OUTLOOK EAST PERTH A CONTEXT ON BUSINESS, CULTURE, LIFESTYLE AND RESIDENTIAL 1 POP 2 INF 3 EMP ACCESSIBILITY DEMOGRAPHICS INFRASTRUCTURE & EMPLOYMENT

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1 OUTLOOK A CONTEXT ON BUSINESS, CULTURE, LIFESTYLE AND RESIDENTIAL s riverside amenity is a major drawcard for residents, visitors and workers. Highly accessible, the suburb is in close proximity to key employment, retail and entertainment nodes A B C D E ACCESSIBILITY Directly serviced by the Graham Farmer Freeway and metropolitan train and bus networks (including the free Central Area Transit buses) / Pg 02 DEMOGRAPHICS Popular among singles and couples without children who have higher average discretionary incomes / Pg 04 INFRASTRUCTURE & EMPLOYMENT Around 9,400 new jobs are forecast to be created in Inner Perth between 2014 and 2019 / Pg 05 SALES ANALYSIS The median unit price in increased by 5.4% per annum over the ten years to September 2015 / Pg 06 RENTAL MARKET Two and three bedroom stock completed post 2011 commands sizeable rental premiums over metropolitan Perth / Pg 07 A VARIETY OF LOCAL CAFÉ, RESTAURANT AND BAR OPTIONS RECREATIONAL OPPORTUNITIES ABOUND THROUGHOUT BRUNCH AT CLAISEBROOK COVE VIBRANT, MIXED-USE DEVELOPMENT SUNRISE BY THE SWAN RIVER 1 POP 2 INF 3 EMP accommodates all three of the Urbis economics and research fundamentals that make a sustainable suburb Population, Infrastructure and Employment. IN CLOSE PROXIMITY OF CENTRAL PERTH

2 FREMANTLE NEDLANDS SOUTH PERTH KWINANA FREEWAY ACCESSIBILITY & WALKABILITY CROWN CASINO PERTH (2.5 KM) PERTH AIRPORT (9 KM) FUTURE WATERBANK PRECINCT THE CAUSEWAYADELAIDE TERRACE Key Legend Employment Culture & Entertainment 1 Perth CBD (1.625 million sqm office space) 2 West Perth (423,000 sqm office space) 3 Parliamentary Precinct 4 Mount Hospital 5 QEII Medical Precinct 6 Royal Perth Hospital 7 Australian Broadcasting Corporation 8 Gloucester Park 9 WACA Ground 10 Cemeteries (heritage listed) 11 Perth Mint 12 Perth Convention and Exhibition Centre 13 His Majesty's Theatre 14 Perth Arena 15 Domain Stadium (Subiaco Oval) Education Cinema Paradiso Alexander Library State Theatre Centre of Western Australia Art Gallery of Western Australia Western Australian Museum nib Stadium Perth Stadium (under construction) Perth Zoo Trinity College Mercedes College Curtin Graduate School of Business Central Institute of Technology Central Institute of Technology Northbridge St George's Anglican Grammar School University of Western Australia Green Space & Recreation Queens Gardens Ozone Reserve Langley Park Swan River Barrack Street Jetty Mends Street Jetty South Perth Foreshore Kings Park Royal Kings Park Tennis Club Indian Ocean Wellington Square Claisebrook Cove Arden Street Reserve State Tennis Centre 2 URBIS OUTLOOK - FOR THE EXCLUSIVE USE OF BLACKBURNE PROPERTY GROUP

3 40 5 SHENTON PARK ELIZABETH QUAY ELIZABETH QUAY PRECINCT SUBIACO UNDER- 14 FUTURE CITY GROUND LINK PRECINCT 46 PERTH McIVER CITY WEST MITCHELL FREEWAY CLAISEBROOK GRAHAM FARMER FREEWAY SWAN RIVER PEDESTRIAN BRIDGE (UNDER CONSTRUCTION) BURSWOOD 22 NEW PERTH STADIUM (ARTIST S IMPRESSION) 44 STADIUM (PLANNED) Retail & Dining Royal Street, William and James Streets, Northbridge Murray Street Mall (Myer) Hay Street Mall (David Jones) Brookfield Place King Street Watertown Brand Outlet Centre Enjoying direct Swan River frontage (south and east) and bordered by Hill Street, Lord Street and the Midland railway line (west), offers residents a variety of employment, recreational, dining and transport options. Comparable suburbs include Melbourne s Southbank and Sydney s Darlinghurst. Additional lifestyle attractions including Perth s Central Business District, Crown Perth, nib Stadium and the Northbridge entertainment and cultural precinct are on s doorstep. Following the Redevelopment Authority s work at Claisebrook Cove from the mid 1990s, has undergone a major wave of redevelopment activity. Recent and upcoming projects such as Waterbank, Queens Riverside and Symphony City are further enhancing amenity and increasing population density. s rapidly evolving profile means that residents, visitors and workers in the area are set to benefit from the precinct s increasing amenity and appeal. URBIS OUTLOOK - FOR THE EXCLUSIVE USE OF BLACKBURNE PROPERTY GROUP 3

4 LIFESTYLE & DEMOGRAPHICS s lifestyle amenity and convenient location position it as one of Perth s most highly desirable residential suburbs. THE LIFESTYLE Food and Beverage Food and beverage options are varied, from high-end premises at the Hyatt Regency to less formal, but high-quality, eateries around Royal Street and Claisebrook Cove. Other options are on Adelaide Terrace. The choices are multicultural and relaxed and many boast scenic outlooks. Culture s past is celebrated with the preservation of heritage-listed buildings and sites. These include the WACA Ground, Gloucester Park, Perth Mint, Perth Girls School and Cemeteries. An iconic seating prop from the film Notting Hill now resides in Queens Gardens. Swan River Recreational opportunities abound on and along the Swan River. High-quality pedestrian and cycle paths are adjacent to the water, also facilitating opportunities for sailing, fishing and other water activities. A Rottnest Express ferry terminal is located at Barrack Street s Pier Two. Employment Office space in makes a 14% contribution to total stock in Perth s CBD. Major occupiers include Fortescue Metals Group, Perron Group, state government departments and the Australian Broadcasting Corporation. s retail, hospitality and education sectors provide additional job opportunities. Accessibility is on the doorstep of many lifestyle attractions including Perth s CBD, Crown Perth, nib Stadium and the Northbridge entertainment precinct. It is highly accessible via the Graham Farmer Freeway and metropolitan train and bus networks (including the free CAT buses). POPULATION & DEMOGRAPHICS The suburb of is characterised by a high proportion of residents aged between 20 and 34 years (45% of the population) who are often single (39% of households are lone person) and rent their accommodation (61% of dwellings are rented). These residents are able to place a greater emphasis on lifestyle and enjoy a higher level of discretionary income. s income distribution indicates higher proportions of residents in top tier brackets, with 9.9% earning between $1,500 and $1,999 per week and 16.8% earning over $2,000 per week. This strong income profile can be credited to a high proportion of professional residents, with 52% of employed persons classified as professionals or managers. Inner urban areas, in particular, are residential markets of choice for such demographic cohorts. Drawn to the suburb s waterfront lifestyle, proximity to key employment and amenity nodes and stock of modern apartment accommodation, East Perth is forecast to increase by around 18,600 new residents between 2011 and Average annual population growth of 5.5% is expected between 2011 and This rate significantly outperforms the equivalent for Greater Perth (2.5% per annum). AGE PROFILE BY MARKET SEGMENT VERSUS GREATER PERTH 35% 30% 25% 20% 15% 10% 5% 0% Young Children GREATER PERTH Children Singles (Renters) Prepared by Urbis, Source: ABS (2011) Pre-Family Young Mature Empty Retirees Couple Family Family Nesters WHO LIVES IN THE SUBURB OF? Residents Aged Years Lone Person Households Proportion of Rented Dwellings GREATER PERTH 45% 22% 39% 24% 61% 28% POPULATION PROJECTIONS THOUSANDS 30,000 25,000 20,000 15,000 10,000 5, ,000 ACTUAL POPULATION PROJECTED POPULATION 6,300 Prepared by Urbis, Source:.id SAFi 9,000 12, F 2021F 2026F 2031F 2036F 15,400 20,000 24,300 27,600 White Collar Workforce Catch Public Transport to Work Average Annual Household Income Prepared by Urbis, Source: ABS (2011) 81% 68% 31% 13% $108,257 $93,009 4 URBIS OUTLOOK - FOR THE EXCLUSIVE USE OF BLACKBURNE PROPERTY GROUP

5 The WA government has allocated $24.1 billion to infrastructure projects to INFRASTRUCTURE & EMPLOYMENT INFRASTRUCTURE INVESTMENT Elizabeth Quay Linking the Swan River and Perth s Central Business District, Elizabeth Quay is a $2.6 billion project which will deliver 800 apartments, 400 hotel rooms and 225,000 square metres of commercial retail and office space (opportunities for 10,000 workers). The impressive public realm of Elizabeth Quay opened in January 2016 and offers itself as both an events venue and recreation space. The 2.7 hectare river inlet provides a transport link with ferry services that connect the CBD to South Perth. Waterbank Waterbank is located between The Causeway and Trinity College in. With a project value of $1 billion, the development will deliver 800 apartments, 15,000 square metres of office accommodation and 1,200 square metres of retail space. It will add 1,200 residents to s population and 1,500 people to the local worker population. An exciting public realm (including boating berths) will be enjoyed by locals and visitors alike. City Link Linking the CBD and Northbridge, City Link is one of Australia s largest transit orientated developments which will ultimately comprise 1,900 apartments providing a home to over 3,000 people. It will also create 244,000 square metres of office and retail space providing opportunities for 13,500 new workers. Other major components include the sinking of the Fremantle railway line and extensive public realm works. The government is investing $1.3 billion in the precinct (including Perth Arena). Burswood Peninsula Crown Perth is being extended to include a new dining precinct and a six star Crown Towers hotel (comprising 500 rooms, increasing capacity to 1,200). The adjacent new Perth Stadium represents a project value of $820.7 million and up to 70,000 seats, expected to be completed in Construction has also commenced on the Swan River Pedestrian Bridge, linking and Burswood. Chinatown The Metropolitan Redevelopment Authority is investing $2 million in Northbridge s Chinatown precinct to enhance its vitality and unique character. Works will include contemporary public art, colourful entry statements, attractive landscaping and enhanced laneway experiences (including new lighting and lanterns). Queen Street will lead directly to Chinatown, via Perth City Link, bringing many new visitors to the precinct. NEARBY EMPLOYMENT NODES Perth s Central Business District Perth s CBD offers diverse employment opportunities. Employment sectors include professional (1.625 million square metres of office space), retail and food and beverage (Hay, Murray, Barrack, King and William Streets), education (Curtin Graduate School of Business, Mercedes College, St. Georges Anglican Grammar School), health (Royal Perth Hospital) and tourism (hotels, Perth Convention and Exhibition Centre). Queen Elizabeth II Medical Centre According to the QEII Medical Centre Trust s 2014/2015 Annual Report, the precinct employs over 8000 people. This number will grow following the recent completion of Ronald McDonald House and Mental Health Unit, and the upcoming opening of the Children s Hospital and Neuroscience Research Facility. The precinct is benefiting from state government health sector framework which promotes the centralisation of services in key locations. West Perth West Perth comprises 423,000 square metres of office space, in addition to government (Dumas House, Parliament House), residential, retail (Hay Street, Watertown) and short-stay accommodation uses. For office tenants, the market is particularly popular among small to mid-sized mining and oil and gas companies and their consultants. Like the Perth CBD, it is wellserviced by public transport including the free Central Area Transit buses. Perth s Eastern Industrial Market Perth s eastern industrial market is located south of the Swan River, north of the Canning River and largely surrounds Perth Airport. Its proximity to the Perth CBD, Perth Airport, major regional and interstate roads and railway lines makes it favoured among tenants related to transport and logistics. The east is historically home to larger-scale industrial construction projects, including the largest amount of new metropolitan supply over the last ten years. EMPLOYMENT FORECASTS According to projections prepared by the Australian Department of Employment (2015), Inner Perth (including the Perth CBD and fringe areas) is forecast to record employment growth of 9,400 jobs, or 8.7%, between November 2014 and November The key contributing sectors will be Health Care and Social Assistance (1,900 positions), Professional, Scientific and Technical Services (1,600 positions), Education and Training (1,200 positions) and Retail Trade (1,200 positions). URBIS OUTLOOK - FOR THE EXCLUSIVE USE OF BLACKBURNE PROPERTY GROUP 5

6 SALES ANALYSIS is an established apartment market enjoying strong ongoing demand. Its development history spans several decades. RESIDENTIAL MARKET APARTMENT SUPPLY AND THE OFF-PLAN MARKET was one of the first suburbs to embrace the lifestyle benefits of low maintenance inner city living, with 81.5% of dwellings classified as units or apartments (ABS 2011). The 5.9% of single detached dwelling stock is a limited commodity and therefore commands a strong price premium. The median house price for the 12 months to September 2015 was $1,312,500 based on 16 settled sales. This result was almost 2.4 times greater than that of metropolitan Perth. The higher median house price sets a benchmark for s apartment market, where the median unit price is 25.8% higher than that of metropolitan Perth. Units recorded a median price of $544,000 over the 12 months to September 2015, based on 328 settled sales. has historically shown consistent and strong price growth. The median sale price of units increased by 5.4% over the course of 10 years to September 2015, outperforming the City of Perth s 5.1% and just behind greater Perth s 5.9% Urbis Q Apartment Essentials report indicates a weighted average sale price for Inner City apartments of $630,500. This result is slightly higher than that of metropolitan Perth. The Inner City area was a highly active spot in Q4, with 31% of total unconditional sales for the period. One bedroom apartments represent the most popular offering for the Inner City, at 37% of future supply, reflecting the overall appeal of this product type relative to alternatives. The proven market is soon to experience further transformation, with a number of new developments to enter the market. These projects will greatly enhance the urban benefit for residents, visitors and workers. Liveability and vibrancy will be enhanced by major redevelopment projects in nearby areas, including Perth City Link, the new Museum and projects in Burswood (Perth Stadium, new facilities at Crown Perth). The median unit price in increased by 5.4% per annum over the ten years to September KEY STATISTICS SEPTEMBER 2015 $548,100 Metropolitan Perth median house price $1,312,500 median house price $432,200 Metropolitan Perth median unit price $544,000 median unit price Prepared by Urbis; Source: APM PriceFinder 6 URBIS OUTLOOK - FOR THE EXCLUSIVE USE OF BLACKBURNE PROPERTY GROUP

7 Apartments completed since 2011 are achieving rental premiums over older stock. RENTAL MARKET RENTAL ANALYSIS records a rental premium for units when compared with the median rents for the wider metropolitan area and City of Perth. As at September 2015, the median asking rent for units in was $525 per week. This is a premium over the Perth Local Government Area, and significantly higher than that of Perth ($400). New (furnished and unfurnished, constructed post 2012) apartments in command rental premiums over older stock. The premium starts at 9% for a onebedroom apartment, rising to 17% for a two bedroom apartment and 19% for a 3 bedroom apartment. This price difference indicates the value attached to the lifestyle and quality finishes potential tenants. As more supply is added to the inner city, renters have greater choice and are choosing to upgrade to modern buildings with better facilities. The large difference in 3 bedroom apartments reflects this. During Western Australia s most recent mining boom, inner city rents rose considerably driven by strong corporate demand. Rents have now softened and are closer to more sustainable longer term levels. Consistent with the broader metropolitan area, has seen a softening in its rental market. However, s median rent is still above the median set by Greater Perth. From a rental return perspective, recorded an indicative rental yield of 5.0% over the 12 months to September This outperforms the City of Perth (4.9%) and Greater Perth (4.8%). INDICATIVE GROSS RENTAL YIELDS FOR UNITS 12 MONTHS TO SEPTEMBER % 4.8% 4.9% City of Perth Metropolitan Perth MEDIAN APARTMENT ASKING RENTS 12 MONTHS TO SEPTEMBER 2015 COMPARISON OF AVERAGE WEEKLY APARTMENT RENTS MARCH 2006 TO DECEMBER 2015 MEDIAN WEEKLY REENT Metropolitan Perth Prepared by Urbis, Source: APM PriceFinder $800 $700 $600 $500 $400 $300 $200 $100 $0 City of Perth $400 0 Prepared by Urbis; Source: APM PriceFinder RENTAL PREMIUM: NEW VERSUS EXISTING AS AT JANUARY 2016 NEW AND NEAR NEW APARTMENTS IN ESTABLISHED APARTMENTS $365 METROPOLITAN PERTH $100 $580 $200 $300 MEDIAN ASKING RENT $497.5 $400 $750 $500 1 BED 2 BED 3 BED $630 $600 Prepared by Urbis; Source: APM PriceFinder Prepared by Urbis, Source: REIWA URBIS OUTLOOK - FOR THE EXCLUSIVE USE OF BLACKBURNE PROPERTY GROUP 7

8 EDUCATION & PUBLIC TRANSPORT Located in Perth s Free Transit Zone, is well serviced by CAT and regular service buses along Wellington and Plain Streets. The Claisebrook rail station is within walking distance and offers ready access to the Perth CBD. PRIMARY & SECONDARY EDUCATION * 1 State Ranking * State Ranking * State Ranking * State Ranking CARMEL SCHOOL 55.5 FULL-TIME EQUIVALENT STAFF** PERTH MODERN SCHOOL 95.1 FULL-TIME EQUIVALENT STAFF** METHODIST LADIES COLLEGE FULL-TIME EQUIVALENT STAFF** PENRHOS COLLEGE FULL-TIME EQUIVALENT STAFF** Half of the state s best 40 schools are within ten kilometres of East Perth. In total, Urbis estimates there are around 180 schools (Primary, secondary and colleges) within a ten kilometre radius, providing educational and employment opportunities. * Based on number of year 12 subject enrolments where a WACE course score of 75+ was achieved (excludes vocational subjects), 2015 (SCSA) ** Teaching and non-teaching staff, 2014 (ACARA) SCHOOL Christ Church Grammar School 8* 254.5** Hale School 10* 246.5** John XXIII College 11* 196.4** St Andrews Grammar 13* 44.8** Ursula Frayne Catholic College 14* 119.5** Rossmoyne Senior High School 18* 141.6** Scotch College 20* 219.1** Shenton College 22* 124.4** Perth College 23* 157.7** Newman College 25* 189.5** Churchlands Senior High School 28* 131.9** Applecross Senior High School 33* 103.9** Trinity College 34* 157.4** Aquinas College 36* 157.8** Mercedes College 38* 117.2** Servite College 39* 96.1** STATE RANKING FULL-TIME EQUIVALENT STAFF TRAIN STATIONS ARE WITHIN A WALKABLE CATCHMENT OF 3 OF PERTH S 4 CAT BUS SERVICES HAVE ROUTES THROUGH TRAIN The Perth rail network is an essential part of CBD amenity and benefits from its proximity to key stations. The closest train station is Claisebrook (less than 800m), with bus routes stopping near the central Perth Train Station. Trains run every 15 minutes, and more frequently in peak periods, with free late night services on weekends. CAT BUS The Central Area Transit (CAT) buses provide free transport from to the CBD and its immediate surrounds, with Wellington Street and Plain Street having stops for CAT services (Blue, Red and Yellow) operating at high frequency (the red CAT every five minutes between 6.45AM 7PM, and others every 5-10 minutes) through the Perth CBD, with later services operating on Friday, running every 15 minutes. Source: Public Transport Authority, Urbis urbis.com.au AUSTRALIA ASIA MIDDLE EAST This publication is prepared on the instruction of Blackburne Property Group and is not suitable for use other than by the party to whom it is addressed. As the publication involves projections and assumptions it can be affected by a number of unforeseen variables. The forecasts and assumptions are a prediction and whilst Urbis has made every effort to ensure that the forecasts and assumptions are based on reasonable information, they may be affected by assumptions that do not necessarily eventuate or by known or unknown risks and uncertainties. It should be noted that past performance is not necessarily a reliable indication of future performance. The information in the publication does not represent financial advice and should not be regarded as such. It 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. Urbis accepts no responsibility for the accuracy or completeness of any such material. The information is subject to change without notice and Urbis is under no obligation to update the information or correct any assumptions which may change over time. This study has been prepared for the sole use of Blackburne Property Group and is not to be relied upon by any third party without specific approval from Urbis. 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 written permission. Enquiries should be addressed to the publishers. Data sourced February 2016.