Investment Sales Market

2Q 2013 INVESTMENT SALES RESEARCH & FORECAST REPORT SINGAPORE REAL ESTATE MARKET Investment Sales Market Singapore s property investment sales staged a healthy showing in 2Q 2013 despite concerns over the sustainability of the low interest rate environment. Total property investment sales value inched up 4.0% on a quarter-on-quarter (QoQ) basis to $7.21 billion in the April to June 2013 period from the $6.93 billion garnered in 1Q 2013. This brought the total investment sales value for 1H 2013 to $14.14 billion, just 3.1% shy of the $14.59 billion closed in 1H 2012. Singapore s property investment sales staged a healthy showing in 2Q 2013 despite concerns over the sustainability of the low interest rate environment. While private investment sales managed to rake in some $4.99 billion worth of deals public sector sales fell by 18.3% QoQ to $2.23 billion in the three months ending 30 June 2013. While private investment sales managed to rake in some $4.99 billion worth of deals, representing an improvement of 18.5% from the $4.21 billion accumulated in the preceding quarter, public sector sales fell by 18.3% QoQ to $2.23 billion in the three months ending 30 June 2013. TOTAL INVESTMENT SALES S$ Million $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 Total property investment sales value inched up 4.0% on a quarter-on-quarter (QoQ) basis to $7.21 billion in the April to June 2013 period This brought the total investment sales value for 1H 2013 to $14.14 billion $2,000 Nonetheless, developers strong appetite for residential land sites, particularly those that are rare and well located, bolstered the public land sales market. $0 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 Public SectorP Private Sector The public sector saw the sale of 12 land parcels in 2Q 2013, comprising seven residential sites (four for non-landed homes, two for executive condominiums and one for landed housing), four industrial sites and one petrol service station site. The fall in sales value was due to a lack of land parcels designated for higher value use, as compared to 1Q 2013 when two commercial sites and one mixed-use site were transacted. Nonetheless, developers strong appetite for residential land sites, particularly those that are rare and well located, bolstered the public land sales market. This was manifested in some land tenders that closed with more than 10 bids, including two non-landed residential sites on Kim Tian Road and Faber Walk, as well as a land parcel located on Coronation Road/Victoria Park Road designated for landed homes. www.colliers.com

While private residential land sales activities remained sluggish in 2Q 2013 private land sales volume improved by 47.5% QoQ from the conclusion of five residential land sales worth a total of $365.57 million. In all, developers picked up some $2.42 billion worth of residential development sites from both the public and private sectors in 2Q 2013, representing 65.1% of the sector s investment sales value compared to the 57.4% share such sales garnered in the preceding quarter. The condominium site located on Kim Tian Road was the most sizeable residential State land parcel sale in 2Q 2013 in terms of absolute price quantum. A unit of Keppel Land Limited topped the 11-party tender exercise for the 118,302-sq ft 99-year leasehold site with its bid of $550.28 million or $1,163 per sq ft per plot ratio. Another showcase of developers enthusiasm for residential land was the tender for a 162,808-sq ft condominium site located on Faber Walk. It drew a whopping 18 bidders when the tender closed in June 2013 with the highest bid submitted by Aspial Corporation Limited s subsidiary, World Class Land Pte Ltd, at $156.69 million or $687 per sq ft per plot ratio. Also in June 2013, a record price was achieved for a 99-year leasehold landed residential site located on Coronation Road/Victoria Park Road. It was snapped up by a subsidiary of CapitaLand Limited in a 12-party tender exercise. The winning bid of $908.16 per sq ft per plot ratio (or $366.00 million) is the highest unit land price achieved for a 99-year leasehold landed site since the award of the landed housing parcel located on Wak Hassan Drive from Sembawang Greenvale Phase 3 for $640 per sq ft per plot ratio to Fragrance Homes Pte Ltd in October 2010. While private residential land sales activities remained sluggish in 2Q 2013 due to a lack of suitably priced private residential development land and the ample supply of residential sites under the 1H 2013 Government Land Sales (GLS) programme, private land sales volume improved by 47.5% QoQ from the conclusion of five residential land sales worth a total of $365.57 million. The most noteworthy residential collective sale in 2Q 2013 was the conclusion of Gilstead Court on Gilstead Road for $150.17 million or $1,292 per sq ft per plot ratio (including a 10% balcony area) to a subsidiary of Tuan Sing Holdings Limited. Located in the prime District 11, the freehold site measuring 75,479 sq ft will be developed into a high-end residential project, according to the developer. Another notable residential land transaction was the collective sale of freehold Yi Mei Garden, located on Tampines Road, to Roxy- Pacific Holdings Limited for $136.00 million, which translates into $856 per sq ft per plot ratio including a development charge of about $4.00 million. The developer also inked another collective sales deal on Lorong K Telok Kurau. The freehold site, which currently houses SunnyVale Apartments, was acquired for $25.00 million or $771 per sq ft per plot ratio. Additionally, Chancery Garden, which sits on a 29,468-sq ft freehold lot on Chancery Hill Road, changed hands for $41.00 million via a private treaty, reflecting $1,391 per sq ft over land area. In all, developers picked up some $2.42 billion worth of residential development sites from both the public and private sectors in 2Q 2013, representing 65.1% of the sector s investment sales value compared to the 57.4% share such sales garnered in the preceding quarter. This helped to lift the sector s total investment sales value by 18.6% QoQ to reach $3.72 billion in 2Q 2013. The collective sales market also saw the sale of a commercial development, Bright Chambers on Middle Road, for $45.00 million or $1,076 per sq ft per plot ratio over its existing gross floor area (GFA) to entities linked to the Pamfleet Group, an independent and privately PRIVATE COLLECTIVE SALES PRIVATE COLLECTIVE SALES IN 2Q 2013 PROPERTY NAME LOCATION SALE PRICE SALE PRICE ($ PER SQ FT PER PLOT RATIO) SECTOR TENURE BUYER Gilstead Court 54M Gilstead Road 150.17 1,292 Residential Freehold Tuan Sing Holdings Limited Yi Mei Garden 111 Tampines Road 136.00 856 Residential Freehold SunnyVale Apartments 134B Lorong K Telok Kurau 25.00 771 Residential Freehold Roxy-Pacific Holdings Limited Roxy-Pacific Holdings Limited Milton Court 21 Paya Lebar Crescent 13.40 721 Residential Freehold Logistics Holdings Limited Bright Chambers 108 Middle Road 45.00 1,076 Commercial 99 years from 01/12/1974 Entities linked to Pamfleet Group P. 2 COLLIERS INTERNATIONAL

five commercial deals boosted the investment sales value of commercial properties in 2Q 2013 to $1.82 billion, 49.2% above the $1.22 billion chalked up in the first three months of 2013. INVESTMENT SALES VALUE INVESTMENT SALES VALUE IN 2Q 2013 PROPERTY SECTOR NON-INSTITUTIONAL PRIVATE SECTOR SALES INSTITUTIONAL SUBTOTAL PUBLIC SECTOR SALES GRAND TOTAL Industrial 310.75 0.00 310.75 146.74 457.49 Commercial 1,368.46 454.00 1,822.46 0.00 1,822.46 Residential 1,662.34 0.00 1,662.34 2,053.63 3,715.97 Hospitality 50.00 564.30 614.30 0.00 614.30 Mixed 250.00 0.00 250.00 0.00 250.00 Others 325.79 0.00 325.79 27.03 352.82 Total 3,967.34 1,018.30 4,985.64 2,227.40 7,213.04 held real estate investment adviser based in Hong Kong. Zoned commercial, the 5,263-sq ft site has a balance lease term of about 60 years. The commercial sector also saw the conclusion of several noteworthy deals involving completed buildings. The biggest commercial deal, which is also the largest private deal this year, was the sale of a 25% equity stake in the 99-year leasehold, Jem. Located adjacent to the Jurong East Mass Rapid Transit (MRT) Station, the retail-office development was sold by Lend Lease Corporation to Lend Lease Jem Partners Fund for $454.00 million (assuming a gearing ratio of 50% and the price for the equity portion of 25% at $227.00 million). This reflects a blended rate of $2,022 per sq ft based on Jem s total net lettable area of about 898,000 sq ft. Other significant deals in the sector include Tuan Seng Holdings Limited s buy of the freehold Robinson Point on Robinson Road for $348.90 million or $2,579 per sq ft; the sale of an office and retail development, PoMo on Selegie Road to EH Property and Investments Pte Ltd (a Joint-Venture between BS Capital Pte Ltd and Enviro-Hub Holdings Limited) for $336.00 million or $1,897 per sq ft; and the disposal of a 14-storey freehold office building at 135 Cecil Street for $182.00 million or $2,191 per sq ft by Alpha Core Real Estate Fund that is managed by Keppel Land s unit Alpha Investment Partners, to Indonesian tycoon Tahir, the founder of the Mayapada Group. Additionally, all 22 retail units at The Sail @ Marina Bay were acquired by Wen Way Investments Pte Ltd, a Singapore-incorporated company controlled by mainland China investors, for a combined sum of $105.00 million or $4,582 per sq ft. The conclusion of the aforementioned five commercial deals boosted the investment sales value of commercial properties in 2Q 2013 to $1.82 billion, 49.2% above the $1.22 billion chalked up in the first three months of 2013. At $1.82 billion, the commercial sector maintained its second spot with its market share of 25.3% in the quarter s sales chart after the residential sector. COMPOSITION OF INVESTMENT SALES VALUE IN 1Q 2013 BY SECTOR Residential 51.1% Hospitality 8.5% Mixed 3.5% At $1.82 billion, the commercial sector maintained its second spot with its market share of 25.3% in the quarter s sales chart after the residential sector. Others 4.9% Commercial 25.3% Industrial 6.3% COLLIERS INTERNATIONAL P. 3

the hospitality sector chalked up a total of $614.30 million worth of deals in 2Q 2013 reflecting a quantum leap from the meagre $150.00 million sealed in the preceding three months. the mixed-use sector saw the quarter s sales plunge by 75.0% from the $1.00 billion amassed in 1Q 2013. The moderation in investment sales deals was also witnessed in the industrial sector the total investment sales plummeted 54.6% QoQ to reach $457.49 million the lowest in 16 quarters since 2Q 2009. it has also become more challenging for thirdparty facility providers, including institutional investors like REITs, to purchase industrial properties sitting on land leased from the JTC Corporation. there is potential for Singapore s investment sales market to improve progressively in the next six months. The total investment sales value from the public sector for 2H 2013 is likely to exceed that garnered in 1H 2013, given the availability of sites designated for higher value commercial/retail use. Trailing behind was the hospitality sector which leapfrogged to the third spot with its market share of 8.5%, up from last position in the preceding quarter. The sector chalked up a total of $614.30 million worth of deals in 2Q 2013 reflecting a quantum leap from the meagre $150.00 million sealed in the preceding three months. Riding on the thriving tourism sector in Singapore, Singapore Real Estate Investment Trusts (REITs) inked two significant deals in the 2Q 2013. Ascendas Hospitality Trust acquired Park Hotel Clarke Quay at 1 Unity Street from Parksing Properties Pte Ltd for $300.00 million or $892,857 per room at the beginning of the quarter. This marked the Trust s first foray into Singapore s hospitality market. Reportedly, the 330-room hotel will continue to be managed by the Park Hotel Group and will be leased to the group for an initial term of 10 years, with an option to renew for another fiveyear term. Far East Hospitality Trust expanded its footprint in Singapore s hospitality market by acquiring Rendezvous Grand Hotel Singapore and Rendezvous Gallery on Bras Basah Road for $264.30 million for its 70-year leasehold interest in the property together with the plant and equipment. The property, which sits on a 99-year leasehold land commencing from 30 March 1994, comprises a 298-room hotel and 24,703 sq ft of retail space dedicated to food and beverage outlets. In addition, the Berjaya Hotel, located on Duxton Road, also changed hands for $50.00 million or $1.02 million per room to Satinder Garcha s Elevation Group. With a remaining tenure of approximately 74 years, the 49-room hotel is housed in eight adjoining three-storey conservation shophouses, which also accommodate an office and a restaurant. Other hotel-related deals include the sale of the 99-year leasehold Park Regis Singapore on Merchant Road for $250.00 million to a China investor. The asset is a seven-storey integrated development comprising a 41,392-sq ft office tower and a 203-room hotel, which is currently managed by Australia-based StayWell Hospitality Group. Assuming the office space is valued at $2,000 per sq ft, the pricing for the hotel component works out to be some $823,700 per room. This made up the sole transaction in the mixed-use sector which saw the quarter s sales plunge by 75.0% from the $1.00 billion amassed in 1Q 2013. The moderation in investment sales deals was also witnessed in the industrial sector. In the three-month period from April to June, the total investment sales accumulated in the industrial sector plummeted 54.6% QoQ to reach $457.49 million the lowest in 16 quarters since 2Q 2009. This came about as investors retreated to the sidelines following the imposition of a seller s stamp duty on industrial properties sold within three years of purchase with effect from 12 January 2013. In addition, it has also become more challenging for third-party facility providers, including institutional investors like REITs, to purchase industrial properties sitting on land leased from the JTC Corporation. This is because, effective from 1 January 2013, such buyers are required to put in an upfront land premium for the remaining part of the lease term. All things being equal, this potentially increases the acquisition price for a property and could translate to a lower yield. Only a handful of smaller price-quantum warehouses were transacted in the industrial sector in 2Q 2013 and these include Metro Holdings Limited s divestment of Metro Holdings Building on Pasir Panjang Road for $39.80 million to OC Land, an acquisition vehicle incorporated by wine importer and supplier Wine Culture. Golden Logistics Hub on Pioneer Walk was also sold off by Ascendas REIT (A-REIT) to CKE Private Limited for $32.00 million. With global macroeconomic conditions stabilising and the United States on a slow recovery trajectory, there is potential for Singapore s investment sales market to improve progressively in the next six months. The total investment sales value from the public sector for 2H 2013 is likely to exceed that garnered in 1H 2013, given the availability of sites designated for higher value commercial/ retail use. For instance, a commercial site at Cecil Street and Telok Ayer Street, which is scheduled for tender closing on 15 August 2013, is likely to give next quarter s public land sales a boost. Additionally, the Government continues to ensure an ample supply of land through its biannual GLS programme for the coming six months. Collectively, the 31 sites on the Confirmed List and 23 sites on the Reserve List would be able to yield about 14,155 homes (including 3,320 executive condominium units), P. 4 COLLIERS INTERNATIONAL

The private investment sales sector is poised for more activity with a line-up of Initial Public Offerings (IPO) of REITs in 2H 2013. sales emanating from the industrial sector are likely to remain thin given that investors, especially existing industrial REITs, have shifted their focus to overseas for yield-accretive deals. While hotels are expected to be the favourite asset class among investors, limited quality stocks as well as the likelihood of yield compression could curtail sales. the total investments sales value for the second half of 2013 is forecast to surpass the $14.14 billion garnered in 1H 2013 Singapore s investment sales market is on track to achieve the full year forecast of $37.00 billion. 2.89 million sq ft GFA of commercial space, 955 hotel rooms and 5.45 million sq ft GFA of industrial space. The private investment sales sector is poised for more activity with a line-up of Initial Public Offerings (IPO) of REITs in 2H 2013. Already, the shareholders of Singapore Press Holdings (SPH) and Overseas Union Enterprise (OUE) have given the green light to inject their respective portfolios of properties into REITs. Reportedly, properties that are to be injected into the OUE Hospitality Real Estate Investment Trust include Mandarin Orchard Singapore and its adjacent Mandarin Gallery. The IPO is expected to raise up to $613.60 million. This is in addition to the potential IPOs of at least two industrial REITs in the next half of the year. Turning to the completed building segment, sales emanating from the industrial sector are likely to remain thin given that investors, especially existing industrial REITs, have shifted their focus to overseas for yield-accretive deals. While hotels are expected to be the favourite asset class among investors, limited quality stocks as well as the likelihood of yield compression could curtail sales. 482 offices in 62 countries on 6 continents United States: 140 Canada: 42 Latin America: 20 Asia Pacific: 195 EMEA: 85 $2.0 billion in annual revenue 1.12 billion square feet of property under management Over 13,500 professionals SINGAPORE: Colliers International 1 Raffles Place #45-00 One Raffles Place Singapore, 048616 TEL +65 6223 2323 FAX +65 6222 4901 RCB NO. 198105965E On the other hand, driven by the strong appetite for strata-titled commercial units, developers and investors are increasingly scouting for older commercial buildings that are centrally located and have redevelopment potential. Being cognisant of the above and assuming the successful listings of new REITs, the total investments sales value for the second half of 2013 is forecast to surpass the $14.14 billion garnered in 1H 2013. Hence, Singapore s investment sales market is on track to achieve the full year forecast of $37.00 billion. RESEARCHER: Chia Siew Chuin Director EMAIL singapore.research@colliers.com This report and other research materials may be found on our website at www.colliers.com. Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for general information only. Colliers International makes no guarantees, representations or warranties of any kind, express or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s). 2013. All rights reserved. Accelerating success. www.colliers.com