OPPORTUNITIES FOR TENANTS IN A DOWN MARKET

Agenda = Where Are We Now = Hanoi Office Market " Hanoi Serviced Apartment Market = Seizing Market Opportunities inc... The growth environment of early 2008 has changed to cost cont

OPPORTUNITIES FOR TENANTS

INA DOWN MARKET

PRESENTED TO EUROCHAM BY RICHARD LEECH

15 April 2009

CBRE

CB RICHARD ELLIS

Agenda

= Where Are We Now

= Hanoi Office Market

" Hanoi Serviced Apartment Market

= Seizing Market Opportunities inc Lease Restructuring

Internal Conditions & Drivers

CB Richard Ellis | Page 3

Where we are now?

The growth environment of early 2008 has changed to cost containment in 2009 Real Estate costs are often the second largest expense for Companies — typically behind labour

In a contracting economy, an aggressive occupancy cost reduction plan can mean the

ditference between success and survival Following headcount reduction activities over the last 6 months, some corporate occupiers are carrying a significant amount of vacant space

Market conditions have given rise to new opportunities for restructuring leases

By mid-2008, most Asian markets had achieved record high rents with five of the world’s ten most expensive office markets located in Asia

In HCMC we have seen Grade A rents for new or under construction properties drop

30 to 40% trom their peaks In Hanoi we are seeing an 8% quarter on quarter drop in office rents on existing buildings

Landlords are keen to secure reliable income that will see them through this economic downturn and a significant amount of planned new supply They are offering capital contributions to fit-outs, free rent periods, enhanced flexibility, and lower face rents to

Stock Market Rising - 30 Day Trend

Graph from VNDirect

CB Richard Ellis | Page 5

Web Analytical Data — Heat Graph

* Binh Thanh Dist *

» Apartment Apartments for Sale: Jan — Dec 2008

Janf/os Feb Mar Apr May June July Aug Sep Oct Now Dec

This heat graph shows the individual listings and the color shows the number of views

Lighter blue is fewer views, darker purple represents more views

Heat Graph provided by MetVuong.com

What's driving the oftice market?

Landlord Market Balances Market Tenant Market

L Rent

Higher Rents Tenants Landlords ower wes

Less favourable rental terms Lower Cash flow

CB Richard Ellis | Page 7

Hanoi Office Market

Source: CBRE (Vietnam)

CB Richard Ellis | Page 9

Office Rent Cycle — Hanoi Office Market

Hanoi Office Market Supply 2007 to 2010

1,000,000 ¬ 900,000 - 800,000 - 700,000 - 600,000 - 500,000 - 400,000 - 300,000 - 200,000 - 100,000 -

0-

CB Richard Ellis | Page 11

Hanoi Office Market - 2007 to 2010

942,000

622,000 379,000 412,000

2007 2008 2009 2010 year

Source: CBRE (Vietnam)

Asking rents of Grade A and B

Current asking rents

Sun Red River, Hanoi Tower, Opera Business Center, Asia 63 Ly Thai To, Central Building,

HCOB, Vincom City Tower Tower, Vietcombank Tower Pacific Place, Sun City

*Buildings are not listed in any particular order within rental ranges

CB Richard Ellis | Page 13

Occupancy rates in existing buildings

Proposed headline rent & GFA — 2009 new buildings

New Hanoi Grade A&B Office Supply

* The above rentals include Service Charge, exclude VAT

CB Richard Ellis | Page 15

Proposed rent GFA sq.m

BIDV Tower US$60 — 70 23,800

CDC Building US$30 6,160 Resco Building US$35 21,000 CMC Building US$20- US$22 15,000 CEO Tower US$25 — US$28 18,000

Vinaconex 9 US$25 — US$28 18,000 Plaschem Plaza US$22 12,800

Cau Giay New Submarket Unknown 40,000

Hacinco Complex unknown 3,000

197,760

Hanoi office market — Net absorption & vacancy rate

Ñ œ& œ& Œœ& ŒœẰ& &䜜Gœ &&=œœ&«(&ốeẶœ&e&œ&8ẽe&œ&eẶœ&œeeẶ&œ&e«œe«œ&euẶ&e«

Wa Net Absorption ex Vacancy Rate

HANO! NEW GFrrice SUPPLY HS — a

= Grade A 2008 |m@ Grade A 2009 ©) Grade B2008 @) Grade B 2009 CBRE

CB RICHARD ELLIS

Hanoi My Dinh New Urban Area office supply in 2008, 2009

@ Projects opening in 2009 @ Future Projects CBRE

Hanoi Serviced Apartment Market

¢ Hanoi drops 35 places to rank 91st

se Ho Chi Minh City drops 40 places to rank 100th

= Reasons:

° Stable VND against USD

° Lower inflation observed on goods here compared with

New York

Accommodation options available

Serviced Apartments / Villas

Somerset Grand, Fraser Suites, Sun Red River, Atlanta Residences

Buy to let apartments

The Manor, Pacific Place, Kinh Do, Trung Hoa Nhan Chinh,

Buy to let Villas

The Manor, Ciputra, Tay Ho,

10 Dang Thai Mai

Institutionally Owned Institutionally Leased

Or less often, Institutionally Owned Institutionally Leased Institutionally Managed

Monthly Bill

(including rent and utilities)

Monthly Tax Invoice Issued

Multi- monthly Bills

(including rent, utilities, parking,

management fee, etc )

Monthly Tax Invoice (optional) Multi-monthly Bills

(including rent, utilities, parking,

management fee, etc.)

Monthly Tax Invoice (optional)

CB Richard Ellis | Page 21

Serviced Apartment Facilities*

Available in 50%-95% projects

= Retail & Entertainment Complex

Sauna/ Steam Room

Standard Serviced Apartments

= Internationally Branded = , locally branded

“

,

#

- ,

Somerset Hoa Binh Fraser Suites Hanoi Skyline Tower

= 106 Hoang Quoc Viet, Cau Giay = 54 Xuan Dieu, Tay Ho = 4 Dang Dung, Ba Dinh

= Operator: Ascott International = Operator: Frasers Hospitality = Operator: Nam Hung Co Ltd

= 206 rooms (studio to 2-bed apartments) = 170 rooms (1 to 4-bed = 86 rooms (1 to 4-bed

apartments, 3-bed penthouse)

= Starting time: Q2/2008 apartments, 4-bed penthouse)

= Starting time: Q2/2008 = Starting time: Q2/2008

CB Richard Ellis | Page 23

Hanoi Serviced Apartment market overview (Q1/2009)

= No new supply in Q1/09

° Total supply 1,886 units in 21 projects (133% y-o-y)

= Average asking rents reduced slightly from Q4/08 with greater flexibility in price negotiation, varied between projects (3%-5%- 10%- 15%-20%)

° 5 Internationally managed projects : US$47.8/sm/month

= Vacancy dropped significantly from Q4/08, especially in the 3 new projects

° Whole sector (21 projects) : 11%

° An unveritiable portion of the occupancy came trom daily guests (10%- 20%) The portions are higher in big projects

Serviced Apartment rent cycle

Hanoi Serviced Apartment average asking rents

Average Asking Rents (Q1/09)

Min Rent $34 $21 $20 $19 $16 $21 $23 $20 Max Rent $68 $73 $52 $49 $32 $26 $35 $48

MONTHLY ASKING RENT PER UNIT (Q1/09) MONTHLY ASKING RENT PSM (Q1/09)

Studio 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed Villa Penthouse Studio 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed Villa

ME Max Rent %4 Min Rent ==== Averoge Ren† mmm Marx Rent Z Min Renl Average Rent

CB Richard Ellis | Page 27

Penthouse

Hanoi Serviced Apartment historic supply and vacancy

Hanoi Serviced Apartment future supply

= The market is expected to receive no new signiticant supply until 2011

Hanoi Serviced Apartments new & future supply

Hanoi Serviced Apartment market outlook

Decreasing demand due to Global economic turbulence

° MNCs slow growth, unassisted contract based workers replacing families on expat packages

e Accommodation budget is tightened

° Expats seeking alternative accommodation Direct competition from semi- & non-serviced apartments

° Typically private-owned, have security & maid services

° Often in central locations e.g Hoan Kiem, Tay Ho (West Lake)

°Rents are usually 1/3 — 1/2 the rent for traditional serviced apartments Change in Residential Leasing requirements — budget, unit size, location, standard of accommodations

Greater flexibility in price negotiation Achievable rents can be 3% - 20%

lower than asking rents

CB Richard Ellis | Page 31

Seizing Opportunities in the

Ottice Market

The Opportunities tor office tenants

Taking Advantage of Current Conditions

rents and landlords’ exposure and

a Restructure these leases to provide

immediate and significant cost ees

savings to the business —

——=82995-

= Secure higher quality space, flexibility and/or naming rights

a Not only is it possible to drop base rent, it may be possible to drop excess

space in the process

a Done correctly, savings could equal NPV savings of hundreds of thousands

of USD

= In-market execution by CBRE’s market leading Tenant Representation teams

will ensure results and a positive impact on your bottom line

CB Richard Ellis | Page 33

The Range of Options

= Subleasing

= Rental holidays

= Asset sales

= Sale and leasebacks

= Improving space utilisation

= Consolidate and co-locate

= Dropping swing space

= Lease restructures

What is Lease Restructuring?

= A lease restructure (also known as re-gearing or a blend & extend) is when a tenant enters into discussions with the current landlord to adjust the current contracted rent to market and/or dropping space in exchange for one or a combination of the following:

= Extending the lease

= Consolidating within a landlord’s porttolio

= Dropping existing tenant options to break the lease early

= Dropping a first right of refusal on contiguous space

= For extension lease restructures, the most common form, the differential between the contracted rent and the new agreed market rent for the remaining lease term

is often amortised over the new longer term

= Lease restructures are often seen as win/win projects as landlord's receive a renewed and often longer commitment to their portfolio by the tenant and the tenant receives an immediate reduction in occupancy cost

CB Richard Ellis | Page 35

Key Factors to Consider

= Length of Lease Commitment to be made `“

= Quantum of space required

= Open market reviews or fixed rent throughout term

= Rent caps and collars at review

= Subletting rights required

= Options to surrender space during lease term

= Rights of first refusal during lease term

= Value of any early surrenders

= Effects of future known vacancies in the subject building and portfolio

= Transactions taking place elsewhere in the markets

Optimal Conditions for Restructuring Leases

= Falling market rents

= Leases where the rent has been reset to market in the last 12 months

= Leases that expire in the next 24 months

= Good relationship with the landlord

= New supply coming on the market ov

= Landlords look for quick decisions from

Tenant Representation The Opportunity

A good Tenant Representative can help you achieve your rental goals quickly and efficiently by:

= Identifying locations where you can take advantage of the significant drop in

rents and landlords’ exposure and risk aversion

= Restructure leases to provide immediate and significant cost savings

= Secure higher quality space, flexibility and/or incentives

= Work with you and the Landlord for the best incentive package tor you

= Assist you in dropping excess space in the process or helping to consolidate your offices

= Help you to renegotiate your current lease either to extend or to get out

= Has the local knowledge to navigate conditions

Rental Expenses vs Incentives on Offer

¢ Rent Free in Lease e Extended Fit-Out

¢ Free Signage ¢ Stepped Rents Period (2 mo.)

¢ Rent Reviews in Lease ¢ Rent Reviews in Lease * Rent Free in Lease

International Standard

n * Longer Leases ° Options to Renew ¢ Longer Leases ¢ Options to Renew : ° Stepped Rents ° Free Signage ;

* Rent Reviews in Lease ¢ Offer to Lease Higher ° Offer to Lease Higher ° Free Porking

* Options to Renew Floors Floors ¢ Rent Reviews in Lease

* Rental Caps & Collars ¢ Stepped Rents ¢ Stepped Rents ¢ Longer Leases

* Offer to Lease Higher ¢ Rental Caps & Collars * Rental Caps & Collars * Options to Renew

EXISTING CBD Floors * Bank Guarantees as ¢ Bank Guarantees as ¢ Offer to Lease Higher

¢ Bank Guarantees as Deposit Deposit Floors

Deposit ¢ Longer A/C Hours ° Longer A/C Hours ¢ Stepped Rents

° Free Signage Longer A/C Hours ¢ Free Rates/Utilies ° Fit-Out Contribution ¢ Rental Caps & Collars

* Rent Reviews in Lease Fit-Out Period ¢ Fit-Out Period e¢ Fit-Out Period * Bank Guarantees as

¢ Longer Leases Extended Fit-Out Period Eranded Fit-Out ° Extended Fit-Out Deposit

* Options to Renew (2 mo.) Period (2 mo.) Period (2 mo.) * Longer A/C Hours

* Offer to Lease Higher Contraction Option * Contraction Option * Contraction Option * Contraction Option

Floors First Rights of Otter ¢ First Rights of Offer ¢ First Rights of Offer ¢ First Rights of Offer

CB Richard Ellis | Page 39

Incentives DO count

Area Rent (based on NET area) Service Charge

VAT

Total Rent Inclusive Total Monthly Rent Only Total Monthly Service Charge Total Monthly VAT

Total Monthly Rental inclusive Lease Period

Total Rent during Lease period Incentives

Rent Free (months) Rent Free amount

Roof Top Signage (7.2m x 1.2m) Market Rate

Total Signage Cost for 5 year lease

Free Parking Cars

Market Rate Total Car Parking for 5 year lease

Motorbikes Market Rate Total Motorbike parking for 5 year lease

Contnbution Towards Fitting Out

3,026

$50.00 sq.m / month

$6.00 10%

USD USD USD USD

Months

USD

USD sq.m / month

sq.m

sq.m / month

USD sq.m / month

spaces month USD sq.m / month

It’s NOT just the RENT

Motorbike Parting 375 morm

=Ittirg Out Ccet SECO sam

Floor Area Sic Exleting Rate Revised Rate Floor Area SiC Rants! Rate Ground 793sam $6.00 $99.06 360.00 Grouns 750 5g.m $900 $150.00 Mezzanire cigsqm $6.00 $75.00 370.00 1st 1377 sam $6.00 $92.00

na 1152 sqm $6.00 $53.00 $50.00 1én 1.696 sg.m $6.00 $32.00

17 in 1,194 s<gm $6.00 565.00 365.00 178 1697 sam $602 $32.00

18in 1794sqam $6.00 $65.00 365.00 Tota! 5,253 sq m Total 5.520 eq.m

VAT & 10% $36,635.70 morn $37,427.20 monn 355,392.00 montr

Total Monthly Rent all Inclusive $425,542 70 month $411,639.20 month $615,912.00 month incentives

Taal Rent Free 0 5 mons 34.00 Rent Free Amcum $1,705,600.00 34.00

Car Parking 1€ 'œs 18 lots 5S jolts

Taal Car Paraing Cost $2,600 morn $3,600 monn 371.000 montr

Taal Worcroike Parking Cost $2,000 morn 33,000 monn na

Suliding Operstiora 4ours 3am - pm Mon - Fri 8am - 6pm Mon - Fri 3am - pm Mon - Fn

63am - ipm Sat 6am - ipm Sat éam - 129m Sat

ATM Exchisivty Yes Yes Yes

Toaral incentives - 5 year 3€0,000 $1,765,600.00 $120,000

> year Tota! Rent Inclucing = $25,472,562 $22,336,352 $36,834,720

ncentives Such 35 rent Te= / parairg

Fitting Out Cost $3,155,400 $3,155,400 $3,312,000

Total Occupancy Cost! 5 year lease $28,627,362 E $40,146,720 Total Occupancy Coe! / Monthly $30.73 sq.m $82.69 $121.22 sq.m

DIFFERENCE $2, $14,054,968

CB Richard Ellis | Page 41