1.Malaysian Economy: Performance 2013 and Outlook 2014 How Economic Performance Affects the Commercial Property Market: New Key Trends and Drivers to a Sustainable Market Today we shouldnt look at tomorrow but at a tomorrow that is 10 years from today REI Group of Companies - Presentation by Dr. Daniele Gambero Connecting the dots between economy, demographic trends and current-new property hotspots

2. What we do -CONSULTANCY Strategic Marketing Property Market Surveys Property Market Reporting Property Market Analysis Branding CreativeGambero Property Market Intelligence (Gambero PMI) - access updated information & data on both Regional & Local economic indicators - latest information on future market trends in property development - insights on developers information, new forthcoming hotspots and proposed infrastructures 3. AGENDA Globalization and the Malaysian Economic Performance Malaysian Demographics now and future Market Sustainability: Where it Comes From? Strategically Sustainable Location Commercial Property: past and present drivers 2014, is it the end or a new beginning? 4. Malaysian Economic and Property Market Performance: 2013 Outlook 5. Malaysian Economic and Property Market Performance: 2013 -2014 Outlook . Are we in the bricks? 6. GLOBAL & MALAYSIAN ECONOMY - FACT FILE USAEUJAPANAUSTRALIAUKMALAYSIA2.10%-0.90%0.90%0.55%0.63%4.70%101.60%90.60%218%21%92%54.80%Gov deficit as % of GDP-8.50%-3.7%-9.2%-3.1%-6.3%-4%Balance of current acc-440 USD Bil25.9 USD Bil60 USD Bil-57 USD BilInflation1.5%1.10%1.10%2.20%2.70%2.50%Unemployment7.20%12%4.10%5.60%7.70%3.10%Business confidence56-112127115.2consumer confidence73-1445.2108-18125.3GDP Growth Gov debt as % of GDP-93.5 USD Bil 18.6 USD Bil 7. GLOBAL & MALAYSIAN ECONOMY - FACT FILE 8. GLOBAL & MALAYSIAN ECONOMY - FACT FILE CountryEase of doing businessDealing with Starting a Registering a construction business property permitsTrading across bordersResult Enforcing over 3 contracts years2010 2013 2010 2013 2010 2013 2010 2013 2010 2013 2010 2013Overall Ranking 2010 Rank 2013 RankSINGAPORE11442216361113120371562NEW ZEALAND2311563226251017-1472541HONG KONG3218611756022310+21025813US4481325171225182286-1753874UK5716191620237316142321-29941546THAILAND12185585131662612202423-412261887JAPAN1524911144572546417192035-624283289S. KOREA1985324232671758352+217971385MALAYSIA2312885410996863335115933+640092398 9. MALAYSIAN DEMOGRAPHIC - FACT FILE +3.6 M +1.6 M +6 M+2.6 M 10. MALAYSIAN MIGRATION FLOWS - FACT FILE Malaysian Migration Flow Rural to Urban Areas 22,000,000.00 21,000,000.00 20,000,000.00 19,000,000.00 18,000,000.00 17,000,000.00 16,000,000.00 15,000,000.00 2003200420052006200720082009201020112012MALAYSIAN FLOW Source: World Bank Statistics2012: 72.5% of the Malaysian population lives in urban areas 2012: 21,000,000 Malaysians live in urban areas 3.5% growth every year 11. MALAYSIAN WEALTH DISTRIBUTION - FACT FILE FEW CONSIDERATION ON MALAYSIANS WEALTH: Malaysian average per capita income (2012) Source IMFUSD10,304 per year = RM3,200 (per month) Malaysian Wealth Distribution Lowest 20% Share 5% of Malaysian wealthHighest 20% Share 40% of Malaysian wealth =Median 60% share 55%18,000,000 12. MALAYSIAN WEALTH DISTRIBUTION - FACT FILE FEW CONSIDERATION ON MALAYSIANS WEALTH:PER CAPITA INCOME STATISTICS StateGDP per Capita at current pricesState by 2012 % on GDP @ state Malaysia const prices Population Population 2012 in 2012 RM Billion %2009201020112012RMRMRMRMKuala Lumpur57,04062,07568,07273,9311,768,6805.90%114,106Sarawak31,28634,13639,32440,4142,601,0008.68%71,874Pulau Pinang30,09833,60135,18837,0061,664,6405.56%52,530Selangor28,46831,45733,72736,1355,826,24019.44%176,239Malacca25,39728,32831,09333,550832,3202.78%21,953Negeri Sembilan25,59528,58631,29532,5111,040,4003.47%27,717 13. MALAYSIAN WEALTH DISTRIBUTION - FACT FILE FEW CONSIDERATION ON MALAYSIANS WEALTH:PER CAPITA INCOME STATISTICS StateGDP per Capita at current pricesState by 2012 % on GDP @ state Malaysia const prices Population Population 2012 in 2012 RM Billion %2009201020112012RMRMRMRMPahang Kuala Lumpur20,548 57,04023,008 62,07526,066 68,07226,197 73,9311,560,600 1,768,6805.21% 5.90%30,750 114,106Johor18,87821,32923,59324,5743,537,36011.81%68,791Terengganu19,10220,58122,22022,7331,144,4403.82%19,627Perak15,80917,34119,36220,5692,496,9605,826,24019.44%176,239Sabah15,51517,11819,03819,0103,537,36011.81%44,434Malacca25,39728,32831,09333,550832,3202.78%21,953Perlis15,18616,17516,99218,119208,0800.69%3,535Negeri Sembilan25,59528,58631,29532,5111,040,4003.47%27,717Kedah12,48113,74415,38815,8142,080,8006.94%25,3078,4219,32210,36610,6171,664,6405.56%13,461Sarawak Pulau Pinang SelangorKelantan31,286 30,098 28,46834,136 33,601 31,45739,324 35,188 33,72740,414 37,006 36,1352,601,000 1,664,6408.68% 5.56%8.33%71,874 52,53039,627 14. HOUSING EXISTING STOCK AND FUTURE SUPPLY EXISTING STOCK AND HOUSE SUPPLY TILL 2020 STATESUPPLY OF LANDED TILL 2020SUPPLY OF NEED/OVERSUPPLY SUPPLY OF LOW LOW COST ON TOTAL HOUSES POPULATION BY HIGH RISE TILL OF HOUSES BY COST TILL 2020 POPULATION % SUPPLY BY 2020 2020 2020 2020KUALA LUMPUR113,005156,9158.39%251,854521,7741,870,000101,559SELANGOR833,155491,5847.83%342,1541,666,8936,279,686426,336JOHOR652,827260,6165.79%87,9681,001,4114,499,432498,400PENANG204,903214,78013.15%63,728483,4111,633,70361,157MALACCA138,60750,2445.49%18,979207,830914,50697,005NEGERI SEMBILAN265,63890,7257.11%47,461403,8241,276,24421,591PAHANG230,25169,8564.17%17,862317,9691,674,660240,251PERAK383,46095,8733.84%12,909492,2422,494,237339,170PERLIS19,8049,2943.82%1,60230,700243,40030,150KELANTAN67,51112,7220.83%4,18984,4221,533,613426,782TERENGGANU91,25443,1734.13%1,026135,4531,045,864213,168KEDAH247,710115,2175.92%3,173366,1001,947,472283,057SABAH98,33562,9301.83%41,618202,8833,443,107485,738189,64051,9152.04%14,893256,4482,543,759252,3043,536,1001,725,8445.50%909,4166,171,36031,399,6853,476,669SARAWAK GRAND TOTAL FOR MALAYSIA 15. MALAYSIAN PROPERTY MARKET SUSTAINABILITY How House Price Index and Per Capita income index are strictly correlated, what is this comparison showing? House - Income trend House price index Income statistics2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 100.0 101.1 103.5 107.5 112.4 115.0 117.2 123.1 128.6 130.5 138.8 151.2 167.2 178.4 213.0 232.1 238.2 244.2 250.0 260.8 271.5 282.2 294.6 307.0 330.0 352.9 375.8House price index growth 2000 2012 = +67%Median income growth 2000 2012 = +175% 16. MALAYSIAN PROPERTY MARKET SUSTAINABILITY How House Price Index and Per Capita income index are strictly correlated, what is this comparison showing? House - Income trend House price index Income statistics2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 100.0 101.1 103.5 107.5 112.4 115.0 117.2 123.1 128.6 130.5 138.8 151.2 167.2 178.4 213.0 232.1 238.2 244.2 250.0 260.8 271.5 282.2 294.6 307.0 330.0 352.9 375.8Median income +175%House price index +67% 17. MALAYSIAN PROPERTY MARKET SUSTAINABILITY 18. MALAYSIAN BUDGET 2014 - SUSTAINABILITY STRENGTHENING ECONOMIC RESILIENCE ACCELERATING TRANSFORMATIONToday we shouldnt look at tomorrow but at a tomorrow that is 10 years from today 19. MALAYSIAN BUDGET 2014 PROPERTY MARKET SUSTAINABILITY RPGT REVISION EFFECTIVE JANUARY 1st, 2014 20. MALAYSIAN BUDGET 2014 PROPERTY MARKET SUSTAINABILITY RPGT: HOW IT WORKS? THIS IS WHY RPGT WILL NOT AFFECT THE PROPERTY MARKET BUT ONLY PENALIZE UNSCRUPULOUS SPECULATORS.Year 1Year 2Year 3Year 4Under constructionUnder constructionUnder constructionDelivery Vacant Poss.RPGT @ 30%RPGT @ 30%RPGT @ 30%RPGT @ 20%CURRENT LOCK-IN PERIOD IMPOSED BY BANKS ON CONVENTIONAL FINANCINGYear 5Year 6RPGT @ 15%RPGT @ 0%ACTUAL HOLDING PERIODCAN SELL WITH NO TAX 21. MALAYSIAN BUDGET 2014 PROPERTY MARKET SUSTAINABILITY MINIMUM PURCHASING VALUE FOR FOREIGNERS RAISED TO RM1,000,000.00 -Properties priced RM900,000 and below will be not at all affected by this new regulation.-The only properties which values might be pushed up by developers to attract possible foreigner purchasers are the ones priced RM900/950,000 and above-In Iskandar Malaysia, considered to be the hottest Property Market in Malaysia for foreigners, less than 8% of the transactions in 2013 have been actually done by foreigner purchasers. 22. MALAYSIAN BUDGET 2014 SUSTAINABILITY HOW DOES TRANSPARENCY APPLY? 23. MALAYSIAN BUDGET 2014 The AftermathEFFECT OF THIS MOVE House prices will re-adjust in the short term to more real-actual Values! 24. MALAYSIAN BUDGET 2014 The AftermathEFFECT OF THIS MOVE House prices will re-adjust in the short term EXPECTED VALUES ADJUSTMENT to more real-actual +2% Values!to max -5 to 6% 25. MALAYSIAN PROPERTY MARKET SUSTAINABILITY 26. MALAYSIAN PROPERTY MARKET SUSTAINABILITY Penang: the 8th destination worldwide to retire.Ipoh: retirement homes and health tourismKota Baru: the Northern Educational Hub with 15 Local and International Universities already working to establish a northern campus Kuantan: the new commercial port, the already committed investment from Chinese, European and American Multinational CorporationKlang Valley: the Northern, Southern and Western Corridor and the MegaprojectsIskandar Malaysia: the most Strategically Sustainable Location in the region (SEA) 27. KL GREATER KL KLANG VALLEY AND BEYOND 28. KL GREATER KL KLANG VALLEY AND BEYOND Klang Valley 1990Klang Valley 2012 29. KL GREATER KL KLANG VALLEY AND BEYOND Klang Valley view from 130 kmHong Kong view from 130 kmKlang Valley: 7,800,000 populationHong Kong: 7,200,000 populationJust a consideration on how Greater KL should evolve 30. KL GREATER KL KLANG VALLEY AND BEYOND Klang Valley view from 130 kmHong Kong view from 130 kmKlang Valley: 7,800,000 populationHong Kong: 7,200,000 populationJust a consideration on how Greater KL should evolve 31. KL GREATER KL KLANG VALLEY AND BEYOND 32. KL GREATER KL KLANG VALLEY AND BEYOND 33. KL GREATER KL KLANG VALLEY AND BEYOND 34. KL GREATER KL KLANG VALLEY AND BEYOND 35. KLANG VALLEY AND THE SOUTHERN CORRIDOR 36. KLANG VALLEY AND THE SOUTHERN CORRIDOR 37. KLANG VALLEY AND THE SOUTHERN CORRIDOR 38. KLANG VALLEY AND THE SOUTHERN CORRIDOR 39. KLANG VALLEY AND THE SOUTHERN CORRIDOR 40. KLANG VALLEY AND THE SOUTHERN CORRIDOR 41. KLANG VALLEY AND THE SOUTHERN CORRIDOR 42. KLANG VALLEY AND THE SOUTHERN CORRIDOR Datum Bangi IBangi1& 2 Bangi1& 2 byDATUM BANGI I RM1.5 billion, 17-storey hotel, service apartments & convention hall, and 3 storeys of retail mall & office suites. 75,000 square meters of Gross Floor Area (GFA).Datum Bangi IIDATUM BANGI II 2 towers service apartment, convention centre. Retail and office complex. 43. KLANG VALLEY AND THE SOUTHERN CORRIDOR New office tower, hotel & serviceapartment by PKNSBlock B Block A 44. KLANG VALLEY AND THE SOUTHERN CORRIDOR 45. KLANG VALLEY AND THE SOUTHERN CORRIDOR The return of Cyberjaya 46. KLANG VALLEY AND THE SOUTHERN CORRIDOR The return of Cyberjaya 47. KLANG VALLEY AND THE WESTERN CORRIDORLRT 3 48. KLANG VALLEY AND THE WESTERN CORRIDOR 49. KLANG VALLEY AND THE WESTERN CORRIDOR Damansara Shah Alam (DASH) highway alignment 50. KLANG VALLEY AND THE WESTERN CORRIDOR 51. KLANG VALLEY AND THE SOUTHERN CORRIDORPhase 1 Phase 2 52. KLANG VALLEY AND THE SOUTHERN CORRIDORSACC RM2.5 billion GDV, 31.5 acre urban regeneration in Shah Alam City Centre. Garden City concept with Islamic architecture & Biophilic features for sustainable living. 53. GREATER KL, KLANG VALLEY AND THE FUTURE OF COMMERCIAL PROPERTIES 54. MALAYSIAN PROPERTY MARKET SUSTAINABILITY MARKET PERCEPTION 55. KL GREATER KL KLANG VALLEY AND BEYOND 56. KL GREATER KL KLANG VALLEY AND BEYOND KL METROPOLIS WARISAN MERDEKA Bukit Bintang City Centre Ex Pudu JailKL CentralTRXKL Eco City City of Malaysia 57. KL GREATER KL KLANG VALLEY AND BEYOND NEW KLANG VALLEY GROWTH AREAS PROJECTSLOCATIONSIZE (ha)SIZE (acres)Bangsar South CityKUALA LUMPUR24.0059.30Platinum Park KLCCKUALA LUMPUR3.709.14SHAH ALAM72.80179.89KL SentralKUALA LUMPUR29.0071.66Datum JelatekKUALA LUMPUR2.405.93MPHB's Golden Triangle Develp.KUALA LUMPURn.a.Bukit Jelutong Commercial CentreDamansara Avenuen.a.SELANGOR19.0046.95KL City Centre Redevelop. Kg BaruKUALA LUMPUR152.00375.59Bukit Bintang City CentreKUALA LUMPUR8.6021.25Bangsar/KL Eco CityKUALA LUMPUR9.7023.97Pekeliling Tamansari Riverside Garden CityKUALA LUMPUR22.0054.36TRXKUALA LUMPUR34.0084.01Merdeka Park CityKUALA LUMPURn.a.City of Malaysia - Sg BesiKUALA LUMPUR162.00Jln Cochrane-Jln Peel Development CherasKUALA LUMPURn.a.n.a.KL Media City - Kerinchi/Pantai DalamKUALA LUMPURn.a.n.a.Sungai Buloh Urban Development - RRIMKUALA LUMPUR1,370.003,385.27Bukit Jalil Green CityKUALA LUMPUR24.0059.30Bukit Jalil Link 2KUALA LUMPUR21.0051.89Kesas new Shopping Mall Sri PetalingKUALA LUMPUR19.9049.17Naza KL MetropolisKUALA LUMPUR3.007.41SELANGOR4.8011.861,981.904,897.27PJ Sentral Garden TOTALn.a. 400.30 58. GREATER KL, KLANG VALLEY AND THE FUTURE OF COMMERCIAL PROPERTIES 59. GREATER KL, KLANG VALLEY AND THE FUTURE OF COMMERCIAL PROPERTIES OFFICE OCCUPANCY RATES IN MALAYSIA PERLIS TERENGGANU KELANTAN PERAK SARAWAK KEDAH NG. SEMBILAN SABAH PAHANG SELANGOR MALAYSIA PENANG MALACCA KL JOHOR 70%75%80%85%90%95%100% 60. GREATER KL, KLANG VALLEY AND THE FUTURE OF COMMERCIAL PROPERTIES COMPARISON BETWEEN: DEMAND-SUPPLY-ACTUAL OCCUPANCY 61. GREATER KL, KLANG VALLEY AND THE FUTURE OF COMMERCIAL PROPERTIES 62. GREATER KL, KLANG VALLEY AND THE FUTURE OF COMMERCIAL PROPERTIES OCCUPANCY RATE AND RENTAL RATES OPPOSITE TREND 63. GREATER KL, KLANG VALLEY AND THE FUTURE OF COMMERCIAL PROPERTIES FDI Flow since year 2000 64. GREATER KL, KLANG VALLEY AND THE FUTURE OF COMMERCIAL PROPERTIES BANKS EXPOSURE TO COMMERCIAL PROPERTIES 65. THE 2020 INVESTMENT PLAN What and why.. 66. THE 2020 INVESTMENT PLAN What and why.. pre-check your financing capabilities....Choose the area and product 67. THE 2020 INVESTMENT PLAN What and why.. .. all on one and .. Pray God that it will go right!Multiple choice = Risk management and Possible higher return 68. THE 2020 INVESTMENT PLAN Learn how to be a wise smart investor 69. Thank youFacebook Daniele GamberoFor questions please email to: daniele.g@reigroup.com.my