asia industry market overview
TRANSCRIPT
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8/3/2019 Asia Industry Market Overview
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Asia Pacic
Industrial Market OverviewR E G I O N A L R E S E A R C H
OurKnowledge is your Property
B I -ANN UAL UPDATE | MAY | 2009
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2/40COLLIERS INTERNATIONAL | REGIONAL RESEARCH2
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009
Reional Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
International Comparison. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-11
Single-user Warehouse Land Values, Capital Values and Monthly
Gross Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Single-user Factory Land Values, Capital Values and Monthly
Gross Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Multi-user High-Specs Average Monthly Gross Rents . . . . . . . . . . . . . . . . .11
Local Market Norm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-15
Single-user Warehouse Land Values, Capital Values and Monthly
Gross Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Single-user Factory Land Values, Capital Values and Monthly
Gross Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16-19
Melbourne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Sydney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-25
Beijing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Guangzhou . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Shanghai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Hon Kon SAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26-27
India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28-29
New Delhi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30-31
Jakarta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Greater Tokyo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
New Zealand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33-35
Auckland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Wellington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
Sinapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36-37
Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Taipei . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Defnitions & Terminoloy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
This is the eighth issue o the Asia
Pacic Industrial Market Overview,
which covers 13 cities in 9 countries,
or the review period o October
2008 to March 2009. With this bi-
annual update, we hope to provide
an overview o industrial markets
catering to multi-national corporations
and a comparison o industrial real
estate costs across the key cities o the
Asia Pacic. Three types o industrial
properties are tracked in this report,
namely single-user actory premises,
single-user warehouse premises
and multi-user high-specications
industrial premises, as these are the
preerred choices o multi-national
corporations. This publication eatures
land and capital values, as well as rents
o single-user industrial premises; and
rents o multi-user high-specication
actories.
Contents
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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009
EXECUTIVE SUMMARY
Regional Overview
This May issue o the Asia Pacic Industrial Market Overview is enhancedby the addition o Taiwan, bringing the total number o countries and citiessurveyed to nine and 13, respectively.
The industrial property markets o the Asia Pacic region deteriorated in theperiod o review between October 2008 and March 2009 as a result o thelingering global nancial crisis.
Led by a slump in demand or exports, many export-oriented Asia Paciccities slipped into recession in the last quarter o 2008. To arrest the slide ineconomic growth and to boost domestic demand, cities in the region have cuttheir interest rates and/or approved a large stimulus budget or 2009.
With manuacturing plants operating at excess capacity due to the slump indemand, an increasing number o manuacturers across the Asia Pacic regionare adopting cost cutting measures such as reducing their workorce and realestate requirements or holding back their expansion plans. As a result, demandor industrial space cooled considerably in the six months under review.
Investors continued to remain cautious in the ace o uncertain economicconditions and declining rents. Stricter requirements by banks resultinggenerally in a lower loan-to-value ratio and/or higher borrowing rates, havealso constrained sales.
Against such a backdrop, industrial rents, land and capital values which largelycontinued to hold rm in the last review period amidst the global downturnnally buckled and contracted during the period between October 2008 and
March 2009 or all cities surveyed except or Jakarta.
The extent o declines in rents, land and capital values was more severewhen measured in US Dollars or Sydney, Melbourne, Jakarta, Auckland andWellington as their local currencies had depreciated signicantly against theUS dollar during the review period. On the contrary, industrial rents, landand capital values or Tokyo recorded a rise when measured in US Dollar as itslocal currency had strengthened against the US Dollar between October 2008and March 2009.
The economies o most cities in the Asia-Pacic region are likely to be inrecession in the next 12 months notwithstanding the interest rates cuts andlarge stimulus budget. As such, demand or industrial properties is likely tostay weak. With the exception o Jakarta and Shanghai where rents, land andcapital values are expected to hold rm, those in the remaining cities surveyedare orecast to see declines o up to 30% over the next 12 months.
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The purpose o the International Comparison tables is only to acilitate easy and equal comparison o single-user industrial costs. However,
payment schemes vary with each country. Some countries may have the practice o paying annual land rent, whilst others pay lump sumland premium or through other modes. Colliers International does not iner that industrial land and buildings in these cities may be acquiredthrough the same schemes or on the basis stated in the table.
International Comparison
1. Land values are expressed in US$ per sq ft per plot ratio
2. Capital values refer to the values of both land and building3. Values provided are for multi-user warehouse buildings
continued on page 5
SINgLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS
CITY
VALUE AS OF MARCH 2009(US$)
12-MONTH FORECAST (US$) bASIS OF LAND AND CAPITAL VALUES
LAND
VALUE1
(PSF)
CAPITAL
VALUE2
(PSF)
MONTHLY
gROSSRENT(PSF)
LAND
VALUE1
(PSF)
CAPITAL
VALUE2
(PSF)
MONTHLY
gROSSRENT(PSF)
LAND
TENURE(YEARS)
PLOT
RATIO
LAND
AREA(Sq FT)
gROSS
FLOORAREA(Sq FT)
Auckland
Auckland 13.27 49.82 0.46 9.95 40.90 0.40 60 1.0 100,000 100,000
Manukau 14.15 43.90 0.43 10.61 36.36 0.39 60 1.0 100,000 100,000
North Shore 16.60 61.30 0.55 12.45 50.86 0.49 60 1.0 100,000 100,000
Beijing
Tianzhu 19.21 75.84 0.41 19.44 74.38 0.41 60 1.0 100,000 100,000
Tongzhou 9.49 58.19 0.37 9.49 57.46 0.35 60 1.0 100,000 100,000
Greater Tokyo
Yokohama - Daikokuuto 14.97 156.21 1.72 14.22 148.40 1.61 60 1.0 100,000 100,000
Kawasaki - Higashi Ogishima 33.47 181.23 1.79 31.80 172.17 1.66 60 1.0 100,000 100,000
Tokyo - Heiwajima 120.43 294.42 2.79 114.41 279.70 2.58 60 1.0 100,000 100,000
Tokyo - Ariake 116.18 220.88 1.99 110.37 209.84 1.99 60 1.0 100,000 100,000
Tokyo - Shinsuna 148.13 269.64 2.26 140.72 256.16 2.26 60 1.0 100,000 100,000
Chiba - Urayasu 44.60 128.87 1.23 42.37 122.43 1.23 60 1.0 100,000 100,000
Chiba - Shibayama 3.58 96.51 1.15 3.40 91.69 1.07 60 1.0 100,000 100,000
Guangzhou
GETDD 8.73 52.29 0.41 8.72 52.26 0.41 60 1.0 100,000 100,000
Hong Kong3
Ramp Access - 187.02 0.97 - 158.97 0.83 60 1.0 100,000 100,000
Cargo Lit Access - 172.51 0.69 - 129.38 0.56 60 1.0 100,000 100,000
Jakarta
Bekasi 6.29 15.63 - 6.29 15.63 - 60 1.0 100,000 100,000
Melbourne
East & South East 9.79 43.30 0.38 9.53 42.34 0.38 60 1.0 100,000 100,000
Fringe 29.79 95.16 0.71 29.10 94.26 0.69 60 1.0 100,000 100,000
North 8.65 42.46 0.47 8.53 41.86 0.47 60 1.0 100,000 100,000
West 7.40 38.87 0.32 7.28 38.20 0.32 60 1.0 100,000 100,000
SINGLE-USER WAREHOUSE
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EXECUTIVE SUMMARY
International Comparison
SINgLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS (CONTD)
CITY
VALUE AS OF MARCH 2009 (US$) 12-MONTH FORECAST (US$) bASIS OF LAND AND CAPITAL VALUES
LANDVALUE1
(PSF)
CAPITALVALUE2
(PSF)
MONTHLYgROSSRENT(PSF)
LANDVALUE1
(PSF)
CAPITALVALUE2
(PSF)
MONTHLYgROSSRENT(PSF)
LANDTENURE(YEARS)
PLOTRATIO
LANDAREA
(Sq FT)
gROSSFLOORAREA
(Sq FT)
New Delhi
Delhi - East 87.67 57.52 0.58 82.06 52.10 0.53 60 1.0 100,000 100,000
Delhi - West 166.00 52.53 0.65 157.82 49.50 0.61 60 1.0 100,000 100,000
Delhi - South 156.06 71.64 0.81 148.98 65.13 0.73 60 1.0 100,000 100,000
Delhi - North 124.91 71.64 0.30 115.83 65.13 0.26 60 1.0 100,000 100,000
Delhi - NH24 30.72 34.91 0.39 27.03 31.34 0.34 60 1.0 100,000 100,000
Delhi - NH1 15.41 - 0.19 14.23 - 0.17 60 1.0 100,000 100,000
Delhi - NH8 - 16.35 0.24 - 14.99 0.20 60 1.0 100,000 100,000
Shanghai
Pudong New Area 38.01 51.75 0.48 38.01 51.75 0.48 60 1.0 100,000 100,000
Singapore
East 36.12 98.40 0.91 30.71 83.26 0.84 60 1.0 100,000 100,000
Sydney
South 54.16 146.26 0.98 47.84 130.59 0.98 60 1.0 100,000 100,000
Southwest 14.75 72.17 0.59 12.69 64.43 0.59 60 1.0 100,000 100,000
West 24.03 126.26 0.84 20.67 113.40 0.84 60 1.0 100,000 100,000
Wellington
Ngauranga 9.04 44.86 0.42 8.14 41.44 0.40 60 1.0 100,000 100,000
Petone 9.17 41.90 0.42 8.25 38.98 0.39 60 1.0 100,000 100,000
Seaview 9.17 41.90 0.42 8.25 38.86 0.40 60 1.0 100,000 100,000
SINGLE-USER WAREHOUSE
1. Land values are expressed in US$ per sq ft per plot ratio2. Capital values refer to the values of both land and building
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0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00
Jakarta - Bekasi
Delhi - NH8
Delhi - NH24
Melbourne - West
Wellington - Petone
Wellington - Seaview
Melbourne - North
Melbourne - East & South East
Auckland - Manukau
Wellington - Ngauranga
Auckland - Auckland
Shanghai - Pudong New Area
Guangzhou - GETDD
Delhi - West
Delhi - East
Beijing - Tongzhou
Auckland - North Shore
Delhi - South
Delhi - North
Sydney - SouthwestBeijing - Tianzhu
Melbourne - Fringe
Greater Tokyo - Chiba - Shibayama
Singapore - East
Sydney - West
Greater Tokyo - Chiba - Urayasu
Sydney - South
Greater Tokyo - Yokohama - Daikokufuto
*Hong Kong - Cargo Lift Access
Greater Tokyo - Kawasaki - Higashi Ogishima
*Hong Kong - Ramp Access
Greater Tokyo - Tokyo - Ariake
Greater Tokyo - Tokyo - Shinsuna
Greater Tokyo - Tokyo - Heiwajima
Warehouse Capital Values (US$ psf)
International Comparison
INTERNATIONAL COMPARISON OF WAREHOUSE CAPITAL VALUES
* Values provided are for multi-user warehouse buildings
0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00
Greater Tokyo - Chiba - Shibayama
Jakarta - Bekasi
Guangzhou - GETDD
Melbourne - West
Melbourne - North
Melbourne - East & South East
Beijing - Tongzhou
Greater Tokyo - Yokohama -
New Delhi - Greater Noida
Wellington - Ngauranga
Wellington - Petone
Wellington - SeaviewBeijing - Tianzhu
Auckland - Auckland
Auckland - Manukau
Sydney - Southwest
Auckland - North Shore
New Delhi - IMT Manesar
Sydney - West
Greater Tokyo - Kawasaki - Higashi
Melbourne - Fringe
Singapore - East
Shanghai - Pudong New Area
Greater Tokyo - Chiba - Urayasu
New Delhi - Noida
Sydney - South
Greater Tokyo - Tokyo - Ariake
Greater Tokyo - Tokyo - Heiwajima
Greater Tokyo - Tokyo - Shinsuna
0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00
Greater Tokyo - Chiba - Shibayama
Jakarta - Bekasi
Guangzhou - GETDD
Melbourne - West
Melbourne - North
Melbourne - East & South East
Beijing - Tongzhou
Greater Tokyo - Yokohama - Daikokufuto
New Delhi - Greater Noida
Wellington - Ngauranga
Wellington - Petone
Wellington - Seaview
Beijing - Tianzhu
Auckland - Auckland
Auckland - Manukau
Sydney - Southwest
Auckland - North Shore
New Delhi - IMT Manesar
Sydney - West
Greater Tokyo - Kawasaki - Higashi Ogishima
Melbourne - Fringe
Singapore - East
Shanghai - Pudong New Area
Greater Tokyo - Chiba - Urayasu
New Delhi - Noida
Sydney - South
Greater Tokyo - Tokyo - Ariake
Greater Tokyo - Tokyo - Heiwajima
Greater Tokyo - Tokyo - Shinsuna
INTERNATIONAL COMPARISON OF WAREHOUSE LAND VALUES
0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 180.00
Greater Tokyo - Chiba - ShibayamaJakarta - Bekasi
Melbourne - WestMelbourne - North
Guangzhou - GETDDWellington - Ngauranga
Wellington - PetoneWellington - Seaview
Beijing - TongzhouMelbourne - East & South East
Auckland - AucklandAuckland - ManukauSydney - Southwest
Greater Tokyo - Yokohama - DaikokufutoDelhi - NH1
Auckland - North ShoreBeijing - Tianzhu
Sydney - WestMelbourne - Fringe
Delhi - NH24Greater Tokyo - Kawasaki - Higashi Ogishima
Singapore - EastShanghai - Pudong New Area
Greater Tokyo - Chiba - UrayasuSydney - South
Delhi - EastGreater Tokyo - Tokyo - Ariake
Greater Tokyo - Tokyo - HeiwajimaDelhi - North
Greater Tokyo - Tokyo - ShinsunaDelhi - SouthDelhi - West
Warehouse Land Values (US$ psf per plot ratio)Warehouse Land Values (US$ ps per plot ratio)
Warehouse Capital Values (US$ ps)
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EXECUTIVE SUMMARY
International Comparison
INTERNATIONAL COMPARISON OF WAREHOUSE MONTHLY GROSS RENTS
* Values provided are for multi-user warehouse buildings
0.00 0.50 1.00 1.50 2.00 2.50 3.00
Delhi - NH1Delhi - NH8
Delhi - NorthMelbourne - WestBeijing - Tongzhou
Melbourne - East & South EastDelhi - NH24
Beijing - TianzhuGuangzhou - GETDDWellington - Petone
Wellington - NgaurangaWellington - SeaviewAuckland - ManukauAuckland - AucklandMelbourne - North
Shanghai - Pudong New AreaAuckland - North Shore
Delhi - EastSydney - Southwest
Delhi - West*Hong Kong - Cargo Lift Access
Melbourne - FringeDelhi - South
Sydney - WestSingapore - East
*Hong Kong - Ramp AccessSydney - South
Greater Tokyo - Chiba - ShibayamaGreater Tokyo - Chiba - Urayasu
Greater Tokyo - Yokohama - DaikokufutoGreater Tokyo - Kawasaki - Higashi Ogishima
Greater Tokyo - Tokyo - AriakeGreater Tokyo - Tokyo - Shinsuna
Greater Tokyo - Tokyo - Heiwajima
Warehouse Monthly Gross Rents (US$ psf)Warehouse Monthly Gross Rents (US$ ps)
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International Comparison
SINgLE-USER FACTORY LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS
CITY
VALUE AS OF MARCH 2009 (US$) 12-MONTH FORECAST (US$) bASIS OF LAND AND CAPITAL VALUES
LANDVALUE1
(PSF)
CAPITALVALUE2
(PSF)
MONTHLYgROSSRENT(PSF)
LANDVALUE1
(PSF)
CAPITALVALUE2
(PSF)
MONTHLYgROSSRENT(PSF)
LANDTENURE(YEARS)
PLOTRATIO
LANDAREA
(Sq FT)
gROSSFLOORAREA
(Sq FT)
Beijing
Shang Di 41.71 126.95 1.14 41.71 126.95 1.14 60 1.0 100,000 100,000
Yi Zhuang 3.90 58.24 0.63 3.80 57.55 0.59 60 1.0 100,000 100,000
Greater Tokyo
Tokyo - Ota 63.36 126.03 - 61.46 122.25 - 60 1.0 100,000 100,000
Yokohama - Naka 33.01 107.46 - 32.02 104.23 - 60 1.0 100,000 100,000
Chiba - Ichikawa 34.64 123.38 - 33.60 119.68 - 60 1.0 100,000 100,000
Chiba - Mihama 16.24 75.33 - 15.75 73.07 - 60 1.0 100,000 100,000
Saitama - Ageo 12.81 71.78 - 12.43 69.63 - 60 1.0 100,000 100,000
Guangzhou
GETDD 8.73 54.24 0.51 8.72 54.00 0.50 60 1.0 100,000 100,000
Hong Kong3
Low Quality - 110.92 0.70 - 77.64 0.53 60 1.0 100,000 100,000
Mid Quality - 145.99 0.86 - 102.19 0.64 60 1.0 100,000 100,000
Prime Quality - 221.80 1.03 - 155.26 0.77 60 1.0 100,000 100,000
Jakarta
Bekasi 6.35 19.43 - 6.35 19.43 - 60 1.0 100,000 100,000
Karawang 4.41 17.54 0.29 4.41 17.54 0.29 60 1.0 100,000 100,000
Melbourne
East & South East 9.79 43.30 0.38 9.53 42.34 0.38 60 1.0 100,000 100,000
Fringe 29.79 95.16 0.71 29.10 94.26 0.69 60 1.0 100,000 100,000
North 8.65 42.46 0.47 8.53 41.86 0.47 60 1.0 100,000 100,000
West 7.40 38.87 0.32 7.28 38.20 0.32 60 1.0 100,000 100,000
New DelhiDelhi - East 82.10 60.78 0.66 76.85 56.01 0.61 60 1.0 100,000 100,000
Delhi - West 155.46 64.04 0.70 147.80 58.62 0.65 60 1.0 100,000 100,000
Delhi - South 146.15 78.16 0.90 139.52 71.64 0.83 60 1.0 100,000 100,000
Delhi - North 124.69 71.64 0.29 115.43 65.13 0.26 60 1.0 100,000 100,000
Delhi - NH24 28.99 34.91 0.37 25.51 31.34 0.34 60 1.0 100,000 100,000
Delhi - NH1 14.54 - 0.19 13.43 - 0.17 60 1.0 100,000 100,000
Delhi - NH8 - 16.35 0.24 - 14.99 0.20 60 1.0 100,000 100,000
Shanghai
Minhang District 15.15 46.96 0.31 15.15 46.96 0.31 60 1.0 100,000 100,000
Pudong New Area 16.74 43.07 0.31 16.74 43.07 0.31 60 1.0 100,000 100,000Singapore
Central 51.00 101.36 0.94 43.35 86.16 0.87 60 1.0 100,000 100,000
SINGLE-USER FACTORY
1. Land values are expressed in US$ per sq ft per plot ratio2. Capital values refer to the values of both land and building3. Values provided are for multi-user factory buildings
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EXECUTIVE SUMMARY
International Comparison
0.00 50.00 100.00 150.00 200.00 250.00
Delhi - NH8
Jakarta - Karawang
Jakarta - Bekasi
Delhi - NH24
Melbourne - West
Melbourne - North
Shanghai - Pudong New Area
Melbourne - East & South East
Shanghai - Minhang District
Guangzhou - GETDD
Beijing - Yi Zhuang
Delhi - East
Delhi - West
Delhi - North
Greater Tokyo - Saitama - Ageo
Greater Tokyo - Chiba - Mihama
Delhi - South
Melbourne - Fringe
Singapore - Central
Greater Tokyo - Yokohama - Naka
*Hong Kong - Low Quality
Greater Tokyo - Chiba - Ichikawa
Greater Tokyo - Tokyo - Ota
Beijing - Shang Di
*Hong Kong - Mid Quality
*Hong Kong - Prime Quality
Factory Capital Values (US$ psf)
INTERNATIONAL COMPARISON OF FACTORY LAND VALUES
INTERNATIONAL COMPARISON OF FACTORY CAPITAL VALUES
* Values provided are for multi-user factory buildings
0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 180.00
Beijing - Yi Zhuang
Jakarta - Karawang
Jakarta - Bekasi
Melbourne - West
Melbourne - North
Guangzhou - GETDD
Melbourne - East & South East
Greater Tokyo - Saitama - Ageo
Delhi - NH1
Shanghai - Minhang District
Greater Tokyo - Chiba - Mihama
Shanghai - Pudong New Area
Delhi - NH24
Melbourne - Fringe
Greater Tokyo - Yokohama - Naka
Greater Tokyo - Chiba - Ichikawa
Beijing - Shang Di
Singapore - Central
Greater Tokyo - Tokyo - Ota
Delhi - East
Delhi - North
Delhi - South
Delhi - West
Factory Land Values (US$ psf per plot ratio)
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International Comparison
* Values provided are for multi-user factory buildings
INTERNATIONAL COMPARISON OF FACTORY MONTHLY GROSS RENTS
0.00 0.20 0.40 0.60 0.80 1.00 1.20
Delhi - NH1
Delhi - NH8
Delhi - North
Jakarta - Karawang
Shanghai - Minhang District
Shanghai - Pudong New Area
Melbourne - West
Delhi - NH24
Melbourne - East & South EastMelbourne - North
Guangzhou - GETDD
Beijing - Yi Zhuang
Delhi - East
Delhi - West
*Hong Kong - Low Quality
Melbourne - Fringe
*Hong Kong - Mid Quality
Delhi - South
Singapore - Central
*Hong Kong - Prime Quality
Beijing - Shang Di
Factory Monthly Gross Rents (US$ psf)
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EXECUTIVE SUMMARY
International Comparison
MULTI-USER HIgH-SPECS AVERAgE MONTHLY gROSS RENTS
CITY
AS OF MARCH 2009 12-MONTH FORECAST bASIS OF RENTAL RATES
AVERAgE MONTHLYgROSS RENT
(US$ PSF)
AVERAgE MONTHLYgROSS RENT
(US$ PSF)
LEASETERM
(YEARS)
LOCATION NET FLOORAREA
(Sq FT)
RENT FREEPERIOD
(MONTH)
Auckland 0.62 0.56 3 Suburban 10,000 1
Beijing 1.17 1.17 3 Suburban 10,000 1
Hong Kong 1.79 1.26 3 Suburban 10,000 1
Melbourne 1.11 1.11 3 Suburban 10,000 1
New Delhi - East 0.76 0.68 3 to 9 Suburban 10,000 Negotiable
New Delhi - West 0.76 0.72 3 to 9 Suburban 10,000 Negotiable
New Delhi - South 0.90 0.82 3 to 9 Suburban 10,000 Negotiable
New Delhi - North 0.44 0.40 3 to 9 Suburban 10,000 Negotiable
New Delhi - NH24 0.46 0.42 3 to 9 Suburban 10,000 Negotiable
New Delhi - NH1 0.22 0.20 3 to 9 Suburban 10,000 Negotiable
New Delhi - NH8 0.40 0.36 3 to 9 Suburban 10,000 Negotiable
Shanghai 1.10 1.10 3 Suburban 10,000 1
Singapore 2.24 1.57 3 Suburban 10,000 1
Sydney 0.78 0.78 3 Suburban 10,000 1Taipei - Neihu Technology Park 0.92 0.84 3 to 5 Suburban 10,000 1 to 2
Greater Tokyo - Kanagawa Science Park 5.16 4.87 3 Suburban 10,000 1
Greater Tokyo - Yokohama Business Park 3.44 3.44 3 Suburban 10,000 1
Greater Tokyo - Hakusan Hi-Tech Park 3.73 3.44 3 Suburban 10,000 1
Wellington 0.47 0.45 3 Suburban 10,000 1
MULTI-USER HIGH-SPECS
INTERNATIONAL COMPARISON OF HIGH-SPECS MONTHLY GROSS RENTS
0.00 1.00 2.00 3.00 4.00 5.00 6.00
New Delhi - NH1New Delhi - NH8
New Delhi - North
New Delhi - NH24
Wellington
Auckland
New Delhi - East
New Delhi - West
Sydney
New Delhi - South
Taipei - Neihu Technology Park
Shanghai
Melbourne
Beijing
Hong Kong
Singapore
Greater Tokyo - Yokohama Business ParkGreater Tokyo - Hakusan Hi-Tech Park
Greater Tokyo - Kanagawa Science Park
High-Specs Average Monthly Gross Rents (US$ psf)
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Local Market Norm
The purpose o the Local Market Norm tables is only to provide an understanding o single-user industrial costs in the context o the various
submarkets. The land tenure, plot ratio, land and building size quoted are based on recent oerings and transactions in each local market.However, payment schemes vary with each country. Some countries may have the practice o paying annual land rent, whilst others paylump sum land premium or through other modes. Colliers International does not iner that industrial land and buildings in these cities maybe acquired through the same schemes.
SINgLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS1
CITY LOCALCURRENCY
IN LOCAL CURRENCY AS OFMARCH 2009
IN US$ AS OF MARCH 2009bASIS OF LAND, CAPITAL VALUES
AND MONTHLY gROSS RENTS(LOCAL MARKET NORM)
LANDVALUE2
(PSF)
CAPITALVALUE3
(PSF)
MONTHLYRENT(PSF)
LANDVALUE2
(PSF)
CAPITALVALUE3
(PSF)
MONTHLYRENT(PSF)
LANDTENURE(YEARS)
PLOTRATIO
LANDAREA
(Sq FT)
gROSSFLOORAREA
(Sq FT)
Auckland
Auckland NZ$ 32.34 136.36 0.95 18.18 76.65 0.53 Freehold 0.5 30,000 15,000
Manukau NZ$ 30.32 111.57 0.86 17.04 62.71 0.48 Freehold 0.5 100,000 50,000
North Shore NZ$ 35.58 145.41 1.03 20.00 81.73 0.58 Freehold 0.5 105,000 52,500
Beijing
Tianzhu CNY 118.31 484.50 2.83 17.31 70.88 0.41 50 0.7 150,000 105,000
Tongzhou CNY 60.04 371.74 2.54 8.78 54.38 0.37 50 0.9 120,000 108,000
Greater Tokyo
Yokohama -Daikokuuto
JPY 2,039 14,586 135 20.79 148.77 1.38 Freehold 4.0 107,639 430,556
Kawasaki - HigashiOgishima
JPY 3,155 14,214 121 32.18 144.98 1.23 Freehold 3.0 1,076,390 3,229,170
Tokyo - Heiwajima JPY 10,357 22,203 183 105.64 226.48 1.86 Freehold 3.0 1,614,585 4,843,755
Tokyo - Ariake JPY 14,987 24,061 177 152.87 245.43 1.81 Freehold 2.0 107,639 215,278
Tokyo - Shinsuna JPY 17,288 25,176 177 176.34 256.80 1.81 Freehold 2.0 215,278 430,556
Chiba - Urayasu JPY 6,431 15,793 121 65.59 161.09 1.23 Freehold 2.0 53,820 107,640
Chiba - Shibayama JPY 418 9,011 90 4.26 91.92 0.92 Freehold 2.0 215,278 430,556
Guangzhou
GETDD CNY 56.31 305.50 2.56 8.24 44.69 0.37 50 1.5 150,000 225,000
Hong Kong4
Ramp Access HK$ - 1,450.00 7.55 - 187.02 0.97 N.A. N.A. N.A. N.A.
Cargo Lit Access HK$ - 1,337.50 5.38 - 172.51 0.69 N.A. N.A. N.A. N.A.
Jakarta
Bekasi Rp 61,608 140,749 - 5.56 12.71 - 30 2.4 10,000 24,000
SINGLE-USER WAREHOUSE
1. Values and rents may not be quoted in $ psf in local market practice2. Land values are expressed as per sq ft per plot ratio3. Capital values refer to the values of both land and building4. Values provided are for multi-user warehouse buildings
continued on page 13
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EXECUTIVE SUMMARY
Local Market Norm
SINgLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS1 (CONTD)
CITY LOCALCURRENCY
IN LOCAL CURRENCY AS OFMARCH 2009 IN US$ AS OF MARCH 2009
bASIS OF LAND, CAPITAL VALUESAND MONTHLY gROSS RENTS
(LOCAL MARKET NORM)
LANDVALUE2
(PSF)
CAPITALVALUE3
(PSF)
MONTHLYRENT(PSF)
LANDVALUE2
(PSF)
CAPITALVALUE3
(PSF)
MONTHLYRENT(PSF)
LANDTENURE(YEARS)
PLOTRATIO
LANDAREA
(Sq FT)
gROSSFLOORAREA
(Sq FT)
Melbourne
East & South East A$ 19.50 90.00 0.62 13.40 61.86 0.43 Freehold 0.6 40,000 24,000
Fringe A$ 59.39 213.00 1.21 40.82 146.39 0.83 Freehold 0.6 30,000 18,000
North A$ 17.25 88.26 0.77 11.86 60.66 0.53 Freehold 0.6 40,000 24,000
West A$ 14.75 87.00 0.55 10.14 59.80 0.38 Freehold 0.6 30,000 18,000
New Delhi
East Rs 6,944 4,416 34 139.16 88.50 0.68 Freehold 0.6 5,000 3,000
West Rs 13,148 4,033 38 263.49 80.82 0.76 Freehold 0.6 7,000 4,200
South Rs 12,361 5,500 48 247.71 110.22 0.95 Freehold 0.6 10,000 6,000
North Rs 9,166 5,500 18 183.69 110.22 0.35 Freehold 0.6 15,000 9,000
NH24 Rs 2,159 2,562 23 43.27 51.34 0.46 99 0.6 15,000 9,000
NH1 Rs 1,083 - 11 21.70 - 0.22 99 0.6 15,000 9,000
NH8 Rs - 1,200 14 - 24.05 0.28 99 0.6 15,000 9,000
Shanghai
Pudong New Area CNY 232.00 330.62 3.26 33.94 48.37 0.48 50 0.6 150,000 90,000
Singapore
East S$ 56.00 130.00 1.20 36.86 85.57 0.79 30+30 2.0 150,000 300,000
Sydney
South A$ 90.58 224.00 1.24 62.26 153.96 0.85 Freehold 1.2 220,000 264,000
Southwest A$ 30.22 140.00 0.91 20.77 96.22 0.63 Freehold 1.2 60,000 72,000
West A$ 37.20 167.00 0.94 25.57 114.78 0.65 Freehold 1.2 430,000 516,000
Wellington
Ngauranga NZ$ 21.44 114.02 0.83 12.05 64.09 0.47 Freehold 0.5 70,000 35,000
Petone NZ$ 19.65 106.49 0.82 11.05 59.86 0.46 Freehold 0.5 100,000 50,000
Seaview NZ$ 19.65 106.49 0.83 11.05 59.86 0.47 Freehold 0.5 100,000 50,000
SINGLE-USER WAREHOUSE
1. Values and rents may not be quoted in $ psf in local market practice2. Land values are expressed as per sq ft per plot ratio3. Capital values refer to the values of both land and building
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Local Market Norm
SINgLE-USER FACTORY LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS1
CITY LOCALCURRENCY
IN LOCAL CURRENCY AS OFMARCH 2009 IN US$ AS OF MARCH 2009
bASIS OF LAND, CAPITAL VALUESAND MONTHLY gROSS RENTS
(LOCAL MARKET NORM)
LANDVALUE2
(PSF)
CAPITALVALUE3
(PSF)
MONTHLYRENT(PSF)
LANDVALUE2
(PSF)
CAPITALVALUE3
(PSF)
MONTHLYRENT(PSF)
LANDTENURE(YEARS)
PLOTRATIO
LANDAREA
(Sq FT)
gROSSFLOORAREA
(Sq FT)
Beijing
Shang Di CNY 240.58 657.43 6.22 35.19 96.18 0.91 50 1.1 390,000 429,000
Yi Zhuang CNY 27.88 390.33 4.52 4.08 57.10 0.66 50 1.3 42,000 54,600
Greater Tokyo
Tokyo - Ota JPY 10,183 17,651 - 103.87 180.04 - Freehold 2.0 16,146 32,292
Yokohama - Naka JPY 4,258 11,706 - 43.43 119.40 - Freehold 2.0 107,634 215,268
Chiba - Ichikawa JPY 4,043 11,520 - 41.24 117.50 - Freehold 2.0 215,278 430,556
Chiba - Mihama JPY 2,412 9,848 - 24.61 100.44 - Freehold 2.0 32,292 64,584
Saitama - Ageo JPY 1,903 9,383 - 19.41 95.71 - Freehold 2.0 32,292 64,584
Guangzhou
GETDD CNY 56.31 316.90 3.15 8.24 46.36 0.46 50 1.5 150,000 225,000
Hong Kong4
Low Quality HK$ - 859.96 5.46 - 110.92 0.70 N.A. N.A. N.A. N.A.
Mid Range HK$ - 1,131.88 6.66 - 145.99 0.86 N.A. N.A. N.A. N.A.
Prime Quality HK$ - 1,719.63 7.97 - 221.80 1.03 N.A. N.A. N.A. N.A.
Jakarta
Bekasi Rp 62,212 174,950 - 5.62 15.80 - 30 2.4 15,000 36,000
Karawang Rp 40,653 140,749 3,100 3.67 12.71 0.28 30 2.4 70,000 168,000
Melbourne
East & South East A$ 19.50 90.00 0.62 13.40 61.86 0.43 Freehold 0.6 40,000 24,000
Fringe A$ 59.39 213.00 1.21 40.82 146.39 0.83 Freehold 0.6 30,000 18,000
North A$ 17.25 88.26 0.77 11.86 60.66 0.53 Freehold 0.6 40,000 24,000
West A$ 14.75 87.00 0.55 10.14 59.80 0.38 Freehold 0.6 30,000 18,000
New Delhi
East Rs 6,944 4,666 39 139.16 93.51 0.78 Freehold 1.25 5,000 6,250
West Rs 13,148 4,916 41 263.49 98.52 0.82 Freehold 1.25 7,000 8,750
South Rs 12,361 6,000 53 247.71 120.24 1.06 Freehold 1.25 10,000 12,500
North Rs 9,722 5,500 17 194.83 110.22 0.34 Freehold 1.25 15,000 18,750
NH24 Rs 2,159 2,562 22 43.27 51.34 0.44 99 1.25 15,000 18,750
NH1 Rs 1,083 - 11 21.70 - 0.22 99 1.25 15,000 18,750
NH8 Rs - 1,200 14 - 24.05 0.28 99 1.25 15,000 18,750
SINGLE-USER FACTORY
1. Values and rents may not be quoted in $ psf in local market practice2. Land values are expressed as per sq ft per plot ratio3. Capital values refer to the values of both land and building4. Values provided are for multi-user factory buildings
continued on page 15
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EXECUTIVE SUMMARY
Local Market Norm
SINgLE-USER FACTORY LAND VALUES, CAPITAL VALUES AND MONTHLY gROSS RENTS1 (CONTD)
CITYLOCAL
CURRENCY
IN LOCAL CURRENCY AS OFMARCH 2009 IN US$ AS OF MARCH 2009
bASIS OF LAND, CAPITAL VALUESAND MONTHLY gROSS RENTS
(LOCAL MARKET NORM)
LANDVALUE2
(PSF)
CAPITALVALUE3
(PSF)
MONTHLYRENT(PSF)
LANDVALUE2
(PSF)
CAPITALVALUE3
(PSF)
MONTHLYRENT(PSF)
LANDTENURE(YEARS)
PLOTRATIO
LANDAREA
(Sq FT)
gROSSFLOORAREA
(Sq FT)
Shanghai
Minhang District CNY 95.00 300.00 2.13 13.90 43.89 0.31 50 1 150,000 150,000
Pudong New Area CNY 105.00 320.00 2.52 15.36 46.81 0.37 50 1 150,000 150,000
Singapore
Central S$ 81.57 140.00 1.30 53.69 92.15 0.86 30 + 30 2.5 100,000 250,000
SINGLE-USER FACTORY
1. Values and rents may not be quoted in $ psf in local market practice2. Land values are expressed as per sq ft per plot ratio3. Capital values refer to the values of both land and building
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Australia
ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth October 2008 - March 2009 -1.2%
Year-on-Year Manuacturing Output Growth Rate October 2008 - March 2009 2.6%
Total Imports October 2008 - March 2009 A$24.5 billion
Total Exports October 2008 - March 2009 A$7.3 billion
Container Throughput (TEUs) October 2008 - March 2009 n.a.
Air Cargo Throughput (Tonnes) October 2008 - March 2009 n.a.
*n.a. denotes not available
ECONOMIC INDICATORS FOR MELBOURNE
MELBOURNE
Factory and WarehouseIn response to the changing economic conditions, the Reserve`Bank o Australia cut the ocial cash rate rom 7.0% to 3.25%in the period under review, with urther cuts anticipated. Theinfation rate or Melbourne, too, decreased to 3.2% or theDecember 2008 quarter rom 4.8% in the September 2008quarter.
Investment sales activity was most active within the sub A$5`million range, with private investors taking advantage oalling interest rates and vendors being orced to meet themarket. However, tightened lending conditions resulted inthe medium to higher-end property market being locked in astalemate, thereby contributing to the absence o signicantsale transactions exceeding A$5 million during the periodunder review. As a result, land and capital values eased by anaverage o 1.8% and 1.1%, respectively.
Tenant demand declined considerably across most regions`during the latter hal o 2008, with many businesses opting to
postpone any previous relocation plans and instead, choosingto renew leases. The majority o leasing activity occurredwithin the smaller end market (building areas under 10,760 sqt) while tenant demand or medium to larger sized warehousesell signicantly, with marketing periods commonly exceedingsix months. But on the whole, Melbournes industrial net acerents remained relatively stable between October 2008 andMarch 2009, whilst incentive levels within the West and Eastregions increased on average by 5% as landlords competed tosecure tenants.
Major lease transactions in the period under review include`Breeze Logistics 53,800 sq t commitment to 1464 FerntreeGully Road, Knoxeld; and, Corus 48,420 sq t commitmentto 1/66-74 Micro Circuit, Dandenong.
Amongst the new completion o warehouse space in the period`
October 2008 to March 2009 was a 59,180-sq t warehouseor a transport and logistics provider, GKR Transport at theWyndham Industrial Estate.
With the ocial cash rate reduced by 375 basis points since`end-September 2008, to 3.25% in March 2009, and withurther reductions anticipated, private investors are expectedto continue to return to the market as buying opportunitiesresulting rom orced sales and vendors being compelled tomeet the market rise. Capital values are, thus, likely to remainunder pressure and are expected to decline by between 0.9%and 2.2% on average in the next 12 months. Average landvalues are oreseen to decline by a steeper range o between
1.4% and 2.6% during the same time period.Except or eastern and south-eastern Melbourne where rents`are orecast to ease by an average o 1.6% over the next 12months, rents or the remaining submarkets surveyed areorecast to hold rm. However, incentives oered by landlordsare likely to increase across all grades and regions over thenext 12 months amidst a climate o weakened demand andlandlords competing to secure tenants.
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EXECUTIVE SUMMARY
A U S T R A L I A
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASER FLOOR / LANDAREA (SQ FT)
107 William Angliss Drive, Laverton North Warehouse Lease Moreton Hire 44,632
1464 Ferntree Gully Road, Knoxeld Warehouse Lease Breeze Logistics 53,800
Buildings 6, 7 & 8 Aquatica Business Park, 344Lorimer Street, Port Melbourne
Warehouse Lease Staging Connections 33,679
1/66-74 Micro Circuit, Dandenong Warehouse Lease Corus 48,420
Units 5, 6 & 7 97 Lewis Road, Wantirna Warehouse Lease ANL Lighting 39,285
MAJOR TRANSACTIONS IN MELBOURNE
Australia
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Australia
ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth October 2008 - March 2009 -0.02%
Year-on-Year Manuacturing Output Growth Rate October 2008 - March 2009 n.a.
Total Imports October 2008 - March 2009 A$60.2 billion
Total Exports October 2008 - March 2009 A$23.1 billion
Container Throughput (TEUs) October 2008 - March 2009 n.a.
Air Cargo Throughput (Tonnes)
*n.a. denotes not available
October 2008 - March 2009 n.a.
ECONOMIC INDICATORS FOR SYDNEY
SYDNEY
Factory, Warehouse and High-SpecsActivity in the pre-commitment market eased in the last`quarter o 2008 due to the global nancial crisis and soteningeconomic outlook. This, coupled with rising constructioncosts, has put a halt to speculative development or the time-being.
As speculative development activity took a breather, land`values or warehouses in Sydney slid by between 4.7% and14.9% during the review period. Capital values o warehousesalso declined, by between 1.2% and 3.6% on average duringthe review period.
Despite the uncertain economic environment, the cut in`the ocial cash rate to 3.25% in March 2009 and increasing
industrial yields have persuaded some investors to enter theinvestment market. Major transactions which took place,despite the cautious investor market due to the nancialmarket meltdown, include the sale o a 63,593-sq t buildingat 70 Euston Road, Alexandria or A$10,000,000 and alarge 266,396-sq t warehouse in Erskine Park to Linox or
A$25,000,000.
Sydneys industrial market is expected to continue to soten`over the next 12 months with land values and capital valuesdecreasing by up to 15%. Investment sales activity is expectedto pick up in the second hal o 2009 as real estate investmenttrusts are orced to ofoad their assets to re-weight theirdebt.
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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009
EXECUTIVE SUMMARY
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASERFLOOR / LAND
AREA (SQ FT)
Homebush Corporate Park Warehouse Lease Grays Online 274,813
9-15 Gundah Road, Mount Ku-ring-gai Warehouse Lease Auspods 26,770
Lidcombe Business Park Warehouse Lease Rentokil 75,595
8 Distribution Place, Seven Hills Warehouse Lease Cabac 132,600
Capicure Drive Warehouse Lease Schnelder Electric 193,750
Lockwood Road, Erskine Park Warehouse Lease Corporate Express 462,525
Beauchamp Road & Botany Road, PortBotany
Warehouse Lease PJM Logistics 80,729
6 MacDonald Road, Ingleburn Warehouse Lease Australia Post 54,896
70 Euston Road, Alexandria Warehouse Sale Undisclosed 63,593
6-8 Helles Avenue Moorebank Warehouse Sale Private Investor 21,400
Lot 5&6 Lenore Drive, Erskine Park Warehouse Sale Linox 266,396
MAJOR TRANSACTIONS IN SYDNEY
Australia
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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009
China
ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth January 2008 - December 2008 9.0%
Year-on-Year Manuacturing Output Growth Rate January 2008 - December 2008 2.2%
Total Imports October 2008 - December 2008 CNY291.3 billion
Total Exports October 2008 - December 2008 CNY98.4 billion
Container Throughput (TEUs) October 2008 - December 2008 n.a.Air Cargo Throughput (Tonnes)
*n.a. denotes not available
October 2008 - December 2008 326,000
ECONOMIC INDICATORS FOR BEIJING
BEIJING
Factory and WarehouseBeijings economic growth slowed to 9.0% in 2008 whilst`the growth rate o manuacturing output slowed to 2.2% aso end-2008, a decrease o 6.1 percentage points rom 1H08to 2H08. To sustain economic growth, several local districtcouncils continued to promote and introduce new incentivesto incubate the industrial property market.
As a result, the land sales market remained active, led by`domestic demand or owner-occupancy. For example, BOETechnology Group and Suning Appliance acquired landlots o 188,616 sq t and 1.6 million sq t, respectively, orindustrial development in Beijing Economic TechnologicalDevelopment Area (BDA) and warehouse development inthe Beijing Tongzhou Logistics Park. This provided supportor actory land values in Shangdi to hold rm and warehouseland values in Tianzhu to nudge up by 6.7% during the periodo review. The actory land values in Tongzhou and warehouseland values in Yi Zhuang, however, plummeted by 32.7% and40.8% during the six-month period ending March 2009 asthe government marked down land prices signicantly toentice high-prole manuacturers to set up operations inthese submarkets.
The leasing demand or industrial properties, however,`slackened with limited deals concluded, mostly by domestic
enterprises. For example, Shenzhen Sundan, a local homeappliance retailer, leased 10,764 sq t in BDA DHL warehouse.On the other hand, multi-national corporations suspended orroze their expansion plans, resulting in a sharp decrease inleasing demand or industrial space. Echoing the weakeneddemand, landlords started cutting asking rentals in the last
quarter o 2008 to attract tenants. As a result, the overallrental decreased by 7.7%, 9.3%, 7.8% and 15.8% in thesubmarkets o Tianzhu, Tongzhou, Shangdi, and Yi Zhuangareas, respectively, during the review period.
Capital values o warehouses and actories decreased`moderately by up to 3.3% between October 2008 and March2009. No signicant transactions were recorded, exceptor ProLogis which, on 23 November 2008, announcedan agreement to sell its regional operations in China andproperty und interests in Japan to GIC Real Estate or a totalconsideration o USD1.3 billion.
The outlook or the industrial market should be challenging`albeit the stimulus plans announced by both the centraland local government may likely take gradual eect in thelatter hal o 2009. Rents o industrial properties are expectedto soten by up to 6.2% year-on-year (YoY) in the next 12months.
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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009
EXECUTIVE SUMMARY
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASER FLOOR / LANDAREA (SQ FT)
Beijing Economic Development AreaDHL warehouse
Warehouse Lease Shenzhen Sundan 10,764
Beijing Tianzhu Airport Industrial Zone Land Sale ChinaAMC 13,207
Tongzhou Industrial and Logistics Park Land Sale SNP Leeung 93,162
Tongzhou Industrial and Logistics Park Land Sale Liando Jinqiao Real Estate 593,834
Tongzhou Industrial and Logistics Park Land Sale Suning Appliance 1,552,682
Beijing Zhongguancun Area Land Sale Beijing Institute o Aeronautical Materials 685,402
Beijing Economic Development Area Land Sale BOE Technology Group Co., Ltd 188,616
MAJOR TRANSACTIONS IN BEIJING
China
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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2009
China
ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth October 2008 - December 2008 12.3%
Year-on-Year Manuacturing Output Growth Rate October 2008 - March 2009 n.a.
Total Imports October 2008 - February 2009 CNY87.9 billion
Total Exports October 2008 - February 2009 CNY102.1 billion
Container Throughput (TEUs) October 2008 - January 2009 126,580
Air Cargo Throughput (Tonnes)
*n.a. denotes not available
October 2008 - January 2009 204,100
ECONOMIC INDICATORS FOR GUANGZHOU
GUANGZHOU
Factory and WarehouseGuangzhous manuacturing industry is weakening on the back`o the contraction in global demand or manuactured goodsamidst the global economic downturn. This is evidencedby the all in imports and exports rom US$3.3 billion andUS$3.8 billion, respectively, in October 2008 to US$2.2billion and US$2.0 billion, respectively, in February 2009.
The global economic downturn had also led to companiesturning their preerence towards leasing instead o owning anindustrial unit.
All the above actors have caused the average capital`values o warehouses and actories to decrease by 4.3% and5%, respectively, during the review period. Data rom theGuangzhou City Land Resources and Housing Authorityshowed that the average land values or warehouses andactories had also eased in the review period, by 1.8%. Incontrast, the average rent o industrial space rose during thereview period, by between 3.3% and 8.5%, uelled by the
shortage o high quality industrial space or rent, companiespreerence towards leasing, as well as shortened lease periodsto six months or one year.
The land sale market during the review period was dominated`by local corporations. Notable land transactions concluded
in the period under review include those by the GuangzhouAutomobile Group Motor Co., Ltd., the Guangdong TianhongCable Co., Ltd., and the NHK-HK-UNI Spring (Guangzhou)Co., Ltd., which acquired 14.7 million sq t, 418,669 sq t and129,491 sq t o land, respectively, in the Hualong ModernIndustrial Park in Panyu, the Yonghe Economic Zone, andthe Economic Development Zone in Luogang, respectively.
Looking ahead, the uncertain business environment will have`a drag on the industrial market. The rents, land and capitalvalues o actories and warehouses are predicted to easeslightly by up to 0.6% in the next 12 months.
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EXECUTIVE SUMMARY
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASERFLOOR / LAND
AREA (SQ FT)
Jiulong Industrial District, Luogang Land Sale Guangzhou Lont Electronic Co.,Ltd. 201,816
Daiguan Road, Tianhe Land Sale Guangzhou Hongtai Sotware TechonologyCo., Ltd
113,070
Development Zone, Luogang Land Sale Yongjie Automobile Transportation Co., Ltd 38,668
Hualong Modern Industrial Park, Panyu Land Sale Guangzhou Automobile Group Motor Co.,Ltd
14,678,260
Yonghe Economic Zone, EconomicDevelopment Zone, Luogang
Land Sale Guangdong Tianhong Cable Co., Ltd 418,669
Development Zone, Luogang Land Sale NHK-HK-UNI Spring (Guangzhou) Co., Ltd 129,491
Jiulong Industrial District, Luogang Land Sale Meiqianuo International Holding Co., Ltd 116,624
MAJOR TRANSACTIONS IN GUANGZHOU
China
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China
ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth January 2008 - December 2008 9.7%
Year-on-Year Manuacturing Output Growth Rate August 2008 - January 2009 -2.4%
Total Imports August 2008 - January 2009 CNY4,627.5 billion
Total Exports August 2008 - January 2009 CNY5,734.8 billion
Container Throughput (TEUs) August 2008 - January 2009 1.4 million
Air Cargo Throughput (Tonnes) August 2008 - January 2009 1.5 million
ECONOMIC INDICATORS FOR SHANGHAI
SHANGHAI
Factory and Warehouse
Shanghai industrial property market slowed down noticeably`amidst the volatile external environment and moderation othe China economy as witnessed by the 2.4% contraction inindustrial output rom August 2008 to January 2009 comparedto a 14.9% growth rom February 2008 to July 2008. Thedownturn o the global economy has also hit exports and
resulted in the slowdown o growth in container throughputrom 16.7% recorded or the six-month period ending August2007 to 0.9% or the six-month period ending January 2009.
Shrinking demand or industrial space on the back o a`slowing economy resulted in some landlords and developerslowering their asking rents or prices in order to secure tenantsor boost sales to improve cash fows. Consequently, rents andcapital values o industrial properties recorded declines o upto 12.7% on average during the period o review. Aggressiveincentives were also oered, such as extending rent-reeperiod in addition to more competitive rents and prices.
Despite the slowing economy, the land auction market held`
steady. However, unding pressures on the back o the tightercredit market resulted in some landlords in the secondaryland sales market succumbing to lower bidding prices rominvestors. Consequently, land prices ell between 3.1% and
5.8% during the six-month period between October 2008 andMarch 2009.
Supply o new industrial properties during the period June to`December 2008 decreased markedly to 2.0 million sq t, downby nearly 70% compared with the same period a year ago. Many
developers halted or slowed down the construction progressdue to pressure on unding amidst the shrinking demand.
Major transactions during the review period included`Heidelberg Graphic Equipment Ltds purchase o a 292,549-sq t land parcel in Qingpu Industrial Park and Degussa-AJ(Shanghai) Initiators Co., Ltds purchase o a 371,408-sqt land lot in Baoshan Industrial Park. On the lease ront,Mitsubishi Logistics leased a 174,377-sq t warehouse inProLogis Park Pudong Heqing while Parker Hannin leased a191,599-sq t actory in ProLogis Park Jinqiao.
Although the global economic slowdown will prevail`or some time, the economic stimulus introduced by theCentral Government should provide some support or themanuacturing sector and in turn, the industrial market.This will help to hold rents, land and capital values steady atcurrent levels over the next 12 months.
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EXECUTIVE SUMMARY
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASER FLOOR / LANDAREA (SQ FT)
ProLogis Park Pudong Heqing Warehouse Lease Mitsubishi Logistics 174,377
ProLogis Park Jinqiao Factory Lease Parker Hannin 191,599
Qingpu Industrial Park Land Sale Heidelberg Graphic Equipment Ltd 292,549
Baoshan Industrial Park Land Sale Degussa-AJ(Shanghai)Initiators Co., Ltd 371,408
MAJOR TRANSACTIONS IN SHANGHAI
China
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Hong Kong SAR
ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth July 2008 - December 2008 -0.5%
Year-on-Year Manuacturing Output Growth Rate September 2008 - February 2009 -33.0%
Total Imports September 2008 - February 2009 HK$1,357.0 billion
Total Exports September 2008 - February 2009 HK$1,291.0 billion
Container Throughput (TEUs) September 2008 - February 2009 11.0 millionAir Cargo Throughput (Tonnes) September 2008 - February 2009 1.6 million
ECONOMIC INDICATORS FOR HONG KONG SAR
HONG KONG SAR
FactoryHong Kongs re-export trade perormance continued to`deteriorate during the review period amidst contraction inglobal demand or imports on the back o the global economicdownturn. The territorys overall re-export growth slippedinto negative territory in November 2008 and the pace ocontraction accelerated rom -4.1% YoY in November 2008
to -22.4% YoY in February 2009. Meanwhile, the value ototal exports dropped 23.0% YoY in February 2009 thesharpest all registered since the oil crisis in the 1970s.
Leasing demand or actory space sotened during the review`period as an increasing number o companies downsized theirpremises or relocated to cheaper alternatives in order to keepoperating costs low as a strategy to weather the prevailingeconomic downturn. As such, the average rental or actoriesdeclined 18.9% to HK$6.76 per sq t during the six-monthperiod ended February 2009, compared to a positive growth o3.1% recorded during the preceding six-month period.
Uncertainty about rental direction and the economic outlook,`
and more importantly, the lack o sucient nancing rombanks, resulted in only 873 transactions recorded or the six-month period ending February 2009. This refected a declineo 65.4% compared to the preceding six-month period and isthe lowest level since 1999. On the price ront, the averageprice o actory premises declined 17.5% during the six-monthperiod ending February 2009 to HK$1,543 per sq t.
Despite alling rents, the prevailing low interest rate`environment presents a market entry opportunity or a groupo property investors with strong equity positions whose primeacquisition targets are quality strata-titled developments. Forexample, Rolex (Hong Kong) Limited acquired two foors in
Kodak House Phase 2 in North Point rom Sun Hung KaiProperties or a total consideration o HK$300 million, or anaverage unit price o HK$4,531 per sq t based on a total foorarea o 66,208 sq t. Rolex is reported to be retaining the twofoors or owner-occupation.
Looking ahead, worsening global trade on the back o global`economic consolidation will remain the key actor limitingnew leasing demand or industrial properties. Rentals andcapital values o actory premises are orecast to be pressureddown by 25% and 30% respectively over the next 12 months.
WarehouseIn tandem with shrinking re-export trade, cargo throughput`contracted considerably during the review period. Containerthroughput declined 9.6% YoY during the six-month periodended February 2009, compared with an increase o 5.3%YoY in the preceding six-month period. Air cargo throughputdeclined 18.3% YoY during the six-month period endedFebruary 2009, compared with an increase o 3.8% YoY in thepreceding six-month period. This has aected the perormanceo the trading and logistics sector, the main demand drivero the warehouse sub-sector. A number o logistics operatorswere seen returning a portion o their space to their vendorsin view o the current dicult market conditions.
Slackened leasing demand or warehouse properties resulted`in the average rental or cargo lit access warehouse declining18.9% between August 2008 and February 2009 to HK$5.38per sq t per month, while capital values ell 24.1% duringthe same period to HK$1,338 per sq t. The average rentalor ramp access warehouse also plunged, by 20.5% betweenAugust 2008 and February 2009 to HK$7.55 per sq t permonth, while capital values ell 27.1% during the same periodto HK$1,450 per sq t.
On top o alling rents, to retain tenants, individual landlords`are also proactively oering their tenants avourable terms,such as long leases o up to six years, together with a cap on
rental growth on renewal o the lease.
Depending on the availability o physical provisions such as`ramp access, rentals and prices are expected to decline 15%to 25% over the next 12 months.
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EXECUTIVE SUMMARY
High-Specs Industrial BuildingAs with the actory and warehouse sub-sectors, the high-specs`Industrial-Oce buildings (I-O) have similarly suered romthe contraction in leasing demand amid the deterioration othe re-export trade perormance.
During the six-month period ending February 2009, the`average I-O rent declined 20.3% to HK$13.90 per sq t permonth.
Hong Kong SAR
Large oce supply in the pipeline in decentralised districts`will create additional downward pressure on I-O rentals,which are expected to drop 30% over the next 12 months.
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASERFLOOR / LAND
AREA (SQ FT)
Smile Centre Factory Lease Logistic company 97,750
Sue Yue Co Ltd Godown No.3 Warehouse Sale Local developer Undisclosed
Two foors, Kodak House Phase II Factory Sale Rolex (Hong Kong) Limited 66,208
Inormtech Industrial Centre Factory Sale Local investor 95,582
MAJOR TRANSACTIONS IN HONG KONG SAR
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India
ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth April 2008 - March 2009 7.1%
Year-on-Year Manuacturing Output Growth Rate April 2008 - March 2009 4.1%
Total Imports April 2008 - February 2009 Rs 1,223.2 billion
Total Exports April 2008 - February 2009 Rs 705.2 billion
Container Throughput (TEUs) April 2008 - September 2008 n.a.Air Cargo Throughput (Tonnes)
*n.a. denotes not available
April 2008 - September 2008 n.a.
ECONOMIC INDICATORS FOR INDIA
NEW DELHI
Factory and WarehouseThe Delhi Government announced that the ollowing sectors`will be allowed to set up Special Economic Zones (SEZs) inthe countrys capital: inormation technology enabled services(ITES), electronic hardware and sotware, nanotechnology,biotechnology, gems and jewellery, non-conventional energy
equipment, ashion and garments (excluding dyeing) andhigher technical education institutes providing world-classmanpower. The development o SEZs will provide a much-needed boost to industrial supply in Delhi.
Due to prevailing negative sentiments across the globe,`a substantial decrease in investors activities has beenwitnessed or all the segments o the industrial propertymarket. Consequently, land and capital values as well as rentsotened during the six-month review period o October 2008to March 2009.
Nevertheless, demand or Noida Authoritys land plots`remained buoyant, with 5,500 applications received or 191
industrial plots measuring 21,528 sq t each in Phases II andIII during the review period. All 191 plots were alloted onthe basis o a draw o lots at xed rates o INR516 per sq t orPhase II and INR534 per sq t or Phase III.
Despite the short-term turbulence in the market, some`companies remained condent in the long-term prospects othe India market. For example, Arshiya International Ltd,a logistics company, received approval rom the Board oApprovals o the SEZs to set up a ree trade and warehousingzone (FTWZ) at Khurja in Uttar Pradesh (part o Nationalcapital Region). This is the companys second FTWZ in thecountry and is expected to be completed by end-2009.
The slower economy and weaker manuacturing output`growth are, however, expected to have a drag on the industrialmarket. Rents, land and capital values o industrial spacecould see declines o up to 14%, 12% and 10%, respectivelyover the next 12 months.
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EXECUTIVE SUMMARY
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASER FLOOR / LANDAREA (SQ FT)
Building Warehouse Lease Spice Jet 15,000
Building Warehouse Lease Markson Television 12,000
Building Factory Lease Relexo Foot ware 14,000
Building Factory Lease Pidilite 10,000
Building Service Station Lease Udiya Service Station 22,000
Building Service Station Lease Tata Motors 20,000
Building Business ProcessOutsourcing
Lease ATS 18,000
Building Business ProcessOutsourcing
Lease Inovision 18,000
Building Factory Sale Anand Button 28,000
MAJOR TRANSACTIONS IN NEW DELHI
India
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JAKARTA
Factory and Warehouse
Indonesias economy is expected to grow by between 3%`and 4% this year, down rom an earlier orecast o 5%. Tobolster demand and stimulate economic growth, Indonesiasmonetary authority, Bank Indonesia, has slashed its keyinterest rate or the th consecutive month to 7.75% inMarch 2009 rom 9.5% in October 2008.
In spite o the slowing economy and manuacturing output,`industrial rents, capital and land values remain unchangedduring the period o review. In the leasing market, industriallandlords have resisted raising rents as they are ocused onhelping their tenants survive through these dicult times.Some measures taken include allowing tenants to postponetheir maintenance cost payment or one to two months atzero interest. As or land values, they had been propped up bythe increased in Sales Value o Taxable Object (or NJOPas known in Indonesia) issued by the Government. This isthe value on which tax is computed or land ownership inIndonesia.
Sales activity slowed in the period o review as industrial`developers turned cautious on the back o the slowingeconomy and held back development and the launch onew projects. The weakening Indonesian Rupiah againstthe US Dollar also contributed to slow sales, particularly orprojects quoted in US Dollar denominations. Nevertheless,
the industrial property market is seeing demand rom localcompanies who rely more on the domestic market instead oexports. These companies have continued to expand theiroperations so as to be ready or the upturn. For example, PT.Timah Tbk, an integrated tin mining company, acquired a914,932-sq t land parcel in the Krakatau Industrial Estateduring the period o review.
While the economy is expected to slow down, demand rom`local companies will provide some support to the industrialmarket. As such the industrial market is orecast to remainstable in the next 12 months.
Indonesia
ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth January 2008 - December 2008 6.1%
Year-on-Year Manuacturing Output Growth Rate January 2008 - December 2008 3.7%
Total Imports January 2008 - December 2008 US$142.6 billion
Total Exports January 2008 - December 2008 US$151.5 billion
Container Throughput (TEUs) January 2008 - December 2008 11.1 million
Air Cargo Throughput (Tonnes)
*n.a. denotes not available
January 2008 - December 2008 n.a.
ECONOMIC INDICATORS FOR JAKARTA
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EXECUTIVE SUMMARY
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASER FLOOR / LANDAREA (SQ FT)
Greenland International IndustrialCenter
Land Sale Carpet manuacturer 2,152,780
Greenland International IndustrialCenter
Land Sale Disposable sanitary napkin company 753,473
Bekasi Fajar Industrial Estate Land Sale Toyota 2,475,697
MM2100 Land Sale Heavy equipment manuacturer romJapan 245,417
Modern Cikande Land Sale Frozen ood company 538,195
Krakatau Industrial Estate Cilegon Land Sale PT. Timah Tbk 914,932
Krakatau Industrial Estate Cilegon Land Sale Cheetham Salt 269,098
Delta Silicon Land Sale LPG station 118,403
MAJOR TRANSACTIONS IN JAKARTA
Indonesia
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Japan
ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth July 2008 - December 2008 -0.6%
Year-on-Year Manuacturing Output Growth Rate July 2008 - December 2008 -14.8%
Total Imports July 2008 - December 2008 JPY16,852.4 billion
Total Exports July 2008 - December 2008 JPY14,062.0 billion
Container Throughput (TEUs) July 2008 - December 2008 3.6 million
Air Cargo Throughput (Tonnes) July 2008 - December 2008 994,001
ECONOMIC INDICATORS FOR GREATER TOKYO
GREATER TOKYO
Factory and Warehouse Japans economy is showing signicant downturn. Gross`domestic product contracted by 3.2% quarter-on-quarter(QoQ) in the last three months o 2008 (-12.1% annualised),the worst perormance since the rst quarter o 1974.
The ocially announced posted land prices as o January 2009`showed declines across the board, by 3.0% on a nationwidebasis and 2.7% or Greater Tokyo. Industrial rents declinedmore signicantly with the submarkets o Chiba-Shibayama,Chiba-Urayasu and Kawasaki-Higashi Ogishima experiencingup to 15.5% decrease during the review period.
Major completions in the review period include ProLogis`Park Ichikawa I, a ve-storey warehouse building with a grossfoor area o 1.6 million sq t located 1.5 km rom a highwayintersection and 16 km away rom Tokyo.
Industrial sales transactions were limited during the period`o review due to the economic recession and nancingdiculties. The ew which were successully concluded weremostly by J-REITs. They included the sale o IIF Musash-Murayama Logistic Centre or JPY8.04 billion in February2009, Shinonome Logistic Centre which was sold or JPY11.8
billion in February 2009; and Kazo Logistic Centre which wasacquired or JPY3.79 billion in March 2009.
As Japans economy is expected to continue deteriorating`or the time being, industrial rents, land and capital valuesare oreseen to remain depressed. Land and capital values areorecast to ease by 3% to 5% and rents by 6% to 8% over thenext 12 months.
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASER FLOOR / LANDAREA (SQ FT)
CRE Logi-Square Sagamihara Warehouse Sale Subsidiary o Mitsubishi Co. 251,468
IIF Musash-Murayama Logistic Center Warehouse Sale SPC o Mitsui & Co., Realty ManagementLtd.
440,074
Shinonome Logistic Center(47% o total)
Warehouse Sale Japan Logistics Fund, Inc. 174,160
Kazo Logistic Center Warehouse Sale Japan Logistics Fund, Inc. 270,503
MAJOR TRANSACTIONS IN GREATER TOKYO
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EXECUTIVE SUMMARY
New Zealand
ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth December 2008 0.2%
Year-on-Year Manuacturing Output Growth Rate December 2008 -2.0%
Total Imports October 2008 - February 2009 NZ$18.3 billion
Total Exports October 2008 - February 2009 NZ$17.2 billion
Container Throughput (TEUs) October 2008 - February 2009 16.3 million
Air Cargo Throughput (Tonnes) October 2008 - February 2009 77,877
ECONOMIC INDICATORS FOR NEW ZEALAND
AUCKLAND
Ofce / WarehouseCurrently, both the Resource Management Act (RMA) and`Overseas Investment Act in New Zealand are under review.The majority o the RMA reorms are concentrating onimproving the resource consent processes, plan developmentand plan change processes, the streamlining o processes orprojects o national signicance and overall decision making.
The review o the Overseas Investment Act aimed to makethe Act easier or constructive oreign investment, andmake oreign investment more simple and attractive, while atthe same time protecting sensitive land, assets and resources.
Meanwhile, the global economy deteriorated rapidly in the`latter hal o 2008, in response to ongoing losses and volatilityin international nancial markets. The Reserve Bank o NewZealand cut the ocial cash rate (OCR) to 3% in March thisyear, the lowest rate since its inception in March 1999. Inaddition to the substantial change in monetary policy settings,there has been a large stimulus rom scal policy. Thesechanges coupled with sizeable exchange rate depreciation
should act to support the New Zealand economy. Nevertheless, banks high pre-leasing requirements beore`approving loans under the current weak market condition,has limited developers access to unds or development. Asa result, demand or development sites weakened and landvalue ell signicantly by 12% on average during the reviewperiod.
While the OCR is likely to remain lower or longer, increasing`competitions within New Zealand banks or cash deposits andthe continued high cost o oshore unding are pressuringlong-term xed interest rates or property mortgages andbusiness loans up. This, coupled with tightening o available
nance amid cautious tenant attitudes, is constraining sales.Investors are also opting to take a wait and see approach todetermine the ull extent o the market downturn beorecommitting. As a result, capital values o industrial premises
eased by up to 5.5% on average in the six-month reviewperiod ending March 2009.
However, despite more cautious investor attitudes, demand`or prime grade, well tenanted and located industrial premisesremained rm. For example, a 109,200-sq t industrial space
at 41 Nesdale Avenue in Wiri currently leased to FivestarDistribution was acquired by a private investor or NZ$12.05million, refecting a yield o 8.97%.
In the leasing market, landlords decisions to oer attractive`incentives to keep the ace rent up has helped to cushion thedrop in rents to 5% on average in the period under review.Some leasing deals successully concluded between October2008 and March 2009 included a 61,400-sq t design-build industrial warehouse located at Pukekiwiriki Placein Highbrook Business Park, currently under construction.The property was leased by Goodman Property Trust toSchneider Electric on a ten-year lease term or NZ$835,000a year. Lewis Holdings leased its industrial premises locatedat 68 Harris Road and 14 Oenhauser Drive in East Tamakito NZL Group on a seven-and-a-hal-year term returningNZ$855,771 per annum. The property comprises a 90,200-sqt oce, warehouse and canopy, and 53,800 sq t o usableyard space.
Several new buildings have come on-stream during the review`period and these included a 82,000-sq t design-build premisesor DHL Global Forwarding at Westney Industry Park and a133,200-sq t purpose-built distribution centre at 8 HautuDrive in Wiri or the Amalgamated Hardware MerchantsGroup (AHM). In addition, a number o design-buildindustrial premises amounting to 645,800 sq t are currently
under construction and are scheduled to come online in thenext 12 months. A ew proposed developments are still onthe drawing board, waiting or tenants pre-commitmentbeore commencing construction.
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New Zealand
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASER
FLOOR / LAND
AREA (SQ FT)
47 Wil liam Pickering Drive, Albany Oce/Warehouse Lease Eagleburgmann New Zealand 20,600
7 John Glenn Avenue, North Harbour Oce/Warehouse Lease Maxwell Marine International 23,500
68 Harris Road and 14 Oenhauser Drive, East Tamaki Oce/Warehouse Lease NZL Group 90,200
320 Rosebank Road, Avondale Oce/Warehouse Lease Doyle Sails 67,700
51 Aintree Avenue , Airport Oaks Oce/Warehouse Lease Husqvarna Outdoor 40,400
Pukekiwiriki Place, Highbrook Oce/Warehouse Lease Schneider-Electric 61,400
372 Rosebank Road, Avondale Oce/Warehouse Lease Vernon Carriers 24,000
Unit B & C, 89-91 Captain Springs Road, Onghunga Oce/Warehouse Lease Ecodiesel 60,800
Westney Industry Park Oce/Warehouse Lease DHL Global Forwarding 82,000
41 Nesdale Avenue, Wiri Oce/Warehouse Sale Private Investor 109,200
7 Basalt Place, East Tamaki Oce/Warehouse Sale Family Trust 25,100
39 Rawene Road, Birkenhead Oce/Warehouse Sale Owner Occupier 21,200
11 Aetna Place, Henderson Oce/Warehouse Sale Syndicator 69,900
16 Dalgety Drive, Wiri Oce/Warehouse Sale Owner Occupier 13,700
MAJOR TRANSACTIONS IN AUCKLAND
The outlook or the industrial market remains volatile.`Demand or development sites is expected to weaken urtherand land values could decline by 25% in the 12 months ahead.Rentals are orecast to all by another 10% on average whilecapital values are expected to drop by an average o 17.3%
over the next 12 months. During this same time period, yieldsare predicted to stabilise in the range o 8% to 9% on averageor new and prime investment grade stock.
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EXECUTIVE SUMMARY
New Zealand
WELLINGTON
Ofce / WarehouseA lack o development nance and higher lease pre-`commitment requirements rom the banks continuedto strangle new developments and dampen demand ordevelopment sites. As a result, the high land values achievedover the years have come to an end with prices dropping byapproximately 25% on average during the period o review.
Investment activity continued to slow with owner occupiers`being the main driver o demand at the smaller end.For example, an owner-occupier acquired a 14,900-sq t
warehouse built in the 1980s located at 3-5 Glover Streetin Ngauranga or NZ$1.65 million with vacant possession.Enquiries on larger scale industrial properties remained scarce.Nevertheless, capital values managed to hold rm during theperiod o review.
Rents, too, remained static in the review period October 2008`to March 2009. Leasing deals concluded include Nautilus
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASER FLOOR / LANDAREA (SQ FT)
14 Tunnel Grove, Lower Hutt Oce/Warehouse Lease General Cable 24,300
15 Birmingham Street, Paraparaumu Oce/Warehouse Lease Harvey Norman 5,400
115 Hutt Park Road, Lower Hutt Oce/Warehouse Lease ERS New Zealand 20,900
3-5 Glover Street, Ngauranga Oce/Warehouse Sale Owner Occupier 14,900
69 Waione Street, Petone Oce/Warehouse Sale Private Investor 41,200
MAJOR TRANSACTIONS IN WELLINGTON
Properties JV leasing 24,300 sq t o industrial space with a5,800-sq t yard at 14 Tunnel Grove in Lower Hutt to GeneralCable or NZ$187,500 per annum on a three-year lease.
Stable rents and capital values were attained despite the`weakening economic climate partially because supply was heldin balance with levels o occupier demand. Greater dicultyin sourcing nance has reduced development activity and anumber o developments were put on hold. Consequently,no new industrial developments were added to the supplypipeline during the review period.
Slow economic growth together with an unsettled nancial`market will result in moderate downward movements oless than 10% in land values, rents and capital values in theWellington industrial sector in the next 12 months. Yieldsare projected to soten by another 25 basis points in this timeperiod.
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Singapore
ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth July 2008 - December 2008 -2.1%
Year-on-Year Manuacturing Output Growth Rate July 2008 - December 2008 -10.9%
Total Imports July 2008 - December 2008 S$222.5 billion
Total Exports July 2008 - December 2008 S$233.3 billion
Container Throughput (TEUs) October 2008 - March 2009 13.0 millionAir Cargo Throughput (Tonnes) July 2008 - December 2008 913,000
ECONOMIC INDICATORS FOR SINGAPORE
SINGAPORE
Factory and Warehouse
The Government announced the 2009 Budget in January`2009. Measures which could help manuacturing concernsand developers o industrial properties ease their cash fowinclude a 40% property tax rebate or industrial landlords, twoyears deerment o property tax or land under developmentand a 15% rental rebate or tenants and land lessees o JTCCorporation and the Housing and Development Boardsindustrial properties. These measures will provide some supportor the industrial property market in this dicult time.
The decline in exports as a result o contraction in global`demand led to excess capacity o manuacturing plants andprompted many rms to shelve their expansion plans ordownsize their industrial premises, thus leading to lowerdemand or industrial properties. The average rents andcapital values o actory space dipped 12.8% and 17.6%,respectively, in the review period, compared to a 6.4% and6.9% growth seen in the previous review period rom April2008 to September 2008.
Weakening exports also translated into sotening demand`or warehouse acilities. Average rents and capital values owarehouse space saw a drop o 13.0% and 13.3%, respectively,in the period under review.
Major completions o industrial space during the study period`include a 128,000-sq t light industrial building at SerangoonNorth Avenue 6 by Credit Suisse and a 80,700-sq t lightindustrial building at Changi North Rise by Thales AerospaceAsia Pte Ltd.
Acquisition o industrial properties in the review period`were limited to smaller properties partly due to tighter creditand investors decisions to limit their risk exposure in theuncertain market. Some o the more signicant transactionsin the industrial property market in the October 2008 to
March 2009 period were the sale o a 123,693-sq t landparcel at Ubi Avenue 4 or S$26.3 million to Sim Lian LandPte Ltd and the sale o a 61,820-sq t land parcel at KallangPudding Road or S$10.8 million to Orion-Four DevelopmentPte Ltd. Acquisitions by listed real estate investment trusts(REITs) have grinded to a halt because o the diculty inraising unds, increased costs o unds and the sharp spike indistribution yields due to alling stock prices.
The weak showing o the economy and export growth in`the rst three months o 2009 (-11.5% and -29.0% YoYrespectively) led to the Government revising downwardsits 2009 orecast or economic growth to between -9% and-6% and export growth to between -13% and -10%. Thiswill weigh heavily on demand or industrial properties inthe next 12 months. Land prices, capital values and rentso industrial space might drop by up to 15% in the next 12months.
High-Specs Industrial BuildingThe steep alls in oce rents due to shrinking demand amid`growing supply had signicantly slowed down the relocationo qualiying oce users to high-specs premises. Thiscontributed to the sluggish demand or high-specs space inthe review period.
As a result, rents o high-specs space eased by 7.8% to S$3.41`per sq t per month in the six-month period rom October2008 to March 2009.
Tighter credit conditions and alling rents curtailed buying`interest in high-specs buildings. In the period under review,only one high-specs building Applied Materials Building
at Changi Business Park, was sold to Union Investment RealEstate AG or S$63 million or S$318 per sq t o gross foorarea.
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EXECUTIVE SUMMARY
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASERFLOOR / LAND AREA
(SQ FT)
10 Changi South Street 2 Warehouse Lease Deutsche Post Global Mail(Australia) Pte Ltd
17,480
Agilent Technologies Factory Lease 3M 43,418
New Tech Park High-Specs Lease Schaeer (Singapore) Pte Ltd 11,829
Ubi Avenue 4 Land Sale Sim Lian Land Pte Ltd 142,030
Kallang Pudding Land Sale Orion-Four Development Pte Ltd 61,820
Applied Materials Building High-Specs Sale Union Investment Real Estate AG 198,056
MAJOR TRANSACTIONS IN SINGAPORE
Singapore
Moving orward, the infux o high-specs space completing`in 2009 amounting to an estimated 2.5 million sq t, coupledwith sluggish demand are likely to exert downward pressure oup to 30% on rents in the next 12 months.
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Taiwan
ECONOMIC INDICATORS
INDICATORS PERIOD DATA
Year-on-Year GDP Growth January 2008 - December 2008 0.1%
Year-on-Year Manuacturing Output Growth Rate January 2008 - December 2008 -10.9%
Total Imports October 2008 - February 2009 NT$64.6 billion
Total Exports October 2008 - February 2009 NT$76.2 billion
Container Throughput (TEUs) October 2008 - February 2009 13.0 million
Air Cargo Throughput (Tonnes) October 2008 - February 2009 261.8 million
ECONOMIC INDICATORS FOR TAIWAN
TAIWAN
High-Specs Industrial Building
The prolonged nancial turmoil resulted in the Taiwanese`economy growing by just 0.1% in 2008, compared to 5.7 %in 2007. Demand rom Taiwans key export markets such asthe United States, China, and Hong Kong dropped as theireconomies urther weakened, causing manuacturing outputor 2008 to shrink by 10.9%
Aected by the weakened economy, many companies,`including those located in the Neihu Technology Park, areadopting cost cutting measures such as downsizing theirworkorce, real estate requirements or relocating to moreaordable business premises or locations. This led to a risein the average vacancy rate o the park to 16.0% as o March2009.
Correspondingly rents declined by 5.0% in the six-month`review period between October 2008 and March 2009 toNT$31.03 per sq t per month.
The overall stock o high-specs space in Neihu Technology`Park increased by 890,978 sq t between October 2008 andMarch 2009 to 26.1 million sq t. Among the major newcompletions in the review period were Elitegroup ComputerSystems Building (315,630 sq t), Chong-Hong Suntech City(177,900 sq t), and Chu-Chen Building (131,539 sq t).
In the next 12 months, more than 700,000 sq t o new`high-specs space are expected to be completed in the NeihuTechnology Park, adding urther pressure on vacancy ratesand rents. Rents o high-specs space are expected to declineby 7.8% to NT$28.61 per sq t per month on average in thenext 12 months.
TRANSACTIONS
BUILDING / LAND PLOT PROPERTY TYPE LEASE / SALE TENANT / PURCHASER FLOOR / LANDAREA (SQ FT)
Tokyo Technology Plaza High-Specs Sale MiTAC INC. 93,170
MAJOR TRANSACTIONS IN TAIPEI
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EXECUTIVE SUMMARY
1. MULTI-NATIONAL CORPORATION (MNCs)
A multi-national corporation is dened as a large company that hasoperations in multiple nations and that requires industrial space.
2. FACTORY
Unless otherwise stated, this reers to single-user industrial spacecatering to MNCs or production / manuacturing purpose.
3. WAREHOUSE
Unless otherwise stated, this reers to single-user industrial spacecatering to MNCs with warehousing requirements as well as theirbusiness as third party logistics, distribution and warehousing.
4. HIGH-SPECIFICATIONS (HIGH-SPECS) INDUSTRIALSPACE
This reers to mu