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Appendix V Market Report THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. APPENDIX V MARKET REPORT DTZ Debenham Tie Leung Limited, the independent market consultant, was commissioned by the Company to prepare a report on the property and the commercial complex market in the PRC for the purpose of incorporation in this [REDACTED]. The Company has included the DTZ Market Report in this [REDACTED] because the Company believes such information would facilitate investors to understand the property and the commercial complex market in the PRC where the Company’s business operations and most properties are currently located. The Company has made a total payment of RMB750,000 for the services provided by DTZ Debenham Tie Leung Limited. 16th Floor Jardine House 1 Connaught Place Central Hong Kong [REDACTED] The Directors Dalian Wanda Commercial Properties Co., Ltd Levels 21 to 25, Block B Wanda Building, No. 93 Jianguo Road Chaoyang District Beijing, the PRC Introduction DTZ Debenham Tie Leung Limited (“DTZ”) was engaged by Dalian Wanda Commercial Properties Co., Limited (the “Company”) to provide an independent market report (“Market Report”) of the real estate and economic markets in Beijing, Shanghai, Guangzhou, Nanjing, Chengdu, Fuzhou, Hefei, Ningbo, Xiamen, Xian, Changzhou, Yichang, Qingdao and Wuxi. This Market Report is prepared for the purpose of incorporation in the [REDACTED] of the Company (the “[REDACTED]”) and the information will form part of the [REDACTED] for the listing of the Company. Date of Assignment The contract engaging DTZ was executed on [●], 2014 and the fee agreed was RMB750,000. This report contains information, estimates and assumptions that reflect market conditions as of June 2014. DTZ is one of the world’s largest real estate consulting firm, with 208 offices in 52 countries worldwide with 47,000 employees, providing expert local knowledge. DTZ is a member of UGL Limited. — V-1 — THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. APPENDIX V MARKET REPORT Scope of Services Our scope of market research comprises the following contents: • Overview of the PRC Economy Major Indicators of the PRC Economy and the Retail Industry • Overview of the Real Estate Market in the PRC Major Indicators of the Real Estate Market, Impact of Real Estate Policies on the Market and the Development History of the Real Estate Market in the PRC. • Analysis of the Large Commercial Complex Market in the PRC Overview of the Large Commercial Complex Market, Market Position, Market Scale and Distribution, Market Drivers, Market Competition, Future Supply and Analysis of the Shopping Center Market in the PRC • Overview of Tourism, Cultural Tourism and the Hotel Market Overview of the Tourism Market, Cultural Tourism Market and the Luxury Hotel Market • Overview of the Local Economy and Commercial Complex Market Overview of the cities, local economy and the real estate market of Beijing, Shanghai, Guangzhou, Nanjing, Chengdu, Fuzhou, Hefei, Ningbo, Xiamen, Xi’an, Changzhou, Yichang, Qingdao and Wuxi Statement of Pecuniary Interest We confirm that DTZ has no pecuniary or other interest in the market that would conflict with a proper assessment or could reasonably be regarded as being capable of affecting our ability to give an unbiased opinion. The position will be maintained until the purpose required to be achieved by this Market Report is completed. Information Utilized Our review is based on information developed from research of the markets, certain information provided by the Company and DTZ’s knowledge of the industry, which is integral to the outcome of our conclusion and estimation. We have also obtained data and information for this Market Report from a wide range of sources. While due care has been undertaken in the application of the information, DTZ has no responsibility to warrant or represent that such information is accurate or correct. We also have no responsibility to update this Market Report for events and circumstances occurring after the date of issuance. The content of this market report is objective and is not intended to be in favour of the Company. — V-2 — THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. APPENDIX V MARKET REPORT Assumptions This Market Report is based on current as well as the likely future market conditions as perceived by the markets. The estimation of the future demand and supply for the commercial complex market may not materialise, and unanticipated events and circumstances may occur; therefore, actual results may vary from our estimates and the variations may be material. We do emphasis that the estimation of the future market conditions and outlook should be regarded as an indicative assessment of possibilities rather than absolute certainties. The major findings and conclusions are based, in part, on the following critical assumptions: • There will be no political or administrative developments that may have significant impact on the general confidence in China, specifically in Beijing, Shanghai, Guangzhou, Nanjing, Chengdu, Fuzhou, Hefei, Ningbo, Xiamen, Xi’an, Changzhou, Yichang, Qingdao and Wuxi, and adverse effects on the business activities, tourist arrivals and domestic travel. • Support infrastructure such as fresh water, sewage treatment, electricity and gas will be supplied and generated at a consistent and reliable level to maintain end-user satisfaction. • The existing transportation systems to and from, and within, Beijing, Shanghai, Guangzhou, Nanjing, Chengdu, Fuzhou, Hefei, Ningbo, Xiamen, Xian, Changzhou, Yichang, Qingdao and Wuxi will be maintained and improved to meet the accessibility requirements of the cities. • The economies of the major places of trading, investor and tourist sources for the PRC, specifically Beijing, Shanghai, Guangzhou, Nanjing, Chengdu, Fuzhou, Hefei, Ningbo, Xiamen, Xi’an, Changzhou, Yichang, Qingdao and Wuxi, will not experience significant and sustained recession in the near future. Yours faithfully, for and on behalf of DTZ Debenham Tie Leung Limited Andrew K.F. Chan Registered Professional Surveyor (General Practice) Registered China Real Estate Appraiser MSc., M.H.K.I.S. Senior Director Note: Andrew K. F. Chan was elected a professional member of The Hong Kong Institute of Surveyors in 1992. Mr. Chan is a Registered Professional Surveyor (General Practice) with over 27 years’ experience in various fields of the property industry in the PRC and Europe. He has been providing advice relating to property valuation, development consultancy and land administration matters in the PRC and Europe and has participated in assignments in relation to property market research. — V-3 — THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. APPENDIX V MARKET REPORT 1. Overview of the PRC Economy 1.1 Major Economic Indicators Overview Despite the impact of the volatile global economic environment on the PRC economy, China’s GDP maintained high-level growth in the past few years to RMB56,884.52 billion in 2013 from RMB26,581.03 billion in 2007, representing a CAGR of 13.5%, thanks to the impetus of various macro-economic policy adjustment and control measures. According to the National Bureau of Statistics of China, China overtook Japan to become the world’s second largest economy in terms of nominal GDP in the second quarter of 2010. Guided and driven by the macro-economic policies of the government, fixed asset investment maintained steady growth. China’s total fixed asset investment reached RMB44,707.4 billion in 2013. China’s per capita disposable income of urban residents grew significantly to RMB26,955 at the end of 2013 from RMB13,785 in 2007. Strong growth of disposable income indicates the increasing willingness to spend and the significant increase in purchasing power of urban residents. Table 1.1 Major economic indicators in the PRC CAGR 2007 2008 2009 2010 2011 2012 2013 (2007-2013) GDP (RMB billion). 26,581.0 31,404.5 34,090.3 40,151.3 47,310.4 51,947.0 56,884.5 13.5% Total fixed asset investment (RMB billion) .......... 13,732.4 17,282.8 22,459.9 25,168.4 31,148.5 37,469.5 44,707.4 21.7% Foreign direct investment (US$ billion) .......... 74.8 92.4 90.0 105.7 116.0 111.7 117.6 7.8% Per capita disposable income of urban residents (RMB) .... 13,785.8 15,780.8 17,174.7 19,109.4 21,809.8 24,564.7 26,955.1 11.8% Source: National Bureau of Statistics of China 1.2 Economic Indicators of Retail Industry Overview According to the Outline for the Twelfth Five-Year Plan for National Economic and Social Development (國民經濟和社會發展第十二個五年規劃綱要) issued by the PRC government, boosting domestic demand will become a long-term strategic goal of the PRC government. It will shift its economic growth model from heavily relying on investment and export to focusing on domestic consumption, which is set to become the strongest driver for the PRC economic growth. — V-4 — THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. APPENDIX V MARKET REPORT Table 1.2 Major economic indicators of the PRC retail industry CAGR 2007 2008 2009 2010 2011 2012 2013 (2007-2013) Total retail sales of consumer goods (RMB billion) ...... 9,357.2 11,483.0 13,267.8 15,699.8 18,391.9 21,030.7 23,781.0 16.8% Per capita consumer spending of urban households (RMB).
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