DTZ Research. Occupier Perspective Global Occupancy Costs Logistics 2014 SwareQ Asian cost advantages to reduce further. 22 October 2014.

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1 Occupier Perspective Global Occupancy Costs Logistics 2014 SwareQ Asian cost advantages to reduce further 22 October 2014 Contents Section 1 Global ranking 2 Section 2 Fundamental demand drivers 4 Section 3 Structural demand drivers 5 Section 4 Supply trends 7 Section 5 Outlook 8 Definitions 10 Author Milena Kuljanin Occupier Research milena.kuljanin@dtz.com Contacts Richard Yorke Head of Occupier Research +44 (0) richard.yorke@dtz.com Fergus Hicks Global Head of Forecasting + 44 (0) fergus.hicks@dtz.com Hans Vrensen Global Head of Research + 44 (0) hans.vrensen@dtz.com In this edition of our Global Logistics Landscape report, we present the costs of occupying prime logistics space in 89 global markets - 25 more than our last report. Furthermore, we review the cyclical and structural drivers changing the use of logistics space globally. Finally, we provide our view about the outlook for occupancy costs across 50 major markets. Average European occupancy costs are currently USD 120 per sq m per year. This is 2 higher than the US and 3 higher than Asia Pacific, confirming that the Asian cost advantage compared to western markets endures. However, there are low-cost opportunities in every region. These traditional preconceptions of low-cost Asian and high-cost Western logistics locations have been challenged by recent changes. Warehouse labour and logistics property in Asia Pacific have become considerably more expensive, driven by strong demand. In contrast, labour costs in Europe and the US have increased very modestly. Combined with decreasing occupancy costs, this trend has improved the two regions relative cost effectiveness. A continued recovery of the world economy will encourage consumption, manufacturing and global trade. Combined with growing E-commerce, this will bolster demand for logistics space. E-commerce is forcing supply chains to fragment with increased proximity to urban centres and transhipment nodes. Consequently, logistics operators are developing increasingly sophisticated operational forms to improve cost efficiencies and reduce delivery times. These increased demand-side efficiencies combined with new supply are expected to limit logistics cost growth over the next five years to below inflation levels (Figure 1). US and Asia Pacific markets will provide challenges for occupiers in the short term. Occupiers in Asia Pacific will face further reductions in cost advantages, reflecting both rising occupancy and labour costs. US occupancy cost increases are projected to surpass regional inflation. Meanwhile, European occupiers will benefit from the lowest cost increases, despite some cities rebounding from recent steep declines. Figure 1 Forecast pa increase in logistics occupancy costs, end % 2% 1% Lowest increase Highest increase 3% 2% 1% DTZ Research Cost growth Inflation

2 Section 1 Global ranking Large intra-regional differences in costs Our analysis of costs reveals that inter regional differences between Europe, Asia Pacific and US are markedly smaller than cost differences within these regions (Figure 2). Average European occupancy costs are USD 120 per sq m per year, 2 higher than the US (USD 100 per sq m pa) and 3 higher than Asia Pacific (USD 92 per sq m pa). However, within Europe, the most expensive location (London Heathrow) is six times higher than the most affordable (Milan). Similarly, in Asia Pacific, the least affordable regional market (Hong Kong) is nearly seven times more costly than the most affordable (Hyderabad). Intra-regional differences within the US are relatively smaller than the other regions. Figure 5 provides a more comprehensive view of costs by location. Occupiers face steepest cost increases in Asia Since 2009, the average annual global inflation has been 17 times stronger than growth in global logistics costs. Although Europe is on average the most expensive region, costs have decreased year on year since 2009 by an average annual rate of 0.. Numerous logistics locations, including Dublin, Milan and Kyiv, have seen significant cost contractions (Figure 3). This partly reflects subdued economic activity. Conversely, Asia Pacific saw positive growth, albeit at a rate below the global inflation rate of 3.7%. Hong Kong, one of the markets to experience growth above the global inflation, is nearly 5 more expensive now than in This is due to a combination of strong demand and reduction in available industrial space due to office conversion. Occupiers in China challenged by fast rising labour costs Labour costs are an important factor in determining location strategy. Our new labour cost analysis reveals that wages for warehouse operatives in Europe and the US have increased modestly over the last five years (1. and 1.9% per annum respectively). Conversely, Asia Pacific has seen an average annual increase of 11%. In Shenzhen and Qingdao, wages have increased by 17% and 1 respectively per year since 2009 (Figure 4). This reflects a significant imbalance between the demand and supply of labour. Rapidly growing labour costs in Asia, in combination with increased taxes and regulation, are likely to accelerate a shift in the economics of global logistics. Whilst some companies are reshoring operations from China back to Europe and the US, others are shifting demand to newer markets in Asia. Nevertheless, it should be noted that labour costs for warehouse operatives are still significantly lower in China than in the US and Europe. Figure 2 Occupancy costs by region (USD per sq m pa), Figure 3 Average annual growth in occupancy costs, Figure 4 Current warehouse operative salary (USD) and average annual change in salary, ,000 16% 12% 30,000 8% 20,000 10,000-0 Hong Kong Hyderabad San Francisco Atlanta Asia Pacific US Global average Europe Average Highest Lowest 1 Largest decrease Largest increase Average annual growth (LHS) 2.6% 0.2% % London Milan Cost growth Inflation Annul gross salary, 2014 (RHS) Occupier Perspective 2

3 Figure 5 Global occupancy costs, Q (USD per sq m per year) Hyderabad Nanjing Dalian Bengaluru Shenyang Qingdao Milan Atlanta Memphis Nairobi Dar er Salaam Hangzhou Wuhan Chongqing Chengdu Delhi Pune Tianjin Guangzhou Monterrey New Orleans Brussels Chennai Antwerp Durban Marseille Bucharest Budapest Lyon Shenzhen Beijing Dallas Kyiv Madrid Shanghai Chicago Barcelona Prague Rotterdam Phoenix Melbourne Greater Paris Rome Amsterdam Seoul New York Berlin Philadelphia Mexico City Houston Vilnius Denver Istanbul Global (average) Tallinn Montevideo Dusseldorf Warsaw Hamburg Boston Buenos Aires Los Angeles Frankfurt Copenhagen Riga Dublin San Diego Brisbane Gothenburg Seattle Stockholm Perth Sydney Leeds Miami St. Petersburg San Francisco Taipei Helsinki Birmingham Glasgow São Paulo Manchester Luanda Moscow Oslo Singapore Zurich Hong Kong London The global top 10 most affordable markets are dominated by Chinese and Indian markets Two US markets are in the top ten most affordable list The world s most affordable logistics market Hyderabad is 7 times less expensive than the world s least affordable market London Heathrow Asia Pacific Europe US Latin America Africa The US is split between South and West - Southern markets Atlanta, Memphis and New Orleans offer more affordable logistics space than West Coast markets San Francisco, Seattle and Los Angeles At $170 per sq m pa, Latin American hub São Paulo is the ninth least affordable market globally and more than double the price of Monterrey Luanda in Angola is the world's 7th most expensive market, reflecting supply shortage and a booming oil industry Six of the global top ten least affordable markets are European. Three of these (London, Manchester and Glasgow) are in the UK Occupier Perspective 3

4 Section 2 Fundamental demand drivers Cyclical and structural economic trends underpinning regional differences in logistics demand Logistics demand is highly correlated to GDP and consumption. Regional GDP as well as private consumption growth have diverged in recent years reflecting the cyclical downturn, especially in the West, and the long term structural changes in Asia Pacific reflecting the rotation towards a consumer centric economy (Figure 6). Likewise, manufacturing and transportation - key drivers of the logistics sector - have diverged, with Asia Pacific recording strong output growth compared to the US and Europe where activity has been flat or worse. Emerging markets such as India, Indonesia and Vietnam have posted especially strong growth. The changes in occupancy costs, discussed in Section 1, reflect these economic trends. Global trade weighed down by weak European demand World merchandise trade, another significant driver of demand for logistics real estate, was deeply affected by the economic downturn and sudden drying up of trade finance. This is evidenced by a collapse of trade flows across all regions in 2009 (Figure 7). The bounce back in sentiment in 2010 enabled world trade to return to its precrisis level. China in particular made a significant contribution to the recovery of world trade in 2010, as the country's exports increased by more than 2. However, global trade growth has been sluggish since 2011, mainly due to the lingering impact of recession and especially high unemployment in parts of the EU which has continued to suppress demand. However, recent forecasts suggest that the economic recovery in Europe will gain momentum from next year (see Outlook on page 8 for more). E-commerce powers demand for global logistics Despite the slowdown in international trade, global e- commerce is growing. Annual business-to-consumers e- commerce sales grew by 18% in 2013 (Figure 8). According to emarketer s latest forecasts, global B2C e-commerce sales will increase by 2 in 2014, driven mainly by growth in Asia. It is also estimated that online retail currently account for just 1 of all retail sales globally, but this is expected to double over the next decade. The growth in e- commerce is supercharging the expansion, and increasing the complexity, of logistics real estate. This is evolving from traditional distribution activities (to store) to fulfilment centres (direct to customer). Moreover, the need for retailers to improve profitability, reinforce brand differentiation and accelerate delivery times to customers means that logistics facilities are key revenue drivers. Figure 6 Average pa growth in GDP, Consumption, Manufacturing and Transportation* GVA, % 2% 1% -1% -2% *Transportation includes Warehousing in the US, Storage in Europe and Communications in Asia Pacific Source: Oxford Economics Figure 7 Annual growth in the real value of traded goods (local currency), Source: Oxford Economics Figure 8 Business-to-consumer (B2C) e-commerce sales growth by region (USD bn), Source: emarketer GDP Consumption Transportation GVA EU US Asia Pacific Manufacturing GVA Latin America Europe US Asia Pacific Asia Pacific North America Western Europe (f) Global Occupier Perspective 4

5 Section 3 Structural demand drivers Structural drivers forcing supply chains to fragment Globalisation, just-in-time (JIT), outsourcing and e- commerce increasingly require global businesses to establish complex supply and distribution chains. Logistics users must find a balance between centralised locations that consolidate inventories and distributed models that reduce delivery times by being within or adjacent to major population centres. As a result, proximity to transport nodes, especially transhipment hubs, is increasingly important. In an effort to reduce costs, points of supply have shifted to more distant locations which require an extended supply chain reliant on air and shipping especially. This requires substantial investment in ocean facilities and associated infrastructure. See Box 2 describing the growth of global port activity. Increasingly sophisticated trade patterns require flexible and agile supply chains. This is forcing logistics real estate to evolve into new operational forms as illustrated in Box 1 below. Box 1: New operational forms Shared facilities logistics space is leased from a multi-tenant facility or via an outsourced 3PL (third party logistics) provider. A 3PL is defined as a firm that provides multiple logistics services including transportation, warehousing, inventory management, packaging and freight forwarding. A 3PL can offer convenient facilities with established systems and a skilled workforce. This is increasingly important for firms which require specialized warehouse services. Containerisation is driving down shipping costs and offsetting high and unpredictable fuel costs The ability of exporters to effectively connect with international markets depends on the performance of the entire supply chain in terms of cost, time, reliability and predictability. Goods in transit are carefully factored into supply chains, requiring transhipment hubs to operate to very high levels of capacity and efficiency. This has underpinned the growth in large ports able to handle the largest container ships (see Box 2). Moreover, falling shipping costs, thanks to the economies of scale associated with containerisation, has offset rising door-to-door delivery costs which have been driven upwards by high and unpredictable fuel costs. In addition, technological improvements have significantly increased the speed of ships and reduced the time required to load and unload ships. When this is taken into account, the qualityadjusted cost of ocean shipping has gone down. Retailers shifting from retail to logistics space can realise real estate cost savings It is estimated that e-commerce users typically require three times the logistics space used by traditional retailers. However, logistics is significantly more affordable than retail space (Figure 9). Thus, retailers who shift from instore to online sales can reduce their retail real estate footprint by storing all products in warehouses and closing all deals online. This enables significant property cost savings. This is increasingly important in locations where competitiveness for retail space as well as affordable labour is stiff. Retailers in several Asian markets are seeing rapidly rising wages. These are likely to continue to increase rapidly across the region over the next few years. Figure 9 Prime logistics rents vs prime retail rents major markets, USD per sq m pa 6, Combined operations where online and in-store distribution reside together in a single facility, leveraging existing distribution and supply chains. 4,000 2, Distributed fulfilment centres disseminated fulfilment is achieved by using multiple facilities located close to customers. The benefits are faster delivery times, more responsive service and lower transport costs. Prime logistics rent (LHS) Prime retail rent (LHS) Difference (RHS) *US retail rents refer to community centres Occupier Perspective 5

6 Box 2: Top Global Ports Transhipment ports flourishing in Asia Ports play an important role in world trade. Cities that are especially well positioned to attract new occupiers are those that link to the global economy through ports and airports. Warehouses located near ports can help to optimise supply chains, reduce shipping costs and enable companies to undertake a number of other value added logistics services. The world container port system is characterized by a high level of traffic concentration. The 20 largest container ports handle nearly half of global traffic and are important generators of added value and employment. The Journal of Commerce s latest global container ports ranking shows that Asian ports hold 15 of the 20 top port rankings (Figure 10). They also fill up nine of the top ten slots, up from just five in Given the region s relatively robust economic outlook, widening manufacturing base and government efforts to improve infrastructure, it has become a major engine of growth for global occupiers within the transport and logistics sector. The port of Shanghai tops the list, handling 33.6 million Twenty-Foot Equivalent Units (TEUs) in Shanghai s status as an international trade hub is supported by the rapid development of the Chinese economy and the large industrial and trade base of the Yangtze River Delta region. The second largest port of Singapore, an important logistics hub, faces growing competition from other South East Asian transhipment hubs, including Port Klang (Malaysia) and the Port of Colombo (Sri Lanka). To maintain its dominance, Singapore is focusing on more high-end logistics services and also expanding its container terminal capacity. By 2020, Pasir Panjang Terminal is expected to increase port capacity to 50 million TEUs. Congestion threatens growth in US and Europe Dalian in China saw the strongest growth in cargo volume (23%) in 2013, underpinned by a surging domestic container business (Figure 11). In spite of this, prime warehouse space remains one of the most affordable globally. The port of Ho Chi Minh also saw uplift in volumes. Indeed, the fast-growing Vietnamese hub is becoming increasingly important for logistics operators. Outside Asia Pacific, major gateway ports in the US and Europe are struggling with congestion. Los Angeles is the only US port to appear in the top 20 list. Long Beach recorded the fifth strongest year-on-year growth in volumes of 11%. Figure 10 Top 20 global container ports, ranked by volume of cargo handled (million TEUs), 2013 Source: The Journal of Commerce Figure 11 Shanghai Singapore Shenzhen Hong Kong Busan Ningbo-Zhoushan Qingdao Guangzhou Harbor Jebel Ali, Dubai Tianjin Rotterdam Port Klang Kaohsiung Dalian Hamburg Antwerp Keihin ports Xiamen Los Angeles Tanjung Pelepas Growth in cargo volume (million TEUs handled), 2013 Source: The Journal of Commerce Asia Pacific EMEA Largest increase Largest decrease US Occupier Perspective 6

7 Section 4 Supply trends New supply in Germany outpaces rest of Europe In Germany, ninety-five warehouses totalling 1.42 million sq m were completed in the first half of This is an increase of 7 compared to the first half of the preceding year. At end of the Q there were 142 warehouses under construction with a combined space of approximately 2.8 million sq m. A majority of these properties are expected to be delivered before the end of Thus, the total annual completion will exceed three million sq m this year, a record (Figure 12). In Poland, international distributors and e-commerce companies continue to drive demand. This has translated into robust construction activity. The total grade A stock has grown by 5 since 2008 and it is estimated that the pipeline supply for will account for over 2 of the current total stock. Meanwhile, availability in France has been limited for several years and activity in H points to continued limitation in the choice of new logistics space. In the UK, supply constraints are causing occupiers to increasingly look to the build-to-suit market for good quality buildings. E-commerce drives Chinese logistics delivery Strong activity in the e-commerce industry is driving the demand for space in Asia Pacific. The supply of grade A warehouses is expected to grow in major markets (Figure 13). The development pipelines in Hangzhou and Nanjing, small but growing Chinese markets, account for large parts of total stock. In Nanjing, the warehouse space to be completed over the next three years is in fact larger than the current stock. In Singapore, an estimated 1.5 million sq m of warehouse space is expected to be delivered between the start of 2014 and the end of 2016, representing 19% of the current logistics stock. On an annual average basis, this pipeline supply is higher than the annual average demand of 200,000 sq m. Large warehouses driving supply in US Construction in the US is ramping up to meet the growing demand for warehouse space. Dallas is currently outpacing the other markets, with a significant amount of new warehouse and distribution space entering the market in In 2015 and 2016, occupiers in Chicago will benefit from a particularly large injection of new space (Figure 14). Conversely, Los Angeles is seeing limited construction due to land constraints. However, Inland Empire, situated directly east of the Los Angeles metropolitan area, will see 1.8 million sq m delivered in This market provides a good alternative for operators targeting the wider Los Angeles area. Figure 12 New logistics supply major markets, Europe (million sq m) NB: UK includes all industrial schemes, PMA Figure 13 New logistics supply selected markets, Asia Pacific (million sq m) Figure 14 Warehouse/distribution completion selected markets, US (million sq m) Source: REIS Germany Poland UK France Czech Republic (f) 2015 (f) 2016 (f) Shanghai Singapore Hangzhou Nanjing Dallas (f) 2015 (f) 2016 (f) Inland Empire Houston Chicago Los Angeles (f) 2015 (f) 2016 (f) Northern New Jersey Occupier Perspective 7

8 Section 5 Outlook Global economic recovery solid but uneven across regions The world economy is improving and with it consumption as well as manufacturing and transport activity. However, economic growth is likely to be slow and uneven between and within the regions. GDP and consumption growth will be especially weak in Southern Europe which means the entire region will continue to lag behind Asia Pacific and the US (Figure 15). In the US, increased reshoring and labour efficiency is sparking a manufacturing rebound. As a result, productivity growth is forecast to be level with Asia Pacific. The American South in particular is emerging as a major manufacturing and logistics hub. Relatively low costs and tax rates means it is becoming increasingly attractive for logistics companies relying on low-skilled workers. Memphis is attracting a number of manufacturing and logistics operators. Swedish household appliances giant Electrolux established a 70,000 sq m manufacturing facility in the city in Supply injections to impact costs in Europe and the US As discussed in section 4, occupiers can expect significant new supply across all three regions over the next years. Modest growth in economic demand drivers in Europe and the US means rental growth in these regions will be particularly sensitive to new supply. New European supply in 2014 will be 52% higher than in In the US, it will be 6 higher (Figure 16). European occupiers will benefit from a particularly large injection in 2016, but the US will see a slowdown in construction activity in It should be mentioned that this development pipeline bears a degree of underestimation. Growing demand is likely to spur new construction activity which will keep a lid on rental growth. Global cost increases projected to be well below inflation Our forecasts of the major 50 global logistics markets are based on projections of outgoings and prime headline rents. We forecast an average annual uplift of 1.9% in global occupancy costs to 2018, below the global inflation rate of 2.8% (Figure 17). The US is the only region where cost increases are projected to surpass regional inflation. Asia Pacific is set to see the strongest growth driven by improving underlying market fundamentals and increased demand from e-commerce companies such as Alibaba Group. But, even in Asia Pacific rental growth will be limited by a steady supply of grade A space. Occupiers in several CEE markets, including Prague and Bucharest will benefit from the lowest cost growth globally as supply adjusts. Conversely, big increases in Dublin costs will reflect strong demand from expanding logistics operators. Figure 15 Average pa growth in GDP, Consumption, Transportation* and Manufacturing GVA by region, % 2% 1% -1% * Transportation includes Warehousing in the US, Storage in Europe and Communications in Asia Pacific Source: Oxford Economics Figure 16 New logistics supply in Europe* and the US, (million sq m) *Europe includes UK, Germany, France, Czech Republic and Poland., REIS Figure Forecast pa increase in occupancy costs, % 2% 1% GDP Consumption Transport & Manufacturing EU US Asia Pacific (f) 2015 (f) 2016 (f) Europe Lowest increase Highest increase US Cost growth Inflation 3% 2% 1% Occupier Perspective 8

9 Asia Pacific to face highest absolute cost increases Although Atlanta is amongst the top five centres in terms of average annual percentage growth in costs, this growth is from a very low base. As such, the market will continue to offer comparative value to occupiers. Looking at absolute changes in costs, we note that on a regional level, Asia Pacific will see the largest absolute cost uplifts (Figure 18). Hong Kong and Singapore will post the biggest challenge to occupiers. By 2018, the cost for one sq m of prime logistics space in Hong Kong and Singapore will have grown by nearly USD 50 and USD 40 respectively. Occupiers in Dublin and London (Heathrow) will face the highest absolute cost growth in Europe. Costs in London will exceed USD 360 per sq m by As such, the UK capital is forecast to remain the most expensive market globally. Other UK markets, including Leeds and Birmingham, will also see above average cost growth on the back of improving demand and unsatisfying levels of new supply. European low-cost markets, including Bucharest, Prague and Antwerp will be the most favourable markets in terms of absolute cost growth. Labour costs will also increase across all three regions. Asia Pacific will see the highest increase in percentage terms. The absolute warehouse operative wage increase is also close to the levels projected in Europe and the US. Figure 18 Forecast total increase in occupancy costs (USD per sq m per year) and warehouse operative salary (thousands USD), High Occupier favourability Low, Oxford Economics Bucharest Prague Antwerp Rome Warsaw Berlin Gothenburg Madrid Marseille Lyon Budapest Frankfurt Perth Greater Paris Hamburg Vilnius Dallas Boston Brussels Chicago Rotterdam Philadelphia Barcelona Phoenix Los Angeles Tallinn Shanghai Milan Europe average US average Global average Asia Pacific average Atlanta Melbourne Taipei Copenhagen Brisbane Manchester Riga San Francisco Oslo San Diego Helsinki Amsterdam Sydney Denver Houston Birmingham Seattle Leeds London Dublin Singapore Hong Kong Asia Pacific Europe US Wage increase, thousands Lowest absolute cost growth Highest absolute cost growth Occupier Perspective 9

10 Definitions Logistics building A logistics building is a large-scale industrial premise in which (a range of) logistics activities are performed, such as storage and transhipment. The logistics building is located in a prime industrial area with good transport links. The building normally consists of approximately 5-1 office, a minimum gross internal floor area of 5,000 sq m and an eaves height in excess of 10 metres. Gross Internal Area (GIA) Gross Internal Area refers to the total floor area within the building measured to the internal face of the external walls. It includes areas such as internal walls, partitions, columns, toilets, changing rooms, lift rooms, boiler rooms and open-sided covered areas. Prime rent Prime rent is the highest rent that could be achieved for a typical building/unit of the highest quality and specification in the best location to a tenant with a good (i.e. secure) covenant. The prime rent is a net rent, excluding service charge and tax. It is based on a standard lease, excluding exceptional deals for that particular market. Total occupancy costs Total occupancy cost is defined as the total cost of leasing prime usable space on a gross internal basis. Total costs include rents, property taxes and service charges. The definition of service charge varies depending on the market. Service charges typically include security, site maintenance and landscaping, and can also vary depending on the type and size of the estate. Total occupancy costs exclude leasing incentives, such as rent-free periods. Our rental forecasts refer to prime headline rents. As such, they do not take changes in incentives into account. Main components of logistics occupancy costs Prime rent The highest rent that could be achieved for a typical building/unit of the highest quality and specification in the best location to a tenant with a good (i.e. secure) covenant Outgoings Real estate tax and service charges. Service charges may typically include security, site maintenance and landscaping Total Occupancy Costs Occupier Perspective 10

11 Other DTZ Research Reports Other research reports can be downloaded from These include: Occupier Perspective Updates on occupational markets from an occupier perspective, with commentary, analysis, charts and data. Global Occupancy Costs Offices Global Occupancy Costs Logistics Occupier Perspective - User Guide to The Americas Occupier Perspective - User Guide to Asia Pacific Occupier Perspective - User Guide to EMEA Occupier Perspective - Global User Guide Global Office Review India Office Demand and Trends Survey Sweden Computer Games Developers November 2013 Property Times Regular updates on occupational markets from a landlord perspective, with commentary, charts, data and forecasts. Coverage includes Asia Pacific, Baltics, Bangkok, Barcelona, Bengaluru, Berlin, Brisbane, Brussels, Budapest, Central London, Chennai, Chicago, Delhi, East China, Europe, Frankfurt, Geneva, Guangzhou & Central China, Hamburg, Helsinki, Ho Chi Minh City, Hong Kong, Hyderabad, Jakarta, Japan, Kolkata, Kuala Lumpur, Los Angeles, Luxembourg, Lyon, Madrid, Manhattan, Melbourne, Milan, Mumbai, North China, Paris, Poland, Prague, Pune, Rome, San Francisco, Seoul, Singapore, South & West China, Stockholm, Sydney, Taipei, Toronto, Ukraine, UK, Warsaw, Washington. Investment Market Update Regular updates on investment market activity, with commentary, significant deals, charts, data and forecasts. Coverage includes Asia Pacific, Australia, Belgium, Czech Republic, Europe, France, Germany, Italy, Japan, Mainland China, South East Asia, Spain, Sweden, UK, US. Money into Property For more than 35 years, this has been DTZ's flagship research report, analysing invested stock and capital flows into real estate markets across the world. It measures the development and structure of the global investment market. Available for Global, Asia Pacific, Europe, North America and UK. Foresight Quarterly commentary, analysis and insight into our inhouse data forecasts, including the DTZ Fair Value Index. Available for Global, Asia Pacific, Europe, UK and China. In addition we publish an annual outlook report. Insight Thematic, ad hoc, topical and thought leading reports on areas and issues of specific interest and relevance to real estate markets. Great Wall of Money October 2014 German Open Ended Funds October 2014 Insight Singapore medical suites September 2014 China Insight Establishing the Capital Economic Region Aug 2014 Insight European Transaction Based Price Index Q Insight European Nursing homes -July 2014 Insight GB Retail Property Health Index (RPHI)- July 2014 Insight Beijing TMT Office Occupier Survey- June 2014 Net Debt Funding Gap - May 2014 China Insight Office Pipeline and Dynamics May 2014 Insight Deflation and Commercial Property - March 2014 Insight Tokyo Retail Market 2014 China Investment Market Sentiment Survey - January 2014 DTZ Research Data Services For more detailed data and information, the following are available for subscription. Please contact graham.bruty@dtz.com for more information. Property Market Indicators Time series of commercial and industrial market data in Asia Pacific and Europe. Real Estate Forecasts, including the DTZ Fair Value Index TM Five-year rolling forecasts of commercial and industrial markets in Asia Pacific, Europe and the USA. Investment Transaction Database Aggregated overview of investment activity in Asia Pacific and Europe. Money into Property DTZ s flagship research product for over 35 years providing capital markets data covering capital flows, size, structure, ownership, developments and trends, and findings of annual investor and lender intention surveys. Occupier Perspective 11

12 DTZ Research DTZ Research Contacts Global Head of Research Hans Vrensen Phone: +44 (0) Head of Occupier Research Richard Yorke Phone: +44 (0) Head of EMEA Research Magali Marton Phone: +33 (0) Head of Americas Research John Wickes Phone: DTZ Business Contacts Global Corporate Services Steven Quick Phone: Global Corporate Services, EMEA James Maddock Phone: +44 (0) Global Corporate Services, Asia Pacific David Jones Phone: Global Head of Forecasting Fergus Hicks Phone: +44 (0) Head of North Asia Research Andrew Ness Phone: Head of South East Asia and Australia New Zealand Research Dominic Brown Phone: +61 (0) US Tenant Representation Greg Schementi Phone: EMEA Logistics Robert Hall Phone: +44 (0) Asia Pacific Logistics Tony Su Phone: DISCLAIMER This report should not be relied upon as a basis for entering into transactions without seeking specific, qualified, professional advice. Whilst facts have been rigorously checked, DTZ can take no responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy within this report. Information contained herein should not, in whole or part, be published, reproduced or referred to without prior approval. Any such reproduction should be credited to DTZ. DTZ October Occupier Perspective 12