March 2017

Chadstone - The Fashion Capital Expression of Interest Response Outline

The Fashion Capital Hotel Operator Selection

2 Colliers International

The Fashion Capital Hotel at Chadstone Australia is envisioned to be an urban hotel resort with a fashion and retail theme, taking advantage of a market under supply for corporate accommodation and leveraging Chadstone Experiences to grow a unique tourism market.

Colliers International have been engaged by co-owners Vicinity Centres and the Gandel Group to approach a select number of operators to participate in this exciting Hotel development.

The co-owners of Chadstone have outlined a number of objectives and performance indicators that will be key to the selection process, namely:

• The brand should as a minimum be nationally recognized;

• The brand by association, should have capability to complement the world class retail, dining and entertainment components of the Centre;

• TheoperatorshouldbewillingtoengageinthesignificantongoingmarketingandpromotionoftheprecinctasThe Fashion Capital and package unique Chadstone experiences (Fashion, Dining and Entertainment) for the leisure and tourism market;

• Theoperatorshoulddemonstrateatrackrecordofefficienthoteloperationandparticularlywhereoccupancyisderived from multiple markets;

• The nominated brand should satisfy the broad requirements of a 4.5 star standard;

• Demonstrated examples or interior design collaboration for the customer facing aspects of the Hotel; and

• A track record of industry leadership in conferencing, meetings and events. As a subset of events there is a need for the Hotel to be an anchor for establishing a culture of live and pop-up activations that will be planned and curated in collaboration with the Centre team.

As part of its decision making process, the owners are contemplating two different operating structures for the hotel, namely:

• Traditional Hotel Management Agreement (HMA); and

• Lease.

As part of your submission, we would be interested for you to consider each of the structures above and what the key terms for each of these structures would look like. Operators should also include consideration for the owner to have the option to convert to a franchise arrangement at a point in the future (e.g. after 5 years). At this stage, the owner has no preference, so an operator’s submission will not be prejudiced if you do not offer an option for these structures.

2017 2018 2019

APRIL/MAYInterior Design

Documentation in collaboration with

Operator

MARCH/APRILOperator selection

Shell and CoreDocumentation

Project timelineThe following provides an indicative outline of the project to hotel opening.

SEPTEMBERConstructionTender Close

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LATE 2019Hotel Opens

JANUARYCommence Construction

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In lodging your submission, we request you have regard to the following:

1. Proposed brand and an overview as to how that brand will complement Chadstone and leverage its brand proposition.

2. Background information on the proposed brand, including number of properties globally and in Australia.

3. Minimum room size requirement for the brand and review of the plans provided.

4. Food and beverage strengths and how the hotel operated F & B venues (restaurant, the lobby communal space andtopfloorclublounge)willbepositionedtoprovideabespokeandengagingofferthatispatronisedbyin-guests and the expansive local demographic. The Hotel F & B offers should drive demand and after hours activation, increasing overall campus visitation.

5. Approximate split of bar/beverage compared to food for each venue.

6. Review of the meeting and function space proposed, and how proposed brand captures and appeals to MICE demand.

7. Other facilities required under this brand and minimum space requirements for these facilities;

• Valet,

• Spa (potential to be separately operated).

8. Proposed term.

9. Proposed fee structure for HMA or Rent under a Lease.

10. An outline of all other charges and fees.

11. Outlineofloyaltyprogram–membership,fees,revenuedeliveryetc,andflexibilitytolinkwiththeChadstoneShopping Centre.

12. Outline of international reach into key Australian inbound tourism markets.

13. Outline of brand strategies and approach to next generation distribution channels.

14. Outline your technology based guest service platforms that are geared toward the millennial Hotel guest experience.

15. Sustainable business processes and practices.

16. FF&E contribution (noting a notional reserve is preferred).

17. Consideration regarding key money.

18. Consideration regarding performance guarantees.

19. Technical development fees.

20. An indicative breakdown of pre-opening costs and timing.

21. Indicativefitoutcostperroomforthebrandoffering.

22. Termination provisions.

23. Non-compete territory.

24. Outline how the operator’s and more particularly the hotel database can be used to facilitate synergistic marketing with the Centre.

25. Contemplation of how the hotel can leverage off the existing resources associated with the Centre, for example facilities management/maintenance.

26. People and culture systems and values relevant to the hotel team.

27. Approach to hotel team training.

28. Due to the co-ownership structure, the operators consideration to employ the staff directly.

5Colliers International

Aspartofthesubmission,werequestafiveyeartradingforecast,reflectingoccupancy,averagerate,roomsrevenue, conferencing revenue, food and beverage revenue, other revenue, departmental costs, overheads and grossoperatingprofitafterbaseandincentivefee.

Theseprojectionsshouldincludeaseparatetablereflectingtheindividualfeesandchargesthataredeductedasexpenses in the forecast above.

For the purpose of the forecast, you should assume 248 rooms as the key scenario however, as there is some flexibilityaroundthenumberofkeystobedelivered/fittedout,yourviewsontheidealkeycountforopeningandinthefirstthreeyearsshouldbeprovided.

Please outline any additional information you require from the co-owners / developer should you be shortlisted for the next stage of the selection process in order to carry out full due diligence on this opportunity.

We request submissions be delivered to Colliers International by Monday 1st May 2017 at 4pm Australian Eastern Standard Time.

For further information or to arrange an inspection of the site please contact either:

Gus MoorsHead of Hotels | AustraliaGus.moors@colliers.comD: +61 2 9257 0369M: +61 404 005 066

Guy Wells Associate Director | HotelsGuy.wells@colliers.comD: +61 3 9612 8821M: +61 405 612 416

www.colliers.com.au