3:EAST. Information Pack: Project Description with Research and Investment Analysis. Address: Bosisto Street, Richmond, Victoria, 3121

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Information Pack: 3:EAST Project Description with Research and Investment Analysis Address: 37 39 Bosisto Street, Richmond, Victoria, 3121 Artist s impression of the external façade of 3:EAST This

1 Information Pack: 3:EAST Project Description with Research and Investment Analysis Address: Bosisto Street, Richmond, Victoria, 3121 Artist s impression of the external façade of 3:EAST This information pack has been prepared by the John Hopkins Group for private use by its clients and Valued Intermediary Partners. This information may be subject to change, and may be updated from time to time. The information contained herein is general property investment advice and does not take into account individual situations, needs or goals. It should not be relied upon and persons should satisfy themselves through independent means that any decisions based on this material are appropriate. We recommend that you consult with your John Hopkins Group Adviser who will be able to make a recommendation based on your specific circumstances.

DEVELOPMENT OVERVIEW 3:EAST is a new boutique residential apartment building in Richmond. The name of this development, 3:EAST, came about because it is located 3 kilometres east of the Melbourne CBD.

2 DEVELOPMENT OVERVIEW 3:EAST is a new boutique residential apartment building in Richmond. The name of this development, 3:EAST, came about because it is located 3 kilometres east of the Melbourne CBD. 3:EAST is located on Bosisto Street, in Richmond, just off Bridge Road. Bridge Road is famous for it s retail and outlet shopping and it s abundance of cafés and restaurants. Many public transport options are available and due to the lifestyle and amenity this position provides, 3:EAST is in a highly sought after location. 3:EAST will consist of 57 one and two bedroom apartments over seven levels. All apartments will face either North or West and splendid views can be expected on and above Level 4. The apartments have been designed by multi award winning architects, Fender Katsalidis, and were inspired by Richmond s industrial heritage. It will be a striking building which combines bold rectangular elements and a mix of robust and tactile materials. The external walls of the building will be carefully toned in shades of deep greys and warm whites. Additional colour will be provided by golden steel screening and projecting louvres, strategically positioned to increase privacy whilst enhancing views over Richmond. Views from Richmond to the Melbourne skyline

DEVELOPMENT OVERVIEW Artist s impression of the internal living area featuring floor to ceiling windows Designed as urban retreats with northerly aspects, the apartments will have a neutral colour

3 DEVELOPMENT OVERVIEW Artist s impression of the internal living area featuring floor to ceiling windows Designed as urban retreats with northerly aspects, the apartments will have a neutral colour scheme and a high standard of finishes including Smeg stainless steel appliances, porcelain tiles, veneer joinery in the kitchen, floor to ceiling windows and reverse cycle air conditioning. All apartments will have a storage cage located in the basement and, while each two bedroom apartment will have one carpark, the one bedroom apartments will have the option of a carpark. A retail store or café will be located on the ground floor. No further amenities will be provided to keep the ongoing costs and owners corporation fees to a minimum. Price Range Rental Estimates One bedroom, no car park (50m 2 ) $400,000 - $450,000 $380 - $395 per week One bedroom, with car park (50m 2 ) $430,000 - $480,000 $ per week Two bedroom with car park (59 83m 2 ) $530,000 - $850,000 $540 - $580 per week Construction Period: Construction is expected to commence in September 2011 with a 12 month build. Completion is expected to be September 2012.

LOCATION Address: 37 39 Bosisto Street, Richmond 3: EAST is located just 3 kilometres east of the Melbourne Central Business District on Bosisto Street, which is just around the corner from Bridge

4 LOCATION Address: Bosisto Street, Richmond 3: EAST is located just 3 kilometres east of the Melbourne Central Business District on Bosisto Street, which is just around the corner from Bridge Road, Richmond. Richmond is bordered by Victoria Street, Hoddle Street, Swan Street, and the Yarra River. Neighbouring suburbs are East Melbourne to the west, Cremorne and Burnley to the south, Abbotsford to the North, and Hawthorn to the east, separated by the Yarra River. Richmond is one of ten neighbourhoods in the City of Yarra. Melbourne CBD 3:EAST MCG 3:EAST lies in the heart of one of Melbourne s most enviable inner city suburbs, Richmond. Richmond truly captures Melbourne s cosmopolitan personality a thriving cultural, sporting hub and commercial centre. Set amidst heritage steeped surrounds, leafy streets and the affluent Eastern suburbs, Richmond is an urban gem. Combining its historical charm and lively pace, Richmond is a place for people who value a vibrant and pulsating lifestyle. Its enviable location, abundance of delicious international dining choices, stylish bars and pubs, and reputable retail outlets puts everything at your fingertips. Richmond is a mecca for all types of shopping. Not only for its popular Bridge Road fashion boutiques and outlet shopping, but also for its many designer home interior stores. Richmond is also home to Victoria Gardens Shopping Centre featuring Ikea and Hoyts Cinemas. One of Melbourne s hidden gems is the traditional farmers market that operates every Saturday morning on Gleadell Street in Richmond. It started operating in 1873 and is one of the few traditional street markets left in Melbourne. In addition to this, you can shop for luxury cars along Swan and Church Streets and artwork at the various galleries dotted around the suburb.

LOCATION CBD Train Station 3:EAST Tram Stop MCG As well as great shopping, Richmond is also a haven for many cafés, restaurants, bars and pubs, plus providores providing shoppers with unique and

5 LOCATION CBD Train Station 3:EAST Tram Stop MCG As well as great shopping, Richmond is also a haven for many cafés, restaurants, bars and pubs, plus providores providing shoppers with unique and quality preserves, cheeses and other fine produce. Nearby, Victoria Street, also known as Little Saigon, is home to an abundance of Vietnamese restaurants and Asian foodstores. 3:EAST is just a short stroll to Bridge Road with all its amenity and it is also a short walk to several public transport options. Trams are available both on Bridge Road (with a tram stop on Bosisto Street) and along Church Street. West Richmond, Jolimont and Richmond Train Stations are within walking distance to 3:EAST and Richmond also has good access to freeways and all outer areas of Melbourne. Recreational facilities are located nearby such as the popular gymnasiums, Richmond Recreation Centre and Fitness First, plus yoga studios, karate studios, netball and lawn bowl clubs. Parks and open spaces are available at the City Reserve, Melbourne Park and Olympic Park with many sporting facilities. Also nearby is the Yarra River with its walking/bike paths and waterside reserves. Also within walking distance to 3:EAST are medical facilities including the Epworth Hospital and the Melbourne Clinic, and a Community Health Centre. Other facilities include the Richmond Town Hall, Richmond Police Station and Richmond Library. Educational facilities including the St Kevins College, Ivanhoe Grammar Urban Centre, Trinity Catholic School, Richmond Kindergarten, Melbourne Girls College, Vaucluse College, Lynall Hall Community School, St James Primary School, Yarra Primary School, Richmond West Primary School and Language School. Being only 3 kilometres from the CBD, the city is also within walking distance, as is Melbourne s iconic MCG.

Please note that the actual views in the finished apartments may vary from what is shown in these images.

6 LOCATION Excellent views towards the Melbourne CBD and its surrounds are expected from Levels 4, 5, 6 and 7. These images are a representation of the views from Level 6. Please note that the actual views in the finished apartments may vary from what is shown in these images. SOUTH WEST A representation of the south westerly views from 3:EAST towards the city skyline. WEST NORTH A representation of the north westerly views from 3:EAST towards the city skyline.

7 INVESTMENT OUTLOOK MELBOURNE S MEDIUM DENSITY APARTMENT MARKET Source: Market Overview Charter Keck Cramer, 8 October 2010 Overview of Recent Trends, Conditions and Demand Drivers 1 Despite a fluctuating housing market over the past 2-3 years, the medium density apartment market has remained resilient, and has in fact performed above expectations, due to a number of contributory factors as follows: Continuing strong population growth in Melbourne driven by international migration into Australia and increased attraction to Melbourne because of housing affordability benefits. Strong rental market conditions underpinned by ongoing population growth, chronic undersupply and limited vacancies. Acceptance of strong fundamental demand drivers and a relatively stable domestic economy, particularly in Victoria. Innovative development solutions enabling price point pricing structures meeting value thresholds of demand. The emergence of a new purchaser profile, specifically intending owner/occupiers (Gen Y) now seeking apartment accommodation due to housing affordability issues in the inner urban areas. The recognition and acceptance by many investors that residential real estate represents a less risky venture than the often volatile stock and commodity markets. Changing household composition and lifestyle requirements are more attuned to apartment living as opposed to conventional housing. An acceptance from overseas purchasers, particularly from Asia, that Australia represents a safe haven investment opportunity. State government initiatives supporting medium density developments through innovative planning policies, rezoning, etc. Increased exposure to living in apartments in other international cities, resulting in families occupying inner city apartments. Continued attraction of living within, or in proximity of, major Activity Centres that provide a range of amenities and lifestyle opportunities. Lifestyle, social and employment considerations and higher fuel costs are all additional drivers for apartment living. For a range of economic, social, environmental and demographic reasons, apartment living has clearly moved from being a forced choice to a preferred choice for more households. This trend is anticipated to continue with future demand for residential apartments.

8 INVESTMENT OUTLOOK Population Growth and Demographics for Melbourne 1 The medium density apartment market is strongly governed by issues associated with population growth and demographics, summarised as follows: Beyond any other influence, the fundamental driver of the residential markets is population growth, and to a lesser extent, but still importantly, demographic and lifestyle change. Current population growth of approximately 70,000 to 75,000 per annum in the Melbourne Metropolitan area creates demand for circa 35,000 new dwellings per year. Charter Keck Cramer s internal research indicates that of this need, approximately a third (10,000-12,000) is sought within 20 km of the CBD, demonstrating the trend towards greater inner urbanisation. Such a large number of new dwellings being required within established inner urban locations supports the assumption that due to underlying inner urban land values, the new stock will be of apartment and townhouse built form, but exclusively apartments at the immediate inner urban sector. Charter Keck Cramer estimates Melbourne has an annual need for approximately 5,000-6,000 inner urban apartments, yet there are real concerns that the conduits of supply, developer confidence and activity, the availability of suitable land, planning issues and resources within the construction industry are not capable of meeting underlying demand. Melbourne has historically demonstrated a capacity to produce approximately 4,000-5,000 inner urban apartments per year, and thus the reality suggests a period of compounding undersupply, placing further pressure on vacancy rates, rental price growth and long term affordability. Complementing population growth, the gentrification of Melbourne s inner urban precincts and the acceptance of the medium density inner urban lifestyle support the prospects for apartment development. Owner/occupiers and tenants demand immediate amenity complementing the contemporary lifestyle, and due to housing affordability and other issues, a higher proportion of young owner occupiers are accepting apartment living as a primary housing option, or alternately tenants are accepting a long term rental proposition. The desire by generations X and Y to retain existing social and lifestyle networks is influencing their long term housing choices, with a greater proportion of the target market opting for an inner urban apartment lifestyle in preference to a conventional detached dwelling or townhouse in an alternate, although lower amenity location. The established inner urban mixed use precincts can now support sophisticated development schemes targeting a clearly delineated target market and occupancy profile. Melbourne s inner urban medium density market has historically been orientated towards the investment sector (at circa 80% of off the plan (OTP) sales), and project releases within inner urban locations have therefore targeted the investment sector, reflecting design and specification commensurate with the

9 INVESTMENT OUTLOOK target market. The purchaser profile is however changing, the market increasingly characterised by entry level owner occupiers (first home buyers) seeking to maintain lifestyle amenity but due to affordability issues are not able to fund a conventional dwelling/townhouse. Population growth, changing demographics, contemporary social attitudes, the continuing inner urban renaissance, increasing fuel costs and the demand for immediate access to employment, social and lifestyle opportunities, are all attributes that provide well conceived projects with a strong standing in the market. Market Evolution and Segmentation 1 The Melbourne apartment market has segmented into a range of sub-sectors that were not obvious in the earlier stages of market maturity. Increasingly, projects are being designed and marketed to specific participants, with particular emphasis on purchaser profile and socioeconomic grouping, price point entrance products, lifestyle and locational attributes and design and quality. This has resulted in many sub-sectors, with the three (3) principle markets summarised as follows: The Central City Region (CCR)/City Fringe - high rise towers, incorporating a high volume of apartments, generally commencing at or about 200, rising to 500, and appealing primarily to the investor market. The inner city fringe within 10 kilometres of the CBD, and therefore including areas such as Richmond. These areas have been characterised by new contemporary developments, more of a boutique nature, better specified and appointed, appealing still to investors, but increasingly to owner/occupiers due to housing affordability issues in these select locations. The suburban markets more than kilometres from the city, characterised by new development in the form of conventional smaller zero lot subdivisions, or in the circumstances of multi-units, townhouse developments. More recently however, a number of apartment developments have been marketed within the outer suburban locations. The market segment within which the subject site is located relates to the inner city fringe, a sector which has emerged strongly over the past 5-6 years, characterised by a consistent pattern of redevelopment, designed and catering to the specific needs of the purchaser profile who are generally within the same socio-economic grouping.

INVESTMENT OUTLOOK RICHMOND Why invest in Richmond? Richmond is prime real estate territory Population has increased by 15% over the last 5 years Current median apartment price is $520,000.

10 INVESTMENT OUTLOOK RICHMOND Why invest in Richmond? Richmond is prime real estate territory Population has increased by 15% over the last 5 years Current median apartment price is $520,000. This represents 48% capital growth since 2005 (an average of 8% growth per year). Apartment market has experienced an approximate 13% growth rate in the past year. 42% of properties in Richmond are rented the highest rate in Melbourne. Rents have increased by 10-15% over the last 2 years. Investment Benefits Highly sought after location Low body corporate fees Substantial stamp duty savings Significant depreciation benefits History of good capital growth High demand for tenancy (low to no vacancy) Strong rental yields

11 MEDIAN PRICE FOR UNITS/APARTMENTS IN RICHMOND (3121) 2 MEDIAN PRICE: This provides a measure of the midpoint of residential unit/apartment sales, meaning that 50% of sale prices are greater than the median and 50% are below the median. In general, the median price is preferable to using average sales price, which can be skewed upwards in any time period by a number of expensive properties, or conversely skewed downwards in any time period by a number of lower priced properties. The median price does not distinguish between different unit and apartment types, so it includes one bedroom, two bedroom, three bedroom and other configurations such as with or without carpark(s), study, balcony, view and onsite facilities, which all need to be kept in mind when comparing a property to the median unit/apartment price. Richmond s unit/apartment prices have continued on an upward trend over the last five years. Here we see a dip in the first quarter of 2011 which is in line with the Melbourne property market which has been flattening or falling during the first half of This is expected to continue for the next six months or so, but over the long term it is expected that prices will continue to follow the upward trend and increase.

12 DEVELOPER PROFILE: HICKORY DEVELOPMENTS Hickory Developments is a company of builders that has continually evolved over their twenty years in business. Their journey in business has allowed them to learn, innovate and contribute. They build teams of motivated individuals who continually strive to improve their personal and professional performance. They are always improving and by doing so, continue to stretch the boundaries of construction efficiency, productivity quality and time. ARCHITECT PROFILE: FENDER KATSALIDIS ARCHITECTS At Fender Katsalidis Architects they listen, think, investigate and collaborate. They seek the simple, compelling solution. Their process through feasibility, design and documentation, enhanced by 3D information rich virtual building environments, is acclaimed by their clients and the international design community. The practice is renowned for producing buildings which are cutting edge in design with sound functional planning. Their approach has generated a high practice profile and gained many design awards. The directors, including famed Karl Fender and Nonda Katsalidis, remain closely associated with each project throughout its life to ensure the final outcome is aligned with the original vision. Fender Katsalidis has also developed a reputation both in Australia and internationally as an industry leader in utilising an integrated 3D virtual building methodology for its design and documentation processes. This approach, pioneered by Fender Katsalidis, is also changing the face of construction practices. Artist impression of the bathroom

13 SAMPLE FOOTPLATE: LEVEL 1

14 SAMPLE FLOOR PLAN: 1 BEDROOM APARTMENT SAMPLE FLOOR PLAN: 2 BEDROOM APARTMENT

15 COMPARITIVE SALES Suburb: Richmond(3121) and surrounding 0.5kms Date: 25 May May

17 FOR MORE INFORMATION: Contact your Adviser or our Client Liaison Officer on SOURCE: 1 Market Overview Charter Keck Cramer, 8 October

Strategic Property Consulting. Charlie Richmond 7-11 Judd Street Richmond. Prepared for Baracon Pty Ltd. 23rd April 2008

Strategic Property Consulting. Charlie Richmond 7-11 Judd Street Richmond. Prepared for Baracon Pty Ltd. 23rd April 2008 Strategic Property Consulting Market Overview and Commentary Proposed Residential Development Charlie Richmond 7-11 Judd Street Richmond Prepared for Baracon Pty Ltd 23rd April 2008 T257808:AR:LK Artist