Office Investment Market Review. January 2009 March 2010 Australia

Transcription

1 Office Investment Market Review January 2009 March 2010 Australia

2 Highlights The 2009 Australian Office Investment Market Global economic uncertainty and tight credit conditions continued to cast a shadow over the Australian office investment market in However, the Australian economy proved to be resilient, avoiding a technical recession in 1Q09, followed by three successive quarters of positive GDP growth (2Q09 to 4Q09). In the second half of 2009, the improving economic conditions and relatively solid office market fundamentals provided greater confidence to both local and overseas investors. The first half of 2009 followed the trend of Buyers remained cautious, although low interest rates and higher yields encouraged activity from private investors as the projected returns were above historical benchmarks for office buildings. A distinct price point was observed in early There were no transactions above AUD 60 million recorded in the first quarter. While the level of stock in public on-market campaigns was low in early 2009, there were high levels of stock available on an off-market basis. Institutional owners were quietly willing to consider offers on properties across their portfolios with a view that property fundamentals would deteriorate and capitalisation rates would move out further. With this supposed approaching storm, offshore groups became more interested in the Australian property market, thinking that they will be able to pick up quality property at distressed prices. Declining asset values led to a number of A-REITs approaching (or breaching) loan covenants. However, successful capital raisings by large A-REITs from institutional investors generated positive sentiment in the office sector. It was estimated that the A-REITs successfully raised AUD 14 billion in equity capital in With these capital raisings, a number of institutional owners started to reconsider their positions and pulled their properties from the market. As the year progressed, the positive sentiment created by the recapitalisation of the sector and the firm market fundamentals started to lift the shadow that was cast over the office sector and gave fund managers room to strategise and reconsider their positions. In late-2009, the market started to see the return of the Wholesale and REITs with increasing number of buy mandates. In 2009, access to debt financing remained difficult. While the official interest rates were at historic lows, 2 Jones Lang LaSalle Office Investment Market Review

3 financing costs had significantly increased, with spreads above bond rates at up to 400 basis points plus facility fees. The ability to acquire club debt stalled, and many banks new loans facilities for commercial property had stopped. For those groups that were able to source debt, the rules had changed. Banks loan-to-value (LVR) ratio and debt coverage ratios had become more stringent. Banks were no longer lending on property or projects that were not solid opportunities and the ability to acquire debt above AUD 50 million was scarce. Jones Lang LaSalle recorded 107 major (over AUD 5 million) office transactions in 2009, totalling AUD 3.76 billion (Figure 1). Both the number and value of sales were comparable to It is worth noting that the 2008 figure was inflated by a number of large transactions earlier that year that were actually negotiated in 2007 and settled in 2008, while the 2009 figure did not include a number of large transactions that entered due diligence towards the end of the year. million) and 2007 (AUD million). While the average size of transaction was comparable in both 1H09 (AUD million) and 2H09 (AUD million), the number of transactions increased from 45 The average transaction size of AUD to 62 in 2H million remains well below the figure recorded in 2006 (AUD Figure 1: Total Office Transactions $8, $7, $6, $5, $4, $3, $2, $1, $ Value Number Source: Jones Lang LaSalle Jones Lang LaSalle Office Investment Market Review 3

4 Victoria and Queensland dominated transaction activity in 2009, accounting for 27.7% and 21.3% of the total value of transactions recorded. The positive fundamentals of the Melbourne office markets and the availability of assets at the private investor price point were the main drivers for strong activity in Victoria. Interestingly, there were a number of purchases made by overseas-based private investors, and a heightened interest from participants will limited exposure to the Australian property market. Activity in Queensland was driven by local private investors, a number of whom disposed of assets in the boom and re-emerged as active purchasers. Similar to 2008, there were fewer large transactions (greater than AUD 100 million). In total, seven assets above AUD 100 million were transacted compared with an average of 15 per annum between 2003 and The reduction in larger transactions and a strategy to dispose of assets in markets outside of Sydney is part of the reason for the reduced sales volume in New South Wales, which accounted for 19.5% of transactions by value. New South Wales is seen as a barometer for the sentiment of the wider market, and the turnaround in sales from AUD 112 million in 1H09 to AUD million over 2H09, coupled with the increased number of settlements in early 2010 reflects the increased optimism in Australia. On average, indicative equivalent yields appear to have stabilised for prime assets. Indeed, a number of December 2009 valuations showed capitalisation rate compression for well-leased prime assets. In 2010, additional institutional investors are expected to re-enter the market and overseas investors will become more prevalent as it is now clear that distressed quality core assets will not appear on the market. Increased competition for assets, risk premiums above historical benchmarks, the stabilisation of debt markets and the prospect of strong medium-term rental growth could lead to yield compression by late With greater depth to the buyer pool, the total and average value of transactions is predicted to increase over the next 12 months. What has happened so far in 2010? Respondents to the latest Jones Lang LaSalle Survey of Investor Sentiment (November 2009) believe that the overall real estate market is currently at the bottom of the property cycle (Figure 2). The shift in investor sentiment has been rapid from the late upturn stage in 2007, to an early downturn in In comparison the property market downturn of the early Figure 2: Total Office Transactions 6 1 Early Downturn 6 2 Late Downturn 3 Trough Nov 01 (6.0) 4 Early Upturn May 99 / May 01 / 5 Late Upturn Nov 00 / Nov 04 / 1 6 Peak 5 Jun 04 / Nov 05 / Jun 05 / Nov 06 (5.0) Nov 98 (4.9) Nov 08 (1.4) May 00 (4.7) Nov 99 (4.6) May 97 / Nov 97 / May 98 (4.3) 2 4 May 95 / Nov 94 (4.1) Nov 03 / May 03 / Nov 02 / May 02 / (4.0) May 91 (2.4) Nov 95 / May 96 / May 94 (3.9) Nov 91 (2.5) 3 Nov 92 (2.7) Nov 93 (3.2) May 92 (2.8) Nov 09 (3.0) May 93 (2.9) These figures show the position on the cycle based on the median of responses. Source: Jones Lang LaSalle 1990s took three years to progress from the peak (1990) to the trough (1993). With investors believing that the bottom of the cycle has occurred, transaction activity improved in late 2009 and a number of properties have reached settlement in the first part of With the Sydney CBD office market at the trough in terms of effective rents and the peak for equivalent yields, investors have looked to capitalise on the bottom of the cycle. There were five recorded transactions in the Sydney CBD totalling AUD million. The largest transaction to complete in 2010 was the NPS of Korea purchase of RBS Aurora Place at 88 Phillip Street, Sydney for AUD 685 million. Interestingly, a number of offshore groups have made their first entry into direct real estate in Australia. K-REIT purchased a 50% stake in 275 George Street, Brisbane for AUD million, while Aviva Investors purchased 80 Clarence Street, Sydney for AUD 29.5 million. 4 Jones Lang LaSalle Office Investment Market Review

5 2010 Major Office Transactions Q1 (greater than AUD 15 million) 2010 Sales Property Name Address Suburb Month Sale Price Initial Yield NLA (SQM) Rate ($ per sqm) Vendor Purchaser New South Wales RBS Aurora Place 88 Phillip Street Sydney Mar-2010 $685,000, % 45,328 $14,009 Commonwealth Property Investment Trust NPS 55 Hunter Street 55 Hunter Street Sydney Feb-2010 $106,100,000 ~7.0% 13,622 $7,789 ISPT Core Fund City Freeholds 80 Clarence Street Clarence Street Sydney Feb-2010 $29,500, % 5,481 $5,382 Oakland Property Holdings Pty Ltd Aviva Investors Asia Pacific Property Funds 8 West Street 8 West Street North Sydney Jan-2010 $19,000, % 6,028 $3,094 Becton Office Fund Property Bank Australia & Security Capital Corporation 60 Martin Place (50%) Sydney Feb-2010 $95,000, % 27,855 $6,821 Martin Place Property Trust Gwynvill Group 52 Alfred Street Milsons Point Jan-10 $51,000,000 ~8.0% 10,219 $4,991 Colonial Direct Property Investment Fund Lipoma Pty Ltd 107 Mount Street North Sydney Jan-2010 $33,000, % 6,201 $5,130 Century Funds Management Undisclosed Private Investor Victoria Myer Headquarters 800 Collins Street Docklands Mar-2010 $76,870, % 28,676 $5,213 Australian Prime Property Fund SEB Asset Management 1 Spring Street Melbourne Mar-2010 $67,000, % 31,776 $4,217 Record Realty Highpoint Property Group 357 Collins Street (Former Stock Exchange House) 357 Collins Street Melbourne Mar-2010 $45,000,000 N/A 21,455 Development Maxicity Australand 383 King Street West Melbourne Jan-2010 $34,000, % 12,989 $2,618 Trinity Stapled Trust/Trinty Property Trust Henkell Brothers Australia Pty Ltd 171 Collins Street 171 Collins Street Melbourne Mar-2010 $15,500,000 N/A Development Charter Hall Office REIT CBus Property Queensland 275 George Street (50%) Brisbane Jan-2010 $166,000, % 40,317 $7,952 Charter Hall Core Plus Office Fund K-REIT Asia (Australia) Trust Navision House 10 Market Street Brisbane Jan-2010 $34,254, % 6,850 $4,803 Heathley Diversified Property Fund GDI No. 33 Brisbane Office Trust South Australia Hp House 148 Frome Street Adelaide Feb-2010 $17,600, % 4,680 $3,761 ISPT Core Fund Local Government Association of South Australia

6 Economic Overview The Australian economy avoided a technical recession in 1Q09 and recorded positive growth figures in each quarter. The Economist Intelligence Unit (EIU) estimate economic growth of 0.9% for Australia in 2009, making Australia and Korea the only major advanced economy (out of 33 countries) to record positive GDP growth over the calendar year (Figure 3). A number of factors have contributed to the performance of the Australian economy. The swift policy response was highlighted by the Reserve Bank of Australia aggressively cutting the official cash rate by 425 basis points from September 2008 (7.25%) to April 2009 (3.00%) and the Federal Government s various policy measures, including direct transfer payments to tax payers and longer-term investments in infrastructure. To put the fiscal policy spend in context, the Federal Government spent approximately 5.4% of GDP on the various stimulus measures. This figure was one of the highest in the OECD, only behind South Korea (6.1%) and the US (5.6%). After reaching a low of 3.9% in February 2008, unemployment rose 1.8 percentage points to 5.7% by March Job losses were concentrated in the finance and insurance and property and business services sectors, resulting in a rise in sub-lease availability as major office space occupiers restructured, consolidated and released excess space to the market. From 3Q08 to 2Q09, sub-lease vacancy increased by 1.6 percentage points to 2.1% of total stock. Figure 3: Real GDP Growth, Advanced Countries, 2009 Annual GDP Growth 2% 1% 0% -1% -2% -3% -4% -5% -6% Japan Source: EIU Germany Denmark Italy United Kingdom Czech Republic Netherlands Spain Taiwan The resilience of the domestic economy has supported labour markets and the underlying demand for office space. Unemployment fluctuated through the course of the year before tightening to 5.6% in December 2009 and 5.3% in February The unemployment rate masks the growth in the Australian workforce, which has increased from million in March 2009 to million in January Business confidence has staged a recovery in the second half of The NAB Business Survey (February 2010) showed confidence was at an 8-year high. The majority of corporations are no longer exploring sub-lease opportunities Austria Hong Kong Belgium Greece United States Canada France Singapore Switzerland Norway Korea Australia and are willing to retain hidden vacancy in their real estate portfolios in anticipation of growth over the next two to three years. Consequently, sub-lease availability declined to 1.8% of total stock in 4Q09 and is expected to decline towards the 20-year average (1.1%) through the course of The Australian economy is forecast to rebound strongly and Access Economics project growth of 2.5% and 3.5% in 2010 and As the economic 6 Jones Lang LaSalle Office Investment Market Review

7 recovery gathers momentum, this will precipitate an upturn in employment growth for the key industry sectors and demand for office space (Figure 4). This recovery is supported by the strengthening of lead indicators such as the ANZ Job Advertisements series and the employment component of the NAB Business Survey. While the outlook for the Australian economy is positive, some negative points remain. Credit markets are improving, but the cost of debt as illustrated by the spread between corporate and government rates remains high. Overseas, the Chinese government is tightening bank lending criteria in response to overvalued asset prices and excess capacity in industry sectors, including steel production, aluminium smelters and concrete. In the US, unemployment remains at 10.0% and private sector demand remains weak. The Changing Nature of Tenant Sentiment The economic recovery is reflected by the improvement in conditions across the office markets. Leasing enquiries reached a cyclical low in June 2009 and have staged a remarkable turnaround over the second half of 2009, increasing by between 10% and 50%, depending on the market. Businesses are increasingly willing to make long-term capital investment decisions, including real estate relocation decisions. The rising level of enquiry is a precursor for increased leasing transactions, which are starting to recover and will improve further in Figure 4: Employment Growth, Key Industry Sectors y-o-y% Change 6% 4% 2% 0% Kevin George Head of Leasing Australia -2% -4% Finance & Insurance Property & Business Services Communication Services Public Administration Source: Access Economics

8 Review of 2009 Vendors Capital values fell by an average of 20% to 30% for prime office assets between December 2007 and December A number of A-REITs approached (or breached) loan covenants, although lenders were reluctant to force asset sales while buildings managed to maintain high occupancy rates and were cash flow positive. Refinancing activity continued with the Reserve Bank of Australia (Financial Stability Review, September 2009) stating that the larger A-REITs had successfully refinanced AUD 24 billion of debt since January Meanwhile, commercial mortgage backed securities markets (CMBS), which traditionally provided some diversification in funding, remained all but closed although real estate firms have generally been able to replace this financing facility mainly through bank loans. Essentially, A-REITs were able to rollover debt finance, however the spreads increased. Whilst they were able to rollover debt finance, the larger A-REITs were also successful in raising equity capital to lower gearing ratios. It is estimated that A-REITs raised AUD 14 billion in There was a disparity with the larger A-REITs with a quality portfolio of assets more successful than the smaller A-REITs that were weighted towards secondary assets. Consequently, the volume of asset sales by A-REITs was lower than expected in They remained net sellers of commercial property; however, there was limited evidence of distressed vendors even if some were highly motivated. In 1H09, the groups in the market that had cash or access to cash, mainly private and offshore investors, were active. This was due to the perceived unique opportunity to acquire good quality assets across Australia at relatively soft prices. While little on-market campaigns were conducted, the number of properties being discussed off-market was high. A clear vendor buyer gap still existed, however as time went on, this gap started to close. The narrowing proved to be short lived. In 2H09, a number of A-REITs started to withdraw assets (prime assets in particular) from sale, while pricing started to firm towards end-2009 in some instances, above June 2009 valuations. Through the course of 2009, A-REITs accounted for 11.1% of the total transactions by value. The immediate fix of a rights issue was not readily available to unlisted property trusts. Hence, the primary strategy for this sector to deal with refinancing and covenant issues and in some instances, to deal with clients redemption issues was to sell assets. In 2009, the unlisted sector accounted for 48.0% of recorded transactions (by value). Developers and property companies were net sellers in 2009, accounting for 16.6% of vendors by value. Private investors continued to be active on both sides of the ledger and accounted for 7.0% of transactions by value. Although offshore investors were net purchasers of commercial property, a number of offshore groups reduced their exposure to the Australian market. 8 Jones Lang LaSalle Office Investment Market Review

9 Offshore investors represented 7.2% of vendors by value. The Grosvenor Group disposed of 20 Hunter Street, Sydney for AUD 77 million and 25 Smith Street, Parramatta for AUD 48.4 million; while UK fund manager New Star Asset Management exited Australia after the disposal of 414 LaTrobe Street, Melbourne for AUD 49.5 million. Although syndicates only accounted for 3.8% of the vendor type by value, a number of highly leveraged syndicates are scheduled to reach maturity over the next three to four years and further asset disposals are likely. Purchasers Following on from the re-emergence of private investors in 2008, this cohort was the main purchaser type in 2009, accounting for 37.7% of transactions by value. Private investors were active in the sub AUD 60 million price category and the average price transacted by private investors was AUD 24.9 million with the median transaction even lower at AUD 14.5 million. Approximately 36.9% of the purchasers made by private investors were in Victoria. These included 215 Spring Street (AUD 59 million) and 414 LaTrobe Street (AUD 49.5 million). In contrast to other markets where private purchasers were locally based, a number of transactions in Melbourne were made by overseas-based private investors. Activity from private investors was strong in Queensland, accounting for 8.6% of total purchases or AUD million, including the HSBC Building at 300 Queen Street (AUD million) and the ICB Centre at 15 Butterfield Street, Herston (AUD 67.5 million). The investment case for Australia was strong in Around 22.5% of transactions recorded an offshore purchaser (private and institutional). The strong macroeconomic environment and excellent market transparency were highlighted by offshore investors seeking to gain an exposure to the Australian commercial property market. The due diligence process increased as offshore investors looked to reduce their unsystematic risk, focusing on a number of factors, including the employment base and growth forecasts, income level and growth and vacancy rates, as well as the characteristics of the individual property. Victoria (25.8%), the ACT (25.4%) and New South Wales (25.3%) were the main destinations for overseas investments in Deka Immobilien purchased two assets: 15 William Street, Melbourne (AUD 167 million), and the ATO building at 45 Francis Street, Northbridge, WA (AUD 95 million); while the Swiss-based AFIAA purchased the Atrium at 60 Pyrmont Street, Pyrmont, NSW (AUD 137 million). Asian interest remained strong with notable purchases including 20 Hunter Street, Sydney (AUD 77 million) by CLSA. In the second half of the year, opportunistic offshore groups realised that they had to realign their pricing as the stock started to dry up and funds started to recapitalise. This, coupled with the increase in value of the Australian dollar against major currencies, has affected the ability of some groups to invest into Australia, and subsequently, we saw the departure of some opportunistic investors.

10 Sales campaigns in late-2009 and early-2010 showed the first signs of the larger A-REITs and Wholesale trusts seeking to re-enter the investment market. Many of these groups came to the market with strong buy mandates from their investors with their major debt issues behind them. A-REITs accounted for 11.0% of the purchaser type by value, but this figure was inflated by the Commonwealth Property Office Fund purchasing 145 Ann Street, Brisbane (AUD million) and a 50% stake of Mounts Bay Road, Perth (AUD 95 million) in late Prior to the current downturn, the last major correction in property values happened in the early 1990s. After that downturn, syndicates became a preferred vehicle with defined investment periods, set distributions, struck interest rates and, on occasion, established hedging strategies. The market upswing between 2004 and 2007 led to an evolution in the type of syndicated vehicle with a number of open-ended syndicates comprising of multiple properties diversified across sectors and financed through mortgage backed securities and mezzanine debt products. Syndicates accounted for 10.2% of transactions in 2009, but there was a return to the single building syndicate of the early 1990s focused on yield and potential for income growth (Figure 5). Product Investors remained risk-conscious in 2009 and focused on income return, especially as yield decompression continued through the first half of the year. Investors do not earn income on empty space and Figure 5: Buyer and Seller Types in 2009 Others Institutions Syndicates A-REITS Developers / Property Companies Offshore Investors Private Companies and Investors Unlisted Property Trusts Source: Jones Lang LaSalle 0% 10% 20% 30% 40% 50% Buyer Vendor transactional evidence suggests that investors did not value vacant space when purchasing assets in This sentiment was also reflected in the lending practices of major lenders. The ability to access debt financing was difficult and assets that had moderate to high levels of risk were problematic to finance. Therefore, investors typically avoided assets that had a higher vacancy risk or short weighted average lease expiry (WALE) and looked for assets with a strong tenant mix and income growth potential.

11 Some of the characteristics of assets that investors have typically been searching for include: Prime or good quality B grade assets; Strong covenant to blue chip tenant(s) or public sector occupiers; There was a reduction in the volume of larger transactions in excess of AUD 100 million. Financial institutions were unwilling to take on such large exposures, and there was limited evidence of syndicated lending. Furthermore, a higher proportion of equity was required to fund purchasers compared with the period. As a result, there were only seven transactions above AUD 100 million in 2009, compared with an average of 13 transactions between 2003 and Well structured, long weighted average lease expiry; Attractive income growth potential through fixed rental increases; Showed good value with the potential for medium-term yield compression; and In some cases, repositioning potential. Breaking down the sales by market, investment activity in Victoria and Queensland was relatively firm, in part reflecting the availability of assets as the price point desired by private investors. Furthermore, the vendor was typically an unlisted property trust or A-REIT that had an investment strategy to dispose of assets in non-core locations. Comparing the different states, Victoria and Queensland accounted for 27.7% and 21.3% of all transactions by value. This was followed by New South Wales (19.5%), ACT (12.9%), WA (10.3%) and SA (8.3%) (Figure 6). Figure 6: Transactions by Market and Average Value Share of Transactions VIC QLD NSW ACT WA SA Total Share Average Transaction Size Source: Jones Lang LaSalle Average Value 42,500,000 40,000,000 37,500,000 35,000,000 32,500,000 30,000,000 27,500,000 25,000,000

12 Yields Yield decompression that started in 2008 continued through the 1H09, before slowing in the second half of the year. It appears that the process of yield adjustment has occurred for prime assets. A cyclical reversal of rental growth, rising vacancy and rising risk premium for commercial property (and other asset classes) were the main drivers pushing yields higher in Through 2H09, the clouds around each of these factors started to lift. Rents stabilised in the financial centres (Sydney and Melbourne), while the rate of decline is slowing in the resource-dominated markets (Brisbane and Perth), vacancy pressures are starting to moderate with the cyclical vacancy peak being revised down, while risk aversion on many indicators such as corporate bond spreads, appear to be subsiding. Since peaking in 4Q07, yields have softened across all markets by between 175 and 200 basis points for prime assets. The exception is Canberra where prime yields have moved out by an average of 125 basis points. Investor risk aversion is highlighted by the disproportionate interest in the Canberra market from offshore investors and domestic private investors who have sought out counter cyclical opportunities with strong covenants, long lease terms and high NABERS energy ratings. In this regard, there are few commercial markets in the world with characteristics similar to Canberra. The current downturn highlighted the mispricing of risk in the commercial sector, cumulating in the spread between prime and secondary assets compressing to the tightest level on record in late Greater yield decompression has been recorded for secondary assets, and in most markets, the re-establishment of the historical prime/secondary yield spread has occurred (Table 1). 12 Jones Lang LaSalle Office Investment Market Review

13 Australian CBD office markets have shown a strong positive relationship with the inflation-adjusted bond rate. The market downturn and rising investor risk aversion resulted in prime equivalent yield decompression and a rise in the risk premium. The real bond rate has stabilised slightly below 3.00%, resulting in an implied risk premium above the long-term average in all CBD office markets (except Canberra) (Figure 7). Based on this valuation benchmark, prime assets are in fair value to cheap territory and we expect the historical risk premium to be re-established in 2010 and 2011 as investor confidence increases. Market Balance The national vacancy rate increased by 2.5 percentage points to 8.0% in As the CBD office markets approach a point of inflexion, the headline vacancy rate remains within the 7% to 8% band generally regarded as equilibrium for the national markets. Completions across the national office markets peaked in 2009 with approximately 659,200 sqm of new and refurbished space entering the market was a year of two halves for the Sydney CBD office market. Negative net absorption was recorded in 1Q09 and 2Q09 as tenants contracted and sub-lease availability continued to rise. Figure 7: Equivalent Investment Yields and Real Bond Rate Spread Basis Points Adelaide Brisbane Canberra Melbourne Perth Sydney Source: Jones Lang LaSalle Jones Lang LaSalle Office Investment Market Review 13

14 The market recorded four successive quarters of negative net absorption (3Q08 to 2Q09) totalling 194,700 sqm, or 4.1% of total stock. From a demand perspective, conditions in the Sydney CBD were weaker than the early 1990s. However, the rise in vacancy was stemmed by a reduction in total stock. Vacancy rose from 7.5% in 2008 to 8.9% in 2Q09 before tightening to 8.2% by year-end as the tentative recovery in tenant demand resulted in positive net absorption (22,100 sqm) for 2H09. From a demand perspective, Melbourne was the stand out performer. Net absorption totalled 64,000 sqm in 2009 led by pre-commitments to new developments and the continued net flow of tenants from the fringe and suburban markets to the CBD. Vacancy increased from 5.3% in 2008 to 6.4% in 2009 as backfill space became available from the completion of 153,200 sqm during the year. After an extended period of below average vacancy, completions totalled 222,200 sqm in the Brisbane CBD, equating to 12.3% of total stock. Approximately 80% of the space was pre-committed or leased by year-end and net absorption was 63,600 sqm. However, restrained tenant demand for backfill space resulted in vacancy rising by 6.4 percentage points through the year to 10.2%. Similar to Brisbane, completions in the Perth CBD were strong (92,200 sqm), pushing the headline vacancy rate out to 7.7%. Negative net absorption ( 7,100 sqm) was recorded in 2009, although there 2010 will continue the strong ending to 2009, which marked the return of A-REITs and Superannuation funds to the investment market. This, combined with the continuation of offshore buyers looking to gain exposure to the Australian commercial market, will see the depth of demand for prime assets continue to increase. The recent campaign for RBS Aurora Place provided an insight into the level of investor demand for a rarely traded premium asset. The fundamentals of the Australian office markets remain positive and the prospect of yield tightening over the short to medium term as historical relativities are restored is expected to drive total returns above the long-term benchmark in Sydney and Melbourne. was a noticeable turnaround in sentiment in the second half of the year with the approval of the Gorgon Gas development precipitating a strong recovery in leasing enquiry. With a moderate development pipeline and soft tenant demand, vacancy in the Adelaide CBD drifted out by 4.4 percentage points through 2009 to 8.2%. Despite the rise in vacancy, the current figure remains below the 10-year average (8.8%). Figure 8: CBD Office Markets, Vacancy Rates National Brisbane Canberra Sydney Adelaide Perth Melbourne Canberra recorded another year of strong completions in 2009 (99,900 sqm). Tenant demand was subdued in 1H09, but recovered in the second half of the year as the growth in the public sector translated into positive net absorption. Vacancy peaked at 9.4% in 2Q09, before tightening to 8.5% by year end (Figure 8). 0% 2% 4% 6% 8% 10% 12% Dec-07 Dec-09 John Talbot Head of Capital Markets Australia Source: Jones Lang LaSalle 14 Jones Lang LaSalle Office Investment Market Review

15 What does 2010 hold? Market Fundamentals Yields The outlook for prime yields has improved as rents approach the trough in the current cycle. In previous market recoveries, investment yields have tightened on the expectation of rental growth. Furthermore, yields over-correct during market downturns. Valuation benchmarks such as the spread between the property yield and the real bond rate indicate that prime assets in CBD office markets are in cheap territory with the risk premium between 40 (Adelaide) and 110 (Melbourne) basis points above the 10-year average. The exception is Canberra where counter cyclical drivers and a re-rating of the market have ensured that investor activity remains strong. Base Office Demand There has been an improvement in the lead indicators for office demand in late The NAB monthly Business Survey (February 2010) showed that confidence rebounded to an eight-year high, while the employment component of the survey continues to improve and is now above long-term averages. Furthermore, the ANZ Job Advertisements Series (February 2010) noted that job advertisements troughed in July 2009 and were up 28% through February. The improvement in these surveys is reflected in Access Economics outlook for employment growth in the finance and insurance and property and business services sectors at 3.2% and 4.1% in The upturn in business confidence precipitated a recovery in leasing enquiry figures. All markets recorded increased enquiry levels in the second half of 2009, and leasing activity is expected to improve as tenants take advantage of the softer rental market conditions and the availability of prime contiguous space to upgrade or consolidate their real estate requirements. Consequently, net absorption across the CBD office markets is forecast at between 225,000 sqm and 275,000 sqm in 2010, above the 48,400 sqm recorded in Supply Total completions across CBD office markets in 2010 are forecast to be strong at 622,500 sqm, slightly down from the levels recorded in 2009 (660,000 sqm). Almost 55% of the space under construction is pre-leased. Completions are forecast to be strong in Canberra (160,100 sqm), Perth (136,500 sqm), Sydney (126,500 sqm) and Melbourne (118,200 sqm). Completions will slow from the record levels in Brisbane (72,900 sqm), while there is minimal new development in Adelaide (5,420 sqm). Access to development finance remains difficult while major occupiers have been reluctant to pre-commit. Furthermore, the rise in capitalisation rates has raised the rent required for developer feasibility models. Only seven new developments in excess of 10,000 sqm commenced in 2009 and given a lead time of months for a major CBD development, short to medium-term supply additions are forecast to be relatively benign. At the onset of the credit crunch in late-2007, Jones Lang LaSalle Research forecast supply additions of 1.48 million sqm between 2011 and 2013, a figure which has been revised down to 763,000 sqm in our current forecasts. Vacancy Rates At 8.0%, the vacancy rate remains within equilibrium for the national office market. Over the next 12 months, vacancy is predicted to rise and reach a cyclical peak between 9.0% and 9.5%. Tenants are starting to upgrade from secondary to prime space and similar to previous cycles, vacancy will be displaced to poorer quality secondary-grade assets.

16 Effective Rents Prime gross effective rents appear to have reached the trough in the financial centres (Sydney and Melbourne) while the rate of decline is starting to slow in the resource-dominated markets (Brisbane and Perth). There is a strong positive correlation between vacancy and incentives in Australian office markets. The following chart shows quarterly observations over the past 25 years. The current levels of incentives in the Sydney CBD office market are outliers on the time series. Essentially, landlords offered a higher level of incentive in 2009 to maintain occupancy rates and cash flow over what was expected to be a protracted downturn. As the market stabilises, leasing incentives will ease to a level more attuned to market fundamentals in Sydney (and Melbourne), resulting in positive effective rental growth from late-2010 onwards. The correction in Brisbane and Perth effective rents is expected to continue for a further 12 months, before stabilising in 2011(Figure 9). Buyer Profile The relative strength of the Australian economy has not gone unnoticed by domestic and overseas property investors and it is evident that distressed quality prime assets will not appear on the market. Furthermore, risk premiums for prime assets are above historical benchmarks and the prospect of rising income in the medium term will attract a greater depth to the buyer pool than the last two years. Sales campaigns in late-2009 showed larger A-REITs that are now focused on the first signs of the large A-REITs growing portfolios to boost dividends to and Wholesale trusts re-entering the shareholders. Nevertheless, the extent of investment market to compete for rarely the debt refinancing task over the next few traded prime assets. Most analysts years ensures that smaller A-REITs will estimate that the A-REITs have raised continue to be active vendors and look to excess capital relative to optimal gearing dispose of non-core assets. and acquisitions will be a key strategy for Figure 9: Sydney CBD Vacancy Rate and Incentives Incentives (Months Rent Free on a 10-Year Lease) F 0 0% 5% 10% 15% 20% 25% Vacancy Rate Source: Jones Lang LaSalle 16 Jones Lang LaSalle Office Investment Market Review

17 The Australian investment market continues to appear attractive for a number of global property investors, with the combination of a highly developed and transparent real estate market and solid fundamentals in comparison with a number of mature markets in North America and Europe. There are, however, hurdles to entry. On a trade weighted basis, the AUD rose 25.8% between 2008 and November 2009, and by 32.4% against the USD. The appreciation of the AUD may represent a hurdle for overseas investors looking to gain exposure to the Australian real estate markets. The prospect of strong capital value over the medium term will see overseas institutions with global mandates target Australia, but as other mature market approach a trough in the value cycle and start to offer stronger upside potential, Australia may see a reduction in the level of counter cyclical overseas investors. As a result of growing institutional and overseas interest, the total and average value of transactions is predicted to increase over the next 12 months. We expect to see more transactions in excess of AUD 100 million relative to 2008 and 2009, although it is unlikely it will be to the level recorded between 2003 and Private investors will continue to seek out counter cyclical opportunities. As the demand outlook continues to firm and most markets have a moderate development pipeline, the growing competition amongst private investors will encourage them to consider assets that at the time of purchase offer some risk such as vacancy, competition and lease expiry. Even with a higher risk, these assets offer the opportunity for innovative strategies to maximise both capital and income returns. A compelling case for the refurbishment of secondary assets is emerging. Benefits include tenant retention, increased income and lower vacancy. The market is more discerning regarding covenant, lease term and the physical attributes of an asset and refurbishment can amortise the yield spread and owners can achieve a significant return on investment through a minor or staged refurbishment. Consequently, property companies and private investors will start to target asset with refurbishment potential as the year progresses. Jones Lang LaSalle Office Investment Market Review 17

18 Major Transactions Throughout Grenfell Street Location: Adelaide Sale Date: April 2009 Sale Price: AUD 76 million NLA: 25,244 sqm Rate: AUD 3,011 per sqm Initial Yield (passing income): 9.67% Vendor: AMP Life Ltd Purchaser: GDI Property Group A landmark office tower, 25 Grenfell Street is a 23-storey building positioned at the centre of the Adelaide CBD. This makes the property easily accessible through all forms of public and private transport, and is highly visible from the flight path. The AUD 76-million building has a total NLA of 25,244 sqm and sale rate of AUD 3,011 per sqm. It comprises basement car parking, a plaza, modern foyer, retail accommodation on the ground level and quality office accommodation from the 1st to the 23rd levels. 300 Queen Street Location: Brisbane Sale Date: June 2009 Sale Price: AUD million NLA: 19,167 sqm Rate: AUD 5,721 per sqm Initial Yield (fully leased): 8.24% Vendor: Colonial Office Fund Purchaser: S.KW Pty Ltd Commonly known as the HSBC Centre, 300 Queen Street is a 24-storey commercial office building that is prominently situated at the heart of the Brisbane CBD. The AUD million building has a total NLA of 19,167 sqm and a price rate of AUD 5,721 per sqm. It comprises 18,213 sqm of Grade A office accommodation and 954 sqm of prime retail space adjacent to the Post Office Square. 33 Breakfast Crek Road Location: Newstead, Queensland Sale Date: July 2009 Sale Price: AUD 173 million NLA: 30,904 sqm Rate: AUD 5,598 per sqm Initial Yield (fully leased): 7.73% Vendor: FKP Commercial Developments Pty Ltd Purchaser: Cromwell River Park Trust Gasworks is a landmark commercial and retail building. This development is currently under construction within the AUD 1-billion master-planned Newstead Riverpark mixed-use development. Targeting a sixstar Green Star rating, the development will comprise basement car parking on two levels, retail accommodation on the ground level and office space on the upper six levels. Upon completion, the building will provide 28,614 sqm of commercial accommodation and 2,290 sqm of retail space. The purpose-built complex will accommodate Energex, which has fully leased the commercial component of the building as well as 252 car bays for an initial term of 15 years. Australian Tax Office Headquarters Location: Genge Street, Canberra Sale Date: July 2009 Sale Price: AUD 205 million NLA: 42,680 sqm Rate: AUD 4,803 per sqm Initial Yield (fully leased): 7.43% Vendor: QIC Purchaser: Real IS Commonly known as the Australian Tax Office Headquarters, the ten-storey office building is situated along Genge Street in Canberra. The property, which was completed in 2008, is part of the AUD 500-million redevelopment of Section 84 by Queensland Investment Corporation (QIC). It has a total NLA of 42,680 sqm and a sale rate of AUD 4,803 per sqm. The building includes two storeys of basement car parking, which has about 400 parking bays. Achieving a 4.5 NABERS rating, the property comprises 1,584 sqm of retail space and 41,096 sqm of office accommodation 15 William Street Location: Melbourne Sale Date: June 2009 Sale Price: AUD 167 million NLA: 40,844 sqm Rate: AUD 4,089 per sqm Initial Yield (passing income): 8.85% Vendor: AMP Capital Investors Purchaser: Deka Immobilien Known as 15W, 15 William Street is a 20-storey office building that is located at the heart of Melbourne s highprofile financial district. It enjoys extensive frontage to William and Flinders streets, and Flinders and Custom House Lanes. The building, which was constructed in 1967 and completely refurbished and upgraded in 2006, currently provides Grade A office accommodation and incorporates parts of the ground floor for retail use and parking space. It has a total NLA of 40,844 sqm and a sale rate of AUD 4,089 per sqm. 18 Jones Lang LaSalle Office Investment Market Review

19 120 Harbour Esplanade Location: Docklands, Melbourne Sale Date: April 2009 Sale Price: AUD million NLA: 8,019 sqm Rate: AUD 4,116 per sqm Initial Yield (passing income): 8.60% Vendor: APN Purchaser: Private Investor A signature Grade A office building, 120 Harbour Esplanade is located within Melbourne Docklands Australia s premier commercial growth centre. The eight-storey property, which features a modern design and was completed in 2005, enjoys outstanding waterfront views and is securely leased to a high-profile blue chip tenant. The building, which has a total NLA of 8,019 sqm and a price rate of AUD 4,116 per sqm, provides 50 parking slots on the basement level. 45 Francis Street Location: Northbridge, Perth Sale Date: March 2009 Sale Price: AUD 95 million NLA: 22,013 sqm Rate: AUD 4,316 per sqm Initial Yield (fully leased): 9.78% Vendor: Macquarie Purchaser: Deka Immobilien Accredited with a five-star NABERS energy rating, 45 Francis Street provides one of the largest floor plates in Perth. Constructed in 1992, the property offers a high level of income security with a lease to the Australian Taxation Office expiring in The property, which has a total NLA of 22,013 sqm and a sale rate of AUD 4,316 per sqm, comprises five levels of Grade A office space, a basement car parking and eight retail tenancies on the ground floor. 81 St Georges Terrace Location: Perth Sale Date: March 2009 Sale Price: AUD 38 million NLA: 11,911 sqm Rate: AUD 3,190 per sqm Initial Yield (fully leased): 6.37% Vendor: Macquarie Purchaser: Private Investor Enjoying high exposure to pedestrian traffic, 81 St Georges Terrace is located on the southern side of St Georges Terrace intersecting Howard Street. The property, which has a total NLA of 11,911 sqm and a sale rate of AUD 3,190 per sqm, comprises office space on the upper 11 levels, a retail space on the ground level and a basement parking on the lower ground level. 343 George Street Location: Sydney Sale Date: July 2009 Sale Price: AUD 55 million NLA: 10,328 sqm Rate: AUD 5,325 per sqm Initial Yield (fully leased): 8.59% Vendor: Dexus Property Group Purchaser: Abacus Property Group Heritage-listed 343 George Street is a ten-storey commercial office building situated on the south-west portion of the CBD core precinct, which enjoys direct frontage to George and Barracks Streets. The 1,169 sqm site, which was completed in 1925 and refurbished in 2006, has a total NLA of 10,328 sqm and a sale rate of AUD 5,325 per sqm. It comprises 834 sqm of retail space on the ground level and 8,450 sqm of office space, with the remaining area comprising lower ground and basement accommodation. 60 Union Street Location: Pyrmont, Sydney Sale Date: November 2009 Sale Price: AUD 137 million NLA: 19,790 sqm Rate: AUD 6,923 per sqm Initial Yield (fully leased): 7.33% Vendor: Charter Hall Group Purchaser: AFIAA Foundation for International Real Estate Completed in 2006, Atrium or 60 Union Street is located in Pyrmont, Sydney. The property comprises an eightstorey commercial building, a four-storey terrace building and a retail space on the ground floor and lower ground floors. The eight-storey tower is allocated for office space, while the four-storey terrace building that fronts Union Street comprises retail space on the lower ground floor and office space on three floors. The building, which was accredited with a four-star NABERS rating, has a total NLA of 19,710 sqm and a sale rate of AUD 6,923 per sqm. It comprises two levels of basement parking with 182 parking slots. Jones Lang LaSalle Office Investment Market Review 19

20 2009 Major Transactions (greater than AUD 15 million) All Office Transactions 2009 Property Name Address Suburb Month Sale Price Initial Yield NLA (sqm) Rate ($ per sqm) Vendor Purchaser New South Wales Quay Street Haymarket Feb $38,000,000 N/A Site N/A NGI Investments Metroland Australia Limited George Street Sydney Feb $24,000,000 N/A Site N/A Derisi Pty Ltd Terra Australis Property Fund 1 Bligh Street Sydney Feb $210,000,000 N/A Site N/A Dexus Property Group Cbus Property 50 Margaret Street Sydney May $40,500, % 8,722 $4,643 Challenger Hybrid Fund Phillip Wolanski Kindersley House 33 Bligh Street Sydney Jul $75,000,000 N/A 18,241 $4,752 Investa Funds Management Ltd Energy Australia 343 George Street Sydney Jul $55,000, % 9,932 $5,538 Dexus Property Group Abacus Property Group Macquarie Place 45 Macquarie Street Parramatta Jul $15,000,000 N/A Site N/A Becton Property Group Crown International Holdings Group 54 Park Street Sydney Aug $50,000, % 15,950 $3,135 PBL Property Pty Ltd AMP Capital Investors Limited George Street Sydney Oct $85,000, % 16,554 $5,135 Challenger Coombes Property Group The Atrium 60 Union Street Pyrmont Nov $137,000, % 16,800 $6,919 Charter Hall Core Plus Office Fund AFIAA Foundation for International Investments AMP Building 20 Hunter Street Sydney Nov $77,000, % 9,942 $7,745 Grosvenor Group CLSA 25 Smith Street Parramatta Nov $48,400, % 11,058 $4,377 Grosvenor Group Private Investor 234 Sussex Street Sydney Nov $46,000, % 10,020 $4,591 Stockland Property Group Clipper Property Group 93 George Street Parramatta Dec $18,500, % 7,217 $2,896 Becton Office Property Fund No. 2 Quintessential Constructions Victoria Bourke Street Melbourne Jan $34,000, % 15,132 $2,247 Macquarie Direct Property Fund Manhattan Investments Chandler McLeod Bourke Street Melbourne Feb $42,000, % 9,290 $4, Bourke Street Pty Ltd Royal Automotive Club of Victoria 1 Spring Street* Melbourne Apr $65,200, % 31,776 $4,115 Australian Prime Property Fund Henroth Group IOOF Centre 303 Collins Street Melbourne Apr $56,000, % 20, 591 $2,720 Macquarie Direct Property Fund Phileo Australia Limited Victoria Point Docklands - Stage Harbour Esplanade Melbourne May $33,010, % 8,019 $4,116 APN Direct Property Fund Private Investor 15W 15 William Street Melbourne Jun $166,500, % 40,400 $4,121 AMP Australian Core Property Portfolio Deka Immobilien Investment Victoria Police 412 St Kilda Road Melbourne Jun $42,000, % 16,285 $2,579 ING Office Fund Private Syndicate 369 Royal Parade Parkville Jun $19,930, % 8,676 $2,297 Investa Property Group Riverlea Aviva House St Kilda Road Melbourne Jul $55,000, % 19,687 $2,794 Dexus Wholesale Property Fund Calibre Capital 215 Spring Street Spring Street Melbourne Aug $59,000, % 15,500 $3,806 Colonial First State (Private Investor Fund 1) Knowles Group Australian Tax Office 990 Whitehorse Road Box Hill Aug $43,800, % 26,650 $2,121 ING Office Fund Glorious Sun C Leicester Street Carlton Aug $29,800,000 N/A 7,000 $4,157 Blue Earth Developments Pty Ltd Melbourne University 456 Lonsdale Street Melbourne Aug $27,000, % 8,226 $3,282 Maquarie Direct Property Fund Undisclosed Collins Street Melbourne Sep $52,250, % 17,800 $2,935 Orchard Commercial Office Fund Private Investor Doncaster Corporate Park Stage Doncaster Road Doncaster Sep $17,300,000 N/A N/A N/A Mirvac Real Estate Investment Trust Undisclosed Customs House 414 La Trobe Street Melbourne Oct $49,500, % 14,415 $3,434 New Star Asset Management Juilliard Group 883 Whitehorse Road Box Hill Oct $24,300, % 7,237 $3,358 Blackrock Undisclosed 128 Exhibition Street Melbourne Oct $15,000, % 4,778 $3,139 AMP Capital Investors Salvest Capital 606 St Kilda Road Melbourne Nov $23,750, % 8,659 $2,731 Becton Office Property Fund Private Investor 446 Collins Street Melbourne Nov $18,300, % 5,350 $3,421 Becton Investment Management H & TSC Pty. Ltd. Owen Dixon Chambers West Lonsdale Street Melbourne Dec $54,000,000 N/A 19,000 $2,842 Private Investors Barristers Chambers Limited * 50% Stake

21 All Office Transactions 2009 Property Name Address Suburb Month Sale Price Initial Yield NLA (sqm) Rate ($ per sqm) Vendor Purchaser Queensland 321 Montague Road West End Feb $20,120,000 N/A N/A Site Energex Mirae Asset ICB Central 15 Butterfield Street Herston Mar $67,500, % 11,254 $5,998 Mirvac Domaine SEQ Growth Fund Bergh Pty Ltd 380 Queen Street Brisbane Apr $19,000, % 4,359 $4,359 Aria Securities Pty Ltd Mineralogy Pty Ltd 159 Coronation Drive & 5 Cribb Street Milton May $21,060, % 5,371 $3,921 Becton Diversified Direct Property Fund Private Investor HSBC Building 300 Queen Street Brisbane Jun $109,650, % 19,167 $5,721 Commonwealth Property Office Fund S.KW Pty Ltd Energex Building 33 Breakfast Creek Road Newstead Jul $173,000, % 30,904 $5,598 FKP Property Group Cromwell Riverpark Trust Ann Street Brisbane Aug $21,500, %* 6,679 $3,219 Macquarie Direct Property Fund City of Brisbane Investment Corporation 164 Grey Street South Brisbane Aug $15,000, % 3,079 $4,872 Mirvac Funds Ltd Renweed Queen Street Brisbane Sep $23,800, % 5,878 $4,049 Trinity Enhanced Return Fund Undisclosed National Bank Central 180 Queen Street Brisbane Sep $22,000,000 N/A 3,652 $6,024 Mirvac PFA Diversified Property Fund Private Investor 400 Queen Street Brisbane Oct $15,750, % 3,989 $3,948 Trinity Enhanced Return Fund Private Investor State Service House 96 Albert Street Brisbane Oct $15,250, %* 3,341 $4,565 Devine Ltd Undisclosed King George Central 145 Ann Street Brisbane Nov $208,100, % 27,820 $7,534 Leighton Properties Pty Ltd Commonwealth Property Office Fund Centenary Square 108 Wickham Street Fortitude Valley Nov $63,500, % 11,885 $5,343 Fortius Fund Management Pty Ltd Primewest Western Australia St Georges Centre 81 St Georges Terrace Perth Mar $38,000, % 11,910 $3,191 Macquarie Bank Nick Tana ATO 45 Francis Street Northbridge Apr $95,000, % 22,013 $4,316 Macquarie Bank Deka Immobilien Investment Phillips House 53 Ord Street West Perth Jun $41,500, % 6,864 $6,046 Commonwealth Property Office Fund Primewest Management 1100 Hay Street West Perth Jun $38,000, % 7,244 $5,246 Macquarie Bank (Macquarie Office Trust) Private State One House St Georges Terrace Perth Jun $35,000, % 6,265 $5,586 GE Real Estate Investments Undisclosed Alluvion Mounts Bay Road Perth Nov $95,000, % 22,395 $8,484 Charter Hall Opportunity Fund (No. 4) Commonwealth Property Office Fund South Australia Australian Taxation Office Waymouth Street Adelaide Jan $51,000, % 17,878 $2,853 Trust Company of Australia Ltd KTS Properties Pty Ltd Chesser House Grenfell Street Adelaide Jan $34,500, % 11,483 $3,004 Stocklands Chesser Properties Pty Ltd Naylor House 191 Pulteney Street Adelaide Feb $49,000, % 16,000 $3,062 Macquarie Office Trust Perpetual Trustee Co Ltd Grenfell Centre 25 Grenfell Street Adelaide Apr $76,000, % 25,244 $3,011 AMP Life Ltd GDI Property Group 115 Grenfell Street Adelaide Aug $41,000, % 13,238 $2,949 Investa Diversified Office Fund Grenfell 115 Pty Ltd 80 King William Street King William Street Adelaide Oct $21,750, % 8,105 $2,684 Trinity Funds Management Limited Peter Tunno Conservatory on Hindmarsh Grenfell Street Adelaide Nov $16,400, % 4,050 $4,049 Grenfell East Century Funds Management * Equivalent Yield

22 All Office Transactions 2009 Property Name Address Suburb Month Sale Price Initial Yield NLA (sqm) Rate ($ per sqm) Vendor Purchaser ACT 38 Akuna Street City Jan $22,000,000 N/A 12,522 $1,757 MacarthurCook Office Property Trust Amalgamated Property Group 62 Northbourne Avenue City Feb $38,000, % 10,218 $3,719 Investa Property Group Credit Suisse Real Estate Fund International Industry House 10 Binara Street City May $123,000, % 28,250 $4,918 AMP Capital Wholesale Office Fund Andrew Roberts ATO Stage 2 Genge Street City Jul $205,000, % 48,045 $4,163 QIC Real I.S. 64 Allara Street City Jul $18,500, % 3,154 $5,866 Orchard Funds Management Australian Ethical Investment Northbourne Avenue Offices 82 Northbourne Avenue Braddon Nov $44,000, % 6,799 $6,472 Melvip Undisclosed (Private Investor, Australia) Perpetual Trustee 10 Rudd Street City Nov $18,700, % 4,739 $3,946 Mirvac Real Estate Investment Trust Strada Pty Ltd * Equivalent Yield

23 Authors John Talbot Head of Capital Markets, Australia john.talbot@ap.jll.com John Talbot is the Australian Head of Capital Markets at Jones Lang LaSalle. John is a 25-year veteran of the commercial property industry in Australia with a background in institutional valuations, consulting, agency and in more recent years major investment sales. As the leader of the his firm s Capital Markets business, John has been involved in some of the largest investment transactions in Australia over many years including Chifley Tower and Aurora Place in Sydney, the Melbourne Central complex in Melbourne, Central Plaza in Brisbane and Central Park in Perth. Andrew Ballantyne Associate Director, Research andrew.ballantyne@ap.jll.com Andrew joined Jones Lang LaSalle in July 2007 and is an Associate Director within the national research division. He is responsible for managing the provision of strategic research services to all of Jones Lang LaSalle s Victorian business lines and for conducting primary research on the national office markets. Andrew also undertakes consultancy assignments across the property sectors for overseas and domestic clients and is a key resource for the Jones Lang LaSalle: Real Estate Intelligence Service. Andrew is an experienced industry researcher with over nine years experience in the property and transport and logistics industries. Andrew holds a Bachelors degree in Business Economics (with honours) and a Master of Applied Research.