1. GLOBAL DEMOGRAPHICS: SHAPING REAL ESTATE’S FUTURE GLOBAL DEMOGRAPHICS: SHAPING REAL ESTATE’S FUTURE M. Leanne Lachman Lachman Associates May 5, 2010

2. Takeaways Greatest urban population growth in 3 largest countries: China, India, U.S. In U.S., Gen Y outnumbers Baby Boomers Fastest growing regions: Africa, Middle East, Southeast, Asia, South Central Asia (the globe’s future labor force) Europe: only region facing population decline Rapid expansion of moderate-income, middle-class, and affluent households throughout developing world Overwhelming demand for residential, retail, logistics, hospitality, infrastructure development Densification is key everywhere, including N. America

3. World Population Growth Billions of People Less Developed Regions More Developed Regions Source: United Nations Least Developed Countries 2009: 6.8 Billion

4. More Developed Countries - 2005 100+ 95-99 90-94 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 5 MaleFemale Source: United Nations

5. Less Developed Countries - 2005 Source: United Nations 100+ 95-99 90-94 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 5 MaleFemale

6. Maturity & Youth Source: United Nations 100+ 95-99 90-94 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 5 MaleFemale Less Developed Countries – 5.3 billionMore Developed Countries – 1.2 billion 100+ 95-99 90-94 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 5 MaleFemale

7. Urban/Rural Mix Source: United Nations Billion

8. Working-Age Population Change 2005-30 Change Number (Mil) Percent Sub-Saharan Africa372.790.6 MENA119.752.2 Latin America and Caribbean116.032.5 Asia647.026.4 Oceania5.525.2 Northern America29.513.2 Europe-52.8-10.6 World1,237.629.5 Source: United Nations

9. Employment by Sector - 2006 Source: ILO Developed Economies

10. Employment by Sector - 2006 Source: ILO Developed Economies Latin America & Caribbean Middle East Central & Southeast Europe North Africa World East Asia Southeast Asia & Pacific South Asia Sub-Saharan Africa

11. Northern America Source: United Nations Millions 338.8 405.4 445.3

12. Northern American Urbanization 200720302050 United States81.4%87.0%90.4% Canada80.384.087.9 Source: United Nations

13. Latin America & Caribbean Source: United Nations Millions 572.2 712.8 769.2

14. Urbanization in Latin America & Caribbean 200720302050 South America82.6%88.3%91.4% Central America70.877.783.3 Caribbean65.475.582.6 Source: United Nations

15. Asia Source: United Nations Billion 3.8 4.6 4.9

16. Asian Urbanization 200720302050 South Central31.2%43.0%57.2% East46.162.471.4 Southeast45.861.873.3 Total Region39.4%52.9%65.2% Source: United Nations

17. Europe Source: United Nations 731.2 706.9 666.3 Million

18. Europe’s 10 Big Countries Loss Gain Source: United Nations

19. Selected European Fertility Rates - 2008 NorthEast Ireland1.90Poland1.28 Norway1.90Russia1.31 Sweden1.85Ukraine1.25 SouthWest Greece1.40France1.98 Italy1.35Germany1.40 Spain1.37Netherlands1.73 Source: Population Reference Bureau

20. EU Real Estate Without growth, demand for replacement space only New buildings will be needed – modern design, preferable locations, emerging uses (e.g., logistics, senior housing) Demolition volumes must match construction volumes Otherwise: –Vacancy rises –Rents fall –Values decline

21. Middle East and Africa Source: United Nations Million 1185.0 1829.9 2370.0 Sub-Saharan Africa Middle East and North Africa

22. Middle Eastern/African Urbanization 200720302050 Western Asia65.5%72.5%79.3% Northern Africa52.961.571.4 MENA Total60.2%68.1%76.2% Sub-Saharan Africa35.9%48.2%60.5% Source: United Nations

23. MENA and Sub-Saharan Africa MENA Sub-Saharan AfricaWorld 2007 Population (mil)3388076,700 Annual Growth1.8%2.5%1.2% Growth in working-age population 2005-2030 52%91%30% Life expectancy (years)705068 Fertility rate2.95.22.5 Primary school completion91%60%86% Secondary school enrollment, relevant ages 74%31%65% 2007 Per capita income, (PPP)$7,385$1,870$9,852 Source: World Bank, United Nations

24. Global Real Estate Implications Strong demand in the Americas Only replacement demand in Europe: exercise caution Increasingly global retail branding and chain store expansion: think emerging markets Urbanization (and urban movement) generate massive real estate needs Overwhelming moderate- and middle-income residential demand in emerging markets Global production, commodity trading, and distribution require sophisticated logistics Stimulus funds = infrastructure

25. Population Projections to 2030 Thousands Source: Census Bureau

26. Components of Population Change 2000-2008 (millions) Births Minus Deaths Domestic Migration International MigrationTotal Northeast+1.7-2.4+1.8+1.3 Midwest+2.7-1.6+1.1+2.2 South+5.1+3.6+2.6+11.5 West+4.6+0.4+2.7+7.7 U.S.+14.1__+8.1+22.6

27. Households by Type: 2010 and 2020 Thousands Source: Harvard Joint Center for Housing Studies

28. Two Big Generations Gen YBoomers 2010 Size74.8 million74.6 million Birth Years1977-19941946-1964 Age Now16-3346-64 Hispanic19%10% Black15%12% Asian6%5% Housing TenureRentersOwners Neighborhood Preference Urban/ Walkable Suburban/ Auto-Oriented

29. America’s Ethnic Mix Source: Pew Research Center

30. GLOBAL DEMOGRAPHICS: SHAPING REAL ESTATE’S FUTURE GLOBAL DEMOGRAPHICS: SHAPING REAL ESTATE’S FUTURE M. Leanne Lachman Lachman Associates May 5, 2010