jll - retail cities in asia pacific apr13

Retail Cities in Asia Pacific The new retailers in town

joneslanglasalle.com/asiapacific

The retail sector in Asia Pacific is witnessing rapid change and one of the driving forces is the aggressive expansion of international retailers throughout the region. Our second edition of Retail Cities in Asia Pacific highlights many of these new market entrants together with other trends shaping the retail landscape.We hope you enjoy it. Dr Jane Murray Head of Research Asia Pacific

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Contents

Making Mall Marketing Interactive

Redefining a Retail Network

Retail Track Record

Market Statistics

Is Shopping Centre Ownership Going Global?

City Profiles

10 Hong Kong11 Beijing12 Shanghai13 Guangzhou14 Tokyo15 Singapore16 Bangkok17 Jakarta18 Delhi19 Mumbai20 Sydney21 Melbourne

Hong Kong Beijing Shanghai Guangzhou Tokyo Singapore Bangkok Jakarta Delhi Mumbai Sydney Melbourne

7.1 15.6 20.2 10.8 37.2 5.2 8.4 9.8 22.7 19.7 4.5 4.0

AsiaPacificisalsohometosomeoftheworlds wealthiestnations,withAustralia,HongKong, SingaporeandJapaninthetop30intermsofper capitaincome.

Internationalluxuryandmid-rangeretailersare aggressivelygrowingtheirbusinessesinthese rapidlytransformingmarkets.

Withrisingaffluencecomeslargescale developmentofretailstock.Acrosstheregions majorretailmarkets,primeretailstockcurrently sitsat80millionsqmandisforecasttoriseby another55millionsqminthenextfiveyears.Of this,20%willbebuiltinAsiasTierImarketsand astaggering75%or40millionsqmintheTierII marketsofChina.

Nominal Retail Sales (Y-o-Y % Growth)

Total Stock (mil sqm) as at end-2012 2013 to 2017 New Supply Additions as % of Stock

Retail Investment Trends Astheretailsectorgrowsandmatures,realestateinvestorsinAsiaPacificareincreasinglyfocusingonretailassets.In2012,USD22.8billionofretailpropertywastransacted acrosstheregion.

ThetopretailinvestmentdestinationsarecurrentlythematuremarketsofHongKong,JapanandAustralia.Inthecomingyears,wepredictthatinterestintheregionsemerging marketswillcontinuetogrowandChinawillbecomeAsiaPacificsnumberoneretailinvestmentdestinationby2020.

JustoverhalfoftheworldspopulationlivesinAsia Pacific.Thatis3.8billionpeople,ofwhich1.7billion currentlyliveincities.

Theregionsurbanpopulationissettoriseto 2billionbytheendofthedecade.Combinethat withrapideconomicgrowthinmanycountriesand theresultisameteoricriseinwealthlevels.

2011 Population (mil)

9.1% 11.9% 9.0%-1.1%

16.7%

TheJonesLangLaSalleAsiaPacificResearchteamprovidesin-depthcoverageof42retailmarketsin11countries.

+64%

1.77.5

+46%

4.5

+28%

3.6

+3%

n/a

Hong Kong Beijing Shanghai Guangzhou Tokyo Singapore Bangkok Jakarta Delhi Mumbai Sydney Melbourne

7.1 15.6 20.2 10.8 37.2 5.2 8.4 9.8 22.7 19.7 4.5 4.0

03MarketStatistics

Market Statistics

SourcesCityPopulation:WorldUrbanizationProspects,UnitedNations:The2011RevisionRetailsales:variousgovernmentwebsitesRetailstockandsupplyadditions:JonesLangLaSalle(RealEstateIntelligenceService),4Q12

Notes Retailsalesgrowth:BangkokreferstoThailand,Sydney(NewSouthWales)andMelbourne(Victoria).FullyearfigureforShanghai,Decemberfortherest.Stock/supplyfiguresrefertoprimeretailcentresforAsiancitiesandregional/sub-regionalcentresforAustraliancities.

-1.5%22.6% 14.9%

n/a n/a 0.9% -0.3%

+15%

1.8

+19%

1.71.9

+22%+6%

3.02.1

+39% +12%

2.5

+43%

1.3

Making Mall Marketing InteractiveThe creative application of modern technology offers new opportunities for engaging customers and building marketing partnerships.

05MakingMallMarketingInteractive

Shoppingcentreshavealwaysbeenuniquevenuesforconnectingbrandsandconsumers.Today,advancesinmobiletechnologyarediversifyingthenatureofthatrelationship.Ownerscannowconsidertheirretailassetasbothatheatreofexperientialinteractionandasocialmediaplatform.

DuringChristmas2012,shoppersattwoMosaicmalls,anewretailcentreconceptthatisbeinglaunchedacrossChina,werepresentedwithanewformofmarketingpromotioninteractivevideogames.IntheMosaicDalianMallandMosaicChangshaMall,theinitiativedrewsizeablecrowdsofshopperseagertoparticipate.

Largescreenswereerectedinprominentpositionsandcustomerswereinvitedtotakepartinalivevideogamecontrolledviatheirmobilephones.Shoppers,whoparticipated,shotfireworksontoascreentotargetvariousmovingprizes.Uponwinningaprize,competitorscompletedashortsurveyontheirphoneandmallstaffdistributedthegift.

Forparticipants,theimmediateactivationusingascannedQRcodeandmulti-uservideogameformatmeanttheydidnothavetowaitinlinetoplay.Viralappealwasalsocreatedbytheremotecontrolnatureofthegame,asplayersinvitedfriendsandcolleaguesbySMSmessagestocomeandjoinin.

Theobjectiveofinteractivepromotionslikethisistodifferentiateamallinanincreasinglycompetitiveenvironmentandextractmorevaluefromthecommonareasofamall,saysMarcusDee,AssociateDirector,RetailAssetManagement,GreaterChina,JonesLangLaSalle.Entertainingshoppersaddsrealvaluetotheirexperience.Forowners,itcreatesnewadvertisingchannelsandbrandpartnershipopportunities,plusthecapabilitytocollectconsumerdatainanon-invasiveway.

InteractivemarketingiswellsuitedtoAsiaPacific,wheremallsarepopularleisuredestinationsandtechnologyadoptionratesarehigh.China,forexample,isnowtheworldslargestmarketforactiveAndroidandiOSsmartphonesandtablets,accordingtoa2013reportbyresearchfirmFlurryAnalytics,makingtheiruseevenmorerelevanttothemallindustry.

Thetrendhasglobalroots.In2009,afterthefinancialcrisis,shoppingmallsintheUnitedStatesbeganlookingfortechnology-basedmechanismstoengageshoppers.Multimediaandgamingeventsgrewinpopularitybecausetheycanbetailoredtoeachmalllayout.Appliedsoftwareenablesownerstoupdateadsandpromotionsinrealtimeandgarnerkeydata,whilecustomersenjoythecompetitionandpost-gamescorerankings.

TheSanFrancisco-basedInternationalExperientialMarketingAssociation(IEMA)believestechnologicallyenlightenedandempoweredconsumersnowdesireexperiencesthatarepersonallyrelevant,memorable,sensory,emotionalandmeaningful.TheIEMAsaysmarketingthatengagespeoplewithindividualexperiencesthathavetangiblebenefitsisafundamentalbasisforthefutureofmarketingstrategy.

MichaelYuann,founderofShanghai-basedGameConcourse,whichdevelopedthesoftwareforthegamingeventsinDalianandChangsha,believestheopportunitiesforinteractivemallmarketingarestillintheirinfancy.

Thisisanewfrontier,bothforthesoftwareandgamingindustriesandmallowners,thatridesonthetailsofsocialnetworkapplications,saysYuann.Totheuser,theobjectiveissimple:entertainment.Buttherangeofinteractiveadvertisingandmarketingcapabilitiesbeingopenedupmakethistypeofpromotionsoattractive.

GameConcourseaimstorolloutnewgameformatsindifferentmalllocations,andisworkingwithJonesLangLaSalleonthenextgenerationofconsumerinteraction.Wewanttouseinteractivemarketingtoaddevengreatervalueformallowners,saysMarcusDee.

Thenewprojectwillembedseveraldisplayscreensinmallsthatcustomerscanconstantlyinteractwithastheyarewalkingthroughthepublicareas.Inthisway,itspossibletograduallygatherdatathatbuildspicturesaboutconsumerbehaviourandbuyinghabits.Thisinformationcanbeusedtodrivenewmarketinginitiatives,saysDee.Atthesametime,interactiveadvertisingcontentcangenerateextrarevenueandhelpbuildpartnershipsbetweenmalls,brandsandoutsidesponsors.

The objective of interactive promotions like this is to differentiate a mall in an increasingly competitive

environment and extract more value from the common

areas of a mallMarcus Dee

Associate Director, Retail Asset Management, Greater China Jones Lang LaSalle

Is Shopping Centre Ownership Going Global?Retail property investors are eyeing opportunities beyond their core markets, and the fast-growing economies of Asia Pacific are top of the shopping list.

JonesLangLaSallesoldthedebtsecuredoverTopRydeCity(Sydney)forUSD359milliontoBlackstoneonayieldof7.3%.

07IsShoppingCentreOwnershipGoingGlobal?

Theglobalisationofretailbrandsinrecentyearsishelpingtoreshapethewayownersandoperatorsofretailpropertybehave.WesternretailersarecontinuingtoextendtheirreachtotapintostrengtheningconsumerdemandacrossAsiaPacific,withsalesgrowthoftheirAsianportfoliosfrequentlyexceedingtheirhomemarkets.Thistrendisnotjustoneway;first-moverAsianbrandsaresimultaneouslyenteringmatureretailmarketsbeyondtheregion.Astheseambitiousretailersembracetransnationalopportunities,willtheownersandoperatorsofshoppingmallsfollowsuit?

ThestrengthandunderlyinggrowthprospectsofretailmarketsinkeyAsianeconomiesisattractiveforinvestors.JonesLangLaSallesGlobalCapitalFlowsresearchillustratesthatinternationalcapitalisbeinginvestedtotakeadvantageofprojectedgrowth.Since2010,approximately35%ofthetotalUS$65bnofretailtransactionsinAsiaPacificwasundertakenbynon-domesticparties,ofwhich29%wascomprisedofbuyersfromoutsidetheregion.Thisinvestmenthaslargelytakentheformofinternationalfundspartneringwithdomesticorregionaldevelopersandowners.

GivenAsiasongoingretailsectorboomandtheinternationalisationofretailersandcapital,agreaterpushintotheregionbymajorretailpropertyoperatorsmayhavebeenexpected.Whilsttheglobalheavyweights,suchasLendLeaseandSimonPropertyGroup,dohaveapresenceinAsia,itissmallrelativetothemarketandeachoftheirrespectiveportfolios,yetWestfieldisconspicuousbyitsabsence.

TheprimarychallengesforspecialistoperatorsenteringAsiaPacificmarketsincludethedifficultyinaccessingappropriatestock,regulatoryrestrictions,findingappropriatelocalpartners,thehighcostofsettinguplargelocalteamstomanageahandsonrealestatesectorandtherequiredcriticalmassofmallstojustifyhighset-upcosts,saysDavidRaven,RegionalDirectorofRetailInvestment,AsiaPacificCapitalMarkets,JonesLangLaSalle.TherelativepricingofAsianmarkets,thecapitalstructuresoftheseoperatorsandthesheerweightofcapitalrequiredarealsoinhibitingfactors.

Despitethesechallenges,itswidelybelievedthattheexperienceandexpertiseofglobalretailoperatorscouldbenefitcertainmarketsintheregion.ThesegroupsarealsoobservingtheapproachesofexperiencedAsiandevelopers,suchasCapitaLand,SMGroup,SwireandLippo,whohavesuccessfullydevelopedretailassetsacrossborderswithintheregion.

Evolvingmarketdynamicscouldcatalyseactivitybylargeretailoperators.AsthedevelopmentpipelineinmostAsiancountriesisdelivered,greatercompetitionwillexistbetweenmalls.Heightenedcompetitionwillgiveconsumersextrachoiceandhighlightthedifferencesbetweentheleadingandlesssuccessfulmallsineachmarket.Overtime,thiswilldrivetherequirementforspecialistrepositioningandmanagerialskillstoachieveandmaintainsuccess.

Asmarketsmatureacrosstheregion,shoppingcentresdevelopedorrepositionedbyexperiencedretailspecialistsareexpectedtooutperformthecompetition,saysDavidRaven.Weforeseeanincreasingtrendofassetlevelstrategicjointventuresbeingestablishedbetweenownersandoperatorswithinternationalretailexpertiseandrelationshipswithbothglobalretailersandglobalcapital.

AsiaPacificsfastestgrowingmarkets,suchasChina,offerconsiderablescopeforretailassetpartnerships.Othercountriesarealsoattractinginterest.LendLeasesrecentannouncementthatitispartneringwithMalaysiandeveloperSPSetiatoopentheSetiaCityMallnearKualaLumpurin2013couldbeasignofthingstocomeacrosstheregion.Itisexpectedthatglobalretailoperatorscoulddeliversuperiorreturnsforinvestorsandpartnersthroughleveragingtheirrelationshipswithinternationalretailers,operatingmallswithgreaterefficiencyandutilisingtheirspecialistexperienceindesigningandrepositioningmalls.GrowingapresenceintheregioncouldalsostrengthenrelationshipswithambitiousAsianbrandsthatcanbeexportedtotheglobaloperatorscoreportfolios.

As markets mature across the region, shopping centres

developed or repositioned by experienced retail specialists

are expected to outperform the competition.

David RavenRegional Director of Retail Investment, Asia Pacific Capital Markets

Jones Lang LaSalle

Redefining a Retail NetworkThe increasingly competitive nature of retail real estate in Asia Pacific means acquiring desirable sites can be a challenging process.

09RedefiningaRetailNetwork

TheevidenceofAsiaPacificsconsumerboomisaroundus.Retaildevelopmentisgalvanisingmanycitiesandmultiple-channeladvertisingbombardsconsumers.Tomeetdiversifyingdemand,globalanddomesticretailersaredevisingstrategiestoenhancetheirmarketpenetration.Butwhetherabrandisrollingoutnewstoresoradaptingformatstomeetchangingmarketcontexts,retailnetworkplanningisanevolvingprocess.

TherearecertainkeysupplysidechallengesinAsiaPacificthatimpactretaildecisions,particularlyincentrallocations.Theseincludeshoppingcentrewaitinglists,risingrents,short-termleases,lackofsecurityoftenure,highfit-outcostsandcapitaldepreciation,saysIainMackenzie,HeadofSolutionsDevelopment,AsiaPacific,JonesLangLaSalle.Thesefactorsarecontributingtothecomplexityofshapingaretailnetwork.

US-basedlifestylebrandTommyBahamaenteredAsiaPacificwithfouroutletsinAustralia,andin2012openeddebutstoresinMacau,HongKongandSingapore.TokyoandYokohamawillfollowin2013.Abigchallengehasbeenfindingsufficientspace.IntheUnitedStates,ouraveragestoresizeis3,000-4,000squarefeet.InAsia,ourminimumrequirementis2,500squarefeet,butthatishardtoachieveasmallunitsaresmaller,saysRaymonddeMalherbe,SeniorManagingDirector,TommyBahamaInternational.

Asanewbrandtotheregion,itisfocusingonhigh-trafficlocations.WeneedspacesthatenableustopositionourselvessotheTommyBahamalifestylecanbeeasilyunderstoodandenjoyed.Weinvestalotoftimeandeffortinourwindowandstoredisplaystopresentourproductlines,saysBrianPearce,ManagingDirector,TommyBahamaAsia.

Storeformatalsoinfluencesthelocation.TommyBahamasstoreinWanchai,HongKongsellsmensandwomensapparelandhomeaccessoriesandfeaturesabarandcaf,andtheGinzaretailstoreinTokyowillincludetwobarsandarestaurant.TheHongKongretailandbarconceptisaprototype,andwewouldliketodomoreofthose,saysPearce.Thisformatisbettersuitedtoastreetlocation,butaswebecomemoreestablishedwewanttohavemultiplestoresinkeycities,andwillcreateformatstofiteachlocation.

Withanestablishedpresencein22countriesacrossAsiaPacific,thechallengesfacingStandardCharteredBankaredifferent.Asthebankingindustryrespondstorapidchangesintechnologyandconsumerbehaviour,retailbanknetworksareassumingadifferentrole.

Thebankingindustryisverydynamic,andbanksarechangingtomeettheneedsofmarkets,consumersandregulators.Retailbanksnowarefocusedonsalesandincomenotjustservice,sothereisaneedtorepositionandresizetocreatenetworkassetsthathaveaninterconnectionwitheachother,saysDavidRees,HeadofProjectManagementandDesign,GroupRealEstate,StandardCharteredBank.

Asianconsumersaremovingtowardsdebitandcreditandawayfromcash,andinsomecountriesmobilemoneyenablingfundstobetransferredusingmobilephonesisgainingtraction.Consequently,thelong-heldnotionofabankbranchofferingtellersandATMsisbeingchallenged.Newbankformatshaveafocusoninteractivetechnologyandadviceandconsultancyservicesratherthantraditionaltellertransactions,saysRees.

Locationdecisionsarebeingreassessedaccordingly.Forthespaceswewant,whicharetypicallybetween1000-1500squarefeet,wearecompetingwithconsumerbrandsthatsellalotofproduct,saysRees.Sowemustbenchmarkourbranchneedsagainstbrandsthatcanmovequickly,ratherthanagainstotherbankswhomustseekthesameregulatoryapprovalsaswedobeforeopeningabranch.

There are certain key supply side challenges in Asia Pacific

that impact retail decisions and contribute to the complexity

of shaping a branch retail network. These factors include

shopping centre waiting lists, rising rents, short-term leases,

lack of security of tenure, high fit-out costs and capital depreciation,

Iain Mackenzie Head of Solutions Development, Asia Pacific

Jones Lang LaSalle

Abercrombie&FitchAlexanderMcQueenBlackFleecebyBrooksBrothersBreitlingCosForever21HackettHollisterTommyBahamaVeraWang

New RetaileRs iN 2012

Hong Kong

Note:HongKongRetailreferstoHongKongsoverallPrimeShoppingCentreandHighStreetretailmarkets.Source:JonesLangLaSalle

Asset PerformAnceHIGH STREET SHOP RENTS RISE

HighStreetshoprentsgrewby2.4%q-o-qin4Q12.

SECONDARY LOCATIONS SEE STRONGER DEMAND

Highrentsincoreareascontinuedtodriveleasingdemandintofringestreetsandnon-coreareas;rentsinoverallprimeshoppingcentresincreasedby2.1%q-o-qin4Q12and1.8%q-o-qinpremiumprimeshoppingcentres.

CAPITAL INFLOWS LIFT TRANSACTION VOLUMES

Investmentactivitypicked-upnoticeablyin4Q12onthebackofcapitalinflowsarisingfromfurtherstimulusintheUSandtheannouncementofmoreausteritymeasuresinthecitysresidentialsector.

12 montH oUtLooK

RetailsalesareexpectedtobewellsupportedbythesustainedgrowthinMainlandChinesevisitorarrivals,whichgrewby24.2%y-o-yin2012.

MAINLAND CHINESE VISITORS TO SUPPORT RETAIL SALES

Astrongergrowingdomesticeconomyshouldlendsupporttothecitysretailingmarketin2013.

IMPROVING ECONOMIC OUTLOOK

MODERATE GROWTH EXPECTED IN RETAIL RENTS

ThechangingprofileofMainlandChinesetouristsislikelytoresultinmoremoderateretailsalesgrowth.Assuch,weexpectretailrentstorisein2013albeitatamoremoderatepace,intherangeof0-10%.

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Sales growth of 9.8% in 2012 suggests Hong Kongs retail sector is in vibrant health. One of the worlds premier shopping destinations, Hong Kong is a magnet for global brands targeting affluent local shoppers and tourists, especially from Mainland China. Many retailers now view their city flagships as showrooms for expanding into China. Luxury brands and high-street stores are locked in competition for prime sites at The Landmark, Harbour City, Times Square and ifc malls, plus high-traffic locations on Queens Road in Central and Canton Road in Tsimshatsui. Continued rental growth in downtown Hong Kong has resulted in an overspill into previously non-core areas. Clusters of luxury and fashion brands are emerging on Wellington Street in Central, Johnston Road in Wanchai and Peking Road in Tsimshatsui, while fashion retailers are also moving into malls in decentralised areas like Shatin and Tuen Mun.

retAiL stocK comPLetions

Completionsinthousandsqm

FutureSupply

2008 2009 2010 2011 2012 2013F

14610 99 29 76 24

VCity,anew269,000sqftshoppingcentreinTuenMunwascompletedin4Q12andisscheduledtoopenin2Q13.

Anon-primeshoppingcentreinRepulseBay,ThePulse(147,693sqft),completedin4Q12andisscheduledtoopenin1Q13.

Retailsalesgrowthimprovedin4Q12,rising7.6%y-o-ycomparedwith5.8%y-o-yin3Q12.

Growthintouristarrivalsmoderated,downto15.1%y-o-yin4Q12from17.7%growthrecordedin3Q12.

Primeshoppinglocationscontinuedtodrawconsiderableinterestfromluxuryinternationalbrands.

RENTAL INFORMATION

High Street ShopsRental Value^ HKD 709.3 psf pm

Stage in Cycle Rents Rising No. of Quarters Since Last Trough 15

^net,onGFA

Overall Prime Shopping CentresRental Value^ HKD 149.6 psf pm


^net,onLFA

12-MONTH OUTLOOK

Rental ValueHighStreetShops

Capital ValueHighStreetShops

4Q 08 4Q

09 4Q

10 4Q11 4Q12

240

200

280

160

120

80

RVIndex(PremiumPrimeShoppingCentres)

RVIndex(HighStreetShops)

RVIndex(OverallPrimeShoppingCentres)

CVIndex(HighStreetShop)

IndexBase4Q08=100

LEASING TRANSACTIONS INVESTMENT TRANSACTIONSLongchamp8,000sqft,SilvercordGAP 15,800sqft,MPMBreitling10,000sqft,517-519HennessyRoad

Park Hotel Shopping Arcade(70,000sqft)inTsimshatsuisoldforHKD2.2billionKatherine House(49,500sqft)inTsimshatsuisoldforHKD780millionLaguna Plaza(163,611sqft)inLamTimsoldforHKD1.5billion

NOTABLE DEALS IN 2H12

4Q 2012 Highlights10RetailCities|HongKong

AlexanderWangAmericanApparelBakerCosForever21HarmanHollisterPatagoniaSpringfieldToysRUs


Beijing

Note:BeijingRetailreferstoBeijingsUrbanPrimeretailmarket.Source:JonesLangLaSalle

Asset PerformAnceSTRONG RETAILER EXPANSION

Retailsalesincreased11.9%y-o-yinDecember.Retailersmaintainedastrongpaceofexpansionthroughout2012.

LANDLORDS FOCUS ON IMPROVING TENANT MIXES

Experiencedlandlordsexecutedmoreeffectiverentrevenuestrategiesbyimprovingtheirtenantmixes.Theyreplacedlow-profit-margintenantswithtenantswithalimitedpresenceinothermallstodifferentiatethemselves.

CORE & URBAN MARKET RENTS RISE

Atend-2012,averagerentsintheurban&coremarketsrose8.7%&10.1%y-o-y,respectively.

12 montH oUtLooK

Averageneteffectiverentswillcontinuegrowingatadoubledigitratein2013.

RENTAL GROWTH LIKELY SIMILAR TO 2012

Areboundinretailsalesisexpectedin2013inlightofimprovingmacro-economicdata,fallingcreditcardfeesandlowertariffsonimportedgoods.

A REBOUND IN RETAIL SALES EXPECTED

NEW SUPPLY CONCENTRATED IN PRIME LOCATIONS

Alargeportionofnewurbanprojectsin2013willbeinprimelocations.Meanwhilethesuburbanmarketisexpectedtobecomeanemerginghot-spot.

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RENTAL INFORMATION

Urban Prime Shopping Centres Rental Value^ RMB 762 psm pm


^neteffective,onNLA

12-MONTH OUTLOOK

Rental ValueUrbanPrimeShoppingCentres

Capital ValueUrbanPrimeShoppingCentres

demAnd

sUPPLy

The evolution of Beijings retail landscape has closely followed the redevelopment of the Chinese capital both before and since the 2008 Olympics. Previously overshadowed by Shanghai in terms of retail cachet, Beijing is now pivotal to the China expansion strategies of international retailers. An entire spectrum of consumer brands is now delivering extravagant campaigns targeting discerning shoppers in both downtown and decentralised areas.Well-managed malls in large mixed-use developments, such as Seasons Place, Oriental Plaza, Wanda Plaza, Solana and China Central Place, offer appealing locations for both brands and shoppers. Hip shoppers are attracted to The Village at Sanlitun, a central Beijing precinct offering edgy consumer brand stores, eclectic dining and entertainment. Newer shopping centres, such as Indigo in Jiuxinqiao and Xinao Shopping Centre in the 2008 Olympic Park, attract a mixed clientele, including younger consumers an increasingly influential China demographic.

LEASING TRANSACTIONS

Forever 212,500sqm,BeijingAPMEsprit 1,300sqm,SolanaApple2,300sqm,BeijingAPM

ParkviewGreen,ahigh-endshoppingmallintheCBDwaslaunchedin4Q12,adding56,000sqm(GFA)tothemarket.

ZhuozhanShoppingCentre(GFA300,000sqm),adepartmentstore,openedintheWestChanganStreetsubmarket.

F&B,fashion,jewellery,andhouseholdretailerswerethelargestcontributorstonettake-upin4Q12.

Fashionretailerswerekeentointroducemoresub-brandstocreatemoresalesopportunities.

During4Q12,luxurybrandspreferredopeningwatchstorestoapparelstores.

INVESTMENT TRANSACTIONSNo major investment deals in 2H12.



FutureSupply

2008 2009 2010 2011 2012 2013F

386772 767 236 520 335

160

140

120

100

804Q

08 4Q

09 4Q

10 4Q11 4Q12

RentalValueIndex

CapitalValueIndex

IndexBase4Q08=100


4Q 2012 Highlights11RetailCities|Beijing

10CorsoComoAlexanderMcQueenCarolinaHerreraDeBeersForever21HarryWinstonPeutereyVeraWang


Shanghai

Note:ShanghaiRetailreferstoShanghaisOverallPrimeretailmarket.Source:JonesLangLaSalle

Asset PerformAnceSLOWER RETAIL SALES GROWTH LIMITS RENTAL INCREASE

Onalike-for-likebasis,rentsinprimeanddecentralisedmarketsincreasedby4.1%and5.5%y-o-y,respectively.

VACANCY RISES IN SELECT SHOPPING CENTRES

Vacancyratesincreasedmarginallyinsomeexistingshoppingcentresasseveralelectronicsstoresandlarge-formatrestaurantsclosed.

12 montH oUtLooK

Inaslowergrowthenvironment,varianceofstoreperformanceislikelytoincreaseduetolocationsandlevelofexperienceofoperators.

PERFORMANCE GAP AMONGST RETAILERS TO CONTINUE

Asconsumersremainsensitivetoprices,rentalgrowthislikelytobeslowthrough1H13.Somemildpick-upmaytakeplacein2H13ifpro-consumptionpoliciesareaggressivelyrolledouttogeneratehighersales.

SUBDUED RENTAL GROWTH EXPECTED IN 1H13

STRONGER PRE-COMMITMENT FOR NEW PRIME SUPPLY

Thegapinpre-commitmentperformancebetweenprimeanddecentralisediswidening,leadingtomorepotentialnewcompletionswithhighvacancy.

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Chinas most exciting and diverse retail city boasts sophisticated shopping on both sides of the Huangpu River that bifurcates Shanghai. In downtown Puxi, international and local brands vie for prime storefronts along the Nanjing Road and Huaihai Road thoroughfares. Luxury brand flagships are also magnetised to premium locations in Xintiandi and the restored heritage mansions along the riverfront Bund. Chic Shanghai mall shopping is popular, especially for high-end fashion brands in the smart surrounds of Plaza 66, Rel and Hong Kong Plaza. Across the river, Pudongs Super Brand Mall and ifc Mall offer designer shopping and smart dining in the Lujiazui commercial district noted for its dramatic skyline. Shanghais vast urban sprawl also offers plentiful retail development opportunities in decentralised areas, both east and west of the Huangpu River, and in the many satellite towns that are now connected by the citys extensive subway network.



2008 2009 2010 2011 2012 2013F

35200 278 55 71 385

FutureSupply

RENTAL INFORMATION

Overall Prime Shopping Centres Rental Value^ RMB 48.5 psm per day


^net,onNLA

12-MONTH OUTLOOK

Rental ValueOverallPrimeShoppingCentres

Capital ValueOverallPrimeShoppingCentres

sUPPLy

RelDepartmentStore(45,700sqm)andTakashimayaDepartmentStore(61,000sqm)werecompletedin4Q12.

Inthedecentralisedmarket,threecommunitymallsopened.

GrowingcompetitionfromonlineretailforShanghaisincreasinglyprice-sensitiveconsumers.

Forshoppingcentres,thegapbetweenthemarketwinnersandloserswidenedin4Q12.

InternationalbrandscontinuetoopeninShanghaibutareincreasinglysensitivetotheprofitpotentialofeachstore.

RentalValueIndex

CapitalValueIndex

IndexBase4Q08=100

130

120

110

150

140

100

904Q

08 4Q

09 4Q

10 4Q11 4Q12

LEASING TRANSACTIONS INVESTMENT TRANSACTIONS

10 Corso Como3,000sqm,WheelockSquareForever 21 7,000sqm,TheBundPlazaAbercrombie & Fitch800sqm,JingAnKerryCentre

Plaza 353 (40,000sqm)soldforRMB2.37billionChannel One (42,000sqm)soldforRMB1.46billion


4Q 2012 Highlights12RetailCities|Shanghai

CaliforniaFitnessDaisoJapanIppudoKiehlsMaxValuMuji


Guangzhou

Note:GuangzhouRetailreferstoGuangzhousOverallPrimeretailmarket.Source:JonesLangLaSalle

Asset PerformAnceINVESTMENT TRANSACTIONS LIMITED IN 4Q12

Thelimitedavailabilityofsaleablestockandfirmaskingpricesdemandedbyvendorsresultedinfewtransactionsbeingrecordedduringthequarter.

FEW LANDLORDS SOUGHT TO INCREASE RENTS

Overallrentsedgedupmarginallyin4Q12by0.5%q-o-q,closetothe0.4%q-o-qgrowthrecordedin3Q12.

CAPITAL VALUES GROW

Coupledwiththelowerinterestrateenvironment,marketyieldsremainedbroadlyunchangedfromthepreviousquarter,resultingincapitalvaluesgainingby0.5%q-o-qin4Q12.

12 montH oUtLooK

Anyupsideonrentswilllikelyberestrictedbytherecordvolumeofnewsupplyduetobecompletedin2013.Assuch,weexpectrentstogrowbyafurther6-7%in2013.

RECORD NEW SUPPLY LIKELY LIMITS RENTAL UPSIDE

ThelatesteconomicindicatorssuggestthatChinaseconomyhastroughedandislikelytogrowataslightlyfasterratein2013,whichshouldhelpunderpinretailsalesgrowthanddemandforretailingpremises.

IMPROVING ECONOMY SHOULD AID RETAIL SALES GROWTH

INVESTMENT YIELDS TO REMAIN BROADLY STABLE

Investmentvolumesareunlikelytodiffergreatlyfrom2012.Marketyieldsareexpectedtoremainbroadlystablekeepinganymovementincapitalvalueslargelyinlinewithrents.

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demAnd

sUPPLy

The capital of southern Chinas Guangdong province, Guangzhou continues to benefit from the massive urban development programme undertaken before the 2010 Asian Games. Greatly enhanced infrastructure citywide has been accompanied by the opening of a handful of prime retail centres. Global and local retailers are also attracted to Guangzhou by its strong consumer spending combined with a close proximity and easy travel access to Hong Kong that have helped raise brand awareness.The emerging riverside district known as Zhujiang New Town is an appealing location for retailers because of its collection of new luxury hotels, premium offices, dining and entertainment. The Mall of the World, is scheduled to open here in 2013. Elsewhere in a city famed historically for its street market culture, the top malls are located in the Tianhe CBD.

RENTAL INFORMATION

Overall Prime Shopping Centres Rental Value^ RMB 446 psm pm

Stage in Cycle Rents Slowing No. of Quarters Since Last Trough 14

^net,onGFA

12-MONTH OUTLOOK



2008 2009 2010 2011 2012 2013F

405 302 120 290 541

AoyuanPlaza(90,000sqm),locatedinPanyudistrict,wastheonlynewsupplytobecompletedin4Q12.

Aslowdowninretailsalesgrowthcurbedleasingactivity.

Inspiteofaslowingretailmarket,somewell-knownretailersshowedconfidenceinthegrowthofthemarket,committingtonewstores.

TheremainingvoidinthenewlycompletedAoyuanPlazapushedtheoverallmarketvacancyrateupto3.1%byend-4Q12.


No major investment deals in 2H12.Sony2,800sqm,TaiKooHuiZara 4,300sqm,RockSquareJusco 25,300sqm,RockSquare



FutureSupply

RentalValueIndex

CapitalValueIndex

IndexBase4Q08=100

100

90

80

70

130

120

110

604Q

08 4Q

09 4Q

10 4Q11 4Q12


4Q 2012 Highlights13RetailCities|Guangzhou

BillsKennel&SchmengerLePaindeJoelRobuchonRebeccaMinkoffTheConranShopKitchen


TokyoFew cities can compete with Tokyo for the colour, vibrancy and sheer sense of theatre of its shopping experience. One of the worlds most famous shopping cities, the Japanese capital offers an alluring mix of grand malls, large department stores, sumptuously designed brand flagships and boutiques.Tokyos vast size means its shopping landscape is sub-divided into distinctive districts.Ginza is a refined, upmarket area where brand stores are interspersed between art galleries, restaurants and cafes.Roppongi combines clusters of offices and deluxe hotels with a pulsing nightlife and Roppongi Hills, one of Tokyos most popular malls. Young consumers head to Shibuya and Shinjuku districts, famed for their large departments stores and bright neon street advertising. Omotesandos offbeat street fashions appeal to youthful hipsters and tourists, whileTokyo Bayslarge shopping malls offering varied dining and entertainment options magnetises families on weekends.

Note:TokyoRetailreferstotheGinzaandOmotesandoPrimeretailmarket.Nohistoricaland/orforecaststockdataavailableforTokyo.Source:JonesLangLaSalle

Asset PerformAncePRIME RETAIL RENTS RISE 0.5% Q-O-Q IN 4Q12

CAPITAL VALUES EDGE HIGHER

Atend-4Q12,rentsforprimeretailspaceinTokyoincreased0.5%q-o-q,reflectinganincreaseinrentsforspaceonsomehigherfloors.

Stronginvestordemandunderpinnedgrowthincapitalvaluesof0.5%q-o-qin4Q12.

12 montH oUtLooK

Inlinewithanimprovingeconomicoutlook,rentsshouldrisemoderatelyin2013.

MODEST GROWTH IN RENTS EXPECTED

Theretailsectormayreceiveanaddedboostfromarecentlypassedstimuluspackageintendedtospureconomicactivityandcreatejobs.

ECONOMIC STIMULUS LIKELY TO SUPPORT RETAIL SECTOR

finAnciAL indices

RENTAL INFORMATION

Ginza & Omotesando Prime Street Shops Rental Value^ JPY 63,243

per tsubo per month Stage in Cycle Rents Rising

No. of Quarters Since Last Trough 1^gross,onNLA

12-MONTH OUTLOOK

Rental ValueGinza&OmotesandoPrimeStreetShops

Capital ValueGinza&OmotesandoPrimeStreetShops

demAnd

sUPPLy

RedevelopmentoftheformerHanaeMoriBuildingsiteintheOmotesandoareaisdueforcompletioninMarch2013.

TheGinza6-chome10DistrictRedevelopmentProject,a13-storeybuilding,isexpectedtobeginconstructionin2014.

In4Q12,salesforlarge-scaleretailstoresdeclinedforthesecondconsecutivequarter,down0.5%y-o-y.

Theconsumerconfidenceindexcontinuestobeweak,decliningforthefourthconsecutivemonthinDecember.

Consumersremainconcernedovertheeconomy,partlyduetoweakexports.

RentalValueIndex

CapitalValueIndex

IndexBase4Q08=100

120

100

80

604Q

08 4Q

09 4Q

10 4Q11 4Q12


Tokyu Plaza Harajuku Omotesando (11,368sqm)soldforJPY45billionG-Bldg. Omotesando (1,508sqm)soldforJPY5.85billionOmotesando Gates Building (1,300sqm)soldforJPY4.3billion

Uniqlo 9,990sqm,GinzaKomatsuBuildingEmporio Armani 463sqm,OakOmotesandoCoach 600sqm,OakOmotesando


4Q 2012 Highlights14RetailCities|Tokyo

A.Lange&SohneCarvenCostaCoffeeCrate&BarrelJLindebergPhilipSteinSmoothieKingStellaMcCartneyTommyBahamaToryBurch


SingaporeSingapore is an aspirational shopping destination for visitors from across Asia Pacific and worldwide, in addition to boasting strong domestic purchasing power. This appeal is recognised by the tourism board, which heavily promotes its world-class malls and annual Great Singapore Sale. Top of the shopping list for locals and tourists is Orchard Road, an iconic strip of designer boutiques and glitzy malls, such as Ion Orchard, Paragon and Wisma Atria. Beyond downtown, Singapores retail scene is diversifying. The redevelopment of Marina Bay into an office, shopping and entertainment district features The Shoppes at Marina Bay Sands, a smart mall offering luxury boutiques and emerging labels. Nearby, the Suntec City Mall adjacent to the Suntec City Convention Centre has received a major revamp. Retailers are also tapping into domestic demand in decentralised areas, such as Dhoby Ghaut, and new shopping centres in suburban locations.

Note:SingaporeRetailreferstoSingaporesPrime,SuburbanandMarinaretailmarkets.Source:JonesLangLaSalle

Asset PerformAnceRENTS REMAIN RELATIVELY STABLE

TheMarinasubmarketregisteredamarginaldeclineof0.1%q-o-q,whiletheOrchardandSuburbansubmarketswereunchanged.

AVERAGE CAPITAL VALUES HOLD FIRM

Transactionvolumesdeclinedin4Q12,atraditionallyslowinvestmentperiod,whileaveragecapitalvaluesremainedflatsupportedbystrongdomesticliquidityandalowinterestrateenvironment.

12 montH oUtLooK

Theriseinbusinesscosts,attributabletoSingaporesstrongcurrencyandtheimplementationofthedependencyratioceilingon1July2012forforeignworkersintheservicessector,couldcapfurtherrentincreases.

RISING BUSINESS COSTS COULD CAP RENTAL GROWTH

Thelowunemploymentrateandimprovingeconomyshouldsupportincreasingrentalsbymid-2013.

INCREASING RENTALS EXPECTED BY MID-2013

finAnciAL indices

RENTAL INFORMATION

Orchard Road Prime Shopping Centres Rental Value^ SGD 4,204 psm pa

Stage in Cycle Rents Stable No. of Quarters Since Last Trough 11

^neteffective,onNLA

12-MONTH OUTLOOK

Rental ValueOrchardRoadPrimeShoppingCentres

Capital ValueOrchardRoadPrimeShoppingCentres

demAnd

sUPPLy

Occupancyremainstight,withsustainedinterestfromfoodandbeverageandfashionapparelretailers. PlazaSingapurasExtension(11,797

sqm)and100AM(11,799sqm)roundedout2012ssupply.

Atover80%,thepre-commitmentlevelsofbothmallswerehealthy.

TheSuburbansubmarketcontinuedtogeneratehealthyinterestfromretailers,bothdomesticandinternational.

RetailsalesinDecember(excludingmotorvehicles)declinedby0.4%y-o-y.



FutureSupply

2008 2009 2010 2011 2012 2013F

23085 156 64 85 199

RentalValueIndex

CapitalValueIndex

IndexBase4Q08=100

100

95

90

110

105

85

80 4Q 08 4Q

09 4Q

10 4Q11 4Q12


Nex(617,214sqft)soldforSGD825millionMurray Terrace (50,000sqft)soldforSGD75millionThe Quayside retail units (33,000sqft)soldforSGD69million

H&M20,000sqft,IONOrchardCrate & Barrel 16,000sqft,IONOrchardMulberry 4,000sqft,MandarinGallery


4Q 2012 Highlights15RetailCities|Singapore

AlexanderMcQueenCoffeeBeanandTeaLeafFoodRepublicH&MPaylessShoesourceStellaMcCartneyTWGTeaSalon&BoutiqueTwiningsTea


BangkokThailands retail market is expected to grow by around 10 per cent this year, and its capital boasts both strong consumption and global appeal as a shopping destination. Brand-hungry shoppers from home and abroad make for Bangkoks stylish city centre malls, such as Siam Paragon, Emporium, CentralWorld, Terminal 21 and Erawan Bangkok. New developments are also catching the eye. Signature 2012 openings included Mega Bangna, a 400,000 sqm mall featuring Thailands first IKEA store, and Asiatique the Riverfront, which combines a mall and night bazaar beside the Chao Phraya River that runs through Bangkok. Commanding attention in 2013 will be Central Embassy, a mixed-use residential and hotel development in the heart of the capital that promises a retail mall with just the right mix of chic and swagger. The development pipeline is expected to continue, Siam Future is among the developers building community malls in suburban Bangkok.

Note:BangkokRetailreferstoBangkoksPrimeretailmarket.Source:JonesLangLaSalle

Asset PerformAnce

12 montH oUtLooK

finAnciAL indices

RENTAL INFORMATION

Overall Prime Shopping Centres Rental Value^ THB 21,159 psm pa


^net,onNLA

12-MONTH OUTLOOK



demAnd

sUPPLy

Nonewprimeprojectscompletedin4Q12andSilomComplexwastheonlyprojecttocompleterenovations.

CentralEmbassyandEmquatier(TheEmporiumII)arescheduledtocompletein2013&2014respectively.

In4Q12,strongleasingdemandinprimeretailcentreswassupportedbyinternationalbrands.

RisingpurchasingpowerhasledretailerstoexpandtheircustomerbasetoThailand.

Theaveragevacancyrateincreasedin4Q12to6.8%asseveralprimecentresunderwentrenovations.

RENTS MOVE HIGHER

Supportedbystrongleasingdemandandhigherachievedrentsinrenovatedprojects,theaveragegrossrentin4Q12wasupby1.3%q-o-q.

CAPITAL VALUES RISE 1.3% Q-O-Q

Supportedbyongoinggrowthinrents,capitalvaluesroseby1.3%q-o-q,reflectingthestronginvestmentinterestinretailproperty.

Rentsareexpectedtoriseandthestronginterestinowningretailassetsisforecasttoseecapitalvaluesalsorise.

RENTS AND CAPITAL VALUES EXPECTED TO GROW

TheoutlookforBangkoksretailmarketshouldremainpositivein2013,givengrowingdomesticconsumptionandstrongleasingactivity,especiallyamonginternationalbrands.

RETAIL MARKET OUTLOOK SHOULD REMAIN POSITIVE


Family Mart (713branches)soldforTHB3.12billionMerry King Rangsit Building (20,000sqm)soldforTHB2billion

H&M 3,300sqm,SiamParagonUniqlo 1,780sqm,SiamParagonLouis Vuitton 450sqm,SiamParagon



FutureSupply

2008 2009 2010 2011 2012 2013F

187190 43 298 681 154

RentalValueIndex

CapitalValueIndex

IndexBase4Q08=100

100

95

90

110

105

85

80 4Q 08 4Q

09 4Q

10 4Q11 4Q12


4Q 2012 Highlights16RetailCities|Bangkok

AlfredDunhillBrooksBrothersFurlaMichaelKorsNewLookVictoriasSecret


JakartaIndonesia is home to Southeast Asias largest population and one of the fastest growing economies in the world. Consequently, the retail market in the capital Jakarta is considered to offer high potential, and the shopping options and patterns of consumer behaviour are continuing to diversify.Jakartas leading malls include Plaza Indonesia, Grand Indonesia, Plaza Senayan and Pacific Place, all of which target middle to upper class spending power with a mix of mass market and luxury brands. Adding an extra frisson of excitement will be the opening in 2013 of a three-floor department store by Paris-based Galeries Lafayette at Pacific Place. A wave of real estate development has delivered two major new mall developments, Kota Kasablanka and Ciputra World, which is part of a large mixed-use complex featuring a luxury hotel, residences and offices.

Note:JakartaRetailreferstoJakartasOverallPrimeretailmarket.Source:JonesLangLaSalle

Asset PerformAnce

12 montH oUtLooK

Asweanticipatedemandtogrowsteadily,thevacancyrateislikelytoremainstablearoundthecurrentlevel(i.e.4-5%)in2013.

VACANCY LIKELY TO REMAIN STABLE

Theretailmarketisexpectedtoreceive223,000sqmofnewsupplyfromthreeprojects(LotteShoppingAvenue,St.MoritzandPondokIndahStreetGallery)in2013;almost70%ofthesethreeprojectshasbeenpre-committed.

THREE PROJECTS TO COMPLETE IN 2013

RENTS & CAPITAL VALUES EXPECTED TO RISE

Rentsandcapitalvaluesareprojectedtopickupinlinewiththeincreaseinretailsales.

finAnciAL indices

demAnd

sUPPLy

STRONG DEMAND HAS LIMITED IMPACT ON RENTS

Healthydemandgrowthhasyettotriggersignificantrentalincreasesaslandlordsfocusonattractingtenantstofill-upvacantspace.Overall,neteffectiverentsgrewmarginallyby0.8%q-o-qin4Q12.

GROWTH IN CAPTAL VALUES COMPRESSES YIELDS

Capitalvaluesgrewfasterthanrentsat1.4%q-o-q.Thispushedyieldstocompressby10basispointsto11.0%byend-4Q12.

Therewerenoprojectcompletionsin4Q12.

KotaKasablanka,whichwascompletedin3Q12,wastheonlyadditiontoJakartasprimeretailmarketintheyear.

Healthyeconomicgrowthandrobustdomesticconsumptioncontinuedtosupportretailsalesin4Q12.

Netabsorptiontotalled22,000sqmin4Q12,slightlyabovetheaveragelevelinthepreviousthreequarters.

Strongdemandresultedinmallvacancydecliningfrom5.4%in3Q12to3.7%byend-4Q12.

RENTAL INFORMATION

Overall Prime Shopping Centres Rental Value^ IDR 4,895,968 psm pa

Stage in Cycle Rents Rising No. of Quarters Since Last Trough 7^

^neteffective,onNLA

12-MONTH OUTLOOK





FutureSupply

2008 2009 2010 2011 2012 2013F

2531 120 0 62 223

RentalValueIndex

CapitalValueIndex

IndexBase4Q08=100

98

96

94

92

90

106

104

102

110

108

100

4Q 08 4Q

09 4Q

10 4Q11 4Q12


No major investment deals in 2H12. Central Department Store 10,000sqm,GrandIndonesiaLotte Department Store 80,000sqm,CiputraWorldJakarta


4Q 2012 Highlights17RetailCities|Jakarta

ArmaniJeansArmaniJuniorBurgDunkinDonutsLaTagliatellaNandosRobertoCavalliStarbucksThomasPinkVanLaack


DelhiAs Indias retail sector prepares to profit from relaxed rules governing foreign direct investment by multi-brand retailers, Delhi seems poised to be a leading beneficiary. Indias vibrant, capital city encompasses several retail submarket spread across its sprawling landscape. The favourite hangouts for local shoppers include DLF Emporio, Select City Walk , DLF Promenade and Ambience Mallin South Delhi, Ambience Mall in Gurgaon and Pacific Mall in West Delhi. Competition to attract affluent, brand-savvy capital shoppers is increasing between retailers, especially in prime areas and the difference between high-quality retail projects and the less successful malls is increasingly apparent. Rapidly growing outbound travel is helping to boost sales for luxury retailers at Indira Gandhi International Airport, the largest and busiest airport in South Asia.

Note:DelhiretailreferstoDelhisOverallretailmarket.Source:JonesLangLaSalle

Asset PerformAnceRENTS STABLE

Overall,rentsremainedstableinallsubmarketsduringthequarter.

REVENUE SHARING ARRANGEMENTS RISE

Retailersresistedrentincrementsandfavouredrevenuesharingarrangementsoverplainleaseagreements.

CAPITAL VALUES HOLD FIRM

Inlinewithstablerents,capitalvalueswerealsorelativelyunchangedineverysubmarketin4Q12andyieldsheldfirm.

12 montH oUtLooK

Retailersareexpectedtopursuedealsinunder-constructionprojectsthatoffergooddesign,brandingandprofessionalmanagement,asthesefeatureswilllikelytranslatetohealthyfootfallandpositivebusinesspotential.

STRONG DEMAND SHOULD CONTINUE FOR NEW PROJECTS

Asglobalretailersandstategovernmentsdecideonwherestoresshouldbelocated,itisexpectedthattheintroductionofFDIintomulti-brandretailislikelytotakea6-12monthperiodtorollout.

FDI INTO MULTI-BRAND RETAIL LIKELY IN 2H13

RENTS EXPECTED TO MOVE HIGHER

Sustainedretailerinterestislikelytocauserentstomoveupwards,whilelowervacancysupportsariseinselectsubmarkets.Supplyrationalisationmayeasethedownwardpressureonrents.

finAnciAL indices

demAnd

sUPPLy

MSXCentralMarket(285,000sqft)inGreaterNoidaandEuroPark(450,000sqft)inGhaziabadopenedin4Q12.

Limitedvacancyingoodperformingmallspushedretailerstopre-commitinupcomingprojects.

Absorptionincreasedassmallstoreformatretailerswereactivein4Q12,withnetabsorptionrecordedat630,000sqft.

NewcompletionsintheSuburbscontributednearly97%oftotalnetabsorption.Overall,vacancydroppedto24.1%in4Q12.



FutureSupply

2008 2009 2010 2011 2012 2013F

168180 229 310 99 153

RENTAL INFORMATION

Prime South Shopping Centres Rental Value^ INR 242 psf pm

Stage in Cycle Growth Slowing No. of Quarters Since Last Trough 8

RentalInformationisforthePrimeSouthonly^gross,onGFA

12-MONTH OUTLOOK

Rental ValuePrimeSouthShoppingCentres

Capital ValuePrimeSouthShoppingCentres

90

80

70

110

100

60

504Q

08 4Q

09 4Q

10 4Q11 4Q12


No major investment deals in 2H12. Hamleys 36,000sqft,DLFPlaceSaketMarks & Spencer 18,500sqft,MomentsMall


4Q 2012 Highlights18RetailCities|Delhi

RentalValueIndex

CapitalValueIndex

IndexBase4Q08=100

KennethColePizzaExpressStarbucksSuperdry


MumbaiIndias pulsing financial and commercial hub is also the nations capital of style. Brand awareness among consumers is growing fast, encouraging more global retailers and luxury and fashion brands to tap into Indias edgiest retail market. Mall shopping is a popular concept, and shopping centres such as Palladium at High Street Phoenix, Atria, Inorbit and Oberoi Mall offer a sophisticated mix of retail, dining and entertainment. Mumbai is a vast city and the quality of mall developments in recent years has varied considerably. Shopping centres in the suburbs tend to offer better infrastructure and operational management in addition to large residential catchment areas for retailers. A wave of real estate development in 2011 caused an imbalance in supply, and several underperforming malls have been retrofitted into stand-alone and high street style retail formats.

Note:MumbairetailreferstoMumbaisOverallretailmarket.Source:JonesLangLaSalle

Asset PerformAnce

12 montH oUtLooK

Vacancyratesareexpectedtodeclineintheprimesubmarketsasdevelopersprefersmallstandaloneandmixeddevelopmentretailformatsinsteadofdistinctlargermalls.

DEMAND FOR SMALLER FORMATS TO PUSH VACANCY LOWER

FDI SHOULD SUPPORT THE RETAIL MARKET

TheopeningofFDIintomulti-brandretailislikelytoboosttheretailmarketinthemediumtolongtermduetotheentryofinternationalproducts,practicesandtechnology.

RENTS & CAPITAL VALUES EXPECTED TO GROW

Rentsandcapitalvaluesarelikelytoincreasegraduallyinallsubmarkets,albeitbyvaryingdegrees.

finAnciAL indices

demAnd

sUPPLy

RENTS RISE IN THE PRIME SOUTH & SUBURBS

RentsincreasedinthePrimeSouthby0.8%q-o-qin4Q12andintheSuburbsby1.0%q-o-q.Similarto3Q12,agradualincreaseinoccupancyinselectqualitymallsintheSuburbsraisedaveragerents.

SLIGHT INCREASE IN CAPITAL VALUES

Capitalvaluesincreasedmarginallyacrossallsubmarkets.However,thehighestgrowthincapitalvalueswaswitnessedintheSuburbsbecauseofitsgrowingimportanceasaninvestmentdestination.

Therewasonecompletionin4Q12,KaulHeritageCityMall(250,000sqft)inVasai.

Netabsorptionincreasedin4Q12asdomesticretailersexpandedtotakeafirst-moveradvantagefollowingachangetoallowFDIintomulti-brandretailing.

Mumbairecordedtotalnetabsorptionof217,000sqftin4Q12comparedto64,400sqftin3Q12.

MajorleasingactivitywasconcentratedintheSuburbsbecauseofitsqualitymalls,infrastructureandvastresidentialarea.

RENTAL INFORMATION

Prime South Shopping Centres Rental Value^ INR 244 psf pm


RentalInformationisforthePrimeSouthonly^gross,onGFA

12-MONTH OUTLOOK

Rental ValuePrimeSouthShoppingCentres

Capital ValuePrimeSouthShoppingCentres



FutureSupply

2008 2009 2010 2011 2012 2013F

130349 228 334 88 123

100

90

110

80

70

604Q

08 4Q

09 4Q

10 4Q11 4Q12


No major investment deals in 2H12. Marks & Spencer 18,000sqft,AndheriWestSmoke House Deli 2,115sqft,BKCPizza Express 3,900sqft,Colaba


4Q 2012 Highlights19RetailCities|Mumbai

RentalValueIndex

CapitalValueIndex

IndexBase4Q08=100

CultureKingsMarimekkoPocoAustraliaSamsungT.M.LewinTopshop/Topman


SydneySydneysiders love to shop, and Australias largest city counts an eclectic shopping environment befitting its status as a high-profile international destination. Shoppers in Sydney can choose from a diverse portfolio of smart malls, department stores, designer brand flagships and homegrown fashions. A large working population and a regular flow of tourists in the downtown CBD creates a strong market for its distinctive shopping centres, such as the historic Strand Arcade and Queen Victoria Building, plus the recently refreshed Westfield Sydney. Retail outlets also extend along George Street, the citys main thoroughfare, and are bookended by the busy China Town markets and precinct in the south and The Rocks near to the Harbour Bridge in the north. The waterside Darling Harbour is a popular shopping area for visitors. Beyond the centre, the suburban districts of Bondi, Chatswood and Parramatta also offer also offer diverse shopping experiences.

Note:SydneyRetailreferstoSydneysOverallretailmarket.Source:JonesLangLaSalle

Asset PerformAnce

LEASING INCENTIVES RISE

Leasingincentiveshaveincreasedacrossallretailformatsthroughouttheyeartoattractandretaintenants.

RENTS DECLINE IN SOME SUB-SECTORS

ChallengingleasingconditionsresultedinadeclineinrentsintheRegional(0.3%q-o-q)andNeighbourhood(-0.8%qo-q)categories.AveragerentswerestableintheCBD,Sub-regionalandBulkyGoodscategoriesin4Q12.

INVESTMENT MARKET INCREASINGLY ACTIVE

TheretailinvestmentmarkethasbecomeincreasinglyactivewithfourmajorsalesrecordedinSydneyin4Q12.

12 montH oUtLooK

Theprojectscurrentlyinthepipelinesuggestsupplyshouldbelimitedin2013butdevelopmentconditionsareimproving.

SUPPLY PIPELINE SHOULD BE LIMITED

Weexpectleasingmarketconditionstoimprovein2013,butrentalgrowthislikelytoremainbelowthelongtermaveragetrendintheshortterm.

RENTAL GROWTH TO REMAIN BELOW TREND

MODEST YIELD COMPRESSION EXPECTED

Theinvestmentmarketislikelytoremainrobustandinstitutionaldemandforcoreassetsisexpecttoresultinsomemodestyieldcompressionthroughouttheyear.

finAnciAL indices

demAnd



2008 2009 2010 2011 2012 2013F

136146 199 121 114 43

FutureSupply

sUPPLy

RENTAL INFORMATION

Regional Shopping Centres Rental Value^ AUD 1952 psm pa

Stage in Cycle Rents Stable No. of Quarters Since Last Peak 5

^net,onNLA

12-MONTH OUTLOOK

Rental ValueRegionalShoppingCentres

ExtensionswerestartedatMacquarieShoppingCentre(31,800sqm)andDFOHomebushin4Q12.

Completionsin2012totalled114,200sqm,withBulkyGoodsbeingthedominantformat(52%).

NSWretailturnovergrowthacceleratedin2012butremainsconsiderablybelowthelong-termtrend.

Theaveragevacancyratedecreasedfrom2.3%in1H12to1.7%in2H12.

Theleasingmarketremainschallengingandfeedbackindicatesenquirylevelsremainlow.

RentalValueIndex

IndexBase4Q08=100

120

110

100

904Q

08 4Q

09 4Q

10 4Q11 4Q12


Top Ryde City (77,060sqm)soldforAUD341millionBateau Bay Square (29,162sqm)soldforAUD164millionCentro Toormina (21,337sqm)soldforAUD65.5million

Samsung 212sqm,450GeorgeStreetTopshop / Topman 1,800sqm,455GeorgeStreetWilliams-Sonoma 2,040sqm,466-472OxfordStreet


4Q 2012 Highlights20RetailCities|Sydney

GapMarimekkoSamsung


MelbourneMelbourne is famed for its eclectic dining and colourful calendar of festivities, and its claim to be the heartland of Australian style and fashion is supported by growing global interest in the annual Melbourne Fashion Festival. Melbourne boasts a vibrant and diverse retail market, ranging from the artisans of Flinders Lane, the high-end stores on Chapel Street and Collins Street to the Bourke Street Mall and Chadstone the Fashion Capital.To position Melbourne as an internationally recognised shopping destination, the City of Melbourne teamed up with the Victorian State Government to develop the six-year Melbourne Retail Strategy. The initiative aimed to encourage the citys retail sector to constantly innovate and create campaigns that showcase Melbournes cultural, artistic and commercial diversity.

Note:MelbourneRetailreferstoMelbournesOverallretailmarket.Source:JonesLangLaSalle

Asset PerformAnceRENTS STABILISING

AveragespecialtystorerentswereunchangedinMelbournein4Q12acrossallretailformats.Thebroad-basedslowdownisinlinewithnationaltrendsinretailrents.

SEVEN MAJOR SALES TRANSACT IN 4Q12

RetailtransactionstotalledAUD292.1millionin4Q12andlargelycomprisedofWestfieldsacquisitionofa20%shareinWestfieldKnoxand50%shareinCaseyCentral.

YIELDS REMAIN STABLE

PrimeequivalentyieldswerestableacrossallretailformatsexceptRegionalcentres.ThemedianRegionalcentreyieldforMelbournetightenedfrom6.50%in3Q12to6.25%in4Q12.

12 montH oUtLooK

Theforwardpipelineofprojectscurrentlyunderconstructionorwithplansapprovedsuggestsannualsupplyshouldaverage229,800sqmoverthenextthreeyears.

NEW SUPPLY SIMILAR TO 2012

TheVictorianeconomyandretailturnoverareforecasttopostamodestrecoveryin2013.Leasingmarketconditionsarethereforesettoimproveandlowvacancyratessuggestsomemildupwardpressureonrents.

MILD RENTAL GROWTH ANTICIPATED

YIELDS EXPECTED TO BE RELATIVELY STABLE

Averageretailyieldsareforecasttoremainstabledespiterobustinvestordemandbuttheremaybefurtherwideningoftheyieldrangeinsomeretailsub-sectors.

finAnciAL indices

demAnd

Melbournesaveragevacancyratewasstablein2H12at2.1%buttheresultsweremixedbetweenretailformats.



FutureSupply

2008 2009 2010 2011 2012 2013F

250359 61 190 222 275

sUPPLy

Supplyroseto221,550sqmin2012,representinga17%increasefrom2011.

Fournewprojectscompletedin4Q12comprisingthreeBulkyGoodsoutletsandoneNeighbourhoodcentre.

Retailturnovergrowthdeclined0.3%y-o-yinDecember,reflectingaslowerstateeconomyandlabourmarket.

RENTAL INFORMATION

Regional Shopping Centres Rental Value^ AUD 1479 psm pa

Stage in Cycle Rents Stable No. of Quarters Since Last Peak 0

^net,onNLA

12-MONTH OUTLOOK

Rental ValueRegionalShoppingCentres

RentalValueIndex

IndexBase4Q08=100

120

110

100

904Q

08 4Q

09 4Q

10 4Q11 4Q12


Centro Keilor (19,052sqm)soldforAUD67millionAxis South Morang (20,000sqm)soldforAUD30millionLaurimar Shopping Centre (4,491sqm)soldforAUD19million

Topshop / Topman 1,600sqm,HighpointShoppingCentreSamsung 380sqm,HighpointShoppingCentreZara 2,400sqm,HighpointShoppingCentre


4Q 2012 Highlights21RetailCities|Melbourne

PROPERTY AND ASSET MANAGEMENT

AmanoraTownCentre,Pune1.1millionsqft

CentreSquare,Cochin450,000sqft

CentreSquareBaroda,Vadodara140,000sqft

GulmoharPark,Ahmedabad220,000sqft

Jones Lang LaSalle Retail Track Record: Recent Highlights

LEASING

Marks&Spencer,Mumbai18,000sqft

RelianceHyper,Nashik75,000sqft

PizzaExpress,Mumbai3,900sqftfirsttransaction

asexclusiveadvisor

Marks&Spencer,NewDelhi18,500sqft

Hamleys,NewDelhiFirstHamleysstoreinNorthern

India36,000sqft

Starbucks,NewDelhi5,000sqft,firststorein

NorthIndia

Thailand

IndiaChina

LEASING

Aeon,Guangzhou135,625sqft

ZARA,Guangzhou33,368sqft

I.T,Shanghai25,295sqft

Inditex(ZARA,MassimoDutti,BershkaandPull&Bear),Jilin3,484sqft

BeijingHuananCenter,Beijing807,300sqft

PROJECT LEASING

RockSquare,Guangzhou1,076,391sqft

TheFubonInternational,Shanghai1,022,571sqft

TheStarlifePlaza,Shanghai1,184,030sqft

TheEcoIslandProject,Nanjing376,737sqft

TheTiandiHui,Wuhan1,076,391sqft

PROJECT LEASING

AutomallRangsit,PathumThani473,612sqft


144,571,103millionsqft

LEASING

15.07millionsqft

PROJECT LEASING

58.21millionsqft

CAPITAL MARKETS

billionintransactions3.22> USD

Wine Connection, Phuket

LEASING

WineConnection,Phuket4,521sqft,BananaWalk

VillaMarket,Phuket4,854sqft,BananaWalk

CAPITAL MARKETS

EverbrightMall,GuangzhousoldforUSD318million

TianxingRooseveltMall,DaliansoldforUSD330million


MacquarieGroup5.3millionsqftacross9

shoppingcentres

TheStarlifePlaza,Shanghai1,184,030sqft

RockSquare,Guangzhou1,076,391sqft


BananaWalk,Phuket129,167sqft

The Fubon International, Shanghai

CAPITAL MARKETS

NEX617,214sqftsoldforUSD662million

MurrayTerrace50,000sqftsoldfor

USD60million

TheQuaysideretailunits33,000sqftsoldfor

USD55million

HougangPlaza79,640sqftsoldfor

USD96million

SingaporeLEASING

PureYoga11,507sqftandanchortenantforChevron

House

TommyBahamanewtomarketbrand1,959sqft

CAPITAL MARKETS

WestlandsCentreG/Fshop1soldforUSD33million

YenLokBuildingvariousportionssoldforatotalof

USD13million

Hong KongLEASING

Longchamp8,000sqft,Silvercord

GAP15,800sqft,MPM

Breitling10,000sqft,517-519HennessyRoad

Hamleys, New Delhi

NEX, SingaporeLongchamp, Hong Kong

Measurementsarerepresentedinsquarefeet,roundeduptothenearestfigure.QuotedvalueshavebeenconvertedtoUSDroundeduptothenearestfigureandcorrectasof25March2013.

KoreaPROJECT LEASING

SignatureTower,Seoul39,975sqft

T-Avenue,Seoul10,778sqft

New ZealandLEASING

ANZWellington,22-26WillisStreet5,640sqft

MetroCentre,291-297QueenStreet,Auckland26,910sqft

CAPITAL MARKETS

KelstonShoppingCentre,AucklandUSD24million,232,156sqft

PoriruaMegaCentre,Wellington436,099sqftsoldforUSD25million


Eastgate,Christchurch290,626sqft

MerivaleMall,Christchurch80,729sqft

RetailTrackRecords 23

LEASING

Telstra,Brisbane1,340sqft

MosBurger,BrisbanefirstCBDstore1,722sqft

GuzmanyGomezlargeststoreinAustralia3,767sqft

Australia

CAPITAL MARKETS

FederationCentresPortfolio(formerlyCentro)50%stakesoldinthreeregionalshoppingcentresacrossAustraliaforUSD722million(GalleriaWA,TheGlenVicandColonnadesSA)

MyerCentre,Brisbane(50%)683,293sqftsoldforUSD383million

TopRydeCity,Sydney829,467sqftsoldforUSD356million


BatemansBayShoppingCentre,NSW226,042sqft

KensingtonVillageShoppingCentre,VIC64,583sqft

HorshamPlazaShoppingCentre,VIC135,625sqft

ShoppingCentresofAustraliaTrust(SCA)managementof50shoppingcentresacrossAustraliatotallingover3,767,369sqft

Top Ryde City, Sydney

T-Avenue, Seoul

Kelston Shopping Centre, Auckland

It takes perspective and expertise to stay ahead. Jones Lang LaSalle combines in-depth local knowledge with far-reaching global insights to help you discover hidden opportunities.

With our retail intelligence and integrated platform of leasing, management and capital markets, we provide solid advice that will maximise your investment.

From the high street to out of town, from mini-mart to mega-mall, we measure value the same way one square at a time.

Retail opportunities in every square

joneslanglasalle.com/asiapacific

Asia PacificAnuj PuriHeadofRetail,AsiaPacificChairmanandCountryHead,[email protected]

David [email protected]

AustraliaTony DohertyHeadofRetail,[email protected]

Cameron [email protected]

ChinaEugene [email protected]

Colin [email protected]

Hong KongTom [email protected]

IndiaPankaj [email protected]

Shubhranshu [email protected]

IndonesiaAngela Wibawa [email protected]

James [email protected]

JapanMidori SuzukiCo-HeadofPropertyandAssetManagementmidori.suzuki@ap.jll.com

Taichi IioHeadofRetail,[email protected]

KoreaJay [email protected]

MacauGregory [email protected]

New ZealandAlistair [email protected]

Chris [email protected]

Philippines Lizanne [email protected]

SingaporeHannah [email protected]

TaiwanSteve [email protected]

ThailandSuphin [email protected]

Krid [email protected]

VietnamTrang [email protected]

Thu [email protected]

Asia Pacificwww.joneslanglasalle.com/asiapacificAustraliawww.joneslanglasalle.com.auChinawww.joneslanglasalle.com.cnHong Kongwww.joneslanglasalle.com.hkIndiawww.joneslanglasalle.co.inIndonesiawww.joneslanglasalle.co.idJapanwww.joneslanglasalle.co.jpKoreawww.joneslanglasallekorea.co.krMacauwww.joneslanglasalle.com.moNew Zealandwww.joneslanglasalle.co.nzPhilippineswww.joneslanglasalle.com.phSingaporewww.joneslanglasalle.com.sgSri Lankawww.joneslanglasalle.com.lkTaiwanwww.joneslanglasalle.com.twThailandwww.joneslanglasalle.co.thVietnamwww.joneslanglasalle.com.vn

Jones Lang LaSalle Asia Pacific

COPYRIGHT@JONESLANGLASALLE2013.Allrightsreserved.Thecontentofthispublicationhasbeencompiledfromthevarioussourcesacknowledged.Theinformationisfromsourceswedeemreliable;however,norepresentationorwarrantyismadetotheaccuracythereof.Thisreporthasbeenproducedsolelyasageneralguideanddoesnotconstituteadvice.Westressthatforecastingisaproblematicalexercisewhichatbestshouldberegardedasanindicativeassessmentofpossibilitiesratherthanabsolutecertainties.

jll - retail cities in asia pacific apr13

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