DTZ Analyst & Investor presentation - UGL

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1 DTZ Analyst & Investor presentation Sydney, Australia 18 October 2013 PRIVATE & CONFIDENTIAL www.dtz.com 0

2 Agenda Friday 18 October 2013 Richard Leupen Welcome & opening 8.30am - 9.00am UGL Managing Director & CEO Tod Lickerman Overview of DTZ 9.00am - 9.30am DTZ Global CEO John Forrester EMEA 9.30am 10.00am Chief Executive, EMEA Morning tea break 10.00am 10.15am Edward Cheung North Asia 10.15am 10.45am Chief Executive, North Asia Henry Arundel Asia Pacific 10.45am - 11.15am Chief Executive, South East Asia ANZ Nick Westley Americas 11.15am 12.00pm Chief Executive, Americas George Keches Facilities Management 12.00pm 12.30pm President, Global Facilities Management Open Q&A All presenters plus: Lunch Joe Friedman DTZ EVP Finance 12.30pm 2.00pm Chris Cooper Head of Investment Management UK Jun Sochi Chief Executive, Facilities & Engineering, DTZ Singapore Richard Leupen Closing 2.00pm UGL Managing Director & CEO 1

3 Introduction 2

4 Evolution of DTZ UGL acquires Singapore based UGL acquires US based UGL acquires trading UGL acquires Premas International Unicco Service Company assets of DTZ plc Kilpatrick Green 1998 2005 2007 2011 2002 2006 2010 2012 UGL acquires US based UGL rebrands the property UGL Services and UGL acquires KFPW Equis Corporation business UGL Services DTZ rebrand to DTZ 2,247 1,935 1,559 1,603 1,362 1,329 1,101 416 177 270 51 73 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 DTZ 5.9% 6.8% 14.1% 12.1% 11.7% 31.7% 32.8% 32.5% 31.0% 36.0% 45.2% (% UGL revenue) 3

5 DTZ today DTZ is a leading global integrated property services company with a strong recurring revenue base and attractive growth outlook FY13 Business Mix Revenue >$2.0B By Service By Geography Order book $3.5B CRE Asia Pacific 22% EMEA 16% 27% North People (Including contractors) ~45,000 Asia 7% FM Countries 52 73% Americas 55% Clients End markets DTZ Revenue ($m) Blue-chip Commercial Life Sciences 1,933 companies and corporate Logistics and 1,603 Government Education industrial 1,362 1,329 Private Financial Public venues enterprise institutions Retail Public Government Technology institutions FY10 FY11 FY12 FY13 4

6 DTZ Core Services DTZ has a unique integrated, end-to-end global service offering Investor End-to-end Consulting Building Integrated property Leasing agency and Investment and Consultancy/ and facilities Capital markets Valuation brokerage Asset Management Project management Management Research End-to-end Occupier 5

7 DTZ - Global Geographic Footprint Americas EMEA North Asia APAC 3 countries 33 countries 5 countries 11 countries 33,500 employees 3,500 employees 1,800 employees 5,500 employees #1 CRE firm in the Netherlands Leading alternative asset manager with $12b funds under #1 in Poland in management various CRE services Largest footprint in Fully integrated Top 4 CRE firm Greater China and self-perform model in UK Top 4 CRE firm #1 valuations business in France in North Asia Top 4 CRE firm in Germany #1 global service provider by Client #1 in Czech Advocate Score in the Republic in various 2013 Watkins Survey CRE services #1 by revenues in Asia Pacific #1 in Qatar in various CRE & FM services #1 by revenues in Australasia 6

8 Demerger Overview A demerger provides the optimal corporate structure for both DTZ and Engineering On 26 March 2013, UGL announced that it was undertaking a corporate structure review Review involved a detailed evaluation of issues, costs and benefits of various alternatives UGLs Board concluded that a demerger of DTZ and Engineering provides the optimal corporate structure to deliver the best long-term sustainable outcome for all UGL stakeholders Both DTZ and Engineering have grown significantly over recent years and as both businesses enter their next phase of growth, the operational and strategic priorities of each business are starting to diverge A demerger recognises that the two businesses operate in fundamentally different markets and have different geographic focuses and strategic requirements going forward UGL will proceed as quickly as possible to prepare DTZ and Engineering to operate on a standalone basis, including completion of the global integration of DTZ and the build-out of DTZs global headquarters in the US UGL aims to complete the demerger in FY15 Board of Directors, management teams, capital structure and dividend policies of Engineering and DTZ will be determined closer to time of demerger 7

9 Rationale for a Demerger A demerger will ensure that both DTZ and Engineering have the ability to pursue their strategies unhindered and is expected to deliver long-term sustainable shareholder value A demerger of DTZ and Engineering will A Demerger of DTZ and Engineering will Create two attractive, market leading entities with a single industry focus A leading global integrated property services company A market leader in engineering, construction and maintenance services in Australia, NZ and Asia Allow separate Board and management teams to focus on their core business strategies and growth opportunities Allow each business to adopt independent capital structures and dividend policies appropriate for their operational and financial requirements Enhance long-term shareholder value and offer investors a clear investment choice Both companies will be ASX-listed and are expected to be included in the S&P/ASX 200 index Provide clarity of strategy and increased transparency of value Demerger expected to facilitate a better recognition of the value of the two businesses over time Allow each business to recruit and retain the best people and foster an independent corporate culture 8

10 Timing and Key Milestones of a Demerger UGL aims to complete a demerger in FY15 Key milestones Description Separate UGL consolidated functions (e.g. finance, tax, treasury, IT, legal, company secretarial, investor relations, human resources etc.) Build out DTZ global headquarters in the US and Engineering in Australia with the necessary functions to support independent ASX-listed entities Establish proven track record for Establish separate Boards of Directors and senior management teams appropriate for ASX-listed DTZ and Engineering companies Establish a proven track record for DTZ and Engineering operating as standalone entities Establish appropriate capital structures which will allow each business to achieve their strategic objectives and pursue growth opportunities as they arise Determine appropriate dividend policies for the two companies Complete DTZ integration program Completion of comprehensive global integration of DTZ including global IT systems roll-out Obtain the necessary regulatory and statutory approvals, including shareholder approval Apply for demerger tax relief and stamp duty reconstruction relief Obtain necessary regulatory and Prepare scheme of arrangement booklet and documentation statutory approvals ASIC and ASX review Shareholder vote Court approval Ensure supportive market conditions Capital market conditions will also need to be supportive at the time of a demerger 9

11 Market The Opportunity 10

12 Opportunity 2011 total real estate services market 2011 market share by revenue Outsourced Top 4 $60B 30% $14.5 B 22% CBRE JLL UGL/DTZ C&W $200 B $60 B Self-perform All Others $140 B 70% $45.5 B 78% 11

13 Recent data show pick-up in US and European economies Average GDP growth 6% 5% 4% 3% 2% 1% 0% -1% EU27 US Asia Pacific World 2008-12 2013-17 Source: DTZ Research, Oxford Economics 12

14 Fed tapering talk has prompted rise in global bond yields 5 year government bond yields 6% 7% 6% 5% 5% 4% 4% 3% Spain (RHS) (RHS) Italy (RHS) (RHS) 3% 2% 2% UK UK (LHS) (LHS) US (LHS) (LHS) France (LHS) (LHS) 1% Germany (LHS) 1% Germany (LHS) Japan (LHS) (LHS) 0% 0% 2007 2008 2009 2010 2011 2012 2013 Source: DTZ Research, Bloomberg 13

15 Recovery in investment volumes across all regions Global investment volumes, USD bn 450 400 350 300 250 200 150 100 50 0 North America Asia Pacific Europe Source: DTZ Research, RCA, RealNet 14

16 Growth initiatives 15

17 Growth initiatives People: Talent development / retention / succession Coverage and markets: Controlled international expansion, expand skill lines and capabilities Global Corporate Services (GCS): Increased cross-selling of services to clients, particularly multinational corporations Platform: Execute Global Property System (GPS) / redefine and implement customer facing technology platform / roll-out global CRM system 16

18 Regional snapshots 17

19 Americas Ongoing investment in brokerage business driving future growth Performance highlights / priorities FY13 revenue ~$1.1BN Improving market conditions People 33,500 Pursuing larger / more complex FM accounts Number of recent key wins with global opportunity 13% Fee earner recruitment momentum building with number of new hires announced in key markets (eg New York) 87% Facilities Management Brokerage / GCS 18

20 APAC Strong contract retention with significant pipeline Performance highlights / priorities FY13 revenue ~$430m Business confidence remains subdued across the APAC region People 5,500 Strong contract renewal rates Pipeline remains strong despite weak near-term End to End, 26% economic growth in Australia Valuation, 1% Organisation restructured with new leadership in place Leasing Agency/Occup ational FM growth strategy formulated with key growth Development, resources identified Other, 9% Facilities Management, 64% 19

21 EMEA Building momentum Performance highlights / priorities FY13 revenue ~$320m Improving macro conditions People 3,500 DTZ UK performing well primarily by Central London France and Germany restructure on-track Other Middle East (Qatar and KSA) operations continuing to 13% Occupational grow Markets 29% Investment Agency 12% Property Valuation Management 16% 29% 20

22 North Asia Continued growth and outperformance Performance highlights / priorities FY13 revenue ~$135m #1 commercial real estate services firm in worlds second largest economy People 1,800 Market leaders in major investment transactions in China: Consulting & DTZ arranged the sale of Metropolitan Plaza a Research Investment Agency Project and Building 11% 15% US$4.5bn transaction Consultancy 2% Residential Agency 3% Continuing to expand presence into second tier cities Property and Facilities Management 17% Occupational Valuation Markets 23% 29% 21

23 Europe, Middle East & Africa (EMEA) 22

24 Europe Middle East & Africa (EMEA) coverage EMEA 33 countries (7 minority equities and 12 affiliates) 93 offices 3,500 employees Top four market position among UK commercial real estate advisory firms France - #1 market position in retail valuation services Germany - 25m sq ft of lettable space under management Poland - #1 in property management Nordic & Baltic region - #1 market position in valuation and as overall advisor and consultant Qatar (minority equity) - #1 in valuation, leasing agency, consulting and corporate services Aspire Zone Project - 2011 Middle East 'Facilities Management Project of the Year' 23

25 EMEA skill line breakdown Capital Markets Leasing Agency / Occupational Each country in EMEA has designated capital Development Markets markets resources advising clients on the buy and sell side. This has recently been augmented Market leading office agency teams specialising by a pan-European capital markets team based in the leasing of city centre offices, business in London focused on the movement of global parks and mixed used developments capital flows Property Management Valuation National and international integrated property Comprehensive commercial and specialist and asset management services for investors, residential property valuation, appraisal and due corporate owners and occupiers of property diligence advice Global Corporate Services (GCS) Consulting Interface for global occupiers, offering the range Alignment of real estate portfolios with business of real estate services required by corporates. objectives, turning financial, socio-economic and No significant FM capability in-house, solutions regeneration objectives into deliverable policies, through sub-contractors strategies and solutions 24

26 EMEA skill line breakdown Retail Project Management & Building Consultancy DTZs retail team works closely with developers, Our project and building consultancy investors, retailers, landlords and owners to professionals advise on the construction, repair deliver solutions in all aspects of retail property and maintenance aspects of commercial property Research Investment and Asset Management DTZ is the premier source of thought led Investment and Asset Management teams help research on real estate markets worldwide. A clients achieve optimum performance in their consolidated team provide coverage of all key property portfolios through strategic advice, global property markets portfolio management and transaction services 25

27 Organisational structure CE Business General Counsel HSSE CFO (Fin/Ops) HR COO Trading Development/Sales Marketing Comms Projects Company Operational Learning and Risk Trading Recruitment Reward Secretarial Property Development New Geographies Territories Client Bids and Relationship Contracts Compliance Financial New Pipeline Executive Management Compliance & Business Assistant Control Finance Audit Shared Service Centre IT Central & Global Northern Western Middle East & Outsource UK & Ireland Nordics Eastern Corporate Europe Europe Africa Services Financial Europe Services Planning and Analysis Reporting EMEA Skill Lines (Cross Border Leadership) Project & Office Investment Retail Valuation Logistics Research Consulting Building Agency Consultancy 26

28 EMEA revenue by skill Other 13% Occupational Markets 29% Investment Agency 12% FY13 EMEA Revenue $319.6m Property Management 29% Valuation 16% 27

29 Market overview and trends Overview Trends European economy fragile but green shoots emerging, with EMEA Macroeconomic positive growth expected in Q4 2013 (Eurozone +0.5%), Some signs of improvement in European economy; but GDP although growth in CY2013 will be still be broadly flat. expected to fall in CY 2013 in many countries (incl. Spain, Italy, Renewed political uncertainty over Italy is partially offset by Netherlands); the UK leading the recovery, and expected to electoral success of incumbent in Germany record strong growth in the second half of 2013 UK, FR and DE still dominate, pockets of activity in the rest of Some growth expected for CY 2013 in core Europe and Europe, notably the Nordics, and signs of improvement in forecasts revised higher, (DE=+0.5%, FR=+0.2%, UK=+1.4%); stronger growth forecast for CY 2014 Southern Europe. London remains strong, but we are seeing more activity in UK regional markets Unemployment in Europe at record high (Eurozone=12.1%), apart from Germany (5.3%) Significant bias of DTZ EMEA revenue to economies with Significant rise in bond yields since beginning of May as markets positive outlook. Only 2% of revenue lies in Spain, Italy, Ireland have re-assessed quantitative easing (QE) withdrawal timetable and Portugal. in US. In addition, the Bank of England (BoE) has stated there will be no more QE in the UK. Real Estate Occupiers remain reluctant to invest in expansion European investment volumes to be broadly flat in CY 2013 Prime rents to show little growth across most of Europe in CY 2013, and yields to be steady Few corporate clients are seeking full EMEA E2E solutions. Project management and property management, data and strategy are often bundled with transactions, resulting is a requirement to be first class in all disciplines to retain or win transactions. 28

30 EMEA differentiators Services Market leader in retail malls Leading office market adviser Leading valuation provider Leading UK public sector advice provider Reach Market leading access to global real estate capital flows Market leading solutions for multi-territory corporates Integrated global services offering Reputation Outstanding client performance proven through audit Recognition for client first approach 29

31 Key strategic initiatives 1. Capital Markets Market leading capital markets group which facilitates cross border investment into EMEA by identifying and tracking new sources of investor capital globally and building relationships with new investors. DTZs strong Asian platform is utilised to guide cross border capital into EMEA from the Far East. DTZ has recently secured an exclusive sales instruction on a $2.9bn pan-European portfolio. 2. Corporate Occupiers Global Corporate Services is a strategic partner to corporate clients providing global, integrated, end-to end strategy, management and coordinated local execution. DTZ has recently been appointed to a three-year contract to advise Rolls-Royce, the worlds second-largest maker of aircraft engines, on the management of its occupational real estate across 20 countries in EMEA. 3. Recruitment Real focus on the recruitment of senior client facing roles. Antoine Derville (President, France), Marc-Henri Bladier (Managing Director, France), Douglas Babington Smith (Head of Italy) and Paul Boursican (Head of EMEA Capital Markets Group) are recent examples. 30

32 EMEA major clients RBS Hammerson British banking and insurance Major British property development holding company and investment company Capital Markets, Occupational/ Capital Markets, Occupational/ Development Markets, Valuation, Development Markets and Property Management, Building Valuation Services and Consulting & Research Standard Life Aberdeen Asset Management International investment Long term savings and investment management group business headquarted in the UK Capital Markets, Occupational/ Occupational/Development Development Markets, Valuation, Markets, Valuation, Property Property Management, Building Management, Building Services Services and Consulting & Research AXA French global investment, Segro retirement and insurance group Property investment and Capital Markets, Occupational/ development company Development Markets, Valuation, Capital Markets, Occupational/ Property Management, Building Development Markets Services and Consulting & Research 31

33 EMEA select key mandates Significant mandates won in recent months Morgan Stanley Chevron Sale and leaseback of 450,000 sq ft London Agency and professional services across HQ. Target price $400m EMEA Verifone Wipro Global account management providing Global mandate to provide transaction transaction management and project advisory and management services management Vistaprint CAVP (Gecina) Global contract covering 52 countries providing transaction management, project Sales instruction for 100,000 sq ft office management and lease administration space in Paris High Speed 2 (HS2) Rolls-Royce Appointed to three UK lots to advise on DTZ has been appointed the main property estates services, property management, adviser for Rolls-Royce across its 160m sq ft urban regeneration and development EMEA estate 32

34 Capabilities case study Westfield Stratford City, London Background At 1.9m sq ft, Westfield Stratford City is Europes largest retail centre with 300 retail units, 60 restaurants, cinema, casino and bowling alley The clients challenge To have the centre fully let by the opening date A tenant mix that includes established as well as new and interesting retailers in order to establish a point of difference in the new shopping centre Market rent in an undeveloped area of London where retail was virtually non existent Maintain a critical level of rents throughout the mall Results achieved in order to meet Westfields financial targets 97% leased or committed on centre opening date DTZ solution Lettings achieved on average rents of between Bring our market knowledge of the best UK centres $385-$460 per sq ft Zone A and of international brands Provide a team of five dedicated agents to the project Host tours with agents in order to build up interest and understanding of the scheme Build on skills and relationships with retailers and retail agents learnt from our involvement with Westfield London and Bluewater in Kent 33

35 Capabilities case study Kings Cross, London Background In 2006, planning permission was granted for 8m sq ft of mixed use development Spread over a site that totals 67 acres, it is providing 3.4m sq ft of new offices, 500,000 sq ft of retail, cafs, bars and restaurants, c.2,000 new homes, a new university and a leisure, hotel and cultural uses The clients challenge At the time of DTZs engagement Kings Cross had image problems and the scheme wasnt even a building site DTZ was required to help change the image of Kings Cross, give robust and credible advice on the likely Devised a short, medium and long term commercial terms achievable for the accommodation, marketing strategy provide advice on the design criteria for that Promoted accommodation on a prelet basis accommodation in the context of the wider scheme Results achieved We were then required to identify and attract 1m sq ft of accommodation disposed of in one occupiers for Kings Cross and successfully conclude transaction to Google. DTZ was at the heart of transactions with them this deal and at the clients side for every single step of the process. DTZ solution Numerous other disposals have taken place in Placed a senior team on the job from the outset deals with BNP, Camden Council, Zone, Hoare Became heavily involved in the design development Lea and The Office Group of each individual building The client is delighted with our service and we are in a very strong position on this scheme Heavily involved in marketing and place making 34

36 Capabilities case study The Sony Center, Berlin, Germany Background The Sony Center is a 1.3m sq ft prime mixed use scheme in the heart of Berlin comprising office, residential, retail and leisure DTZ has managed The Sony Center during two changes of ownership The clients challenge Set up accounting system across the entire development Undertake a full review of service charge, reduce cost and establish a more equitable apportionment of costs amongst the occupiers Results achieved Increase value by improving the initially low Our approach resulted in over $675,000 p.a. occupancy levels reduction in costs following a full re-tendering of Create and execute a marketing campaign to sell services remaining residential apartments Massive increase of apartment sales (from 5 units to Maintaining stability during transfer period to new ownership over 30 units in just one business year) Reduction in arrears by 45% achieved through better communication increased confidence and the more equitable service charge system Provided stability by increasing tenant communication during period of transfer of ownership 35

37 DTZ Investment & Asset Management (I&AM) 36

38 DTZ Investment & Asset Management (I&AM) Overview DTZ Investment Management DTZ Asset Management United Kingdom Continental Europe $7.0B AUM $4.4B AUM 45 Professionals 50 Professionals Highlights Highlights Top manager by investment performance in the UK (Best 10-year Leading asset manager in France with mandates across risk adjusted return award from IPD for 2006, 2007, 2008, 2009 Continental Europe for some of the most sophisticated real estate and 2011) investors globally Outperformed the UK market as measured by IPD consistently Achieved significant business growth, from a standing start, in less over the long term, with cumulative outperformance of ~20% over than 10 years the last decade which was achieved without using leverage in portfolios Regulatory environment Regulatory environment Regulated by the Financial Conduct Authority (FCA) in the UK Unregulated as providing direct real estate management services AAF 01/06 accredited and audited Seeking authorisation as an Alternative Investment Fund Manager Overview Overview Research-driven investment house Well established European real estate asset manager 45 years of investment management experience Set up in 1999, it has delivered consistently high financial Discretionary and advisory mandates performance to DTZ and investment results to our clients Segregated account and fund of funds management Third-party asset management for a broad range of private equity Investment strategy, investment due diligence, and portfolio real estate funds and institutional investors management services Market intelligence, strategic advisory, investment and Winner of 12 IPD pension fund awards in the last 12 years, acquisition, financing advisory, legal structuring, portfolio including Best 10-year risk adjusted return award for 2006, management, and asset management and (where required) 2007, 2008, 2009 and 2011 recognising DTZ IM as the best property management services performing investment manager in the UK on a risk-adjusted basis. Winner of Pierres dOr for Asset Manager of the year in 2004 and Top 10 real estate manager in the UK by AUM. European Pensions Award for Best Asset Manager in 2009 37

39 Overview of I&AM Sustainable High margins Synergies Global Growth Advantages revenue +20% with skill potential consolidation lines 1 for 1 trend Assets under management ($million) $14,000 DTZ IM DTZ AM $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 38

40 I&AM is a mature manager but with strong growth potential Growth potential Organic 1. Clients increasing their real estate allocations in search of more favourable returns 2. Infill of existing EMEA network, particularly UK and CEE asset management expansion 3. Launch of new products including pan-European property funds and debt funds Inorganic 1. US platform growth 2. Asia-Pac markets 39

41 DTZ Research 40

42 Market leading research capabilities Consistent report series covering all relevant client perspectives Occupier Perspective regional and global reports which review occupier issues Property Times regular reports on the occupational real estate market with commentary, analysis, forecasts and key data; now covering more than 75 markets Investment Market Update country/regional reports on real estate investment markets with commentary, data, analysis and key transactions DTZ Insight a range of timely, thematic and topical reports providing insight into the key issues for the real estate industry DTZ Foresight regular updates of our forecast and analysis of regional property markets around the world, including the DTZ Fair Value Index analysis 41

43 Clients see media coverage, read reports and view webcasts August 2011 August 2013 87,000 Over 13,500 Over150,000 Over 5,593 reports downloaded Clients registered on Concep campaigns subscribers to DTZ from DTZ.com DTZ.com sent webcast channel 81 Global webcasts recorded 166,000 25,000 198,000 14,665 reports downloaded Clients registered on Concep campaigns webcast viewings from DTZ.com DTZ.com sent 42

44 Leading fund managers and Sovereign Wealth Funds use DTZ Research data Paul McNamara, Head of Global Research, PRUPIM Simon Durkin, Head of Research & Strategy, Deutsche Asset & Wealth Management I am consistently impressed with the depth and breadth of DTZ Research and their knowledge of global property this is excellent and will form a critical element of our markets strategic research program going forward Their various data products... analysis and insight help us formulate our investment plans and strategy 43

45 North Asia 44

46 North Asia coverage North Asia Greater China, South Korea, Japan 27 cities 1,800 employees DTZs offices in North Asia offer on the ground expertise in all aspects of the property market. Greater China, #1 commercial real estate services firm in worlds second largest economy First and only company holding national valuation licensed appraisers among international real estate firms in South Korea 45

47 Organization Structure North Asia Property Edward Cheung Chief Executive North Asia Functions Regions COO Sean Wang CFO Greater China Japan South Korea Global Corporate David Tan Services Head Head Head Head HSSE Edward Cheung Yoshiki Kaneko Dr. JW Shin Adam Catchpole Andy Morrison Human Resources Christine Jou Marketing/ Communications Wye Yee Low Investment/ Capital Markets Business Development Gordon Marsden Technology NORTH ASIA SKILL LINE LEADERSHIP Project Leasing Agency / Property and Management & Valuation Occupational Investment Agency Facilities Consulting Research Building KK Chiu Development Francis Li Management Alva To Andrew Ness Consultancy Johnson Yip Anthony Ng 46

48 North Asia revenue by skill Consulting & Research 11% Investment Agency 15% Project and Building Consultancy 2% Residential Agency 3% Property and Facilities Management 17% Occupational Markets 29% Valuation 23% FY13 North Asia Revenue = ~AUD136.6m 47

49 Market overview and trends Market Overview Trends The Chinese economic growth slowed to 7.5% in Customers are diversified while they prefer the 2nd quarter of 2013 while it is widely expected companies with high standard services and that GDP growth has stabilized in the 3rd quarter an international image. even though some risks remain. Investors and developers show divergent interests Market entries by local competitions intensify in the Chinese real estate market with some price wars and compress margins. divesting out of the mainland market while others are taking up more positions. Bank of Japan continues to take strong Business is expanding faster in the smaller 2nd and actions to revitalize the Japanese economy by 3rd tier cities. DTZ with the largest footprint in China is positioned to take advantage. pumping liquidity into the market. Japanese investment market has remained improving and has been continuously driven by J- Stable policies provide opportunities for REIT and domestic players. Japanese logistics Korean corporates and foreign investors to continues to be one of the most active markets. invest in Korean domestic market. Consulting and Investment have a continuous demand South Korean investment market is expected to be from the market. mainly driven by domestic institutional investors. Return on retail property investment climbed in 2013. 48

50 North Asia differentiators We have the largest footprint in Greater China Our brand is synonymous with quality real estate services and integrity in China We are #1 in valuation business in the North Asia region We are market leaders in major Investment transactions in China We have the strongest track record of government and local clients appointments 49

51 North Asia major clients HSBC Swire Properties Working as the exclusive valuer for Providing office leasing agency the mortgage services of HSBC in service in Hong kong Hong Kong Hutchison Whampoa Global Logistic Properties Provided investment agency Provide property management service for an office building service for GLP park in Suzhou disposal in Shenzhen Intel Roche Provided investment agency Providing office relocation service service for Intels site disposal in for Roche in Beijing Shanghai 50

52 North Asia select key mandates Metropolitan Plaza Guangzhou, China Provide investment advisory for the disposal of Metropolitan Plaza deal worth 2.6billion. Guangzhou Metropolitan Plaza is a four-storey shopping mall completed in 2012, with retail gross floor area totaling approximately 88,885 sq m. Kenedix Japan Provide investment advice to Kenedix in respect of the land disposal and also supported the procedure of land use conversion, which was originally registered as farmland KT Estate Korea Provide strategy planning for 454 properties' re-positioning by understanding current state and valuation the potential use of the properties. The total GFA is approx. 45.4 million sq ft. 51

53 Capabilities Case Study Services : Investment Agency Our investment agency professionals provide advice on the sale, acquisition and funding of commercial property, with specialists in office and business parks, retail, hospitality, industrial, logistics and residential development Case Study: Dangdai Building In Calendar year 2013 alone, DTZ has closed nearly USD1.4 billion. This extraordinary figure includes the teams latest coup in assisting Shun Tak Holdings to acquire the Dangdai Building (for RMB 1.29b) from award-winning Modern Green Development, a Beijing-based developer. Services : Consulting With close to 300 dedicated consulting professionals worldwide, we have one of the largest pools of consultants specializing in real estate. We advise governments, developers, investors and corporate owners and real estate development. Case Study: Xiamen International Cruise Centre The Consulting teams in Xiamen, Shenzhen and Hong Kong, worked together to perform a preliminary study for the development of the Xiamen International Cruise Centre, in Dongdu Port of Xiamen. Services : Leasing Agency and brokerage Our leasing agency and brokerage professionals serve landlords and occupiers in fulfilling their leasing needs as well as the purchase and sale of business space on behalf of occupiers. Case Study: Pfizer Beijing offices DTZ was appointed to provide tenant representation services to consolidate and relocate the existing Beijing offices of Pfizer that spans 10,808 sq m, including identifying a building that satisfies the real estate requirements of both the local and regional management with the best rental package. 52

54 Capabilities Case Study Services : Property and Facility management We provide property management for investors and occupiers across all types of commercial property. We are also devoted to supporting our clients in managing the workplace service requirements, provide users with a safe and enjoyable environment. Case Study: New Nike headquarter in Yangpu district Nike China awarded DTZ the integrated facilities management services contract for its new headquarters campus in the Yangpu district of Shanghai. Services : Project Management & Building Consultancy We provide services covering all aspects of project management including concept development, budget and scheduling, financing and design and construction management. We also manage capital outlays for maintenance, repairs and operations and oversee construction management. Case Study: Jinjiang Metro Cash & Carry DTZ PBC was awarded 6 projects for Metro (Mega stores national wide) including 4 Greenfield and 2 Built to Suite project management for year 2013. Services : Valuation / Appraisal We provide comprehensive valuation, appraisal and due diligence advice to a wide range of clients, including investors, corporate and public sector owners, lenders, and fund managers. Our clients use our valuation advice for assessing potential transactions, asset financing, financial reporting and IPO listings. Case Study: Yum DTZ East China Valuation team has been named sole valuer to Yum! Brands Inc (China Division) for the next two years. This engagement includes the valuation of selected properties of Yum! Brands current chain stores in China, as well as proposed new stores. 53

55 Asia Pacific 54

56 Asia Pacific coverage Asia Pacific 11 countries 31 offices 5,500 employees #1 in Full Service Residential Singapore market. 2.1 billion sq ft property and facilities management portfolio in Asia Pacific and North Asia Manage two Townships in Singapore with over half a million residents Strategic partner and shareholder of Singapore Sports Hub, one of the largest sports infrastructure projects in the world 55

57 Regional breakdown / skill line breakdown End-to-end property solutions across Asia Pacific Agency Leasing Capital Markets Leasing services to building owners, Advise on sale, acquisition and funding of developers and landlords for all commercial commercial property across all sectors and property types across Asia Pacific industries Consulting Energy and Sustainability Services Specialist consultants focusing in key Deliver complete suite of environmental property-related business issues sustainability services including policy, strategy, implementation and innovation Facilities Management (FM) Global Corporate Services Integrated FM solutions across a diverse Provide global integrated end-to-end client base. Manage the entire building life portfolio strategy, management and cycle from both a strategic as well as a day- coordinate local execution to-day operational perspective 56

58 Regional breakdown / skill line breakdown End-to-end property solutions across Asia Pacific Investment and Asset Project Management Management Core services include: Advice on investment strategy, fund Project Management creation, investment management and Building consulting and advisory maximising the productivity, reliability and Program Management efficiency of the facilities in our client portfolios Property Management Research and Forecasting Property management services for investors Timely and forward looking research on and occupiers across Asia Pacific commercial property markets across the region Tenant Representation Valuation Strategic tenant advice including leasing, Comprehensive valuation, appraisal and due acquisition and disposal of commercial diligence advice to a wide range of clients properties 57

59 Organisational Structure 58

60 Asia Pacific revenue by skill End to End, 26% Valuation, 1% Capital Markets/Investment Agency, 1% Leasing Agency/Occupational Development, 6% Project Management/Building Consultancy, 1% Facilities Management, 64% FY13 APAC Revenue = $430m 59

61 Asia Pacific property market indicators Investment transaction volume growth Q3 2013 prime office rental growth forecasts USD (bn) Average annual growth (% p.a.) 200 6% 11% 4.4% 180 12% 3.8% 4% 160 3.2% -1% 140 2% 120 0.8% 0.4% 0.1% 100 0% -0.1% 80 -0.9% -2% 60 40 -4% 20 -4.8% -6% 0 2012 2013F 2014F 2012 2013F 2014F 2012 2013F 2014F 2012 2013F 2014F Australia Singapore India Asia Pacific NB: Transaction volumes forecasts are as at Q3 2013 Source: DTZ Research 60

62 Overall FV score reduces but vast majority of markets remain attractive Asia Pacific fair value index, Q2 2013 83 88 86 47 76 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Australia China India Other Asia Pacific Cold Warm Hot Source: DTZ Research 61

63 Asia Pacific differentiators #1 occupier services provider in ANZ market #1 in Full Service Residential Singapore market Singapore Only International Consultancy providing specialist Hospitality Management services (e.g. Award winning Treetops Executive Residences) Singapore Top #3 in Residential Resales/brokerage with 2000+ Associate agents Malaysia- #1 in Retail Development Consultancy & Leasing Only IPC in India with base build project experience for high-rise buildings India Valuations team developed RICS Red Book for Valuations standards in India India, Awarded Best Property Consultancy of India for 4 consecutive years: 2010-2013 62

64 Asia Pacific major clients National Australia Bank, Australia Strategic consulting Hong Leong/CDL Group, Singapore Transaction Advisory Transacted portfolio of Commercial Office services office/industrial buildings Data Centre Management Development Consultants and sole Integrated facilities/property/ Marketing Agents portfolio management JTC Corporation, Singapore Integrated facilities management Sydney Opera House Property management Building Fabric Maintenance Agency leasing Services Secured 3-year renewal managing agent contract from 2014 to 2017 Singapore Sports Hub, Singapore 25 years PPP contract Yahoo, India Integrated facility management Transaction Advisory 63

65 Asia Pacific select key mandates Coles Nationally across Australia Summary of services: Provision of security services Fully integrated facilities management services for Coles Distribution Centres BCA Dormitory Singapore Full integrated dormitory management services including building maintenance, M&E maintenance, security, horticulture, landscaping, cleaning and pest control, in addition to tenancy management Township Singapore Managing Marine Parade, Jurong Town Council Routine & cyclical maintenance for the estate Emergency repair service and lift rescue work One-stop customer service help desk Neighbourhood renewal and upgrading program 64

66 Asia Pacific select key mandates DUO Appointed for marketing consultancy and sale of The Duos residential tower Developed by M+S Pte Ltd, a collaboration owned 60/40 respectively by Malaysias strategic investment fund, Khazanah Nasional Berhad and Singapores state-owned investment company, Temasek Holdings (Private) Limited DUO is an integrated development comprising premium residences, a 5-star hotel, grade A offices and a retail gallery on a 26,688 square metre site ITE College West, Singapore 27 year PPP contract Integrated facility management Singapore Land Authority (SLA) Singapore Client since 1985 A new 3-year contract commencing in this year to manage and operate the commercial properties for SLA Scope of work includes tenancy & lease administration, preventive & ad-hoc maintenance works, renovation and improvement works and valuation services 65

67 Capabilities case studies End-to-end solutions platform built to respond to the exacting needs of our clients Westpac, Australia National Australia Bank, Australia Five years of service 13 years of service Full-service solutions End-to-end delivery 2,568 properties; 1,898 leases 1,787 properties; 7.3 million sq ft Portfolio management Portfolio management Property management Transaction advisory Workplace management Strategic consulting Facilities management Project management Financial management Office services Environmental sustainability services On-site property management Subcontractor management Capital works program management Integrated facilities management 66

68 Capabilities case studies 67

69 Capabilities case studies Jurong Town Corporation (Singapore) Department of Foreign Affairs and Trade 1,300 residential apartments (DFAT) More than 200 industrial estates 12 years of service (Since March 2001) Seven blocks of bio-medical research buildings at Full-service solutions [email protected] Nearly 700 high profile, diverse and special Over 100 vacant properties purpose properties, including Embassies, Consulates, official residences and staff housing facilities (free standing, town houses and residential compound arrangements) in 83 Services include: countries around the world Hard and soft FM services Property management & maintenance Services include: Fire safety & security Estate management M&E engineering systems maintenance Facilities management Utilities & EHS management Compliance management Tenant management Procurement Transport and car park management Financial management and administration services Facilities booking 68

70 Capabilities case studies End-to-end solutions platform built to respond to the exacting needs of our clients Singapore Sports Hub Energy & Sustainability Services 25-year PPP contract More than 10 years of experience in delivering energy Integrated FM and Asset Life Cycle Management & sustainability services in Asia Identified over US$100 million of energy savings for clients Sport stadia/halls, commercial and leisure facilities Serve investors, owners, occupiers and developers totaling 278,700 sqm Scope of services Scope of services Security & access control management Energy management consultancy Cleaning, waste management & conservancy Energy audit Landscaping & turf pitch management Green mark certification Mechanical & electrical services Energy procurement Help desk & asset management Metering and arrears management Event support services Green products and solutions Utilities management Carbon management consultancy Car park, parking & traffic management Health & safety 69

71 Americas 70

72 Americas coverage Americas 3 countries 63 offices 33,500 employees #1 most recommended real estate firm in North America (Watkins Survey) 800 million sq ft facilities management portfolio Self-performs more services in more geographies than any other real estate services provider in North America 95% customer retention rate Leader in energy and sustainability services Particular strength in public institutions, e.g. Universities, Government, and Life Sciences 71

73 Americas Skill Line Breakdown 72

74 DTZ Americas Organisational chart DTZ Tod Lickerman Group CEO Americas Nick Westley Chief Executive Global Corporate Services CFO Nick Westley Jim Lawlor Sub Regions/Business Lines EVP Canada Mexico / Latin AM CRE Facilities Mgt Americas Functions Rob Cookson Human Resources Marketing/Comms EVP President Greg Schementi George Ketches Technology Research Legal/Risk Safety 73

75 Americas revenue by skill 13% Facilities Management Brokerage / GCS 87% FY13 Americas Revenue ~$1.1bn 74

76 Market Trends and Issues: Investment in CRE North American investment volumes Stock size, long term liquidity and relative value were up 15% in 2012, the strongest of Stock Region any region. Cross-border volumes Underpriced JP IR $100 bn Europe have returned to their 2005 level. $250 bn Asia Pacific Volumes might be restricted going $500 bn USA forward due to lack of sellers. CN US All U.S. markets are classified as DE UK AU attractive or very attractive, ahead of Europe and Asia Pacific. SG Overpriced IT FR ES SE Low liquidity High liquidity Sources: U.S. Government, REIS, Moodys, DTZ Research 75

77 Differentiators Americas FM Americas Brokerage Leverage large national presence Very high Client Advocate Scores Fully integrated, end-to-end services Occupier focused experience 17,000+ in-house workforce Majority of services self-performed Tenacious reputation Relationships with multi-levels of buyers Loyal customer base high client retention Consolidated financial reporting Entrepreneurial sales team (brokers) One-stop shopping Ability to leverage a collaborative global First-to-market - Sustainability CRE platform 76

78 Americas FM Representative clients by industry Marketplace Current DTZ Customers Financial & Insurance Retail Manufacturing Information, Communication, Technology Education Harvard University Government Public Venue 77

79 Americas brokerage Representative clients by industry 78

80 Global Corporate Services Global RE and FM o/sourcing is continuing to spread overall market is growing Secured Twenty-One (21) new GCS clients Renewed or expanded Twelve (12) existing GCS client relationships Centralized and upgraded GCS marketing material Increased GCS visibility at CoreNet and other industry recognized organizations 79

81 Facilities Management 80

82 Global Facilities Management Market A sizeable, highly fragmented global market A 635bn global market Market drivers: Trend to outsourcing Bundling: demand for single point of contact from clients Increased contract complexity requiring enhanced specialisation Increased focus on developing bespoke solutions for select end markets Innovation and technology to increase barriers to entry Market challenges: Fragmented market Very few pan-European players Margin pressure Being able to demonstrate benefits of fully integrated solutions Managing agent vs self-delivery Migration from single service to multi-service providers Source: Merrill Lynch 81

83 Global Facilities Management market Competitive landscape Source: Merrill Lynch, DTZ insights, market reports 82

84 DTZs Facilities Management platform Global DTZ revenue by type Global DTZ FM revenue by geography Asia Pacific EMEA CRE 22% 16% 27% North Asia 7% FM 73% Americas 55% 83

85 Expanding DTZs global FM platform Objectives Opportunities with existing customers Objectives: Robust response to global RFPs Drive profitable revenue growth globally Consistent service delivery across all regions Consolidate platform and infrastructure to deliver global FM capabilities Leverage best practice capabilities 84

86 Capabilities case studies Toyota Leading worldwide automotive manufacturer and provider of various financial services for more than 100 years Proactive leader in quality initiatives and workplace cultural change: The Toyota Way TMS North American corporate headquarters located in Torrance, California Contract Highlights Scope of Services Contract since 2011 (transition began Full Facilities Services: CMMS operation (Maximo v.7) 1/11; assumed full FM 4/11) Operations and maintenance (both Maintenance planning Full FM contract, coordinating self- fixed and mobile) performance & subcontract mgmt, Capital and expense project including aggressive M/WBE targets Central plant operations management, incorporating facility 8.8M square feet; 1,607 acres; 132 condition assessments Custodial services locations Mail, shipping & receiving services Grounds maintenance/ landscaping Corporate and regional headquarter and audio/visual services campuses, R&D facilities, service Space planning & management Space planning & moves, adds and centers, training centers, financial and administrative offices, warehouses and Call center operations changes manufacturing plants 338 DTZ employees plus 3 prime M/WBE subcontractor support companies 85

87 Capabilities case studies Cargill International marketer, processor and distributor of agricultural, food, financial and industrial products Founded in 1865, the privately held company employs 131,000 people in 66 countries around the world Contract Highlights Scope of Services 13 plant locations: 7 Wet Corn Milling; 2 Production & facilities maintenance services: mechanical, electrical & Cocoa & Chocolate; 1 Dressings, Sauces instrumentation, lubrication, HVAC, reliability PM program, welders/fitters, and Oils , 1 Malt, 1 Sweet Bran and 1 and mechanical (projects and capital) Horizon Milling Planning and scheduling 2,400 acres 670 DTZ employees Maintenance support: insulators and scaffolding services, expediting, transportation, warehousing, tool room, vacuum truck, sweeper truck, Contract since 1996 plant grounds, process sanitation, janitorial, vehicle/equipment repairs, process cleaning, production maintenance, clean room, rail car movement, 86

88 Important notice This presentation and any oral presentation accompanying it: is not an offer, invitation, inducement or recommendation to purchase or subscribe for any securities in UGL Limited (UGL) or to retain any securities currently held; is for information purposes only, is in summary form and does not purport to be complete; is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor, potential investor or any other person. Such persons should consider seeking independent financial advice depending on their specific investment objectives, financial situation or needs when deciding if an investment is appropriate or varying any investment; may contain forward looking statements. Any forward looking statements are not guarantees of future performance. Any forward looking statements have been prepared on the basis of a number of assumptions which may prove to be incorrect or involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of UGL, which may cause actual results, performance or achievements to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. Any forward looking statement reflects views held only as of the date of this presentation. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, UGL does not undertake any obligation to publicly update or revise any of the forward looking statements or any change in events, conditions or circumstances on which any such statement is based. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation and any oral presentation accompanying it. To the maximum extent permitted by law, UGL and its related bodies corporate, and their respective directors, officers, employees, agents and advisers, disclaim and exclude all liability (including, without limitation, any liability arising from fault or negligence) for any loss, damage, claim, demand, cost and expense of whatever nature arising in any way out of or in connection with this presentation and any oral presentation accompanying it, including any error or omission therefrom, or otherwise arising in connection with any reliance by any person on any part of this presentation and any oral presentation accompanying it. 87

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