1. Analysis - What does Q1 cost data indicate about the outlook for Hong Kong's construction market?

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2 Contents 1. Analysis - What does Q1 cost data indicate about the outlook for Hong Kong's construction market? 2. Approximate Building Costs in Hong Kong 3. Construction & Installation Price Index - Mainland 4. Tender Price Index - Hong Kong 5. Materials 6. Labour 7. Gross Value of Construction Work Performed - Hong Kong 8. Approximate Building Costs for Major Cities in Asia Statistical data are compiled from sources deemed reliable but accuracy is not guaranteed. The information contained herein should be regarded as indicative and for general guidance only. Whilst every effort has been made to ensure accuracy, no responsibility can be accepted for errors and omission, however caused. All rights reserved. Reproduction of this data, in whole or in part, is permitted providing the source is quoted.

3 1 Analysis - What does Q1 cost data indicate about the outlook for Hong Kong's construction market? In the first three months of 2016, Hong Kong s construction market reached an all-time high in terms of output and has been very busy. However, the approval of new works from LegCo in 1Q2016 was relatively slow compared with previous years. This slow approval rate and more subdued economies in Macau and are impacting market confidence as the outlook for future work looks less certain. By June 11th the Public Works Sub-Committee (PWSC) had approved around HKD67bn worth of public works, with a further HKD7bn subject for review before LegCo goes into recess. This value is at a similar level to the 2014/15 sessions, however before the money can be released, it must receive final approval from the Finance Committee (FC) and this has been slower to come through this year. The first quarter saw only a small portion of the HKD67bn approved by the PWSC successfully trickle down into the market. Anecdotal evidence also indicates that less consultancy work has been awarded which will affect construction levels further down the line. In the last couple of months the approval rate seems to have picked up with HK47.1bn of new works now approved by the FC. As election season begins to take hold, including the LegCo elections in September, it will be interesting to monitor whether the elections impact the level of filibustering seen in the first half of the year and the future approval of works. Against this backdrop, it s increasingly important to understand the current dynamics playing out within the Hong Kong, Macau and Greater construction markets, and in particular, how some of the key trends emerging could impact the viability of current and future projects. In our analysis of a wide range of cost data and lead factors from Q1, we saw five key themes: 1. Drop in Tender Price Index inflation continues in Hong Kong: At the end of last year, the government TPIs began to slow down with the ASD BWTPI negative for the first time since 2Q2009. Our quarter on quarter increase for 1Q2016 shows a 0.4% rise, representing a 2.36% increase year-on-year since 1Q2015. We have revised our own 12 month forecast down to circa 2% and this could drop further the market is currently busy but the pipeline appears slimmer towards the end of the year. Another point that s worth noting is that in our analysis of the façade tender returns we ve received over the last 6-9 months, we noted higher than average price increases particularly in residential curtain wall and window works. We attribute this to the limited number of specialist facade contractors available in the market. The external wall elements could be contributing to a higher tender price, which may be masking a more pronounced slowdown. Overall, our unit rates of construction have remained flat. FIRST QUARTER

4 1 Analysis - What does Q1 cost data indicate about the outlook for Hong Kong's construction market? 2. Slow approval from LegCo impacting on balance in supply and demand: In 4Q2015 the gross output of construction work in Hong Kong reached a record high, with a combined nominal value of HKD221bn. This is 68% higher than the previous peak in 1997 with the public sector showing a particular rise. A spike in work output in Q4 is not uncommon however it must be factored into programmes to avoid the risk of under supply of resource to deliver or close out projects at year end. Given that workload reached this record high, the slowdown in approval of works from LegCo in the first half of this year may mean that output has reached its peak, and mid-term forecast will remain relatively flat. However, if the same pace of decision making continues throughout the next six months, it could tip the balance too far in the opposite direction. 3. Labour costs in Hong Kong continue to rise in 2016: In the first three months of the year overall labour prices rose by 1% with rebar benders and fixers and mechanical services trades showing the biggest positive movement. Whilst this has led to a focus on wages it s important to look beyond just the salaries paid. The higher quality standards that are now expected within Hong Kong s construction industry in terms of finish, compliance, health and safety and sustainability, means that the extent of labour that needs to be carried out onsite is much higher than before. If the work itself is becoming more complex and labour intensive, then additional man days are needed and it s inevitable that costs will remain higher. To get a greater control over rising construction costs, the government has launched a 3S initiative. This stands for Standardisation, Simplification and Single integrated element. This campaign is focused on trying to increase productivity and rationalise the manpower demand of trades with a predicted shortage of labour. In the medium to long term we can expect to see wider use of innovative approaches like pre-fabrication and more application of technology like BIM. These aren t currently filtering through to the private sector although there are some good examples in the public sector where the Housing Authority is already an early adopter of pre-fabricated solutions. In 1Q2016 the percentage of young workers increased by 2% and workers aged over 40 dropped from 67.7% to 67.2%. The increase in young workers is a positive development, however the percentage of older workers is still higher than most other markets. 4. Increase in unemployment levels in Hong Kong may signal beginning of a wider slowdown One of the interesting points to note in the 1Q2016 data was an increase in unemployment in certain parts of the construction industry, particularly the decoration and maintenance trades. This may reflect the time of year, with a number of people looking for new jobs following bonuses and pay reviews, however these trades often serve as a good barometer for the health of the wider industry. A rise in unemployment in these areas could signal the start of a slowdown in workload throughout FIRST QUARTER

5 1 Analysis - What does Q1 cost data indicate about the outlook for Hong Kong's construction market? The slowdown in Hong Kong s retail sector and an increase in the number of professionals coming back from Macau are two other contributing factors that are worth monitoring over the coming months. 5. Slowdown in increasingly evident in construction industry Q1 statistics indicate that in Mainland, many of the inputs to construction are showing a year-on-year decrease or negative inflation. For example, construction labour prices are increasing at the slowest rate for seven years with a rise of just 3.7% in 1Q2016. This is much lower than the 10-15% rises we were typically seeing as recently as Similarly, compared with 1Q2015, the cost of core construction materials like copper, concrete, steel reinforcement and cement has decreased by 7.2% overall. However, whilst year-on-year material costs are significantly down, 1Q2016 data showed an increase in the cost of these materials. This may be a bit of market volatility or a seasonal adjustment, with suppliers and manufacturers known to raise prices in the first quarter of a year, however it could also indicate that the market has bottomed out. Despite the decrease in material costs in Mainland, unit rates have generally remained flat as rising labour costs have offset any potential savings here. An opportunity on the horizon? So what can we take from the first quarter statistics in 2016? Is it a good time to build in Hong Kong with material prices low, or should the industry be more concerned at the all-time record highs of output, at a time when labour wages continue to rise and our industry continues to grow older? Similarly, can we consider these market trends in Hong Kong in isolation? Or do we also need to factor in the slowdown in workload in Macau and the impact of changing conditions in Mainland as well? A conclusive answer to these questions will become clearer over the coming months however the continued softening in the Tender Price Index should not be overlooked or underestimated. There is an opportunity for clients to start looking at bringing forward their projects as lower costs can be secured by tendering new work at a time when the construction market outlook is less positive, and economies in Hong Kong, Macau and Mainland continue to face headwinds. FIRST QUARTER

6 2 Approximate Building Costs in Hong Kong Building Type HK$/m2 CFA Outline Specification DOMESTIC Apartments, high rise, public authority standard 11,000-14,000 Apartment units with fit-out, based on Hong Kong Housing Authority Non-standard Cruciform Block design Apartments, high rise, average standard 24,500-28,800 Apartment units with fit-out, including air-conditioning, kitchen cabinets and home appliances, but excluding decorative light fittings and loose furniture Apartments, high rise, high end 33,100-38,500 Apartment units with good quality fit-out, including airconditioning, kitchen cabinets and home appliances, but excluding decorative light fittings and loose furniture Terraced houses, average standard 33,600-39,200 Houses with fit-out, including air-conditioning, kitchen cabinets and home appliances, but excluding decorative light fittings, loose furniture, garden and parking Detached houses, high end 43,500-49,500 Houses with good quality fit-out, including air-conditioning, kitchen cabinets and home appliances, but excluding decorative light fittings, loose furniture, garden and parking OFFICE / COMMERCIAL Medium/high rise offices, average standard 24,000-28,500 RC structure, curtain wall/window wall, including public area fit-out, tenant area with screeded floor, painted wall and ceiling High rise offices, prestige quality 29,800-36,700 RC structure, curtain wall, including public area fit-out, tenant area with raised floor/carpet, painted wall and false ceiling Out-of-town shopping centre, average standard Retail malls, high end 32,600-38,700 INDUSTRIAL Owner operated factories, low rise, light weight industry HOTEL 24,500-28,800 Including public area fit-out and M&E, but excluding shop fit-out 18,800-23,900 RC structure, including small office with simple fit-out and M&E, but excluding a/c and heating Budget hotels - 3-star, mid market 31,300-33,800 1) Interior decoration 2) Furniture (fixed and movable) Business hotels - 4/5-star 32,800-38,800 3) Special light fittings (chandeliers, etc.) Luxury hotels - 5-star 38,400-44,500 4) Operating Supplies and Equipment (OS&E) excluded OTHERS Underground/basement car parks (<3 levels) Multi storey car parks, above ground (<4 levels) 18,500-23,000 RC structure 11,500-13,500 RC structure, natural ventilation, no facade enclosure Schools (primary and secondary) 20,200-21,900 Public authority standard, including fit-out, no a/c, complete with basic external works but excluding educational equipment Students' residences 19,800-23,000 Including fit-out, loose furniture and a/c Sports clubs, multi purpose sports/ leisure centres (dry sports) 31,000-35,000 Dry sports (no swimming pool) and are for 'leisure centre' type schemes including main sports hall, ancillary sports facilities, changing and showers, restaurant / cafe, bar, etc. Costs include a/c, Furniture, Fittings and Equipment (FF&E) General hospitals - public sector 40,000-45,500 Excluding medical and operating equipment Notes: 1. The costs for the respective categories given above are averages based on fixed price competitive tenders. It must be understood that the actual cost of a building will depend upon the design and many other factors and may vary from the figures shown. 2. The costs per square metre are based on Construction Floor Areas (CFA) measured to the outside face of the external walls / external perimeter including lift shafts, stairwells, balconies, plant rooms, water tanks and the like. 3. All buildings are assumed to have no basements (except otherwise stated) and are built on flat ground, with normal soil and site conditions. The cost excludes site formation works, external works, land cost, professional fees, finance and legal expenses. FIRST QUARTER

7 3 Construction & Installation Price Index - Mainland Index Construction & Installation Price Index Published (by NBS of ) (Base : Corresponding Quarter in Preceding Year = 100) Projected (by Arcadis) (Base : Q4/2002 = 100) (see explanatory notes below) Quarter / Year st Quarter nd Quarter rd Quarter th Quarter Source : National Bureau of Statistics (NBS) of Explanatory Notes: Data are published on a quarterly basis, measuring the year-on-year change in price level of each quarter, but the quarter-on-quarter change is not published, ie. the changes between consecutive quarters are not given. To give an illustration of the price trend over time, Arcadis applies a hypothetical calculation to derive the data table and chart as above, basing on the following understanding and assumptions: 1. Only indices from 1st Quarter 2003 and onwards are published. 2. For 2002 and before, indices were only published annually. This annual index indicates that the average fluctuation of 2002 was moderate. Arcadis' own in-house data further substantiates that construction costs in 2002 were rather stable throughout the year. 3. Changes between quarters in 2002 are assumed to be evenly distributed throughout the year. This establishes a notional relationship between the four quarters in 2002 and can be compared with the published data for 2003 to find their notional quarter-on-quarter changes. 4. For comparison purposes, 4th Quarter 2002 is referred to as base and the base index as 100. FIRST QUARTER

8 4 Tender Price Index - Hong Kong Quarter / Year ASD BWTPI (Base = 100, at Year 1970) Q ,118 1,074 1,134 1,273 1,414 1,516 1,621 1,732 Q , ,161 1,320 1,438 1,532 1,648 1,761 Q ,401 1,111 1,249 1,369 1,467 1,559 1,679 1,777 Q ,262 1,107 1,266 1,408 1,496 1,590 1,703 1,775 ASD BSTPI (Base = 100, at Year 1989) Q () Q Q () 225 Q () 196 Arcadis TPI (Base = 100, at Year 1970) Q1 1,020 1,239 1,245 1,297 1,385 1,511 1,688 1,789 1,946 1,992 Q2 1,074 1,360 1,242 1,315 1,425 1,552 1,713 1,808 1,958 2,000* Q3 1,175 1,355 1,253 1,342 1,452 1,595 1,747 1,857 1,963 2,010* Q4 1,150 1,281 1,273 1,367 1,491 1,632 1,786 1,903 1,984 Source: Notes: Competitive tenders received by Arcadis, Building Works Tender Price Index (BWTPI) and Building Services Tender Price Index (BSTPI) of Architectural Services Department (ArchSD) of HKSAR. 1. [*] denotes forecast figures. 2. Both BWTPI (ArchSD) and Arcadis TPI measure the trend of general builder s works only. Special works and Mechanical and Electrical Services would have to be considered separately. 3. All indices were published quarterly. For reference purpose, only indices from 1st quarter of 1998 and onwards are given in detail, whereas indices between the years 1970 to 1997 are shown with their 4th Quarter figures. FIRST QUARTER

9 5 Materials Mainland Construction Material Prices Year-on-Year Change Quarter / Year st Quarter (-)0.4% (-)4.5% (-)7.2% 2nd Quarter (-)1.2% (-)4.6% 3rd Quarter (-)1.6% (-)3.7% 4th Quarter (-)2.4% (-)8.2% Source : National Bureau of Statistics of Basic Construction Materials FIRST QUARTER

10 6 Labour Mainland Construction Labour Prices Year-on-Year Change Quarter / Year st Quarter (+)6.9% (+)5.7% (+)3.7% 2nd Quarter (+)6.0% (+)4.5% 3rd Quarter (+)5.7% (+)3.9% 4th Quarter (+)5.9% (+)4.3% Source : National Bureau of Statistics of Hong Kong SAR Age Group No. of Workers Employed by Construction Industry Age , % Age , % Age , % Total (as at Apr 2016) : 378, % Source : Census & Statistics Department, Hong Kong SAR Age Distribution of Workers FIRST QUARTER

11 7 Gross Value of Construction Work Performed - Hong Kong Quarter Value Performed (HK$ Million) A. Private sector sites 1st Quarter 6,051 6,959 8,382 8,600 6,349 7,529 11,209 11,675 13,395 15,528 2nd Quarter 6,161 7,429 8,122 9,055 9,276 8,458 12,260 12,176 12,507 17,284 3rd Quarter 6,016 6,582 7,688 8,408 7,360 9,192 12,481 11,848 12,792 16,849 4th Quarter 6,627 8,004 9,303 7,543 7,322 10,102 13,411 13,781 15,259 16,426* Year Total : 24,855 28,974 33,495 33,606 30,307 35,281 49,361 49,480 53,953 66,087* B. Public sector sites 1st Quarter 4,693 4,293 3,819 3,967 6,511 9,880 13,168 16,829 18,258 18,531 2nd Quarter 3,998 3,575 3,762 4,652 6,937 9,263 12,023 14,690 15,397 18,964 3rd Quarter 3,918 3,105 3,653 4,428 8,651 10,814 12,137 13,792 16,253 18,163 4th Quarter 4,526 3,530 4,105 5,605 9,117 12,113 17,332 16,976 18,915 21,425* Year Total : 17,135 14,503 15,339 18,652 31,216 42,070 54,660 62,287 68,824 77,082* C. Locations other than sites 1st Quarter 11,229 10,995 11,883 11,750 11,926 12,172 13,347 15,140 17,909 19,549 2nd Quarter 12,305 11,979 13,213 12,415 12,109 11,620 13,245 15,914 20,327 18,744 3rd Quarter 12,368 13,057 12,818 11,969 12,620 12,953 14,358 16,038 18,636 19,520 4th Quarter 12,338 13,358 12,851 12,552 13,097 14,439 16,479 17,716 20,088 20,478* Year Total : 48,240 49,389 50,765 48,686 49,752 51,184 57,429 64,809 76,960 78,291* Annual gross value performed (A + B + C) Total : 90,230 92,866 99, , , , , , , ,461 * Provisional Source : Census and Statistics Department, Hong Kong SAR FIRST QUARTER

12 8 Approximate Building Costs for Major Cities in Asia Building Type Shanghai Beijing Guangzhou/ Shenzhen Chongqing/ Chengdu Dalian Shenyang RMB / m 2 CFA DOMESTIC Apartments, high rise, average standard 2,470-2,850 4,280-4,750 2,500-2,900 4,000-4,400 2,210-2,450 3,310-3,650 2,200-2,500 3,100-4,100 2,360-2,540 3,570-4,140 2,260-2,450 3,300-3,760 Apartments, high rise, high end 3,050-3,330 10,460-11,420 3,000-4,400 10,000-11,400 2,280-3,050 5,500-6,060 2,600-3,200 5,000-6,600 2,720-3,100 6,780-7,430 2,630-3,010 5,410-6,120 Terraced houses, average standard 2,850-3,050 2,900-3,400 5,900-6,400 2,490-2,750 2,500-3,000 2,630-3,020 2,450-2,820 Detached houses, high end 4,280-4,750 4,400-4,900 11,400-11,900 3,410-3,750 3,400-4,000 3,570-3,960 3,300-3,580 OFFICE / COMMERCIAL Medium/high rise offices, average standard 5,700-7,600 5,700-7,700 4,810-5,320 5,100-6,100 5,370-5,740 5,180-5,640 High rise offices, prestige quality 7,600-9,500 7,700-12,700 6,630-7,320 6,500-9,000 7,340-7,720 7,060-8,000 Out-of-town shopping centre, average standard 4,400-5,900 4,580-5,050 4,000-5,300 4,700-5,280 4,240-4,700 Retail malls, high end 8,080-10,450 7,900-10,900 6,770-7,470 7,000-9,500 7,250-8,190 7,060-8,000 INDUSTRIAL Industrial units, shell only. (Conventional single storey framed unit) Owner operated factories, low rise, light weight industry 3,330-3,800 3,400-3,900 3,130-3,450 2,800-3,700 HOTEL Budget hotels - 3-star, mid market 6,180-7,600 6,400-7,900 6,230-6,880 6,000-7,500 6,400-6,960 6,220-6,870 Business hotels - 4/5-star 10,450-14,250 10,900-13,900 10,060-11,110 10,500-13,500 10,810-12,240 9,410-12,240 Luxury hotels - 5-star 14,250-17,100 13,900-17,900 13,720-15,150 OTHERS Underground/basement car parks (<3 levels) Multi storey car parks, above ground (<4 levels) 4,750-6,660 4,900-5,400 3,160-5,060 3,560-3,960 2,370-3,330 2,900-3,400 2,260-2,490 2,100-2,500 2,310-2,410 2,210-2,380 Schools (primary and secondary) 3,330-4,280 3,400-4,400 2,500-2,770 Students' residences 2,370-3,330 2,400-3,400 1,600-1,770 Sports clubs, multi purpose sports/leisure centres (dry sports) 6,180-7,600 5,900-7,900 4,690-5,180 General hospitals - public sector 9,500-12,350 7,900-9,900 FIRST QUARTER

13 8 Approximate Building Costs for Major Cities in Asia Building Type Hong Kong Macau Singapore Kuala Lumpur Bangkok USD / m 2 CFA (See also exchange rates per U.S. dollar below) HK$ 7.80 MOP 7.98 S$ 1.41 RM 4.20 BAHT DOMESTIC Apartments, high rise, average standard 3,140-3,690 1,692-2,506 2,168-2,657 1,350-1, Apartments, high rise, high end 4,240-4,940 2,506-3,747 3,033-4,637 2,060-3, ,086 Terraced houses, average standard 4,310-5,030 2,957-3,684 3,709-4,424 1,740-1, Detached houses, high end 5,580-6,350 3,584-5,163 4,511-5,877 2,200-2, OFFICE / COMMERCIAL Medium/high rise offices, average standard 3,080-3,650* 2,506-3, # High rise offices, prestige quality 3,820-4,710 3,233-3, , ,001 ## Out-of-town shopping centre, average standard 3,140-3,690 2,356-3,534 1,915-2, Retail malls, high end 4,180-4,960 3,709-4,474 2,060-2, INDUSTRIAL Industrial units, shell only. (Conventional single storey framed unit) Owner operated factories, low rise, light weight industry ,410-3, HOTEL Budget hotels - 3-star, mid market 4,010-4,330 3,296-3,722 2,165-2, ,370 1,072-1,187 Business hotels - 4/5-star 4,210-4,970 4,474-5,338 2,770-3,125 1,695-1,985 1,372-1,573 Luxury hotels - 5-star 4,920-5,710 5,338-6,316 2,770-3,125 1,890-2,205 1,601-1,715 OTHERS Underground/basement car parks (<3 levels) Multi storey car parks, above ground (<4 levels) 2,370-2,950 1,955-2, , ,470-1,730 1,078-1, Schools (primary and secondary) 2,590-2,810** 2,155-2, Students' residences 2,540-2,950 1,717-1,992 1,600-1, Sports clubs, multi purpose sports/leisure centres (dry sports) 3,970-4,490 1,990-2, General hospitals - public sector 5,130-5,830 2,770-2, ,055 FIRST QUARTER

14 8 Approximate Building Costs for Major Cities in Asia Building Type Jakarta Brunei Manila Seoul USD / m 2 CFA (See also exchange rates per U.S. dollar below) IDR 13,525 B$ 1.40 PHP KRW 1,131 DOMESTIC Apartments, high rise, average standard , , ,193 1,361-1,635 Apartments, high rise, high end 908-1, ,254 1,180-1,516 1,061-1,282 1,635-2,006 Terraced houses, average standard Detached houses, high end 950-1, ,058 1,535-1,950 1,025-1,264 2,218-3,376 OFFICE / COMMERCIAL Medium/high rise offices, average standard , ,202-1,388 High rise offices, prestige quality 958-1,071 1,102-1,393 1,080-1,352 1,396-1,715 Out-of-town shopping centre, average standard , ,131-1,750 Retail malls, high end ,288 1,034-1,596 1,326-2,192 INDUSTRIAL Industrial units, shell only. (Conventional single storey framed unit) Owner operated factories, low rise, light weight industry HOTEL Budget hotels - 3-star, mid market 1,127-1,332 1,474-1, ,254 1,653-2,077 Business hotels - 4/5-star 1,542-1,666 2,079-2,369 1,306-1,793 2,316-3,995 Luxury hotels - 5-star 1,643-1,852 2,134-2,425 2,028-2,503 2,572-4,110 OTHERS Underground/basement car parks (<3 levels) Multi storey car parks, above ground (<4 levels) , Schools (primary and secondary) ,158 Students' residences ,326-1,503 Sports clubs, multi purpose sports/leisure centres (dry sports) 1,020-1,528 1,572-1, ,504 General hospitals - public sector 1,767-2,058 1,351-1,780 FIRST QUARTER

15 8 Approximate Building Costs for Major Cities in Asia DOMESTIC Building Type Apartments, high rise, average standard Apartments, high rise, high end Terraced houses, average standard Detached houses, high end OFFICE / COMMERCIAL Medium/high rise offices, average standard High rise offices, prestige quality Out-of-town shopping centre, average standard Retail malls, high end INDUSTRIAL Industrial units, shell only. (Conventional single storey framed unit) Owner operated factories, low rise, light weight industry HOTEL Budget hotels - 3-star, mid market Business hotels - 4/5-star Luxury hotels - 5-star OTHERS Underground/basement car parks (<3 levels) Multi storey car parks, above ground (<4 levels) Schools (primary and secondary) Students' residences Sports clubs, multi purpose sports/leisure centres (dry sports) General hospital - public sector Outline Specification Shell and core, including finishes to public area, but excluding finishes to apartment units Full fit, with air-conditioning, kitchen cabinets and home appliances, but excluding decorative light fittings and loose furniture Shell and core, including finishes to public area, but excluding finishes to apartment units Full fit, good quality provisions, with air-conditioning, kitchen cabinets and home appliances, but excluding decorative light fittings and loose furniture Shell and core, joined houses in row(s), excluding garden, parking, finishes and fittings to house interior Full fit, joined houses in row(s), with air-conditioning, kitchen cabinets and home appliances, but excluding decorative light fittings, loose furniture, garden and parking Shell and core, good quality facade, excluding garden, parking, finishes and fittings to house interior Full fit, good quality provisions, with air-conditioning, kitchen cabinets and home appliances, but excluding decorative light fittings, loose furniture, garden and parking RC structure, curtain wall, including public area fit-out, tenant area with raised floor/ carpet, painted wall and false ceiling Including public area fit-out and M&E, but excluding shop fit-out RC structure with steel roof and M&E to main distribution, but excluding a/c, heating and lighting RC structure, including small office with simple fit-out and M&E, but excluding a/c and heating 1) Interior decoration 2) Furniture (fixed and movable) 3) Special light fittings (chandeliers, etc.) 4) Operating Supplies and Equipment (OS&E) excluded RC structure RC structure, natural ventilation, no facade enclosure Including fit-out and a/c, but excluding educational equipment Including fit-out, loose furniture and a/c Dry sports (no swimming pool) and are for 'leisure centre' type schemes including main sports hall, ancillary sports facilities, changing and showers, restaurant / cafe, bar, etc. Costs include a/c, Furniture, Fittings and Equipment (FF&E) Excluding medical and operating equipment Notes: 1. The costs for the respective categories given above are averages based on fixed price competitive tenders. It must be understood that the actual cost of a building will depend upon the design and many other factors and may vary from the figures shown. 2. The costs per square metre are based on Construction Floor Areas (CFA) measured to the outside face of the external walls / external perimeter including lift shafts, stairwells, balconies, plant rooms, water tanks and the like. 3. All buildings are assumed to have no basements (except otherwise stated) and are built on flat ground, with normal soil and site conditions. The cost excludes site formation works, external works, land cost, professional fees, finance and legal expenses. 4. The standard for each category of building varies from region to region and do not necessarily follow that of each other. 5. Shell and core generally covers ONLY base building elements. Shell refers to overall structure and foundations, exterior walls, floors and roof, completing with common areas, staircases, lift shafts, service ducts and fire services systems to local statutory requirements. Core refers to fully-fitted public areas (like lobbies, corridors and lavatories) and M&E main plant and upfeed, with tenant or occupant areas unfurnished. 6. Full fit buildings should complete with all elements that allow the buildings to be ready for operation, including public and tenants (or occupants ) areas (i.e. with ALL finishes, fittings and M&E distributions). 7. Fluctuation in exchange rates may lead to changes in construction costs expressed in U.S. dollars. 8. Hong Kong: * (i) Tenant area with screeded floor, painted wall and ceiling (ii) Facade in curtain wall/window wall ** Public authority standard, no a/c and complete with basic external works Excluding Open on all sides with parapet Bangkok: # (i) Excluding raised floor/carpet and inter-tenancy partition (ii) Facade in windows and brick wall/pre-cast concrete panel ## Excluding raised floor/carpet and inter-tenancy partition Seoul Excluding home appliance Curtain wall to external wall Steel structure Medium to high grade cladding, with garden Mechanical ventilation and car guidance system FIRST QUARTER

16 Our Offices in Greater HONG KONG 38/F, AIA Kowloon Tower Landmark East 100 How Ming Street Kwun Tong, Kowloon Hong Kong T: (852) F: (852) E: BEIJING Suite , South Wing Central Tower, Junefield Plaza 10 Xuan Wu Men Wai Street Beijing , T: (86 10) F: (86 10) CHANGSHA Room 11051, Zhong Tian Plaza 766 Wu Yi Avenue Furong District Changsha, Hunan Province T: (86 731) F: (86 731) CHENGDU Room 807 Block A Times Plaza 2 Zong Fu Road Chengdu, Sichuan Province T: (86 28) F: (86 28) CHONGQING Room 3408 International Trade Centre 38 Qing Nian Road Central District Chongqing , T: (86 23) F: (86 23) DALIAN Unit 07, 32F, Xiwang Tower 136 Zhongshan Road Zhongshan District Dalian, Liaoning Province T: (86 411) F: (86 411) FOSHAN 3/F, Foshan Ling Nan Tian Di Zu Miao Road Shop Nos. Z01-Z11 Zu Miao Road, Foshan Guangdong Province , T: (86 757) F: (86 757) GUANGZHOU 3A10-18 Unit, 3/F Bank of America Plaza 555 Ren Min Zhong Road Guangzhou Guangdong Province T: (86 20) F: (86 20) HAIKOU Unit B, 27/F, Times Square 2 Guomao Road Haikou, Hainan Province T: (86 898) F: (86 898) HANGZHOU Room 2305, WinNing International 100 Min Xin Road Hangzhou Zhejiang Province , T: (86 571) F: (86 571) HENGQIN 7/F, 156 Nan Shan Ju Road Hengqin, Zhuhai Guangdong Province T: (86 756) F: (86 756) MACAU 12th Floor Avenida da Praia Grande No. 594 Edificio BCM Macau T: (853) / F: (853) E: iinfo-mo@arcadis.com NANJING Room 1104 South Tower Jinmao Plaza 201 Zhong Yang Road Nanjing T: (86 25) F: (86 25) QINGDAO Room 09, 16/F, HNA Center 234 Yan An San Road Shinan District Qingdao Shangdong Province T: (86 532) F: (86 532) SHANGHAI 11th Floor, Building C, The Place No. 150 Zunyi Road Changning District Shanghai T: (86 21) F: (86 21) SHENYANG Room Office Tower 1, Forum Qingnian Avenue Shenhe District Shenyang Liaoning Province T: (86 24) F: (86 24) SHENZHEN Room 1001, AVIC Centre 1018 Huafu Road Shenzhen Guangdong Province T: (86 755) F: (86 755) SUZHOU Room 906, Century Financial Tower 1 Suzhou Avenue West Suzhou Jiangsu Province T: (86 512) F: (86 512) TIANJIN 4002, 40F, Tianjin World Financial Centre Office Tower 2 Dagubei Road Heping District Tianjin T: (86 22) F: (86 22) WUHAN Room 1008, 10/F Corporate Centre 5 Wuhan Tiandi 1628 Zhongshan Road Wuhan Hubei Province T: (86 27) F: (86 27) XI'AN Unit 06-07, 16/F CapitaMall Office Building 64 South Second Ring Western Xi'an Shaanxi Province T: (86 29) F: (86 29)

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