AUSTRALIAN RESIDENTIAL MARKET OVERVIEW PROSPECTUS REPORT

AUSTRALIAN RESIDENTIAL MARKET OVERVIEW PROSPECTUS REPORT MAY 2015

COPYRIGHT 2015 2015 This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to the publishers. www.urbis.com.au

TABLE OF CONTENTS Introduction... i 1 Australian Residential Property Market Overview... 2 1.1 Australian Residential Market Assessment... 2 1.1.1 Population Growth... 2 1.1.2 Economic Growth... 3 1.1.3 Interest Rates... 4 1.1.4 Housing Affordability and Consumer Confidence... 4 1.1.5 Median Household Income (ABS)... 6 1.1.6 Real Wage Growth (ABS)... 6 1.1.7 Employment (ABS)... 7 1.1.8 Capital Cities Median Residential Property Prices... 9 1.1.9 Investment Yields... 10 1.1.10 Construction Costs... 12 1.2 Residential Industry Activity... 13 1.2.1 Purchaser Assessment... 14 1.2.2 Government and Regulatory Policy... 14 2 Australian Residential Property Market Key Markets... 15 2.1 Sydney, New South Wales... 16 2.2 Melbourne, Victoria... 17 2.3 Brisbane, Queensland... 18 2.4 Perth, Western Australia... 19 2.5 Adelaide, South Australia... 20 3 Inner Brisbane Apartment Market Focus... 21 3.1 Inner Brisbane Off-The-Plan Apartment Market... 22 3.2 Future Pipeline and Proposed Supply... 26 3.3 Rental Vacancy Rate... 28 3.4 Infrastructure Investment... 29 3.5 Newstead, Fortitude Valley and South Brisbane Focus Demand Analysis... 31 3.5.1 Population Growth Projected Settlements... 33 3.5.2 Population Growth Government Forecasts... 34 3.6 Fortitude Valley... 35 3.7 Newstead... 36 3.8 South Brisbane... 38 4 Australian Apartment Market Findings & Outlook... 40 Disclaimer... 41 AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

Introduction Urbis has been commissioned to provide a high level overview of the Australian residential market, specifically reviewing key Capital City markets of Sydney, Melbourne, Brisbane, Perth and Adelaide. The overview includes a focus on the Inner Brisbane Apartment Market, drawing on primary and secondary data to analyse its strength and depth AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL INTRODUCTION i

1 Australian Residential Property Market Overview The following section provides an overview of the Australian residential property market, including: A brief insight into key market drivers (population growth, economic growth, investment yields and construction costs etc.) affecting the national residential market. A brief assessment of the wider Australian residential market, identifying the size of the Brisbane, Sydney, Melbourne, Adelaide and Perth markets. These markets have been assessed on the basis of a Greater Capital City Statistical Area (GCCSA). Overview of the competitive residential landscape from home builders/developers across each capital city. 1.1 AUSTRALIAN RESIDENTIAL MARKET ASSESSMENT 1.1.1 POPULATION GROWTH Population Growth Components AUSTRALIA SEP-84 SEP-14 CHART 1.1 Although having slowed from peak levels, population growth continues to be at historically high levels. The key driver for this has been increased overseas migration which now accounts for 60 per cent of population growth. 2 AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

State Population Growth State Population Growth SEP-84 SEP-14 CHART 1.2 On a state by state basis, mining states are seeing a significant slowing whilst Vic and NSW have seen growth in population. However, the national slowdown in migration means that the rate of population growth has peaked in these states for now. 1.1.2 ECONOMIC GROWTH Australian Gross Domestic Product DEC-84 DEC-14 CHART 1.3 National growth has slowed from the last peak level in 2012 but at 2.5 per cent is still at internationally strong levels. AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW 3

1.1.3 INTEREST RATES Interest Rates AUSTRALIA - DEC-79 DEC-14 CHART 1.4 Interest rates are now at their historically lowest level. Market expectations that the RBA s next move could be a further cut were founded, with April 2015 registering a historic low of 2.0 per cent. Low interest rates are fuelling property markets across the country, particularly in the nonmining states. 1.1.4 HOUSING AFFORDABILITY AND CONSUMER CONFIDENCE Housing Affordability AUSTRALIA BY STATE - DEC-04 DEC-14 CHART 1.5 4 AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

Affordability levels are deteriorating in non-resource state capitals and improving in resource state capitals. Falls in interest rates and relatively low levels of price growth in Brisbane and Perth have seen an improvement in affordability. Housing Affordability AUSTRALIA - DEC-04 DEC-14 CHART 1.6 Consumer Sentiment Index AUSTRALIA - JAN-05 JAN-15 CHART 1.7 130 120 110 100 90 80 70 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 The Westpac - Melbourne Institute Consumer Sentiment Index is the most widely quoted barometer of consumer sentiment in Australia and its monthly results over the past two decades are illustrated below. A score of greater than 100 means that optimists outnumber pessimists, with readings of below 100 indicating that pessimistic consumers are in the majority. Jun-10 Nov-10 Apr-11 Period (Half Yeary) Source: Reserve Bank of Australia; Westpac; Melbourne Institute of Applied Economic and Social Research Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Mar-14 Aug-14 Jan-15 AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW 5

Consumer confidence is a key driver of demand for residential property. Consumer confidence tends to provide an indicative outlook taking into account factors such as the prevailing macroeconomic environment for interest rates, employment and real wages as well as current residential property prices. Consumer Confidence has trended down since late 2013 before rebounding to a neutral level in early 2015. 1.1.5 MEDIAN HOUSEHOLD INCOME (ABS) Household Income (2011) BRISBANE, PERTH, SYDNEY, MELBOURNE & ADELAIDE Capital City Median Weekly Household Income Perth GCCSA $1,459 Sydney GCCSA $1,447 Brisbane GCCSA $1,388 Melbourne GCCSA $1,333 Adelaide GCCSA $1,106 Prepared by Urbis; Source: ABS Census 2011 The median household income for the five Australian capital cities ranges from approximately $1,100 to $1,550 per week. Perth has registered the highest weekly household income of $1,459 with Adelaide recording the lowest at $1,106 per week. 1.1.6 REAL WAGE GROWTH (ABS) Real Wage Growth State Comparison MAR-05 MAR-15 CHART 1.8 Real wage growth has been at historically low levels in all states with growth at below 1% per annum. It has been noted however that growth has been cycling upwards since early 2014. 6 AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

1.1.7 EMPLOYMENT (ABS) Employment Growth AUSTRALIA MAR-00 MAR-15 CHART 1.9 From a national perspective, employment growth has increased steadily over the last 12 months; however it currently represents a paused state. Employment Growth (%yoy) AUSTRALIA SELECTED STATES JAN-12 JAN-15 CHART 1.10 The increase in employment growth is being driven by Victoria and Western Australia. The slowdown in Queensland has hit its employment market harder and this has had an effect on employment growth. AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW 7

Unemployment Rate (% Trend) AUSTRALIA SELECTED STATES MAR-80 MAR-15 CHART 1.11 The unemployment rate, despite its upward trend is below the long term average rate. Whilst the bulk of the states indicate similar rates, Northern Territory and Western Australia indicate the lowest rate of unemployment. 8 AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

1.1.8 CAPITAL CITIES MEDIAN RESIDENTIAL PROPERTY PRICES Capital Cities Median House Prices - December 2000 December 2014 BRISBANE, SYDNEY, MELBOURNE, PERTH & ADELAIDE CHART 1.12 An analysis of major capital cities for the December quarter 2014 identifies the growth in the Sydney housing market since late 2012, and the comparable affordability of the Adelaide market. Key to note is the similarity in median price trend within Brisbane, Melbourne and Perth, with only $55,000 separating these cities as at the December quarter 2014. Capital Cities Median Apartment Prices - December 2000 December 2014 BRISBANE, SYDNEY, MELBOURNE, PERTH & ADELAIDE CHART 1.13 Similar to the trends found in the housing market, Sydney recorded the highest median apartment price over the December quarter 2014 at $610,000, with Adelaide recording the lowest median price of $340,000. Brisbane is also registering a relatively affordable apartment market recording a steady median sale price of $420,000 over the last two quarters. AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW 9

1.1.9 INVESTMENT YIELDS Indicative Gross Rental Yields - December 2014 BRISBANE, PERTH, SYDNEY, MELBOURNE & ADELAIDE Indicative Gross Rental Yield (House) Indicative Gross Rental Yield (Apartments) Capital City 12 Months Quarter (3 Months) 12 Months Quarter (3 Months) Brisbane LGA 4.0% 3.9% 5.0% 5.1% Perth GCCSA 4.3% 4.3% 5.1% 5.1% Adelaide GCCSA 4.4% 4.3% 4.7% 4.6% Sydney GCCSA 3.6% 3.3% 4.4% 4.2% Melbourne GCCSA 3.6% 3.5% 4.2% 4.1% Prepared by Urbis; Source: RPData Suburb Scorecard December 2014 Over the last 12 months the five Australian capital cities have recorded indicative gross rental yields for houses of between 3.6 per cent and 4.4 per cent. Slightly higher rental yields were recorded in the apartment market with yields of between 4.2 per cent and 5.2 per cent. The highest rental yield for houses was registered in Adelaide and Brisbane at 4.4 per cent, followed closely by Perth at 4.3 per cent. Brisbane also recorded the greatest return on investment for apartments with a 5.2 per cent indicative gross rental yield. Melbourne recorded the lowest gross rental yields for both houses and apartments a 3.6 per cent and 4.2 per cent respectively. House Rental Yields - March 2010 December 2014 BRISBANE, SYDNEY, MELBOURNE, PERTH & ADELAIDE CHART 1.14 On the back of the highest median house price, Sydney is recording the lowest rental yield of 3.3 per cent as at the December quarter 2014. Both Perth and Adelaide are achieving the highest rental yield of 4.3 per cent over the same period. 10 AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

Apartment Rental Yields - March 2010 December 2014 BRISBANE, SYDNEY, MELBOURNE, PERTH & ADELAIDE CHART 1.15 Melbourne has consistently recorded the lowest apartment rental yield of all capital cities over the 10 year period between March 2010 and December 2014. During the quarter ending December 2014, Melbourne registered a yield of 4.1 per cent, followed closely by Sydney at 4.2 per cent. Both Brisbane and Perth recorded the highest rental yield of 5.1 per cent over the same period. House Yields vs. Mortgage Rate - March 2010 December 2014 CAPITAL CITIES WEIGHTED AVERAGE CHART 1.16 The charts above and over the page compare the weighted average rental yield of both houses and apartments across the five major capital cities (Sydney, Melbourne, Brisbane, Perth and Adelaide) against mortgage rates over the past five years. While yields can vary significantly across sub-markets and product types, the figures indicate that generally the spread between the rental yield and mortgage rate for both apartments and houses have decreased substantially since 2011. AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW 11

Apartment Yields vs. Mortgage Rate - March 2010 December 2014 CAPITAL CITIES WEIGHTED AVERAGE CHART 1.17 1.1.10 CONSTRUCTION COSTS Australian Construction Building Costs - December Qtr 2014 BRISBANE, PERTH, SYDNEY, MELBOURNE & ADELAIDE Adelaide Brisbane Melbourne Perth Sydney Cost Range Per Gross Floor Area ($/m2) Low High Low High Low High Low High Low High Residential Single and Double Storey Dwellings (Custom Built) $1,500 $3,400 $1,650 $3,200 $1,365 $2,700 $1,420 $2,263 $1,500 $4,150 Residential Units Walk-up 85-120 Sqm $1,750 $2,750 $1,450 $3,050 $1,465 $3,050 $1,745 $2,803 N/A N/A Townhouse 90-120sqm $1,800 $2,600 $1,400 $2,600 $1,415 $2,650 $1,585 $2,613 N/A N/A Multi-storey Units Up to 10 Storeys with Lift Units 60-70sqm $2,150 $2,950 $2,000 $2,750 $2,250 $2,900 $2,280 $2,975 $2,500 $3,100 Units 90-120sqm $2,100 $2,850 $1,900 $2,600 $2,400 $3,250 $2,230 $2,880 $2,250 $2,900 11-20 Storeys Units 60-70sqm $2,350 $3,150 $2,300 $2,800 $2,530 $3,235 $2,725 $3,375 $2,650 $3,400 Units 90-120sqm $2,300 $3,100 $2,250 $2,650 $2,500 $3,250 $2,655 $3,275 $2,500 $3,250 21-40 Storeys Units 60-70sqm $2,750 $3,500 $2,300 $3,050 $3,000 $3,500 $3,405 $3,830 $3,400 $4,100 Units 90-120sqm $2,700 $3,450 $2,200 $2,900 $2,800 $3,400 $3,335 $3,780 $3,250 $3,750 41-80 Storeys Units 60-70sqm N/A N/A $2,800 $3,500 $3,350 $4,000 $3,810 $4,475 $3,850 $4,600 Units 90-120sqm N/A N/A $2,700 $3,350 $3,200 $3,900 $3,665 $4,395 $3,750 $4,500 Prepared by Urbis; Source: Rider Levett Bucknall (RLB ) Rider Digest 2015 Based on figures collated at December 2014, the Sydney residential market registers the highest construction costs when compared across the key capital cities. For a residential development of between 21 and 40 storeys, Sydney construction costs are anywhere from $250 to $800 per square metre greater than Brisbane, which currently represents the most affordable construction market for developments of this scale. For higher density development over 41 storeys, the construction affordability of the Brisbane market is again noted ($2,700-$3,500/sqm), with a number of capital cities registering dollar per square metre premiums of $550/sqm (Melbourne), $1,045/sqm (Perth) and $1,150/sqm (Sydney). 12 AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

1.2 RESIDENTIAL INDUSTRY ACTIVITY This section provides an insight into the competitive landscape within the homebuilder and residential developer industry across Australia. Data has been utilised from the HIA Housing 100 report (2013/14), which reviews Australia s largest 100 residential builders/developers. It was noted that main housing activity was driven by the detached house market, making up 72 per cent of total activity within the group, despite a growing share of medium and high density dwelling starts. Overall, the 2012/13 and 2013/14 years will represent the first period since 2002/03 2003/04 when there has been two consecutive financial years of growth in housing starts, with 2013/14 marking the second highest level of housing starts on record. The table below indicates the top 5 homebuilder and residential developer in each state, as well as their dominant activity, whether this be in detached housing or multi-unit developments. Dwelling Starts - By State 2013/14 - TOP 5 BY STATE RANK COMPANY DWELLING STARTS (2013/14) DOMINANT ACTIVITY NEW SOUTH WALES 1 Meriton Apartments 7,586 Multi-unit Developments 2 Eden Brae Group 958 Detached House 3 Masterton 908 Detached House 4 McDonald Jones Homes 859 Detached House 5 Mirvac Group 655 Multi-unit Developments VICTORIA 1 Simonds Group 2,238 Detached House 2 Brookfield Multiplex 1,875 Multi-unit Developments 3 Metricon Homes 1,579 Detached House 4 Porter Davis Homes 1,339 Detached House 5 L.U. Simon Builders Pty Ltd 1,179 Multi-unit Developments QUEENSLAND 1 Henley Properties 673 Detached House 2 Tamawood 1 534 Detached House 3 Sandsky Developments 500 Multi-unit Developments 4 Metricon Homes 478 Detached House 5 GJ Gardner Homes 2 459 Detached House WESTERN AUSTRALIA 1 BGC (Australia) 5,004 Detached House 2 Alcock Brown-Neaves Group 3,340 Detached House 3 JWH Group 1,425 Detached House 4 Pindan Pty Ltd 1,334 Multi-unit Developments 5 Redink Homes Pty Ltd / 101 Residential Pty Ltd 1,175 Detached House SOUTH AUSTRALIA 1 Hickinbotham Group of Companies 1,309 Detached House 2 Rivergum Homes 501 Detached House 3 Longridge Group 285 Detached House 4 Rossdale Homes 263 Detached House 5 Metro Property Development Pty Ltd 242 Detached House Total 36,698 1. Some dwellings built under franchise 2. All dwellings built under franchise Source : HIA - Colourbond Steel Housing 100; Urbis AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW 13

This table highlights the level of competition across these five key markets, with a number of dominant operators in specific markets including New South Wales, Western Australia and South Australia. Whilst a number of developers/builders may be dominant in a particular region, this competition is fragmented, with no entity heavily prominent across all markets. 1.2.1 PURCHASER ASSESSMENT Across the key national markets, our qualitative insight has noted the general buyer trend being high levels of investment activity within the Inner ring apartment markets, with owner occupiers dominating the outer ring markets. With a focus on the Inner Ring markets, Sydney, Melbourne and Brisbane all register high levels of investor interest; with Sydney and Melbourne s markets driven by international interest, with a slowly increasing proportion of developments being targeted at the local owner occupier market this typically is in premium locations/developments. Brisbane observes its dominant investor profile being interstate, with a lower proportion of international and local purchasers. Sydney, Melbourne and Brisbane middle ring apartment markets share similar dynamics, with a higher proportion of local purchasers (both investors and owner occupiers). The Perth Inner ring market has a different dynamic to both the Melbourne and Brisbane markets, with the primary focus on the local market. The buyer mix is noted to be quite even, with a higher owner occupier proportion in premium areas. Interstate interest follows the local market, with the international market making up just 7 per cent of all transactions in the December 2014 Quarter of the Urbis Perth Apartment Essentials. Across Melbourne and Brisbane, outer ring new developments are dominated by detached housing, with a lower proportion of townhouse and semi-detached product. Both the Melbourne and Perth outer ring markets are primarily owner occupier driven, with Brisbane s outer ring registering investor presence, particularly in townhouse and semi-detached product. The Sydney outer ring market differs in that this market is registering an emergence of apartment living amongst largely established housing. The emergence of this market has been driven by local interest, and represents a shift towards the lifestyle that density living provides. 1.2.2 GOVERNMENT AND REGULATORY POLICY Specific government and regulatory policies to stimulate or temper investment in housing have a direct impact on demand. Often policies are designed to target a specific type of buyer such as first home owners, investors or overseas buyers. Examples of current and past policies include: - First home owner grant: state-based schemes that vary across states and territories whereby a one-off grant or stamp duty tax concession is provided to first home buyers that satisfy certain criteria (owner-occupier purchases only) - New home grant: state-based schemes that vary across states and territories whereby a one-off grant or stamp duty tax concession is provided for the purchase of new homes, homes off the plan and vacant land on which a new home will be built - Negative gearing: income tax concessions for investors that generate income losses based on assessable deductions associated with residential property 14 AUSTRALIAN RESIDENTIAL PROPERTY MARKET OVERVIEW AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

2 Australian Residential Property Market Key Markets The following section provides an overview of the five largest capital city residential markets including Sydney, Melbourne, Brisbane, Perth and Adelaide and the key fundamentals, including median price, investment yields, population growth, affordability and any state based investment concessions and incentives. The table below provides a residential market snapshot and proportion of apartment sales by capital city at the period ending December 2014. Australian Residential Market Overview CAPITAL CITY - DECEMBER 2014 House Median Price Median Price Gap Apartment Median Price Housing Market Apartment Market Dec 2014 (3 Month Period) House vs Apartment (3 Month Period) Dec 2014 (3 Month Period) Proportion (%) Proportion (%) SYDNEY $740,000 $130,000 $610,000 62% 38% MELBOURNE $577,500 $102,500 $475,000 72% 28% BRISBANE $605,000 $185,000 $420,000 64% 36% PERTH $550,000 $113,000 $437,000 83% 17% ADELAIDE $421,000 $81,000 $340,000 76% 24% So urce: R P D ata, Urbis Sydney s house and apartment market have registered the highest median price in both markets which is approximately apportioned into 62 per cent housing and 38 per cent apartment dwellings. Brisbane (36%) has registered the next highest proportion of apartments with Melbourne apartments recording approximately 28 per cent of the residential market. The chart below provides an overview of the median house and apartment price at the period ending December 2014. Capital City Apartment Market Median Sales Price DECEMBER QUARTER 2014 CHART 2.1 From a median price gap standpoint, Brisbane has recorded the largest difference between house and unit registering a median price gap of $185,000. Sydney ($130,000), Perth ($113,000) and Melbourne ($102,500) have followed, with Adelaide providing the tightest range between house and unit median price at $81,000. AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL AUSTRALIAN RESIDENTIAL PROPERTY MARKET KEY MARKETS 15

2.1 SYDNEY, NEW SOUTH WALES The following section provides a snapshot of the Sydney Greater Capital City Statistical Area (GCCSA), with reference to a residential market summary, population projections and median weekly income. Residential Market Summary - December 2014 SYDNEY GCSSA House Apartment Number Sold (12 months) 58,847 37,763 Median Sales Price (12 months) $750,000 $580,000 Change in Median Price (12 months) 12.80% 8.40% Median Asking Rent (12 months) $520 $490 Indicative Gross Rental Yield (12 months) 3.60% 4.40% So urce: R P D ata; Urbis Population Projection 2012-2036 SYDNEY GCSSA Year Prepared by Urbis; Source: ABS 3218.0; SAFI No. of People New Residents Per Annum (5 Year Period) Growth Per Annum (5 Year Period) 2012 4,672,619 - - 2016 4,986,714 78,524 1.6% 2021 5,398,481 82,353 1.6% 2026 5,805,642 81,432 1.5% 2031 6,206,843 80,240 1.3% 2036 6,599,601 78,552 1.2% Median Weekly Income - ABS Census SYDNEY GCSSA Greater Sydney New South Wales Australia People aged 15 years and over Personal $619 $561 $577 Family $1,683 $1,477 $1,481 Household $1,447 $1,237 $1,234 So urce: A B S Census; Urbis 16 AUSTRALIAN RESIDENTIAL PROPERTY MARKET KEY MARKETS AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

2.2 MELBOURNE, VICTORIA The following section provides a snapshot of the Melbourne Greater Capital City Statistical Area (GCCSA), with reference to a residential market summary, population projections and median weekly income. Residential Market Summary - December 2014 MELBOURNE GCSSA House Apartment Number Sold (12 months) 56,775 25,840 Median Sales Price (12 months) $550,000 $455,000 Change in Median Price (12 months) 6.80% 2.70% Median Asking Rent (12 months) $385 $370 Indicative Gross Rental Yield (12 months) 3.60% 4.20% So urce: R P D ata; Urbis Population Projection 2012-2036 MELBOURNE GCSSA Year Prepared by Urbis; Source: ABS 3218.0; SAFI No. of People New Residents Per Annum (5 Year Period) Growth Per Annum (5 Year Period) 2012 4,248,344 - - 2016 4,605,993 89,412 2.0% 2021 5,070,416 92,885 1.9% 2026 5,530,901 92,097 1.8% 2031 5,984,219 90,664 1.6% 2036 6,428,575 88,871 1.4% Median Weekly Income - ABS Census MELBOURNE GCSSA Greater Melbourne New South Wales Australia People aged 15 years and over Personal $591 $561 $577 Family $1,576 $1,460 $1,481 Household $1,333 $1,216 $1,234 So urce: A B S Census; Urbis AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL AUSTRALIAN RESIDENTIAL PROPERTY MARKET KEY MARKETS 17

2.3 BRISBANE, QUEENSLAND The following section provides a snapshot of the Brisbane Local Government Area (LGA), with reference to a residential market summary, population projections and median weekly income. The Brisbane LGA has been assessed as its geographic spread is comparable to the GCCSA catchments of the other key capital cities. Residential Market Summary - December 2014 BRISBANE LGA House Apartment Number Sold (12 months) 16,724 10,537 Median Sales Price (12 months) $585,000 $422,500 Change in Median Price (12 months) 7.30% 1.80% Median Asking Rent (12 months) $450 $410 Indicative Gross Rental Yield (12 months) 4.00% 5.00% So urce: R P D ata; Urbis Population Projection 2012-2036 BRISBANE LGA Year No. of People New Residents Per Annum (5 Year Period) Growth Per Annum (5 Year Period) 2012 1,110,332 - - 2016 1,176,418 16,522 1.5% 2021 1,246,841 14,085 1.2% 2026 1,310,033 12,638 1.0% 2031 1,378,728 13,739 1.0% 2036 1,440,223 12,299 0.9% Prepared by Urbis; Source: ABS 3218.0; OESR Median Weekly Income - ABS Census BRISBANE LGA Brisbane (C) Queensland Australia People aged 15 years and over Personal $696 $587 $577 Family $1,873 $1,453 $1,481 Household $1,547 $1,235 $1,234 So urce: A B S Census; Urbis 18 AUSTRALIAN RESIDENTIAL PROPERTY MARKET KEY MARKETS AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

2.4 PERTH, WESTERN AUSTRALIA The following section provides a snapshot of the Perth Greater Capital City Statistical Area (GCCSA), with reference to a residential market summary, population projections and median weekly income. Residential Market Summary - December 2014 PERTH GCSSA House Apartment Number Sold (12 months) 31,529 6,644 Median Sales Price (12 months) $550,000 $442,250 Change in Median Price (12 months) 4.00% 2.80% Median Asking Rent (12 months) $460 $430 Indicative Gross Rental Yield (12 months) 4.30% 5.10% So urce: R P D ata; Urbis Population Projection 2012-2036 PERTH GCSSA Year Prepared by Urbis; Source: ABS 3218.0; SAFI No. of People New Residents Per Annum (5 Year Period) Growth Per Annum (5 Year Period) 2012 1,899,999 - - 2016 2,181,194 70,299 3.5% 2021 2,531,727 70,107 3.0% 2026 2,888,637 71,382 2.7% 2031 3,248,550 71,983 2.4% 2036 3,609,029 72,096 2.1% Median Weekly Income - ABS Census PERTH GCSSA Greater Perth Western Australia Australia People aged 15 years and over Personal $669 $662 $577 Family $1,781 $1,722 $1,481 Household $1,459 $1,415 $1,234 So urce: A B S Census; Urbis AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL AUSTRALIAN RESIDENTIAL PROPERTY MARKET KEY MARKETS 19

2.5 ADELAIDE, SOUTH AUSTRALIA The following section provides a snapshot of the Adelaide Greater Capital City Statistical Area (GCCSA), with reference to a residential market summary, population projections and median weekly income. Residential Market Summary - December 2014 ADELAIDE GCSSA House Apartment Number Sold (12 months) 20,407 6,495 Median Sales Price (12 months) $412,000 $335,000 Change in Median Price (12 months) 5.10% 3.10% Median Asking Rent (12 months) $350 $300 Indicative Gross Rental Yield (12 months) 4.40% 4.70% So urce: R P D ata; Urbis Population Projection 2012-2036 ADELAIDE GCSSA Year Prepared by Urbis; Source: ABS 3218.0; SAFI No. of People New Residents Per Annum (5 Year Period) Growth Per Annum (5 Year Period) 2012 1,278,432 - - 2016 1,340,503 15,518 1.2% 2021 1,419,500 15,799 1.2% 2026 1,495,341 15,168 1.0% 2031 1,566,929 14,318 0.9% 2036 1,633,305 13,275 0.8% Median Weekly Income - ABS Census ADELAIDE GCSSA Adelaide South Australia Australia People aged 15 years and over Personal $554 $534 $577 Family $1,403 $1,330 $1,481 Household $1,106 $1,044 $1,234 So urce: A B S Census; Urbis 20 AUSTRALIAN RESIDENTIAL PROPERTY MARKET KEY MARKETS AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

3 Inner Brisbane Apartment Market Focus The Inner Brisbane area was established to provide a benchmark to examine the trends and differences across key regions. The Inner Brisbane area reflects an approximate five kilometre circumference around the Brisbane CBD and incorporates around 45 suburbs (as reflected in the following table and map). Inner Brisbane Catchment Area BY PRECINCT BRISBANE CBD INNER EAST INNER NORTH INNER SOUTH INNER WEST NORTHSHORE Brisbane City Balmoral Bowen Hills Dutton Park Ashgrove Albion Bulimba Fortitude Valley Highgate Hill Auchenflower Ascot Coorparoo Herston South Brisbane Bardon Hamilton East Brisbane New Farm South Bank Kelvin Grove Eagle Farm Hawthorne Newstead West End Milton Norman Park Spring Hill Woolloongabba Newmarket Camp Hill Teneriffe Annerley Paddington Morningside Wilston Fairfield Red Hill Seven Hills Windsor Greenslopes St Lucia Kangaroo Point Yeronga Toowong Taringa The GIS map below illustrates the Inner Brisbane Catchment by precinct. Prepared by Urbis; Source; Urbis Apartment Insights December 2014 AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL INNER BRISBANE APARTMENT MARKET FOCUS 21

3.1 INNER BRISBANE OFF-THE-PLAN APARTMENT MARKET This section provides an analysis of active off-the-plan apartment supply within Inner Brisbane for the December Quarter 2014. The breakdowns outline findings regarding estimated sales conducted, product type, and project stage and associated price points. Information is sourced from the Urbis Brisbane Apartment Insights, which is a quarterly publication providing independent research into the off-the-plan apartment market within Inner Brisbane. Urbis surveys active developers within Brisbane to collect the number of unconditional sales each quarter. The Off-the-Plan Apartment Projects by Precinct chart illustrates the proportion of active apartment projects within Inner Brisbane by Precinct at the conclusion of the December 2014 quarter. Inner Brisbane Off-the-Plan Apartment Projects by Precinct DECEMBER QUARTER 2014 CHART 2.2 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 Key points to note in regard to the December Quarter 2014 results for the Brisbane off-the-plan apartment market are: In the December Quarter 2014, Urbis identified a total of 1,540 unconditional sales from the surveyed projects. This is 139 more sales than the September Quarter 2014. Within the sample of projects, there are a total of 3,105 apartments remaining for sale, with 5,781 apartments being sold to date within the active projects. The most preferred apartment type was one bedroom product (including one bed no car), equating to 770 unconditional sales over the quarter, or 50 per cent of the market share. The high proportion of one bedroom product has occurred across previous quarters, with the high activity within the one bedroom apartment market being supported by a significant investor market purchasing within Inner Brisbane. This product has appealed to investor purchasers due to a lower initial capital outlay when compared to other product while maintaining attractive potential rental yields. The second preference of new apartments within Inner Brisbane has been for two bedroom two bathroom apartment product, which accounted for 546 unconditional sales during the quarter, equating to 35 per cent of total sales. Two bedroom two bathroom apartments have been a strong market over recent quarters despite registering a small decline in unconditional sales within the December Quarter 2014. Within the December Quarter 2014, the weighted average sale price within Inner Brisbane was $565,276, representing a $10,027 increase on the previous quarter. This increase is influenced by the record breaking sales within the CBD which registered higher than average one bedroom sale prices due to premium views and amenity. The largest proportion of unconditional off-the-plan transactions within Inner Brisbane were within the CBD, recording 427 unconditional sales, equating to 27 per cent of the Inner Brisbane total. The Inner South recorded 370 unconditional apartment sales (24%) while the Inner North recorded 314 (20%) unconditional apartment sales during the December Quarter 2014. 22 INNER BRISBANE APARTMENT MARKET FOCUS AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

The Total Sales by Status chart illustrates the proportion of active apartment stock within Inner Brisbane that is either in presales, under construction or completed and yet to settle. Key points to note in regard to this are: A number of Inner Brisbane projects have now begun construction as at the end of the December 2014 quarter, registering 53 per cent of the active apartment market indicating that the buyer market are displaying a preference for purchasing within projects that are more secure. Despite the number of transactions within presales still registering the highest proportion of the offthe-plan sales, the proportion of these transactions against projects under construction have tightened toward the back half of 2014. Inner Brisbane Off-the-Plan Apartment Sales by Status DECEMBER QUARTER 2014 CHART 2.3 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 The Total Stock Sold and Remaining graph illustrates the stock volumes within Inner Brisbane and the volume of stock still remaining for sale. Key points to note in regard to the current supply of apartments in Inner Brisbane are: The largest volume of stock remaining is two bedroom two bathroom apartments with 1,276 apartments unsold, equating to 27 per cent of remaining stock within Inner Brisbane. The high proportion of two bedroom two bathroom apartments remaining to sell reflects older active product, in less appealing locations and at mismatched price points. The continued strong proportion of sales for two bedroom two bathroom apartments has largely been driven by the flexible option this product offers, with interstate investors in particular seeing value in this product due to potential yields and proximity to the Brisbane CBD. Inner Brisbane Off-the-Plan Total Stock Sold and Remaining DECEMBER QUARTER 2014 CHART 2.4 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL INNER BRISBANE APARTMENT MARKET FOCUS 23

One bedroom stock has shown a comparable proportion of remaining stock within the sample, with 1,379 one bedroom apartments (including one bed no car) remaining for sale. This equates to 29 per cent of the total active available market within Inner Brisbane. Sales within one bedroom apartments have been supported through the use of domestic and international sales channels, which have increased the rate of sale for investor targeted projects when compared to a retail sales strategy. The graph below illustrates the volume of stock transacted across all product types within Inner Brisbane for the December Quarter 2014 as well as the incremental change in transactions by quarter since June 2012 (when the survey commenced). Key points to note in regard to the total volume of stock sold by quarters in Inner Brisbane are: Inner Brisbane Total Volume of Stock Sold by Quarter DECEMBER QUARTER 2014 CHART 2.5 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 The December 2014 quarter has recorded the largest number of sales in any quarter since the inception of the Urbis Apartment Insights in June 2012. Similarly, the level of remaining stock available after December 2014 is also the highest it has been. The increased level of sales is in line with the increasing number of developments surveyed, which has increased periodically to register a total of 80 surveyed projects in December 2014. As a number of the established and completed apartment projects begin to settle, so too will the number sold prior to the quarter which has on average increased by more than 100 per month over the past twelve months ending December 2014. 24 INNER BRISBANE APARTMENT MARKET FOCUS AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

The graph below illustrates the total stock sold by price point and product mix for all unconditional contracts within Inner Brisbane for the December Quarter 2014. Key points to note in regard to the total stock sold by price point in Inner Brisbane are: The price points for off-the-plan unconditional sales within the December Quarter 2014 in Inner Brisbane for each product type are shown below. This chart provides an overview of market activity within the quarter, highlighting the price ranges for each product type, as well as the price point where the majority of sales have occurred. The peak market depth per product highlights the market price range where the largest volume of each product type has transacted. This provides insight into the proportion each peak market demands out of the total market for that product. The most preferred apartments were one bedroom product (incl. car). This product type has a broad price range and a sweet spot at the $400,000 to $499,999 price point. The one bedroom, no car stock is tighter recording a sweet spot between $400,000 and $449,999. With the one bedroom market being largely targeted at investor purchasers, this purchaser profile is especially price sensitive, seeking apartments that maximise value for money through a lower purchase price and strong potential yields. The second preference of apartments was for two bedroom, two bathroom apartments which has shown a much wider price range with a slight skew toward the bottom end of the range, between $550,000 and $599,999, despite ranging between $450,000 and $1M. This product type s broad price range is linked to a diversity of product variables, including size, location, apartment layout and views that differ across projects. Total Stock Sold by Price Point and Product Mix INNER BRISBANE DECEMBER QUARTER 2014 CHART 2.6 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL INNER BRISBANE APARTMENT MARKET FOCUS 25

3.2 FUTURE PIPELINE AND PROPOSED SUPPLY The following section provides an overview of the future pipeline and proposed development for the Inner Brisbane precinct. It must be noted that while this analysis takes into consideration all development applications and approvals lodged, the possibility that all developments will enter the active apartment market is unlikely. It is important to understand that the projects in this analysis that have entered presales are recorded in the active apartment analysis and are only removed from the future supply once construction is underway. Of the 89 projects across Inner Brisbane that have received development approval, 18 per cent are located within Fortitude Valley and/or Newstead and 10 per cent are located within South Brisbane. Similarly, of the total projects across Inner Brisbane currently in the development application stage, Fortitude Valley and Newstead hold the larger proportion with 21 per cent compared to South Brisbane at 10 per cent. Inner Brisbane Future Supply INNER BRISBANE Status Projects Yield Percentage (%) Presales 40 5,884 19% Approval 89 13,761 43% Application 72 10,097 32% Deferred 7 2,060 6% TOTAL 208 31,802 Prepared by Urbis:;Source: Brisbane City Council - PD Online Of the 208 apartment projects that have submitted development applications, 43 per cent have received approval yielding a total of 13,761 apartments. 5,884 apartments have entered presale which signifies approximately 19 per cent of the 31,802 apartments that will likely enter the Inner Brisbane Apartment market. Fortitude Valley and Newstead Future Supply FORTITDUE VALLEY AND NEWSTEAD Status Projects Yield Percentage (%) Presales 8 1,596 20% Approval 16 2,987 38% Application 15 3,377 42% Deferred 0 0 0% TOTAL 39 7,960 Prepared by Urbis:;Source: Brisbane City Council - PD Online Development applications in Fortitude Valley and Newstead have recorded 25 per cent of the Inner Brisbane precinct, of which 20 per cent are currently in presales and yet to begin construction. A further 31 projects have lodged development applications, with 16 (2,987 apartments) of these receiving approval. Interestingly the 31 projects that have lodged development applications that are yet to enter presale average approximately 205 apartments per project, larger than current off-the-plan apartment projects in Newstead and Fortitude Valley. South Brisbane Future Supply SOUTH BRISBANE Status Projects Yield Percentage (%) Presales 10 1,465 31% Approval 9 1,585 34% Application 7 1,639 35% Deferred 0 0 0% TOTAL 26 4,689 Prepared by Urbis:;Source: Brisbane City Council - PD Online 26 INNER BRISBANE APARTMENT MARKET FOCUS AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

Development applications in South Brisbane have recorded only 14 per cent of the Inner Brisbane precinct, of which 31 per cent are currently in presales and yet to begin construction. A further 16 projects have lodged development applications, with nine (1,585 apartments) of these receiving approval. Interestingly, the 16 projects that have submitted development applications that are yet to enter presale average approximately 201 apartments per project, comparable to the figure registered for the Newstead and Fortitude Valley precincts. Future Supply by Product Type FORTITUDE VALLEY, NEWSTEAD, SOUTH BRISBANE AND INNER BRISBANE Fortitude Valley and Newstead South Brisbane Inner Brisbane Studio 1 0.0% 162 4% 476 2% One Bed 3,659 50.9% 2,321 51% 12,658 46% Two Bed 3,375 46.9% 1,960 43% 13,246 48% Three Bed 147 2.0% 143 3% 1,170 4% Four Bed 2 0.0% 2 0% 84 0% Penthouse 7 0.1% 0 0% 22 0% Total 7,181 4,424 27,074 P repared by Urbis:;So urce: B risbane C ity C o uncil - P D Online Following a similar trend to the active apartment market, the majority of Inner Brisbane s future supply is made up of one bedroom and two bedroom products. The four per cent of proposed threebedroom stock is primarily located in fringe suburbs including Hamilton and Kangaroo Point. Looking closer at the suburbs of Fortitude Valley/Newstead and South Brisbane, their proposed future supply is heavily dictated by the density and demographic profiles of their respective areas. Due to the large proportion of younger professional couples inhabiting these suburbs (ABS Census 2011), Fortitude Valley, Newstead and South Brisbane are reporting a higher proportion of one bedroom stock at 51 per cent compared to the Inner Brisbane benchmark of 46 per cent. Fortitude Valley and Newstead are expected to supply, approximately 3,375 two bedroom apartments to the market. Representing 47 per cent of the suburbs future, this figure is in line with the Inner Brisbane future supply of 48 per cent for two bedroom products. South Brisbane s two bedroom apartment supply is slightly lower at 43 per cent. Associated density levels are influencing Fortitude Valley/Newstead and South Brisbane s future supply of three bedroom products, with the suburbs proposed to deliver a combined total of only 290 three bedroom apartments. At an average of 2.5 per cent this is lower than the Inner Brisbane benchmark of 4 per cent. Due to the high proportion of potential supply (51 per cent), pricing for one bedroom apartment product is expected to remain relatively stable within Fortitude Valley, Newstead and South Brisbane moving forward. Two bedroom apartments will continue to register slight variations in price, particularly where design, aspect and amenity differ greatly. AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL INNER BRISBANE APARTMENT MARKET FOCUS 27

3.3 RENTAL VACANCY RATE The table below illustrates the rental vacancy rate in the three year period between March 2011 and December 2014 across Brisbane. Vacancy Rate Inner Brisbane, Brisbane City & Brisbane SD DECEMBER QUARTER 2014 CHART 2.7 Since June 2011, the Brisbane residential vacancy rate remained consistent, ranging between 1.5 per cent and 3.0 per cent to the quarter concluding September 2013. In December 2013, a number of apartment projects settled, thus providing supply of rental product to the market, and subsequently increasing the rental vacancy rate temporarily due to a natural lag between when apartments settle and are first able to be tenanted. This was rectified in the March quarter (3.1 per cent) before a further 15 projects launched in the Inner Brisbane market in June 2014 resulting in a marginal vacancy increase to 3.4 per cent at the close of the quarter. Typically a normal rental market, one that has competitive levels of supply and demand, is indicated by vacancy rates of between 3% and 3.5%. 28 INNER BRISBANE APARTMENT MARKET FOCUS AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

3.4 INFRASTRUCTURE INVESTMENT Additional to the infrastructure investment in the commercial, residential and retail sectors, the Inner Brisbane precinct is positioned to benefit from a range of mixed use, healthcare and transport orientated investment. Key infrastructure projects that will benefit Inner Brisbane and the Metro focus suburbs that have recently been completed; currently under construction or pending have been highlighted in the table below. Infrastructure Investment INNER BRISBANE PRECINCT Project Type Location Proximity to Metro Est. Value ($) Focus Suburbs Queens Wharf Mixed Use Brisbane CBD Adjacent $4b Royal Brisbane Hospital Health Herston Adjacent - Brisbane Showgrounds Mixed Use Bowen Hills Adjacent $2.9b Description The Queens Wharf project is expected to offer a mix of new uses such as six star hotels, retail, restaurant and entertainment zones, theatre and convention facilities and new open spaces within the Brisbane CBD The Royal Brisbane and Women s Hospital is the largest tertiary referral hospital in Queensland encompassing 53 buildings and covering 17.7 hectares The Brisbane Showgrounds will be one of Brisbane s largest inner city renewal projects when complete. Staged over a development period of 15 years, the completed development will offer a wide range of uses including open space, retail, residential living, commercial office, convention facilities and hotel accommodation. Airportlink M7 Transport Transport Infrastructure Connecting $4.8b Inner City Bypass Transport Transport Infrastructure Connecting $220m Howard Smith Wharves Public Space Brisbane CBD Adjacent $100+m Gasworks Mixed Use Newstead Within $1.1b Queensland s Lady Cilento Children s Hospital Mater Private and Public Hospitals Transport Transport Infrastructure Connecting $1.2b Health South Brisbane Within - Go Between Bridge Transport South Brisbane/West End Within $338m QLD Cultural Centre Redevelopment Masterplan Entertainment South Brisbane Within $1.15b South East Busway Transport Transport Infrastructure Connecting $426m $16.3b Airportlink was built to relieve congestion in Brisbane s northern suburbs and improve public transport. It provides connectivity to the Clem7 Tunnel, the Inner City Bypass, northern arterials and the International and Domestic Airports. Completed in 2002, the 4.5 km bypass provides a connection between the northern suburbs and the entrance to the Pacific Motorway and Go Between Bridge, bypassing the Brisbane CBD. Howard Smith Wharves is set to be redeveloped as a waterside destination across a 3.4 hectare site. Located under the northern end of Brisbane's Story Bridge, the Wharves precinct is expected to incorporate commercial elements such as five-star hotel, exhibition space, restaurants, retail and community facilities with 80 per cent of the site being publically accessible open space. When complete, the $1.1 billion Gasworks development will provide retail and commercial activities. It is proposed to include 60,000 sqm of commercial space and 20,000 sqm of retail space, further expanding the existing retail offering. Opened in November 2014, the new Queensland Children s Hospital, adjoining the Mater Hospital is a combination of the Royal Children s and Mater Children s Hospitals. The LCCH provides specialist paediatric care for children. The Mater Private Hospital is a leading acute medical and surgical private hospital, offering 320 beds and a range of general and specialised services. In addition, the Mater Public offers more than 125 beds, whilst further beds are offered by the Mater Mothers Hospital, Mater Children s Private Hospital and smaller specialty clinics. Completed in 2010, the Go Between Bridge was Inner- Brisbane s first car-accessible bridge in 40 years. The Bridge acts as a link between South Brisbane, the Brisbane CBD and northern suburbs Located in South Brisbane, this multi-venue centre encompasses the Queensland Art Gallery, Gallery of Modern Art, Queensland Performing Arts Centre, Queensland Museum and State Library of Queensland. A 20-year Cultural Precinct Strategy is currently being developed to ensure the success of this key tourism, events and cultural destination The South East Busway is an at-grade bus-only corridor running from the Brisbane CBD to Eight Mile Plains. The first stage was completed in 2000, with additional extensions occurring in 2001 and 2014. Prepared by Urbis; Source: QLD Govt Department of State Development, Queensland Health, RNA Queensland, BrisConnections AirportlinkM7, Leighton Contractors; Queensland Government, Brisbane City Council - Howard Smith Wharves Revitalisation Project, AVEO Gasworks,Queensland Government - Children's Health Queensland, Mater Health Services, Brisbane City Council - Go Between Bridge, Queensland Government - Arts Queensland, Queensland Government - Department of Main Roads and Transport AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL INNER BRISBANE APARTMENT MARKET FOCUS 29

At the period ending December 2014, the Inner Brisbane precinct had upward of $16b worth of investment across a number of projects in the pipeline, ranging from transport infrastructure investment, mixed use master plans and public space projects. Of the projects listed above, a number will directly benefit the suburbs that Vital Property Group has identified as their focus suburbs, including the Newstead Gasworks, Mater Private and Public Hospitals, Go Between Bridge (complete), and Cultural Centre Redevelopment. Additional initiatives by local and state government including the Kurilpa Riverfront Renewal and Southbank Riverfront Renewal will also assist to positively shape South Brisbane and West End. Whilst not only benefitting the Metro focus suburbs, the AirportLink M7, Inner City Bypass and South East Busway will all work to improve transport corridors and increase connectivity within the Inner Brisbane precinct and surrounding suburbs. Proximity Definitions: Within Infrastructure located within the boundaries of the Metro focus suburbs. Adjacent Infrastructure located in suburb that shares a boundary with Metro focus suburbs Connecting Infrastructure that may have an element that is either located within, or provides a connection to the Metro focus suburbs. 30 INNER BRISBANE APARTMENT MARKET FOCUS AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

3.5 NEWSTEAD, FORTITUDE VALLEY AND SOUTH BRISBANE FOCUS DEMAND ANALYSIS Outlined below is the active apartment market based on a quarterly period ending Q4 2014 within selected suburbs of Fortitude Valley, Newstead and South Brisbane. These suburbs have been highlighted in this assessment upon instruction by the client, representing three of the most markets in Inner Brisbane for new apartment (off-the-plan) activity. Information that will be covered in this section includes a broad overview of average price, size of apartment and gross dollar per quarter metre rate with reference to the number of off-the-plan apartment sales registered in the December 2014 quarter, as well as the level of remaining stock for sale in comparison to the number which have already transacted. Urbis Apartment Insights Metro Focus Precinct Summary DECEMBER QUARTER 2014 NUMBER OF SALES (Q4 2014) WEIGHTED AVERAGE SALE PRICE AVE. GROSS SQM AVE. $/SQM FORTITUDE VALLEY 85 $646,765 94 $6,880 NEWSTEAD 81 $506,481 71 $7,134 SOUTH BRISBANE 202 $557,178 80 $6,965 INNER BRISBANE 1,541 $564,909 80 $7,061 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 Urbis Apartment Insights Stock Available and Sold by Precinct DECEMBER QUARTER 2014 CHART 2.8 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL INNER BRISBANE APARTMENT MARKET FOCUS 31

The tables below highlight the active apartment market based over an annual period taking in Q1 to Q4 2014 within the selected suburbs of Fortitude Valley, Newstead and South Brisbane. The key data that we have highlighted in these tables includes a high level overview of the weighted average price points and the product types that have transacted within these suburbs over the twelve month period. Urbis Apartment Insights Stock Sold by Precinct by Price 2014 CHART 2.9 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 Urbis Apartment Insights Stock Sold by Precinct by Price 2014 CHART 2.10 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 32 INNER BRISBANE APARTMENT MARKET FOCUS AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

3.5.1 POPULATION GROWTH PROJECTED SETTLEMENTS The table below displays the monitored number of settlements based on data derived from the Urbis Apartment Insights (December 2014). These projected settlements display the Fortitude Valley, Newstead and South Brisbane suburbs between 2014 and 2019 with an average settlement per year figure extrapolated to 2019 to inform the projected future settlements of Fortitude Valley, Newstead and South Brisbane. Urbis Apartment Insights Projected Settlements and Population Projections DECEMBER QUARTER 2014 CHART 2.11 Fortitude Valley Newstead South Brisbane Number of Settlements Population Increase (p.a.) Projected Population Number of Settlements Population Increase (p.a.) Projected Population Number of Settlements Population Increase (p.a.) Projected Population 2014 5,872 6,253 4,267 2015 289 549 6,421 214 407 6,660 507 963 5,230 2016 796 1,512 7,934 1,218 2,314 8,974 534 1,015 6,245 2017 423 804 8,737 984 1,870 10,843 1,093 2,077 8,322 2018 783 1,488 10,225 1,066 2,025 12,869 879 1,670 9,992 2019 573* 1,089 11,314 871* 1,655 14,524 1,081 2,054 12,046 TOTAL 2,291 3,482 4,094 AVERAGE 573 871 819 *Assumed 5yr Average Prepared by Urbis; Source; ABS, Urbis Apartment Insights December 2014 The above settlement figures have assisted Urbis project the estimated resident population increase across the suburbs of Fortitude Valley, Newstead and South Brisbane using the average residents per household figure of 1.9 persons per dwelling. This average resident per household figure has been derived from Urbis primary research and its understanding of the focus suburbs. Using this information, as well as the information gathered via the quarterly publication of the Urbis Apartment Insights, the following population increases can be projected to 2019 based on the anticipated settlement figures recorded in the table above, including Fortitude Valley (2,281 or 573 per year), Newstead (3,482 or 871 per year) and South Brisbane (4,094 or 819 per year). Urbis Apartment Insights Projected Settlements and Population Projections DECEMBER QUARTER 2014 CHART 2.12 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 The chart above displays the anticipated population growth in the Fortitude Valley, Newstead and South Brisbane suburbs spurred by the projected apartment settlements over the period to 2019. AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL INNER BRISBANE APARTMENT MARKET FOCUS 33

3.5.2 POPULATION GROWTH GOVERNMENT FORECASTS Newstead, Fortitude Valley and South Brisbane Government Population Projections 2014-2018 CHART 2.13 The above chart demonstrates the population growth for Newstead, Fortitude Valley and South Brisbane based on Queensland Government population projections (2013 edition). The total population of Metro s key target market (Newstead, Fortitude Valley and South Brisbane) is expected to grow from approximately 18,000 as at the beginning of calendar year 2015 to 23,300 as at the end of calendar year 2018, representing a compounded annual growth rate (CAGR) of 6.7 per cent. On average, 1.85 1 people reside in an apartment dwelling which implies a total of 3,076 new apartments would need to be completed between 2015 and 2018 to accommodate this forecast increase in population alone (assuming all new residents move to apartment dwellings). 1 The figure of 1.85 persons per household has been based on the ABS Census (2011) average household size for attached dwellings in this catchment. 34 INNER BRISBANE APARTMENT MARKET FOCUS AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

3.6 FORTITUDE VALLEY The following table classifies the new apartment projects within Fortitude Valley that Urbis have identified to settle in the coming years to assist in forming the apartment future supply between now and 2019. This process has been completed by identifying apartment projects that have recently launched, are under construction, completed or expected to enter the market in the coming twelve months. Active and Pending Projects - Summary FORTITUDE VALLEY PROJECT NAME LAUNCH MONTH SETTLEMENT YEAR DEVELOPER STATUS 1 SOLD AS AT DEC 2014 YIELD WEIGHTED AVG PRICE 2 Cambridge Towers - Central Village Nov-12 2014 Metro Property Development COMPLETED 156 161 $525,000 Mosaic Nov-10 2014 Leighton Properties COMPLETED 205 213 $641,667 M & A Jul-10 2014 Laing O'Rourke COMPLETED 234 234 $591,667 Oxford Towers - Central Village May-13 2015 Metro Property Development COMPLETED 119 158 $400,000 Brooklyn on Brookes Oct-11 2015 Metro Property Development COMPLETED 216 216 $506,250 Alex Perry Residential Jan-14 2016 Chrome Properties CONSTRUCTION N/A 131 N/A Canterbury Towers - Central Village 3 Aug-14 2016 Metro Property Development CONSTRUCTION 195 195 $471,429 Belise Sep-12 2016 Group Kildey CONSTRUCTION 208 228 $555,000 Broadway on Ann 3 Sep-13 2016 Metro Property Development CONSTRUCTION 247 247 $555,000 FV - Flatiron 4 Jul-14 2016 Gurner PRESALES N/A 354 The James Apartments 4 Feb-15 2017 Portfolio Pty Ltd PRESALES N/A 79 Elixir 4 Oct-14 2017 HGW Projects PRESALES N/A 126 FV - Valley House 4 Jul-14 2017 Gurner PRESALES N/A 297 Central Village Stage 6 2018 Metro Property Development PENDING 199 FV - No.1 2018 Gurner PENDING 261 188 Wickham Tce 2018 Twin Ocean Group PENDING 522 Central Village Stages 4 & 5 2018 Metro Property Development PENDING 345 1. Project Status as at May 2015 2. Weighted Average Price based on most recent transaction period for the project in the Urbis Brisbane Apartment Insights 3. Project Sales Data provided as at May 2015 4. Projects not particpating in the Urbis Brisbane Apartment Insights Source : Urbis Brisbane Apartment Insights Urbis Apartment Insights Stock Available and Sold by Product Type FORTITUDE VALLEY - DECEMBER QUARTER 2014 CHART 2.14 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 Historically, Fortitude Valley has recorded strong sales within the one-bedroom apartment market. In the December 2014 quarter, the two bedroom two bathroom market emerged as the primary market, with remaining one bedroom and two bedroom product registering similar sales transactions Fortitude Valley has witnessed a continued preference for two bedroom two bathroom product, equating to 40 unconditional sales over the quarter. This product has appealed to both investor purchasers and owner occupiers (albeit not the majority), due to the flexible nature of a product that can product stable yields yet has the added internal space over a one bedroom product. AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL INNER BRISBANE APARTMENT MARKET FOCUS 35

Urbis Apartment Insights Sales by Development Status and Product FORTITUDE VALLEY - DECEMBER QUARTER 2014 CHART 2.15 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 From the surveys collected through the Urbis Apartment Insights, zero sales were transacted in the presales market over the December 2014 quarter. Whilst Urbis are aware of a small number of projects in presales within Fortitude Valley, transaction information was not available. Apartment projects under construction recorded the largest proportion of sales over the December 2014 quarter with five projects currently under construction, yielding 959 apartments. 3.7 NEWSTEAD The following table classifies the new apartment projects within Newstead that Urbis have identified to settle in the coming years to assist in forming the apartment future supply between now and 2019. This process has been completed by identifying apartment projects that have recently launched, are under construction, completed or expected to enter the market in the coming twelve months. Active and Pending Projects - Summary NEWSTEAD PROJECT NAME LAUNCH MONTH SETTLEMENT YEAR DEVELOPER STATUS 1 SOLD AS AT DEC 2014 YIELD WEIGHTED AVG PRICE 2 Kurv Nov-12 2014 Cavcorp COMPLETED 55 55 $625,000 Riverstone Apartments Nov-13 2015 Drew Group CONSTRUCTION 72 72 $575,000 Lumira Apr-14 2015 Lancini CONSTRUCTION 74 75 $475,000 Y43 Sep-13 2016 Cavcorp PRESALES N/A 52 N/A Casa Newstead - Stage 1 Jun-14 2016 Dibcorp Pty Ltd CONSTRUCTION N/A 62 N/A 1 Oak Jul-14 2016 Cavcorp CONSTRUCTION N/A 91 N/A Newstead Central Stage 1 - Aqua 3 Nov-14 2016 Metro Property Development PRESALES 149 149 $500,000 Mode Apartments Aug-14 2016 Devine PRESALES 110 157 $525,000 Skyring Jun-14 2016 TDD PRESALES N/A 263 N/A Unison May-14 2016 Mirvac CONSTRUCTION 223 279 N/A Newstead Towers (1 & 2) 3 Apr-14 2016 Metro Property Development CONSTRUCTION 314 314 $507,000 Le Bain - Newstead Nov-14 2017 Cavcorp PRESALES N/A 98 N/A La Vida Jan-15 2017 Bekka Group PRESALES N/A 187 N/A Newstead Central Stage 2 - Laguna 3 Mar-15 2017 Metro Property Development PRESALES 121 193 N/A Newstead Central Stage 3 - St Tropez 3 Mar-15 2017 Metro Property Development PRESALES 191 231 N/A Casa Newstead (Stages 2-4) 2018 Dibcorp Pty Ltd PENDING N/A 94 N/A Newstead Series - Stage 1 2018 JGL Properties PRESALES N/A 130 N/A Haven Newstead 2018 HCAP Developments PRESALES N/A 246 N/A 20 Festival Place 2018 Cavcorp PENDING 366 Newstead Central Towers 4 & 5 2019 Metro Property Development PENDING 374 1. Project Status as at May 2015 2. Weighted Average Price based on most recent transaction period for the project in the Urbis Brisbane Apartment Insights 3. Project Sales Data provided as at May 2015 4. Projects not particpating in the Urbis Brisbane Apartment Insights Source : Urbis Brisbane Apartment Insights 36 INNER BRISBANE APARTMENT MARKET FOCUS AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL

Urbis Apartment Insights Stock Available and Sold by Product Type NEWSTEAD - DECEMBER QUARTER 2014 CHART 2.16 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 Newstead has generally provided a range of apartment product. In the December quarter 2014, as the number of available stock continues to increase by product type, so too has the number of transactions recorded. During this quarter, one bedroom, one bathroom product registered the highest number of transactions. From a supply standpoint, the one bedroom, one bathroom apartment product provides the largest number of available product, followed by two bedroom two bathroom and two bedroom one bathroom apartments. Urbis Apartment Insights Sales by Development Status and Product NEWSTEAD - DECEMBER QUARTER 2014 CHART 2.17 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 In terms of development status, the majority of sales in Newstead were transacted in apartments under construction over the December 2014 quarter. Consisting of six projects currently under construction between 62 and 314 apartments, Newstead is expected to see a large number of settlements from the end of 2015 until 2017. AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL INNER BRISBANE APARTMENT MARKET FOCUS 37

3.8 SOUTH BRISBANE The following table classifies the new apartment projects in South Brisbane that Urbis have identified to settle in the coming years to assist in forming the apartment future supply between now and 2019. This process has been completed by identifying apartment projects that have recently launched, are under construction, completed or expected to enter the market in the coming twelve months. Active and Pending Projects - Summary SOUTH BRISBANE PROJECT NAME LAUNCH MONTH SETTLEMENT YEAR DEVELOPER STATUS 1 SOLD AS AT DEC 2014 YIELD WEIGHTED AVG PRICE 2 Edge - South Brisbane Oct-12 2014 Sanchi Manning Pty Ltd CONSTRUCTION 46 46 $625,000 Austin Jan-14 2014 Aria Property Group CONSTRUCTION 140 140 $513,929 Canvas Jun-12 2014 Pradella COMPLETED 133 141 $525,000 The Plaza Aug-12 2014 Metro Property Development COMPLETED 168 168 $497,222 Basse Apartments Feb-14 2015 Centracorp CONSTRUCTION 56 68 $575,000 Arena - Building One Jan-13 2015 Galileo COMPLETED 94 94 $544,892 Arena - Building Two Mar-13 2015 Galileo COMPLETED 97 97 $545,000 Botanica Oct-13 2015 Aria Property Group CONSTRUCTION 182 182 $523,056 Peak - South Brisbane Jul-14 2016 Horan Group CONSTRUCTION 38 40 $493,750 Fleet Lane Jul-14 2016 HCAP Developments CONSTRUCTION 49 66 $562,500 Soda Nov-13 2016 GDL Group COMPLETED 131 131 $560,305 Opera Oct-14 2016 Kaias Family PRESALES 60 180 $627,083 Verde South Brisbane 2017 VCP Developments PENDING 81 234 Vulture Street 2017 Aria Property Group PENDING 84 Spice Apartments (South Tower) Jun-14 2017 Abacus Property Group / Kilcor Properties PRESALES 106 124 $491,667 Spice Apartments (North Tower) Mar-14 2017 Abacus Property Group / Kilcor Properties PRESALES 122 150 $546,429 Art House Sep-14 2017 Mirvac PRESALES 79 189 $533,544 The Melbourne Residences Sep-14 2017 Aria Property Group PRESALES 195 195 $588,333 Southpoint Mar-13 2017 Anthony John Group CONSTRUCTION 198 221 $1,484,091 220 Vulture Street 2017 Aria Property Group PENDING 242 Southpoint - Stage C 2018 Anthony John Group PENDING 192 35 Merivale St 2018 Backshall Group PENDING 239 Brisbane Casino Towers 2018 Metro Property Development PENDING 376 54 Manning Street 2019 Long Ze International Development Group PENDING 245 1 Cordelia St 2019 R & F Properties PENDING 600 1. Project Status as at May 2015 2. Weighted Average Price based on most recent transaction period for the project in the Urbis Brisbane Apartment Insights 3. Project Sales Data provided as at May 2015 4. Projects not particpating in the Urbis Brisbane Apartment Insights Source : Urbis Brisbane Apartment Insights Urbis Apartment Insights Stock Available and Sold by Product Type SOUTH BRISBANE - DECEMBER QUARTER 2014 CHART 2.18 Prepared by Urbis; Source; Urbis Apartment Insights December 2014 South Brisbane has generally been driven by investor apartment product. In the December quarter 2014, the number of sales has generally aligned with the level of remaining stock in the active apartment market. This being said, one bedroom apartments have visibly registered a higher take up over the quarter when compared to the secondary two bedroom two bathroom market. 38 INNER BRISBANE APARTMENT MARKET FOCUS AUSTRALIAN RESIDENTIAL OVERVIEW - FINAL