Insight Key Australian Transactions

Savills Research February 2014

Insight Key Australian Retail Transactions

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Savills Research

Overview
The calendar year 2013 marked a signicant recovery for investment markets with property sales turnover at record levels and strong gains made on local and global sharemarkets interest rates have stayed low, the search for yield and security remained strong however there has been more capital allocated for higher risk property including development. The S&P500 index rose 25 percent to a record high reecting cheap capital and a sense of economic recovery in the United States. The Australian ASX200 Index rose 13 percent and the Australian dollar fell 15 percent against the US dollar. Nationally, over $22 billion of commercial property has been transacted and over 3 million square metres of industrial and ofce space has been reported leased which gives us condence that the markets are operating normally. Commercial property yields in particular continue to look attractive. The Australian economy is being rebalanced as growth in mining softens. This means housing and retail should continue to lift with positive knock on effects to industrial and ofce markets. As consumer condence continues to rise, so should business condence. As prot margins are restored, business decision making should gain momentum. Some State governments will move into election mode and could be expected to provide some stimulus to parts of the economy providing further momentum to investment markets. China and the United States are forecast to contribute positively to Australias economic outlook whilst Europe could be on the cusp of a subdued recovery.

Insight Key Australian Transactions

Australian Retail Property

The retail sector faces both cyclical and structural issues. Some cyclical issues are starting to move in its favour. Consumer condence is improving, certainly not deteriorating and the cyclical falls in interest rates are certainly helping. Employment is growing strongly in four or ve sectors and shrinking in four or ve sectors and the jobs gained and lost are not necessarily in the same physical place. This means certain catchment areas are doing it tough and some are doing well. The size and shape of the workforce has a profound impact on retail property because wages determine spending and jobs dene catchment areas. Australia is almost unique in the world as being one of very few countries that have expanded their workforce during the global nancial crisis. The Australian workforce has grown by almost a million people from 10.7 million to 11.6 million from November 2007 to November 2013. Over the past year we have shed jobs in Agriculture, Real Estate, Manufacturing, Mining and IT. However, we have created twice as many jobs as we have lost Retail, Healthcare, Government and Transport. Over the six years of the global nancial crisis we have shed jobs in Manufacturing and Agriculture but we have created ve times as many jobs elsewhere. These same trends have been present for 30 years (with some bumps along the way). Agriculture and Manufacturing have been in the doldrums for 30 years an entire generation this is not new news. Whilst we have lost 256,000 jobs in these two sectors, we have created 21 times the same number of jobs in other sectors a total of 5.3 million jobs. How much more is earned in these newly created jobs? If workers are paid more, they put more into superannuation, they pay more tax, they spend more and they pay more for a house a virtuous property cycle.

Australian Retail Property Sales by Price Range ($m)

Dec-03 to Dec-13 <$10m $10-$50m $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0
3 4 8 9 -1 0 -0 7 -1 2 -1 1 -0 -0 -0 -0 -0 -0 ec ec ec ec ec ec ec ec ec ec ec D -1 3 5 6

$50 - $100m

>$100m

Source: Savills Research

The newly arrived population have a profound impact on property because they need somewhere to live and goods to put in it. Instant housing and bulky goods demand. Less people leaving the country means fewer houses freed up for those arriving. With the size of the workforce growing and more people coming into the country (and less leaving) it is little wonder that a recovery in housing is underway. It may not feel like a boom, but it is starting. Credit growth has been rising for a year and prices for dwellings are starting to rise again. Changes in consumer spending patterns since 2007 appear to have had an adverse effect on department store, apparel and discretionary retailing turnover generally. This has impacted tenants in Regional and some Sub-Regional shopping centres. Lower turnover combined with increasing rents has led to specialty occupancy costs rising to an average of 18 percent in Regional Shopping Centres. This is a level that could generally be described as unsustainable and any one or combinations of three things are likely to happen from here. One, occupancy costs fall to a more sustainable level; two, incentives are provided by the landlord to mitigate

the high occupancy costs; three, turnover increases as consumers return. In any case, the returns from this sector of retail appear to be constrained for the foreseeable future. The structural issues facing retail are more formidable but not insurmountable. Savills expect the retail sector to evolve to take advantage of the structural issues rather than be over-run by them. The ageing of the population will continue to create challenges for retailers as they jockey for the dollars of retirees. Retirees can be expected to prefer services over goods and will not necessarily continue to dwell in their traditional catchment areas. Internet retailing has already changed the face of retailing for certain categories of goods and will no doubt continue to evolve and challenge more categories over time. New business models are establishing themselves.

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Savills Research

Retail Investment Market

Savills recorded approximately $6.8 billion worth of retail property transactions nationally in the 12 months to December 2013, up from $4.4 billion in the previous year, and up on the ve year average, which was $4.3 billion. In the 12 months to December 2013, 158 properties were sold, up from the previous year of 133, and up on the ve year average of 136. In the 12 months to December 2013, $2.9 billion worth of transactions were reported in the > $100m price range, accounting for 43 percent of total retail property sales activity. Over the same period, sales in the $10m - $50m price range had the greatest number of transactions (91 or 58 percent).

Retail bulky goods property sales within Australia have increased in volume
Savills Research
In the 12 months to December 2013, $2.1 billion worth of transactions occurred in the 'Sub Regional' retail centre category, accounting for 31 percent of total retail property transactions. During the same period the 'Neighbourhood' centre category had the greatest number of transactions (58 or 37 percent). The 'Trust' purchaser category was the most active in the investment market for the year ended December 2013, purchasing 35 percent of stock sold. However, the 'Private Investor' category recorded the most transactions (59). Retail bulky goods property sales within Australia have increased in volume in the 12 months to December 2013. Savills recorded 24 property sales. These sales amounted to $807 million worth of retail bulky good property transactions. This was up from the previous year of $787 million worth of sales in 29 transactions and up from the ve year average of $573 million worth of sales in 22 transactions. Australian institutional investors (Funds, Trusts and Syndicates) are increasingly active as ows to superannuation continue unabated. Foreign investors have been purchasing part shares of shopping centres as passive investments whilst private investors continue to be attracted to high street retailing, CBD retailing and freestanding supermarkets. If the RBA are successful in stimulating growth in the nonresources side of the economy then the retail sector nationally should be a beneciary of stronger retail turnover growth. Very early signs of this were seen in the last six months of 2013.

Australian Retail
Retail Property Transactions by Centre Type ($m) Dec-03 to Dec-13 City Centre Freestanding Bulky Goods Neighbourhood Sub Regional Regional Other Shops $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0
-0 7 -1 0 -0 -0 -0 -0 -0 -0 -1 2 -1 1 ec ec ec ec ec ec ec ec ec ec D D D D D D D D D D D ec -1 3 5 6 3 4 8 9

Source: Savills Research

Insight Key Australian Transactions

Special Insight: The Ageing Of The Population

Because there is no fountain of youth, one thing we can rely on is the ageing of the population. For most of human existence on the planet only 10 percent of the population were considered old. Today we are moving from around 10 percent to around 30 percent. This is not an Australian phenomenon but a global phenomenon. The effect on property can be expected to be profound. Demand for lifestyle property, retirement property, aged care, health care and peripheral health services is expected to triple over coming decades. The number of people aged greater than 65 in Australia is expected to rise from approximately 3 million today to 4.5 million in a decade and peak at 8 million in the years that follow. As sure as night follows day, this trend in population is unavoidable. So, what property trends may we expect to see? An increase in demand for healthcare and health services is to be expected. In the United States, health services are moving into shopping centres we should expect to see that here too.

Demand for short term accommodation near hospitals, medical centres and aged care facilities appear obvious. Demand for appropriate amounts and styles of residential property at appropriate pricing to cater for demand from over 65 year olds is another enormous opportunity in property markets. A one size ts all strategy is unlikely to be successful location, amenity, transport and other lifestyle considerations will play their part. House swapping (popular in Europe), time share (popular in America), retirement living, aged care, granny ats, tree change and sea change all present opportunities for those providing services to property. Finally, the way you spend money when you are retired is different to the way you spend it when you are working. We should expect to see some profound changes to the retail landscape as demand for goods and services change. This is an evolution in the retail landscape not a death knell though certain categories will struggle, others will thrive and new ones will be born.

Australian Retail
Retail Property Buyer Prole 12 months to Dec-13 Fund 22% Private Investor 17% Developer 1%

Trust 36%

Foreign Investor 20% Syndicate Undisclosed 2% 2%

Source: Savills Research

Savills recorded approximately $6.8 billion worth of retail property transactions nationally
Savills Research

Australian Retail
Bulky Goods Property Sales ($m and number) Dec-03 to Dec-13 Sales >$5m (LHS) No (RHS) $900 $800 $700 $600 $500 $400 $300 $200 $100 $0
3 4 5 6 9 -1 0 -0 7 -1 2 -1 1 -0 -0 -0 -0 -0 -0 ec ec ec ec ec ec ec ec ec ec D D D D D D D D D D D ec -1 3 8

35 30 25 20 15 10 5 0

Source: Savills Research

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Savills Research

Insight Key Australian Transactions

New South Wales

Savills recorded approximately $2.4 billion worth of retail property transactions in the 12 months to December 2013, up from $1.4 billion in the previous year, and up on the ve year average, which was $1.3 billion. In the 12 months to December 2013, 44 properties were sold, down from the previous year of 50, and up on the ve year average of 43. The 'Fund' purchaser category was the most active in the investment market for the year ended December 2013, purchasing 39 percent of stock sold. Similarly, the 'Fund' category recorded the most transactions (16). Retail bulky goods property sales within Australia have increased in volume in the 12 months to December 2013. Savills recorded 9 property sales. These sales amounted to $352 million worth of retail bulky good property transactions. This was up from the previous year of $322 million worth of sales in 10 transactions and up from the ve year average of $247 million worth of sales in 8 transactions.

New South Wales Retail

Retail Property Sales by Price Range ($m) Dec-03 to Dec-13 < $10m $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0
3 -0 7 4 5 6 8 9 -1 0 -1 2 -1 1 -0 -0 -0 -0 -0 -0 ec ec ec ec ec ec ec ec ec ec ec D -1 3

$10m - $50m

$50 - $100m

> $100m

Source: Savills Research

The retail sector faces both cyclical and structural issues. Some cyclical issues are starting to move in its favour.
Tony Crabb, Savills Research

1 Erina Fair, Erina savills.com.au/research

Savills Research

NSW Key Retail Transactions 2013

1 Erina Fair (50%), Terrigal Drive, Erina Price: $397.10 million Date: May 2013 Initial Yield: na Market Yield: 6-6.15% Rate/sq m: $7,764 Vendor: GPT Purchaser: National Pension Service (via APPF) Comment: Erina Fair is the largest shopping centre on the Central Coast. The centre is anchored by Myer, Kmart, Target, Big W, Best & Less, Woolworths, Coles and Aldi plus over 300 specialty stores.

3 Carlingford Court, Corner Pennant Hills and Carlingford Rds, Carlingford Price: $175.50 million Date: December 2013 Initial Yield: 7.25% Market Yield: na Rate/sq m: $6,187 Vendor: GPT Purchaser: Federation Centres Comment: The centre is anchored by Coles, Woolworths, Target and approximately 100 specialty stores. Carlingford Court is located approximately 20 kilometres north west of the Sydney CBD.

5 Top Ryde City, Corner Delvin and Pope St, Ryde Price: $341.00 million Date: November 2012 Initial Yield: 7.77% Market Yield: 6.97% Rate/sq m: $4,428 Vendor: John Beville Trust Purchaser: Blackstone Group Comment: Top Ryde City is a predominantly four level, Regional shopping centre with a total GLA of 77,009 square metres (excluding pad sites/external tenancies). The centre commenced trading in its current form in August 2010. The centre comprises a Myer, Big W, Woolworths, Franklins and Aldi, Fitness First Gym, Event Cinema, 18 Mini-Major tenancies, 168 specialty tenancies, 31 kiosks, 9 ATMs, four pad sites/external tenancies and 46 vacancies.

4 Centro Roseland (50%), Roselands Dr, Roselands Price: $166.90 million Date: June 2013 Initial Yield: 7.00% Market Yield: na Rate/sq m: $5,577 Vendor: Federation Centres Purchaser: Challenger Comment: The centre offers over 170 specialty stores anchored by Myer, Target, Coles and Food for Less, along with Best & Less, Priceline Pharmacy and Dick Smith.

2 Centro Bankstown (50%), 12 North Tce, Bankstown Price: $287.50 million Date: June 2013 Initial Yield: 6.80% Market Yield: na Rate/sq m: $7,223 Vendor: Federation Centres Purchaser: Challenger Comment: The centre is anchored by Myer, Big W, Target, Kmart, Woolworths, Supa IGA and over 310 specialty stores. There are two fresh food precincts (Grand Market, Fresh Life), a food court and numerous cafes serving delicious food at extremely competitive prices.

4 Centro Roselands, Roselands

8
225 George Street, Sydney 3 Carlingford Court, Carlingford

Insight Key Australian Transactions

9 Auburn Home Mega Mall, Auburn Price: $55.00 million Date: July 2013 5 6 Supa Centre Belrose, Mona Vale Rd, Terrey Hills Price: $88.00 million Date: November 2013 Initial Yield: 8.26% Market Yield: 8.22% Rate/sq m: $2,745 Vendor: Terrace Tower Group Purchaser: BB Retail Capital Comment: Supa Centre Belrose comprises a fully enclosed Bulky Goods centre that opened for trade in October 2006. The centre is laid out over 3 retail levels with a GLA of approximately 31,692 square metres (excluding the car wash). The centre comprises several national retailers including Domayne, JB Hi-Fi, Spotlight, Anaconda, Nick Scali, Plush and Freedom Furniture together with 12 Mini-Major tenants (including 2 vacancies), 19 specialties, two ATMs, one Kiosk and one Pad site (car wash). The centre also provides car parking for 1,185 vehicles on a site of 4.023 hectares. Top Ryde City, Ryde Initial Yield: 7.50% Market Yield: 10.50% Rate/sq m: $1,722 Vendor: AMP Capital Investors / Unisuper Purchaser: Primewest Management Comment: Homemaker Megamall Auburn comprises a fully enclosed Bulky Goods centre that opened for trade in October 1999 and was refurbished in 2004. The centre is predominantly laid out over two retail levels with an additional upper mezzanine level and has a GLA of approximately 32,341 square metres (excluding pad site). The centre has a strong presence of national retailers including Freedom, Deco Rug, The Good Guys, Snooze, The Sleeping Giant and Fantastic Furniture.

7 Centro Warriewood (50%), Jacksons Rd, Warriewood Price: $72.23 million Date: March 2013 Initial Yield: 7.50% Market Yield: na Rate/sq m: $6,521 Vendor: Federation Centres Purchaser: ISPT

8 Centro Toormina (50%), 5 Toormina Rd, Toormina Price: $65.50 million Date: June 2013 Initial Yield: 8.80% Market Yield: na Rate/sq m: $6,288 Vendor: Federation Centres Purchaser: Challenger Comment: Centro Toormina is the only centre in Coffs Harbour to house both a Coles and Woolworths supermarket under the one roof and also boasts the only Kmart within a 200km radius. Located in the developing Southern urban area of Coffs Harbour, Centro Toormina underwent a major re-development in November 2008 expanding the centre to over 21,694 square metres.

10 Oxford Square, 63 Oxford St, Darlinghurst Price: $62.70 million Date: February 2013 Initial Yield: 8.00% Market Yield: 11.30% Rate/sq m: $5,187 Vendor: Local Private Investor Purchaser: Australian Property Opportunities Fund Comment: Oxford Square comprises a convenient fully leased retail/commercial complex (extensively refurbished 2005) prominently located on major thoroughfare Oxford Street within one of Sydney's most densely populated areas. The mixed use asset is situated below the residential building known as The Monument.

10 Oxford Square, Darlinghurst savills.com.au/research

Savills Research

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Insight Key Australian Transactions

Beenleigh Marketplace

Queensland
Savills has recorded approximately $930 billion worth of retail property transactions in the 12 months to December 2013, down from $2.46 billion in the previous year, and down on the ve year average, which was $1.15 billion. In the 12 months to December 2013, 31 properties were sold, down from the previous year of 48, and down on the ve year average of 39. The 'Trust' purchaser category was the most active in the Queensland investment market for the year ended December 2013, purchasing 31 percent of stock sold. However, the 'Private Investor' category had the most transactions (11). Bulky goods property sales in Queensland have increased in volume in the 12 months to December 2013. Savills have recorded $371 million worth of retail bulky good property transactions within the state, up from the previous year of $258 million and up on the ve year average of $214 million.

Queensland Retail
Retail Property Sales by Price Range ($m) Dec-03 to Dec-13 < $10m $3000 $2500 $2000 $1500 $2000 $500 $0
3 4 -0 7 5 6 8 9 -1 0 -1 2 -1 1 -0 -0 -0 -0 -0 -0 ec ec ec ec ec ec ec ec ec ec ec D -1 3

$10m - $50m

$50 - $100m

> $100m

Source: Savills Research

savills.com.au/research

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Savills Research

QLD Key Retail Transactions 2013

1 Homemaker City, Wickham Street, Fortitude Valley Price: $103.77 million Date: July 2013 Initial Yield: 9.35% Market Yield: 8.95% Rate/sq m: $2,711 Vendor: GPT Purchaser: Altis Property Partners Comment: Homemaker City, Fortitude Valley comprises a three stage enclosed Bulky Goods development completed between 2002 (Stage 1 and 2) and 2004 (Stage 3). Stage 1 is anchored by rst level Harvey Norman / Domayne (7,384 square metres) as well as 13 specialties to the ground level.

3 Centro Gympie, Bruce Hwy, Gympie Price: $63.80 million Date: April 2013 Initial Yield: 7.55% Market Yield: 7.50% Rate/sq m: $4,540 Vendor: Centro Purchaser: Federation Centres Comment: Centro Gympie is a single level enclosed Sub Regional with a total GLA of 14,054 square metres. The centre was constructed in 1979 with major redevelopment completed in March 2007. The centre comprises a Woolworths (3,534 square metres), Big W (5,574 square metres) one Mini-Major tenancy and some 46 specialty stores. 4 Kmart Plaza, 878 Ruthven St, Toowoomba Price: $57.00 million (including land) Date: July 2013 Initial Yield: 7.04% Market Yield: 6.97% Rate/sq m: $4,216 Vendor: ISPT Purchaser: McConaghy Comment: Toowoomba Plaza is a single level enclosed Sub Regional with a GLA of 13,045 square metres. The centre commenced trading in 1977 and was last refurbished in 2009. The anchor tenant comprises of a Coles (3,314 square metres) and a Kmart (7,324 square metres) with 24 specialities, 6 ATMs and 2 kiosks.

5 Bluewater Square, 20 Anzac Avenue, Redcliffe Price: $41.75 million Date: March 2013 Initial Yield: 9.84% Market Yield: 8.51% Rate/sq m: $4,147 Vendor: Syndicate Purchaser: CP Retail & Alceon Group Comment: Bluewater Square Shopping Centre is a two-level, fully enclosed neighbourhood centre. Anchored by a Woolworths (3,941 square metres) and some 27 speciality shops, ve kiosks, four ATMS and nine rst level ofce/other tenancies. Car parking provided for some 625 vehicles.

2 Beenleigh Marketplace, 114 Beenleigh St, Beenleigh Price: $88.40 million Date: October 2013 Initial Yield: 7.67% Market Yield: 7.48% Rate/sq m: $4,881 Vendor: Colonial Purchaser: Dexus Comment: Beenleigh Marketplace is an enclosed single level Sub Regional with a total GLA of 17,128 square metres. The centre commenced trading in March 1999 and comprises a Big W, Woolworths, one Mini-Major tenancy and 54 specialty tenancies.

6 Great Western Super Centre, 1028 Samford Rd, Keperra Price: $62.90 million Date: May 2013 Initial Yield: 7.57% Market Yield: 7.50% Rate/sq m: $4,088 Vendor: Brookeld Purchaser: Charter Hall Comment: A single level partially enclosed Neighbourhood incorporating some bulky goods tenancies. The centre is anchored by Woolworths (3,173 square metres) and Aldi (1,296 square metres).

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Insight Key Australian Transactions

3 Centro Gympie

7 Inala Plaza, 156 Inala Ave, Inala Price: $32.35 million Date: August 2013 Initial Yield: 10.99% Market Yield: 10.08% Rate/sq m: $1,968 Vendor: 360 Capital Purchaser: Inala Plaza Qld Comment: Inala Plaza is a single level, fully enclosed Neighbourhood situated south of the Brisbane CBD and adjoining the partially enclosed Inala Civic Centre. The centre is anchored by Coles (2,748 square metres) and Woolworths (5,163 square metres), with four MiniMajors, 58 specialties (ve vacant), four kiosks and six ATMs (one vacant). Open at grade parking is provided for some 365 vehicles on a site of approximately 3.7181 hectares.

8 Logan Mega Centre, 3525 Pacic Hwy, Slacks Creek Price: $52.00 million Date: July 2013 Initial Yield: 10.21% Market Yield: 9.76% Rate/sq m: $1,926 Vendor: Mirvac Purchaser: Blackstone Comment: Logan Mega Centre is a fully enclosed two level homemaker centre comprising 29 Bulky Goods tenancies over two levels as well as basement car parking for approximately 600 vehicles.

10 Ashmore City, Nerang Rd, Ashmore Price: $37.00 million Date: September 2013 Initial Yield: 8.40% Market Yield: 8.62% Rate/sq m: $4,177 Vendor: Centra Company Purchaser: Engage Capital Comment: Ashmore City is an enclosed single level Neighbourhood that also incorporates three freestanding buildings leased to medical, banking and restaurant tenants with a total GLA of 8,858 square metres. The centre is anchored by Supa IGA (2,853 square metres), Crazy Clarks (463 square metres) and 34 specialty shops.

9 Bunnings Portfolio Price: $158.69 million Date: August 2013 Initial Yield: 7.25% (average) Market Yield: na Rate/sq m: $2,203 (average) Vendor: Wesfarmers Purchaser: BWP Trust Comment: Wesfarmers (owner of big-box hardware retail chain Bunnings) announced the sale and leaseback of 10 Bunnings properties to the BWP Trust for $271 million. As part of the portfolio six Bunnings properties were located in Queensland.

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Insight Key Australian Transactions

South Australia
Savills has recorded approximately $205 million worth of retail property transactions in the year to December 2013, down from $431 million in the previous year, and down on the ve year average, which was $302 million. In the year to December 2013, 29 properties were sold, down from the previous year of 37, and down on the ve year average of 39. The 'Trust' purchaser category was the most active in the South Australian investment market for the year ended December 2013, purchasing 43 percent of stock sold. However, the 'Private Investor' category had the most transactions (22). Bulky goods property sales in South Australia have decreased in volume in the 12 months to December 2013. Savills have recorded $24 million worth of retail bulky good property transactions within the state, down from the previous year of $134 million and down on the ve year average of $54 million.

South Australian Retail

Retail Property Sales by Price Range ($m) Dec-07 to Dec-13 < $10m $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0
-0 7 8 9 -1 0 -1 2 -1 1 -0 -0 ec ec ec ec ec ec D D D D D D D ec -1 3

$10m - $50m

$50 - $100m

> $100m

Source: Savills Research

1 Southgate Plaza, Morphett Vale

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SA Key Retail Transactions 2013

1 Southgate Plaza, 90-108 Sherriffs Rd, Morphett Vale Price: $60.00 million Date: October 2013 Initial Yield: 7.47% Market Yield: 7.97% Rate/sq m: $3,787 Vendor: ISPT Purchaser: Charter Hall Comment: Southgate Plaza is a single level partially enclosed Sub Regional originally constructed in 1968 and last extended/refurbished in 2012. The centre comprises a Coles (3,696 square metres), Target (7,035 square metres), 39 specialty shops (including three vacancies), 16 ATMs and one pad site. Open air at grade car parking is provided for 767 vehicles on a large site of 4.613 hectares.

2 Fairview Green Shopping, Centre, 325-339 Hancock Rd, Fairview Park Price: $24.75 million Date: August 2013 Initial Yield: 9.12% Market Yield: 8.30% Rate/sq m: $3,725 Vendor: Akrotiri Property Corp Purchaser: Primewest Funds Comment: A Neighbourhood which opened in 2009 comprising a Foodland (4,756 square metres GLA which includes a mezzanine ofce area of 920 square metres), 14 specialty shops (including one vacancy), kiosk, and two ATMs. The centre comprises an internal mall while six of the specialty tenancies have external access. The property provides some 398 car parking spaces, the majority (approximately 305 spaces) of which are situated on a lower level with retail area accessed via a travelator. There is also an upper level car parking area (approximately 75 spaces) together with 18 spaces at ground level. Located within a strong retail trade area.

3 Bunnings Warehouse, 933-945 North East Rd, Modbury Price: $16.30 million Date: November 2013 Initial Yield: 7.75% Market Yield: 7.75% Rate/sq m: $2,642 Vendor: National Mutual Life Nominees (AMP) Purchaser: Local Private Investor Comment: Improvements comprise a modern (2004) purpose built hardware and building supplies store, providing open plan showroom for hardware sales, ofce, fenced garden centre and rear timber storage yard. On-grade car parking is provided for approximately 87 vehicles together with under-croft car parking for approximately 203 vehicles. Leased to Bunnings for an initial 12 year term commencing 1 October 2013 (lease was recently renegotiated) with a further four option terms of ve years each. Net passing income is assessed at $1,263,000 per annum. The property was originally purpose built for Mitre 10 Mega Hardware, with Bunnings taking over the site in 2007.

The 'Trust' purchaser category was the most active in the South Australian investment market.
Savills Research

2 Fairview Green, Fairview Park

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Insight Key Australian Transactions

3 Bunnings Warehouse, Modbury 4 71 Rundle Mall, Adelaide Price: $7.53 million Date: October 2013 Initial Yield: 5.50% Market Yield: 5.50% Rate/sq m: $43,029 (ground oor retail area) Vendor: Local Private Investor Purchaser: Private Investor Comment: Improvements comprise a 2 storey building currently disposed as ground oor retail tenancy and rst oor ofces. The property is located on the southern side of Rundle Mall to the corner of Francis Street, and west of the newly established Rundle Place retail development. The property is leased to QJ Finance Pty Ltd (trading as Mazzucchellis Jewellers) for a term of 5 years commencing 2 April 2012 (lease extension) and expiring 1 April 2017 with a current passing rental of $587,663 per annum gross. Rent is reviewed to CPI annually, with a market review having been implemented as at 2 April 2012 at which time the lease was extended. 5 Burbridge Shopping Centre, 693-709a Burbridge Rd, West Beach Price: $6.54 million Date: November 2013 Initial Yield: 6.38% Market Yield: 6.38% Rate/sq m: $2,835 Vendor: Local Private Investor Purchaser: Local Private Investor Comment: Burbridge Shopping Centre is a Neighbourhood anchored by a Drake Foodland, together with 12 specialty shops and one ATM. Passing income of the centre is advised as $425,883 per annum net. The property is located approximately 9 kilometres west of the Adelaide CBD, and approximately 500 metres from the Adelaide coastline. The property is situated in a well established catchment area, with the surrounding residential population and seasonal tourism as well as limited competition providing for strong trade in the Centre.

4 71 Rundle Mall, Adelaide

5 Burbridge Shopping Centre, West Beach savills.com.au/research

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Insight Key Australian Transactions

Victoria
Savills has recorded approximately $1.9 billion worth of retail property transactions in the year to December 2013, up from $560 million in the previous year, and up on the ve year average, which was $1.22 billion. In the year to December 2013, 97 properties were sold, up from the previous year of 75, and up on the ve year average of 75. The 'Fund' purchaser category was the most active in the Victorian investment market for the year ended December 2013, purchasing 27 percent of stock sold. However, the 'Private Investor' category had the most transactions (64). Bulky goods property sales in Victoria have increased in volume in the 12 months to December 2013. Savills have recorded $98 million worth of retail bulky good property transactions within the state, up from the previous year of $68 million and up on the ve year average of $85 million.

Victoria Retail
Retail Property Sales by Price Range ($m) Dec-03 to Dec-13 < $10m $2,500 $10m - $50m $50 - $100m > $100m

$2,000

$1,500

$1,000

$500

$0
-1 0 -0 -0 -0 -0 7 -0 -0 -0 ec ec ec ec ec ec ec ec ec ec D D D D D D D D D D ec -1 3 3 4 -1 2 -1 1 5 6 8 9

Source: Savills Research

Savills has recorded approximately $1.9 billion worth of retail property transactions in Victoria.
Savills Research

2 206 Bourke Street, Melbourne savills.com.au/research

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VIC Key Retail Transactions 2013

1 Greensborough Plaza, Main St, Greensborough Price: $360.00 million Date March: 2013 Initial Yield: n/a Market Yield: n/a Rate/sq m: $6,223 Vendor: Lend Lease: APPF Purchaser: Blackstone Group Comment: Eight majors including Target, Kmart, Coles, Rebel Sport, Harvey Norman & JB HiFi, with 160 specialties.

3 Rosebud Plaza, Boneo Rd, Rosebud Price: $100.00 million Date: October 2013 Initial Yield: 7.80% Market Yield: n/a Rate/sq m: $4,193 Vendor: Colonial Purchaser: Charter Hall Comment: Sub Regional with three majors and 53 specialties.

5 Showground Village, Taylors Hill Village, Lilydale Village and Tarneit West Village Price: Part of $532.00 million portfolio sale Date: May 2013 Initial Yield: n/a Market Yield: n/a Rate/sq m: n/a Vendor: Coles Purchaser: ISPT Comment: ISPT purchased 75% interest in 19 neighbourhood centres owned by Coles for $532 million. Four of these centres were in Victoria. ISPT expected to place centres into newly created trust ISPT Retail Australia Property Trust of which ISPT will be 75% owner and Coles 25%.

4 Karingal Shopping Centre, Cranbourne Shopping Centre Price: Part of $371.00 million portfolio sale Date: February 2013 Initial Yield: circa 7.25% & 7.50% respectively Market Yield: n/a Rate/sq m: $4,485 & $3,706 respectively Vendor: Federation Centres Purchaser: ISPT Comment: Part of $371m shopping centre portfolio sale involving 50% interest in four sub regional centres and a convenience centre. Two centres located in Victoria.

2 206 Bourke St, Melbourne Price: $105.00 million Date: September 2013 Initial Yield: 7.74% Market Yield: n/a Rate/sq m: $8,865 Vendor: Private investor Purchaser: Hiap Hoe (Singapore) Comment: City centre arcade including tenants such as G Star, Quicksilver, JB Hi Fi, Regent Club, Shanghai Dynasty and Dragon Boat Restaurant.

6 Keilor Downs Plaza, 80 Taylors Road, Keilor Downs Price: $67.00 million Date: March 2013 Initial Yield: 8.80% Market Yield: n/a Rate/sq m: $3,567 Vendor: Centro MCS 33 Purchaser: Colonial Comment: Anchored by Coles, Aldi and Kmart, including 57 specialties and more than 50,000 square metres vacant land.

6 Keilor Downs Plaza

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Insight Key Australian Transactions

7 Langwarrin Plaza, Alfred Square, Drouin Central, Ocean Grove Marketplace, Target Centre & Wyndham Vale Square Price: $135.80 million portfolio sale Date: June 2013 Initial Yield: 7.70% Market Yield: n/a Rate/sq m: n/a Vendor: Lascorp Purchaser: SCA Property Group Comment: SCA Property Group acquired a portfolio of seven neighbourhood centres, six in Victoria.

9 Home HQ, Whitehorse Rd, Nunawading Price: $48.00 million Date: July 2013 Initial Yield: 10.70% Market Yield: 9.79% Rate/sq m: $2,099 Vendor: Charter Hall Purchaser: Arkadia Comment: Bulky Goods centre with three anchor tenants of Nick Scali, The Good Guys and Bev Marks Beds with seventeen other outlets.

10 Kookai, 254 Collins St, Melbourne Price: $14.21 million Date: November 2013 Initial Yield: 4.42% Market Yield: n/a Rate/sq m: $35,704 Vendor: Victorian Private Investor Purchaser: Foreign Investor Comment: Recently refurbished three level retail building fully leased to international fashion label 'Kookai' on a new long term lease.

8 Neighbourhood & Freestanding centres in Bright, Maffra, Mildura and Warrnambool Price: $53.60 million portfolio sale Date: November 2013 Initial Yield: n/a Market Yield: n/a Rate/sq m: n/a Vendor: SCA Property Group Purchaser: Private Investment Consortium Comment: Five properties (four in Victoria) sold as a portfolio for $53.6 million.

9 Home HQ Nunawading

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Savills Research

22
10 254 Collins Street, Melbourne

Insight Key Australian Transactions

Western Australia
Savills has recorded approximately $1,276.43 million worth of retail property transactions in the year to December 2013, up from $716.88 million in the previous year, and up on the ve year average, which was $683.78 million. In the year to December 2013, 27 properties were sold, up from the previous year of 18, and up on the ve year average of 17. The 'Fund' purchaser category was the most active in the Western Australian investment market for the year ended December 2013, purchasing 30 percent of stock sold. However, the 'Private Investor' category had the most transactions (8). Bulky goods property sales in Western Australia have increased in volume in the 12 months to December 2013. Savills have recorded $20 million worth of retail bulky good property transactions within the state, down from the previous year of $43 million and down on the ve year average of $23 million.

West Australia Retail

Retail Property Sales by Price Range ($m) Dec-03 to Dec-13 < $10m $1,400 $1,200 $1,000 $800 $600 $400 $200 $0
3 4 -0 7 5 6 8 9 -1 0 -1 2 -1 1 -0 -0 -0 -0 -0 -0 ec ec ec ec ec ec ec ec ec ec D D D D D D D D D D D ec -1 3

$10m - $50m

$50 - $100m

> $100m

Source: Savills Research

3 Claremont Quarter, Claremont

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Savills Research

1 Bunbury Forum, Bunbury

WA Key Retail Transactions 2013

1 Bunbury Forum, Sandridge Rd, Bunbury Price: $143.28 million Date: September 2013 Initial Yield: 6.65% Market Yield: 6.65% Rate/sq m: $6,410 Vendor: Atlas Point Purchaser: Challenger Comment: The centre was sold to Challenger Life after an off market Expressions of Interest campaign closing August 2013. The passing gross rentals within the centre are considered sustainable with the average specialty GOC ratio below industry benchmarks. There is a Development Approval to expand the centre up to 30,942 square metres.

3 Claremont Quarter (50%), Claremont Price: $171.50 million Date: February 2013 Initial Yield: 6.17% Market Yield: 6.22% Rate/sq m: $11,433 Vendor: Brookeld Purchaser: QIC Comment: Remaining 50% interest and management rights retained by Hawaiian. 5.76 year WALE. The centre is currently held within a strata title and as such any future redevelopment potential is very limited.

5 Kelmscott Plaza, Albany Hwy, Kelmscott Price: $15.00 million Date: April 2013 Initial Yield: 8.71% Market Yield: na Rate/sq m: $2,953 Vendor: CK Properties Purchaser: Singaporean Investor Comment: Located on busy Albany Highway, Kelmscott, this centre is anchored by a Woolworths and Wizard Pharmacy, with other national tenants such as Subway.

4 Melville Plaza, Canning Hwy, Bicton Price: $29.00 million Date: April 2013

6 Secret Harbour, Beard St, Secret Harbour Price: $33.20 million Date: June 2013 Initial Yield: 7.80% Market Yield: 7.81% Rate/sq m: $4,432 Vendor: Secret Harbour Shopping Centre Purchaser: Charter Hall Comment: Transaction includes adjoining 3.1 ha development site for possible future expansion. Sold via an Expressions of Interest campaign.

2 Phoenix Park, 254 Rockingham Rd, Spearwood Price: $75.80 million Date: February 2013 Initial Yield: 8.06% Market Yield: 8.03% Rate/sq m: $3,690 Vendor: Volley Investments Purchaser: Rockworth Asset Management Comment: All three major tenancies trading poorly, below the Urbis average. Subject property sold to a Singaporean investor after a prolonged sales campaign.

Initial Yield: 6.83% Market Yield: 7.36% Rate/sq m: $3,821 Vendor: Federation Centres Purchaser: Hawaiian Investments Comment: The short term lease expiry to Coles (three years) was considered a deterrent to some prospective buyers however most were actively encouraged by this given the outgoings recovery which was considered to provide some leverage at the pending option.

2 Pheonix Park Shopping Centre, Spearwood

4 Melville Plaza, Bicton

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Insight Key Australian Transactions

7 Centro Mandurah (50%), 330 Pinjara Rd, Mandurah Price: $131.71 million Date: June 2013 Initial Yield: 7.25% Market Yield: 7.18% Rate/sq m: $7,835 Vendor: Coles Purchaser: ISPT Comment: The Centre formed part of the 50% interest acquisition by ISPT in a portfolio of ve shopping centres owned and managed by Federation Centres that also included Halls Head in WA, Cranbourne and Karringal in VIC and Warriewood in NSW. The portfolio sale collectively transacted for $371.4 million.

9 Harbour Town (50%), 840 Wellington St, West Perth Price: $205.00 million Date: October 2013 Initial Yield: 6.52% Market Yield: 6.52 Rate/sq m: $9,653 Vendor: Lend Lease Purchaser: Far East Organisation Comment: The only dedicated DFO retail asset in Perth and Western Australia. Central Perth location fronting Wellington, Sutherland and Market Streets, West Perth, within 1km of CBD. Located within 200 metres of City West Railway station, and adjacent to Perths main north/south freeways. Signicant landholding of over 1.98 hectares.

10 Brighton Village, 5 Kingsbridge Rd, Butler Price: $21.00 million Date: November 2013 Initial Yield: 7.90% Market Yield: na Rate/sq m: $5,460 Vendor: Primewest Purchaser: Coles / ISPT Comment: Purchased by the centres anchor tenant Coles in partnership with ISPT. This centre is surrounded by recently developed residential estate in a thriving northern coastal Perth suburb between the Neerabup National Park and the Indian Ocean coast line. Regarded as one of Australias fastest selling coastal communities and the fastest growing residential area in the City of Wanneroo.

8 Karrinyup (33%), 200 Karrinyup Rd, Karrinyup Price: $246.70 million Date: September 2013 Initial Yield: 5.75% Market Yield: na Rate/sq m: $13,504 Vendor: Westeld Group & Westeld REIT Purchaser: UniSuper Comment: UniSuper is now the sole owner of this property. Management has been retained by AMP.

8 Karrinyup Shopping Centre, Karrinyup

10 Harbour Town, West Perth

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Savills Research

Key Contacts
Tony Crabb National Head, Research Research +61 (0) 422 221 604 +61 (0) 3 8686 8012 tcrabb@savills.com.au

NSW / ACT
Simon Fenn Managing Director NSW +61 (0) 438 573 431 +61 (0) 2 8215 8830 sfenn@savills.com.au Phil Harding Managing Director ACT +61 (0) 408 868 206 +61 (0) 2 6221 8293 pharding@savills.com.au Simon Hemphill Divisional Director, Research +61 (0) 466 775 680 +61 (0) 2 8215 8892 shemphill@savills.com.au Steven Lerche Divisional Director, Retail Sales +61 (0) 414 467 216 +61 (0) 2 8215 8929 slerche@savills.com.au

QLD
Paul McLean CEO & Managing Director QLD +61 (0) 7 3221 8355 pmclean@savills.com.au Paul Day Divisional Director, Research +61 (0) 403 324 737 +61 (0) 7 3002 8860 pday@savills.com.au Peter Tyson Divisional Director, Retail Sales +61 (0) 418 725 155 +61 (0) 7 3002 8807 jtyson@savills.com.au

SA
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VIC
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WA
Paul Craig Managing Director WA +61 (0) 422 235 519 +61 (0) 8 9488 4156 pcraig@savills.com.au Gemma Alexander Associate Director, Research +61 (0) 437 051 397 +61 (0) 8 9488 4140 galexander@savills.com.au Miles Rowe Divisional Director, City Sales +61 (0) 422 236 311 +61 (0) 8 9488 4116 mrowe@savills.com.au

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Insight Key Australian Transactions

Savills Research Team

Our highly regarded research division are dedicated to understanding and giving in-depth insight into the commercial, industrial & retail markets throughout Australia. We also provide in-depth consultancy services, ranging from tenant representation to property site selection for multinational businesses. Our research teams are highly qualied real estate professionals with comprehensive knowledge of property markets across Australia. The Savills Research & Consultancy team has years of experience, and supported by our extensive agency, property management and valuation professionals, are highly regarded and respected along with Savills Research teams across the globe.

Savills provide free research reports on all major property markets, and some example papers include:

Ofce Markets Retail Markets Residential Trends Industrial Markets International Markets
For our latest reports, contact one of the team or visit savills.com.au/research

Savills Research Queensland

Spotlight Brisbane CBD Retail

March 2013

Highlights
International retailers such as Zara, Retail rents in the CBD should
Abercombie & Fitch continue to look for prime retail space in Brisbanes CBD. declined from 6.30% at August 2011 to 6.01% as at March 2013.

Brisbanes CBD Retail vacancy has Department stores and services

remain relatively steady in the short term as the effects of the economy hold back further increases. Brisbanes CBD retail market and should be supported by strong population growth and demand from leading international retailers.

Overall the future looks bright for

dominated the tenancy mix comprising each 23% of total (sq m) retail space in the CBD.

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This information is general information only and is subject to change without notice. No representations or warranties of any nature whatsoever are given, intended or implied. Savills will not be liable for any omissions or errors. Savills will not be liable, including for negligence, for any direct, indirect, special, incidental or consequential losses or damages arising out of our in any way connected with use of any of this information. This information does not form part of or constitute an offer or contract. You should rely on your own enquiries about the accuracy of any information or materials. All images are only for illustrative purposes. This information must not be copied, reproduced or distributed without the prior written consent of Savills.

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Savills is a leading global real estate service provider listed on the London Stock Exchange. The company, established in 1855, has a rich heritage with unrivalled growth and has been ranked No.1 by turnover in the UK by the Estates Gazette for ten consecutive years. Savills is a company that leads rather than follows and now has over 500 ofces and associates throughout the Americas, Europe, Asia Pacic, Africa and the Middle East. Across the Asia Pacic, Savills have over 45 ofces in Australia, New Zealand, Singapore, Malaysia, Thailand, Vietnam, Hong Kong, Macao, China, Taiwan, Korea and Japan. Savills Australia specialises in the provision of industrial, commercial, retail and residential property services across the country. We are recognised as established leaders within the Australian property markets and deliver a seamless service both locally and throughout our global network of ofces.

A unique combination of sector knowledge and entrepreneurial air gives clients access to real estate expertise of the highest calibre. We are regarded as an innovative, thinking organisation cemented by the best people with excellent negotiation skills. Savills focus on a dened set of clients, offering a premium service to organisations and individuals with whom we share a common goal. Contact Savills for advice on all aspects of property: n n n n n n n n Sales and Leasing Corporate Advisory Asset Management Property Accounting Valuations Residential Services Project Management Research

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