Industry Overview

Company No. 10091l4-M Company No. 10091l4-M 7. INDEPENDENT MARKET RESEARCH REPORT
Prepared for Titijaya Land Berhad INDUSTRY OVERVIEW REPORT Date: 28’h October 2013 Preparedfor: Prepared by: TITIJAYA LAND BERHAD PA INTERNATIONAL N-16-01, FIRST SUBANG, JALAN SSI5/4G, SSI5, PROPERTY CONSULTANTS (KL) SDN BHD 47500 SUBANG JAYA, NOS. 29A & 31A, 1ST FLOOR, JALAN 52/1, SELANGORDARULEHSAN PJNEWTOWN,46200PETALINGJAYA, Tel: 03-8022 9999 Fax: 03-8022 9888 SELANGOR DARULEHSAN Tel: 03-7958 5933 Fax: 03-79575933 Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013 123 7. INDEPENDENT MARKET RESEARCH REPORT (Conl’d)
28′” October 2013 PA INTERNATIONAL PROPERTY CONSULTANTS (KL) SDN BHD (748916W) (VE(1)OOB5/4)Messrs. Titijaya Land Berhad (formerly knowo as Param & Assoc1ales (KL) Sdn. Bhd.) PArn~:tlll)]I!.6ifiil Ci!iT!t.:Il:!!) flm~ilJN-16-01, First Subang, Jalan SS15/40, SSI5, 29A & 31A, Jalan 52/1,47500 Subang Jaya Pelaling Jaya New Town, 46200 Pelaling Jaya, SELANOOR DARUL E!lSAN Selangor Darul Ehsen. ~ 03·79585933 g 03.79575933 18I pakl@pa.com.myDear Sirs, 8 www.pa.com.my RE: INDUSTRY OVERVIEW REPORT FOR INCLUSION IN mE PROSPECTUS IN CONNECTION WITH TITUAYA LAND BERHAD’S (“TITUAYA”) INITIAL PUBLIC OFFERING ON mE MAIN MARKET OF BURSA MALAYSIA SECURITIES BERHAD (‘PROSPECTUS”) We, PA International Property Consultants (KL) Sdn. Bhd., have prepared this Industry Overview Report for inelusion in the abovementioned Prospectus. This research is undertaken with the objective of providing an overview of the property market industry in which Titijaya and its subsidiaries C”Titijaya Group”) operate and also involve an analysis of the supply and demand of similar subsectors of properties in the state of Selangor. This Report has been prepared based on the following scope of works:­o Brief background ofTitijaya Group;
o Economic perfonnance of Malaysia and Selangor;
o Description of the property industry;
o Market size and share;
o Laws and regulations;
o Property market activities;
o Demand and supply;
o Demand and supply dependencies;
o Reliance .on and vulnerability to imports;
o Barriers to entry; and
o Industry outlook and prospects.

We are aware that the contents of this report will be included in the abovementioned Prospectus and we are aware of our responsibilities under Section 214 of the Capital Markets and Service Act, 2007. We further confirm that this Report has been written in an objective and independent manner which is subject to the following standard limitations:­o The responsibility of PA International Property Consultants (KL) Sdn. Bhd. in cOImection with this Report is limited to the client to whom the study is addressed and to that client only;
o Our final report will not include the possible impact of zoning or environmental regulations, licensing requirements, or other such matters unless they have been brought to our attention and are disclosed in the Report; and
o PA International Property Consultants (KL) Sdn. Bhd. has, within its capacity, ensured the accuracy and completeness of this Report. It is PA International Property Consultants (KL) Sdn. Bhd.’s opinion that this Report, together with all information, opinions, estimates and statements herein furnished, represent a true and fair assessment of the overall industry under study within the limitations of, among others, secondary data and statistics and primary research. The statements, infonnation and opinions expressed or provided in this Report are intended only as a guide, and any values or forecasts stated are intended as infonnal opinions and should not be construed as fOlmal valuations as in a valuation report.

Registered Valuers” Property Consultant!; .. Real Estate Agents .. Property Managers .. Plant & Machinery Valuers” Auctioneers K.Parampathy Chairmen Jerome Hong Boon Pang Managing Di(f3Glor A. 5ubram;>niam ElieGutJve Director Slew Kok Kong E.llecutive Director PENllAf
Ong Cha Sang Direclor Lao Cheong Fal Direc/or V. Sivedee Diraclor PA INTERNATIONAL PROPERTY CONSULTANTS SON BHO (2862790) (formerlykoown as Parem &Assoclates Sdn. Bhd.) HEAD OFFICE: Johor Bahru (VE(1)0085) Suite 1101, 11 10 Floor, Johor Tower, 15, Jalen Gereja, 80100 Johor Behru, Johor Darul Tak.zlm. -Tel: 07-2232762 Fax: 07·2241780 Email: pajb@pa.com.my/pajb@po.Jaring.my OTHER OFFiCES: Segamat (VE(1)008511) No. 62-G, Second Floor, Jalan Genueng, 85000 5egamal, Johor. Tel: 07-9313299 Fax: 07-9313377 Email: pasg@pa.com.my Kluang (VE(1)008512) No.5 & 7, Flrsl ROOf, Jalen Syed Abdul Hamid 5agal1, 86000 Kluang, Johor. Tel: 07·7725168 Fax: 07-7722054 Email: pakg@pa.com.my Balu Pahat (VE(1}0085I3) Suite 3.01, Third Floor, Wismll Eng Lam, No.9, Jllian Ismail, 83000 Batu Pahat, Johor, Tel: 07-4336855/4324577 Fax: 07-4324575 Email: pabp@pa.com.my Klang (VE(1)008515) Lot 308, Tingkat 3, Bllngunan Tabung HaJI, Jalan Kapar, 41400 Klang, 5elangor Darul Ehsan. Tel: 03-3341 5933 Fax: 03-3341 5733 Email: paklg@pa.com,my REP. OFFICES: Ho Chi Minh City (S6:41·002910) 31’1 Floor, 511igon Trade Cenler, 1137 Ton Due Thang SIreel, BEln Nghe Ward District 1, Ho Chi Minh City, Vielnam. Till! Fax: (+848) 39104505 Chief Resident RepresenleliVi3: Jerome Hong ‘\,:+8012-2117839 Email: jelome.hong@pa.eom.my 124 Company No. l0091l4-M 7. INDEPENDENT MARKET RESEARCH REPORT (Con/’d)
The sources of infOlmation for the market study include amongst others but not limited to the following:­o Infonnation provided by Titijaya Group;
o Enquiries made at the Planning Departments of relevant local authorities to identify approved and planned supply of comparable I competitive developments in the study area;
o References made to publications and periodicals such as the annual Property Market Report published by the Valuation & Property Services Department, the Property Stock Report by the National Property Information Centre (NAPIC), data from the Department of Statistics and the Economic Planning Unit as well as news articles; and
o References made to our in-house data which are believed to be from reliable sources.

Except as otherwise indicated, statistical and certain other infonnation contained in this Report is based on or derived from data prepared by Titijaya Group. We acknowledge that if we are aware of any significant changes affecting any of contents of this Report between the date thereof and the issue date of the abovementioned Prospectus, we have an on-going obligation to cause this Report to be updated for changes and, where applicable, cause Titijaya to issue a supplementary prospectus, or withdraw our consent to the inclusion of this Report in the abovementioned Prospectus. We, however, acknowledge that a copy of Our report will be submitted to the Securities Commission Malaysia and disclosed in the abovementioned Prospectus. Thank you. Yours faithfully PA INTERNATIONAL
PR~TYCONSULTANTS (KL) SDN BHD . <.
7. INDEPENDENT MARKET RESEARCH REPORT (Con/’d)

 

‘1itiItfflI’·@4@@’;i¥·I.I, Prepared for Titijaya Land Bemad CHAPTERl BRIEF BACKGROUND
BRIEF BACKGROliND OF TITIJAYA GROllI’ • The Titijaya Group (“Group”) has been involved in property development since the year 2001. • The Group is involved in the residential, commereial and industrial sectors of the property development industry in Malaysia. • To date, the Group has successfully completed a total of 4 residential and 5 commercial schemes in the Klang Valley, concentrated mainly in the Subang Jaya and Klang localities in Selangor, including the reeently completed residential project known as Subang Parkhomes Phase 1 in Subang Jaya, in July 2013. Additionally, the Group has also embarked on the development of 2 industrial schemes: (i) Seri Alam Industrial Park (phase I and 2); and (ti) Zone Innovation Park @ Sungai Kapar Indah (Phase I and 2) in the Klang locality and two other commercial schemes: The Galleria in Klang and 3Elements in Seli Kembangan. [The rest of this page is intentionally left blank] Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013 Page 1 126 7. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
ti.1i@@i;’i§l·t.l, Prepared for Titijaya Land Berhad Table 1.1.1
Project Name  Location  Type of Development  y”,r*  Tako-up Rate (as at LPD)  Mutiara Bukit  Jalan Meru.  2-storey  terrace  2003 for terraced  Terrace houses -100.00%  Raja  Klang  houses, residential lots  houses and 2005  and  low-cost  for low cost  Residential lots -100.00%  apartments  apartments  Low~cost apartments-100.00%  E-Tiara Serviced  Persiaran  Serviced  apartments  2007  Serviced apartments -99.68%  Apartment  Kemajuan  with a retail podium  Subang, Subang  Retail1ots~ 100.00%  lara  Mutiara Point  Jalan Meru, Klang  2-storey and 3-storey  2008  100.00%  Business Park  shop offices  (phase I)  Tiara Square  USJ 12,  2-storey  and  3-storey  2008  100.00%  Business Centre  Subang laya  shop offices  Casa Tiam  Persiaran  Serviced  apartments  2008  Serviced apartments -99.85%  Service Suites  Kemajuan  with a retail podium  Subang, Subang  Retaillots-l00.00%  laya  Klang Sentral  Orf 1alan Meru,  3-storey shop offices  2009  97.14%  Commercial  : Klang  Centre  First Subang  SSI5,  Oftlce  suites  and  2011  Office suites -100.00%  Suhang Jaya  studio suites Oil a retail  podium  Studio suites -100.00%  Retail podium-l00.00%  OneSOHO  SSI9,  Small  office  Home  2012  SoHo -100.00%  (former~v known  Subang Jaya  office C’SoHo”) suites  asSubang  and retail shops  Retail shops ~ 80.00%  SOHO)  Subang  SS 19, Subang  Low density  and  low  2013  Phase 1: 94.70%  Parkhomes  lara  rise condominiums  (pbase 1)  Source: Titijaya Group and PA International Property Consultants (KL) Sdn Slid
Note: *Complefiotl year based on the Date a/Certificate o/Completion and Compliance issued. Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013 Pa e2 Company No. I009Il4-M 7. INDEPENDENT MARKET RESEARCH REPORT (Cotlt’d)
‘ij1i!!M@j·PMG14U’;§·I.li Prepared for Titijaya Land Berhad Table 1.1.2
EstimatedProject Name Location Type of Development Status of the construction (%)Completion Year Subang SSI9, Low density and low 2014 23.77 Parkhomcs Subang Jaya rise condominiums (Phase 2) The Galleria Off JaJan Mern, 3-storey stratified shop 2014 64.57 Klang offices Seri AJam  Off Jalan Kapar, Vacant  industrial  land 2015  Industrial Park  Klang  for  light  industrial  (Phase I and  factory  Phase 2)
Zone OffJalan Kapar, 1Yz~storey and 2\>-2016 Innovation Park Klang storey semi-detached @Sungai factories Kapar Judah (Phase 1 and Phase 2) 3 Elements Bandar Putra 4-storey and 6-storey 2016 Shop offices ~ 51.33 (phase 1, Phase Pennai, shop offices with lifts, SoFo & Serviced Apartments-II 2, Phase 3, Sed Kembangan retail lots, serviced Retail lots _tffI Phase 4 and apartments, Small Phase 5) oftiec Flexible office (“SoFo”) suites Source: Titijaya Group and PA International Property Consultants (KL) Sdn Bhd Notes: ** The latest status 0/the constntction based on the project cost incurred as at 5 September 2013 asprovided by Titijaya Group divided by budgeted cost. II-No revenue and cost 0/sales have been recognised as the progress 0/these projects has not reached a stage where the financial results can be reliably estimated. #II As af 5 September 2013, Titijaya Group hasyet to launch the Phase 20/3Elements. • As most of the Group’s developments are cUlTently located in Selangor, this Industry Overview Report will focus on the property development industry in Selangor. [The rest ofthis page is intentionally left blank] Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013 Page 3 Company No. l009ll4-M 7. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
Prepared for Tilijaya Land Bemad CHAPTER 2 ECONOMIC PERFORMANCE OF MALAYSIA AND SELANGOR 2.1 MALAYSIA’S ECONOMIC GROWTH • 2009 was a year of uncertainty for the global markets. Due to the economic impact of the United States of America’s (“US”) subplime crisis which had erupted in October 2007 and eventually became a full-blown global fmandal crisis that lasted through to 2009, the Malaysian economy recorded an annual average contraction of 1.7% in 2009 (2008: +4.7%). (Source: Quarterly Bulletin. Bank Negara Malaysia (“BNM”))

• In the first quarter of 2010 (“IQ 2010”), the Malaysian economy recorded high growth of 10.10% on a quarterly basis, the highest in a decade, surpassing expectations and indicating that the nation is on the right track to economic recovery. In the second quarter of 201 0 (“2Q 2010 “), the economic growth rate was 9.00%; in the third quarter of 2010 (”3Q 2010″) and fourth quarter of 2010 (“4Q 2010”), however, the economy growth slowed to 5.30% and 4.80% respectively. Overall, the economy charted a commendable growth of 7.2% in 2010 supported by higher private consumption and sustained public spending. (Source: Quarterly Bulletin, BNM)

• The Malaysian economy recorded a modest growth of 5.20% in the first quarter of 20 II (“IQ 2011”) which declined to 4.30% in the second quarter of201 1 (“2Q 2011”) due to emerging external risks such as weaker external demand) supply chain disruptions caused by the natural disaster in Japan, ongoing European Union sovereign debt concern, elevated commodity prices and global inflationary pressures. In the third quarter of 2011 (“3Q 2011”), the Malaysian economy expanded 5.80%. However, it registered a lower growth rate of 5.20% in the final quarter (“4Q 2011”) supported by higher private consumption and sustained public spending. Overall for the year of 2011, the Malaysian economy recorded an annual average growth rate of 5.10% (2010: 7.20%), supported by positive domestic consumption and investment, implementation of government projects and strong fmancing patterns. (Source: Quarterly Bulletin. BNM)

• However, due to the challenging external environment in the first quarter of 2012 (“IQ 2012”), the Malaysian economy recorded a modest growth of 5.10% and increased to 5.60% in the second quarter of 2012 (“2Q 2012″) against 5.20% and 4.30% respectively registered in the corresponding quarters of 2012. In the third quarter of2012 (”3Q 2012″), the Malaysian economy decreased to 5.30% but increased to 6.50% in the final quarterof2012 (“4Q 2012”).

• Overall, the Malaysian economy perfomled better and recorded a higher growth of 5.6% in 2012 compared with 2011 (5.10%), supported by positive domestic consumption and investment as well as implementation of government projects.

• The quarterly gross domestic product (“GDP”) statistics for Malaysia fi’om 1Q 2010 to 2Q 2013 are tabulated below:­

Table 2.1.1 10 20 3Q 4010’20 30 40 10 20 3040 lQ 20 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 201: +5.10 +10.10 +9.00 +5.30 +4.80 +5.20 +4.30 +5.80 +5.20 +5.60% +5.30 +6.50 +4.10% +4.30% Source: Department o/Statistics Malaysia & Bank Negara Malaysia Notes: 1Q = first quarter 2Q = second quarter 3Q = third quarter 4Q = fourth qUa/1er Prepared by PA Inlernallonal Property Consullants (KL) Sdn Bhd October 2013 Page 4 129 Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Coltt’d)

Prepared for Titijaya Land Berflad • The following graph eharts the quarterly economic growth ofMataysia since 2004, denoting a stable economic growth since mid-2005 before a sharp dip in 3Q 2008, followed by a strong recovery after the crisis. Chart 2.1.2 :r\’Itd~}Y””A’sECOUOlnlc Growrh (2004 -2Q 20U) 12.0 -20 -j———-.———–‘\——J———–­~ 1~

 

~ aa j;”Q;;;;Q-:;-Q;Q;Q;Q.;q~Q;Q;Q’;;-;Q ~Q3Q..;.4vQnlJ8Qcc-2eiQu;Qsl~m\1ml9fi~4IJSQr,lliQT2Q<T-3TCQn4liQ’T1 Q+2rQf-:36Q,4-y.Q.ylQr2riQ~3riQ’T4QrrlQr-,2QCi ·20 104040404050505050606060607070i 101010111111111212121213 n -40 1————\–1————–­
::: L –==~=_-_-_ -~~~===_.: -_-_—-~~~~==_.:_-~_-_-_-_–_-_-TbnelillE’ Source: Department ofStatistics Malaysia • In early 2013, the Government had forecasted Malaysia’s economic growth to remain on a steady growth of between 5.0% and 6.0% for 2013. The economy grew 4.2% in the firsthalfof20l3 (“IH 2013′) and recently Bank Negara cut its forecast for Malaysia’s full-year growth to 4.5% -5.0%. In 2014, in tandem with an improved global economic outlook, the domestic economy is projected to grow at a stronger pace of 5.0% ­5.5%. Growth will be driven by private investment and consumption as well as better external demand (Source: Budget 2014). • The Prime Minister’s promise of further package details in March 2010 for the New Economic Model (“NEM”) to drive the country towards a high-income economy has also garnered cautious optimism among business circles. The NEM to be achieved through an Economic Transformation Programme (“ETP”) will propel Malaysia to being an advance nation with inclusiveness and sustainabihty in line with the goals in Vision 2020. One of the strategjes targeted under NEM is to improve the frnaneial services sector which includes promoting Malaysia as an international and Islamic fmancial centre. The Government has unveiled plans to build a new international financial district in the centre of Kuala Lumpur to be known as the Kuala Lumpur International Financial District (“KLIFD”). Other construction / property-related plans under the ETP include the implementation of new highway projects, the Klang Valley Mass Rapid Transit (“KVMRT”) system and the redevelopment ofvarious tracts ofland that are set to further boost the property market. • Since March 2010, BNM has been undertaking measures to stabilise rising inflationary pressures while remaining accommodative and supportive of the fmaneial conditions in the country albeit a gradual recovery in both domestic and global economies. The Overnight Policy Rate (“aPR”) was at a record low of 2.0% in FebrualY 2009, before a hike of 25 basis points each in March, mid-May and early July2010 to 2.75%. BNM raised the aPR again in May 2011 by another 25 basis points to 3.0%. With this latest hike, the bencbmark interest rate for commercial banks to calculate their bank lending rate increased by 30 basis points from 6.3% per annum to 6.6%. As at August 2013, BNM decided to maintain the aPR at 3.0%.
Company No.1 009114·M 7. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
Prepared for Tilijaya Land Berf1ad • Average headline inflation saw a minimal increase of 1.6% in 2010 compared to 0.6% in 2009,5.4% in 2008 (the latter due to the mid·2008 increase in fuel prices and electricity tariffs causing a multiplier effect) and 2.0% in 2007. The turbulent year of 2009 saw inflation rates falling in tandem with economic growth rates, with inflation rates dipping into the negative zone in June 2009 before increasing to the positive region in December 2009. In IQ 2010, the country recorded an average inflation of 1.3%; against 1.6% in 2Q 20[0, 1.9% in 3Q 20 I0 and 2.1 % in 4Q 2010. With rising fuel and conunodity priccs, removal of subsidies and the hike in electricity tariff, inflation was recorded at 2.8% in IQ 2011,3.3% in 2Q 2011 and 3.4% in 3Q 2011 before stabilizing at 3.2% in 4Q 2011. Overall, the inflation for 2011 averaged at 3.2% (20[0: 1.7%). In IQ 2012, the inflation rate moderated to 2.3%, 1.7% in 2Q 2012, 1.4% in 3Q 2012 and 1.3% in 4Q 2012. Overall, the CPI for 2012 averaged at 1.7%. (Source: Bank Negara Malaysia). • Inflation continued to rise to 1.5% in IQ 2013 and 1.8% in 2Q 2013, attributed mainly to higher inflation in the food and non-alcoholic beverages and housing, water, electricity. gas and other fuel categories. However, in August 2013, the inflation rate recorded slightly lower at 1.9% compared to July 2013 (2.0%) (Source: Bank Negara Malaysia). Based on the Economy Report 2013120[4, inflation is expected to increase and average between 2.0% and 2.5% in 2013 (eompared to 1.6% in 20 [2). Chart 2.1.3 MldlllJslll’SlnOlllt10R Raff(Jan 200S~ July 2013) —_.._._ . 60
t.. 4.’ ~, ~ 2.0 ~ …. T1rnf’lull’
–_._——-_ __
Source: Department ofStatistics Malaysia • Throughout 2009, the Government announced various measures to drive the nation’s economic recovery. The measures which have a significant impact on the real estate sector incJude:­o Threshold for purchase of properties by foreigners is increased to RM500,000, above which foreigner:; will no longer need to refer to the Foreign Investment Committee (“FIC”) for the purchase of properties;
o Homebuyers will be given tax relief on interest paid on housing loans of up to RMIO,OOO annually for 3

years; o The launch of the Green Building Indices in May 2009 for conunercial and residential buildings, jointly developed by the Malaysian Institute ofArchitects and the Association ofConsulting Engineers Malaysia -suppOlted by tax incentives for buildings obtaining the Green Building Index Certificate;
o In July 2009, the Prinne Minister announced the deregulation of the FIC, in which all property

transactions, except for those involving a dilution of the Government or Bumiputera interests for property valued at RM20 million and above, would no longer require FIC approval; and Prepared by PA Inlernalional Property Consullanls (KL) Sdn Bhd October 2013 Page 6 Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Collf’d)
Prepared tor Titijaya Land Bemad o Increased purchasing power of Employees Provident Fund (“EPF”) contributors via a special scheme utilising current and future savings. • The Prime Minister also tabled the lOW Malaysia Plan (“IOMP”) for the period of 2011 to 2015,. which highlights the country’s approach towards becoming a high income and high productivity economy. Among the property-related highlight, ofthe 10MP include:­o Redevelopment of certain parcels of land in Kuala Lumpur which includes land in the vicinity of Kampung Barn and Sungai Besi airport, the latter ofwhich will be a mixed development known as Bandar Malaysia and has been entrusted to a consortium of companies which includes IMalaysia Development Bhd (“IMDB”), l.embaga Tabung Angkatan Tentera (known as “LTAT”) and Qatar Investment Authority; o The development of the RM26 billion KL International Financial District (“KLIFD”) via a joint venture between IMDB and Mubadala Development Company (an Abu Dhabi govemment investment vehicle); and
o The creation ofa Facilitation Fund worth RM20 billion to help the private sector finance projects such as

land reclamation in Westport, Port Klang, the Malaysia Truly Asia Tourism Centre in Kuala Lumpur and Senai High Technology Park in Iskandar Malaysia, Johor. • On October 7,2011, the Prime Minister presented Budget 2012 themed “National Transfurmation Policy”: Welfarefur theRakyat,Well-Being oftheNation. Amongtheproperty-relatedhighlights ofBudget2012 are:­D The Government will impose a 10% Real Property Gains Tax (“RPGT”) on properties disposed ofwithin two years of purchase. For properties held and disposed of between two and five years of purchase, the RPGT rate remains at 5% while properties sold after five years are not subject to RPGT; o Full stamp duty exemption wil\ be granted to those buying residential properties under Project Perumahan IMalaysia. This covers properties below RM300,000 with sale and purchase agreements executed between I January 2012 and31 December 2016; D Households eaming a monthly income of RM3,000 and below will receive a one-off RM500 cash assistance. The Government will introduce Skim Amanah Rakyat IMalaysia to increase disposable income and encourage savings among those with a monthly household income ofbelow RM3,000; o The maximum house price for low income homebuyers under the My First Home Scheme will be increased fi·om RM220,000 to RM400,000. This improved scherne will be available to house buyers through joint loans ofhusband and wife beginning January 2012; a Under the ongoing Program Perumahan Rakyat, the Govemment will allocate RM443 million for the construction of 8,000 affordable homes for sale and 7,000 for rent. Syarikat Perumahan Negara Bhd will build 10,000 homes for the low-income group in 2012 in which the units will be sold at RM45,000 each with the Government subsidising RM20,000 ofthe construction costs; o The Government intends to develop several plots of Government-owned land around Sungai Besi and Sungai Buloh. In 2011, 1,880 houses will be built in Putrajaya and Bandar Tun Razak, while in 2012, a total of 7,700 houses will be built in Cybeljaya, Putra Heights, Seremban, Damansara and Bubt Raja. The Government also provides 100% stamp duty exemption on loan instruments for the purchase of houses; Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013 Page 7 Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Collt’d)
Prepared for Titijaya Land Bemad o To encourage the construction of more houses which adopts the build-then-sell eonceptj Islamic banks have agreed to provide Syariah-eompliant fmaneing and undertake construction risks. Instalments will only eommence after the finance property is completed. This scheme will be implemented for houses priced below RM600,000; o An incentive package has been proposed to accelerate the development ofKLIFD:­./ Income tax exemption of 100% for a period of 10 years and stamp duty exemption on loan and service agreements will be given to KLIFD-status companies; ./ Industrial Building Allowance and Accelerated Capital Allowance for KLIFD Marquee Status Companies; and ./ Income tax exemption 0£70% for a period aftive years for property developers in KLIFD.
o The concessionary tax rate of 10% on dividends ornon-corporate institutional and individual investors in Real Estate Investment Trusts (“REITs”) up to December 31, 20 II will be extended for a period of five years commencing January I, 2012 until December 31, 2016; o The income tax exemption for shipping companies is to be reduced from 100% to 70% of statutory income starting from 2012;
o The Small and Medium Enterprises (“SME”) sector will be supported by a Syariah-eompliant SME fmancing fund totalling RM2 billion. The fund is to be managed by selected Islamic banks with the Govenunerit financing 20/0 of the profit rate. The Govennnent will provide RMIOO million for the 8MB Revitalisation Fund whict). offers soft loans ofup to RMI million to entrepreneurs to revive their business. The Government will also establish a RM500 million Syariah-compliant Conunercialisation Itmovation Fund to financially support SMEs in the commercialisation ofresearch products;

o The Government will release RM2.5 billion out of the RM20 billion allocated fur tbe public-private partnership facilitation fund in 2012. An estimated RM300 million has been earmarked fur Bumiputera entrepreneurs; o The Govemment will allocate RM978 million in 2012 to boost the development of 5 regional corridors which include the Johor Baru-Nusajaya Coastal Highway (Iskandar Malaysia), the heritage tourism development in Taiping, Perak (Northern Con-idar Economic Region), the agropolitan scheme in Besut, Terengganu (East Coast Economic Region), the palm oil industrial cluster in Lahad Datu, Sabah (Sabah DevelopmentCorridor) and theSamalajuwatersupply(SarawakCorridor ofRenewable Energy); and o The Second Rolling Plan (“RP2”) will be allocated RM98.5 billion for high-impact development projects commencing in 2012. RP2’s main projects include the construction of the Gemas-Johor Baru double­tracking rail project, Lebuhraya Pantai Timur Jabor-Kuala Terengganu, Lebuhraya Pantai Barat Banting­Taiping, Lebubraya Segamat-Tangkak, Lebuhraya Central Spine, Kota Marudu Ranau road and the redevelopment of the SlUlgai Besi Kuala Lumpur Air Base. Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013 Page 8 7. INDEPENDENT MARKET RESEARCH REPORT (CoIlI’d)

Prepared for Tilijaya Land Berhad • Prime Minister, Datuk Seri Najib Tun Razak, presented Budget 2013 on 281h September 2012. Among the highlights ofBudget 2013 relating to the housing and property sectors are:­o The government will allocate RMl.9 billion to build 123.000 affordable housing units in strategic locations in 2013. The initiative will be implemented by PRJMA, Syarikat Perumahan Nasional Berhad (SPNB) and National Housing Department;
o A total ofRM500 million will be spent by PRlMA to build 80,000 houses in major locations nationwide with the selling price ranging between RMlOO,OOO and RM400,000 per unit. Among the locations are Kuala Lumpur, Shah Alam, Johor Bahru, Seremban and Kuanlan;
o PRIMA will provide the Housing Facilitation Fund totalling RM500 million to build 30,000 houses in

collaboration with private housing developers. The house prices under this programme will be 20% lower than the market price and distributed through an open balloting system; o RM320 million will be allocated through SPNB to build 22,855 residential units including low and medium-low apartments, Rumah Mesra Rakyat and Rumah Mampu Milik. SPNB’s housing projects, which will be implemented inunediately, including the construction of I ,855 medium-cost apartment units with a built-up area of 850 square feet in Shah Alam and Sungai Buloh. These units will be sold at about RM 120,000 to RM220,000 per unit;
o My First Home Seheme, which was launched under the previous Budget, will be improved by increasing the income limit fur individual loans from RM3,000 to RM5,000 per month or joint loans ofhusband and wife of up to RMIO,OOO per month. In addition, the requirement for a savings record equivalent to three months instalment and minimum employment of six months will be abolished;
o A sum ofRM543 million will be provided to the National Housing Department for the implementation of 45 projects under the Rakyat Housing Programme (PPR) involving 20,454 units which will be constructed using the Industrialised Building System (IBS). These units of houses will be sold at a price of between RM30,000 and RM40,000 per unit, much lower than the market priee of about RM120,000 per unit. The Government will also allocate 20% of the PPR houses to public sector employees and partly to the disabled;
o SPNB will build a total of 21 ,000 houses in 2013 and construct the houses priced at RM65,o00 per unit with a subsidy ofRM20,000 as well as a 2% subsidy on interest rate;
o In the 2009 Budget, the Government had given a 50% stamp duty exemption on the instruments of

transfer agreements and loan agreements for the purchase of the first residential property of up to RM350,000. The Government has extended the exemption to 31 December 2014 with the price limit on residential properties raised to RMAOa,OOO, effective sale and purchase agreement executed from 1 January 2013 to 31 December 2014; . o The government will impose a 15% Real Property Gains Tax (RPGT) on properties disposed of within two years of purchase. For properties held and disposed of between two and five years of purchase, the RPGT rate remains at 10% while properties sold after five years are not subjected to RPGT. In addition, gains from the disposal of one residential property once in a lifetime and disposal of properties based on Jove and affection between husband and wife, parents and children, grandparents and grandchildren are exempted from RPGT; o The Government will allocate RMIOO million to the Ministry of Housing and Local Government to revive 30 abandoned housing projects. In addition, to encourage the involvement of the private sector, the Government will provide tax incentives; Prepared by PA Internalional PropertyConsullanls (KL) Sdn Bhd Oefober 2013 Page 9 Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Coltt’d)
Prepared for Titijaya Land Berhad o The Government will continue to accelerate the implementation of the 12 National Key Economic Areas (NKEAs). In 2013, a sum of RM3 billion is allocated for the implementation of entry point projects (EPPs). This includes RMI.5 billion for agriculture projects sueh as oil palm, rubber, high-value herbs and paddy. Atotal ofRM500 millionwillbeallocated fortheRiver ofLifeprojectfor thebeautification ofthe Klang River. An additional RM300 million is provided for replacement of water pipelines to improve water supply and sewage system; o A sum of RM9 billion or 43% of the total infrastrueture cost of the MRT project has been allocated to Bumiputera companies; o The 5MB Bank will provide RMl billion to the Bumiputera Finaneing Fund to assist local SMEs to fmance the acquisition ofGLC subsidiaries engaged in non-core activities; and o In the Budget 2010, the Government established the Green Technology Financing Scheme (GTFS) with a fund ofRMI.5 million fur three years ending 31 December 2012. The fund for GTFS will be increased by RM2 billion and the application period extended for another titree years ending 31 December 2015. • Prime Minister, Datuk Seri Najib Tun Rozak, presented Budget 2014 on 25 October 2013 themed “Strengthening Economie Resilience, Acee1erating Transfonnation and Fulfilling Promises”, Among the highlights ofBudget 20 14 relating to the housing and property sectors are:­o The Government will impose Goods & Serviees Tax (GST) at 6%, effective from April I, 2015. GST will not be imposed on basic food items such as rice, sugar, salt, piped water supply, and the flfst 200 units of electrieity per month for domestic consumers, Sale, purehase and rental of residential properties and selected fmancial services are exempted from GST; o The Government will allocate RMI billion to build 80,000 PRIMA units, with the house priees being 20% lower than the market price; RM578 million to be alloeated for National Housing Department (JPN) to build 16,473 Program PelUmahan Rakyat housing units and RMI46 million to build 600 units for Program Pelumahan Rakyat Disewa and Perumahan Rakyat Bersepadu; o A total of RM300 million will be used to subsidise private developers fur construction of low and medium-cost homes under MyHome scheme; o Syarikat Perumahan Negara Bhd (“SPNB”) will build a total of 15,122 units of affordable houses, 3,000 units ofRumah Idaman Rakyat and 8,000 units ofRumah Mesra Rakyat.
o The new category of Rumah Mesra Rakyat will be sold at a price ranging from RM45,000 to RM65,000 per unit with a subsidy ofRM15,000 to RM20,000 for every uni~
o A total of223,000 units ofaffordable houses will be built by the Government and private secior in 2014;
o RMI billion will be allocated for Housing Faeilitation Fund under Public Private Partnership Unit UKAS);
o Proposed establishment of National Housing Council to further strengthen the real estate market and

inerease opportunities for the people to own the houses; o The Government will allocate RM82 million to the Ministry of Housing and Local Government to revive 20 abandoned housing projeets which involve 8,197 houses; Prepared by PA Intemational Property Consultants (KL) Sdn Bhd October 2013

¥t.[it.1 Company No, 1009114-M 7, INDEPENDENT MARKET RESEARCH REPORT (Collt’d)

‘liti!Mjh.N4@IMiji$.I.I, Prepared for Tilijaya Land Berhad o In Budget 2014, Real Property Gains Tax (RPGT) has been revised upwards from Budget 2013. For properties disposed ofwithin three years of purchase, the RPGT rate has been revised from 20% currently to 30% effective 1″ January 2014, For properties held and disposed in the fourth and fifth year of purchase, the new RPGT regime imposes a 20% and 15% tax on gains respectively while properties sold after five years are not subjected to RPGT fur individual citizens and petmanent residents. For properties held by companies, a 5°/l,) tax on gains continues to be imposed for disposal made in the sixth and subsequent years. Meanwhile, for non-citizens, a flat rate (RPGT) of30% is imposed on gains for disposal ofpropertics within 5 years. For disposal made in the sixth and subsequent years, the RPGT rate for non­citizens is 5%; o Since 2009, foreigners were allowed to purchase properties worth RM500,000 and above. In this latest Budget (2014), it was announced that the minimum price of property that can be purchased by foreigners will he increased /i’om RM500,000 to RMI ,000,000;
o The Government will prohibit developers /i’om implementing projects that have features of Developer Interest Bearing Scheme (“DIBS”) to prevent developers from incorporating the interest rates on loans in

house price during the construction period. Financial institutions are prohibited from providing the final funding for projects involved in the DIBS scheme; o A sum of RM I06 billion for puhlic investments will be allocated, Projects to be implemented include a 316-kilometre West Coast Expressway from Banting to Taiping, double-tracking rail project along west coast Malaysia from Ipoh to Padang Besar and later from Gemas to Johor Bahru and various projects from state oil firm Petronas under its RM300 billion capex programmed, including a petrochemieals plant in Johor; o A sum ofRM62 million will be spent for “park and ride” fucilities at LRT, KTM Komuter and ERL stations, RM28 million for “last city terminals” hus stop upgrades and RMI5J million will be allocated for Centralised Taxi Service Systern; • There are also regulatory measures implemented by the govemment and Bank Negara Malaysia in promoting a stable and sustainable property market as well as curbing excessive household debts which amongst others include the following:­o A maximum loan-to-value (“LTV”) ratio of70% to the third house fmancing facility taken out hy the horrower, effective 3″Novemher 2010 by Bank Negara Malaysia,
o Effective1st January2012,housingloaneligibility tobebased onnetincome instead ofgrossincome.
o Reintroduction of the Real Property Gains Tax (“RPGT”), 1976 in Budget 2010, With effect from I” January 2010, a flat rate of5% on the gain is imposed on the disposal ofany real property, regardless of the year ofdisposaL
o However, effective 1sl January 2014, the Government will impose a 30% RPGT on properties disposed within three years of purchase, For properties held and disposed of between the fourth and fifth years of

purchase, the RPGT rate is increased to 20% and 15% respectively. Citizens and pennanent residents are not subject to RPGT fur disposal made after the fifth year, while the disposal by companies will be taxed at a rate of 5%. For non-citizens, RPGT will be imposed at a flat rate of 30% on the gains from disposal ofproperties made within 5 years and gains from disposal thereafter (sixth and subsequent years) will be chargeable at 5%, . o Limiting maximum tenure of 35 years for fmancing granted for the purchase of residential and non­residential properties, effective 5 July 2013,
o As announced in Budget 2014, developers are now prohibited /i’om implementing projeets that feature Developer Interest Bearing Scheme (DIBS), Financial institutions are also prohibited from providing fmal funding for projeets that incorporate theDIBS,

 

7. INDEPENDENT MARKET RESEARCH REPORT (Colt/’d)
Prepared for Titijaya Land Bemad
o Another new measure annOtUlced in this latest budget is increase transparency in property sales price, where property developers will have to display sales price including all benefits and incentives offered to buyers such as exemption of legal fee, stamp duty, sales agreements, cash rebates and free gifts in Budget 2014. The implementation of these measures is expected to moderate the excessive investment and speculative activities particularly in residential properties, which have resulted in higher than average price increases and contributing to the declining overall affordability ofhomes for genuine house buyers. These measures however are likely only to have an impact on the property market in the short term and is not expected to have any or only minimal negative impact on the property market in the mid to long run. Therefure, overall, the Malaysian economy is expected to be challenging throughout 2013 and the overall property market performance for 2013 will be subject to the local and global economic environment. The greater private­sector participation, implementation of the Economic Transfonnation Programme and improvement in external demand from regional economies are expected to continue to be the key drivers of economy growth. Public sector expenditure is also expected to lend strong support to the overall growth perfunnance. [The rest ofthis page is intentionally left blanlr] Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013
Company No. 1009114-M=:] 7. INDEPENDENT MARKET RESEARCH REPORT (ColI/’d)
Prepared for Titijaya Land Bemad SELANGOR’S ECONOMIC GROWTH • The state of Selangor (“Selangor” or “State”) is Malaysia’s richest and most developed state, housing the country’s largest port and international airport. On August 27, 2005, the Selangor State Government declared Selangor as Malaysia’8 first “developed state”. ­
Source: Department o/Statistics Malaysia • In 2008, the average annual growth rate for Selangor was 8.3%, representing a 360-basis-point difference from the national growth rate of 4 .7%. However, as a result of the global financial crisis in 2009, Selangor’s growth rate dropped to -1.0%, marginally better than the national growth rate of-1.7%. In 2010, Selangor registered a growth rate of 10.8%, the highest in five years, representing a 360-basis-point difference from the natlonal growth rate of? .2%. It is noted that Selangor has consistently contributed more than 20% to the country’s total GDP over the last 5 years.
• It is also observed that the GDP per capita in Selangor is 5.49% to 15.68% higber than the GDP per capita in Malaysia dUling 2006 to 20 10. The GDP statistics fur Selangor shows that it is a highly productive state and is conducive for businesses. [111e rest of this page is intentionally left blank] Prepared by PA International Property Consultants (KL) Sdn Bhd Odober 2013
Mi••• 7. INDEPENDENT MARKET RESEARCH REPORT (Colt/’d)
Prepared for Tilijaya Land Berhad Table 2.2.3 r”-\iJi.””‘-“””.~””””’ll’B·””·s-“~~_·~·0″l$\”~·”o’·.\ll·”‘.·l··<‘iI’!.’F’iW\””i;;;”_”‘” ~~::’Jl!.::.i,:i1.1@i~l,lliil;ij§MJ:;m~ “~{;. _ .!it1k “,. 1’-‘ -~””I :rt~ \.Jt:<f-®>})L ,_.~~tR. ~,a~I;r;);’;I~~W.i:0g.w~~ff~~{$.f(&”*~.£~f!j}1W1M’,)W,’f~\fm4,!f,jrmt~lll’.·”’C”·””’%7”””””W””Wf”0j)jlllff1~i!f1rf§Bi,*01i~if!.>lR~_iWt ~ <§”irAi:~t .,’ >\!M~l\ “””II’YJ’ O:!!%g , ” -, ‘fp’!’li,”‘I”””t€jJ!~A’ ‘~”‘i”II”f!~; ‘!.’-~J~n, ,,~’f.\~ <A’I~&-Mi,:J1J,I~t9\&1~±t:;Wjf.li;”‘~l*M~t*’:~:i.tP..&0″~~d#tf,-”’@;g%,m”,Wt~\”ii!i#tl’«””~’ • Sector i 2005 • 2006 i 2007 I 2008 ! 2009 , 2010″ i ————–~. ——-‘ __. ._._L _..,—-,’ ..-‘” —!–_.–,-,———..-,_. ,····.–i —-. ,—-.—.—–+—-‘-_ –..–.•—.————-; , Agriculture . 1.38 i 1.60 i 1.40 1.53 I 1.71 1.64’ lMhiiiig&Quarr;.;ilg’o.Ts ‘iU5 0.15 j -‘0.14 0.14 0.13 ‘Construed”;;T’ 4.88 4.66 5.001–4.80 5.10 4.66 rManofac”;;;;;g -f X8.9K] 37.56 35.05 —\ 33.95 -I 31.81 34.06 I Set=;;[ces-1-50.44i.’-52.96 r 55.56,J 56.16 i 58.0956.49–‘ji Pms: imPortdutiesJ–4.19 __ L ‘3:07 t_~.84_~_Tj.4~-=1 3.15 302 _ Source: Department ofStatistics Note: P= preliminary
• The largest contributor to Selangor’s economy is the services sector which has been consistently contributing more than 50% of Selangor’s GDP since 2005. The manufacturing sector is the second largest contribulor, constituting 34.06% in 2010.
• In line with the Malaysian Government’s Third Industrial Master Plan 2006 -2020 which was launched on 18th August 2006, the Selangor State Investment Centre (“SSIC”) has outlined its policies aimed at attracting investors by encouraging the following industrial developments:­

o Quality projects that are skill-intensive and have high-value capital;
o Industries that encourage the development of Research and Development (“R&D”) s«otors;
o Industries that possess the potential to develop the state by using local natural resources;
o Pliority to be given to high-technology, aerospace, information-technology industries utilising skilled labour and marine activities;
o Priority to be given to eeo-friendly industries that preserve and protect the environment (non-polluting industries) and which consume low power and water; and
o Industries that offer business opportunities for local entrepreneurs and are not labour-intensive.

• To achieve the goal of industrialisation and attract investors to Selangor, the State Government has played an important TO le in developing various major industrial areas within Selangor, namely Pulau Indah Industrial Park, Selangor Science Park 2, Port Klang Free Zone, Zurah Industrial Area, Klang Valley II, Selangor Halal Hub, the Infonnation and Communications Technology (“ICT”) investment havens of Cybcrjaya, University Putra Malaysia -Malaysian Technology Development Cooperation (“U PM-MTDC”) and i-City of Shah Alam.
• SSlC is also constantly pursuing opportunities that will generate long-tenn businesses for the state. lCT is one of the key investment choices for global innovators and investors. The country’s established lCT locations such as Cyberjaya are mainly located in Selangor and this will further enhance business and revenue for the manufacturing sector in the state.

 

:m.g,.Prepared by PA Inlernational Property Consultants (KL) Sdn Bhd October 2013 Company No. I009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Collt’d)
Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Cont’d) [()4J
liijijlpn’@@IM’d§.l.I, Prepared for Tilijaya land Bemad
Country  2007  2010  2011  2012  Russian  Federation  Saudi Arabia  2,021,433  SC()t1and  500,000  Singapore  154,867,950  202,127,804  394,818,056  938,804,083  770,567,957  Sweden  14,000,000  28,368,465  333,737,532  216,889,085  Switzerland  27;716,800  180,874,501  49,554,790  2,808,000  92,000,000  267,520,000  Taiwan  43,403,520  45,114,859  30,187,604  422,635,234  7,018,890  Thailand  77,457,000  94,313,606  617,100  226,652,056  : Turkey  19,687,236  9,983,093  United Arab  42,500,000  90,877,420  73,472,984  21,380,000  Emirates  United  199,729,660  647,893,387  67,143,666  11,828,000  27,577,450  45,140,333  Kingdom  United States  19,800,679  2,674,546,900  1,700,208,255  40,600,000  72,024,978  5,078,900  OChers  1,091,706,784  362,863,278  135,618,789  118,108,904  128,502,343  790,669,189  .  Total  4,191,710,938  9,004,746,224  4,007,064,184*  5,146,848,849  4,236,263,747  4,429,323,569A
Source: Selangor State Investment Centre & Malaysian Industrial Development Authon’ty (“MIDA “) Notes: *There is a summation error noted in the total approved FDI in Man~racturing Sector in Selangorfor year 2009. Our calculation shows that the tota/figure is RM4,051,679,184. I\The total approved FDf in Manl1{acluring Sector in Selangor does not sum the same figure as in the approved industrial investmenfs by districts in Selangor as the copies made available to us. • Selangor recorded a significant growth in FDI of I 14.80% to RM9.00 billion in 2008 Ii-om RM4.19 billion in 2007. However, due to economy slowdown in 2009, Selangor’s FDl had declined to RM4.00 billion. In 2010, Selangor continued to pull over a total ofRM5.15 billion FDl which is about 28.75% higher than year 2009.
• In 2011, Selangor had attracted a total ofRM4.24 billion in FDI, a decline of 17.67% li’OIn year 2010 (5.15 billion). However, we noted in 2012, Selangor continued to attract a total ofRM4.43 billion in FD1, a slightly increase of4.48% from year 2011 (RM4.24 billion). The FD1 in 2012 represented a 37.77% of the total capital investment in Selangor (RMll.73 billion) and 21.25% of total foreign investment in manufaculring projects in Malaysia (RM20.85 billion) respectively.
• The major foreign investors in the manufacturing sector of Selangor since 2005 include those fi:om Australia, China, Denmark) Germany, Hong Kong, India, Japan, Korean Republic, Netherlands, Singapore, Sweden, Switzerland, Taiwan, United Kingdom and the US.

[The rest of this page is intentionally left blank]
Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Collt’d)
.!iti@1lri·kM,T)!$;U4,1,1,
Prepared for Tilijaya Land Berhad Table 2.2.5
Petaling  76  1,258,952,372  685,486,856  1,944,439,228  Klang  80  1,663,614,171  1,525,896,210  3,189,510,381  Kuala Selangor  18  304,773,854  46,881,532  351,655,386  Hulu Langat  34  306,696,159  983,275,969  1,289,972,128  Gombak  25  594,463,116  230,641,480  825,104,596  Kuala Langat  11  29,573,066  665,181,761  694,754,827  Hulu Selangor  6  238,703,817  53,834,838  292,538,655  Sepang  4  40,113,058  0  40,113,058  SabakBemam  0  0  0  0  Other areas  9  67,963,400  45,065,100  113,028,500  Total  263  4,504,853,013  4,236,263,746  8,741,116,759
Source: SelangorState Investment Centre & MJDA • In 2011, the district of Klang had the largest amount of foreign investment in Selangor, having attracted RMI.53 billion for 80 projects, followed by the district of Petaling with foreign investments amounting to RMO.69 billion for 76 projects. Table 2.2.6 District ‘Projects Local Invettment Foreign Investment Total Invettment : Petaling 97 2,577,034,207 1,738,593,821 4,315,628,028 i Klang 58 1,038,954,697 739,570,122 1,778,524,819 Kuala Selangor 8 36,884,621 13,952,499 50,837,120 Hulu Langat 36 278,581,421 173,756,503 452,337,924 Gombak 19 430,250,524 38,266,229 468,516,753 , Kuala Langat 14 494,183,097 378,120,002 872,303,099 Hulu Selangor 6 2,174,651,507 46,399,541 2,221,051,048 Sepang 5 197,217,776 86,982,617 284,200,393 SabakBemam 0 000 Other areas 9 77,736,517 1,213,682,234 1,291,418,751 Total 252 7,305,494,367 4,429,32.1,568 11,734,817,935 Source: SelangorState Investment Centre & MJDA • We also noted that in 2011, Klang district had the largest amount of total investment in Selangor by both local and foreign investments. However, in 2012, Petaling district has attracted the most foreign investment in the state at 39.25% (RM1.74 billion) of the state’s foreign investments for 97 projects, followed by the other areas (9 projects) with 27.40% (RM1.21 billion) and Klang district (58 projects) with 16.70% (RMO.74 billion) of the Selangor’s foreign investments (Total for Selangor: RM4.43 billion). • Therefore, this indicates that Petaling and Klang districts have the potential and anticipated the demand for industrial among other districts.
Company No. 1009l14-M 7. INDEPENDENT MARKET RESEARCH REPORT (Coltt’d)
‘Milti’W4′!¥,;;;·I,i, Prepared for Titijaya Land Bemad 2.3  DEMOGRAPHICS IN TIl E STATE OF SELANGOR  •  Based on the Population Distribution and Basic Demographic Characteristics 2010 1 the total population in Malaysia stands at 28.33 million. It is projected to increase by 4.07 million (14.37%) to 32.4 million in 2020, another 11.11 % to 36.0 million in 2030 and increased another 2.6 million (7.22%) to 38.6 million in 2040. (Source: Population Projections Malaysia 2010-2040).  •  The following table shows tlle population growth trend in Malaysia eategorised by states (2000 -2010):­

• SeJangor is Malaysia’s most populous state with 5.46 million, representing 19.27% of Malaysia’s total population. Selangor’s population growth over a period of 11 years from year 2000 to 2010 is 38.58%. The high growth is attributed to Selangor being the most developed state in the country and its close proximity to tlle country’s capital city and commercial hub of Kuala Lumpur. The Selangor State Structure Plan intends to attain a population of 6.85 million and 7.37 million by 2015 and 2020 respectively which is based on a forecasted population growth of 25.46% within the next 5 years and 34.98% within the next 10 years -this augurs well for the property industry as property developers will continue to playa role in catering to housing needs ofthe growing population.

Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Colt/’d)

Prepared for Tililaya Land BemadliffiM·iiH@I;i.x.Ji Table 2.3.2 1;0\•.·.rT.,lq~~llr~~1!ii~~#tY.’~c~r~wth.-.vilbinS~b..hg~r¥Wlj~~~~1i~~~1’il~~7Jj:~h)jj.L~;.;:k~!Ji!lt\lX··(.·· …·..•··.··….. , j>_:_..1=:_’c_,.~-;;;;;~:_C:L.:2.:’:”:’:-,::’:2:_::_;-L:’}’::-,’.•-:…;.• ~”:.”~’.,;:::,:~~ .~,_,–_ .. .”. _.:.,:__ :’~.:~ __,~:: ‘,:.:,.:o::L L;:S!;:’-~;,–‘:~: :;,.::….:~::::::..:~,::.:-‘~::.::2.::…-,::::.i;2:::L~~,~::e.i.::.o.._~.:–.’..,j’,.:; ‘:’;;_’! ! ! Area i D”ty i Average Annual Population i StateIDistrict ! (kilometre’ Population (pe:n.:nz) i Growth .. :S-ELANGOR-. s:.~~~ ,,~.. 5,462,141 670+ Qoo~t2l0)% -,, , . G mbak ‘ ‘628682,226 1,086L8r-­i 0: ‘ !kjang! 636 861,189 1354″ 234 : KuaJaTat,gat .! 885 224,648 ~54 10:95­IKuaia Selangor 1’1,2’3:2’ 209,590—j70-‘ + 208 —–j Ipetrl1ing –I 1,812,633 ”3,6’18-t 3.68 ——i! :’SabakBemam-‘–“.1,1’ 1,056 105,777 ‘-100’—‘j -1.22 : ———-;rSei’ang—‘-‘ ‘I 612 211,361-“‘345—~-‘ 6.03 fUJilLaog.t—–J 840 1,156,585 “,-1;377—+—-,· 2.34 ._j” 1~lusel3n~~-~~”,”:lil’764j 198,132-!12~~~j–!.:·=~_ i 1,:~YSIA–_m “‘clli:03 ‘J__l~:;::5 .__ ~’:Z~±-m–__-~~~-‘~-:..-=-=j Source: Population Distribution and Basic Demographic Characteristics 2010, Department afStatistics Note: *The total area for Selangor does not sum to lolal due to rounding.
• Selangor recorded a population density of 670 people per km’ with the Petaling district being the most densely populated area. Population growth implies that demand for residential property will increase in tandem as housing is one ofthe basic physiological needs.
• ThebreakdownofpopulationbyagegroupsinSelangorin20I0based onthelateststatistics ofthePopulation Distribution and Basie Demographic Characteristics 2010 is shown in Chart 2.3.3 below.

Chart 2.3.3 Age 40-49 17.51% Source: Population Distribution and Basic Demographic Characteristics 2010, Department a/Statistics • According to Chart 2.3.3, in 2010, adults aged between 20 and 59 years constituted 60.44% (3,301,178 people) of Selangor’s total population (5,462,141 people). This age group comprises the main income-earning group. Those aged 60 years and above constituted only 6.12% of the population (334,289 people), whereas the younger population aged 0 -19 years constituted 33.44% of the population (1,826,674 people) in Selangor. It is observed that within Se1angor, there is a larger proportion of younger population aged between 20 and 59 years when compared to the olber age groups. This augurs well for the property industry within Selangor as individuals within this age group are identified as the income-earning category and are deemed as potential buyers ofproperty. Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013 w·. 7. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
‘rmnmtN·PJAGI4’ri§.!.!’ Prepared for Titijaya Land Bemad Table 2.3.4 ::~.2:;;:.;~:oi:·,{·~· –,-‘__ ._”. ……~6jj3rl~~r~~~~~~!~JTh;~~2~~~~~~~~~rILfftfi~~~;~~3lL-‘-.~_, District ‘ Kuala I Kuala IP J’ Sabak I S I Vlu Ulu I Gombak KIang I’• eta mg, • epang ,Age Langat i Selangor ii Beroam Ii Langat ,—~~!~~~~ 0-4 54.84 69.19-‘ 20.93 . -18.66-~’-141.53 L 3.57 l 21.85 i 92.55 18.68 5-9 58.60 77.14 22.35 21.82 135.97 4.65 20.15 94.62 21.03J_ i T10-14 57.44 12.83 22.46 21.34 120.39 r 5.32 17.23 90.08 21.11 i jS~b~~:l +-;~~o 1:~;0 ~:;~+~:~-l~;~~~: ~~:4 i ~:::~l;;i~·j ~:::~ J! 20-24 L ’76.oS-,l-87.18 19.25 ‘-’20JIT-‘-i-228.80 4 3.44 j-28j6-~ 138.33–19.56 125-29 . ’74’,64 r 100.12 21.64 ·i-16.27-‘-234.66 . 3.19 I 25.09′! 142.36 18.06. 1 30-34 57.90 78.93 17.65 I 15.27 1 176.25 2.75 20.38 105.85 13.97i 35’::”39 51.64’1 68.73 1522 ‘-1 14.54 ‘-‘:-142.73-1.. 2.88 .. 116.61 -I 91.10 13.03 i:~=-~ ;’ ::~~r :~:~ ~ ::.~~:. ~~~~-l~9~:~= –~:~~,rj82:32j’ :::~: :~:~~, t=~~ =-~:–~ ~~-:~i ~~:~~ ~ \0;;-I-~:~ –i-::.:~ ;~::: -=L -:~~ –1-~~.~ :.~:!I Sub-total t-401.3.fj ~57J4,90 -t1~7.i8, _LI~6.54 ~ll:~~~~ _13.57+~-t 704.35 ll03’4~j i 60-64 ~ I~:~_~ _=0.87 5.74 _ 1 .s:.5~ __ 1_~4.84_ 1.82 I 327 2689 4.52!I __ I t’—;:: 1 ~:~ II;~-=;~ 181~ –L ~::_-I-I ~~:~~ ~~: II ~; J :~::; f-~-;~ -jI 75+ 7.60 9.48 i 3.21 , 3.06 I 21.95=_J. 0,82 1.97 I 11.95 2.51′ r, S-ub~tOt.-‘ ,-‘030 ..!,iJ.64 –r__!~Yi–J.i.61 1-108.~_ 4:56 _,-8.55=]-=_~2:~-_ r!;,36:-4 14~~’~~i~%i~~{~’~~ iFJb’~!~l~¥~~~\_rifl~!~1f1~ )~1:1~~j~~E~fir~.li~li~~~~tU~~~~~~~~tiit;~E~~4~~1’~ Note: The abovefigures have not been adjustedfor under-enumeration. Source: Population and Distribution by Local Authority Areas and Mukims 2010, Department ofStatistics
• As shown in Table 2.3.4 above, the breakdown of population hy age according to districts within Selangor (5,288.24 people) as per figures for 2010 indicates that the Petaling district is the most populous district (33.39%), followed by the Ulu Langat district (21.52%), Klang district (15.92%) and Gombak district (12.65%) respectively.

• Petaling district also recorded the highest number of individuals aged between 20 and 59 years (34.95%), which are deemed to he the potential property purchaser age group. This is followed by the U1u Langat district (21.98%), Klang district (15.76%) and Gombak district (12.52%).

 

Prepared by PA International Property Consuttants (KL) Sdn Bhd October 2013
Company No. 1009ll4-M 7. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
Prepared for Titijaya Land Berhad 2.4 UNE~IPLOYMENT RATE FOR MALAYSIA AND SELANGOR • The table 2.4.1 below shows the unemployment rate in Malaysia from 2003 to 2012. The unemployment rate decreased from 3.6% in 2003 to 3.3% in 2006 and 3.2% in 2007. In Selangor, however, the unemployment rate decreased from 3.2% (2003) to 2.7% in 2004 but increased slightly to 3.1 % in 2005, rates still lower compared to the nationallll1employment rates.
• The unemployment rate in Malaysia later showed a gradual increase to 3.7% in 2009 and 3.6% in Selangor from 2008 due to the slowdown in economic activities. In 2010, the employment rate decreased to 3.4% and 3.2% in Malaysia and Selangor respectively due to the gradual recovery in the global economy. The unemployment rate continues to decrease to 3.0% in Malaysia and 2.3% in Se1angor respectively. We noted that Selangor have a significant decrease from 3.2% (2010) to 2.3% in 2012 which reflected a much lower rate than national unemployment rates.
• According to Department ofStatistic Malaysia, the latest national unemployment rate recorded in August 2013 was at 3.1 %, which reflected an increase ofO.l% from the previous month (3.0%).

Table 2.4.1 Labour force (million persons) Employed (million persons) UnernploymentRate(%)  10.57 10.18 3.6  10.93 10.55 3.5  1l.29 10.89 l5
11.63 3.7 3.4 J.l Source: Property Market Reports 2003 -2012 Note: P= preliminary
Table 2.4.2 Source: Department ofStatistics Malaysia 2.5 ~IEAN GROSS MONTHLY HOUSEHOLD INCOME FOR MALAYSIA AND SELANGOR • The mean gross monthly household income has increased from RM2,472 in 1999 to RM5,000 in 2012 based on the survey carried out by Department ofStatistics.
• Since year 1999 to 2012, the gross monthly household mcome in Selangor was higher than the national average gross monthly household income.

Table 25.1 October 2013 ib[.ji'”
Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (CoIII’d)

Prepared for Titijaya Land Berhad CHAPTER 3 DESCRIPTION OF THE PROPERTY INDUSTRY 3.1 INDUSTRY STRUCTURE • The property development industry in Malaysia is generally segregated into residential, commercial, industrial, agricultural and development land sectors. 3.2 INDUSTRY PLAYERS AND COMPETITION • The property development market in Malaysia, although fragmented, is higWy-competitive. There are no official statistics and reports on the number of players in Malaysia. However, the nwnber of property development companies listed on Bursa Malaysia Securities Berhad (“Bursa Malaysia”) provides an indication of the number of players in the property market in Malaysia. As at 5 September 2013, there are about 87 property development companies listed on the Main Market ofBursa Securities. In addition, there are also many other non-listed property development companies in Malaysia, of which over 900 companies are members of dIe Real Estate and Housing Developers’ Association (REHDA) ofMalaysia.
• The Group focuses on 3 sectors of property development, namely the residential, commercial and industrial sectors.

 

Figure 3.2.1 The Group’s property development sectors • Most ofthe Group’s propelty developments are located in the Subang Jaya and Klang districts. In addition, the Group has embarked on a commercial development in Bandar Putra Petmai, Seti Kembangan. The property developers who have completed or have ongoing projects since year 2001 within these localities competing with the Group ‘5 projects include, amongst others:­Table 3.2.2
Property Developer Name o(Projectrs)
Gamuda Land Sdn. Bhd. Mah Sing Group Bhd. . NBC Land Sdn. Bhd. WCT Land Bhd. SP Setia Bhd. Sirnc Darby Group BandarBotanic, Klang Aruan Peniana, Klang Kota Pendarnar, Klang Bandar Bukit Tinggi, Klang Selia Alam and Setia Ecopark, Klang Bandar Bukit Raja, Klang
• .tt,Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013 Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Col1t’d)
IUiti’X@.11@’j§1.1.n ••••••••••••••••••••L PF’-rree’!’pa.,r:§eddjcfo”rITitiitij2ja”1yaa..hLa.,nlCdIiBlEelllrflh<alrid,­
Property Developer Name ofProject(s)
UMLand Bhd. 10 Baiduri, Laman Bmduri and The Boulevard, Subang Jaya Latania Town Centre and Pusat Perniagaan Bukit Raja, Klang AmanahRaya Bhd, Subang Olives, Subang Jaya Lion Group Saujana Resldeney, SUbang laya MeT Homes Sdn. Bhd. USJ I Avenue and One City, Subang Jaya Pi Development Holdings Berh8d Impian Meridian and You One @ Subang Jaya, Subang Jaya Mammoth Empire Holdings Sdn. Bhd.Em”pl-re Sub~g-~dEmpire-R~mjx@ US] 1, Subang Jaya Casa Andaman Sdn. Bhd Casa Subang, Subang Jaya Sanjung Utama Sdn Bhd (a revival project by -RhYthm Avenue, Subang j~ya the project receiver PricewaterhouseCoopers, and (he bridging financier, Ambank (M) Berliad) BHLGroup USJ OnePiuk, Subang jay” SimeDarby Berhad Isola Subang, Subang Jaya Global Oriental Berhad \-Da:men, Subang-Jaya Regina Development Regina USJ I, Subang Jaya Bina Purl Properties –iMam Plaee Resl<ience, _·subang-Jaya
CHobal Orienllli Berhad -sprill~iileResidenee, Equme Bouievard, Perrnai Square 2 and Equator shop offices, Equine Park. Sen Kembangan Perfect Eagle Development Sdn Bhd 02 Residence @Puchong South, Bandar Putra Permai, Scri Kernbangan Paragon Promenade Sdn Bhd Paragon 3, Taman Lestari Puehong, Sen Kembangan Zip i-iill Development Srln Bhd Univ 360 Plaee, Serdang Gabungan AQRS Berhad K~l~~ Uptown shop offiees, Sed Kembangan Source: PA International Property Consultants (KL) Sdn Bhd SUBSTITUTE PRODUCTS/PROPERTY TYPES • In general, while buyers may choose between different property types depending on their needs and budget as welt as their prefened developers, there are no practieal substitutes for property itself, which provides shelter for daily lives and premises for conducting businesses.
• The Group has developed and/or is developing the following types ofresidential properties:­
o Condominiums
o Land residences such as terraced houses and semi~detached
o Residential vacant land lots

 

 

Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Coflt’d)
….i1fKM;t§,i.l, Prepared for Titijaya Land Bert1ad • The Group has also developed and/or is developing the following types ofcommercial properties:­
o Retail shops o SeIViced apartments/suites
o Studio office suites

o SoHo
o SoFo

o 2-storey, 3-storey, 4-storey and 6-storey shop-offices
o Commereial centre

 

• Recently, the Group has ventured into developing the following types of industrial properties:­

o Industriallots o Semi-detached factories
o Detached fuctories

• In the near future, the Group intends to undertake the following new developments:­
o Residential properties: Superlink terraeed houses and semi-detached houses in Kemensah, Se1angor. o Commercial properties: Shopping complex and hotel building in Section UI, Shah Alam, Selangor.
• Having a diversified mix of property products may enhance the Group’s perfonnance and improve its

branding. Therefore, subject to the right demand and supply conditions, the Group may consider the following developments in the future:­o Residential properties: Detached houses, bungalow lots, townhouses and cluster houses
o Commercial properties: Semi-detached/detached shops, resortileisure properties such as hotel or motel.

o Industrial properties: Flatted (Industrial units within a low-rise multi-storey stratified building) and terraced factories as well as industrial complexes/warehouses CHAPTER 4 MARKET SIZE AND SHARE
MARKET SIZE AND SHARI-; • According to the Property Market Report 2012, in the year 2012, the market size of the overall property industry in Malaysia based on 427,520 transactions is valued at a total ofRM142.84 billion (2011: 430,403 transactions worth RM137.83 billion). However, in the first half of 2013 (“lH 2013”), the market size of the overall property industry in Malaysia recorded a lotal of 185,709 transactions worth RM67.06 billion. • Selangor recorded 96,513 transactions with a lotal value of RM49.24 billion in 2012, contributing about 22.58% and 34.47% 10 the national volume and value of transactions respectively (source: Property Market Report 2012). In IH 2013, Selangor still remained the most dominant stale whereby a total of 40,282 transactions worth RM21 .92 billion were recorded, contributing about 21.69% and 32.69% to the Malaysia volume and value of transactions respectively. This indicates that Selangor has a very active property market and high population growth due to in-migration and urbanisation. Selangor appeals to a large segment of property buyers and investors due to, amongst other factors, its mature infrastructure with supporting facilities, rapid industrialisation and strategic location near the country’s capital city of Kuala Lumpur. The Group’s existing land bank which is concentrated mainly in Selangor) primarily in established and upcoming localities ofSubang, Mern and Kapar, augurs well for its future growth.
7. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
Industry Overview Report Prepared for Tilijaya Land Berhad • In 2012, cile Group recorded 488 transactions with a total value ofRM265.83 million, comptising residential, commercial and industrial properties from projects which include Subang Parkhomes Phase 1 and Phase 2, One SORO (fonnerly known as Subang SOHO), KIang Sentral Commercial Centre, Mutiarn Point Business Park, First Subang, The Galleria, 3EJements shop offices, SoFa and Nouvo, Seri Alam Industrial Park Phase I and Phase 2 and Zone bmovation Park. The Group’s market share of the overall property industry in Se1angor based on the volume and value of transactions 2012 are estimated at 0.51 % and 0.54% respectively (Selangor: Volume: 96,513; Value: RM49.24 billion). The following table depicts d,e analysis of the Group’s markel share in three sectors of the property industry: residential, conunercial and industrial in Petaling and Klang districts based on the volume and value of transactions in 2012. Table 4.1.1 Value (RM mil) 25,373.91 13,326.09 2,734.15  Volume  Value (RM mil) 8,709.73 4,878.48 921.68  2012 Volume  Valu~ (RMmiI) 5,842.23 1,994.55 1,282.65
77.19 63.97 124.67 • However, in IH 2013, the Group recorded 420 transactions with a total value of RM243.09 million, comprising residential, commercial and industrial properties from projects which include Subang Parkhomes Phase 1 and Phase 2, First Subang, Klang Sentral Commercial Centre, The Galleria, 3Elements SoFa and Nouvo, Sen Alam Industrial Park Phase 2 and Zone llmovation Park. The Group’s market share of the overall property industry in Selangor based on the volume and value of transactions 1H20 13 are estimated at 1.04% and 1.11% respectively (Selaugor: Volume: 40,282; Value: RM2l.92 billion). The following table depicts the analysis of the Group’s market share in three sectors of the property industry: residential, commercial and industrialinPetalingandKlangdistricts based onthevolumeandvalue oftransactionsin IH2013, Table 4.1.2 Volume 3,359 1,371 532 148 SELANGOR Pctaling Klang THE GROUP  ‘~{l,.fi~(~,~#,:::,<“”,,:\ (PeJoling & Khing diitrids’ ,’ .

Source: Titijaya Group and Property Market Report First Half2013 Value mil 3,756.19 1,859.40 43885 46.97 ,104% Volume 1,312 282 438 14 1.94%
[The rest ofthis page is intentionally left blank] Prepared by PA Inlernational Property Consultants (KL) Sdn Bhd Oefober 2013 _11′ Company No. l0091l4-M 7. INDEPENDENT MARKET RESEARCH REPORT (Collt’d)
Prepared for Titijaya Land 8emad CHAYTER5 LAWS AND REGULAnONS LAWS AND REGULATIONS AFFECTING THE MALAYSIAN PROPERTY INI)USTRY • The property development industry in Malaysia is governed by a set of laws and regulations, which include, amongst others:­o Building and Common Property (Maintenance and Management) Act 2007
o Environmental Quality Act 1974 & Regulations, Rules & Order
o Federal Territory ofKuala Lumpur Land Rules 1995

o Guideline on the Acquisition ofProperties by the Economic Plamling Unit, Prime Minister’s Department o Housing Development (Control and Lieensing) Act 1966 (revised 1973) & Regulations
o Housing Development (Control and Licensing) Regulations 1989
o Housing Development (Housing Development Account) Regulations 1991
o Land (Group Settlement Areas) Act 1960
o Land Acquisition Act 1960 & Rules & Order
o Land Conservation Aet 1960
o Local Government Act 1976 & Subsidiary Legislation
o Malaysian Construction Industry Development Board Act 1994
o National Land Code (Act 56 of 1965) & Regulations
o Selangor Land Rules 2003 & Selangor Quarry Rules 2003
o Strata Titles Aet 1985 & Rules & Order
o Street, Drainage and Building Act 1974
o Town & Country Planning Act 1976 (Act 172)
o Unifurm Building By-Laws 1984
o Water Services Industry Act 2006 (Act 655), Regulations, Rules & Orders
o Architects Act 1967 (Act 117) & Rules

• Other policies implemented by the federal, state and local governments include a foreign ownership policy, low-cost housing policy as well as allocation of a percentage of properties for Bumiputera purchasers. o Foreign ownership policy The Economic Planning Unit implemented ti,e new FIC Guidelines on I January 2010 which states that foreigners are allowed to purchase residential properties priced at RM500,000 and above. Following the announcementofBudget2014, theminimumprice ofpropertytilatcall bepurchasedbyforeigners will be increased from RM500,000 to RMI ,000,000;
o Low-cost housing policy

In line with the National Housing Policy, the government imposed a low-cost housing quota upon private sector developers fur housing projects, by which die low-cost allocation is detemtined by the State government. Residential developments of I 0 acres and above within and outside Klang Valley are required to alloeate 50% (20%for low cost; 20%for low medium; 10%for medium oost) and 40% (20%for low cost; 10%for low medium; lO%for medium cost) of their housing illlits respectively. For all residential developments of 50 units and above, with a land area of between 2 to less than 10 acres, 30% must be designated for medium-cost housing units. All commercial developments of 50 units and above in SeJangor have to allocate 20% of their units as low-cost commercial units with a selling price ofRM120,000 each. All industrial developments of I 0 acres and above in Selangor have to allocate 30% of their units as low­cost industrial units at a selling plice ofRM150,000 each.
Company No. 10091 14-M 7. INDEPENDENT MARKET RESEARCH REPORT (CoIII’d)
Prepared for Titijaya Land Berhad o Bumiputera housing Since the introduction of the National Economic Policy in the 1970s, housing developers in Malaysia are required to set aside at least 30% of their housing units for Bumiputera purchasers, in order to encourage more Bumiputera to own houses and to promote multi-racial interaction among the Malaysian population. According to the Blueprint Perumahan Negeri Selangor Darnl Ehsan (2004 -2014) by Lembaga Perumaban dan Hartanah Selangor (“LPHS”), the allocation for residential areas is based on areas ofState Constituencies. For commercial areas of less than 50 units, the proportion depends on Pejabat Tanah dan Galian. If the commercial development has more than 50 units, there is an allocation of 50% for low-cost units priced at RMI20,000. For industrial areas less than 10 acres, 40% are allowed for Bumiputera ownership, whereas industrial developments of more than 10 acres have to allocate 50% of its units to be sold at a low-cost price of RMI50,000. The BumiputeIa discount for property purchase is fixed by the State government at 7% for residential properties and 10% for commercial or industrial properties. The discount is not applicable for low-eost units. ill additional~ the developers may apply for release of their Bumiputera-allocated units Once they have advertised with LPHS for 3 months and were unsuccessful in selling those units. A percentage of contribution is given to the State government for the release or reduetion of the Bumiputera allocation at the following rates:­./ Residential areas: 7% ofthe selling price per unit released ./ Commercial areas: 10% ofthe selling price per unit released ./ Industrial areas: 10% ofthe selling price per unit released
• The above laws and regulations are principally designed in the broad sense to achieve the Government’s aspirations of providing affordable housing to the general population, as well as to control and protect individual consumers by setting the minimum standards to the property sector. These laws and regulations also regulate the industry by means ofproviding consultaney, quality accreditation, R&D, promoting usage of high technology as well as manpower training services. [The rest ofthis page is intentionally left blank] Prepared by PA International Property Consultanls (KL) Sdn Bhd October 2013
PMtl’ Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)

Prepared for Titijaya Land Bemad CHAPTER 6 PROPERTY MARKET ACTIVITIES 6.1  PROPERTY MARKET ,\CTlVITIES IN MAL.\YSIA  •  According to the Property Market Report 2012, the Malaysian property market recorded a total of 427,520 transactions with a total value ofRM142,84 billion. The volwne of transactions in 2012 decreased by 0.67% whilst the value of transactions recorded an increase of 3.63% when compared to the previous year (2011: 430,403 transactions worth RM137.83 billion).  •  In ftrst half of 2013 (“IH 2013”), our nation property market recorded a total of 185,709 transactions worth RM67,06 billion. Compared to ftrst half of 2012 (“IH 2012″), the volwne and value ofproperty transactions decreased by 14.45% and 2.81 % respectively (IH 2012: Volume: 217,067; Value: RM69,00 billion).  •  Compared with the previous year, the volume of property transaetions declined for the ftrst time after 2009. However, the value ofproperty transactions still remains on an increasing trend since 2009.  •  Chart 6.1.1 below shows that the property market in Malaysia generally has been experiencing an increase in both volume and value of property transactions between the years of2002 to 2012, In the II-year period from 2002 to 2012, the nwnber of trarisacted properties in Malaysia has risen by 84.76%, whereas the value of transactions has grown by 269.67%.  Cbar16.LI  M:tI:l.~·s:I11: Volmm &. Vlllutorp:rop”-lrTrlll1S11l’1Jom(21102-IH2013)

Source: Property Market Reports 2003 ~ First Half2013. Jabatan Penilaian & Perkhidmatan Harta [The rest ofthis page is intentionally left blank] Prepared by PA International Property Consultants (KL) Sdn Bhd Odober2013
4M’1:1 Company No. f009f14-M 7. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
Prepared for Titijaya Land Bemadlijijrpx.pt:1WM;J4.I.l’ PROPERTY MARKET ACTIVITIES IN SELANGOR • As depicted in Table 6.2.1 below, the total transactions in Selangor in tenns of volume and value have shown annual increments since 2008 to 2011. Most property sectors expetienced a year-on-year increase. in the volume and value oftransactions except for those from the industrial and other sectors.
• However, in 2012, the nwnber ofproperties transacted decreased by 1.73% between 2011 and 2012, compared to an increase of 8.62% in the corresponding peliad of 2010 to 2011. The total value of properties transacted continued to rise by 13.79% between 2011 and 2012 compared to an increase of 18.19% flam 2010 to 2011.
• The total transactions in Selangor declined for the first time after 2008 in 20 f2. Most of property sectors experienced a year-on-year decrease in the volume of transactions except for development land and other sectors. This shows that demand for property is slower in 2012 but the property prices trended upwards, caused mainly by scarcity of land in prime locations, higher prices of new property launches in prime locations and preference for properties as assets to hedge against the inflation -all these reasons which may have attributed to the recent property prices movement.
• The majority of the transactions were those of residential properties, constituting about 77.67% of the total numberand 51.53% ofthetotal value ofpropertytransactions in Selangorin 2012 (20II: Residential Volume: 76.72% and Value: 53.40%).
• Table 6.2.2 below shows that the total transactions in Se1angor in tenns of volume and value have shown annual increments in general since first half 2009 (“IH 2009”) to fIrst half 2011 (“IH 2011”). However, in IH 2012, the total number of properties transacted dropped on year~on-year basis whilst the value of transactions continued to rise.
• In IH 2013, there were 40,282 transaetions recorded Walth RM21,917.40 million for Se1angor. Both volume and value of transactions decreased by 17.15% and 4.01 % respectively (1 H 2012: 48,619 transactions worth RM22,833.75 million).

 

Prepared by PA Inrernalional Property Consullants (KL) Sdn Bhd October 2013
Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Conl’d)
Prepared far Titijaya Land Bemad  •  In tenns of volume, the residential sub-sector remained the most dominant sector, contributed about 78.25% ITom the overall property market activity, followed by commercial (8.34%), agricultural (6.94%), industrial (3.26%) and development land sub-sectors (3.21 %) in IH 2013. By value, anly industrial, agricultural and other sub-sectors registered positive growths against IH 2012 although the voltune of the said sllb~sectors registered negative growth agaulst IH 2012. Residential sub-sector registered the highest at 55.45%, followed by commercial (17.14%), industrial (14.42%), development land (7.81 %), agricultural (5.16%) and other sub­sectors (0.02%).  •  Generally, all the sub-sectors have decreased in volwne of property transactions in IH 2013 from IH 2012. This indicated that the demand for property is generally slower in IH 2013 due to concerns over the general election in the country, the global economy environment and the regulatory measures implemented by the government and Bank Negara Malaysia in promoting a stable and sustainable property market.
Table 6.2.2
IH IH 2012 2013 11,635.78 12,228.60 12,154.28Residential 31,573 33,260 . 38,424 31,519 7,793.33 Commercial 3,185 4,114 4,801 3,359 2,008.78 3,775.03 4,517.61 3,756.19 1,941 1,414Industrial 1,217 1,399 1,312 1,569.63 2,887.49 2,599.26 . 3,159.90.-.. __.-. 3,136 2,992 2,796 456.09Agriculture 2,711 2,982 750.61 778.03 1,129.96 Development : 1,619 1,496 1,295 744.35 851.94 1,811.48 ‘ 2,708.22 1,712.561,204 1,434land 7.70 2.02 4.502.35 103.48Others 6 32 12,57451 17,041 AlTOTAL 39,896 43,221 20,868,10 22,833.75 21,917AO Penilaian Harta Note’ The Value afTransactions (RMmiilion)for lH 2009, lH2010, lH 2011, lH 2012 and lH2013 do not Slim to total due to rounding. Source; Property Market Reports
[The rest ofthis page is intentionally left blank] Prepared by PA International Property Consultants (Ki:jL)~S;cdj;;nBB:hhdd——–COlCcliOabibe”r22DD:lI!31J ••••••¥~.~!.ml;B’!lI’ Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Co/lI’d)

Prepared for Titijaya Land Bemad CHAPTER 7 DEMAND AND SUPPLY
7.1 RESIDENTIAL PROPERTY ~HRKET IN S~:LANGOR • The following sections of this Report analyse the demand for the Se1angor residential property market, as reflected by the volume and value of its property transactions, as well as taking into consideration the current and future supply of the residential property stock in the state. 7.1.1 DEMAND FOR RESIDENTIAL I’ROPERTIES IN SELANGOR • The sale of residential properties in Selangor has generally been on an uptrend over the years, as indicated by the high annual number of residential transactions. The following chart denotes the volume and value of transactions of residential properties in Selangor which generally showed consistent annual increases except in 2012, whereby the volume of transactions decreased by 0.51 % from 2011. The value of transactions in 2012 howevercontinued toincreasetoRM25,373.91 million(2011:RM23,110.70million).
• However, the state recorded only 31 ,519 transactions valued at a total of RM12,154.28 million in IH 2013. As compared to the preceding year, both volume and value of transactions of residential properties in Selangor dropped about 16.21 % and 0.61 % respectively (lH 2012: 37,616 transactions worth RM12,228.60 million).

Chart 7.1.1.1 ,_.__.—.~–~——_ _—–_..to,ooo “—~——-~”-j 30,00000 r…..vil,;,;,;=···i~3~0{i,TtE~,r ,t’J;’~lji:~~~r!,:iii.r ~N;;,f.’;Pii,T~~1! 6t;g~1~~*i_I H;{iI’g:~d 0.00~_._’:.~~~~5RM mil) 6.~~_3~~}.,t~~18.’~~!.:?~~ii’!.~~~?_~:~.~I~_~~~!~8~~~t~_~.:~!”~.:?~~~_:~~,:-:i?i~J3.:~!J.~~:.1_~_4~~ Source: Property Markel Reports 2003 ~ First Half20J 3, Jabatan Penilaian & Perkhidmalan Harta • The following is noted from Chart 7.1.1.1 :­o The volume of residential property transactions in Selangor increased by 107.55% in 2012 since 2002. Consequently, the value of transaeted properties, as shown by the red line in the chart, has also risen by 288.36% for the same II-year period, translating to an average annual growth rate of26.21 % per annum.
Prepared by PA International Property Consultants (KL) Sdn Bhd Oefober 2013
Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
Prepared for Titijaya Land Berhad’rmrmIW·kkl0@§iUij·i.u • The following table depicts the volume of transaction by type and district in Selangor for IH 2013. Table 7.1.1.2 Hulu Bulu Sepang Total Selangor Langat District Pe”‘ling Type YP 542 249 106 72 46 683 268 1037 405 3,408 T1 455 726 253 100 44 244 161 49t 228 2,702 T2-3 3,515 1,620 242 267 24 1,162 280 2,169 490 9,769 SDI 18 52 38 16 6 8 46 23100307 SD2 -3 402 173 26 37 1 142 4 365 103 1,253 17 10 280 t41 254 60 1,308D 413 100 33 79 o 985 47 1,343 147 7,160 • Clu, 9 t5 1 C / Apt 4,133 390 36 258 4 13 3 31109 Town 138 26o 73 o 115 0 177 22 551 Flat 914 103 o o o 189 14. 724 111 2,055. LC h,e 135 159 87 55 51 94 . 125 368 63 1,137 .; .f ,’LC flat 764 96 5 i! o i 161 99 593 26 1,745 o 0 2ooo 5 13415 To”” 11,438 3,711 827 742 190 • 4;072 : 1,199 • 7,550 1,790 31,519 .~,,_ ..•_.C. __… _.’_.._ .•c.-· , Source: Property Markel Report Half2013, Jahn/an Penilaian & Perkhidmatan Harta . Legend: YP ~ Yacant plot D = Detached LC hse = Low-cost house T1 = I-storey terraeed C / Apt = Condominium / apartment LC flat = Low-cost flat T2-3 = 2-3 storey terraced elus = Cluster house 0= OtlH:rs SDI -,= I-storey scmi~detaehed Town = Town house Sp2-3 = 2-3 storey semi-d.etached Flat ~ Flat
• The number of transactions that took place provides an indication of the demand for the various types of properties by districts in Selangor. Based on Table 7.1.1.2, we noted the following:­o The Petaling district was the most popular location, with 36.29% of total residential transactions) followed by Hulu Langat, Gombale and Klang disu’icts at 23.95%, 12.92% and 11.77% of total residential transactions, respectively.
o 2-3 storey terraced houses were the most transacted, representing 30.99% of total residential transactions in Selangor, followed by condominiums/apartments at 22.72%. Of all the 2-3 storey tertaced houses transacted, 35.98%, 22.20% and 16.58% of the u’ansactions were in the Petaling, Hulu Langat and Klang districts, respectively,
o 57.72% of condominiums/apartments were transacted in the Petaling district, followed by 18.76% and 13.76% in the Hulu Langat and Gombak disu’icts, respectively.

• In the Petaling district, the highest transacted properties were condominiums/apartments, followed by 2-3 storey ten-aced houses. Whereas, in the Klang district, 2-3 storey terraced houses were the most highly transacted, followed by I-storey terraced houses. Prepared by PA International Property Consullanls (KL) 3dn Bhd October 2013

Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Conl’d)
Prepared for Tilijaya Land Berflad • The foHowing table depicts tile value of the residential properties transacted in 1H 2013 with breakdown by property type and district in Se1angor. Table 7.1.1.3 District Kuala Sabak Selangor Bernam
Type VP 350.27 45.45 39.43 979 5.02 144.81 35.85 429.09 96.97 1,156.68 Tl 167.87 119.22 38.30 15.32 5.87 60.82 15.77 • 99.88 42.14 565.18 T2-3 2,249.73 644.01 60.28 74.81 5.81 483.75 44.48 946.64 251.27 4,760.78 SOl 12.87 • 15.16 10.60 3.57 1.56 2.39 6.31 7.35 30.37 90.19 S02-3 608.99 149.90 11.82 14.73 0.50 162.27 1.95 35846 97.94 l,406,55 D 709.46 104.66 7.85 5.89 1.60 283.96 28.56 256.84 30.28 1,429.09 C I Apt 1,371.91 62.84 4.53 6.56 0.00 24043 2.86 276.28 43.79 2,009.21 Clu, 3.18 943 0.15 6.24 042 1.23 2.92 1.77 8.09 33A2 Town 70.38 9.77 0.00 18.01 0.00 28.21 0.00 45.56 i 9.87 181.80 i Flat 123.79 9.61 0.00 0.00 0.00 18.56 0.67 88.25 10.22 • 2S1.10! LCh,e 22.56 17.69 7.12. 3.52 3.78 13.56 7.68 55.33 7.56 138.79 : LCflat’ .63:89″! 5.70 0.27 ; 0.05 0.00 11.02 240 4047 1.66 I:z.SA6 : o ..L 0.00 i 0.55 0.00 0.00 0.00 3.17 0.16 0.97 ‘ 1.15 6.00 j Total L ..5,7?4,9.nl.1J23,98!1.8.0..3.5.! 158.48 2456.L!,~?~:17 ! .!49.62 2,606.89’ 631.32 : .12A?4~.8 i Source: Property Market Report First Ha1f2013, labatan Peflilaian & Perkhidmatan Hano Note: The Value ofResidential Property Transactions for the districts ofKiang, Kuala Selangor, Gombak, HuJu Selangor and Sepang and the Value of transactions for the I-storey terraced, I-storey semi-detached, 2-3-slorey semi-detached, detached, wndominium / apartm en!, duster house and low-cost house do not sum to total due to rounding. Legend: VP = Vacant plot D = Detaehed LC hse = Low-cost house , Tl = I-storey terraced C / Apt = Condomi.nium / apartment LC flat = Low-eost flat ! T2-3 = 2M3 storey terraced elus = Cluster house o ~ Oth”,s I SDI = I-storey semi-detached Town = Town house Sl?k~ ,,”_.2-3 sto~~y ~~mi-deta~hed Flat ~ Flat • Based on Table 7.1.1.3, we uoted the following:­o Petalingdistrictrecordedthehighestvalue ofresidentialtrallsactions at47.35%oftotalvalue,followedby the Hulu Langat and Gombak districts at21.45% and 11.96%, respectively.
o The average transacted price in Petaling district increased from RM295,446 per unit in IH 2009 based on Property Market Report First Half 2009 to IUvl503,139 per lll1it in 1H 2013, which is about 30.48% higher than the State’s average (RM385,618 per lll1it); indicating a slTong demand for residential units in the Petaling district.
o 2-3 storey terraced houses is the most transacted residential property by value, representing 39.17% of total residential transactions in the State, followed by condominiums/apartments (16.53%) and detached houses (11.76%).

 

Prepared by PA Inlernalional Property Consullants (KL) Sdn Bhd Oc/ober 2013
Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Coltl’d)
Prepared for Titiiaya Land Berhad • Sales performance of newly-launched residential schemes in Selangor in IH 2013 was encouraging, with 51.86% ofthe 2,925 newly-Ialmched units sold. \\~lile 81.40% ofthe completed residential units have already been sold, the take-up rate for properties which are still under construction is 65.89%. The statistics of these fmdings are detailed in the following ~,ble:­Table 7.1.1.4 Statu, Newly-Launched Completed Under Comtruction Not Constructed Units Launched  2,925  13,327  26,620  1,754  . Units Sold  1,517  10,848  17 ,540  323  Sales Performance  51.86%  81.40%  65.89°/1)  18.42%
Source: Property Ma/*et Report First Ha(f2013, Jabatan Penilaian &Perkhidmalan Harta 7.1.2 SUPPLY OF RESIDENTIAL PROPERTIES IN SELANGOR Existillg Supp(v Table 7.1.2.1 Existing S~pply~fR~s!~eD~a.JU!!J~~ ~rTY~~ and_p~Jy~cti~ Se1ilD”go_:t.: (~Q ~Op l) District Kuala Kuala Sabak , Hulu HuluPetallng Klang Gombak Sepang TotalType Langat Sehl!!g_~~ __, Bemam Se~!1g_~r Lang~t _. T1 28,169 38,695 i2;274 . 8,411 2,394 17,064 15,153 28,599 5.929 156,688 T2-3 155,750 59,262 8,128 12.208 i-1,665 49,124 16,214 95,701 15,014 413,066 . SD1 1,306 1,135 311 428 314 207 2,611 1.005 2,864 10,181 SD2-3 10,505 5,280 436 1,722 1 118 3,608 162 8,745 1,318 ‘ 31,894 D 15,961 2,630 580 782 94 10,418 9,726 4,002 ; 1,864 46,057 Town 3,429 310 0 633 i 0 4,291 0 6,193 1,610 : 16,466 Clus 2,611 408 68 825 664 240 . 132 817 1,520 7,285 LCbse 14,976 11 ,664 7,231 5,866 3,291 9,044 8,374 23,505 4,612 88,563 LC fla’ 71,784 17,429 1,880 ‘ 339 0 26,337 19,167 55,980 2,725 195,641 FIa’ 45,814 12,439 1,536 1,588 48 15,935 11,380 . 58,209 6,349 153,298 Svc apt 13,185 0 0 798 0 2,893 0 1,162 512 18,550 CIAI” 115,967 13,873 722 4,700 0 32,899 1,297 27,972 7,725 205,155 SoHo 000 000000 Total 479,457 163,125 33,166 38,300 8,588 172,060 84,216 311,890 52,042 1,342,844 Source: Property Slack Report 2Q 2013, Jabatan Penilaian &Perkhidmatan Harta Legend: TI = I-storey terraeed SD I = I-storey semi~detachcd D = Detached T2-3 = 2~3 storey terraced SD2-3 = 2-3 storey semi-detaehed Town = Town house Cius = Cluster house LC tlat = Low-cost fiat Sve apt = Serviee apartment LC hse = Low-eost house Flat ~ Flat C / Apt = Condominium / apartment SoBo = Small officelHome offiee Prepared by PA International Property Consultants (KL) Sdn Bhd Oclober 2013 Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (CoIlI’d)
‘Ii1itlAtN·NWlI4i;iij·i.j, Prepared for Tifijaya Land Bemad • As at end oUwle 2013, there were a total of 1,342,844 wilts of residential propel1ies in Selangor (2Q 2012: 1J 13,901 wilts) which is an illcrease of2.20% in the supply ofresidential units in the state sillce luue 20 12. o The supply of residential properties in Selangor comprises mainly 2-3 storey terraced houses, representing 30.76% aftotal residential properties in the State. Condominimns/apartments and low-cost flats represent 15.28% and 14.57% respectively ofthe total residential properties in the State.
o In the Petaling district, the main residential properties were 2-3 storey teITaced houses and condominiums/ap31tments. In the Klang district, 2-3 storey teIT3ced houses and I-storey terraced houses were the main residential properties.

Future Supply Table 7.1.2.2 Future SupplY_l!f~~~t~~}}..t~aJVn_it~_~Y_IYP~_a~~_pi_strict in S~la_~go.. (2Q ~Q_13′) , District Type  Petaling  Klang  Kuala J.~n_gat  Kuala S~lango..  Sabak Bcmam  Gombak  Hulu Sclangor  Hulu Langat  Sepang  Total  T1  87  .  8,544  4,813  1,329  283  107  1,300  783  1,970  .  19,216  T2-3  8,860  .  14,175  3,809  5,367  163  5.733  1.612  10,838  6,950  .  57,507  SDI  12  1,131  i,247  170  204  971  908  170  704  5,517  S02-3  2,668  3,440  1,123  666  48  2,058  80  3,137  2,508  15,728  .  .D  2,069  931  1,067 •  1,574  15  3;377  1,787  1,712  -1,634-i  14,166  ,  ·  Town  1,095  1,845  536 .  52  28  862  0  1,578  6,612  Clus  832  1,128  632  376  24  371  472  180  198  4,213  ·  LC bse  O’  630  15  195  42  0  278  66  330  1,556  ·  LC flat  8,137  4.003  1,272  2,924  0  5,415  2,389  5,784  2,726  32,650  Flat  2.623  2,114 •  0  450  280  3,742  480  4,1l9  4,801  18,609  Svc apt  15,642  357  1,972  0  0  2,519  0  2,800  2,348  25,638  .  C / Apt  21,672  4,461  406  O·  0  17,586  80  II ,044  .  3,706  58,955  SoHo  320  0  0  0  0  189  0  151  0  660  Total  64,017  42,759  16,892  .  13,103  1,087  42,930  9,386  42,362  28,491  261,027 •
Source: Property Stock Report2Q 2013, Jabatan Penilaian &Perkhidmatan Harta • As at end ofJune 2013, it was expected that the number ofnew residential properties in Selangor will increase to more than 260,000 in the next two to three years. o The Petaling district will see the highest number of future residential supply (24.53%), followed by the Gombak district (16.45%) and Klang district (16.38%) respectively.
o Condominiums/apartments were the most higWy supplied (22.59%), followed by 2-3 storey len·aced houses (22.03%).

• With the high take-up rate for residential properties in Selangor (as depicted in Table 7.1.1.4), it is not expected that there will be an oversupply ofthese properties in the State in the near future. Prepared by PA Inlernational Property Consullanls (KL) Sdn Bhd October 2013
4Mb’ 7. INDEPENDENT MARKET RESEARCH REPORT (Coll/’d)
Prepared for Titljaya Land Bemad 7.2 COM~IERCIAL PROPERTY MARKET IN SELANGOR • Selangor’s commercial property market is resilient and has charted continuous growth over the years. The following sections of this Report analyse the demand for the Se1angor commercial property market, reflected by the volume and value of its transactions, as well as examine the existing and future supply of the commercial property stock in the state. 7.2.1 DEMAND FOR COMMERCIAL PROPERTIES IN SELANGOR • Transactions of commercial properties have generally been on an uptrend since 2002 to 2011, as indicated by the high aIUlual volume of commercial transactions. However, in 2012, the data showed that the volume of commercial transactions have declined by 3.38% from 2011 whilst the value of transactions increased to RM8,709.73 million from RM7,490.26 million in 2011.
• In IH 2013, a total of3,359 commercial transactions worth RM3,756.19 million were recorded. Both volwne and value of commercial property have decreased by 34.00% and 16.85% respectively on year-on-year basis (IH 2012: Volwne: 5089 ttansaclions; Value: RM4,517 .61 million).

Chart 7.2.1.1,————————————_.._._-_.—–Stlangol: Coullnerdal Properly TnmsacUolls (2 002 -‘lH 2013)

Source: Property Market Reports 2003 -First Half2013, Jabatan Penilaian &Perkhidmatan Harta • From Chart 7.2.1.1, we noted the following:­o The volwnc of commercial property transactions in Sellingor has decreased by 3.38% in 2012 from 2011, compared to an increase of 11.46% in the corresponding period of2010 to 2011. Consequently, the value of transacted properties has risen by 412.46% for the same ll-year period, translating to an average annual growth rate of 37.50% per annum. [The rest of this page is intentionally left blank] Prepared by PA International Property Consullants (KL) Sdn Bhdd———(O)CcttooJ;be”r’22~Olr:31] ••••••i1i€mi,!’*BIIIIII Company No. 1009114-M 7. [NDEPENDENT MARKET RESEARCH REPORT (Coltt’d)
liiijliNI@0!Mi;1§.I.J, Prepared for Titijaya Land Berhad • Table 7.2.1.2 depicts the various types of commercial properties that were transacted in IH 2013 within the respective districts in the state ofSelangor. Tab[e 7.2.1.2
Legend: , VP ~ Vacant plot 504-4.5 = 4 -4Yz-storey shop Sh Comp = Shopping complex I PW = Pre-war shop 505-5.5 = 5 -5Y2-storey shop PB Off= Purpose-huilt office SO1-1 .5 = I ~ 1liz-storey shop 506-6.5 -= 6 -61,/z-storey shop H I Svc = Hotel/service apartment S02-2.5 = 2 -211z-storey shop Sh Lot = Shop unit I retail lot Lei = Leisure S03 w3.5 = 3 -3Yz-storey shop GffLot = Office lot 0= Others
• In tenus ofdemand for commercial properties in Selangor, the following are noted from Table 7.2.1.2:­o The Petaling district has the highest demand, with 40.82% of total commercial transactions, followed by the Hulu Langat and Klang districts at 19.29% and 15.84%, respectively.
o The2 -2~-storey shops were the most highly transacted, constituting 21.26% of total commercial transactions in the state, followed by shop unit / retail lot at 20.1 0%.
o Between these 2 -2% and 3 -3 ~ storey shops, it was noted that 3 -3’i) storey shops were more fuvoured over the fanner type in the district ofPetaling.
o Of the total number of 2 -2~ storey shops transacted, 23.67% were in the Petaling district, with 23.39% in the Klang district and 20.3 [% in the Hulu Langat district.
o 42.67% ofshop units / retail lots were transacted in the Petaling district, compared to 23.85% in the Hulu Langat district and 14.96% in the Klang district.

 

$1.;;;.Prepared by PA Inlernational PropertyConsullanls (KL) 3dn Bhd October 2013 Company No. 10091l4-M 7. INDEPENDENT MARKET RESEARCH REPORT (Cotlt’d)
Induslry Overview Repod Prepared for Tilijaya Land Bemad a In the Petaling district, the most highly transacted properties were office lots, followed by shop units / retail lots and 3 –3′;’ storey shops. In the Klang district, 2 -2;1, slorey shops were the most highly transacted commercial property, followed by the shop unit!;) / retail lots and 3 -3Yz storey shops. • The following table depicts the value of the conunercial propelties that were transacted in lH 2013 within the respective districts in Selangor. Table 7.2.1.3
I~::.:] …~. -~:’ ~~, -·;:’~f”‘:~Gom’~J ‘:~·l~~.[ ‘7″‘:’:’ ~,—“‘,, ,-‘”” ….. ‘C’C -_W-‘A’-‘~3t jH~l!’1U=~li
~~~~5~_~~.~~ -.~ _.-~.~~.’ _-~.~~ -·~·.~~·–··’~.~~r··~~~t.-~~h ~.~~ L__~. -Sh’r:;;;—“—‘177.17 38.05—-0:00 -‘-0.00 1 -O:Oii—-39j9..i~571-.69.jT-j”1229 –337.771~i-~’li ill i’~~i ~i~~iiF=1i~i==i
-Lei-‘-‘ ==o.!!.(J_ 0.00 .. _ 0.00 0.00 .=~-::TQ.o.: ==::::.2::QQ.::::::::§(igI=::::::QiO.I·.=.0.50 •__.”0:50­~olal -‘i8~:~~ 43~:~~ -‘-7~~~ 3~~~ —-.&~~ ······3ii~~~j-+~j:i~t -~i-H-Hi5~%~ 3~~~;:. ..__. _.___ . _…. …1…__..__……_.1..__…__….._… “….__ __ Source: Property Market Report First Half2013, Jabatan Penilaian & PerkhidrnalQn Harta Note: The Value ofCommercial Property Transactions for the districts of Pelating, Klang, Kuala Langat, Sabak Bernam, Gombak, Hulu Selangor and Hulu Langat and the Value oftransactions for the vacant plot, pre-war shop, 2-2’l$ ~srorey shop,shoplot andothersdo notsum fototalduetorounding. . Legend: VP = Vacant plot 5044.5 = 4 -41h-storey shop Sh Comp= Shopping complex PW = Pre-war shop 505-5.5 = 5 -51h-storey shop PB Off= PUrpose-bUllt office 501-1.5 = 1-1 Y2-storey shop 506-6.5 = 6 -6lh-storey shop H I Svc = Hotel! service apartment S02~2.5 = 2 -2Y2-storcy shop Sh Lot = Shop unit / retail lot Lei = LClsurc 503-3.5 = 3 -3Y2-_storcy shop Off Lot ~ Office lot 0= Others • Based on Table 7.2.1.3, we noted the following:. o The highest value of transactions was recorded in the Petaling district, with its value constituting 49.50% ofthe total value of connnercial properties b’ansacted in Sclangor. Tlus was followed by the Hulu Langat and Klang districts at 21 .79% and 11.68%) respectively. The average transacted price for commercial properties in tile Petaling district was RM1 ,356,236 per unit in 1H 2013 whilst in the Klang district the average was RM824,906 per unit.
o Vacant plots make up 24.25% of the total value of commercial transactions in the state, followed by 3 ­3;1, storey shops at 21 .31 % and 2 -2;1, storey shops at 14.58%.

 

Company No. 10091l4-M 7. INDEPENDENT MARKET RESEARCH REPORT (Conl’d)
Prepared for Tilijaya Land Berhad  Table 7.2.1.4  Status Units Launched Units Sold Sales Perlormance  Completed 1,679 1,351 80.46%  Under Construction 2,300 1,707 74.22%  Not Constructed 1,066 869 8152%
Source,’ Property Market Reporl First Half2013, Jabatan Penilaian & Perkhidmatan Harta • Statistics revealed that demand for shops in Selangor is good in general, as evident from Table 7.2.1 A. About 74.22% and 81.52% of the under construction and not constructed shops were sold respectively in IH 2013 whilst only 19.54% ofcompleted shop units in the state remained unsold. 7.2.2 SUPPLY OF COMMERCIAL SHOP UNITS IN SELANGOR Existing Supply

Klang Sepang Total ~an¥at 266 0 0 153 142 1,179 801-15 2,426 991 764 72 257 398 852 507 6,785 802-25 7,055 . 4,302 1,725 2,323 814 2,103 1,503 4,957 1,508 26,290 _____ -1­803-35 9.423 3,004 321 365 59 2,437 31 5,930 656 22,226 804-45 4,212 3,761 8 2 0 1,282 144 2,845 196 12,450 805-55 467 44 0 0 0 20 0 127 14672 806-65 165 8 0 0 0 4 0124 0301 80>65385 0 0 0 0 2O. 0388 Lock-up 5,921 570 14 13 0 1,791 0 2,288 114 10,711 .’D 32 0401010149 8D 340 000000034 SoHa 0 0 00’0 0 072 072. Cluster 0000000000 8trata 46 0 0 0 0 0 0 154256456 Total 30,201 12,947 2,832 3,275 945 8,059 ” 2,341 17,619 3,394 81,613 SOIlrce: Property Stock Reporl2Q 2013, Jabatan Penilaian & Perkhidmatan Harta Legend: PW = Pre-war shop S06-6.5 = 6 -6Y2-storey shop SoHo =SoHo SOI-I.5 = 1-1 Y2-storey shop SO >6.5 = Above 6Y2-storey shop Cluster= Cluster S02-2.5 = 2-2Y2-storcy shop Lock-up~ Lock-up shop Strata = Strata S04-4.5 =4-4Y2-storey shop D ~ Detach shop S05-5.5 = 5 -5Yz-s(orey shop SD = SelUi-~~~ach shop Prepared by PA Internalional Proper1y Consultanls (KL) 3dn Bhd Oclober 2013
Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Coltt’d)

Prepared for Titijaya Land Bemad·ijrmin.’@Wi@i6;·I.I, • As at end of June 2013, there were a total of 81,613 commercial shop units in Selangor (Jillle 2012: 79,316 uruts) which reflected an increase of2.90% in the supply of shop units in the state since June 2012. o The supply of shop units in Selangor comprised mainly 2 -2\1, storey shops, which constituted 32.21 % of total shop units in the state. This was followed by 3 -3\1, storey shops (27.23%) and 4 -4’h storey shops (15.25%).
o In the Petaling district, the largest supply of shop units were 3 -3\1, storey shops, followed by 2 -2″ storey shops, lock-up shops and 4 -4’12 storey shops.
o The Klang district has a similar composition of shop units as the Petaling district with the largest supply being 2 -2’h: storey shops, followed by 4 -4’h: storey shops and 3 -Yh. storey shops.

Future Supply Table 7.2.2.2
District Kuala Kuala Sabak Hulu HuluPetating Klang Gombak Sepang TotalType _~,,:ng_at Selangor Bernam Selangor Langat PW 00 00000000 S01-1.5 95 231 144 54 4 0 106 28 55 717 S02-2.5 1,210 • 2.150 623 1,052 76 385 307 392 376 6,571 S03-3.5 2,086 1,529 140 435 125 96 105 401 582 5,499 504-4.5 815 201 75 4 3 193 22 350 105 1,768 S05-5.5 325 10 0 0 036 020 0391 S06-6.5 80000000300110 SO>6.5 17036 0000000206 Lock-up 858 403 15 0 0 300 28 123 41,731 D 820 I 0240 0035 SD 1072000000028155 SoHo 576 0 0 0 0 392 0 02,237 3,205 Cluster 322000 00000322 Strata 1,745 160 32 . 0 9 168 0 108 530 2,752 Total 8,397 4,742 : 1,029 1,546 217 1,594 568 1,452 3,917 23,462 SOllrce: Property Slock Reporl2Q 2013, Jabatan Penilaian & Perkhidmatan Haria Legend: PW = Pre-war shop S06~6.5 :=0 6 -6Y1~storey shop SoHo= SoHo SO l-1.5 = 1 -1Y2-stOrcy shop SO >6.5 = Above 6Y2~storey shop Cluster = Cluster S02-2.5 = 2-2lh-storcy shop Lock-up = Lock-up shop Strata = Strata S04-4.5 = 4 -4 Yz-storey shop D = Detach shop S05-5.5 = 5 -5 Yz-storey ~~op SD = Semi:-detach shop
Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013 M·I Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (CollI ‘rfj

Prepared for Titilaya Land Bertlad • As at end of June 2013, it was expeeted that Selangor will have 23 ,462 new commereial shop units by 20 IS, an increase of28,75 % to the existing supply of81 ,613 units.
• As shown in Table 7.2.2.2, 2 -2 Yo storey shops in Selangor are expected to be the most highly s~pplied (28.01%), followed by 3 -3\1, storey shops (23.44%) and SoHo (13.66%). The Petaling district is expected to have the highest number of future supply in shop units (35.79%), followed by the Klang district (20.21 %J. However, based on statistics for shop take-up rates in Selangor (as per Table 7.2.1.4), it is expected that there will be a high demand for shops in the state, particularly for units in prime locations.

7.3 INDUSTRIAL PROPERTY MARKET IN SELANGOR • The following sections of this Report shows an analysis on the demand for the Selangor’s industrial property market in teons of volume and value of its transactions, as well as examine the existing and future supply of the industrial property stock in the state. 7.3.1 DEMAND FOR INDUSTRIAL PROPERTIES IN SELANGOR • The following chart shows the volume and value of transactions of industrial properties in Selangor with an overall growth trend from 2002 to 2012, albeit displaying greater volatility compared to the residential and commercial sectors. Chart 7.3.1.1 Sdllngol’: Illd1U1l1~Pl’opfliy D1Ul511cc1oll.!I'(lOOl” IH 2013) 4,DO(l r .-.———.—-~—-..”-.———–, 700000 .uoa1—.-..,,–.——.. .. _~j ‘00000:::: F~~—I -.–..-­z.ooo 1~­I <00 I I 1,000 <00
2002 2(lO\ I 2,004 200~ 2006 I 20[)7 ! 200a 2009 i 2010 WJJ I 2012 : 2~~3 i r~iolum;-_-_G.!~..: -i.j97~~ .\,030-l-2 76S tT!~O 1-~097 12&11-2: ~oo r 312~ :04J~tT~]~~~J i-:-:~~III.!(R1tll~lI~!~~~l l 0_06 6~:~~~..!4 i~ ‘iJJ :~ 1~0~ ~J1J 7~7 :.~ I~~J23 ~~6 941 ‘i 0’i4 s~ ~16! _~ ~,S’U Bl)~1’i9 9Q i Source. Property Market Reports 2003 -First Half2013, Jabatan Penilatan & Perkhidmatan Harta
• Chart 7.3.1.1 shows that the number of industrial property transaetions in the state peaked thrice in 2004,2007 and 2011, over the II-year period, with the highest value oftransactions in 20 II.
Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013 :mi’l Company No. 10091l4-M 7. INDEPENDENT MARKET RESEARCH REPORT (CoIlI’d)
Prepared for Tilijaya Land Berhad • The state of Selangor’s industrial property market experienced a slowdown in the number of transactions from 2007 to 2009. It is noted, however, that the value of transactions increased in 2008, despite a drop in the number of transactions -reflecting an increase in industrial property prices during this period. However, in 2009, both volume and value of transactions dropped, likely due to the impact of the global fmancial crisis which greatly affected the manufacturing sector. The sector quickly rebounded since 2009 onwards with 15.70% increase in volume oftransaction in 2010 and 19.81% by end oflOll. As for the increase ofvalue of transaction, it was 44.96% in 2010 and 21.90% in 2011. • In 2012, both volume and value of industrial property transactions decreased from 2011. The volume of transactions dropped in number from 3,743 units in 2011 to 3,080 units in 2012 (17.71%) and the valuc of transactions decreased by 5.18% from RM6,161.59 million in 2011 to RM5,842.23 million in 2012. Despite a drop in both volwne and value of transactions, the average transacted price increased marginally by 15.15% from RMI.65 million in 2011 to RMI.90 tnillion in 2012. • However, in IH 2013, the volume of transactions dropped in numbers from 1,414 writs in IH 2012 to 1,312 units in IH 2013 (-7.21 %) whilst the value of transactions increased by 21.57% from RIv12,599.26 million to RM3,159.90 million in IH 2013. The average transacted prices of industrial property was recorded at RM2,408,460 per unit in lH 2013. • The average transacted price in Selangor declined by 11.64% from RMI.46 million in 2008 to RMI.29 tnillion in 2009. The Petaling and Klang districts recorded the highest average transacted price for industrial propertics in Selangor at RM2.38 million (Volume: 1,096 units; Value: RM2,611.87 million) and RMI.68 million (Volume: 907 units ; Value: RMI ,527 .99 million) respectively. Although the global financial crisis had affected the average transacted prices in both the Petaling and Klang districts, both the locations’ average transacted prices had surpassed the RMI.5-million mark. • During the II-year period (2002 to 2012), it is noted that both volume and value of the transactions in Sclangor peaked in 2011. The volume of transactions in Selangor during the II-year period, averaged at about 2,906 units per year. However, the value of transacted properties, as shown in Chart 7.3 .1.1 has risen by 195.19%in2012compared to2002,reflectinganaverageannualgrowthrate of]7.74%perannum.
• Table 7.3.1.2 depicts the demand for various types of industrial properties that have been transacted in IE

2013 within the respective districts in SeIangor.

Company No. 1009l14-M 7. INDEPENDENT MARKET RESEARCH REPORT (Coltt’d)
Prepared for Titijaya Land Bemad  Legend: VP ~ Vacant plot T = Terraced factory I warehouse SD = Semi-detached factory I warehouse  D = Detached faetory I warehouse Ie = Industrial complex / unit o ~ Others
• Based on Table 7.3 .1.2, we noted the following:­o The Klang district had the highest number of industrial property transacted, constituting 33.38% of total industrial transactions, followed by the Petaling and Hulu Langat districts at 21.49% and 18.98% of total industrial transactions, respectively. o In Klang district, the vacant plots were the most frequently transacted, constituting 42.24% of total industrial transactions in the state, followed by terraced factories/warehouses at 40.41%. However, in Petaling district, the most frequently transacted type was terraced factories/warehouses (58.16%), followed by semi-detached factories/warehouses (23.76%). o Of the total number of telTaced metones/warehouses transacted, 27.36% were in the Klang district, 25.35% in the Petaling district and 18.08% in the Hulu Langat district. o In the Klang district, the highest number of industrial properties transacted were vacant plots, followed by terraced factories/warehouses, detached factories/warehouses, semi-detached factories/warehouses and others, In the Petaling district, terraced metones/warehouses were also the most highly transacted, followed by semi-detached, detached fuetories/warehouses, vacant industrial plots, others and industrial complexes/units. Table 7.3.1;:;.3″‘=””””””==7 “,,~\~1-””’-”’·”’1O!«iii_m,~.
,..”~iS~ictt~~talin~ ~_”_g t.:~~ s~~=~:r __~;:~ __~~I11~~J s::~~_r_ _~:~t __~::an__ TO~~_ VP §§c:?~ 352.56 29.28 _ ~~20~ 0.30 -171.3.-[:_.. 3;3_.03 __….2.Q.6,~_ .._52.72.. ..JJ7.06 ..! 139.~9 .52:!Q ..Q..32r-Q59 —‘.2~ .. 80,03 _ 7}..5.. _ 1O…2..9~ __ ..7..,~ 399.15 _~f)_ .._…__.. 277.09 .?8.26 t–J~I—__._21&.. __.._..(l.00 1430 IQ,J6 __1’1<1.01 __ 47.51 _~J. ..17 o 331.08 4.97 0.14 0.00 0.03 0.00 ‘ 0.04 180 10.15 348.22f­..2~taL”..l. –!974.68_ =~84E~ 63.3!..I..:=:-37:86 =:-“-:.1.:?.2.. ~~~~209 .1~ t_-i~~ 74:~C..J;91.0~I.::1}J~I7 t3~~..2.~c-_ Source: Property Market Report First Half2013, Jabatan Peni/aian &Perkhidmatan Haria Note: The Value of Industrial Property Transactions for the districts of Petaling, Klang, Kuala Selangor, Hulu Selangor and Hulu Langat, and the Value oftransactionsfor the vacant plot and others do not sum fa total due to rounding. Legend: VP ~ Vacant plot D= Detached factory / warehouse T = Terraced factory / warehouse lC = Jndustrial complex / wlit SD = Semi-detached factory / warehouse o ~ Odler,
• Table 7.3.1.3 depicts the value ofthe industrial properties that have been transacted in the 1H 2013 within the respectivc districts in Selangor and we noted the following:­o Thehighestvalue oftransactionsoccurrcdinthePetalingdistrict,representing34.0I%ofthe totalvalue ofindustrial properties transacted in Selangor. This was followed by dlC Klang and Hulu Langat districts at 26.70% and 21.87%, respectively. Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013
iff@M 7. INDEPENDENT MARKET RESEARCH REPORT (Coltt’d)
Prepared for Titijaya Land Bemad o Transaction of detached factory / warehouse represented 33.08% of the total value of industrial transactions in the state, followed by vacant plots representing 24.59% and semi-detached factory/warehouses at 18.65%. • The following table shows the sales perfonnance of indust::rial units in Selangor, with the chart showing the breakdown ofthe unsold completed units:­Table 73.1.4 Sales Performance of Industrial Units in SeJangor (lH 2013) Status  Completed  Under Construction  Not Constructed  Units Launched  469  97  16  Units Sold  422  66  2  Sales Performance  89.98%  68.04%  12.50%
Source:PropertyMarketReportFirst Half2013, JabatQn Penilaiall & Perkhidmatan Harta Chart7 3 .1.5r—-.—.———. .._-.–. ! Unsold rOlnJ)Il’h.·d illdus(l’i~lllnits in St’l:mgol’ (2Q 2013P) I _Kuab. LaIl~L 0′) _Sabflk Bemllm (‘1’) I;> KbnE;(SD)
~,—————- ­Source: Property Market Status Report, Property Overhang 2Q 2013, .labatan Penilaian & Perkhidmatan Hana • Based on Table 7.3 .lA, we noted the following:­o Out of the 469 completed industrial units that were launched in I H 2013, 422 units or 89.98% were sold. Fromtheoverhang of47units,themajoritywasmadeup ofterraced factoriesat38unitswithabalance of 9 units being semi-detached factories. From tilis total of 47 units (based on ChaIt 7.3.1.5), 63.83% (30 units) were in the Kuala Langat district, 19.15% (9 units) in Klang district, 17.02% (8 units) in the Sabak Bernam district.
o Industrial units under construction recorded a take-up rate of 68.04% which reflected that there is moderate demand for industrial properties in Selangor> in which demand levels are affected by access to good infrastructure and transportation linkages.

Prepared by PA International Property Consultants (KLJ 3dn Bhd October 2013 MM'” CompanyNo.10091l4-M 7. INDEPENDENT MARKET RESEARCH REPORT (Conl’d)
Prepared for Titijaya Land Bemad o The overhang of completed industrial units in the Klang district in 2Q 2013 comprises 9 units of semi­detached factories which are lesser compared to IQ 2013 (Ten’aced: 10 units; semi-detached factories: 20 units). On year-on-year basis, the total overhang volume in Klang districts which represents about 19.15% of tl,e unsold units within the Selangor state (2Q 2012: 21.35% of the unsold units) showed a better sign and it is not perceived as a direct threat to the Group’s current launches of indusuial parks in Klang such as Zone Irmovation Park and Seri Alam Industrial Park as well as the subsequent phases of industrial park in Kapar. The latter is to be developed on a site located off Jalan Kapar with good accessibility and connectivity to major highways like the North Klang Stt’aits Bypass Expressway, the New Klang Valley Expressway and the Federal Highway. 7.3.2 SUPPLY OF INDUSTRIAL PROPERTIES IN SELANGOR Existing Supply
SD 1,603 972 o 18 o 119 117 824 303 3,956 D 1,658 960 87 39 o 708 76 742 25 4,295 FF 263 9o oooooo272 Ie 14 53 39 oo 8 ooo114 Total 14,400 6,547 296 166 21 3~79 3,721 5,447 884 35,061I Source: Property Stock Report 2Q 2013, labatan Penilaian & Perkhidmatan Harta Legend: T = Terraced factory / warehouse FF ~ Flatted factory SD = Semiwdctachcd factory / warehouse Ie = Industrial complex / unit D= Detached factory I warehouse -_ .._–_ _._.—-_ _–~——-­• As at end of June 2013, there were a total of 35,061 units of industrial properties in Se1angor (June 2012: 34,557 wlits) which was a marginal increase of 1.46% (504 units) in the supply of industrial property units in the state from June 2012. o The supply of industrial properties in Selangor comprised mainly terraced units, which constituted 75.37% of total industrial properties in the state. This was followed by detached units (12.25%) and semi-detached units (11.28%).
o The highest supply of industrial properties was in the Petaling district (41.07%), followed by the Klang district (18 .67%) and Rulu Langat district (15.54%).

 

[Cillnpany No. 10091 14-M 7. INDEPENDENT MARKET RESEARCH REPORT (Coltl’d)

Prepared for Titijaya Land Berhad Future Supply Table 73.2.2 District Peta ling Klang Kuala Kuala Sabak Gombak Hulu Hulu Total Type Langat Selangor Bernam Selangor Langat Scpang T 374],454 49 0 40 445 187 282 32 2,863 SD 514 411 23 22. o 128 o 602 o 1,700 D 83254 167 47 55 4 245 2 858 FF o4 oooooo5 IC 4 12 5 8ooooo29 Total 975 2,135 245 77 41 628 191 1,129 34. 5,455 Source: Property Stock Repon 2Q 2013, Jabatan Penilaian & Perkhidmafan Harta • As at end of June 2013, it is expected that the state of Selangor will have 5,455 new industrial units in the future, with an increase of 15.56% to its existing stock of 35,061 units in the next 2-3 years. The Petaling district will continue to contribute this sector in the overall future supply, although the Klang district is expected to have the highest number offuture supply (39.14%), followed by the Hulu Langat district (20.70%) and Petaling district (17.87%). Of the upcoming 5,455 industrial units, 52.48% will consist of terraced units, 31.16% semi-detached units and 15.73% detached units.

No. of Units (2Q 2004­. Property Type 2Q 2013) 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2QNo.of %2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 units Terraced 4,315 4,461 4,461 4,461 4,461 4,553 4,553 4,553 4,553 4,553 238 5.52 Semi-detached 898 966 966 966 966 966 966 966 966 972 74 8.24 Detached 884 895 896 896 918 924 926 935 953 960 76 8.60 Flattedfactory 7 7 7 7 7 7 7 7 8 9 228.57 Industrial complex. 42 42 42 42 47 49 49 49 52 53 11 26.19 Total 6,146 6,371 6,372 6,372 6,399 6,499 6,501 6,510 6,532 . 6,547 401 6.52 Source: Property Slack Repon 2Q 2004 -2Q 2013, Jabatan Penilaian & Perkhidmatan Hmta • Table 7.3 .2.3 shows that the supply trend of industrial properties in the Klang district had no significant increases in the past 10 years.

• In the Klang district, the total supply of industrial properties increased by only 6.52% by the end ofJune 2013, as compared to end ofJune 2004. We noted that the supply of all the industrial properties in Klang district has increased between the periods of 2Q 2004 and 2Q 2013. The number of flatted factories, industrial complexes, detached factories, semi-detached and terraced factories increased by about 28.57%, 26.19%.. 8.60%, 8.24% and 5.52% respectively over the 1O-year period of2Q 2004 to 2Q 2013.

 

Company No. 10091l4-M 7. INDEPENDENT MARKET RESEARCH REPORT (Coll/’d)

Prepared for Titijaya Land Bemad’dIIN·PJQ”@’ii§.I.I, • Over the 8-year period since 2Q 2005 to 2Q 2012, the supply of semi-detached factories and flatted factories (between 2Q 2004 to 2Q 2011) in the Klang district had remained stagnant. However, in 2Q 2013 supply inereased by 6 units (0.62%) to 972 units for semi-detaehed factories, whilst flatted faetories has increased by 2 units to 8 units since 2Q 2011. Based on the Table 7.3.2.3, it also noted that the supply of flatted faetories and industrial complex contributed the least in tenns of number ofunits compared to other types of industrial properties, i.e. terraced, semi-detached and detaehed factories in Klang district.
• Hence, it is expected that the upcoming industrial development will be able to address the small supply

situation. [The rest ofthis page is intentionally left blank] Prepared by PA Inlernational Property Consultants (KL) 3dn Bhd Oclober 2013
MM'” Company No. I009Il4-M 7. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
‘ij!NtN·,@@§§’;iij.r,I, Prepared for Titijaya Land Bemad
CHAPTER 8 DEMAND & SUPPLY DEPENDENCIES
8.1 DE~I.\ND DEPENDENCIES • There are number of internal and external factors that will be affecting the demand for property. Some of the demand dependencies are as follows:­8.1.1 DEMAND DEPENDENCIES -ECONO~IIC • The economic well being of the nation will directly influence the business confidence, purchase confidence, disposable income and unemployment rates -thus affect the take up rate of the properties. Some of the economic factors that will determine the well-being ofthe nation include the following:­a Gross Domestic Product (GDP); a Gross Nation Product (GNP); and o Performance of the capital markets 8.1.2 DE~l.\ND DEPENDENCIES -MICRO AND MACRO ECONOMIES • The demand for properties is also dependent on the following economic and fiscal policies adopted by the govemment:­o Inflation;
o Base Lending Rate (“BLR”) and interest rates; a Money supply;

 

o Taxation; and a Lending policies
8.1.3 DE~IAND DEPENDENCIES -GOVERN~IENT POLICIES AND LOCAL GOVERNMENT REGULAnONS • There are also policies and regulations which will affect the demand of properties. Among the federal, state and local government policies that will have the impact are as fullows:­o Bumiputera quota;
o Low cost housing policy; and
o Foreign ownership policy

8.1.4 DEMAND DEPENDENCIES -DESIRABILITY OF PRODUCT • At the individual property and purchase’s level, the demand for any property is also dependent on the product, surrounding and other factors such as:­o Location and its surrounding;
o Accessibility with good infrastructure;
o Design and quality of product;
o Available amenities and public transportation;
o Reputation of the developer; a Pricing of property;

 

·0 Densityofdevelopment; and o Attractive marketing strategies
CompanyNo.1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (CoIII’d)
Prepared for Titilaya Land Bemad 8.1.5 DEMAND DEPENDENCIES -LOANS • One of the most critical demand dependencies especially for the residential sectors is tile amount of loans given to buyers. Availability ofloans from the lenders’ perspective is predicated by the following factors:­o Financial institutions’ lending policies;
o Government policies;

o Bank Negara guidelines; and
o Liquidity in the market

• During December 2012, total loans to property sector increased from RM469.91 billion (December 2011) to R.M541.89 billion. This indicated tllat there is an increment of about 15.32%. However, tile total loans to non­property sectors are at about RM566.I0 billion in December 2012 which increased by 6.09% from RM533.60 billion in December 201 I. (Source: Property Market Reports 2011 and 2012, Jabatan Penilaian dan Perkbidmatan Harta) 8.2 SUPPLY DEPENDENCIES 8.2.1 SUPPLY DEPENDENCIES -RAW MATERIALS • Generally, the main raw materials used in property development include building materials such as piles, tiles, cement, iron, steel and concrete materials, which are widely available locally and overseas. Therefore, the shortage wiIl be minimized. 8.2.2 SUPPLY DEPENDENCIES-FINANCIAL RESOURCES • One of the supply dependencies is the financial resources needed to undertake the purchase of land and construction activities. • Access to loan is one of the main dependencies to sustain business activities in the property industry.
• Loans approved for the construction sector recorded at a rate of -5.8% in 2Q 2013 compared to the -9.0% in

2Q 2012, according to the Quarterly Bulletin, Bank Negara Malaysia. CHAPTER 9 RELIANCE ON AND VULNERABILITY TO IMPORTS RELIANCE ON AND VlILNERABILlTY TO IMPORTS • The property-based industry is highly depending on the main raw materials in the property development. The main raw materials used such as piles. tiles, cement, iron, steel materials and concrete materials are easily available both locally and overseas. • Nevertheless, the raw materials and services are generic in nature and can be sourced from other local and overseas suppliers. Therefore, the Group is not reliant on or vulnerable to imports of these materials. Prepared by PA International Property Consultants (KL) Sdn Bhd October 2013
[ Company No. I009114-M 7. [NDEPENDENT MARKET RESEARCH REPORT (Cont’d)

Prepared for Titijaya Land Bemad CHAPTER 10 BARRlES TO ENTRY [0.1 BARRIERS TO ENTRY Due to many players in the market, the property sector is highly-competitive in general. However, there are several factors which need to be considered by potential players before entering the industry. These include:­• Set-up costs o A property developer needs to have a strong financial standing as large capital outlay is usually required upliont while the returns will only materialise at a later date depending On the take-up I sales rate of its property products, timely delivery and other fuctors. Small-scale developers sOllletimes face difficulty when competing against larger players that enjoy competitive advantage due to economies of scale. The fanner may also be priced out as good development land become scarce and expensive, in addition to facing limitations in tenns of capacity to handle larger development projects or several ongoing projects simultaneously. • Technical skills and expertise o Generally, a property development company requires technically-skilled personnel and expertise which include engineers, surveyors and project managers, to acquire land bank, develop a project, construct the buildings and run a property development company. New entrants to dIe property market would require time and need access to this pool ofprofessional engineers, technical personnel and skilled labour with the necessary qualifications and experience. • Track record o Most discerning property purchasers prefer to buy properties fi:om developers with proven track records. In addition, a good track record would likely ease a property development company’s application for fmancing facilities from banks and fmancial institutions. This means that new players are at a disadvantage by not having a proven track record and this may create some form of barriers for new entrants. [The rest ofthis page is intentionally left blank] Prepared by PA Intemational Property Consultants (KL) Sdn Bhd October 2013 W·N.’ Company No. 10091l4-M 7. INDEPENDENT MARKET RESEARCH REPORT (Conl’d)

Prepared for Titijaya Land Berl1ad
CHAPTER 11 INDUSTRY OUTLOOK AND PROSPECTS I I.I INDUSTRY OUTLOOK AND PROSPECTS • For the year 2012, tlle Malaysian economy recorded an annual average growth rate of5.60% (2011: 5.10%), supported by positive domestic consumption and investment, implementation of govellllnent projects and strong frnaneing patterns. With the continued growth in domestic demand driven by expansion in private consumption and investment as well as public spending and investment, Malaysia is expected to continue registering positive economic growth albeit at a slower pace and the volatility of the ringgit of late. The announcement and implementation of the various pump-priming measures which include the lOth Malaysia Plan (2011-2015), ETP Roadmap, Budget 2013 and 2014 and other accommodative monetary policy stance undertaken by the Government are expected to lend further support to the country’s growth barring major adverse effects from the ongoing European debt crisis. • As the global economy improves, there is likely to be growing interest in the property market, especially from foreign investors attracted towards Malaysia’s long term prospects and its investorwfriendly environment. Based on the statistic of the Malaysia My Second Home Programme (MM2H), Ministry ofTourism Malaysia showed that there are 3,227 participants approved in 2012, an increase of 35.19% compared to the corresponding year (2011: 2,387 participants). However, it is to be noted that the proposed hike on RPGT rates on disposal of properties by foreign buyers -a flat rate of30% on gains for disposal made within the first five years and thereafter a 5% RPGT rate fur disposal in the sixth and subsequent years, is expected to dampen foreign demand for properties. This, coupled with the raising of the minimum price of property purchase by foreign buyers from RM500,000 to RM1,000,000, is expected to lead to a general slowdown in property sales, particularly for projects targeting a high level offoreign interests. • Meanwhile, the revised Real Property Gains Tax (RPGT) regime with its higher tax rates and the removal of the Developer Interest Bearing Scheme (DlBS), are also expected to lead to a slowdown in the property market. The volume of transactions, particularly in the primary market is expected to contract as these new cooling measures will further curb speculation. In the short tenn, transaction volume is likely to fall substantially along with property prices. The following observations provide some indications of the trends for the property development industry and Selangor, the state in which the Group operates in:­o Based on GDP statistics, Selangor has a consistently higher GDP per Capita when compared to Malaysia. The investment data in Selangor 2012 indicates that the number of approved projects in the Petaling district and Klang district were the highest, with 97 and 58 projects worth RM4.32 billion and RM1.78 billion respectively. The approved projects are expected to generate employment of 9,094 jobs for Petaling and 4,060 jobs for Klang according to Selangor State Investment Centre and MIDA. This in tum will translate to higher demand fur residential and commereial properties in the medium to long tenn. o Demographic statistics from the Economic Planning Unit and Department of Statistics also show that Selangor is the country’s most populous state with high population growth and in-migration due to its proximity to the country’s capital city of Kuala Lumpur which offers ample employment opportunities. The Selangor State Structure Plan intends to attain a population of6.85 million and 7.37 million by 2015 and 2020 respectively which is based on a forecasted population growth of25.46% within the next 5 yea”, and 34.98% within the next 10 years -this augurs well for the property industry as property developers will continue to playa role in catering to the growing population’s housing needs.
Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Com ‘d)

Prepared for Tilijaya Land Berhad o In addition to being the most populous state in Malaysia, the Group’s land bank in Selangor is concentrated mainly in the Petaling and Klang districts, the former being the most populous and dense1y­populated district in the state, and the latter being the third most populous. With the state of Selangor having a larger proportion income-earning population of 60.44% (population aged between 20 and 59 years) when compared to the other age groups, this augurs well for the Group as this population group is deemed as potential property buyers generating high demand for properties. Also, with Selangor having one of the ltighest annual population growth rate at 2.7% (2000 -2010) in the country, this supports growing and sustained demand for new housing products and business premises alike. o According to Property Market Report 2012, Selangor recorded 96,513 transactions with a total value of RM49.24 billion in 2012, contributing about 2258% and 34.47% to the national volume and value of transactions respectively. In IH 2013, Selangor still remained the most dominant state which recorded 40,282 transactions worth RM2L92 billion, eontributing about 21.69% and 32.68% to the Malaysia volume and value of transactions respectively. This indicates that Selangor has a very active property market and high population growth due to in-migration and urbanisation. Based on the statistics ofvolume and value of property transactions from 2002 to First Half 2013 as reported in Property Market Reports 2003 to First Half 20 13 by Iabatan Penilaian & Perkltidrnatan Harta, more properties are being transacted in the Malaysian property market annually, with the average value of properties also increasing over the years from RM166,987 in 2002 to RM361,I02 in IH 2013. Based on the Industrial Property Transactions in Property Market Reports 2003 to 2012 by Iabatan Penilaian & Perkhidmatan Harta, it is observed that prices of industrial properties in Selangor have also risen over the past II years fi-om RM854,907 in 2002 to RMI,896,828 in 2012. In IH 2013, the average industrial property prices archived RM2,408,460 per unit, an increase of26.97% from the price recorded in 2012. o In lH 2013, healthy movements in property prices were noted in the state ofSelangor in the residential, commercial and industrial sectors as evident from the higher average transacted values on year-on-year basis (IH 2012). Table 11.1 .1 shows that the average transacted value of residential unit for the Petating district of RM503,138.66 were higher than the state’s average of RM385,617 56. As for commercial properties, Petaling district average transacted prices of RMI,356,236.32 also surpassed the State’s average of RMI ,118,24650 wltilst the average in Klang district traded at RM824,906.02. In IH 2013, the average transacted prices for industrial properties in Petaling was recorded at RM3,810,921.99, were ltigher than the State’s average transacted price wltilst the average in Klang district traded at RM I,926,392.69. The higher average transacted prices for the industrial properties in PetaHng district were mainly attributed to sales of semi-detached, detached factories/warehouses and others. However, in Klang district, the transacted prices were mainly attributed to the sales ofvacant plots and detached factories. [The rest ofthis page is intentionally left blank]
Company No. 1009114-M 7. INDEPENDENT MARKET RESEARCH REPORT (Cont’d)
l!ifiijIW,@§GIM;1§·I.!! Prepared for Titijaya Land Berflad Table 11.1.1
Residential (RM) Commercial (RM) Indnstrial (R’I1)Area 1H 2012 IH2013 1H 2012 IHZ013 IH2012 IH 2013 District: 431,326.95 503,138.66 1,000,522.57 1,356,236.32 2,358,966.29 3,810,921.99Petaling District: 259,733.61 321,740.77 567,160.80 824,906.02 1,845,993.79 1,926,392.69Klan¥ District: 331,556.22 357.11444 585,805.47 1,012,640.26 1,963,661.97 1,349,354.84Gombak State: 325,090.39 385,617.56 887,720.57! 1,118,246.50 1,838,231.97 2,408,460.37Selangor Source: Property Market Report First Half2013, Jabatan Penilaian & Perkhidmatan Harta o The districts of Petaling and Klang (in which most of the Group’s projects and land banks are located) have continued to be in the forefront, having attracted a total of RM6.09 billion worth of industrial investments in 2012, representing 51.92% oftotal industrial investments in Selangor by the Selangor State Investment Centre & MIDA. During the same period, FDI made up 37.77% oftotal capital investment in Ule state, Widl Petating distriet drawing the highest total capital investments. In 2012, there are a total of RMl1.73 billion worth ofindustlial investment in Selangor.. representing about 28.57% ofthe Malaysia’s total investment (2012: RM41.05 billion) by the Selangor State Investment Centre & MIDA. The approved projects indicate that there are more industrial activities in Selangor and this in twn will translate to higher demand for residential and commercial properties in the medium to long teon. o To date, Kapar, in whieh the Group has on-going and future industrial developments, houses several large manufacturers such as Supennax Corporation Berhad (“Supelmax”), Press Metal Berhad and Bata. The announcement on 6th March 2009 by Supennax of its new Glove City in Kapar bodes well for the overall industrial property market sector in Klang. q The Glove City is a la-year industrial project as reported in OSK Research on 6th March 2009, costingRM400 million.Theprojectis partofSupelmax’splanto progressivelytransfer all itsrubber glove production to a central location whilst enhaneing it’;; operating efficiency. The Glove City will be built in two phases. As at May 2012, it was mentioned by Supelmax Corporation Berhad that the inti’astructure and earthworks of Glove City have been completed and Phase I will be fully commissioned by year 2014. (Source: “Invest Malaysia 2012” Conference at Shangri-La Hotel, Kuala Lumpur, 29 -30 May 2012) q Fraser & Neave Holdings Berhad (“F&N”) is investing RM350 million in a new manufacturing plant in Pulau Indah to cater for the increase in demand for its products. The new plant is scheduled for completion by the end of 2012. (Source: New Straits Time, 24′” October 2009). The new plant in Pulau Indah was completed ahead of schedule in November 2011 (Source: Bomeo Post Online, 16″ November 2011). Based on F&N AImual RCPOlt 2012, dIe new plant was located on a-37.4 acre site within the Selangor Halal Hub in Pulau Indah. The commercial production already began end of March 2012 followed by its complete operations in August 2012. q Cargill Pahn Products has announced in May 2010 on plans to build a new vegetable oil refinery in Port Klang Free Zone. The construction ofthe RM162 million plant was completed in 20 II.
Company No. 10091 14-M 7. INDEPENDENT MARKET RESEARCH REPORT (Co1!/’d)
‘Mii!§iUI@@!M;l$·I.i, Prepared for Titijaya Land Berflad The new Glove City in Kapar, the completed and the construction of new plants in Klang by multinationals, i.e. Cargill and F&N, will benefit the prospect and growth ofthe indusuial sector in Klang. The Glove City in Kapar is anticipated to generate spill-over effects on the other property sub-sectors (residential, commereial and indusu·ial) given the likelihood of increased employment, which in rum will see antieipated demand from the workforce in Glove City and also other supporting industries related to the rubber production industry. As noted from Industrial Property Stock Report 2Q 2013, the fultJre supply for industrial in Klang has been increasing in numbers eornpared to other districts. With this, it may support the demand in residential and commercial in Klang district. o Based on the volume of transactions of industrial properties in IH 2013 within Selangor, it appears that the Klang district has the highest demand for vaeant plots in the state, fullowed by tenaced, detached and semi-detached factories. Furthelmore, we note that there has been no new supply of semi-detached factories in the Klang distriet since 2Q 2005 to 2Q 2012. However, the supply has been increased from 966 units (2Q 2012) to 972 units in 2Q 2013, with future incoming supply of 411 units targeted to be completed in the next 2-3 years making up only 42.28% of the existing supply of 972 units. This indicates that the Group’s industrial project in Kapar may be able to address the current lack of supply in the Klang distric~ particularly as the Petaling and Klang districts have the highest and second highest number and value of industrial properties transactions respectively, whereby indicating a strong demand for industrial properties in both districts. • In conclusion. all these developments bode well for the prospects of the Group, in particular its on-going as well as future development projects that are sited within Se1angor, fur w~ich has a growing demand for various property products ranging from residential, commercial and industrial and its high population growth and in­migration and the conducive business environment provides ample opportunities for the Group to develop projeets that may be well-reeeived by the market. [The rest ofdlis page is intentionally left blank]

 

 

 

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