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Hong Kong Office Market Overview

25th September 2012

Q3 2012

PRIVATE & CONFIDENTIALwww.dtz.com

1

Hong Kong office market overviewGDP growth vs. Islandwide net absorption

Source: Census and Statistics Department, DTZ Research

-10

-5

0

5

10

15

20

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

%GFA (million sq ft)

Islandwide net absorption (LHS) GDP

2

Hong Kong office market overviewNet absorption by district

Source: DTZ Research * as of 14th September

DistrictQ2 2008

(Peak) Q1 2011 Q2 2011 Q3 2011 Q4 2011 2011 Q1 2012 Q2 2012 Q3 2012

Sheung Wan 8,914 1,714 10,519 14,313 -14,369 12,177 9,917 -39,280 50,808

Central/ Admiralty 13,851 -26,398 121,563 206,191

-168,017 133,339 -291,194 5,707 -38,369

Wanchai/ Causeway Bay 166,647 87,357 48,520 59,315 30,136 225,328 -7,589 -13,004 168,420

Island East 1,391,479 105,155 118,046 53,186 52,641 329,028 16,226 -16,332 134,268

Hong Kong Island 1,580,891 167,828 298,648 333,005 -99,609 699,872 -272,640 -62,909 315,127

Tsimshatsui 7,930 -115,152 114,058 209,624 20,580 229,110 -25,646 -85,543 44,000

Kowloon East 202,203 25,597 42,093 138,926 -7,848 198,768 130,241 -78,188 199,573

Kowloon 210,133 -89,555 156,151 348,550 12,732 427,878 104,595 -163,731 243,573

Overall 1,791,024 78,273 454,799 681,555 -86,877 1,127,750 -33,537 -226,640 558,700

GFA, sq ft

3

Hong Kong office market overviewVacancy by district

Source: DTZ Research * as of 14th September

District

Q2 2008

(Peak)Q4

2010Q1

2011Q2

2011Q3

2011Q4

2011Q1

2012Q2

2012Q3

2012Frompeak

QOQ change

YOY change

Sheung Wan 3.6% 4.6% 4.6% 4.3% 3.8% 4.3% 4.0% 5.2% 3.6% +0.0% pt -1.6% pt -0.2% pt

Central/ Admiralty 1.1% 3.9% 4.0% 3.6% 2.7% 5.3% 6.4% 6.4% 6.6% +5.5% pt +0.2% pt +3.9% pt

Wanchai/ Causeway Bay 2.3% 4.7% 4.1% 3.8% 3.4% 3.2% 3.3% 3.4% 3.8% +1.5% pt +0.4% pt +0.4% pt

Island East 2.8% 7.0% 6.1% 5.0% 4.5% 4.0% 3.9% 4.0% 2.8% +0.0% pt -1.2% pt -1.7% pt

Hong Kong Island 1.9% 4.8% 4.5% 4.0% 3.4% 4.4% 4.9% 5.0% 4.9% +3.0% pt -0.1% pt +1.5% pt

Tsimshatsui 3.4% 5.5% 6.7% 5.5% 3.2% 3.0% 3.3% 4.2% 3.7% +0.3% pt -0.5% pt +0.5% pt

Kowloon East 14.0% 5.4% 5.1% 4.8% 3.5% 3.6% 4.2% 4.9% 3.2% -10.8% pt -1.7% pt -0.3% pt

Overall 3.5% 5.0% 4.9% 4.3% 3.4% 4.1% 4.6% 4.9% 4.5% +1.0% pt -0.4% pt +1.1% pt

4

Hong Kong office market overviewRental by district

Source: DTZ Research * as of 14th September

District

Q2 2008

(Peak)Q4

2010Q1

2011Q2

2011Q3

2011Q4

2011Q1

2012Q2

2012Q3

2012Frompeak

QOQ change

YOY change

Sheung Wan 52 50 55 59 61 60 58 58 58 +11.5% - -4.9%

Central/ Admiralty 122 105 113 124 125 120 111 107 106 -13.0% -1.0% -15.2%

(Central AAA) 168 136 145 160 162 154 137 131 130 -22.6% -0.8% -19.8%

Wanchai/ Causeway Bay 45 41 44 49 50 48 46 45 47 +4.4% +3.6% -5.3%

Island East 31 33 36 38 39 38 37 37 37 +18.5% - -4.5%

Hong Kong Island 66 69 75 81 83 80 75 73 73 -6.3% -0.2% -11.8%

Tsimshatsui 32 30 32 34 35 33 33 33 33 +4.0% +0.3% -3.7%

Kowloon East 26 27 29 31 31 31 31 31 31 +19.6% - -0.1%

(Kowloon East AAA) 29 29 32 35 35 35 36 36 36 +24.1% - +2.9%

Overall 53 58 63 68 69 67 63 62 62 -6.2% -0.1% -10.6%

HK$ per sq ft

5

Hong Kong office market overviewRental gap between Central and Island East

Source: DTZ Research * as of 7th September

0

20

40

60

80

100

120

140

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Central Island East

HK$ per sq ft per month

$91

$9

$69

6

Hong Kong office market overviewDevelopment pipeline

District Development Total GFA Developer(s)

2012

CentralCCB Tower(Ritz-Carlton Hotel Redevelopment)

220,000 Lai Sun & China Construction Bank

Wan Chai28 Hennessy Road (24-34 Hennessy Road)

150,000 Swire

Kwun Tong Kinggroup Plaza (55 King Yip Street) 240,000 Billion Development

Kwun Tong Elite Centre (20-24 Hung To Rd) 207,000 Sun Hung Kai

Kwun Tong One Pacific Centre (414 Kwun Tong Road)

220,000Hong Kong Pacific Investment

Sub-total 1,037,000

7

Hong Kong office market overviewDevelopment pipeline

District Development Total GFA Developer(s)

2013

Central 31-37 Des Voeux Road Central(United Chinese Bank Building Redevelopment)

86,700 Bank of East Asia

Wong Chuk Hang 38 Heung Yip Road 165,000 Casey

Kowloon Bay 6 Wang Kwong Road(Kwong Sun Hong Redevelopment)

240,000 Billion Development

Kwun Tong 135 Hoi Bun Road 206,000 Sundart Holdings

Kwun Tong 181 Hoi Bun Road 309,000 Sun Hung Kai / Wong’s

Kwun Tong 49 King Yip Street 120,000 Sun Hung Kai

Kwai Chung KCC – Tower B(50 Kwai Cheong Road)

550,000 Sun Hung Kai

Sub-total 1,676,700

8

Hong Kong office market overviewDevelopment pipeline

District Development Total GFA Developer(s)

2014

Central Exchange Square – The Forum 49,400 Hongkong Land

Central 22 Des Voeux Road Central(Wing On Life Building)

81,000 Chinachem

Wong Chuk Hang 50 Wong Chuk Hang Road 120,000 Sun Hung Kai

Wong Chuk Hang 19-21 Wong Chuk Hang Road 200,000 Henderson

Kwun Tong 52-56 Tsun Yip Street 360,000 Billion Development

Kwun Tong 174 Wai Yip Street 453,800 Sun Hung Kai / Wong’s

Kwun Tong 10 Shing Yip Street 198,000 Billion Development

Kwun Tong 15-17 Chong Yip Street(Nan Fung Industrial Building)

250,000 Billion Development

Cheung Sha Wan 10 Cheung Yue Street 173,000 Billion Development

Sub-total 1,885,200

9

Hong Kong office market overviewDevelopment pipeline

District Development Total GFA Developer(s)

2015

Central Shanghai Commercial Bank Building Redevelopment(10-12 Queen’s Road Central)

114,000 Shanghai Commercial Bank

Tsimshatsui New World Centre Development 538,000 New World

Kowloon Bay NKIL 6314(Junction of Kai Cheung Road & Wang Kwong Road)

850,000 Goldin Properties

Kwun Tong NKIL 6269(Junction of Wai Yip Street, Shun Yip Street & Hoi Bun Road)

915,000 The Wharf

San Po Kong 2 Ng Fong Street 380,000 Billion Development

Hunghom KIL 11111(Junction of Hung Luen Road & Kin Wan Street)

589,000 The Wharf

Shatin STIL 412(On Kwan Street, Shek Mun)

351,900 Billion Development

Shatin STTL 463(Junction of On Yiu Street & On Kwan Street, Shek Mun)

430,000 Billion Development

Sub-total 2,468,000

10

Hong Kong office market overviewDevelopment pipeline

District Development Total GFA Developer(s)

2016 & beyond

CentralCentral Government Headquarters Redevelopment

450,000 by Tender

Central Prince’s Building Redevelopment 605,000 Hongkong Land

Central Wing On Central Building 90,000 Chinachem

Kwun TongKTIL 240 (Bus Depot Redevelopment, How Ming Street)

1,000,000 Billon Development

Kwun Tong Kwun Tong Town Centre Redevelopment 2,300,000 Urban Renewal Authority

Quarry Bay Cityplaza One Extension 460,000 Swire

Quarry BaySomerset House, Warwick House & Cornwall House Redevelopment

2,010,000 Swire

Wan Chai Asian House Redevelopment 360,000 Chinachem

Sub-total 7,275,000

11

Hong Kong office market overviewFuture completion by district

Source: DTZ Research

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016+

GFA (sq ft)

Central/ Admiralty Wanchai/ CWB Island East Island South Kowloon East Kowloon West Tsimshatsui Shatin