Real Estate

In 2013, asking rents will be raised at better quality office buildings coming onto

the market in 2013. However, the anticipated rent growth will be slower in 2013 in

anticipation of slower demand growth and a batch of new supply comprising about

half a million square metres and the completion of a few buildings being deferred to

2013. The office sales market is expected to perform well with the strongest growth

among the other real estate sectors in 2013 thanks to the sustained buying interests

from a number of local institutions and growing interest among domestic players.

Given the projection that the prevailing buying and lending restrictions on the local

residential sector are going to remain intact, both residential prices and rents are

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Shanghai, China

1 Office refers to prime offices in the CBD

2 Residential refers to high-end units with unit prices at RMB40,000 per sq m or above

3 Retail refers to shopping malls in both core and decentralised locations

2012 2013

(% growth YoY) Rents Capital Values Rents Capital Values

Office1 10.0% 11.0% 6.5% 7.5%

Residential2 1.0% 3.0% 1.0% 3.0%

Retail3 1.1% 3.0% 1.1% 3.0%

Industrial 6.4% 7.0% 4.0% 5.0%

Logistics

Industrial 2.8% 2.8% 2.5% 2.5%

Workshop

expected to see only mild growth on the order of 1 - 3% at best in 2013. As such, real estate capital values in other non-commercial sectors

are predicted to enjoy the shift of investment capital and the benefits of a projected economic recovery in 2013.

The on-going trend of retail sales in Shanghai remains solid. However, the retail real estate sector will be relatively flat in 2013 because of

the supply cycle, thus putting a cap on both rents and capital values.

In the industrial market, workshops, largely factories are going to stage a mild growth in 2013 but the local logistics warehousing sector

will see more exciting growth due to growing...