General investor mood is one of cautious optimism around the globe. Colliers’ Global Investor Sentiment Survey revealed that most property investors now classify themselves as low to moderate risk-takers. Yet, there is much to be positive about in the coming year, with investors expecting steady economic improvement. We favor this sentiment and believe that while the global economy will face headwinds from recession in Europe and moderating global demand for commodities, 2013 will end with a respectable 1.5% to 2% global GDP growth rate. For the commercial property sector, beneficiaries of the current environment will include office properties in global safe-haven cities such as London and New York and industrial properties in global transportation centers that have enacted infrastructure investments, such as U.S. East Coast ports including Baltimore, Charleston and Miami, which have invested the capital to prepare for the widening of the Panama Canal

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General investor mood is one of cautious optimism around the globe. Colliers’ Global Investor
Sentiment Survey revealed that most property investors now classify themselves as low to
moderate risk-takers. Yet, there is much to be positive about in the coming year, with
investors expecting steady economic improvement. We favor this sentiment and believe that
while the global economy will face headwinds from recession in Europe and moderating
global demand for commodities, 2013 will end with a respectable 1.5% to 2% global GDP
growth rate.
For the commercial property sector, beneficiaries of the current environment will include
office properties in global safe-haven cities such as London and New York and industrial
properties in global transportation centers that have enacted infrastructure investments, such
as U.S. East Coast ports including Baltimore, Charleston and Miami, which have invested the
capital to prepare for the widening of the Panama Canal.
JANUARY 2013
Colliers International’s
21 Predictions for 2013
Table Of Contents
2 GLOBAL
5 EUROPE, MIDDLE EAST & AFRICA
7 UNITED STATES
6 LATIN AMERICA
5 CANADA
3 ASIA
4 AUSTRALIA & NEW ZEALAND

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1 — ICEE INDUSTRIES WILL DRIVE FIRST WORLD ECONOMIC GROWTH
Intellectual Capital, Energy and Education (ICEE) industries will drive economic growth in the
developed world. Tech growth will continue to support FIRE (Finance, Insurance and Real
Estate) demand in markets such as San Francisco, Tel Aviv, Dublin and London.
› In the U.K. and North America, maturing e-commerce networks will reshape distribution
strategies in the logistics market.
› Tech companies will generate further demand for office space, although many will be
sophisticated users with lighter-than-traditional office footprints.
2 — LABOR DISPUTES WILL CAUSE TRADE DISRUPTIONS
Disagreement between management and labor, for a variety of causes, will affect economic
growth in the coming year. Port labor strife is likely to be a dominant global threat through
2014.
› Strikes by the International Longshoremen’s Association could close down major ports on
both U.S. coasts, backing up retail supply chains and disrupting transportation and
warehousing. Shippers and retailers will look to expand redundancy in their port-related
supply chains and also grow port relationships in Canada, Mexico and U.S. right-to-work
states.
› Europe can expect labor flare-ups in struggling Spain and Greece. In France, new
austerity measures could also spark public sector workers to strike.
› Wage disputes at the Panama Canal could halt or slow both expansion work and cargo
traffic.
3 — CMBS WILL BE SUBDUED FOR A FOURTH YEAR AS U.S. BANKS PLAY THE WAITING
GAME
CMBS loan growth will continue its sluggish recovery as U.S. banks take a wait-and-see
approach to new federal regulations. The Fed has announced no timeline for the release of
bank capital hold requirements. When the rules are made clear, CMBS issuance in the U.S.
will rise. In Europe, CMBS issuance remains subdued not for lack of rule clarity but rather a
lack of demand due to nervousness about the general state of the European economy and the
fact that a significant number of legacy loans are still in work-out or standstill mode.
GLOBAL

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4 — PRICE INFLATION WILL PRESSURE HEATED ASIAN REAL ESTATE
We expect most Asian economies to foster private consumption growth through a variety of
policy initiatives in 2013. Meanwhile, geopolitical tensions could push oil prices sharply higher
given low global inventories and spare capacity. Extreme weather conditions may lead to
harvest disruption and also inflate prices. Real estate investment will be especially attractive
amid expectations of price inflation, but it will add pressure to the already heated Asian real
estate markets.
5 — PROPERTY YIELDS IN ASIA WILL COMPRESS TO HISTORIC LOWS
The continued high volume of capital seeking investment in a limited supply of Asian real
estate will combine with the growing risk appetite of real estate funds with newly loosened
loan-to-value ratios. This will be supported by new lending on both core and mezzanine
loans.
6 — ASIAN COOLING MEASURES ARE HERE TO STAY
In anticipation of currency appreciation and sustained capital flow into Asia, most of the
restrictive residential market cooling measures will remain intact throughout 2013.
Governments will stabilize markets to avoid social unrest caused by soaring residential prices.
The new Chinese leadership is expected to adopt a more conservative approach to growth
and economic reform. Non-residential real estate assets will be increasingly popular among a
wider group of buyers including private equities, end users and real estate funds.
7 — JAPAN’S ECONOMY WILL IMPROVE
With the Liberal Democratic Party back in power after the December election, a new prime
minister will enact economic stimulus measures meant to hold down inflation, making for a
cheaper yen to support an export-led economy.
8 — CHINA WILL SEE RISING DEMAND FOR LOGISTICS
Relatively little land in China has been designated for development into logistics property.
This constrained new supply, combined with several other factors, will make Chinese logistics
facilities star performers in 2013.
ASIA

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› A growing roster of small to medium enterprises will outsource their logistics operations
to save costs.
› Intra-regional trade flows in Asia will continue to perform well, compared to total exports
to the western economies.
› Inflation fears in countries including China, Indonesia, the Philippines and Thailand will
foster retail sales of foodstuffs and consumer goods, as well as the logistics required to
deliver them to the marketplace.
9 — INDIA’S GDP WILL BEAT FORECASTER EXPECTATIONS
India’s GDP growth will reach 6.5% in 2013. Past growth forecasts have suffered from
downward revision owing to the lack of implemented reform measures expected from the
current government. However, the government has recently displayed a keen resolve to
introduce numerous fiscal and economic measures, including allowing foreign direct
investment in multi-brand retail; introduction of a uniform goods and service tax; capping
subsidies on LPG, diesel, petrol and fertilizers; pilot programs for direct cash transfer;
reducing the budget deficit; and increasing investment in infrastructure. India’s central bank
is expected to slash bank rates in the first quarter of 2013, which will further foster growth.
10 — INDIAN RENTAL RATES WILL DROP ON THE BACK OF LOW DEMAND AND HIGH VACANCY
The year-to-date absorption of commercial office space in the third quarter of 2012 was
approximately 40% lower than the same period in 2011. Our expectations for demand for
office space in 2013 are also low. Rental values will face downward pressure on the back of
low demand and vacant stock. Bangalore—India’s IT hub—will be the most resilient market.
Its current 14% vacancy is lower than other Indian cities. On the other hand, cities like
Chennai, Mumbai and Delhi will face moderate downward pressure on rental values.
11 — AUSTRALIAN DOLLAR WILL REMAIN HIGH
The two-speed nature of Australia’s economic growth will continue, however slowing
economic growth in China and a stalling of several major mining projects means that mining
growth is set to moderate. While there is some hope that this will lead to a depreciation of the
Australian dollar and a corresponding resurgence in the larger, non-mining states of New
South Wales and Victoria, this has not yet occurred. We expect that quantitative easing in
Europe, U.S. and Japan will keep the Australian dollar high for at least the next 12 months.
AUSTRALIA & NEW ZEALAND

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13 — CANADIAN DEMAND DIVIDE WILL CONTINUE
In Canada, the divide between the east and west is firmly entrenched, with the energy and
mining sectors driving stronger commercial property demand in Alberta, Saskatchewan and
British Columbia. Industrial demand will be moderate in the East, as export and goods pro-
duction activity flattens. Canadian office space demand will soften in major markets with the
exception of Calgary and Edmonton.
CANADA
14 - EUROPEAN BIFURCATION: EURO AREA WILL SEE A FURTHER NORTH/SOUTH SPLIT
Northern countries in the eurozone will continue to see stronger economic growth than their
southern and peripheral counterparts, which will remain weak with local recessions.
EUROPE, MIDDLE EAST & AFRICA
12 — DOMESTIC INVESTORS WILL RAMP UP COMPETITION IN AUSTRALIA
Offshore investors account for more than half of all transactions in excess of AU$5 million
(US$5.24 million) in 2011 and 2012, attracted by the transparency of Australian property
markets, strong economic growth and, most importantly, the high yields of Australian
property relative to other investment opportunities. One of the main reasons that yields
remained high despite strong interest from offshore groups is that Australian investors have
been relatively inactive. This has started to change over the past six months with a number of
domestic REITS acquiring properties once again, as well as several Australian pension funds
stating that they would be increasing their allocations to direct property. Expect a firming of
yields in 2013, particularly for prime stock, and investors moving up the risk curve to achieve
superior returns.

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The eurozone as a whole will post marginal 0.25% GDP growth in 2013, with business in-
vestment and occupier demand gaining traction in the second half of the year.
15 — EMEA PROPERTY TRANSACTIONS WILL GROW BY UP TO 10%
We expect transaction velocity to struggle in early 2013, but gain momentum through a mod-
est economic recovery in the second half of the year. New lending sources such as insurance
companies and mezzanine funds will continue to develop and partly ease the challenging
lending environment. The year will end with transaction volume as much as 10% greater than
in 2012.
16 — EUROPEAN ELECTIONS WILL NOT THREATEN THE EUROZONE
While upcoming elections in Germany and Italy will prolong uncertainty and potentially create
volatility in investment markets, they do not pose a true threat. Germany’s support of the eu-
rozone will continue post-election. The risk that Italy’s April elections will fail to produce a
government willing to continue on the reform path is also low. Mario Monti has brought stabil-
ity and confidence back to Italy and it is unlikely that Berlusconi will return to power. We ex-
pect a center-left government in Italy’s future and with it a continuation on the reform path.
17 — CAPITAL WILL SEEK SAFETY IN LONDON
Colliers International’s 2013 Global Investor Sentiment reported that more than half (56%) of
EMEA investors surveyed think it a good time to invest in the region and 59% plan to expand
their portfolios. For most of these investors, Paris, German core cities and especially London
are safe havens they will choose for capital protection. EMEA investors seek liquid and trans-
parent markets with a quality stock of investment properties. Because London is outside the
eurozone, it is especially attractive in these times of euro uncertainty. Investors are willing to
trade relative security for lower yields.
18 — MEXICAN ECONOMIC GROWTH WILL OUTPACE THE U.S. AND CANADA
Mexico has seen three years of continuous growth and we expect this emerging market to
beat out its northern neighbors in terms of percentage of GDP growth in 2013. Mexico’s GDP
will grow by 3.56%, with economic stability through President Enrique Peña Nieto’s transition
into power.
LATIN AMERICA

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Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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19 — U.S. GDP GROWTH WILL STUMBLE, THEN RECOVER
In the United States, 2013 will be the third consecutive year of 2% to 2.5% GDP growth. The
majority of growth will occur in the second half of the year, when the fiscal cliff threat and
ILA East Coast port strike are in our rear-view mirrors.
20 — U.S. HOUSING RECOVERY WILL SOLIDIFY
The U.S. single-family housing market is finally in recovery. The National Association of
Home Builders/First American Improving Markets Index shows 201 housing markets now in
recovery— a post-recession high. This trend will continue in 2013.
UNITED STATES
21 — U.S. INDUSTRIAL WILL BE A TOP INVESTOR TARGET
With the expansion of the Panama Canal and the emergence of new Post-Panamax routes to
the East Coast, demand for modern industrial property will rise surrounding port cities. We
expect strong investor interest in the entire U.S. warehouse sector, thanks to several ongoing
trends:
› Industrial yields remain higher than for other commercial property types.
› Despite growing demand, industrial construction remains low.
› Industrial properties experienced less distress than other commercial property types.
› As U.S. trade with global emerging markets grows, so too will the demand for warehouse
space to store traded goods.
COLLIERS INTERNATIONAL
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Copyright © 2013 Colliers International.
The information contained herein has been obtained
from sources deemed reliable. While every reasonable
effort has been made to ensure its accuracy, we
cannot guarantee it. No responsibility is assumed for
any inaccuracies. Readers are encouraged to consult
their professional advisors prior to acting on any of the
material contained in this report.
522 offices in
62 countries on
6 continents
United States: 147
Canada: 37
Latin America: 19
Asia Pacific: 201
EMEA: 118
• $1.8 billion in annual revenue
• 1.25 billion square feet under
management
• Over 12,300 professionals and staff
Accelerating success.
REGIONAL CONTRIBUTORS:
Bruno Berretta (EMEA)
Mark Charlton (U.K)
Nerida Conisbee (Australia)
KC Conway (U.S.)
James Cook (U.S.)
Flavio Gómez Aranzubia (Mexico)
Simon Lo (Asia)
Ian MacCulloch (Canada)
Amit Oberoi (India)
Yumiko Yasada (Japan)
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