Annual Conference - 2012 Shangri-La Hotel, Cairns Tropical North QUEENSLAND 22nd – 26th August 2012

Yields, Price & Volume

Australia & NZ Capital Inflows

As at may 2012

Ray White NZ vs Aus

East Coast Residential Sales

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

sydney house volumes melbourne house volumesbrisbane house volumes sydney median house pricemelbourne median house price brisbane median house price

Source: Real Estate Insitute of Qld, Nsw, Vic & LandMark White Research

Sydney, Melbourne and Brisbane median house price and house volumes

What are the main reasons people are buying?

Latest % Month Ago

% Average

%

Fear of missing out/Feel time is right for prices 9.8 14.6 10.9

Trading up 10.9 13.1 14.2

Trading down 10.9 13.9 16

Shifting into town 11.4 16.6 15.3

Arriving from overseas 4 5.5 5.6

Relationship breakdown 8.4 11 12

Commuting costs 1.7 1.8 2.4

Schooling 5.3 9.2 8.2

Want closer proximity to shops 1.3 2.5 2.1

Want closer proximity to relatives 1.5 2.5 2.7

Want closer proximity to health care services 1.2 2.5 2.1

Investing 0.4 0.5 0.5

First home 15.1 2.3 2.2

Earthquake 0.2 0.9 1.5

Good interest rates 16.2 0.7 1.4

Other 1.5 2.6 3.2

Source:

REINZ Residential Survey August 2012

NZ Survey

NZ Survey What are the main factors motivating vendors to sell

Latest %

Month Ago % Average %

They think prices are going to fall 2.4 3.4 3

Need the money 14.1 16.8 18.9

Trading up 11.4 13.5 11.6

Trading down 15.6 16.9 16.4

Leaving town 10.9 14.3 13.8

Leaving the country 6.3 8.7 7.5

Relationship breakdown 13.5 13.9 15.4

Commuting costs 1.2 0.6 1.3

Schooling 2.4 3.9 3.2

Want closer proximity to shops 0.9 1.1 1.1

Want closer proximity to relatives 1.2 2 1.7

Want closer proximity to health care services 1.4 2.6 2.2

Earthquake 0.3 0.2 0.4

Bank request, job loss 0.3 0 0.1

Retirement 9.9 0.2 0.9

Estate sales 6.6 0.1 0.6

Other 1.6 1.7 1.9

Source:

REINZ Residential Survey August 2012

Hong Kong Rents Fall

Source: The Wall Street Journal 13/08/12

American Residential Trends

CBD Office Market

Office Leasing- Mining Activity • Groote Eylandt Mining Company (GEMCO) recently Leased 900² in 333 Ann Street.

• GEMCO are a JV between BHP and Anglo American Corp based in South Africa that are expanding their operations in Brisbane after leasing 1,200sqm in Riparian Plaza last

year.

Dubbo Retail Delroy Park Shopping Centre Dubbo • 2,500m² Woolworths • 15 Speciality shops • 3 to be leased • c. $500/m² • 195 Car Parks

• 5 - 6 Woolworths

appointments • More in the Pipeline

Perth Industrial Lease • Annual Rental $1M p.a Tenant: Milne Agrigroup Pty Ltd

• 20yr + 10yr + 5yr + 5yr

• Whole site - 8 h.a • Leased Portion - 6 h.a

Rural Foreign Investment Tanumbirini NT • Sold for $32 M

• 28,000 cattle.

• 1.25 million acres

• Purchased by an English Fund making their first

Australian purchase.

Queensland New Households & Approvals

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

no. o

f sa

les

and

appr

oval

s

quarter ending

queensland new house sales & approvals

new house sales private house approvalsSource: HIA, ABS & LandMark White Research* approvals to March only

First Home Buyers

• First-home buyer activity is rising - 30% rise in sales to first-timers in June, compared to June last year.

• The number of first home owners grants in the June Quarter rose to 5,413, up from 4,005 same time last year. Source: Australian Bureau of Statistics and Office of State Revenue

19 Chapman Court, Eimeo Rent from: $480/wk in 2011 $550/wk in 2012

Mackay - Residential

33 Kohuna Sands Resort, Bucasia Rent from: $320/wk in 2011 $350/wk in 2012

Mackay - Residential

1/12 Kent Street, Regency Heights Rent from: $305/wk in Jul 2011 $480/wk in Jan 2012

Gladstone - Residential

13 Delacour Drive Rent from: $340/wk in April 2007 $800/wk in July 2012

Mount Isa - Residential

51 Nautilus Street Sale Price: $720,000 in July 2006 $450,000 in Aug 2012

Port Douglas - Residential

19 Waterfall Close Sale Price: $750,000 in March 2007 $750,000 in April 2012

Cairns - Residential

11 Pascoe Close Sale Price: $450,000 in March 2008 $375,000 in Mach 2012

Cairns - Residential

Unit 402 Allegra Sale Price: $606,000 in Sept 2005 $360,000 in Feb 2011

Hervey Bay - Residential

237 Shute Harbour Road Sale Price: $800,000 in December 2009 $470,000 in Aug 2012

Airlie Beach - Residential

Cumberland court Airlie Summit Estate Sale Price: Lot 25 - $330,000 in 2006 Lot 24 - $312,500 in 2007 Lot 26 - $335,000 in 2007 Lot 23 - $75,000 in 2012

Airlie Beach - Residential

Plantation Lot A Sale Price: $1,733,000 in August 2003 $770,000 in July 2012

Airlie Beach – Residential Development Site

Residential Development Sites

2012 • High level investigation and Due

Diligence

• Competition is rare

• Limited quantum of offers

• No fear of losing a deal

• Prevalence of Buyer “Remorse”

Pre-GFC • Sale was about buyer management

• Multiple offers above price

expectation

• Unprecedented competition

• Fear of loss / missing a deal was

paramount

Transaction Idiosyncrasies

Buyer Behaviour Current Market • Commitment to acquisitions

overly cautious

• Buyers well organised

• Debt funding either

- pre-arranged

- not relied upon

• Site acquisitions often made from

100% equity

Pre-GFC • Limited investigation

• Aggressive pricing often based on

future price escalation

• Debt funding post acquisition

• Little equity invested into

developments

Funding Current • Challenging environment for acquisition

funding

• Lenders repositioning their requirements

since 2008

• Non-income producing asset a burden

• Shaping what the market is looking for

• Focus on funding recycling equity –

faster turn around of developments

Pre-GFC • 2007 approx. 42 Lenders in the

market

• No problem arranging Debt funding

both for site acquisition and

development

• Land considered a strong asset in

portfolio

What the market is looking for

• Approved / De-risked sites • Rate of Sale is the key • Little interest in price maximisation of

“product” • Fast turnaround of developments • Affordable end of the market

Auctions

Innovative Solutions for Realising Property

The Challenge

• Lower enthusiasm in the market – “Wait and See”

• The amount of Mortgagee / Receiver property on the market “is it still a point of difference?”

• A belief in many purchasers minds that the ball is in their court and they can decide when to purchase and for how much – “Buyers Market”

Case Study - Southport Central 3

Case Study - Southport Central 3

• Southport Central 3 – third and final tower of a $700 million development, started by Raptis

• 1 level of retail

• 11 levels of commercial office accommodation

• Topped by 258 residential units

• 4 Sales in the past 2 years

Gold Coast Net Absorption (6 monthly)

Southport Central 3 Target Market & Needs

Target Market:

NEEDS:

Settlement Terms:

Occupation: .

. Fit Out Contribution:

Local Owner Occupiers & Investors

Approximately 12 Months Settlement

Occupation for Owner Occupiers and Tenants upon Deposit Release (buyer pays outgoings)

$300/m²

Southport Central 3 Offering

Process: . .

Marketing Period Prior to Price Release:

Marketing Budget:

Expression of Interest and Registration of Interest on Terms offered and specific Lot Set Date Price Release

2 Weeks Whisper Campaign 3.5 Weeks High Impact Price Release May 20 2010

$284,000

Owner Occupiers v Investors

77%

23% Investor

Owner Occupier

Case Study - Southport Central 3

• 141 strata offices have now settled or had unconditional contracts placed on them

• $31,028,500 Gross Realisation

Case Study – Belle Grove Estate

Case Study – Belle Grove Estate

Case Study – Fig Tree Pocket

• Lots Available: 34 Lots

• Lot Range: 702m2 to 1,784m2

• Average Size: 921m2

• Vendor: Cerebral Palsy League Queensland

• Sales History: 2 Sales in last 12 months

3½ Weeks Later

Auction

Press Coverage

Auction Statistics

Bidders registered: 83 bidders

Total bids: 225

Contracts signed on auction date: 22 Contracts

Total realisation on auction date: $10.067m

Marketing budget: $220k (10K per lot)

Auction Day – Helmsman Auction

Bidder Cards

Example

Example

Auction Boards

Auction Venue

Example – Helmsman Auction

Auction – 48% Bid on more than 1 Lot

Sales to Date

• In the 12 months prior to the Auction, 33 vacant lots sold for over $400,000 in the entire Western Suburbs of Brisbane.

• We have now sold 31 Lots for over $14 million

Case Study – Aspire Apartments

• Ipswich’s first Residential High-Rise

• Remaining 44 of 106 Apartments in Receivership

• 44 Residential Apartments

•11 Dual Key

•15 One Bed Apartments

•4 Two Bed Apartments

•12 Two Bed + MPR Apartments

•2 Penthouses

• 3 Retail Stratas

Aspire Apartments

Survey of Buying Intentions • 300 Current Market Participants (100 Enquirers, 100 Vendors

and 100 Land Lords)

• Survey Undertaken by Ray White Concierge (Ray White’s telemarketing arm)

• 21 of the survey participants (7%) expressed interest in purchasing in the next 12 months

• The 6 local offices we were teaming up with identified 2,750 land lords, vendors and enquirers. We anticipated a 7% rate of interest totalling 192 enquiries.

Survey of Buying Intentions

Survey of Buying Intentions

Aspire Apartments - Research

Millennium Apartments Case Study

Millennium Apartments Auction Day

Millennium Apartments Auction Day

Auction Statistics

Bidders registered: 68 (27 active)

Total bids: 131

Contracts signed on auction date: 10 Contracts

Total realisation on auction date: $8.6m

Marketing budget: $90,547k (9K per lot)

Millennium Apartments

Millennium Apartments Property Website

Page Views: 18,000 Views

Total Visits: 4,094

Unique Visitors: 2,930

Subscribers: 142

Case Study – Falls Creek Snow Sale

• 4 Complexes

• 77 Residential Apartments

•26 Studio Apartments

•10 One Bed Apartments

•20 Two Bed Apartments

•18 Three Bed Apartments

•3 Apartments in Old-Style Complex

• 3 Retail Stratas

• 49 Year Leasehold

Case Study – Falls Creek Snow Sale

• In the 12 months prior there had been no sales in the complexes

• In the 12 months prior there had been a total of only 18 unit sales in Falls Creek

• 601 apartment or unit listings in Australian Ski Field Areas

Falls Creek Snow Sale - Market Status

Falls Creek Snow Sale - Strategy

Falls Creek Snow Sale - Website • All Marketing directed buyers to online website

Falls Creek Snow Sale - Website

Falls Creek Snow Sale - Website

Virtual Inspections

Virtual Inspections 88%

Physical Inspections 12%

First Contact: Online v Agent Registration

852 Parties Registered Online then had Agent Contact

119 parties only contacted Agent

244 parties contacted Agent then Registered Online

Data Collation • 1,096 Parties Registered online at

www.fallscreeksnowsale.com

• 619 Parties took Virtual Inspections

• 12,361 Virtual Inspections undertaken

• 76% of Buyers undertook virtual inspections

• 343 Parties agreed to Bidding Terms Online

• 67% of Buyers agreed to Bidding Terms Online

Ray White eMarketing

11% of Sales Originated from RW eDatabase

Falls Creek Snow Sale – Auction Day

Falls Creek Snow Sale – Auction Day

Falls Creek Snow Sale – Auction Day • 80 Lots Sold at Auction

• 3 Hour Auction

• 147 Registered Bidders

• 1,183 Bids

• Average of 15 Bids Per Lot

• 83% of Bidders bid for Multiple Lots

• Sale Prices from $30,000 to $410,000

Bidders Who Bid for Mulitple Lots