restart the sale process during the restriction period will have to abide by stricter rules. The changes are expected to take effect in June.

Philippines releases draft REIT rules

The Securities and Exchange Commission of the Philippines has released draft rules covering the launch of REITs in the country. Rules include the requirement that REITs must be listed on the Philippine Stock Exchange and have at lease 1000 public shareholders, each holding a minimum of 50 shares for an aggregate of one third of the REIT’s outstanding shares. REITs should have a minimum capitalisation of PHP 300 million (US$6.7 million) and must distribute 90% of their distributable income (net income adjusted for unrealised gains or losses) as dividend each year. REITs may invest in real estate located in the Philippines, whether freehold or leasehold.

Sunway to sell properties to new M-REIT

Malaysian developer Sunway City Bhd is to sell eight properties comprising three hotels, two shopping malls, two office towers and one hypermarket to a new a M-REIT which is expected to be listed on Bursa Malaysia shortly. The new M-REIT would be the largest in Malaysia based on asset size.

the Singapore real estate investment market enjoyed another active month in April as sentiment remained positive amid brisk residential sales. Developers remained keen to replenish their dwindling land banks and buy land for future development but were frustrated by the competition for government land auctions and the lack of private sector collective sales. the month was also notable for the opening of the long awaited Marina Bay Sands integrated resort although it will take a while to gauge its full impact on the real estate market.

interest in the office sector among S-Reits, local high net worth individuals and Asian and european funds continued to be strong although the availability of quality assets was limited and the month only saw a small number of relatively minor deals. Prices are firming up in advance of rental growth. this ensured yields remained relatively low at around 3.0% - 3.5%. S-Reits retained a healthy appetite for industrial properties and the month saw a steady flow of mostly sale and leaseback deals. Retail remained a tightly held sector and there were no significant transactions.

overall the economic picture remains good and the various cooling measures introduced by the government in February appear to have had little immediate effect on the market. the only real concern going forward is the possibility of government intervention to cool the residential market which would undoubtedly have a dampening effect. that said, the outlook for the remainder of the first half of 2010 continues to be positive.

©2010 CB Richard Ellis, Inc. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

HONG KONG34/F Central Plaza18 Harbour Road, WanchaiHong KongT: (852) 2820 2800F: (852) 2810 0830

Suite 2109-12, 21/F, Sun Life TowerThe Gateway, 15 Canton RoadTsimshatsui, Kowloon, Hong KongT: (852) 2820 8100F: (852) 2521 9517

MACAUThe Executive Centre, Level 20AIA Tower, 251A-301Avenida Comercial De MacauT: (853) 2857 5722F: (853) 2857 5720

BEIJING11/F, Tower 2, Prosper Centre 5 Guanghua Road, Chaoyang District Beijing 100020People’s Republic of ChinaT: (86) 10 8588 0888F: (86) 10 8588 0899

SHANGHAISuite 3201, 3203-320632/F, K. Wah Centre1010 Huai Hai Middle Road Shanghai 200031 People’s Republic of ChinaT: (86) 21 2401 1200F: (86) 21 5403 7519

Suite 1004, 10/F, Azia Centre1233 Lu Jia Zui Ring RoadShanghai 200120 People’s Republic of ChinaT: (86) 21 2401 1200F: (86) 21 5047 1171

GUANGZHOUSuite 804, R&F Center10 Hua Xia Road, Pearl River New CityTianhe District, Guangzhou 510623 People’s Republic of ChinaT: (86) 20 2883 9200F: (86) 20 2883 9248

SHENZHENSuite 1601, Tower 2, Kerry Plaza 1 Zhongxinsi Road, Futian DistrictShenzhen 518048People’s Republic of ChinaT: (86) 755 8271 8999F: (86) 755 2399 5370

HANGZHOUSuite 703, South TowerAnno Domini Plaza, 8 Qiu Shi RoadHangzhou 310013People’s Republic of ChinaT: (86) 571 2880 6818F: (86) 571 2880 8018

CHENGDUSuite 704A-706, Office Tower at Shangri-La Centre Chengdu, Block B9 Bin Jiang East Road, Chengdu 610021People’s Republic of ChinaT: (86) 28 8447 0022F: (86) 28 8447 3311

TIANJINSuite 903, Tower A, The Exchange189 Nan Jing Road, Heping DistrictTianjin 300051People’s Republic of ChinaT: (86) 22 8319 2178F: (86) 22 8319 2180

DALIANSuite 2104, 21/FTian An International Tower88 Zhong Shan Road, Zhongshan District Dalian 116001People’s Republic of ChinaT: (86) 411 3980 5855F: (86) 411 3980 5866

QINGDAOSuite 501-502, Office Tower Shangri-La Centre9 Xiang Gang Middle RoadQingdao 266071People’s Republic of ChinaT: (86) 532 6887 7222F: (86) 532 6887 7234

WUHAN Suite 3308, 33/F, Block 1New World International Trade Centre568 Jian She Avenue, Jianghan DistrictWuhan 430022People’s Republic of ChinaT: (86) 27 8555 8277F: (86) 27 6885 0506

SHENyANGSuite 2102-2103 North International Media Centre167 Qingnian Street, Shenhe DistrictShenyang 110014People’s Republic of ChinaT: (86) 24 2318 2688F: (86) 24 2318 2689

CHONGQINGSuite 2005-2006, 20/FChongqing International Trade Centre38 Qingnian Road, Yuzhong DistrictChongqing 400015People’s Republic of ChinaT: (86) 23 6310 7070 F: (86) 23 6310 7171

TAIPEI13F/A, Hung Tai Centre170 Tun Hua North Road Taipei 105, TaiwanT: (886) 2 2713 2266F: (886) 2 2712 3065

SINGAPORE6 Battery Road #32-01Singapore 049909T: (65) 6224 8181F: (65) 6225 1987

168 Jalan Bukit MerahTower 3 #01-09Singapore 150168T: (65) 6854 8688F: (65) 6271 2583

TOKyO, JAPAN5/F JEI Hamamatsucho Building2-2-12 Hamamatsucho, Minato-kuTokyo 105-0013, Japan T: (81) 3 5470 8711F: (81) 3 5470 8715

1/F JEI Hamamatsucho Building2-2-12 Hamamatsucho, Minato-kuTokyo 105-0013, Japan T: (81) 3 5470 8800F: (81) 3 5470 8801

*17 offices throughout Japan

SEOUL, KOREA12/F SC First Bank Building100 Gongpyeong-dong, Jongno-guSeoul, Korea 110-702T: (82) 2 2170 5800F: (82) 2 2170 5899

PHNOM PENH, CAMBODIAColonial MansionA-One Building, 1A Street 102 Phnom Penh, CambodiaT: (855) 12 822 509

NEW DELHI, INDIAG/F P.T.I Building4 Parliament StreetNew Delhi 110 001, IndiaT: (91) 11 4239 0200 F: (91) 11 2331 7670

MUMBAI, INDIA#5, 3/F Tower C, Laxmi TowersG-block, Bandra Kurla ComplexBandra (E), Mumbai 400 051, India T: (91) 22 4069 0100 F: (91) 22 2652 7655

BANGALORE, INDIAHulkul Brigade CentreG/F, No. 82 Lavelle RoadBangalore 560 001, IndiaT: (91) 80 4074 0000F: (91) 80 4112 1239

CHENNAI (MADRAS), INDIA2H, 2/F Gee Gee Emerald 2C & 2D 151 Village Road, NungambakkamChennai 600 034, IndiaT: (91) 44 2821 4599/4571F: (91) 44 2821 4607

HyDERABAD, INDIA211, Maximus 2B, Mindspace CyberabadSurvey No: 64 (Part)APIIC Software Layout, MadhapurHyderabad 500 081, IndiaT: (91) 40 4033 5000F: (91) 40 4033 5050

PUNE, INDIA705-706, 7/F Nucleus, Church RoadPune 411 001, IndiaT: (91) 20 2605 5437/5367F: (91) 20 2605 5405

KOLKATA, INDIA4/F, S B Towers 37 Shakespeare SaraniKolkata 700 016, India T: (91) 33 4008 4811-13F: (91) 33 4008 4814

JAKARTA, INDONESIAMenara BCA 45/F, Suite 4502 Jalan M. H. Thamrin No. 1Jakarta 10310, IndonesiaT: (62) 21 2358 7337F: (62) 21 2358 7227

KUALA LUMPUR, MALAySIA#9-1, Level 9, Menara Millenium Jalan Damanlela, Bukit DamansaraKuala Lumpur 50490, MalaysiaT: (60) 3 2092 5955F: (60) 3 2092 5966

JOHOR, MALAySIAUnit 7.06, Level 7, Menara PelangiJalan Kuning, Taman PelangiJohor Bahru 80400, Johor, MalaysiaT: (60) 7 331 8118F: (60) 7 331 8119

PENANG, MALAySIA#9-B, Tingkat 9, Menara BHL Bank51 Jalan Sultan Ahmad ShahPenang 10050, MalaysiaT: (60) 4 226 4888F: (60) 4 226 4111

MANILA, PHILIPPINESSuite 1002-1005, 10/FAyala Tower One & Exchange Plaza Ayala Avenue, Makati CityMetro Manila 1226, PhilippinesT: (63) 2 752 2580F: (63) 2 752 2571

10/F, National Life BuildingAyala Avenue, Makati CityPhilippinesT: (63) 2 893 9325 / 2 894 5120

CEBU, PHILIPPINESSuite 2, 2nd LevelWaterfront Hotel, LahugCebu City, PhilippinesT: (63) 32 318 0070

BANGKOK, THAILAND46/F CRC Tower, All Seasons Place 87/2 Wireless Road, LumpiniPathumwan, Bangkok 10330Thailand T: (66) 2 654 1111 F: (66) 2 685 3300-1

PHUKET, THAILAND12/9 Moo 4, Thepkrasattri RoadKohkaew, Muang, Phuket 83000ThailandT: (66) 76 239 967F: (66) 76 239 970

SAMUI, THAILAND3/6 Moo 1, Baan Bophut - Plailaem RoadBophut, Koh SamuiSurat Thani 84320, ThailandT: (66) 77 430 737F: (66) 77 430 740

HO CHI MINH CITy, VIETNAM Suite 1201, Me Linh Point Tower 2 Ngo Duc Ke Street, District 1Ho Chi Minh City, Vietnam T: (84) 8 3824 6125F: (84) 8 3823 8418

HANOI, VIETNAMFloor 12A, Vincom City Tower B191 Ba Trieu StreetHanoi, VietnamT: (84) 4 2220 0220F: (84) 4 2220 0210

DANANG, VIETNAM6/F, Indochina Riverside Towers74 Bach Dang StreetDanang, VietnamT: (84) 511 2222 111F: (84) 511 2222 100

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