1. Money into Property
Global 2013
Liquidity becomes next differentiator
DTZ Research
1 May 2013
Contents
Introduction 2
Section 1 – Stock and gap update 3
Section 2 – Market sentiment 5
Section 3 – Liquidity and value 9
Authors
Nigel Almond
Head of Strategy Research
+ 44 (0) 20 3296 2328
nigel.almond@dtz.com
Hans Vrensen
Global Head of Research
+ 44 (0)20 3296 2159
hans.vrensen@dtz.com
Focus on further downside potential has receded over the last year. As a result,
the macro outlook is more balanced and the recovery expected to continue. For
the first time in a long while, we can see a surprise on the upside next year.
 Global invested stock set another new record in 2012, despite modest
growth of only 1%. But, Asia Pacific was the only region to post strong
growth of 8%, offsetting declines in both Europe and North America.
 Deleveraging continued across all three regions in 2012, with equity growth
close to 5% and debt unchanged. But, non-bank lending and corporate bond
issuance continued their growth, while bank lending remained flat.
Property market sentiment remains mixed, despite the improving macro
outlook. Lenders are more cautious than investors in our annual survey. While
still selective, more lenders expect growth. Investors feel buying opportunities
remain have returned to normal and that debt availability has improved. In our
view, sentiment has been slow to improve due to the debt-related workout,
especially in Europe. But, things are not as bad as they seem, considering:
 Global investment volumes were up 4% in 2012. Strong 15% growth in
North America offset declines in both Asia Pacific and Europe. Cross-border
volumes also improved and have now returned to their 2005 level.
 More than two thirds of markets are classified as very attractive, with less
than 10% as unattractive. In fact, relative value is at its best level in eight
years, due to lower bond yields and a better growth outlook.
 Total liquidity has returned to near its 10-year average, with North America
ranking top. However, based on inter-regional liquidity Europe is most
attractive for new investors. With relative value now less of a differentiating
factor, we think investors should consider liquidity and size more closely.
Figure 1
Stock size, long term liquidity and relative value
OverpricedUnderpriced
Low liquidity
UKUS
SE
SG
JP
CN
FR
IR
ES
IT
DE
AU
High liquidity
$500 bn
$250 bn
$100 bn Europe
Asia Pacific
USA
Stock Region
DTZ Research

2. Global 2013
www.dtz.com Money into Property 2
Introduction
It is with great pleasure that we present the 39
th
edition of
Money into Property. The focus of this report is Global. We
have published similar reports for Asia Pacific, Europe,
North America and the UK.
This report is divided into three main sections. The first
section provides a detailed update of invested stock, which
is defined as investment-grade commercial real estate held
by investors. Invested stock is different from owner
occupied real estate, both investment and non-investment
grade (Box 1). The majority of stock globally (37%) is
currently invested. A further 26% is considered investable,
but is owner-occupied (Figure 2). The debt funding gap is
defined as the difference between the current debt secured
by commercial property minus the new debt available to
replace it. Our analysis also accounts for regulation and
alternative lending sources, which is particularly relevant
for Europe where the gap has hindered the recovery in
many markets (Figure 3).
Market sentiment is the focus of the second section, where
we share the findings of our investors’ and lenders’ surveys
which were undertaken between February and March 2013.
The surveys provide an insight into current sentiment.
In the final section we provide an update on transaction
volumes and associated liquidity across markets. Finally, we
consider whether investment is focused on the relatively
most attractive markets, using the DTZ Fair Value Index
TM
.
The appendix provides an overview of definitions and
methodologies used.
Figure 2
Breakdown of total stock, 2012, USD tn
37%
26%
36%
10 10 13 33
Europe North America Asia Pacific Global
Non-
investable
Investable
(owner-
occupied)
Invested
Source: DTZ Research
Figure 3
Conceptual breakdown of debt funding gap
0
50
100
150
200
1 2 3
Regulation
Refinancing
gap
Non-bank
finance
Net debt
funding gap
Source: DTZ Research
Box 1: Stock definition
Total stock is all commercial real estate, measured by either monetary value or space. Total stock comprises non-investable owner
occupied stock, investable owner occupied stock and invested stock.
Non-investable owner occupied stock is commercial real estate that is not available to investors due to use or quality of the property.
Investable owner occupied stock is commercial real estate stock that is currently held by occupiers but is attractive to investors in terms of
use and quality. This represents potential for investors as occupiers sell their properties or undertake sale and leasebacks.
Invested stock is commercial real estate held by investors in the relevant country. As a consequence the invested stock should:-
a) Rise as owner occupiers sell property to investors
b) Rise as new developments are unveiled and added to the invested stock
c) Rise with the general rise in capital values
d) Be negatively impacted by depreciation and retirement of stock.

3. Global 2013
www.dtz.com Money into Property 3
Section 1 – Stock and gap update
Invested stock trends
Asia Pacific drives global stock to new record level
Following growth of 7.6% in 2011, invested stock grew by a
more modest 1.5% in 2012 to reach a new record level of
USD12.4tn (Figure 4). This masks differences across the
regions.
Asia Pacific was the only region to post growth in 2012 as its
invested stock grew 8% to USD4.2tn. The region is now
close to surpassing Europe to become the region with the
largest stock. In North America stock fell by 0.5% driven by
a fall in the US stock. Following growth in 2011 the stock in
Europe fell 2.6% to USD4.4tn.
Currency movements impact Europe
The continued weakness in Europe’s economies led to an
appreciation of the dollar relative to the Euro. As a
consequence Europe’s stock fell 3% in dollar terms, but in
local currency terms it stock actually grew by 3% (Figure 5).
Across North America the currency impacts were negligible,
as they were too in Asia Pacific, although marginally
stronger growth of 9% was recorded in local currency
terms.
Debt hinders recovery in Europe
Europe’s recovery continues to be hindered by its sizable
debt funding gap (Figure 6). Our latest analysis estimates a
refinancing gap across Europe of USD77bn, with regulatory
impacts more than doubling this to a gross USD163bn.
Efforts by some banks to delever their CRE loans has helped
to shrink this figure. A further gap of USD22bn remains in
Asia Pacific, and mostly in Japan where we see the gap
reducing. New non-bank lenders – insurers and debt funds
are helping to shrink this gap. So too is an increase in
property company bond issuance.
Globally there remains plentiful new equity capital
(USD314bn) available for investment over the next two
years, with over USD120bn available for investment across
Europe. Combined with new non-bank lenders this should
be sufficient to plug the funding gap in the near term.
Figure 4
Global real estate invested stock, USD tn
3.9 4.2
3.8 3.7
4.5 4.4
12.2 12.4
0
2
4
6
8
10
12
14
Global
Europe
North
America
Asia
Pacific
2012
1.5%
-2.6%
-0.6%
8.0%
Source: DTZ Research
Figure 5
Change in invested stock, 2012
-1%
-3%
8%
1%
0%
3%
9%
4%
North
America
Europe Asia Pacific Global
USD Local Currency
Source: DTZ Research
Figure 6
Net debt funding gap and available equity 2013-14, USDbn
0
50
100
150
200
250
300
350
Global Europe Asia Pacific North America
 Available equity  Netdebt funding gap  Projectednon-bank debt
Source: DTZ Research

4. Global 2013
www.dtz.com Money into Property 4
Sources of capital
Equity continues to recover
Growth this year has again been driven by increases in the
equity quadrants, albeit the pace of growth has moderated
(Figure 7). Private equity added USD273bn to invested
stock, and was main driver of global growth. The increase
reflects a general recovery in capital values during 2012.
Growth in public equity was more modest at less than 2% as
listed companies continued to restructure in many markets
with some becoming net sellers.
Rotation to non banks in deleveraging process
Overall the value of debt outstanding fell marginally,
although we did see some variations in growth across the
different debt components (Figure 8). Following growth of
5% last year, debt outstanding to banks stood still in 2012
as many banks, particularly in Europe actively engaged in
deleveraging. Bad banks also actively engaged in selling
down loans. In contrast non-bank lenders, predominantly
insurers showed growth as they picked-up market share
from traditional banks.
Corporate bond issuance continues to grow
In the public markets property companies (listed and non-
listed) continued to use bond markets as a means of
accessing cheap debt. Globally, new bond issuance grew by
30% to USD92bn triggered by attractive interest rates,
leading to an aggregate growth in outstanding debt. This
growth was not sufficient to offset the redemption of
existing CMBS and covered bonds leading to an overall fall
in public debt.
Deleveraging driven by equity growth
Overall gearing levels in the market continued to fall across
all regions. The global average fell to 59% from 60% last
year (Figure 9). Similar reductions in gearing were observed
in all other regions. With the exception of Asia Pacific,
gearing is now back to levels seen in 2007. With the amount
of debt outstanding remaining broadly flat globally, it was
growth in equity that has again driven the reduction in
aggregate gearing.
Figure 7
Global invested stock by capital source, USD tn
5.8 5.8
1.5 1.5
0.9 0.9
4.0 4.2
12.2 12.4
2008 2009 2010 2011 2012
Private equity
Public equity
Public debt
Private debt
5%
-3%
2%
0%
2012
Global 1%
Source: DTZ Research
Figure 8
Change in components of global debt
-10%
-5%
0%
5%
10%
15%
20%
Banks Bad Banks Non-
banks
CMBS Covered
Bonds
Corporate
Bonds
2011 2012
Private debt Public debt
Source: DTZ Research
Figure 9
Total debt as a percentage of invested stock
63%
58%
73%
66%
55%
54%
64%
59%
40%
50%
60%
70%
80%
2000 2002 2004 2006 2008 2010 2012
North
America
Global
Europe
Asia Pacific
Source: DTZ Research

5. Global 2013
www.dtz.com Money into Property 5
Section 2 – Market sentiment
Our lenders’ and investors’ surveys were undertaken in Q1
2013 canvassing the opinions of over 200 individuals. The
results illustrate the prevailing market sentiment, which
sets the stage for the future performance of commercial
real estate markets.
Lenders’ survey
Loan originations grow
In 2012 half of the respondents to our survey showed an
increase in the value of new loan originations (Figure 10).
On balance the value of loan extensions increased, although
close to half of lenders reported no overall change in the
value of extensions in 2012 compared to 2011. The positive
balance in new loan originations appears somewhat
surprising against the challenging markets conditions,
especially in Europe, although with many banks having
separated their non-core divisions, our analysis could reflect
a more upbeat sentiment in new lending teams.
Growth in loan book
Overall a positive balance of lenders in 2012 reported an
increase in their loan book. The change in loan book was
mostly driven by an increase in new lending reflecting
limited new growth. This was primarily driven by a rotation
towards non-bank lenders who showed the biggest net
growth (Figure 11). This contrasted with a net 17% of bank
lenders reporting a reduction in loan book. Looking forward
to this year the expectation is for growth across the board.
Whilst the non-banks continue to grow, the big change is
with the traditional banks. Here a net balance of 11%
expect growth. This is positive news, and implies banks are
well underway in the workout of loans.
Recovery in lending conditions delayed again
However this improvement is tempered in the outlook for
lending conditions. 70% of lenders do not expect a
substantial recovery in lending conditions until beyond 2014
(Figure 12). Throughout each of our past three surveys,
lenders have showed a recovery coming later, with the
proportion increasing. This shows lenders remain wary of
the recovery and growth will be minimal.
Figure 10
Change in loan originations and extensions, 2012
0%
20%
40%
60%
80%
100%
Originations Extensions
Down
Same
Up
Source: DTZ Research
Figure 11
Change in loan book size by lender type
0%
20%
40%
60%
80%
100%
Banks Funds &
Insurers
Other Banks Funds &
Insurers
Other
Down
Same
Up
2012 2013
-17% 29% 62% Net 11% 43% 76%
Source: DTZ Research
Figure 12
Expectations for a substantial recovery in lending markets
0%
20%
40%
60%
80%
20102011Later 20112012Later 20122013Later 20132014Later
2010 Survey 2011 Survey 2012 Survey 2013 Survey
Source: DTZ Research

6. Global 2013
www.dtz.com Money into Property 6
Substantial progress in non-prime workout
Progress in working out problem loans is well underway,
with lenders reporting some substantial progress in working
out non-prime assets. In 2011 42% of respondents were
reporting that the non-prime workout was well underway
(Figure 13). In our survey this year, this portion has
increased to 69%. Only 31% are reporting that there has
been no start in the non-prime workout compared to over
half two years ago.
Progress on prime assets continues and over a fifth of
respondents now report completion in the workout of
prime. Surprisingly, 12% of respondents still highlight that
the workout of prime has yet to start.
Lending activity in secondary assets and markets
Over half of lenders have indicated that they have lent
against both secondary assets and assets in tier 2 and 3
cities (Figure 14). Whilst banks remain more conservative in
what could traditionally be called their traditional playing
field, it is alternative lenders who are more active in these
markets. This provides some positive news for investors
who are seeking to increase their activity in these markets.
Lenders still selective in opportunities
However, when we asked lenders about their expectation
of lending by type of investment in Tier 1 and Tier 2&3 cities
there remained a clear focus towards prime standing
investments (Figure 15). Overall, a net balance of 74% are
seeking to increase lending towards prime standing
investments in Tier one cities. This balance shrank to a net
29% in Tier 2&3 cities.
Lenders are more cautious towards non-prime investments.
A positive balance (26%) are willing to lend in Tier 1 cities.
This balance turns negative in Tier 2&3 cities. A similar
picture emerges for pre-let development, whilst lending
towards speculative development is mostly off bounds.
Overall, this highlights that lenders still remain cautious in
second and third tier cities, with a clear focus towards core
assets.
Figure 13
Trends in work out of prime and non-prime loans
0%
20%
40%
60%
80%
100%
2011 2012 2013 2011 2012 2013
Already
finished
Well
underway
Not yet
started
Prime Non-Prime
Source: DTZ Research
Figure 14
Lending to secondary assets and markets by lender type
0%
20%
40%
60%
80%
100%
Banks Funds &
Insurers
Other Banks Funds &
Insurers
Other
No
Yes
Secondary assets Tier 2& 3 Cities
Source: DTZ Research
Figure 15
Willingness to lend in Tier 1 and Tier 2&3 cities
0%
20%
40%
60%
80%
100%
Tier 1 Tier
2&3
Tier 1 Tier
2&3
Tier 1 Tier
2&3
Tier 1 Tier
2&3
Up Same Down
Prime standing
investments
Non-prime standing
investments
Pre-let
development
Speculative
development
Source: DTZ Research

7. Global 2013
www.dtz.com Money into Property 7
Investors’ survey
Real estate to underperform equities
Investors’ expectation for the performance of commercial
real estate compared to other assets shows a rather
subdued view. Whilst a net majority (72%) expect real
estate to outperform bonds, most on balance expect direct
real estate to underperform relative to both equities and
real state equities in 2013. A majority only marginally
expect direct real estate to outperform property debt
instruments (Figure 16).
Markets returning to normality
Whereas last year many respondents highlighted difficulty
in accessing prime products, in this year’s survey we have
seen some improvement. More investors have indicated
normal conditions in accessing prime, although just over
half (51%) still report difficulty in accessing prime (Figure
17). For non-prime the vast majority (75%) have reported
normal or easy conditions. Risk aversion amongst investors
has meant many are focussed on prime. Our survey results
suggest prime is being crowded out and we would expect to
see more moving towards non-prime. With banks
accelerating their work-out we could expect to see more
interest in secondary, easing some of the pressure on
prime.
Ease of access to debt finance
With markets returning to normal, it is encouraging that
over three quarters of investors find access to new
acquisition finance not an issue compared to just 61% last
year (Figure 18). Refinancing of existing debt is not
considered a major issue with 70% of respondents having
no issue in accessing debt.
Figure 16
Performance of CRE compared other asset classes
0%
20%
40%
60%
80%
100%
Bonds Property
Bonds
Real Estate
Equities
General
Equities
Outperform
Same
Underperform
72% -25%-3%4% Net
Source: DTZ Research
Figure 17
Global buying opportunities by property grade
0%
20%
40%
60%
80%
100%
2011 2012 2013 2011 2012 2013
Hard
Normal
Easy
Prime Non-prime
Source: DTZ Research
Figure 18
Difficulty in obtaining debt finance
0%
20%
40%
60%
80%
100%
2011
Survey
2012
Survey
2013
Survey
2011
Survey
2012
Survey
2013
Survey
No
Yes
New acquisitionfinance Refinancing ofexisting debt
Source: DTZ Research

8. Global 2013
www.dtz.com Money into Property 8
Non-bank lenders to pick up slack
One of the reasons why investors feel relaxed is that they
do not report any major issues in accessing debt. One of the
reasons is the access to alterative sources (Figure 19).
During 2012 a clear majority of investors felt that lending
would be down from banks, with institutions picking up the
slack. Move forward to this year and sentiment is clearly
changing. Banks are expected to be net lenders again with a
net 19% expecting the availability of debt to be up. An even
higher proportion expect an increase in debt from
institutions along with other sources of finance.
Exposure to loan and partial equity positions up
The number of investors who have invested in loan or
partial equity positions has increased marginally over the
year from 42% to 45% (Figure 20). This trend reflects the
growing appetite for funds to invest in loan positions. The
portion investing in loan positions has shrunk, largely at the
expense of funds who are taking a broader view and
investing in both loan and equity positions. Of those who do
not invest, we see a reduction in the proportion of
respondents who have no capability.
Investors more positive than lenders
Investors are more positive in their macro economic
outlook. Outside of the base case of a slow recovery,
investors are of the belief that the outlook will be
marginally more positive (Figure 21). This contrasts with
lenders who are marginally more pessimistic, with far more
expecting a slightly worse outlook. Given the scale of debt
issues, particularly across Europe, this trend is to be
expected, although like investors we see a change in
sentiment to the upside.
Figure 19
Availability of debt finance by lender type
0%
20%
40%
60%
80%
100%
2012
Survey
2013
Survey
2012
Survey
2013
Survey
2012
Survey
2013
Survey
Institutions Banks Other*
Up
Same
Down
*Other covers corporate bonds,covered bonds, CMBS and mezzanine finance
Source: DTZ Research
Figure 20
Investors’ exposure to loan and partial equity positions
0%
20%
40%
60%
80%
100%
2012
Survey
2013
Survey
2012
Survey
2013
Survey
2012
Survey
2013
Survey
Yes
No
Property
loans
Equity
position
Both
No
capability
No
interest
Yes No
Source: DTZ Research
Figure 21
Most likely economic scenario outside base case
0%
20%
40%
60%
80%
100%
Investors Lenders
Significantly more positive
Marginally more positive
Slightly worse
Signifcanlty worse
Source: DTZ Research

9. Global 2013
www.dtz.com Money into Property 9
Section 3 – Liquidity and value
Economic Outlook
More balanced, as downside recedes
The overall consensus outlook for economic growth has
transitioned over the last year into a more balanced
situation (Figure 22), similar to what our survey results
show. The probability of our base case is now at its highest
level in over a year at 60%. This implies a slow but steady
recovery. Despite recent trouble in Cyprus, we see a
reduced chance of the downside scenario coming through.
A strong return for the upside scenario leaves us with a
more balanced global economic outlook, compared to the
recent past.
Bond yields have come in
In response to this more balanced global economic outlook
and the strong monetary liquidity support, we have seen a
strong reduction in risk aversion with investors across asset
classes. As a result, government bond yields have tightened
across the board, even in peripheral European markets. Of
course, these still remain elevated relative to core markets
globally (Figure 23). Australia’s yields are more related to
the higher growth and inflationary concerns.
Transaction volumes
Global investment volumes up 4% in 2012
Global investment transactions volumes of commercial real
estate in 2012 were up 3.5% on 2011 levels at USD475bn
(Figure 24). 2012 volumes exceeded levels recorded in 2005
providing evidence of a normalisation in activity.
Strong growth in North America offset declines in Asia
Pacific and Europe. Also, the fourth quarter volumes were
strong and made up for weaker volumes in the earlier
quarters. Given the more balanced economic outlook, the
re-balancing of the lending markets, we do expect further
growth for 2013 and beyond. We do not expect a quick rush
back to 2006/07 levels as debt issue remain. Future
transaction volumes will be further helped by improving
liquidity and good relative value.
Figure 22
Evolution of probabilities of various economic scenarios
10%
15%
45%
60%
35%
10%
10%
15%
0% 20% 40% 60% 80% 100%
Jan-12
Jul-12
Jan-13
Apr-13
Upside Base Case Other Downside
Source: Oxford Economics
Figure 23
Five year government bond yields in select countries
0%
5%
10%
15%
0%
1%
2%
3%
4%
Mar-13 Mar-12
Source: Bloomberg
Figure 24
Global investment volumes, USD bn
157 152
145 143
157 180
459 475
0
200
400
600
800
2005 2006 2007 2008 2009 2010 2011 2012
Global
2012
North
America
Asia
Pacific
Europe
3.5%
14.5%
-3.0%
-1.4%
Source: DTZ Research, Propertydata, RCA, RealNet

10. Global 2013
www.dtz.com Money into Property 10
Cross-border investment activity back to 2005 level
Further evidence of a normalisation of the investment
markets is provided, when we consider volumes by source
region (Figure 25). Cross-border activity has returned to its
2005 level of 21%. Inter-regional activity (sourced from
outside home country and region) has in fact now exceeded
its 11% level from 2005. We do expect this trend to
continue over the next few years, as sovereign wealth funds
and investment fund managers start with or return to a
strategy of more international portfolio diversification. This
is a big positive for many property markets, as more active
overseas buyers provide greater liquidity to local owners.
Market liquidity
Back to 10-year average, North America most liquid now
Liquidity
1
has returned to its long run 10-year average on a
global level. But, in both Asia Pacific and North America it is
well above and marginally higher than the historical
average. As in most things, Europe lags behind. As
highlighted above, there is still some remaining blockage
from the workout of legacy debt (Figure 26). Since not all
investors buy and sell in a single year, we do think that
volatility in liquidity is relevant. As highlighted by the
historical maximum and minimum levels, North America
shows the greatest range over the period. Europe is also
more volatile relative to Asia Pacific. We believe that
liquidity is more relevant than market transparency. As long
as an investor can buy into and sell out of a market,
transparency is not material.
But, Europe is more attractive for cross-border buyers
If we finally consider not just total liquidity but also the
more limited inter-regional liquidity
2
, we can see some
interesting regional trends over time. All three regions show
a sort of boomerang effect – improving liquidity from 2003
to 2007 at peak of the cycle, but dropping back in 2012
(Figure 27). Overall, Asia Pacific shows less of a shift post
peak, as volumes were support by robust growth in China.
At year-end 2012, Europe shows the highest inter-regional
liquidity of all regions at 0.8%. Within Europe, the UK is by
far the most liquid market at 2.2% for overseas investors.
This is well above the 0.2% in Asia Pacific and 0.4% in North
America. This has been a consistent trend over the period.
1 Liquidity is defined as investment turnover as a percentage of invested stock
2 Inter-regional liquidity is investment from capital sources outside of the region as a
percentage of invested stock
Figure 25
Global investment volumes by source of capital
10% 10% 9%
11% 9% 12%
50%
60%
70%
80%
90%
100%
2005 2006 2007 2008 2009 2010 2011 2012
Domestic Intra-Regional Inter-Regional
Source: DTZ Research, Propertydata, RCA, RealNet
Figure 26
Trends in regional and global liquidity ratios 2003-2012
0%
2%
4%
6%
8%
10%
Asia Pacific Europe North
America
Global
10-y Max
10-y Average
2012
10-y Min
Source: DTZ Research
Figure 27
Regional total and inter-regional liquidity & stock size
AM 2012
APAC 2003
EU 2003
AM 2003
APAC 2012
APAC 2007
EU 2007
AM 2007
EU 2012
-0.1%
0.3%
0.7%
1.1%
1.5%
0.0% 2.5% 5.0% 7.5% 10.0%
Inter-regionalliquidity
Total liquidity
Source: DTZ Research

11. Global 2013
www.dtz.com Money into Property 11
Relative Market Value
US currently ranks top across regions
Based on our latest Fair Value Index
TM
(FVI), more than two
thirds of our 201 covered markets are classified as very
attractive (hot) (Figure 28). This is not really surprising,
given that our classification is based on the difference
between expected and required returns for each market. As
highlighted above, lower bond yields and reduced investors’
risk aversion have brought down the required “hurdle” rate
well below our forecasted market returns. In many Western
markets, the prolonged lack of new development activity
and a return to positive economic growth and space
demand has also increased our expected returns. The net
effect of these two trends is that all regions show many
attractive. But, the US markets are most attractive across
the three main regions.
Best relative value across global property in eight years
When we look back at relative value historically, we note
that the FVI score is highest since Q1 2005 (Figure 29). In
fact, the global FVI score is currently at a new record high. It
is not only up from 58 a year ago, but has recovered from
the low point of 16 in 2008. Therefore, it has never been a
better time to invest in commercial property. Investors have
136 attractive markets to choose from and only 15
unattractive markets to avoid.
Good liquidity and stock size essential for new investors
New generations of Asian investors continue to emerge
onto the global investment market. But, as risk aversion
recedes further, many European and American investors are
also expected to return to a more active international
diversification strategy in the coming years. For both new
and returning investors in markets, we think that apart from
the currently abundant relative value, good liquidity and
stock size is essential. If you cannot buy (and later sell) into
a market, relative value is immaterial.
Based on this, the US, UK, Germany, China and Japan are
especially attractive for international investors based on
pricing and liquidity (Figure 30 and Map 1). Singapore and
Sweden also look attractive from a liquidity perspective, but
offer less attractive pricing.
Figure 28
Global and regional fair value index scores for Q1 2013
0%
20%
40%
60%
80%
100%
Europe Asia Pacific US Global
Cold Warm Hot
77 81 87 80
Source: DTZ Research
Figure 29
Evolution of Global fair value index scores Q1
0%
20%
40%
60%
80%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013
Cold Warm Hot
58 16 80
Source: DTZ Research
Figure 30
Stock size, long term liquidity and relative value
OverpricedUnderpriced
Low liquidity
UKUS
SE
SG
JP
CN
FR
IR
ES
IT
DE
AU
High liquidity
$500 bn
$250 bn
$100 bn Europe
Asia Pacific
USA
Stock Region
Source: DTZ Research

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Map 1
Market liquidity versus fair value scores
Source: DTZ Research

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Definitions
Invested stock refers to the value of investment grade commercial real estate held by different investor groups.
The total value of the real estate capital market is defined as the total volume of commercial
real estate debt outstanding plus the total value of equity in commercial real estate holdings.
Private debt refers to the total outstanding loan value to the real estate sector that is not held in the form of
listed financial securities. Loans granted and subsequently securitised prior to maturity are not
included in this data. Private debt relates to the activity of all participants involved in the
provision of commercial real estate loans including institutional lenders, commercial bank
lending and insurance companies.
Public debt refers to the total outstanding loan value to the real estate sector held in the form of listed
financial securities, i.e. property company corporate bonds, covered bonds with commercial
property as collateral and commercial mortgage backed securities (CMBS).
Private equity refers to the equity proportion of the commercial real estate holdings of insurance companies,
pension funds, private property companies, high net worth individuals and unlisted property
vehicles. The debt proportion has been stripped out by applying a different gearing ratio for
each investor group.
Public equity refers to the equity proportion of the commercial real estate holdings of listed property
companies, REITs and other listed property vehicles. The debt proportion has been stripped out
by applying a different gearing ratio for each investor group.
Gearing (or LTV) ratio is defined as debt/(debt+equity). The various investor groups have different gearing levels based
on their risk profile, investment strategy, as well as their capital sources.
Money into Property methodology
Private debt allocation In order to capture the value of commercial real estate loans issued by domestic banks to fund
cross-border investment and likewise by foreign banks to fund domestic property investment,
private debt is allocated based on the pattern of cross-border investment transactions.
Cross-border allocation
in invested stock
The value of the commercial real estate held by different investor groups is allocated based on
the location of the property rather than the origin of investor.
Currency conversions Invested stock and its components are converted by using the average quarterly exchange rate
for each year under review.
Transaction volumes
Transaction volumes represent the buying and selling of property and are independent of stock. For example there
can be a lot of transactions, but if price does not change and the property is already in the
invested stock figures then there will be no change in invested stock. The only change is the
owner of the property, which could trigger a change in quadrant (say public to private). Higher
transaction volumes do indicate interest in the market, they tend to imply more development
activity or capital values are rising.

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Fair value methodology
The DTZ Fair Value Index
TM
was launched in August 2010 and has now been rolled out for all 201 markets covered by DTZ
forecasts.
Fair value is the value at which an investor is indifferent between a risk free return and the expected return from holding
property, taking into account the extra risk of investing in the property asset class.
When the property price is at fair value, an investor is being adequately compensated for the risk taken in choosing to
purchase real estate; similarly, when the property price is below the fair value price, an investor is being more than
compensated for the risk taken in choosing to purchase real estate.
When buying at or below fair value, an investor does not necessarily buy at the bottom of the market.
Our fair value analysis focuses on prime assets and a five-year investment horizon, and hold for the market overall;
individual transactions may provide opportunities and risks beyond the average market view.
For more information see the note DTZ Fair Value Estimates – Methodology and Examples at www.dtz.com

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Other DTZ Research Reports
Other research reports can be downloaded from www.dtz.com/research. These include:
Occupier Perspective
Updates on occupational markets from an occupier
perspective, with commentary, analysis, charts and data.
Global Occupancy Costs Offices
Obligations of Occupation Americas
Obligations of Occupation Asia Pacific
Obligations of Occupation EMEA
Office Occupier Review Asia Pacific
Office Occupier Review Europe
The TMT Sector - October 2012
The European Insurance Sector - June 2012
Property Times
Regular updates on occupational markets from a landlord
perspective, with commentary, charts, data and forecasts.
Coverage includes Asia Pacific, Bangkok, Beijing, Berlin,
Brisbane, Bristol, Brussels, Budapest, Central London,
Chengdu, Chongqing, Dalian, Edinburgh, Europe, Frankfurt,
Glasgow, Guangzhou, Hangzhou, Ho Chi Minh City, Hong
Kong, India, Jakarta, Japan, Kuala Lumpur, Luxembourg,
Madrid, Manchester, Melbourne, Milan, Nanjing,
Newcastle, Paris, Poland, Prague, Qingdao, Rome, Seoul,
Shanghai, Shenyang, Shenzhen, Singapore, Stockholm,
Sydney, Taipei, Tianjin, Ukraine, Warsaw, Wuhan, Xian.
Investment Market Update
Regular updates on investment market activity, with
commentary, significant deals, charts, data and forecasts.
Coverage includes Asia Pacific, Australia, Belgium, Czech
Republic, Europe, France, Germany, Italy, Japan, Mainland
China, South East Asia, Spain, Sweden and the UK.
Money into Property
For nearly 40 years, this has been DTZ's flagship research
report, analysing invested stock and capital flows into real
estate markets across the world. It measures the
development and structure of the global investment
market. Available for Global, Asia Pacific, Europe, North
America and UK.
Foresight & Outlook
Quarterly commentary, analysis and insight into our in-
house data forecasts, including the DTZ Fair Value Index™.
Available for the following regions: Global, Asia Pacific,
Europe and in the UK. In addition, we have been publishing
our Annual Global Outlook report for the last three years.
This report provides a concise market outlook for the year
ahead and is presented to key client audiences around the
globe.
Insight
Thematic, ad hoc, topical and thought leading reports on
areas and issues of specific interest and relevance to real
estate markets.
China Healthcare – April 2013
European Sustainability Guide – April 2013
Great Wall of Money – March 2013
European Retail Guide - Shopping Centres – March 2013
China Property Market Sentiment Survey - January 2013
India Special Economic Zones - December 2012
Singapore Executive Condominiums - December 2012
UK Secondary market pricing - December 2012
Singapore office demand - December 2012
China Ecommerce & Logistics - November 2012
Net Debt Funding Gap - November 2012
German Open Ended Funds - October 2012
DTZ Research Data Services
The following data is available for subscription.
Please contact graham.bruty@dtz.com for
more information.
 Property Market Indicators
Time series of commercial property market
data in Asia Pacific and Europe.
 Real Estate Forecasts, including the DTZ
Fair Value Index
TM
Five-year rolling forecasts of over 200
commercial property markets in Asia Pacific,
Europe and the USA.
 Investment Transaction Database
Aggregated overview of investment activity
in Asia Pacific and Europe.
 Money into Property
Data covering capital flows, size, structure,
ownership, developments and findings of
annual investor and lender surveys.

17. www.dtz.com Money into Property 17
DTZ Research Contacts
Global Head of Research
Hans Vrensen
Phone: +44 (0)20 3296 2159
Email: hans.vrensen@dtz.com
Head of Strategy Research
Nigel Almond
Phone: +44 (0)20 3296 2328
Email: nigel.almond@dtz.com
Head of Global Forecasting
Fergus Hicks
Phone: +44 (0)20 3296 2307
Email: fergus.hicks@dtz.com
Head of Asia Pacific Forecasting
Kate Barrow
Phone: +852 2250 8864
Email: kate.barrow@dtz.com
Head of Research Information Management
Graham Bruty
Phone: +44 (0)20 3296 2297
Email: graham.bruty@dtz.com
Head of CEMEA Research
Magali Marton
Phone: +33 1 49 64 49 54
Email: magali.marton@dtz.com
Head of UK Research
Ben Burston
Phone: +44 (0)20 3296 2296
Email: ben.burston@dtz.com
Head of SEA & ANZ Research
Dominic Brown
Phone: +61 (0)2 8243 9999
Email: dominic.brown@dtz.com
Head of Americas Research
John Wickes
Phone: +1 312 424 8087
Email: john.wickes@dtz.com
DISCLAIMER
This report should not be relied upon as a basis for entering into transactions without seeking specific,
qualified, professional advice. Whilst facts have been rigorously checked, DTZ can take no
responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy within this
report. Information contained herein should not, in whole or part, be published, reproduced or
referred to without prior approval. Any such reproduction should be credited to DTZ.
© DTZ May 2013