| In the first quarter of 2007 institutional | | | | Industrial land prices in China appreciated |
| investors continued to show strong interest | | | | further following the Central Government's |
| in the acquisition of logistics facilities, | | | | introduction of minimum land prices and open |
| with high levels of investment activity in | | | | market mechanisms for primary sales of |
| Japan and China. Demand for industrial | | | | industrial land in late 2006. The average |
| property or land remained buoyant in most | | | | price of Shanghai industrial land rose 3.2% |
| Asian cities on the back of robust economies | | | | q-o-q to RMB 879.4 psm (RMB 81.7 psf), while |
| and sustained growth in the manufacturing | | | | the average rent of industrial facilities |
| sector. | | | | increased 2.5% q-o-q to RMB 38.5 psm (RMB 3.6 |
| | | | psf) per month. Three industrial land parcels |
| In Japan, investor interest in distribution | | | | in Shanghai were transferred by means of |
| facilities continued to grow during the first | | | | public listing for the first time under the |
| quarter of 2007, with domestic and | | | | new regime. |
| international investors both active in the | | | | |
| sector. Mitsui Soko and recent entrant | | | | The price of industrial land in Guangzhou |
| Mapletree Logistics Trust were among those | | | | similarly surged after the implementation of |
| making purchases. At the same time, ProLogis | | | | the new policies. The rise in land prices has |
| and AMB remained among the most prolific | | | | not dampened industrialists' enthusiasm about |
| developers of large, high-specification | | | | the Pearl River Delta, and the industrial |
| logistics facilities. The quarter saw | | | | market saw brisk investment and leasing |
| domestic logistics leasing and asset | | | | activity. |
| management firm J-REP announce plans to | | | | |
| construct five distribution facilities over | | | | In Beijing, logistics has emerged as the hot |
| the next 12 months. | | | | spot in industrial property investment, with |
| | | | a number of international logistics property |
| Singapore saw increases in both rents and | | | | developers and investors including AMB, |
| capital values of industrial property during | | | | ProLogis and Mapletree actively seeking |
| the first quarter, with further appreciation | | | | suitable investment opportunities. Investors |
| expected. Developers displayed robust | | | | have focused on mature industrial areas, |
| interest in the sector, purchasing four | | | | including Shunyi Tianzhu in northwestern |
| industrial development sites during the | | | | Beijing and Tongzhou Majuqiao in the |
| quarter at unit prices above those recorded | | | | southeastern city. |
| in 2006. Though high-tech space continued to | | | | |
| lead the sector, average factory rents rose | | | | Chengdu's industrial sector continued its |
| after remaining unchanged throughout 2006 and | | | | rapid expansion in the first quarter of 2007. |
| the average rent for warehouse space | | | | The first two months of the year saw 168 |
| increased for the first time since 2003. | | | | enterprises commit to entering Concentrated |
| | | | Manufacturing Industries Planned Areas. In |
| In Hong Kong, demand for industrial space | | | | March, PetroChina announced that it would |
| remained strong thanks to robust re-export | | | | invest RMB 38 billion in an oil refinery and |
| activities and investors' optimism about the | | | | ethylene plant in Pengzhou, Chengdu. The |
| local economy. Landlords saw room for upward | | | | mega-project is expected to stimulate |
| price and rental adjustments in all | | | | industrial property development throughout |
| industrial sectors. However, completion of a | | | | the Pengzhou area. |
| number of upcoming office developments in | | | | |
| East Kowloon will exert downward pressure on | | | | A number of MNCs are expanding their |
| rents and prices in the industrial/office (I | | | | operations in the Philippines, with companies |
| O) sector. Investment activity was extremely | | | | in the manufacturing and IT services sectors |
| brisk, with HK$2.5 billion in en bloc and | | | | being the chief demand drivers. Occupiers in |
| site transactions recorded during the | | | | a number of industrial zones are expected to |
| quarter. | | | | be awarded a number of tax perks following |
| | | | new legislation. |