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PT PricewaterhouseCoopers FAS

In association withPT Paragon Property

4th Quarter 2006

TRENDS SUMMARYOffice: There is evidence that demand is increasing for both for

lease and strata title spaces. Demand for strata title spacesis driven by both users and investors.

Retail: Occupancies are beginning to decrease as increasingamounts of new for lease centre space is completed. Rentswill come under pressure as additional supply enters themarket.

Apartment: The for lease/serviced apartment occupancies are still belowideal levels. Occupancy of for lease strata units still remainsat very low levels with more units under development.

Hotel: Hotel results are improving but still a long way from 1997levels. 5-star hotel occupancies are still low, hoveringaround 50%, but new developments are underway.

overview economic

Inflation during 4Q06 was 2.44%, lower compared to10.08% in the same quarter last year. 4Q06monthly inflation was at 0.86%, 0.34% and 1.21% inOctober, November and December, respectively. Asof December, Year on Year inflation was 6.60% in2006 compared to 17.11% the previous year.

The quarterly average exchange rate wasRp9,134:US$1.00; weakening fromRp9,121:US$1.00 in 3Q06. The three month BankIndonesia certificate (SBI) rate fell to 8.10% on 7February 2007 from 9.50% on 8 November 2006and 11.36% on 9 August 2006. The JakartaComposite Index closed at 1,803 on 27 December2006, compared to 1,535 on 29 September 2006,and 1,163 on 29 December 2005.

During the period January – November 2006,Approved Domestic and Foreign Direct Investmentwas about Rp157.5 trillion and US$13.9 billion, anincrease of 244.5% and 18.8% respectively from thesame period last year.

During the same period, Realised Domestic andForeign Direct Investment was about Rp16.9 trillionand US$4.7 billion, a decrease of 37.1% and 45.8%respectively from the same period last year.

The value of exports and imports from January toDecember 2006 increased by 17.5% and 5.9%compared to the same period last year to US$100.7billion and US$61.1 billion respectively.

GDP growth decreased by 1.9% compared to theprevious quarter and increased by 6.1% comparedto the same quarter last year. Overall, 2006 GDPgrew by 5.5% compared to 2005.

During this quarter, the Indonesia Business Indexwas 107.43 compared to 108.72 in the previousquarter and is expected to be 108.79 next quarter(Index 100 = no changes compared to the previousquarter).

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2 Jakarta Property Trend - 4Q06 PricewaterhouseCoopers

Jakarta Property and Composite Indexes

020406080

100120140160180

03/27/199

7

12/30/1997

09/30/1998

06/30/1999

03/30/2000

12/22/20

00

09/28/20

01

6/28/2

002

03/31/200

3

12/30/200

3

09/30/2004

06/30/2005

03/29/2006

12/27/2006

JPI

2004006008001,0001,2001,4001,6001,8002,000JCI

Jakarta Property Index Jakarta Composite Index

US$/Rp Conversion Rate and YoY Inflation Rate

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1Q97

4Q97

3Q98

2Q99

1Q00

4Q00

3Q01

2Q02

1Q03

4Q03

3Q04

2Q05

1Q06

4Q06

Rp/1US$

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

US$/Rp Exchange Rate Inflation

SupplyThere was no new supply completed during4Q06. Office stock remained at approximately4.4 million square metres.

Buildings currently under construction in theCBD include: Menara Karya, Plaza SudirmanTower 1 & 2, Sentral Senayan II, Menara Satrio,Grand Indonesia, Pacific Place and The East.

Demand / OccupancyOverall, occupancy of office buildings in Jakartadecreased during this quarter to 86.1%.Occupancy rates decreased to 86.8% in theCBD but increased to 84.3% in the secondaryarea. Total vacant space increased toapproximately 615,000 square metres.

Secondary area Grade B transacted gross rentsranged from Rp75,000–Rp85,000/m2/mth andGrade C from Rp65,000–Rp70,000.

Service charges (within gross rents) for the CBDranged from Rp30,000–Rp70,000/m2/mth and, forsecondary areas, Rp25,000–Rp60,000. Thebroad ranges are due, in part, to theinclusion/exclusion of tenant electricity charges.

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TrendsThere is evidence that demand is increasing forboth for lease and strata title spaces. Demandfor strata title spaces is driven by both users andinvestors.

office

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Occupancy rates for the various office grades inthe CBD were 81.3%, 87.9%, 85.9% and 86.4%for Grades A+, A, B and C, respectively. In thesecondary area, occupancy was 85.7% and77.4% in Grades B and C.

RentsMost CBD Grade A+ transacted gross rentsgenerally remained in the range of US$17.00 -US$19.00/m2/mth, mostly in US$ with floatingexchange rates. For other grades, mosttransactions were still in rupiah: Grade ARp130,000–Rp145,000/m2/mth; Grade BRp100,000–Rp125,000; and Grade C Rp80,000–Rp95,000.

Jakarta Property Trend - 4Q06PricewaterhouseCoopers

Leased Office Occupancy RatesCBD & Secondary Area 4Q97 - 4Q06

50%

60%

70%

80%

90%

100%

4Q9

7

4Q9

8

4Q9

9

4Q0

0

4Q0

1

4Q0

2

4Q0

3

4Q0

4

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5

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6

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(%)

CBD A+ CBD A CBD B CBD C Sec B Sec C

Leased Office Gross Offering RentsCBD & Secondary Area 4Q97 - 4Q06

0

5

10

15

20

25

4Q97

4Q98

4Q99

4Q00

4Q01

4Q02

4Q03

4Q04

4Q05

4Q06

Re

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(US

$/m

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)

CBD A+ CBD A CBD B CBD C Sec B Sec C

SupplyThere was a new supply of about 192,000 m2

from the operation of Pondok Indah Square,Bellanova Country Mall, Lindeteves TradeCentre and Mega Glodok Kemayoran (strata titlekiosks), and about 33,000 m2 from Bellezza DeHeritage and Bellagio Boutique Mall (lease)during 4Q06. In this quarter, total Jakarta leaseand strata title stock increased to approximately1.53 million m2 and 1.19 million m2, respectively.Debotabek lease stock remained atapproximately 444,000 m2 and strata title stockincreased to 371,000 m2.

Subject to timely completion, new supply up to2008 is estimated at about 1.1 million m2. Apartial list of future supply includes: Mall ofIndonesia, Kota Casablanca, Grand Indonesiaand Pacific Place.

Demand / OccupancyJabodetabek shopping centre occupancy ratesdecreased to 92.1% in this quarter. Jakarta andDebotabek occupancies decreased to 92.1% and92.0%, respectively.

Occupancies were 97.4%, 89.4%, 86.4% and91.9% for Grades A+/A, B, C and D respectivelyin Jakarta.

Offering contract rents for typical floors remainedat US$50.00/m²/mth in Jakarta andUS$26.50/m²/mth in the Debotabek area. The4Q06 fixed exchange rates generally rangedbetween Rp9,000 (Grade A+) and Rp5,000(Grade C) across Jadebotabek. Offeringcontract service charges remained at the rangeof US$7.00 to US$14.50/m2/mth forJadebotabek. Strata title kiosk units and longlease prices generally range from Rp30million/m2 to Rp250 million/m2.

TrendsOccupancies are beginning to decrease asincreasing amounts of new for lease centrespace is completed. Rents will come underpressure as additional supply enters the market.

It appears that strata title kiosk developments arereaching saturation point as demand isweakening.

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RentOverall, offering contract rents, fixed exchangerates and effective rents remained the same inJakarta and Debotabek compared to theprevious quarter.

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Jakarta Property Trend - 4Q06 PricewaterhouseCoopers

Shopping Centre Occupancy Rates4Q97 - 4Q06

70%

75%

80%

85%

90%

95%

100%

4Q97

4Q98

4Q99

4Q00

4Q01

4Q02

4Q03

4Q04

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Grade A+ Grade A Grade B Grade C

Shopping Centre US$ Offering Effective 'Typical Floor' Rent(excludes Ground Floor and Anchor Tenants)

4Q97 - 4Q06

0102030405060708090

4Q97

4Q98

4Q99

4Q00

4Q01

4Q02

4Q03

4Q04

4Q05

4Q06

Ren

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Grade A+ Grade A Grade B Grade C

SupplyThere was a new supply of approximately 76service apartment units from the operation ofThe Peak Beaufort Residence in the CBD; and1,230 strata title units from the operation ofSudirman Park Tower B in the CBD andMediterania Boulevard Residences in thesecondary area.

The total stock of apartments increased to about13,660 units in the CBD and 34,570 units in thesecondary area. Leased (non strata title) andserviced apartments account for about 5,640units (48% CBD and 52% secondary) and stratatitle approximately 42,590 units (26% CBD and74% secondary).

New supply up to 2009 is estimated at about44,000 units. A partial list of future supplyincludes: Shangri-la Residences, SetiabudiResidences, Pearl Garden, Marriot ExecutiveApartments, Hollywood Residences, OakwookPremier, Four Seasons Towers 3 & 4 andSenayan City.

Occupancy / Sold RateOverall occupancy of lease/serviced apartmentsof all grades decreased in the CBD andsecondary areas by 1.0% and 1.6%,respectively.

The average lease/serviced apartmentoccupancy was about 79.5% in the CBD and71.1% in secondary areas. In the strata market,81.7% of the CBD supply (current stock andprojects under construction/launched) and87.6% in secondary areas was stated bydevelopers as sold. The occupancy rate of thecurrent stock was 63% and 67%, respectively.

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Average 4Q06 transaction base rents for CBDUpper and Middle Grade lease apartments wereUS$14.60 and US$8.10 respectively and forserviced apartments were US$15.70 andUS$9.80 respectively. Average service chargeswere around US$3.10 and US$1.60 for leaseapartments and US$4.70 and US$3.80 forservice apartments. Average transaction pricesfor strata title apartments were US$1,820/m2 forUpper and effectively US$960/m2 for MiddleGrade apartments.

Rent / PricesOn average, rents for lease/serviced in the CBDand secondary areas remained the samecompared to the previous quarter. Strataapartment offering prices increased in the CBDand in the secondary areas by 0.7% and 1.0%,respectively.

Jakarta Property Trend - 4Q06PricewaterhouseCoopers

CBD Average Occupancy & Sold Rates2Q97 to 4Q06

50%

60%

70%

80%

90%

100%

2Q

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4Q

98

4Q

99

4Q

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Serviced Lease Strata

CBD Average Base Rents2Q97 to 4Q06

0

10

20

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2Q97

4Q98

4Q99

4Q00

4Q01

4Q02

4Q03

4Q04

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Serviced Lease

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TrendsSignificant new strata supply under developmentwill most likely exceed investor demand.

The for lease/serviced apartment occupanciesare still below ideal levels. Occupancy of forlease strata units still remains at very low levelswith more units under development.

Jakarta Property Trend - 4Q006 PricewaterhouseCoopers

hotel

SupplyThere was no new supply during 4Q06. Jakartahotel supply totals 22,297 rooms, consisting of8,890 5-star, 8,152 4-star and 5,255 3-starrooms.

New hotels under development include: RitzCarlton Pacific Place and Sofitel hotel inSenayan City.

Debotabek hotel supply remains atapproximately 1,030 rooms, consisting of 3705-star, 490 4-star and 170 3-star rooms. Overall,Jadebotabek hotel supply was 23,327 rooms.

Demand / OccupancyOverall, occupancy fell by 4.1% to 58.9% fromthe previous quarter. The changes were -2.5%,-3.9% and -10.1% for 5-star, 4-star and 3-starhotels. The occupancies were 52.8%, 62.4%and 68.7%, respectively.

Compared to the same quarter last year, thechanges were 4.9%, 3.1% and 4.8% for 5-star,4-star and 3-star hotels, respectively. Overallsame quarter year on year occupancy increasedby 4.3%.

Room RatesThe overall rate increased from the previousquarter by 1.7% to US$52.70 per night. Thechanges were 0.5%, 2.2% and 2.6% for 5-star,4-star and 3-star hotels. US$ room rates wereUS$71.00, US$43.20 and US$32.20 per night,respectively.

Compared to the same quarter last year, roomrates changed by 9.0% for 5-star, 21.4% for4-star and 20.3% for 3-star hotels. Overall, roomrates increased by 14.0%.

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06Revenue Per Available RoomOverall RevPAR this quarter was US$31.20 pernight or about 4.9% lower than the previousquarter. Compared to the previous quarter,all-star hotel categories RevPAR decreased.The changes were -4.0%, -3.9% and -10.1% for5-star, 4-star and 3-star hotels. RevPAR wasUS$37.50, US$27.00 and US$22.30 per night,respectively.

Compared to the same quarter last year,RevPAR changed by 20.2%, 28.4% and 29.9%for each star-category and 23.4% overall.

PricewaterhouseCoopers Jakarta Property Trend - 4Q06

Jadebotabek Hotel Occupancy Rates4Q97 to 4Q06

20%

30%

40%

50%

60%

70%

80%

4Q9

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8

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5 Star 4 Star 3 Star Overall

Jadebotabek Hotel Average Room Rates4Q97 to 4Q06

020406080

100120140

4Q97

4Q98

4Q99

4Q00

4Q01

4Q02

4Q03

4Q04

4Q05

4Q06

US$

/nig

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5 Star 4 Star 3 Star Overall

hotel

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TrendsHotel results are improving but still a long wayfrom 1997 levels.

5-star hotel occupancies are still low, hoveringaround 50%, but new developments areunderway.

Jakarta Property Trend - 4Q06 PricewaterhouseCoopers

Jadebotabek Hotel RevPAR1Q99 to 4Q06

05

1015202530354045

1Q

99

2Q

99

3Q

99

4Q

99

1Q

00

2Q

00

3Q

00

4Q

00

1Q

01

2Q

01

3Q

01

4Q

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1Q

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2Q

02

3Q

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4Q

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1Q

03

2Q

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3Q

03

4Q

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4Q

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1Q

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2Q

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3Q

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4Q

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2Q

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3Q

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4Q

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US

$/n

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5-star 4-star 3-star Overall

Jakarta Property Trends

Mirza DiranWillie PrasetioPT PricewaterhouseCoopers FAS

In association withJay SmithPT Paragon Property

PricewaterhouseCoopersJl. HR. Rasuna Said Kav. X-7 No.6Jakarta 12940Tel: +62(21) 521 2901Fax: +62(21) 521 3926www.pwc.com/id

ABBREVIATIONS

PwC : PricewaterhouseCoopersCBD : Central Business DistrictJadebotabek : includes Jakarta, Depok, Bogor,

Tangerang and BekasiDebotabek : includes Depok, Bogor, Tangerang

and BekasiGDP : Gross Domestic ProductE : estimatedm2 : square metres/m2/mth : per square metre per months-g area : semi-gross areapa : per annum4Q06 : 4th Quarter 2006

(each quarter abbreviated similarly)s/c : service chargeUS$ : US dollarRp. : Rupiah

DEFINITIONS

GeneralCentral Business : bounded by Jl Sudirman, Jl RasunaDistrict Said and Jl Gatot Subroto (the

‘Golden Triangle’ of Jakarta)Secondary area : area outside the CBDet area : space occupied solely by tenant (or

available for the tenant’s sole use)Semi-gross area : net area plus proportion of common

spaceRents and service : are stated per m2 according to thecharge relevant basis of lease in each sector

(such as on s-g area for offices, seebelow)

SectorsOfficesGrade A+ : A high quality and well maintained

office building located in CBD area,generally more than 20,000m2

Grade A : A standard quality office building,generally more than 20,000 m2

Grade B : A medium quality office building,generally 6,000 –20,000 m2

Grade C : A low quality office building,generally less than 6,000 m2 andusually more than 20 years old

Retail (Shopping centres)Grade A+ : High specification with quality finishes,

located in prime CBD area, generallymore than 40,000 m2. Mainly upperclass retailers and internationaldepartment stores

Grade A : Modern specification with qualityfinishes located in CBD and secondaryarea, generally more than 40,000m2.Mainly middle to upper class retailersand international department stores

Grade B : Medium specification of generally morethan 20,000 m2. Mainly middle classlocal retailers and department stores

Grade C : Basic to medium quality buildinggenerally less than 20,000m2

Basis of lease : Retail units are let on a net area basis

HotelsStar Categorization: The 5, 4 and 3 categories used in our

survey are in accordance with theGovernment licenses awarded to eachindividual hotel

ApartmentUpper Grade : High specification building with larger

units (3BR>150 m2), and range of sportand leisure activities

Middle Grade : Medium specification building withsmaller units (3BR<150 m2), andstandard sports facilities

Basis of lease : Apartments are let on a net area basisApartment size : Average base rents and service chargesurveyed are derived from rentals of 3 bedroom

unitsSold Unit : A unit is considered ‘sold’ after a

deposit has been paid

This publication is provided as a general overview of market trends. Whilst the information contained is believed accurate at the time of printing, it may be subject to future changewithout notice. PricewaterhouseCoopers and PT Paragon Property accept no liability to any party for reliance on the contents of this publication. This document is the property of PwC

and no part of it may be copied or reproduced without our prior written permission.