RESIDENTIAL MARKET & ECONOMIC OUTLOOK QUEENSLAND, BRISBANE & WEST END

RESIDENTIAL MARKET & ECONOMIC OUTLOOK QUEENSLAND, BRISBANE & WEST END

WEST END OUTLOOK INSIGHTS INFRASTRUCTURE 04 $4.1 billion in existing and future infrastructure, with a high proportion being constructed and ready for use by residents and tenants. The infrastructure includes a number of key bridges, giving West End direct access to major employment and education destinations. 06 SALES ANALYSIS Recent sales activity has shown a preference for 1 bed and 1 bath and 2 bed and 2 bath product, making up 92.3 per cent of sales. 66.7 per cent of sales have been priced at $450,000 and below. EMPLOYMENT West End is across the river from Queensland s largest employment node, the Brisbane CBD, set to generate an additional 91,000 jobs over the next 20 years. The growing nearby South Brisbane commercial hub is set to more than double from today, employing over 46,000 people by 2031. 04 LARGER APARTMENTS 07 In competitive rental markets, apartments with a clear point of difference tend to generate more interest from prospective tenants. Anecdotal evidence shows that well sized apartments are preferred by prospective tenants, especially in areas with a higher income profile. EDUCATION Located less than 2km from Queensland s two largest universities, University of Queensland (UQ) and Queensland University of Technology (QUT), this large student population helps drive demand for local dwellings in West End. 04 07 RIVERFRONT APARTMENTS Research has indicated that riverfront apartments in the Inner South of Brisbane showed a 46 per cent premium in median price over non-riverfront apartments, as well as a higher rate of capital growth over the last decade. 06 RENTAL ANALYSIS Median rental rates have grown over the last five years in West End, averaging 4 to 5 per cent per annum. New apartments are renting for a premium of between 19 to 48 per cent over the total apartment stock. MEDIAN SALE PRICE Inner South, November 2012 Riverfront Apartments $690,000 Non-Riverfront Apartments $470,000 NEW PRODUCT PREMIUM $1,200 NEW PRODUCT WEST END CATCHMENT $1,100 MEDIAN RENTAL $ PER W EEK $1,000 $800 $600 $400 $200 TOTAL PRODUCT WEST END CATCHMENT $595 $460 $320 $500 $745 AVERAGE ANNUAL CAPITAL GROWTH Inner South, 2002-2012 Riverfront Apartments 11% Non-Riverfront Apartments 5% $0 1 Bed 2 Bed 3 Bed Source: Urbis, RTA Source: Urbis Independent Research 2 URBIS OUTLOOK URBIS.COM.AU

WEST END INSIGHTS West End has close proximity to key employment and education nodes KEY INSIGHTS The suburb of West End is located less than two kilometres from the Brisbane Central Business District (CBD) and is situated alongside the Brisbane River. The suburb features a number of large parks and the Riverside Drive walk and bikeway along the West End Peninsula, providing residents with community facilities and an ease of access to the river. West End is in close proximity to a number of Brisbane s largest employment nodes, including South Brisbane and the CBD. Significant investment in public transport and infrastructure within the region has provided the residents of West End with a direct link to these key employment centres. The influence of these centres is evident within the demographic makeup of West End, with approximately 40 per cent of the population classified as Professionals at the time of the 2011 Census. The demographic profile of West End also illustrates the suburb s proximity to a number of large educational facilities, with approximately 12.5 per cent of the population enrolled with a university or tertiary institution (2011 Census). West End is within walking distance of campuses of Queensland s major tertiary education institutions, including the University of Queensland (UQ), Queensland University of Technology (QUT) and Griffith University. West End s proximity to employment and education nodes, coupled with investment in infrastructure and community facilities, are key drivers for its residential property market. DEMOGRAPHIC INSIGHTS Generation Y 36% aged 20 to 34 Rental Market 59% of dwellings are Rental Properties Income Over 20% with Personal Income over $1,500 per week Dwelling Type 54% of dwellings are Apartments This publication is prepared on the instruction of Pointcorp Pty Ltd by Urbis for a fee. This publication is not an opinion or representation by or on behalf of Pointcorp Pty Ltd and Pointcorp Pty Ltd accepts no responsibility for the content of the publication and any reliance upon it. This report does not represent financial or investment advice as the publication involves projections and assumptions that can be affected by a number of unforseen variables, any investment decision must allow for the risk that, the accuracy of the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. It must also be remembered that past performance is not a reliable indication of future performance. The information in the publication has been prepared without taking into account your financial situation or investment objectives. You should consider the appropriateness of the information in regards to your current financial situation or needs. Neither Urbis nor Pointcorp Pty Ltd accepts any responsibility for the accuracy or completeness of this publication for your personal circumstances and you should take independent advice before making any decision to invest. The information is current as at the date of publication [March 2013] but subject to change without notice and Urbis and Pointcorp Pty Ltd are under no obligation to contact recipients of this report to update the information or correct any assumptions or inaccuracies which may prove to be incorrect at a later date so any matter of particular interest should be checked prior to any decision to invest. 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 retrievals system or transmitted without prior permission. Enquiries should be addressed to the publisher, Urbis. URBIS.COM.AU URBIS OUTLOOK 3

INFRASTRUCTURE, EMPLOYMENT AND EDUCATION INFRASTRUCTURE The West End Catchment (West End and South Brisbane) has experienced significant rejuvenation over the last decade, driven by public and private infrastructure investment within the region. Furthermore, when compared to other Inner City precincts, the West End Catchment has a high proportion of constructed and existing infrastructure, meaning it is useable for residents and tenants at present. This infrastructure includes a number of key bridges linking West End and South Brisbane with the Brisbane CBD and the Milton Commercial District, allowing direct access to employment and lifestyle amenities. EMPLOYMENT South Brisbane has evolved into a major white collar employment node, within walking distance of West End. Leveraging on modern infrastructure and CBD proximity, South Brisbane has seen a growing concentration of employers move into the area, with projections that an additional 24,000 jobs will be created in South Brisbane by 2031 (NIEIR Employment Forecasts) Forecast Employment SOUTH BRISBANE 46,000 jobs by 2031 24,000 new jobs increase $4.1 billion of existing and future infrastructure BRISBANE CBD 222,000 jobs by 2031 91,000 new jobs increase Source: NIEIR Employment Forecasts, Urbis INFRASTRUCTURE EMPLOYMENT EDUCATION EDUCATION West End is located one CityCat stop from the University of Queensland, and only a short distance from the Queensland University of Technology, South Bank Institute of Technology and Griffith University. A further eight educational and training institutes are located within West End, South Brisbane and the CBD, with demand for local dwellings influenced by this large student population. Located less than 2km from Queensland s two largest universities University of Queensland 32,000 students Queensland University of Technology 40,000 students Southbank Institute of Technology 30,000 students Griffith University 3,373 students 4 URBIS OUTLOOK URBIS.COM.AU

INFRASTRUCTURE, EMPLOYMENT AND EDUCATION TOOWONG MEMORIAL MILTON ROAD AUCHENFLOWER WESLEY HOPITAL MILTON DUNMORE CORONATION DRIVE DAVIES MILTON KINGS ROW MILTON PRECINCT RIVERSIDE DRIVE MILTON COMMERCIAL OFFICE MOLLISON GO BETWEEN BRIDGE THE MARKETS SHOPPING CENTRE STREET WEST END DINING AND RETAIL PRECINCT PEEL STREET MERIVALE STREET CORDELIA STREET VULTURE STREET KURILPA BRIDGE MUSGRAVE CULTURAL CENTRE CONVENTION CENTRE VICTORIA BRIDGE GREY STREET SOUTH BRISBANE ANN STREET BRISBANE CBD SOUTH BANK GRIFFITH UNIVERSITY QUEEN STREET QUT GOODWILL BRIDGE CITY BOTANIC GARDENS KANGAROO POINT CLIFFS KANGAROO POINT MONTAGUE ROAD WEST END WEST END DINING PRECINCT BOUNDARY STREET SOMERVILLE HOUSE ST LAURENCE S COLLEGE MATER HOSPITAL STANLEY STREET HIGHGATE HILL MAIN STREET WEST END FERRY TERMINAL IPSWICH ROAD GUYATT GUYATT FERRY TERMINAL UNIVERSITY OF QUEENSLAND UQ FERRY TERMINAL DUTTON BOGGO ROAD URBAN VILLAGE PRINCESS ALEXANDRA HOSPITAL INFRASTRUCTURE STATUS ESTIMATED COST QUEENSLAND CULTURAL CENTRE (STATE LIBRARY OF QLD, ART GALLERY, MUSEUM AND GOMA) EXISTING $1.15 BILLION GO BETWEEN BRIDGE EXISTING $338 MILLION CONVENTION AND EXHIBITION CENTRE EXISTING PLUS EXTENSION EXISTING $333 MILLION SOUTH BANK TAFE EXISTING $325 MILLION SW1 COMMERCIAL EXISTING $300 MILLION BUSWAY UPGRADE EXISTING $250 MILLION REDEVELOPMENT OF SOUTH BANK SOUTHERN RESTAURANT PRECINCT EXISTING $100 MILLION KURILPA BRIDGE EXISTING $63 MILLION ELEANOR SCHONELL BRIDGE (GREEN BRIDGE) EXISTING $55 MILLION RIVER QUAY (BOARDWALK REDEVELOPMENT) EXISTING $12 MILLION SOUTH BRISBANE STATION REFURBISHMENTS EXISTING $10 MILLION QUEENSLAND CHILDREN S HOSPITAL ASSOCIATED WORKS COMMENCED $1.3 BILLION SOUTHBANK BUTTERFLY HOUSE REDEVELOPMENT COMMENCED $50 MILLION RYDGES BOULEVARD REDEVELOPMENT COMMENCED $11 MILLION SOUTHPOINT MIXED USE PRECINCT PLANNED $570 MILLION SOUTHBANK TRANSIT CENTRE SITE REDEVELOPMENT PLANNED $250 MILLION FUTURE MASS TRANSIT POSSIBLE $315 MILLION QPAC UPGRADE POSSIBLE $100 MILLION URBIS.COM.AU URBIS OUTLOOK 5

INNER SOUTH MARKET ANALYSIS RENTAL ANALYSIS HISTORIC MEDIAN RENTS Based on Residential Tenancy Authority (RTA) data, the rental analysis chart illustrates the historic rental trend for 1 and 2 bed apartments in the West End Catchment (West End and South Brisbane) and the Brisbane Local Government Area (LGA). It highlights the rental premium for apartments in the West End Catchment over the Brisbane LGA benchmark, as well as the growth in rents over time. MEDIAN RENT PER W EEK $ $550 $500 $450 $400 $350 $300 $250 $200 1 BED BRISBANE 1 BED WEST END/SOUTH BRISBANE 2 BED BRISBANE 2 BED WEST END/SOUTH BRISBANE Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Source: Urbis, RTA NEW PRODUCT PREMIUM The New Product Premium graph demonstrates the premium new apartment product within the West End Catchment achieves over the total existing stock (Residential Tenancy Authority data). New apartment product, with data collated from agents advice and via on the market rentals, is currently indicating premiums of between 19 per cent (two bedroom product) and 48 per cent (three bedroom product) over the total existing stock. MEDIAN RENTAL $ PER W EEK $1,200 $1,000 $800 $600 $400 $200 $0 NEW PRODUCT WEST END CATCHMENT $1,100 TOTAL PRODUCT WEST END CATCHMENT $745 $595 $500 $460 $320 1 Bed 2 Bed 3 Bed Source: Urbis, RTA SALES ANALYSIS APARTMENT TYPE 1 bed 1 bath (63.0%) Recent sales activity shows a strong preference for 1 bed 1 bath and 2 bed 2 bath apartment product within the Inner South area, which includes both West End and South Brisbane. This reflects the demographic trends within the catchment, which indicate a younger age profile more likely to be single or living as a couple without children, with a preference for smaller types of housing. This is further reflected in the future apartment pipeline, which consists of 44% 1 bed and 50% 2 bed apartments. Studio (3.3%) 4 bed 4 bath (1.1%) 3 bed 3 bath (1.1%) 2 bed 2 bath (29.3%) 2 bed 1 bath (2.2%) Source: Urbis Apartment Report PRICE POINT Based on the Urbis Apartment Report over the last two quarters of 2012, 66.7 per cent of unconditional sales were transacted under $450,000, while 28.3 per cent of dwellings transacted between $500,000 to $600,000, indicating two different price ranges based on the size and quality of apartments. The weighted average sale price of Inner South apartments was $464,673 over the last two quarters of 2012. $0 to $400k (26.3%) $600 to $650k (4.0%) $550 to $600k (17.2%) $500 to $550k (11.1%) $400 to $450k (1%) $400 to 450k (40.4%) Source: Urbis Apartment Report 6 URBIS OUTLOOK URBIS.COM.AU

RIVERFRONT AND APARTMENT CHARACTERISTICS Research has indicated that riverfront apartments generate higher capital returns that non-riverfront apartments RIVERFRONT APARTMENTS Urbis independent research has conducted a study in 2012 comparing Riverfront to Non-Riverfront apartments in the Inner South of Brisbane. Riverfront apartments have been defined as those apartments that have uninterrupted views of the Brisbane River. The study has revealed that Riverfront apartments have demonstrated a higher median sale price and higher historical capital growth when compared against Non-Riverfront apartments. The Riverfront and Non-Riverfront Median Sale Price chart outlines the difference in median sale price over time for the whole of Inner Brisbane. At June 2012, the median sale price for Riverfront apartments in Inner Brisbane was $600,000, showing a 35% premium over the median sale price of $442,000 for Non-Riverfront apartments. In the Inner South, the median price for Riverfront apartments was $690,000 in November 2012. This represents a 46 per cent premium over the Non-Riverfront median price of $470,000, outperforming the Inner Brisbane benchmark premium. Over the decade between 2002 to 2012, annualised capital growth for Riverfront apartments equated to 11% per year, with Non-Riverfront apartments showing 5% annualise capital growth over the same period. This performance highlights the value that the market places on Riverfront apartments located in the Inner South (Urbis Independent Research 2012). Riverfront and Non-Riverfront Median Sale Price Inner Brisbane, March 2000 to June 2012 LARGER APARTMENTS In competitive rental markets, apartments with a clear point of difference tend to generate more interest from prospective tenants. Anecdotal evidence shows that well sized apartments are preferred by prospective tenants. This is especially the case in areas with higher income profiles, where tenants have a higher disposable income and are more willing to spend to secure an apartment with additional living space. Larger apartments with contemporary design also typically achieve a higher weekly rental, with prospective tenants seeing value in combining the benefits of an inner city lifestyle with a comfortable amount of living space. Prospective tenants see value in combining the benefits of an inner city lifestyle with additional living space AVERAGE ANNUAL CAPITAL GROWTH Inner South, 2002-2012 Riverfront Apartments 11% $1,200,000 $1,000,000 RIVERFRONT NON RIVERFRONT Non-Riverfront Apartments 5% MEDIAN SALES PRICE $ $800,000 $600,000 $400,000 $200,000 MEDIAN SALE PRICE Inner South, November 2012 Riverfront Apartments $690,000 $0 June-00 June-01 June-02 June-03 June-04 June-05 June-06 June-07 June-08 PERIOD QUARTER June-09 - June-10 June-11 June-12 Source: RP Data Non-Riverfront Apartments $470,000 Source: Urbis Independent Research URBIS.COM.AU URBIS OUTLOOK 7