Global Realty 89: Asia
outperforms
􀂄 Japan leads the pack; HK in second place
After a difficult Q1, Japanese real estate stocks surged more than 22% during April
and led by the three large developers which were up between 25% and 39% as the
credit crisis in the US began to subside and investors took advantage of the
attractive valuations in the region. Hong Kong, which we raised to overweight last
month, rose 12% in April and this region is poised to maintain strong over the next 3
to 6 months as residential sector demand runs ahead of new supply by a factor of
2x which could push prices higher by another 30% over the next 18 months.
US takes last place in April
After a strong relative performance during Q1, we reduced the US market to an
underweight given our concern over the health of the US economy and its impact
on earnings for the US market especially in the second half of the year. While Q1
earnings results can be classified as “in line” the comments from management are
clearly on the cautious side and this resulted in a gain of less than 6% during
April. YTD, the US REIT market is up 8% and the sector now trades at a 2%
premium to NAV which is in-line with the sector’s long-term average.
Raising Japan to overweight; Europe underweight
While our colleagues in the UK/Eur region have not lowered many ratings over the
past month, we remain concerned about the occupational cycle and further yield
shift in this region and expect the European stocks to underperform over the coming
months. On the flip side, we are raising Japan to overweight from marketweight
based on stable office demand (vacancy under 3%) and firm cap rates.
Top global Buy ratings
There were a few changes to our top global picks this month (see page p. 21 and
22 for a complete list. In the US, we favor Simon and Digital Realty while our UK
colleagues favor Big Yellow and Safestore. In Australia our top picks are
Goodman and Westfield while in Hong Kong our top pick is Sino Land. In
Singapore we favor CapitaCommercial Trust and CDL Hospitality. Within the
emerging markets, we favor MRV Engenharia e Participacoes of Brazil, DLF of
India, and China’s Bejing North Star, which is defensive due to the relatively high
level of income being generated within its development portfolio versus that of its
Chinese developer peers.
Global Conference – September 17th and 18th in NY
Merrill Lynch is hosting its Annual Global Real Estate Conference in NYC on
September 17th and 18th. In addition to the two day conference we are hosting
property tours in Boston (9/15) and NY (9/16) so please mark your calendar and
join us for a week-long event in the Fall.

Contents
Performance: April ‘08 3
Snapshot of ML’s Global Coverage 3
Summary Valuation Statistics 4
Recent ML Research Highlights 5
Regional Commentary 6
Australia 6
April’s Best & Worst Performers 19
Economic and FX Data 20
Top Buy Picks 21
Top Sell Picks 22
Top 25 Global Stocks 23
Global Valuation Comparison 24
Appendix: Global Property Data 32
Price Objective Basis & Risks 40
G lobal Team Page 47