Hotel Sector. Research & Forecast Report Jakarta Hotel 2Q Star-Rated Hotel. Accelerating success. Ferry Salanto Associate Director - Research

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1 Research & Forecast Report Jakarta Hotel 2Q 215 Accelerating success. The hotel market in Jakarta is anticipating 6,251 new rooms of all classes over the next three years. By the end of 215, total hotel rooms in Jakarta including star rated and budget hotels will total 46,627 rooms. Moreover, the overall occupancy performance softened to 57.9% compared to 64.8% last year. Similarly, the Average Daily Rate (ADR) was down from USD95.4 at the end of last year to USD 92.9 at the end of this quarter. Ferry Salanto Associate Director - Research Hotel Sector Percentage of Travel and Tourism Industry Growth 15% 1% 5% % -5% -1% -15% Source: World Travel & Tourism Council Star-Rated Hotel World South East Asia Indonesia By 2Q 215, there are 212 new hotel rooms with the addition of 3 star-rated hotel Ibis Harmoni. This resulted in the cumulative supply of rooms under the 3-star category YTD to reach 7,435 rooms. There are two new 4 star-rated hotels that recently opened in Jakarta. Aston Priority Simatupang and Conference Center is located in TB Simatupang area. Aston provides 296 new rooms. In addition, 184 hotel rooms are provided by Veranda Hotel. These two new hotels have contributed to the total of the 4-star category hotels, resulting in 12,749 rooms. Veranda Hotel is a business hotel located in Jl Kyai Maja, Kebayoran Baru area. It provides six meeting rooms, gym, swimming pool, spa and one restaurant as supporting facilities. The location is expected to enable the hotel to target the corporate business market within the CBD, Pondok Indah and TB Simatupang areas. Geographically, Veranda is well situated in an area where the supply of 4-star hotels is limited. Aston Priority Simatupang and Conference Center is located in an emerging CBD in Jakarta called TB Simatupang, providing 12 meeting rooms, one ballroom, coffee shop, restaurant and lounge as supporting facilities. With this location, Aston indirectly indicates that its market segment comprises companies in TB Simatupang and its surrounding areas. None of the projected 5-star hotels in Jakarta opened in 2Q 215. They would most likely operate in the second semester of 215. During the Moslem fasting month (Ramadhan) in June July this year, hotel business in Jakarta is generally quiet and occupancy slows down. Thus, hotel owners would prefer postponing the opening until Ramadhan is over. The hotel market is anticipating a relatively significant number of hotel projects to come along this year. Compared to last year, there will be 2 hotel projects of the 3-star category a jump by 48.78% YoY. Meanwhile, the number of new 4-star and 5-star hotels this year will be moderated, as each will grow by 22.92% and 14.29%, respectively. Accordingly, the greater number of projects is in line with the number of hotel rooms. The market of 4-star category hotels is expected to see an additional 21.77% of hotel rooms YoY or about 2,5 new rooms by the end of 215. Likewise, albeit in a smaller number, the 3-star hotel market is anticipating around 2,2 new rooms in the same period. Only 1, new 5-star rooms are scheduled for completion this year.

2 Cumulative Supply of Star-Rated Hotel Projects in Jakarta 7 Cumulative Supply of Star-Rated Hotel Rooms in Jakarta 14, 6 12, 5 1, 4 8, 3 6, 2 4, 1 2, star 4-star 5-star 215F star 4-star 5-star 215F Source: Colliers International Indonesia - Research Source: Colliers International Indonesia - Research Hotel Developments in Pipeline Name of development star rating str global equivalent rate location region No. of rooms projected completion time Neo Hayam Wuruk 3 Midscale Class Hayam Wuruk Cetral Jakarta Neo Kelapa Gading 3 Midscale Class Kelapa Gading North Jakarta Yello Hotel Hayam Wuruk 3 Economy Hayam Wuruk Central Jakarta Aston Neo 3 Midscale Class TB Simatupang South Jakarta 17 3Q 215 Ibis Styles 3 Midscale Class Pantai Indah Kapuk North Jakarta 2 4Q 215 Prima Hotel 3 Wahid Hasyim Central Jakarta 15 4Q 215 Santika 3 Upper Upscale Class TB Simatupang South Jakarta 16 2Q 216 Santika 3 Upper Upscale Class Yos Sudarso North Jakarta 15 2Q 216 Ibis Styles 3 Midscale Class Bangka Raya South Jakarta 2 3Q 216 The Acacia 3 Kramat Raya Central Jakarta 15 3Q Tanah Abang Central Jakarta 225 4Q 216 Citizen M Hotel 3 Upscale Class Mega Kuningan CBD 2 4Q 218 Harris Hotel Hayam Wuruk 4 Upscale Class Hayam Wuruk Central Jakarta Harris Hotel Gunung Sahari 4 Upscale Class Gunung Sahari Central Jakarta Harris Hotel Cilandak 4 Upscale Class Cilandak South Jakarta Grand Mercure Kemayoran 4 Upscale Class Benyamin Sueb Central Jakarta Novotel 4 Upscale Class Pantai Indah Kapuk North Jakarta 22 4Q 215 SwissBelhotel - Kirana Commercial Avenue 4 Upscale Class Boulevar Kelapa Gading North Jakarta Holiday Inn Hotel & Suites Jakarta Gajah Mada 4 Upper Midscale Class Gajah Mada Central Jakarta 447 1Q 216 Aloft 4 Upscale Class Wahid Hasyim Central Jakarta 17 4Q South Tower 4 Mega Kuningan CBD 112 4Q 217 Continued 2 Research & Forecast Report 1Q 215 Hotel Colliers International

3 Hotel Developments in Pipeline Name of development star rating Source: Colliers International Indonesia - Research and STR Global str global equivalent rate location region No. of rooms projected completion time Continuation Sheraton 5 Upper Upscale Class Gandaria South Jakarta 3 3Q 215 InterContinental 5 Luxury Class Pondok Indah South Jakarta 3 4Q 215 The Westin Jakarta 5 Upper Upscale Class Rasuna Said CBD St Regis 5 Luxury Class Gatot Subroto CBD Ammi Hotel 5 Kebayoran Baru South Jakarta The Langham 5 Luxury Class SCBD CBD Rosewood 5 Luxury Class Satrio CBD W World 2 5 Luxury Class Satrio CBD Regent 5 Luxury Class Gatot Subroto CBD Sofitel 5 Luxury Class Mega Kuningan CBD Waldorf Astoria 5 Luxury Class Thamrin CBD Budget Hotel Budget hotels fill the market gap not taken by star-rated hotels. There is always a need for a place to stay or rest but not if the need is for fancy facilities or services and other hotel features. Thus far, budget hotels in Jakarta are generally in the proximity of business activities despite not being in the main business area. Using the STR-Global rating, these types of hotels are generally classified as economy-class hotels. Categorized as economy-class hotels, the general market is mainly price sensitive, resulting in a tight competition level. By the end of, there were a total of 4,248 rooms of hotels of this category from the operation of 33 hotels. By the end of 215, the cumulative number of new budget hotels has increased to nine projects, bringing the cumulative number of room to 5,191. Of the operating budget hotels in Jakarta, there are some active hotel operators managing more than one hotel, including Santika, Aston, Accor and Tauzia. Cumulative Supply of Budget Hotels (Economy Class) in Jakarta F Source: Colliers International Indonesia - Research Budget Hotel (Economy Class) Developments in the Pipeline Name of development str global rate location region Source: Colliers International Indonesia - Research and STR Global No. of rooms projected completion time POP! Hotel Pasar Baru Economy Pasar Baru Central Jakarta POP! Hotel Wahid Hasyim Economy Wahid Hasyim Central Jakarta Whiz - Cipete Cipete South Jakarta 18 - Cawang Cawang East Jakarta POP! Hotel Gadjah Mada Economy Gadjah Mada Central Jakarta Whiz - Hayam Wuruk Hayam Wuruk Central Jakarta Amaris TB Simatupang Economy TB Simatupang South Jakarta BIG Hotel (extention) Gunung Sahari Central Jakarta Research & Forecast Report 1Q 215 Hotel Colliers International

4 Hotel Demand Starting 215 with lower ADR and ARR figures compared to the same period in, the hotel industry undeniably slumped in an unfavourable condition. There are several factors that contributed to this condition. First is the policy of banning government institutions from holding meetings and conferences in hotels and convention centres. Like other capital cities, business hotels characterise the whole composition of hotels in Jakarta aiming at guests with business purpose as the major demand driver. This includes the private sector, as well as government offices. With market from the government sector being the main push for hotel occupancy, such regulation resulted in a great impact to the hotels performance. This ban raised protest from the hotel industry, so the government revoked the regulation. With the relaxing of such measure, the hotel industry is expected to sustain its growth trajectory. Although the unsupportive regulation has been eased, the fundamental weaknesses in the hotel sector performance are basically from the internal condition of the hotel industry, as well as external factors. The internal situation in this industry is the fierce competition amongst hotels. With the currently large number of hotels, the industry is still expecting a significant number of future hotels projected to operate over the next two or three years. Externally, the instability of world economy has made the struggle become more intense, particularly for new businesses. Number of Passenger Through Soekarno - Hatta Airport, Ngurah Rai and Juanda Airports 1,, 9,, 8,, 7,, 6,, 5,, 4,, 3,, 2,, 1,, Source: Statistics Bureau Office (BPS) Soekarno - Hatta Ngurah Rai Juanda Indonesia As discussed above, the disparity between supply and demand contributes to the decline in hotel occupancy. Based on the most recent data from the Statistics Bureau Office (BPS), 888,686 passengers have landed in Soekarno - Hatta International Airport since the beginning of this year until May, 215. This number is 6% lower compared to that in. Jakarta ranks second after Bali in terms of number of passengers. A contradictive condition between the declining number of passengers and the increasing number of hotel rooms has placed the hotel industry in a tough competition. This condition is evidenced by the ongoing development and the opening of new hotels in Jakarta. Performance Although not showing considerably good performance, the sign of moderate recovery has been noted, particularly post the government s cooling measure to annul the ban of meetings in the hotels mentioned above. Occupancy Overall, the occupancy performance of Jakarta hotels QoQ increased at least until May this year. The YTD occupancy data showed an increase by 3.4%. Meanwhile, the biggest increase in the occupancy was experienced by hotels located outside the CBD (5.3%), followed by the CBD area by 1.8%. The occupancy rate of hotels located in the CBD is recorded at 6.2%, whereas that outside the CBD is registered at 56.2%. The overall occupancy performance in the whole Jakarta area stood at 57.9%. The highest increase in occupancy experienced by 4-star hotels was 3.78%, making the occupancy level of this category reach 62.8%. In most cases, quite a few industries are administering efficiency due to the slowing down economy by lowering the accommodation budget, thus helping push the occupancy level of 4-star hotels. Similarly, albeit in lower figure, the occupancy of 5-star hotels was up by 1.2%, bringing the occupancy to 63.5%, particularly benefiting from the international level of the Asian African Conference held in Jakarta and Bandung. Only the occupancy for 3-star hotels slightly decreased by 1.17% to 59.5%, mainly due to the tight competition in this segment. In general, the occupancy level of hotels in Jakarta, particularly in the CBD area and its proximity, is high during the weekdays as business activities characterize the purpose of staying at hotels in Jakarta. Location-wise, any hotel near the amenity areas of Jakarta, such as Ancol, generally register high occupancy on weekends or during the holiday season. The special worship month of Ramadhan habitually lessens the pace of business activity, particularly in the latest week of the month or approaching the peak of the Islamic festival Eid ul-fitr. During this period, hotel booking activities generally reduce in quantity. 4 Research & Forecast Report 1Q 215 Hotel Colliers International

5 Average Occupancy Rate 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % 1Q 215 Average Occupancy Rate (by Month - during 215) 1% 9% 8% 7% 6% 5% Almost all classes of hotels showed a relatively flat number. In MoM review, only the CBD posed a minor up-and-down trend. By April this year, the ADR for CBD area was registered at USD132.28, Jakarta at USD93.51 and outside the CBD at USD6.78. Based on star-rated hotels, the highest QoQ ADR increase occurred in 3-star hotels with 3.55%, to reach USD The second highest increase of ADR happened in 5-star hotels with 2.22%, to reach USD The least was in 4-star hotels with.31%, to reach USD Based on star-rated hotels, the highest QoQ ADR increase happened in 5-star hotels with 7.16%, to reach USD The second highest increase of ADR occurred in 3-star hotels with 6.6%, to reach USD7.16. The least was in 4-star hotels with 4.7%, to reach USD Average Daily Rate of Hotels in Jakarta USD 16. USD 14. USD 12. USD 1. USD 8. USD 6. USD 4. USD 2. 4% 3% 2% USD. 1Q 215 1% % January February March April May Average Daily Rate Hardly any change was noted in the ADR figure in 215 YTD compared to the ADR in. The ADR for the whole Jakarta area stood as it was last quarter. The relatively obvious change in QoQ ADR happened in the CBD area with 2.25% increase, bringing it to a record of USD However, the ADR for hotels outside the CBD area decreased by.58% compared to 1Q 215, and was registered at USD Research & Forecast Report 1Q 215 Hotel Colliers International

6 Average Daily Rate (by Month - during 215) USD 16. USD 14. USD 12. USD 1. USD 8. USD 6. USD 4. USD 2. USD. January February March April May 6 Research & Forecast Report 1Q 215 Hotel Colliers International

7 52 offices in 67 countries on 6 continents United States: 14 Canada: 31 Latin America: 24 Asia: 39 ANZ: 16 EMEA: 18 $2.3 billion in annual revenue Primary Authors: Ferry Salanto Associate Director Jakarta Ferry.Salanto@colliers.com Colliers International Indonesia World Trade Centre 1th & 14th Floors Jalan Jenderal Sudirman Kav Jakarta 1292 Indonesia TEL million square meters managed 16,3 professionals and staff About Colliers International Group Inc. Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIG) is a global leader in commercial real estate services with more than 16,3 professionals operating from 52 offices in 67 countries. With an enterprising culture and significant insider ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include brokerage, global corporate solutions, investment sales and capital markets, project management and workplace solutions, property and asset management, consulting, valuation and appraisal services, and customized research and thought leadership. Colliers International has been ranked among the top 1 outsourcing firms by the International Association of Outsourcing Professionals Global Outsourcing for 1 consecutive years, more than any other real estate services firm. colliers.com Copyright Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Accelerating success.