NATIONAL ASSOCIATION OF REALTORS Commercial Real Estate Forum

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum May 17 th 2007 Julian Josephs, FRICS, FIABCI World President Elect, 2007 - 2008

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Global Real Estate Trends - Hot buttons in 2007 n n n n Transparency Sustainability Convergence Diversification Joint Venturing Title Hedging and currency fluctuations The REIT Answer n n n n n Exit Strategy China India Dubai Russia Global Investors Global Tenants Global Future FIABCI

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Transparency n What is it? n What does it mean to investors? n Who rates where?

Improving Transparency leads to Lower Risk A sizable proportion of the world’s investment grade real estate is located in countries classified as ‘low risk’. ► Based on 3 measures of risks: ► Credit / Political (ING Country Risk Ratings) ► Economic (IMF classification) ► Real estate (Jones Lang La. Salle Transparency Index) including legal system Note: Countries highlighted in red have moved into less risky categories in the past year Sources: IMF, JLL, ING Real Estate Research as of March 2007.

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Sustainability n Why “Green” is so important in international real estate? n What it means in Europe today? n What it will impact in the future?

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Convergence n What does convergence mean? n How it defines investors’ strategies? n What does it mean for tomorrows’ investors?

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Diversification n An investor’s choice n Safety in spreading risk n Different countries have different cycles

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Joint Venturing n Facilitating the learning curve n Supplying local knowledge to the development process n Keeps investors’ options open

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Title Insurance n In developed countries not essential n In developing countries a must n Title Insurance is spreading globally

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 The REIT Answer n What are REITS and why have they gone international? n Why in the US are some going private? n What is indirect so important for investors?

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Hedging and currency fluctuations n More important than ever before vs. n Time horizons very important

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 n Exit Strategy n Pre-determined more than ever n More important in less transparent countries n Makes indirect investment more attractive

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 China n The biggest population in the world n What we can give them they haven’t got n Be careful, get to know them and dip your toe in the water

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 India n They speak English n Infrastructure is lacking n A very poor and populated country needing real estate development

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Dubai n Will the bubble burst? n What is the real inventory of available condos? n If it does burst what are the consequences?

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Russia n How transparent are the real estate markets? n Is there enough stability in the political situation? n What is the best form of entry?

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Global Investors n Developers like Hines, Prologis, Simon Properties and Taylor Woodrow n Investors like US Pension Funds, JE Robert and Apollo n Hotels, Senior Housing, Casinos and Universities

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Global Tenants n All the big office occupiers n Walmart, Tesco, Wholefoods and H&M n Is there an advantage for a global tenant strategy?

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 Global Future n How do you get on the bandwagon? n Which sector, country and lifestyle do you prefer? n Will the US get left behind?

NATIONAL ASSOCIATION OF REALTORS® Commercial Real Estate Forum - 17 th May 2007 FIABCI n A Federation for all real estate professions and associations n A global voice of real estate at the United Nations n 55 national chapters facilitating global real estate transactions