1. 2q 2011 | MARKET REPORTTAIPEITHE KNOWLEDGE REPORT ECONOMY Taiwan GDP growth rate in 2Q 2011 was 2011GDP 4.88% YoY higher than forecast value at 4.8854.64 4.64% in May. The net export of goods, theGDP 3.32%1.70% star performer contributed 3.32% to the 0.08% GDP growth rate. And the private1.20 consumption and government consumptionGDP-0.23% contributed 1.70% and 0.08% to GDPGDP growth rate respectively in 2Q 2011.2.29% 0.43% However, growth rate of capital formation 0.36%GDP was negative 1.2% in 2Q 2011 owing to the 0.09%0.05%2Q 2011 higher investment value in inventory during TAIPEI CBD NEIHU corresponding period in 2010 and55.01TECHNOLOGY contributed negative 0.23% to GDP growth PARKrate in 2Q 2011. In terms of production, manufacturing industry was the key driverand contributed 2.29% to GDP growth rate.VACANCY RATE In turn the wholesale and retail Industry was 0.43% and the finance and insuranceNET TAKE-UPindustry was 0.36%. The real estate industry and construction industry contributed 0.09%NEW SUPPLY and 0.05% to GDP growth rate respectively in 2Q 2011. The Directorate-General ofRENTAL RATEBudget,AccountingandStatistics, Executive Yuan lowered whole year GDP growth rate in 2011 five basis points to 5.01% owing to slowdown of economic growth in developed countries.ECONOMIC INDICATORS INDICATOR MEASURE 2Q2010 3Q2010 4Q201020101Q2011 2Q20112011 Economic Growth RateYoY % Change 12.86 10.697.13 10.88 6.554.885.01 Consumer Price IndexRate(%) 1.100.371.110.96 1.281.631.89 Unemployment RateRate(%) 5.235.144.775.21 4.604.30- Newly Made Housing Loan RateRate(%)1.649 1.745 1.739- 1.767 1.827- Issuing Interest Rate of 10-year Government BondRate(%) 1.461.231.47-1.381.48- SourceColliers International Taiwan Branch www.colliers.com/taiwan

2. THE KNOWLEDGE REPORT | 2q 2011 | TAIPEI INVESTMENT SALESTotal investment sales was NT$18.4 billion in 2Q Total investment sales of commercial real20112011, involving several large transactions.estate reached NT$18.4 billion in 2Q 2011, 18448% which plunged 48% year-on-year (YoY) but 31%184 increased 31% quarter-on-quarter (QoQ).Large transactions contributed to a major portion of investment sales. Deals involving the Sanyang Zhongxiao Building, and the98.6 Shin Kong Life Insurance Co. Songjiang, Chengde and Banqiao Buildings Real Estate Asset Trust (REAT), and the Shoude Building, for example, amounted to NT$9.86 billion.INVESTMENT SALES TRANSACTIONS 450 400 350 NT$100million 300 250 200 150 10050- 2008Q1 2009Q1 2011Q1 2007Q1 2010Q1Q2 Q3Q2Q4 Q3Q4Q2 Q3Q2Q4 Q3Q2Q4 Source: Colliers International Taiwan Branch With NT$7.2 billion, or 39% of total sales value, financial and insurance companies 72 were key drivers in this quarter. Compared 39% to last quarter, investment sales value increased 100%, and investment proportion14%() gained 14% as well. Both TransGlobe Life () Insurance Inc. and Fubon Life Insurance20 Co., Ltd spent over NT$2 billion on the6 investment. Other investors who made ()( deals worth at least NT$0.6 billion include)() China Life Insurance Co., Ltd., Bank Taiwan Life Insurance Co., Ltd., and Taiwan Fire and Marine Insurance Co., Ltd. Asthesecond largest investors, manufacturingcompanies contributed 5228% NT$5.2 billion, or 28% of total sales value. ()()( The highest priced deal was made by) 1 = 3.3 = 35.5Shinkong Synthetic Fibers Corp, who wonpingsq.msq.ftthe auction of the Shin Kong Life Insurance35.4 Co. Songjiang, Chengde and Banqiao 7.1 Buildings REAT with NT$3.54 billion. For owner-occupied purposes, King Car Group spent NT$0.71 billion buying a building on Sec. 1, Jianguo N. Rd.P. 2 | CollIErs InTErnATIonAl 3. THE KNOWLEDGE REPORT | 2q 2011 | TAIPEIBoth of the salesCOMPOSITION OF INVESTORS BY VALUE IN 2Q 2011values from finance and insuranceUnit : 100 millions companies and manufacturingOthersFinance and Insurance companies increased, 41 , fairly in this quarter, Individual72 which accounted for 22%67% of the total sales, 21%39% value.10%Constructionand Development 28%, 18 67%Manufacturing, 52Source: Colliers International Taiwan Branch In terms of asset types, offices contributed117NT$11.7 billion, or 63% to total sales value. 63%In particular, Grade B offices sales value Breached NT$8.3 billion. The sales value of83Sanyang Zhongxiao Building, for instance, 41.5approached NT$4.15 billion, which broke 733the record for average unit price of ground 10floor at NT$7.33 million per ping. OtherBtransactions, such as the Shin Kong Songjiang and Banqiao Buildings, are alsoworth more than NT$1 billion. Situated atprime locations, some Grade B offices aretransacted at higher unit price than second-hand residential properties within the samearea.Office and retail wereCOMPOSITION OF INVESTMENT ASSET TYPE BY VALUE the two most popularIN 2Q 2011 asset types in thisquarter, whichUnit : 100 millions accounted for 90% of the total sales value. OtherIndustrial Office,Office ,13, 2% 7% 5 117Retail90%, 27% 4963%Source: Colliers International Taiwan Branch CollIErs InTErnATIonAl |P. 3 4. THE KNOWLEDGE REPORT | 2q 2011 | TAIPEIRetail properties also demonstrated a goodperformance with NT$4.9 billion, or 27% of49total sales value, which substantially27%climbed 78% QoQ. The highest priced deal78%was TransGlobe Life Insurance Inc.s()NT$2.17 billion purchase of the ground floor()21.7and basement of the Shoude Building 1,180(which equalled to 1,180 ping) from Pan ()12Overseas Corporation. In addition, Lungyen2,050Life Service Corporation paid NT$1.2 billionfor acquiring the third and fourth floor of the Pan Asia Department Store, which equals to 2,050 ping. Recently, there has been nolack of transactions in Zhongzheng orWanhua District, indicating that investorsstrongly believe in the potential of retaildevelopment near Taipei Main Station andXimen business district.Among major cities in Taiwan, Taipei City was the most popular with respect to total144sales value and number of transactions. Oftotal sales value summed at NT$14.4 97.546.60.1billion, offices, retail and industrial offices 16contributed NT$9.75, NT$4.66 and NT$0.01billion, respectively. New Taipei City ranked in the top two cities with its number oftransactions. Among them, the mostcommon asset type of New Taipei City wasoffices, and Shin Kong Banqiao Buildingwas the most highlighted. There was oneoffice transaction each in the cities ofTaichung and Tainan. The former was theRockefeller Building located on Sec. 1,Chongde Rd.; the latter was the purchaseby Jih Sun Securities Co., Ltd. of its currentoffice from Jih Sun International Bank. Among major cities in COMPOSITION OF INVESTMENT AREA BY VALUE IN 2Q 2011 Taiwan, Taipei City was the most popular Investment Amount Number with respect to total Unit : 100 million sales value and 160.01920 number of0.116 140.0 transactions. 120.015 100.046.6 80.010 60.0 40.05220.0 4.5 11 2.7 4.897.518.6 8.3 0.10.3- - Taipei City New Taipei City Kaohsiung City Taichung City Tainan CityOffice Retail Industrial Office Others Number Source: Colliers International Taiwan Branch P. 4 | CollIErs InTErnATIonAl 5. THE KNOWLEDGE REPORT | 2q 2011 | TAIPEIOutlook of investment sales Looking ahead, Dunhua S. Rd. may be2011highly spotlighted and create the highestrecord of unit price during the second half of ()2011, thanks to the auctions of Shin KongDun Nan Building REAT, Cathay Dun NanCommercial Building REAT, the Headquarterof China Bills Finance Corporation and thePrince Motors Co., Ltd.-owned Dun NanBuilding.CollIErs InTErnATIonAl | P. 5 6. THE KNOWLEDGE REPORT | 2q 2011 | TAIPEI LAND SEGMENT Total investment sales of land market wasTotal investment sales of land market was 2011185NT$18.5 billion in 2Q 2011, which was the lowest NT$18.5 billion in 2Q 2011, which declined63%one in the past seven quarters. 63% quarter-on-quarter (QoQ) and 60%60%2011 year-on-year (YoY) respectively. Compared 6822010185 to the first half of 2010, sales value dropped83819% 19% from NT$ 83.8 billion to NT$68.2 billion in the first half of 2011. Sales value for this quarter, the lowest one in the past seven quarters, were mainly affected by lack of land auctions in land readjustment zones and the enforcement of the Luxury Tax Act, which led investors to be more conservative.TRANSACTION VALUE OF LAND MARKET IN 2Q 2011 800 700 600 NT$100million 500 400 300 200 100- 2008Q1 2009Q1 2011Q1 2007Q1 2010Q1Q2 Q3Q2Q4 Q3Q4Q2 Q3Q2Q4 Q3Q2Q4 Source: Colliers International Taiwan Branch Being the biggest investor, construction and development companiescontributed 76 NT$7.6 billion, or 41% of total sales value. 41%2011 Compared to 1Q 2011, both sales values of manufacturing companies and individuals were higher than financial and insurance ( ) H TC companies in 2Q 2011. As one of the major manufacturinginvestors, the HTC17.714,800 Corporation spent NT$1.77 billion on a site of 14,800 ping in Taoyuan County to establish an integrated zone for production.COMPOSITION OF INVESTORS BY VALUE IN 2Q 2011Unit : 100 millions ConstructionOthers and Development , 36 , Finance and20% 76Insurance2% , 41% 4 14%Individual, 2722%Manufacturing, 41 Source: Colliers International Taiwan Branch P. 6 | CollIErs InTErnATIonAl 7. THE KNOWLEDGE REPORT | 2q 2011 | TAIPEILand transactions in Taipei City were active in this quarter, which amounted to NT$6.38 63.8billion. Major transactions from Hontai Life ()Insurance Co., Ltd. in Neihu District, ADATA ()Technology Co., Ltd. in Shilin District, and ()Cathay Real Estate Development Co., Ltd. 42in Daan Dist and Zhongzheng District()accounted for NT$4.2 billion. Other()participants included China Metal ProductsCo., Ltd. and Farglory Life Insurance Co.,Ltd.Furthermore, Xinzhuang and Banqiao weretwo highlighted districts in New Taipei City;20their sales values were NT$2 and 1.7 billion 17respectively. One of the famous cases in ()()Xinzhuang was the cooperation between()Prince Housing and Development Corp. ()and Ability Enterprise Co., Ltd. Additionally,Huaku Development Co., Ltd. and CathayReal Estate Development Co., Ltd. acquiredsites in the land readjustment zone inBanqiao.It is worth mentioning that some companies,including the Leofoo Development Co., Ltd. ()and Radium Life Tech Co., Ltd. , purchased ()sites for tourism development. In addition,Cathay Life Insurance Co., Ltd. and IKEA 8 1 B OT - - jointly spent NT$0.42 billion winning the(IKEA)superficies of Municipal 81 BOT launched 4.2by the Taichung city government. 306,100Cathay Life Insurance COMPOSITION OF INVESTMENT AREA BY VALUE IN 2Q 2011 Co., Ltd. and IKEA jointly won the Investment Amount Number superficies of Unit : 100 million Municipal 81 BOT70 14 launched by the60 12 Taichung citygovernment.5010 10104088 730 63.86 54.5 20 433.7 3811020.722BOT5.66.5-- TaipeiNew TaipeiTaoyuan KaohsiungTaichungOthersCity City County City CityInvestment Amount Number Source: Colliers International Taiwan Branch CollIErs InTErnATIonAl | P. 7 8. THE KNOWLEDGE REPORT | 2q 2011 | TAIPEI OFFICE The vacancy rate declined to 9.96%, the first time Overall stock of offices remained at 2011in two years it has been below 10%.1,458,200 ping, as there were no newly 1,458,200 completed buildings recorded in 2Q 2011. 15,3009.96%On the demand front, 15,300 ping of net3.210% take-up was not only 3.2 times the volume of last quarter, but the best record in the9.96%10% past five years. Thus, the vacancy rate declined to 9.96%, the first time in two years it has been below 10%. In regards to demand in each of the districts, 4,200 ping of net take-up made WEST the4,200 top ranked in this quarter. The demand () came from Metropolitan International Center, which was gradually leased out by financial service institutions and a few 2,300 technology companies, since Yahoo had moved to Nangang. Additionally, Kolin500 Commercial Building and Delpha Heng Yang Rd. made up transactions of over 500 ping of net take-up, although they were occupied by owner-occupiers and new tenants, respectively. Among all grades of offices, 6,200 ping of B6,200 net take-up also pushed Grade B offices to AB be the top ranked in this quarter. Including 10,800 Grade AB offices, the net take-up added up 70% to 10,800 ping, or 70% of overall net take- up. Demand mainly came from owner- occupiers and expansion. For the former() reason, World Financial Center was reserved for owner-occupied spaces; for the latter reason, the Hung Kuo Building was occupied by the expansion of the Taiwan Toshiba International Procurement Corp. Moreover, considering business opportunities from tourist arrivals from mainland China, some office spaces were turned into hotels or medical beauty treatment centres. The Fu Hsin Financial Building, where Yoga Journey and one medical beauty treatment centre moved in, is one such example.P. 8 | CollIErs InTErnATIonAl 9. THE KNOWLEDGE REPORT | 2q 2011 | TAIPEI STOCK AND VACANCY RATES OF OVERALL OFFICE MARKET IN 2Q 2011 Stock / Vacancy Rate / Unit: Ping / 400,000 14.6%16.0%350,00014.0%300,00010.3% 12.0% 9.7% 8.6%250,00010.0%8.0%200,0008.0% 5.6%5.6%150,0006.0%100,0004.0% 50,0002.0%00.0%MS-TN TUN-S HSIN-YI NK-SC NK-4/5 WEST JA-HS /B AB A Grade B Grade ABGrade AGrade PremiumVacancy RateSource: Colliers International Taiwan Branch In contrast with strong demand, average effective rent, which rose seven basis points from NT$1,762 per ping per month in 1Q 1,7631,762 2011 to NT$1,763 per ping per month in 2Q7 2011, was nearly unchanged in this quarter. Among all districts, MS-TN and HSIN-YI were the only two districts that kept upturned 2,053 trends. The others either remained the same or marginally decreased. Being the highest effective rent, effective rent in XIN- YI was NT$2,053 per ping per month, whichAB experienced a similar growth rate with MS- TN. The effective rent of NK-4/5 suffered a slight downturn in this quarter because the effective rent of some Grade AB buildings dropped in this district. EFFECTIVE RENTS OF TAIPEI OVERALL OFFICE MARKET EFFECTIVE RENT QUARTER-ON-QUARTER CHANGEDISTRICT (%)(NT$/ping/month) (//)1Q 2011 2Q 20111Q 20112Q 2011 AVERAGE 1,762 1,7630.21%0.07% MS-TN1,877 1,8830.25%0.32% TUN-S1,816 1,8160.41%0.00% HSIN-YI2,047 2,0530.15%0.31% NK-SC 1,678 1,6750.00%-0.14% NK-4/5 / 1,479 1,4743.14%-0.40% WEST 1,568 1,568-0.45% 0.00% JA-HS1,633 1,6330.00%0.00%SourceColliers International Taiwan Branch Outlook of overall office market In response to economic recovery, 20,000 ping of net take-up in1H 2011 indicated that201120,000 demand significantly improvedin 16,00018,000 comparison with 2010. In anticipation of8% 16,000 to 18,000 ping of net take-up in 2H2011 2011, the vacancy rate is very likely to fall 1% below 8%. On the rental front, although 2% average effective rent only increased by 1% in 1H 2011, there is a possibility that average effective rent will increase by 2% in 2H 2011 if supply remains unchanged and demand increases steadily.CollIErs InTErnATIonAl |P. 9 10. THE KNOWLEDGE REPORT | 2q 2011 | TAIPEIPREMIUM GRADE AND GRADE AAOFFICEThe vacancy rate of Premium Grade and Grade A Owing to the fact that no new supply was 2011Aoffices dropped to 13.31% released into the market, the stock of Premium Grade and Grade A offices538,300A13.31%remained at 538,300 ping. A total of 4,500 4,50013.31%ping of net take-up led the vacancy rate todrop to 13.31%.A total of 3,500 ping of net take-up in GradeA offices indicated a better demandA3,500performance than Premium Grade offices as compared with last quarter. Major leasing 2,300deals included 2,300 ping of net take-up at()Metropolitan International Center, 1,600 1,600ping of net take-up at the Sin Yi Building 600rented by Allianz, and 600 ping of net take- up at Taipei Financial Center rented by1,800()China Ocean Shipping (Group) Company.400In terms of Premium Grade offices, ShinKong Group occupied 1,800 ping of officespace at Shin Kong Xin Yi Financial Buildingfor its own need; Invesco Taiwan Limitedoccupied nearly 400 ping of office space inthe Walsin Xin Yi Building.However, vacant space of Grade A offices Aincreased 1,500 ping in MS-TN, which was 1,500the only district with negative net take-up. The Hung Tai Center, for example, saw an ()increase of 800 ping in new vacant space 800since Lion Travel Service Co., Ltd. movedits headquarter to Neihu.STOCK AND VACANCY RATES OF PREMIUM GRADE ANDGRADE A OFFICES IN 2Q 2011 Stock / Vacancy Rate / Unit: Ping / 300,00018.0%14.7% 15.1%15.4% 250,00015.0%11.5% 200,00012.0% 8.8% 150,0009.0%7.0% 100,0006.0%50,0003.0%0.0% 00.0% MS-TN TUN-S HSIN-YI NK-SC NK-4/5 WEST JA-HS / AGrade Premium Grade AVacancy Rate Source: Colliers International Taiwan Branch P. 10 | CollIErs InTErnATIonAl 11. THE KNOWLEDGE REPORT | 2q 2011 | TAIPEIAverage effective rent up-swung 32 basis32points in this quarter and reached NT$2,462 2,462per ping per month. With 46 basis points of upturn, average rent of Premium Grade 463,114offices in HSIN-YI increased to NT$3,114Aper ping per month. Average effective rentof all the other districts remained the sameas last quarter. In the short term, thanks to the effect of stagnated supply and increasingdemand, effective rent is expected tocontinue the trend of rising.EFFECTIVE RENTS OF PREMIUM GRADE AND GRADE A OFFICESIN 2Q 2011 EFFECTIVE RENT QUARTER-ON-QUARTER DISTRICT(NT$/ping/month) (//) CHANGE (%) 1Q 2011 2Q 20111Q 2011 2Q 2011AVERAGEMS-TN 2,2922,2920.75%0.00%TUN-S 2,6242,6242.02%0.00%HSIN-YI 2,8372,8460.33%0.32%NK-SC 1,8831,8830.00%0.00%NK-4/5/ 1,9001,9008.57%0.00%WEST2,0252,0250.00%0.00%JA-HS 2,0002,0000.00%0.00%PREMIUM GRADEMS-TN 2,2752,275 -2.15%0.00%TUN-S 2,9002,9003.57%0.00%HSIN-YI 3,1003,1140.46%0.46%GRADE AMS-TN 2,3002,3002.22%0.00%TUN-S 2,3252,3250.00%0.00%HSIN-YI 2,3632,3630.00%0.00%NK-SC 1,8831,8830.00%0.00%NK-4/5/ 1,9001,9008.57%0.00%WEST2,0252,0250.00%0.00%JA-HS 2,0002,0000.00%0.00% SourceColliers International Taiwan Branch CollIErs InTErnATIonAl | P. 11 12. THE KNOWLEDGE REPORT | 2q 2011 | TAIPEINEIHU TECHNOLOGY PARKAs Chi-Sing Xi Hu Building contributed a 480 offices intotal of 3,016 ping of new supply in 2Q2011, the overall stock amounted to 794,800 3,016 794,80061 countries onping in Neihu Technology Park. Resulting 8,800 6 continentsfrom 8,800 ping of net take-up, the vacancy201114.52%rate declined from 14.52% in 1Q to 13.74%13.74% United States: 135in 2Q, recording the historical lowest in the Canada: 39Latin America: 17past nine quarters.Asia Pacific: 194Benefiting from maturing life functionality, EMEA: 95Neihu Technology Park continually won $1.6 billion in annual revenuefavour from companies of traditional A+ 672.9 million square feet underindustry and technological industry. managementCompanies such as A+ Sun Tech City, Over 10,000 professionalsFubon Ruei Kwang Building, Dubai Buildingand Metropolitan Era Headquarters eachexperienced approximately 1,000 ping of COLLIERS INTERNATIONALnet take-up.CONSULTAANTS LIMITED TAIWANBRANCHThe rental climbed 54 basis points fromNT$1,114 per ping per month in 1Q to 1,11454 NT$1,120 per ping per month, which could 1,1201107101be seen as a notable growth since 2009.2009 4949F TAIPEI 101 TOWER No 7 Xin Yi RoadEspecially for high quality buildings near Sec 5 Taipei 110 Taiwan ROCMRT stations, asking rent has reachedmore than NT$1,500 per ping per month. 1,500Thanks to steady increasing demand, rental 2011Andrew Liuwill remain on an up-wing trend till the endManaging Directorof 2011.On the sales front, there was no industrial Tel: 886-2-8101-2000offices transaction closed by public offering Fax: 886-2-8101-2345companies in this quarter. It has been Email:andrew.liu@colliers.comobserved that the growth rate of rentals Paul Leecould not keep up with the growth rate of Director, Researchsales prices, which resulted in a downturn trend of rental yields. Typical of a situation Tel: 886-2-8101-2000 ext.155with a rising interest rate, investors becomeFax: 886-2-8101-2345conservative in an anticipation of priceEmail:paul.lee@colliers.comadjustment. Consequently, investment inNeihu became slow.Lorita LoResearcher, Research RENTALS AND VACANCY RATES OF NEIHUTel: 886-2-8101-2000 ext.197TECHNOLOGY PARK Fax: 886-2-8101-2345Email:lorita.lo@colliers.comRental / Vacancy Rate / Unit: NT$/Ping/Month // This document/email has been prepared by Colliers1,200 25.0% International for advertising ulluptatem etuer sequisldolesequam el ea adiat in venisi. Lit prat. Acinim quat1,150 20.0% praestrud minis doloboEnissed enim diam veniam, simduip essis nonsequat nulla augiamet adip euguer aut1,100 lobore veriusto doloborerat ut wisit augiamet, sequis nit15.0%wismodio conseniat.1,05010.0%1,000950 5.0%900 0.0% 2002 2003 2004 2005 2006 2007 20081Q 20092Q 20093Q 20094Q 20091Q 20102Q 20103Q 20104Q 20101Q 20112Q 2011 Rental Vacancy Rate Accelerating success.Source: Colliers International Taiwan Branch www.colliers.com/marketname:taiwan