Cities at the Intersection The New Commercial Geography. Rosemary Feenan

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1 $ % Cities at the Intersection The New Commercial Geography Rosemary Feenan

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3 Static Patterns in Changing World? 50% of investment in 30 cities Seattle Chicago Toronto San Francisco Denver Boston San Jose Los Angeles Dallas NEW YORK Washington DC San Diego Phoenix Atlanta Houston Miami LONDON PARIS Stockholm Berlin Frankfurt Munich Moscow Beijing Shanghai Hong Kong Seoul TOKYO Singapore >$50 bill SUPER CITIES Sydney $20-50 bill $10-20 bill Direct Commercial Real Estate Investment, Q Q2 2014, September 2014

4 The Shifting Hierarchy of Growth Lifting Cities

5 The Power of Technology Spreading Smart

6 The Imperative of Resilience

7 Resurgent Cities Medellin Bogota 7

8 Commercial Real Estate Activity City Evolution Curves Position at High New York London Paris Tokyo Sao Paulo Seoul Shanghai Moscow Istanbul Warsaw Bogota Dubai Madrid Frankfurt Lagos Low Evolution Nascent Early Growth Development Transitional Mature Super City Source: JLL

9 Commercial Real Estate Activity City Evolution Curves The 25 year journey High Tokyo New York London New York Paris Shanghai London Tokyo Sao Paulo Sao Paulo Paris Dubai Moscow Shanghai Moscow Lagos Sao Paolo Istanbul Madrid Bogota Warsaw Madrid Frankfurt Frankfurt Low Dubai Lagos Bogota Istanbul Warsaw Evolution Nascent Early Growth Development Transitional Mature Super City Source: JLL

10 A Change in Tone of the List. Direct Commercial Property Investment, 3-year total volumes, Q Q US$bn 1 London 97 2 New York 90 3 Tokyo 54 4 Paris 52 5 Los Angeles 37 6 Chicago 30 7 Washington DC 29 8 Hong Kong 27 9 Singapore Seoul 26 US$bn 11 Shanghai San Francisco Boston Sydney Dallas Seattle Toronto Houston Stockholm Moscow 15 US$bn 21 Munich San Jose Beijing Atlanta San Diego Frankfurt Denver Miami Phoenix Berlin 10 Europe Americas Asia Pacific Source: JLL

11 The Rise of Tech-Rich Cities Top 12 Office Rent Performers Q3 2014* (year-on-year) Dublin San Francisco Singapore Lyon Houston Taipei Boston Auckland Austin Tokyo Portland Los Angeles Based on rents for Grade A space. *Cities over 1 million population in Advanced and Transitional Economies Source: JLL, October 2014

12 The GAFA Economy, Creating New Platforms for Change

13 A New Silicon Geography

14 A Permanent Realignment? Investment Intensity Index Total Real Estate Investment as proportion of City GDP Oslo Munich London Stockholm Copenhagen Sydney Warsaw Frankfurt Gothenburg Paris Taipei Edinburgh Singapore San Francisco Hong Kong Zurich New York Tokyo * three-year rolling total direct real estate investment volumes to Q Source: JLL, September 2014

15 Urbanisation's Frenetic Pathway : Next Intersection Cities? GDP : Rapid Climbers

16 China, India and LATAM see highest development Office Supply Pipeline - Major Markets, Shanghai Sao Paulo Mexico City Mumbai Dubai Beijing Moscow Tokyo Singapore Hong Kong Paris London Sydney Boston San Francisco Toronto Seoul Washington DC Chicago New York Completions as % of existing stock Source: JLL, October Covers all office sub-markets in each city. Tokyo CBD - 5 wards

17 Risk African Cities Risk v Opportunity Challenge Lowest Jo burg, Cape Town Port Louis Gaborone Tunis, Algiers Dakar Casablanca Accra, Lusaka Dar es Salaam Maputo Cairo Nairobi, Kampala Addis Ababa Luanda Tripoli Khartoum Harare Abidjan Lagos, Abuja Kinshasa Highest Lowest Growth Highest Risk: Country Risk, Oxford Economics, August 2014; GDP Change , Oxford Economics, August 2014 Source: JLL, August 2014

JLL Global 300 17 % 38% 45% Population GDP Office employment $ Investment 72% Office stock 80% JLL Global 300 account for 72% of real estate investment and over 80% of commercial office stock

18 JLL Global % 38% 45% Population GDP Office employment $ Investment 72% Office stock 80% JLL Global 300 account for 72% of real estate investment and over 80% of commercial office stock globally % of global total Jll Global 300 are derived from a weighted basket of population, GDP, corporate presence, air connectivity, commercial real estate stock and real estate investment volumes Source: JLL, 2014 November

19 JLL Global 300 & Economic Commercial Real Alpha Estate Cities Size Investment Attraction Economic Size

Cross-Border Real Estate Investment Activity Real Estate Investment, Q2

61% 39% Tokyo: US$54bn 11% 89% Hong Kong: US$30 bn Shanghai: US$27bn Sao

20 Cross-Border Real Estate Investment Activity Real Estate Investment, Q Q London: US$97bn 41% 59% New York US$90bn 68% 32% Paris: US$57bn 61% 39% Tokyo: US$54bn 11% 89% Hong Kong: US$30 bn Shanghai: US$27bn Sao Paulo: US$3bn San Diego: US$12bn 20% 32% 52% 20% 80% 68% 48% 80% Cross-Border Domestic

21 Growing Share of Cross-Border Investment?

22 Market Transparency

23 Global Real Estate Transparency Index, 2014 Composite Score 5 Sub-Indices Performance Measurement Market Fundamentals Governance of Listed Vehicles Regulatory and Legal Transaction Process Sources: JLL, LaSalle Investment Management 13 Transparency Topics 115 individual questions and data-points for each market

24 Key Drivers of Transparency Improvement, 2014 Media spotlight Source: JLL, LaSalle Investment Management Renewed economic growth Expanding global reach Sustainability tools Recognition of impacts Rising expectations Open Data culture

Global Real Estate Transparency Index, 2014 Opaque Caracas Karachi Algiers Luanda Lagos Khartoum Low Ho Chi Minh City Panama City Casablanca Cairo Lima Bogota Semi Istanbul Shanghai Moscow Jakarta

25 Global Real Estate Transparency Index, 2014 Opaque Caracas Karachi Algiers Luanda Lagos Khartoum Low Ho Chi Minh City Panama City Casablanca Cairo Lima Bogota Semi Istanbul Shanghai Moscow Jakarta Bangkok Seoul Dubai Mumbai Buenos Aires Kiev Riyadh Transparent Hong Kong Singapore Frankfurt Madrid Brussels Warsaw Johannesburg Tokyo Sao Paulo Highly transparent New York London Sydney Toronto Calgary Vancouver Montreal Amsterdam Paris Stockholm Zurich Helsinki

26 Top Transparency Improvers, Nairobi Doha Accra Lagos Bucharest Lusaka Algiers Port Louis Bogota Dublin Belgrade Almaty Lima Budapest Sub-Saharan Africa and Latin America take centre-stage Sources: JLL, LaSalle Investment Management

27 Global Real Estate Transparency Index Predictions for 2016 Technology Social media, Crowdsourcing innovative data models Rising Expectations of Millennial Generation Sustainability Rises Up Agenda Performance Measurement Tools Sub-Saharan Africa shows strongest improvement Return of the BRICs among the Top Improvers

28 The Business of City Competitiveness

29 City Competiveness Indices 2Think Now Innovation Index Creativity and Innovation 1 San Francisco 2 New York 3 London 4 Boston 5 Paris 6 Vienna 7 Munich 8 Amsterdam 9 Copenhagen 10 Seattle 11 Toronto 12 Seoul 13 Berlin 14 Los Angeles 15 Tokyo 16 Stockholm 17 Sydney 18 Hamburg 19 Lyon 20 Hong Kong Z/Yen Global Financial Centres Financial Services Strength 1 New York 2 London 3 Hong Kong 4 Singapore 5 San Francisco 6 Tokyo 7 Zurich 8 Seoul 9 Boston 10 Washington DC 11 Toronto 12 Chicago 13 Geneva 14 Vancouver 15 Luxembourg 16 Frankfurt 17 Dubai 18 Montreal 19 Abu Dhabi 20 Shanghai

30 City Competiveness Indices Mori Memorial Foundation Global Power City Magnetism 1 London 2 New York 3 Paris 4 Tokyo 5 Singapore 6 Seoul 7 Amsterdam 8 Berlin 9 Hong Kong 10 Vienna 11 Frankfurt 12 Zurich 13 Sydney 14 Beijing 15 Shanghai 16 Stockholm 17 Toronto 18 Copenhagen 19 Madrid 20 Los Angeles AT Kearney Global Cities Global Attraction 1 New York 2 London 3 Paris 4 Tokyo 5 Hong Kong 6 Lost Angeles 7 Chicago 8 Beijing 9 Singapore 10 Washington DC 11 Brussels 12 Seoul 13 Toronto 14 Sydney 15 Madrid 16 Vienna 17 Moscow 18 Shanghai 19 Berlin 20 Buenos Aires Source: Mori Memorial Foundation, AT Kearney, Z/Yen

31 The Toronto Competitiveness Cobweb

32 Cities will Follow Different Pathways to Success

Adaptability to new dynamics 10 International connectivity Secure inward investment

33 Global Fluency in Modern Urbanism Ten Attributes of Emerging World Cities Leadership with a worldview Global appeal Legacy of global orientation Specialization & global reach Adaptability to new dynamics 10 International connectivity Secure inward investment Government as global enabler Knowledge and innovation Compelling global brand Brookings/Greg Clark

34 Long- term Momentum JLL City Momentum Index : City Clusters Short-term Momentum Incubator Cities Paris, Berlin, Chicago Amsterdam Copenhagen, Sydney High-Tech Hubs San Francisco, San Jose Austin, Boston, Seoul Toronto, Munich Global Gateways London, New York Hong Kong, Singapore Los Angeles BRIC Urbanisers Shanghai, Beijing Wuhan, Chengdu, Tianjin Shenzhen, Guangzhou Mumbai, Delhi Resurgent Cities Tokyo Dubai, Dublin Beyond the BRICs Lima, Jakarta, Bogota Manila, Bangkok Source: JLL, 2014

35 Real Estate Investment - A Driver of Success

36 $ % This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle IP, Inc. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.

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