AsiaMarketViewQ12010CBRERESEARCH|ASIACONTENTS 2 MarketOverview 9 EconomicUpdate 10 FeaturesMarketSnapshot 17 Office 35 Retail 43 Industrial 49 LuxuryResidential 55 MajorMicromarketsbySector 57 Terminology&Definitions59 Contacts60 AsiaOffices?2010CBRichardEllis,Inc.Weobtainedtheinformationabovefromsourceswebelievetobereliable.However,wehave61 AsiaMapnotverifieditsaccuracyandmakenoguarantee,warrantyorrepresentationaboutit.Itissubmittedsubjecttothepossibilityoferrors,omissions,changeofprice,rentalorotherconditions,priorsale,leaseorfinancing,orwithdrawalwithoutnotice.Weincludeprojections,opinions,assumptionsorestimatesforexampleonly,andtheymaynotrepresentcurrentorfutureperformanceoftheproperty.Youandyourtaxandlegaladvisorsshouldconductyourowninvestigationofthepropertyandtransaction.2ASIAMARKETVIEWQ12010MARKETOVERVIEWDemandforcommercialpropertyinAsiacontinuedtogrowinthefirstquarterof2010“Occupiersintheastheimprovingeconomicenvironmentencouragedcompaniestoreviveexpansionaryofficesectortookplansandactivelysearchfornewpremises.Numerousoccupiersintheofficesectortookadvantageoftheadvantageofthelengthydownwardcorrectioninrents-whichhaslastedoverayearinmostmarkets-toupgradetheirpremisestoGradeAfacilitieswhileariseinleasinglengthydownwardactivitywasrecordedinkeyshoppingdistrictsinmajorAsiancitiesasretailers,particularlycorrectioninrentsfastfashionandF&Bchains,displayedarenewedwillingnesstoexpand.Intheindustrialtoupgradetheirsector,ajumpindemandforindustrialpropertydroveincreasesinrentsinseveralmajorcitiesacrossChina,whilebuyersandinvestorsintheluxuryresidentialsectorexhibitedpremises”amorecautiousstancefollowingashiftinrealestatepolicysettingsimplementedbyvariousgovernmentslookingtoclampdownonspeculativeactivityandreinintherapidescalationofcapitalvalues.CBRichardEllisAsiaOfficeOFFICEMARKETRentalIndexTheopeningquarterof2010sawtherobusttake-upofofficespaceinAsia’smajor300OverallIndexIndiacommercialcentresascorporatesbecamemorewillingtocommittospaceatcurrentSEAsia250GreaterChinarentals.ThelengthydownwardcorrectioninrentswitnessedoverthepastyearinmostJapanmarketsencouragedoccupierstoupgradetoGradeAofficesasoverallbusinesssentiment200aroundAsiawasliftedbythecontinuedimprovementintheregionaleconomy.The150labourmarketalsotightenedwiththeunemploymentrateclearlytrackingdownwardsinmostmarketsasselectedlarge-scalecorporationsannouncingplanstoincreasetheir100headcounts.50TherecoveryofdemandintheAsianofficesectorwasreflectedbythegrowthinnet0absorptionwhichwas31%higherthaninthefourthquarterof2009.MostofthecitiesQ12001Q12002Q12003Q12004Q12005Q12006Q12007Q12008Q12009Q12010(Q12001=100)surveyedrecordedpositiveabsorptionandhencethefirstquartersawoverallvacancyforAsiancitiesdeclineby80bpsq-o-qto11.8%.TheperiodwasalsocharacterisedbythestrongerperformanceoftheGradeAmarketcomparedtotheGradeBsectorasoccupiersembarkedonanewroundofflight-to-qualityactivityinordertolockinleaseswithfavourableterms.Asthequarterprogressedlandlordsbegantotakeafirmerstancetowardsrentalnegotiationsasthemarketstartedtoseethereturnofstrongerdemandamidsttheimprovementintheeconomicenvironment.Overallofficerentsfell0.1%representingamarkeddeclinefromthe1.9%percentdecelerationrecordedinthefourthquarterof2009.CitiesinGreaterChinaexitedthedownwardrentalcyclesomewhatearlierthancitieselsewherearoundtheregion.Beijing,Shanghai,Guangzhou,HongKongandTaipeiallrecordedq-o-qgrowthinofficerentals.India’sleadingcommercialcentresalsosawfurthersignsofofficerentalsbottomingout,withanumberofprimeofficedistrictsinNCRandMumbaistartingtoseeclearsignsofrentalrecovery.RETAILMARKETConsumersentimentinAsiacontinuedtoimproveinthefirstquarteronthebackofincreasedjobsecurityandtheaccelerationoftheeconomicrecovery.TheLunarNewYearholidayalsohelpedboostretailsalesduringtheperiod.Retailersshowedagreaterwillingnesstocommittonewshopsforbusinessexpansionandincreasedleasingactivitywasrecordedinkeyshoppingareasinmajorcities.FastfashionandF&Bchainsremainedthemajordriversofdemand.PrimeretailrentsinmostAsiancitiesrecordedmildgrowth