Quarter Time National Office Q1/2018

Transcription

1 Savills Research Australia Quarter Time National Office CBD Averages A Grade National Office N.F. Rent N.E. Rent Market Yield IRR Cap. Value Sydney CBD 1,020 (12.1%) 795 (10.4%) 4.95 (-45bps) 6.70 (-30bps) 19,500 (14.0%) Melbourne CBD 580 (10.5%) 425 (11.8%) 5.20 (-55bps) 6.90 (-10bps) 10,000 (6.4%) Brisbane CBD 540 (-) 290 (-) 6.15 (-60bps) 7.25 (-90bps) 9,400 (4.4%) Perth CBD 565 (-) 290 (-1.7%) 7.25 (-25bps) 7.50 (-50bps) 7,900 (-) Adelaide CBD 370 (-) 225 (-13.5%) 7.50 (-) 8.25 (-) 5,000 (-) Canberra Civic 370 (2.8%) 290 (3.6%) 6.40 (-) 8.15 (-) 6,800 (-) Note: 12 month change shown in brackets Trends Detailed Sales Activity: $17.581bn 167 Sales ($10m+) Leasing Activity 1,113,433sq m 346 Leases (1,000sq m+) Employment m 3.3% growth savills.com.au/research

2 Report Contents National Indicator Summary 3 Office Economic Drivers 5 National Sales Activity 6 National Leasing Activity 7 State Indicators and Major Activity New South Wales 8 Victoria 11 Queensland 14 Western Australia 17 South Australia 20 Australian Capital Territory 23 Key State Contacts 26 National Head Capital Strategy & Research Chris Freeman cfreeman@savills.com.au Senior Analyst Capital Strategy & Research Shrabastee Mallik smallik@savills.com.au For our latest national reports, visit savills.com.au/research To join Savills Research mailing list, please research@savills.com.au National CBD Average Yield and IRR vs 10yr Bond Rate Source: RBA, Savills Research National CBD A Grade - Average Yield Spread over 10yr Bond Rate and IRR Multiple Source: RBA, Savills Research savills.com.au/research 2

3 Fringe Market Averages A Grade National Office N.F. Rent N.E. Rent Market Yield IRR Cap. Value North Sydney 790 (9.0%) 635 (24.5%) 5.25 (-100bps) 7.25 (-25bps) 13,800 (20.0%) Macquarie Park 360 (-) 260 (4.0%) 6.00 (-65bps) 7.40 (-35bps) 7,000 (27.3%) Parramatta 520 (15.6%) 430 (22.9%) 5.50 (-100bps) 7.00 (-50bps) 9,300 (36.8%) St Kilda 450 (15.4%) 360 (22.0%) 5.90 (-75bps) 6.90 (-35bps) 6,800 (19.3%) Brisbane Fringe 445 (-) 215 (-10.4%) 6.40 (-50bps) 8.00 (-15bps) 8,500 (1.2%) Sunshine Coast 330 (-) 260 (-5.5%) 7.65 (-100bps) 9.75 (-) 4,000 (-7.0%) Gold Coast 350 (7.7%) 245 (-3.9%) 8.15 (-35bps) 9.50 (-) 4,800 (11.6%) West Perth 325 (-) 180 (-12.2%) 7.90 (-10bps) 8.25 (-15bps) 4,100 (-) Adelaide Fringe 345 (-) 260 (-) 7.75 (-) 8.65 (-) 4,400 (-) Canberra Non-Civic 365 (-) 290 (-3.3%) 7.00 (-) 8.50 (-) 6,300 (1.6%) Note: 12 month change shown in brackets National Face Rents, Effective Rents and Incentive Comparison A Grade Average 12 Month Net Effective Rental & Capital Growth A Grade Average savills.com.au/research 3

4 Yield and IRR Spread to Bond Rates A Grade Average Typical Capital Value Range ($/sq m) A Grade Average Capital Value CAGRs by Period A Grade Average (Historic) Effective Rental CAGRs by Period A Grade Average (Historic) 25% 1yr 3yr CAGR 5yr CAGR 10yr CAGR 25% 1yr 3yr CAGR 5yr CAGR 10yr CAGR 20% 20% 15% 15% 10% 10% 5% 0% 5% -5% 0% -10% -15% -5% Sydney CBD Melbourne CBD Brisbane CBD Perth CBD Adelaide CBD Canberra Civic -20% Sydney CBD Melbourne CBD Brisbane CBD Perth CBD Adelaide CBD Canberra Civic Note: CAGR = Compound Annual Growth Rate savills.com.au/research 4

5 Office Sector Economic Drivers Net Absorption vs. Growth in Prof. Job Advertisements Annual Growth in Professional Job Advertisements - % (to Feb-18) 500, ,000 Sydney CBD Melbourne CBD Brisbane CBD Perth CBD Adelaide CBD Canberra Prof. Job Ads 30% 20% WA QLD 11.9% 9.9% 300, , ,000 10% 0% (10%) VIC SA 8.5% 8.4% - (20%) AUS 6.3% (100,000) (30%) ACT 3.9% (200,000) (300,000) (40%) (50%) NT NSW 2.9% 2.5% Note: Net Absorption to Dec-17, Job Adverts to Feb-18 TAS (0.9%) Annual Growth in Employment 500,000 F/T Employed P/T Employed 400, , , ,000 - (100,000) (200,000) Annual Growth in Employment by State - % (to Feb-18) ACT 4.7% QLD 4.6% NSW 3.9% AUS 3.3% VIC 2.5% TAS 2.4% WA 2.3% SA 2.3% NT (3.5%) Note: CAGR = Compound Annual Growth Rate Summary of State Economic Indicators Key State Indicators (%) Latest NSW VIC QLD WA SA ACT AUS SFD / GDP Growth Dec (2.7) 4.7 (3.0) 3.0 (1.9) -1.8 (2.0) 4.5 (2.0) 3.9 (2.7) 2.3 (2.6) Population Growth Sep (1.4) 2.4 (2.1) 1.7 (1.8) 0.9 (2.0) 0.6 (0.9) 1.8 (1.9) 1.6 (1.7) Employment Growth Feb (1.6) 2.5 (2.1) 4.6 (1.4) 2.3 (1.6) 2.3 (0.8) 4.7 (1.6) 3.3 (1.6) Unemployment Rate Feb (5.3) 5.9 (5.7) 6.1 (5.7) 5.8 (4.9) 6.2 (6.1) 4.1 (3.9) 5.5 (5.5) CPI (Inflation) Dec (2.4) 2.2 (2.3) 1.9 (2.4) 0.8 (2.1) 2.3 (2.3) 2.2 (2.1) 1.9 (2.3) Job Adverts (Prof) Feb (-4.0) 10.9 (-2.5) 8.7 (-5.7) 15.2 (-6.2) 14.4 (-4.6) 5.6 (2.5) 7.4 (-3.9) Job Adverts (Total) Feb (-3.5) 8.5 (-3.7) 9.9 (-7.2) 11.9 (-6.2) 8.4 (-6.8) 3.9 (1.7) 6.3 (-4.7) Source: ABS / DOE / Savills Note: Annual change shown, 10yr compound average in brackets; Note: Economic growth numbers are on a rolling annual basis; Employment growth is on trend terms savills.com.au/research 5

6 15,300 15,235 15,144 15,052 14,007 13,008 Savills Research Quarter Time National Office National Sales Activity Reported Transaction Activity Sales $10m+ $20bn NSW VIC QLD WA SA ACT $18bn $16bn $14bn $12bn $10bn $8bn $6bn $4bn $2bn $0bn 100% 80% 60% 40% 20% 0% Purchasers Fund Developer Government Foreign Investor Other Vendors Trust Owner Occupier Syndicate Private Investor Top Recent 15 Sales by Value ($m) Two Melbourne Quarter, VIC - Mar-18 - $11,000/sq m 405 Bourke St, Melbourne, VIC (50.0%) - Dec-17 - $13,008/sq m 32 Turbot St, Brisbane, QLD - Dec-17 - $10,951/sq m 32 Turbot St, Brisbane, QLD - Dec-17 - $10,757/sq m 1 York St, Sydney, NSW - Jan-18 - $11,136/sq m Anz House, SA - Dec-17 - $6,533/sq m (50%) Latitude East, NSW - Mar-18 - $15,235/sq m Gasworks Plaza (Office Portion), QLD - Dec-17 - $14,007/sq m The Victorian Police Centre, VIC - Jan-18 - $5,293/sq m 108 Wickham St, Fortitude Valley, QLD - Dec-17 - $8,915/sq m Cub Melbourne Hq, VIC - Feb-18 - $8,134/sq m Computershare, VIC - Feb $5,640/sq m 50 Franklin St, Melbourne, VIC - Dec-17 - $n.a/sq m 299 Elizabeth St, Sydney, NSW - Jan-18 - $15,144/sq m Hewlett Packard, VIC - Jan $9,241/sq m 88 Musk Ave, Kelvin Grove, QLD - Mar-18 - $5,939/sq m 157 Walker St, North Sydney, NSW - Mar-18 - $8,737/sq m 2-14 Meredith St, NSW - Mar-18 - $5,432/sq m 31 Duncan St, Fortitude Valley, QLD - Dec-17 - $15,300/sq m 606 St Kilda Rd, Melbourne, VIC - Feb-18 - $6,650/sq m Top Recent 15 Sales by $/sq m 18,133 11,979 11,136 11,000 10,951 10,757 9,241 8,915 8,750 8,737 8,134 6,650 6,533 5,939 Thai Airways International, NSW - Mar-18 - $43.52m 31 Duncan St, Fortitude Valley, QLD - Dec-17 - $64.00m (50%) Latitude East, NSW - Mar-18 - $176.00m 299 Elizabeth St, Sydney, NSW - Jan-18 - $90.00m 180 Queen St, Brisbane, QLD - Dec-17 - $55.00m Gasworks Plaza (Office Portion), QLD - Dec-17 - $125.98m 405 Bourke St, Melbourne, VIC (50.0%) - Dec-17 - $400.00m 88 Cumberland St, The Rocks, NSW - Feb-18 - $56.00m 1 York St, Sydney, NSW - Jan-18 - $205.00m Two Melbourne Quarter, VIC - Mar-18 - $550.00m 32 Turbot St, Brisbane, QLD - Dec-17 - $380.00m 32 Turbot St, Brisbane, QLD - Dec-17 - $370.00m Hewlett Packard, VIC - Jan $88.00m 108 Wickham St, Fortitude Valley, QLD - Dec-17 - $106.20m 627 Chapel St, South Yarra, VIC - Jan-18 - $50.00m 157 Walker St, North Sydney, NSW - Mar-18 - $78.00m Cub Melbourne Hq, VIC - Feb-18 - $95.00m 606 St Kilda Rd, Melbourne, VIC - Feb-18 - $57.50m Anz House, SA - Dec-17 - $202.50m 88 Musk Ave, Kelvin Grove, QLD - Mar-18 - $84.00m savills.com.au/research 6

7 7,258 6,600 6,500 5,654 4,750 3,800 3,344 2,700 2,603 2,481 2,129 2,033 1,983 1,808 1,808 1,672 Savills Research Quarter Time National Office National Leasing Activity Reported Leasing Activity Leases 1,000sq m+ 2,000,000 SYD MEL BRI PER ADL CAN 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , ,000 Retail & W'Sale 55,907sqm - 5.1% Mining & Util. 125,285sqm % IT & Comm 133,477sqm % Business Serv. 208,725sqm % Govt. 251,796sqm % Fin & Ins 265,553sqm % Leasing Composition by Type Leases 1,000sq m+ Leasing Composition by Grade Leases 1,000sq m+ Direct - 500,881sqm % Renewal - 61,951sqm - 9.7% Precom - 57,379sqm - 8.9% Sublease - 21,270sqm - 3.3% P - 19,023sqm % A - 72,236sqm % B - 37,009sqm % C - 1,538sqm - 1.2% D - sqm - 0.0% Top 20 Recent Leases 1,000sq m+ 43,000 Precom Direct & Other 22,000 10,634 8,800 National Bank of Australia, VIC Energy Australia, VIC RMIT University, VIC MYOB, VIC Henry Davis York, NSW Flight Centre, NSW Carlton & United Breweries, VIC Allianz Australia Services, NSW Australian Institute of Company Directors, NSW United Petroleum, VIC AMP Capital, QLD Hub Australia, VIC WorkSafe Victoria, VIC Charlton Brown, QLD VGW Holdings, WA Minnovo, WA Fortix, WA Reckon, NSW Reckon Aus, NSW TBA, QLD savills.com.au/research 7

8 New South Wales PCA OMR Statistics (Dec-17) Sydney CBD North Sydney Parramatta Macquarie Park AUS CBD Total Stock 5,023, , , ,482 17,936,827 Total Vacancy 233,318 65,103 21,360 51,843 1,653,498 Vacancy (%) 4.6 (7.3) 7.9 (8.8) 3.0 (7.5) 6.0 (9.0) 9.8 (8.9) Net Absorption (12m) 24,827 (28,804) -3,898 (4,855) 7,539 (8,435) 650 (20,147) 142,321 (171,751) Net Absorption (%) 0.5 (0.6) -0.5 (0.7) 1.1 (1.3) 0.1 (2.9) 0.9 (1.1) Stock Additions 120,910 2,148 1,136 16, ,396 Stock Withdrawals 175, ,819 33, ,850 Net Additions -54,606 (34,889) 1,486 (2,277) -1,683 (5,820) -16,968 (21,388) -49,401 (303,191) Net Additions (%) -1.1 (0.7) 0.2 (0.3) -0.2 (0.9) -1.9 (2.9) -0.3 (1.9) Source: PCA / Savills Research Note: 10yr Average shown in brackets Sydney CBD Key Indicators Sydney CBD Premium A Grade B Grade Low High Low High Low High Rental Gross Face ($/sq m) 1,175 1,550 1,130 1, ,090 Rental Net Face ($/sq m) 975 1, , Incentive Level Gross Rental Net Effective ($/sq m) 745 1, Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) 990 1, , Office Capital Values ($/sq m) 22,000 29,000 18,000 21,000 13,500 20,000 savills.com.au/research 8

9 North Shore Key Indicators North Shore North Sydney A Grade North Sydney B Grade Macquarie Park A Grade Low High Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Net Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Cars Permanent ($/pcm) Office Capital Values ($/sq m) 12,500 15,000 10,000 11,750 6,500 7,500 Parramatta Key Indicators Parramatta A Grade B Grade Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Net Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Cars Permanent ($/pcm) Office Capital Values ($/sq m) 8,500 10,000 6,000 8,000 savills.com.au/research 9

10 Top Recent Notable Sales Property Price ($m) Date NLA (sq m) Yield Type $/sq m 231 Elizabeth St (Telstra House), Sydney Dec-17 23,274 n.a n.a 14, Spring St (Swire House), Sydney Sep-17 13, i 19, Goulburn St (Civic Tower), Sydney Nov-17 23,188 n.a n.a 10, Pitt St, Sydney Dec-17 10,893 n.a n.a 21,023 1 Castlereagh St, Sydney Dec-17 11, i 18,982 1 York St, Sydney Jan-18 18,408 n.a n.a 11,136 9 Hunter St, Sydney Oct-17 15, i 12, Hunter St, Sydney Oct-17 9, i 19, Goulburn St (Latitude East), Sydney (50%) Mar-18 23, r 15, Pacific Hwy, St Leonards Dec-17 16, r 10, Pitt St, Sydney Oct-17 9, i 16, Goulburn St (Sydney Plaza), Sydney Jul-17 19, e 8, Barrack St, Sydney Dec-17 9,595 n.a n.a 14, Elixabeth St, Sydney Jan-18 5,943 n.a. n.a. 15, Walker St, North Sydney Mar-18 8,928 n.a. n.a. 8,737 Yield Types: i = Initial, r = Reported, e = Equated, v = Vacant, dev = development; * Includes >$30 m in compensation beyond market value. Top Recent Notable Leases Property Tenant Date NLA (sq m) Type Rent Term York St, Sydney Sydney Startup Hub Aug-17 17,244 Direct 835 (G) 7 60 Martin Pl, Sydney Henry Davis York Mar-18 7,258 Precomm 1,130 (N) Union Street, Pyrmont The Star Entertainment Group Dec-17 6,617 Direct 864 (G) Miller St, North Sydney, NSW Flight Centre Mar-18 6,600 Direct 830 (G) Hickson Rd, Millers Point WPP AUNZ Aug-17 6,463 Direct 751 (G) Elizabeth Street, Sydney Department of Veterans' Affairs Nov-17 5,335 Direct 595 (G) George Street, Sydney Aust. Inst. of Comp. Directors Mar-18 4,750 Direct 995 (N) n.a. 151 Clarence St, Sydney Pfizer Australia Dec-17 4,460 Direct 1,065 (G) Liverpool Street, Darlinghurst Hub Australia Dec-17 4,200 Direct 750 (G) Pitt St, Sydney Hipages Group Sep-17 3,788 Direct 913 (G) 6 10 Shelley St, Sydney IRESS Market Technology Sep-17 3,433 Direct 654 (G) George St, Sydney Jardine Lloyd Thompson Sep-17 3,149 Direct 1,215 (n.a) Sussex St, Sydney Adobe Systems Sep-17 3,079 Direct 1,010 (N) Sussex St, Sydney Dimension Data Sep-17 2,940 Direct 920 (N) n.a. 126 Phillip St, Sydney Treasury Corp (TCorp) Sep-17 2,888 Direct 910 (N) 7 Leasing Types: p = Pre-commitment, d = Direct, s = Sub-Lease, r = Renewal savills.com.au/research 10

11 Victoria PCA OMR Statistics (Dec-17) Melbourne CBD St Kilda Rd Southbank East Melbourne AUS CBD Total Stock 4,515, , , ,461 17,936,827 Total Vacancy 207,341 46,782 22,226 4,405 1,653,498 Vacancy (%) 4.6 (6.6) 7.2 (10.6) 5.1 (6.8) 2.5 (2.9) 9.8 (8.9) Net Absorption (12m) 74,829 (70,838) 3,052 (-11,083) 19,481 (4,557) 6,394 (-135) 142,321 (171,751) Net Absorption (%) 1.8 (1.8) 0.5 (-1.7) 5.0 (1.2) 3.8 (-0.1) 0.9 (1.1) Stock Additions 27,748-30,519 7, ,396 Stock Withdrawals 38,147 38,634 5, ,850 Net Additions -10,399 (75,703) -38,634 (-11,070) 25,124 (5,928) 7,000 (-82) -49,401 (303,191) Net Additions (%) -0.2 (1.9) -5.6 (-1.6) 6.1 (1.5) 4.1 (0.0) -0.3 (1.9) Source: PCA / Savills Research Note: 10yr Average shown in brackets Melbourne CBD Key Indicators Melbourne CBD (City Core) Premium A Grade B Grade Low High Low High Low High Rental Gross Face ($/sq m) 735 1, Rental Net Face ($/sq m) Incentive Level Gross Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Cars Permanent ($/pcm) Office Capital Values ($/sq m) 10,000 15,000 8,000 12,000 6,000 10,000 savills.com.au/research 11

12 Melbourne St Kilda Rd Key Indicators Melbourne St Kilda Rd A Grade B Grade Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Gross Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Office Capital Values ($/sq m) 5,500 8,000 5,000 6,000 Melbourne Suburban Key Indicators Melbourne Suburban A Grade B Grade Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Gross Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Office Capital Values ($/sq m) 6,100 7,600 4,500 5,500 savills.com.au/research 12

13 Top Recent Notable Sales Property Price ($m) Date NLA (sq m) Yield Type $/sq m 697 Collins St (Two Melbourne Quarter), Docklands Mar-18 50,000 n.a n.a 11, Bourke St, Melbourne (50%) Dec-17 61,500 n.a n.a 13, Spencer St, Melbourne Jun-17 65, e 10, Collins St (Collins Arch), Melbourne Jul-17 49,000 n.a n.a 12, Collins St, Docklands Nov-17 28,650 n.a n.a 10, Spencer St, Melbourne Jun-17 32,217 n.a n.a 7, La Trobe St, Melbourne Nov-17 19,864 n.a n.a 8, Collins St, Docklands Nov-17 17,337 n.a n.a 9, St Kilda Rd, Melbourne Aug-17 20, e 7, Bourke St, Melbourne Nov-17 16,152 n.a n.a 8, Flinders St (The Victorian Police Centre), Docklands Jan-18 23, i 5, La Trobe St, Docklands Aug-17 12, e 8, St Kilda Rd, Melbourne Aug-17 16, e 6,000 Cnr Sturt St & Southbank Rd, Southbank Feb-18 11,679 n.a n.a 8, Franklin St, Melbourne Dec-17 11,500 n.a. n.a. 7,839 Yield Types: i = Initial, r = Reported, e = Equated, v = Vacant, dev = development Top Recent Notable Leases Property Tenant Date NLA (sq m) Type Rent Term 405 Bourke St, Melbourne National Bank of Australia Jan-18 43,000 Precommit n.a Collins St, Docklands Monash College Oct-17 41,000 Direct n.a n.a. 697 Collins St, Docklands Energy Australia Mar-18 22,000 Precommit n.a n.a. 50 Franklin St, Melbourne Department of Justice & Regulation and the Carlton Justice Service Centre Sep-17 11,500 Direct n.a Lonsdale St, Melbourne RMIT University Jan-18 10,634 Direct n.a n.a. 699 Collins St, Docklands AMP Capital Oct-17 9,720 Precommit n.a n.a. The Malt District, Cremorne MYOB Mar-18 8,800 Direct n.a n.a. 2 Lonsdale St, Melbourne DTF Sep-17 8,250 Direct 610 (N) Lonsdale St, Melbourne GHD Sep-17 7,200 Renewal 550 (N) 5 2 Southbank Blvd, Southbank Carlton & United Breweries Feb-18 6,500 Direct 800 (n.a) Collins St, Melbourne Regus Sep-17 4,500 Direct n.a n.a. 600 Glenferrie Rd, Hawthorn United Petroleum Mar-18 3,800 Direct n.a n.a. 35 Collins St, Melbourne Domestic Violence Commitee Sep-17 3,092 Direct 575 (N) Auburn Rd, Hawthorn Bunnings Oct-17 3,000 Direct n.a St Kilda Rd, Melbourne Toll Holdings Sep-17 2,843 Direct 270 (N) n.a. Leasing Types: p = Pre-commitment, d = Direct, s = Sub-Lease, r = Renewal savills.com.au/research 13

14 Queensland PCA OMR Statistics (Dec-17) Brisbane CBD Brisbane Fringe Gold Coast Sunshine Coast AUS CBD Total Stock 2,255,386 1,203, , ,383 17,936,827 Total Vacancy 365, ,433 49,516 25,686 1,653,498 Vacancy (%) 16.2 (11.6) 14.1 (11.0) 10.6 (17.3) 15.0 (12.1) 9.8 (8.9) Net Absorption (12m) -40,879 (13,929) -37,900 (21,437) 1,801 (5,705) 7,139 (4,654) 142,321 (171,751) Net Absorption (%) -2.1 (0.8) -3.5 (2.4) 0.4 (1.5) 5.2 (3.9) 0.9 (1.1) Stock Additions 18,303-5,517 22, ,396 Stock Withdrawals 42,972 27,976 11, ,850 Net Additions -24,669 (49,339) -27,976 (36,679) -6,150 (8,226) 22,542 (6,486) -49,401 (303,191) Net Additions (%) -1.1 (2.5) -2.3 (3.7) -1.3 (2.0) 15.1 (4.9) -0.3 (1.9) Source: PCA / Savills Research Note: 10yr Average shown in brackets Brisbane Key Indicators Brisbane CBD Premium A Grade B Grade Low High Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Gross Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Cars Permanent ($/pcm) Office Capital Values ($/sq m) 11,000 13,500 7,750 11,000 4,500 7,500 savills.com.au/research 14

15 Brisbane Fringe Key Indicators Brisbane Fringe A Grade B Grade Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Gross Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Cars Permanent ($/pcm) Office Capital Values ($/sq m) 6,000 11,000 3,500 9,000 Gold Coast/Sunshine Coast Key Indicators Gold Coast/Sunshine Coast Gold Coast Sunshine Coast Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Gross Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) na na Office Capital Values ($/sq m) 3,500 6,000 3,000 5,000 savills.com.au/research 15

16 Top Recent Notable Sales Property Price ($m) Date NLA (sq m) Yield Type $/sq m 32 Turbot St, Brisbane Dec-17 34, e 10, George Street, Brisbane (50%) Jul-17 43, e 9, Edward Street, Brisbane Jun-17 15, e 9,341 Gasworks Plaza (Office Portion) Dec-17 8, * n.a 14, Ann Street, Brisbane ** Sep-17 15, e 7,476** 520 Wickham St (HQ South), Fortitude Valley Jun-17 14, e 8, Wickham St, Fortitude Valley Dec-17 11, e 8, Charlotte St, Brisbane Oct-17 11, i 9, Grey St, South Brisbane Oct-17 12, e 7,701 Bundall Corporate Centre Apr-17 19, i 4, Musk Ave, Kelvin Grove 84.00** Mar-18 14, *** i 5, Wickham Street, Fortitude Valley Sep-17 13, e 6, Queen St, Brisbane May-17 13, e 5, Charlotte Street (Health & Forestry House), Brisbane Nov-17 26,650 VP VP 2, Duncan St, Fortitude Valley Dec-17 4, i 15,511 Yield Types: i = Initial, r = Reported, e = Equated, v = Vacant, dev = development; * Allocated Cap Rate from RCA; **Net; ***8.24% - fully leased net Top Recent Notable Leases Property Tenant Date NLA (sq m) Type Rent Term 5 King Street, Bowen Hills Aurecon Oct-17 6,489 Precom 590 (N) Boundary St, Spring Hill International Education Services (IES) Dec-17 6,000 Direct 485 (G) Archimedes Place, Murarrie ACT Logistics Nov-17 3,952 Direct 132 (N) Ann St, Brisbane AMP Capital Dec-17 3,344 Direct n.a n.a. 60 Gloucester St, Charlton Brown Feb-18 2,481 Direct 350 (N) Wickham St, Fortitude Valley State Gov - Dept of Housing & Public Works Nov-17 2,270 Direct 590 (G) Ann St, Brisbane Kaplan Nov-17 2,227 Direct 495 (G) Wickham St, Fortitude Valley RPS Nov-17 2,226 Direct 600 (G) Adelaide St, Brisbane Caterpillar Nov-17 1,953 Direct 535 (G) 5 1 Eagle St, Brisbane Australian Digital Health Agency Nov-17 1,822 Direct 840 (G) 7 1 Eagle Street, Brisbane EDL (Energy Developments) Dec-17 1,792 Direct 840 (G) Melbourne Street, South Brisbane Publicis Australia Feb-18 1,667 Direct 656 (G) Gotha St, Fortitude Valley Think Education Oct-17 1,638 Direct 485 (G) Edward Street, Brisbane Boeing Nov-17 1,538 Direct 600 (G) George St, Brisbane Department of Public Works Dec-17 1,461 Sublease 675 (G) 2 Leasing Types: p = Pre-commitment, d = Direct, s = Sub-Lease, r = Renewal savills.com.au/research 16

17 Western Australia PCA OMR Statistics (Dec-17) Perth CBD West Perth AUS CBD Total Stock 1,769, ,864 17,936,827 Total Vacancy 350,927 71,479 1,653,498 Vacancy (%) 19.8 (11.2) 16.7 (8.4) 9.8 (8.9) Net Absorption (12m) 47,308 (14,211) 5,721 (-1,387) 142,321 (171,751) Net Absorption (%) 3.5 (1.1) 1.6 (-0.4) 0.9 (1.1) Stock Additions 3,860 6, ,396 Stock Withdrawals 2,564 4, ,850 Net Additions 1,296 (48,672) 2,509 (5,751) -49,401 (303,191) Net Additions (%) 0.1 (3.3) 0.6 (1.5) -0.3 (1.9) Source: PCA / Savills Research Note: 10yr Average shown in brackets Perth CBD Key Indicators Perth CBD Premium A Grade B Grade Low High Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Net Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Cars Permanent ($/pcm) Office Capital Values ($/sq m) 8,500 12,500 6,750 9,000 4,750 6,500 savills.com.au/research 17

18 West Perth Key Indicators West Perth A Grade B Grade Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Net Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Cars Permanent ($/pcm) Office Capital Values ($/sq m) 2,950 5,300 2,400 3,300 savills.com.au/research 18

19 Top Recent Notable Sales Property Price ($m) Date NLA (sq m) Yield Type $/sq m 167 St Georges Tce (Westralia Square), Perth Aug-17 32, e 6,626 1 William St (Quadrant), Perth Aug-17 23, e 7, Stirling St (Hatch Building), Perth Aug-17 11, e 5, St Georges Tce, Perth Nov-17 10, e 5, Adelaide Tce, Perth* Jul-17 14,409 n.a n.a 3, Bennett St, Perth Jan-18 10, e 4, St Georges Tce, Perth Feb-18 8, e 5, Colin St, West Perth Jul-17 8, i 3, Parkland Rd, Herdsman May-17 4, e 5, St Georges Tce, Perth Feb-18 5, e 3, Civic Blvd, Rockingham Jun-17 3, i 3, Newcastle St, Leederville Jun-17 3,105 n.a n.a 4, Bowman St, South Perth 9.90 Nov-17 1,387 n.a n.a 7, Coolamon Blvd, Ellenbrook 8.10 Apr-17 1, i 5,287 Yield Types: i = Initial, r = Reported, e = Equated, v = Vacant, dev = development; * part of a portfolio sale Top Recent Notable Leases Property Tenant Date NLA (sq m) Type Rent Term Colin St, West Perth IAG Jul-17 6,967 Renewal n.a Murray St, Perth Titan ICT Jul-17 4,080 Direct 425 (N) 4 18 Mount Street, Perth Worley Parsons Jun-17 3,300 Direct n.a n.a. 22 Parkland Rd, Herdsman Decmil Group May-17 3,285 Direct 365 (N) 6 25 Rowe Ave, Rivervale Honeywell Aug-17 2,557 Direct 380 (N) 6 15 William St, Perth VGW Holdings Feb-18 2,129 Direct n.a St Georges Tce, Perth Arthur J Gallagher Aug-17 2,096 Direct 668 (N) St Georges Tce, Perth Tetra Tech Companies (Coffey, Proteus, Eco Logical) Aug-17 2,096 Direct 610 (N) Adelaide Tce, Perth Minnovo Feb-18 2,033 Direct 300 (N) 5 2 Victoria Ave, Perth Optus May-17 2,005 Direct 460 (N) Stirling St, Perth Fortix Mar-18 1,983 Direct n.a n.a. 300 Murray St, Perth Alinta Energy Dec Sublease (N) St Georges Tce, Perth DXC Technology Oct-17 1,608 Direct 650 (N) 5 2 Kings Park Rd, West Perth Western Areas Mar-18 1,440 Direct n.a 4 Leasing Types: p = Pre-commitment, d = Direct, s = Sub-Lease, r = Renewal savills.com.au/research 19

20 South Australia PCA OMR Statistics (Dec-17) Adelaide CBD Adelaide Fringe AUS CBD Total Stock 1,424, ,212 17,936,827 Total Vacancy 219,848 24,856 1,653,498 Vacancy (%) 15.4 (10.6) 11.4 (7.4) 9.8 (8.9) Net Absorption (12m) 14,320 (7,272) 1,600 (245) 142,321 (171,751) Net Absorption (%) 1.2 (0.6) 0.8 (0.1) 0.9 (1.1) Stock Additions 6,261 4, ,396 Stock Withdrawals 2,901 1, ,850 Net Additions 3,360 (24,131) 2,262 (2,309) -49,401 (303,191) Net Additions (%) 0.2 (1.9) 1.1 (1.1) -0.3 (1.9) Source: PCA / Savills Research Note: 10yr Average shown in brackets Adelaide CBD Key Indicators Adelaide CBD Premium A Grade B Grade Low High Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Net Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Cars Permanent ($/pcm) Office Capital Values ($/sq m) 5,250 7,350 4,125 5,850 2,500 4,000 savills.com.au/research 20

21 Adelaide Fringe Key Indicators Adelaide Fringe A Grade B Grade Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Net Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Cars Permanent ($/pcm) Office Capital Values ($/sq m) 4,125 4,725 3,000 3,750 savills.com.au/research 21

22 Top Recent Notable Sales Property Price ($m) Date NLA (sq m) Yield Type $/sq m Waymouth St (ANZ House), Adelaide Dec-17 30, e 6, Pirie St, Adelaide Apr-17 19, e 5, King William St, Adelaide* Jul-17 12,643 n.a n.a 4, Rundle Mall (Citi Centre), Adelaide Aug-17 16,376 n.a n.a 2, O G Road (Campus DXS), Felixstow Mar-18 6, r 5, Gawler Pl, Adelaide* Jul-17 11,127 n.a n.a 3,110 2 Second Ave, Mawson Lakes Apr-17 8, i 3, Chapel St, Norwood Feb n.a n.a 39, Fullarton Rd, Parkside Sep-17 2, r 5, Gawler Stlisbury 9.50 Oct-17 2, r 4, King William St, Adelaide 8.39 Jul-17 3, r 2, Dequetteville Tce, Kent Town 6.00 Oct-17 2,207 n.a v 2, Flinders St, Adelaide 5.30 Jul-17 1,397 n.a n.a 3, Grote St, Adelaide 5.00 Aug-17 1,126 n.a n.a 4,440 Yield Types: i = Initial, r = Reported, e = Equated, v = Vacant, dev = development; * part of a portfolio sale Top Recent Notable Leases Property Tenant Date NLA (sq m) Type Rent Term 26 Flinders St, Adelaide Employers Mutual Jun-17 3,500sqm Direct n.a 3 1 Richmond Rd, Keswick SA Power Networks Aug-17 2,337sqm Direct 405 (G) Grenfell St, Adelaide Gallagher Bassett Aug-17 1,800sqm Direct n.a n.a. 115 Grenfell St, Adelaide First Mortgage Services (FMS) Jun-17 1,271sqm Direct 400 (G) 7 70 Franklin St, Adelaide Confidential Sep-17 1,235sqm Direct n.a n.a. 233 North Terrace, Adelaide Southern Rail Aug-17 1,234sqm Direct 425 (G) 5 1 James Schofield Dr, Adelaide Airport Oz Minerals Oct-17 1,200sqm Direct n.a n.a. Leasing Types: p = Pre-commitment, d = Direct, s = Sub-Lease, r = Renewal savills.com.au/research 22

23 Australian Capital Territory PCA OMR Statistics (Dec-17) Canberra AUS CBD Total Stock 2,377,146 17,936,827 Total Vacancy 310,224 1,653,498 Vacancy (%) 13.1 (11.8) 9.8 (8.9) Net Absorption (12m) 19,579 (20,427) 142,321 (171,751) Net Absorption (%) 1.0 (1.0) 0.9 (1.1) Stock Additions 62, ,396 Stock Withdrawals 27, ,850 Net Additions 34,998 (47,344) -49,401 (303,191) Net Additions (%) 1.5 (2.2) -0.3 (1.9) Source: PCA / Savills Research Note: 10yr Average shown in brackets Canberra Civic Key Indicators Canberra Civic A Grade B Grade Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Net Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Office Capital Values ($/sq m) 5,265 8,350 3,500 5,400 savills.com.au/research 23

24 Canberra Non-Civic Key Indicators Canberra Non-Civic A Grade B Grade Low High Low High Rental Gross Face ($/sq m) Rental Net Face ($/sq m) Incentive Level Net Rental Net Effective ($/sq m) Outgoings Operating ($/sq m) Outgoings Statutory ($/sq m) Outgoings Total ($/sq m) Typical Lease Term Yield Market (% Net Face Rental) IRR (%) Cars Permanent Reserved ($/pcm) Office Capital Values ($/sq m) 4,775 7,725 3,100 5,000 Top Recent Notable Sales Property Price Date NLA Yield Type $/sq m 44 Sydney Avenue, Forrest Nov-17 9, e 6, Northbourne Av, Braddon Jun-17 6, e 8, Moore St, Canberra Jul-17 8, e 5, Brisbane Avenue, Barton Aug-17 4, e 3,440 East Block Building Jan-18 4,958 n.a n.a 3, Bunda St, City 9.80 May-17 2, e 4,732 Yield Types: i = Initial, r = Reported, e = Equated, v = Vacant, dev = development; * Includes $10m in unpaid incentives Top Recent Notable Leases Property Tenant Rent ($/sq m) NLA (sq m) 7 London Cct, City Commonwealth Super Jun-17 6,915 Direct 470 (G) 6 16 Marcus Clarke Street, City NHMRC Dec-17 4,020 Direct 480 (N) 11 8 Brisbane Av, Barton Lockheed Martin Jun-17 2,257 Direct 385 (G) Barry Dr, Turner ANU Jun-17 1,805 Direct 380 (G) Marcus Clarke St, City Mills Oakley Lawyers Sep-17 1,050 Direct 385 (N) 10 2 Constitution Av, City National Aboriginal Community Controlled Health Organisation Sep-17 1,000 Direct 450 (G) Marcus Clarke St, City Mills Oakley Lawyers Sep-17 1,050 Direct 385 (N) 10 Leasing Types: p = Pre-commitment, d = Direct, s = Sub-Lease, r = Renewal savills.com.au/research 24

25 savills.com.au/research 25

26 Savills Australian Capital Territory Research Shrabastee Mallik +61 (0) smallik@savills.com.au Savills New South Wales Research Shrabastee Mallik +61 (0) smallik@savills.com.au Metro & Regional Sales Robert Lowe +61 (0) rlowe@savills.com.au Valuations Phil Harding +61 (0) pharding@savills.com.au Research Houssam Yakzan +61 (0) hyakzan@savills.com.au Office Leasing Rob Dickins +61 (0) rdickins@savills.com.au Capital Transactions Andrew Stewart +61 (0) astewart@savills.com.au Valuations Andrew Pannifex +61 (0) apannifex@savills.com.au Asset Management Howard Chapman +61 (0) hchapman@savills.com.au Project Management Gavin Boswarva +61 (0) gboswarva@savills.com.au Capital Transactions Ian Hetherington +61 (0) ihetherington@savills.com.au Project Management Gavin Boswarva +61 (0) gboswarva@savills.com.au Savills Queensland Research Shrabastee Mallik +61 (0) smallik@savills.com.au Valuations Brett Schultz +61 (0) bschultz@savills.com.au Capital Transactions Anthony Ott +61 (0) aott@savills.com.au Office Leasing John McDonald +61 (0) jmcdonald@savills.com.au Sunshine Coast Scott Gardiner +61 (0) sgardiner@savills.com.au Gold Coast Kevin Carmody +61 (0) kevin@savillsgc.com.au Asset Management Shannon Ormond +61 (0) sormond@savills.com.au Project Management Ken Ng +61 (0) kng@savills.com.au Savills South Australia Research Katy Dean +61 (0) kdean@savills.com.au Valuations Heath Dowling +61 (0) hdowling@savills.com.au Capital Transactions Peter Isaksson +61 (0) pisaksson@savills.com.au City & Metropolitan Sales Steve Bobridge +61 (0) sbobridge@savills.com.au Office Leasing Adam Hartley +61 (0) ahartley@savills.com.au Asset Management Jeffrey Klaebe +61 (0) jklaebe@savills.com.au Project Management Steve Christodoulou +61 (0) schristodoulou@savills.com.au Savills Victoria Research Monica Mondkar +61 (0) mmondkar@savills.com.au Valuations Joe Phegan +61 (0) jphegan@savills.com.au Capital Transactions Ben Parkinson +61 (0) bparkinson@savills.com.au CBD & Metropolitan Sales Clinton Baxter +61 (0) cbaxter@savills.com.au Asset Management Howard Chapman +61 (0) hchapman@savills.com.au Project Management David Hayden +61 (0) dhayden@savills.com.au Office Leasing Mark Rasmussen +61 (0) mrasmussen@savills.com.au Savills Western Australia Research Katy Dean +61 (0) kdean@savills.com.au Office Leasing Shelley Ritter +61 (0) sritter@savills.com.au Valuations Mark Foster-Key +61 (0) mfosterkey@savills.com.au Asset Management Jason Ridge +61 (0) jridge@savills.com.au Capital Transactions Graham Postma +61 (0) gpostma@savills.com.au Project Management Graham Nash +61 (0) gnash@savills.com.au City & Metropolitan Sales Chas Moore +61 (0) cmoore@savills.com.au savills.com.au/research 26