Cushman & Wakefield Ltd. · NYSE:CWK
Cushman & Wakefield — Q1 2021 Earnings Presentation
28 slides from Cushman & Wakefield's earnings presentation, May 2021
Slide 1: Asia Pacific Capital Markets Overview: Spotlight on Australia
This live webinar will begin shortly… A S I A PA C I F I C C A P I TA L M A R K E T S O V E R V I E W SPOTLIGHT ON AUSTRALIA 2021 Q1
Slide 2: Agenda
AGENDA 1. INTRODUCTIONS 4. Q & A James Shepherd Josh Cullen Head of Business Development Services International Director Greater China Head of Capital Markets - james.shepherd@cushwake.com Australia & New Zealand josh.cullen@cushwake.com 2. ASIA PACIFIC MARKET OVERVIEW Catherine Chen Dennis Yeo Head
Slide 3: Asia Pacific in Recovery and Expansion
ASIA PACIFIC IN RECOVERY AND EXPANSION Moody’s Global Business Cycle Status (March 2021) Expansion: Mainland China Vietnam Taiwan Recovery: Australia Hong Kong SAR India Japan Singapore South Korea Expansion At risk Recovery Recession Source: Moody’s Analytics 2021 Asia Pacific Capital Markets Overv
Slide 4: GDP Growth Outlook
GDP GROW TH OUTLOOK Strong growth in India and Philippines in the next decade GDP GROWTH, Y/Y % 10 8 7.4 6.5 6 5.3 5.0 4.9 4.8 4 2.9 2.8 2.4 2.5 2.2 1.9 1.7 2 1.2 0 (2) (4) (6) (8) (10) (12) Taiwan Vietnam China South New Indonesia Australia Japan Singapore Malaysia Hong Kong Thailand India Philippi
Slide 5: Transaction Volume by Market
TRANSACTION VOLUME BY MARKET Q1 2021 ASIA PACIFIC TRANSACTION VOLUME (EXCLUDING LAND) TOTAL TRANSACTION VOLUME (EXCLUDING LAND) US$ bn 200 Tokyo 180 Seoul 160 Hong Kong 140 Sydney 120 Shenzhen 100 Singapore 80 Beijing 60 Shanghai 40 Osaka 20 Guangzhou 0 2016 2017 2018 2019 2020 Q1 2021 0 2 4 6 8 Jap
Slide 6: Cross-Border Transactions
CROSS-BORDER TRANSACTIONS Increasing proportion of investors based outside APAC WITHIN VS. OUTSIDE APAC TOP SOURCES OF CROSS BORDER TOP TARGETS OF CROSS BORDER CAPITAL CAPITAL 100% United States Japan 90% 80% 40% 49% 47% Canada Australia 57% 56% 70% 60% Singapore China 50% 40% Hong Kong SAR India 30
Slide 7: Active North American and European Investors
ACTIVE NORTH AMERICAN AND EUROPEAN INVESTORS Cross-border capital flows (last 12 months*) Japan: 8.9b USD +42% North America Europe Australia: 3.8b USD +312% Singapore: 4.1b USD +31% India: 4.1b USD +31% *refers to 12 months ending March 2021, y-o-y growth rate. Source: Real Capital Analytics Feb 9
Slide 8: Most Liquid Markets in Asia Pacific
MOST LIQUID MARKETS IN ASIA PACIFIC Increasing investment in industrial and retail asset Apartment Hotel 4% Seniors Housing 0.2% OFFICE RETAIL 5% Thousands Thousands Retail Office Billion USD 0 2 4 Billion USD 0 1 2 45% 21% 2021 Japan China +2% Q1 -49% China South -24% Korea -41% Industrial 25% Aust
Slide 9: Strong Preference for Core and Industrial Asset
STRONG PREFERENCE FOR CORE AND INDUSTRIAL ASSET ANREV Capital Raising Survey 2021 Expectations for capital raising activity over the next two years (Global) Capital raised for APAC non-listed real estate funds by country strategy 100% 18 21 18 15 22 20 80% 8 9 3 6 10 7 29 60% 37% Japan 40% 73 76 3 C
Slide 10: Australian CRE Market Overview
AUSTRALIAN CRE MARKET OVERVIEW 2 0 2 1 M AY
Slide 11: Australian Economic Growth
AUSTRALIAN ECONOMIC GROW TH Growth is bouncing in the short term, real GDP annual growth forecasts GDP GROWTH, Y/Y % 5 4 3 2 1 0 -1 -2 -3 2019 2020 2021 2022 2023 2024 2025 Source: Deloitte Access Economics; Cushman & Wakefield 2021 Asia Pacific Capital Markets Overview 10
Slide 12: Sentiment Rebounds
SENTIMENT REBOUNDS Business conditions and consumer sentiment Business conditions, record high 30 140 Consumer sentiment, 10 year high 20 130 Business conditions 120 10 110 0 100 -10 90 Consumer sentiment -20 80 -30 70 -40 60 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Business conditions
Slide 13: Economic Growth Outlook
ECONOMIC GROW TH OUTLOOK T he long-term outlook is also solid, Annual average real growth India China, People’s Republic of Australia United States Canada Singapore New Zealand United Kingdom Euro Zone Korea (Republic of) (South) Japan 0% 1% 2% 3% 4% 5% 6% 7% 2021-2050 2021-2040 2021-2030 Source: Mo
Slide 14: CRE Transaction Volumes
CRE TRANSACTION VOLUMES Total real estate purchasing activity $50,000 $45.5bn $45,000 $40,000 $35,000 $25.8bn $30,000 A$ millions $25,000 $20,000 $15,000 $10,000 $5,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021YTD New South Wales Victoria Queensland Western Australia Other Australi
Slide 15: CRE Transaction Volumes
CRE TRANSACTION VOLUMES Total real estate purchasing activity Other Other 18% 17% Office Industrial 41% 9% Office Industrial 59% 23% Retail 14% Retail 19% Q1 2021 Annual Volume Source: RCA; Cushman & Wakefield 2021 Asia Pacific Capital Markets Overview 14
Slide 16: CRE Transaction Volumes: Quarterly Investment Volumes
CRE TRANSACTION VOLUMES Quarterly investment volumes $18,000 60% $16,000 50% $14,000 A$ millions $12,000 40% $10,000 30% $8,000 $6,000 20% $4,000 10% $2,000 $0 0% Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Domestic (LHS) Foreign (LHS) Rolling Annual Foreign Investment (RHS) Source: RCA;
Slide 17: Commercial Property Income Return Trend
COMMERCIAL PROPERTY INCOME RETURN TREND Office, retail & industrial income returns and 10 year government bond yields 12% 10% 8% 6% 4% 2% 0% 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 Office Retail Industrial 10 Year Govt Bond Yield Source: MSCI/IPD: RBA; Cushman & Wakefie
Slide 18: Global Yields
GLOBAL YIELDS Prime Office Cap Rates (%) Max* Min* 20Q4 (current) 19Q4 (*max/min refer to 2007-2020 Q4) 12% 10% 8% 6% 4% 2% 0% Europe APAC/China Americas Max* Min* 20Q4 (current) 19Q4 Source: MSCI/IPD: RBA; Cushman & Wakefield 2021 Asia Pacific Capital Markets Overview 17
Slide 19: CBD Office Vacancy
CBD OFFICE VACANCY Vacancy moved higher in 2020, vacancy range since 1990 35% 30% 25% 20% 15% 10% 5% 0% Sydney Melbourne Brisbane Adelaide Perth Canberra Min Max Current Average Source: PCA; Cushman & Wakefield 2021 Asia Pacific Capital Markets Overview 18
Slide 20: CBD Office Market Summary
CBD OFFICE MARKET SUMMARY Office markets have softened over 2020 Sydney Melbourne -113,346 sqm 12m Net Absorption 22,397 sqm 12m Net Absorption 8.6% Vacancy 8.2% Vacancy $910 sqm Gross Effective Rent $395 Net Effective Rent 33% Gross Incentive 39% Net Incentive Brisbane Perth -9,807 sqm 12m Net Abso
Slide 21: Retail Turnover Growth
RETAIL TURNOVER GROW TH Moving annual turnover growth rate 14% High CPI & stock bubble 12% Housing boom Housing/credit boom 10% Tech boom COVID-19 & wreck Fiscal SE Aust. 8% stimulus Housing boom 6% GFC 4% Petrol spikes & Recessions Asian crisis Int rate hikes Euro crisis & Slowing income carbon tax
Slide 22: Online Sales
ONLINE SALES Online sales as a percentage of total sales Online Increase during share Feb pandemic, 3.5 2020, 9.4 87.1 Source: NAB; ABS; Cushman & Wakefield 2021 Asia Pacific Capital Markets Overview 21
Slide 23: Retail Transaction Volumes
RETAIL TRANSACTION VOLUMES Annual investment volumes $10,000 $10,000 $9,000 $8,000 $8,000 $7,000 $6,000 A$ billions A$ millions $5,000 $6,000 $4,000 $3,000 $4,000 $2,000 $1,000 $0 $2,000 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2021YTD
Slide 24: Industrial Market Drivers
Q1 2021 Transaction volume by market 1. DECLINE OF MANUFACTURING 2. RISE OF E-COMMERCE & TECHNOLOGY MANUFACTURING SHARE OF ECONOMIC OUTPUT Percent of total retail trade 17% 14% 15% 13% 12% 11% 10% 9% 7% 8% 5% 1982 1986 1998 2010 1974 1978 1990 1994 2002 2006 2014 2018 6% 2016 2017 2018 2019 2020 202
Slide 25: Industrial Transaction Volumes
INDUSTRIAL TRANSACTION VOLUMES Annual investment volumes $7,000 $7,000 $6,000 $6,000 $5,000 $5,000 A$ billions $4,000 A$ millions $4,000 $3,000 $3,000 $2,000 $2,000 $1,000 $1,000 $0 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2021YTD 2020
Slide 26: Summary
SUMMARY 01 Economy – bouncing strongly, COVID risks 02 Investment – supported by economy and low interest rates 03 Office – suffered in 2020, resetting in 2021 04 Retail – adapting to structural change 05 Industrial – structural tailwinds, strong demand 2021 Asia Pacific Capital Markets Overview 25
Slide 27: Moderator and Panelists / Q&A
MODERATOR: Catherine Chen Director, Research Greater China catherine.chen@cushwake.com PANELISTS: Josh Cullen Dennis Yeo International Director Head, Investor Services Head of Capital Markets - Asia Pacific Australia & New Zealand dennis.yeo@cushwake.com josh.cullen@cushwake.com Gordon Marsden Regio
Slide 28: Thank You
THANK YOU ABOUT CUSHMAN & WAKEFIELD © 2021 Cushman & Wakefield. All rights reserved. The information in this communication Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm has been obtained from sources believed to be reliable but has not been verified. NO that delivers