Zurich, 7 December 2011 Investment horizon: 612+ months Global Real Estate Research

Research Monthly

Global Real Estate Outlook 2012: Attractive yield from income versus weaker growth in rents
Private Banking

In 2012, economic headwinds are likely to become more challenging, and the performance of global commercial property markets is likely to slow down markedly. Nevertheless, real estate should continue to appeal to investors in a world marked by high cash levels and demand for real assets with yield. The asset class is therefore part of Credit Suisse Global Researchs top ten investment ideas for 2012. We believe that selected stocks of property holding companies and mutual funds with direct market exposure offer value. For specialist investors, we are recommending outright exposure to commercial real estate in Australia, Singapore, China, Germany, France, Canada and selected US and Latin American markets. Direct commercial real estate offers opportunities Many listed risk-related assets among those, real estate equities came under significant selling pressure in the second half of 2011. On the other hand, direct real estate investments held up rather well. Global commercial real estate transaction volumes (including land sales) remained fairly stable in the third quarter of 2011 at about USD 200 billion according to real estate research firm RCA and are up by 27% in a year-on-year comparison (see Figure 1). The USA in particular came increasingly into the focus of real estate investors in 2011 due to less demanding valuations. Figure 1 Commercial real estate investments held up well in Q3 2011
Commercial real estate (incl. land) transaction volume, USD bn 160 140 120 100 80 60 40 20 0 M ar 07 Sep 07 Americas M ar 08 Sep 08 EM EA M ar 09 Sep 09 M ar 10 Sep 10 M ar 11 Sep 11

Highlights

Outlook: Higher-yielding assets, such as commercial real estate, remain attractive in the current low interest rate environment, but heightened economic uncertainty poses downside risk. Regional Overview: We are currently favoring direct commercial property in Australia, Singapore, China, Germany, France, Canada and some US and LatAm markets. Real Estate Equities: While further nearterm corrections are probable, we see appealing medium-term buying opportunities in Australia, the USA and Japan.
Valuations of prime commercial properties now appear rich in most markets worldwide as indicated by relatively low rental yields (see Figure 2). But compared with government bonds, prime commercial real estate still offers an attractive rental carry. Moreover, since the interest rate environment will likely remain accommodative for some time to come, we do not expect large movements in global prime commercial property yields in the first half of 2012. Real estate as a higher-yielding asset should therefore continue to attract investors. However, investment volumes are unlikely to increase much from current levels. First, there is little room for further capital value appreciation in most global markets, in our view. Properties in many Asian markets especially are already expensively priced. Second, the global rental market recovery will likely slow down considerably due to the weaker economic outlook (see Figure 3). However, we do not expect a return to broad-based declines in commercial property rents. Construction activity has generally been low in this cycle, especially in many Western markets. And while our base scenario calls for a further slowdown in global economic expansion in 2012, we do not expect renewed recession in Asia and the USA, and

Asia-Pacific

Source: CBRE, RCA, Credit Suisse

Important disclosures are found in the Disclosure appendix

Zurich, 7 December 2011

only a mild one in the Eurozone. Overall, we therefore believe that direct commercial real estate will likely continue to offer attractive investment opportunities in 2012 (see the valuation matrix on page 4 for a regional overview). Elevated downside risks require defensive stance However, we are recommending a very defensive stance regarding sectors and markets since major downside risks exist. In the event that the debt crisis in Europe intensifies further and drags the global economy back into recession, commercial real estate as a pro-cyclical asset class should perform poorly as well. However, this fate is shared by many other asset classes, such as commodities and equities, and good diversification of the total investment portfolio is therefore important. Potential spillover effects of balance sheet contractions by financial institutions, especially in Europe, pose another risk. Banks will have to de-leverage in order to meet higher capital requirements. This will likely diminish credit availability for real estate deals an asset class that is very dependent on debt financing. Funding already is scarce in many Western markets for non-prime properties, and credit flows in this segment are likely to dry up further. On the other hand, prime property deals should continue to find financing. Regionally, countries with high current-account deficits and a banking system owned primarily by foreign institutions will likely be affected more negatively, such as parts of Eastern and peripheral Europe. Mixed outlook for indirect real estate investments In the global real estate equity markets, we believe that buying opportunities have opened up after the sell-off in equity markets from a strategic viewpoint. But in the near term, we could see further phases of corrections (see page 3 for detailed discussion). Swiss real estate funds are currently trading at historically high premiums. This raises the risks of premium reductions and negative total returns once interest rates start increasing again. However, this will unlikely occur any time soon. We are therefore taking a Neutral stance toward Swiss Figure 2 Property rental yields are richer, but still attractive
Prime office yields, % 9 8 7 6 5 4 3 2 01 02 03 04 05 06 07 Paris Hong Kong New York 08 09 10 11 0

real estate funds despite the rich valuations because they have proven to be a good diversifier in times of market uncertainty too. Finally, regarding German open-end real estate funds, we recommend staying on the sidelines until some of the currently closed funds have successfully reopened, which most of them have to do in 2012 in order to avoid liquidation.
Martin Bernhard, martin.bernhard@credit-suisse.com, +41 44 334 83 22

Figure 3 Cycle clock for office rental markets (December 2011)

London City Sydney Tokyo

Source: PMA, Credit Suisse

Frankfurt Singapore LA
Source: JLL, Credit Suisse

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Real Estate Equities

Figure 5 Underperformance of Asian property stocks vs. local markets

CH Australia France USA EU ex-UK UK World Asia Japan Germany Sing. HK EM 15.64 10.24 4.37 2.02 0.80 0.04 -1.46 -1.47 -2.75 -3.40 -5.81 -10.14 -15.22 -16 -12 -8 -4 0 4 8 12 16

In H1 2012, we would focus on Australian, US and Japanese property stocks and underweight European markets. We remain cautious on Asia ex-Australia / Japan.
Global real estate equities have slightly underperformed world stock markets year-to-date (see Figure 5). Asian and emerging-market property stocks have corrected the most relative to local equity markets. On the other hand, Swiss and Australian real estate companies have outperformed by 15.6% and 10.2%, respectively. Swiss property stocks have benefited from their safe-haven status, but are now expensively priced. Further downside risks for many Asian developers Asian ex-Japan/Australia real estate companies appear attractively valued from a net asset value (NAV) perspective (see Figure 7), but also exhibit significant downside risk due to a high share of developers. Developers are more dependent on the economic cycle and the outlook for local housing markets, which has deteriorated considerably in the region in recent months. Hence, while we recognize significant upside potential in the long term, we generally remain cautious toward China, Hong Kong and Singapore property stocks in the next months. We favor Australian REITs due to their attractive dividend yield (above 6% 2012E) and their discounts to NAV. Property stocks in the USA could benefit from better economic data, while Japan offers attractive defensive attributes such as relatively stable property yields.
Dominik Garcia, dominik.garcia@credit-suisse.com, +41 44 334 25 38

Relative performance of real estate equities to local stock market year-to-date (%)
Source: Datastream, Credit Suisse

Figure 6 Listed real estate valuations appear undemanding

12-mo nth fo rward P/E 30 28 26 24 22 20 18 16 14 12 10 Oct 01 Oct 02 Oct 03 Oct 04 Oct 05 Oct 06 Oct 07 Oct 08 Oct 09 Oct 10 Oct 11

M SCI Wo rld Real Estate

A verage

+ /- 1 STD

Source: Datastream, Credit Suisse

Figure 4 Volatile and slightly downward trending markets recently

Real estate equity return index (01.07.2011 = 100) 110 105 100 95 90 85 80 75 70 07/11 08/11 Asia Switzerland Australia
Source: Datastream, Credit Suisse

Figure 7 Australian REITs are trading at discounts

% 60 40 20 0 -20 -40 Hong Kong Singapore -60 US Reits Australian Reits S-Reits Continental property J-Reits Switzerland property % 6 4 2 0 -2 -4 -6 Japan UK Europe

09/11

10/11 Europe ex UK UK

11/11 Japan US

Premium / discount to 2011E NAV Yield spread between prime office and govt bond yields (r.h.s.)
Source: Datastream, PMA, Credit Suisse

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Special topic: Real estate equity and mutual funds Real estate equity instruments include single property company stocks and equity real estate investment trusts (REITs). Real estate equity instruments have the advantage of being liquid and easily accessible to many investors. In return, they are more volatile than direct investments and have a relatively high correlation to overall equity markets in the short to medium term, reducing diversification gains in a portfolio. Real estate equity mutual funds include actively managed physical funds, actively managed equity funds and exchange-traded funds (ETFs) on real estate equity indices. Physical real estate funds are funds that own and manage property portfolios directly, while real estate equity funds invest in listed real estate instruments such as property stocks. Physical real estate funds have a higher correlation to the underlying real estate market, while real estate equity funds and ETFs have characteristics similar to real estate equity instruments. Liquidity issues may arise, depending on the specific legal form of a fund.

Figure 8 Characteristics of most common real estate investment vehicles

Source: Credit Suisse

Valuation matrix: Outlook over next 6-12+ months Region Rating Submarket1 North America Europe (excluding UK, Switzerland) Positive Neutral USA Germany France Spain Italy UK Switzerland Asia-Pacific Neutral Neutral Positive Japan Singapore Hong Kong Australia Emerging markets Positive China India Brazil Russia Poland Turkey
1 For requests on specific markets, please contact global.realestate@credit-suisse.com Source: Credit Suisse

Office market Positive Neutral Neutral Negative Neutral Neutral Neutral Positive Positive Neutral Positive Positive Negative Positive Neutral Positive Neutral

Retail market Negative Positive Positive Negative Neutral Negative Neutral Neutral Neutral Positive Positive Positive Neutral Positive Neutral Neutral Neutral

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Zurich, 7 December 2011

Regional overview for individual markets Europe (excluding Switzerland): Neutral We maintain our Neutral rating for overall European direct commercial real estate, despite significantly increased downside risks due to the lingering sovereign debt crisis. Current large regional differences in performance will likely persist in 2012. Within the major Western European countries, we favor the core retail real estate markets in France and Germany due to their relative defensiveness. In Germany, we believe that especially high-street retail properties in West German cities as well as office properties in Berlin, Munich and Stuttgart should outperform. We remain negative on the commercial real estate sector in Spain and other peripheral European countries due to continued deleveraging of local consumers and possible deflationary macroeconomic adjustments. UK commercial real estate returns are likely to soften markedly due to fading growth in rents (see Figure 9), but should remain positive in H1 2012. Switzerland: Neutral We maintain our optimistic view toward commercial properties in major Swiss cities. But in some peripheral markets, commercial rents could come under pressure in the next quarters due to oversupply. Intervention by the Swiss National Bank (SNB) should keep the monetary environment accommodative for property markets for the time being. The office rental property market has benefited from robust growth in employment in recent years, which kept vacancies low (see Figure 10). In 2012, the economic environment is likely to become more challenging. Elevated construction activity should limit the upside for rents both in the office and retail property sector in the medium term.

Figure 9: Europe Growth in rents for office properties likely to fade in the UK and France
EUR/sqm p.a. 1200 1000 800 600 400 200 0 -200 Birmingham Madrid West End London Paris CBD Frankfurt Munich Manchester Barcelona Hamburg Paris Df. Rome Berlin Milan YoY, % 24 20 16 12 8 4 0 -4

Figure 10: Switzerland Office vacancies are low so far due to robust economy
in '000 square meters 700 650 600 550 500 450 400 350 300 250 200 98 99 00 01 02 03 04 05 06 07 08 09 10 11

Prime office rents

Rental growth (r.h.s.)

Known vacant office space in Switzerland

Source: PMA, Credit Suisse

Source: Various local statistical offices, Credit Suisse Economic Research

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North America: Positive While the performance is likely to cool down somewhat, we are maintaining our cautiously positive view toward US commercial real estate. The prolonged low interest rate environment is supportive, rental incomes have shown signs of bottoming in many markets and commercial real estate delinquency rates have receded substantially in the past months. However, the near-term upside potential for rents is limited given the anemic labor market recovery. But economic data have started to surprise to the upside again recently. Our favorite sectors are offices and apartments. Regionally, we prefer San Francisco, the Northeast and Texas due to better rental market prospects and would still avoid Miami and the Southwest. The outlook for overall retail real estate remains somewhat dampened since consumer spending will likely remain subdued due to continued deleveraging by households.

Asia-Pacific: Positive Direct commercial real estate in Asia should continue to benefit from low interest rates, but the weaker economic outlook and rich valuations as indicated by low property yields requires a more defensive stance. Initial yields have fallen to historically low levels, especially in Hong Kong, China and Singapore. Within developed Asia, we currently favor the Australian commercial real estate markets. Major Chinese office property markets especially in Beijing are likely to perform robustly as well next year since vacancies have fallen markedly except in Shenzhen (see Figure 12), and current construction pipelines are low compared with those in recent years. Tokyos office rental property market could finally bottom out in H1 2012 after three years of deterioration.

Figure 11: North America Robust performance of US commercial real estate in 2011
Quarterly total return on direct investments in the USA (%, QoQ) 7 6 5 4 3 2 1 0 Office Dec 10 Retail M ar 11 Industrial Jun 11 Apartments Sep 11

Figure 12: Asia-Pacific Strong decrease in Beijings prime office vacancy rate
Prime office vacancy rate, % (2 quarters m.a.) 30 25 20 15 10 5 0 01 02 03 04 05 Shanghai 06 07 08 09 10 11 Shenzhen

Beijing
Source: PMA, Credit Suisse

Guangzhou

Source: NCREIF, Credit Suisse / IDC

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Emerging markets: Positive Commercial real estate investments in emerging markets offer attractive return prospects for long-term-oriented investors thanks to favorable structural drivers such as superior growth in private consumption. In the near term, selectivity is required due to oversupply in some markets (e.g. in Dubai, India). Latin America is currently our favorite region within the emerging markets due to generally very low vacancy rates in the prime commercial real estate sector. Brazil will likely remain the primary Latin American investment destination in 2012. In Eastern Europe, we expect commercial properties in Poland and the Czech Republic to continue to outperform. A major risk for many Eastern European property markets is some countries dependence on availability of foreign credit (see Figure 13), which will likely be negatively affected by de-leveraging of Western European banks.

Figure 13: Emerging markets Large net foreign debt in Hungary, Bulgaria and Romania poses risk in case of bank de-leveraging
Net foreign asset position in % of GDP 50 0 -50 -100 -150 -200

Czech Rep.

Hungary

Bulgaria

Romania

Russia

Poland

Turkey

Reserve Assets Net Portfolio Debt

Source: Datastream, Credit Suisse

Loans Net Portfolio Equity

Net FDI Net Foreign Assets

Ukraine

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Regional overview of individual markets: Tables

European office property data (including Switzerland)

Office yield1 (%)
Vienna Brussels Copenhagen Paris Berlin Frankfurt Hamburg Munich Athens Dublin Rome Milan Amsterdam Lisbon Madrid Barcelona Stockholm Zurich London City London West End 5.3 5.4 5.0 4.9 5.0 4.9 4.9 4.8 7.4 7.5 5.3 5.0 5.3 6.6 5.2 5.4 4.5 4.3 5.3 4.0

Yield spread2
305 319 278 273 275 265 265 255 521 530 312 284 306 435 301 324 270 344 290 165

Prime office rent3

264 225 221 734 258 396 276 342 260 323 350 500 312 208 300 225 452 656 730 1093

Rent growth YoY (%)

2 2 3 3 8 2 5 4 -10 -14 0 0 4 -1 -4 -3 11 0 5 23

Vacancy rate (%)

6 11 9 7 10 16 10 9 13 23 9 13 19 13 11 14 12 5 11 5

1 Prime net initial yield 2 Spread between yields on office property and 10-year government bonds (in basis points) 3 EUR/sq.m./year Source: PMA, Bloomberg, Credit Suisse

European retail property data (including Switzerland)

Retail yield1 (%)
Vienna Brussels Copenhagen Paris Berlin Frankfurt Hamburg Munich Athens Dublin Rome Milan Amsterdam Lisbon Madrid Barcelona Stockholm London 4.3 4.9 5.0 4.4 4.6 4.4 4.4 4.0 6.3 6.8 4.8 4.8 4.3 7.0 4.6 4.6 5.0 4.0

Yield spread2
205 265 280 219 236 217 217 178 413 455 260 260 214 480 236 236 319 165

Prime retail rent3

2160 1650 1879 6186 2700 3060 2820 3540 1580 2580 2750 2850 2250 900 2580 2408 1435 5416

Rent growth YoY (%)

0 4 8 0 5 4 4 4 -13 -4 0 0 14 0 0 0 4 2

Retail sales growth YoY (%)

-1.4 -6.2 0.1 0.2 3.5 3.5 3.5 3.5 -3.7 -3.7 -1.6 -1.6 -0.9 -8.2 -4.2 -4.2 -1.2 5.4

1 Prime net initial yield 2 Spread between yields on retail property and 10-year government bonds (in basis points) 3 EUR/sq.m./year Source: PMA, Bloomberg, Credit Suisse

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North America property data

Yield1 (%) Office markets
Atlanta Boston Chicago Dallas-Fort Worth Houston Los Angeles Miami New York San Francisco Washington, D.C. Vancouver Toronto 7.1 5.5 5.7 6.4 5.7 6.0 6.9 4.8 5.7 5.2 5.8 6.4 7.8 506 339 363 429 363 386 482 267 363 315 363 423 570 20 47 34 22 36 36 40 70 40 56 54 56 16 -1 2 -1 -3 1 1 -1 9 14 6 16 9 -4 22 18 20 22 16 18 20 11 14 14 2 6 11

Yield spread2

Prime rent3

Rent growth YoY (%)

Vacancy rate (%)

Retail markets
US average

1 Prime net initial yield 2 Spread between yields on property and 10-year government bonds (in basis points) 3 USD/sq.ft./year; CD/sq.ft./year Source: PMA, Colliers, Credit Suisse

Asia-Pacific property data

Yield1 (%) Office markets
Tokyo Singapore Hong Kong Seoul Sydney Melbourne 3.8 3.4 3.1 5.7 6.8 7.0 5.5 3.7 6.4 275 163 172 191 284 304 378 232 241 12 7 17 4 5 3 30 104 25 -6 25 22 1 2 3 36 72 -3 9 12 5 4 9 7 n.a. n.a. 3

Yield spread2

Prime rent3

Rent growth YoY (%)

Vacancy rate (%)

Retail markets
Singapore Hong Kong Sydney

1 Prime net initial yield 2 Spread between yields on property and 10-year government bonds (in basis points) 3 USD/sq.ft./month n.a. = not available Source: PMA, CBRE, Credit Suisse

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Emerging markets Latin America, Asia & EMEA property data

Office markets
Abu Dhabi Bangalore Beijing Bogot Bratislava Bucharest Budapest Buenos Aires Cape Town Chennai Delhi Doha Dubai Guangzhou Istanbul Jakarta Johannesburg Kiev Kuala Lumpur Lima Manila Mexico City Moscow Mumbai Prague Riga Rio de Janeiro Santiago Sao Paulo Shanghai Sofia St Petersburg Taipei Tallinn Tel Aviv Vilnius Warsaw Zagreb
1 Prime net initial yields 2 USD/sq.ft./year Source: Colliers, Credit Suisse

Yield1(%)
10 10 6 10 8 8 8 10 11 9 9 11 11 6 7 8 11 11 n.a. 12 10 10 10 11 7 8 11 9 11 6 9 11 3 8 8 9 7 9

Prime rent2
42 15 44 38 19 24 20 33 12 15 58 55 42 25 30 15 7 37 16 19 21 30 65 59 28 19 89 29 69 41 15 38 29 21 34 21 36 20

Rent growth YoY (%)

-24 -4 29 -9 -25 -17 -35 -17 -22 4 -13 -24 -41 -1 -46 -44 -54 -13 4 -6 7 0 17 7 -10 -11 33 -5 12 0 -47 -3 32 2 20 7 -4 -10

Vacancy rate (%)

7 16 5 5 9 18 25 7 9 22 17 7 50 18 11 8 9 13 11 3 4 11 12 14 12 13 1 3 3 11 26 13 10 11 6 10 6 9

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Overview of real estate equities

Company name
Allreal Ascendas REIT

Bloomberg Regional exposure ticker

ALLN SW AREIT SP Switzerland Singapore Pan-Asia Thailand Philippines Great Britain

Sector
Office Industrial Diversified Developer Diversified Office / retail

Rating
HOLD BUY HOLD BUY HOLD BUY BUY HOLD BUY HOLD BUY HOLD BUY BUY BUY HOLD HOLD BUY BUY BUY BUY BUY

Analyst
Dominik Garcia Shirley Wong Shirley Wong Shirley Wong Junhao Tan Dominik Garcia Shirley Wong Shirley Wong Irene Chow Wen Chi Yu Shirley Wong Simon Clark Kamran Butt Shirley Wong Simon Clark Simon Clark Irene Chow Irene Chow Shirley Wong Dominik Garcia Simon Clark Simon Clark Satoshi Kobayashi Satoshi Kobayashi Dominik Garcia Irene Chow Simon Clark Irene Chow Shirley Wong Irene Chow Dominik Garcia Irene Chow Dominik Garcia Simon Clark Irene Chow

Market cap. Price to Dividend (USD m) book 2011E yield 2011E

1990 3130 830 430 4700 6450 8210 4290 25770 7710 6680 3940 4310 850 4130 5530 13370 10650 2740 7850 4000 4040 13560 4970 3480 7180 7510 31280 1910 17850 3970 7900 16140 17360 13640 1.17 1.23 0.77 1.38 3.66 0.82 0.73 1.13 0.74 1.21 1.37 2.06 0.49 1.12 0.97 0.82 0.91 0.5 0.81 0.72 1.12 0.76 1.02 0.93 1.07 0.67 0.92 0.76 0.63 0.67 1.15 1.12 1.05 1.09 0.64 4.08% 6.82% 8.69% 5.04% 0.97% 5.75% 2.26% 5.47% 3.6% 3.02% 1.45% 6.5% 2.4% 6.48% 6.38% 5.75% 3.18% 2.89% 4.56% 4.58% 5.64% 6.69% 1.85% 4.44% 3.94% 4.34% 7.22% 3.67% 8.58% 3.81% 5.26% 4.43% 6.44% 6.19% 2.79%

Ascott Residence Trust ART SP Asian Property Dev. Ayala Land British Land Capitaland Capitamall Trust Cheung Kong China Resources Land City Developments Dexus Property Group Emaar Properties Frasers Centrepoint Goodman Group GPT Group Hang Lung Properties Henderson Land Keppel Land Land Securities Lend Lease Group Mirvac Group Mitsui Fudosan Nippon Building Fund PSP Swiss Property Sino Land Co. Limited Stockland Sun Hung Kai Suntec REIT Swire Pacific Swiss Prime Site The Link REIT Unibail-Rodamco Westfield Group Wharf Holdings AP TB ALI PM BLND LN CAPL SP CT SP 1 HK 1109 HK CIT SP DXS AU EMAAR UH FCT SP GMG AU GPT AU 101 HK 12 HK KPLD SP LAND LN LLC AU MGR AU 8801 JP 8951 JP PSPN SW 83 HK SGP AU 16 HK SUN SP 19 HK SPSN SW 823 HK UL FP WDC AU 4 HK

Developing and emerging Asia Diversified Singapore Hong Kong China Global, focus on Singapore Global Middle East, India Singapore Asia-Pacific, Europe Mainly Australia, Europe Hong Kong, China Hong Kong Singapore, China, Vietnam Great Britain Australia, UK, USA Australia, New Zealand Japan Japan Switzerland Hong Kong Australia, New Zealand Hong Kong Singapore Hong Kong Switzerland Hong Kong Europe Global Hong Kong Office Diversified Residential Developer Diversified Developer Retail Industrial Retail / office Diversified Diversified Developer Office / retail Developer Diversified

Office / residential BUY Office Office Developer Diversified Diversified Retail Office / retail Office / retail Retail / car parks Retail / office Retail Diversified BUY HOLD BUY BUY BUY HOLD BUY HOLD HOLD HOLD BUY HOLD

Source: Bloomberg, IBES/Thomson Reuters, Credit Suisse Equity Research Analysts: Telephone number: Dominik Garcia Simon Clark Kamran Butt +41 44 334 56 33 +61 2 8205 4314 +971 4 362 0124 Regional responsibility: Switzerland, Europe, USA Australia Middle East Equity Research Analysts: Telephone number: Irene Chow Shirley Wong Satoshi Kobayashi +852 28 41 40 36 +65 6212 6072 +81 3 4550 51 18 Regional responsibility: Hong Kong South East Asia Japan

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Imprint Authors Martin Bernhard, CFA Assistant Vice President Global Real Estate Analysis martin.bernhard@credit-suisse.com +41 44 334 83 22 Dominik Garcia Equity Research dominik.garcia@credit-suisse.com +41 44 334 56 33

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Abbreviations frequently used in reports

Abb.
CAGR CFO CFROI DCF

Description
Compound annual growth rate Cash from operations Cash flow return on investment Discounted cash flow

Abb.
EPS EV FCF FFO IBD

Description
Earnings per share Enterprise value Free cash flow Funds from operations Interest-bearing debt

Abb.
P/B P/E PEG ROE ROIC

Description
Price-to-book value Price-earnings ratio P/E ratio divided by growth in EPS Return on equity Return on invested capital

EBITDA Earnings before interest, taxes, depreciation and amortization

Disclosure appendix
Analyst certification The analysts identified in this report hereby certify that views about the companies and their securities discussed in this report accurately reflect their personal views about all of the subject companies and securities. The analysts also certify that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Knowledge Process Outsourcing (KPO) Analysts mentioned in this report are employed by Credit Suisse Business Analytics (India) Private Limited. Important disclosures Credit Suisse policy is to publish research reports, as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein. Credit Suisse policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. The Credit Suisse Code of Conduct to which all employees are obliged to adhere, is accessible via the website at: https://www.credit-suisse.com/governance/doc/code_of_conduct_en.pdf DEXUS PROPERTY GROUP (DXS AU) For more detail, please refer to the information on independence of financial research, which can be found at: https://www.credit-suisse.com/legal/pb_research/independence_en.pdf The analyst(s) responsible for preparing this research report received compensation that is based upon various factors including Credit Suisses total revenues, a portion of which is generated by Credit Suisse Investment Banking business.

HOLD HOLD HOLD BUY CAPITAMALL TRUST (CT SP) HOLD HOLD HOLD HOLD CHEUNG KONG HOLDINGS (1 HK) BUY BUY BUY CHINA RESOURCES LAND (CRL) (1109 HOLD HK) HOLD CITY DEVELOPMENTS (CIT SP) BUY BUY BUY BUY BUY HOLD HOLD BUY EMAAR PROPERTIES (EMAAR UH) FRASERS CENTREPOINT TRUST (FCT SP) BUY BUY BUY BUY BUY BUY GOODMAN GROUP (GMG AU) BUY BUY BUY GPT GROUP (GPT AU) HOLD HOLD HOLD HANG LUNG PROPERTIES (101 HK) HOLD HOLD HOLD HENDERSON LAND DEVELOPMENT (12 HK) BUY BUY BUY HOLD KEPPEL LAND (KPLD SP) BUY BUY BUY BUY BUY LAND SECURITIES GROUP PLC (LAND LN) BUY BUY BUY BUY BUY HOLD HOLD HOLD

since 27/06/2011 since 02/03/2011 since 05/01/2011 since 23/07/2010 since 19/10/2011 since 19/07/2011 since 31/01/2011 since 24/08/2010 since 09/08/2011 since 07/04/2011 since 06/08/2010 since 29/03/2011 since 21/09/2010 since 11/11/2011 since 27/06/2011 since 01/03/2011 since 05/01/2011 since 02/08/2010 since 02/09/2011 since 17/02/2011 since 19/08/2010 since 24/03/2011 since 29/10/2010 since 24/10/2011 since 26/07/2011 since 28/03/2011 since 22/11/2010 since 22/08/2011 since 08/03/2011 since 01/11/2010 since 05/09/2011 since 07/03/2011 since 07/09/2010 since 01/08/2011 since 08/02/2011 since 07/02/2011 since 20/09/2011 since 13/04/2011 since 21/03/2011 since 17/06/2010 since 20/10/2011 since 27/06/2011 since 01/03/2011 since 05/01/2011 since 18/10/2010 since 16/11/2011 since 20/07/2011 since 19/07/2011 since 08/06/2011 since 18/05/2011 since 18/05/2011 since 09/05/2011 since 15/11/2010

Equity rating history as of 07/12/2011

Company
ALLREAL (ALLN SW)

Rating
HOLD HOLD HOLD BUY

Date
since 29/08/2011 since 25/08/2011 since 02/05/2011 since 17/09/2010 since 02/11/2011 since 19/07/2011 since 19/01/2011 since 26/11/2010 since 21/10/2011 since 25/07/2011 since 14/02/2011 since 26/10/2010 since 24/11/2011 since 05/01/2011 since 03/01/2011 since 06/10/2011 since 15/09/2010 since 17/11/2011 since 10/08/2011 since 04/08/2011 since 24/05/2011 since 24/05/2011 since 16/02/2011 since 15/02/2011 since 17/11/2010 since 09/11/2011

ASCENDAS REIT (AREIT SP)

BUY HOLD HOLD HOLD

ASCOTT RESIDENCE TRUST (ART SP)

HOLD HOLD BUY

BUY ASIAN PROPERTY DEVELOPMENT (AP BUY TB) BUY BUY AYALA LAND (ALI PM) BRITISH LAND COMPANY PLC (BLND LN) HOLD BUY BUY BUY BUY BUY BUY BUY BUY BUY CAPITALAND (CAPL SP) BUY

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LEND LEASE CORPORATION LIMITED (LLC AU)

BUY BUY BUY BUY

since 09/09/2011 since 21/02/2011 since 21/12/2010 since 17/08/2010 since 01/09/2011 since 23/02/2011 since 25/08/2010 since 09/08/2011 since 17/02/2011 since 30/09/2010 since 04/10/2010 since 11/11/2011 since 06/09/2011 since 05/09/2011 since 17/08/2011 since 16/08/2011 since 10/08/2011 since 09/08/2011 since 17/05/2011 since 11/05/2011 since 02/05/2011 since 09/09/2010 since 10/10/2011 since 25/11/2011 since 10/08/2011 since 11/02/2011 since 16/08/2010 since 19/09/2011 since 01/03/2011 since 21/09/2010 since 30/11/2011 since 22/07/2011 since 09/02/2011 since 28/10/2010 since 12/08/2011 since 14/03/2011 since 11/03/2011 since 13/10/2010 since 11/11/2011 since 09/09/2011 since 06/07/2011 since 17/05/2011 since 17/05/2011 since 02/05/2011 since 21/09/2010 since 10/11/2011 since 01/08/2011 since 08/06/2011 since 11/11/2010 since 22/07/2011 since 21/07/2011 since 24/03/2011 since 13/12/2010 since 22/07/2010 since 09/11/2011 since 18/08/2011 since 17/02/2011 since 18/01/2011 since 02/09/2011 since 01/04/2011

BUY

since 02/09/2010

MIRVAC GROUP (MGR AU)

BUY BUY BUY

MITSUI FUDOSAN (8801 JP)

BUY BUY BUY

NIPPON BUILDING FUND (8951 JP) PSP SWISS PROPERTY (PSPN SW)

BUY HOLD HOLD HOLD BUY BUY BUY BUY HOLD HOLD HOLD HOLD

SINO LAND (83 HK) STOCKLAND (SGP AU)

BUY BUY BUY HOLD HOLD

SUN HUNG KAI PROPERTIES (16 HK)

BUY BUY BUY

SUNTEC REIT (SUN SP)

HOLD HOLD HOLD HOLD

SWIRE PACIFIC A (19 HK)

BUY BUY BUY BUY

SWISS PRIME SITE (SPSN SW)

HOLD HOLD HOLD HOLD HOLD HOLD HOLD

RESTRICTED since 08/06/2011

THE LINK REIT (823 HK)

HOLD HOLD BUY BUY

UNIBAIL-RODAMCO (UL FP)

HOLD HOLD HOLD HOLD BUY

WESTFIELD GROUP (WDC AU)

BUY BUY HOLD HOLD

RESTRICTED since 04/11/2010 WHARF (4 HK) HOLD HOLD

Fundamental and/or long-term research reports are not regularly produced for (LAND SECURITIES GROUP PLC). The Global Research department reserves the right to terminate coverage at short notice. Please contact your Relationship Manager for the specific risks of investing in securities of these companies. As at the end of the preceding month, Credit Suisse beneficially owned 1% or more of a class of common equity securities of (CHEUNG KONG HOLDINGS, SUN HUNG KAI PROPERTIES, SWISS PRIME SITE). For the following disclosures, references to Credit Suisse include all of the subsidiaries and affiliates of Credit Suisse AG, the Swiss bank, operating under its Investment Banking division. The subject issuer (ASCENDAS REIT, ASCOTT RESIDENCE TRUST, ASIAN PROPERTY DEVELOPMENT , AYALA LAND, BRITISH LAND COMPANY PLC, CAPITALAND, CAPITAMALL TRUST, CHEUNG KONG HOLDINGS, CHINA RESOURCES LAND (CRL), CITY DEVELOPMENTS, EMAAR PROPERTIES, FRASERS CENTREPOINT TRUST, GPT GROUP, HANG LUNG PROPERTIES, HENDERSON LAND DEVELOPMENT, KEPPEL LAND, MITSUI FUDOSAN, NIPPON BUILDING FUND, SINO LAND, SUN HUNG KAI PROPERTIES, SUNTEC REIT, SWISS PRIME SITE, THE LINK REIT, UNIBAIL-RODAMCO, WESTFIELD GROUP, WHARF) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse. Credit Suisse provided investment banking services to the subject company (ASCENDAS REIT, ASCOTT RESIDENCE TRUST, AYALA LAND, BRITISH LAND COMPANY PLC, CAPITALAND, CAPITAMALL TRUST, CHEUNG KONG HOLDINGS, CHINA RESOURCES LAND (CRL), CITY DEVELOPMENTS, EMAAR PROPERTIES, FRASERS CENTREPOINT TRUST, HANG LUNG PROPERTIES, HENDERSON LAND DEVELOPMENT, KEPPEL LAND, MITSUI FUDOSAN, NIPPON BUILDING FUND, SINO LAND, SUN HUNG KAI PROPERTIES, SUNTEC REIT, SWISS PRIME SITE, THE LINK REIT, UNIBAIL-RODAMCO, WESTFIELD GROUP, WHARF) within the past 12 months. Credit Suisse provided non-investment banking services, which may include Sales and Trading services, to the subject issuer (ASCENDAS REIT, ASIAN PROPERTY DEVELOPMENT , CHEUNG KONG HOLDINGS, GPT GROUP, HENDERSON LAND DEVELOPMENT, SUN HUNG KAI PROPERTIES) within the past 12 months. Credit Suisse has managed or co-managed a public offering of securities for the subject issuer (ASCOTT RESIDENCE TRUST, CAPITALAND, CAPITAMALL TRUST, CHINA RESOURCES LAND (CRL), DEXUS PROPERTY GROUP, SWISS PRIME SITE, WESTFIELD GROUP) within the past three years. Credit Suisse has managed or co-managed a public offering of securities for the subject issuer (CAPITAMALL TRUST, SWISS PRIME SITE) within the past 12 months. Credit Suisse has received investment banking related compensation from the subject issuer (ASCOTT RESIDENCE TRUST, CAPITALAND, CAPITAMALL TRUST, CHEUNG KONG HOLDINGS, FRASERS CENTREPOINT TRUST, SWISS PRIME SITE, THE LINK REIT, UNIBAIL-RODAMCO, WESTFIELD GROUP) within the past 12 months. Credit Suisse has received compensation for products and services other than investment banking services from the subject issuer (ASCENDAS REIT, ASIAN PROPERTY DEVELOPMENT , CHEUNG KONG HOLDINGS, GPT GROUP, HENDERSON LAND DEVELOPMENT, SUN HUNG KAI PROPERTIES) within the past 12 months. Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject issuer (ASCENDAS REIT, ASCOTT RESIDENCE TRUST, ASIAN PROPERTY DEVELOPMENT , AYALA LAND, BRITISH LAND COMPANY PLC, CAPITALAND, CAPITAMALL TRUST, CHEUNG KONG HOLDINGS, CHINA RESOURCES LAND (CRL), CITY DEVELOPMENTS, EMAAR PROPERTIES, FRASERS CENTREPOINT TRUST, GPT GROUP, HANG LUNG PROPERTIES, HENDERSON LAND DEVELOPMENT, KEPPEL LAND, LAND SECURITIES GROUP PLC, LEND LEASE CORPORATION LIMITED, MIRVAC GROUP, MITSUI FUDOSAN, NIPPON BUILDING FUND, SINO LAND, SUN HUNG KAI PROPERTIES, SUNTEC REIT, SWIRE PACIFIC A, SWISS PRIME SITE, THE LINK REIT, UNIBAIL-RODAMCO, WESTFIELD GROUP, WHARF) within the next three months. As at the date of this report, Credit Suisse acts as a market maker or liquidity provider in the securities of the subject issuer (MITSUI FUDOSAN). Credit Suisse holds a trading position in the subject issuer (ALLREAL , ASCENDAS REIT, ASCOTT RESIDENCE TRUST, ASIAN PROPERTY DEVELOPMENT , AYALA LAND, BRITISH LAND COMPANY PLC, CAPITALAND, CAPITAMALL TRUST, CHEUNG KONG HOLDINGS, CHINA RESOURCES LAND (CRL), CITY DEVELOPMENTS, DEXUS PROPERTY GROUP, EMAAR PROPERTIES, FRASERS CENTREPOINT TRUST, GOODMAN GROUP, GPT GROUP, HANG LUNG PROPERTIES, HENDERSON LAND DEVELOPMENT, KEPPEL LAND, LAND SECURITIES GROUP PLC, LEND LEASE CORPORATION LIMITED, MIRVAC GROUP, MITSUI FUDOSAN, NIPPON BUILDING FUND, PSP SWISS PROPERTY, SINO LAND, STOCKLAND, SUN HUNG KAI PROPERTIES, SUNTEC REIT, SWIRE PACIFIC A, SWISS PRIME SITE, THE LINK REIT, UNIBAIL-RODAMCO, WESTFIELD GROUP, WHARF).

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Masayuki Matsushima, an employee of Credit Suisse, is an advisor to the Board of Director of MITSUI FUDOSAN. Mario Seris, an employee of Credit Suisse AG, is a Member of the Board of Directors of SWISS PRIME SITE. Markus Graf, an employee of Credit Suisse AG, is Chief Executive Officer of SWISS PRIME SITE. Peter Wullschleger, an employee of Credit Suisse AG, is Chief Financial Officer of SWISS PRIME SITE and Secretary of the Board of Directors. Peter Lehmann, an employee of Credit Suisse AG, is Chief Investment Officer of SWISS PRIME SITE. Additional disclosures for the following jurisdictions Hong Kong: Other than any interests held by the analyst and/or associates as disclosed in this report, Credit Suisse Hong Kong Branch does not hold any disclosable interests. United Kingdom: For fixed income disclosure information for clients of Credit Suisse (UK) Limited and Credit Suisse Securities (Europe) Limited, please call +41 44 333 33 99. For further information, including disclosures with respect to any other issuers, please refer to the Credit Suisse Global Research Disclosure site at: http://www.credit-suisse.com/research/disclaimer

variables and incorporated into the algorithms available in the Credit Suisse HOLT valuation model. The source financial statement, pricing, and earnings data provided by outside data vendors are subject to quality control and may also be adjusted to more closely measure the underlying economics of firm performance. These adjustments provide consistency when analyzing a single company across time, or analyzing multiple companies across industries or national borders. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes the baseline valuation for a security, and a user then may adjust the default variables to produce alternative scenarios, any of which could occur. The Credit Suisse HOLT methodology does not assign a price target to a security. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes a warranted price for a security, and as the third-party data are updated, the warranted price may also change. The default variables may also be adjusted to produce alternative warranted prices, any of which could occur. Additional information about the Credit Suisse HOLT methodology is available on request. CFROI(r), CFROE, HOLT, HOLTfolio, HOLTSelect, HS60, HS40, ValueSearch, AggreGator, Signal Flag and Powered by HOLT are trademarks or registered trademarks of Credit Suisse or its affiliates in the United States and other countries. HOLT is a corporate performance and valuation advisory service of Credit Suisse. For technical research Where recommendation tables are mentioned in the report, Close is the latest closing price quoted on the exchange. MT denotes the rating for the medium-term trend (36 months outlook). ST denotes the short-term trend (36 weeks outlook). The ratings are + for a positive outlook (price likely to rise), 0 for neutral (no big price changes expected) and for a negative outlook (price likely to fall). Outperform in the column Rel perf denotes the expected performance of the stocks relative to the benchmark. The Comment column includes the latest advice from the analyst. In the column Recom the date is listed when the stock was recommended for purchase (opening purchase). P&L gives the profit or loss that has accrued since the purchase recommendation was given. For a short introduction to technical analysis, please refer to Technical Analysis Explained at: https://www.credit-suisse.com/legal/pb_research/technical_tutorial_en.pdf

Guide to analysis
Equity rating allocation as of 07/12/2011
Overall
BUY HOLD SELL RESTRICTED 47.47% 46.18% 5.48% 0.87%

Investment banking interests only

48.39% 44.84% 5.81% 0.97%

Relative stock performance At the stock level, the selection takes into account the relative attractiveness of individual shares versus the sector, market position, growth prospects, balance-sheet structure and valuation. The sector and country recommendations are overweight, neutral, and underweight and are assigned according to relative performance against the respective regional and global benchmark indices. Absolute stock performance The stock recommendations are BUY, HOLD and SELL and are dependent on the expected absolute performance of the individual stocks, generally on a 6-12 months horizon based on the following criteria: BUY: HOLD: SELL: RESTRICTED: 10% or greater increase in absolute share price variation between -10% and +10% in absolute share price 10% or more decrease in absolute share price In certain circumstances, internal and external regulations exclude certain types of communications, including e.g. an investment recommendation during the course of Credit Suisse engagement in an investment banking transaction. Research coverage has been concluded.

Global disclaimer / important information

References in this report to Credit Suisse include subsidiaries and affiliates. For more information on our structure, please use the following link: http://www.credit-suisse.com/who_we_are/en/ The information and opinions expressed in this report were produced by the Global Research department of the Private Banking division at Credit Suisse as of the date of writing and are subject to change without notice. Views expressed in respect of a particular stock in this report may be different from, or inconsistent with, the observations and views of the Credit Suisse Research department of Division Investment Banking due to the differences in evaluation criteria. The report is published solely for information purposes and does not constitute an offer or an invitation by, or on behalf of, Credit Suisse to buy or sell any securities or related financial instruments or to participate in any particular trading strategy in any jurisdiction. It has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Although the information has been obtained from and is based upon sources that Credit Suisse believes to be reliable, no representation is made that the information is accurate or complete. Credit Suisse does not accept liability for any loss arising from the use of this report. The price and value of investments mentioned and any income that might accrue may fluctuate and may rise or fall. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to individual circumstances, or otherwise constitutes a personal recommendation to any specific investor. Any reference to past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any products mentioned in this document. Alternative investments, derivative or structured products are complex instruments, typically involve a high degree of risk and are intended for sale only to investors who are capable of understanding and assuming all the risks involved. Investments in emerging markets are speculative and considerably more volatile than investments in established markets. Risks include but are not necessarily limited to: political risks; economic risks; credit risks; currency risks; and market risks. In jurisdictions where Credit Suisse is not already registered or licensed to trade in securities, transactions will only be effected in accordance with applicable securities legislation, which will vary from jurisdiction to jurisdiction and may require that the trade be made in accordance with applicable exemptions from registration or licensing requirements. Before entering into any transaction, investors should consider the suitability of the transaction to individual circumstances and objectives. Credit Suisse recommends that investors independently assess, with a professional financial advisor, the specific financial risks as well as legal, regulatory,

TERMINATED:

Absolute bond recommendations The bond recommendations are based fundamentally on forecasts for total returns versus the respective benchmark on a 36 month horizon and are defined as follows: BUY: HOLD: SELL: RESTRICTED: Expectation that the bond issue will outperform its specified benchmark Expectation that the bond issue will perform in line with the specified benchmark Expectation that the bond issue will underperform its specified benchmark In certain circumstances, internal and external regulations exclude certain types of communications, including e.g. an investment recommendation during the course of Credit Suisse engagement in an investment banking transaction.

Credit Suisse HOLT With respect to the analysis in this report based on the HOLT(tm) methodology, Credit Suisse certifies that (1) the views expressed in this report accurately reflect the HOLT methodology and (2) no part of the Firms compensation was, is, or will be directly related to the specific views disclosed in this report. The Credit Suisse HOLT methodology does not assign ratings to a security. It is an analytical tool that involves use of a set of proprietary quantitative algorithms and warranted value calculations, collectively called the Credit Suisse HOLT valuation model, that are consistently applied to all the companies included in its database. Third-party data (including consensus earnings estimates) are systematically translated into a number of default

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credit, tax and accounting consequences. A Credit Suisse company may, to the extent permitted by law, participate or invest in other financing transactions with the issuer of the securities referred to herein, perform services or solicit business from such issuers, and/or have a position or effect transactions in the securities or options thereof. Distribution of research reports Except as otherwise specified herein, this report is distributed by Credit Suisse AG, a Swiss bank, authorized and regulated by the Swiss Financial Market Supervisory Authority. Australia: This report is distributed in Australia by Credit Suisse AG, Sydney Branch (CSSB) (ABN 17 061 700 712 AFSL 226896) only to "Wholesale" clients as defined by s761G of the Corporations Act 2001. CSSB does not guarantee the performance of, nor makes any assurances with respect to the performance of any financial product referred herein. 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issued by Credit Suisse (UK) Limited and Credit Suisse Securities (Europe) Limited. Credit Suisse Securities (Europe) Limited and Credit Suisse (UK) Limited, both authorized and regulated by the Financial Services Authority, are associated but independent legal entities within Credit Suisse. The protections made available by the Financial Services Authority for retail clients do not apply to investments or services provided by a person outside the UK, nor will the Financial Services Compensation Scheme be available if the issuer of the investment fails to meet its obligations. UNITED STATES: NEITHER THIS REPORT NOR ANY COPY THEREOF MAY BE SENT, TAKEN INTO OR DISTRIBUTED IN THE UNITED STATES OR TO ANY US PERSON. JAPAN: NEITHER THIS REPORT NOR ANY COPY THEREOF MAY BE SENT, TAKEN INTO OR DISTRIBUTED IN JAPAN. Local law or regulation may restrict the distribution of research reports into certain jurisdictions.

This report may not be reproduced either in whole or in part, without the written permission of Credit Suisse. Copyright 2011 Credit Suisse Group AG and/or its affiliates. All rights reserved. 11C019A

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