Development Activity

Transcription

1 The North Sydney s vacancy rate has fallen from 7.3% in January 217 to 6.4% in July 217 on the back of positive tenant demand stemming from both expansion and inbound migration. Stock withdrawals will be an important influence on the North Sydney market over the next three years with circa 4,m² earmarked for permanent withdrawal for alternative uses. The increased demand from multiple purchaser types have resulted in further yield compression across the North Shore market over the past 12 months, particularly in the secondary market.

2 Jul-7 Circa 4,m² of existing office space in North Sydney has been earmarked for permanent withdrawal for alternative uses over the next three years. The overall North Sydney vacancy rate has fallen from 7.3% in January 217 to 6.4% as at July 217, well below the 1- year average of 9.% and the lowest level in 16 years. Prime and secondary markets in North Sydney recorded similar gross effective rental growth of 9.% over the past 12 months. North Sydney s prime core market yields currently range between.2% 6.% and secondary yields are between.% 6.2%. Associate Director, Research Development Activity Following the completion of 177 Pacific Highway (39,419m²) in the second half of 216, the North Sydney development market has taken a breather with neither new additions nor withdrawals over the past six months (Figure 1). On an annual basis, 4,123m² was added to the market, which was counterbalanced by 1,118m² of stock withdrawn. This has taken the net addition for the financial year to 3,14m². Looking forward, new developments coming to fruition over the next three years will include 1 Mount Street (41,6m² 1% pre-committed by Laing O Rourke Q1 219) and 1 Denison Street (6,21m² 24% precommitted to Channel 9 H1 22). Additionally, the vacant office building at 88 Walker Street (3,64m²) is expected to be fully refurbished and returned to the market in early 218. Another potential new development is 118 Mount Street, which has recently received DA approval for 21,13m². Zurich Insurance, who is the current owner, is expected to occupy circa 12,m² of the new building upon completion at around H2 22/H Office buildings earmarked for withdrawal for residential will include 61 Lavender Street (1,m² Q1 218), 168 Walker Street (17,663m² Q4 219) and 2 Alfred Street (9,947m² potentially 22). Moreover, 33 Berry Street (13,19m²) is expected to be mostly converted to educational uses by ACU (Australian Catholic University) from 218 following the departure of Flight Centre. North Sydney Office Supply Per six month period ( m²) GROSS SUPPLY WITHDRAWALS NET SUPPLY North Shore/North Ryde Office Market Indicators as at August 217 Market 2 Grade Total Stock (m²)^ Vacancy Rate (%)^ Annual Net Absorption (m²)^ Avg Net Face Rent ($/m²) Outgoings ($/m²) Average Incentive (%)* Average Core Market Yield (%) North Sydney Prime 26,87 6., North Sydney Secondary 61, , North Sydney Total Market 822, , Crows Nest/St Leonards Prime 12, , Crows Nest/St Leonards Secondary 211, , Crows Nest/St Leonards Total Market 314, , Chatswood Prime 17, Chatswood Secondary 121, Chatswood Total Market 278, Macquarie Park/North Ryde Prime 6, Macquarie Park/North Ryde Secondary 223, , Macquarie Park/North Ryde Total Market 873, , Source: Knight Frank Research/PCA * Incentives are on a Gross basis Incentives are on a Net basis ^ As at July 217 Note. Average data is on a weighted basis. Yield ranges reflect the average lower and upper yields for a select basket of office assets in each market and grade Grade: Prime includes modern and A-Grade stock whilst Secondary includes B, C and D quality Grade.

3 Jul-7 Jul-7 Jul-7 NORTH SHORE OFFICE SEPTEMBER 217 Leasing Market and Rents The North Sydney overall vacancy rate has fallen from 7.3% in January 217 to 6.4% as at July 217 on the back of robust tenant demand. This is 26bps below the 1-year average of 9.% and the lowest level of vacancy in North Sydney over the past 16 years. The recent decline in vacancy is attributed primarily to the solid take-up in the prime market, which saw a sharp decline in the vacancy rate from 8.7% in January 217 to 6.% in July 217. Within the prime market, the A- Grade vacancy rate has dropped from 6.% to 4.1%, while Premium-Grade vacancy has fallen from 2.2% to 17.4%. In the secondary market, the vacancy rate has remained relatively steady at 6.6% for the 12 months to July 217. However, Knight Frank Research believes the real secondary vacancy rate should be tracking below 6.% once the buildings earmarked for permanent stock withdrawal over the next three years are taken into account. Over the year to July 217, a total of 32,883m² of office space has been absorbed, of which 6,98m² was taken over last six months. The strong leasing market is evidenced by 177 Pacific Highway being fully leased prior to completion by the end of last year. Much of the demand over the past six months was driven by tenant expansion (73%), whilst the rest came from inbound tenants relocating from other markets (27%). Split by grade, the prime market recorded 4,346m² and 38,876m² of net absorption over the past six and 12 months respectively. In contrast, the secondary market recorded negative absorption of 193m² in the first half of 217 and 18,44m² for the financial year. The negative net absorption in the last year was due to the departure of RMS from 1,614m² at 11 Miller Street, with the backfill space now almost fully leased. The pre-commitment market in North Sydney is expected to be active this year, with the developments at 1 Mount Street and 1 Denison Street proactively canvassing prospective tenants. NBN Co is reportedly close to finalising a deal for between 2 22,m² at 1 Mount Street, while 1 Denison is in active negotiation with a number of major tenants. Additionally, SAP Australia is currently in the market for 11,m², as their current premises at 168 Walker Street will be redeveloped into residential. Gross face rents in the North Sydney market continued to rise in conjunction with falling incentives over the past six months on the back of declining vacancy. Average prime gross face rents have increased by 6.2% over the past year to $86/m² ($734/m² net face) as at July 217. In addition, prime incentives declined further to circa 23.% from 2.6% a year ago, resulting in gross effective rental growth of 9.% YoY. In the secondary market, average gross face rents have risen by 6.1% YoY to $71/m² ($93/m² net face) as at July 217. The average secondary incentive level decreased from 26.% in July 216 to 23.% in July 217 boosting gross effective rents by 9.% YoY. Sales and Investment Activity The North Sydney market has continued to experience a strong level of investment activity since the beginning of 217. A total of $721 million worth of assets ($1 million+) has been transacted over the year to date. Of this amount, 88% or $636 million was purchased by foreign buyers or groups with offshore-sourced capital. Offshore buyers continue to set the pace in the market with the latest acquisition of 1 Pacific Highway by an Asian investor for $114. million. The deal reflects a circa.% core yield and a rate of $14,983/m². Additionally, Chinese-backed developer, Aqualand, continued its aggressive expansion in the market with the purchase of the leasehold of 1 Blue Street $169 million. The property was purchased from the Denwol Group with a 4. year WALE. Aqualand has also picked up 146 Arthur Street for $78 million on a 6.% core market yield and 2.2 year WALE. Another benchmark deal was 116 Miller Street, which sold for $134 million. The property, which has a 3.4 WALE, was acquired by a private offshore buyer from a joint venture of Property Bank Australia and Security Capital Corporation. As at July 217, prime assets in North Sydney are expected to trade at circa.2% to 6.%. In the secondary market, the lack of stock in conjunction with increased demand from offshore groups and rising rents has seen secondary assets achieve firm core market yields of between.% to 6.2%. North Sydney Net Absorption & Vacancy Per six month period ( s m², %) Average Net Effective Rents Prime & Secondary, North Sydney ($/m²) Average Core Market Yields North Sydney 3 's 1% 7 1.% 2 1% 6 9.% 9.% 1 % % 4 8.% 8.% 7.% -1 -% 3 7.% 6.% -2-1% 2 6.% -3-1% 1.%.% -4-2% AVG PRIME YIELD AVG SECONDARY YIELD NET ABSORPTION 6 MTHS TO (M²) - LHS TOTAL VACANCY (%) - RHS PRIME SECONDARY PRIME 1Y AVG SEC 1Y AVG 3

4 Jul-7 Jul-7 Development Activity Development activity in Crows Nest and St Leonards continues to be dominated by residential conversions and redevelopments. No new or refurbished commercial stock was added to the market in the six months to July 217. On the other hand 1,2m² of office space has been withdrawn, stemming solely from Pacific Highway. This resulted in the overall office stock base decline.9% from 333,631m² last year to 314,17m² as at July 217. Since the peak office stock of 368,96m² in January 213, the total office stock has declined by 14.8% over the past four and a half years. The office market is anticipated to see further stock depletion as there are more buildings earmarked for withdrawal in the near future. They include, 1 Christie Street (9,631m² mixed-use redevelopment), Pacific Highway (,317m² residential), 22 Atchison Street (2,7m² residential) and 14-2A Clarke Street (3,217m² withdrawn for the Sydney Metro project). Though a shrinking office market, additional commercial space in the future will derive from auxiliary office components of the mixed-use projects at Atchison Street (2,362m²), Pacific Highway (3,69m²), Pacific Highway (2,82m²) and 88 Christie Street (4,661m²). Crows Nest/St Leonards Net Absorption & Vacancy Per six month period ( s m², %) 's 1% 1% % % -% -1% -1% -2% -2% -3% Two large potential office developments remain mooted at this time pending precommitments. The proposed Gore Hill Technology Park ( Pacific Highway) with a combined NLA of up to 46,m² is awaiting tenant precommitment. Additionally, the NSW Government has plans to construct a building for the NSW Health agencies to occupy at the Royal North Shore Hospital precinct over approximately 2,m² by mid 219. Leasing Market and Rents Net absorption in the six months to July 217 recorded a decline of 8,148m², influenced by the reduced stock base due to withdrawals. Annually, total absorption has declined by 31,26m². This has resulted in an increase in the overall vacancy rate to 12.6% as at July 217 from 1.% in January 217. Split by grade, the prime vacancy rate has increased from 7.% to 14.9%, while secondary vacancy has declined from 12.2% to 11.% over the past six months. The recent increase in prime vacancy was due to the departure of WPP AUNZ from 11,221m² at 72 Christie Street, St Leonards to 3 The Bond in the Sydney CBD. It is noted, however, that there are a number of prospective tenants looking at the space. Additionally, the current vacancy rate is skewed higher due to buildings such as 1 Christie Street currently sitting vacant and will not be withdrawn for redevelopment until December 218. Despite the rising vacancy rate, rental growth has remained positive in the six months to July 217. Average prime gross face rents have increased by.9% YoY to $667/m² ($43/m² net face) as at July 217. Over the same period, average secondary gross face rents have increased by 8.9% to $63/m² ($2/m² net face). Prime and secondary incentives have compressed to around 2.8% and 2.%, respectively, resulting in net effective rental growth of 8.1% for prime and 18.8% in the secondary market. Sales and Investment Activity Sales activity has been moderated over the first nine months of this year in Crows Nest and St Leonards, due to the lack of available stock while demand remains strong. Transaction volumes totalled $167 million since the beginning of 217, slightly lower than $196 million recorded in the corresponding period last year. About % or $91.4 million worth of transactions since the beginning of the year has been carried out by developers or opportunistic funds. Notable transactions include the sale of Albany Street purchased by an offshore developer, Sun Property, for $22 million. The new owner will convert the 3,286m² office building into a residential tower. Additionally, Charter Hall has sold 67 Pacific Highway to a private investor for $22.1 million, reflecting a circa 6.1% yield and a rate of $6,268/m². Another private investor has also picked up 168 Willoughby Road for $16.2 million on a core market yield of.% and a WALE of 1. years. The tight yield and short WALE are indicative of the redevelopment potential of the building. As at July 217, core market yields for prime assets have compressed by bps over the 12 months to July 217 to average between %. Secondary assets, with year WALEs, have tightened by 8bps to an average core market yield of between %. Average Net Effective Rents Prime & Secondary, Crows Nest/St Leonards ($/m²) NET ABSORPTION 6 MTHS TO (M²) - LHS TOTAL VACANCY (%) - RHS PRIME SECONDARY 4

5 Jul-7 Jul-7 Jul-7 NORTH SHORE OFFICE SEPTEMBER 217 Development Activity No new supply was added to the Chatswood office market for the third consecutive year. The lack of suitable development sites has been the major constraint on development, in addition to developers having a residential development focus. With no net supply added to the market, the total office stock remained steady at 278,919m². The lack of new supply is expected to continue with no new developments currently DA approved or under construction as at July 217. The only potential new supply may stem from the redevelopment of the Australia Post Chatswood site (1,86m²), although this is yet to have DA approval. Leasing Market and Rents On the back of a period of negative absorption, the six months to July 217 experienced a pick up in tenant demand to record positive net absorption of 2,43m². Positive tenant demand was observed across the grades. In the prime market, 2,199m² was taken up over the past six months while the secondary market saw 24m² absorbed over the same period. The positive absorption has resulted in a decline in the overall vacancy rate from 7.7% in January 217 to 6.9% as at July 217, 4bps below the 1 year average of 11.4%. The prime market recorded a sharp decline in vacancy, dropping from 8.% to 6.6% as at July 217. The steep decline was aided by Sage Software occupying 2,1m² of A- Grade space at the Zenith Tower on a 1 year term. Additionally, there is speculation that the NSW Government will renew its lease at Zenith Tower, having positive implications for the prime vacancy rate. In the secondary market, the vacancy rate declined marginally from 7.4% to 7.3% as at July 217. Positive take up in the secondary market stemming from a number of lease deals at 9 Help Street, 12 Help Street and 67 Albert Street, has resulted in the slight downward shift in vacancy. Improved tenant demand and falling vacancy rates have led to positive rental growth in both the prime and secondary markets. Over the 12 months to July 217, average prime gross face rents in Chatswood have increased by 6.6% to $621/m² ($499/m² net face rent). In addition, average prime incentives decreased from 26.3% a year ago to 24.% as at July 217, boosting effective rental growth to 7.3% YoY. In the secondary market, average gross face rents have increased by 8.1% YoY to $37/m² ($432/m² net face). With the tightening vacancy in the prime market, owners in the secondary market have dropped incentives from circa 27.3% 12 months ago to around 2.% gross as at July 217. Sales and Investment Activity Sales activity in Chatswood has remained at a moderate pace in the 12 months to July 217 amidst limited available stock to be traded. The last major sale in the prime market was the transaction of The Zenith towers at Pacific Highway by Centuria and BlackRock for $279 million 18 months ago. This remains the largest office building transaction on record in Chatswood. The largest office transaction, thus far in 217 is the recent sale of 1- Railway Street, comprising of two B-Grade office towers with retail accommodation. The two towers with a total NLA of 18,247m² was sold for $11 million on a core market yield of 6.% to Lotus Group and iprosperity Group. This transaction brings total sales in the 18 months to July 217 to $6 million. The demand in the secondary market has remained strong with investors seeking buildings with development opportunities, as seen with 1- Railway Street, which may have the potential future development upside. Limited stock and the repositioning potential of office towers have compressed average core market yields in both the primary and secondary market. Prime assets are expected to trade between 6.2%-7.%, around bps lower than a year prior. In the secondary market the sale of 1- Railway Street has highlighted the strong demand for secondary stock with repositioning potential, yields have tightened to now range between.7% to 7.%. Chatswood Net Absorption & Vacancy Per six month period ( s m², %) 's 2% 1% 1% % % Average Net Effective Rents Prime & Secondary, Chatswood ($/m²) Average Prime Core Market Yields Crows Nest/St Leonards, Chatswood and North Ryde/Macquarie 9.% 8.% 8.% 7.% - -% 1 7.% % 1 6.% -2-1% 6.% -2-2% CROWS NEST/ST LEONARDS CHATSWOOD NET ABSORPTION 6 MTHS TO (M²) - LHS PRIME SECONDARY MAC PARK/NORTH RYDE DENOTES 1 YEAR AVG TOTAL VACANCY (%) - RHS

6 Jul-7 Jul-7 Development Activity Withdrawals continue to outstrip new additions in the Macquarie Park market, which recorded negative net supply of 8,77m² in the six months to July 217. This has resulted in the total stock base compressing from 883,367m² in July 216 to 873,693m² as at July 217. With the new Sydney Metro Northwest and Ryde Council planning changes, the office market is anticipated to continue to compress amidst further redevelopment and conversion opportunities. Residential conversions have been the catalyst behind withdrawals with 19,7m² withdrawn from the market in the past six months, well above the series average of 3,738m² and the largest period of withdrawals since July 214. Withdrawals stemmed from two significant office buildings which include Waterloo Road (14,687m²) and 16 Byfield Street (4,87m²) undergoing conversion to residential. Permanent withdrawals are expected to increase over the next 18 months, with circa 2,m² earmarked to be permanently withdrawn for residential conversion across Talavera Road, Waterloo Road, 8 Waterloo Road and 3 Byfield Street. New supply over the period stemmed from the newly completed 8 Khartoum Road, adding 1,8m² of new office space, fully leased to Fuji Xerox on a 1 year term. Additionally, the refurbished space at 97 Waterloo Road (8,146m²) will come back to the market by November 217, in which Macquarie Park/North Ryde Net Absorption & Vacancy Per six month period ( s m², %) 's 18% 1% 12% 9% 6% 3% % -3% over 9% has already been leased. Looking ahead, there are a number of approved development sites across the Macquarie Park / North Ryde precinct, but most remain mooted as at July 217 pending pre-commitments and the outcome of the Macquarie Park Strategic Investigation. Infrastructure works and the redevelopment of the Macquarie Park area will have positive implications in the long term. However, whilst undergoing the transformation, the precinct is expected to be impacted by the temporary closure of the Epping to Chatswood rail line from Q3 218 for about nine months. Leasing Market and Rents Macquarie Park recorded negative net absorption of 13,348m² over H The negative absorption was partly due to tenants relocating out of the market or exiting from the demolished buildings at 16 Byfield Street and 11 Waterloo Road. Notable tenant movements include Pernod Ricard relocating from 16 Byfield Street to the Barangaroo and Wolters Kluwer contracting its office size by 1,m² when moving from 11 Waterloo Road to 66 Talavera Road. Tenant movements have resulted in the overall vacancy rate increasing from 7.9% in January 217 to 8.% as at July 217. By grade, the prime vacancy rate has risen from.7% to 6.2% in the six months to July 217, whilst the secondary market recorded a slight A-Grade Net Rents & Incentives Macquarie Park/North Ryde, Prime increase from 13.8% to 1.% over the same period. Despite an increase in vacancy, rental growth has remained positive in both the prime and secondary markets. Average prime gross face rents have risen slightly by 2.2% YoY to $463/m² ($368/m² net face), whilst average prime incentives have fallen from 26% to 2% over the year. In the secondary market, average gross face rent increased by 2.% YoY to $41/m² ($32/m² net face) and the average incentive decreased from 28% net in July 216 to circa 26% in July 217. Sales and Investment Activity Investment activity in Macquarie Park/ North Ryde remains robust with transaction volumes totalling $11 million in the 12 months to July 217. There has been a diverse range of purchaser types with offshore purchasers accounting for 22%, developers 24% and private investors representing 3% of total sales. In comparison to the previous corresponding period whereby offshore buyers accounted for 3% of total sales. Thus far in 217, there has been a number of notable sales, which have highlighted the demand for long WALE assets and assets with redevelopment potential. More recently the Goodman Group sold its new fully leased office building at 8 Khartoum Road for $93. million to a private investor, the building is anchored by Fuji Xerox on a 1 year term. John Holland has exchanged contracts for a 3.2ha development site at 4-61 Waterloo Road for about $17 million. The site was purchased from Property NSW, which has pre-committed to lease 2,m² of office space, with a 12-year initial term with options. Altogether, the B3 commercial-zoned site will yield about 117,m² of GFA. Prime assets as at July 217 in Macquarie Park/ North Ryde are estimated to trade between 6.%-6.%, around bps lower than 12 months earlier. In the secondary market core market yields have compressed around 6bps over the past 12 months to average between 6.7% and 7.%. NET ABSORPTION 6 MTHS TO (M²) - LHS TOTAL VACANCY (%) - RHS NET EFFECTIVE INCENTIVES (NET) 6

7 NORTH SHORE OFFICE SEPTEMBER 217 Recent Leasing Activity North Shore and North Ryde/Macquarie Park Address Region Area (m²) Face Rent Net ($/m²) Term (yrs) Lease Type Tenant Start Date 6 Miller Street North Sydney 6,66 U/D 8. New Flight Centre Mar-18 6 Miller Street North Sydney 1,172 U/D 7. New Ardent Leisure Feb-18 8 Mount Street North Sydney New Allianz Australia Dec-17 1 Arthur Street North Sydney New Sterling Insurance Sep Pacific Highway St Leonards New Bench Platform Oct Pacific Highway St Leonards 6 U/D 3. New JQZ Sep Herbert Street St Leonards New Acor Consultant Sep Herbert Street St Leonards New Catalyst One 821 Pacific Highway Chatswood New Innovation Aspect Oct Pacific Highway Chatswood New Shearwater Solutions Aug Pacific Highway Chatswood 3,216 U/D. New ehealth (GPNSW) Aug Pacific Highway Chatswood New Mrs Macs Apr Waterloo Road Macquarie Park New SunPharma Sep Epping Road Macquarie Park New Linear Healthcare Sep Delhi Road Macquarie Park 1,2 3. New Nick Scali Oct-17 Recent Sales Activity North Shore and North Ryde/Macquarie Park Address Region Core Price Market NLA (m²) ($ mil) Yield (%) $/m² NLA WALE (Yrs) Vendor Purchaser 1 Pacific Highway North Sydney 114. c.. 7,642 14, AMP Capital«Offshore Private Sep Pacific Highway St Leonards 22.1 c ,34 6, Private Private Aug West Street North Sydney 9.. 6,23 9, PBA Maville 16 Walker Street North Sydney.9 6.,244 1, Charter Hall Private 1 Blue Street North Sydney 169. C/C 16,114 1, Denwol Aqualand 116 Miller Street North Sydney 134. C/C 11,366 11, PBA/SCC/RGP Maville 8 Khartoum Road Macquarie Park 93..3* 1,686 8,7 1. Goodman Ogen Jun Railway Street Chatswood ,248 6, Hume Lotus/iProsperity Jun Arthur Street North Sydney ,19 9, General Nice Aqualand May Albany Street^ Crows Nest * 3,286 6,69 4. Pindan Sun Property May Willoughby Road Crows Nest ,712 9, Belmont Private May Walker Street North Sydney 19.2 N/A# 2,972 6,477 N/A# Macly Marpop Mar-17 2 Elizabeth Plaza North Sydney ,61 1, Marprop BlackRock Mar-17 2 Richardson Place North Ryde ,9, Blackstone Investec Mar Christie Street St Leonards ,17 6,843.4 Brompton Anton/Proprium Feb Waterloo Road^ North Ryde 12. N/A^ 1,41 11,22 N/A Goodman/CPPIB/ CIC/ABP Romeciti Sale Date Jan-17 7

8 Outlook New supply across the North Shore and North Ryde markets over the next three years will be limited, with only North Sydney and Macquarie Park expected to see new additions coming to fruition. Future supply in North Sydney will come from 1 Mount Street (4,68m² Q1 219) and 1 Denison Street (6,21m² early 22). Tenant demand is expected to continue to improve on the back of the significant infrastructure investment program across the North Shore and North West region, driving tenancy needs for engineering firms and project space. In addition, the significant withdrawal of stock and rising rents in the Sydney CBD will lead to an influx of displaced tenants opting to relocate to the North Shore markets over the next 24 months. Major inbound tenants into the North Shore market will include US Consulate General (,m²), moving from the Sydney CBD, and Channel 9 (circa 1,m²), relocating from Willoughby. Knight Frank Research provides strategic advice, consultancy services and forecasting to a wide range of clients worldwide including developers, investors, funding organisations, corporate institutions and the public sector. All our clients recognise the need for expert independent advice customised to their specific needs. Parramatta Office Market Brief September 217 Perth CBD Office Overview September 217 Over the next two years, prime gross face rents across the North Shore markets are forecast to rise between 4.% to 4.% pa, while effective rents will be boosted to.% pa or above due to the declining incentives. In the secondary markets, net face rents are expected to grow at a faster pace than prime rents at 4.2% 4.7% pa while the declining incentives will see effective rents rising at 6.% or above pa. Investment interest is expected to remain solid over the coming 12 months, with demand stemming from both local and offshore investors. While opportunities for prime assets will be constrained by the lack of available stock on the market, there are still pockets of value for valueadd and opportunistic investors targeting properties with repositioning or redevelopment upside. These dynamics are expected to lead to further compression in yields, particularly for well-positioned secondary assets with upside potential. Definition: Core Market Yield: The percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc). Office Market Transactions Update July 217 Active Capital 217 Alex Pham Associate Director, NSW Alex.Pham@au.knightfrank.com Marco Mascitelli Research Analyst Marco.Mascitelli@au.knightfrank.com NSW Angus Klem Managing Director, North Sydney Angus.Klem@au.knightfrank.com Richard Horne Managing Director, NSW Richard.Horne@au.knightfrank.com OFFICE LEASING Giuseppe Ruberto Head of Office Leasing, North Shore Giuseppe.Ruberto@au.knightfrank.com David Howson Head of Office Leasing, Australia David.Howson@au.knightfrank.com CAPITAL MARKETS Tyler Talbot Head of Sales, North Shore Tyler.Talbot@au.knightfrank.com Arland Domingo Director - Metropolitan Sales Arland.Domingo@au.knightfrank.com Paul Roberts Joint Head of Institutional Sales, Australia Paul.Roberts@au.knightfrank.com Ben Schubert Joint Head of Institutional Sales, Australia Ben.Schubert@au.knightfrank.com VALUATIONS Lachlan Graham Divisional Director, North Sydney Lachlan.Graham@au.knightfrank.com Matt Lucas Associate Director, North Sydney Matt.Lucas@au.knightfrank.com Knight Frank Research Reports are available at KnightFrank.com.au/Research Knight Frank 217 This report is published for general information only. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no legal responsibility can be accepted by Knight Frank Research or Knight Frank for any loss or damage resultant from the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank in relation to particular properties or projects. Reproduction of this report in whole or in part is not permitted without prior consent of, and proper reference to Knight Frank Research.

9 NORTH SHORE OFFICE SEPTEMBER Nest Source of Map: Knight Frank North Sydney Macquarie Park/North Ryde Mount St - 4,6m² [Laing O'Rourke] 8 Khartoum Rd - 1,8m² [Fuji Xerox] 4-61 Waterloo Road [GPNSW] - 117,m² 8 16 Dexus - Q % committed Private - Q % committed John Holland % committed 1 Denison St - 6,21m² [Channel 9]^ Epicentre at Riverside, 6-8 Julius Ave - 34,194m² 9 Winten Property - H % committed ISPT - Mooted Chatswood 118 Mount St - 21,13m² 39 Delhi Rd - 3,m² N/A 1 Zurich - H2 22 Stockland - Mooted Crows Nest/St Leonards 11 1 Rivett Rd (Stage 2) - 11,38m² Pathway Property - Mooted Pacific Hwy - 4,6m Lane Cove Rd - 74,m² 12 Mirvac - Q Frasers Property / Winten Property Group - Mooted 88 Christie St (Fronting Pacific Hwy) - 4,661m² 29-3 Epping Rd -14,m² Under Construction/Complete 13 JQZ Harvey Norman Holdings - Mooted RNS Hospital site - 2, m² 271 Lane Cove Rd - c.34,m² DA Approved/Confirmed/Site Works 14 NSW Government Mirvac - Mooted Gore Hill Technology Park - up to 46,m² 8-1 University Ave - c.,m² Mooted / Early Feasibility 1 Lindsay Bennelong Development - Mooted Macquarie University - Early Feasibility NB. Dates are Knight Frank Research estimates Office NLA quoted, Major tenant precommitment in [brackets] ^NBN Co is reportedly close to finalising a deal for between 2 22,m². 9