asia pacific industrial market overview dec 2011

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This is the thirteenth issue of the Asia Pacific IndustrialMarket Overview, which covers 13 cities in nine countries,for the review period of April to September 2011. Withthis bi-annual update, we hope to provide an overview ofindustrial markets catering to multinational corporationsand a comparison of industrial real estate costs acrossthe key cities of the Asia-Pacific. Three types of industrialproperties are tracked in this report, namely singleuserfactory premises, single-user warehouse premisesand multi-user high-specifications industrial premises,as these are the preferred choices of multinationalcorporations. This publication features land and capitalvalues, as well as rents of single-user industrial premises;and rents of multi-user high-specification factories.

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  • 1. ASIA PACIFICINDUSTRIAL MARKET OVERVIEWDecember 2011Accelerating success.
  • 2. TABLE OF CONTENTS ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | DECEMBER 2011This is the thirteenth issue of the Asia Pacific Industrial Regional Overview 3Market Overview, which covers 13 cities in nine countries,for the review period of April to September 2011. With Australia5-6this bi-annual update, we hope to provide an overview of Melbourne............................................................................................................. 5industrial markets catering to multinational corporations Sydney.................................................................................................................. 6and a comparison of industrial real estate costs across the key cities of the Asia-Pacific. Three types of industrial China 7-9properties are tracked in this report, namely single- Beijing....................................................................................................................7 Guangzhou............................................................................................................ 8user factory premises, single-user warehouse premises Shanghai............................................................................................................... 9and multi-user high-specifications industrial premises, as these are the preferred choices of multinational Hong Kong SAR 10-11corporations. This publication features land and capital values, as well as rents of single-user industrial premises; India 12and rents of multi-user high-specification factories. New Delhi............................................................................................................12 Indonesia 13 Jakarta................................................................................................................. 13 Japan 14 Greater Tokyo......................................................................................................14 New Zealand 15-16 Auckland..............................................................................................................15 Wellington............................................................................................................16 Singapore 17-18 Taiwan19 Taiwan..................................................................................................................19 International Comparison 20-26 Single-user Warehouse Land Values, Capital Values and Monthly Gross Rents................................................................................... 20 Single-user Factory Land Values, Capital Values and Monthly Gross Rents................................................................................... 23 Multi-user High-Specs Average Monthly Gross Rents..................................... 26 Local Market Norm 27-29 Single-user Warehouse Land Values, Capital Values and Monthly Gross Rents................................................................................... 27 Single-user Factory Land Values, Capital Values and Monthly Gross Rents................................................................................... 29 Definitions & Terminology 30
  • 3. REGIONAL OVERVIEWThe economies of the Asia Pacific region showed slower growth weighed down by concernsover the anaemic state of the US economy and European sovereign debt woes. The moreopen economies, like Singapore and Taiwan, saw a marked slowdown in GDP growth on ayear-on-year (YoY) basis during the current review period, due to shrinkages in manufacturingoutput. On the other hand, manufacturing sectors in China and Indonesia remained buoyantbolstered by their strong domestic markets. Economic performance varies for countriesrecently hit by natural disasters. While the Japanese economy remained in recession, thePacific region was more resilient, evident from the low positive growth in New Zealandsand Australias GDP numbers.Of the 182 industrial submarkets across the 13 Asia Pacific cities surveyed, 88.0% or atotal of 160 submarkets either showed growth or were stable during the period betweenApril and September 2011. This is similar to the 88.0% of the 184 industrial submarketssurveyed during the previous period between October 2010 and March 2011. We wereunable to track the Urayasu submarket which remained inundated after the earthquakeand tsunami in March.In line with the downgrading of general business sentiments globally, land and capitalvalues as well as rents for industrial space saw slower growth averaging at 4.7%, 3.6% and2.7% during the six months ending September 2011, compared with the average growth of5.1%, 4.2% and 3.7%, respectively in the previous six-month period. However, high-specsindustrial space bucked this trend, and with a higher average rental growth of 4.1% in thisreview period compared with the 2.0% recorded in the previous one.In total, 43 out of 53 industrial submarkets surveyed in the Asia Pacific region saw theirland values either holding steady at the levels of six months ago or trending up. Notably, inJakartas Bekasi and Karawang, average land prices soared by a record breaking 45.0%during the six months between April and September 2011 due to the aggressive growth ofthe automotive industry in Indonesia combined with a drought in industrial land supply. Incontrast, limited availability teamed with cautious investor sentiments kept values stable inSydney and Auckland. Land values were also flat in Guangzhous GETDD as multinationalcorporations shied away from acquiring industrial land, following a series of measuresintroduced by the Chinese government to regulate the real estate market. The remainingsubmarkets which saw decreases in land values are primarily located in quake-stricken Japan.Moving on to building sales, 49 out of the 58 submarkets surveyed recorded either flat oran increase in capital values. Growth was strongest in Hong Kong, as uncompromisingvendors kept factory and warehouse prices soaring by up to 19.2% and 16.4% respectively.Its economic rival, Singapore, saw warehouse capital values increase by as much as 16.0%,up from the 7.2% recorded in the previous review period, underpinned by occupier demandand acquisition interest from REITS. Capital values were stable in Delhi and Shanghaias credit-tightening measures and high financin

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