Real Estate Korea Where Success Knows No Limits Index 1. Industry Overview3 2. Government Policies18 3. Success Cases19

Real Estate Trends of Korea Growing influence of foreign capital companies in Korea’s office market 3 Sales of large office buildings through foreign capital in 2014 ※ Limited to: Area of 33,000 ㎡ or more Source: Kyobo Reality, IB Industry, quoted from a “Money Today” article dated September 1, 2014

*GIC’s active investment in Korea’s logistic centers 4 Bird’s-eye view picture of Ansung Homeplus Logistics Center Bird’s-eye view picture of the Dukpyeong Logistics Center upon completion Total investments of the GIC KRW 700 billion Total investments of the GIC KRW 700 billion Total investments of TEMASEK KRW 400 billion Total investments of TEMASEK KRW 400 billion *GIC (The Government of Singapore Investment) Real Estate Trends of Korea

Hyundai Motor won the bid for KEPCO’s Gangnam Site 5 Real Estate Trends of Korea

Office Market Status of transactions and newly supplied properties in Status of the office building market in Seoul (2014) Source: Mate Plus

Office Market 7 Foreign capital invested in office buildings in Seoul Source: Mate Plus Foreign capital invested in office buildings in Seoul

Real Estate Fund (REF) Changes in the REF market 8 Chronological status of increase in real estate fund Chronological status of increase in total net asset Chronological status of increase in total net asset (As of June 27, 2014) (As of June 27, 2014, Unit: KRW trillion) Source: Korea Financial Investment Association (KOFIA), KAREIT Report (summer edition, 2014) real estate funds

Real Estate Fund (REF) Current status of REFs in Korea 9 Status of REFs (as of November, 2014) Source: KORAMCO Market Review, January, 2015 Status Established funds Total 608 units, KRW trillion Total net assets KRW trillion (100% of established fund) Invested area Overseas144 units, KRW 8.36 trillion, 28% Domestic464 units, KRW trillion, 72% Capital raise Public offering21 units, KRW 1.18 trillion, 4% Private offering587 units, KRW trillion, 96%

REIT Changes in the real estate REIT market 10 (As of June 27, 2014, Unit: KRW trillion) (As of June 27, 2014) Chronological status of increase in REIT increase in REIT Chronological status of increase in REIT increase in REIT Chronological status of increase in total net asset Chronological status of increase in total net asset Source: Korea Financial Investment Association (KOFIA), KAREIT Report (summer edition, 2014)

REIT Current status of REITs in Korea 11 Status of REIT (As of November, 2014) Source: KORAMCO Market Review, January, 2015 StatusNote Total amount of assets being managed KRW trillion96 REIT in total Average amount of assets KRW billion Excluding companies with assets below KRW 5 billion Dominant type Externally managed REIT54 externally managed REIT Listed REIT 18 companies11 companies are dissolved or de-listed.

Retail Market Current status of Korea’s retail market 12 Stores sold in lots increased 36% in H1 of 2014 YoY. Retail sales in H1 of 2014 increased 2.3% YoY.

Retail Market Status of Korea’s retail market 13 Status and prospects of the retail market Note : *Based on net retail sales, excluding fuel expenses Source : 2011 – 2013: Korea Statistics / 2016 – 2014: Expert forecasts Unit: KRW tn

Retail Market Status of the outlet operation by company 14 Hyundai As of 2013, the company’s outlet sales recorded KRW 1.5 trillion, a 19.5% increase year-on-year. LotteLotte  The company plans to operate eight outlets by  Targeting premium outlets, Simon Property Group and Shinsegae created a joint-venture corporation, Shinsegae-Simon, with each taking a 50% stake in the venture. Shinsegae- Simon Annual sales of KRW 250 billion are expected for the company’s Gimpo outlet, which is scheduled to open in 2015; KRW 730 billion for the Pangyo outlet and KRW 120 billion for Garden Five. HyundaiHyundai The company operates 51 outlets in total: NC outlets (15), 2001 Outlets (8), New Core Outlets (19), Donga Outlets (6) and Premium Outlets (3). E-LandE-Land

Retail Market Status of large discount stores 15 Source: MK Economy No. 1787, December 22, 2014

Hotel Market Overview of hotels in Seoul 16 Undersupply of rooms due to the increased number of foreign visitors Increased number of foreign visitors - 12 million people in Chinese travelers increased 52.5%. Preferences % of travelers visited Seoul and 73.5% chose hotels for accommodations. Booming business hotels (3 – and 4-star, reasonable price) Booming business hotels (3 – and 4-star, reasonable price) Shilla Stay Lotte City Westin Chosun’s business hotel Nine Tree.

Free Economic Zone Occupancy Eligibility Government Support Free Economic Zone 17

Eased restrictions on resale and staying period Government Support Measures to stimulate the local economy 18

Success Cases Construction of the Incheon BridgeCategoryNote InvestorAMEC NationUK Investment areaSongdo, Incheon SizeUSD 37.9 million  Incheon Bridge, the world’s 5th longest cable-stayed bridge, spans a 12.3 km distance.  AMEC will be maintaining Incheon Bridge for 30 years until 2039, collecting the toll.  The construction cost of Incheon Bridge will be recollected through Incheon Bridge Co., Ltd's 23% share of the bridge. Result of investment OverviewOverview 19

Success Cases LegolandCategoryNote InvestorMerlin Entertainments Group NationCheonan, Gangwon Province Development area 1,291,434 ㎡ SizeUSD 100 million  Legoland is expected to draw more than 2 million family tourists from both Korea and overseas annually.  The American Economic Research Association forecasts that Legoland Korea will be visited by about million people in 2025, starting with million visitors in Result of investment OverviewOverview Legoland Deutschland 20