JLL Hotels - Round Table Lunch Presentation (Aug-24)

14.88 Executive Roundtable Lunch

Hosted by JLL Hotels & Hospitality

August 2024

Welcome

Peter Harper Managing Director, Head of Investment Sales Australasia

Trends across Global & APAC CRE sector

Pamela Ambler Head of Investor Intelligence – Asia Pacific

Outlook I Key themes Improving conditions with momentum forecast to build as we head in to 2025

Growth GDP growth is on an improving trajectory with momentum forecast to build as we head in to 2025.

Prices Inflation is falling and is

Interest rates The start of the interest rate cutting cycle is underway in Europe and in sight in the U.S. Easing will continue through 2025. Australia and Japan are exceptions.

Risks & uncertainty Geopolitical tensions and risks remain elevated. Electoral change is happening in Europe, and the US election is just around the corner.

forecast to remain benign over the coming years. Some risks to inflation from global shipping are re-emerging.

Global real estate sentiment survey

% of respondents

Over the next six months, do you think market conditions will:

54 63

Improve

49 45 48

42 39 40

34 28

37 32

34 35 43

Stay the same

24 25 24 23 28 29 29 28 30 32 32

11 5 8 5 16

21 23 19

30 32 31

35 41

42 49

Worsen

Nov

Feb May Aug Nov Feb May Aug Nov Feb May Aug Nov Feb May Aug Nov

Feb May Aug

2022

2019

2023

2021

2020

2024

Source: JLL, October 2022

Growth I The medium to long-term view on growth is positive India moves ahead of China, but China remains the key regional economy

Major economies GDP & population growth (annual average % between 2024 to 2033)

1.6%

Australia

1.2%

Canada

0.8%

India

Mexico

Brazil

0.4%

Spain

France

0.0%

Germany

China

South Korea

Italy

Russia

-0.4%

Japan

-0.8%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

GDP Growth

Source: Oxford Economics, JLL Research.

Inflation I Inflation is forecast to be low and fairly stable The risk of inflationary pressures igniting is seen to be low

China, Hong Kong & Japan (% YoY)

India (% YoY)

Australia & New Zealand (% YoY)

0 1 2 3 4 5 6 7 8 9

-1

2023

2024

2025

2023

2024

2025

2023

2024

2025

China

Hong Kong

Japan

India

Australia

New Zealand

Source: Refinitiv; Consensus Economics, May 2024. *Quarterly data, interpolated to show monthly trend.

Rates I Forecasts predict reduction cycle will begin as soon as this quarter

Rate change since hike cycle

5.25

4.90

4.25

3.41

3.00

2.50 0.25

-0.50

6.50%

5.75%

5.50% 5.50%

5.00%

4.35% 4.25%

3.42% 3.50%

3.35%

0.25%

Hong Kong United States New Zealand United Kingdom

Australia

Eurozone Singapore South Korea

India

Japan

China

Source: Various central bank websites (May 2024); Oxford Economics (May 2024) Note: Singapore rates refer to Singapore Overnight Rate Average (SORA), China rates refer to 1-year Loan Prime Rate (LPR)

Rate cuts this cycle Rate rises this cycle

Global I Investment activity on par with 2023 Global Transactional Volumes by Region, 2007-H1 2024

US$ bn

APAC +7% YoY

1,400

$1,274

1,200

$1,073

$1,067

$991

1,000

$924 $894 $942

$885

$879

$807

$765

EMEA 1% YoY

800

$611

$605

-4%

600

$538

$445

$413

400

$298 $287

$248

Americas -10% YoY

200

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

H1 2023

H1 2024

Asia Pacific

EMEA Americas

Source: JLL Research

Global I Increased travel boosting hotels Transactional Volumes by Sector, H1 2023-H1 2024

Global

APAC

Living / Multi- housing

-16%

Living / Multi-housing

-9%

Industrial & Logistics

-4%

Office

-3%

Retail

12%

Retail

Hotels & Hospitality

21%

90%

Hotels & Hospitality

Healthcare

-21%

-42%

Special Purpose Facility

-32%

52%

Special Purpose Facility

$10

$15

$20

$25

$20

$40

$60

$80

$100

H1 2024 H1 2023

Source: JLL Research, deals US$5m and above excluding entity and land

Global I Bid Intensity is nearing more normalized levels, although market conditions remain varied due to higher rates and cyclicality

Growing number of bidders have re-entered the market since late 2022

Bid frequency

Global bid intensity (2019 = 100)

130

110

105

101

Index, Average bids per…

100

Bid-ask spread

Bid-ask spreads in real estate markets remain widened

100 105 110

90 95

Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 Dec-23 Jun-24

Index, Bid-Ask…

Source: JLL Research

APAC I Hotels registered significant yoy volume growth in key markets Asia Pacific Transactional Volumes

6-year volumes comparison (USD Billion)

17%

-40%

-9%

76%

Japan

China

68%

288%

-39%

-25%

South Korea

-3%

-5%

294%

17.3

-20% -15% -40%

230%

10.5

8.4

7.8

Singapore

3.8

-44% 11%

1105%

-3%

1.8

Australia

APAC Transaction Volumes

Australia China Hong Kong Japan Singapore South Korea +23% -9% -24% +8% +13% -5%

1H24 vs 1H23

106%

Map Key YoY (1H 2024 vs 1H 2023)

-18%

81%

-47%

Office Industrial

1H'19 1H'20 1H'21 1H'22 1H'23 1H'24

Retail Hotel

Source: JLL Research

Offices I Vacancy across APAC shifts dynamically Asia Pacific Office Vacancy Rates, 2019-2024

40%

36%

35%

30%

26%

24%

25%

20%

17%

16% 16%

13%

15%

12%

9% 8%

10%

4% 4%

Q4 2019 Q2 2024

Source: JLL Research, Q2 2024 Note: Vacancy is for the main submarket

Yields I Yield compression begins for some sectors & locations Asia Pacific Yield Forecasts, 2024-2025

Yield changes, Q4 2021 – Q2 2024

Forecast yield changes, Q2 2024 – Q4 2025

Tokyo

-30

Tokyo

-20

Shanghai

Hong Kong

20 20

Hong Kong

-5

-10

Singapore

105 105

Seoul

-10 -10

-30

Sydney

210

Sydney

-10

130

-25

Melbourne

220

-20

170

-50

100

150

200

250

-40 -30 -20 -10 0

10 20 30 40

Basis points

Basis Points

Retail

Logistics Office

Retail

Logistics Office

Source: JLL Research

APAC I Does dry powder provide any comfort of a recovery? APAC Fundraising & Dry Powder, 2007-1H 2024

Dry Powder breakdown, by strategy

USD Bn

USD Mn

600

$69

$6.4

$67

Core Plus

$65

500

$62

$523

$503

$14.6

$480

$54

Core

400

$3.2

$305

$44

$380 $372

$41

$39

$38 $38

$37

300

$29

Debt

$31

$29 $31 $31

$29

$278

$276

$266

$28.8

200

$233

Opportunistic

$22

$211

$207

$205 $191

$195

$190

$186

$180

100

Value-Add

$11.0

$35 $31 $6 $13 $10 $12 $20 $14 $15 $18 $30 $33 $30 $31 $44 $35 $19 $6 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1H 2024

Jul-24

Capital raised (USD Bn)

Dry powder (USD Bn)

Average Fund Size (USD Mn)

Note: Pertains to closed-end funds focused on Asia and Australasia | Source: JLL Research, Preqin, Q2 2024

Sentiment I Investors continue to focus on in-favour assets Investment Strategy

Which sector will be most resilient over the next 12 months

Where is the pricing bottom for APAC assets?

From a capital markets/liquidity perspective, how far is office from the “bottom” in APAC?

40%

Living

28%

31%

30%

26%

16%

17%

Logistics

21%

Q2 2024 Q3 2024 Q4 2024 H1 2025 H2 2025+

20%

16%

15%

Retail

20%

10%

23%

Hotels

17%

29%

End of 2024

1H 2025 2H 2025 and beyond

Only way is up

Catch a falling knife

Office

14%

Living continues to be the favored sector among respondents. As capital continues to flow into multifamily, nascent markets - such as Australia and China – are expected to grow.

Roughly a third of respondents expect pricing for APAC assets (all sectors) to be at the bottom only in the first half of 2025.

Highest share of respondents (29%) expects office liquidity to be at the market bottom in Q4 2024, followed by Q3 2024 (23%).

(survey conducted in May 2024)

(survey conducted in Jun 2024)

(survey conducted in Mar 2024)

Overview of the APAC hotel sector

Nihat Ercan CEO Hotels & Hospitality – Asia Pacific

H1 Global hotel transaction volume since 2010

60.00

50.00

40.00

30.00

20.00

10.00

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Americas APAC EMEA Source: JLL Research Note(s): Includes all transactions $5M+ excluding casinos.

Global hotel industry

by the numbers | H1 2024

$27.5B Total Transaction Volume +15% YoY 622 Total Transactions -19% YoY

23% Portion of Cross-Border Liquidity +13pp YoY $442K Full-Service Average Price per Key* Highest H1 pricing in Global history +5% YoY

Source(s): JLL Research Note(s): Includes all transactions $5M+ excluding casinos. *Single-asset transactions only

Uptick in H1 liquidity uneven across regions

H1 2024 liquidity increased across APAC and EMEA; driven by growth in portfolios and high-dollar single-assets. Volume remains subdued in the Americas except for coveted assets in high barrier-to-entry markets.

H1 Americas transaction volume by type

H1 APAC transaction volume by type

H1 EMEA transaction volume by type

$- $10 $20 $30 $40 $50 $60 $70 $80 $90

$30

$- $10 $20 $30 $40 $50 $60 $70 $80 $90 $100

$25

$120

$27

$20

$25

$100

$23

$20

$21

$20

$16 $15

$80

$15

$16

$15

$12

$60

$11

$13

$10

$11

$10

$40

$20

'15 '16 '17 '18 '19 '20 '21 '22 '23 '24 Single Assets Portfolios

'15 '16 '17 '18 '19 '20 '21 '22 '23 24

Avg. Deal Size

Single Assets

Portfolios

Avg. Deal Size

Source(s): JLL Research Note(s): Pertains to transactions worth $5M+. Includes entity-level transactions in which real estate was traded. Average deal size is calculated as total transaction volume divided by the total number of transactions. Numbers on top of each bar represent total quarterly transaction volume in billions.

Urban markets drive liquidity while resorts drive pricing

Well-capitalized investors can acquire high quality assets in urban markets as pricing generally remains below pre-pandemic levels. Private equity and foreign capital are likely to be the most acquisitive.

H1 single-asset hotel liquidity by hotel location

H1 single-asset hotel average price per key by hotel location

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

$- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000

13% 19%

15% 19%

20% 21% 18%

21% 20% 17%

7% 3%

$309,761 $323,023

8% 5%

9% 5%

3% 4%

6% 8%

12%

20%

15%

10% 15% 16%

19%

22% 15%

$158,380

$151,369

68%

59% 58% 57% 57% 60%

$143,060

53% 47% 49% 53%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Urban Resort

Regional/Small Town Surburban Airport

Urban Resort

Regional/Small Town Airport

Suburban

Source(s): JLL Research. Note(s): Transaction volume pertains to single-asset deals $5M and above, excluding casinos. Figures on the bar charts pertains to the portion of total investment volume.

Cross-border investment soars, reaching highest H1 in three years Cross-border investment surged in H1 2024 driven by large transactions in Europe and Asia. Robust urban luxury performance likely to fuel further cross-border liquidity in H2, investors targeting individual assets and portfolios, particularly in markets where supply growth is constrained

Inbound H1 foreign hotel investment volume by region

$25.0

10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

$19.6

$20.0

$15.0

$10.0

$9.0

$6.7

$6.8

$6.3

$6.1

$4.7

$5.0

$4.2

$2.4

0.0% 5.0%

$2.2

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Americas

APAC EMEA Portion of Global Volume

Source(s): JLL Research. Note(s): Pertains to transactions worth $5M+ (excluding casinos) in which the buyer originated from a different sub-region than where the asset is located. Total global Inbound foreign hotel investment volume figures are shown above the bars in the chart.

Asia Pacific hotel industry

by the numbers | H1 2024

$5.7B Total Transaction Volume +19% YoY 101 22% Portion of Cross-Border Liquidity +2 pp YoY $265K Full-Service Average Price per Key* -14% YoY Total Transactions +10% YoY

Source: JLL – Data as of 29 July 2024, pertains to completed transactions USD5M and above, and excludes Casino Property, Pub/Licensed Leisure, Development Site, Non-arm’s length deals. *Single-asset transactions only

Closed-end funds reaching maturity to unlock opportunities in APAC Significant levels of dry powder available for investment and increased closed-end funds reaching the exit stage of their investment lifespan should catalyse hotel transaction activity over the next few years.

Closed-end funds reaching exit stage of lifespan – APAC*

H1 Closed-end total funds targeting hotel assets – APAC

0 1 2 3 4 5 6 7 8

$0.1

$0.4

$0.0

$0.3

$2.1

$0.0

2024

2025

2026

2027

2028

Total Fund Volume

Number of Funds

Source: JLL, Preqin – Pertains to closed-end real estate funds (diversified & non-diversified) raised targeting hotel assets in APAC. Total number of closed end funds reaching exit stage of lifespan are inclusive of lifespan extensions. *Chart based on data as of Q1 2024.

Hotel yield spread over borrowing cost makes Japan hotel assets attractive

Hotel yield spread over borrowing cost – July 2024

-4%

+4%

Source: JLL estimate – Data as of July 2024, based on stabilized trading performance for an internationally managed hotel asset in a prime location.

Deals in focus

PARKROYAL on Kitchener Road

Conrad Seoul

Hilton Fukuoka Sea Hawk

Location:

Seoul, South Korea

Location:

Fukuoka, Japan

Location:

Kitchener, Singapore

Keys:

1,052

Keys:

434

Keys:

543

Ticket Size:

~JPY 80 B / AUD 823 M

Ticket Size:

~KRW 415 B / AUD 459 M

Ticket Size:

SGD 525 M / AUD 601 M

Price Per Key:

~JPY 76 M / AUD 782 K

Price Per Key:

SGD 966 K / AUD 1.1 M

Price Per Key:

~KRW 956 M / AUD 1.0 M

Indicative Yield:

4.75% (2024B)

Indicative Yield:

2.7%

Indicative Yield:

6.5%

Management:

Encumbered with Management

Management:

Vacant Possession

Management:

Encumbered with Management

Buyer Depth • 29 NDAs signed:

Buyer Depth • 38 NDAs signed:

Buyer Depth • 36 NDAs signed:

• 39% Private equity • 24% Developers • 17% Corporates • 14% Owner-operators

• 46% Private equity • 22% HNWIs • 12% Corporates • 8% Owner-operators • 8% Developers • 4% REITs

• 43% Private equity • 34% Corporates • 14% Owner-operators • 6% Sovereign wealth fund • 3% REITs

• 3% HNWIs • 3% REITs • Investor composition is divided between 62% domestic and 38% international investors. Notably, all investors are from Asia, including domestic ones • 5 EOIs received

• Investor composition is divided between 31% domestic and 69% international investors, with 61% of the investors are from Asia (including domestic), while the remaining 39% are global investors. • 8 EOIs received

• Investor composition is divided between 61% domestic and 39% international investors, with 97% of the investors are from Asia (including domestic), while the remaining 3% are global investors • 6 EOIs received

Deals in focus

The Standard Maldives

Thailand Serviced Apartments Portfolio

Travelodge Harbourfront

Location:

Harbourfront, Singapore

Location:

Raa Atoll, Maldives

Location:

Bangkok, Thailand

Keys:

328

Keys:

115

Keys:

1,809

Ticket Size:

SGD 320 M / AUD 365 M

Ticket Size:

≈ USD 60 M / AUD 91 M

Ticket Size:

Confidential

Price Per Key:

SGD 975 K / AUD 1.1 M

Price Per Key:

≈ USD 521 K / AUD 791 K

Price Per Key:

Confidential

Indicative Yield:

3.2% (Y1), 4% stabilized

Indicative Yield:

11% stabilized

Indicative Yield:

11.3% stabilized (Y4)

Vacant Possession or new management contract by Travelodge Hotels (Asia)

Management:

Encumbered with Management

Management:

Encumbered with Management

Buyer Depth • 28 NDAs signed:

Buyer Depth • 7 NDAs signed:

Buyer Depth • 19 NDAs signed:

• 30% Developers • 28% HNWIs • 26% Private equity • 13% Owner-operators • 2% REITs • 2% Sovereign wealth fund

• 43% Private equity • 14% REITs • 14% Institutional • 14% Corporates • 14% Developers

• 48% Private equity • 26% Corporates • 26% HNWIs

• Investor composition consists entirely of international investors, with ~79% of the investors are from Asia (excluding domestic) and the remaining 21% are global investors • 1 EOI received

• Investor composition is divided between 29% domestic and 71% international investors, with ~90% of the investors are from Asia (including domestic), while the remaining 10% are global investors • 3 EOIs received

• Investor composition is divided between 71% domestic and 29% international investors, with ~96% of the investors are from Asia (including domestic), while the remaining 4% are global investors • 7 EOIs received

Asia Pacific hotel investment volume expected to reach USD11.6 Bn in 2024 Initial forecast for 2024 revised by +USD1.23 Bn, with higher activity expected in Japan, Singapore and Thailand.

Top 5 Markets to watch in 2024

T O K Y O

M A L D I V E S

2024 USD11.6 Bn +2% Y-o-Y

S H A N G H A I

S I N G A P O R E

Source: JLL – Pertains to completed transactions USD5M and above, and excludes Casino Property, Pub/Licensed Leisure, Development Site, Non-arm’s length deals.

SOUTH EAST QUEENSLAND

CRE themes in Australia

Luke Billiau Head of Capital Markets – Australia & New Zealand

Pricing & valuations need to adjust to a compelling level

Yield softening by sector peak-to-trough (Q2 2022 – Q4 2024)

100 125 150 175 200 225

NIL

181

180

NIL

0 25 50 75

134

Book value

Market

Book value

Market

Book value

Market

Office

Industrial

Retail

2Q22-2Q24 2024 (year-end)

Pricing & valuations need to adjust to a compelling level

Yield softening by sector peak-to-trough (Q2 2022 – Q4 2024)

250

200

150

100

Prime CBD office

Prime Industrial

Retail

2Q22-2Q24 2024 forecast

Inbound capital in Australia by purchaser source of capital

• Overseas investors deployed USD 3.8 billion into Australia in Q3 2023 – Q2 2024, declining 15% compared with the prior 12 months. • Japanese investors represented 32% of inbound volumes in Australia.

Source: JLL Note: Including deals >USD 5 million, excluding land and entity deals; global capital refers to deals with >30% coming from multiple geographies

More transaction mandates in US as fewer investors are “waiting out” the market

May‘24 vs Dec ‘23 Industrial: +25% Retail: +42% Office: +54% Multi-housing: +58%

engagements a Renewed increase in transaction leading indicator for more transactions

Overall: +47%

engagements following ~50 bps Rise in transactions following ~50 bps decline in 10~yr UST UST

6.0%

1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

All SalesMandates

10-yr UST

Source: JLL Research

Bidding activity in US reflecting peak cost of capital

June 2022 CPIreportspooksmarkets, leading to cooling of bidding in July

EarlyOct2022:3.6%10yrUSTfuels conviction priorto its rise to4.2%

Deeper bidder pools return w/10yr UST holding near 3.5% mid-March to mid-May

Stronger investor sentiment in YTD 2024 notwithstanding continued market fluidity

16.8

14.8

16.1

11.7

14.6

14.4

11.3

14.5

9.4

11.5

8.0

16.0

9.4

6.6

9.4

9.5

9.6

8.7

15.8 15.9

14.2

11.4 10.4

15.4

6.8

9.0

6.5

10.2

14.6

8.9

14.9

11.1

12.0

12.1 11.4 14.2

17.5

7.3

12.9

11.6

6.8

11.9

13.1

11.4

12.7

8.2

8.8

9.3

8.6

7.4

10.4

12.7

10.1

10.4

4.4

5.2

6.9

6.3

5.6

9.3

6.5

8.3

7.3

7.6

6.3

5.8

4.6

5.8

5.5

4.1

7.3

8.8

5.8

8.1

5.2

9.1

5.2

6.4

9.5

4.8

4.6

9.0

5.5

9.9

8.6

4.6

4.7

7.2

5.5

5.7

6.9

7.5

8.8

7.2

6.9

5.2

5.0

5.3

4.2

4.9

6.4

12.4 12.0 10.8

10.9

10.6 11.9

10.3

9.7

9.3

9.2

9.0

8.9

8.6

8.5

8.3

8.2

8.0

7.7

7.3

7.2

6.4

May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24

Weighted Average Retail

Office Multihousing Industrial

Source: JLL Research (proprietary bid data as of June 30, 2024). Pertains to transactions with 2+ bids

Roundtable Discussion

Thank you

Pamela Ambler Head of Investor Intelligence Asia Pacific pamela.ambler@jll.com

Luke Billiau Head of Capital Markets Australia & New Zealand luke.billiau@jll.com

Nihat Ercan CEO Hotels & Hospitality Asia Pacific nihat.ercan@jll.com

Xander Nijnens Head of Advisory & Asset Management Asia Pacific xander.nijnens@jll.com

JLL Capital Markets

JLL Hotels & Hospitality

Peter Harper Head of Investment Sales Australasia peter.harper@jll.com

Gus Moors Managing Director Australia gus.moors@jll.com

Adam Bury Executive Vice President Australia adam.bury@jll.com

JLL Hotels & Hospitality

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