Asia Pacific's Logistics Strength:

GROWTH DRIVERS AND FUTURE OPPORTUNITIES

FEBRUARY 9, 2023

Cushman & Wakefield | GSCC February 2023 1

 01
AGENDA Navigating the current economic climate

02
Asia Pacific industrial market performance

03
Identifying key growth drivers

04
Identifying opportunities
 NAVIGATING THE
CURRENT ECONOMIC
CLIMATE
THE CURRENT CLIMATE
Global Interest Rates APAC Pricing
350
300 12%
250 10%
200
150 8%
100 6%
50 4%
0
-50 2%
-100 0%
-150
-200 -2%
-4%
-6%
Australia Mainland China India Japan
South Korea US Euro UK
Consumer Price Index Producer Price Index

Global Consumer Sentiment Supply Chain Stress

110 160
108 150
106
140
104 More stressed than pre-pandemic
130
102
100 120
98 110
96 100
94 90
92 80
90 70
60
Less stressed than pre-pandemic

AUS CHN EA19 UK

JPN KOR NZ US
China United States

Source: Moody’s Analytics; OECD; Cushman & Wakefield

Cushman & Wakefield | GSCC February 2023 4

GLOBAL OUTPUT DOWN USD2.2TN; APAC QUICKER TO REBOUND
Global GDP (USDtn); Average annual real GDP growth (Dec 2022 forecast)

Asia Pacific Europe North America

105 2020 -1.2% -5.5% -3.9%
2021 5.9% 5. 8% 5.8%
100
2022 3.2% 2.6% 2.1%
95
2023 3.5% 0.1% 0.9%
90 2024 4.7% 2.2% 2.0%

85

80

75

Feb 2022 baseline June 2022 baseline Dec 2022 baseline

Source: Moody’s Analytics

Cushman & Wakefield | GSCC February 2023 5

 ASIA PACIFIC
INDUSTRIAL MARKET
PERFORMANCE
LANDLORDS IN CONTROL
Industrial occupier conditions
NORTH ASIA
Beijing Tianjin
Seoul
Tokyo
Xi’an
Nanjing
Delhi NCR Suzhou
Chengdu Shanghai
Ahmedabad Shenzhen GREATER
Kolkata Guangzhou Taipei
Pune CHINA
Mumbai Hong Kong
Hyderabad
Bangkok Hanoi
Manila
Bengaluru Chennai
Ho Chi Minh City
Kuala Lumpur
SOUTHEAST ASIA
Singapore
Tenant Favorable
Jakarta
Neutral
AUSTRALIA/NEW
Landlord Favorable ZEALAND

Brisbane

Perth
Sydney
Auckland

Melbourne
Christchurch
*Market condition for New Zealand (Auckland and Christchurch) is provisional.

Cushman & Wakefield | GSCC February 2023 7

BUT RENT GROWTH REMAINS HIGHLY VARIABLE
Prime rent growth (% y-o-y)

Mainland China Logistics Rent Growth Rest of APAC Industrial Rent Growth
(% y-o-y)
Q4 2021 Q4 2022 Q4 2021 Q4 2022
Beijing -4.1% 6.1% Brisbane 9.1% 15.9%
Chengdu -9.5% 2.7% Melbourne 4.8% 14.2%
Chongqing -0.8% -0.6% Sydney 2.6% 29.0%
Guangzhou -0.2% 1.5% Bengaluru 0.0% 7.7%
Hangzhou -3.9% -1.6% Chennai 7.7% -1.6%
Nanjing 4.5% -9.2% Hyderabad 6.7% 31.3%
Qingdao -0.4% 1.2% Mumbai 0.0% 0.0%
Shanghai -3.1% -1.4% NCR 0.0% 0.0%
Shenzhen -2.4% -5.8% Tokyo 0.2% 0.5%
Tianjin 6.4% -1.6% Singapore 1.3% 1.9%
Xi'an 6.0% 5.3% Hanoi 1.5% 3.3%
Hong Kong* -4.1% 6.1% Ho Chi Minh City 3.3% 11.1%

Source: Cushman & Wakefield

Cushman & Wakefield | GSCC February 2023 8

INVESTORS HEAVILY TARGETING THE INDUSTRIAL SECTOR
Rolling annual investment volume (USDbn); capital value index (Q4 2019 = 100)

Investment Volume Capital Values

70 220
Australia Mainland China Australia
60 200 Mainland China
South Korea Japan
South Korea
50 Hong Kong, SAR, China Rest of APAC 180
Singapore
40 160

30 140

20 120

10 100

0 80

Source: RCA/MSCI

Cushman & Wakefield | GSCC February 2023 9

IDENTIFYING KEY
GROWTH DRIVERS
THE ASIA PACIFIC GROWTH STORY

Three of the world’s top four

1 Largest and fastest growing region by
GDP 5 economies by 2030

Seven of the top ten most populated

2 Large and fast growing region by
population 6 metropolitan cities globally

World’s largest
3 Largest and fastest growing region of
middle-class consumers 7 e-Commerce market

Rapid urbanisation across China,

4 India and parts of South East Asia 8 Fastest growing region by industrial
production

Source: Moody’s; United Nations; Brookings Institute; e-Marketer; Cushman & Wakefield

Cushman & Wakefield | GSCC February 2023 11

KEY DEMAND DRIVERS FOR GOODS & SERVICES

Asia Pacific population 2020-30 Global middle class population 2030

100+
95-99
90-94
Males Females
85-89
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
0-4
250 200 150 100 50 0 50 100 150 200 250
2030 2020

Source: United Nations; Brookings Institute, Cushman & Wakefield

Cushman & Wakefield | GSCC February 2023 12

KEY DEMAND DRIVERS FOR INDUSTRIAL LAND

Intra-APAC Trade E-commerce growth

$4,500 60% 7

$4,000
6
$3,500 55%
5.13
$3,000 5
50% 4.54
$2,500
4.05
$2,000 4
45% 3.47
3.25
$1,500 2.93
3
$1,000 40% 2.35
1.99 2.15
$500 2
$- 35% 2.49 2.63
2.16 2.36
1 1.83 1.99
1.59 1.63
1.15 1.23 1.32

-
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Intra APAC exports % of APAC exports staying in APAC Asia Pacific North America Europe Rest of World

Source: IMF; Statista, Cushman & Wakefield

Cushman & Wakefield | GSCC February 2023 13

 IDENTIFYING
OPPORTUNITIES
CHINA +

• U.S.-China trade war and the COVID-19 pandemic have made companies aware of the issues related to
heavy dependence on outsourced, and highly concentrated supply chains
• Reducing supply chain costs in the long-term as well as creating a resilient supply chain is crucial

of respondents have moved of organizations have seen an of China-based European of China-based US companies
sourcing and manufacturing increase in supply chain costs companies prefer ASEAN over prefer Southeast Asia over other
activities out of China or plan to by 10% due to higher tariffs other markets countries as the top destination
do so in the next 2 to 3 years. to redirect investment

According to surveys by Gartner (of 260 global supply chain leaders), PwC China in partnership with AmCham Shanghai, and the European Chamber in China
* Out of respondents that are considering shifting current or planned investments in China to other markets)

Cushman & Wakefield | GSCC February 2023 15

 HUGE INFRASTRUCTURE PUSH
ASIA PACIFIC

Requires US$1.7 trillion a year in

infrastructure investments to 2030

65% of world’s container port volumes

50% of the world’s new airports

Source: DMICDC; ADB; HSF; Land Transit Authority; Cushman & Wakefield Research

Cushman & Wakefield | GSCC February 2023 16

SEA FAVORABLE ON COMPARATIVE RENT AND LABOR COSTS

Cushman & Wakefield | GSCC February 2023 17

SUPPLY CHAIN IMPACTS ON LOGISTICS REAL ESTATE

SUPPLY CHAIN DRIVERS LOGISTICS REAL ESTATE

LAST-MILE FULFILMENT
BUILDING-OUT LOGISTICS NETWORKS IN
REGIONAL DISTRIBUTION CENTRES
GROWING DOMESTIC MARKETS
TRANSPORT NETWORKS

GLOBAL & INTRA-REGION TRADING • PROXIMITY TO PORTS

NETWORKS • FTZ

GROWTH IN CROSS-BORDER ECOMMERCE • ON-AIRPORT DEVELOPMENTS

FULFILMENT • TRANSPORT LINKS TO LAST MILE

Cushman & Wakefield | GSCC February 2023 18

KEY MESSAGES

1. Global economy currently navigating choppy waters, but Asia Pacific expected to rebound the earliest

2. The logistics & industrial sector has thrived during the pandemic as demand for goods intensified
• Logistics & industrial space demand exceeded supply, leading to landlord friendly conditions
• Investors pivoted to the sector, targeting its defensive and growth qualities

3. The decade ahead favours the Asia Pacific region, which will drive demand for industrial land
• World leading industrial production
• Growing population and rising affluence
• A pivot to more intraregional trade
• USD800bn growth in the e-commerce market

4. South East Asia and India to rise in importance

• Expansion of China+ manufacturing strategies
• Comparatively cheaper labour pools and industrial input
• Strong regional and global connectivity, especially in SEA

Cushman & Wakefield | GSCC February 2023 19

GLOBAL SUPPLY CHAIN & LOGISTICS ADVISORY TEAM

• Integrated with over 1,100 L&I brokers globally

• Capital markets expertise
• Project development services

Michael Carson
Head of Supply Chain &
Logistics Advisory, EMEA

Ben Harris
Head of Supply Chain & Tim Foster
Logistics Advisory, Americas
Head of Supply Chain &
Logistics Advisory, APAC

Abraham Joseph
Head of Data & Analytics

Cushman & Wakefield | GSCC February 2023 20

 DR DOMINIC BROWN
Head of Insight & Analysis, Asia Pacific
dominic.brown@cushwake.com

TIM FOSTER
Head of Supply Chain & Logistics Advisory, Asia Pacific
tim.foster@cushwake.com

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