GlobalProperty - GLOBAL REAL ESTATE Global Property Insight...

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Please refer to the important disclosures and analyst certification on inside back cover of this document, or on our website GLOBAL REAL ESTATE Global Property Coordinators Alex Moss, Matt Nacard Analysts European Property Research and Global Property Securities Analytics Macquarie Capital (Europe) Ltd Alex Moss 44 20 3037 4086 Asian Property Research Macquarie Capital Securities Ltd Callum Bramah 852 3922 4731 US Property Research Macquarie Capital (USA) Rob Stevenson 1 212 231 8068 Japan Property Research Macquarie Capital Securities Ltd Hiroshi Okubo 81 3 3512 7433 Australian Property Research Macquarie Securities (Australia) Ltd Paul Checchin 61 2 8232 4197 Matt Nacard 61 2 8232 4017 Canadian Property Research Macquarie Capital (Canada) Inc . Michael Smith 1 416 848 3696 South African Property Research Macquarie First South Securities Leon Allison, CFA 27 11 583 2209 8 April 2010 Global Property Insight Moving from West to East Regional EPRA Indices 1 Q performance (%) rebased in US$ Source: EPRA, Bloomberg, Macquarie Research, April 2010 The US listed property market has had a stellar period of outperformance versus the other regions this quarter. As a result there is now a significant gap in global valuations developing, with the US looking fully valued on fundamentals at a significant premium to NAV and a cash dividend yield of 3.8%, below the 4% on offer from 10 year Treasuries. Against this, valuations in Hong Kong and China in particular look compelling (HK 20% NAV discount; China 30% NAV discount). China macro points to softening of tightening bias Our economist Paul Cavey believes that inflation is under control in China and that Q110 GDP growth released in April will be as good as it gets, meaning the marginal change in growth from here should be down while the marginal change in property oriented policy should be looser – both positive for China developer prices. We note that in March, residential volumes across ten key cities in China were up 64 % MoM. Global valuations suggest 5.7% upside to target prices In aggregate, the potential upside to our target prices is +5.7% (+8.8% last month), with our universe of leading market stocks trading at a weighted average -1.1% (5.9%) discount to NAV, and a FY1 dividend yield of 3.5% (3.9%). Hong Kong and Japan are currently showing the greatest upside to Target Prices. Key Picks Asia Pac – Westfield, ING Office, Henderson, SHKP, CRL, Shimao, Mitsui Fudosan, Mitsubishi Estate North America – Duke Realty,CBL, DuPont, Extra Space, Boardwalk, Allied Properties Europe – British Land, Eurocommercial, Wereldhave Global valuations of leading markets (market cap–weighted) Source: Macquarie Research, April 2010 85 90 95 100 105 110 115 120 31-Dec 0 5-Jan 1 0-Jan 2 5 - Ja n 3 4 -Fe b 9 -M a r 6 11-Mar 16-Mar -Mar EPRA Europe Index -2.8% EPRA North Americas Index +8.8% EPRA Asia Index -0.1% EPRA Global Index +3.1%
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GlobalProperty - GLOBAL REAL ESTATE Global Property Insight...

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