BOUTIQUE CAFES AND DINING CYCLE NETWORK

VIEW OF BRISBANE CITY

WEST ENDWest End accommodates all three of the Urbis economics and research fundamentals that make a sustainable suburb – Population, Infrastructure and Employment.

1 POP INF EMP

BUSTLING CAFES, DINING DESTINATIONS AND BOUTIQUE RETAIL AMENITY

CONNECTIVITY PROVIDED BY INTEGRATED CYCLING, FERRY & BUS NETWORKS

3KM FROM THE BRISBANE CBD, QUEENSLAND’S LARGEST EMPLOYMENT NODE

B

D

F

A

C

E

A CONTEXT ON BUSINESS, CULTURE, LIFESTYLE AND RESIDENTIAL

West End offers significant commercial, entertainment and leisure amenity alongside a waterfront setting, all within three kilometres of the Brisbane CBD.

APRIL 2015

STRATEGIC LOCATIONPositioned within walking distance to a wealth of retail and lifestyle amenity / Pg 02

INFRASTRUCTURE INVESTMENTSignificant completed and proposed infrastructure investment / Pg 04

EMPLOYMENT GROWTHSurrounded by major employment nodes with almost 100,000 new jobs by 2031 / Pg 05

POPULATION GROWTHWest End has outperformed previous population projections in recent times / Pg 06

SALE PRICE GROWTH West End’s median apartment sale price shows a premium over the Brisbane LGA / Pg 08

NEW PRODUCT PREMIUMNew apartments in West End are showing rental premiums of up to 27 per cent over the total West End Market / Pg 09

OUTLOOK WEST END

2 URBIS WEST END OUTLOOK© URBIS.COM.AU

8

14

23

31 3233 34

27

37

MILTON

TOOWONG

BRISBANE RIVER

16

29

28

9

TRAIN

BUS

CITYCAT

West End offers a waterfront setting within close proximity to significant commercial, entertainment and leisure amenity, located less than three kilometres from the Brisbane CBD.

Providing waterfront living and CBD proximity, West End balances inner city lifestyle and extensive green space. Boundary Street showcases an eclectic mix of fashion, restaurants, cafes and nightlife, providing locals with access to a 24/7 activity hub. The regular West End Farmers’ Market and a calendar of festivals continues to attract visitors from throughout Brisbane, while art galleries, theatres and music venues play host to a vibrant arts scene.

West End’s central location within Inner Brisbane offers convenient walkability in every direction. A walk along the river connects to Brisbane’s leading cultural centre and key food and dining hotspots, with Grey Street providing a cosmopolitan mix of multicultural cuisine. West End also is well serviced by ferry and bus networks, providing public transport connectivity to the Brisbane CBD and other key destinations.

30

WALKABILITY & ACCESSIBILITY West End

© URBIS.COM.AUURBIS WEST END OUTLOOK 3

LADY CILENTO CHILDREN’S HOSPITAL/ MATER HOSPITAL 2MIN

7

2 1

15

22

24

25

19

26

20

35

21

36GREY ST

BOUNDARY ST

VULTURE ST

MONTAGUE RD

HARDGRAVE RD

BRISBANE CBD

WEST END

17

3

MELBOURNE ST 4

518

11 10 12 136

GOLD COAST 50MIN

UNIVERSITY OF QLD 10MIN

BRISBANE AIRPORT20MIN

WEST END CITYCAT 2MIN

Enter

tain

men

t, Sh

oppi

ng &

Din

ing Cu

ltura

lEd

ucat

ion

Infra

struc

ture

Recr

eatio

n &

gree

n sp

ace

7

2

10

3

11

4

12

5

13

8

6

141

9

Boundary Street Dining & Entertainment PrecinctThe Markets Shopping Centre & Coles Supermarket

Hardgrave Road Dining Precinct

Melbourne Street Dining Precinct

Little Stanley Street Dining Precinct

Brisbane Convention & Exhibition Centre

Queen Street Mall

The Barracks Retail & Dining Precinct

Gallery of Modern Art (GOMA)

Queensland Art Gallery

State Library of Queensland

Queensland Museum

Queensland Performing Arts Centre (QPAC)

Queensland Theatre Company

15

22

30

16

23

31

17

24

32

18

25

33

19

26

34

20

27

35

21

28

36

29

37

Queensland University of Technology Gardens Point

Queensland University of Technology Kelvin Grove

Griffith University

Tafe Queensland - South Bank Campus

Brisbane State High School

West End State School

Somerville House

Orleigh Park

Davies Park & West End Markets

Musgrave Park

South Bank Parklands

City Botanic Gardens

Roma Street Parklands

Suncorp Stadium

Victoria Park Golf Course

Riverside Cycle & Pedestrian Path

Go Between Bridge

Merivale Bridge

William Jolly Bridge

Kurilpa Bridge

Victoria Bridge

Goodwill Bridge

Wesley Hospital

3KM TO CITY

WEST END

WEST END DINING PRECINCT

MILTON

HIGHGATE HILL

SOUTH BRISBANE

BRISBANE CBD

KANGAROO POINT

7

8

9

10

611

12 13

3

4

MUSGRAVE PARK

DAVIES PARK

RIVERSIDE SOUTH

GO BETWEEN BRIDGE

MILTON COMMERCIAL OFFICE PARK

KURILPA BRIDGE

VICTORIA BRIDGE

GOODWILL BRIDGE

WILLIAM JOLLY

BRIDGE

ORLEIGH PARK

CITY BOTANIC GARDENS

CYCLE PATH

TRAIN STATIONS

CITY GLIDER BUS

CITYCAT STOPS

12

7

8

9

10

11

12

13

14

QUEENSLAND UNIVERSITY OF TECHNOLOGY

UNIVERSITY OF QUEENSLAND

GRIFFITH UNIVERSITY

TAFE QUEENSLAND - SOUTH BANK CAMPUS

MATER HOSPITAL

WESLEY HOSPITAL

SOUTH BANK PARKLANDS

CULTURAL PRECINCT

LEGEND

514

The large majority of West End’s

infrastructure is already present and

useable. This puts the suburb in an

envious position over other inner

city suburbs, which are leveraging

their future growth on planned

infrastructure projects.

Broad investment from public and

private enterprises has enabled the

West End Catchment (West End and

South Brisbane) to develop a wealth

of infrastructure that will continue

to drive employment growth and

demand for residential dwellings

within the market.

Recent infrastructure investment has provided a catalyst for employment

growth and residential demand

1 Kurilpa Riverfront Renewal The Kurilpa Riverfront Renewal aims to optimise the commercial potential of the precinct and explore the opportunity for a mix of quality commercial, retail and residential development along with new public spaces.

2 Queens Wharf $4 BILLION Queens Wharf is to be a world class development located on state-owned land between the Brisbane River, George, Alice and Queen Streets in the heart of Brisbane City.

3 Queensland Cultural Centre $1.15 BILLIONA world class multi-venue centre encompassing QPAC, Queensland Museum, State Library of Queensland, Queensland Art Gallery and GOMA.

4 Brisbane Convention & Exhibition Centre $333 MILLION

The BCEC hosts on average 1,300 events per year, generating in excess of $200 million in economic benefits for Brisbane and Queensland.

5 Go Between Bridge $338 MILLIONInner Brisbane’s first car-accessible bridge in 40 years links South Brisbane to the Brisbane CBD and northern suburbs.

6 Lady Cilento Children’s Hospital $1.2 BILLION

Expansion to Kurilpa plan streetscape $30 MILLION (Planned)

Arts Precinct Extension $225 MILLION (Planned)

South Bank Transit Site Redevelopment $250 MILLION (Planned)

Future Mass Transit $350 MILLION (Planned)

4 URBIS WEST END OUTLOOK© URBIS.COM.AU

INFRASTRUCTUREWest End Catchment

3KM TO CITY

Prepared by Urbis; Source: NIEIR Employment Forecasts, PCA Office Market Report, Urbis

West End is located centrally to South East Queensland’s major education providers. Within a two kilometre radius, there are more than 126,000 students, including in excess of 38,000 international students, currently studying in 13 educational institutes.

These include the University of Queensland, Queensland University of Technology, Tafe Queensland - South Bank Campus and Griffith University, with demand for local dwellings influenced by this significant student population. In addition to tertiary facilities, the West End Catchment also includes a number of Brisbane’s top secondary colleges, including Brisbane State High School, St Laurence’s College and Somerville House.

Within a two kilometre proximity of Queensland’s two largest universities

Almost 100,000 new jobs within walking distance by 2031

West End is located three kilometres from Queensland’s largest employment node, the Brisbane CBD. Furthermore, the neighbouring South Brisbane commercial precinct has evolved into a major white collar employment node providing significant local employment.

Benefiting from CBD proximity and a wealth of infrastructure, West End and South Brisbane have seen a growing concentration of employers within the precinct, with projections that an additional 27,398 jobs will be created in the catchment by 2031 (NIEIR Employment Forecasts). West End also provides easy access to other employment centres, like the Wesley Hospital and the University of Queensland.

Lady Cilento Children’s Hospital Queensland University of TechnologyCultural Precinct

Prepared by Urbis; Source: UQ, QUT, Tafe Queensland, Griffith University

WEST END & SOUTH BRISBANE

58,941 jobs

BY 2031

27,398 new jobs

INCREASE

BRISBANE CBD

222,178 jobs

BY 2031

65,633 new jobs

INCREASE

WEST END

12,493 jobs

BY 2031

3,691 new jobs

INCREASE

30,000 students

TAFE QUEENSLAND - SOUTH BANK CAMPUS

35,000 students

UNIVERSITY OF QUEENSLAND

40,800 students

QUEENSLAND UNIVERSITY

OF TECHNOLOGY

3,500 studentsGRIFFITH

UNIVERSITY SOUTH BANK CAMPUS

© URBIS.COM.AUURBIS WEST END OUTLOOK 5

EMPLOYMENTWest End Catchment

EDUCATION West End Proximity

WEST END POPULATION GROWTH

Prepared by Urbis; Source: OESR Estimated Resident Population and Population Projections

TOTAL PERSONAL INCOME / WEEK

Prepared by Urbis; Source: ABS

AGE DISTRIBUTION

Prepared by Urbis; Source: ABS

6,098 7,290

8,839

10,664

15,967

19,328

22,146

0

5,000

10,000

15,000

20,000

25,000

2003

20

04

2005

20

06

2007

20

08

2009

20

10

2011

20

12

2013

20

14

2015

20

16

2017

20

18

2019

20

20

2021

20

22

2023

20

24

2025

20

26

2027

20

28

2029

20

30

2031

ESTI

MA

TED

AN

D P

ROJE

CTE

D P

OPU

LATI

ON

PERIOD (ANNUAL)

0 to

4

5 to

9

10 to

14

15 to

19

20 to

24

25 to

29

30 to

34

35 to

39

40 to

44

45 to

49

50 to

54

55 to

59

60 to

64

65 to

69

70 to

74

75 to

79

80 to

84

85 +

AGE DISTRIBUTION

0%

2%

4%

6%

8%

10%

12%

14%

16%

PRO

PORT

ION

OF

POPU

LATI

ON

(%) WEST END

BRISBANE LGA

WEST ENDBRISBANE LGA

0%

2%

4%

6%

8%

10%

12%

14%

PRO

PORT

ION

OF

RESI

DEN

TS (%

)

$1 to

$1

99

Neg

or

Nil

$200

to

$299

$300

to

$399

$400

to

$599

$600

to

$799

$800

to

$999

$1,0

00 to

$1

, 249

$1,2

50 to

$1

,499

$1,5

00 to

$1

,999

$200

0or

mor

e

INCOME BRACKET

PROJECTED 739 NEW RESIDENTS PER ANNUM

STRONG GEN Y REPRESENTATION

22% EARNING OVER $1,500 PER WEEK

WEST END’S PAST & FUTUREStrong population growth was experienced in West End between 2003 and 2013, with the suburb registering an increase of approximately 2,741 residents over the ten-year period, to a total of 8,839 residents. The growth in this area has outperformed the traditionally conservative Queensland Government population projections, thereby explaining why the population figures are lower for the initial periods of the current forecast.

Based on OESR projections, West End’s population is expected to increase by more than 13,300 new residents between 2013 and 2031, equating to an annual average growth rate of 5.2 per cent per annum. This growth is expected to be most prominent between 2013 and 2021, with an average annual growth rate of close to 7.7 per cent per annum expected.

West End’s location, benefiting from large employment nodes coupled with significant infrastructure, provides key economic fundamentals. These factors, combined with the potential for residential development, will contribute to sustained long-term population growth within the suburb. Urbis expects this growth to once again outperform the forecast projections.

Demographic changes have long been accredited as vital determinants of economic growth in relation to property market demand and supply fluctuations. The key economic fundamentals that support West End have attracted the demographic that West End is dominated by, with the age group of 20 to 34 making up more than 36 per cent of the population. This group has a proportion 42 per cent higher than the Brisbane LGA benchmark. The more mature Gen Y market, those aged 25 to 34 years of age, saw the greatest growth in proportion over the Census periods 2006 to 2011, growing from 22.3 per cent of the population to 25.4 per cent of the population. The Gen Y demographic typically seeks out locations that provide a wealth of amenity within walking distance (retail, education), connectivity to key destinations and proximity to employment opportunities.

The income distribution of West End shows that residents outperform the Brisbane LGA benchmark in the highest end income brackets. This higher income distribution in West End is especially promising and, given the relative age of the population, points to a significant young professional demographic. With an appetite for inner-city living but with limited savings available to purchase a dwelling, this young professional group choose to use their incomes to rent low-maintenance accommodation in well-located suburbs.

Young professionals are attracted to West End’s active local culture, high lifestyle amenity and CBD proximity

6 URBIS WEST END OUTLOOK© URBIS.COM.AU

POPULATION & SHIFTING DEMOGRAPHICS

Prepared by Urbis; Source: OESR Estimated Resident Population and Population Projections

Prepared by Urbis; Source: OESR Estimated Resident Population and Population Projections

QUALITY OF LIFE

PROXIMITY TO CBD

COMMUNITY & NETWORKS

LOW MAINTENANCE

DWELLINGS

WALKABILITY &

CONNECTIVITY

GREEN SPACE

SUSTAINABLE LIVING COSTS

WHA

T TH

EY W

ANT

The coming decade will see significant shifts in the composition of the Australian population, influencing demand and supply patterns that will differ from previous decades. In order to explore these impacts in depth, Urbis has used a number of sources and market experience to further understand Australia’s major demographic groups, which will aid decision making on structural shifts and future demands in property in this period.

The most dramatic change is expected to be the aging of the Baby Boomer generation into an empty nester/downsizer age distribution. This generation has been the focus point of the property market over the past 30 years, however this market is soon to be downsized from it status of top generation of focus. There is no denying that the Boomer demographic will still play an important role in the demand within the property market moving forward – being the biggest wave of the population moving into part-time employment and retirement in modern history. Significantly this demographic will not have as much of an impact on the property market’s structural demand and supply shifts moving into the next decade, with the Gen Y market providing this impact. The children of these Baby Boomers, “Generation Y,” have been emerging into adulthood, progressing through university, obtaining their first jobs and some even moving into their first independent home.

Investment strategy needs to be sensible to possible impacts and the magnitude and differing preferences each of these demographic waves will have on property performance moving forward. Demand for property over the next decade will be greatly impacted by how each of these unique generations behaves, lives, works and utilises space.

Despite the age gap, Baby Boomers seek similar dwelling characteristics to that of Generation Y - suburbs that offer diverse and inclusive communities, walkability to amenity, low maintenance living and proximity to key activity nodes.

» Lifestyle will be paramount when deciding on the next property of purchase for this demographic, driven by higher density, low-maintenance living.

» Inner-city living in mixed-age environments is expected to become an important lifestyle for Boomers.

» Walkable mixed-use locations with retail, food service and entertainment activities also will attract an increasing proportion of Boomers as they decide to trade down in size, but not in amenity value.

» This demographic between now and 2016 will likely be moving into independent living accommodation, which may represent one of Brisbane’s biggest dwelling demand circumstances ever to be recorded.

» Lifestyle will be paramount – Gen Y locate where they can best meet the goals of entertainment, amenity and employment.

» Diversity of ethnic group is embraced by this demographic, with higher density dwelling options often the norm in many of these diverse cultures.

» As Brisbane’s economy continues to grow - those exiting university and newly employed are expected to fuel tremendous demand for apartments.

Moving forward, the Gen Y & Empty Nester demographics will have an increasing impact on Brisbane’s residential markets

GEN Y ABOVE 24 YEARS OF AGE

BABY BOOMERS 2011

CENSUS2021

FORECAST

33% 26%

2011 CENSUS

2016 FORECAST

30% 40%

BABY BOOMER GENERATION

GENERATION Y

GEN Y

© URBIS.COM.AUURBIS WEST END OUTLOOK 7

SHIFTING DEMANDThe Opportunity

WEST END APARTMENT SALES CYCLE

RESIDENTIAL MARKET - HALF-YEAR DEC 2014

Prepared by Urbis; Source: RPData

Prepared by Urbis; Source: RPData

RENTAL COMPARISON DECEMBER QTR 2014

*Figure reflects 2 bed, 2 bath product. Prepared by Urbis; Source: RTA, realestate.com.au, Agent’s advice

NUMBER OF SALES — WEST END CATCHMENT MEDIAN SALE PRICE — WEST END CATCHMENT

184

164

$499,000

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

0

50

100

150

200

250

300

1984

DEC

19

85 D

EC

1986

DEC

19

87 D

EC

1988

DEC

19

89 D

EC

1990

DEC

19

91 D

EC

1992

DEC

19

93 D

EC

1994

DEC

19

95 D

EC

1996

DEC

19

97 D

EC

1998

DEC

19

99 D

EC

2000

DEC

20

01 D

EC

2002

DEC

20

03 D

EC

2004

DEC

20

05 D

EC

2006

DEC

20

07 D

EC

2008

DEC

20

09 D

EC

2010

DEC

20

11 D

EC

2012

DEC

20

13 D

EC

2014

DEC

MED

IAN

SA

LE P

RIC

E

NU

MBE

R O

F SA

LES

HALF-YEAR PERIOD

$445WEST END

CATCHMENT NEW PRODUCT

$350WEST END

CATCHMENT RTA RENTALS

$333BRISBANE CITY RTA RENTALS

WEST END CATCHMENT

NEW PRODUCT$580*

WEST END CATCHMENT RTA RENTALS

$530

BRISBANE CITY RTA RENTALS $400

WEST END CATCHMENT

NEW PRODUCT$840

WEST END CATCHMENT RTA RENTALS

$660

BRISBANE CITY RTA RENTALS $500

2 BED

1 BED

3 BED

19% PRICE

PREMIUM

$420kBRISBANE

LGA

$499kWEST END

CATCHMENT

MEDIAN SALE PRICE

RENTAL ANALYSIS

The rental comparison chart demonstrates the premium new apartment product within the West End Catchment achieves over the total existing stock.

New apartment product, with data collated from agents’ advice and via ‘on the market’ rentals, is currently indicating premiums of 9.4 per cent for two-bedroom apartment product and 27 per cent for one and three-bedroom apartment product over the total existing stock within the West End Catchment (Residential Tenancy Authority data).

The chart also highlights the rental premium for apartments in the West End Catchment over the Brisbane LGA benchmark, with a 5.1 per cent premium for one-bedroom, 45 per cent for two-bedroom and 32 per cent for three-bedroom apartments.

Rental growth has been exhibited in the West End Catchment over time, with an average annual rental growth of 7.2 per cent for one-bedroom apartments, 7.8 per cent for two-bedroom apartments, and 6.2 per cent for three-bedroom apartments over the ten years between December 2004 and December 2014.

SALES ANALYSIS

The median sale price, based on 164 settlements, for apartments within the West End Catchment (West End and South Brisbane) was registered at $499,000 for the half-year period ending December 2014. This represents a 19 per cent premium over the Brisbane LGA median sale price for the same period.

Apartments in the West End Catchment have shown a long-term upward trend over the course of the sales cycle, with median sale price increases averaging 4.9 per cent per annum over the last ten years. Furthermore, the most recent December 2014 half-year has shown a 11.5 per cent median sale price increase over the past two years since the December 2012 half-year.

West End apartments have attracted significant owner-occupier and investor demand given their premium location on the Brisbane River within close proximity to green spaces, employment nodes and retail amenity.

West End’s median apartment sale price is 19 per cent higher than the

Brisbane LGA

8 URBIS WEST END OUTLOOK© URBIS.COM.AU

RESIDENTIAL MARKET ANALYSIS

APARTMENT

APARTMENT

RIVERSIDE SOUTH PRECINCT VS WEST END CATCHMENT

Prepared by Urbis; Source: RPData

WEST END

MILTON

HIGHGATE HILL

SOUTH BRISBANE

BRISBANE CBD

MUSGRAVE PARK

DAVIES PARK

RIVERSIDE SOUTH

GO BETWEEN BRIDGE

MILTON COMMERCIAL OFFICE PARK

KURILPA BRIDGE

VICTORIA BRIDGE

GOODWILL BRIDGE

WILLIAM JOLLY

BRIDGE

ORLEIGH PARK

Apartments in the Riverside South pocket of West End are commanding a 45 per cent premium over the West End Catchment

The Riverside South Precinct of West End is a private pocket in the southern corner of the suburb. Adjacent to the river, this precinct is protected from the hustle and bustle of the nearby commercial and retail amenity, forming a quiet residential sanctuary. Despite this element of privacy, this pocket is close to all necessary major infrastructure and amenity with strong walkability and connectivity aspects catered for.

A CityCat terminal is within walking distance, taking residents directly to the Brisbane CBD and Hamilton (down river) and the University of Queensland (up river). The CityGlider Bus service runs directly through this southern riverside pocket of West End, connecting the precinct with the Brisbane CBD, Fortitude Valley and a number of Inner Brisbane employment nodes.The Riverside South pocket consists of a mix of established housing and apartment projects. Apartment developments within this precinct have varying degrees of river

MEDIAN SALE PRICE DECEMBER QTR 2014

$420,000 BRISBANE LGA

$499,000 WEST END

CATCHMENT

$722,000RIVERSIDE SOUTH

WEST END

PRICE PREMIUM

OVER WEST END CATCHMENT

OVER BRISBANE LGA

45%

72%

views, however all are within walking distance to the Brisbane River and both Davies Park and Orleigh Park. In order to better understand the Riverside South precinct in comparison to the wider West End Catchment, a pocket of new and near-new apartment buildings located in the precinct have been analysed. The buildings included in this analysis include Flow, Koko, Riverpoint and Waters Edge, and, in total, contain approximately 550 apartments.

The median sale price, based on 49 settled transactions, for the selected apartments within the Riverside South pocket was recorded at $722,000 for the year ending December 2014. This represents a 45 per cent premium over the West End Catchment median sale price and 72 per cent over Brisbane LGA figures, highlighting the premium nature of the residential offering in the Riverside South precinct.

© URBIS.COM.AUURBIS WEST END OUTLOOK 9

RESIDENTIAL MARKET ANALYSIS

Riverside South Apartment Premium

3KM TO CITY

OUTLOOK INSIGHTSSubtitle

10 URBIS WEST END OUTLOOK© URBIS.COM.AU

© URBIS.COM.AUURBIS WEST END OUTLOOK 11

Orleigh Park, West End

Brisbane Level 7, 123 Albert St Brisbane QLD 4000

07 3007 3800

This publication is prepared on the instruction of Pradella Developments Pty Ltd 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 know 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 Pradella Developments Pty Ltd 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. Enquires should be addressed to the publishers. / BPE0869