MARKET OUTLOOK THORNLEIGH Thornleigh is an emerging apartment market located on the Upper of benefiting from improving transport accessibility and amenity.

01 Accessibility 02 Infrastructure & Employment 03 Demographics 04 Population Growth 05 Residential Analysis 06 Rental Analysis

Prepared exclusively for Arden Property Group August 2017 Top-left: Barker College. Top right: . Bottom-Left: Thornleigh Train Station. Bottom-Right: E ROAD NAM

ACCESSIBILITY

AMENITY KU-RING-GAI CHASEHealth Thornleigh is located on the Upper North Shore of Sydney in an RETAIL AND ENTERTAINMENT NATIONAL PARK area surrounded by a large number of schools, parks and green 01 Thornleigh Marketplace Education space, making it an ideal family living environment. 02 Pennant Hills Marketplace NORTH EmploymentAHROONGA Thornleigh provides excellent retail amenity for residents with 03 Westfield Hornsby HORNSBY Parks and Recreation a range of shops within the Thornleigh Town Centre. In addition, 04 Macquarie Centre 19 major regional shopping centres including Hornsby Westfield EDUCATION Retail and Entertainment and Macquarie Centre are easily accessible by car and train. GLENHAEN 23 05 Thornleigh West Public School 25 Several hospitals are located in close proximity including the 3 06 Pennant Hills Public School BEROWRA VALLEY 15 Sydney Adventist Hospital, Hornsby Ku-Ring-Gai Hospital and ° 07 Pennant Hills High School REGIONAL PARK Macquarie University Hospital. y w 08 West Pennant Hills Public School F KM e l The Thornleigh Train Station and M2 Motorway provide direct ESTLEIGH t 14 s 09 Normanhurst Public School a and fast accessibility to employment centres in Macquarie c w 10 Normanhurst west Public School e Park and the Sydney CBD. The future Sydney Metro Northwest N y e n will further improve transport links for residents with regular 11 Loreto Normanhurst d y trains every four minutes to directly connect the north-west 12 S Cheltenham Girls High School 20 of Sydney with Macquarie Park, Chatswood, North Sydney and 13 13 Normanhurst Boys High School CHERRYBROOK 34 10 the Sydney CBD. 32 14 Barker College 26 9 AHROONGA 21 5 30 ARRAEE 15 Hornsby GirlsCASTLE High HILL School 11 16 St Agatha’s Catholic Public School THORNLEIGH 29 EDUCATION 17 Mount St Benedict College 1 18 Macquarie University 22 The Thornleigh Train Station and road links provide access 7 to a number of leading education institutions. Thornleigh 19 TAFE Hornsby campus 6 is centrally located amidst some of Sydney’s finest private 20 Knox Grammar School Pacific Hwy 31 d 2 R e schools including Barker College, Knox Grammar, Abbotsleigh, 21 Abbotsleigh School for Girls TWIN CREEK l 16 TWIN CREEK a RESERVE V Loreto College and Mount St Benedict College. HEALTH 17 RESERVE a n

o It’s also located near several highly regarded state schools 22 Sydney Adventist Hospital ROFE M 28 PARK including Thornleigh West Public School, Pennant Hills Public 23 Hornsby Ku-Ring-Gai Hospital LANE COVE School, Pennant Hills High School, West Pennant Hills Public 8 NATIONAL PARK 24 Macquarie University Hospital PYMBLE School, Normanhurst Public School, St Agatha’s Catholic SOUTH TURRAMURRA PARKS AND RECREATION AVONDALE Public School and Normanhurst West Public School. GOLF COURSE 25 Hornsby RSL BEECROFT Additionally, Macquarie University is a short drive and train 27 26 Thornleigh Golf Centre ride away. Ranked among the top two per cent of universities PENNANT NORTH EPPING

27 Pennant Hills Golf Club HILLS GOLF 12 in the world, and with a 5-star QS rating, the tertiary campus d

R CLUB BIDJIGAL CLUB CHELTENHAM 28 s renowned for producing graduates who are highly sought after Pennant Hills Park l

l RESERVE i by employers. H 29 Jack Thompson Reserve t EST n Hills Mtw a y 30 Headen Park n PYMBLE n e 31 Wollundry Park P 32 Kenley Park EMPLOYMENT

NORTH ROCKS EPPING Ryde Rd 33 Macquarie Business Park MARSFIELD 24 CHATSOOD CBD 4KM 34 Thornleigh Town Centre 18 CARLINGFORD Train station 4

Marsden Rd MACUARIE PARK SYDNEY CBD 10KM PARRAMATTA CBD 2KM 33 EASTOOD LAKE DUNDAS 0 PARRAMATTA Lane Cove Rd RESERVE OATLANDS ALLEY DENISTONE EAST NORTH 2 Market Outlook Thornleigh Briens Rd NORTH OATLANDS RYDE GOLF PARRAMATTA Stewart St COURSE DENISTONE 1 Thornleigh is a leafy suburban area located on the Upper North Shore of Sydney approximately 20km north west of the Sydney CBD.

KU-RING-GAI CHASEHealth NATIONAL PARK Education NORTH Employment HORNSBY AHROONGA Parks and Recreation 19 Retail and Entertainment GLENHAEN 23 25 3 BEROWRA VALLEY 15 ° REGIONAL PARK

y w F KM e l ESTLEIGH t 14 s a c w e N y e n d y S 20 13 CHERRYBROOK 34 10 32 26 9 AHROONGA 21 5 30 11 ARRAEE CASTLE HILL THORNLEIGH 29

1 22 7

6 Pacific Hwy

31 d 2 R e TWIN CREEK l 16 TWIN CREEK a RESERVE V 17 RESERVE a n

o

ROFE M 28 PARK LANE COVE 8 NATIONAL PARK PYMBLE SOUTH TURRAMURRA AVONDALE BEECROFT GOLF COURSE 27 PENNANT NORTH EPPING

HILLS GOLF 12 d

R CLUB

BIDJIGAL CLUB CHELTENHAM s

l

l RESERVE i

H t EST n Hills Mtw a y n PYMBLE n e P

NORTH ROCKS EPPING Ryde Rd MARSFIELD 18 24 CHATSOOD CBD 4KM CARLINGFORD 4

Marsden Rd MACUARIE PARK SYDNEY CBD 10KM PARRAMATTA CBD 2KM 33 EASTOOD LAKE DUNDAS 0 PARRAMATTA Lane Cove Rd RESERVE OATLANDS ALLEY DENISTONE EAST NORTH Prepared exclusively for Arden Property Group 3 Briens Rd NORTH OATLANDS RYDE GOLF PARRAMATTA Stewart St COURSE DENISTONE 1 INFRASTRUCTURE Over $11 billion in infrastructure investment to & EMPLOYMENT benefit the surrounding region.

INFRASTRUCTURE EMPLOYMENT NODES The Sydney Metro Northwest Thornleigh has direct train access to Macquarie Park, $8.3 billion – Completion 2019 which is a major employment centre that is projected Australia’s largest public to continue to grow by 11,400 new jobs by 2031. The transport infrastructure project Macquarie Park Business Park is home to several major and a priority rail project for companies including Hyundai, Foxtel, Canon and Cochlear the NSW Government, to be the first fully-automated amongst others. In addition, the recently redeveloped rapid transit rail system in Australia. Delivering eight Macquarie Centre regional shopping centre is a major new railway stations and 4,000 commuter car parking employment hub anchored by major Australian and spaces to Sydney’s North West, the project will further international retailers. streamline Thornleigh’s connectivity to the north-west Other employment centres close by such as Hornsby region and other areas in Sydney. and Chatswood continue to expand and are projected to continue to expand by 2,000 and 3,100 new jobs by 2031 respectively. NorthConnex $2.7 billion – Completion 2019 The Sydney Metro Northwest will increase frequency of train services with a train every four minutes in peak A 9 km tunnel linking the hour to surrounding employment centres as well as the M1 Pacific Motorway at Sydney CBD, which will strengthen accessibility to these Wahroonga to The Hills M2 employment centres. Motorway at West Pennant Hills. This will remove 5,000 trucks per day off Pennant Hills Road, which will transform the liveability of Thornleigh by improving air quality as well as reducing traffic noise. NorthConnex will Employment Centres New Jobs 2016-31 also reduce traffic congestion along Pennant Hills Road, vastly improving travel times. Hornsby 2,000

Hornsby Ku-Ring-Gai Hospital Redevelopment Macquarie Park 11,400 Stage 2 $200 million – Proposed Norwest Business Park 17,700 Completion 2019 The extension to the Thornleigh Fire Station will include the construction of a new fire station behind the current Chatswood 3,000 location at 1052 Whitehorse Road. It will also include links into the existing station. St Leonards 5,900

Hornsby RSL Redevelopment North Sydney 6,800 $150 million – Proposed Completion 2020 The redevelopment will expand Sydney CBD 65,100 Hornsby RSL to a mixed-use development which consists of a four star 114 room hotel, Source Bureau of Transport Statistics; Urbis a 110-bed retirement village and an 8-storey residential unit complex. This will create jobs as well as boosting entertainment and visitation to the area..

4 Market Outlook Thornleigh Thornleigh is projected to grow by 2,600 DEMOGRAPHICS new residents over the next 15 years.

For the purpose of this assessment, the Thornleigh Thornleigh has a very high proportion of residents who Area has been defined as the suburbs of Thornleigh and work in professional occupations (37%), well above the Pennant Hills. Sydney average of 26%. Thornleigh has a significantly Based on data from the Bureau of Transport Statistics, higher proportion of residents employed in white collar the population of Thornleigh is projected to increase by occupations compared to the Sydney average, comprising 3,700 people between 2016 and 2031, which equates to 84% compared to 74% respectively. Thornleigh Train a growth rate of 1.3% per annum. There is limited vacant Station has direct access to employment centres such as land and high density zoned areas in Thornleigh, which Macquarie Park, Chatswood, St Leonards, North Sydney will limit the supply of new developments. While demand and Sydney CBD which provides excellent accessibility is strong, the relatively low level of new supply will and convenience for white collar workers. constrain population growth. HOUSEHOLD INCOME PROJECTED POPULATION GROWTH Thornleigh Thornleigh $160,000 Thornleigh Sydney 25,000 $140,000 20,346 19,307 20,000 18,663 17,785 $120,000 15,771 15,000 $100,000

10,000 $80,000 Population(No.) 5,000 $60,000

$40,000 0 Annual Household Income($) 2011 2016 2021 2026 2031 $20,000 Source : Bureau of Transport Statistics ; Urbis $0 The average household income in Thornleigh is 21% 2006 2011 2016 above the Sydney average Source : ABS Census 2016 ; Urbis The average household size in Thornleigh is 2.8 persons per household, which is higher than the Sydney average WHO LIVES IN of 2.7. This reflects the high proportion of families that THORNLEIGH? Thornleigh Sydney reside in Thornleigh. These households are more likely to demand larger sized dwellings such as two and three Average Age of Residents 38 37 bedroom apartments. The average household income in Thornleigh is $113,631, Employed as Professionals 37% 26% which is 21% above the Sydney average. This means Thornleigh is an affluent suburb with residents able to Employed in White Collar afford high quality and/or larger apartments. Jobs* 84% 74% There are a higher proportion of residents who have purchased their property with a mortgage in Thornleigh Bachelor Degree or Higher* 37% 24% (42%) compared to the Sydney average (36%). The demographics profile suggests that Thornleigh Dwelling purchased with mortgage 42% 36% consists of a large proportion of affluent family households who are owner occupiers. This suggests that apartments with two or three bedrooms that are well Average Household Income $113,631 $94,428 designed for family living would be an attractive product and in high demand for the Thornleigh market. Household Income Above $130,000 39% 26% Strong connectivity to major employment centres also offers attractive opportunities for younger professionals Source ABS Census 2016; Urbis and renters looking to live in one or two bedroom Note: * 2011 data as 2016 not released at time of publication apartments close to their place of work. Prepared exclusively for Arden Property Group 5 RESIDENTIAL Thornleigh has recorded strong price MARKET ANALYSIS growth for apartments in recent years.

THORNLEIGH APARTMENT MARKET There has been around 80 sales per year on average in Thornleigh has traditionally been a low density suburb Thornleigh from June 1997 to June 2017. Median sale consisting mostly of houses. Data compiled by Cordell prices for apartments in Thornleigh have experienced Connect as of July 2017 indicates there are around 90 rapid growth since 2011, as a result of the residential apartments proposed to be completed in Thornleigh boom and attractiveness of the area. by 2019. This shows the relatively low number of Apartment median sale prices have increased developments currently proposed and limited competition significantly, from $870,000 in June 2016 to $968,000 in in the area. Given the high level of demand the area will June 2017, equating to a 11.2% increase. This highlights likely experience an undersupply of apartments. the strong demand for apartments in Thornleigh.

APARTMENT MARKET Thornleigh

100 No. of Transactions $1,200,000 90 Median Sale Price $968,000 $1,000,000 80

70 Price Sale Median $800,000 60 50 $600,000 40

Number of Sales $400,000 30 20 $200,000 10 0 $0 Jun-17 Jun-11 Jun-14 Jun-12 Jun-15 Jun-13 Dec-11 Jun-16 Dec-14 Dec-12 Dec-15 Dec-13 Dec-16 Jun-10 Dec-10 Jun-97 Jun-01 Dec-97 Jun-07 Jun-98 Jun-99 Dec-01 Jun-02 Dec-07 Dec-98 Dec-99 Jun-05 Jun-03 Jun-08 Jun-09 Dec-02 Jun-06 Dec-05 Dec-03 Jun-04 Dec-08 Dec-09 Jun-00 Dec-06 Dec-04 Dec-00 Period (Semi-Annual) Source: APM PriceFinder; Urbis

PROPOSED APARTMENT DEVELOPMENTS HISTORICAL APARTMENT SALES PRICE GROWTH PER Thornleigh ANNUM (2016) Thornleigh

36 11.3% 10.3% 29 7.8% 24

2017 2018 2019 1 Year 5 Year 10 Year

Source: Cordell Connect; Urbis 89 Total proposed apartment developments in Thornleigh from 2017–2019

Source: APM PriceFinder; Urbis

6 Market Outlook Thornleigh Thornleigh has recorded strong median rental price RENTAL growth in the past year. MARKET

The proportion of rental households in Thornleigh has The majority of rental apartments in Thornleigh are two increased steadily since 2001. Although Thornleigh has a bedroom apartments. (55%), followed by one bedroom high proportion of owner occupiers in an area consisting apartments (23%). The smaller sized apartments are mostly of houses, there has been increasing investor attractive for investors to purchase due to their higher activity in new apartment developments in Thornleigh yields. These apartments suit smaller size households and Pennant Hills. This is supported by research into the (such as couple households) that may not need a lot of buyer profiles of new development projects in Thornleigh. space.

PROPORTION OF RENTERS RENTAL APARTMENTS BY BEDROOMS Thornleigh Thornleigh Sydney 2001 16% Less than 1 Bedroom 2% 2%

2006 18% 1 Bedroom 23% 20%

2011 19% 2 Bedroom 55% 62%

2016 21% 3 Bedroom 19% 16%

Source ABS Census 2016; Urbis Source ABS Census 2016; Urbis

The median weekly rent for a two bedroom apartment MEDIAN WEEKLY RENT GROWTH FOR 2 BEDROOM UNITS in Thornleigh increased by 4% from $505 in the March 2016 quarter to $525 in the March 2017 quarter. This Thornleigh $505 $525 was in line with the Greater Sydney average increase of 4% from $520 in the March 2016 quarter to $540 in the March 2017 quarter. This further illustrates the increasing demand for apartment living in Thornleigh Greater Sydney region $520 $540 and when compared to limited new supply, represents an opportunity for investors. Due to the limited supply of apartments in Thornleigh, Source: Housing NSW; Urbis historical rental data is only available for houses. As at March 2017, the median weekly rent for a three-bedroom MEDIAN WEEKLY RENTS FOR THREE BEDROOM HOUSES house in Thornleigh was $650 per week. This was higher Thornleigh than the Greater Sydney median of $490. The 10-year median rental prices in Thornleigh have increased by $700 $650 $600 5.2% per annum for three bedroom houses. This suggests $490 that houses in Thornleigh have similar rental prices $500 to apartments. Therefore, apartments represent an $400 $300 attractive option for investors due to lower purchase $200 3 Bed House (Study Area) prices and relative higher rental yield. $100 3 Bed House (Sydney)

Weekly Median Rent ($) $0 2017 2011 2014 2012 2013 2015 2016 2010 2007 2008 2009

Source : Housing NSW ; Urbis

Prepared exclusively for Arden Property Group 7 BRISBANE GOLD COAST MELBOURNE This publication is prepared on the instruction of Arden Property Group 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 PERTH 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 known, or unknown, risks and uncertainties. It should be noted that past SYDNEY 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 CISTRI — SINGAPORE 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 Arden Property Group cistri.com 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. PER0130