Building Starts Forecast

3rd Quarter 2008 to 2nd Quarter 2009 Non-residential starts to climb 30%
Scheduled non-residential building starts are to rise 30% in the year from July 2008 with Indonesias growth accelerating and Vietnams tapering.
Construction starts for non-residential building projects in Hong Kong and Southeast Asia are expected to rise 30% in the year from 1 July 2008 over the same period last year, according to research on scheduled building starts by BCI Asia. Growth of non-residential building starts is mixed across the region with Vietnam to remain the fastest growing region despite its rate of annual growth slowing to 125% from a peak of 366% recorded last quarter (see Building Starts Forecast: 2nd Quarter 2008 to 1st Quarter 2009). Growth for Indonesia has accelerated to 41% on a steep increase in planning activity for the office, hotel and recreation segments. Malaysias starts are to rise 13% on increasing activity in the industrial segment while Hong Kongs are set to rise 3%. Non-residential building starts are scheduled to decline 12% in Philippines, 10% in Thailand and 3% in Singapore.

About this forecast

BCI Asias Building Starts Forecast provides advanced insight on trends in the building industry. The quarterly forecast is based on floor area data for 50,000 projects collected by BCI Asia researchers in interviews with developers, project managers, architects or engineers. Projects from the interviews were included in this survey if construction or renovation works were scheduled to start in the forecast year from 1 July 2008 or if they had been scheduled to start construction similarly in the prior year. This forecast, focusing on large buildings, is not intended to describe total market size. Rather, it indicates future building supply trends by geography and category. While every effort has been made to ensure that the information contained herein is accurate, the publisher will not accept any liability for omissions or errors. BCI Asia Construction Information Pte Ltd disclaims any and all liability which may be claimed arising out of reliance upon the information presented in this publication. Copyright 2008 by BCI Asia Construction Information Pte Ltd. All rights reserved.

Forecast for non-residential building starts by region

Hong Kong SAR 3%

Philippines

-12%

-3% Singapore

Thailand

-10%

Indonesia

41%

Vietnam

195%

Malaysia

13%

10 15 20 Square metres (millions)

3rd Qtr 08 - 2nd Qtr 09

25

30

3rd Qtr 07 - 2nd Qtr 08

BCI Asia Building Starts Forecast - 3rd Quarter 2008 to 2nd Quarter 2009

The office segment is set to grow faster than any other building segment in terms of construction starts by floor area across the combined region of Southeast Asia and Hong Kong in the year from July 2008. The office segment is expected to rise 78% on a steep increase in starts in Vietnam, Indonesia, Singapore and Hong Kong. Although relatively minor, exhibition building starts are set to rise 71%. The hotel sector is to rise 68%, recreation by 65%, residential by 33%, health/ community by 19%, retail by 10% and education/research by 8%. Declines are expected in the transport sector (down 25%) particularly in Malaysia and in the industrial sector (down 5%). Construction starts for large residential projects are scheduled to rise 292% in Vietnam with a large number of major residential projects on the drawing board for Ho Chi Minh City. These projects include 160,000 square metres of residential floor area in the Phu Hoang Anh Apartment which is being designed by Surbana International Consultants for a site in the Nha Be District, 270,000 square metres in the Thanh Cong Tower 2 in Binh Thanh District and 200,000 square metres in the Diamond Island Urban Zone in District 2. Residential starts have surged 93% in Indonesia with the planning of multitower projects such as the four 30storey Mayapada apartment towers in Lebak Bulus, Jakarta, with 180,000 square metres of residential floor area designed by Urbane Indonesia. Other high-rise projects in Jakarta include 136,000 square metres of residential floor area in Green Park View Apartment in Jalan Daan Mogot, 138,000 square metres in Royal Mediterania Garden City in Jalan S Parman, 100,000 square metres in Soho Kemayoran and in Ancol Mansion. Scheduled office building starts are scheduled to rise 218% in Vietnam with projects such as the 230,000-squaremetre Subeco Office Building designed

Forecast starts for combined region by category

71%

Exhibition

Transport

-25%

Health / Community

19%

Recreation

65%

Education / Research

8%

Industrial

-5%

Hotel

68%

Retail

10%

Office

78%

33% Residential

10

20

30

40

50

60

70

80

Square metres (millions)

3rd Qtr 08 - 2nd Qtr 09 3rd Qtr 07 - 2nd Qtr 08

Forecast starts for large residential projects

Singapore Hong Kong SAR Thailand Philippines Indonesia Vietnam Malaysia 0 2 4 6 8 10 12 14 16 18 20 -58%

-22% -3% 51% 93% 292% -6%

22

Square metres (millions)

3rd Qtr 08 - 2nd Qtr 09 3rd Qtr 07 - 2nd Qtr 08

BCI Asia Building Starts Forecast - 3rd Quarter 2008 to 2nd Quarter 2009

for District 4 of Ho Chi Minh City by Campbell, Shillinglaw and Partners. Office starts are to rise 129% in Singapore with projects such as the 44-storey North Tower at Marina View being designed by Architects 61 and Denton Corker Marshall. Office starts are to rise 129% in Indonesia with projects such as the 44-storey Equity Tower being designed for a site in Kuningan, Jakarta, by Airmas Asri for the Permata Birama Sakti Group. Indonesia is registering strong growth in the retail sector with forecast starts up 33% on large projects across Java such as the 100,000-square-metre Union Square mall, the 75,000-square-metre Pakuwon Power Centre and the 35,000square-metre Fashion Walk in Surabaya, East Java, as well as the 70,000square-metre Solo Paragon mall and the 20,000-square-metre Kusuma mall in Surakarta, Central Java. Retail starts are surging in Vietnam (up 128%), in Singapore (up 117%) and climbing marginally in Malaysia (up 5%), but the sector seems to have peaked in the Philippines (down 49%), Hong Kong (down 41%) and Thailand (down 10%). Thailands hotel sector remains strong with 31% growth expected for building starts including five-star hotels designed for three sites in Surat Thani, for two sites in Phuket, for two sites in Chonburi as well as for sites in Bangkok, Rayong and Prachuap Khiri Khan. The hotel sector is growing rapidly across the region with starts to rise 218% in Vietnam, 129% in Singapore, 127% in Indonesia, 83% in Hong Kong, 20% in Malaysia and 18% in the Philippines. The outlook for the industrial sector is mixed with growth expected in Malaysia, Singapore and Vietnam, but contractions expected in Hong Kong, Thailand, the Philippines and Indonesia.

Forecast starts for office projects

Hong Kong SAR Philippines Singapore Indonesia Malaysia Vietnam Thailand 0.0 0.5 1.0 1.5 2.0 2.5 83% 18% 129% 127% 20% 218% 31% 3.0

Square metres (millions)

3rd Qtr 08 - 2nd Qtr 09 3rd Qtr 07 - 2nd Qtr 08

Forecast starts for retail projects

Hong Kong SAR Singapore Philippines Vietnam Thailand Indonesia Malaysia 0.0 0.5 1.0 1.5 2.0 2.5 -41% 117% -49% 128% -10% 33% 5% 3.0

Square metres (millions)

3rd Qtr 08 - 2nd Qtr 09 3rd Qtr 07 - 2nd Qtr 08

Forecast starts for hotel projects

Hong Kong SAR Philippines Singapore Indonesia Malaysia Vietnam Thailand 0.0 0.5 1.0 1.5 2.0 2.5 83% 18% 129% 127% 20% 218% 31% 3.0

Square metres (millions)

3rd Qtr 08 - 2nd Qtr 09 3rd Qtr 07 - 2nd Qtr 08

BCI Asia Building Starts Forecast - 2nd Quarter 2008 to 3rd Quarter 2009

Forecast starts for industrial projects

Hong Kong SAR Vietnam Philippines Indonesia Thailand Singapore Malaysia 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 22% 167% 4.0 4.5 -98% 394% -59% -45% -60%

The strength of Malaysias industrial starts rests on metal processing plants such as the USD840 million Mukah Smelting Plant in Sarawak being designed by the Aluminium Corporation of China (Chalco) for Press Metal Sarawak. This aluminium smelting plant will have an initial annual capacity of 50,000 tons. Construction starts for educational facilities are set to rise in Vietnam with projects such as the University of Economics and Finance being designed by HOK International and the University of Architecture being designed by Vo Trong Nghia for sites in Ho Chi Minh City. In other countries, except Indonesia construction starts for education/ research projects are declining. Recreation projects are on the rise everywhere except Malaysia. Recreation starts are to rise 241% in the Philippines, 166% in Thailand, 135% in Vietnam, 74% in Singapore and 73% in Indonesia.

Square metres (millions)

3rd Qtr 08 - 2nd Qtr 09 3rd Qtr 07 - 2nd Qtr 08

Forecast starts for education / research projects

Philippines Hong Kong SAR Singapore Thailand Indonesia Vietnam Malaysia 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 -13% 39% 574% 0% 4.5 -26% -33% -73%

Square metres (millions)

3rd Qtr 08 - 2nd Qtr 09 3rd Qtr 07 - 2nd Qtr 08

Hong Kong is set to enjoy a 77% surge in recreation building starts with large projects on the drawing board including the Hong Kong Sports Institute Redevelopment as well as the Indoor Velodrome Cum Sports Centre at separate sites in the New Territories.

Forecast starts for recreation projects

Hong Kong SAR Thailand Singapore Indonesia Philippines Malaysia Vietnam 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 77% 166% 74% 73% 241% -25% 135%

Contact BCI Asia

For more information on this forecast or to subscribe to BCI Asias detailed construction reports, please contact an office below or visit www.bciasia.com: Bangkok Brisbane Hanoi Hong Kong Jakarta Kuala Lumpur Manila Melbourne Perth
4.0 4.5

+ 662 651 8600 + 61 7 3634 8500 + 84 4 537 8548 + 852 2538 0011 + 62 21 5790 2930 + 60 3 7661 1380 + 63 2 884 1122 + 61 3 8412 7900 + 61 8 9228 2227 + 65 6538 6836 + 62 31 547 3439 + 61 2 9432 4100

Ho Chi Minh City + 84 8 997 4220

Singapore Surabaya Sydney

Square metres (millions)

3rd Qtr 08 - 2nd Qtr 09 3rd Qtr 07 - 2nd Qtr 08