Outlook for Global Real Estate

Outlook for Global Real Estate

Global economy recovering despite uncertainty GDP growth varies across regions and countries Percent 2 15 Emerging economies 1 World 5 Forecast Percent 2 Middle East and North Africa 15 China 1 5-5 Advanced economies -1 2 2 4 6 8 1 12-5 Euro zone United States -1 2 2 4 6 8 1 12 Source: International Monetary Fund.

Interest rates fell in the aftermath of crisis Interest rate change in selected industrial economies, 2-211 Percent 7 6 U.K. 5 4 3 2 1 United States Euro zone 2 21 22 23 24 25 26 27 28 29 21 211 Sources: Federal Reserve System, European Central Bank, Bank of England.

Inflation rose worldwide as liquidity increased Inflation, emerging economies vs. major industrial countries Percent 1 8 Emerging economies 6 4 2 Euro zone United States -2 22 23 24 25 26 27 28 29 21 211 Source: International Monetary Fund.

Office market performance varied worldwide Office rent change in major cities, 29-21 Percent 4 3 2 31.8 28.5 25 1-1 -2 8.7-8.5-7.6-12.5-16.7 Sao Paulo Hong Kong London New Delhi Madrid New York Dubai Tokyo Source: CB Richard Ellis.

Industrial property market recovered slowly Quarterly change in industrial rents worldwide, 21-211 Percent 4 3 2 1-1 -2-3 -4-5 -6 21 22 23 24 25 26 27 28 29 21 211 Source: CB Richard Ellis.

Asia led the worldwide recovery in the retail property market Annual change in retail space rent, 21-211 Percent 12 11.1 1 8 6.9 6 3.8 4 2.5 Asia Pacific Americas EMEA Global Percent 8 7 6 5 4 3 2 1-1 74.2 Hong Kong 13.5 1.1 5.6-1. Tokyo New York London Paris Source: CB Richard Ellis.

Recovery still weak in countries suffering most from housing crisis Annual change in house prices, 22-21 Percent 2 Spain 15 1 U.K. 5-5 United States -1-15 Ireland -2 22 23 24 25 26 27 28 29 21 211Q1 11Q2 Source: Scotiabank Group.

1987 1988 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 Global CMBS issuance 1987 211* US$, billions All U.S. All Non-U.S. 35 3 25 2 15 1 5 *Year-to-date 28 th September 211 Source: Bloomberg.

Construction put-in-place United States Percentage change from previous year 3% 2% Non-residential 1% % -1% -2% -3% Residential -4% 23 24 25 26 27 28 29 21 211 Sources: U.S. Census, Moody s Analytics.

Construction put-in-place United States, by non-residential sub-sector Percentage change from previous year 8% 6% Lodging 4% 2% Office % -2% -4% Commercial -6% -8% 23 24 25 26 27 28 29 21 211 Sources: U.S. Census, Moody s Analytics.

Delinquency rates United States, by property type Percent 18 Hotel 16 14 12 1 8 6 4 2 21 22 23 24 25 26 27 28 29 21 Multifamily Industrial Retail Office Sources: Moody's Investors Service, Moody's Analytics.

Capitalization rates United States, by property type Multifamily Office Industrial Retail Hotel 15 13 11 9 7 5 2 21 22 23 24 25 26 27 28 29 21 Sources: American Council of Life Insurers, Moody's Analytics.

Dow Jones Equity REIT Index Total Return Index, January 19=1 4 35 3 25 2 15 1 5 Apr-99 Oct- Apr-2 Oct-3 Apr-5 Oct-6 Apr-8 Oct-9 Apr-11 Source: Moody s Analytics.

REIT IPO performance 29 211 Company IPO Price ($) YOY Change IPO Change IPO Date Hyatt 25-4.68% 74.48% Nov-9 Pebblebrook 2 6.35% 8.5% Dec-9 Chesapeake 2-9.4% -14.45% Jan-1 Piedmont 14.5-2.4% 36.7% Feb-1 Terrino 2-6.92% -16.55% Feb-1 Chatham 2-5.1% -18.15% Apr-1 Excel 14-3.97% -17.% Apr-1 Hudson Pacific 17-5.12% -16.% Jun-1 Whitestone 12-3.35% 19.2% Aug-1 CoreSite 16 13.34% -3.37% Sep-1 Campus Crest 12.5-2.9% 11.28% Oct-1 American Assets 2.5 n/a 5.76% Jan-11 Summit Hotel 9.74 n/a 5.13% Feb-11 Preferred Apt 9.75 n/a -2.4% Mar-11 STAG Industrial 13 n/a -6.62% Apr-11 Source: NAREIT: IPO Rundown 211

Roaring growth in South America Brazilian mortgage lending growth Brazilian real (billions) 9 8 7 6 5 4 3 2 1 Over the past years the Brazilian residential mortgage market has shown strong growth. CAGR +53% 7 5 9 Source: European Mortgage Federation Mortgage Info - September 211. SBPE 7 18 FGTS 1 17 3 34 25 26 27 28 29 21 Note: SBPE = Brazilian System of Savings and Loans (public and private); FGTS = Guarantee Fund for Length of Service (mainly public) 27 56

Total outstanding residential lending Year-on-year growth rates (%) Note: Please note that figures are calculated on values expressed in local currencies for non-euro area countries. Source: European Mortgage Federation quarterly statistics Q1 211.

Gross residential lending Year-on-year growth rates (%) Note: Please note that figures are calculated on values expressed in local currencies for non-euro area countries. Source: European Mortgage Federation quarterly statistics Q1 211.

Global investment transaction volume* Recovering from the bottom but stability uncertain *Commercial property only (excludes land development sites). Source: CBRE Research and RCA, as of Q2 211.

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