HONG KONG RESIDENTIAL PRICES JUMP 14% IN ONE QUARTER

The CB Richard Ellis (CBRE) Asian Luxury Residential Capital Value Index rose by 5.5% quarter on quarter. Most markets saw growth beginning to ease except Hong Kong which saw prices rises by 14%, compared to the previous quarter. Overall luxury condominium prices remained flat in Bangkok but a limited number of the best quality well located completed projects saw price rises with only a limited number of transactions. Further Cooling Measures Unveiled as Home Prices Continue Upward TrendGovernments across Asia continued to introduce cooling measures during the first quarter as they attempted to rein in surging residential prices. Trading volume in China, Hong Kong and Singapore fell during the period. Prices nevertheless remained on an upward trend although most cities, particularly Beijing, Shanghai and South East Asian markets, recorded a slower pace of growth. Property Cooling Measures Released During the Quarter Market Cooling measures Policy impacts China ? Restricted home purchases by non-domestic buyers and existing homeowners ? Primary sales declined by about 26% to 41% q-o-q in first tier cities in Q1 2011 ? Introduced a pilot property tax on second home purchases in Shanghai and Chongqing ? Price growth began to slow ? Required local governments to set targets to contain price growth of first-hand residential sales Hong Kong ? Resumed regular land auctions ? Land sites continued to be sold at prices on the upper end of market expectations Singapore ? Extended the holding period for Seller’s Stamp Duty (SSD) from 3 years to 4 years and increased the rate of Seller’s Stamp Duty (SSD) to a maximum of 16% from 3% for properties sold in the first year ? Trading volume declined by about one-fifth ? Lowered the LTV to 60% from 70% on buyers with existing mortgages on one or more properties ? Prices growth has started to ease Malaysia ? Launched “My First Home Scheme” to help low income households to buy homes ? No significant impact so far ? Raised Commercial Banks’ Statutory Reserve Requirement ratio from 1% to 2% Thailand ? Introduced a cap on the LTV ratio at 90% ? No significant impact so far Taiwan ? Imposed luxury tax on non-owner occupied homes resold within two years (15% on the first year, 10% on the second year) ? Expected to depress prices in Taipei. Source : CBRE Q1 2011 Asia Luxury Residential MV Hong Kong remained the most expensive market in Asia with average luxury prices of almost THB 900,000 per square metre based on gross area. If the price was adjusted to net area to be able to compare with the Bangkok market then the price would be in the region of 1.25 million baht per square metre more than ten times the average price of a Bangkok luxury condominium. Singapore prices were around THB 750,000 per square metre for net sellable area. “There has been very little new luxury supply launched in Bangkok with most developers focusing on one bedroom units,” said Ms. Aliwassa Pathnadabutr, Managing Director of CBRE Thailand. “There are some interesting opportunities for end-user and rental investors in Bangkok with attractive prices for 2 – 3 bedroom units in projects where developers are clearing unsold inventory. It is highly unlikely that land prices will fall in central areas for new projects and construction costs are rising. This means that new projects are going to be priced higher than existing projects in similar locations.” Region / Country City* Local currency/ measure (LCM) Average Prime Capital Values LCM THB / sq.m. q-o-q (%) Greater China Beijing RMB / sq.m. 53,802 23,242 2.9 Shanghai RMB / sq.m. 57,191 24,707 1.2 Guangzhou RMB / sq.m. 28,140 12,156 5.1 Hong Kong HK$ / sq.ft 21,601 84,560 14 Singapore Singapore S$ / sq.ft 2,900 70,065 3.6 Thailand Bangkok THB / sq.m. 114,088 10,658 0.5 Vietnam HCMC US$ / sq.m. 4,368 12,357 -0.7 Malaysia Kuala Lumpur RM / sq.ft. 739 7,439 0.4 Notes: Refers to good quality residential apartment / condominium units. (*) The following markets are quoted on gross floor area basis: Beijing, Shanghai, Guangzhou, Hong Kong and Kuala Lumpur. Others are quoted on net floor area basis. USD 1 = THB 30.45 Source : CBRE Q1 2011 Asia Luxury Residential MV The implementation of new cooling measures in Beijing dampened primary transaction volume by 34% q-o-q in the first quarter. Developers began to offer discounts and price growth of luxury apartments slowed to 2.9%. Following Chinese New Year a number of foreign companies posted new expatriate staff to Beijing, a trend which boosted leasing demand for luxury apartments and resulted in a 1.9% q-o-q rise in rents. Market uncertainty could see developers slow the pace of new launches over the remainder of the year and new supply in the next six months may be less than had originally been thought. Newly tightening policies weighed heavily on sales in Shanghai during the first quarter. Many projects postponed their launches and new supply was just 30% of that released in the fourth quarter of 2010. The transaction volume of first-hand sales fell 26% q-o-q while the price growth of luxury residential apartment slowed to 1.2% q-o-q. Rents bounced back by 1.2% q-o-q following a decline of 1.4% in the post-Expo period. Prices should remain stable over the next quarter, although should transaction volume continue to fall developers will come under greater pressure to lower prices. A substantial correction is unlikely given the limited supply at present. Capital value appreciation in Hong Kong accelerated to 14% in the first quarter from 0.8% q-o-q in the previous quarter as the impact of the Special Stamp Duty introduced in November 2010 rapidly faded. Rental appreciation picked up speed from 2.7% in Q4 2010 to 7.2% q-o-q amidst higher leasing demand, which was led by expatriates moving to the city. It is expected that luxury residential sales will continue to outperform the overall market given the strong buying interest of Mainland Chinese and low supply factors prevailing over the short term. In Singapore, cooling measures announced in January, including the high seller’s stamp duty and a reduction of credit availability to those who already have outstanding mortgages, started to take effect in the first quarter. The price growth of luxury homes in the Core Central Region moderated to 0.9% q-o-q whilst sales volume was also down by 20.4%. Rents remained basically unchanged but appeared to show signs of softening towards the end of the quarter along with the slowdown of expatriate leasing demand. The performance of the Seoul luxury residential market diverged between small and larger-sized units. While the price of large apartments reached their lowest level in five years, prices for small apartments in the Seoul National Capital Area recovered to levels last seen prior to the global financial crisis. The subdued performance of larger-sized apartments is essentially due to price cap on the selling prices of new apartments on several sites introduced by the government before the crisis in 2008. Capital values for luxury residential apartments in Kuala Lumpur remained largely stable in the first quarter with average prices edging up by 0.3% q-o-q. Local developers are focusing on developing smaller more affordable flats and are gearing up to offer projects in areas along the new MTR line, which are anticipated to fetch higher-than-expected prices. Demand for luxury housing in Ho Chi Minh City fell in the first quarter as the State Bank of Vietnam raised refinancing rates for third time this year to 13% on April 2, denting buyer interest. A further interest rate hike remains highly likely and will inhibit residential price growth going forwards, even though future supply is expected to remain limited. About CB Richard Ellis CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2010 revenue). The Company has approximately 31,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis established an office in Bangkok in 1988, followed by its Phuket office in 2004. CB Richard Ellis (Thailand) Co., Ltd. has grown to be a leading real estate services provider, offering strategic advice and execution for sales and leasing for all types of property, property and facilities and tenancy management, valuation and advisory, and research and consulting. For more information, visit the company's website at . For further information: Ms. Ngamjai Jearrajarat Manager Marketing andCommunications - Thailand 66 2 654 1111 ext 522 [email protected]

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